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SAP Profit Center Accounting

SAP profit center accounting allows organizations to track profitability and balance sheet information according to their organizational structure. Profit centers can represent divisions, product lines, locations, or other business units. This helps management review performance and control costs within different areas of responsibility. The SAP system automatically routes accounting information to the appropriate profit centers when profit center accounting is activated for a controlling area. Key fields for profit center setup include the dummy profit center, standard hierarchy, and transaction currency storage.

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Vinoth Kumar Peethambaram
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512 views5 pages

SAP Profit Center Accounting

SAP profit center accounting allows organizations to track profitability and balance sheet information according to their organizational structure. Profit centers can represent divisions, product lines, locations, or other business units. This helps management review performance and control costs within different areas of responsibility. The SAP system automatically routes accounting information to the appropriate profit centers when profit center accounting is activated for a controlling area. Key fields for profit center setup include the dummy profit center, standard hierarchy, and transaction currency storage.

Uploaded by

Vinoth Kumar Peethambaram
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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SAP Profit Center Accounting

SAP Profit center accounting provides the information of an organization’s profit and
loss. The method which can be utilized for profit center accounting is period
accounting. Profit centers can be set-up to identify product lines, divisions,
geographical regions, offices, production sites or by functions. Profit centers are used
for internal control purposes enabling management the ability to review areas of
responsibility within their organization. The difference between a cost center and
profit center is that the cost center represents individual costs incurred during a given
period.

The SAP profit center accounting allows an organization to route all profitability and
balance sheet related information to a profit center. It helps to meet profitability
reporting requirements that do not align with your company code structure. As you
activate profit center accounting for each of your controlling areas, all assigned
company codes are automatically associated with the ledger. Thus, there is no
necessity of manual maintenance.

There are some key fields:

 Dummy profit center: The dummy profit center is the default profit center for
entire controlling are. All SAP cost objects are routed through the dummy
profit center. There can be only one dummy profit center per controlling area.
 Standard Hierarchy: The standard hierarchy can plays major role in SAP
controlling area. Once you have created profit centers that should be assigned
to standard hierarchy. Once you assigned profit center to standard hierarchy,
the name cannot be changed.
 Store transaction currency: If you want to maintain separate transaction
currency in SAP profit center accounting, you have to select this field. It can
be important for reporting.
SAP BASIS – Production Support and
Comprehensive Activities for Landscape
Management
At ArchitectSAP, our SAP BASIS team will manage your SAP landscape completely,
so that you can focus on higher priority matters.

Our SAP BASIS team is performing comprehensive activities:

 SAP BPM Automation – Accounts


Payable (AP Process)
At ArchitectSAP, we are automating core business processes and paper-based manual
processes:
1. Workflow automation across users and departments
2. Paperless process: The paper documents are scanned and uploaded into the
workflow
3. Fetch data from SAP ECC, SRM, CRM, HR and non-SAP systems
4. Email notifications to the user to take actions
5. Auditing and traceability of approvals by line managers
Our team has automated the Account Payable Process for Approval Automation
and Paperless processing:

Here is the current process for Accounts Payable Processing:

The Business Process flow is as follows:

Here is the Solution implemented using SAP BPM:


Accounts Payable Process – Approvals through
iPhone/iPad/Android/BlackBerry smartphones:

Integration of material management


(SAP MM) with SAP PP
SAP MM based Materials Management has an important role in most organizations
due to the high investments in inventory. The proper management of the material will
give the results of reduced investment. SAP MM has a deep integration with SAP PP
for manufacturing organizations. In this article, we describe the major areas of SAP
MM integration with SAP PP.
Key Points of SAP MM and SAP PP integration are:

 Bill of Materials (BOM)


 Material Requirement Planning for External Procurement (MRP)
 Stocks Determination

At architectSAP, we are providing SAP MM and SAP PP expertise for our


manufacturing customers that need the close integration between production and
inventory management.

Bill of Materials (BOM)

Bill of Material is the list of materials to produce a unit of the finished goods. Once
we define the BOM for the Header material (such as the finished good), we can get
the exact requirement for the quantity of inventory. Here, the correctness of BOM is
very important. Additionally, we can estimate the cost of the header material for
pricing/procurement/profitability purposes.

Actual cost of Header Material = Cost of Inventory + Production Cost (Machine cost
+ Labor Cost)

Material Requirement Planning (MRP)

Once we maintain the MRP views (MRP I, MRP II, MRP III) in Material Master, we
can generate the automatic reservation and Purchase Requisition after running the
MRP. MRP depends upon the lead time, safety stock, reorder point, procurement
type, special procurement, lot sizing and delivery time for materials. We can run the
MRP as a background job for automatic creation of PR and Reservations. MRP is
applicable for both in-house as well as external material procurement.

Stock Determination

Stock determination enables you to implement various strategies to withdraw


materials for goods issues and stock transfers based on the material requirements
entered. The system determines how and when the material should be withdrawn, and
from which storage locations and stocks.

Based on the stock determination strategy, the system makes decisions on material
withdrawal depending on the material, plant and the business process.

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