Tasks to be completed when documenting an operation (from creation to publication)

1. Enter the Title of the operation / page

2. Add the following Labels:

    • Scope of applicability: ww, country_accounting

    • Country or group of countries (if applicable): belux, china, france, italy, lam, nam,uk_ie, bulgaria, dach, netherlands, iberia, poland, latvia, australia, india, japan, south_korea, thailand, singapore, new_zealand, emea_transversal, apac_transversal

    • Unit and Domain according to the List of labels to be used in the Finance Service Line space

      • E.g. 1: WW Operation in Financial Accounting under domain "Central Finance Processes & Compliance":
        • Labels to be used: ww, financial_accounting, central_fin_proc_compliance

      • E.g. 2: France Operation in Financial Accounting:
        • Labels to be used: country_accounting, france, financial_accounting
          (for country operations, the Domain is always country_accounting)

3. Fill in all fields as described above

4. Name the title of each section using OPD methodology naming convention - Infinitive verb without the “to”, mainly action verb...something) -" I do something..."

5. Once the description of the operation is completed, ensure it is approved and published by launching the SBS-Finance approval workflow

Domain:

Responsibility area:

Table of contents 


Scope


ERP


Frequency

 

References



Forms

Deferred Compensation Posting File PF1

Deferred Compensation Reconciliation Template



Attachments




<< US - Deferred Compensation >>



1. Objective and Scope

1.1. Objective of this Operation

The purpose of this document is to explain how the Deferred Compensation provision is calculated and posted for US Companies.

The Deferred Compensation is a monthly contribution paid by the key executives. The managers choose to defer a part of their remuneration and the funds are deposited in as a saving plan, but these plans are considered as non-qualified, that means the government is not responsible for this funding in case of company’s bankrupt. So, the company is not obligated to fund these amounts.  Under these rules, the company maintains the liability but is not required to deposit funds into the Deferred Compensation accounts.

When an individual retires or leaves the company, he develops a program with the company outlining withdrawals from the plan. Withdrawals are issued from the payroll system. Besides the executive’s contributions, we shall have a saving from the company that happens because the US tax code has limits on the amount companies can contribute to an individual's qualified savings plan. We call these plans 401(K) plans. When contributions exceed these limits, these additional contributions are recorded in the deferred compensation plan. Generally in the second half of the year you will see these types of contributions as highly paid individuals exceed the tax law limits.


1.2. Scope

This procedure is applicable for US companies on D+12.


2. Definitions

See Finance Glossary.

3. Tasks description

Finance Operation team receives a report from HR issued by the plan Trustee that defines the deferred compensation balance by company. The column "Earnings" should be posted to the account of the related company following the procedure below:

  • Receive the information from HR
  • Prepare the file for the journal posting.
  • If there are questions contact HR. As of this issue the individual to call is Sara D'Agostino based in Houston at 713-525-6044. Annually Finance Operation team needs to verify with NAFTA HR that this individual remains the key contact on deferred compensation. 

3.1. I retrieve the data

3.1.1. I search for the ticket

Go to the Freshdesk portal or your emails and search for the previous month + Sara Dagostino as the example below:


Open the ticket related to previous month and download the file named Activity Summary (month+year).

3.1.2. I filled the data on the posting file

Copy the values in file Activity Summary tab 'Summary' and paste on template Deferred Compensation Posting File PF1 tab 'CALCULATION':


The earning to be posted will be filled at column J and also in the tab 'TEMPLATE' and 'POSTING FILE'.  To confirm that amount to be posted in column J is correct, it should be the sum of the amounts in columns "Sum of DivOrInterest" and "Sum of Mkt Value Chg".

In the tab 'TEMPLATE', change the Doc Date and Posting Date to the first day of the current month, runs the controls and post the document.

3.2. I do the Deferred Compensation reconciliation

Using the same file sent by Sara Dagostino, open the Deferred Compensation Reconciliation Template.

On the tab "Reports", copy and paste the same information that you used in the first template, according to the period. For this example, the period was 07. 

Check if there is any difference in the next column, which compares the initial balance of the current month with the end balance of the last month. If there is , you should contact Intercompany team and the CAM of the company to create an invoice  since usually these differences are related to transferences between company codes.

After that, paste the same information in tab "FS10N", and copy the amount from FS10N in account 4000000016 from the previous month to check if there is any difference:

For example, company code 3384 has no difference after the amount of FS10N was inputted:

If you have no difference, the reconciliation is complete and you can save the file.

3.3. I inform the CAM

Send a case to the CAM with the document number generated.


End of document.