SAP Cost center Accounting are used to track where cost occur in the organization. As costs are incurred, they are assigned or posted to the appropriate cost center. The posting and assignment of costs to cost centers is a critical step in using the CO module.
SAP Cost center are organized in a Standard Hierarchy. The SAP Cost Center Standard Hierarchy is used to structure the cost centers in an organization. All cost centers must be entered in the Standard Hierarchy.
SAP Cost center is the area of responsibility where costs are incurred. Cost center represents one of the small units of responsibility within an organization structure. In cost center accounting, operational expenses are captured by three separate master data objects such as cost centers,
SAP Cost Center Accounting Step By Step
To display the standard hierarchy follow the menu path:
Accounting ->Controlling ->Cost Center Accounting ->Master data ->Standard Hierarchy ->Display
Then enter the controlling area code and hit “enter” button.
The following screen will be appeared
Simple example of cost centers is distribution of rental fee to several cost centers in G/L
The important functionalities within cost center accounting are as the ability to process, allocate quickly through the assessment and distributions. As standard hierarchy plays important role, so all cost centers must be assigned to one standard hierarchy.
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