Processing Payroll

Now, let's come back to the place where we started. In the flash back, we learnt, how to configure things alright? Now we will learn about the processing. Here we will use everything that we've defined this far.

We know we have three stages to process the payroll.

• Pre-Processing
• Processing
• Post-Processing

This is the stage where all the preparations are done; things like, creating element entries, getting the costing in place, taxing etc. So let's talk about these a little bit.

Getting Time Card Data

It all starts with the Time card entry, which happens to be another module in Oracle HRMS called OTL (Oracle Time and Labour). With OTL, we get all the time cards captured. Employees log in to OTL, enter the time sheets and then it stores the time entered by each employee. It also has rules in place to determine, whether it’s a regular working hour or an Overtime Hour.

Now, as we have the time card in OTL, we can either run a process to get it loaded on to Payroll system, or we might get the Time card entries in the form of a file(Cases where Time card is managed by a vendor), which can in turn be loaded by using BEE. So once either of the process is complete, which means the data is transferred to the assignment entries, the time sheet information is captured.

Getting Benefits Data

To move on, we should then look into the Benefits side of it; the deductions by the Insurance premium / rate. It’s captured by OAB (Oracle Advanced Benefits) OR OSB (Oracle Standard Benefits). If we have the benefits system implemented, it will automatically create assignment entries based on the deduction. However If our Benefits is managed by a Vendor, we must request a Payroll Extract / Payroll Interface for the same. Once we receive the Extract, we will have to use either an Interface or BEE to load the Entries on to the assignments. So that takes care of the Benefits portion of it.

Getting Payments Data

So next is the salary. We will have to create Regular Hours / Regular Salary elements to link it to Assignments. Isn't it? However in few cases, we might have to give some additional payments to the Employees other than the regular wages. So, we should always have those types of Non-Recurring elements in place, so that whenever we need some additional payment, we could use the appropriate Element. The Wage Attachment itself is a big subject to discuss. Please see the Wage attachment link for further information on the same.

Getting Absence Data

Employees go on leave; sometimes they go on Paid Leaves, and sometimes even on unpaid leaves. The Paid Leaves are something that an employee must accrue during his tenure/ length of service in the Company. Like the longer he stays, the leaves get added/ get carried over from one year to another, based on business rules. That is known as PTO (Paid Time Off) accruals. So we must have the Information elements in place to gather the PTO information, so that we can print that along with the Pay slips, to let the employee know about the accrual numbers. For Unpaid leaves, the data is taken from the OTL, and based on that the payments are made.

Once all these data are captured, the next task is to Process the Payroll.

Now, we will process a Payroll. To do the same, we will have to run it through a seeded Concurrent Program. The name of the Program is "Payroll Run / Payroll Process".

Responsibility: HRMS Manager

Navigation: View (M) -> Request (M) ->Submit a new request -> Single request

Steps: Enter the name of the Process "Payroll Run / Payroll Process" and enter the parameters. See Figure 5.23 – Payroll Process Parameters.

Figure 23 Payroll Process Parameters

(Figure 5.23 – Payroll Process Parameters)

This will process the payroll. We can always check the Concurrent Program to see if there are any Errors in the log file. We can also check the number processed to be reasonable. There is a screen called Payroll Process Results (Navigation: View -> Payroll Process Results). Look for the payroll Name and the time period, if the process status is complete, that means the payroll has no errors. We will discuss more about it later in this chapter.

So now, as the payroll is processed, what are the next steps? There is a lot of processing involved. Some are mandatory processes, and some are optional. Usually the Optional Processes are to generate reports that can be used for verification. Usually Payroll Administrators ask for their own set of reports for comparison and logging, which is very enterprise specific. However in this section, we will learn about the Mandatory processes first and then will look at some of the widely used optional Processes.

Prepayments

This is a mandatory Process. This process looks in to the amounts processed for each of the employees and their respective Payment methods. It then divides the money to be paid on to their Payment methods. So for an example, Joe's salary for his month is $5000, and he has two preferred payment methods, 20% as a check and rest of the money in a Bank Account. After running Prepayments, the system will know that it has to transfer $1600 in to his bank account and it has to give $400 as a check to Joe. To run the process, we need to go to single Request and put the process name as PrePayments. See Figure 5.24 – PrePayments Parameters.

Figure 24 PrePayments Parameters

(Figure 5.24 – PrePayments Parameters)

Usually in Start and End Date fields we should enter the date span in which the Prepayment will be run. The System will look in to the payroll tables to see, if there is any amount that has not paid yet with in those two dates. If it finds any, it will sort that according to the Payment methods. However as we should be running Prepayments after every payroll, the dates should always be the Pay Period end date. This saves a lot of system time.

If the system does not find details about the Personal Payment methods, then it will default the payment with the Default payment method used with the payroll. Usually the default payment method is Check.

Magnetic Transfer

As we know, this is the process for direct deposits. UK localization supports the BACS and North American Localization support NACHA, similarly all localization follow a specific payment gateway. This process generates an output file that can be sent to the Bank and the treasury.

Once the Process is run, we can select the output of the Process and verify the details. We can then send the Output report to the Bank via established Preferred Electronic Media.

In few cases, in US Localization, we would also need to run the NACHA Report. This Report gives us the clear picture about the Number of Deposits and the Total Dollar amount.

We can then send this Report to our HR managers for a review.

Archiver

Now, as the Payments are about to happen through the Direct Deposits, which is Bank's headache now, we will proceed to the next action item, Payroll Archive. This Process generates a pay slip kind of report. This is an optional step for most of the localizations.

Check / Cheque Writer

Let's write some checks. If we have ‘check’ as one of the valid payment methods then we need to write the checks to get them out to the Employees. To do so, we will run a process called the Check Writer process. We must have the Printer in place with the check leaf book attached, so that the checks can be generated.

Here, we must have the start check number with us. We can get that from the Printer. All we need is the number of the first check leaf which is going to be printed.

We will have to run this Process twice, once for the Normal Payroll check, and again for the Third party Garnishments.

Deposit Advice

The Deposit Advice actually prints the Pay slips that we might send to the Employees. This Process goes through the Statements of Earning and gets us the details of the Earning and Deductions in a more understandable format as a report.

Costing

As Part of this process, Payroll Engine divides the costs according to the Cost Allocation Flex Field, keeping Overrides in consideration. This Process assures that the cost paid for labour is accurately being captured. If no Costing Information is found on any particular entry, the cost goes to the Suspense Account.

Transfer to GL

This Process is the one that takes care of the migration of cost to the General Ledgers. The Payroll Costs are migrated to the General Ledger and then it gets added against the actual financial accounts.

Other Standard Reports

There are a few other Standard Reports that can also be processed as part of the Oracle Payroll for reporting purposes. Here is a list of few popular ones; however there are a lot of seeded reports that can be used. We can also create our own reports and use them for analysis, based on the requirements posted by our Payroll administration team.

Payroll Activity Report: This report is run just after the Payroll Process and before the Prepayments. With this report we can view the status of the Payroll with details like, how many employees are processed, what is the total Earnings, Total Deductions, Total Taxes etc. It can be processed with the following details:

Name of the Process: Payroll Activity Report

• Beginning Date Paid: Last Day of Current Pay Period
• Ending Date Paid: Last Day of Current Pay Period
• Process Type: Payroll Runs
• Suppress Current Zero Records: Yes
• Full Report: Yes
• Reporting Dimensions: Run
• Sort Option One: GRE
• Employee Page Break: No
• All other parameters should be NULL

Costing Detail Report: This is run after the Transfer to GL process is complete for all Payrolls as of that date. This gives us a detailed picture of the accounts and the respective Labour costs for all Payrolls run as of the given dates.

Name of the Process: Costing Detail Report

• Costing Effective Date Begin: Last Day of Pay Period
• Costing Effective Date End: Last Day of Pay Period
• Output File Type: HTML
• All the other parameters should be NULL.

Costing Summary Report: This is run after the Transfer to GL process is complete for all Payrolls as of that date. This is more or less similar to the Costing Detail report, however with a summary of data, not with details.

Name of the Process: Costing Summary Report

• Costing Effective Date Begin: Last Day of Pay Period
• Costing Effective Date End: Last Day of Pay Period
• Output File Type: HTML
• All the other parameters should be NULL.

Payroll Register Report: This is run after the Transfer to GL process is complete for all Payrolls as of that date. This gives us details on the entire payroll process, starting from prepayments to costing for all Payrolls run as of the given date.

Name of the Process: Payroll Register Report

• Beginning Date Paid: Last Day of Pay Period (i.e. 06-MAR-2010)
• Ending Date Paid: Last Day of Pay Period (i.e. 19-MAR-2010)
• Suppress Zero Count Records: Yes
• Full Report: Yes
• Reporting Dimensions: Current
• Sort Option One: GRE
• Employee Page Break: No
• All the other parameters should be NULL.

Payment Register Report: This is run after the Transfer to GL process is complete for all Payrolls as of that date. This gives us details on the Payments made to the Employees as part of Labour cost for all Payrolls run as of the given date.

Name of the Process: Payment Register Report

• Starting Pay Date: Last Day of Pay Period
• Ending Pay Date: Last Day of Pay Period
• Payroll: NULL
• Consolidation Set Name: The Consolidation Set being used
• Selection Type: Original Payment Date
• Display Employee Details: Yes
• Summary Report: No
• All the other parameters should be NULL.

Third Party Payment Register Report: This is more or less the same as the Payment Register Report. However this tracks the Third Party Payments only.

Name of the Process: Third Party Payment Register Report

• Starting Pay Date: Last Day of Pay Period
• Ending Pay Date: Last Day of Pay Period
• Payroll: NULL
• Consolidation Set Name: The Consolidation Set being used
• Selection Type: Original Payment Date
• All the other parameters should be NULL.

US Gross to Net Summary: With this report, we can see the summation of Salary information of the employees with Gross Earnings, Net Earnings and deductions.

Name of the Process: US Gross to Net Summary

• Starting Pay Date: Last Day of Pay Period
• Ending Pay Date: Last Day of Pay Period
• GRE: NULL
• Payroll: NULL
• Consolidation Set Name: The Consolidation Set being used
• Sort Option One: NULL
• Sort Option Two: NULL
• Sort Option Three: NULL
• Template: US Gross to Net Summary (PDF)

As the payroll is processed now, how do we validate the results? We can do it in many ways. We can view the run results sorted by assignments or processes.

Process level View

This window shows all the details related to the processes run for a particular payroll for a given period. Every process that we run as part of Processing / Post Processing get registered here. See Figure 5.25 – Payroll Process Results

Responsibility: HRMS Manager

Navigation: View > Payroll Process Results

Figure 25 Payroll Process Results

(Figure 5.25 – Payroll Process Results)

Assignment level View

Like the Payroll Process Results, this screen helps us monitor the processes run for a given Assignment. See Figure 5.26 – Assignment Process Results.

Responsibility: HRMS Manager

Navigation: View > Assignment Process Results

Figure 26 Assignment Process Results

(Figure 5.26 – Assignment Process Results)