Managing the Challenges of Payroll Application Maintenance

  • by Satish Badgi, HCM Consultant
  • February 6, 2013
Companies that implement SAP payroll also have to plan and execute a strategy for application maintenance of the payroll systems. When implementing it globally, they have even bigger challenges for keeping the payroll applications up to date with regulatory and other changes. Compared to other applications, payroll applications need higher maintenance and upkeep due to regulatory changes. See how to plan for and execute the application maintenance strategy for both local and global SAP payroll landscapes.
Key Concept

Payroll regulatory changes and tax updates are released through SAP ERP HCM Support Packages. In global and local environments, these Support Packages are the backbone of payroll application maintenance. In addition, SAP Notes are also released for emergency fixes. Payroll application maintenance planning and execution revolve around the scheduled release of Support Packages and SAP Notes. The time of year that these changes and updates are released affects how and when these packages are implemented and tested. For example, the timing of a country’s tax year certainly impacts payroll operations and therefore the strategy around applying such regulatory and tax changes to your SAP system.

Payroll implementation teams often underestimate the importance of planning a strategy for application maintenance and then executing it throughout the year. Payroll managers and HR IT support teams are responsible for keeping payroll systems updated with ongoing changes. These changes are a result of regulatory changes or scheduled SAP Support Package releases.

Although SAP issues SAP ERP HCM Support Packages today, for other SAP modules and in the early days of SAP ERP HCM, they issued what were termed Legal Change Packages (LMCs). Not to add confusion, but SAP also issues Country Legal Changes Packages (CLCs), which are directed towards legal or regulatory changes for a particular country.

Managers also have the challenge of managing the quarter-end and year-end processing and similar periodic events (e.g., quarterly tax filing documents). Beyond regulatory changes, payroll applications also have to address employee paycheck questions and issues as well as other, data-related problems. The bottom line is that payroll systems need to be accurate, on time, and compliant. Payroll application maintenance has to answer what, when, why, and how questions to be successful. Payroll managers sometimes have answers to all of these, but they need to have complete answers for all four to come up with an effective and efficient implementation strategy. In addition, payroll needs to work closely with IT in the planning and execution of the maintenance strategy.

Satish Badgi

Satish Badgi has been helping clients implement SAP ERP HCM and payroll for more than 15 years. He has been involved with large full-scale SAP ERP HCM and payroll implementations using the breadth and depth of SAP modules. Satish works for a large management and systems integration consulting firm and handles global payroll for clients. He has published two books on SAP payroll, Configuring US Benefits with SAP and Practical SAP US Payroll.

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