Payroll Audit/Reconciliation Report

Description

Purpose
The purpose of the Payroll Audit/Reconciliation Report is twofold:
To ensure the integrity of the accumulated year-to-date payroll and/orwage type amounts within the payroll cluster results, and
To reconcile the payroll cluster results with the reports producedduring final payroll processing, including those results posted toThird-Party Remittance and mySAP Financials.
SAP recommends that you use this report as part of the normal balancingand reconciliation process in your payroll department. Specifically, werecommend that you perform the report either after each regular andoff-cycle payroll run or on a periodic basis (semi-monthly, monthly, orquarterly) to validate that Financial Accounting and Third-PartyRemittance have been updated correctly. The Payroll Audit/ReconciliationReport also plays an essential role during Year End Reporting byensuring the accuracy of employees' annual incomes and deductions.Nonetheless, although the report may appear to be most useful duringYear End Reporting, we strongly recommend that you execute the reportat least once per quarter.
The output of the Payroll Audit/Reconciliation Report is meant toreflect actual payroll results as closely as possible. It is not theintent of this report to duplicate the logic of the FI posting program,nor of third-party remittance functionality, nor of the Payroll Driver(RPCALCK0). Therefore, amounts reported by the PayrollAudit/Reconciliation Report will not necessarily match the results ofother reporting programs. Indeed, the fundamental purpose of thereport is to enable users to discover such discrepancies, so that theymay ultimately resolve them.

Features
The following list highlights the features of the PayrollAudit/Reconciliation Report in the version delivered for Year End:

• The report is driven by pay date.


• Reconciliation can be performed for regular and/or off-cycle payroll
runs, including voided and reversed payroll results. These payroll runscan be grouped together or selected individually for optimalperformance.

• Reconciliation can be performed expressly for year-to-date payroll
and/or wage type amounts.

• Reconciliation can be performed for adjustments that consist of
retroactive changes to employee payroll results triggered either bymaster data changes or by the Adjustments Workbench. For cross-yearretroactive changes, details of inflow and outflow activities areprovided.

• Standard selection criteria allow reconciliation to be performed by
date, time interval, payroll period, and personnel number range, as wellas by other selections.

• Terminated employees are selected automatically.


• Pre-configured wage type applications are provided for a variety of
reconciliation scenarios. These applications include:
GL Account reconciliation
Third-party remittance vendor reconciliation (e.g. for tax authorities,garnishment recipients and benefits providers)
Outstanding claims reporting
Net reversals reporting
Year End Reporting reconciliation (T4, T4A, Relevé 1, Relevé 2)

• Ready-to-run standard report variants enable a high degree of precision
to be attained when reporting with pre-configured wage typeapplications.

• In addition to the pre-configured wage type applications, user-defined
wage types are supported for ad-hoc reporting.

• Flexible output options consist of:

Summary and detailed tax audit views of the total original andadjustment earnings with a breakdown by tax company elements (BusinessNumber, work area).
Summary and detailed company views of the total original and adjustmentearnings, with breakdowns by financial elements (company code, payrollarea).

Configuration
Prior to running the Audit/Reconciliation Report, you must modify thepre-configured wage type applications to suit the reconciliation needsof your enterprise. During configuration, you review the structure ofyour wage type applications, which represent a collection of wage types(grouped into "wage type buckets") that reflect a specific area to applythe report. This configuration is carried out in Customizing forPayroll Canada (PY-CA) under:
Reporting and Statistics -> Audit Reporting ->
Maintain wage type applications.
This step consists of four subsidiary levels, which are explained indetail below.
RESET N1
Copying, creating, or modifying wage type applications
In this step, you can copy standard wage type applications to createcustomer-specific wage type applications. This step also enables you tocreate entirely new wage type applications. Finally, you can modify thestandard wage type applications found here to suit the needs of yourenterprise. In any case, the Audit/Reconciliation Report can later beexecuted under any of these wage type applications to perform specificreconciliation tasks.
Example
In the standard system, one of the pre-configured wage type applicationsis T402, which covers payroll reconciliation for the T4 for taxyear 2002. The Year End Reporting utility (RPCYERK0), which processesthe T4, uses this same application. By executing theAudit/Reconciliation Report under wage type application T402, you canreconcile the amounts reported on the T4 with the amounts that wereactually paid to employees. Therefore, depending upon the needs of yourenterprise, you can modify wage type application T402, copy it to anequivalent in the customer name range, or create an entirely new wagetype application for the T4.
Note
In most cases, it is not necessary to perform additional configurationhere, although it is at your discretion to do so. In fact, you shouldavoid re-configuring wage type applications to influenceaudit/reconciliation reporting if the affected wage type applicationsare also used for other reports, such as Year End Reporting or PD7AReporting. Consequently, only wage type applications that have beencreated expressly for audit/reconciliation reporting purposes should bemodified to meet the reconciliation needs of your enterprise. Step 4explains how you can define whether a wage type application is to beused for the Payroll Audit/Reconciliation Report alone or for otherreporting applications, too.
Reviewing wage type buckets
In this step, you review the wage type cumulation groups (also known aswage type "buckets") that are assigned to the wage type applications inyour system. Wage type cumulation groups or "buckets" representsummations of several individual wage types. In general, a wage typebucket contains the total of the amounts that have accumulated inseveral wage types.
Example
In the standard system, wage type application T402 contains anumber of individual wage type buckets. Among these wage type buckets isB14, which contains all of the wage types related to employmentincome before deductions. The sum of all amounts contained in wage typebucket B14 will ultimately be reported on Box 14 of the T4. This stepcontains a number of other standard wage type buckets, each of whichcorrespond to individual boxes and footnotes on the T4.
Caution
As a general rule, we recommend that you do not perform additionalconfiguration here. The wage type buckets that are delivered with thestandard system have been designed to meet the reporting requirements offederal and provincial tax authorities. Modification of these wagetype buckets may cause both reconciliation and reporting errors toarise. We do, however, recommend that you review the assignment ofwage type buckets to wage type applications, so that you can familiarizeyourself with the reconciliation process in SAP Payroll.
Performing wage type assignment
In this step, you perform the majority of the configuration that isnecessary to run the reconciliation process in SAP Payroll.Specifically, you assign all of the wage types in your system to theappropriate wage type bucket(s), then define their validity periods.
Example
In the standard system, wage type application T402 contains wagetype bucket B14, which, in turn, contains wage types /102(Regular taxable income) and /103 (Non-per. taxable payments). Inthis final step of configuration, you would explicitly assign anyadditional wage types whose amounts should be reported in Box 14 of theT4 to wage type bucket B14 of wage type application T402.
Performing report ID assignment
As mentioned above under Step 1, wage type applications can be shared byseveral reports. For this reason, every wage type application must beassigned to report IDs to define the report(s) that are permittedto process the wage types defined in wage type applications.
Example
Wage type application T402 is used by the Year End Reporting utility; assuch, it should only be customized to meet the reportingrequirements of your enterprise at Year End. Wage type application T402is assigned to report ID YERG (Year End Reporting), an assignmentthat identifies that the wage type application is used by the Year EndReporting utility. However, you may also define this wage typeapplication to be permissible for use by the PayrollAudit/Reconciliation Report. To indicate that a wage type applicationcan be used by the Payroll Audit/Reconciliation Report, you must assignreport ID RCON to that application. By assigning report ID RCONto wage type application T402, you define that this wage typeapplication can also be used for reconciliation purposes.

Applications
As delivered, the Payroll Audit/Reconciliation Report features severalpre-configured wage type applications that enable reconciliation to takeplace between payroll and system reporting applications. Theseapplications can be either used as delivered or modified to meet thespecific reconciliation requirements of your enterprise.


• FICO - GL Account Reconciliation

This application reflects those GL accounts that are attached to wagetypes in financial posting configuration. The output of theAudit/Reconciliation Report under this application can be used toreconcile payroll with GL account balances in the FI module.

• CLMS - Claims Reporting

This application is used to identify employees who have outstandingclaims (represented by wage type /561 amounts) within their payrollresults.

• NETR - Net Reversals Reporting

This application is used to identify employees who have net payrollreversals (represented by amounts in wage types /568, /569, /570, /571)within their payroll results.

• AUDT - Audit Report: Default

This default wage type application is used to reconcile tax remittanceswith payroll. The tax wage types are grouped into tax reporting areas.
Examples
AITB,,,,Federal taxable income (/102, /103, /104, /105, /112,/113)
AITX,,,,Federal income tax (/301, /312, /313)
AQTB,,Quebec taxable income (/152, /153, /154, 158, /160, 162,/163)
AQTX,,Quebec income tax (/351, /362, /363)

• TAUD - General Tax Audit Report

This application is similar to wage type application AUDT, except thatthe tax wage types are reported individually, rather than in groups.

• THPN - Third Party Remittance Vendor Reconciliation

This application is used to evaluate remittances that are submitted todifferent vendors. The vendors defined in application THPN are Benefits(but not Pension) and Garnishments. Since the corresponding wage typesare not added to table TCRT, the output of the Audit/ReconciliationReport for table TCRT under applications AUDT and TAUD will not makesense. However, using application THPN, the output of the report can beused to balance against the vendor accounts in Accounts Payable.

• TPNT - Third Party Remittance Vendor Reconciliation (TCRT)

This application is similar to application THPN, except that it isdefined for Tax (Federal and Provincial), Workers' Compensation, HealthTax, Pension Benefits and Miscellaneous (Union Dues and CharitableDonations).
In addition to the wage type applications listed above, the followingstandard wage type applications are delivered for Year End Reporting,but are also suitable for reconciliation purposes:
R100 - Relevé 1: Definitions for tax year 2000
R101 - Relevé 1: Definitions for tax year 2001
R102 - Relevé 1: Definitions for tax year 2002
R103 - Relevé 1: Definitions for tax year 2003
R104 - Relevé 1: Definitions for tax year 2004
R105 - Relevé 1: Definitions for tax year 2005
R199 - Relevé 1: Definitions for tax year 1999
R200 - Relevé 2: Definitions for tax year 2000
R201 - Relevé 2: Definitions for tax year 2001
R202 - Relevé 2: Definitions for tax year 2002
R203 - Relevé 2: Definitions for tax year 2003
R204 - Relevé 2: Definitions for tax year 2004
R205 - Relevé 2: Definitions for tax year 2005
R299 - Relevé 2: Definitions for tax year 1999
T400 - T4: Definitions for tax year 2000
T401 - T4: Definitions for tax year 2001
T402 - T4: Definitions for tax year 2002
T403 - T4: Definitions for tax year 2003
T404 - T4: Definitions for tax year 2004
T405 - T4: Definitions for tax year 2005
T499 - T4: Definitions for tax year 1999
TA00 - T4A: Definitions for tax year 2000
TA01 - T4A: Definitions for tax year 2001
TA02 - T4A: Definitions for tax year 2002
TA03 - T4A: Definitions for tax year 2003
TA04 - T4A: Definitions for tax year 2004
TA05 - T4A: Definitions for tax year 2005
TA99 - T4A: Definitions for tax year 1999

Selection criteria
The Payroll Audit/Reconciliation Report allows for a broad range ofselection criteria to enable a high degree of precision in defining thescope of the report and its output. To take full advantage of thefunctionality offered by this report, we recommend that you alwaysdefine the report selection options as narrowly as possible.


• Standard selection criteria

The Payroll Audit/Reconciliation Report features the same standardselection criteria found in other reports, including selection bydate, by payroll period, by personnel number and by payroll area. Tofurther restrict standard selection criteria before executing thisreport, choose Further selections from the top of the selectionscreen.

• Wage type selection

Under Wage type application, enter the four-character designationof the wage type application to be evaluated by the PayrollAudit/Reconciliation Report. As explained above, the standard systemprovides several pre-configured wage type applications for the purposeof reconciliation.
Example
To perform reconciliation for all wage types posted to the FinancialAccounting component, specify wage type application FICO beforeexecuting the report. Alternatively, you may select Specific wagetype(s) to perform ad-hoc reporting for wage types of your choosing.

• Overview list selection

In this section, you define whether you are reconciling payroll resultswith tax results, FI results, or both. The report displays a conciselist of the total amounts within the payroll results per applicable wagetype or wage type bucket, without the employees or pay period details.
The following output options are available:

• Audit overview

This overview represents a summary of total original earnings for agiven time interval or payroll period with a breakdown by taxcompany elements (Business Number, work area). It shows totalyear-to-date earnings before the evaluation interval/pay period (intable TCRT), earnings during the evaluation interval/pay period (intable RT), inflow and outflow activities triggered by cross-yearretroactive changes to the payroll past (in table TAXI), and totalyear-to-date earnings after the evaluation interval/pay period (in tableTCRT). Choose this view if you want the report to reconcile payrollresults with the tax results.

• Company overview

This overview represents a summary of total original earnings for agiven time interval or payroll period with a breakdown by financialelements (company code, payroll area). It shows all earnings duringthe evaluation interval/pay period (in table RT) as well as theyear-to-date earnings before and after the evaluation interval/payperiod (in table CRT), where applicable. Choose this view if you wantthe report to reconcile payroll results with the FI results.
When earned view
This selection provides the year-to-date when-earned accumulation intable CRT with calendar type Y. This is the default selection.
When paid view
This selection provides the year-to-date when-paid accumulation in tableCRT with calendar type K.
Cost centre view
This selection provides a breakdown of the company data by costdistribution units defined in table C0. The total of all costdistributions must add up to 100%. If there is a discrepancy, theremaining percentage is allocated to the default cost centre in theOrganizational Assignment infotype (0001).

• Detail list selection (optional)

In this section, you specify further details for the report to displayat the employee level. These selections, however, are optional, sincethey can considerably reduce the performance of the PayrollAudit/Reconciliation Report. You should not select these options if youare performing reconciliation for a large number of employees.
Employee details
This option displays detailed breakdowns of the payroll results peremployee, per wage type bucket.
Wage type bucket details
This option displays detailed breakdowns of the payroll results peremployee, per wage type bucket, and per wage type.
Details per pay date
This option displays detailed breakdowns of the payroll results peremployee, per wage type bucket, and per pay date. If the Wage typebucket details option is selected, each wage type is broken down bypay dates.
Details per retrocalculation
This option can only be selected together with the Details per paydate option. It displays detailed breakdowns of the payroll resultsper employee, per wage type bucket, and per pay period, includingin-period and for-period information. If the Wage type bucketdetails option is selected, each wage type is broken down byin-period and for-period details.
YTD check / list of YTD errors
This option displays a year-to-date error list. It restricts the outputto those employees with balance differences in their results tofacilitate analysis and resolution of potential payroll errors.

• Payroll result selection

This section enables you to restrict the selection of payroll results.By making the corresponding selection, you can instruct the report toprocess only the last payroll result - for example, if you would like tocheck outstanding claim wage types. You may also instruct the report toprocess voided results only, or to process only off-cycle results. Wheninstructing the system to process only off-cycle payrolls, you canfurther restrict the selection to just a single run or multiple runswith specific payroll types, such as adjustment runs or bonus runs.
Please note that the Select last result only option is supportedfor time interval evaluation only, since it does not apply to perpayroll period evaluation.

• Correction runs selection

This section is supported for time interval evaluation only. Inthis section, you specify how the Payroll Audit/Reconciliation Reportwill take retrocalculations into consideration, including adjustmentsand corrections that took place retroactively after the evaluationinterval. Examples of these include year-end adjustments, which eithercorrect last year's payroll results or amend previous year-endadjustments. The following parameters are supported:
As-of-date (start from date)
Use this parameter to exclude previous adjustments that took place up toand including the specified date.
As-of-date (up to date)
Use this parameter to include current adjustments that took place up toand including the specified date.
In this section, the following three scenarios are possible:
Neither the start from date nor the up to date arespecified.
In this case, no adjustments or corrections will be considered.
Only the up to date is specified.
In this case, all current adjustments with pay dates up to and includingthe specified up to date will be considered.
Both the start from date and the up to date are specified.
In this case, all adjustments and corrections with pay dates after thestart from date and up to and including the up to date will beconsidered.
In addition to the above as-of-dates, an additional option exists toselect correction runs only. If this option is selected, the output ofthe Payroll Audit/Reconciliation Report will display only adjustmentsand corrections that satisfy the as-of-date conditions. All otherpayroll results within the evaluation interval will be suppressed.
The pre-configured variants SAP_T4 and SAP_T4_AMEND, whichare delivered by SAP, provide examples for the correct use ofas-of-dates.
To ensure optimal performance, we recommend that you narrow the scope ofthe report selection to specific audit/reconciliation needs.Furthermore, we recommend that you always select an appropriateOverview list selection when executing the PayrollAudit/Reconciliation Report for an entire reporting unit. Doing so willalso enable a reconciliation of totals with other system applications.
If the respective totals do not reconcile, you may use the Detaillist selection to enable more precise analysis of the differencesbetween the respective amounts. However, it is essential that yourestrict your selection to a small number of employees when obtainingdetailed information at the employee and wage type levels. Since theoutput of this report may constitute an immense amount of data(especially if employee data is displayed), evaluating large numbersof employees may lead to performance problems and lengthy processingperiods.
To enable users to take full advantage of the functionality offered bythe Payroll Audit/Reconciliation Report, several ready-to-run variantsare delivered with the standard system. These variants include:
SAP_FICO,,,,,,Positing to FI/CO reconciliation
SAP_CLMS,,,,,,Uncleared claims
SAP_NETR,,,,,,Reversal of net payments
SAP_THPN,,,,,,Third-party remittances (Non-tax wage types)
SAP_THPT,,,,,,Third-party remittances (Tax wage types)
SAP_TAUD,,,,,,General tax audit
SAP_T4,,,,,,Year End: T4
SAP_T4_AMEND,,,,Year End: Amended T4
SAP_REL1,,,,,,Year End: Relevé 1
SAP_REL1_AMEND,,Year End: Amended Relevé 1