Using these simple steps and some example scenarios, I show how to navigate through payroll and the posting to financial accounting (FI) for employees who are paid via different payment methods. During payroll processing employees are paid either by check, direct deposit, or sometimes a combination of the two. In the following example (Table 1), the first employee is paid by check, the second employee is paid via direct deposit, and the third employee is paid with a combination of a check and direct deposit.  

Posting to Accounting

  After completion of payroll and payments to employees (direct deposits and checks), additional post-payroll activities include posting to accounting. The posting to accounting process evaluates employees’ payroll results and creates a summarized posting document (run type PP) that is posted to FI. The posting document for the above three employees is shown in Figure 1. The posting to accounting document reflects:

• Posting to expense general ledger (G/L) accounts (broken down by cost center)
• Posting to liability G/L accounts
• Posting to accrued net payroll G/L accounts

The employee’s net pay (irrespective of the payment type, e.g., direct deposit or check) is posted to one G/L account: the Accrued Net Payroll G/L account (Figure 2). In this example, a net pay amount of $15,000 for all three employees is posted to the Accrued Net Payroll G/L account ($6,000.00 + $3,000.00 + $4,500.00 + $1,500.00 = $15,000).

 

Posting to Payments

 

The posting of the payments posting run (report H99_POST_PAYMENT) reads the payments to the employees from the bank transfer payroll table and creates a summarized posting of payments document that is posted to FI. The posting of the payments document (run type PM) reflects:

• Postings to the relevant house bank clearing accounts based on the payment type (e.g., direct deposit or check):
  • Posting to direct deposit G/L account
  • Posting to check G/L account
• Offset posting to Accrued Net Payroll G/L account

In this posting (Figure 3), the employee’s net payments (direct deposit and checks) are posted to different G/L accounts, which enables easier cash reconciliation. Direct deposit payments are posted to bank clearing G/L account 113002 (Figure 4) with an amount equal to $10,500.00 ($6,000.00 + $4,500.00). Check payments are posted to bank clearing G/L account 113001 (Figure 5) with an amount equal to $4,500.00 ($3,000.00 + $1,500.00).  

Final Result

  After posting of accounting (run type PP) and payments (run type PM) documents to FI are completed, the final result is as shown in Figure 6:

• Posting to expense G/L accounts (broken down by cost center)
• Posting to liability G/L accounts
• Postings to the relevant house bank clearing accounts based on the payment type (e.g., direct deposit or check)

 

Configuration

  The following steps explain the required IMG configuration for using the posting of payments functionality.  

Step 1. Activate Posting of Payments Functionality

  In this IMG activity, you need to specify the effective date of when the posting of payments functionality is activated. Follow IMG path SPRO > Payroll > Payroll: USA > Posting to Financial Accounting > New General Ledger: Distribution of liabilities according to expenses > Posting of Payment > Determine period for posting of payments. On the Change View “Payment Posting Active US”: Overview screen (Figure 7), specify the effective date (in YYYYMMDD format) on the POST PPMUS row. In my example the activation date is specified as 20130101 (January 1, 2013).  

Step 2. Specify Bank Clearing Account for HR Payments

  In this IMG activity, you need to specify the bank clearing accounts for each net payment type (e.g., direct deposit or check). Follow IMG path SPRO > Payroll > Payroll: USA > Posting to Financial Accounting > New General Ledger: Distribution of liabilities according to expenses > Posting of Payment > Specify bank clearing account for HR payments. On the Determine Work Area: Entry screen (Figure 8), specify the Paying company code; 1000 in my example. On the Change View “Account Determination of Bank Clearing A/C for HR Payments”: Overview screen (Figure 9), specify the bank clearing accounts for each payment type. In my example, clearing account number 113001 for check payments (payment method C) and clearing account number 113002 for direct deposit payments (payment method P) are maintained for the corresponding house bank and account ID of the paying company code. If you have HR and FI on different instances, G/L accounts are not maintained in SAP ERP HCM. During the posting of payments configuration setup, when you enter the G/L account for the corresponding payment type the SAP system provides a warning message that the G/L account does not exist, but it allows you to save the record. (This is similar to the warning message produced by the SAP system while maintaining the G/L accounts in table T030 [symbolic account mapping to G/L account].) During the posting process, posting of payments document is successfully created and posting to FI is based on the ALE setup between the HR and FI instances. No additional setup is required on the FI instance for posting of payments functionality.  

Step 3. Determine Wage Types for Posting the Payments

  In this step you need to specify the wage types for posting of payments. Follow IMG path SPRO > Payroll > Payroll: USA > Posting to Financial Accounting > New General Ledger: Distribution of liabilities according to expenses > Posting of Payment > Determine wage types for posting the payments. On the change view screen (Figure 10), specify the wage types as shown (/559 and/568 in my example).

Execution Steps

Similar to posting to accounting, you need to perform the following activities for posting of payments:

• Execute a posting run for payments (simulation)
• Execute a posting run for payments (live)
• Process posting run:
  • Releasing posting documents
  • Posting documents

Step 1. Execute Posting Run for Payments (Simulation)

You need to execute a simulation of a posting run for payments prior to exiting payroll. In this way, you can recognize any posting-relevant errors in the payroll results early and avoid errors when creating a live posting run. Use transaction code PC00_M99_PPM or follow easy access menu path Human Resources > Payroll > Americas > USA > Subsequent activities > Per Payroll Period > Evaluation > Post to Accounting > Execute posting run for payments. On the Posting of Payments: Create Posting Run screen (Figure 11), specify S (Creation of simulation documents) in the Type of Document Creation field. The other screen selections are the same as the regular posting to accounting process selections. Once done, click the execute icon to create the posting document. Upon execution of the posting of payments run, a simulation document (type PM) is created (Figure 12). Figure 12 is an example of an error-free simulation document, which is indicated by the selection of the Documents created check box.

Step 2. Execute Posting Run for Payments (Live Run)

You should only execute live posting runs for payments after the payroll processing is complete (e.g., the control record is in exit status) and you have successfully created an error-free simulation posting document. Use transaction code PC00_M99_PPM or follow Easy access menu path Human Resources > Payroll > Americas > USA > Subsequent activities > Per Payroll Period > Evaluation > Post to Accounting > Execute posting run for payments. On the Posting of Payments: Create Posting Run screen (Figure 13), specify the Type of Document creation as P (Live posting run). The other screen parameters are the same as the regular posting to accounting process selections. When done, click the execute icon to create the posting document. Upon execution of the above posting of payments run, a live production document (type PM) is created (Figure 14). Figure 14 is an example of an error-free live production document (indicated by the unchecked Documents created check box).

Step 3. Process Posting Run

After the live posting document has been created, you need to release and post it to FI. The posting run execution steps for the posting of payments (document type PM) process are exactly the same as the posting of accounting documents (document type PP) process. Use transaction code PCP0 or follow easy access menu path Human Resources > Payroll > Americas > USA > Subsequent activities > Per Payroll Period > Evaluation > Post to Accounting > Process posting run.

Releasing Posting Documents

Prior to posting the document, all the posting documents within the posting run should be released. After all the posting documents have been released, the posting run status is changed to All documents released (Figure 15).

Posting Documents to FI

Once a posting run reaches the All documents released status, you can post it to FI. Once the posting run number is successfully posted, the posting run status is changed to Documents posted (Figure 16). Upon successful execution of the above posting of payments process, net pay is distributed and posted to the relevant direct deposit and check clearing G/L accounts.