Integration of Profit Center Planning
Profit center planning forms part of corporate planning. For this reason, planning integration and reconciliation are particularly important. In the following topic, you will find information about the:
Short-Term Corporate Planning
Profit center planning is a part of short-term corporate planning and thus encompasses as span of one fiscal year. Short-term corporate planning generally consists of the following partial plans:
The planning process combines these individual planning areas into an integrated planning network. You can use different
Plan Versions to reflect changes during the planning process or different planning scenarios at the same time. The integration of content and time-frames in planning is generally influenced by the following considerations.Sales Plan
The starting point for short-term planning is the sales plan, in which you determine the quantities you expect to sell during the planning period. The sales plan is usually created by the sales department. The planned sales quantities are then passed on to production planning so that the planned capacities and activities can be coordinated.
Master Production Plan
The master production plan is worked out in close coordination with the sales plan. It determines both the capacities and the quantity requirements for raw materials and operating supplies. The planned activities established here are forwarded to the cost centers, which must supply these capacities in the form of activity units. Furthermore, the cost center managers must plan the costs to be incurred and the activity quantities to be taken from other cost centers based on the planned capacities and activities.
Cost Plan (Cost Center Plan)
Once the activity units have been planned, it is necessary to plan the costs expected for these activities. Cost center planning can thus be divided into two stages:
Together with sales planning, cost planning forms the basis for revenue and profit planning.
Sales and Profit Plan
The planned costs and sales quantities can then be used to derived planned contribution margins. The costs from cost center planning and the planned sales quantities (valuated based on the expected revenue) are used in sales revenue planning.
Profit center planning represents these planned profits by area of responsibility.
Medium-Term Corporate Planning
You can use profit center planning to create a medium-term rough plan when you do not have a detailed plan. For example, if you have already created a detailed plan for the fiscal year 1998, you can use these values as a basis for your 1999 plan, adding a revaluation factor to these values.
Integrated Profit Center Plan
The planning of profit centers is performed in two stages:
Plan data can currently be transferred from the following applications:
The data is planned for these objects and then transferred to Profit Center Accounting. Here the integrated nature of profit center planning takes on great importance, since it summarizes the individual sub-plans under the aspect of profits for areas of responsibility. Plan data is transferred either
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periodicallywhereby all existing plan data from the above applications is transferred per controlling area and plan version
or
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onlinewhereby the following plan activities are transferred online:
Plan data is represented on profit centers by fiscal year, period, company code and plan version.
Planning can be carried out directly on profit centers within Profit Center Accounting.
The following planning functions are available: