Category: Blog

This is the fourth of 10 most critical factors of SAP payroll. We covered Data integrity, Integration, and Configuration and Customization in the first three and in this post we will cover Human Resources Support Packages and Country Legal Changes.

Human Resources Support Packages (HRSPs) were put in place by SAP many years ago to reduce the impact of updates towards year-end to HR and HR submodules. HRSPs are released approximately every month and contain individual SAP Notes and other legal and correction updates.

Country Legal Changes (CLCs) are similar to HRSPs, but contain a subset of the HRSP SAP Notes. SAP started creating CLCs in the last few years to provides for lesser disruption and risk to the SAP environment as a whole, HR and HR submodules, and payroll. CLCs are released periodically and contain individual SAP Notes and other legal and correction updates relevant to payroll for a specific country or countries. CLCs do require a specific synchronization HRSP so HRSPs are still required.

Synchronization HRSPs are typically released in May and November. You may apply the HRSP released in May and then the CLC for U.S. payroll released towards year-end and be able to complete year-end processing for the U.S. Many organizations now take this approach to limit testing towards year-end to U.S. payroll.

We are able to identify the minimum HRSP and CLC needed to be applied prior to year-end using the enhancement pack and HRSP currently in place and using SAP Service Marketplace.

• Access https://service.sap.com (requires login credentials)
• Follow path Products > ERP > SAP ERP Human Capital Management > HR Support Packages > Schedule

HRSPs and CLCs are a fact of life and can be very difficult for support organizations and the business to accept. However, we need to make sure all parties impacted understand HRSPs and CLCs contain required legislative compliance updates along with bug fixes. HRSPs and CLCs are not an option, but a requirement for payroll to run successfully. The following items are examples of what are included.

• Tax Reporter form layouts
• 401k or other benefit limits
• New functionality required for the next year, such as employer paid benefits
• Processes may change or underlying program logic changes

With all these changes, a thorough testing plan should be put in place that is repeatable. Repeatable allows us to slightly tweak the data from one testing project/year to the next.

Through our due diligence of what is included in the HRSPs and CLCs being applied, we need to define the impact and expectations for support and business areas outside of the HR module. The HRSPs may require Basis to apply a kernel update or our interface points may be impacted.

Developing a plan early in the year and monitoring the SAP Service Marketplace for release dates and side effects can make for a smooth process to keep payroll up-to-date by applying HRSPs and CLCs.

Please join us for our next blog post where we’ll discuss Unit and parallel testing 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.

If you’ve been keeping up with ICG on Twitter, Facebook or LinkedIn, you’ll know that through the rest of the week I’ll be attending the HR2015 Conference in Las Vegas.

I have already spoken at my five sessions and was an expert at Ask-the-Experts. I look forward to a more relaxed couple of days at the conference. Check out some pictures from HR2015 Day 2:

 

Check back later this week for more photos and updates from HR2015. And in the mean time, for more updates about the conference and ICG, check in with us on Twitter, Facebook, and LinkedIn.

If you’ve been keeping up with ICG on Twitter, Facebook or LinkedIn, you’ll know that through the rest of the week I’ll be attending the HR2015 Conference in Las Vegas.

I have already spoken at two session, had time to see some wonderful speakers, and take a look around at all of the great things happening at the conference. Check out some pictures from HR2015 Day 1:

 

Check back later this week for more photos and updates from HR2015. And in the mean time, for more updates about the conference and ICG, check in with us on Twitter, Facebook, and LinkedIn.

Yesterday was fun at HR2015! Catch these afternoon sessions today on Day 2.

Managing payroll claims, garnishments, month-end accruals, and more: Lessons from the trenches

Mike Timm, ICG
Time: Wednesday, March 4 1:00 PM Pacific
Room: Raphael 3

Through detailed screenshots and system demos, this session provides critical guidance based on real-world experience for ensuring accurate and timely processing of overpayments, garnishments, retroactive calculations, and month-end accruals. By attending, you will learn how to:

• Configure wage types to support claims forgiveness, repayment, and deduction recovery
• Reconcile claims from a user, functional, and technical perspective, including insight into the impact of IRS regulations related to claim processing and the different taxing rules that apply
• Avoid common pitfalls associated with posting retroactive calculations and month-end accruals
• Ensure the accuracy of garnishment configuration and administration, including tips to manage effective garnishment dates and track and monitor their activity

Panel discussion: Payroll Q&A with SAP customers and experts

Mike Timm, ICG
Linda Crosby, United Launch Alliance
Steve Bogner, Insight Consulting Partners
W. Eric Sauerhoefer-Thompson, The Walt Disney Company
Time: Wednesday, March 4 2:30 PM Pacific
Room: Tower Ballroom 8

This no-holds-barred exchange of ideas with peers and experts tackles your most pressing payroll challenges. Join this panel to:

• Learn how your peers are streamlining and increasing the consistency of their regular payroll runs
• Examine how others are reducing the time spent making payroll adjustments through proactive analysis and error correction
• Hear about best practices to adopt (and worst practices to avoid!) to ensure the accuracy and timeliness of payroll results

A comprehensive guide to US taxes and their impact on payroll operations

Mike Timm, ICG
Time: Wednesday, March 4 4:45 PM Pacific
Room: Tower Ballroom 8

This session examines key factors essential in avoiding costly tax-related pitfalls, including a thorough review of US tax regulations and associated reporting and auditing requirements. By attending, you will:

• Master tax configuration in SAP ERP HCM, including lessons to avoid or overcome challenges associated with setting up key tax models and wage types
• Get critical guidance to comply with state and federal tax regulations and auditing requirements
• Explore how to use Tax Reporter to run multi-worksite, SUI, and W2s, including how to reconcile between Tax Reporter and payroll results
• Obtain best practices for managing and tracking BSI Tax Update Bulletin (TUBs), and get an overview of new and enhanced functions delivered in the latest version of BSI TaxFactory

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.

If you are attending HR2015 today, make sure to catch these sessions!

Field-tested strategies to avoid or overcome the most common and costly payroll and time-related challenges

Mike Timm, ICG
Time: Tuesday, March 3 11:15 AM Pacific
Room: Raphael 3

This session tackles some of the most common payroll and time-related pitfalls and offers proven techniques for identifying, troubleshooting, and resolving them, including lessons to:

• Identify the object master data, configuration, or systemic issue causing the payroll error, and determine the best approach for resolution
• Overcome technical complexities associated with setting up and customizing process models, schemas, and rules
• Manage common challenges associated with mergers and acquisitions (M&A) and get tips to accelerate the acceptance of a new payroll system
• Leverage CATS and the time schema to more easily process complex time rules and avoid time-related discrepancies

Integrating payroll with accounting (FI/CO) and benefits: Configuration guidelines and best practices to reduce complexity

Mike Timm, ICG
Time: Tuesday, March 3 4:30 PM Pacific
Room: Raphael 3

This session examines key process decisions and technical considerations for integrating SAP payroll with accounting (FI/CO) and benefits applications and processes. By attending this session, you will:

• Examine the integration points between payroll and key accounting (FI/CO) applications like GL, treasury, cost accounting, and accounts payable and get tips for optimizing data flows
• Discover payroll interface design techniques that help drive streamlined integration
• Understand what’s required to process benefits in conjunction with payroll in SAP ERP HCM, including an overview of required configuration and integration

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.

HR2015 is right around the corner and the Agenda Builder has been released. There are many options at each time slot and choosing can be difficult. Below is the recommended schedule we put together to get the most out of the conference.

March 3, 2015

9:00 AM – Tower Ballroom 2
How moving your HR to the Cloud is like the game “Snakes and Ladders”
Mike Ettling, SAP

Keynote panel: Cloud: What, why, and how
David Ludlow, SAP
Roland Cloutier, ADP
Tony Coyle, Capgemini

11:15 AM – Raphael 3
Field-tested strategies to avoid or overcome the most common and costly payroll and time-related challenges
Mike Timm, Integrated Consulting Group

1:30 PM – Tower Ballroom 8
Case study: Hindsight is 20/20: A look back at United Launch Alliance’s initial SAP payroll and time installation – What they would have done differently if they knew then what they know now!
Linda Crosby, United Launch Alliance
Marty Schmoker, United Launch Alliance

3:00 PM – Tower Ballroom 8
Latest enhancements in SAP ERP HCM self-services: HR Renewal, SAP Fiori, and SAPUI5
Jeremy Masters, Worklogix

4:30 PM – Raphael 3
Integrating payroll with accounting (FI/CO) and benefits: Configuration guidelines and best practices to reduce complexity
Mike Timm, Integrated Consulting Group

 

March 4, 2014

8:30 AM – Da Vinci 3
Field-tested techniques to ensure an effective compensation model
Jeremy Masters, Worklogix

10:30 AM – Tower Ballroom 8
An A-to-Z guide to streamlining HR processes across desktop and mobile devices with SAP Fiori
Martin Gillet, Cogilius bvba

1:00 PM – Raphael 3
Managing payroll claims, garnishments, month-end accruals, and more: Lessons from the trenches
Mike Timm, Integrated Consulting Group

2:30 PM – Tower Ballroom 8
Panel discussion: Payroll Q&A with SAP customers and experts
Moderator: Mike Timm, Integrated Consulting Group
Panelists: Steve Bogner, Insight Consulting Partners; Linda Crosby, United Launch Alliance; Eric Sauerhoefer-Thompson, The Walt Disney Company

4:45 PM – Tower Ballroom 8
A comprehensive guide to US taxes and their impact on payroll operations
Mike Timm, Integrated Consulting Group

 

March 5, 2015

8:30 AM – Da Vinci 3
Advanced customizations for savings plans with SAP
Clay Molinari, C&C Savant

10:30 AM – Tower Ballroom 8
Panel discussion: Answers to FAQs about SuccessFactors Employee Central
Moderator: Steve Bogner, Insight Consulting Partners
Panelists: Jyoti Sharma, HRIZONS; Becky Murray, hyperCision; Luke Marson, Hula Partners; Joachim Foerderer, SAP SE

1:00 PM – Raphael 1
Payroll and benefits integration exposed
Clay Molinari, C&C Savant

3:00 PM – Da Vinci 2
Case study: Lessons learned from HR Focal Point’s implementation of Employee Central Payroll
Graham Wong, HR Focal Point

4:30 PM – Raphael 3
Introducing the SAP Payroll control center add-on: Lessons for enhancing payroll operations with the real-time capabilities of SAP HANA
Ralf Wagner, SAP SE

 

March 6, 2015

8:30 AM – Raphael 1
HR transformation: Options, considerations, and benefits
Martin Gillet, Cogilius bvba
10:00 AM – Raphael 3
Tackling taxability setup and BSI TaxFactory 10.0
Aditya Aggarwal, Terra Information Group11:30 AM – Da Vinci 2
SAP and Concur travel solutions: An overview
Hendrik Vordenbaeumen, SAP SE

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.

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.

Summary
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.

In my last blog post, I identified Data Integrity as the first of 10 most critical factors of SAP Payroll. Continuing with this blog series, now we’ll cover how integration is critical to SAP Payroll.

Integration occurs throughout the SAP payroll process by way of table configuration, schemas and rules, HR master data and configuration, employee time entry, Finance and Controlling master data, Accounts Payable configuration and master data, and interfaces to partners both before and after. There are many other integration points that directly impact the payroll process as well.

The level of integration that SAP provides between modules is astounding and allows for a holistic view. It’s awesome when it works! However, each module needs to understand new or changing functionality or master data that others are putting in place. For example:

• Controlling changing the cost center structure can cause significant issues for payroll when it comes time to post.
• Accounting opening and closing periods can cause issues depending on when payroll is processed and the posting date.
• Accounts payable needs to create and maintain vendors for assignment of garnishments, benefits, taxes, and miscellaneous vendors.
• The list could continue for quite some time.

To illustrate the integration, we’ll touch on a few.

Finance and Controlling

The Finance and Controlling modules have defined objects that are assigned to employees in Human Resources master data. These objects are then processed through to payroll and used during the Posting to Accounting process allowing actual expenses and liabilities to be allocated according to requirements.

• Company code
  • Personnel areas are assigned to a company code.
• Cost center
  • Organizational units or Positions may be assigned to a cost center.
  • Assignment performed at the individual employee level or even within a specific info type record.
  • Cost centers can be assigned at many different points during data collection and passed through payroll.
    • Infotype 0001 and 0027 for home and automatic distribution.
    • With wage types in Infotypes 00014, 0015, 2010.
    • Time entry in CATS or directly in Infotype 2001 and Infotype 2002.
  • Cost centers can also be overridden during payroll processing in schemas and rules.
  • Posting to accounting configuration may dictate a substitute cost center.
    • IMG > Payroll > Payroll: USA > Posting to Financial Accounting > Activities in the AC-System > Set up substitute cost centers
• WBS element
• Orders

Finance and Controlling have many objects that are used by payroll.

Accounts Payable

The process to send data from SAP Payroll to Accounts Payable is known as Third-party remittance. Third-party remittance allows a method for wage types generated during payroll to post to an Accounts Payable vendor account.

• Garnishment processors
• Tax authorities
• Benefit providers
• Other vendors

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.

• Vendors used for garnishments are selected directly in Infotype 0194
• All other third-party remittance vendors go through a mapping process.

The mapping process requires the creation of an HR payee that is then tied to company code and AP vendor number. Keep in mind that since this is transportable configuration, the vendor number in production and development must be identical.

Proper review of how we’ll use third-party remittance and planning of the configuration is vital.

Time Management

Time Management is similar to payroll in that it is impacted by table configuration, time evaluation schemas and rules, employee master data, other SAP modules, and possibly external interfaces.

Time Management includes the collection of data in a raw or evaluated state.

• SAP provides methods to capture data in a mostly raw manner through Infotypes and CATS (cross-application time sheets).
• Using third-party data capture tools, data may be put in Infotypes or CATS in a mostly raw manner or put in a mostly evaluated manner in Infotype 2010.

The raw data is then processed through time evaluation to produce data ready for payroll processing.

The integration SAP has woven throughout their modules is wonderful when all the adjoining parts are working together. Proper planning,  coordination, and communication is essential to the integration working harmoniously. That is why Integration is one of the 10 most critical factors of SAP Payroll.

Please join us for our next blog post where we’ll discuss how Configuration and Customization is another critical factor and how it relates to 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.

In last week’s blog post, we introduced our blog series about the 10 most critical factors of SAP payroll. This week, we will cover the first critical factor: Data Integrity.

Data integrity in payroll is a fundamental requirement due to the sensitive nature of what is being accomplished. Payroll is processed at a point in time with the expectation that incoming data is factual and complete.

The most straight forward and probably the best definition is from Thomas McRae in The Impact of Computers on Accounting, 1964. “Garbage in, garbage out.”

What are causes of poor data integrity?

• Integration points
• Configuration, customizations, system updates
• Inadequate testing
• Incomplete process knowledge or poorly implemented processes

When poor data integrity occurs, there are several possible outcomes:

• Employees do not trust payroll and examine their remuneration statement
• Employees do not receive their expected pay or no pay at all
• Employees lose faith in the company and move on
• Company loses money due to overpayments
• Off-cycle adjustments are commonplace

Knowing the stakes are high and that employees don’t ever seem to forget that an error on their check occurred, what can be done to improve data integrity?

1. Develop metrics that will identify areas that cause the most errors. Do we have issues with:
   • Employee profile maintenance and time entry
   • Manager time approval
   • HR maintenance
   • System updates or outages
   • New or changing configuration and customization
   • Support personnel
2. Determine an acceptable rate of failure
   • 100% accuracy is impractical, but how close can we get
   • The rate of failure should decrease over time
3. Improve processes
   • Develop a strong change management program so that new or updated functionality is fully understood by those impacted
   • Reminders through company email can be generated by looking at time entry on a daily or weekly basis and comparing against the employee schedule
   • The payroll process may require opening windows of time for HR to make updates
   • Effectively train new employees and continually train existing employees
4. Implement proactive audits
   • Simple to deploy, SAP delivered, before payroll, quick return
     • Verify employees are not missing a cost center using the Flexible Employee Data report: Tcode S_AHR_61016362
     • Check for locked employees prior to running payroll using report: Tcode PC00_M44_UCPL
     • Utilize the Wage Type Reporter variance from period to period functionality: Tcode S_PH9_46000172
   • Moderate to deploy, configuration required, before payroll when added to time evaluation or during payroll in its schema, quick return
     • Custom time and payroll rules to validate info type data: Tcode PE01 for schemas and PE02 for rules
     • Does Infotype 0001 have a cost center?
   • More difficult to deploy,ABAP, requires detailed analysis of all scenarios, before payroll, worth the effort if done right
     • CATS user exits: CATS0001-CATS0012
     • Infotype user exits and BAdIs: Enhancement PBAS0001 and BAdI HRPAD00INFTY

Please join us for our next blog post where we will discuss how Integration is another critical factor and how it relates to 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.

SAP Payroll can be a complex and unwieldy system when not methodically implemented and maintained. The SAP Payroll business processes can be accurate and efficient when the 10 most critical factors are considered and understood by those implementing, maintaining, and performing business processes. When it comes to configuring, processing, and administering payroll, small details can have big ramifications.

This 10 blog post series will dive into the most critical business, strategy, and technical topics every payroll professional must weigh carefully in order to avoid unnecessary costs and maximize efficiency. The posts will provide insight into the time, effort, and cost associated with each item, its impact on overall ROI, and where it falls within the overall payroll process.

1. Data integrity
2. Integration
3. Configuration and customization
4. HRSP and legal changes
5. Unit and parallel testing
6. Time management
7. Tax reporting and auditing
8. Troubleshooting
9. Year-end processing
10. Overpayments and claims

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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photo credit: StockMonkeys.com via photopin cc