Cost Center VS Project
How does Cost Center/Profit Center works in SAP B1 2007A and what different with using project?
I want to utilize Cost Center or Profit Center, Can you tell me how to set up this and how to relate to transaction and how to check the result?
Appreciate to your quick reply
here is what I could summarize from help file and pdf file :
A profit center is a company unit or division that performs a specific business function, such as manufacturing specific products or providing a specific service. The profit center you define here represents the respective division or department, and is used to consolidate the expenditures and revenues resulting from the ongoing activity of the specific organizational unit.
To define profit centers, choose Financials Cost Accounting Profit Centers .
A distribution rule is used to allocate direct and indirect costs and revenues to one or more profit centers, thus containing information regarding the portion of the costs or revenues to be allocated to each individual profit center.
To distribute the indirect costs incurred by rent you could specify what portion of the total rented space a specific profit center uses. If one store used 150 square yards of the total rented floor space of 200 square yards, and the other used only 50 square yards, you could distribute the costs incurred by rent and professional cleaning services proportionately among the stores on the basis of the space they occupy. To achieve this, you can assign the distribution rules to the appropriate expense accounts and revenue accounts.
Another way of defining such a distribution key would involve expressing the number of employees belonging to a profit center as a proportion of the total head count in the company.
End of the example.
To activate the cost accounting functionality, you need to link the distribution rules to the respective expenditure and sales G/L accounts of the business. As a result, the amount of each accounting transaction that is posted to these accounts is recorded in the respective profit centers.
Assigning Distribution Rules to G/L Accounts
Use this procedure to assign distribution rules to G/L accounts of type Expenditure or Sales.
You cannot assign distribution rules to G/L accounts of type Other.
End of the note.
You have defined the required profit centers in Financials Cost Accounting Profit Centers .
You have defined the required distribution rules in Financials Cost Accounting Distribution Rules .
You have defined the required G/L Accounts in Financials Chart of Accounts , and specified them as Expenditure or Sales.
From the SAP Business One Main Menu, choose Financials Chart of Accounts .
Select the G/L Account to which you want to assign a distribution rule.
In the G/L Account Properties section, select Distribution Rule.
A drop-down menu appears.
Select the required distribution rule, or specify a new one.
To save your choice, choose Update.
Every transaction involving the G/L account to which the distribution rule was assigned is recorded automatically in the appropriate profit center(s), according to the ratio defined in the distribution rule.
The distribution rule assigned to G/L accounts according to this procedure functions as the default distribution rule when you post different transactions in SAP Business One. You might have transactions or documents in which you may be required to assign a different distribution rule to a specific G/L account. In such cases, the default distribution rule can be changed in most forms in the application. For the complete list, click here.
End of the note.
One time update of distribution rules
from pdf file:
Fix inconsistencies related to impossibility of entering profit
centres/ distribution rules on some forms in previous version and now in 2007A version, profit center is available here:
u2022Financials : Recurring postings, Posting Templates
u2022AP/AR Documents : Freight (lines, header)
u2022Inventory Transactions : Goods receipt, Goods Issue, Stock Transfer, Stock count, Material
u2022Banking : Incoming/Outgoing payments, Payment wizard
u2022Production : Receipts for Production
u2022Issue for Production