SAP Custom Labor Distribution Functionality and Reporting

The Labor Distribution process is an enhanced SAP Payroll function for High Education and   U.S. Public Sectors created by Feng Enterprise in additional to Labor distribution infotype (9027).   The Payroll calculation process creates the posting documents to FI. The Labor Distribution process provides departments with employee payroll expense (salary and fringe benefits) detail to reconcile their accounts with the financial system and supports central business office reporting and compliance requirements.

The development of functionality to enable departments to submit changes to salary and cost distribution through workflow, and the ability to run individualized reports to reconcile salary and fringe benefit expenditures by account or payroll posting period, are a highly visible measure of success for High Education and   U.S. Public Sectors.

The following is a typical list of labor distribution process and reporting requirements:

  1. Integration  with SAP HR/Payroll and the SAP FI or other Financial System (such as Kuali Financial) to post payroll expenditures in summary.
  2. Provide  detailed employee payroll expense (salary and fringe benefits)  distribution data for all departments.
  3. Provide  information for financial control reports (reconciliation of balance sheet activity).
  4.  Provide the data for central fringe benefit calculations and reporting.
  5. Automatically calculate retroactive fund transfers to salary and hourly records.
  6. Automatically  calculate fringe benefits due to salary expense transfer.
  7. Distribute  fringe benefit costs to the same accounts as salary funding (prorated or retroactive basis), or redirect fringe costs to another account according account chargeability rules.
  8. Validation on funding distribution to determine if accounts are active.
  9. Ability  to support academic year (AY) accrual accounting to reflect salary and fringe benefit expenditures on accounts over the contract period but  disbursement of pay over 12 months.
  10. If  decided, automatically replace any invalid account with valid departmental  “default” account on employee labor distribution (to prevent payroll errors).
  11. Report   should be available on the web in a downloadable file format for central  administration and departmental use.

To meet labor distribution process requirements, following are created by Feng Enterprise

  1. A user-friendly custom infotype (IT9027) which combines functionality for employee salary and funding sources into one infotytype
  2. Z-Transaction screen (Z9027) for payroll cost transfer with workflow, in SAP HR/Payroll to enable departments to directly change and update employee salary and funding distribution master data records
  3. ABAP labor distribution report  in SAP HR/Payroll to provide departments with the means to reconcile salary and fringe benefit expenditures by account, at the employee detail level.  The report can be access through a web portal to run real time (once payroll runs), individualized reports by account or payroll posting period.

By using SAP HR/Payroll, with its integrated logic and effective dating, labor distribution process requirements will be met as follows:

  1. Using standard      functionality in SAP, retroactive adjustments to employee salary or cost      distribution, on activated financial accounts, will occur.
  2. Departments will have the      ability to make adjustments to employee master data salary and funding      changes using the custom developed Z9027 transaction screen (with workflow      for approval) in the SAP HR/Payroll system.
  3. Employee master data      history is permanently stored in SAP HR/Payroll.  History will be visible to departments      in transaction screen Z9027 for salary employees.
  4. Fringe benefit      recalculations, due to salary expense transfers, will be accurately      calculated.
  5. Account validation will occur      in real time when employee master data is updated.
  6. Account validation (and      permissibility) will occur in real time at the data entry level of time      (CATS) for hourly employees.
  7. Current and retroactively      calculated payroll records and accounting records will be synchronized.
  8. ABAP customized labor      distribution reports will be available, via the web portal, and departments      can customize their reports by pay period, fiscal year quarter, or any      other date parameter.

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