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Understand the functions in Profit Center Accounting. Explain Profitability management in SAP. Describe and maintain CO-PCA master data. Identify the source of actual values. Execute planning. Use the CO-PCA information system.
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
Profit center accounting, in conjunction with transfer pricing, enables: Structuring of the A Group according to Strategic Business Units (SBUs), leading to:Full Income Statements according to lines of business (Product Groups rolled up to SBU/Sectors) Selected reporting of Balance Sheet items by Product Group/SBU and Sector (e.g. Payables/Receivables, Fixed Assets. Inventories). The ability to reflect material movements between SBUs at commercial prices rather than cost
Accounting Methods
Period Accounting Cost-of-Sales Accounting
Values
Gross Sales Net Sales Variances
Ratios
Return on Investment Margins Economic Profit Cash Flow Contribution Margin
CO PA
Profitability Analysis
How profitable are individual market segments?
CO PC
EC PCA
Are the responsibility areas working efficiently? How high are the organisational activity costs? Are they within their budgets? How can we optimise our internal business processes?
Manufacturing
Costs of a product?
CO CEL
CO PA
Operating concern (9100 A Grp) Profitability Analysis Profitability Analysis Overhead Cost Controlling
Internal orders
Profitability segment
EC PCA
CO OM
Cost centers
Internal Orders
Activity types
CO CEL
FI
Asset
Expense
Revenues
HR
Human Resources
MM
SD
Profit Centers
Ethylene Propylene Pharma Polyolefins Power Teleco mmuni cation Inform ation techno logy Corporate common
Company Codes
A Ltd 9100
A1 Ltd 9200
HQ 1000
Cost Centers
Purchasing 13
Gen Services 14
R&T 16
Orders
Cost Objects
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
PCA
PA
Responsibility Accounting
(Company oriented)
Revenue Salaries
2000 468
Revenue Discounts
External Market
Materials
Profit
230
COGS
Contr. Margin Advertising
230
1440
Profit Centers
Procurement
Production
Sales
Distribution
Characteristics
CO-PA costing-based
EC-PCA
profit center
Sales and
profitability controlling
Enterprise controlling
cost-of-sales method
period accounting
posted values
Return on capital
Cost management
Reporting Dimensions
Sales Revenue Sales Deductions Cost of Goods Sold Operating Profit Liabilities Accounts Receivables Invested Capital in Assets Inventory Cost of Capital Return on Investment
Determine and analyze profit, balance Answers and financial ratios by Profit Center
Profit
ROI Equity Turnover Return on Sales Economic Profit
Invested Capital
A Group
Legal
Group
Profit Center
Company 1 A Ltd
Company 2 A1 Ltd
Company 3 A2 Ltd
Profit Center 1
Profit Center 2
You use valuation views to represent different ways of viewing business transactions in a company.
Legal view (Individual enterprise) For transactions between company codes. Group view For a consolidated view of the corporation. Profit center view For business transactions between profit centers.
ECPCA
Currency
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
Profit Centers
Ethylene Propylene Pharma Polyolefins Power Teleco mmuni cation Inform ation techno logy Corporate common
Company Codes
A Ltd 9100
A1 Ltd 9200
HQ 1000
Cost Centers
Purchasing 13
Gen Services 14
R&T 16
Orders
Cost Objects
Profit Center
Organizational unit in Accounting that reflects a management-oriented structure of the organization for the purpose of internal control. Profit Center groups are collections of Profit centers with similar characteristics. In the case of A Grp this structure is by Product Group.
Validity
Period
Company Code
Assignment
Address /
Communications Data
Profit
Center
Basic data
Validity
Period
Indicators:
Dummy Profit Center
Address /
Communications Data Basic data
Profit Center
Profit Center
Profit Center
Profit Center
Mass Processing
1
Assets
2
Liabilities
3
Equity
1
Current financial assets and shortterm capital
NonMaterial Primary Revenue operainventory cost elements ting elements costs, revenue
9
Secondary cost elements
Cost Elements
Profit Centers
Activity Types
Cost Elements
Personnel
Fertilizers
Employees
Labour : contract
Wages Salaries
F1
F2 F3
Domestic
Foreign
Profitability Segment
Cost center
Profit Center Internal order
Sales order
Asset
Production order
Material
Not assigned
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
A transfer price is a price used to valuate the transfer of goods and services between independent organizational units.
America
Europe
Middle East
Asia
Division A
USA UK
KSA
MEX
Division B
BRA
Legal View that of independent legal companies Group View that of the organization as a whole Profit center view - that of the decentralized responsibility areas
CO
FI
Transfer price from the group viewpoint = Transfer price from the profit center viewpoint = Transfer price from the legal viewpoint =
A3 Ltd
220 220
L G P
Profit Center 1
Profit Center 2
PCA
Material
Production order
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
Plan Integration
Planning Methods Plan Data Transfer
Microsoft Excel
Internal Order
CO Production Order
Cost Center
Manual entry
New Plan
Plan Allocations
Final Plan
Plan Profit Center Cost Center Internal / CO Production Order On- line Plan Data Transfer AND/OR Subsequent Postings Revenue 100,000 Marketing 50,000 Admin 10,000 . .
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
ECPCA
FI
Primary Costs
COOM
COPA
COPC
Business process
Procurement
Production
Goods Movement
Sales/Billing
MM
PP
MM
SD
Source Transaction
Profit Center
Goods Movement
ECPCA
V A L U E F L O W
500
Business process
MM
PP
V A L U E F L O W
450
500
ECPCA
Business process
PP
MM
ECPCA
V A L U E F L O W
Stock
FI
Cost of Goods Sold 462002 6,028.50
Change Stock
Business process
Goods Issue
MM
Sales
810000 V A L U E FI F L O W
Receivables
ECPCA
10,000
10,000
Sales
810000
10,000
Business process
Sales/Billing
SD
Source Transaction
Profit Center
Material/Plant Account Assignment of Sales order/Purchase Order Customizing Automatic Account Assignment
Building Assets
V A L U E F L O W
100
ECPCA PCA
FI
100
Periodic Transfer
Business process
Material Stock
V A L U E F L O W
1000
ECPCA PCA
FI
Periodic Transfer
WIP
V A L U E F L O W
80
ECPCA PCA
FI
WIP 80
On-line
Periodic Transfer
Sales order
FI
Item 1 Profit center A 1000 Item 2 Profit center B 2000 Item 3 Profit center C 3000
1 2
Carry out period -closing activities for payables and receivables in FI (payables and receivables are split according to profit center) Run transfer program in Profit Center Accounting
ECPCA
Auto Expenses
V A L U E F L O W
450017
ECPCA
FI
Auto Expenses 450017 500
500
CO OM
Business process
Cost Center 1
Cost Center 2
V A L U E F L O W
Profit Center 1
500
500
COOM
5 hours
COOM
5 hours
Business process
V A L U E F L O W
Profit Center 1
8000
8000
Business process
ECPCA
ECPCA
Business process
Course Map
Module 1: Overview Module 2: Profitability Management Module 3: Master Data Module 4: Transfer Prices Module 5: Planning Module 6: Actual Data Module 7: Information System
Summary Records
Interactive Reporting
Listoriented Reports
Interactive Reporting
Variable output areas Navigation tree / drag & drop Cumulative display functionality
You should now: Have an understanding the functions in Profit Center Accounting. Explain Profitability management in SAP. Describe and maintain CO-PCA master data. Identify the source of actual values. Execute planning. Use the CO-PCA information system.