10 most critical factors of SAP payroll: Data Integrity

In last week’s blog post, we introduced our blog series about the 10 most critical factors of SAP payroll. This week, we will cover the first critical factor: Data Integrity.

Data integrity in payroll is a fundamental requirement due to the sensitive nature of what is being accomplished. Payroll is processed at a point in time with the expectation that incoming data is factual and complete.

The most straight forward and probably the best definition is from Thomas McRae in The Impact of Computers on Accounting, 1964. “Garbage in, garbage out.”

What are causes of poor data integrity?

• Integration points
• Configuration, customizations, system updates
• Inadequate testing
• Incomplete process knowledge or poorly implemented processes

When poor data integrity occurs, there are several possible outcomes:

• Employees do not trust payroll and examine their remuneration statement
• Employees do not receive their expected pay or no pay at all
• Employees lose faith in the company and move on
• Company loses money due to overpayments
• Off-cycle adjustments are commonplace

Knowing the stakes are high and that employees don’t ever seem to forget that an error on their check occurred, what can be done to improve data integrity?

1. Develop metrics that will identify areas that cause the most errors. Do we have issues with:
   • Employee profile maintenance and time entry
   • Manager time approval
   • HR maintenance
   • System updates or outages
   • New or changing configuration and customization
   • Support personnel
2. Determine an acceptable rate of failure
   • 100% accuracy is impractical, but how close can we get
   • The rate of failure should decrease over time
3. Improve processes
   • Develop a strong change management program so that new or updated functionality is fully understood by those impacted
   • Reminders through company email can be generated by looking at time entry on a daily or weekly basis and comparing against the employee schedule
   • The payroll process may require opening windows of time for HR to make updates
   • Effectively train new employees and continually train existing employees
4. Implement proactive audits
   • Simple to deploy, SAP delivered, before payroll, quick return
     • Verify employees are not missing a cost center using the Flexible Employee Data report: Tcode S_AHR_61016362
     • Check for locked employees prior to running payroll using report: Tcode PC00_M44_UCPL
     • Utilize the Wage Type Reporter variance from period to period functionality: Tcode S_PH9_46000172
   • Moderate to deploy, configuration required, before payroll when added to time evaluation or during payroll in its schema, quick return
     • Custom time and payroll rules to validate info type data: Tcode PE01 for schemas and PE02 for rules
     • Does Infotype 0001 have a cost center?
   • More difficult to deploy,ABAP, requires detailed analysis of all scenarios, before payroll, worth the effort if done right
     • CATS user exits: CATS0001-CATS0012
     • Infotype user exits and BAdIs: Enhancement PBAS0001 and BAdI HRPAD00INFTY

Please join us for our next blog post where we will discuss how Integration is another critical factor and how it relates to SAP payroll.

Here at Integrated Consulting Group, we specialize in the design, development, and customization of SAP Human Capital Management business software for leading edge North American companies with global reach. Have any questions about SAP? Feel free to contact us via the contact page of our site, or on Twitter or LinkedIn.