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SAP Business ByDesign and Payroll

With the 1811 release of Business ByDesign, in the Payroll Processing Work Center, a new Reports work center view has been introduced – in future, this view would contain all the reports that would be relevant for an administrator to consolidate from a payroll perspective, and send to the payroll provider system.

As product manager for HCM in Business ByDesign, I would like to share with you the rationale behind introducing this work center view, and what is the current outlook for the payroll processing functionality.

Since the beginning of 2018, I was part of a study where we tried to understand how existing ByDesign customers integrate with their payroll providers, and what their needs are. As part of this study, we conducted a series of interviews with both customers and partners in America, Europe and Australia.

We found that for transactional data like expense reports and time sheet time recordings which are relevant for an employee’s payroll, administrators were using ByDesign’s analytical reports to review and download the data. They would modify this downloaded data to a format which was acceptable for upload to their payroll provider – many times using an excel macro provided by the customer’s implementation partner. Employee master data was typically manually maintained across both systems, either by the administrators themselves, or by the customer’s payroll consultant.

We understood that we need to provide a simpler and standard way for administrators to review and transfer data to their payroll provider systems.

Way forward for payroll provider integration

Based on the product roadmap and strategy, SAP ByDesign plans to continue to rely on payroll providers to calculate an employee’s payslip. It will not incorporate an own payroll engine, at least not in the foreseeable future.

We believe that leveraging the analytics framework – that many of our customers are already doing – would be the right approach to make things easier for customers to transfer data to their payroll providers.

In the upcoming releases, we would like to enhance the HCM analytical reports to make it easier for administrators to review both transactional as well as master data that is relevant to be sent to a payroll system, or a payroll consultant. Administrators can download the data using the existing analytical report framework capabilities. We would also try to deliver an excel based payroll workbook – which would be a consolidated set of reports for all employees for the administrator – with one report per worksheet in that workbook. This workbook would have one worksheet per report – it’s likely to have worksheets for time recording, time account balances, compensation and employee master data.

If customers want a service based integration with the payroll provider, the partner can build ODATA services on these reports. My colleague Knut Heusermann has written a very good blog post on the same : https://blogs.sap.com/2015/03/10/odata-for-sap-business-bydesign-analytics/

What about existing ByDesign HCM Payroll functionality ?

The integration mechanism stated above would allow payroll provider systems to specify the period for which data has be extracted or reviewed from ByDesign. This would make the maintenance of payroll periods and associated functionality redundant in the ByDesign system.

As a consequence, in the coming releases, we would consider the deprecation of the existing payroll functionality like payroll periods, snapshot generation, xml data file creation, customers would be advised to use the delivered reports only.

Customers will still be able to maintain compensation data in the ByDesign system, as long as the employee is hired to a supported country (from the ByDesign payroll  perspective).

Regarding Payroll relevant legal information like Tax and Social insurance – Payroll provider systems would be up to date with regards to the payroll specific legal information for employees. Customers are encouraged to maintain this data in the payroll provider system directly. In our current outlook, SAP ByDesign would not be making enhancements to the existing payroll master data that is captured currently in the system.

Integration with specific payroll providers

While in North America, ADP and Ceridian appear to be the dominant payroll provider systems, in Europe, the marketplace appears more fragmented, with every country having a few key payroll providers. Certain partners have already used the existing services to provide out-of-the-box integration with specific payroll providers. With our current outlook, this is a direction that we would like to pursue – to encourage our partners to build out-of-the-box integration to payroll providers commonly used by their customers.

Summary

My recommendation to customers and partners is to use ByDesign analytics reports to review, collect and transfer data to the payroll provider. In the coming releases, we aim to enhance existing reports, and provide new ones to facilitate this, following which we would look at deprecating the existing payroll file extract, snapshot generation, payroll period maintenance.

It would be great to hear your feedback. If you would like to have a chat regarding the approach, or have requirements on the kinds of reports that would be helpful for you to connect with a payroll provider, do put in a comment and I will be happy to schedule a call.

Thanks a lot for reading !

Sandy

6 Comments
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  • Hi Sandeep,

    I have a question about the integration between ByD and a Payroll Provider:

    In the ByD Scoping, under Payroll > Payroll Integration there is the following question:

    Do you use automated data exchange? (This option is currently not supported and is unavailable for scoping)

    Is this an old option that is no longer available, or is it an option that is still under development?

    If it is still under development, where can I find additional information on how to set up the automated integration to a 3rd party Payroll Provider?

    Or will payroll integration in the future consist of building ODATA services on the reports in the Payroll Reports workcenter view?

     

    Thanks!

     

    Marcel Dekker

    • Hello Marcel

      Thank you for your question !

      The options for automated data exchange will be removed from the business configuration entities as they are not supported. The future for payroll integration would be the reports – they can be used for either a file based download-upload process, or via ODATA services if system integration with the payroll provider is preferred.

      Regards,

      Sandy

       

       

  • Dear Sandy,

    I have a situation where one of the Client is not outsourcing the payroll services, they just wanted to generate the Monthly employee payroll report with details of employee code, earning and deductions and the net payable from the system.

    Please guide me in this scenario. Am also new and exploring HR functionalities in Business ByDesign.

     

    Rgds,

    Sri

    • Hello Sridevi

      Looking at the simplest use case, the minimum you would need to compute is the list of compensation components that are assigned to the employees. This is available through the Compensation Details report that is predelivered by SAP, which is available in the Compensation work center.

      If employees are paid for overtime they put in, or salary has to be adjusted because of unpaid vacation, or even a payout because of unused vacation, the number of hours for each of these cases can be extracted from the Time Account Balances report, present in the Time Administration work center. Of course, the prerequisite is that system is set up for recording overtime.

      Data from these two reports can be downloaded to excel, from which salary can be computed.

      This is of course the simplest use case where salary computation can be performed in excel itself. It is when use cases get more complicated, with both the types of overtime that is offered by the company, as well as the types of tax deductions, when a company outsources the computation to either a service provider or a payroll system.

      I hope this serves as a starting point from where you can figure how to meet your customer’s requirements.

      Regards,
      Sandy

  • Hi Sandeep,

    I have a client who asks to change the standard Compensation Component Details report to include the following: salary (and deductions for loan) (current month valid cost components) + absenteeism (leave) (of current month) + Company (Visa sponsor) + Bank Details of the employees + Employee Labour Card Numbers + Sort Code of Bank.  My colleague tried to modify the date source in Business Analytics work center with no success. Do you know if achieving those requirements is feasible and how should I approach it?

     

    Thanks in advance,

    • Hello Mousa

      With the 1905 release, we have a new data source “HCMBANKB01” that is delivered that can be used to extract bank information of employees.

      From the Business Analytics work center, you can create a new combined data source with HCMBANKB01, HCMCMPB01 (for compensation component details) and possibly HCMTLMU01 (for time recording) to collect the data you need.

      I am not familiar with the Employee Labour Card numbers – if this is a custom field on the Employee BO, you can add the corresponding employee data source for this information.

      Hope this helps !

      Regards,
      Sandy