What is Profit Center accounting? and How to Maintain Controlling Area Settings?

Profit center accounting is generally is not the regular core component of controlling. It is a part of Enterprise Controlling. The main purpose of Profit center accounting is providing the opportunity to analyze and report to the management regarding internal profitability of sub units. Hence it is called a company code with in a company code. It can capture the financial statements as well as Return on investment also within a company code level. It is called as management tool to analyze the performance of particular organizational unit and compare the variances for taking a strategic decision.

Profit Center accounting

This part of application component is same as the cost center configurations. Here we can plan the profit centers, and compare the data with actual data. The difference between the cost center accounting and profit center accounting, the former one deals with the costs only and the later one deals costs as well as revenues as well. Profit center reporting can be considered as legal valuation also. The sum of all the profit centers reports can be construed as company code legal valuation.

The profit center accounting is a similar functionality of Special purpose ledger. It can be considered as predefined special purposed ledger tool. Before going into the details of Profit Center Accounting, we must set some basic setting requirements.

 Set controlling Area: path: controlling-profit center accounting-basic settings-set controlling area: TC: okks.


Give the controlling area: 2006

Save the data

Also See: What is the difference between SAP Financials and SAP Controlling?

Maintain Controlling area settings

Path: controlling-profit center accounting-basic settings-controlling area settings-maintain controlling area settings: TC: OKE5

1. Standard hierarchy: the name we have to give like in the cost center accounting. It is useful for reporting purpose.

Profit center accounting

2. Elimination of internal business volumes: select this check box to eliminate the business volumes assigned to one or more controlling objects. The transaction among the controlling objects will be eliminated for the purpose of profit center accounting.

3. Give the profit center currency type: as you require from the selection list. If the currency type is as controlling area currency uses the currency of controlling area currency as the profit center currency. Other wise select the group currency as the profit center currency or any other currency as profit center currency.

4. Selection of the check box store transaction currency the system stores the currency values in transaction currency also.

5. Valuation view: this setting will give an understanding that the usage of profit center accounting with in a company code level.

6. Activate the profit center accounting from the fiscal you want. Default year is the controlling area fiscal year.

Save the data.

Also See: To Explain Profit Center Accounting

Online Training Tutorials

  • Accounts Payable Processing in SAPAccounts Payable Processing in SAPThe application component in financial accounting is accounts payable and accounts receivables. The longevity of an organization more or less will depend on their abilities to manage the […]
  • Material Ledger Multiple CurrencyHow to do Material Ledger Multiple Currency?Material Ledger Multiple Currency: The system stores valuation data for a material in its material ledger in up to three currencies. You specify in which currencies the system stores this […]
  • SAP Down Payment ProcessSAP Down Payment Process an OverviewSAP Down payment are treated as special general ledger transactions in sap. The down payment transactions will be stored in the vendor account with special general ledger indicator. The […]
  • General Ledger PlanningWhat is General Ledger Planning in SAP?General Ledger Planning can be done for general ledger wise in financial accounting exclusively. For that purpose we have to define the plan periods for the variant. Path: spro> […]
  • Variant PrincipleWhat is Variant Principle in SAP?The variant principle there is 3 variants. They are 1.fiscal year variant 2.posting period variant3.feild status variant. The first customization is fiscal year variant. The variants […]
  • Product Costing in SAPProduct Costing in SAP OverviewProduct costing is one of the important tools in SAP environment. It explains how to determine the cost of product or a unit. Product Costing is used to know the unit cost of the goods […]
  • Explain the Categories of General Ledger accounts in SAPTax Accounts are exclusively used as tax accounts. The collected tax will be credited into these accounts. While determining these accounts we have to specify the Tax type allowed. […]
  • Special General LedgerWhat is a Special General Ledger Transaction (G/L)?Special GL transactions (G/L) is transactions that are not normal business transactions with your business partners. These are generally shown in different control ledgers and are not […]