Business area, segment or profit center

I have following situation. My customer is a company which is situated all over the country. So, this 'parts' of the company are acting like companies inside a company. There is a need for producing balance sheet and P&L statement per this parts. Next topic is that this customer has a need for producing balance sheet and P&L statement per line of businesses.
My question is what to use. First idea was to create this 'parts' of company as a business areas and line of businesses to present as profit centers. My concern here is reconciliation between business areas and that now I have to include BA as an organizational element in the structure (every cost center belongs to BA, etc...). But I was reading about New GL and Segments and I came to an idea to use segment instead BA. But I can not find report, for ie. which should present AR or AP per Segment? Also, I don't know are segments sufficient for 'internal invoicing' which occurs in the company.
My question is, can this needs be fulfilled with segments + profit centers approach, or I must use BA.
Thank in advance!

Hello,
whether you use BA, profit center or segment, you have to carefully assess whether you activate or not the NewGL setting that requires FI documents to match (debet=credit) by segment, for example. If not activating, you can not easily guarantee that all line items are assigned to segement. If activating, there is a lot of spefication and testing to make sure that segment information is derived or entered.
Good luck,
Auvo Ahola

Similar Messages

Business Area v/s Profit Center

Hi Friends,
Can some body tell me the major differences between a Business Area and a Profit Center
or pls send me to mail i .e [email protected]
Thanking u,
Siva S.

Hello,
Business area is higher in hierarchy compared to Profit center. A business area can have multiple PCs assigned to it.
Business area is used for reporting for internal -management accounting purpose. Financial statements for internal purposes can be drawn for BA just as for Co Cd for external and auditory purpose.
Profit center are operation entities and lower in hierarchy, have a person reponsible and many cost centers can be assigned to one PC. It is used only for statistical purpose.Profit center data canbe rolled up to BA data.
Also see:
http://help.sap.com/saphelp_47x200/helpdata/en/02/30793485231774e10000009b38f83b/frameset.htm
Thanks,
Sourabh

Single Business Area versus multiple profit center issue

Dear Experts,
My client is basically an infrastructure company. We have received a roll out
project under a department which inturn is billed to another department
under the same company code. Now I am planning to create a single business
area and multiple profit centers under that BA. This is because the business
is same but responsible areas of profit are two different departments.
Now I am not sure on the set up process and how do knock off etc are achieved
to get the financial reports balanced.
Cost of dept 1 is revenue of dept 2. For this I create a BA and also
2 profit centers. I do assignment in OKB9. What are other settings required.
Which profit center would be assigned in the material master?
My whole idea is to use a single BA with multiple profit centers, if one to one
relationship is the best way of approach then I shall follow that. But kindly give
inputs if I use single BA with multiple PC's how effective usage can I make of the
whole system. client is using MM, SD, PM, PP, FI, CO, PS modules.
Regards
Komal

Hi,
Recently we have got a business requirement for the concept of Single Plant which is assigned to multiple profit centers. I would request any of you to help me with any points which has the pros and cons of this set up.
First think why many profit center required for one plant explain it ?
Now you know from where system will take profit center in accounting docuement ?
as per me system take from Material master costing view
you have project base company or client or WBS at your end ?
In one material we can assign single profit center
In on cost center we can assign single profit center
so can you explain your requirement exactly
Regards
Kailas Ugale

Business Area vs. Profit Center Accounting

Hi all,
I have a doubt regarding this issue.
Our customer is a holding composed by 3 legal entities, each one with its own Balance Sheet. The company produces in such a way that they need to plan production and purchases globally (for the 3 legal entities).
I searched how to deal with this, and if a create 3 different company codes it is really difficult to plan production and purchases for the 3 company codes globally. The most suitable solution would be to use STO process (stock transfer orders), but the purchases would be done by only one company code and this is not what the customer wants because only this company code would have tax credits.
I am now thinking about having one company code divided into 3 different business areas or profit centers, but I am not sure which solution will be better, taking into account that each legal entity must submit a separate Balance Sheet. In Sap Help, I found that it is better to have different business areas if each organizational unit must submit external presentatios. But I was told that Profit Center Accounting came to replace Business Area. Is that right? May I use Business Area to do so or Profit Centers ? Which one is the most reccomendable?
Thanks in advance.
Regards,
Florencia.

hi,
if u r setting as a business area,still u need to follow the reporting procedures to the local authorities, such as banks,tax,etc. but,if u do it as a profit center,it will come under ur internal entity (controlling), and for the local authorities,ur holding entity will take care of reporting,etc.
thanks..

Automatic payment method for business area wise or profit centre wise?

hi,
tell me about customization of Automatic payment method for business area wise or profit centre wise? or where we have to assign
Regards,
Munna
Edited by: munna !! on Jan 18, 2008 7:38 AM

App?

Changing business area on a cost center

We mainly use HR, but we use some FI/CO for accounting. (I am no expert in FI/CO whatsoever - so please excuse any incorrect terms).
Our users have entered incorrect business area to a cost center.
This business area is now registered on employees, and payroll/posting has been run up unitil October 2010.
If I try to change business area from 01.11.2009 (realize it is probably not good to change earlier due to postings); I get the following error message: "Field change Business Area is not possible (transaction data already exists)"
In addition, the message says: If you still want to change the object, select a suitable change interval by choosing "Edit -> Analysis period...". However, trying to change the analysis period I am told I have to choose year end.
My questions are:
1. Is there a way I can change business area from 01.11.2009 ?
2. Is there a way to change area earlier - and if so, what are the impacts+
I appreciate any help
Kirsten
Edited by: Kibo on Oct 11, 2009 2:44 PM

Hi Kirsten,
Normally, it's not possible to change business area during a fiscal year once there is already postings in this Fiscal Year.
The reason is to make sure that there is no change within the fiscal year since you then would have different postings - cost center belonging to different business areas within the same fiscal year. Meaning that it is possible to change the business area for the next fiscal year like described in the long text of the error message KS134. The reason is that it is to avoid inconsistency update of the table (COSS, COEP, or COSP).
Although, If the following requirements are met, than it is is possible to change the business area during a fiscal year with the
help of the note 62716:
1. The change interval is set to period limits
2. There is no dependent actual transaction data in the change interval
    or afterwards.
3. There must already be an analysis period for the respective cost
    center which starts on the first day of the chosen period. If this
    is not the case, you can create one with 'Change cost center'
If the requirements are met, you can run the report RKACOR06 in SE38
safely. I recommend you to execute the report first with Test Run on
your test system.
Regards,
Greta

How to suppress business area feild in cost center master data urgent plzzz

how to suppress business area feild in cost center master data

Hi ,
Please check these notes
Note 606933 OKEON: Business area is no required entry field
Note 506308 OKEON: Business area financial statement prevents change
Note 422801 KS01 with template does not check business area
It might be possible to create a modification,.
Please assign points if it useful
Regards
Ravinagh Boni

Modify segment from Profit center

Hi experts:
I see that after assigning a segment to a profit center, the field become display only and it is not possible to change.
How is usually the segment modified?
Thanks in advance for your help.
Best regards
Jose

Hi Jos,
Once there is transactional data in Profit center segment field is no longer changeable in order to prevent inconsistencies and incorrect result from the segment reporting point of view. This is standard system behavior.
Please Refer to notes mentioned below.
Note# 1373616    Segment in profit center changed despite transaction data
Note# 1037986    KE52: Changing the segment in the profit center master data
note# 940721      KE52: Segment in prof center master record cannot be changed
According to note 940721,If you have not posted any transactional data yet or have deleted the transaction data in the test system, you can activate the change option in the view V_FAGL_SEGM_PRCT using transaction SM30.
Hope this will help you.
Please search the forum well as this query has been answered many times.
Regards
Eugene
Message was edited by: Ranu Eugene

Business Area & Segment

Dear Friends,
Can any one tell me what is the basic differnce between Business Area and Segment in ECC 6
Thanks & Regards
Raj

Hi,
The Business area & segment are used for the legal reporting of your account standards,
The Business area you can define & used in all the posting transaction & Accounting standard report can be derived from the business area.
Where as the Segment is defined and attached in the profitcenter master data.So whenever the posting against profitcenter will accumulated in Segment & Accounting standard report can be derived.
Regards,
Raj

Business area change in cost center

Dear Expers,
Please guide me,
How to change the business area in cost center master data, which is having already data in that cost center, any programme to change, if i change B.A what will happen, any problem to old data which is posted with that cost center.
Regards
Chandu

Hi,
It is not possible or allowed to change the master data field: business
area of the cost center once you have made postings to this cost center
period.
And normally it's also not possible to change business area during a
fiscal year once there is already postings in this Fiscal Year.
The reason is to make sure that there is no change within the fiscal
year since you then would have different postings - cost center
belonging to different business areas within the same fiscal year.
Meaning that it is possible to change the business area for the next
fiscal year like described in the long text of the error message KS134.
The reason is that it is to avoid inconsistency update of the table
(COSS, COEP, or COSP).
To change business area,you should create a new period for the cost
center with no postings to this new period and change BA then.
But if you want to change BA during FY,please review note 62716
as well as the requirements stated in the note.
I hope it helps,
Regards,
MLM

Business area field in Cost center

Dear Guru's
We created a Cost center for a validity period of 01.01.2006 to 31.12.9999 with a business area of ABC.
Transactions and line items are existed in the cost center
Now we decided to change the business area of the cost center from the ABC TO XYZ. I went to KS02 here the filed is editable mode when i enter the new business area for cost center it gives a message in the following manner.
Field change Business Area is not possible (transaction data already exists)
Message no. KS134
please could you help me how to change the field.
Thanks and Regards

Dear Laxmi,
There are records that have been created and hence the system is not allowing you to change the data. Change the analysis period and then system would allow you.
KS02 -> Enter the Controlling area -> Enter the cost centre -> go to menu "EDIT- Analysis period" -> click on the button "Other Analysis Period" and change the validity.
Regards,
Naveen.

Mass change "segment" in profit center master

Hi Dear,i am trying to mass change "segment" in profit center master,first i make segment changable,then i try mass change "segment",but that feild not appeared in mass change view,can someone advice,thanks

Hi,
The segment can't be changed in the profit center once the document has been posted. But you can create a new profit center with new validity periods with new segment.
Regards,
SMuvva

Segment in Profit center

Hi all,
I like to know the significance of segment field in profit center master data.
regards
Durga Prasad

HI
Read the following then you will understand the significance of segment in cost center accounting.
A segment represents a division of a company that can create its own financial statements for external reporting.
Use
The accounting principles US GAAP and IAS require companies to perform segment reporting. You can define segments in your SAP system for this purpose. You find the appropriate IMG activity in Customizing under Enterprise Structure -> Definition -> Financial Accounting -> Define Segment.
You can enter a segment in the master record of a profit center. The segment is then derived from the assigned profit center during posting. If you want to apply different rules to derive the segment during posting, you can define your own rules for this. You find the corresponding settings in Customizing under Financial Accounting (New) -> Financial Accounting Basic Settings (New) -> Tools -> Customer Enhancements -> Business Add-Ins (BAdIs) -> Segment Derivation.
You can use the Document Splitting [Ext.] function to ensure that you are able to create financial statements for the Segment dimension. For this, you need to set up a zero balance setting for the Segment dimension. You find the document splitting settings in Customizing under General Ledger Accounting (New) -> Business Transactions -> Document Splitting.
Structure
US GAAP and IAS set out different requirements regarding segment reporting:
US GAAP requires a virtually complete balance sheet at the segment level for segment reporting (essentially everything apart from stockholders' equity). The segment is defined as a subarea of a company with activities that generate expenses and revenues, with an operating result that is regularly used by management for profit assessment and resource allocation purposes, and for which separate financial data is available.
You can use the Segment dimension to represent the segment levels.
IAS requires for segment reporting primary and secondary segmentation, which have different reporting depth. A distinction is made between the following types of segment:
Business Segment
A business segment is a distinguishable subactivity of a company that relates to the manufacture of a product or the provision of a service and that has risks and revenues that differ from those in other business segments.
Geographical Segment
A geographical segment is a distinguishable subactivity of a company that relates to the manufacture of a product or the provision of a service within a specific field of business and that has risks and revenues that differ from those in other geographical segments active in other fields of business.
You can choose which segment type you want to have as the primary or the secondary segmentation. You can use the Segment dimension for the primary segmentation. You can represent the secondary segmentation in your system. You can do this by including a customer field Region in your general ledger accounting.
Segment can be created at a client level in a mySAP ERP Financials system.
Hope this helps
Good Luck
Hari

Wrong segment in profit center

Hi guys,
We created profit centers with assignment to segments(the segments represent branches).But created a few profit centers with wrong segments.
Posting have been made to this profit centers over the last 6 months so i have a lot of data reporting to the wrong segments.
Is there a way i can change this segments within the profit centers even though they already contain postings.
Please help.
Regards,
Banji
Edited by: BANJI ADEBOYE on May 19, 2008 8:01 PM

Hi,
A change of the segment to a profit center is critical when there were already documents posted to this profit center. In this case assitional repostings have to be done to ensure the consistency of the current process chain respectively the correctness of the P/L and balance per segment.
As the validation of existing transaction data in certain circumstances is really time-consuming and the performance of the system is affected, the change of the profit center / segment assignment is per default eliminiated.
As described in note 940721, the change of the segment can be managed with the view V_FAGL_SEGM_PRCT. As a pre-condition the profit center must not have transaction data. The first assignment of a profit center to a segment is also an assignment change.
When you for example already have posted a goods receipt to an purchase order with profit center PC1 and segment initial, you afterwards assign the segment A to the profit center PC1 and finally post the invoice receipt, the GR/IR account is debited with segment initial and credited with segment A.
Such changes are espacially critial when you use the online split functionality. Because of these reasons it is not recommended and possible to change the segment in the SAP Standard.
As there is already transaction data in your system you have to check if you have activated the document split functionality.
If the document split functionality is active, please contact you FI consultant. In this case, the impacts of the new assignment on the current business processed have to be checked in detail. It has to be ensured that the change will not cause further posting problems.
If the document split functionality is not active, but there is already transaction data, you also have to check with your consultant which economical impacts the new assignment will have. The assignment
can be done on you own responsiblity, with cancelling the correction of note 940440 or you assign a new segment with a customer own report.
Another option will be creating a new profit center with the correct segment and repost all postings from the profit center with the incorrect segment, to the profit center with the correct segment.
Cheers,
Daniela

Allocation of Business Partner to a profit center.

Hi,
I had earlier posted a question on how to allocate a BP to a Profit center:
Hi,
Is it possible to allocate a BP to one or more Profit centers when creating a BP Master in SAP;such that, on creation of a marketing document the Profit center is directly picked up instead of selecting it.
Please comment.
Regards,
The answer which solved it is :
Projects can be associated with a Business Partner in the Master data definition but not Profit Center.
Profit Center have associated distribution rules and are linked to G/L account or a transaction at the row level.
You could do this. Create a UDF in the BP Master to enter the profit Center information.
In the Sales Order Rows..in the Profit Center field create a Formatted Search to pull the Profit Center from the BP Master UDF
Example: Let us say your Profit Center User field on the BP Master is called U_PC
then your Formatted Search on the Marketing document would be
SELECT T0.U_PC FROM dbo.OCRD T0 WHERE T0.CardCode = $http://$4.0.0
Set it to Auto Refresh on Item Code ....check Display Saved Values
If you want 2 Profit Centers on the BP Master and the user would select it in the Marketing document then let us presume your UDF's are U_PC1 and U_PC2,
the FMS would be
SELECT T0.U_PC1 FROM dbo.OCRD T0 WHERE T0.CardCode = $http://$4.0.0
UNION ALL
SELECT T0.U_PC2 FROM dbo.OCRD T0 WHERE T0.CardCode = $http://$4.0.0
Suda
Now, since the BP has already been allocated to the profit center anytime a service type credit note is passed which links to a Liability or an "Other" Account type, the profit center still gets allocated.
Can I make any changes to the query such that only Sales or Expenditure account could be allocated to the BP, and any other account if tagged the entry is not tagged with a profit center.
This has become kindof critical for users who check the profit center report, which does not give hte correct figure because of the above issue.
Please advise.

Projects can be associated with a Business Partner in the Master data definition but not Profit Center.
Profit Center have associated distribution rules and are linked to G/L account or a transaction at the row level.
You could do this. Create a UDF in the BP Master to enter the profit Center information.
In the Sales Order Rows..in the Profit Center field create a Formatted Search to pull the Profit Center from the BP Master UDF
Example: Let us say your Profit Center User field on the BP Master is called U_PC
then your Formatted Search on the Marketing document would be
 SELECT T0.U_PC FROM [dbo\].[OCRD\] T0 WHERE T0.CardCode = $\[$4.0.0]

Set it to Auto Refresh on Item Code ....check Display Saved Values
If you want 2 Profit Centers on the BP Master and the user would select it in the Marketing document then let us presume your UDF's are U_PC1 and U_PC2,
the FMS would be
 
SELECT T0.U_PC1 FROM [dbo\].[OCRD\] T0 WHERE T0.CardCode = $\[$4.0.0]
UNION ALL
SELECT T0.U_PC2 FROM [dbo\].[OCRD\] T0 WHERE T0.CardCode = $\[$4.0.0]

Suda

Business area, segment or profit center

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