SAP Modules Interview Question:

What is the difference between profit center accounting and Profitability analysis?

Submitted by: Administrator

profit center accounting is basically done for internal controlling purposes. It lets you determine the profit and loss using the cost of sale approach or period accounting approach. Here you can find the profit from an "area of responsibility or person" point of view.this is account based costing Whereas in Profitability analysis, market segments based on product , customer,order or any combination of these are studied to find wots the profit. PA provides information to the marketing,sales and planning department so that they can make decisions. PA has two forms account based and CO based.Both these are tools for profit management, and both are alternative. They are not same.
Submitted by: Administrator