10 most critical factors of SAP payroll: Configuration and Customization

Configuration and Customization

Configuration and Customization

In this blog post, I’ll be covering Configuration and Customization as the next critical factor of SAP payroll. In previous blog posts I covered Data Integrity and Integration.

I believe there are four major areas of configuration and customization, all of which can be accomplished using standard SAP functionality.

  • SAP Project (transactioncodeSPRO)
    • Implementation Guide (IMG)
  • Schemas (tcode PE01)
  • Rules (tcode PE02)
  • Features (tcode PE03)

Beyond those major areas, we can get a better understanding of how things are working or enhance how payroll processes using tcode PE04 to review or customize Operations and Functions.

First let’s look at SAP Project using tcode SPRO and more specifically the Payroll: USA node.
Configuration of most payroll functionality may be completed by following the sequential steps in SPRO.  Do keep in mind that not all nodes are required if specific functionality will not be utilized.

If your configuration is not currently documented or the documentation is outdated or in a poor state, you can easily follow the nodes to document configuration. This exercise is well worth the effort because it will undoubtedly bring up questions about why some items are configured they way they are. You may also identify pieces of configuration that are not setup causing you to miss out on useful functionality. Prior to beginning a new project to add functionality, understanding what is already configured will provide guidance. If functionality exists, but is not exactly what is needed, you can use that as a starting point.

Integration points we talked about in the previous post are found in tcode SPRO.

  • Accounting
  • Third-party remittance (Accounts Payable)
  • Benefits

Next we’ll cover Schemas in tcode PE01.
Schemas control the payroll processing steps and provide the instructions for the payroll program. They supply the logical flow of data in, calculation performance, and data out of the payroll program. The schema calls snippets of code within the payroll program for calculations, etc. at the appropriately defined time. Schemas call the snippets of code through functions and are highly customizable and flexible to meet business requirements. However, configuring has a feel of mixing table configuration and programming together that may be more difficult to catch onto as quickly. You must also keep in mind that schemas are not date delimited like most of the table configuration entries.

Next up are the Rules in tcode PE02.
Rules provide the logic flow of processing payroll and are attached to schemas and executed during payroll processing. Schemas trigger the use of a rule through assigning a function and rule. Rules contain operations that perform calculations or other decision logic, but configuration is not necessarily intuitive. Just like schemas, rules have the feel of mixing table config and programming together and are not date delimited.

Careful consideration should be taken when determining where to place a rule in a schema. Specific data may need to be pulled from employee master data or configuration tables or calculations performed prior to reaching the new schema.

The next major area of configuration is Features using tcode PE03.
Features (tcode PE03) are unique to SAP HCM and there are many that allow the defaulting of values in Infotypes or programs behind the scenes. Below are a some that every payroll expert should be aware of and understand

ABKRS – defaults the payroll area in Infotype 0001
ANSAL – wage type for annual salary
DTAKT – sender bank account number for DME
MODDE – default value for payment model
PPMOD – Symbolic account determination
TARIF – default pay scale type and area in Infotype 0008
ZLSCH – default setting for payment method

Last, but not least, we need to discuss the importance of documentation as part of configuration and customizing.
Documentation of the the configuration is crucial in the ongoing maintenance and support of the system. Documentation will help us remember and onboard new team members more quickly because we know why the original configuration was put in place. Documentation will also help us identify other issues or unintended consequences. Examples:

  • Payroll requests change to wage type posting attribute, but accounting hasn’t adjusted their audit process
  • Change to overtime calculation for 95% of employee base causes remaining 5% of employees to have incorrect overtime calculation
  • Change to cumulation settings of a wage type cause employee base not to have cumulation

Another area of documentation is the definition of service level agreements (SLA). The business and support working closely together to define the SLA is very important because it helps to prioritize and resolve issues in a timely manner. SLAs should be put in place whether the support is internal or outsourced to a third party.

Keep in mind, that SLAs should be defined both ways. User acceptance testing turnaround time should be known to assist in determining adequate resourcing for the business.

SAP provides a step-by-step method to configure most of the functionality required to run payroll. Customizing schemas, rules, and features we can enhance the configuration to meet nearly all business needs. Documentation of the configuration and customizations along with SLAs is critical to the success of ongoing maintenance and support.

Please join us for our next blog post where we’ll discuss HRSPs and LCPs as another critical factor in SAP payroll.

Here at Integrated Consulting Group, we specialize in the design, development, and customization of SAP Human Capital Management business software for leading edge North American companies with global reach. Have any questions about SAP? Feel free to contact us via the contact page of our site, or on Twitter or LinkedIn.

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