Control Cross-Company Accounting in SAP Payroll

  • by Steve Bogner, Managing Partner, Insight Consulting Partners
  • July 15, 2004
R/3’s Payroll functionality allows you to charge payroll costs from one company code to another. However, it does not always work the way you want it to. You may be unable to charge a cost to another code or an unwanted charge could appear on your company code. You can create a function module that alerts you to invalid cross charges so that you can verify the information and correct any errors.

One of the strengths of R/3’s Payroll functionality is the ability to charge payroll costs from one company code to another, commonly called “cross charging.” When posting the payroll results to FI/CO, payroll creates accounting documents for each company. However, a problem occurs when you want to allow cross-company postings for some companies but not for others.

A common example is when you process retiree or long-term disability payrolls in the same SAP system your operating companies use. Since retirement and disability payments are paid from trust funds (as opposed to the company’s operating funds), most often companies do not want to charge part of a retiree’s pension payments to an operating company, or charge part of an active employee’s payments to the disability trust fund. Even though the payrolls might be run together in the same system at the same time, co-mingling of the funds is not allowed. SAP Payroll has no standard functionality to allow cross charges in some cases while preventing them in others. I will show you how to create a function module that prevents cross charges between specific company codes.

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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