Understanding the SAP Payroll Reversal Process

  • by Imran Sajid, Senior Education Consultant, SAP
  • February 9, 2016
Understand and use the standard SAP process for payroll reversal by using the off-cycle workbench. Learn the required steps for when a payment is issued in SAP payroll to an employee that should not have been issued. Learn the details and identify all the options when you need to reverse a check, based on where you are in the process.
Learning Objectives

By reading this article, you will understand:

  • The process for reversing a payroll run as well as the key payroll tables involved
  • The impact on finance (FI) when a payroll run is reversed
  • The process for reversing a payroll posting run for a reversed payroll run and how to reconcile the numbers
  • What happens when a reversal becomes an out-of-sequence reversal, and the impact of and differences for an out-of-sequence reversal versus a regular reversal
Key Concept
There are two concepts that must be understood when making corrections in the SAP Payroll module. A payroll reversal is the process of reversing a payroll run that was created in the SAP system. An out-of-sequence reversal process is a payroll reversal in which a payment has already been made to a third party or it is not the most recent payroll run.

I provide a detailed look at the standard SAP processes and how to proceed when you find out that you need to reverse a payroll run. The method used differs greatly depending on where—at which step of the process—you are. Understanding this information helps you make the correct decision on how you should reverse a payroll run.

Tips!
To understand this article, readers need to have a good grasp of complex SAP Payroll concepts; in other words, this article is not intended for beginners just learning about SAP Payroll.

For more information about this topic I recommend attending the SAP workshop class WNAOC, which offers a deeper look at the entire functionality of the off-cycle workbench, including payroll reversals. The SAP payroll class should be taken based on your country. For the U.S., that would be the HR410 – U.S. Payroll class; for Canada, the appropriate class is HR407. For information about classes for other countries or for more information about any other SAP classes, visit this website: https://training.sap.com/.

For more information about payroll basics, see these other HR Expert content items:

Automating Tuition Reimbursement in SAP Payroll,” by Imran Sajid

System Tips for a Global SAP Payroll Strategy,” by Satish Badgi

Managing the Challenges of Payroll Application Maintenance,” by Satish Badg

Automate Period-Based Payments in the SAP Payroll System,” by Irfan Malik

Learn New Methods for Comparing Payroll Results and Improve Your Payroll Implementation Projects,” by Owen McGivney

Troubleshooting Payroll Problems,” by Satish Badgi

Been There, Done That! Best Practices & Real-life Advice for Optimizing SAP ERP HCM & Payroll Projects,” [video]

Understanding the Payroll Reversal Options

The first step for understanding this functionality and the options that you have for the reversal or voiding of a payroll is to determine where you are in the overall payroll process flow. Where you are in the process has a huge impact on what choices you have for correcting the data in the system. To determine the best option for correcting payments, you need to ask the following questions to see what can be done:

  1. Has the payroll control record been exited?
  2. Has payroll posting already been run and posted to finance (FI)?
  3. Has third-party remittance already been run?
  4. Are you reversing the most recent payroll run or a previous one?

Imran Sajid

Imran Sajid is a Senior Education Consultant at SAP based in the Atlanta, GA, area. At SAP, he focuses on teaching classes in the HCM area within both SAP and SuccessFactors. Previously, Imran was a consultant who implemented and provided post-go-live support for more than a dozen different client systems spanning many industries, including manufacturing, automotive, retail, information systems, the public sector, and energy. He is the author of the book entitled, The Payroll Control Center for SAP ERP HCM and SAP SuccessFactors, as well as a frequent contributor to SAP Experts, where he has published almost a dozen articles. Imran is also frequent blogger on SAP Community Network (SCN). He graduated from the Georgia State University Robinson College of Business with a degree in Computer Information Systems. Imran can be found on Twitter @ImranSajidSAP.

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