Profit center and Cost center Basics

[Former Member]

Hi,

Can any one of you give me what is profit center(what all make a profit center) and what is cost center(what all element make cost elements)?

Any links with information will also help

KSK

[former_member197269 · Accepted solution]

Hi Sashi,

Following link would be help ful:

Profit Center: http://help.sap.com/saphelp_erp2005/helpdata/en/ff/277203deea11d3b5b4006094b9b0a5/frameset.htm

Controlling area: http://help.sap.com/saphelp_erp2005/helpdata/en/02/30793485231774e10000009b38f83b/frameset.htm

Following link would also be helpful:

https://websmp203.sap-ag.de/~form/sapnet?_FRAME=CONTAINER&_OBJECT=011000358700000089671997E

hope this helps.

please assign points as way to say thanks

Ravi

[Former Member]

thanks

[Former Member]

Hi

Profit center:

An organizational unit in Accounting that reflects a management-oriented structure of the organization for the purpose of internal control. Normally revenue are accured in profit center. eg., product line, location etc.,

Cost center:

An organizational unit within a controlling area that

represents a defined location of cost incurrence.

The definition can be based on:

o Functional requirements

o Allocation criteria

o Physical location

o Responsibility for costs

You assign a cost center to a profit center so that you can see the profitability.

You can have all the cost elements(Profit & Loss - Expenses) related used in cost center.

Only revenue related elements are used in profit center.

Regards,

Suraj