Profit center accounting

Profit centers are organizational units of a company, with the company being the legal unit. Profit centers may be plants, branches, subsidiaries, business units, and divisions, for example.

Profit center accounting provides information about the profitability of an organizational unit. For this purpose, profit centers are reconciled if one profit center provides material, operations or activities for another profit center.

Profit centers are reconciled in cost accounting. Postings to cost accounting are therefore triggered when two profit centers are reconciled. Depending on how the quantity and value flows have been configured, profit centers are reconciled in cost object accounting or income accounting.

Note: The functionality and its integration in proALPHA are explained in the following. Your consultant will help you with its design and implementation. Profit center accounting is available with the corresponding license only (S_ProfCenter software option).

Master files

Master files

Explanations

Profit center master files

Profit centers are entered in the profit center master files in proALPHA. These master files provide the basis for defining a company-specific profit center structure.

Topic: Profit center master files

Profit center structure

The profit center structure is the central element that allows profit centers to be used in logistics modules such as sales, materials management, and production. The profit center structure groups the profit centers of your company with respect to time. Consequently, it can be determined which profit centers are valid at which time. The profit center structure is entered in the company master files.

Topic: Profit center structure

Cost object

Quantities and values flowing between profit centers are posted from the logistics modules to cost object accounting (pa_S_Traeger/pa_V_Traeger). Profit centers are managed as cost objects for this purpose. For convenience purposes when entering master files, you can adopt profit centers as cost objects (Function | Adoption Profit Center menu item in the cost object master files).

Topic: Cost Object

Income object groups

Income objects

Quantities and values flowing between profit centers are posted from the logistics modules to income accounting (pa_S_Traeger/pa_V_Traeger). Profit centers are managed as income objects for this purpose (Profit Center income object group). In the income object group, the profit centers are entered as income objects. For convenience purposes when entering master files, you can adopt profit centers as income objects just like other master files (Function | Adoption Master Files menu item in the income object master files).

Note: The "Profit Center" income object group cannot be used as the primary group.

Topics:

Value flow groups

The Profit Center Accounting tab is available in the Value Flow Groups window. On the tab, you define cost accounting data for profit center accounting that are relevant to material postings.

Depending on the configuration of the quantity and value flows (pa_S_Traeger/pa_V_Traeger), objects are entered in cost object accounting and income accounting that correspond to the profit centers. These objects are posted when a business activity causes two profit centers to be reconciled. Besides the objects, cost items CObj and/or income accounts are posted. They are determined based on the value flow group of the part. For this purpose, the respective master files have to be defined on the Profit Center Accounting tab.

The tab is organized like a matrix. Value flow categories and value flow types are differentiated. The value flow category indicates the starting point of the value flow, e.g., sales. The value flow type indicates the specification of the value flow, e.g., debit.

The value flow categories define the direction of the value flow, e.g., from sales to income accounting. The pa_V_Traeger and pa_S_Traeger compiler constants define which cost accounting module is posted.

You define a costing group for debiting and crediting. If the quantity and value flow is directed towards cost object accounting, the costing group has to be relevant to cost object accounting. If income accounting is posted, the costing group has to be relevant to income accounting.

You define a cost item CObj or an income account to post the internal revenue and internal costs. This also depends on how the quantity and value flow has been configured.

Topics:

Cost item groups

In the cost item groups, you define cost accounting data for profit center accounting that are required for time postings.

Depending on the configuration of the quantity and value flows (pa_S_Traeger), objects are entered in cost object accounting and income accounting that correspond to the profit centers. These objects are posted when a business activity causes two profit centers to be reconciled. Besides the objects, cost items CObj or income accounts are posted. They are determined based on the cost item group of the operation or activity. The required cost items or income accounts are defined in the cost item types for profit center accounting. The following fields are available for this purpose:

  • Profit Center Credit

  • Profit Center Debit

  • PCtr IntRev

  • PCtr IntCosts

Topic: Cost item groups

Document types

The document types that are relevant to analyze profit centers have been identified in proALPHA. The document types are defined in the pa_SB_ProfitCenterDocTypes compiler constant. Settings for entering and initializing profit centers have been predefined for these document types.

These settings define whether and how a profit center (PCtr) is to be entered in the document header and initialized.

Entry

Possible settings:

  • None

    No profit center can be entered.

  • Optional

    It is optional to enter a profit center.

  • Required

    It is required to enter a profit center.

Initialization

Possible settings:

  • None

    The desired profit center is defined manually.

  • Specialist

    The profit center is determined from the user settings of the specialist (Active Profit Center field).

    An MRP area can be determined and suggested based on the profit center. The desired MRP area is defined in the master files record of the profit center for this purpose.

  • MRP Area

    The profit center is determined based on the MRP area in the profit center structure.

    If the MRP area is changed in sales documents (New window), the profit center is initialized again.

Note: The settings of the configuration table of document types can be changed, if required. In this case, all document types of a document chain (e.g. order - shipping document - invoice) have to be included.

Predefined settings for sales documents

Document types (keys)

Descriptions

Entry

Initialization

A

Quote

Optional

Specialist

VUR

Blanket Order (Sales)

Optional

Specialist

U

Order

Optional

Specialist

VUA

Call Sales Order

Optional

Specialist

MLE

Withdrawal Notice Customer

Optional

Specialist

L

Shipping Document

Optional

Specialist

VUD

Demo Shipping Document

Optional

Specialist

VSD

Transport Document ESP

Optional

Specialist

VSE

Transport Document External

Optional

Specialist

VSI

Transport Document Internal

Optional

Specialist

VFP

Pro Forma Invoice

Optional

Specialist

R

Invoice

Optional

Specialist

G

Credit

Optional

Specialist

VFS

Final Invoice

Optional

Specialist

Predefined settings for service documents

Document types (keys)

Descriptions

Entry

Initialization

VSW

Maintenance Agreement

Optional

Specialist

VSA

Service Order

Optional

Specialist

VSC

Call

Optional

None

VSM

RMA Document

Optional

None

Predefined settings for purchasing documents

Document types (keys)

Descriptions

Entry

Initialization

EAA

Request for Quote

Optional

Specialist

ERA

Blanket Purchase Order

Optional

Specialist

EB

Purchase Order

Optional

Specialist

EAB

Purchase Order with Delivery Plan

Optional

Specialist

ECO

Call Purchase Order

Optional

Specialist

EBB

Order Confirmation

Optional

Specialist

EDA

Dispatch Notification

Optional

Specialist

EWE

Stock Receipt

Optional

Specialist

ERL

Return

Optional

Specialist

MPA

Packaging material

Optional

Specialist

ERR

A/P Invoice Voucher

Optional

Specialist

EBA

Debit Memo

Optional

Specialist

ERZ

A/P Invoice Voucher (Partial Payment)

Optional

Specialist

Predefined settings for materials management documents

Document types (keys)

Descriptions

Entry

Initialization

MKB

Staging Suggestion

Optional

Specialist

MKD

Staging Suggestion (Coverage)

Optional

Specialist

MLL

Shipping Document to Warehouse

Optional

Specialist

MLI

Internal Shipping Document

Optional

Specialist

MBA

Manual Purchase Request

Optional

Specialist

Predefined settings for production documents

Document types (keys)

Descriptions

Entry

Initialization

PPN

Quoted Order

Optional

MRP Area

PPA

Work Order

Optional

MRP Area

Predefined settings for project management documents

Document types (keys)

Descriptions

Entry

Initialization

J

Project

Optional

Specialist

Company-specific settings for entering and initializing profit centers

The settings predefined in the configuration table of the document types are relevant to all customers (Entry and Initialization fields).

You can define company-specific settings for the individual document types in the standard document parameters. If you enter standard document parameters in a company for a document type, the predefined settings for the document type from the configuration table are suggested.

The predefined settings of the configuration table can be automatically adopted into the standard document parameters in one step. For this purpose, the Reconciliation Profit Center Settings utility in the tools of the system administration is available. When you execute the utility, the settings for each document type for which there already are standard document parameters are adopted. Already existing settings for the entry and initialization are overwritten. If no standard document parameters are entered for a document type, no new standard document parameters are entered for this document type by means of this utility.

Note: The settings can be changed, if required. In this case, all document types of a document chain (e.g. order - shipping document - invoice) have to be included.

When a document is entered, the settings from the standard document parameters are determined and used for the document. If no standard document parameters are entered for the corresponding document type, no settings are determined for the document, not even from the configuration table.

Document parameters

The document parameters can be entered and updated for each profit center. This applies to the following:

  • Standard document parameters

  • Document parameters customers

  • Document parameters suppliers

"For each profit center" means that the document parameters that have been directly defined in the master files window apply to the company. However, various document parameters may differ for each profit center, e.g., work groups, order categories, and forms. These document parameters are entered in the Document Parameters Profit Center window (Function | Profit Center menu item in the master files window of the document parameters).

When documents are entered, the document parameters are determined in the following order:

  1. Profit center-specific document parameters of the customer or supplier

  2. Document parameters of the customer or supplier

  3. Profit center-specific standard document parameters

  4. Standard document parameters

Documents

Depending on the business activity and the corresponding document, the following specifics are differentiated:

Item

Specifics

Document adoptions in sales

A profit center for the sequential document can be defined in the Data Document Header window.

Adopting EDI messages into documents

During the adoption, the profit center is determined in the following order:

  1. Based on the GLN transferred

  2. Based on the settings for entering and initializing the profit center of the respective document type

This type of determination is used for the following message types:

  • 003 (purchase orders/changed purchase orders)

  • 007 (invoices)

Only the determination based on the document type is used for message type "4913 (Shipping Document and Transport Data)" because no GLN is transferred.

Adopting INWB messages into documents

During the adoption, the profit center is determined in the following order:

  1. From the preceding document

  2. Based on the GLN transferred

  3. Based on the settings for entering and initializing the profit center of the respective document type

Shipping document invoices

The profit center of the shipping document is adopted into the invoice. If no profit center has been defined in the shipping document, it is determined by means of initialization of invoices (document type "R"). If no profit center can be determined, you will be informed by a system message.

Generating consolidated invoices

Only shipping documents of the same profit center can be combined in a consolidated invoice.

Editing documents

To edit documents, you can select them by profit center, e.g., in the Editing Orders window.

Partial payment transactions in sales

All documents of a partial payment transaction must have the same profit center so that a final invoice can be created. As a result, the profit center of an order can no longer be changed if a partial payment invoice has already been created.

Worker postings in production

Profit center postings are performed if the profit center of the employee's master cost center deviates from the profit center of the resource's cost center. The cost items or income accounts are used which are also used for normal postings of the operation, e.g., Credit CCtr and Debit CObj.

Scrap posting in production

Separate scrap postings for the reconciliation of profit centers are not performed.

Reporting an external service in production

An external service is treated like a material posting without a movement. This means that the cost items or income accounts are determined in the value flow group as defined in the value flow group of the part. An external service does not feature a storage area or cost center. Therefore, the profit center of the MRP area of the work order and the profit center defined in the work order are relevant. If the two profit centers are different, the following applies: The profit center of the MRP area is the sending profit center, and the profit center in the work order is the receiving profit center.

Object change in work orders

If postings to income accounting are performed, deviating IObj combinations are included. This is shown in the following example.

Active income object groups include:

  • Product Line (Primary Group)

  • Customer

Income objects "10" (product line) and "100000" (customer) are used. IObj combination "10/100000" is posted. Income object "10" is replaced with income object "20". As a result, IObj combination "10/10000" is credited and the new combination "20/100000" is debited. The profit center postings (10/100000) are canceled and posted again with the new combination (20/100000).

Inventory overview

The inventory overview of a part provides information about the stock of individual profit centers, MRP areas, and storage areas. For example, movements are displayed. The document for each movement is available, too.

Purchasing plans and sales budgets

Purchasing plans and sales budgets can be created for the entire company and individual profit centers.

Note: The budgeted values of basic profit centers are not included in rollup profit centers. Consequently, no rollup is performed for purchasing plans or sales budgets.

Statistics

Various statistics are kept for the entire company and individual profit centers. When you want to display or output them, define whether the statistics are to be created for the company or a profit center.

When displaying statistics, you define the profit center beforehand in a window. The window contains a line for the company and further lines for profit centers, for example:

Click the desired line to define the object for which the statistics are to be displayed. You then open the statistics in the Statistics menu of the window.

When outputting statistics, you define the desired profit center in the Profit Center input field, for example:

You can enter or assign the profit center. If you want to assign it, open the <Ctrl + A> overview, where you can search for the record.

Explanations of the statistics rollup

The statistics rollup is performed according to the profit center structure. Basic profit centers are rolled up into rollup profit centers. Rollup profit centers may be rolled up into rollup profit centers. If a rollup profit center can be posted directly, directly posted single values as well as values of subordinate profit centers are accumulated in it.

Reconciliation of profit centers

Profit centers are reconciled if one profit center provides material, operations or activities for another profit center. For example, a profit center can withdraw material from the storage area of another profit center by means of a shipping document. The profit center from which the material is withdrawn (document line) is the sending profit center. The profit center of the document header is the receiving profit center.

Topic: Reconciliation of profit centers