Cost Centers & Profit Centers in PM Order Settlements
Dear All,
Can anyone please explain me the exact use of following Fields in the PM Order?
Additional Data Tab - Responsible CCt , Profit Center , Object Class
Location Tab - Account Assignment u2013 Cost Center
Settlement Rule - Settlement Receiver (When category is CTR-Cost Center)
Also would appreciate if the explanation can be given on the impact on above in settling the Orders.
(CAPEX Orders as well as OPEX Orders)
Thanks & Regards,
Thushantha
Hi,
Additional Data Tab
Responsible Cost Center: - The responsible cost center is the responsible area for authorization check on internal orders.
This does not have to be the cost center to which the order settles its costs.
(ex The cost center "site office" is the responsible cost center).
Profit Center:- Operating results for profit centers can be analyzed using either the
cost of sales approach or the period accounting approach.
By analyzing the fixed capital as well, you can expand your profit
centers for use as investment centers.
Location Tab
Cost Center:- which belongs to Equipment Master or Functional Location. This cost will be comes under Account Assignment Category
Settlement Reveiver:- Its the set of cost elements which receives the Actual cost from the work order & transfers to the cost center.
regards,
Venkatesan Anandan
Edited by: Venkatesan Anandan on Mar 11, 2009 3:03 PM
Similar Messages
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Copy cost centers & profit centers to a new Company
Hello,
What's the transactions or customizing path to copy cost and profit centers to a new company ?
Best reagards
PaulHi,
Good evening and greetings,
Try using KE56.
Please reward points if found useful.
Thanking you,
With kindest regards,
Ramesh Padmanabhan -
Usage of Cost Centers, Profit Centers and Internal Orders
Hello everyone,
i have perhaps for some of you a simple question but it bothers me alot.
Imagine we are using Cost centers and Internal Orders. For them we create statistical key figures using transaction KB31N.
Now we are installing SAP BI and want to create a report which would be generated acording to cost centers but with statistical key figures.
The question would be how to make a connection between cost centers orders and those stat.key.figs?
In our case the economists say that we are using this kind of scenario:
Dist.chanel ->
Sender: Cost center, Cost element
Receiver: Int.Order
and Stat key fig.
This is the only place where we have a connection between thos objects. Is there other way how to connect them. perhaps using profit centers?
If somebody didnt understand it, maybe ill try to explain it a bit better
Reagards
Laurynas PrikockisHi Laurynas,
Pls try to understand the concept as explained hereunder...
Cost Element:
Primary Cost Element : Replication of GL to bring costs into CO module when they are posted in FI
module
Secondary Cost Elements: Carriers of costs between two Cost Objects (when we want to transfer the
cost from Cost Centers to Internal Orders, vice versa and more, we create
Secondary Cost Elements to carry the costs and transfer them to the
reciever objects from sender objects)
Cost Center: It is a Cost Object, maintained on long-term basis, where we can capture the costs (Ex:
Marketing Cost Center)
Internal Order: It is also a Cost Object, maintained on shor-term basis, where we can capture the costs
(Ex: Internal Order for Special Marketing Campaign). Ultimately, whatever the costs
posted to this Internal Order, will get settled to Marketing Cost Center.
Staitistical Key Figure: It is used as a basis for allocation of certain expenses (Simple example would
be, Total rent paid for office is $100000 per month. This cost has to go to
different Cost Centers like Finance and Accounts, Marketing, Purchase Dept
etc on the basis of "Area Occupied". So, We will define "Area Occupied" as a
Statistical Key Figure in our system.
Now, when the Rent amount is posted in FI, it wil reach a Virtual Cost Center
(An "Allocation Cost Center" with name "Rent" to be created under your
Controlling Area) "Rent". From there, it has to reach the other Cost Centers (lie
F&A etc as explained above) on the basis of Area Occupied (SKF Created
for "area occupied")
For this, you need enter the Area Occupied values (Ex:Sq Ft) in KB31N and you need to create an Allocation Cycle (Distribution / Assessment) where in you will select "Area Occupied" (SKF) as your Receiver Tracing Factor.
I hope I am clear, don't hesitate to revert back for more explanation...
Srikanth Munnaluri
Edited by: Srikanth Munnaluri on Mar 3, 2009 7:26 PM -
To view the company code wise cost and profit centers
hi all,
how to know the company code wise cost centers and profit centers? and what is the transactin codes for this?
Regards,
SomaHi Soma,
Could you try Table-->CSKS. I believe it will give you the complete list of Cost Centers and the default Profit Centers along with Company Code info.
Regards
Srinivas -
WIP assets has wrong Cost Centers/Profit Centers
Hi Experts,
There are several WIP (AuC) assets created after releasing the WBS Elements.
Ideally the WIP assets should have the Cost Center/Profit Center similar to the ones in the WBS Elements.
However the assets have different CC/PC than the WBS Elements.
We cannot change the Cost centers in asset master manually as there are postings done and depreciation ran on these assets.
Please suggest if we need to change the Cost Centers in all the assets or is there any other solution to this issue??
Thanks in advanceHello Experts,
Please share your suggestions on the above issue...
Thanks.. -
Assignment of cost centers and profit centers
Hi Friends,
can anybody give me a series of steps of assignment of cost centers and profit centers, like I know there is a T.code 3KEH, but I really dont know the chronological (step by step) order of steps to be followed to assign the cost centers to profit centers, as profit centers cannot be directly posted to and as the postings.
And above all when I see the info about 3KEH, it says we need to assign only balance sheet items there and not cost items.
Basically I've not studied Profit center accounting Properly and so I'm facing this problme
If there is any documentation on this can anyone pass this on to: kiransandhyaATyahooDOTcom
regards
sandhyaHi Sridhar,
Thnx for replying. I've gone ahead and defined cost and profit centers and did what you have told me to. Now this is where I'm stranded. How do I map profit and cost centers so that the we get the right kind of reports.
Basically, my question would be: say for eg: if we are defining Company, Co.Code, before completing with Global paramters, there are a series of steps that we need to complete, right.
Like wise, I just wanted to have a series of mandatory steps that I need to follow where the cost centers and profit centers mapping is done, atleast if I have the steps with me then I can go ahead and check the logic as to why should I define a particular step.
Like I mentioned I happened to see some information about 3KEI, so before going to 3KEI or 3KEH, are there any other steps that I need to follow.
I need to get the cost center and profit center reports, so that is what I'm looking for, and what do i need to configure, before getting to that point?
I dont have a great insight into PCA, and I was not a part of the controlling configuration, but because a person has left in between the project, I'm supposed to do this and that is the reason why I dont have much time in doing R&D, and thats the whole reason why I'm seeking inputs which would actually minimise my time of R&D, once I'm able to convince my people, then again I can sit back and try to improvise my self.
regards
sandhya -
Cost Centers and Profit centers default
Hi,
Apart from OKB9 settings where else we can design for default cost and profit centers.
thanks
RPHi,
For cost centres you can set the default directly in cost element master data (KA02). Regarding profit centre, you can use 3KEH transaction.
Regards,
Eli -
Cost centers and profit centers mapping
Hi Friends,
I'm through with defining cost and profit centers. How do I map the cost centers and profit centers. I've gone ahead and assigned the cost elements to cost centers in OKB9, giving 2-Business area mandatory.
I'm just done with defining the profit centers, but i dont have an idea how do I map the profit centers.
pls suggest.
regards
Pallavifound it
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About profit centers assignment in Material Master
Hi Frnds,
Have a doubt to clarify. As far as assigning the (Cost centers and) Profit Centers in Material Master (MM01/MM02 ) is concerned, when we look at the costing views, there we have an option only to enter a Profit Center and not a Cost Center. Can anyone suggest to me in this regards.
My doubt is: When we purchase a Raw material/ Semi finished (in short any material), it is a cost incurred to produce a Finished product, which means this has to hit some cost center, first.
And above all when a PO etc from MM are made, there the purchasing clerk punches the RELEVANT COST CENTERS, then:
what is the use of defaulting Profit center in the material master,(without actually defaulting both cost and profit centers in costing views of MM).
(ii) when a cost object (profit center) is being defaulted, why not cost center?
Coz, primarily we need to know the cost in purchasing the material, then add up all costs and OH and then arrive at a selling price, thereby arriving at PROFIT which is where profit center is highly useful.
Plz suggest
regards
sandhyaHi,
To clarify your doubts see my response below:
1) Only Costs can be assigned to Cost Centres. i.e.Balance Sheet items cannot be assigned to Cost Centres.
2) On the other hand Balance Sheet items can be assigned to Profit Centres.
When you purchase a Raw material or Intermediate it is not a Cost at the point of Purchase but it is only a Cost at the time of Consumption, if the same is going to be inventorised. In this case it cannot be assigned to a Cost Centre as the Inventory Account which is a Balance Sheet Account is debited in FI.
Only when the Material is issued to the Production line for manufacture of a Finished product, the Cost centre will be manually assigned. Further, you cannot assign a default Cost Centre to a material , as the material can be issued & consumed by any Cost centre and thus the Cost centre will be assigned at the time of issue.
If you purchase a material and if the same is not going to be inventorised but it is a consumable material, it is assigned to a Cost Centre as the time of purchase and it will be debited to a P&L account in FI. The Cost Centre can be defaulted from the Purchase Requisition or the Purchase Order as the case maybe.
Profit centres are defaulted in the Material master, as we need to generate Profit Centre wise Financial statements and the Inventories need to be posted to Profit Centres to generate Financial statements.
Hope this clarifies your doubts.
Regards,
Assign points if useful. -
Order settlement cost ( Activity cost) can we consider for financial report
I am in port Implemetation as per their senario financial reports based on cost center hierarchy,
for minisrial report requirement, they submitting Operational wise nothing but cost center heirarchy wise
for Pm order settlement Man hour cost based on kp26 computed cost converted actual at the time of confirmation. At the time of settlement to concern cost center is debited but primary cost booking for (man hour) salaries not deducting the primary cost element. Here is salaries and manhours both is apprearing in the cost center. My client requirement is based manour activity cost deducted in salary primary element, they want that process. After Order settlement based on amount we can deduct concern intial cost booking cost center to Order settle cost center.
Please suggest and PM order cost affect in cost center in primary booking and after order settlement
Please anyone resolve my issue
Clarification above issue
when we settle PM order Activtiy cost (Manhours) based on the salaried booked in primary cost element,we assume per hour man hour cost and specify in kp26 based on the activtiy cost planning system picks cost and at time of order settlement it will settle concern cost center.
intially we booked salaries in primary cost not thing but salaries a/c and once again we are settling the same salary assumption cost to cost center ...
when we go for cost center report Initial salary a/c booking Administrative cost center and now production cost center with activity cost with secondary cost element ....so problem is both cost centers are debiting for the same salaries( activity cost) but my client want cost center report all including primary and secondary cost element total balance.
Please resolve my problem it very critical
Edited by: msreddy08 on Sep 10, 2009 6:27 AM
Edited by: msreddy08 on Sep 10, 2009 6:39 AMDear Sudhakar,
salaries cost booked in administrative cost center with primary cost element salary a/c
but Activity type man hour is meant for per hour salary cost. we can specified in kp26
so when we take cost center report, we get salary amount and activity cost in admin cost center and product cost center for the same salary amount... for financial report requirment, if we use cost center report the salay amount appeared twice.
Please explain the activity cost against salay amount .. -
Hi All
Could you please tell at what level ( level 5 or level 9 ) are the profit centers
maintained in SAP. For example how to find the level of FRBs in the table
BSIS.
Also if anybody can explain me the concept of cost centers, profit centers
and cost center groups.
Regards
AnkitHi Ankit,
i am giving the defination of cost centre, profit centre
Cost centres are divisions that add to the cost of the organisation, but only indirectly add to the profit of the company. Examples include Research and Development, Marketing and Customer service. A cost centre is often identified with a speed type number.
Because the cost centre has a negative impact on profit (at least on the surface) it is a likely target for rollbacks and layoffs when budgets are cut. Operational decisions in a contact centre, for example, are typically driven by cost considerations. Financial investments in new equipment, technology and staff are often difficult to justify to management because indirect profitability is hard to translate to bottom-line figures.
Business metrics are sometimes employed to quantify the benefits of a cost centre and relate costs and benefits to those of the organisation as a whole. In a contact centre, for example, metrics such as average handle time, service level and cost per call are used in conjunction with other calculations to justify current or improved funding.
Profit Center Accounting provides visibility of an organizations profit and losses by profit center. The methods which can be utilized for EC-PCA (Profit Center Accounting) are period accounting or by the cost-of-sales approach. Profit Centers can be set-up to identify product lines, divisions, geographical regions, offices, production sites or by functions. Profit Centers are used for Internal Control purposes enabling management the ability to review areas of responsibility within their organization. The difference between a Cost Center and a Profit Center is that the Cost Center represents individual costs incurred during a given period and Profit Centers contain the balances of costs and revenues.
nagesh -
Hi,
I am trying to create an add-on that adds Profit Centers (Financials->Cost Accounting->Profit Centers). Is this supported by the DI API?
thanksHi Costas,
Currently there is no object that allows you to handle (create/delete) Profit Centers.
That is one object that I would very much appreciate.
Regards,
Vítor Vieira -
Difference between Internal order & Profit centers
Hello guru's
Can you please explain in detail the diffenece between Internal orders and profit centers. As i know that, profit centers are used to find out the profit of the particular cost object or task in controlling. can we use the internal order costing for the same purpose or only for the cost accumulation?
Thanks in advance!!
Rgds,
Yatheendra NathHi Yatheendra,
Profit Centre refers to the area of responsibility with in an organisation(in lay man's language you may consider it as company with in a company).Profit centre hierarchy reflects the internal structure of areas of responsibility within your company.
The main purpose of profit centre is to provide reports to management as per these responsibilty centres.It serves to calculate internal (plan and actual) results according to the period accounting approach. If the function area is specified for the data in the controlling components, you can also analyze results using the cost‑of‑sales approach.You can access the original postings from FI, CO, SD, MM, and so on directly to identify potential weaknesses.
Internal orders-An internal order is used to monitor parts of the costs, and under certain circumstances, the revenues of the organization.You can create an internal order to monitor the costs of a time-restricted job or the costs (and revenues, if required) for the production of activities. Internal orders can also be used for the long-term monitoring of costs.The SAP system enables you to monitor your internal orders throughout their entire life-cycle; from initial creation, through the planning and posting of all the actual costs, to the final settlement.
<u>Please award points if I had been of some help to you.
Rgds
Manish -
No postings on profit centers or cost centers or both
Hi!
I will assin points for every reasonable answer!
This is the problem.
We are on ECC6.0 - new GL is NOT activated!
We have tons of cost center and profit center problems - sometimes there are no postings on profit center, sometimes there are no postings on cost centers, but it goes to Dummy profit center. sometimes there are no posting on profit AND cost center....it is not even going to dummy.
Where do i start fixing it?
I know there can be multiple problems, but please help me to start looking.....What are the steps of fixing it?
Any ideas?There are all types of issues:
-Sometimes JE are not having profit center assigned to revenue accounts (and it wouldn't go to dummy)
-Every time production order settlement will go to dummy for the part of the cost that comes from the Purchase order ( the rest of the cost would go to the profit center assigned in the production order master data)
-Customer deposits wtire offs (that i think is the user error too)
-Material Scrap transactions
So, most of the errors require user training. But, whatever is in the system need to be fixed, right?
What are the reports i can execute to see all the differences?
What is the best way to monitor it from happening? -
Hi all ,
I have a requirement to Post Cash Journal Document using FBCJ tcode.
Is it possible multiple line items debit & single line item credit and different cost centers and different profit centers
for exp:
pk GL a/c description amount cost center profit center
40 400101 telephone exp 500 1403 P 1000
40 400101 telephone exp 100 1404 P 2000
50 200100 cash in hand 600-
This is My requirement is it possible in fbcj
Please suggest me.ASAP.
Regards
Naresh.Hi,
This you can do it in two ways:
1. Make three header under top level....one Product A, 2nd Product B ( as Billing element) and third as Common expense ( only cost). Now 1st & 2 nd WBS, you have to have sales order linking with individual lint item, for third you will accumulate all the common expense till the period end then make a reposting of the same in desired proportion to both products WBS hierarchy
(This is if you want to have a track on the common expense as well.......like planning, budgeting & control)
After this reposting, run RA for individual billing element and hence you will all the complement detailing and control over Revenue and expense with respect to Product A and Product B individually.
2. If you don't want to maintain that kind of detailing the common expense and keep track of it through project, then have cost centers accordingly and make an assesment/ distribution with respect to expenses accumulated at those cost centers for the period to the respective WBS under each product. Then execute the period end processes for the project.
Or
You can try with have two more line items in the costing sheet as an overhead against common expenses with respect each product.
I hope this should help you.
Regards
Avisek Bhardwaj
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