SAP S/4HANA Profit Center Accounting | SAP Blog | Eursap

When you create a GL account, we choose an Account type from Balance Sheet Account, Non-operating Expense or Income, Primary Costs or Revenue, ... +442031500318 |[email protected]| November13,2018 ExploreEursap’stopSAProles.SecureyournextSAPjobwithEursap–Don’tdelay!Applytoday! SearchOurSAPJobBoard Summary WecreateProfitCentersinSAPtounderstandoperatingprofitateachareaofresponsibility.TheProfitCenterdefinitioncriteriadependsonindividualcustomerrequirements.SomecustomersneedProfitCentersbylocation,othersdefinebyProduct,Function,ProductGroup,ProductDivisionetc…AProfitCenterisanorganizationalunitthatoperatesindependentlywithincompany.Typically,SAPsystemsderiveProfitCentersbasedontheassignmenttootherobjects,thatmaybematerialmasters,costobjectsandoverheadobjectstotherelevantproductionorder,salesorder,WBSelement,productcostcollector,networketc…. IfCustomersdecidetousecost-of-salesaccounting,theyneedtodefineanddeterminefunctionalareaswhichcontaintherelevantcostcomponentsasfunctionalcosts.ProfitCenterAccountingallowsprofitabilityreportsbyperiodorcost-of-salesaccounting.TheobjectofdefiningProfitCentersistodrawfinancialstatements,profitandlossstatement/balancesheetforeachareaofresponsibilitycompany.YouneedtoactivateonlinedatatransferintheProfitCentersettingsforthecontrollingareaduringconfiguration. ThisarticleisintendedtoprovideaquickoverviewonProfitCenterAccountinggiventhatthisisthemostimportantmasterdatainanySAPimplementationsandstructuredtoprovideanoverviewofProfitCenterAccountinginSAPS/4HANA1709/1809. Introduction AProfitCenterisan“SAPControlling”organizationalunitdefinedforinternalcontrolpurposes.Basedonorganizationalrequirements,youcandividecompaniesintoProfitCentersthatenablesmanagementtoanalyzetheareasofresponsibility.Italsoenablesyoutodelegateauthorityandresponsibilitytothesedecentralizedunitstosteerandcontrolthem.ThepersonresponsiblefortheProfitCenterisresponsibleforitsbalanceofcostsandrevenues.ProfitCenterAccountingisoneofthetoolstoevaluateaspecificunitofenterprisewithinthecompany.Itmaybeaplant,branchoffice,functionorproduct,productgroupordivisionetc…toanalyzeprofit&lossinternally.ProfitCenterAccountinggetsdatafromvariousbusinessprocessesfromAccounting,Logistics,SDandsoon.Duringmasterdatadesign,weassignProfitCenterstootheraccountassignmentobjectslikeSalesOrders,Productionorders,CostCenters,Internalorders,Projectsetc…towhichcostsandrevenuesaretobeposted. Asaresult,theProfitCenterfiledintheSAPsystemisnormallynotuserinputfiledexplicitly.Instead,dataisderivedfromcostcenters,internalorders,materialmastersetc…SAPS/4HANAFinanceConsultantsdefineControllingareasettingstobeabletousethefunctionswithinControllingorinProfitCenterAccounting.OneControllingareahasdifferentProfitCenters.EachProfitCenterheadrequiresinformationtoprepareP&Ltotakedifferentdecisions.Grouphead(Controllingislevel)needsoverallinformation.DifferentinformationisneededbydifferentProfitCenterheadsfordecisionmakingprocesses,astheyareresponsibleforeachareaofresponsibility. Inthisarticle,IwouldliketosharebasicinformationonProfitCentersAccountingonSAPS/4HANAwithreferencetoSAPS/4HANAVersions1709/1809. MasterData Duringimplementationprojects,SAPS/4HANAFinanceConsultantswillfinalizethecriteria(basedonGeographicallocations,Productlines,byfunction–Marketing,Productionetc.….)todefinetheProfitCenterMasterData.Oncedefinitioncriteriaisfinalized,SAPS/4HANAFinanceConsultantscreateProfitCenterstandardhierarchy,ProfitCentergroups(alternativehierarchies)andcreateProfitCentermasterdatainSAPS/4HANAsystem. ProfitCenterMasterdatacanbecreatedusingfollowingOptionsinSAPS/4HANA1709/1809: 1.UsingFioriLaunchpad–FioriApp“ManageProfitCenters” 2.SAPGUI: OntheSAPEasyAccessscreen,Accounting→FinancialAccounting→GeneralLedger→MasterRecords→ProfitCenters→IndividualProcessing→Create-TransactionKE51 3.UsingTheMigrationCockpit: YoucanalsouploadProfitCenterMasterDataUsingTheMigrationCockpit(LTMC) ThemigrationcockpitcanbeaccessedinSAPS/4HANAusingtransactionLTMC.Youcanfindamigrationobject“ProfitCenter”tomigrateProfitCenterMasterdatainSAPS/4HANAusingatemplateprovidedbySAP. ProfitCenterAccountinginS/4HANAworksbasedontheGLaccountsoftheoperationalchartofaccountsassignedtoyourcompanycode.WhenyoucreateaGLaccount,wechooseanAccounttypefromBalanceSheetAccount,Non-operatingExpenseorIncome,PrimaryCostsorRevenue,SecondaryCosts. AssignProfitCenterstoAccountAssignmentObjects: OnceProfitCenterMasterdatadefinitioncriteriaisfinalizedduringSAPS/4HANAimplementation,SAPS/4HANAFinanceConsultantsneedtoplantoderiveProfitCentersfromvariousaccountassignmentobjectsinSAPS/4HANAtowhichcostsandrevenueswillbeposted BelowarethewaystoestablishalinkbetweenProfitCentersandotherAccountAssignmentObjects •SAPEasyAccess–Accounting→FinancialAccounting→GeneralLedger→MasterRecords→ProfitCenter→CurrentSettings. Or,youcanalsousethebelowmenupathfromIMG: SPRO→FinancialAccounting,underGeneralLedgerAccounting→MasterData→ProfitCenter→AssignmentsofAccountAssignmentObjectstoProfitCenters. AprobableproblematicareaisProfitCenterassignmentinAssetMaster: EitherProfitCenterorSegmentcannotbestoreddirectlyinAssetMasterData,S/4HANAsystemderivessegmentandProfitCenterfromacostcenteroraninternalorderindirectly. OnceyouactivatebelowbusinessFunctionandActivateSegmentReportingoptioninIMGmenu,youwillbeabletoseesegmentandProfitCenterinAssetMasterrecord. FinancialAccounting→AssetAccounting→IntegrationwithGeneralLedgerAccounting→SegmentReporting→ActivateSegmentReporting. Caution:OnceyouhaveactivatedsegmentreportingforAssetAccountingyoucannotdeactivate. ForExample,ifyouareworkingonaprojectwhereSegmentreportingwithAssetAccountinghasaproblem,youcanalsoactivatethisinIMGshownaboveandexecutetheprogram.FAGL_ASSET_MASTERDATA_UPDthruSE38orusingmenupath.SothesystemwouldbeabletoupdateallassetmasterswithsegmentandProfitCenterfields. OnceProfitCenterMasterdataanditsassignmentwithotherobjectsiscompleted,SAPS/4HANAFinanceConsultantsneedtostartotherconfigurationsettingsthatareneededforintegrativebusinessprocesses.TheyhavetodothenecessarysettingstoflowdatafromFinancialAccounting,MaterialsManagement(MM)CostObjectControlling(COC)SalesandDistribution(SD).ThentheyhavetoplanforProcessingAllocationsinProfitCenterAccounting. ActualDataFlowtoProfitCenterAccounting AsProfitCenterAccountingenablesyoutocalculateoperatingprofit/LostforaProfitCenter,ConsultantsworkingonSAPS/4HANAimplementationswillmakesurethatdataisflowingcorrectlytoProfitCentersthroughproperconfigurationsettingsacrossalllinesofbusiness. WhenweactivatetheDocumentsplittingprocessatProfitCenterLevel,itiseasytoidentifyAccountspayablesandAccountsreceivablesaccordingtotheiroriginatProfitCenterlevel.AsProfitCenterAccountingisintegratedinACDOCATable,BusinessesdonotrequiretodoreconciliationsamongstFinancialAccounting–Controlling–CenterAccounting.DatafromlogisticsflowthroughassignmentoftheobjecttoaProfitCenterorpartnerProfitCenter. AsuserscannotenterProfitCenterinformationmanuallyforreceivables,payables,orautomaticallygeneratedlineitems,properassignmentsandconfigurationsettingsareneededsothesystemfillstheProfitCenterfieldautomatically.SometimesduringexecutionofallocationsinControllingthismayresultinachangeoftheProfitCenters.ThenitaffectsP&LofrespectiveProfitCenters. Whendataispostedtofinancialaccounting,usersgiveaControllingobjectmanually.AswehavealreadyestablishedalinkbetweenCOobjecttoaProfitCenter,dataflowstoProfitCenter.InmanyFItransactions,userscanalsoenterProfitCentermanually. ProfitCenteristakenfrommaterialmasterperpurchaseorderitem.ThisProfitCenterismovedtoGR(goodsreceipt)whenwedoMIGO.Thisgives“costsofthematerialconsumption”intherelativeProfitCenters. Ifthereisapricedifference,thisisassignedtotheProfitCenterofthematerialpurchased.Ifthepricedifferenceaccountisdefinedasacostelement,thepricedifferenceamountispostedtotheProfitCenterofthecorrespondingCOobject.Besides,transferfromFinancialAccounting,Materialmanagement,SystemtransfersfromprimaryandsecondarycostpostingstoProfitCenterAccounting. IfusersexecuteGoodsIssueforaProductionorder,theProfitCenterisdeterminedbythefinishedgoods(MaterialProduced). ForSDtransactions,ProfitCenterispassedfromthesalesordertothedeliverynote,andthentothebillingdocument(VF01)whenthegoodsissuedtoCustomer,changeinstockispostedtotheProfitCenterautomatically. Ifaccount-basedCO-PAisactive,GLaccountforchangesinstockistobedefinedasacostelement.IfCO-PAisnotactive,youmustdefinethisGLaccountasaprofitandloss(P&L)account.ProfitCenterisassignedtoeachitemofthesalesorder. AllocationsinProfitCenterAccounting: DuringAllocationsinProfitCenteraccounting,weusestatisticalkeyfiguresasanallocationbase.SAPrecommendsusingDistributiontomovefromasingleProfitCentertomultipleProfitCentersasitallocatesitemstothecostelement(thesameaccountremainsinthereceiver). ProfitCenterPlanninginSAPS/4HANA1709/1809 SAPBPCisoptimizedforSAPS/4HANAwithRealtimeaccesstoMasterdataandtransactiondatawithsingleplanningsolution.ItispartofSAPS/4HANA.ItisdeliveredwithcontentrelatedtorelevantBWandplanningstructuresandwithanalysisofficeplanningworkbooks.Ithassimulationcapabilities,pre-builtplanningmodelsandmanyfurtherkeycapabilities.Iteliminatesdatareplication&retraction.OnceSAPAccountingpoweredbyHANAisimplemented,thenSAPBPCOptimizedforSAPS/4HANAcanbeimplemented. ACDOCATableisthemaintableforAccounting.FromSAPS/4HANA1610itispossibletostoretheresultsofplanninginanewtable,ACDOCP,thathasthesamestructureastheuniversaljournal(ACDOCA).Plan/actualreportingisprovidedbycomparingtheentriesinthetwotables. BelowareafewworkbooksdeliveredwithSAPS/4HANA1709: AsSAPHANAisacommondatabaseforOLTPandOLAP,itcaneliminatecomplexityandlatency.Thisimprovesdataprocessingperformanceandfasterresponsetimes.SAPS/4HANAisbuiltonSAPHANA.Planning,execution,prediction&simulationaredone“on-the-fly”,atthehighestlevelofgranularity,todrivefasterbusinessimpacts.Ithelpsforreimaginingbusinessesandmakesdecisionsfast. ProfitCenterPlanninginSAPECCisbasedoncertaintransactions(SAPGUI).Example:7KE1-6and7KEP(ProfitCenterplanning),IKE0(transferCO-OMplantoProfitCenterplan).BusinessesnowhavetouseSAPBPCOptimizedforSAPS/4HANAforplanningtransactions.TheseTransactionshavebeenremovedfromthemenuinSAPS/4HANAon-premiseedition1511orhigher. WhenconsultantsworkonConversionProjects,theyneedtorefertoSAPNotes2081400and1972819asapartofConversionPre-Checks.TheyalsoneedtocheckthescopeofexistingplanningactivitiesanddetermineiftheycanbecoveredusingthebusinesscontentcurrentlyavailableforSAPBPCforS/4HANAFinance. HowtoReactivateClassicPlanningFunctionalitiesinSAPS/4HANA ProfitCenterPlanningisnowcoveredbySAPBPCforS/4HANAFinance.RefertoSAPNote2081400.AsperSAPnote2270407,ifyoudonotwanttouseSAPBPCforS/4HANA,butclassicplanningfunctionsinstead,youcancontinuetousetheclassicplanningtransactions.RefertoSAPnotesforfulldetails. FI-GLPlanning–SAPNote2253067describeshowtoreactivate. ProfitCenterPlanning(classic)–SAPNote2345118and2313341describehowtoreactivate. SAPNotes2227515,2226649,and2234577mustbeimplementedfirstinthesystem.ProgramFINS_FILL_DEPR_OBJECTmustbeexecutedinupdatemode(withSE38) Execute: Inaddition,thegeneraluseofoldobjectsmusthavebeenactivatedbyexecutionoftheprogramFINS_SET_DEPR_STATUS TransferpriceinSAPS/4HANA: Manyorganizationsarerequiredtoreportfinancialstatementsbasedonmultipleaccountingprinciples. CompanieslistedinIndiaarealsorequiredtoreportconsolidatedfinancialresultsbasedonIFRS.ProfitCenterheadsareresponsiblefortheresultsoftheProfitCenter.ProfitCentersmustevaluatethetransferofgoodsandservicesamongtheProfitCenterswhengoodsandservicesaremovedamongsttheProfitCenterswithinthecompanycode.TheSAPS/4HANASystemsupportstransferpricesfunctionality.OlderVersionslike3.1usedtoallowustoevaluatelegally.LaternewerversionsallowedustoevaluatetransferpricesinProfitCenterAccountingfromthegroupviewandfromthepointofviewofProfitCenters Threetypesoftransferprices: Legalview transferpricesrepresentsalesprice.ThiswillreflectintheindividualfinancialstatementsofthoseProfitCenters. Groupview representsCOGM,whichcanbeusedfortheallocationofgoodsandserviceswithinCompanycode.GroupViewistovaluateexchangesofgoodsandservicesamongstProfitCenterswithinthecompanycodeusingcostofgoodsmanufactured(withoutinternalprofits).ThereceiverProfitCenterreceivesasemi-finishedproductatcostofGoodsManufactured. ProfitCenterView representsvaluationapproachesthatareagreedamongstProfitCenters. Valuationviewalwaysusesitsowncurrencytype(Legal,Group,ProfitCenter).Thecombinationofcurrencytypeandvaluationviewisreferredtoasthevaluationapproach. Inacurrencyandvaluationprofile,youcanspecifyuptothreevaluationapproaches. Configuration: DefineSettingsforLedgersandCurrencyTypes: Currencytypes“GrouporProfitCenter”valuationhaveanassignmenttothecorrespondinglegalcurrencytype. Twooptions: 1.Separateledgerforeachvaluation. 2.Parallelvaluationsupdatedinamulti-valuationledger. Separateledgerforeachvaluation: Parallelvaluationsupdatedinamulti-valuationledger: Forthis,0Lisassigned10,11,12,30,31&32currencies. Ledger0Lwillbeassignedtocompanycodeandcurrencytypesshownabove.Currencytypes10&30isforlegalview,Currencytypes11and31isforgroupview,andCurrencytypes12&32areforProfitCenterview. Otherconfigurationsettingsareasfollows: 1.Currencyandvaluationprofile 2.AssignCurrencyandValuationProfiletoControllingArea MaintainCurrencyandValuationProfile:  DefineCurrencyandvaluationprofilesinIMG:Controlling>ControllingGeneral>MultipleValuationAppraches/TransferPrices>BasicSettings>Maintaincurrencyandvaluationprofile. Thecurrency&valuationprofiledetermineswhichvaluationviewsarebeingstoredinwhichcurrencies. C&VProfileshowsCurrencytypeandvaluationview.Wecangiveuptothreevaluationviewsinuptotwocurrencies. Thecombinationofcurrency&valuationviewisreferredtoasvaluationapproach. AssignCurrencyandValuationProfiletoControllingArea AssignCurrencyandValuationprofiletocontrollingarea:IMG:Controlling>GeneralControlling>MultipleValuationApproaches/TransferPrices>BasicSettings>AssignCurrencyandValuationProfiletoControllingArea. WemustassigntheC&VprofiletoaControllingareaandthenactivatetheprofile.SeebelowscreenPrint. Note:ValuationapproachesinCO,ML,FI&allotherforthecompanycodes,depreciationareas,andplantsmustbeconsistentwiththeprofile. ActivateC&VprofileunderControlling>GeneralControlling>MultipleValuationApproaches/TransferPrices>Activation>MultipleValuationApproaches:Check/ExecuteActivation Whenweexecutethis,thesystemchecksifallthesettingsinthecontrollingareaareconsistentornot. Results: CanIDeactivatetransferprices? Deactivationofthetransferpricesmayleadtoinconsistenciesinthetransactiondata.DeactivationoftransferpricesinsystemswithexistingpostingsinmultiplevaluationapproachesisstillNOTsupportedinthestandardSAPsystem.RefertoSAPNote:175758–Deactivatetransferpricesforfullinformation. Conclusions: BusinessesneedtodosufficientexercisestofinalizetheorganizationunitssuchasCostCenters,ProfitCenters,Plants,Segmentsetc…ItisthekeyelementforanySAPimplementationProject. Effectivenessofanorganizationismeasuredbydataqualityandreportingability.DuringmydiscussionswithmanySAPECCcustomersabouttheirpreferredpathforSAPS/4HANA,theysayitisafreshimplementationratherthanconversion.BadmasterdatadesigninexistingSAPECCsystemsisputtingthemoffgoingforaconversion.Creating“thebest”businesscaseforConversionisbecomingachallengeduetoincorrectProfitCenterandCostCenterdesignintheirSAPECCsystem.DesigningperfectProfitCenterMasterData,withappropriateassignmentswithothercostobjects,cansurelyleadtoefficienciesandenhancementsindataqualityandreportingability. BadMasterdatadesignimpactsnegativelyongoodbusinesses.Youmayencounternumerousissuesduringdailyactivities,complianceissuesmayarise,andyoumaymissopportunitiesduetolackofqualitydatabecausemasterdataisoftenusedbymultipleapplicationsandprocesses.Asmallerrorinmasterdatadesigncanhaveahugeeffectonthebusinessprocesses. Author:Dr.RaviSuryaSubrahmanyamworksasDirectoroftheSAPPracticefortheHackettGroupIndia.HeisanAPCertifiedApplicationProfessional–FinancialsinSAPS/4HANA1709–S/4HANASolutionArchitect.HehasaDoctorateinFinance.HeisVisitingInstructorforSAPIndia&SAPIndonesia. NeedtohireSAPS/4HANAresources? GetintouchwithEursap–Europe’sSpecialistSAPRecruitmentAgency ControllingProfitCenterAccountingS/4HANA Share Tweet Share Share RecentPosts Eursap’sTipoftheWeek:ActivatingNotificationsiconinSAPFiorilaunchpad April6,2022 Eursap’sTipoftheWeek:ShowingtheSAPsystemnameinthetaskbar–AUsefulTip March31,2022 SAP–GoingBackinTime–ADeepDiveIntoTheHistoryofTheCompanyandTheSoftware March23,2022 Eursap’sTipoftheWeek:ChangingyourbackgroundinSAPFiori–BrightenupyourdailySAPexperience March22,2022 ImportanceofCustomCodeAdaptationinS/4HANAConversions March16,2022 HowwillSAPC/4HANAEnrichCustomerExperience? 7Next-Generation,HANA-Powered,Cloud-BasedSAPApplications CopyrightEursapLtd.-AllRightsReserved Home SAPJobs QuickHire Hire OurTeam RegisterCV WhyEursap? SAPBlog SAPTips CSR Contact Data × Show ContactUs