Hi,
Main distinguishing factor is that Distribution or assessment within profit center can be done for allocation of overheads.
No such allocation functionality is possible within Business area.
Hierarchical structure for profit center can be created.
Hierarchical structure for business area is not possible.
Business area does not need to be attached to any organization structure.
But profit centers can be created under the controlling area.
PCA helps to arrive at profitability of business unit
Business area is used to segregate FI transactions pertaining to various
Profit Center Accounting as the Product manufactured.
Business area would have been useful only when the Areas of Business are Different.
Business area concept is used for making strategic decisions by the management whereas the primary purpose of profit center is accounting.
PCA would be much more suitable. You may need some derivation rules for Populating Profit centers, but it would be much more easier than using Business area and reconciling FI-CO on monthly basis.
The main difference between profit centers and business areas is that profit centers are used for internal management whereas business areas are geared more towards external purposes.
Under ECC 6.0, you should be able to do most of this without business areas.
Instead using the classical business area in FI, ECC 6.0 adds a new functional object which is called Segment. And for segments you can use for example the classical business area's. However this functionality is part of the New General Ledger (NGL).
When NGL is implemented several new transactions like financial statements (balance sheet / P&L) are added to SAP Easy Access menu.
If I can give you some advice, be prepared to work on Segment Reporting and I should recommend you to be more familiar with ECC 6.0
Regards,
Satish Muvva.
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