In a ‘normal’ SAP organization structure, the NewGL, or profit center (PC), is the smallest level in which P&L and Balance Sheets can be created for a management entity. Deriving the PC is a complicated process. It’s critical to consider the sources of GL postings and how each of those postings will get a PC.
Manually-assigned profit center
The easiest way to assign a PC is manually in the posting. Here we can see the user keying the profit center onto the entry in FB50.1
Deriving the profit center from a CO assignment
For entries that have a CO item assigned—such as a cost center, WBS element or real estate contract—the PC can be derived from the CO object. Below, we have a cost center that is assigned to a PC.2
When a posting uses the cost center just created, the PC will be automatically derived in the posting.3
Material master
On a material master, the PC is populated on the “Costing 1” view. The PC on the accounting view is used on SD & MM flows on their downstream accounting documents.4
It’s critical that the PC be populated as part of standard material master setup. Otherwise, postings will likely err out.
Defaulting via configuration
For cash clearing, house bank GL, and a few other accounts, configuration can be done to enable the PC to be derived from the GL account and company code.5 This configuration should be used carefully since a default is not generally as detailed as a direct assignment.
Bank accounts and sub accounts tend to use a default PC since there is no option in either lockbox processing or in electronic bank statement that is easy to populate. This does makes some sense. Cash is usually held at a corporate level and not in a management division.
Substitution
For more complex logic on assigning PC, substitutions can be setup in OBBH on the Financial side or GGBH on the Controlling side. PC substitutions should be used cautiously. If they are needlessly complex or used in lieu of more careful configuration and design, they can become unwieldy to maintain and understand. Here the PC is populated with a constant “1” when GL account 511050 is used.6
Adding the profit center through the document splitter
Definitely the trickiest, but most common method of derivation is via the document splitter. The document splitter is a feature of the NewGL that ensures all postings receive a PC—including subledger, balance sheet, and so forth. The complete document splitter will be explored in a second post, but I’ll write a few words now.
First, there is an entry view and a GL view. The entry view of a posting is what the user enters and what is used for subledger purposes. The GL view is used for financial statement preparation and reporting. Most users look at the entry view. GL accountants are usually the only ones who care about the GL view.
What makes the splitter powerful is that even subledger postings can receive a PC. And even more importantly, they can receive more than one PC. This enables the receivable on a sale that is split between two PCs to receive both PCs.
In the entry below, we can see that an invoice is being raised with expense items in two different PCs.7
When we look at the entry view8, there is only a single AP item against the vendor. But when we look at it in GL view9, the AP line is split into two line items.
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1,3 FB50
2 KS01
4 MM01
5 Financial Accounting (New) -> General Ledger Accounting (New) -> Master Data -> Profit Center -> Assigned Default Profit Center to Accounts
6 OBBH
7 FB60
8,9 FB03
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