This section addresses the requirement to provide profit reporting. The main decision which typically has to be made is which module to use.

• If your company is using the SD module, then the question is often between the CO-PA Profitability module and EC-PCA the Profit Centre module.
• If your company is a financial or government organisation and/or you are not using SD, then you are probably considering the EC-PCA Profit centre module. You should consider the CO-CCA vs EC-PCA discussion to determine whether perhaps you could get away with just using the CO-CCA Cost Centre module.
• Limited Profit Reporting by Legal Entity and Business Area is available via the standard FI Financial Statement Reporting.
• You should also review the Period based vs Cost of Sales Based Accounting section.

Profit Reporting via Profitability Analysis or Profit Centre Accounting

Which module to use is a question that I often get asked by people unfamiliar with the operation of one or both.

Some rule of thumb guidelines to help you get a feel for which way you should be going are as follows:

Profit Centre Accounting (EC-PCA module) vs Cost Centre Accounting (CO-CCA)

This section addresses the question: "Do you really need to use Profit Centres ? OR How can I have revenue in my Cost centres?"

If you are not using SD and MM (perhaps you do not have logistic operations but are in a government or finance type industry) or are not using CO-PA for some reason (SD and CO-PA usually go together), you will probably have been looking at using Profit Centre accounting. If you are only doing this for Profit Reporting and are not using the Balance Sheet related functionality, then you should consider possible only using Cost Centres. This will simplify data setup and maintenance and reduce the data volume.

How ? Well there are a couple of options:

1. Revenue as 'negative' expenses

• Create your revenue accounts as primary cost elements (same as your expense accounts). Basically ignore the revenue element option.
• Create appropriate cost element groups to report appropriate subtotals etc.

Standard Cost centre reporting will then provide profit/loss reporting by cost centre and cost centre group.

2. Allow 'revenue' posting to Cost Centres:

Set the appropriate indicators in each cost centre master record for which you wish to see revenue postings. Note however the system regards revenue element postings to Cost Centres as "statistical postings" and therefore this revenue information will not be as visible in the standard reports as with option 1.