Profit Center Accounting Case Study

Profit Center Accounting Overview:
Profit Center Accounting helps us to analyze/determine all the profits and losses based on profit center by either period accounting or by cost of sales method. It helps to determine the fixed capital or statistical key figures (for example square meters, number of employees, etc.) profit center wise. This helps an organization to analyze the area of responsibility and delegate the responsibility to different divisions.
Profit center can be set up to any productions, geographical factors, or functions to keep the internal management enabled to review the areas of responsibility within their organization. Each profit center contains the detailed balances of cost and revenues.
PCA is a part of Controlling

This step should be maintained in ledger for the defined characteristic.
Constant
Document Splitting is designed in such a way that we can assign standard account assignments (or Constant) for different scenarios based on the condition to derive correct account assignments of specific document splitting characteristics of General Ledger Accounting.
To understand more clearly, I will take an example of an expense a/c using Petty Cash. The document gets posted by pre-defined SAP Document Splitting rules – as of now we have not customized document splitting rules to this particular Petty cash account. Hence, as you see below screen shot, the document is not split, the profit center field is blank against petty cash a/c entry. (Note: An error message can also be generated depending upon the pre-configured SAP rules instead of showing blank Profit center field) This financial document can be compared in two different scenarios as shown in the below screen shot:
1. Document splitting rules after customizing as shown in the previous screenshot; and
2. After configuring the Constant as shown in this below screen

Configuration can be done in IMG menu path
Path: Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Edit Constants for Nonassigned Processes

Activate Document Splitting
Next we need to assign this Constant (newly created one) to the activation of Document splitting. FYI: Document splitting activation can only be assigned to one Constant.
Configuration can be done in IMG Path
Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Activate Document Splitting

Once the customization of these two tables is completed, all the processes that were not deriving a profit center (blank Profit center field) can now be able to derive a same Constant.
Configuration steps to restrict the use of Constants
As we have seen above how a Constant was customized in a client, similarly the usage of this Constant to an individual item category or individual business transaction can also be restricted.
There are two ways by which we can restrict the application of Constant at individual item category level;
1. Assignment of a Constant to specific item