Profit Center Business Units

A profit center business unit is a part of a company that you treat as a separate business. Your organization calculates the profits and losses for this profit center separately from other parts of the organization.

A profit center business unit represents a portion of a legal entity that's tracked for profitability, revenue, and costs. You can set up a profit center to have trade agreements with other profit centers for the following business flows:

  • Global procurement

  • Intercompany drop shipment

  • Inter-organization transfer of inventory

When defining inventory organizations, you must specify a profit center business unit to generate intercompany trade transactions for various business flows. If you don't associate a profit center business unit to an inventory organization, it may result in trade transaction errors during cost processing.

Note: Updating the profit center business unit for transactions that are in process results in data corruption and errors during cost processing. It also results in transactions errors causing scenarios that hold up period-end processing.