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Payroll Costing in Oracle | Print |  E-mail
Written by Anil Passi   
Tuesday, 19 December 2006
This article discusses how Accounting Segments are built in Oracle Payroll.



For this article, assume that you do not have Labor Distributions implemented. Also assume that you do not have OTL [Oracle Time and Labour].
I will explain the significance of those two modules in future articles. But for the purpose of simplicity, lets make that assumption inn this article.
You must also read Metalink Note 69475.1

Why is costing needed in payroll?
Because each employee that gets paid, their costs must be reflected in Oracle General Ledger. If IT department employs Anil Passi, then IT Departments Cost Centre will bear my cost. Effectively IT Department will pay for my salary from their budget.

Every employee assignment record in Oracle HRMS is attached to an Organization.
Organizations are usually mapped to cost centres. Is that true?
Yes, in most cases this will hold true.


If cost centre can be derived from person's HRMS assignment, then why the need of this article on payroll costing?
For the following reasons:-
1. Cost Centre is not the only accounting segment. For example, in this article, I assume we have Company Segment, Cost Centre Segment, Project Segment and Expenditure Type Segment.
Payroll Costing must be able to work out values for each of these segments for each Payroll run result.
2. IT department may not always be the only department that bears my cost. For example, if I am asked to do some enhancements or customizations to Oracle iProcurement, then Purchasing department may agree to cover my costs for say 2 weeks. Please note my assignment will remain attached to IT Organization/Department.
Note:- With this example, its obvious that default Cost Centre from Organization Level must be overridden.


How about the project segment?
Lets assume, I work in parallel on "Oracle Apps Support Project" and also in "Oracle Apps Development Project". In this case, my costs must be split between multiple project codes.


What are the various levels where you can Set up Payroll Costing Accounts? Which levels take the highest precedence?
Element Entry => Highest
Assignment => Second Highest
Organization => Third Highest
Element Link => Fourth Highest
Payroll => Fifth Highest

It is obvious that if you attach a IT Cost Centre to persons assignment, that will override the Cost Centre setup at payroll level.


This is confusing, why will someone ever default a cost centre from payroll level?
This is why Cost Allocation Flexfield in Oracle Payroll has qualifiers.
Note :- Payroll can be a monthly payroll, or weekly payroll etc. Frequency of running payroll has nothing to do with cost centre.



What is qualifier in payroll cost allocation Flexfield?
By means of qualifier, you instruct Oracle which segment must be visible at which costing level. Well let me explain further...its important...
You do not want to be displaying Cost Centre Segment at Payroll level. Hence you will make just the company segment qualify at payroll level. See below pictures.





Similarly, you do not want to default company segment from element entry level or element link or assignment level. Hence you do not qualify company segment at element entry or assignment level or element link.



See the screenshots above...

Fine, how will payroll costing work out these details?
After you have run Payroll Process, you will then run Payroll Costing concurrent program. For each Run Result in Oracle Payroll, Costing program will check if that was created for Monthly Payroll or Weekly Payroll or Other Payroll. The company segment will be defaulted from that specific Payroll. Next, it will check the Element Link related to Run-Result record. In our example cost centre and project code and also expenditure type codes will be defaulted from Element Link definition. Next, Oracle Payroll Costing engine will check Costing Segments are assigned a value at Assignment Level or at Element Entry level, if so then Assignment/Element entry will overrule the  values fetched from Element Link

Comments (12)add
...
written by Kiran , May 12, 2007
Hi ,
Anil I got to see u r web site this week only.I got it from one of my friends thanks to him and Thanks to you for u r amazing work.
I have a question regarding costing (I got toknow much after reading u r article.)

This is my cost allocation keyflex structure.

COMPANY:COST CENTER:GL:LDsmilies/tongue.gifRODT

Level segments defined at diff levels

PAYROLL COMPANY:LDsmilies/tongue.gifRODT
ELEMENT LINK COMPANY:COST CENTER:GL:LDsmilies/tongue.gifRODT
ORGANIZATION COST CENTER
ASSIGNMENT COST CENTER
ELEMENT ENTRY COST CENTER LD

See here at element link level it has all the segments defined.So when i ran the payroll costing ,suppose if it gets all the segments values at element link level ,dose it gose to other levels also or if it stops there???
My another question I want to override the ld value obtained at link level to that at element entry level.But if it gets all the values at link level and if it stops searching there ,then there is no meaning of putting value at element entry level.

I hope I explained the question properly.

Thanks
Kiran.
...
written by Kiran , May 12, 2007
One more request from you Anil.
can u please post traiing docs for OAB also ..
I have no knowlegde on OAB.
IF u provide some thing like the HRMS AND PAYROLL training it will be great useful for people like me.

Thanks
Kiran.
...
written by Tariq , June 27, 2007
Mr Anil.
How we define Pre Run Payroll and Post Run Payroll
Waiting for your answer
regards
...
written by Siddharth , June 28, 2007
Hi Anil,

I learned a lot about HRMS/Payroll module from your blog. It will help me in implementing this things in new project.
I had one question:
Can u tell me the path for accessing Keyflexfield segments?
I am using Vision Instance for getting the functional knowledge. How can I connect to backend of Vision instance???
means If I want to implement the kknowledge, then How can I access the backend?
...
written by Anil Passi , October 09, 2007
Hi Siddarth

Please use the menu path /Application/Flexfield/Key/Segment in System Administrator or in Application Developer responsibility.

Thanks,
Anil Passi
screen shots are displaying
written by RamV , October 26, 2007
Anil,

For some reason screen shots are not displaying....Can you please check?

Thanks
Ramesh
payroll related question
written by amruta , November 15, 2007
Hi,

Can we run the Payrolls consecutively for 12 pay periods first and then run Prepayments for 12 pay periods, then run check for 12 pay periods and at last run costing for all the pay periods.

Will this give wrong result? or is this possible?
Payroll related question
written by Arun Kumar , December 01, 2007
Hi Amruta,
you are right. We can do that and there is no issue in that. But your payment check will be made as a single check payment for all the 12 months. Your prepayment and costing process parameter should cover all the 12 months period.

Thanks
Arun
Employee working for 2 organizations and costing should be distributed between those 2 orgs
written by Suresh sane , December 04, 2007
Hi Anil
Grate to see this wesite and i am very lucky to see this this is amazing and absolutly super.
After seeing this website i came to know u are the right person to help me in this issue.First let me explain this issue.Here we have employess working for diff org at a time meens seee an employee XX will work for Org1 for 20days a month and ORg2 10days a month now the problem comes is in costing....
Here the clint is very perticular about the multipul assignment and he dont want that...but employee has to work for 2 org simultamiously and costing in the above case for 20days costing should be done for Org1 cost center and 10days of billing should be done to Org2 cost center so please suggest me asolution with clear exp..please

thank u and any suggestions from others also will be appritiated and my mail id is
Iamhere.suresh@gmail.com
Costing Hierarchy
written by Ganeshan , December 10, 2007
Hi Anil,

In above section where the various level at which costing can be set is mentioned.

Element Entry => Highest
Assignment => Second Highest
Organization => Third Highest
Element Link => Fourth Highest
Payroll => Fifth Highest

Is the Elmenet Link Level not the Third highest rather than Organization. The organization would be fourth highest. Please correct me if I am wrong.

Regards
Ganeshan Rajagopal
...
written by Ganeshan , December 10, 2007
Hi Anil,
I just got to become a member as i was browsing the net for few Oracle Payroll costing related queries. Its really great to see this web site. Kudos to you for the good work.

I would like to be an active participant in this.


Regards
Ganeshan Rajagopal
costing
written by mehta_ankit , February 13, 2008
can we do costing at job level.


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