In Profit Center Accounting, you can determine internal operating results for profit centers using either the period accounting or cost-of-sales accounting.

With period accounting, the operating result is grouped according to revenue elements and cost elements. The costs for a period are compared to the total expected output (revenues, changes in stock, activated capitalized goods on own account).

With cost-of-sales accounting, only costs incurred for sold services are assigned to revenues. With this approach, the distinction is made between functions (production, administration, distribution) rather than cost elements.

Profit Center Accounting is primarily grouped according to period accounting. A prerequisite for calculating profit in Profit Center Accounting according to cost-of-sales accounting is that cost-of-sales accounting has also been activated in Financial Accounting. If this is the case, the functional area is carried through in the transaction data of both Financial Accounting and Profit Center Accounting. This makes it possible to calculate profit using cost-of-sales accounting. The functional areas do not have to be entered directly. Instead, they can be derived from existing account assignment objects, such as cost centers or orders.

In this scenario, you can calculate profits for your profit centers using cost-of-sales accounting. You display the settings required in the Implementation Guide for cost-of-sales accounting, make a posting to a profit center and create a profitability report grouped according to cost-of-sales accounting for a profit center group.