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Oracle Payroll Accounting Basics | Print |  E-mail
Written by Anil Passi   
Friday, 25 August 2006

Please find the very basics of Accounting in Oracle HR and Payroll Module. 


 

Golden Rule of accounting from ORACLE PAYROLL

            Dr :- Actual Account

            Cr :- Balancing Account

 

When LD(Labour Distributions) comes into play, “Actual Account in Payroll” is
replaced by “Clearing Account in Payroll”.

 

Based on above golden rule, for Earning Elements, following account
entry takes place .

The payroll run result value is +ve for “XX_Custom Basic Salary”

Step

Credit

Debit

Element

How to recognise

Post from Payroll

Balancing Account

 

XX_Custom Basic Salary

Pickup Balancing entries for LD elements when in Credit

Post from Payroll

 

Clearing Account

XX_Custom Basic Salary

Ignore debit entries for LD elements

Post from LD

Clearing Account

 

XX_Custom Basic Salary

 

Post from LD

 

Actual Account

XX_Custom Basic Salary

 

 

 

For Rebate element, following accounting takes place

( golden rule is violated, as the original entries need to be either fully
or partially reversed). The payroll run result value is –ve for Rebate Element       

Step

Credit

Debit

Element

Post from Payroll

 

Balancing Account

NI Employers Rebate

Post from Payroll

Clearing Account

 

XX_Custom Basic Salary

Post from LD

 

Clearing Account

XX_Custom Basic Salary

Post from LD

Actual Account

 

XX_Custom Basic Salary

 

 

Conclusions( Not taking LD into account. These rules apply to costing entries in Payroll.) :-

1.        The golden rule applies only when run result values are Positive.

a.        If run result value is positive, then

v       Credit          Balancing Account

v       Debit           Actual Account

 

2.        The golden rule DOES NOT apply when run result values are Negative.

a.        If run result value is negative, then

v       Credit          Actual Account

v       Debit           Balancing Account

 

3.        The distributed element has a negative run result value then

a.        Debit entry is made against Actual Element ( i.e. “NI Employers Rebate” )

b.        Multiple Credit entries are made against elements in Distribution Set
 ( i.e. XXX_BASIC_SALARY, XXX_LONDON_ALLOWANCE etc)

NI Employers Rebate

2.25

Dr

Balancing Account

Basic Salary

2.15

Cr

Actual Account

London Allowance

0.1

Cr

Actual Account

 

 

4.        The distributed element has a positive run result value then

a.        Credit entry is made against Actual Element ( i.e. “NI Employer” )

b.        Multiple Debit entries are made against elements in Distribution Set
( i.e. XXX_BASIC_SALARY, XXX_LONDON_ALLOWANCE etc)

NI Employer

399.99

C

Balancing Account

Basic Salary

382.57

D

Actual Account

London Allowance

17.42

D

Actual Account

 

Comments (19)add
...
written by Dilip , November 03, 2006
Hi Anil,
Can I get some more basic information about Payroll.
...
written by Dilip , November 03, 2006
Hi Anil,
Can I get some more basic information about Payroll.
...
written by Anil Passi , November 15, 2006
Sure you can, but it is only logical to begin with HRMS first. I am covering HRMS topics for next couple of weeks. Some of those topics have been posted already

thanks
anil
...
written by Anil Passi , November 15, 2006
Sure you can, but it is only logical to begin with HRMS first. I am covering HRMS topics for next couple of weeks. Some of those topics have been posted already

thanks
anil
...
written by ayman , November 16, 2006
feefef
...
written by ayman , November 16, 2006
feefef
...
written by Rinkesh , December 12, 2006
Hi Anil,

I have found your site very informative and good for both Technical and functionals.I was working in Financials since last four yrs now i have got work in HRMS/PAYROLL.so i want to learn inouts of HRMS..functionality of hrms...if you have some student guide kind of stuff..or steps to learn HRMS/PAYROLL with table details that will great help for me.
Please mail me if you have this kind of document...i am refering your articles on your portal as well.

Thanks a Lot

Rinkesh
...
written by Anil Passi , December 12, 2006
Hi Rinkesh,

Congrats for having joined the HRMS/Payroll cub. This is one of my favourite modules.

I dont have a student guide I am afraid. But I will write something up on important Payroll tables.

Thanks
Anil Passi
...
written by Rinkesh , December 12, 2006
Hi Anil,

I have found your site very informative and good for both Technical and functionals.I was working in Financials since last four yrs now i have got work in HRMS/PAYROLL.so i want to learn inouts of HRMS..functionality of hrms...if you have some student guide kind of stuff..or steps to learn HRMS/PAYROLL with table details that will great help for me.
Please mail me if you have this kind of document...i am refering your articles on your portal as well.

Thanks a Lot

Rinkesh
...
written by Anil Passi , December 12, 2006
Hi Rinkesh,

Congrats for having joined the HRMS/Payroll cub. This is one of my favourite modules.

I dont have a student guide I am afraid. But I will write something up on important Payroll tables.

Thanks
Anil Passi
...
written by kirankumar , December 20, 2006
my question is can i get complete reference ob payroll 11i hrms
can u give some booknames
...
written by kirankumar , December 20, 2006
my question is can i get complete reference ob payroll 11i hrms
can u give some booknames
...
written by Thanigaivelan , April 03, 2007
Hi Anil, It would be great if you could throw some light on costing of payment methods. How can we achieve this if we are going to develop a customized process for payments processing (like bank transfer procedure) ?

Thanks and Regards,
S. Thanigaivelan
...
written by Anil Passi , April 04, 2007
Not sure if your question was in Payroll context or general Payables

Assuming you are refering to costs associated with payment methods like CHAPS, SWIFT etc.
These payments can costs from 1 to 10 USD, depending upon the correspondance bank structure in place.

A service provider that makes these transactions[i.e. sends our messages accross to SWIFT network] will be sending you lumpsump invoices.
You can put charge those invoices into a placeholder account.

next, you can run the custom monthly process that reads all the SWIFT payments on monthly basis, and apportions the transfer charges accross to different cost centres.
this custom process can post straight to GL [and it will credit the placehold account entries from AP]

Rules for apportioning can be discussed with your business analysts

Thanks,
Anil Passi
...
written by Kadhiresan L , April 17, 2007
Hi,

Real useful stuff. Thanx.

Could you please pass on some step by step processing payroll docs.

this will be more useful.

Thanx & Regards,
Kadhiresan L
Chennai
...
written by Anil Passi , April 20, 2007
Hi Hari

I have written step by step demo on fast formulas

please see http://oracle.anilpassi.com/or...ing-3.html

Thanks,
Anil Passi
...
written by Kadhir , May 03, 2007
Hi Anil,

This is my second time of contacting you to have very urgent help.

Kindly give some material or setup docs of OAB (Advanced Benefits). THIS WOULD BE GREAT HELP FROM YOU.

Thanx & Regards,
Kadhiresan L
09840260674
...
written by ramesh , August 28, 2007
hi anil,
this is ramesh,pls help me in getting API's in HRMS.and if possible any API inbound

Thanks & Regards
ramesh
Payroll Costing
written by CK , March 13, 2008
Hi Anil
I have enter costing element link level salary expense Account 0001 and Balanacing (payroll clearing) 9999. After payroll run costing summary shows Salary expense Debit and Payroll Clearing Credit. Please tell me how to i can reverse this entry or set off this liability. In other words what entry finance pass in against my Payroll entry. Please also tell me How AP will pay this payment
Many Thanks
CK
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