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A Comprehensive Guide
to SAP HR Payroll
Integration with SAP
ERP Financials and SAP
General Ledger
Mike Timm
Integrated Consulting Group
© 2009 Wellesley Information Services. All rights reserved.
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
2
Understanding FI Data Objects Used by HR/Payroll
• External modules have defined objects that are used in Human
Resources and assigned to employees
Company code
Cost center
WBS element
4
FI Data Objects Found in Infotype 0001 Org Assignment
• Transaction Code PA30
• Infotype 0001 Organizational Assignment
• Company code is
inherited from the
Personnel Area
assignment set in
configuration
6
FI Data Objects Found in Infotype 0015 Additional Payments
• Transaction Code PA30
• Infotype 0015 Additional Payments
• Position 20001398 cost center
assignment record in
Organizational Management
7
Understanding FI Data Objects Used by HR/Payroll
• The FI objects used in Human Resources processed and
integrated with the payroll process
• These objects will dictate how postings to accounting and
third-party remittance are completed
• Cost centers may be assigned at many different levels allowing
for a great deal of flexibility for cost distribution
Organizational Unit or Position – Org Management assignment
inherited by the employee
Infotype 0001 Organizational Assignment – home/master cost
center for employee
Infotype 0027 Cost Distribution – allows for multiple cost
centers to be allocated a percentage
Infotype 0015, 0014, 2001, 2002, 2010, etc. – individual entries
may be posted to different cost centers
8
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
9
Utilizing the SAP General Ledger Functionality
• SAP ERP 6.0 has an optional general ledger that posts liabilities
according to expenses based on the following elements:
Order
Company Code
Business Area
Cost Center
Cost Object
Network
WBS Element
Oper./Act.
Sales Order
10
Utilizing the SAP General Ledger Functionality (cont.)
• You have the option of posting the liabilities in the following
manner:
Do not want to distribute liabilities
11
Utilizing the SAP General Ledger Functionality (cont.)
• IMG Payroll Payroll:USA Posting to Financial Accounting
New General Ledger: Distribution of liabilities according to
expense
No configuration required if not distributing liabilities
12
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
13
How Payroll Updates FI and AP
• Posting to accounting
Payroll and FI have defined integration points through which
data is passed, just like Materials Management/Sales and
Distribution (MM/SD)
Unlike MM/SD, though, some integration points require human
intervention
This may cause confusion between the payroll and FI teams
both on the implementation and after go-live
• Third-party remittance
Creates payables to different vendors as a result of HR/Payroll
14
Payroll Integration Points with FI
• The integration points between Payroll and FI are:
Creating the Data Medium Exchange (DME) for payments —
update check register only
Posting to financial accounting
15
Running the Payroll
• First, select “Release payroll”
In this step, the payroll area and payroll period to be processed
are selected
The payroll control record is set to allow payroll processing
16
Running the Payroll (cont.)
• Finally, select “Exit payroll”
The payroll control record is set to finalized, allowing for
additional processing such as posting to accounting and
third-party remittance
Employee master data records are unlocked for current and
past changes
17
Running the Payroll (cont.)
• How to run payroll:
Release payroll
Start payroll
Exit payroll
• Menu Path
HR Payroll Americas
USA Payroll
f Payroll Check
• Payroll uses the AP Payment Program for the ACH and check
printing processes
The check register will be updated
After doing this, your check register will be out of balance with your outgoing payments’
general ledger 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.
19
Creating the DME (cont.)
• How to generate the DME:
Pre-program DME
Create DME
DME management
Print check
• Menu path
HR Payroll Americas
USA Payroll Bank
transfer
20
Creating the DME (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 has no payroll information
• Conclusions
Checks and direct deposits may be generated without
transferring to FI
In other words: The payroll may be run successfully, with check
and direct deposits for payroll cut and distributed, without
updating FI
21
Posting to Accounting
• The discrepancy caused while creating the DME is solved by
executing transaction PCP0
This is an important, separate step after generating payroll
and cutting checks (DME)
• PCP0 updates FI — expenses, liabilities, and assets — using any
of these
The employee’s home cost center
22
Posting to Accounting (cont.)
• Execute posting run (RPCIPE00)
• Execute posting run for
payments
(H99_POST_PAYMENT)
• Process posting run (PCP0)
• Menu Path
HR Payroll Americas
USA Subsequent activities
Per payroll period
Evaluation Posting to
accounting
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 posting)
23
Posting to Accounting (cont.)
• Posting to accounting and Posting of payment processes
generated the following two documents
24
Retroactive Calculation Posting
• Retroactive postings with amount change
If only the amount changes, the difference is posted
25
Retroactive Calculation Posting (cont.)
• Retroactive postings with accounting object change
If an account assignment object changes, the amount in the
old account assignment object is reversed and posted to the
new one
f In the original period starting 11/01, the company code 0010
employee was paid $1,000 in salary
f A retroactive change is made effective 11/01 moving the
employee to company code 0020
f The period starting 11/01 will generate a reversal posting of
$1,000 in company code 0010 and $1,000 posting in company
code 0020 along with the 12/01 period generating a posting of
$1,000 for company code 0020
Period 11/01 Period 12/01
Payable 1,000 Payable 0010 1,000
Salary 11/01 0010 1,000 Salary 11/01 0010 1,000
Payable 0020 2,000
Salary 11/01 0020 1,000
Salary 12/01 0020 1,000
26
Reverse Payroll Postings
• Reverse postings
Reversal documents are created with identical information as
the original posting with the exception of the sign (+/-)
Reversal documents transfer and post to accounting, canceling
the incorrect original posting
Payroll results are reset
28
Posting Third-Party Remittance
• Payables may be generated for vendors as a result of HR/Payroll.
Examples include:
Garnishment processors
Taxing authorities
Benefit providers
• This is an additional step done after payroll and the update of
payroll results to FI
Posting third-party remittances isn’t required to run the next
payroll
Employee withholdings such as garnishments can NOT be
passed to the AP vendor if the third-party remittance posting
run is not executed
Once you post your third-party remittances, the proper AP
vendors’ accounts are updated so that you can process them
like any other liability through the AP payment program 29
Posting Third-Party Remittance (cont.)
• How to post third-party remittance:
Evaluation remittance (New)
(PC00_M99_URME)
Create posting run
(PC00_M99_URMP)
Process posting run (PCP0)
• Menu path:
HR Payroll Americas
USA Subsequent activities
Per payroll period Evaluation
Third-party remittance
30
Check Third-Party Remittance Completeness
• Program RPURMC00 is the check completeness for third-party
remittance
Human Resources Payroll Americas USA
Subsequent activities Per payroll period Evaluation
Third-party remittance Run remittance completeness check
• Execute and you will receive output of third-party remittance
processing that needs to be completed
31
Third-Party Remittance Reconciliation
• Program RPURMR00 is the third-
party reconciliation report
Human Resources Payroll
Americas USA Subsequent
activities Per payroll period
Evaluation Third-party
remittance Reconcile postings
• Unless you know you have few
entries, narrow down the HR payee
item selection to keep a controllable
amount of output
• ALV Layout determines how the
data will be displayed
32
Third-Party Remittance Reconciliation (cont.)
33
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
34
Using the Payment Program
• As was shown in the previous section, Payroll uses the AP
payment program to generate checks and ACH payments (DME)
• Configuration is essentially the same as is done for AP
Create house banks and accounts (tcode FBZP)
• Whether the same bank accounts are used for AP payments and
payroll payments, new payment methods for payroll check and
ACH transfers should be configured
Enables easier reconciliation of checks, accounts, and check
register to SAP General
Allows for a greater degree of authorization to
view/create/change payroll checks 35
House Bank Account and Payment Method
C is the AP check
K is the Payroll check
36
Employee Infotype 0009 Bank Details
37
Using the Payment Program
• As shown earlier, there is no “automatic” integration link between
Payroll and FI/CO
This is an issue, especially when corporations use one
company code to make payments for other company codes
Manual processing allows more room for error
There is no financial link between the G/L line items in the bank
clearing account and the check register
• You can automate clearing journal entries and link the G/L line
items to the check register with program H99_POST_PAYMENT
The program requires that the payroll results be posted to a
clearing account
Automatically journals out of the clearing account and into the
proper bank clearing account and company code
f Based off the DME run in the payment program
f This program is a must-have in a cross-company scenario 38
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
39
Mapping Components for the Posting to Accounting
Process
• In this section, I will show the configuration behind the Payroll
integration points with FI/CO:
1 – Defining Symbolic Accounts
2 – Defining Wage Types (Gross to Net)
3 – Mapping Wage Types to Symbolic Accounts
4 – Mapping Symbolic Accounts to the SAP General Ledger
40
1: 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
Vendor – Vendors
Customer – Customers
41
1: Defining Symbolic Accounts (cont.)
• Symbolic accounts have an employee grouping key, which allows
the symbolic account to be associated with different G/L accounts
Employee groupings are done with the feature PPMOD
PPMOD allows many employee organizational fields to be used
for decisions, with the following being most common:
f Company code, cost center
f Personnel area, subarea
f Employee group, subgroup (hourly, salaried, etc.)
43
2: Defining Wage Types (Gross to Net)
• 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
• The payroll schema uses wage types in the calculation of net
payroll from gross payroll
The wage types used in payroll are what will ultimately drive
SAP General Ledger postings and accounts that are used in FI
44
3: Mapping Wage Types to Symbolic Accounts
• Next, wage types need to be mapped to symbolic accounts so
SAP R/3 can determine which G/L accounts to update
IMG Payroll Payroll:USA Posting to Financial Accounting
Activities in the HR-System Wage Type Maintenance
Define Wage Type posting attributes
45
3: Mapping Wage Types to Symbolic Accounts (cont.)
• Tax wage type posting attributes are slightly different
• Use the Posting US Tax node on the left side of the Dialog
Structure
Normal
processing
signifies this
posting
Specifies how the attributed will
positive number will be used
post to accounting. during
This option allows regular
us to determine how payroll
a wage type positive processing
or negative amount
will post to the SAP
General Ledger
47
4: Mapping Symbolic Accounts to the SAP General Ledger
• Next, you need to map symbolic accounts to G/L accounts
Technically, the task typically resides in the FI module based on
the updated table
The mapping is an Automatic Account Assignment T030 — just
like any other FI automatic account assignment
Very straightforward
48
4: Mapping Symbolic Accounts to the SAP General
Ledger (cont.)
• How to map symbolic accounts to G/L accounts:
Enter symbolic account
49
4: Mapping Symbolic Accounts to the SAP General
Ledger (cont.)
• How to create a clearing account:
Enter the account key
Enter the G/L account
51
4: Tips for Mapping Symbolic Accounts to the SAP General
Ledger
• Work closely with the finance team to coordinate how the
symbolic accounts are being used
• Be careful about changing the mapping.
Make sure that the symbolic account
needing change is not assigned to
another wage type that needs to post
where the symbolic account is currently
set to post!
52
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
53
Automating Month-End Accruals
• Additional configuration is required to trigger and perform the
month-end accruals
Rule UAC0 will trigger the month-end processing
54
Automating Month-End Accruals (cont.)
• Accrual postings are automatically reversed in the next month
Assuming one company code, three payroll posting documents
will be created in the accrual period
f Current period payroll results
55
Triggering Month-End Accrual in Payroll
• Transaction code PE02
• Update rule UAC0
• Change the value of UAC0 line 10 from ACCMO=0 to ACCM0=1
K = calendar days
S = work hours
56
Triggering Month-End Accrual in Payroll (cont.)
• Maintain posting dates
IMG Payroll Payroll:USA Month End Accruals
Triggering Month-End Accrual Computations Maintain
posting dates
• Defines the posting date of individual payroll periods
Typically, this is the same as the check date
57
Triggering Month-End Accrual in Payroll (cont.)
• Define closing dates
IMG Payroll Payroll:USA Month End Accruals
Triggering Month-End Accrual Computations Define closing
date
• Defines the last possible payroll posting date for payroll in the
previous month
Dictated by accounting irrespective of when accounting actual
closes the month
In the example below, payroll must post to accounting no later
than 01/08/2009 for December 2008 payrolls
58
Triggering Month-End Accrual in Payroll (cont.)
• Set latest document creation date
IMG Payroll Payroll:USA Month End Accruals
Triggering Month-End Accrual Computations Set latest
document creation date
• Defines the posting date of individual payroll periods
Typically, this is the same as the check date
59
Triggering Month-End Accrual in Payroll (cont.)
• Using the table entries from the previous three slides, we know
that period 01.2009 will generate three posting to accounting
documents
Current period 01.2009 with a posting date of 01/07/2009
60
Mapping Wage Types to Symbolic Accounts
• Wage types need to be mapped to symbolic accounts so SAP R/3
can determine which G/L accounts to update
• IMG Payroll Payroll:USA Month End Accruals Line item
Creation for Month-End Accruals Assign symbolic accounts to
wage types
61
Reviewing Wage Type Posting Attributes
• Once you have your mappings completed, use the wage type to
G/L mapping report RPDKON00
Human Resources Payroll Americas USA Tools
Customizing Tools Wage Type Assignment - Display G/L
Accounts
62
Considerations for Month-End Accruals
• Future actions or changes to employee master data are not taken
into account during the accrual calculation
Keep this in mind if the next period has significant pay raises
since those increases are in the future and not automatically
accrued
• The accruals are based on results from the current payroll period
• Also be aware of the accruals for taxes in a month when employee
bonuses are paid, as the accrual will not be accurate
63
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
64
Identifying Objects for Posting Third-Party Remittance
• The third-party remittance process was described earlier
During payroll, liabilities may be accrued for:
f Benefit providers
f Tax authorities
65
Identifying Objects for Posting Third-Party
Remittance (cont.)
• Garnishment processors are directly connected to an
AP vendor
When creating a garnishment document for an employee, the
user selects an AP Vendor directly
All other types of vendors go through the third-party mapping
process
66
Defining Third-Party Tax Remittance Components
• Assign wage types to HR payee and HR payee to AP Vendor
Human Resources Payroll Payroll:USA Third-party
remittance HR payee maintenance Setup HR payees for
tax remittance
67
Defining Third-Party Regular Remittance Components
• Assign wage types to HR payee and HR payee to AP Vendor
Human Resources Payroll Payroll:USA Third-party
remittance HR payee maintenance Setup HR payees for
regular remittance
68
Identifying Objects for Posting Third-Party Remittance
69
What We’ll Cover …
• Understanding FI data objects used by HR/Payroll
• Utilizing the SAP General Ledger functionality
• How payroll updates FI and AP
• Using the Payment Program
• Mapping components for the Posting to Accounting process
• Automating Month-End Accruals
• Identifying objects for the Posting Third-Party Remittance process
• Wrap-up
70
Resources
• SAP Note 119865
Provides additional information about payroll postings that may
not be found in documentation
• SAP Note 532744
The master Note for third-party remittance that will redirect to
other Notes or resources
• Clay Molinari, “Accurately Manage Changes in Your HR to FI
Posting Configuration” (HR Expert, May 2006).
• Ilene Schuss, “Create an Error-Free Connection Between Your HR
and FI Modules” (HR Expert, April 2003).
• Phil Taylor, “An expert guide to leveraging SAP General Ledger to
allocate liabilities by expense category during payroll accounting”
(Financials 2009, March 2009).
71
7 Key Points to Take Home
• SAP General Ledger will impact many facets of design
• Accounting elements may be assigned in numerous places
throughout HR and passed to accounting after payroll processing
• Transferring payroll results must be manually posted to FI/CO
• The Payroll Payment Program does not update FI/CO like it does
in AP; it only updates the check register
• SAP delivers easy-to-use reconciliation and completeness reports
for posting to accounting and third-party remittance
• Create new payment types in the AP payment program for payroll
payments
• Mapping payroll creditors to AP vendors is the key integration
step for third-party remittances
72
Your Turn!
74