hi,
Profit Center Accounting (EC-PCA) lets you determine profits and losses by profit center using
either period accounting or the cost-of-sales approach. It also lets you analyze fixed capital and
so-called u201Cstatistical key figuresu201D (number of employees, square meters, and so on) by profit
center. Consequently, you can calculate all the key figures commonly used in cost accounting
(return on investment, cash flow, sales per employee, and so on).
A profit center is a management-oriented organizational unit used for internal controlling
purposes. Dividing your company up into profit centers allows you to analyze areas of
responsibility and to delegate responsibility to decentralized units, thus treating them as
u201Ccompanies within the companyu201D.
The essential difference between a profit center and a business area is that profit
centers are used for internal control, while business areas are more geared toward
an external viewpoint.
rohit
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