In this tutorial, we will learn How to create a new COST CENTER

Step 1) To create a Cost Center , Enter KS01 into SAP transaction code box.

Step 2) In the next SAP screen

• Enter the new cost center number.
• Enter the validity dates of the new cost center.

  Optional - In the Reference section:

• In the Cost Center field, you can enter a reference cost center if the details are similar to the new cost center.
• In the Controlling Area field, you can enter the reference cost center's controlling area.

In this tutorial, we will create a cost center without a reference.

Step 3) Click Master Data Button

Step 4) In the Names section:

• In the Name field, enter the name of the new cost center.
• In the Description field, enter a description for the new cost center.
• In the Basic Data section:
• Enter the Person Responsible.

Step 5) In the Basic Data section:

• Enter the Person Responsible
• Select W (Administration) for Cost Center Category.
• Select the Hierarchy area.
• Enter the Company Code.
• The Currency will default based on the earlier selections.

Step 6) On the Control tab select the appropriate indicators.

Step 7) Click Save. New Cost Center is created.

Why A Cost Center is Required?

It is the location where the costs are incurred.It can be setup based on areas of responsibility, functional requirements, allocation criteria, geographical locations or activities or services provided. Its purposes is to provide cost related information in Overhead Cost Accounting for which cost centers are grouped into units of decision making, control and responsibility. To map this structure, Cost center is placed in cost center standard hierarchy.

How To Create Cost Center Groups

Step 1) Enter Transaction Code KSH1 in the SAP Command Field

Step 2) In the next screen , Enter the Cost Center Group ID to be created

Step 3) In the next screen , Enter the Cost Center Group Description

Step 4) Press 'Save'  button in the SAP Standard Toolbar for the Creation of the Cost Center Group

Other Noteworthy SAP transactions-

KS02 to Change Cost Center
KS03 to Display Cost Center
KS04 to Delete Cost Center