Element Costing Options
Element costing options are configured when creating or updating an element by using the Costing section. However,when you're setting up costing, you typically specify costing by using Costing of Elements
Decide how you want to cost element eligibility records, such as which type of costing to apply and which input value to cost. And, determine which account numbers you want to specify for the cost account segments, such as the natural account, and which offset account balances the cost account.
Predefined Costing Options
The primary element classification includes predefined costing options which determine whether you can perform these actions:
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Cost an element that belongs to a primary classification
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Include the element in a distribution group
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Charge the cost as a debit or credit
Element Eligibility Records
The type of element you create determines which element eligibility records you cost. When you create an element, you create a base element. Some templates also create a related element to store the calculated results. For example, when the element template creates pretax, involuntary, and voluntary deductions, it also creates a results element. For some countries, the template also creates a results element for earnings elements.
As a guideline, if the element template creates a base and results element:
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Set up element eligibility records for both the base and results element
The base and results element eligibility records can serve different purposes. For example, you might create two records for the base element to limit who is eligible, and one open record for the results, if you cost the element results for your eligible employees the same way.
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Specify costing information for the results element eligibility record
For instance, the template for a garnishment element might generate several processing fee elements. You set up element eligibility records for the base element and all the fee result elements, and then specify costing for all the element eligibility records for the fee result elements. You must cost all the element eligibility records of the results element, even if you set up the same costing information for all the eligibility records.
Input Values to Cost
When you create costing for an element eligibility record, you must indicate which input value to cost, such as the pay value or the tax calculated. The costed input values usually contain the calculated monetary result. Or, specify other input values to cost, such as input values used to report the costs for the number of hours or days, or other units, such as piece work completed or the number of miles driven. The primary output value for the element is typically the one defined. For distributed costing, it must be primary output value.
Costing Type to Select
The Costing Type option determines which levels of the cost hierarchy the application checks when building the account number for each segment of the cost account.
Review this table before you select the costing type.
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Costing Type |
Levels Checked for Costing Details |
When to Use |
Examples |
|---|---|---|---|
|
Costed |
All levels |
Earnings elements at assignment level |
|
|
Distributed |
All levels Calculation for distributed costing starts with the values entered in the element eligibility costing record. The calculation derives values for other segments from the costing values on the associated entries of the distribution group. It generates one costing result for each entry in the distribution group. |
Elements for employer costs and other elements at the payroll relationship level. Elements where you distribute costs based on the costs of earning elements. |
|
|
Fixed Costed |
Element entry, element eligibility, and payroll levels only To enter the cost account segments normally derived from the department, job, or position level, you must set up your Cost Allocation key flexfield structure to enable entry of those segments at the element eligibility level. |
Deduction elements |
|
|
Not Costed |
None The element isn't costed. |
Optionally, record your decision not to cost the run result value for this element |
|
Elements at the Payroll Relationship Level
If you're costing an element at the payroll relationship level that requires attributes, use one of these methods:
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Fixed costing if you charge the payroll relationship level entries to a balance sheet
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Distributed costing if the payroll relationship level entries require department number information
Offset Account Segments to Complete
The Cost Allocation key flexfield determines the segments available for entry for the offset account. You don't have to complete all the segments. If you leave a segment blank, the application builds the account information based on the corresponding segment entered for the cost account.
Priority Account to Use
Use a priority cost account to bypass the standard process and to charge all or a percentage of the cost to a single account combination. The functionality is similar to fixed costing, except that costing at the element entry level doesn't override it. You can use a priority account to allocate a portion of the results to a cost account and the standard costing derives results for the remaining portion.
When you create a priority account you specify the percentage of the cost to charge to the priority account. If a priority account pays for only a portion of the cost, such as a matching grant, specify the percentage covered by the priority account. The account number for the remaining percentage is derived by the standard costing process.