To understand Payroll Costing concept, I would first discuss the Costing Allocation Key Flex field, during the business group definition it is being created and map with Cost Allocation KFF with following segments normally
• Cost Centre
• Natural Account
During the configuration of Cost Allocation KFF the most important concept is to set the Flex Field Qualifiers at each segment level, we have the five levels available for each segment i.e.
• Element Link
• Element Entry
For the Company segment following setting can be applied
This setting will explain that the Company Account will be input at Payroll level (debit information) and balancing information will goes into credit information and on every segment level it is mandatory to define Balancing.
For the Cost Centre segment, I can set the following setting
This setting will explain that the Cost Centre Account information will be input at Payroll and Organization level (debit information) and balancing information will goes into credit information and on every segment level it is mandatory to define Balancing.
For the Natural Account segment, I can choose the following setting
Element Link Checked
Element Entry Checked
This setting will explain that the Natural Account information will be input at following levels
Element Link, Assignment, Element Entry level information will directly hit the debit account and balancing information will goes into credit Account and on every segment level it is mandatory to define Balancing.
After this step we map Cost Allocation KFF Segments with GL Flex field Segments
In Oracle payroll, Costing information can be input at five levels
• Element Link
• Element Entry
Now based on the above configuration, the following codes will be define at Payroll level
Cost Centre 000
For example if Business Group has four Departments i.e. Finance, HR, IT, Operations then on every organization the following information will be define at the Organization level
Finance Cost Centre 001
HR Cost Centre 002
IT Cost Centre 003
Operations Cost Centre 004
Note: Here the Cost Centre information will override with information available on Payroll Level
Payroll Level 000
Finance Org Level 001
So the system will pick the value of 001 instead of 000.
Finally following information need to define at every Element Link level, for example if Business Group has only three elements links then Natural Account need to define at every link
Basic Salary 2345
Housing Allowance 2346
Transport Allowance 2347
For Assignment and Element Entry levels, the Natural Accounts codes will not be defined at these levels , but if need to override the link level information then the Natural Account can be enter at assignment or Entry Level. Following the is Override information, if we defined all segment on every level then
The following Entry will be hit to GL
Because Element Entry Level will override all the above mention levels but this is only for example, if we see this table in our scenario then the value will be shown like this
In this case the following Entry will hit to GL accounts
Now based on the above configuration the Cost Breakdown report will be shown like this
Cost Summary Breakdown Report– Cost Centre wide
Cost Centre Code Cost Centre Amount
001 Finance xxxx
002 HR xxxx
003 IT xxxx
004 Operation xxxx
Cost Breakdown Report– Element wide.
Muzzamil Khan ( Team Lead HRMS)