How Payroll Costing Components Integrate with Other Applications

Payroll costing integrates components required to accurately report labor costs and generate journal entries for your payroll run results and payments.

To set up and manage payroll costing, you must have the appropriate duty roles to create components used by payroll costing, such as ledgers that you associate with legal entities, accounting methods and rules, and banking information.

You must create these components for Payroll costing:

• Financial ledgers, calendars, accounting periods, and legal entities

• Subledger accounting methods and rules

• Cash Management bank account and reconciliation information

• Cost allocation key flexfield

• Payroll costing accounts

This figure illustrates how Oracle Fusion Global Payroll works with the applications listed in this table.

Application	Tasks Performed
Oracle Fusion Financials	Maintain chart of accounts, ledgers, accounting periods, and calendars for legal entities
Oracle Fusion Cash Management	Reconcile payments with bank statements
Oracle Fusion Subledger Accounting	Create journal entries for transfer to Oracle Fusion General Ledger

Financials

You create components in Financials that support payroll costing, such as general ledgers, accounting calendars, and accounting periods. For example, you create ledgers in Financials that you later associate with your payrolls.

Note:

If you didn't install Financials, configure your offerings and select the feature choice for the Payroll Costing Options for Maintain Subledger Application and Accounting Method.

When setting up components in Financials:

1. Create an Accounting key flexfield for the chart of accounts.

2. Create value sets for the new structure.

3. Create General Ledger accounts that record payroll costs, such as cost, offset, payroll liability, cash clearing, and cash accounts.

When you create the equivalent accounts in payroll, ensure that you use the same natural account as your General Ledger accounts. For example, you ensure that the Cash account uses the same natural account, so that you can easily reconcile the cash account balance with the bank balance for transactions that occur in the same bank account.

You must have the Financials duty roles required to perform these tasks.

Subledger Accounting

Subledger Accounting generates subledger journals, creates subledger balances, and generates general ledger journals. Payroll supplies predefined data for Subledger Accounting, such as event classes for event entities.

When setting up components that Subledger Accounting uses to create and post accounting entries, you create:

1. Accounting methods

2. Journal line and entry rules

You must have the Subledger Accounting duty roles required to perform these tasks.

Cash Management

Payroll requires bank account information for check/cheque and electronic funds transfer payment types, and optionally for cash and money order payment types. If you plan to cost the payments that you issue, complete the bank, branch, and bank account information for the payment source and specify the General Ledger cash account.

To reconcile your payments, you create reconciliation rules, map transaction types to payment types, create bank statement transaction codes, and specify the General Ledger accounts for cash clearing and reconciliation differences.

You must have the Cash Management duty roles required to perform these tasks.

Payroll Costing Integration with Labor Distribution

You can distribute payroll cost results to the Project Financial Management offering using labor schedules. Use the Import Payroll Costs process to import the payroll costs results after they've been transferred to subledger accounting and properly accounted. View the import status for each payroll cost, using the Process Results Summary and Person Result pages. If costs have been imported to projects but payments haven't been issued, you can run the Reverse Transfer to Subledger Accounting process, and correct the payroll run. The Reverse Transfer to Subledger Accounting process reverses the previous subledger accounting entries. Project financial management users can import the reversed costs into projects after the flow in payroll is complete. You must run the Create Accounting process in Final mode to post both the original and reversed entries to the general ledger. When these steps are complete, you can correct the payroll run.

Payroll Cost Distribution to Projects using Payroll Costing Configuration

In addition to the existing person assignment methods, you can distribute payroll costs to projects using the payroll costing configuration values. Leveraging the results of the payroll costing business rules lets you seamlessly distribute payroll costs to the requisite projects. For example, location is defined in the payroll costing segments depending on the person's work location. You can configure a precedence based set of rules, per location, to distribute each payroll cost to the appropriate project and grant, when applicable.

Payroll Cost Distribution to Projects using Timecards

In addition to the existing person assignment and payroll cost configuration methods, you can distribute payroll costs to projects using the existing time card hours in Project Costing as the distribution basis. Record time on projects using Oracle Fusion Time and Labor, Oracle Fusion Projects, or a third-party source, and calculate the cost of the time transactions using distributed actual payroll costs. This payroll cost distribution method provides you the most accurate costing of the labor effort on a project, allowing for efficient cost control and enhanced financial analysis.

For more information, see Overview of Labor Distribution.

Cost Allocation Key Flexfield

Each Cost Allocation Key Flexfield segment is configured to represent different parts of your account number structure. And, each segment has an associated value set to match your requirements. If you have different requirements, you can configure one flexfield for each of your legislative data groups (LDG).

Tip:

As a best practice, work with your financials department to ensure that you set up your chart of account segments so that you can transfer information between your payroll and general ledger.

Payroll Costing Accounts

After you create the components that support payroll costing in the other applications, create the costing setup information for the different payroll accounts you intend to use, such as the cost, offset, suspense, default, payroll liability, cash clearing, and cash accounts. You enter the account information and any overrides for the different levels of the cost hierarchy.

Note:

Ensure that natural account segments are the same as the natural account specified in the equivalent general ledger accounts.

Load Payroll Costing Data

After you create the components supporting payroll costing in the other applications, you can use HCM Data Loader to load costing data into your costing application. HCM Data Loader is a powerful tool for bulk-loading and maintaining data. The data can be from any source. Refer to the Integrating with HCM guide for details on loading payroll costing.