Is it advisable to assign "Business Area" to all "Cost Center". If so, then it will allow us to post the cost only to that particular business area which is mentioned in Cost Center.
A cost center requires a business area allocation in dependency of the company code it is allocated to. If a balance sheet or P&L is to be created for each business area for the company code used, you have to enter a business area.
Business areas are your line of business. You will not have number of business areas in an organization.
If I give you an example of a chemical company
You will have
Soda Ash
Salt
Chlorine
Fertilizers
Under each business area you have 100 departments, say cost centers, you have.
All 100 cost centers relatings to soda ash will be assigned with business area soda ash. In KS02, for cost center relating to soda ash will be assigned with SODA business area, accordingly postings made to the cost center relating to soda ash will hit SODA business area.
At the end of the day you should able to identify, though it is a common cost, this should be relating to which business area. You need to bifurcate your postings per business area.
Meaning that if you want to post travelling expenses of person, who has done work for two different business areas.
In that case
the entry would be
Travelling Expenses Dr 200 (Co assignment Cost Center of SODA ASH)
Travelling Expenses Dr 120 (Co assignment Cost Center of SALT)
To Cash Account (Co assignment Cost Center of SODA ASH)
To Cash Account (Co assignment Cost Center of SALT)
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