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Why profit center is created at controlling area leve and cost center is not

Hi All,

I want to know why we create profit center at controlling area level i.e., a profit center can be used by multiple company codes under that controlling area. While cost center is at company code level as in one cost center can only be used in one company code.

Please explain the logic behind this design in SAP and in real business scenarios.



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  • Best Answer
    Posted on Jul 22, 2014 at 02:51 PM


    Cost centres (and other CO objects, e.g. internal order, WBS, etc.) are part of Cost Accounting component of SAP Controlling domain (CO). Profit centres are part of Enterprise Controlling (EC) domain, namely of EC-PCA. So, these two objects are not even belonging to the same domain and have, therefore, different perspective of business functionality. SAP has created reporting objects on different level of control: business areas on client level, cost centres - on company code level, profit centres - on controlling area level, etc. All this is a part of system design in functional prism of system's evolution.

    Of course, technically speaking, one could have created profit centres on company code level or vice versa, cost centres on controlling area level, but it would have provoked similar questions.



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