SAP FI CO (Financial Accounting & Controlling)
SAP FI CO (Financial Accounting & Controlling) Forum
Is there Anyone who could tell me the difference between internal order and cost center.
They are two different terms. Cost center is a unit which does not produce direct profits to the company. Basically its a work center. Whereas an Internal order is used to accumulate cost for a specific project or task.
Cost centre is like a building, geographical area which can produre the accounting reports.. IO is used to monitor and allocate the costs or expenses the company goes through... yes they are completely different and for any sort of such domain accounting questions please refer to accounting principles by weygandt available in torrents..
Lets take an example marketing is a cost center, in this we do lot of activities to cell or promote out product like we will conduct trade fairs exibitions.
In this scenario we will create trade fair as internal order, at the month end we will settle internal order to cost center.
Internal Orders are - Individual costs by individual products.. Ex - in a dept we have a 100 Telephones, internal order will be shown as a each telephone expenses in a department....
Cost Centers are - Group of products with in one account expenses ... Ex - if we have 100 telephones in dept.. it will not shown by each product wise expenses...
We will post the entry in dept as telephone exp without mentioning the telephone no.
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