A profit center is an organizational unit created for internal control. It’s created to evaluate the success of an independent area that is responsible for costs & revenues within a company.
A profit center can be used in many companies (relationship 1:N).
1. What the profit center can represent #
Profit centers reflect a management-oriented structure of the organization that divides the enterprise into areas of internal responsibility for profits. This structure could represent:
- Units within the company (such as different plants).
- Lines of business.
- Products that the company produces and sells. (a product-related profit center structure)
- Geographical locations.
2. Organizational units related #
Profit center group.
A profit center group is a hierarchical structure of profit centers or profit center groups. They are mainly used for reporting, to get the financial statements of the top level profit center group or other hierarchy levels.
Segment.
A segment is a division of the company that generates revenues and expenses, whose results are regularly inspected to make decissions. Read segment documentation for more detail.
3. How profit center ends in the accounting document #
Profit centers can be derived from:
- The CO objects that affect income (cost center, internal order, …. )
- Sales orders & purchase orders
- Master data: Materials, assets…
Profit centers can be entered manually when posting provisions.
4. FI Statements at profit center level #
If you need the FI Statement at the profit center level, first you have to activate document splitting.
5. Example – Create a profit center #
You can use SPRO and go to “Enterprise Structure” to define a profit center, or use Fiori app. You can create one from scratch or copy a similar profit center:
6. Related transactions and apps #
Fiori app: Manage Profit Centers.
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