Question - What is the difference between business area and profit center?
Answer -
1. Business area is where the total business is valuated as a whole
Whereas Profit centre is an area where the company/work place allows the outside agency to use its machinery for external profits (eq: A CNC machine which can run 24 hrs a day is utilized in our company for 15 hrs and the balance 9 hrs is let out for addition to the company's profit) is known as Profit Centre.
2. Business area is related term to FI module and Profit centre is related to CO module. One business area can have one or more profit centers.
3. Business area is gared on external accounting where as profit centers are used for internal accounting purposes