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Difference between cost and profit centre

Financials (FI, CO, TR, EC)

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Difference between cost and profit centre

Postby XXX420 » Thu Jun 10, 2004 12:08 am

What is the difference between cost and profit centre? I noticed that when entering line items into standard documents (like F-43) if I enter a proft center and leave the cost center blank and then park the document the next time I go back into the document the cost center is populated with the same as the profit centre. Is this normal or is there some parameter set up to do this? I directed this inquiry to the SAP helpdesk at my company, but I got the runaround and my question left unanswered.

Profit Center & Cost Center

Postby sree 2004 » Thu Jun 10, 2004 12:42 am


Both are in controlling Module only.
Cost Center is overhead cost management. You could see the where cost is incurred excatly.

In Profit Center You could see P&L a/cs and Balance Seet also. regional wise or geographical wise also.

We could not maintain in the Cost Centers.

Please check in Profit center Master a/c. You must have assigned.

Thatis why its updating the both profitcenter & costcenter.

I hope it will give a clear pitcture.

sree 2004

Postby Guest » Thu Jun 10, 2004 4:25 am

Imagine an earning member (EM) and a non-earning member (NEM) in a 2-member family.

EM has income and costs. EM is responsible for income and savings (net of expenses). NEM has only costs. In short EM is akin to profit center and NEM is akin to cost center

Postby SAP Learner » Thu Jun 10, 2004 7:46 am

I am trying to replicate your situation when you do F-43 and parking it. Do the accounts you are using use cost elements? if so, wouldn't it require an assignment to a CO object (which a profit center isn't)? So far, the only way i have been able to replicate it is by creating an account assignment (maybe a substitution will work too) for a particular gl account. you can use transaction OKB9 to see if the gl account you used has an account assignment.

My contribution to the costs center/profit center difference discussion is that profit center postings are statistical only :)
SAP Learner

Postby Guest » Thu Jun 10, 2004 9:04 am

Profit centres may consist of any number of cost centres which can then be used to calculate sales, costs etc for eg certain products or regions.
Cost centres do not have to be attached to profit centres which are used more statistical purposes.


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