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This tutorial deals with Fusion Payroll, and how it functions.

In this part, we will discuss


about the topic of Costing in Payroll.
Costing
Costing is a part of the financials, and it is either opted for or not, depending upon the
implementation of the project, which can vary from organisation to organisation. Usually, when
the financial aspects are included in the implementation, it makes sense to opt for the costing
feature as well. In case you decide to opt out of the costing feature, then the tasks that are
related to the feature will also not be part of the implementation.
Costing is a mechanism by which a company determines how the company activities and the
labour are costed to the company at various stages of its operation. It can be very helpful for the
management of the organisation to get a wider picture about the costs undergone by the
companys operations. Costing plays a vital role in helping managers to form strategies and
budgets to reduce the cost borne by the company and to utilise available resources effectively.
As far as Fusion Payroll is concerned, the accounts that are related to the costing feature are
the Payroll Account as well as the General Ledger Account.
Apart from these, there are other accounts which are present to provide the costs
pertaining to certain areas, such as:
Cost Account - the main account where each cost entry is recorded.
Offset Account - the account where the excess or unused amounts are recorded.
Usually interest from this amount is used to pay off the principal of any loans taken.
Natural Account - the actual account by which the company determines how the
expenses and costing takes place.
Suspense Account - the account which is not viewable by external parties for audits or
other purposes. It is an internally used account which is used when a transaction takes
place that the accountant does not know in which account to place.
Priority Accounts - special accounts with certain privileges depending on when and
where such an account is created.
To create accounts, there are flexfields which have to be set up, called the Account Key
Flexfields, such as:
For the General Ledger - Accounting Flexfield
For Global Payroll - Cost Allocation Flexfield
When setting up the Accounting Flexfield, it is advisable to have a similar structure as that of the
Cost Allocation Flexfield.
In order to have the complete feature of Costing, it is better to have a prerequisite setup from
Financials, before being set up in Payroll. The results are then to be transferred from Payroll
onto Financials so that entries are made in the General Ledger.
Fig. 1 - Integration of costing with applications in Global Payroll
The above diagram shows the integration of costing with Financials. The chart of accounts,
ledgers, accounting periods, and calendars for legal entities are part of Financials; while the
reconciliation of payments with bank statements is a part of the Cash Management. Subledger
Accounting is involved with the creation of journal entries and posting them to the General
Ledger.
Fig. 2 - An overall view of the components created for Global payroll Costing
The above chart presents an overall view of the components that are created for a full cycle of
costing to be implemented in Global Payroll.
Cost Allocation Flexfield
From the Global Payroll perspective, the Cost Allocation Flexfield has to be defined in order to
use the costing feature. For this, the requirements are listed below:
Value sets for the segments (the cost accounts used for costing)
Structure of the Cost Allocation Key Flexfield (mapped to the General Ledger)
Cost hierarchy levels required for each cost account segment (visibility of the segments
at different levels)
Segments required for the offset account
Number of structure instances of the Cost Allocation Key Flexfield (at the Legislative
Data Group level; once set, it cannot be edited)
Cost Hierarchy
Cost Hierarchy is the hierarchy which the Calculate Payroll process traverses to build the
account number for costing. It starts with the lowest level (Element Entry) of the cost hierarchy
and ends with the highest level (Payroll). The process checks each level sequentially until it
finds a value for the costing result.
In case the Calculate Payroll process cannot find any account number, it places the costing
result in a Suspense Account.
Fig. 3 - Cost hierarchy used to build each account segment
The above flowchart depicts how the Calculate Payroll traverses through the cost hierarchy,
from the bottom to the top.

Part 2

Costing is a mechanism by which a company determines how the company activities and the labour are
costed to the company at various stages of its operation. It can be very helpful for the management of the
organisation to get a wider picture about the costs undergone by the companys operations.
Costing plays a vital role in helping managers to form strategies and budgets to reduce the cost
borne by the company and to utilise available resources effectively.
Cost Information
In order to use the costing feature, proper cost information has to be provided at the proper places. For
example, a particular department has to have costing enabled in order to be eligible for the costing to be
done for that department. This can be done by using the respective tasks, as follows:
Person - Manage Costing for Persons
Payroll - Manage Costing of Payrolls
Elements - Manage Costing of Elements
Payment Sources - Manage Costing of Payment Sources
Departments - Manage Costing of Departments
Jobs - Manage Costing of Jobs
Positions - Manage Costing of Positions
Costing Processes
Costing has a number of processes available in Payroll to perform the required actions, as follows:
Calculate Payroll - Payroll run which creates the actual costing results.
Calculate Costing of Payments - Allocates costs for payment results, plus voided, cleared, and
external payments. This is run before creating the accounting entries.
Calculate Retroactive Costing - Recalculates the costs for retroactive changes to costing setups.
Costing of Balance Adjustment - Calculates the costing details for a balance adjustment.
Transfer to Subledger Accounting - Submits a process which transfers payroll costs to Subledger
Accounting.
The UIs for tasks related to costing
Cost Allocation Flexfield
From the Global Payroll perspective, the Cost Allocation Flexfield has to be defined in order to use the
costing feature. To do so, follow the steps below:
1. On the Navigator menu, go to Tools -> Setup and Maintenance.
2. Click on the Implementation Projects tab (circled in the screenshot below).
3. Click on the name of your Implementation Project from the list.
4. Expand the task list and go to the Manage Cost Allocation Key Flexfield task under Define Payroll
Costing.
5. Click on the Manage Structures button (circled in the screenshot below).
6. Click on the Search button to get the list of flexfields. Use the New icon to create a new flexfield,
or the Edit icon to edit an already existing flexfield.
7. The segments of the flexfield will show up. Select a segment and click on the Edit icon to view its
details.
8. You can add or remove labels associated with a segment.
9. Once you are done, click on the Save and Close button.

Fig. 1 - Setup and Maintenance in the Navigator menu


Fig. 2 - The Implementation Projects tab is circled

Fig. 3 - The Implementation Projects


Fig. 4 - The Manage Cost Allocation Key Flexfield task

Fig. 5 - The Manage Structures button is circled

Fig. 6 - The Cost Allocation Key Flexfield structures

Fig. 7 - The segments of the flexfield


Fig. 8 - The Company segment details

Fig. 9 - The Cost Centre segment details. Here, the department is the cost centre
Managing Cost Information
As discussed before, proper cost information has to be provided at the proper places for costing to work
effectively in Payroll Calculation. There are specific tasks to achieve this for payrolls, elements,
departments, persons, etc. The UIs related to these tasks are discussed below.
Managing Costing of Payrolls
To edit costing information for Payrolls, follow the steps below:
1. Go to the Manage Costing of Payrolls task under Define Payroll Costing.
2. Search for your payroll by using the Search button.
3. From the search results, click on the name of your payroll to view the costing information for your
payroll. If necessary, you can edit the information by using the Edit button (circled in the
screenshot below).

Fig. 10 - The Manage Costing of Payrolls task


Fig. 11 - Searching for your payroll

Fig. 12 - Costing information of the payroll


Managing Costing of Elements
To edit costing information for elements, follow the steps below:
1. Go to the Manage Costing of Elements task under Define Payroll Costing.
2. Search for an element by using the Search button.
3. From the search results, click on the name of the element eligibility to view the costing
information for it. If necessary, you can edit the information by using the Edit button (circled in the
screenshot below).

Fig. 13 - The Manage Costing of Elements task


Fig. 14 - Searching for the element eligibility

Fig. 15 - The costing information for the element


Part 3

As discussed before, costing is employed by a company to determine how the company activities and the
labour are costed to the company at various stages of its operation. It can be very helpful for the
management of the organisation to get a wider picture about the costs undergone by the companys
operations.
Continuing from Part 2 of the tutorial, we shall discuss UIs related to the managing of cost
information at different levels in Payroll.
Managing Costing of Payment Sources
To edit costing information for payment sources, follow the steps below:
1. Go to the Manage Costing of Payment Sources task under Define Payroll Costing.
2. Search for a payment source by using the Search button.
3. From the search results, click on the name of a payment source to view the costing information
for it.
4. To create a new costing of a payment source, click on the New icon (circled in the screenshot
below).
5. Select the Effective Date and click on the Continue button.
6. Enter the account numbers for the costing of payment source and click on the Submit button.
Fig. 1 - The Manage Costing of Payment Sources task

Fig. 2 - Searching for payment sources. The New icon is circled

Fig. 3 - Creating a costing of payment source

Fig. 4 - Entering the details of the costing of payment source. The Submit button is circled
Managing Costing of Departments
To edit costing information for departments, follow the steps below:
1. Go to the Manage Costing of Departments task under Define Payroll Costing.
2. Search for a department by using the Search button.
3. From the search results, click on the name of a department to view the costing information for it. If
necessary, you can edit the information by using the Edit button (circled in the screenshot below).
Fig. 5 - The Manage Costing of Departments task

Fig. 6 - Searching for departments

Fig. 7 - Costing information for the department


Similarly, you can view and edit the costing information for jobs and positions through the Manage
Costing of Jobs and Manage Costing of Positions tasks respectively.
Viewing the Costing Results
Once the costing information has been defined for each level, the Calculate Payroll process has to be
run, which can be done through the Submit a Process or Report task that has been discussed in earlier
tutorials. To view the Costing Results after running the Calculate Payroll process, follow the steps below:
1. From the Navigator menu, go to Payroll -> Payroll Calculations.
2. In the Payroll Calculations Workarea, go to the View Payroll Process Results task from the task
list on the left.
3. Search for your Payroll Name and Legislative Data Group and click on its name from the search
results.
4. From the Person Process Results that are listed, click on the name of a person.
5. Click on the dropdown on top of the Statement of Earnings section and select the Costing Results
option to view the costing results of that person.
6. The Costing Results will then be displayed on the screen.
7. Click on the Done button.
Fig. 8 - Payroll Calculations in the Navigator menu

Fig. 9 - The View Payroll Process Results task


Fig. 10 - Searching for the Payroll Process Results

Fig. 11 - Person Process Results

Fig. 12 - Navigating to the Costing Results of the person


Fig. 13 - The Costing Results of the person Kapoor, Arjun
The Accounting Distribution Workarea
The Accounting Distribution Workarea can also be used to access all of the tasks related to costing from
one place.
To submit processes related to costing from the Accounting Distribution Workarea, follow the steps
discussed below:
1. From the Navigator menu, go to Payroll -> Accounting Distribution.
2. In the Accounting Distribution Workarea, click on the Submit Process or Report task from the task
list on the left.
3. Select your Legislative Data Group from the dropdown to get a list of costing processes available
to be submitted. Read the description of the processes and use the process that best suits your
requirement.
a. For example, to adjust a cost in case of an error or adjustment, select the Adjust Cost for a
Person process and click on the Next button on the top right-hand corner.
b. Enter the parameters for the processes and on the final page, review the details and click on the
Submit button.

Fig. 14 - Accounting Distribution on the Navigator menu


Fig. 15 - The Accounting Distribution Workarea

Fig. 16 - A list of all processes available to be submitted

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