Future Payroll Supports Common Processes

All too often as consultants we end up configuring the same process for each customer because the SAP payroll software doesn’t provide it. For example, in the US we setup stock option processing for most every customer. In Brazil it might be Vacation Scheduling, or electronic payslips in Argentina. Every country has some examples of these common processes companies require that are not fully delivered with the software.

But why do we repeat this configuration work for every company? Two reasons, usually: SAP provides incomplete functionality, or SAP provides only parts of the process instead of the whole process. Let’s look at US stock option processing as an example.

For SAP Payroll in the US, we usually implement the stock option process with an inbound interface from a broker for the exercises, and an outbound interface for the grants and employee demographic information.  Each broker has their own format and requirements, but the basics are the same; yet we build custom interfaces all the time for this since there is no starting point delivered by SAP. The inbound interface generally comes into infotype 0221 Payroll Adjustments, via some custom wagetypes we build to record the proceeds, taxes and such. We setup a daily process for running this special payroll because Federal tax deposits usually have to be made within a few days of the exercise. On the outbound side we build an interface to send the usual employee demographic and payroll YTD data, but sometimes we also have to find a way to send each employee’s marginal tax rate per tax authority and tax type.

This is built for each company’s implementation – what a waste of resources! Future Payroll would deliver a common process for this scenario so that customers have a 90% solution ready to go. The same can be done for charitable deductions (such as United way), nonqualified savings plans, overpayment processing (NOT what SAP currently offers for overpayments) by country, and more.

As a consultant, this reduces the amount of my effort needed for an implementation. And it’s the right way to go so that we can put resources on efforts that really have some impact for the payroll function. Anything that makes implementation easier is also good for customers, and I’m always in favor of that!

(click here to see the other blogs on Future Payroll)

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Great blog and spot on Steve as I have set up that stock option solution at every US customer I have implemented in various forms. A few more to throw in that are core functionality most big US customers want:

1. Expat Solution
2. US Garnishment Rules Updated by SAP
3. FLSA

Know there are more but just wrapping up my 45th go-live so my brain is not as sharp as most days (or I am getting older) :-)

Thanks,

Jarret

PS - I love this series and hopefully SAP has this bookmarked

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Yes expat solutions are another good example.  Compliance issues like garnishments and FLSA regular rate will be covered in a future blog - Future Payroll Is Fully Compliant :)

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It's all about establishing business rules completely in effective-dated, applicability-expressed, and IP owner-described metadata which can then, along with related text, video, etc. be inherited across and within tenants. One of the really great things about true SaaS, well really "Blooming" SaaS is that it's built this way from the ground up. So, if you have a particularly clever approach to handling garnishments efficiently, your "version" of same can be implemented once, inherited by all of your clients -- but not by others -- and maintained by you in one place as an extension to what the vendor delivers or doesn't. For more on this: http://infullbloom.us/1080/the-future-of-hrm-software-applicabilityeligi...

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Thanks for your perspective Naomi - I agree that is the way forward. I think the interesting part will be to see how much SAP (or any other vendor) decides to invest in providing & maintaining full and effective payroll processes. The payoff for customers is with vendors who provide not only the technology but also the business rules/content/processes.

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