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© Copyright 2003 SAP Professional Journal
What We’ll Cover
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© Copyright 2003 SAP Professional Journal
How Payroll Updates FI/CO
Most people misunderstand how Payroll updates FI/CO
“Payroll updates FI/CO automatically just like MM and SD automatically
update FI/CO, right?”
WRONG!
Some Payroll-to-FI/CO data must be transferred manually
Payroll and FI/CO have defined integration points through which data is
passed, just like MM/SD
Unlike MM/SD, though, some integration points require human intervention
This causes a lot of confusion between the Payroll and FI/CO teams during
both the implementation and after go-live
GOTCHA!
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Payroll-FI/CO Integration Points
The integration points between Payroll and FI/CO are
Creating the DME (payments)- automatic (check register only)
Posting to Accounting - manual
Posting third-party Remittance – automatic
I will demo these in R/3 4.6C. The process is similar in other versions
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1 - Running the Payroll - Calculation Steps
First, we’ll release the payroll
This sets a system parameter that allows the payroll to be run
In this step you select the payroll area and payroll dates you are processing
Next, we’ll select “Start payroll”, enter screen parameters and
launch the payroll process
This will generate wage types and assign cost centers
We’ll check the results by viewing the Remuneration statement
Finally, we’ll select the “Exit payroll” step
This sets payroll process system parameter to “finalized”, so additional
processing may be completed
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1 - Running the Payroll - Calculation Steps (cont’d)
Demo
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2 - Creating DME - Payments
Next, we’ll create the Data Medium Exchange (DME)
This step prepares the payroll remuneration data for ACH & check printing
You specify one of the following DME types
Payroll Check
ACH Transfer (Direct Deposit)
Wire Transfer
Payroll uses the A/P Payment Program for the ACH and check
printing processes
The check register will be updated
In contrast to A/P payments, the G/L (FI/CO) will not be updated
After doing this, your check register will be out of balance with your
outgoing payments G/L account in FI/CO. FI/CO will also be out of
balance with Payroll because no expense or liability postings will
have been transferred yet.
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2 - Creating DME - Payments (cont.)
Demo
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2 - Creating DME - Payments (cont.)
The results
Payroll checks and ACH files for the direct deposit were generated
The check register has been updated and reflects the newly printed payroll
checks, but FI/CO has no payroll information!
Conclusions
You can run payroll and generate checks without transferring to FI/CO
In other words: you can successfully run the payroll, cut the payroll checks,
and distribute them to employees without updating FI/CO at all!
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© Copyright 2003 SAP Professional Journal
3 - Post To Accounting
To solve this Payroll-FI/CO discrepancy, we’ll “manually”
execute transaction PCP0
This is an important, separate step after generating payroll and cutting
checks (DME)
PCP0 updates FI/CO – Expenses, Liabilities and Assets
It uses the employee’s home cost center to determine the cost center to
post to
It uses the mapping of wage types to symbolic accounts to G/L accounts to
determine the correct G/L account/cost element to use
I'll explain these elements and relationships in detail later
Hint: When viewing the FI/CO update document, use menu path
Extras>Original Document to jump to the payroll Remuneration
statement (which lists the wage types/employees that make up the
FI/CO posting).
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3 - Post To Accounting (cont.)
Demo
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3 - Post To Accounting (cont.)
Demo
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3 - Post To Accounting (cont.)
Demo
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3 - Post To Accounting (cont.)
Demo
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4 – Third-Party Remittances
R/3 allows you to automatically create payables to different
vendors as a result of HR/Payroll. Examples include:
Garnishment Processors
Taxing Authorities
Benefit Providers
This is a separate step done after payroll and the update of
payroll results to FI/CO
Posting third-party Remittances isn’t required to run the next payroll
Good
Employee withholdings such as garnishments can NOT be passed to the
Thing A/P vendor if the third-party Remittance Posting Run is not executed
In this step the Integration Is Automatic. Once you post your third-party
Remittances, the proper A/P vendors accounts are updated so that you can
process them like any other liability through the A/P payment program
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4 – Third-Party Remittances (cont.)
Demo
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5 - Posting With CATS
CATS = Cross-Application Timesheet
Time Capture and Data Transfer Tool
Is an additional piece of functionality that can be used for Payroll and FI/CO
CATS can be used as the time transfer tool to update HR/Payroll
with hours worked by employee
CATS can be used to enter one-time earnings/deductions for
employees
Using CATS you can capture an employee’s time across
different cost centers (projects, etc.)
Update HR, CO or both with time worked by employee by activity
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5 - Posting With CATS (cont.)
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5 - Posting With CATS (cont.)
An Example
Employee John works 80 hours over a two-week pay period
John is an hourly employee who makes $15/hour and is assigned to cost-
center 123-A as his home cost center
John’s company uses CATS as a time entry/capture tool
Over the two-week period John worked 40 hours in cost-center 345-B, 30
hours in cost-center 678-A, and 10 hours in his home cost-center 123-A
His gross pay for the period is 80hours*15/hr = $1200
cont. >
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5 - Posting With CATS (cont.)
An Example (cont.)
From the Payroll to FI/CO transfer – John’s home cost-center 123-A is
debited $1200 (the entire 80 hours that he worked)
The CATS interface will credit John’s home cost-center 123-A 70 hours --
(times a pre-defined activity rate - $15/hr) $1050 – via an internal activity
allocation. This will leave a net debit of $150 (10hrs * 15/hr) on John’s home
center
The other side of the CATS interface activity allocation will debit cost-center
345-B 40 hours for a total of $600, and debit cost-center 678-A 30 hours for
a total of $450
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5 - Posting With CATS (cont’d)
Conclusions
CATS is a great tool to use when you have hourly employees, especially
when these employees can do work over several projects or cost-centers
CATS even allows you to “charge” the worked cost-centers for different
activity rates depending on the type of work/project the employee is working
on
CATS allows you to spread costs over the cost-centers actually worked,
instead of the employee’s home cost-center which is the SAP default when
posting from Payroll to FI/CO
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What We’ll Cover
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© Copyright 2003 SAP Professional Journal
Configuring the Payment Program
As was shown in the previous section, Payroll uses the A/P
payment program to generate checks and ACH payments (DME)
You use the same configuration techniques that you use for A/P
Create House Bank and Accounts
Create Payment Methods
Assign to Accounts
Create RFFOUS_C and RFFOUS_T variants
Solution
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Configuring the Payment Program (cont’d)
Even if you don’t use different bank accounts for A/P payments
and payroll payments you should create a new payment method
for payroll check and ACH transfers
Enables easier reconciliation of checks, accounts, and check register to G/L
Allows you to have a greater degree of authorization to view/create/change
payroll checks
Tip
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What We’ll Cover
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Mapping Payroll Components to FI/CO
In this section we’ll show the configuration behind the Payroll –
FI/CO integration points
1 - Defining Wage Types (Gross to Net)
2 - Defining Symbolic Accounts
3 - Mapping Wage Types to Symbolic Accounts
4 – Mapping Symbolic Accounts to the G/L
5 - HR Payee Payees to Vendor Accounts (for Garnishments and third-party
Remittances)
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Step 1 - Defining Wage Types
Wage Types are elements used in the payroll schema to
represent different types of payroll activities (e.g., wages,
deductions, taxes)
Wage types for gross wages, net wages, and taxes are delivered standard
and ready to use
Employee deductions and earning codes are delivered as examples
Wage types are created or modified by the Payroll team
The payroll schema uses wage types to calculate Net Payroll
from Gross Payroll
Similar to SD condition types and pricing procedures
The wage types used in payroll are what will ultimately drive our G/L
postings and accounts used in FI/CO
Building Block
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© Copyright 2003 SAP Professional Journal
Step 2 - Defining Symbolic Accounts
Symbolic Accounts are names used in HR/Payroll instead of G/L
account numbers
They’re similar to account keys in SD
You can think of symbolic accounts as an intermediate step to determining
the proper G/L account
The types of symbolic accounts are
Financial – Balance Sheet
Cost – Income Statement
Vendor – Vendors
Customer – Customers
Building Block
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Step 2 - Defining Symbolic Accounts (cont.)
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Step 2 - Defining Symbolic Accounts (cont’d)
IMG Payroll>Payroll:USA>Posting to Financial Accounting>Activities in
the HR System>Employee Grouping and Symbolic Accounts>Define
Symbolic Accounts
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Step 3 - Mapping Wage Types
Next, Wage Types need to be mapped to symbolic accounts so
R/3 can determine which G/L accounts to update
Use IMG path: Payroll>Payroll:USA>Posting to Financial
Accounting>Activities in the HR System>Wage Type Maintenance>Define
Wage Type Posting Attributes
There are no debits and credits in
the bizzaro world of Payroll. Use a
+ like a debit and a – like a credit.
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Step 3 - Mapping Wage Types (cont.)
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Step 4 - Mapping Symbolic Accounts to G/L Accts
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Step 4 - Mapping Symbolic Accounts to G/L Accts (cont.)
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Step 5 - Mapping HR Payees to a Vendor Acct
Building Block
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5 - Mapping HR Payees to a Vendor Acct (cont.)
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What We’ll Cover
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Std. R/3 Lacks an Automatic Payroll-FICO Link
Issue
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Std. R/3 Lacks an Automatic Payroll-FICO Link (cont.)
Issue
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SAP Has Released a Solution!
Solution
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SAP Has Released a Solution! (cont.)
Program
RFPYHR00
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© Copyright 2003 SAP Professional Journal
Important Steps When Using RFPYHR00
It’s important to do things in the following order or your updates
could get out of order or you could lose your linking of checks
in the check register to line items in the G/L
1. Transfer payroll to FI/CO
2. Create DME
3. Print DME
4. Run RFPYHR00
If you run RFPYHR00 after creating the DME but before you print
the DME your payroll checks in the check register won’t be linked
Warning
to an accounting document
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7 Key Points to Take Home!
cont.>
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7 Key Points to Take Home! (cont.)
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Your Turn! (to launch Q&A)
Questions?
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