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Profit Center FAQs
Summary: Frequently-asked questions about how profit centers work.
Q. What is a profit center?
Any division, department, or office in the company which has both billings and costs associated with it can be considered a profit center. It can even be a subsidiary company.
Q. I want to sub-total by department on the financial statements, should I set up profit centers?
No, profit centers are used for printing separate financial statements for parts of the company. Use sub-classes instead for organizing the departments on the same statement.
Q. How do the Profit Centers work in the program?
Profit centers can be set up in Clients & Profits in order to print individual financial statements for different parts of the company. Each profit center has its own general ledger accounts assigned to it. There can be only one profit center on each account. When a profit center is selected in the options for printing financial statements, only the accounts for that profit center will appear on the statement. Statements can be printed for one or all profit centers.
Q. How do I see all profit centers on the same financial statement?
To show all profit centers, select "ALL" from the Profit Center option (this is the default selection). When printing reports for all profit centers, the account totals combine all PCs together, you will not see a separate total for each profit center. If you always need to see the company's divisions on the same statement, consider using sub-classes and roll-up accounts. For information on sub-classes and roll-up accounts, see the online Clients & Profits Visual Feature Guide.
Q. I want separate statements for my side businesses, but I want to be able to consolidate the reports with my primary business. Should I set up profit centers?
Yes, profit centers will allow you to choose between printing financial statements for one business or all.
Q. I have a large, separate business with different clients, jobs, and vendors. Should I set up profit centers or create a separate database?
It will probably be more efficient to set up a separate database for this company, especially if it has a different company name (C&P X supports one company name per database for invoicing, etc.). As well, only selected areas can print reports broken out by profit center, such as financials, profitability reports, productivity reports, and job cost reports, but not all areas, so you'll have limited reporting abilities trying to combine two companies into one database.
Q. Can I track jobs (and print job reports) for different profit centers?
Yes and partially. Yes, you can assign a profit center to jobs, and to tasks on the task table, which ensures only those tasks associated with the job's profit center (and their uniquie dGL and cGL task general ledger accounts) are added to this job. Partially, in that reporting on jobs by profit center is limited. Only select areas have profit center reporting capabilities, as mentioned above. But, additional areas of job based profit center reporting could be added over time.
Q. Can profit centers be assigned to any general ledger account?
Yes. It's most common to delineate revenue, cost, and expense accounts by profit center. But the assets, liabilities and other equity accounts can also be set up by profit center, it's just not as common. For example. if there is a large division that is separate from the main company, if asset purchases are budgeted, or the receivables and payables are separate, a balance sheet for the profit center may be necessary.
Q. The balance sheet for ALL profit centers is in balance. Why is it out of balance when I print it for one profit center?
If an entry to the general ledger involves more than one profit center, printing the balance sheet for one profit center will reflect only half of the journal entry and the balance sheet will be out of balance. For example, if you transfer money from one profit center to the other you have a debit to one account and a credit to the other. The balance sheet for ALL profit centers reports both balances, but the balance sheet for one profit center reports only one side of the transaction, resulting in an out of balance.
Q. Are Profit Centers available in all versions of Clients & Profits?
No. Profit Centers are only available in Agency. They are not available in Studio. To upgrade your version of Clients & Profits, contact Clients & Profits Sales at (800) 272-4488.
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