Payroll Accounting is usually carried out in a fixed cycle. This cycle is determined by the length of the periods for which the payroll is run, such as a month or a week.

Once the payroll run is complete, the results are transferred to accounting (Financial Accounting and Cost Accounting) where they are posted using a fixed posting date, such as the check date. Financial Accounting also assigns its accounting transactions to fixed periods, such as months or four weeks.

If the periods used within Human Resources (HR) and Financial Accounting are the same, the posting date enables you to assign the posting of payroll results correctly.

If the payroll periods are not the same as the posting periods used within Financial Accounting, the FROM and TO dates of the payroll period might belong to different posting periods within Financial Accounting. The payroll results are then posted using a fixed posting date, such as the check date. As a result, all of the personnel expenses are assigned to a single posting period within Financial Accounting, even though the expenses were actually incurred in two different posting periods. This makes it difficult to make a meaningful comparison of expenses incurred in different posting periods.

You then need to be able to split personnel expenses so that for exact periods within Financial Accounting they can be assigned to different posting periods.

The month-end accruals function was developed to solve this problem.

• Approach Using Actual Values

The SAP solution is designed to use a combination of these two methods, but can be configured to use one or the other.