GL Account Profit Centers & Departments
Profit Centers & Departments are used to further categorize and report on Income and Expense activity only. They are optional.
Profit Centers enable you to track the profitability for a logical "division" of your company while automatically rolling up this activity to the company-wide GL Accounts as well. Also, a Current Earnings GL Account is assigned to each Profit Center card and any Profit Center activity is also rolled up to the Earnings Account.
Departments enable you to categorize the activity within each Profit Center into common groupings. You can then report on a Department across all Profit Centers. A Department can only be used with Profit Center Accounts; you cannot use a Department without a Profit Center.
Both the Profit Center and Departments are defined by a Code and a Name. Once you define a Profit Center or Department, you can use its Code in defining GL Accounts that belong to it.
In general, the decision to use (or not to use) Profit Centers and Departments is driven by reporting requirements. This is usually dictated by your accountant.