Professional Documents
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Profit Center Accounting
Profit Center Accounting
Course Objectives
Overview
Profitability Management
Master Data
Transfer Prices
Planning
Actual Data
Information System
PCA Overview
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
Profitability Management
Aspects of Profitability Management
PCA PA
Profitability Analysis
Responsibility Accounting By Market segment
(Company oriented) (Market oriented)
Profitability
Segments
Revenue 2000 Revenue 2000
External Market
Salaries 468 Discounts 100
CO-PA EC-PCA
Characteristics
costing-based profit center
Contribution of
What is the operating profit for a profit center?
organizational
unit
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.
Valuation Views
A
Group
Legal Profit Center
Group
Company 1 Company 2 Company 3
A Ltd A1 Ltd A2 Ltd
Profit Center 1
Profit Center 2
EC-
Profit Center Accounting
PCA
Company Special
Transaction
Code EC PCA
Currency
Currency Currency
-
Master Data
Organizational Units & Master Data
A Grp Operating
Operating Concern Concern (9100)
A Grp Controlling
Controlling Area Area (9100)
Profit Centers
Inform
Teleco
Ethylene ation Corporate
Pharma Polyolefins Power mmuni
Propylene techno common
cation
logy
A Ltd A1 Ltd HQ
Company Codes 9100 9200 1000
Profit Centers
Profit
Center
Address /
Communications Basic data
Data
Master Data – Dummy Profit Center
Validity Indicators:
Dummy Profit Center
Period
Dummy Profit
Center
Address /
Communications Basic data
Data
Accounts in PCA
A Grp Chart of Accounts
Financial Accounting
1 2 3 4 8
Assets Liabilities Equity Expense Revenue
accounts
1 2 3 4 8 9
Current Non- Material Primary Revenue
opera- inventory cost Secondary
financial elements cost
ting elements
assets costs, elements
and revenue
short-
term
capital Controlling
Profit center
Chemicals
Profitability
Segment
Sales order
Cost center
Profit
Center Asset
Internal order
Production order
Material
Monitoring Assignments
Not
Check Assignments for: assigned
Materials
Cost Centers
Orders Objects per
profit center
Profit
Center
Profit centers
without
cost centers
Material fast
assignment
Transfer Price
Definition of a Transfer Price
Company code 9100 A Ltd Company code 9200 A1 Ltd Company code 9300 A3 Ltd
PrCtr1 PrCtr2 PrCtr2 PrCtr3
CCtr 10 CCtr 20
L 80 L 120 PrCtr3
100
+5 G 80 G 100
P 85 85 P 120
L 70 L 80 L 120 220 L 220
L 70 L 100
G 70 G 80 G 100 G 100
G 70 G 100 220
P 70 P 120 P 220
P 85
P 70 P 85
Transfer price
Profit Center 1 120 Profit Center 2
PCA
Production
Material order
120
Plan Integration
Planning Methods
MS Excel
Internal Cost
Production
Order
Order Center
Planning methods in PCA
New Plan
Plan
Allocations
Final Plan
Plan Data Transfer
Goods
Procurement Production Movement Sales/Billing
MM PP MM SD
Actual Values Overview
Material Expense
FI 400000
500
CO-PC
Raw Materials
119400 Material Expense 500
500
Flow from materials management (2)
Production Output
M. Expense
462001 EC-PCA
450 500
Finished Products
FI 119430
450
CO-PC
Production Output
462001
Production Output- 450
450
Flow from sales and distribution (1)
Inventory
EC-PCA
- Finished Product (FG)
119430
Stock
6,028.50-
FI Receivables
…
10,000
Sales
810000
10,000
Actual Values Overview
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.
Information System
Information System Overview
List-
Interactive oriented
Reporting Reports
Line Item
Reports
Report Output Types
Variable output areas
Interactive Reporting Navigation tree / drag & drop
Cumulative display functionality
Interface Report-to-Report
List – Oriented Reports Printing options
Integration with MS Office