Q1.

– What is the basic purpose of creating a Profit

Center in SAP Controlling?
Ans. – The basic purpose of creating a Profit Center in SAP is to analyze the revenues and costs
for a particular product line, or a plant or a business unit. Though you can generate balance
sheets and profit and loss accounts per profit center still a profit center should basically be used
as a tool only for internal reporting purposes.

If legally one has to produce the Balance sheets and Profit and Loss Accounts for a profit center
then it is advisable to create it as a company code instead of a profit center

Q2. – How does the cost and revenue flow to the profit
center?
Ans. – The profit center is stored in the cost center this way the costs flow to the profit center.

The profit center is also stored in the material master. This way all sales orders created for the
finished product automatically picks up the profit center from the material master and all the
revenues and costs coming from sales order for that finished product is passed on to this profit
center.

You create a profit center document in addition to the Finance document whenever revenue or
consumption takes place. This document contains the details of the profit center. Once both the
costs and revenues flow to the profit center you can write reports using the Report Painter to get
intelligent analysis. You can also use SAP standard reports statistical key figures are created in
the cost center accounting module. Now the same statistical key figures are required in the profit
center accounting module.

Q3. – Do we require to maintain SKF figure in Profit

Center Accounting in SAP?
Ans. – No, Since the SKF (Statistical Key Figures) are created in the controlling area, we don’t
require it to maintain in PCA. Profit Center is a submodule within the controlling area. The SKF
figure is created for the controlling area and such is available in the Profit Center accounting
module.

Q4. – What are the precautions to be taken while

maintaining the 3KEH table for Profit Center Accounting?
Ans. – We should take the following precautions:

1. You should not maintain the customer and vendor reconciliation accounts in the 3KEH
table.
2. Further, you should also not maintain the special GL accounts in this table.
3. As per the process, we transfer the customer and vendor balances to profit center
module through separate month-end programs. Thus, if the reconciliation accounts will
be maintained here, it will result in double posting in the profit center module.

Q5. – Should secondary cost elements be maintained in

the 3KEH TABLE?
Ans. – No, since here we maintain only those accounts for which the value should flow FI to
PCA. Secondary cost elements are already defined in the controlling module which will reflect
posting in PCA also.

Q6. – How can we maintain the default settings for cost

elements per company code?
Ans. – We can maintain the default settings in transaction OKB9. Here we can specify for a
company code, cost element which is the cost center to default or whether profitability segment is
to be automatically derived. Further, we can also maintain whether the business area is
mandatory or profit center mandatory and can maintain the default business area and profit
centers.

Q7. – What are the other important activities in the profit

center?
Ans. – The assignments of the profit center to the cost center and also the assignment of a profit
center to the material master is what will determine the success of profit center posting. If these
assignments are wrongly done then the profit center postings will not come in properly