Calculate Cost Distributions

Calculate Payroll process automatically calculates the costs for the payroll run.

Submit separate processes to calculate the cost distributions for retroactive costs, payments, cost adjustments, balance adjustments, and partial period accruals throughout the payroll cycle.

Calculate Retroactive Costing

Costing of payments typically occur after you have calculated and distributed your payments or after you have reconciled your payments against a bank statement. These two types of costing of payments are Costing of Unreconciled Payments and Costing of Reconciled Payments.

The Calculate Retroactive Costing process:

1. Compares the recalculated costs to the original results.

2. Negates original entries that have changed.

3. Creates new entries for the current payroll process.

Calculate Costing of Payments

Costing of payments typically occur after you have calculated and distributed your payments or after you have reconciled your payments against a bank statement. These two types of costing of payments processes are Costing of Unreconciled Payments and Costing of Reconciled Payments.

Both of these processes:

• Allocates costs to the accounts that you set up for each payment source

• Calculates costs for all payments, including voided, canceled, external, unreconciled, and reconciled payments

Costing of Unreconciled Payments process:

• Setup Payroll Liability Account and Cash Account for Payment Source using the Costing of Payment Sources function.

• Prepayments are costed to the Debit Liability Account and the Credit Cash Account.

Costing of Reconciled Payments process:

• Setup Payroll Liability, Cash Clearing Account, and Cash Account for Payment Source using the Costing of Payment Sources function.

• Prepayments are costed to the Debit Liability Account and the Credit Cash Clearing Account.

• After you reconcile in Cash Management and you run the process, it creates a Debit to the Cash Clearing Account and Credit the Cash Account.

Note: Costing of payments uses the setup in the Costing of Payments Sources only and doesn't use the hierarchy or any other levels of the costing.

Adjust Cost for a Person

Manually adjust the amount or percentage of a cost result allocated to one or more accounts. The adjustment creates an offset for the original costing entry.

Cost adjustments are corrective actions that apply only to the costing result for the payroll run, and in reports and calculations based on the payroll run. To use the adjusted information in subsequent payroll runs, update the account information on the costing setup pages.

Costing of Balance Adjustment

Calculate the costing of balance adjustments after you complete the balance adjustment or later in the accounting cycle.

Costing balance adjustments ensures that later processes or reports use the correct costing. You select an option to cost a balance adjustment when you process the adjustment on the Adjust Individual Balances. After you complete the adjustment, you submit the Costing of Balance Adjustment process to cost the adjustment.

To prevent payroll costs from posting to the suspense account when distribution group entries aren't available, you can override the costing type of a distributed element during the Costing of Balance Adjustment process. Use the Payroll Process Configuration to control the costing of distributed element with the Use costed option for distributed balance adjustments parameter.

Default value is N. In order to stop balance adjustment costs from being posted to the suspense account when distribution group entries aren't available, create the parameter, and set the default value to Y. When the parameter is set to Y and the distribution group entries aren't available, this process uses the costing hierarchy applicable to the employment level of the element to cost the balance adjustment results. If the parameter is set to N and the distribution group entries aren't available, this process sends the balance adjustment results to the suspense account.

Note: The profile option doesn't affect the balance adjustment results costing when the distribution group entries are available.

Calculate Partial Period Accruals

Submit the Calculate Partial Period Accruals process to use the costs from a previous payroll period as the basis for the estimates of the current accounting period. You typically estimate costs with partial period accruals when:

• Your payroll period overlaps two accounting periods.

• You require an estimate of costing results to close an accounting period.

When you run the Transfer to Subledger Accounting process, the process creates Partial Period Accrual and Partial Period Accrual Reversal transactions as needed. And, then when you calculate the actual costs for the full payroll period, the actual cost results offset the partial period accrual calculations.

Note: In the Calculate Partial period Accruals process parameters, use the Payroll Relationship Group to limit the estimates to a specific group of employees, and the Element Group to limit the estimates to a specific group of elements.

Costing of Unreconciled and Voided Payments

Calculate Costing of Payments process creates the payment costing results when a payment is unreconciled in cash management and later voided in payroll. Costing entries are created with a debit to the cash account and a credit to the cash clearing account, which reverses the costing of payment results originally created after the reconciliation in cash management. Costing entries are also created with a debit to the cash clearing account and a credit to the liability account that reverses the costing of payment results for the original pre-payment costs.

If the payment is processed again for the voided payment, the costing payment results are created as normal.