Cost Center and Profit Center in Sales Order and Deliveries.

[Former Member]

What are the different methods of determining cost centers and Profit centers in Sales orders ?

Can Cost Center be determined independently in sales order or will be detrmined from Profit center ?

[Former Member · Accepted solution]

Hi,

Profit Centres (KE51) can be defaulted in the sales order from material master - Sales General /Plant data view

Internal Order (KO01) will have this profit center

With Cost Centers (KS01) it is derived based on Pofit Center

Reward if helpful

Ravi

[ranjeetrajendra_jain]

Hi Sunil

Profit Centres are used primarily in S&D (at billing stage it is transferred to FI) for registering revenue.

Billing -

Integration Points Module

•Debit A/R - FI/ CO

•Credit Revenue - FI/ CO

•Updates G/ L - FI/ CO

(Tax, discounts, surcharges, etc.)

Return Delivery & Credit Memo -

Integration Points Module

•Increases Inventory - MM

•Updates G/ L - FI

•Credit Memo - FI

•Adjustment to A/R - FI

•Reduces Revenue - FI

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.

Regards

[Former Member]

Any inputs on this ?