1. Objective and Scope

1.1. Objective of this Operation

This procedure explains how to handle the personal costs in Spain. 
Based on the data in HR SAP system, on a monthly basis a payroll posting by company is generated via ALE from HR SAP systems to FI SAP system. This posting includes the payroll expenses paid but also the smoothing expenses of other payroll payments done in a yearly basis (like Extra payment of June and November, end of year premium, bonus …etc.). Additionally, this posting includes also the booking of other expenses related to personnel costs like: pension costs and insurance life premiums.
In this monthly FI posting the expenses are allocated directly to the cost center of the employee with his own primary cost elements. 

This procedure describe the actions to be done on a recurrent basis in order to assess the accuracy of the Financial Statements at company level.

These actions are mainly focus on:

• Check if the posting has been correctly posted;
• Split the information posted document in different assignments, to allow a better follow up of the personal cost operations and provisions;
• Check that the amounts of balance sheet accounts related to provisions in FI are equal with the amounts from HR;
• Clearing and checking the B/S payroll account, 2455000000 to follow up the payments done and the payroll posting amount.

1.2. Scope

This procedure is valid for Spanish company Solvay Servicios

2. Definitions

See Finance Glossary:

• ERP
• FI
• GL
• HR

3. Tasks description

3.1. I perform the personal costs operations

On the 20^th of each month, you will check in AODOCS the HR - Finance files details. These files will allow the consistency check between HR and FI. 
The files naming follow the same criteria each month, the month and the year the information refers to. This way, the information you may receive for use along the procedure are:

• ES Reconciliation HR-FI_MMYYYY", that will be the basis of your analysis;
• SOLES_E1_Prov.Acumuladas_MMYYYY;
• SOLES_E1 POSTING.

Attached to this procedure is also one excel file ES Personal Costs - Template that will help you to perform all the steps, calculations and postings required and explained through the procedure.

3.1.1.I check the payroll posting

1^st Step

Confirm that the HR posting is correctly booked in the company. To do it, check that the amounts at account level on the HR Excel Payroll file match with the posting done in SAP following the steps hereafter:

• Open the file ES Personal Costs - Template

Open the excel file named "ES Reconciliation HR-FI_MMYYYY" 

Once this file is open, copy the values from line 2 column B to H and paste them to the file ES Personal Costs - Template (sheet E1_Account List) (in column B, line 2) without performing any change. 

• Run the macro created in the file by clicking on the button "Payroll".
  This macro will perform the following actions:

1.  
1. Sort the excel file by account and adjust the header text;
2. Create new columns to split the account number from the text of the account, the cost object number from the cost object name and the wage type number from it's description;
3. It is also creating a new column and performing the addition of column debit and column credit.
4. Update the pivot tables/formulas used to perform the comparison between SAP and the HR file and the creation of the posting file.

Once the macro is finished, you might obtain a file like: 

2^nd Step

Go to SAP, run transaction FB03, click on "Document List" and insert the variant 6397 PAYROLL that is created to search in the system for all the postings done for:

• Company Code: 6397
• Posting Date: Current Period (01/MM/YY to 31/MM/YY)
• Reference Transaction: HRPAY 

Execute it and you will obtain the list of payroll postings done in the period: 

You should double click on it to get the document overview. Then, to check the total amounts at account level change the layout to /ES PAYROLL:

3^rd Step

Copy from FB03 the information related to the accounts and the amounts posted. 

Paste it in the file ES Personal Costs - Template (sheet Step 2.1.1 - grey cells). This will allow you to compare step 1 (columns Debit-t and Credit –T) with step 2 at account level: 

In case of differences (check different from zero):

• If you have received more files than usual, remember that two postings were done so you must add the accounts/amounts of the second posting also;
• If for each account the amount is not the same in both list advise HR team, it should mean that the Excel file is wrong;
• If the accounts with difference are: 2455003230, 2455000009, 2455005501 or 2322010000 only after Local feedback you can continue with the procedure, otherwise you can proceed just informing in the end the accounts with difference;
• If for all accounts the amount is the same, the check is OK and no communication is needed. 

3.1.2. I perform the posting to split the data using the template

In order to do a better follow up of some personal cost operations, in some defined accounts, is necessary to split in several lines the amount posted in the general ledgers according to the HR details. 

The split will be done based on the file "ES Reconciliation HR-FI_MMYYYY" sent by HR department once the HR closing is performed for the following accounts: 

• 2455003230 Payroll-end of year premium 
• 2455000009 Smoothing personnel costs 
• 2455005501 Payroll-13 month 
• 2455025000 Bonus accruals 
• 2322010000 Services Accruals

The purpose of this is to split the monthly amount by wage type.

1. Select the company that you are currently working on;
2. Select the year and month you are currently working on;
3. You will have to confirm that the pivot table is getting the correct amounts from the sheet "E1_Account List" and retrieving all the wage types;
4. Copy all the wages type from the pivot table to the correspondent account. This will prepare your posting on step 2.1.2. 

Repeat the same steps for accounts 2455000009, 2455005501 and 2322010000.

Note

To each one of the postings documents created on this step 2.1.2. attach the file received on the ticket named "Soles_Posting_YYYY_MM".

If the final check is OK, go to sheet "2.1.2. Posting File", where you will find the ZZF_POSTING_FILE template filled with the posting details. In this sheet confirm that:

• The company code is updated;
• Add the posting, document date (31/MM/YY) and posting period (MM);

In the end for each one of that defined accounts, clear the documents with assignment YYYYMMDD (posting date of the payroll document, see step 2.1.1). The document types to be cleared are H0 and H1. If there are differences communicate to your local contact.

Additional information

It's important to fill all the information highlighted in the file since sheet "2.1.2. Posting File" is being feed by the information available in sheet "Step 2.1.2". 
The assignment file is already being considered in the template and in case of any update performed by locals in this file is necessary to perform the update of sheet "PAYROLL- Detail of Assignments". 

...

3.1.3. I check the personal accruals amounts

We have to check if the amounts on accounts 245500009, 2455005501 and 2455003230 on FI statements at company level are the same as the ones recorded in EuHreka employee by employee at company level. 
This check will be done by comparing the HR-Provision Excel File and the detail by assignment of that accounts. Finance Operations should list the open items of that accounts, summarized by company/account/assignment and compare the amounts in SAP FI with the ones on HR at wage type level, taking into account that the wage type code in HR Provisions Excel file are defined as the first 3 position of the assignment code on SAP postings. 

Detailed operations: 

1) We open the HR Provisions Excel file received named "SOLES_E1_Prov.Acumuladas_MMYY" with a format like : 

Copy this information to sheet 2.1.3 "E1_Provisions" of the ES Personal Costs - Template folder Step 2.1.3 E1_Provisions

2) Then we need to list the open items for the mentioned accounts at 31/MM/YYYY with the transaction FBL3N using variant ES-CTB03 and layout /ES-CTB01.

We will obtain a list by company/assignment as exemplified hereafter: 

With this information you must will fill the table in sheet "Step 2.1.4 – table INPUT from SAP" of the ES Personal Costs - Template file and we will obtain the comparison as follows: 

The table is making a comparison between the information sent by HR and the splitting done at account and wage type level. 

Whenever there is a difference ACP should communicate the difference to Local FI by sending this file although it's usual to have differences and there are some checks that can be done before reporting to Local Finance: 

3) Go to FBL3N and check the assignments - they should follow the exact codification of the file. It's easy to see if there is something wrong "612-BONUS-2012" is not the same as "612-BONUS 2012" 



4) Confirm that the assignment 609-CGIQ values are compared with the addition of the values of wage type codes 609A-619A-629A; 6A6-SUPL compared with the addition of 6A6A+ 6A6P and 6I0-IPC compared with the addition of 6I0A+6I0P; 

5) There are moments where we have amounts reflected in accounting referring to two different years, this happens because we are accruing something that will be paid next year. During the current year the provision assumes the code A, when the year changes and until it's paid assumes the code P thing that may generate some differences. 
To resume:

• Wage type finishing with A – concerns to the actual amount of the provision at the current date.
• Wage type finishing with P – concerns to the accumulated provisions that are accrued and paid one year after the accrual period. 

For a better understanding of the analysis to be done, look to the example for wage type 6V0 - Provision Bonus+ROE: 

We have the information that the wage type 6V0P is zero in HR provisions file although in accounting we have a credit balance of 438.429,24. 
Analyzing the details of the posting done we can see that besides the accounting of the provision for the current month 6V0R there are also other wage types booked

After this final adjust a small difference remains: 

This check must be done on a monthly basis since we have different payment dates for each HR accruals and even among the sites the payments can be different. For that reason is not easy and possible to have these assignments correctly filled when performing the postings through the file ES Personal Costs - Template.

3.2. I reconcile and clear the payroll accounts

3.2.1. Periodicity 

3.2.2. Analysis by Account

2322010000 - Purchase accruals-n/transport-thirds

In this account is accrued Life insurance and saving premium: 

6751-APORT, cleared month end.

6752-PRIMA, cleared year end.

6754-PRIMA, cleared year end.  

2402000000 - Sundry receiv of more than 1yr-personnel - LOANS

In this account, we have the reflection of the loans to personnel, meaning that the company lends to its employees a sum of money that is expected to be paid back with interest. These loans can be maintained for a number of years and are repaid via payroll deductions.

The interest calculated during the period is not automatically booked, only the deductions done in the employee salary. So, as per file received from HR with the monthly calculation we need to book the interest.

The basis for your reconciliation is the file sent by HR team “SOLES_6397-SQU_MMYYYY”

2416210000 - Sundry receiv <1yr-pers-pers - ADVANCES

In this account, we have the reflection of the advances to personnel.

The open balance end of the month represents the total amount due plus the monthly payments, these amounts are easily confronted with the file "SOLES_0245-SQU_MMYYYY >> Sub-Total Value of codes 9$E5 + 9$E6" received from HR team.

With this report, we can analyze the monthly evolution and as we have the cumulated balance in the beginning of the month and in the end of the month in case of differences, we can see if payments are missing or if there was an issue in HR interface.

Note that all payments done after the payroll of the month are processed in the payroll of next month and only then, we can reconcile the amounts.

2452030000 - Withholding taxes payable

In this account we have the IRPF - personal tax on the income of residents in Spain. Every month the amount is deducted from the salaries/wages of the employees and paid to the authorities the month after. But not only, as an "autonomous" also pay this tax, we will receive invoices where the withholding tax is directly included on the invoices received. 

The deduction of the current month will be regularized in the next month after tax posting Modelo 216, 111 and 115. 

The small difference should be posted on account 6470000000 Other operating expenses or 7470000000 Other operating income cost center 6A37800001.

2454000000 - Official social security institutions

In this account, we have the reflection of the monthly deductions to be regularized with social security. The deduction of the current month will be regularized in the month+1.

Specifications to be taken into account: 

1. There are social security bonuses per training – these bonuses are requested at the end of the courses. 
2. Acts as an “auto insurance” company - That means that a part of the company S.S. is not paid by Solvay (60% return in the case of normal low and 100% in case of maternity leave). The HR accounting is not customized to operate in this sense and counts 100% of the company part, so the monthly S.S. payment is lower and there is a difference that will be adjusted manually.

If there are differences higher than 2.000 € we should double check assignment and consult CAM before clear the account.. 

2455000000 - Payroll

In this account, we have the reflection of the Employees’ salaries posting. IBA payment is generally by the same amount, although we can have payments done out of the normal timings. The movements that did not arrive in time for the current month are usually reflected in the month after process. 

What we know: 

1. WT /559 should be equal to the payment done in the month (SX);
2. WT /561 and /563 are never paid and balance should be equal to the accumulated amount present in the detail received;
3. Delta until 500€ can be cleared (debit or credit) and use 7470000000 or 6470000000 (debit or credit) cost center 6A37800001.

2455000009 - Smoothing personnel costs

In this account we have the reflection of the extra payments for Holidays, Christmas Allowance and productivity bonus: 

• Holidays (WT 606A and 606P “606-EXTRA 06”) - Monthly Accrual between 01.01 - 30.06 and it is paid in June with the extra summer; balance should be set to zero at this stage.

• Christmas (WT 600A and 600P “600-EXTRA 12”) - Monthly Accrual between 01.07 - 31.12 and it is paid in November; balance should be set to zero only in December. 

The small difference should be posted on account 6470000000 Other operating expenses or 7470000000 Other operating income cost center 6A37800001.

2455003230 - Payroll-end of year premium

In this account we have the movements related with the yearly Bonus and the AFE (1,5 payment).

AFE (WT 602…) - Monthly Accrual between 01.01 - 31.12 (payment February or March) 

PAY seniority in the AFE (612) - Monthly Accrual between 01.01 - 31.12 (payment February or March) 

Bonus 01.01 - 31.12 (6VO) - Monthly Accrual between 01.01 - 31.12 (payment March or April) 

There are moments where we have amounts reflected in accounting referring to two different years, this happens because we are accruing something that will be paid next year. During the current year the provision assumes the code A, when the year changes and until it’s paid assumes the code P thing that may generate some differences. 

2455005501 - Payroll-13 month

CGIQ which stands for “Convenio General de la Industria Química” regulates labor relations in the chemical sector, namely the agreed wage increases with payment as follows:

609-CGIQ:  - Monthly Accrual between 01.10 - 30.09  (payment September) 

6A6-SUPL Vacations supplement  - Monthly Accrual between 01.07 - 30.06 (payment June) 

End of document.