Insight on Payroll Costing Process

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Insight on Payroll Costing Process

• Gene Jannece
• AST Corporation

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Things You Should Know

• The Cost Allocation Flexfield must contain all of
  the segments that are required by the General
  Ledger system.
• General Ledger will NOT accept blank entries.
  Blank segments will be rejected during the import
  process.
• You may include other segments not used in
  General Ledger for other purposes such as job
  costing.

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Things You Should Know

• Payroll Cost Allocation and GL Accounting
  flexfields should use the same value sets for
  simplicity. This way General Ledger controls the
  values for both G/L and Payroll.
• Cross Validation of segments does not work well
  for Payroll costing as new valid combinations
  happen all the time and it may disrupt the
  Payroll cycle. Value sets should be independent.

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Things You Should Know

• For the most part it is easier to leave ALL
  flexfield qualifiers displayed. As a rule only
  Super Users see these segments and it has been
  found that it can be limiting when conditions
  change.
•  The system will always use the Paid Date for
  costing.

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Things You Should Know

• All transactions will show a single date in
  costing.
• Transactions are used only once. There is no
  danger of pulling in details to General Ledger a
  second time.

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Types of Costing
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No Costing

• Used for memo balances or when an amount is
  handled elsewhere.

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Costed

• Uses the complete set of flexfield qualifiers in
  the following order. A higher level overrides
  the lower.
• Element Entry
• Assignment
• Element Link
• Organization
• Payroll

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Fixed Costing

• Uses the complete set of flexfield qualifiers in
  the following order. A higher level overrides
  the lower.
•  Element Entry and Assignment are ignored.
• Element Link
• Organization
• Payroll

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Distributed

• Built with a distribution set which is found in
  Payroll/Element set. It will look at an element
  and distribute it proportionally to earnings
  elements. For example if you want to distribute
  Employers FICA to earnings such as Regular, Shift
  and Over-Time it will add them proportionally to
  those elements.

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Levels of Costing
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Element Entry

• This level overrides all other levels unless it
  is fixed costed. Typically used for one-time
  earnings such as a bonus or a one time special
  assignment.

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Assignment

• Most often this is used when an employee is not
  charged to the cost center specified by the
  organization code or is distributed to more than
  one cost center. The distribution must always
  equal 100. Ignored by fixed costed.

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Element Link

• This element usually supplied the natural account
  such as salary or overtime. It can be used to
  specify an account such as Employer FICA.

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Organization

• Very commonly used to ease maintenance of
  employee costing. If an employee is in a
  particular department, they will be costed here.

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Payroll

• This is useful if everyone in a particular
  Payroll is in the same company or fund.

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Things I Learned the Hard Way
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Things I Learned

• Always link and cost arrearage for taxes.
• Distributed actually sends an expense to an
  earnings account.
• If in doubt, use a wider range of dates to pick
  up any odd transactions floating about.
• Fixed costing will not distribute employer
  expenses by assignment over ride.

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Things I Learned

• If you are willing to write custom scripts you
  can do amazing things with a custom detail table,
  which will be fed to General Ledger.
• Post SIT taxes by a separate account on the
  balance sheet!
• Distribute employer expenses by percent of
  earnings in a department and allocate them to the
  department.
• Have the system calculate the burden for
  manufacturing clients.
• When a pay period end does not coincide with
  month end calculate a payroll accrual!