Can a Cost Center become a Profit Center. What are the ways to make the change?
This was selected as Best Answer Personally, I’d start with treating it like a Profit Center, even if it’s just on paper and not dealt with that way in formal accounting procedures. Even if Profit=0 or some negative number, you’ll begin to have a better understanding of all of your real costs and where they go. You’ll also begin to see opportunities to minimize the costs, re-allocate them more appropriately, and/or opportunities to bring in new revenue. Service and Support Centers have long been treated strictly as Cost Centers. These days, however, many of them are Profit Centers now instead and many of them are bringing in good revenues so yes, it IS possible to make such a shift. The ‘how is it done’ part probably depends on the type of department and the specific circumstances…
