A cost center in SAP FICO is an organizational unit that reflects the areas of responsibility within a company’s organizational structure (Skillstek, 2022). It is used to track and manage the costs incurred by each department or unit within the organization.
Key Facts
- Definition: A cost center reflects the areas of responsibility within a company’s organizational structure.
- Activation: Cost Center Accounting needs to be activated in the Controlling Area before use.
- Cost Center Master Data: Cost centers are created by assigning them to a cost center category, which helps in activity planning and defaulting specific characteristics.
- Creation: Cost centers can be created using transaction code KS01 or through the menu path Accounting => Controlling => Cost Center Accounting => Master Data => Cost center => Individual Processing.
- Fields in Cost Center Master Data: Important fields in cost center master data include user responsible, person responsible, department, cost center category, hierarchy area, company code, business area, functional area, and currency.
- Cost Center Standard Hierarchies: A cost center standard hierarchy is defined for the controlling area and represents the structure of the company.
- Cost Center Groups: Cost center groups can be created to display cost centers in different structures.
- Integration with Profit Center Accounting: Cost centers and profit centers are closely connected. If profit center accounting is activated, a profit center can be assigned to a cost center.
- SAP HANA in Cost Center Accounting: SAP S4 HANA Finance offers new line item reports in Cost Center Accounting when activating the corresponding accelerator scenario.
Activation
Before using Cost Center Accounting, it must be activated in the Controlling Area (Skillstek, 2022). This can be done through transaction code OKKP or by navigating through the Implementation Guide (IMG).
Cost Center Master Data
Cost center master data is created by assigning cost centers to a cost center category (Skillstek, 2022). This helps in activity planning and defaulting specific characteristics to the cost center.
Creation
Cost centers can be created using transaction code KS01 or through the menu path Accounting => Controlling => Cost Center Accounting => Master Data => Cost center => Individual Processing (Skillstek, 2022).
Fields in Cost Center Master Data
Important fields in cost center master data include (Skillstek, 2022):
- User responsible
- Person responsible
- Department
- Cost center category
- Hierarchy area
- Company code
- Business area
- Functional area
- Currency
Cost Center Standard Hierarchies
A cost center standard hierarchy is defined for the controlling area and represents the structure of the company (Skillstek, 2022). It is equivalent to a cost center group that contains all cost centers within the controlling area.
Cost Center Groups
Cost center groups can be created to display cost centers in different structures (Skillstek, 2022). These groups can be up to 15 characters long and cannot contain special characters.
Integration with Profit Center Accounting
Cost centers and profit centers are closely connected (Skillstek, 2022). If profit center accounting is activated, a profit center can be assigned to a cost center.
SAP HANA in Cost Center Accounting
SAP S4 HANA Finance offers new line item reports in Cost Center Accounting when activating the corresponding accelerator scenario (Skillstek, 2022).
References
- Skillstek. (2022). Cost Center in SAP | Cost Center Accounting – Overview. https://skillstek.com/cost-center-in-sap/
- Guru99. (n.d.). Cost Center and Profit Center in SAP: What is the Difference? https://www.guru99.com/comparison-between-cost-center-profit-center-and-internal-order.html
- SAP Community. (2008). cost center & profit center. https://community.sap.com/t5/enterprise-resource-planning-q-a/cost-center-profit-center/qaq-p/4358957
FAQs
What is a cost center in SAP FICO?
A cost center is an organizational unit that reflects the areas of responsibility within a company’s organizational structure. It is used to track and manage the costs incurred by each department or unit within the organization.
How do I activate Cost Center Accounting in SAP FICO?
Cost Center Accounting can be activated in the Controlling Area through transaction code OKKP or by navigating through the Implementation Guide (IMG).
How do I create a cost center in SAP FICO?
Cost centers can be created using transaction code KS01 or through the menu path Accounting =>; Controlling =>; Cost Center Accounting =>; Master Data =>; Cost center =>; Individual Processing.
What are the important fields in cost center master data?
Important fields in cost center master data include user responsible, person responsible, department, cost center category, hierarchy area, company code, business area, functional area, and currency.
What is the difference between a cost center and a profit center?
A cost center is used to track and manage the costs incurred by each department or unit within the organization, while a profit center is used to track and manage the profits and losses of each unit within the organization.
How are cost centers and profit centers connected?
Cost centers and profit centers are closely connected. If profit center accounting is activated, a profit center can be assigned to a cost center.
What is the role of SAP HANA in Cost Center Accounting?
SAP S4 HANA Finance offers new line item reports in Cost Center Accounting when activating the corresponding accelerator scenario.
What are the benefits of using cost centers in SAP FICO?
Using cost centers in SAP FICO provides several benefits, including improved cost control, better decision-making, and increased transparency.