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Cost Accounting

Former Member
0 Kudos

Hi Experts,

What is the difference between Cost Accounting, Cost Center, and Profit center...

Why it is used in Business and when it Will Use?

In SAP B1, how we have to define those things?

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi,

COST ACCOUNTING

To use cost accounting, you define the various cost centers or departments in your company as profit centers. You then assign revenue and expense accounts to the profit centers so that any data relevant to a profit center can be updated automatically for all transactions entered in the application. Costs are allocated to profit centers using information that you define in a distribution rule .This means that any costs incurred are allocated to the profit centers on the basis of a specific distribution rule. If you decide that the way in which costs are allocated no longer reflects the way your company works, you simply change the distribution rule as required.

Cost accounting can be used to track and allocate shared expenses or revenues. In every company there are always expenses and sometimes even revenues that cannot be assigned to one specific business activity. These include administration costs, advertising costs, and financing costs. These indirect costs (and indirect revenues) are spread across multiple business activities using distribution rules.

cost center = profit center

Goto Financials >>> Cost Accounting for defining profit center and distribution rule. Profit Center Reports will show you the expenses and revenues you allocated to profit center by giving distributon rule at every transaction.

For more info. you can press F1 in SAP Business One

Hope this helps,

Son.

Answers (0)