Profit Center Accounting

Definition

This component is used for working out the operating profit of profit centers, using either the period or cost-of-sales accounting procedures. By assigning the invested capital to profit centers, you can also use them as investment centers. Dividing a company into profit centers enables you to perform controlling for various departments, which then assume responsibility for their own profitability.

Profit center assignment
You can assign profit centers to the following objects:

Selection Criteria

You will need this component if you have to work out the profit made during a particular period by a specific area of your business, and if you want to use this analysis for controlling your business activities or evaluating their profitability. To a certain extent, profit center managers operate as independent entrepreneurs, which motivates them to produce the best possible results for their areas.