Profit process documentation for controlling.ppt
- 2. Course Objectives Understand the functions in Profit Center Accounting. Explain Profitability management in SAP. Understand and maintain CO-PCA master data. Identify the source of actual values. Execute planning. Use the CO-PCA information system.
- 3. Overview Profitability Management Table of contents Planning Master Data Transfer Prices Actual Data Information System
- 4. PCA Overview Profit center accounting, in conjunction with transfer pricing, enables:- Structuring of the A Group according to Strategic Business Units (SBUs), leading to:Full Income Statements according to lines of business (Product Groups rolled up to SBU/Sectors) Selected reporting of Balance Sheet items by Product Group/SBU and Sector (e.g. Payables/Receivables, Fixed Assets. Inventories). The ability to reflect material movements between SBUs at commercial prices rather than cost
- 5. Accounting Methods Period Accounting Cost-of-Sales Accounting Values Gross Sales Net Sales Variances Ratios Return on Investment Margins Economic Profit Cash Flow Contribution Margin Terms used in Profitability Management
- 7. Aspects of Profitability Management Revenue 2000 Discounts 100 COGS 230 Contr. Margin 1440 Revenue 2000 Salaries 468 Materials 230 Profit Telecom Pharma Ethylene Power Advertising 250 Profitability Analysis By Market segment (Market oriented) Responsibility Accounting (Company oriented) Profit Centers PCA PA Segments External Market Profitability
- 8. Aspects of Profitability Management Characteristics CO-PA costing-based EC-PCA profit center Enterprise controlling Aims of profitability accounting Key figures Calculation of profits Reconciliation with FI profit-related key figures posted and imputed values Sales and profitability controlling period accounting and cost-of sales methods cost-of-sales method profit-rel. key fig. balance sheet fig. posted values
- 9. Typical Questions in Profit Center Acctng. What is the operating profit for a profit center? What asset value is attributed to A profit center? Which responsibility areas Exceeded their plan for last month? What goods and services are exchanged within The corporation? Return on capital Cost management Management of internal sales & services Contribution of organizational unit
- 10. EC-PCA lets you calculate internal operating results for profit centers. A profit center represents an organizational subunit that operates independently on the market and bears responsibility for its own costs and revenues. You organize your organization into profit centers by assigning the master data of each profit- relevant objects (materials, cost centers, orders, projects, sales orders, assets and cost objects) to a profit center. All the business transactions in the R/3 System which are relevant for cost and profits are updated in the profit centers at the same time they are processed in the original module, and organized according to cost and revenue elements. This transforms all the flows of goods and services within the company into exchanges of goods and services between profit centers. This profit center structure applies for both actual postings and profit center plan data. It is also possible to treat a profit center as an investment center. In addition to the flows of goods and services, you can transfer selected balance sheet line items (fixed assets, payables and receivables, material stocks, and work in process) to profit centers on a periodic basis. This makes it possible to calculate such key figures as profit on sales, return on investments and cash flow. Responsibility Accounting
- 11. Company 3 A2 Ltd Group Company 1 A Ltd Company 2 A1 Ltd Profit Center 1 Profit Center 2 You use valuation views to represent different ways of viewing business transactions in a company. Legal view (Individual enterprise) – For transactions between company codes. Group view – For a consolidated view of the corporation. Profit center view – For business transactions between profit centers. Legal Profit Center A Group Valuation Views
- 12. Parallel Currencies in Profit Center Acctn. Profit Center Accounting EC EC- - PCA PCA Transaction Company Special Code EC - PCA Currency Currency Currency
- 13. Master Data
- 14. Organizational Units & Master Data A1 Ltd 9200 A Ltd 9100 HQ 1000 Cost Centers Purchasing 13… Gen Services 14… Company Codes Orders Cost Objects Sales and Marketing 15… R & T 16… Other Cost Objects Operating Concern Controlling Area A Grp Operating Concern (9100) A Grp Controlling Area (9100) Ethylene Propylene Pharma Polyolefins Power Teleco mmuni cation Inform ation techno logy Corporate common Profit Centers
- 15. Master Data in Profit Center Accounting Profit Centers Profit Center Groups Accounts P&L, Balance Sheet Items Statistical key figures
- 16. Master Data - Profit Center (1) Profit Center Organizational unit in Accounting that reflects a management-oriented structure of the organization for the purpose of internal control. Profit Center groups are collections of Profit centers with similar characteristics. In the case of A Grp this structure is by Product Group.
- 17. Address / Communications Data Basic data Company Code Assignment Master Data – Profit Center (2) Validity Period Profit Center
- 18. Address / Communications Data Basic data Indicators: Dummy Profit Center Master Data – Dummy Profit Center Validity Period Dummy Profit Center
- 19. 9 Controlling Controlling Revenue elements 1 2 3 Assets 4 Liabilities Equity Financial Accounting Financial Accounting Expense accounts 8 Revenue Profit Center Accounting Profit Center Accounting 1 Current financial assets and short- term capital 2 Non- opera- ting costs, revenue 3 Material inventory Accounts in PCA A Grp Chart of Accounts Primary cost elements Secondary cost elements 4 8
- 20. Master Data Groups Profit center Chemicals Ethylene Propylene Benzene
- 21. Cost center Cost center Internal order Internal order Sales order Material Profitability Profitability Segment Segment Asset Production order Profit Profit Center Center Profit Center Assignments
- 22. Monitoring Assignments Materials Materials Cost Centers Cost Centers Orders Orders Material fast assignment Profit centers without cost centers Objects per profit center Not assigned Check Assignments for: Check Assignments for: Profit Center
- 23. Transfer Price
- 24. Definition of a Transfer Price A transfer price is a price used to valuate the transfer of goods and services between independent organizational units.
- 25. Enterprise Controlling Legal View – that of independent legal companies Group View – that of the organization as a whole Profit center view - that of the decentralized responsibility areas
- 26. Transfer Prices in SAP Controlling area (Corporate Group) CO CO Transfer price from the group viewpoint = group production costs Transfer price from the profit center viewpoint = management price Transfer price from the legal viewpoint = sales and purchase price
- 27. Assumed Plan = Actual => No Variances Company code 9100 A3 Ltd PrCtr1 PrCtr2 +5 L 80 G 80 P 85 L 80 G 80 P 85 G 70 L 70 P 70 Company code 9300 A Ltd Company code 9200 A1 Ltd PrCtr2 85 CCtr 20 L 120 G 100 P 120 L 120 G 100 P 120 100 PrCtr3 P 220 G 100 L 220 220 220 Transfer Pricing CCtr 10 Ethylene Butene-1 Polyethylene Polyethylene Butene-1 L 100 P 85 G 70 L 70 P 70 PrCtr3 G 100
- 28. Transfer prices in PCA Profit Center 1 Profit Center 2 PCA Quantity flow Parallel value flows 120 Material Production order Logistics FI/CO Transfer price 120
- 29. Planning
- 30. Profit Center Planning Objectives Plan Integration Planning Methods Plan Data Transfer
- 31. Plan Integration Sales 100,000 Discounts 5,000 Cost of Sales 50,000 Marketing Expenses 10,000 Admin. Expenses 15,000 Number of Sales Orders 1,000 …. Profit Center Plan Profit Center Plan Cost Center Internal Order Production Order MS Excel
- 32. Planning methods in PCA Plan Allocations New Plan Final Plan Plan data transfer Manual entry Copy existing data Excel-Upload
- 33. Plan Profit Center Revenue 100,000 Marketing 50,000 Admin 10,000 …. …. Cost Center Internal / On-line Plan Data Transfer AND/OR Subsequent Postings Plan Data Transfer CO Production Order
- 34. Actual Data
- 35. Actual Values Overview Flow of Actual values in Profit Center Accounting Overview Flow from Profit and Loss accounts • Flow from materials management • Flow from sales and distribution Flow from Balance Sheet items – Period end closing • Flow from Asset Management • Transfer of Material Stock • Transfer of Work In Process • Flow from Accounts payable and receivable Flow from controlling – Period end closing • Flow from Overhead Cost Management • Profit Center Document Entry • Assessment & Distribution
- 36. Actual Values Overview Flow of Actual Values in Profit Center Accounting Overview
- 37. FI FI CO CO- - PC PC CO CO- - PA PA CO CO- - OM OM Overview of Value Flow in PCA E E V V A A L L U U F F L L O O W W EC EC- - PCA PCA Production Goods Sales/Billing Procurement MM MM PP PP MM MM E Profit Center Accounting Movement Primary Costs SD SD
- 38. Actual Values Overview Flow of Actual Values in Profit Center Accounting Flow from Profit and Loss accounts • Flow from materials management • Flow from sales and distribution
- 39. Material/Plant of Sales Order Substitution Material/Plant of Purchase Order Material/Plant Indirect /Manual Assignment Customized Automatic Account Assignment Invoice Receipt Invoice Receipt Goods Movement Goods Movement Direct Posting from Direct Posting from FI FI Other Other P&L Accounts P&L Accounts Source Transaction Billing Document Billing Document Determination of Profit Centers in P&L Profit center
- 40. Material Expense 400000 Raw Materials 119400 500 500 500 Material Expense 500 Flow from materials management (1) Material Expense 400000 FI FI CO-PC EC-PCA
- 41. FI FI Finished Products 119430 450 450 450 M. Expense 500 Production Output - 450 Production Output 462001 Flow from materials management (2) Production Output 462001 CO-PC EC-PCA
- 42. 6,028.50- Cost of Goods Sold 462002 Inventory - Finished Product (FG) 119430 6,028.50 Flow from sales and distribution (1) Stock Change Stock FI FI EC-PCA
- 43. Flow from sales and distribution (2) Receivables … 10,000 Sales 810000 10,000 FI FI Sales 810000 10,000 EC EC- - PCA PCA
- 44. Actual Values Overview Flow of Actual Values in Profit Center Accounting Flow from Balance Sheet items – Period end closing • Flow from Asset Management • Transfer of Material Stock • Transfer of Work In Process • Flow from Accounts payable and receivable
- 45. Determination of Profit Center for B/Sheet The system determines the profit center to which balance sheet accounts are assigned as follows : Receivables are divided according to the corresponding revenue line items and assigned to the profit centers. Payables are posted to the profit center of the material ordered for purchases orders to stock, and to that of the account assignment for purchase orders to account assignment objects. The assignment of material stocks and assets is based on the assignment made in the master record of a material. Because postings for down payments do not reference an invoice, it is not possible to automatically assign the down payment to profit centers. However, you can assign them manually.
- 46. Flow from Asset management Online Transfer: Assets are assigned to profit centers indirectly via their assignment to an internal order or cost center.
- 47. Flow of value in AP and AR Before you can transfer payables and receivables, you first need to calculate the payables and receivables to be split in Financial Accounting. In this step, the payables and receivables are broken down according to profit center based on sales order line item assignments. Within PCA you can transfer the data to Profit Center Accounting. Select the desired company codes and choose the periods you want to transfer. The payables and receivables are posted to Profit Center Accounting in the reconciliation accounts in the general ledger. No Financial Accounting documents are created in the process. If you choose line items, the system creates a line item for each customer and vendor in Profit Center Accounting.
- 48. Actual Values Overview Flow of Actual Values in Profit Center Accounting Flow from controlling – Period end closing • Flow from Overhead Cost Management • Profit Center Document Entry • Assessment & Distribution
- 49. Transfer from Controlling (1) All primary postings to account assignment objects in Controlling are posted to profit centers using the same cost element. For allocations in cost accounting (distribution, assessment, cost allocation, transfers, order settlement, calculation of overhead), the following records are updated in Profit Center Accounting: The profit center of the crediting account assignment object is “credited” using the same cost element, and the profit center of the object to be debited is used as the partner profit center. In addition, the profit center of the “receiver” is debited using the same cost element, and the profit center of the sender is used as the partner profit center.
- 50. Transfer from Controlling (2) All the secondary transfers between CO objects are selected and represented in the assigned profit centers. You can represent the data in Profit Center Accounting by reflecting the original document directly. The exchange of services between profit centers is represented as internal cost allocations in CO. If elimination of internal business volume is active, as in A Group, Profit Center Accounting only reflects those services which are provided by one profit center for another one or between different controlling object type (e.g. cost center and internal order)
- 51. Assessment In case you cannot assign the final cost centers or materials to one profit center, you can collect the data in an allocation Profit center and then assess it in Profit Center Accounting. We only assess postings to P&L accounts since for allocation of Balance Sheet accounts we use distribution. When you define assessment (XXGA1A - Assess Other PC to Product PCs), you collect all the sender-receiver relationships in segments. You then store these segments in different cycles, which are stored with a time reference. Note that for technical reasons, a cycle is always defined for one company code. You can create more than one cycle for a company code if allocation or performance aspects make this necessary. The cycles will be processed in sequence.
- 53. Line Item Reports Profit Center Report Interactive Reporting List- oriented Reports Information System Overview
- 54. Report Output Types Interactive Reporting Variable output areas Navigation tree / drag & drop Cumulative display functionality List – Oriented Reports Interface Report-to-Report Printing options Integration with MS Office
Editor's Notes
- #5: The period accounting approach distinguishes between individual cost and revenue elements (such as material costs). The total costs for the period are compared with the total operating output for the period. The output of products manufactured within the period but not yet sold (stock increases), are added to the sales revenues, and the costs of the products produced in past periods but sold in this period (stock decreases), are taken away. Together with additional capitalized internal activities and other revenues, this yields the total operating output for the period. In the cost-of-sales accounting approach there is no differentiation according to cost elements. Here the sales revenues are compared with the manufacturing costs for the products sold (cost of sale). The manufacturing costs may include material and personnel costs, which were incurred in previous periods. Costs which cannot be directly assigned to the sale, such as sales and administration costs, are displayed separately. The cost-of-sales procedure therefore also indicates whereabouts in the company costs were incurred. Profit Center Accounting supports a representation of profits according to both cost-of-sales accounting and period accounting. The profitability approach takes place on a period for period basis in an account-based representation (using accounts). By assigning balance sheet items, you also have the possibility of displaying additional success key figures (return on investment, profit-sales ratio, etc.).
- #7: Profitability Reporting: Profitability Analysis (CO-PA) lets you analyze the profitability of segments of your external market. These segments can be defined according to products, customers, countries, and numerous other characteristics, as well as your internal organizational units such as company codes (i.e. 9100) or distribution channels (I.e. direct, wholesale, e-Commerce). The aim is to provide your executive management, sales, marketing, planning, and other groups in your organization with decision-support from a market-oriented viewpoint. Responsibility Reporting: EC-PCA lets you analyze internal profit and loss for profit centers. This makes it possible for you to evaluate different areas or units within your company. You can structure profit centers according to region (branch offices, plants), function (production, sales), or product (product groups, as in A Grp). Profit Center Accounting is a component of the "Enterprise Controlling" module.
- #9: A profit center is a management-oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as "companies within the company". EC-PCA lets you set up your profit centers according to product (product lines, divisions), geographical areas (regions, offices or production sites) or function (production, sales).
- #10: The period accounting approach distinguishes between individual cost and revenue elements (such as material costs). The total costs for the period are compared with the total operating output for the period. The output of products manufactured within the period but not yet sold (stock increases), are added to the sales revenues, and the costs of the products produced in past periods but sold in this period (stock decreases), are taken away. Together with additional capitalized internal activities and other revenues, this yields the total operating output for the period. In the cost-of-sales accounting approach there is no differentiation according to cost elements. Here the sales revenues are compared with the manufacturing costs for the products sold (cost of sale). The manufacturing costs may include material and personnel costs, which were incurred in previous periods. Costs which cannot be directly assigned to the sale, such as sales and administration costs, are displayed separately. The cost-of-sales procedure therefore also indicates whereabouts in the company costs were incurred. Profit Center Accounting supports a representation of profits according to both cost-of-sales accounting and period accounting. The profitability approach takes place on a period for period basis in an account-based representation (using accounts). By assigning balance sheet items, you also have the possibility of displaying additional success key figures (return on investment, profit-sales ratio, etc.).
- #11: In Profit Center Accounting this field controls whether data is to be managed from a legal view, group view or profit center view. In the legal view goods movements are posted between profit centers at the sales price which was agreed between internal trading partners who produce a balance sheet/profit and loss statement independently. In the group view the goods movements are posted at the group production cost price which is used for clearing within a group without transfer price surcharges. In the profit center view goods movements are posted between profit centers at negotiated transfer prices which are used for internal profit determination and corporate management.
- #12: Amount in transaction currency (coming from a posting document, i.e. USD) Amount in company code currency (i.e. CCod. 9100 A Ltd – INR) Amount in profit center local currency (EUR – Profit Center Valuation View) You can select the currency of the controlling area, the group currency or any special profit center currency as your report currency. Note: In the standard reports for Profit Center Accounting, the values are displayed in the profit center report currency.
- #15: Data that is stored in the database for long periods of time is referred to as master data This permanent (yet changeable) data is created for: Profit centers, cost elements, accounts and statistical key figures Accurate master data reduces: Creation time for controlling documents Amount of errors in the controlling process
- #16: A profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control. You can analyze operating results for profit centers using the period accounting approach By calculating the fixed capital as well, you can use your profit centers as investment centers.
- #17: A profit center is assigned to a controlling area. When creating a profit center, you enter the name of the profit center and the period of validity. Profit center master data is time-based; therefore, you can create different data for different periods of time.You can copy the master data information from an existing profit center. You maintain the important master data on the basic screen, such as the profit center name and description, the person in charge, and the department. The Profit center group field defines the assignment to the standard hierarchy. You can enter more information for the profit center on additional screens, such as address and communication data and long text about your profit center. By default, a profit center is assigned to all company codes assigned to the controlling area. You can deselect certain company codes for a profit center by choosing Company codes. This setting is also used by functions in Consolidation (EC-CS) in order to create consolidation units.
- #18: In practice you may inadvertently forget to assign a particular controlling object or material to a profit center. In such case if costs or sales are posted to this object, the corresponding data is posted to the dummy profit center in Profit Center Accounting. This ensures that reconciliation between EC-PCA and Financial Accounting is still possible in such instances. You can also discover missing assignments by analyzing the postings to the dummy profit center what should be done during end-period procedure.
- #19: The transaction data in Profit Center Accounting is stored in the accounts contained in the controlling area chart of accounts. These accounts include: Those from Financial Accounting which are used in Controlling (revenue and primary cost elements) Accounts which occur only in Controlling (secondary cost elements) Accounts from FI which are not used in Controlling (payables/receivables, material stocks, work in process, and so on) You can maintain revenue and cost elements directly in Profit Center Accounting. As with profit centers, you can define any number of hierarchical structures of accounts for use in the information system, allocations, and planning. These structures, called account groups, are maintained in the same way as profit center groups. Unlike profit centers, however, a standard hierarchy of accounts is not required. Account groups are valid only in Profit Center Accounting. If you want to use the same balance sheet account groups used in Financial Accounting, you can copy these groups into Profit Center Accounting.
- #20: A profit center group is an alternative hierarchy to the standard hierarchy. These are useful in the information system, for allocations, and for planning. In addition to the standard hierarchy for your controlling area, you can also create alternative profit center hierarchies -- so-called "profit center groups" -- for use in the information system, allocations and planning. In contrast to the standard hierarchy, these profit center groups do not have to contain all the profit centers in the controlling area. On the contrary, profit center groups let you select only certain profit centers and reorganize them to allow you more flexibility. You can define any number of hierarchical structures of accounts for use in the information system, allocations and planning. These structures are called "account groups". You can create new account groups as well as display or change existing ones.
- #21: By assigning all the objects which incur costs or revenues in your system to profit centers, you determine how your company is to be divided into profit centers. These assignments also make it possible to display selected balance sheet items. All relevant account assignment objects are assigned to the respective profit centers using Customizing functions. These assignments mean that it is not necessary to post data explicitly to profit centers each time. Instead, it is posted automatically in Profit Center Accounting when it is posted to the original object. Generally, revenue and goods input are transferred to Profit Center Accounting based on the assignment of sales order items (derived from material master), direct costs based on the assignment of production orders and cost objects, and overhead costs based on the assignment of the account assignment objects in Overhead Management (cost centers, internal orders, and so on). Materials are always assigned at the plant level. You can assign materials directly in the material master or using the fast assignment function. Material master maintenance is divided into several views. If you have already created the ‘Sales: plant data’ view, you can enter the profit center there. If this view is not created (for example, with raw materials), you can maintain the profit center in the ‘Costing 1 view’ and after that it will be copied to other views (advisable). Assets are not assigned directly, but via appropriate cost center from their master data.
- #22: The assignment monitor (1KE4) provides you with an overview of all the assignments you have made to profit centers and supports you when you make or change assignments. For example, you can call up a list of cost centers which have not been assigned to a profit center or those cost centers which are assigned to a particular profit center or profit center group. When you display the list online, you can jump from there directly to the transaction for changing the object. That way you can make any missing assignments or correct any incorrect ones. The menu Material also contains the option Fast assignment, which lets you assign a large number of materials to a profit center quickly. Note: Incorrect assignments lead to incorrect transaction data in Profit Center Accounting. This is normally quite difficult to correct. Therefore check assignments to profit centers very carefully.
- #24: Transfer prices are maintained as conditions. You should take into consideration the price from material master stored in ‘Group currency, profit center valuation’ field in Accounting 1 view. Currently transfer pricing has only been realized in R/3 for goods movements. The transfer of goods and services between profit centers should be conducted at a set transfer price. Transfer prices have to be maintained for materials of the pipeline material type (I.e. electricity). Prices are required for creation of cost estimates for Profit Center Valuation View .
- #25: The way profits are shown might look entirely different depending on your viewpoint on the organization. When you analyze the organization as a whole, you do not see the individual companies within the group, but rather only the group itself as one company. For the individual companies, on the other hand, only the results of the company are relevant. Managers of profit centers, meanwhile, only want to look at their individual profit center as if it were an independent company.
- #26: For the purpose of parallel valuation, the corporate group is represented by the controlling area. The transfer prices from the group view result from a group cost estimate. In the profit center view, transfer prices are the prices negotiated by the managers for goods and services. The legal view is the viewpoint of the individual company, represented by the company code. The transfer prices for this view are the sales and purchase prices.
- #27: From the viewpoint of the profit centers involved, the goods transfer from profit center 1 to profit center 2 appears as a sale valuated with a special price defined in PCA. The goods withdrawal from profit center 2 for an order in profit center 3 is a sale from both the profit center viewpoint and the legal viewpoint, and is valuated separately using the appropriate PCA price and legal price. The same applies to the stock transfer to profit center 3 at the end. If your organize decides to use transfer prices from the profit center viewpoint, you can calculate special managerial prices for all goods movements between profit centers. This transfer price is a negotiated price between profit centers. It may be oriented on the market price, or it may be determined as a markup on the cost of goods manufactured as seen from the group view or legal view. These markups can depend on a number of factors, such as the profit centers involved, the product, plant, date, and so on. Material flow: Ethylene -> Butene 1 -> Polyethylene -> Polyethylene
- #28: You can define transfer prices (markup) for goods movements between profit centers. The markup will be added to the material price stored in Profit Center Valuation View.
- #31: 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: Sales plan Master production schedule Cost plan Sales revenue plan 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. Cost Plan (Cost Center Plan) Once the activity units have been planned, it is necessary to plan the costs expected for these activities. 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.
- #32: The planning process is not a one-time activity, but rather an iterative process, which is usually performed in several steps. You need to pay special attention to the sequence in which the planning activities are carried out, and which planning areas need to be coordinated with one another. The overall planning process therefore needs to be supported by a number of different planning methods. Profit center planning offers you the following methods of planning: Copying existing plan or actual data to a plan Posting plan data simultaneously (online) by transaction from other applications Manual planning of profit centers Assessment and distribution of data between profit centers (separate cycles per company code) Execution of various plan reports for comparison of different plan versions.
- #33: It is possible to transfer plan data real-time from cost centers and internal orders to Profit Center Accounting for each activity. The system reflects every planning activity in Profit Center Accounting. This lets you observe the progress of your profit center plan. If you do not transfer plan data for CO objects to Profit Center Accounting online, you can post this data en bloc, for single objects or for a single plan version and fiscal year . Planned overhead (planned primary costs, results analysis, distribution, planned secondary costs, assessment, and so on) is posted to profit centers via the assignment of cost centers and internal orders. Production costs are planned on CO production orders (order type CP03) on the product level of detail. If there is no average data per year you have to plan these costs on separate orders per period. This process was prepared for planning such costs not directly on Profit Centers to avoid manual data entry. Since CO production orders are not plan integrated you should post them to plan subsequently.
- #37: Which data is transferred to Profit Center Accounting? All postings affecting revenue and cost elements P&L postings directly coded to a profit center P&L accounts maintained with automatic account assignment in PCA customizing Balance Sheet accounts maintained with automatic account assignment in PCA customizing P&L accounts related to transactions in Logistics The data is posted to other objects and passed on from there to a profit center in Profit Center Accounting. This makes it possible to display your company’s results by profit center based on the original postings and with no additional work. Actual data is reflected in Profit Center Accounting from the account assignment objects for both postings in Financial Accounting (revenues, primary costs) and allocations in cost accounting. In addition, you can reflect changes in stock from Materials Management (MM) and changes to work in process from production orders, as well as revenues directly from Sales and Distribution (SD) in Profit Center Accounting.
- #39: When you post data directly in Financial Accounting, all primary cost elements require an additional assignment to a CO object. The assignment of this CO object (cost center, order, and so on) to a profit center ensures that the data is passed on to Profit Center Accounting. It is necessary to assign SD sales orders (items) to profit centers in order to reflect sales revenues and sales deductions. The profit center is derived from material master and afterwards can be changed manually. All the goods movements between profit centers are created in Materials Management and, where necessary, reflected from a profit center point of view via a special account determination. When you post a purchase order, the system posts the goods usage immediately upon goods receipt if the purchase order has an account assignment. At invoice receipt, if the amount on the invoice is different from the standard price of the material purchased, price differences arise when you post the invoice receipt. This difference is also reflected in Profit Center Accounting.
- #40: The above example shows the processing of a production order, where materials are issued to a production order (consumption). The material document also results in a posting in Profit Center accounting for the material expense. The profit center will be determined based on the materials produced.
- #41: The above example shows the processing of a delivery from a production order to inventory. The transaction credits the product order expense, and debits factory output. Both transactions are reflected in Profit Center Accounting. Balance on hand for the material delivered to stock will be debited. Any resulting variances are typically charged to a price difference account, another posting which would then be reflected in profit center accounting during order settlement.
- #42: The assignment of a sales order to a profit center is passed from the sales order to the delivery note and then on to the billing document. The profit center is assigned at the item level of the sales order. The Financial Accounting document and the profit center document are supplied from the original document in SD via the same interface. The change in stock is posted to the profit center upon goods issue (cost of sales). The material price from Profit Center Valuation View in material master will be taken into consideration.
- #43: The following data is transferred from bills and debit and credit memos to Profit Center Accounting. Revenues Sales deductions (shipping, discounts, and so on) Accruals (e.g. from rebate agreements)
- #53: Information System in the Profit Center Accounting can be classified into 3 groups: Drilldown reports (Interactive Reports) Report Painter reports (and Report Writer reports) Line item report
- #54: The standard report tree delivered with the system encompass a number of Report Painter reports. These are provided in so-called report groups. A report group usually consists of two reports of one type (such as plan/actual comparison). One report displays the data with elimination of intercompany sales (IOC) between profit centers, the other without. When you display these reports, you can switch between the two versions.