Using Time and Labor with Commitment Accounting

Commitment Accounting

Commitment accounting, part of the Commitment Control feature in PeopleSoft Financials, helps your organization track financial obligations accurately and ensure that planned and actual expenses do not exceed budget.

A combination code (also referred to as a funding source) is a key that defines a valid combination of Standard Configuration ChartFields setup in FMS or HCM. These are the codes that you attach to components of your budget, such as earnings and deductions, to indicate the funding source the system should attribute to each expense. For example, if you account for salaries by department and project, you might attach a ChartField value of Department and Project to the Salaries combination code.

If you're using PeopleSoft Financials with Time and Labor you can integrate commitment accounting functionality with task reporting. This enables Time and Labor to automatically retrieve certain ChartField values when time reporters enter their time.

The Commitment Accounting Interface

To use the commitment accounting functionality with Time and Labor, you must create task templates, task profiles, and task groups that are enabled for the commitment accounting functionality. You then assign each time reporter who works in a department that is set up for commitment accounting functionality to a taskgroup defined for commitment accounting.

When time reporters enter their time, they must provide a combination code, and any other task elements you selected when defining the task template. Time and Labor uses the combination code to retrieve the appropriate ChartField values for the following fields:

• Account

• Alt Acct (alternate account)

• Operating Unit

• Fund Code

• GL Department

• Program Code

• Class Field

• Budget Reference

• Product

• Project ID

• Affiliate

• Fund Affiliate

• Operating Unit Affiliate

• ChartField1

• ChartField2

• ChartField3

When you run the Time Administration process, Time and Labor performs the following validations on time reporters who belong to a commitment accounting taskgroup:

• Verifies that, if a taskgroup was positively reported, the taskgroup is defined for commitment accounting. If the taskgroup is not defined for commitment accounting, the system generates an exception.

• Determines if the time reporter changed departments or if the Use Actuals Distribution flag for the department changed. If either situation occurred, the Time Administration process generates an exception for the time reporter's default taskgroup. You can use the Maintain Time Reporter Data page to change the default taskgroup.

If you send payable time to Payroll for North America for processing, you can distribute costs associated with combination codes and ChartFields back to Project Costing after a pay run.

See PeopleSoft FSCM Project Costing for more details.

Selecting Distribution Options for Commitment Accounting Departments

The Department table, accessed through PeopleSoft Human Resources, controls whether a department participates in commitment accounting and whether Time and Labor data is used when the commitment accounting Actuals Distribution process runs for the department. The Actuals Distribution process—not to be confused with the Labor Distribution process—automatically distributes actual earnings, deductions, and employer taxes calculated by Payroll for North America across combination codes (funding sources) and uses the Pay Message Table to notify users when a department's budget has been exceeded. After you run the Actuals Distribution process you can run a separate process (in Payroll for North America) that creates the general ledger transactions for your PeopleSoft General Ledger system.

To configure the commitment accounting feature so that the Actuals Distribution process takes into account the task information reported through Time and Labor, access the Comm Acctg and EG page for each department that's set up to use the Actuals Distribution process. Select the Use TL Distribution check box and the Use Actuals Distribution check box, if it is not already selected.

When you then run the Actuals Distribution process, it uses the labor-distributed (not labor-diluted) costs as the source of funding. That is, the process creates an entry for each combination code to which time was reported in Time and Labor and distributes the costs in the same ratio that was used for labor distribution.

Use the task reporting pages in Time and Labor to create:

• Task templates that are enabled for commitment accounting.

  To activate commitment accounting, select the Commitment Accounting check box on the Task Template page when you create the task template.

• Task profiles that are enabled for commitment accounting.

  To enable a task profile for commitment accounting, link it to a task template that's defined for commitment accounting by selecting the template in the Task Template ID field on the Task Profile page.

• Taskgroups that are enabled for commitment accounting.

  Select the Commitment Accounting check box on the Taskgroup page when creating the template.

Enrolling Time Reporters in Taskgroups Defined for Commitment Accounting

Use the Create Time Reporter Data page to assign a commitment accounting taskgroup to each time reporter who works in a department that's subject to commitment accounting.