PCA Configuration

SAP Profit Center
Configuration
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SAP PROFIT CENTER CONFIGURATION
TABLE OF CONTENTS
INTRODUCTION .............................................................................................3
1 Basic settings................................................................................................4
1.1 Maintain Controlling Area Settings .........................................................4
1.2 Create Dummy Profit Center ..................................................................6
1.3 Set Control Parameters for Actual Data .................................................7
1.4 Maintain Plan Versions...........................................................................8
1.5 Allow Balances to Be Carried Forward.................................................10
2 Master Data ................................................................................................10
2.1 Maintain Standard Hierarchy................................................................10
2.2 Create Profit center ..............................................................................12
3 Transfer Prices (Optional)...........................................................................17
3.1 Basic Settings for Pricing .....................................................................17
3.2 Define Account Determination for Internal Goods Movements.............19
3.3 Define Acct Determination for Production Variances in Delivs to other
Pctrs.......................................................................................................22
3.4 Define Special Handling for Internal Goods Movements......................23
4 Planning......................................................................................................24
4.1 Define Number Ranges for Local Documents ......................................24
4.2 Maintain Planning Layout for Costs/Revenue, Balance Sheet accounts,
Statistical key figures .............................................................................25
4.3 Maintain Planner Profiles .....................................................................32
4.4 Define Distribution................................................................................39
4.5 Create Assessment Cost Elements......................................................47
4.6 Define Assessment ..............................................................................49
5 Actual Postings ...........................................................................................58
5.1 Maintain Document Types....................................................................58
5.2 Define Number Ranges for Local Documents ......................................59
5.3 Maintain automatic account assignment of revenue elements (OKB9) 59
5.4 Choose Additional Balance Sheet and P&L Accounts (3KEH).............60
6 Period-end closing ......................................................................................62
6.1 Define Distribution...............................................................................62
6.2 Define Assessment .............................................................................62
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INTRODUCTION
The main aim of Profit center accounting is to determine profit for internal
areas of responsibility. By Assigning balance sheet items (Fixed assets,
Receivables and Payables, Stocks) to profit centers, we can analyze our
company’s fixed asset by profit center. Profit centers can be set up according
to product lines, geographical factors (region, offices or production sites) or
function (production, sales). We divide our business into profit centers by
assigning the profit centers to the various master data (materials, cost
centers, orders, projects, Sales orders, assets, cost objects and profitability
segments). Every profit center is assigned to the organizational unit
controlling area.
In our scenario we have already configured controlling area 9100 in e-book
‘Controlling configuration’. In the controlling area settings for 9100 we have
switched on the component profit center active. A group which is a fast
growing group intends to have profit center based on product lines. We
therefore create profit center based on the product lines.
Let us proceed with the configuration of the profit center module.
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1 Basic settings
For doing the configuration we use the following path on the SAP application
screen: -
SAP Menu Tools AcceleratedSAP Customizing SPRO - Edit
Project
Configuration for all the modules will be done here. The above path will
not be referred henceforth; we will directly refer to the IMG node.
1.1 Maintain Controlling Area Settings
IMG Controlling Profit Center Accounting Basic Settings Controlling
Area Settings Maintain Controlling Area Settings
Update the following: -
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The Dummy profit center will be updated, once we create the dummy profit
center.
We have switched on the elimination of internal business which ensures
that transaction data between two objects of the same type that are assigned
to the same profit center (such as two cost centers or two orders) is not
updated in Profit Center Accounting.
Since material ledger is active for the A Grp, we select the valuation view
profit center valuation. If the material ledger is not active we need to select
Legal valuation.
ALE distribution method – We have selected no distribution to other systems
since we do not want to transfer data from one system to another. In case we
want to transfer master data from one system to another (development to
quality and production system) we need to select another setting.
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Click on Save
1.2 Create Dummy Profit Center
IMG Controlling Profit Center Accounting Master Data Profit
Center Create Dummy Profit Center
Double Click
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Click on Save
1.3 Set Control Parameters for Actual Data
Area Settings Activate Direct Postings Set Control Parameters for Actual
Data
Click on and update the following: -
We want online line item transfer to the Profit center accounting module,
therefore we make the following settings.
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Click on Save
1.4 Maintain Plan Versions
Area Settings Activate Direct Postings Plan Versions Maintain Plan
Versions
Select the controlling area by clicking Extras Set controlling area
Update 9100 as the controlling area.
Select version 0 Plan/Actual version
And Double Click
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Ex. Rt. Type P – Std. translation for cost planning
You can consider even M (Std. translation at average rate)
Then maintain the control indicators for each fiscal year.
If the lock indicator is selected, the plan version is locked. This means that the
plan data for that year cannot be changed. This flag lets you protect plan data
from being changed once it is in its final form. If the indicator is not selected,
the plan version can be changed. If necessary, we can remove the tick and
then make our changes.
The flag online data transfer determines whether postings are transferred to
Profit Center Accounting simultaneously with original activity. If the indicator is
not selected, we need to transfer the postings manually by fiscal year using
the plan data transfer function.
The Line items flag controls whether plan line items are created when you
change plan data. The line items document every change made to a plan.
With the exchange rate type, we determine which rate - such as the average
rate or bank-selling rate - should be used to translate the plan data in that
version. If we do not put a value date, the values will be translated using the
exchange rate valid on the first day of the month. With a value date, you can
set a date to be used for the translation.
Click on Save
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1.5 Allow Balances to Be Carried Forward
IMG Controlling Profit Center Accounting Basic Settings Balance
Carryforward Allow Balances to Be Carried Forward
Select and click the Execute button.
2 Master Data
2.1 Maintain Standard Hierarchy
IMG Controlling Profit Center Accounting Master Data Profit
Center Maintain Standard Hierarchy
Position the cursor on P9100 and Click on
Click on
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Click on
Similarly update for other profit center groups such as Power,
telecommunication, information technology and Corporate, which
Will look like this.
Page 11 of 11

Click on Save
2.2 Create Profit center
SAP Menu Accounting Controlling Profit Center Accounting Master
Data Profit Center Individual Processing KE51 - Create
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Here the company codes are automatically assigned (because company
codes are attached to the controlling area). You can remove the assignment
of any particular company if you do not want the company to post to the profit
center. For e.g. company code 9200 is not into ethylene manufacture or sale,
it is only into Polylolefins. In that case you should uncheck company 9200
from the profit center 1100.
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Uncheck
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Click on Activate to activate profit center.
Similarly create other profit centers such as 1101, 1102, and 1103 under profit
center group 11
Create profit centers under profit center group 12, 13, 14, 15, 16 and 99
Create a Corporate common profit center 9999 under the profit center group
99.
For corporate profit center
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Other master data sets such as statistical key figures need not be
created again in profit centers since they are already created in the cost
center accounting module. The transaction code for creating statistical
key figure is KK01.
3 Transfer Prices (Optional)
3.1 Basic Settings for Pricing
IMG Controlling Profit Center Accounting Transfer Prices Basic
Settings for Pricing
Preset standard deliveries are provided for all components of transfer pricing.
The standard deliveries are displayed in the left-hand screen area, together
with condition types, pricing procedures and transfer price variants which we
have defined our self. By clicking on the individual elements, we can see the
corresponding settings in the right-hand screen area.
To define condition types, pricing procedures or transfer price variants ourself,
click on create in the left-hand screen area.
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The first preset condition type TP01 (Transfer Price fix) is a fixed price
condition type.
The access sequence TP00 is as follows: -
The condition records can be maintained either for each of the following:-
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Material and receiver profit center
Dependent on material
Dependent on material group.
Dependent on material - needs to be used for pipeline material, since
pipeline materials cannot be activated for material ledger. These
materials will not have group view and the profit center view.
The other condition record TP02 (Markup percentage) is as follows:-
3.2 Define Account Determination for Internal Goods
Movements
IMG Controlling Profit Center Accounting Transfer Prices Settings
for Internal Goods Movements Define Account Determination for Internal
Goods Movements
Internal goods movements in Logistics (stock transfers, materials usage for
production orders, and so on) can lead to an exchange of goods between
profit centers.
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To be able to show the material flow correctly in Profit Center Accounting, we
need to look at the profit center as an independent company. This means that
a sale is made by the sending profit center, while the receiving profit center
posts a goods receipt.
This way of looking at postings in Profit Center Accounting cannot be
achieved based solely on the original posting. We therefore need to make an
additional account assignment. A separate account determination generates
additional posting lines on the basis of the original document, and then posts
these in Profit Center Accounting.
The source document is not changed. Therefore this has no effect on
Financial Accounting (FI). However, note that these lines are also updated in
FI since we are using transfer prices.
In this step, you enter the accounts that you need in order to represent
internal goods movements in Profit Center Accounting for each controlling
area.
The additional accounts must be defined as P&L accounts in Financial
Accounting (FI). Cost elements are not permitted.
As seen in the following example, three types of additional account are
required:
• internal revenues
• internal change in stock
• deliveries from profit centers
Material withdrawal of semifinished product material 1 (profit center 1)
for production order 2 (profit center 2) using legal valuation in Profit
Center Accounting and FI
For material withdrawals, the costs on the receiver profit center are shown,
plus an internal sale is assigned to the sender profit center. On the receiving
side, it may be necessary (consumption of semi finished goods) to correct the
posting under "Change in stock" with a posting "Delivery from profit center".
FI posting:
Change in stock of semi finished Debit 1000.00
Stock Credit 1,000.00
Profit center posting:
In Profit center 1
Internal change in stock Debit 1,000.00
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Internal revenues Credit 1,000.00
In Profit center 2
Change in stock of semi finished Debit 1,000.00
Delivery from profit center Debit 1,000.00
Internal change in stock Credit 1,000.00
The two lines "Change in stock" on the receiver side cancel each other out.
The transaction is an external delivery from the point of view of the receiver
profit center, which is reflected in the line "Delivery from profit center".
Material withdrawal of a semi finished product 1 (profit center 1) for
production order 2 (profit center 2) using transfer prices
The stock value using legal valuation is: 1,000.00
The stock value using profit center valuation is: 1,200.00
The transfer price for the semi finished material is: 1,500.00
FI posting:
In FI, only legal valuation is stored.
Entry
Change in stock of semi finished good Debit 1000.00
Stock Credit 1,000.00
PCA posting:
In Profit Center Accounting, profit center valuation is stored.
Profit center 1
Internal revenues Credit 1,500.00
Internal change in stock Debit 1,200.00
Profit center 2
Change in stock Debit 1,500.00
Internal change in stock Credit 1,500.00
Delivery from profit center Debit 1,500.00
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You may want to leave out material types for operating supplies which have
little value. If you do not choose these material types, only the consumption
postings will be debited to the profit center on the receiver side.
You can set up the account determination by:-
Material type
Valuation class
Valuation modification constant
Blank entries (e.g. without a valuation class) are interpreted as generic
entries. However, the material type must have at least one entry.
In the field No receiver records you enter whether the system should ignore
the data records on the receiver side.
Assign the following gl codes
827100 Internal Stock changes
827200 Internal transfers
827000 Internal revenues
Click on Save
3.3 Define Acct Determination for Production Variances in
Delivs to other Pctrs
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for Internal Goods Movements Define Acct Determination for Production
Variances in Delivs to other Pctrs
In transfer prices in cross-plant manufacturing, a price is negotiated for goods
delivered from one profit center to another. However, if the actual cost of
goods manufactured differs from the planned cost, we need an additional
account in which to post production variances. This account is necessary so
that we can settle the difference to the sender profit center instead of the
receiver.
In this step, we define the profit and loss account to which we want to post
production variances. We can define this separately for each valuation class
and valuation grouping code.
Click on Save
3.4 Define Special Handling for Internal Goods Movements
for Internal Goods Movements Define Special Handling for Internal Goods
Movements
All internal goods movements which are not represented as material flow
between profit centers are contained here. E.g. scrapping a material:
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The table is pre delivered within the standard SAP R/3 system.
If any new movement types is created in Materials Management, you need to
check whether these lead to a material flow between profit centers. If this
movement type should not be taken into account, we need to make an entry
in this table.
4 Planning
4.1 Define Number Ranges for Local Documents
IMG Controlling Profit Center Accounting Planning Basic Settings
for Planning Define Number Ranges Define Number Ranges for Local
Documents
The number ranges in profit center are maintained year independent by
inputting year 9999
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Click
Select and
Click and update the following: -
Click on
Click on Save
4.2 Maintain Planning Layout for Costs/Revenue, Balance
Sheet accounts, Statistical key figures
IMG Controlling Profit Center Accounting Planning Manual
Planning Planning Layout Maintain Planning Layout for Costs/Revenues,
Balance sheet accounts, Statistical key figures
We will copy from an existing SAP plan layout (8A-111) for costs/revenue
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Click on
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If you notice the layout has PrCtr report cur. , we need to change it to
company code
Double Click on and select in company code currency
and confirm the text by clicking
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Similarly you need to change distrb key and unit field also to company
code currency
Let us add quantity and unit of measure to the existing layout
Position the cursor on the column next to Unit and Double Click
Select
Select Quantity
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Click
Position the cursor next to quantity and Double Click and select
attribute
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Click on
Similarly distribution key for qty select Attribute
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Click on . If no errors are found then Click on Save
Similarly you create planning layout for Balance sheet Accounts and statistical
key figures by copying SAP std. Layout.
4.3 Maintain Planner Profiles
IMG Controlling Profit Center Accounting Planning Manual
Planning Maintain Planner Profiles
Here, we define planner profiles, which we can use to organize our
organization's planning. A planner profile determines which planning
layouts can be used with which default parameters for each planning
area. We can enter any number of planning layouts for each planning area.
These layouts are sorted according to their "Profile item" number. It is also
possible to use the same layout in different items of the profile, specifying
different default parameters each time.
Planner profiles help us structure our organization's planning process,
especially if our organization uses a decentralized planning process. We can
assign our users planning layouts in which the objects they are allowed to
plan are predefined and not changeable.
If you want to assign planner profiles to authorization groups, you first need to
carry out the step Maintain authorization groups to define these. Authorization
groups determine which users can maintain which planner profile. You can
assign authorizations using the authorization object CO: Planner profiles
(K_TKA50).
Double Click
Page 32 of 32

Select and
Select
and Double Click and update the following: -
Click on Save
Select
And Double Click
Page 33 of 33

Delete the SAP standard layout by selecting the 2 items
And click on
Attach the layout created for costs and revenues here.
Click on Save . Select overwrite so that defaults can be overwritten.
Select
And Double Click and update the following: -
Page 34 of 34

Click on Save
Comeback and attach the planning layout created for statistical key figures to
the planning area Statistical key figures.
Let us create planner profile for excel upload (decentralized)
A file description is a generic file name for use with integrated Excel and with
the Excel upload function that assigns the cells in the Excel spreadsheet with
those in the planning layout. The system automatically enters a file description
when we save the generic file name for our Excel template. If you want to use
the same layout more than once, you can enter the generated file description
for the next planning layout
Page 35 of 35

Select and
Select
Click on Save
Select
And Double Click
Delete the SAP standard layout by selecting the 2 items
And click on
Page 36 of 36

Attach the layout created for costs and revenues here.
Click on Save . Select overwrite so that defaults can be overwritten.
Select
Page 37 of 37

Click Overview
Page 38 of 38

Click on
Click on Save
Now when you go back you will find the file description created.
4.4 Define Distribution
IMG Controlling Profit Center Accounting Planning Allocations
Define Distribution
Cycle definition in a cross company code-controlling scenario should start with
the company code such as 91. Further it should reflect in abbreviated form the
distribution such as General administration cost cycle 1 and that it is a
planned cycle.
Thus the cycle name is 91GA1P
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In the next screen update the following: -
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Click on Save
Click on Check to check the cycle settings
4.5 Create Assessment Cost Elements
Create Assessment Cost Elements
Page 47 of 47

Click on Save
Page 48 of 48

Similarly create assessment cost element for CO production costs
4.6 Define Assessment
Define Assessment
Double Click and update the following: -
Page 49 of 49

Click on
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Click on Save
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Click on Save
Click on Cycle Check Formal check
5 Actual Postings
5.1 Maintain Document Types
IMG Controlling Profit Center Accounting Actual Postings Basic
Settings: Actual Maintain Document Types
This option lets us define which document types are valid for allocating actual
data (assessment and distribution) and creating profit center documents.
The three columns for the transaction currency, local/company code currency
and third currency determine which currencies are stored for this document
type. Select all three.
The information on the number ranges used for local and global ledgers are
only displayed here. It is defined here automatically for when we maintain
number ranges for this document type later.
The profit center ledger "8A" is a local ledger.
Here you attach Balance Check:-
Page 58 of 58

In case there is a difference in FI PCA and in case you need to pass a single
entry in PCA you can select the balance check indicator 2 No balance check.
Normally we don’t need to configure here anything.
5.2 Define Number Ranges for Local Documents
IMG Controlling Profit Center Accounting Actual Postings Basic
Settings: Actual Define Number Ranges for Local Documents
This step is already done in step 11, when we have copied the number
range.
5.3 Maintain automatic account assignment of revenue
elements (OKB9)
IMG Controlling Profit Center Accounting Actual Postings Maintain
automatic account assignment of revenue elements
Here we can assign revenue elements and sales deductions to profit centers.
The system automatically enters the specified profit center in the primary line
items of the revenue elements.
Normally we do not have to maintain anything here, since the profit centers
are determined from the material master into the sales order. But if we want to
default some other profit center, we can do so.
The configuration is you select company code, cost element, order and enter
profit center.
This particular configuration can also be called from the SAP easy access
menu by entering OKB9 in the command field.
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5.4 Choose Additional Balance Sheet and P&L Accounts
(3KEH)
IMG Controlling Profit Center Accounting Actual Postings Choose
Additional Balance Sheet and P&L Accounts Choose Accounts
Here we define which accounts or account intervals we want to transfer to
Profit Center Accounting. It is imperative that we maintain all the GL accounts
which need to be transferred to Profit center. Needless to say that if we don’t
maintain the GL accounts here it will not be transferred to PCA.
This setting is also particularly required, if no profit center is entered for a
specific transaction in one of these GL accounts, the system posts to the
default profit center for that account interval.
This particular configuration can also be called from the SAP easy access
menu by entering 3KEH in the command field.
Note that the GL codes for Customers and Vendors including Advances
(special GL account) which are called Reconciliation accounts should not be
maintained in the 3KEH table. Reason being the Customers and Vendors line
items are not transferred to the PCA module online. We have to run month
end programs to transfer Customer and Vendor balance from FI module to
PCA module
Page 60 of 60

These are GL codes which are reconciliation accounts for customer and
vendors, that should be excluded from the 3KEH table.
YCCA 119020 9100 Accounts Receivables -Third Parties
YCCA 119025 9100 Accounts Receivables -Bills of Exchange
YCCA 119030 9100 Accounts Receivables Trade -Inter-company
YCCA 119050 9100 Accounts Receivable SWAP & Exchange
Customers
YCCA 119060 9100 Accounts Receivables -Old Customers
YCCA 119740 9100 Accounts Receivable -Employee Receivable
YCCA 119770 9100 TR-LO Reconciliation account - receivables
YCCA 119771 9100 TR-LO Reconciliation acct - repayment receivables
YCCA 119772 9100 TR-LO Reconciliation acct - interest receivables
YCCA 119773 9100 TR-LO Recon.account - payment oblig. for loans
YCCA 119774 9100 TR-LO Reconciliation account - premiums
YCCA 119775 9100 TR-LO Reconciliation acct - payment adjustments
YCCA 119806 9100 Noted Items -General
YCCA 119807 9100 Noted Items -Outgoing Payments
YCCA 119820 9100 Vendor Down Payments
YCCA 212030 9100 Accounts Payables Trade -Inter-company
YCCA 213000 9100 Accounts Payable -Trade -Partner
YCCA 213320 9100 Accounts Payable Trade-Third Parties
YCCA 213350 9100 Accounts Payable -SWAP & Exchange Vendor
YCCA 213370 9100 Accounts Payable Trade-Old Vendors
YCCA 215200 9100 Accounts Payable Non Trade-Third Parties
YCCA 215300 9100 Accounts Payables -Employee Payables
YCCA 219906 9100 Noted Items -General
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YCCA 219907 9100 Noted Items -Outgoing Payments
YCCA 219924 9100 Customer Down Payment
Click on Save
6 Period-end closing
6.1 Define Distribution
IMG Controlling Profit Center Accounting Actual Postings Period-
end closing Define Distribution
Distribution cycles in actual are configured similar to the plan cycles only you
need to select radio button.
6.2 Define Assessment
IMG Controlling Profit Center Accounting Actual Postings Period-
end closing Define Assessment
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Assessment cycles in actual are configured similar to the plan cycles only you
need to select radio button.
Page 63 of 63

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