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business aera& profit centers

Former Member
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hi experts ,

what is main difference between the business area & profit center ?

because my client using both for reporting ?

thanks in advance ?

Accepted Solutions (0)

Answers (4)

Answers (4)

Former Member
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Hi,

A profit center is a management‑oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as u201Ccompanies within the companyu201D.

The essential difference between a profit center and a business area is that profit centers are used for internal control, while business areas are more geared toward an external viewpoint.

Hope this helps you.

Rgds

Manish

Former Member
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Hi,

The main difference between Bus Area and Profit Center is that Prft Ctr is part of controlling and Bus Area is part of FI itself. Both are mainly used for reporting purposes.

If your client is using both, then the Business Area and Profit Center would be grouped based on different parameters for eg one might be based of geography and the other might be on various business segments.

Former Member
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Any in New general ledger, it is better to use segment to replace business area, as it is have better intergation with profit center.

Former Member
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firstly hello

Business area: is the field that company working in like Automotive. and it used when i want to know information about every business area (line industry)

Profit center: is using in controlling module and it can using in expense and revenue. and it was used to control the income for this company