Shingle Creek Resort, FL

1
Payroll Costing Get it Right the First Time

• Oracle Payroll Costing
• Bill Daley, BOSS Corporation

2
8

• Bill Daley Practice Director and Project
  Manager BOSS Corporation - 18 years of accounting
  and IT management experience, with 8 years
  experience in managing and implementing and
  upgrading the Oracle Applications

3
AGENDA

• We will discuss key steps for Payroll Costing
• Planning
• Defining Costing Processes
• Implementing a logical Payroll Costing
• Schedule and Timing

4
Planning

• Planning
• Stakeholders - getting key stakeholders involved
• Communications
• Method

5
Planning

• Stakeholders

6
Stakeholder Involvement

• Stakeholder Involvement is key to success
• Create the infrastructure to support the costing
  activity need the contributions from
• Payroll
• Accounting
• Treasury
• Executives
• Get involvement in the beginning.

7
Stakeholder Involvement

• Stakeholder Involvement is key to the success of
  costing (continued)
• Communicate Often!
• Communicate.
• Who needs what information?
• When will they need it?
• How will it be given and by whom?
• What is the Payroll Schedule?

8
Stakeholder Involvement

• Communicate
• Manage communication outputs
• Issue logs
• Change management
• Corrective Actions
• Information distribution in timely manner

9
Critical success factors with Stakeholders

• Success Factors
• Clear understanding of the business objectives.
• Reasonable expectations that are understood by
  the stakeholders.
• Acceptable transition and contingency plan.
• Effective participation by business management.
• Committed user involvement and ownership.
• Successful performance of acceptance testing.
• Active listening and timely response.
• Evidence that all employees understand their new
  processes.
• Objectives and expectations, as well as the
  importance of their contribution in the change
  effort.

10
Planning

• Method

11
Planning Method

• Planning - Road map to getting something done.
• Setting Clear Objectives
• Making Commitments
• So we dont miss something important
• So we dont dwell on what we dont know to be
  unimportant
• Common place to identify and document forward
  progress and decisions.
• Representative best-practices.

12
Planning Method

• Create a high level costing process for the
  integration between payroll and accounting.
• Earnings
• Deductions
• Payments
• Refine tasks down to each process and
  transaction.
• Specific Instructions
• What to do
• Why it should be done Internal? Regulatory?
• How to do it
• Record Assumptions
• Make sure that each process is evaluated by all
  the stakeholders.

13
Planning Method

• Create an efficient integration between payroll
  and accounting systems.
• A good test during the payroll and cost
  accounting processes is to walk through the core
  transactions and assess whether they will be
  sufficient to meet the organizations needs.

14
Planning Method

• Reevaluate the need for the structures and
  processes you initially might exclude.
• Re-plan based on new information.
• Clear vision of up and coming activities.
• Mergers
• Acquisitions
• Year end

15
Defining
16
Requirements Definition

• Determine the current and future business costing
  need.
• Identify costing events
• Describe the steps taken to capture the costing
  events and accounting related to the event.
• Conduct baseline of current costing
• Construct future business costing process
• Create the infrastructure to support the costing
  activity and involve all stakeholders.

17
Why Describe Current Process?

• Hard to transition to a new costing process if
  current state is unknown.
• Modeling catches errors early.
• Modeling helps specify data requirements.

18
Describe Future Costing Process

• Identify the target costing process.
• Streamline the costing process.
• Take advantage of newer technology in process.
• Serve as the basis for downstream activities.

19
Requirements Mapping and Analysis

• Collect Costing Information and Requirements.
• Map costing requirements to application
  functionality.
• Develop model for each costing process.
• Map costing models to applications and identify
  any gaps.

20
Requirements Mapping and Analysis

• If you cant find a keystroke by keystroke, debit
  to credit definition of the elementary key
  costing function/process it causes a gap.
• Resolve gaps.
• Records the hierarchies, elements, codes, mapping
  and other set up for each costing process.
• Develop a transition strategy.

21
Tools

• Helpful Tools
• Current Accounting
• Payroll Registers, Journals, Payroll Gross to Net
  Reports
• Gross to Net Reporting
• Contains Elements
• Oracle Report reflects other data
• Checks,
• Garnishments
• Direct deposits
• Remember to include Payroll Adjustments and their
  effects on the costing transactions.
• Requirements definition used to create test
  plans.

22
Implementing a Logical Payroll Costing
23
Labor Costs in Oracle HRMS

• The Costing process allocates payroll run results
  to cost segments.
• The Transfer to the General Ledger process
  transfers cost information to Oracle General
  Ledger interface tables.

24
Labor Costs in Oracle HRMS

• At the installation - setting up segments of the
  Cost Allocation key flexfield to determine the
  windows in which users can select cost codes.
• If you do not have Oracle General Ledger, you
  must consider how to relate information on labor
  costs entered in Oracle Human Resources to your
  financial systems.
• Oracle Costing you use a postpayroll run process
  to accumulate payroll costs.
• For Oracle General Ledger you can map the
  segments of the Cost Allocation key flexfield to
  the corresponding segments of the General Ledger
  Accounting flexfield.

25
Define Cost Allocation Flexfield Segments

• Define a structure for your Cost Allocation
  Flexfield which contains the segments you want to
  use for your Business Group. You will use this
  structure to enter your payroll costing details
  in Oracle HRMS.
• You use Segment Qualifiers to control the level
  at which costing information can be entered to
  the system. Each Qualifier determines the level
  at which costing information can be entered.

26
Define Cost Allocation Flexfield Segments
There are six possible choices for each segment.
27
Costing Entry Points
The different points at which you can make
entries to segments of the Cost Allocation
flexfield exist as related entry levels. Ranging
from top to bottom, the five entry levels are
these
28
Costing Tips

• Keep it simple.
• Document the processes.
• Remember the hierarchy will determine the
  population of the segments and will overwrite
  existing values.
• Watch out for second assignments as they can
  carry first assignment values (GRE information).
• Develop Security and Cross Validations.
• Security in GL
• Cross Validation - Dual set up in GL and Payroll

29
Involvement

• Test! - Unit Test
• Test!! - Integration Test
• Test!!! Volume Test
• And Test Again! All components.
• Review results with all stakeholders.

30
Costing Schedule

• Payroll Timing and Transition

31
Payroll of B1 Hourly 2007 Start Date of Period
is 1/27/2007 and End Date is 2/9/2007
32
Payroll Department Processes the Payroll 2/9/2007
to 2/13/2007 The payroll run process includes
time entry and calculation
33
Payroll Checks and Deposits are written Payroll
Costing is run and Journal Entry is Created
34
(No Transcript)
35
(No Transcript)
36
Payroll of B1 Hourly 2007 Start Date of Period
is 2/10/2007 and End Date is 2/23/2007
37
(No Transcript)
38
Once the Oracle Costing Process is Run any
subsequent Manual Checks activity will be
processed in the next costing process run
Period end date of Payroll Period
When the Oracle Costing Process is Run the Manual
Checks from the last costing process through the
current date will be included in the costing
process run
The Oracle Costing and Journal export is usually
run Thursday night prior to the Check Date of the
Payroll
Once the Oracle Costing Process is Run any
subsequent Manual Checks activity will be
processed in the next costing process run
39
Wrap Up

• Stakeholder Involvement is key to success.
• Planning - Road map to getting something done.
• Definition.
• Test!!!!
• Schedule.
• Review results with all stakeholders.
• Communicate will all Stakeholders.

40
Wrap-up
Bill Daley 610-659-8526 bill.daley_at_bosscorporatio
n.com www.bosscorporation.com