Assignment of Profit Center and Partner Profit Center (SAP Library

Assignment of Profit Center and Partner Profit Center

Use

The primary objective of Profit Center Accounting is to determine the net profits for each area of responsibility. To achieve this goal, all costs and revenue must be allocated to each profit center.

The assignment of balance sheet items to profit centers enables the extension of the profit center to an investment center and its assumption of responsibility for the tied in assets. This also enables the determination of controlling figures, such as Cash Flow, Working Capital, Return on Investment, and so forth.

Profit center consolidation also requires that costs and revenue and any balance sheet changes stemming from group-internal business transactions be assigned with the partner profit center.

Features

Assigning the Profit Center

Profit Center Accounting reflects the portion of transaction data from transaction applications that is relevant. The profit center is not an independent coding object in the SAP system. Instead, the system derives the profit center from the original, posted coding objects.

You make settings in the Implementation Guide for Profit Center Accounting to achieve this derivation. Two essential settings are mentioned here:

- The assignment of coding objects to profit centers:

You assign all objects that contain profit-related data to a profit center - for example orders, cost centers, controlling areas, etc.

- The selection of additional financial statement accounts as well as the assignment of a default profit center and, if needed, the definition of derivation rules (in the Implementation Guide under Actual Postings):

For example, you could include the balance sheet items for group-internal receivables and payables in Profit Center Accounting and in profit center consolidation.

However, you can transfer these balance sheet items to Profit Center Accounting only periodically, usually at the end of the month. Prior to the transfer, in the G/L application menu you must run the calculation of balance sheet adjustments (General ledger ® Periodic tasks ® Closing ® Transfers ® Balance sheet adjustment: Calculate). Using the relevant FI documents, this program determines which profit centers and partner profit centers are to assume the receivables and payables.

This is illustrated in the following example:

Example

FI Document: Invoice

Account	Profit Center	Partner Profit Center	Amount
Customer / receivable			1000.00
Revenues	A	C	700.00-
Revenues	B	C	300.00-

The FI document divides the revenues by profit centers; however, the customer or reconciliation account Receivables is not divided up.

The FI program passes on the revenue allocation to the receivable.

Calculation of the Adjustment

Account	Profit center	Partner Profit Center	Amount
Receivable	A	C	700.00
Receivable	B	C	300.00

However, instead of in G/L, you post the adjustment in the application menu of Profit Center Accounting (Actual posting ® Period closing ® Transfer receiv. / payables). The system only posts in Profit Center Accounting - no FI documents are created.

Posting the Adjustment

Account	Profit Center	Partner Profit Center	Amount
Receivable			1000.00-
Receivable	A	C	700.00
Receivable	B	C	300.00

Note

For more information about profit center determination and assignments, see the documentation on Profit Center Accounting in the SAP Library, specifically the following sections:

Basic Functions ® Profit Center Allocations

Actual Postings ® Transfer of Actual Data

Actual Postings ® Balance Sheet Items in Profit Center Accounting

Derivation of the Partner Profit Center

Automatic "Cross-diagonal" Derivation

In material acquisition and sales, the system is able to derive the partner profit center automatically if the supplying or receiving partner uses the corresponding SAP applications on the same system and the same client.

- In the goods issue document the system assigns the partner profit center, which it derives from the purchase order.

- In the goods received document the system assigns the partner profit center, which it derives from the delivery data.

You activate this derivation in the Implementation Guide for Profit Center Accounting, section Preparation for Consolidation ® Reread Purchase Orders/Sales Orders, where you identify the trading partners in your SAP system.

Note

For more information, see the Profit Center Accounting documentation in the SAP Library, section Preparation for Consolidation.

Using Derivation Rules

If the partner assignment cannot be derived automatically because of different systems or clients, you can use derivation rules to determine the partner profit center. You can have the partner profit center be determined from the vendor number, customer number, material number, partner company, sender profit center, or from a combination of these assignments.

You define these rules in the Implementation Guide for Profit Center Accounting in section Preparation for Consolidation ® Derive Partner Profit Centers in Purchasing and Sales.

Note

For more information, see the Profit Center Accounting documentation in the SAP Library, section Preparation for Consolidation.

Transfer from Non-SAP Feeder Systems

If you do not use the SAP components Materials Management and Sales, you must transfer the partner profit centers from the non-SAP feeder systems to SAP Financial Accounting.