Processing Payroll

Contents

1. 1 Pre-Processing

1. 1.1 Getting Time Card Data

2. 1.2 Getting Benefits Data

3. 1.3 Getting Payments Data

4. 1.4 Getting Absence Data

2. 2 Processing
3. 3 Post Processing

1. 3.1 Prepayments

2. 3.2 Magnetic Transfer

3. 3.3 Archiver

4. 3.4 Check / Cheque Writer

5. 3.5 Deposit Advice

6. 3.6 Costing

7. 3.7 Transfer to GL

8. 3.8 Other Standard Reports

4. 4 Validating Payroll Run

1. 4.1 Process level View

2. 4.2 Assignment level View

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
Pre-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
its 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.
Its 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.

Processing

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)

Payroll Name Name of the Payroll

Consolidation Set Name of the Consolidation set used in the Payroll
Name
Date Earned The Pay period end date
Date Paid The Pay period end date
Element Set Name Name of the element set, if the run has to be on specific Elements
Assignment Set Name Name of the assignment set, if the run has to be on specific Assignments
Regular Type of run : Regular / Supplemental

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.

Post Processing

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)

Name of the PrePayments

Process
Payroll Name of the Payroll
Consolidation Set Name of the Consolidation set used in the Payroll
Start Date The Pay Period End Date
End Date The Pay Period End Date
Payment Method This can be used to override all payment methods. For an example, if our Enterprise wants
Override to pay everyone by Check this month. No Bank Transactions. We can override this payroll
run to be on Checks only.

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
Localizations support NACHA, similarly all localizations follow a specific payment gateway. This process
generates an output file that can be sent to the Bank and the treasury.

Name of the Process NACHA / BACS/ Process type based on Localization

Payroll Name of the Payroll
Consolidation Set Name of the Consolidation set used in the Payroll
Start Date The Pay Period End Date
End Date The Pay Period End Date
Payment Method Choose Direct Deposit
Deposit Date Override An Override date, if we want the Deposit to happen later
File Id Modifier Choose 0

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.

Name of the NACHA Report

Process
NACHA Process Choose the NACHA process that was run with the table above.
Totals Only Choose No to get a detailed report.

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.

Name of the Process Payroll Archiver

Start Date The Pay Period End Date
End Date The Pay Period End Date
Payroll Name Name of the Payroll
Consolidation Set Name The Consolidation set associated with the Payroll

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.

Name of the Check Writer

Process
Consolidation Set The Consolidation set associated with the Payroll
Start Date The Pay Period End Date
End Date The Pay Period End Date
Payment Method Check
Sort Sequence Any sorting preference. Advised : Organization, Person
Start Check The number of the first check leaf on the Printer
Number
End Check Optional. Fill in only if the count is known
Number
Check Style Choose a style of check printing: "Payroll Check" for the Usual check writer and "Third
Party Check" for the Garnishment / third party payments

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.

Name of the Process Deposit Advice

Consolidation Set The Consolidation set associated with the Payroll
Start Date The Pay Period End Date
End Date The Pay Period End Date
Sort Sequence Any sorting preference. Advised : Organization, Person
Assignment Set Enter the Assignment set, if we want to run this for a set of Employees only.
Deposit Advice Style Choose a style of Deposit Advice. You can create your own style and use it here.

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.

Name of the Process Costing

Payroll Name of the Payroll
Consolidation Set Name The Consolidation set associated with the Payroll
Start Date The Pay Period End Date
End Date The Pay Period End Date

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.

Name of the Process Transfer to GL

Consolidation Set The Consolidation set associated with the Payroll
Name
Start Date The Pay Period End Date
End Date The Pay Period End Date

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)

Validating Payroll Run

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 Process To see the Process Results for a given assignment

Messages To see Error messages related to a given assignment
Costing Breakdown Shows the Costing Breakdown
Process Information Shows the Concurrent Process status and details.
Concurrent Opens up the View Concurrent Programs window

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)

Messages To see Error messages related to a given assignment

Run Results This button opens the Run Results window to show the Pay Value of each element
processed for the employee, together with basic information about the element. From the
Run Results window, choose the Run Result Value button to view the input values for an
element.
Balances Shows up the Balance window for the Balance related Information
Payment Methods Shows the details about the Payment method and the amount of money added to that as
part of the Payroll.
Costing Shows the Costing Breakdown
Balance Shows the Balance Adjustments if any
Adjustments
Payment Shows the Payments made by this payroll. Includes all. Direct deposits, Garnishments and
Check payments
SOE Report Displays the Statement of Earning