Lesson 2 of 5
Derivation
10 min
Listen to this lesson
Users rarely type a profit center. In almost every posting it is derived from something the user did enter or something the process already knows: the cost center on an expense, the material on a goods movement, the sales order item on a billing document. Getting derivation right is most of Profit Center Accounting.
Where the profit center comes from
| Posting | Profit center comes from | Contoso example |
|---|---|---|
| Expense to a cost center | Cost center master record | Detroit assembly cost center → CMC-FLEET |
| Cost to an internal order or WBS element | Order or WBS master record | Fleet Expo order → CMC-FLEET |
| Goods receipt, goods issue, inventory | Material master, plant-level data | CMC-RTR-200 in plant 1710 → CMC-FLEET |
| Sales order item, delivery, billing | Sales order item (proposed from the material, can be substituted) | Aftermarket order item → CMC-AFTMKT |
| Production order | The order, proposed from the material | Order for CMC-ALT-100 in plant 1710 → CMC-FLEET |
| Fixed asset | Asset master, or its cost center or order | Test bench asset → CMC-AFTMKT via its cost center |
| Supplier, customer, tax lines | Document splitting from the base lines | Payable split by the expense lines |
SAP's learning material describes two ways a document gets its profit center. Dynamic determination reads the object in the document now, so a later change to the cost center's profit center affects later postings. Indirect determination takes the profit center from a preceding document: a billing document uses what the sales order item had, even if the material has changed since. That is why fixing master data does not repair open documents.
One material, two profit centers
The material master allows only one profit center per plant. Contoso sells the same alternator, CMC-ALT-100, to fleet and aftermarket customers, so the plant data cannot tell the two apart. The design keeps CMC-FLEET in the material's plant data and uses a substitution on sales order items: items in the aftermarket distribution channel get CMC-AFTMKT. Substitutions replace values at posting time based on conditions; SAP's course lists them as one of the steps that can override what objects supply. Chicago needs no substitution: the plant data of CMC-ALT-100 in plant 1720 carries CMC-AFTMKT, and Chicago Assembly (17201101) and Chicago Maintenance (17201102) carry CMC-AFTMKT too, so plant 1720 sales and costs derive the Aftermarket profit center by design.
- Sales order itemMaterial CMC-ALT-100 proposes CMC-FLEET
- SubstitutionAftermarket distribution channel → CMC-AFTMKT
- Delivery and goods issueCost of goods sold line takes the item's profit center
- BillingRevenue line takes the item's profit center
- SplittingReceivable and tax lines split by the revenue line
Override steps and the default
Above the object-based sources sit a few override steps. Substitution rules replace entered values when conditions are met. A default profit center can be assigned to accounts per company code with transaction FAGL3KEH, used when no other profit center is found. Document splitting then fills balance sheet lines from the lines that carry profit centers. SAP notes that the default is derived before document splitting, which makes it mainly useful for P&L and balance sheet accounts that genuinely have no object, such as some bank charges.
- Does the line have a cost object or material that carries a profit center?Yes → use it · No → next question
- Does a substitution rule apply to this posting?Yes → use the substituted value · No → next question
- Is a default profit center assigned to the account?Yes → use the default · No → next question
- Can document splitting fill the line from base lines?Yes → split value · No → dummy profit center, or the posting is rejected if the field is mandatory
What would you do?
Maria reports that aftermarket billing documents post to CMC-FLEET. The material master for CMC-ALT-100 in plant 1710 shows CMC-FLEET, as designed. What should the team check first?
- Profit centers are derived from cost centers, orders, materials, sales order items and assets.
- Indirect determination copies from preceding documents; fixing master data does not fix open documents.
- The material master holds one profit center per plant; substitutions handle exceptions.
- Default and dummy profit centers stop errors but hide gaps; monitor them.
Check your understanding · not graded
Lesson check
1. Where does a billing document line usually get its profit center?
2. Why can't the material master alone separate fleet and aftermarket sales of the same product?
3. Which transaction assigns default profit centers to accounts?
4. A cost center's profit center was corrected. Do already-open sales documents change?