Choice of Method used to Split Expenses

The SAP solution for month end accruals enables you to split personnel expenses for the appropriate posting periods. You can do this by using a combination of Approach Using Estimates and Approach Using Actual Values . As a result, such splits are executed using the most up-to-date (and therefore the best) information available.

This means that the splits are based on current values, if possible. This is the case if all of the posting periods in question are still capable of receiving posting data when the payroll results are posted.

Otherwise, the amount of personnel expenses still expected for a posting period is estimated during an earlier payroll run.

You can also set up the system so that only the Approach Using Estimates or Approach Using Actual Values is used.

There are no presettings to determine the date on which the payroll results are posted for a particular payroll period. When customizing the system, you are required to enter dates by which the payroll results must be posted. Using this latest document creation date (LDCD), you can determine the date by which postings must be effected for each subsequent payroll period. You cannot change these dates, which means it is essential that you meet the specified deadline for posting. You must also use the Implementation Guide (IMG) to specify a final date for each posting period with regard to postings from HR. When the payroll is run, the system compares these two dates with each other.

If the LDCD of the payroll period in question is earlier than the final dates for all of the posting periods within Financial Accounting, the system recognizes that the expenses can be split on the basis of the current payroll results.

In the following example, the LDCD of the (current) payroll period C is earlier than the final posting date of the June (and July) posting period (s). For this reason, the expenses can be split using the appropriate basis (see below) in accordance with the Approach Using Actual Values .

If the earlier of the two posting periods can no longer receive posting data by the LDCD of the current payroll period, you can no longer split the current values. The system recognizes this situation during the payroll run for the previous payroll period.

In the next example, the June posting period is no longer capable of receiving posting data by the LDCD of payroll period C. During the payroll run for payroll period B, the system uses the payroll results for payroll period B to estimate the expected amount of June expenses for payroll period C. The system then creates accruals for June in the amount of the estimated expenses.

The current results for the whole of payroll period C are subsequently posted using a posting date in July. For this reason, the accruals created for June must be reversed in July.

See Approach Using Estimates for a description of how the system splits expenses by creating accruals.

The system also splits the current values (by creating and reversing accruals in accordance with the Approach Using Actual Values .

Effected Postings: Example

Of the $1000 incurred for payroll period C that must be posted to July in accordance with the customizing settings, $400 (for example) should actually be posted to the posting period for June. This is achieved by debiting the $400 to an expense account ( Accrued Expenses ) using a posting date in June. The offsetting entry is made in an accruals account. The actual payroll posting of $1000 ( Expenses to Payable ) is effected using a posting date in July. A posting date in July is also used to credit the so-called Accrued Expenses account and to reverse the accrual.

If you use the Approach Using Estimates, the additional postings are effected after the payroll run for payroll period B. If you use the Approach Using Actual Values, on the other hand, these postings are not effected until payroll period C.

Note that you must set the Posting date acc. to table parameter when starting Transfer to FI/CO to ensure that the regular posting is effected using the posting date specified during customizing.

Basis Used to Split Expenses

The system enables you to split expenses in accordance with:

Refer to the appropriate section within the IMG for more information.

Effect of an Organizational Reassignment

If an employee’s remuneration or organizational assignment changes during a payroll period (creation of a WPBP split), the calculation of month end accruals is affected as follows:

1.    Approach Using Estimates

If expenses for a future payroll period are estimated on the basis of the current payroll results, the system assumes that the employee’s organizational assignments in the period to be estimated are the same as on the last day of the current payroll period. For this reason, the expected personnel expenses are debited to the Cost Center assigned on the last day because the system assumes that the employee will remain on this Cost Center after the change has been effected. However, the entire period is used as the basis of the amount of expected expenses. The following example makes this clearer:

At the end of payroll period B, the employee works on Cost Center 2 so that the accruals for payroll period C are debited to Cost Center 2. However, the basis of the estimation consists of the entire periodic expenses at the amount of $1000.

Note the system’s assumption that wage types with an explicit cost assignment (table C1) also occur in the period to be estimated with the same cost assignment. Such payments are assigned to the entire payroll period, irrespective of the exact time at which the payment is effected, and are then split accordingly.

The system ignores future changes made to the employee’s organizational data, even if they are already entered and stored in the system when the payroll is run. The reason for this is that changes usually compensate for one another. For example, an employee who leaves the company in the payroll period to be estimated and for whom month end accruals are not really required is usually replaced by another employee.

2.    Approach Using Actual Values

When expenses are split using the Approach Using Actual Values, all of the required information on the best possible split is already in the system when the posting is effected. All of the partial periods within the payroll period are checked individually and assigned to the posting periods. In the following example, the first of the two partial periods, during which the employee works for Cost Center 1, is assigned in its entirety to the June posting period. The expenses incurred in the second partial period, on the other hand, are distributed to June as well as July, in accordance with the basis used for the split (workdays in this example).

Wage types with an explicit cost assignment (table C1) are assigned to the partial period in which they occur. Irrespective of their exact date of origin, they are distributed to the posting periods in accordance with the expenses incurred in the partial period that includes their date of origin.

Regularly Entered Delayed Wage Types

Sometimes, particular wage types, such as overtime bonuses, are regularly entered in the system in the period following the payroll period to which they apply. When the payroll is run, the system has no information on the amount of these wage types for the current payroll period.

Such wage types are not entered until the subsequent payroll run, which triggers a retroactive accounting run for the current payroll period.

If the current period is used as a basis for distributing expenses to two different posting periods, these wage types are ignored because they are not yet available in the system. However, it is possible to estimate the expected amount of such wage types on the basis of the last payroll period for which they are available, which is the preceding period.

You can flag such wage types as Regularly Entered Delayed when customizing the system. They are then taken from the previous period when month end accruals are created.

The following example explains this situation for the Approach Using Actual Values. It illustrates a hybrid form because the amount of Regularly Entered Delayed wage types is estimated.

The basis of the distribution does not merely consist of the $1000 in current payroll period C. Instead, $200 are also used; period C is expected to incur this amount but it is not entered and included in a payroll run until payroll period D. At this time, you can no longer assign part of this amount to the June posting period because this period can no longer receive posting data.

If the Approach Using Estimates is used (see following example), the expenses expected in period C are estimated during the payroll run for period B.

Period A represents the last payroll period for which Regularly Entered Delayed wage types are available at this time. Thus, the basis of the estimation consists of the wage types normally entered for period B and the Regularly Entered Delayed wage types in period A.

The personnel calculation schema determines whether a particular wage type is Regularly Entered Delayed for specific employee groupings.