Structure of Profit & Cost center

Hi All,
I am at the phase of defining the Organization structure of Company.
And I am facing the problem in defining the Cost center and profit center for that. Hope any one can help me in that.
Scenario is like
1. I have 5 Raw Material.
2.By  processing  all that I  get  15 type of Finish product.   
3.Four product are produce from same work center just by changing the drums(which change the nature of product)    of  machine. Rest of the finish products are produce in different machine(Work Center)
4. Client are  selling all that finish product .
5.In many cases there client want 7finish product to be clubbed  together and sell it to him. In that case we have to do some activity on that and make according to their requirement.
6.This is and ongoing permutation and combination and any 2  or 3 or 4 (which Is in point number2 )become 1 finish product , this combination create total of 40 final product.
7.And in some case they are also selling raw material also (of point number 1 ).
So in that case we have to create all that material as Finish Product and semi finish product and have to create  sales view of each and every material.
And  they have 7 plant across the country and do same activity.
Client requirement is  that they want to identify the cost of each product .
Till now I have thought of defining the plant as segment.
Now how should I proceed with cost center and profit center for all that product.
Please help me in solving this.
Regards,
Shayam

Thanks for reply
Please correct me if I am wrong.
I am planning to created profit center for each material. As client want to determine cost and profit of each material.
But what  I do in case of  work center where we can only assign only one cost center. And we can have one profit center in cost center master data. And in my case from one work center we produce different finish product and I am treating each material as profit center. So if any coast incurred in that work center it will go in one cost center and accordingly to one profit centeru2026 so in that case what about other finish product produce from that work center as cost will flow to profit center which assigned  to that cost center.
And what about raw material which I use in production of other good and also sell , so what profit cent will I put in that material master, will it me same of raw material or of finish the material produce from that material.
Please tell me the best way to structure the profit center and cost center in this case.
For understanding my senerio you can think of any automobile industry where each parts are manufacture and are sold separately and in combined with others. So in that case how will I assign cost center and profit center . in simple word who I structure my cost and profit center.
thanks
Shayam

Similar Messages

  • Mass change of profit/cost center groups

    we have a requirement to mass change the descriptions for profit/cost center groups. We tried out folowing options but they are not working.
    1. BDC recording for KCH2/KSH2.KCH5N - i think these are not supported in BDC.
    2. LSMW using available BAPI... it can be used only if the group is not assigned in the hierarchy.
    Please let me know if there is any other way of handling this.

    Have you seen note 314528 ?
    Rob

  • Profit/Cost center best practice

    Hi,
    I'm looking for some best practice document on how to setup properly profit/cost centers for a manufacturing company. I'm thinking at a very simple manufacturing company which purchases some raw materials and manufactures and sells some finished goods.
    Any advice on that?
    Thanks!
    Fabio

    Hi ,
    check below links:
    https://websmp101.sap-ag.de/~form/sapnet?_FRAME=CONTAINER&_OBJECT=011000358700002498432003E
    https://websmp201.sap-ag.de/~sapidb/011000358700000760832007E/CW34_FIN_Profit_Centers.pdf
    Thanks,
    Neetu

  • Want to copy actual data to plan version for profit & cost center

    Hi,
    I want to copy data from actual to plan data for first half of the financial year.
    I was trying with T-Code CP98 . Are any Configration settings required to be done?
    But facing error "you have not selected a traget project" 
    Is there any other way out for doing these activity?
    Thanks & Regards,
    Mayur
    Edited by: Mayur on Feb 23, 2010 11:56 AM

    Hello Mayur,
    Please try with KP97/KP98 transactions.
    I suspect, that you are giving wrong target plan version.
    Please check your entries once again.
    Regards,
    Praisty
    Edited by: Praisty on Feb 23, 2010 12:04 PM

  • Document change/display - Profit Center / Cost center name

    Hi,
    We have a requirement where client wants to display the profit center and cost center names (short or long) when displaying or changing a parked or a posted document. As we all know SAP shows only the profit center and cost center code and not the description during the document display. After all the deliberations, this seems to be an important piece of information while posting a parked document or even viewing it as a posted document.
    What are our options?
    Any help is much appreciated.
    Regards,
    Subodh

    Thanks for your response Tamim.
    Profit center / cost center naming is following a different convention and we are in a roll out phase, therefore we can't think of first item.
    About match code, the requirement is not so much during the posting but primarily while releasing the parked document or viewing the parked / posted document - they want to see the description along side profit / cost center.
    I was looking for clues on any utilities / enhancements / BTE that I may use to bring extra fields during document display.
    Regards,
    Subodh

  • Can 2 cost center group share same cost center?

    Dear Experts,
    Can 2 cost center group share the same cost center? 
    Basically I'm looking at MATRIX structure where one cost center, say an Equipment shared by 2 different cost center groups (say one in "Location-A" cost center group, and the other one is in "Process-A" cost center group).  This is to enable the management to be able to see the costs incurred in either by "Location" cost center group or "Process" cost center group.
    The "Location-A" cost center group may tied to Cost center 101, Cost Center 102 and Cost Center 103.  The "Process-A" cost center group may only tied to Cost Center 101, and other cost center 201 (which is also tied to other "Location-B" cost center group).
    Please advise.
    regards,
    Abraham

    Hi Abraham,
    its not possible to assign a cost center to several cost center groups in the standard hierarchy. Otherwise, the standard hierarchy would be inconsistent.
    As stated in the online documentation under http://help.sap.com/erp2005_ehp_05/helpdata/EN/25/908fc66d8411d194f000a0c93031df/frameset.htm
    'You can assign each cost center to only one group in the standard hierarchy, but to as many alternative groups as you require.!
    Regards,
    Greta

  • Cost Center, Work Center and Profit Center

    Hi ALL,
    Can any one please explain me the concept of Cost Center, Work Center and Profit Center.
    And where and when do I assign the cost center???
    Amit

    Hi Check the following "
    Cost centers represent areas of responsibility where costs are incurred or where responsibility for costs may be assigned.  They represent the smallest unit of responsibility within the organizational structure of an enterprise.
    A cost center can be pictured as a ‘cost bucket’ such as a department, product line, production stage or geographical area. 
    An unlimited number of cost centers may be created.
    All cost centers within on controlling area have to be assigned to a cost center hierarchy (standard hierarchy).
    Costs originally posted to one cost center may be distributed and assessed to one or more other cost centers using allocations.
    How are costs assigned/posted to a cost center?
    External financial accounting documents created in FI, AM or MM that post to a G/L expense account can be configured to require a cost center assignment be entered at the time of transaction entry.  The system automatically creates a parallel CO document that posts to the indicated cost center.
    Cost elements master records can be configured to be posted to a certain cost center (automatic account assignment).
    In addition, other non-financial activity (i.e., direct labor hours) may be posted directly to cost centers from within CO or via other modules such as PP  or HR
    chandra

  • Functionality of Profit Center and Cost Center

    Hi,
    I am unable to understand the functionality of Profit center and cost center, I know that cost center represents area within an organization for which you will like to see the expenses for a particular time period. for example in an organisation we have three cos centers Accounts, HR and Admin. whenever you post an accounting document in FI you will specify the cost center to which the expense relates. but in some cases when you post an expense and give the relative cost center the profit center is also driven by the system. why is this behavior? i mean i have posted an expense not an income then why is system driving the profit center as well?
    Profit centers are used if you want to see the profit of different area of your organisation. in what kind of postings we use profit center? and if we could use profit center to draw income and loss for a specific area why do we need segment reporting? and what is the difference between Segment and Business area. what i understood from their definition is that they are both same and use for same purpose.
    I am totally lost in these concepts. please some one help me out with an example. i am stuck at this point. some one please clarify my concept of Profit Center, Cost Center, Segments and business area please.

    Hi,
    Cost center & Profit Center are organizational units   within the enterprise structure , created for better internal control.
    As the name suggests Cost Center  is  the lowest level  of the organizational unit representing a defined location of cost incurrence or otherwise to which you can meaningfully assign the cost(both direct & Indirect).
    Profit Center is an organizational unit  in accounting  ,where management would require to see the profitability & fix the responsibility. It may be each plant/division of the company .
    If you consider the Plant is the Profit center, you can take the various deptts in the Plant as cost centers. you can draw a balance sheet & profit & loss account statement at profit center level but this will be for your internal use.From this you can know the ROI on particular area. Profit centers are assigned inside the cost center so when you update cost center, profit centers are updated automatically.
    Where as Segments are used for legal reporting of your accounting standard as per IFRS. Both Business Area & Segments are more or less same with some technical difference.
    Business area  is a free organizational unit. It can be derived through cost center or can be entered manually.
    But segment is a dependent organizational unit. It is defined & attached inside the  profit center master data. It can’t be entered manually.
    SAP suggest to use the Segment concept.
    Thanks & regards
    Deepak

  • Structure view "Profit center hierarchy" for Information system

    Hi Experts
    The structure view "Profit center hierarchy" is not available in standard system. I have created a new key with assignement of PS Hierarchy type '2'.
    But iam getting below message when I use this new structure view:
    Alternative hierarchy could not be determined
    Message no. OK032
    Diagnosis
    You attempted to structure your project elements according to an alternative hierarchy (profit center, cost center or summarization hierarchy). The alternative hierarchy could not be read.
    System Response
    The system uses the "Work breakdown structure" view.
    Any suggestion?
    warm regards
    ramSiva

    Ok lets start from basics
    go to CN41 and enter a project with std PS info profile 000000000000001
    if you click o the DB profile you will have basic setting 000000000000001 etc
    this gives us the project structure
    Now in transaction OPUR create a view for PC hierarchy
    Z00000000001 - whatever description
    select PS hier type 2 - Profit Ctr via set
    I think you have done this
    In this configuration there is a group name - you need to enter the profit centre hierarchy group name from your system
    this group must exist in your system check using transaction KCH3 to display group - if this is not entered correctly you will get the exact error you have got - I have been able to replicate in my system
    Now run CN41 change DB profile project view from 00000000001 to Z0000000001

  • Assignment of Profit center in cost center

    Hello Friends,
    What is the significance of assignment of profit center in cost center ?  System does not allow me to post activity prices in KP26 without assignment of profit center to cost center. It gives error that
    "Profit center 1000/DUMMY_PCA does not exist for 01.04.2009"
    How to solve this error with out assignment of profit center in cost center?
    Waiting for reply!

    Profit Center is an Organizational unit in Accounting that reflects a management-oriented structure of the organization for the purpose of internal control.
    Hence its Assignemnt with Cost center should be there for proper assessment of Organisation.
    If  you do not assign a profit center, the SAP System transfers the data from the dummy profit center defined in configuration for the respective controlling area to Profit Center Accounting.
    Therefor proper cost center with Proft center assgined has to be used for Cost center / actvity type planning in KP26.

  • Profit Center / Cost Center Distribution

    Hello,
    I'm trying to send Profit Centers / Cost Centers via IDoc.  I can create the master records with PRCMAS01 / COSMAS01, but I'm not sure how to do the assignment to a company code via IDoc.  Can anyone shed some light?
    Thanks,
    Harrison

    Update:
    The cost center IDoc contains a field for company codes even though it's not mentioned in the IDoc documentation for COSMAS01.  As cost centers are only assigned to one company code the field only supports one entry
    Profit centers on the other hand do not support the assignment of company codes via IDoc.  I believe this is because SAP by default assumes that you want to assign a profit center to all company codes, therefore it doesn't have a purpose for a structure to support this in the IDoc.

  • Cost center and profit center hierarchy

    Hi guys: We have a situation where a cost center is a truck that moves from city 1 to city 2 to city 3...the clients whats to track the costs by city (which is another cost center group)... But if i change the hierarchy in the cost center from city 1 to city 2, the cost center doesnt save the change. how can i only make the cost show up in city 2? what is best design for something like this?
    also what about profit centers? What if a profit center is a truck,  and that truck captures revenue and costs, but when it moves from city 1 to city 2, i dont want the history to carry over to city 2...how can i show the postings in city 2 for the new period? whats the best design?
    i know everyone has implemented in several different ways, but any design ideas will be very helpful
    thank you
    Brian

    Hello Brian
    Costing based profitability analysis is better than account based. Since you are using costing based profitability analysis, you have more flexibility. Among other things you need to define PA transfer structure (Tcode KEI1), assessment cycles etc. Since it is vast area and also one need to have full information about your situation, it is not possible to list "to do" things here. Alternatively what I can suggest is to go through the excellent stuff available at
    http://help.sap.com/saphelp_erp60_sp/helpdata/en/7a/4c48c64a0111d1894c0000e829fbbd/frameset.htm
    About internal orders: you need to create an internal order for this purpose, which will take precedence to cost centre during posting. 
    Hope this helps!
    Ambadas

  • Cost Center assign Profit Center Issues

    Hi Controlling Expert,
    i have one issues regarding, Cost Center assign to Profit Center
    wht happened , we have made MIS Report Thru Report Painter KE80, we have map based on   Primary Cost Element, at the time of Business Transaction, we have capture the Finance Cost center i.e FI000, Marketing Cost center i.e MK000 , HR Cost Center i,e HR000 and assign the same cost  center FI000 to Profit Center i.e FI000 also same name, respectively. in MIS report there is two Head  i.e Sustaining Cost and Development Cost ,where we have to capture only Cost center  for Sustaining Cost related  to display i.e FI000, MK000 and HR000. KE80 report belongs to Profit Center wise you can see the Report. But same FI000, MK000 and HR000 also updated related with business transaction and capture above cost center like in depreciation  GL Amount 1000 cost center FI000 and sustaining cost also updated the same amount 1000 because we have assign FI000, i.e wrong . last 3 months post the amount now wht should I do for not updated sustaining cost, as I understand , should be delete sustaining Cost as well Development, and later on we can take report from KSB1 for FI000, MK000 and HR000, for management purpose, so if I cannot assign profit center FI000 to Cost Center .kindly correct me whether ryt or wrong. Coz Fianance, HR cost and marketing is only cost center. not suppose to assigh profit center, in this case how Profit Center removed from Cost center. kindly let me knw, or give me other option.
    wen we see the report same Profit Center showing two times along with amount i.e wrong coz of Sustaining Cost we have assign Profit Center
    in this report particulars are Below
    Revenue  : Relevant GL ( At time of Business Transaction we have captured the Relevant Profit Center i.e Finished Product i.e R100: RA Tube
    and RA Tube R100 assign with same Cost Center R100.
    B.Material Cost : Relevant Primary Cost Element
    Manpower      : same like Above
    2.Energy            : same like Above
    3.Consumption   : same Like Above
    Conversion Cost (1+2+3)
    Sustaining Cost   : Here we have given Profit Center i.e FI000, MK000 and HR000 these profit center assign 
    Development Cost : Here we have given profit Cente EN000
    Profit      (A-B-C-D-E-F)
    G.Depreciation : Relevant Primary  Primary Cost Element
    Financing Cost : Relevant Primary Cost Element
    I. Other Income/Loss : Relevant Primary Cost Element
    PBT : (F-G-H-I)
    Kind regards
    Pranav Kr. Gupta
    SAP FICO Consultant.

    Hi Pranav
    You are logging same issue twice. I didnt see any difference in the two threads though.
    If its the same issue, request you not to repeat this in future.
    KE80 report two times value effected
    Regards
    Mustafa

  • Profit Center deriviation from Cost Center

    Hi all,
    I have just configured CCA and PCA for one of our new company code.
    I have created 3 cost centers like A, B, C and subsequently same have been created as profit centers too.
    Maintained the profit center in the cost center master data.
    No other derivation rules has been configured so far.
    Now i am trying to do a expense posting with F-02, after entering cost center, system is updating profit center field with a dummy profit center only.
    Even i f a changed the dummy to normal profit center, again system replacing the normal PC with dummy PC.
    I want like...when i enter CC as A, then i need to derive PC also as A for the line item. ( For both expense items as well as revenue items).
    Please suggest.
    Regards,
    Srinu

    Hi Chintan,
    Thanks for your quick response.
    We have already implemented the said SAP note.
    Let me explain my requirement again.
    We have IOA, CCA, PCA active in our system.
    For every expense or revenue line item Internal order is mandatory.
    apart from we have 3 cost centers and 3 profit centers ( 1:1 )
    in cost center master , profit center is assigned.
    1) users are going to decide the cost center, while posting FI direct entries only. So while doing F-02, they will enter CC, and IO manually and at the same time PC should derive from cost center master data ( as it is 1:1 only).
    2) as specified above, we have IOA, CCA, PCA active. In this case IO, CC, PC are to be set as mandatory fields for Field Status Groups G004 and G029?
    Please advise...
    Regards,
    Srinu

  • Profit Center value for Creation of Cost Center in MDG F

    Hi
    I am using MDG-F 6.1. I want to create cost center using change request type OG_W003 ( Cost Center single processing) without uploading intial data from ECC check table ( CEPC- Procit Center Master Data ).
    Is this possible as there is warning message while creation of CC?
    As there is warning message befor submitting of CR as 
    'Field "Profit Center": Field should be filled because Profit Center Accounting is active'
    If we go ahead for with final processing then again one warning message
    'The status of change request 86 does not allow for object changes'
    After Approval active CC stores in MDG database table and not replicated to ECC even assigned Edition with flag'Immediate replicate' .
    Also one more question How referance data ( Like Controlling Area/Company Codes) are retrived in MDG F in case of add on deployement?
    Does intial upload is requird for this as well?
    In ECC it is possible to create CC without PC.

    Hello Sanjay
    For Interface and for ALE setup Global company code is must. You are dealing with cross-company transfers since you are using MDG and ECC. In the ALE distribution layer, it is required to set up the global company code for the program to understand for which company code the master data is created. This setting will not affect any process. Tcode- ob72 and obb5.
    Kiran

Maybe you are looking for