Profit Center derivation during expense posting

Profit center in SAP represents an internal area of responsibility for which the management is interested in analyzing the costs incurred and revenues earned. A department, a branch, or a product or a product group are a few examples based on which profit centers can be defined in an organization.

 Profit center values are normally not directly assigned in a transaction. For example, consider an expense entry as follows:

Electricity expense – EUR 100 Debit

                        Accounts payable – EUR 100 credit

In this case, profit center is determined based on the cost center assigned to the expense item. As an example, cost center could be a specific department within a branch and profit center could represent the branch itself. 

In cost center master data, profit center is assigned. The same profit center is derived during the posting.

In case, there are two cost objects in the same posting, for example, if above expense item was assigned both internal order and the cost center as cost objects, internal order having higher priority than cost center will be the real cost object for the transaction and profit center maintained in the internal order master data will be derived in the transaction. Cost center is statistical cost object in this case and its profit center is overridden.

Leave a Reply

Your email address will not be published. Required fields are marked *