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Excerpt from the book Concur: Travel and Expense Management with SAP by @sven.ringling, @hannah.smith.iprocon, and Andy Wittmann. Used with permission of SAP PRESS. All rights reserved.

 

Trying to integrate Concur with SAP Payroll? This blog gives you some quick tips for a workaround solution.

Many customers want integration with Payroll in SAP ERP HCM for one or more of three reasons:

1. To pay expenses through Payroll

2. To calculate and retain taxes on taxable expense payments

3. For statutory reporting managed through Payroll

As of February 2017, SAP’s standard Concur integration add-on does not yet cover Payroll. SAP indicates that it’s on the roadmap and is expected to become available in the second half of 2017.

If paying expenses is the only reason for integrating Concur with Payroll, our advice is to use this opportunity to change your process and switch to payment through SAP ERP Financials Accounts Payable. Paying through Payroll has several drawbacks:

  • It delays reimbursement unnecessarily, particularly if payroll runs monthly.
  • Delayed payment leads to a high number of advance requests, which are difficult to handle. Switching from monthly to timely reimbursement, which is easily feasible with Concur and integration with Accounts Payable, has in many cases lead to a drastic reduction of advance payments, thus reducing process cost significantly.
  • Even if weekly payroll is currently used, tying expense reimbursement to payroll can make it more difficult to switch to monthly payroll (bringing a large reduction in payroll process costs) in the future.
  • Overpayments of expenses are much easier to handle through Accounts Payable than Payroll. Overpayments can happen due to advance payments being set too high, data-capturing errors, reimbursements of tickets paid for by employees, or cancellation of trips when advances have already been paid.
  • Reimbursement through Payroll only works for employees. Contractors, candidates, guests, and other travelers requiring expense reimbursements will need to be paid through Accounts Payable anyway, so it makes sense to have one standardized process for all groups.

If there are taxable elements that require processing through Payroll or if statutory reporting through Payroll requires some expense data (e.g., UK P11D forms or the M-flag in German tax reporting), then SAP customers need an interim solution, similar to what they need for third-party payroll solutions.

The required information can be pulled from Concur through custom reports, global standard reports, or bespoke reports available for some countries and, for example, exported into a spreadsheet and then imported into the Payroll system.

Of course, much more sophisticated solutions are possible, most notably when making use of Concur’s web services, but developing such solutions can take some time; we recommend to keeping the cost of interim solutions low and aiming to use the standard integration once it’s available.

Let’s next take a look at two pragmatic approaches for an interim solution.

1 Import Data through Infotype 2010

One approach is to use Infotype 2010 (Employee Remuneration Info) in SAP ERP HCM to import expenses. The figure below shows the full screen of Infotype 2010, although you usually only need to capture wage type, amount, and currency.

The wage types required may already exist in Payroll and may just need to be made eligible for Infotype 2010 using table V_T512Z. If they don’t exist yet, you need to liaise with your Payroll experts to have them created. How many you need and how they need to be configured depends on the tax, national insurance, and reporting requirements of the countries affected and on how you want to present and report on these wage types out of Payroll.

The import can be performed via manual upload or a job set up to run each night. A quick way to build an import tool is to use SAP’s Legacy System Migration Workbench (LSMW) or Computer-Aided Test Tool (CATT). You will need to ask the respective technical specialist to build it.

2 Import Data through SAP Travel Management Database

Another approach is to make use of the SAP Travel Management module, which can be done even if it hasn’t been set up or used in the past. The idea is to import the data extracted from Concur into the result tables of SAP Travel Management. Once they’re in there, SAP’s internal standard interfaces are available with very little configuration. Below illustrates the data flow from the Concur export (the SAE file), into the SAP Travel Management tables; from there, the data can be transferred into Payroll, posted into the Finance module, or even paid directly through the SAP Travel Management’s Data Medium Exchange (DME) feature.

This approach based on a simple template has been tried and tested with several clients as a stable and cost-effective solution to bridge the gap until the availability of the required standard integration. It can also be used for a proof of concept or pilot in which Concur runs live for a small population in parallel with the on-premise SAP Travel Management solution.

In the long run, we recommend you aim to use the standard integration, once it’s available. Doing so will guarantee you the updates required to stay compliant with changing statutory requirements and keep up with further innovations in the Concur solutions, such as the capability to process retroactive changes.

Excerpt from the book Concur: Travel and Expense Management with SAP by @sven.ringling, @hannah.smith.iprocon, and Andy Wittmann. Used with permission of SAP PRESS. All rights reserved.

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