Compare Cost center, Profit center and Internal order

Lets quickly compare the three entities

Profit center:

  1. Profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.
  2. Profit Center Accounting evaluates the profit or loss of individual, independent areas within an organization.
  3. These areas are responsible for their costs and revenues.

Cost Center:

  1. Cost Centers are the organizational units within a controlling area that represents a location where costs occur.
  2. Organizational divisions can be done on the basis of functional, settlement-related, activity-related, region/section/department related, and/or responsibility-related, to monitor actual and plan figure standpoints
  3. Where cost is captured.

Internal Order:

  1. An internal order is used to accumulate cost for a specific project or task for a specific time period.
  2. An internal order is therefore used for a short period with a specific deadline.