Controlling is one of the key functions of management. A profit center is an SAP controlling organizational unit whose main purpose is to analyze the areas of responsibility. Another goal of profit center accounting is to show financial users aggregated information from disaggregated information available within an entity. The profit center is this context can be a product or service category; geographical entity such as a region, territory, or division; line of business, department or any other classification that meets the company’s business goals in the eyes of management. In addition, from a management viewpoint, management needs to understand segment profit measurement, each unit’s contribution margin, controllable fixed costs, uncontrollable fixed costs for internal management reporting. Per GAAP ASC 280, publicly traded companies must disclose segment reporting to provide information about the different types of business activities in which a company operates. Understanding profit center and segment classification is essential prior to designing an organization structure in SAP. In this session, we will provide an overview of how SAP profit center accounting and segment reporting functionality in SAP S/4HANA fulfills requirements of GAAP and management reporting.
The session covers the following key areas:
Anand Seetharaju is an SAP S/4HANA Financial and Controlling certified consultant and CPA with more than 20 years of experience including global SAP transformation projects for central finance, profitability analysis, project system, product costing, SAP Material Ledger, cash applications, capital asset management, leasing, global tax, management, and legal reporting.