SAP Profit Center Accounting Master Data Configuration

Before you begin creating profit center master data, it is important to map out exactly

what the profit centers in an organization represents. It is also important to determine the

numbering convention to be used for the profit center master data.

- Profit center master data can cross company codes if required.

- Determine profit center numbering convention before creating master data

- Determine which company codes are required for the profit center

- Determine validity period for profit center

Before you begin creating profit center data, you need to make the following configurations:

Profit Center Group: This element of master data can be created either from the user menu by using the transaction code KCH1 or by using the following menu path in configuration: You can maintain as many groups as required, as this helps you in better reporting. - Profit center master data is time dependant, so be careful that the correct validity date is entered.

- Before a profit center can be used it needs to be activated. You can either perform

the activation as a part of the profit center creation, use KE52 and activate, or as part

of the mass activation process, you can navigate as per the above screen to activate

the profit center master data

- It is a very good and normal practice to create your profit center hierarchy and

structure in the SAP development environment, and then transport this hierarchy up

to production as it will save you a lot of time in creating the master data

SAP Profit Center Accounting Posting Configuration

To post financial information into PCA, the following must be performed

Profit Center Accounting (EC-PCA) is being used to determine profits and losses by profit center using period accounting approach.  

1. Set Controlling area – OKKS2. Maintain Controlling area settings - 0KE5

o        In this IMG activity you define the general control parameters for the controlling area.

o        The first step you need to take is to enter the name of the standard hierarchy of profit center master data. The system creates the standard hierarchy automatically when you save.

o        The dummy profit center receives all the postings in your system to objects, which are not assigned to a profit center. This ensures that your data will be complete in Profit Center Accounting. This field is displayed here for informational purposes only. You create the dummy profit center under Master data -> Dummy center.

o        The checkbox Elimination of internal business volume for Profit Center Accounting is ticked for the controlling area OP01

o        Currencies:o        Profit Center Local Currency Type    = Controlling area currencyo        Profit Center Local Currency = USD (as this is the group reporting

currency)o        Store Transaction currency: Yeso        Valuation view = Legal valuationo        ALE Distribution method: No distribution to other systemso        Currency Type changed to 30. This is as per OSS Note 119428.This note

recommends keeping the PCA currency type to 30 if the currency type for the controlling area is 30 since the currency type in Controlling area settings is 30 the PCA Currency type is changed to 30.

3. Activate Average Balance Ledger – 0KE6: The average balance ledger is not being used hence the 8Z ledgers have been kept as deactivated.

4. PCA –Allow balance C/F: In PCA the balances have been configured to allow carry forward. The Pre requisite are that retained earnings accounts have been maintained.

5. Set Control Parameters for Actual Data -1KEF: As soon as Financial Accounting entries are been made the PCA – 8A Ledgers will be updated simultaneously.

6. Maintain Document Types:  GCBX -> Document type maintained is A0. The three check boxes are for:

a. The transaction currency,b. Local/company code currency and c. Third currency determines which currencies are stored for this document type

has been used. SL:  Maintain additional document type. This needs to be used when correction

documents, (to rectify data posted from Finance and other modules) are posted during the test phases for the period end scenario.  This process will be used only during the test phases and hence this document type will not be transported to Production. 

7.      Maintain Number ranges for local documents - GB02: The number assignment is dependent on the company code

 8.      Maintain Automatic account assignment – OKB9

 9.      Choose Accounts:  3KEH: In this activity, you define which accounts or account

intervals you want to transfer to Profit Centre Accounting. If no profit center is specified in a posting, the system uses the default profit center for the account or account interval.

a. BS readjustment: The balance readjustment program read all AR, AP and TAX postings (posted without or with profit center DUMMY). It allocates the correct profit center to AR/AP and TAX and creates postings in FI and In the period end-closing schedule we also run the PCA AR/AP update where all open items (AR/AP) are updated in total in PCA per profit center. The offset postings are updated real time. This means we have double counting in PCA in the AR/AP area. To solve this the readjustment accounts are removed from 3KEH.

10.   Derivation Rules for Finding the Profit Center: 3KEI: 3KEH configuration is used for determining default profit centres for all Balance Sheet accounts, other than reconciliation accounts, where the COB cannot be determined. These accounts are therefore, assigned to Corporate or Financing. Certain Balance Sheet accounts are defaulted to DUMMY because the COB cannot be determined at time of posting, and should not be reported against any particular COB from a 'day to day' perspective. They are, however, dealt with during the period end and eventually are allocated to the COB's guidelines.

 11.   Adding fields to PCA distribution /assessments: Transaction GCA6: View/Table:

V_T811I12.   Assignment of Profit Centres to Co codes: In this activity the profit centres are

assigned to company codes. This can be done while changing the Profit center or can be done collectively. Transaction KE52, KE56

13.   Perform Account Control for Valuation Differences: When payables and receivables are transferred to Profit Center Accounting, the system adjusts valuation differences arising from foreign currency revaluation. In this activity, you decide which account these adjustments through foreign currency revaluation are to be posted to. There are two possibilities here:

         Posting to the General Ledger account for payables/receivables          Posting to the balance sheet adjustment account of the general ledger

account for payables/receivables