Understand and Streamline Your R/3 HR Payroll-FI Integration

  • by Steve Bogner, Managing Partner, Insight Consulting Partners
  • October 15, 2004
Understanding how R/3 Payroll, part of the Human Resources (HR) module, comes up with its R/3 FI postings is the essential first step in creating an accurate and reliable integration between these two complex modules. Though many more issues and details need to be considered, the basic framework described here is the starting point for Payroll and FI analysts.
Key Concept
One of the most challenging aspects of the Payroll-FI integration is reconciling the payroll results to FI accounts. For example, every payroll account balance in FI should match a report of all the detail from the payroll module. Any differences should be attributable to manual entries or documents from other modules.

The integration between SAP Payroll and SAP FI can be a problem for some companies. To make the integration work correctly, people need to know about both payroll and accounting and be able to speak in SAP terms about both subjects. That is an uncommon skill set. I'm going to present a basic overview of the integration from Payroll to FI. Subsequent articles will provide more detail about integration, implementation, and management. Figure 1 presents an overview of creating payroll results and posting them to FI.

Figure 1
Overview of payroll posting process

The four major processes that create postings from Payroll to FI are: current-period payrolls, third- party payments, payroll retrocalculations, and intercompany payroll charges. An effective way to understand the relationship between Payroll and FI is to map the payroll transactions to their corresponding FI accounts.

Current-Period Payrolls

For the base scenario, let's pay an employee as specified in Table 1. A payroll result is simply a collection of wage types. Wage types are codes created in Payroll configuration that carry various types of payments, deductions, taxes, etc. When employees look at their pay stubs, all the items are stored in payroll wage types. Wage types are also mapped to FI accounts. Notice that the positive or negative sign on the wage type amount doesn't necessarily correlate to a debit or credit; that is controlled via Payroll configuration.

Steve Bogner

Steve Bogner is a managing partner at Insight Consulting Partners and has been working with SAP HR since 1993. He has consulted for various public, private, domestic, and global companies on their SAP HR/Payroll implementations; presented at the SAP user's group ASUG; and been featured on the Sky Radio Network program regarding SAP HR.

Steve will be presenting at the upcoming HR Payroll Seminar November 7-8 in Chicago and November 27-28 in Orlando. For information on the event, click here.

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