A Department is a separate activity
or product line within a company. A department is coded within the
general ledger chart of accounts by the 3-digit extension to the
main 5-digit account code.
A Profit Center can consist of a group of one or
more departments that are grouped together for financial summaries
such as profit & loss and balance statements.
Overhead costs can be posted to a single general
ledger account and then allocated to individual profit centers based
on a monthly or annual percentage. The percentage distribution is
dynamic can be entered on a monthly or annual basis. For example:
multiple profit centers may share a common building and the building
costs such as maintenance, utilities, and insurances. These costs
are then distributed to the individual profit centers based on the
percent of space used within the building.
Do you wish to determine which department within
your company is profitable? Do you need to identify the areas within
your company that are creating a loss? If so, implement the profit
center option within EBMS. |
Department and Profit Centers
