How to locate the functions of an accounting profit cost center

Cost centers are departments that bear the costs and expenses and are not responsible for revenues and profits. For example, some companies, such as the personnel department and finance department as a cost center. Profit centers are relative to revenue, emphasizing the relative cost savings. It can be a separate unit from the income statement. For example: you can assess the business unit as a profit center.

In each independent accounting subject, each functional department is a cost center, such as five functional departments, it can be divided into five cost centers or two cost centers, which can be determined according to the management needs of the management, but only one profit center is possible, that is, this independent accounting subject. In SAP, cost centers and profit centers have to be set up in advance. That is, when we enter a general ledger entry related to costs, such as borrowing: administrative expenses - salary credit: cash, SAP requires that the cost of the department must be re-entered, such as a cost center must be entered; cash must be entered into a profit center. This is because, when a cost center is entered, all the amounts related to the cost center will be pooled, and then this cost center will be assigned to a profit center (cost center

center of the master data set), which can automatically generate from the profit center for the management of the profit and loss statement of a self-accounting accounting entity. The cash mentioned above is also required to be entered into a profit center in order to be able to generate a balance sheet with a separate accounting entity. This feature becomes very useful when an independent legal entity has more than two separate accounting entities! That is, the two independent accounting subjects do not have to carry out independent accounting, only to allocate the respective cost center and profit center can be! In SAP, it is easy to produce a profit and loss account with independent accounting, but it is more difficult to produce a balance sheet with a balanced relationship! Said above to do such as cash, which can be generated automatically, but with the headquarters of the transactions between the end of the month, we must enter some of the way through the hand entry to generate the balance sheet. Assuming that a legal person has two independent stores, in the traditional accounting system, the legal person's balance sheet should be "allocated to the funds belonging to" the account used to account for the funds allocated to the two stores between the relationship between the store's balance sheet there should be "funds allocated to the superior There should be an account of "funds transferred from higher level" on the balance sheet of the store corresponding to the balance sheet of the legal person, and when transactions occur every month, they can be accounted for through the two accounts or by adding another internal account for accounting. At the end of the month, the corporate statements should be summarized and then offset the "funds allocated to the funds" and "superior funds" and related internal transactions. However, in SAP, this time has not been used as described above for accounting! Such as a store renovation costs allocated to the store, the original practice is: debit: allocated funds credit: long-term amortized expenses, and

SAP directly under the long-term amortized expenses to enter a profit center that can generate the corresponding store accounting statements. Of course, for some transactions and month-end (or year-end) realized profits, you must manually enter adjusting entries to make the store balance sheet. However, there is a drawback to this approach: because of the reduction of the traditional accounting practice of offsetting internal transactions, when inventory transfers between the headquarters and stores without markups, the manual adjustment at the end of the month is able to realize the balance sheet of the store. However, when there is a markup on the transfer of goods from headquarters to stores, it becomes more difficult to handle