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Business area, profit center

Updated May 18, 2018

Hi gurus,

Can anybody elaborate in more details the following

1. What is the relation of business area and company code.
2. What is the relation of business area with profit center.

Your response will be highly appreciated.

Best regards

Comments

10 Mar 2011 11:54 am rekha Best Answer
1. What is the relation of business area and company code.
There is no relationship of business area to company code, it is cross company code relationship, ie. one business area can be used for multiple company codes.
Example: If an automotive company has a business division (which will be a business area in SAP) Breaks. Breaks business area will be posted in all company codes
selling Breaks. A full balance sheet and P&L can be created for Breaks business area

2. What is the relation of business area with profit center.
There is no relationship between business area and profit center. Usually, these two organizational elements are used exclusively. However, you may use
business area besides profit center. Both are responsibility areas and balance sheet and P&L can be created by business area/ profit center.
There are many white papers on this topic

20 Apr 2010 3:16 am Shalesh Singh Visen Helpful Answer
Business Areas can be used across different company codes and are mainly used for different product or business segments for which a company wants to have separate financials.
Profit centre on the other hand can be related to specific location resposible for generating profits which may be through different products segments symbolising different business areas