--- description: Standard hierarchy is a tree structure for grouping all profit centers which belong to a controlling area. When creating a profit center, you must assign it to a group (node) of the standard hierarchy. title: Creation Of Profit Center using Standard Hierarchy in SAP image: https://www.guru99.com/images/profit-center-standard-hierarchy.png --- [Skip to content](#main) Standard hierarchy is a tree structure for grouping all profit centers which belong to a controlling area. When creating a profit center, you must assign it to a group (node) of the standard hierarchy. This ensures that all profit center of a controlling area are grouped in one node. This helps in reconciliation purposes. We can maintain the standard hierarchy from the application menu or in Customizing. Customizing also provides a function which allows you to create profit center groups by copying cost center groups. If our cost center structure is similar to our profit center structure, we can use this function to copy the cost center standard hierarchy to create our profit center standard hierarchy. ## How to Create Profit Center Group in SAP **Step 1)** Enter Transaction Code KCH1 in [SAP](https://www.guru99.com/sap-training-hub.html) Command Field [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy01.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy01.png) **Step 2)** In the next screen, Enter the Controlling Area for which you want to create the Profit Center Standard Hierarchy [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy02.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy02.png) **Step 3)** In the next screen, Enter the main node Profit Center Group of the Standard Hierarchy for the Controlling Area to be created [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy03.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy03.png) **Step 4)** In the next screen, Enter subnodes or sub profit center groups of the Standard hierarchy [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy04.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy04.png) Similarly Assign profit center to the [profit center](https://www.guru99.com/all-about-profit-center.html) groups. [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy05.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy05.png) **Step 5)** Save the structure, and check the status bar for the changes be saved [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy06.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy06.png) **Step 6)** A typical Standard Hierarchy display in [SAP System](https://www.guru99.com/sap-training-hub.html) [![Creation Of Profit Center using Standard Hierarchy](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy07.png)](https://www.guru99.com/images/sap/2012/08/CrPrtCtrHchy07.png) #### Summarize this post with: ChatGPT Perplexity Grok Google AI **Stay Updated on AI** **Get Weekly AI Skills, Trends, Actionable Advice.** ##### Sign up for the newsletter Subscribe for Free You have successfully subscribed. 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