Regarding Cost center and profit center

[Former Member]

Hi gurus

I am new to SAP Can you tell me what is Profit center & Cost Center and its assignments to FI what is the use for.....

and related documents please send to me.

Regards & thanks

Anil

[Former Member]

Hi Anil,

I would like to explain by taking one explain. Consider one manufacturing organization having branches all over India. In this case, we can consider each state as profit centre. Under state, each district we can consider as cost centre. Any document u are booking (P & L Accounts), you can consider cost centre. Any document u are booking by considering Balance Sheet Account you can directly refer profit centre.

Basing on the above, you can derive reports.

I hope above solution will give clear picture to you.

Assign points without fail.

ALL THE BEST FOR BETTER CARRER IN SAP.

Regards.

[sridevi_p]

Hi,

Profit centers are similar to business areas, in the sense that they are set up for internal reporting purposes. However, profit centers are formally defined as components of a controlling area, not as components of one or more company codes. Income statements may be created for profit centers, and selected assets may also be reported for profit centers, but not complete balance sheets

A cost center is the basic organizational/responsibility component of a controlling area. A controlling area is broken down into cost centers, which are organized in a “standard cost center hierarchy.” Cost centers may also be linked to a specific business area, company code, and profit center

<i><b>Pls. assign points, if useful</b></i>

Regards,

Sridevi