Field-Tested Tips and Tricks for Troubleshooting SAP ERP HCM Payroll Processing Errors

  • by Parvatharajan Muthusami, Manager, Deloitte Consulting LLP
  • December 27, 2016
Payroll users can often be overwhelmed by the variety and amount of errors encountered in daily operations. Learn how to categorize these errors logically, see how to resolve them, and get tips for avoiding them going forward.
Learning Objectives

This article is intended to help you understand:

  • What happens when master data isn’t audited prior to payroll processing
  • Common errors that appear in SAP payroll, and the possible causes of and resolutions for each
  • How audits, checks, and balances can be put in place to avoid errors while payroll is being processed
  • The types of issues encountered when SuccessFactors Employee Central is integrated with Employee Central Payroll
Key Concept
In SAP payroll, various master data inputs, configuration setups, and integrations within SAP ERP HCM and Financial Accounting impact the accuracy of employees’ paychecks. It is essential to understand the different components so that appropriate checks and balances can be applied to each step. It is also important to note that most troubleshooting concepts for SAP ERP HCM on-premise payroll still apply to the cloud Employee Central Payroll model.

There are several steps involved in a typical cycle of payroll processing in an SAP system. Below is a summary of the three key processes:

  1. Maintenance of master data: Inputs to the payroll process include core HR master data, time interfaces and punches, benefits interfaces, tax and regulatory data, finance master data, and other payments and deductions.
  2. Payroll processing: A series of complex calculations are performed to arrive at gross pay, deductions, taxes, and net pay.
  3. Subsequent steps: Several post-payroll activities must be completed to finish the process, such as creating the bank file, check printing, posting to Financial Accounting and accounts payable, and statutory reporting.

As you can see, payroll processing is dependent on a variety of data-maintenance tasks, encompassing inputs from employees (e.g. address, bank, and withholding information), managers (e.g., transfers and leaves of absence), and HR administrators (e.g., life events and miscellaneous data updates). These dependencies also mean payroll is at risk for errors when data entry is not done properly. Appropriate steps are required to audit data quality prior to payroll processing. In this article, I review the most common errors and provide some tips for resolving them now, as well as for avoiding them in the future.

Five Common Master Data-Related Issues in Payroll

Data validation before each payroll run is key to success. It’s critical to proactively identify any master-data-related issues before they get too far along the process and cause delays.

An effective data-validation process:

  • Reduces the number of payroll errors
  • Decreases instances of over- and under-payments, thus requiring fewer off-cycle payroll runs for corrections
  • Provides more time for post-payroll reconciliation and validation activities

Parvatharajan Muthusami

Parvatharajan Muthusami is a manager with Deloitte and has over 10 years of experience in delivery of US and global SAP payroll projects. He has had hands-on delivery roles and led teams in the areas of SAP payroll and time management for various clients in the US and globally. Parvatharajan functional areas of focus include: SAP payroll, time management, benefits and core HR (on-premise and cloud).

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