business area & profit center

[Former Member]

hi sap gurus,

When it is useful to activate new Profitcenter & when it is useful to activate Business Area.

Can any body narrate difference and benefts of each

Thanks & Regards

krishna.

[Former Member · Accepted solution]

Hi,

Profit center and business are org units and both are used for similar purposes.

Business area is gared on external accounting where as profit centers are used for internal accounting purposes

Business Area

Based on the above we can prepare Balance sheet and profit

centre for separate product segment, geographical segment

etc. In India for certain companies it is the external

reporting.

Profit Centre

Based on the above responsble profit centre derive the

profit (only profit) (revenue minus expenses). Internal

reporting

Thanks

Ram

[Former Member]

hi,

Profit center accounting and Business area reporting can be used for a similar purpose.

But for a Profit center acounting the reporting is very eloborate and detailed...like drill down reports

which are not possiable in Business area funcationalty. ... Profit center reporting is more accurate than business area.

if useful assign points.