Profit Center Accounting Order to Cash Course
April, 2005
Welcome
Ground Rules
Parking Lot
• Participation (Open & Honest) • Questions (Please Ask)
Facilities
• Bathrooms / Breaks • Food & Beverage • Emergency Exit
• Pagers / Cell Phones (off or vibrate)
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Technical
Agenda
•
•
Global Financial Reporting Overview
Course Objectives:
→ → → → Review topics from the PCA & TT Conceptual Overview Master Data as It Relates to the Order-to-Cash Process Order to Cash Concepts R/3 Profit Center Reporting
• • • •
Summary of What‟s Happening 4/17/05 Q&A Next Steps Conclusion
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Global Financial Reporting (GFR)
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GFR Goal
Goal: To standardize reporting and close the books within 10 days of period end.
This includes completion of consolidated financials - Balance Sheet, P&L and Cash Flow.
•
To meet the GFR goal, we must:
– Create a standard, global Chart of Accounts and a clear and efficient SAP organization structure for Adolph Coors Company.
•
Leverage standard SAP configuration & functionality:
– – – Define and properly use master data components. Use SAP controls (ensure data integrity) and security. Use standard functionality/practices for recording transactions (including F/X and inter-company).
– – – – –
Utilize standard R3 - FI & CO functionality. Enable flexible and efficient financial reporting using SAP BW. Automate consolidation of financial results. Address key business process issues along the way that impact objective statement (i.e., items that obstruct the river). A river of data - turned into meaningful information - delivered to an ocean of users management, shareholders, regulatory agencies, suppliers and customers.
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GFR Business Requirements
Management Regulatory Agencies Shareholders Customers Suppliers Customers
Business Consolidation System
It‟s harder for a river to go upstream ...
R/3
Master Data
Business Warehouse
Transactions
it loses water along the way.
All of these processes must be right for BCS to work.
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GFR Scope – Future
External Reporting
Analytics Management Reporting – Profit Centers/Segments Planning and Forecasting Transactional Reporting
Analytical Reporting
Transactions
Inter-Company Accounting FX Functions Inventory Movements/Sales
September
Master Data
Chart of Accounts Profit Centers Cost Centers Transaction Types Trading Partners
April
December
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Course Objectives At the end of this course, you should be able to understand . . .
• The rules and master data used in assignment of Profit Centers throughout the Order to Cash Process. • Profit Center Accounting as it relates to the Order to Cash process.
• How to identify where a Profit Center applies (which one, why, where, and impacts). • Standard Profit Center reporting in R/3.
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Review: topics from the PCA & TT Conceptual Overview Course
It Pays to Play
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Let‟s Review PCA and Transaction Types
What is a Profit Center? Profit Center names start with what letter? Profit Center groups start with what letter?
Today, sales revenue posts to cost centers? What‟s going to change now?
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Let‟s Review PCA and Transaction Types
What percentage of the Balance Sheet (e.g., 50%) and P&L accounts must be assigned to Profit Centers? What are Transaction Types used for? Does every Balance Sheet account require a Transaction Type?
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Let‟s Review Master Data What are the three (3) Master Data elements (discussed in the PCA Overview course) that require an entry of a Profit Center in General FI-CO?
What fields within a Sales Order determine the Profit Center assignment for revenue?
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PCA Assignment: General Rules
Remember . . . 100% of the Balance Sheet and P&L must be assigned to a Profit Center.
1. Master Data
a. Elements of Master Data where a Profit Center needs to be entered (Cost Centers, Material Master, WBS)
b.
c.
Sales Order Substitution Table
Balance Sheet Profit Center Assignment Table 3KEH (some specific accounts and some generic accounts based on company code)
2. Transactions
a. b. c. Control Accounts (A/P, A/R) Non-Control Accounts (expense, accrual) Unassigned Accounts
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Profit Center Accounting: and the Order to Cash Process
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Order to Cash Process Flow
Order Call
OMS SAP Sales Order SAP Proce ss Order SAP Delive ry
Ship ment
Pick & Pack
SAP Good s Issue
SAP Invoi ce
Paym ent
Cash Appli ed
Customer places Delivery an Internet order Initiated through Point and the order info is sent to SAP Sales Order automatically created in SAP Beer is produced based on input from the Sales Order The Goods Issues and Goods Receipts as part of the process order creates financial documents in SAP
Shipment Initiated Pick and Pack
Generate and send invoice to customer. The invoice creates financial documents in SAP
Post Goods Issue in SAP (PGI) Ship goods to customer. The post goods issue creates financial documents in SAP
Coors collects cash
Cash receipt is posted to respective accounts and a financial document is created in SAP
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Master Data
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Master Data Learning Objectives • At the conclusion of this topic, you should be able to understand:
– Master data for the Order to Cash process and its relationship to Profit Center Accounting.
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What‟s Happening in the Background?
• It all starts with Master Data. In the background, there are different Profit Center rules and Master Data determining Profit Centers:
– within the Profit Center Sales Substitution Rules – within the Balance Sheet PC Assignment Table – within the Material Master Record – within the Cost Center Master Record
(certain cost centers are not associated to Profit Centers)
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Profit Center Sales Substitution Rules
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Balance Sheet Profit Center Assignment Table
For specific accounts posted from the SD billing document, we have assigned them to a specific Profit Center.
(i.e., A/P Deposits – Bottles, Pallets, Kegs, etc).
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Material Master
Plant
0001
Profit Center
N/A
Mat Types
N/A
Plant
2004
Profit Center
PL2004
Mat Types
All
0010
0011
PL0010
N/A
All
N/A
2005
2006
PL2005
PL2006
All
All
0016
0020
PL0016
PL0020
All
All
2007
2008
PL2007
PL2008
All
All
0030
0070
PL0030
PL0070
All
All
2009
2010
PL2009
PL2010
All
All
0310
0345 0350 0353 0360 0361 0366 0372 0377 0383 0388 2000 2001 2002 2003
PL0310
PL0345 PL0350 N/A PL0360 PL0361 PL0366 N/A N/A N/A PL0388 PL2000 PL2001 PL2002 PL2003
All
All All N/A All All All N/A N/A N/A All All All All All
2011
5814 5815 9001 9002 9003 D001 D002 D005 D003 D004 M001 RMB1 Z3PV ZSAP
PL2011
N/A N/A PL9001 PL9001 PL9003 PLD001 PLD002 PLD005 N/A N/A N/A N/A PLZ3PV N/A
All
N/A N/A All All All All All All N/A N/A N/A N/A N/A All
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Cost Centers Assignments
Notice that NO Profit Center is assigned to this cost center.
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PCA Hierarchy
US Sales M2100
Domestic Sales M2101
Military M5104
Duty Free P0054 CBC1
CDC - Sales P0019 CDC1
Sandlot M2103
Field Sales M2104
Golden P0009
CBC1
Military P0052
Sandlot - Sales P0020 CBC1 CBC1
East Region-CBC M2109
West Region-CBC M2110
East Region-Molson MXXXX
West Region-Molson MXXXX
MUSA Corporate P0153 MUSA
Military Domestic P0053 CBC1
Sandlot Plant PL0070 CBC1
Key Accounts P0016 CBC1 NE FBA-CBC P0001 CBC1 NW FBA-CBC P0005 CBC1 NE FBA-Molson P0180 MUSA NW FBA-Molson P0184 MUSA
Employee Sales P0017 CBC1 VP Administration P0018 CBC1
MW FBA-CBC P0002 CBC1
SW FBA-CBC P0006 CBC1
MW FBA-Molson P0181 MUSA
SW FBA-Molson P0185 MUSA
GC FBA-CBC P0003 CBC1 East Region Office-CBC P0004 CBC1
SC FBA-CBC P0007 CBC1 West Region Office-CBC P0008 CBC1
GC FBA-Molson P0182 MUSA East Region Office-Molson P0183 MUSA
SC FBA-Molson P0186 MUSA West Region Office-Molson P0187 MUSA
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Master Data Objectives Review • By now, you should be able to able to understand:
Master data for the Order to Cash process and its relationship to Profit Center Accounting.
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Order to Cash Concepts
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Order to Cash Learning Objectives
At the conclusion of this topic, you should be able to understand:
• The concept of Profit Center Accounting as it relates to the Order to Cash process: → Order Call → OMS → SAP Sales Order → SAP Process Order → SAP Delivery → Shipment → Pick & Pack → SAP Goods Issue → SAP Invoice → Payment → Cash Applied → Miscellaneous FI Billing
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SAP Sales Order
Order Call OMS
SAP Sales Order
SAP Proce ss Order
SAP Deliver y
Shipm ent
Pick & Pack
SAP Good s Issue
SAP Invoic e
Paym ent
Cash Appli ed
Customer places an Internet order through Point and the order info is sent to SAP Sales Order automatically created in SAP
Note on Transaction Type!
None of the accounts related to the Order to Cash process require a Transaction Type.
OMS: The Order Management System receives an order from a customer.
Sales Order: A Profit Center assignment is derived in a Sales Order via substitution rules.
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Sales Order Display Demo Instructor demo - “show me”
1. Display the order header data on the Sales tab of the Sales Order. 2. Display the Profit Center for a line item on the Sales Order.
3. Validate the Profit Center is correct.
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Sales Order Display Demo (1 of 3)
Step 1
Transaction: VA03 Order: 10008367 Menu Path: Goto→ Header→Sales
• Notice Sales area data and Sales office. View your PCA Substitution Rules spreadsheet for the Profit Center.
• The Profit Center in the Sales Order is derived from the Sales Order Substitution Table.
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Sales Order Display Demo (2 of 3)
Step 2
Transaction: VA03 Order: 10008367 Menu Path: Goto→Overview
Action: • Double-click the line item and then click the Account assignment tab to view the Profit Center.
• At the time of sales order creation, the Profit Center is assigned to the sales order.
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Sales Order Display Demo (3 of 3)
Step 3
Validate the Profit Center is correct based on our Sales Substitution Rules.
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Sales Order Display Exercise Exercise to reinforce learning – “let me”
1. Display the order header data on the Sales tab of Sales Order # 10008368. 2. Display the Profit Center for a line item on the Sales Order. 3. Validate the Profit Center is correct.
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SAP Delivery, Shipment, Pick & Pack
SAP Sales Order SAP Proce ss Order SAP Delive ry
Ship ment
Order Call
OMS
Pick & Pack
SAP Good s Issue
SAP Invoic e
Paym ent
Cash Appli ed
Delivery Initiated
Shipment Initiated Pick and Pack
No demo or exercise here.
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SAP Post Goods Issue
SAP Sales Order SAP Proce ss Order SAP Deliver y
Ship ment
Order Call
OMS
Pick & Pack
SAP Good s Issue
SAP Invoic e
Paym ent
Cash Appli ed
Post Goods Issue in SAP (PGI) Ship goods to customer. The post goods issue creates financial documents in SAP 34
Post Goods Issue Demo
Instructor demo - “show me”
1. Goto Material Master from Sales Order. 2. Display the Material Master Record for the material on our Sales Order. 3. Note the Profit Center. 4. Goto the Sales Order Document Flow and choose the Post Goods Issue Document. 5. Display the Material Document.
6. Display the Accounting documents from the Document Flow of the Sales Order.
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Post Goods Issue Demo (1 of 6)
Step 1 From the Sales Order – Menu Path: Goto→Overview
Action:
• Double-click the line item and then click the Account assignment tab to view the Profit Center.
Menu Path: Environment → Display material (F8) 36
Post Goods Issue Demo (2&3 of 6)
Step 2
Menu Path: Goto(1) → Sales: general/plant • The Profit Center from the Material Master Record is used at Post Goods Issue to relieve inventory.
Step 3
• Notice „Profit center‟ field. 37
Post Goods Issue Demo (4 of 6)
From the Sales Order – Menu Path: Environment→Display document flow Step 4
From the Sales Order „Document Flow‟ – Actions:
• Single click the GD goods issue: delvy number line item.
• Single click the Display document button.
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Post Goods Issue Demo (5 of 6)
Step 5
From the „Material „Document – Actions:
• Single click the Accounting docs… button. • Single click the Accounting document line.
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Post Goods Issue Demo (6 of 6)
Conclusion: From the material docs, you get to the Click Accounting docs button. financial postings to Click Accounting document. view the Profit • The Profit Center Centers. Step
4 Step 6
assignment for FG Packaged Beer is derived from the combination of the material and plant from the Material Master.
• This entry relieves finished goods inventory and posts the debit to the unbilled shipments count. Notice the Profit Center on each line of the accounting document. The Profit Center assignment for Unbilled shipments is derived from the Sales Order Substitution Rules. 40
Post Goods Issue Exercise
Exercise to reinforce learning - “let me”
1. 2. 3. 4. 5.
6.
Goto Material Master from Sales Order. Display the Material Master Record for the material on our Sales Order. Note the Profit Center. Goto the Sales Order Document Flow and choose the Post Goods Issue Document. Display the Material Document.
Display the Accounting documents from the Document Flow of the Sales Order.
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Order to Cash Process Flow
Order Call
OMS SAP Sales Order SAP Proce ss Order SAP Delive ry
Ship ment
Pick & Pack
SAP Good s Issue
SAP Invoi ce
Paym ent
Cash Appli ed
Generate and send invoice to customer. The invoice creates financial documents in SAP
Coors collects cash
Cash receipt is posted to respective accounts and a financial document is created in SAP
42
Invoice Display Demo
Instructor demo “show me”
1. Choose the Invoice from the Sales Order Document Flow. 2. Choose the Accounting document from the Overview of the Billing Item. 3. Review the Profit Center and cost center assignment on the Accounting document.
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Invoice Display Demo (1 of 3)
Step 1
From the Sales Order „Document Flow‟ –
Actions:
• Single click the Invoice # line. • Single click the Display document button.
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Invoice Display Demo (2 of 3)
Step 2
From the „:Overview of Billing Items‟ –
Action: • Single click the Accounting button.
• Single click the Accounting document line item.
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Profit Center Accounting
April 17th – September 6th
Continue to post beer revenue and the related revenue accounts to cost centers and Profit Centers (Sales, Price Promotions, Excise Taxes, etc).
After September 6th
Discontinue posting beer revenue and some related revenue accounts to cost centers. Post directly to Profit Centers.
Instead of posting beer revenue to cost centers (e.g., at 10CRLT005), post beer revenue and the related revenue accounts to cost centers: CBC1SALES, 51MUSALES, CINESALES, 132420399
Discontinue use of cost center:
CBC1SALES, 51MUSALES, CINESALES, 132420399
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Invoice Display Demo (3 of 3)
• Notice the cost centers we also post to for P&L line items.
Step 3
• During the interim period, we must continue to post every P&L item on the billing document to a cost center.
• This entry records the beer sale, cost of goods sold, the receivable from the distributor and other accounting entries. Notice the Profit Center on each line of the accounting document. The Profit Center assignment for Beer/Ale Sales, Cost of Goods Sold and various other lines is derived from the Sales Order Substitution Rules. • The Profit Center assignment for AP Dep Plastic Pallet (line item 22 above) is derived from the Sales Order Substitution Rules, Balance Sheet Profit Center Assignment Table (3KEH).
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Invoice Display Exercise
Exercise to reinforce learning - “let me”
1. Choose the Invoice from the Sales Order Document Flow. 2. Choose the Accounting document from Overview of the Billing Item. 3. Review the Profit Center and cost center assignment on the Accounting document.
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Transfer of Payables/Receivables: What does it do?
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Transfer of Payables/Receivables
What is the Transfer of Payables/Receivables?
• Standard SAP programs to find all open balances by customer and vendor. • Two steps are involved:
– Calculate control account balance by Profit Center – Post the control account balance by Profit Center in PCA
When will this program be executed? • This program will be executed at period end and specific day will be determined by the business.
How do I run a Period End Job? • Transaction F.5D • Transaction 1KEK Who will be responsible for this Transfer?
• Only open balances in the control accounts will be assigned a Profit Center.
• The EF team will set this up as an automated job to be executed in the background.
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Period End Job Demo
Instructor demo “show me” 1. Run transaction F.5D. 2. Run transaction 1KEK. 3. Company Code CINE.
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Period End Job Demo
Step 1
Transaction: F.5D
Result: Screen displays with message.
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Period End Job Demo
Step 2
Transaction: 1KEK
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Period End Job Demo
Step 3 Result: Message displays.
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Period End Job Demo
Step 4
Results: Summary
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Profit Center Reporting in R/3
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R/3 PCA Reporting
• We will use some standard R/3 reports to review and analyze Profit Center postings during the interim period until we deploy Business Warehouse (BW) reporting with the September 2005 go-live. • Some reports will only have data in the reports after some period end programs run to update the PCA reports from the G/L. • We recommend you familiarize yourself with your Profit Centers to apply questions you may have to the business.
• A formal process to follow after the April 2005 go-live on context and work application.
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R/3 PCA Reporting
From the initial SAP Menu –
Menu Path: Accounting → Controlling → Profit Center Accounting → Information System → Line Item Reports → KE5Z
Transaction: KE5Z Action: • Record Type: 0 • Version: 0 • Controlling Area: COOR • Posting Period: • Fiscal Year: • Profit Center: IMPORTANT!! When running a report, input as many fields as you can to receive your information. Otherwise, the system may time out by searching through data. 58
R/3 PCA Reporting
Results
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R/3 PCA Reporting Exercise
Exercise to reinforce learning - “let me”
1. Display Profit Center Line Item report
• Transaction: KE5Z
2. Explore the report and functionality.
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Conclusion
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What‟s Changing April 17, 2005
• Profit Center Accounting:
– Profit Center functionality turned on in the system. – Profit Centers become linked to financial transactions. – Some master data processes will require entry of a Profit Center. – Some transaction processes may change. – Business Consolidation team will begin using Profit Centers to consolidate, validate and reconcile financial results by period for 2005.
• Transaction Type Functionality:
– We will begin using the Transaction Type functionality to track account activity for certain balance sheet accounts.
– Information gathered via Transaction Type will be used to build the basis for the Cash Flow Statement.
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Miscellaneous FI Billing
Any audience members generate FI billing? If so, are you attending the General FI-CO course?
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Review of Course Objectives
By now, you should understand . . .
The rules and master data used in assignment of Profit Centers throughout the Order to Cash Process. Profit Center Accounting as it relates to the Order to Cash process. How to identify where a profit center applies (which one, why, where, and impacts). Standard Profit Center reporting in R/3.
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Go-Live Support
• Contact the Help Desk for support
– Ext. 7HELP (74357) – Give them the key words: Enduring Focus • This will bump you to the highest priority queue to get the issue resolved
• NetBar for Training Materials (coming soon)
– Department Websites→Coors Finance→Enduring Focus
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Questions
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Conclusion
Congratulations! You have completed the PCA – Order to Cash course!
Thank You!
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Appendix
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Glossary of Terms
Term
Company Code
Description
Represents usually a legal entity, but could also be a reporting unit depending if a Balance sheet and Profit & Loss (P&L) Statement is desired. Balance Sheets and P&L Statements can be created.
Profit Center Profit Center Hierarchy Profit Center Group
Cost Center Transaction Type
Represents a “Company within a Company” . Used to determine profitability for internal areas of responsibility within the organization. P&L and limited Balance Sheet can be produced. Contains all profit centers in a controlling area and reflects the organizational structure used in Profit Center Accounting. Represents a listing of one or more profit centers organized into a group used for reporting purposes. Multiple profit center hierarchies (e.g., profit-oriented, functional, regional) make it possible to analyze data in different ways in multi-dimensional organizations.
Generally utilized to capture expenses for a term longer than one year. A cost center should capture expenses at a level within the company that is planned and forecasted. The object that classifies the business transaction (e.g., acquisition, retirement, transfer) and determines how the transaction is processed in the system. Transaction types are used to show the historical development of a financial statement item. They are used to show: - changes in fixed assets, from opening to closing balance - changes in appropriations - changes in equity In the Consolidation system, you can use subitems for assigning transaction types to FS items.
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Acronyms
Acronym
BCS BW
Description
Business Consolidation System Business Warehouse
COA
FX
Chart of Accounts
Foreign Exchange
GFR
PCA
Global Financial Reporting
Profit Center Accounting
PPC
SLO
Partner Profit Center
System Landscape Optimization
TP TT
Trading Partner Transaction Type
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