Over the last 15 years, one of my key roles included working with customers in relationship to the Payment Summary process, and in particular, the reconciliation and additional reporting of their Payment Summary data. Just about every SAP customer has had a process to validate the Payment Summary figures. Most of them do this at year end but a large portion of our customers also reconcile on a per pay period basis.
With STP, you may ask the question of whether there is still a need for Reconciliation, and how you should do this.
The short answer is Yes, there is still the need for Reconciliation to be done.
As the STP solution is still based on Wagetype Configuration and Employee Data (Very similar to Payment Summaries) and given that there is now the need for Transmission to the ATO on a weekly basis, there is still the need for Reconciliation.
To understand this need, the following declaration is part of the new STP process, and as you can see, there is the need to declare that the data is correct prior to transmitting this through to the ATO.
Most customers I have worked with over the years would be reluctant to just sign off the transmission file without any sort of validation.
A simple example of what could go wrong is that if a wagetype is not flagged for STP, then it will not be reported to the ATO. Without some form of Reconciliation this can go unnoticed.
The following will give you some areas of reconciliation that we believe will be required:
I Go Live
Initially, during Go Live, there is the need to validate the STP Process. This is not only to check that the support packs have been loaded correctly, it also finds out if your configuration is completely setup and if this process works with your own employee data.
Some of the areas that you would want to have validation checks are as follows:
- Verify the STP Mid Year Go Live conversion of the existing Payroll Results over to the new Clusters
- Validate that the Payroll Run is calculating and updating the STP Cluster tables correctly
- Check that the STP Reporting process that takes the payroll cluster information (From the new ACRT, SETP and SABN tables) and creates the data for transmission to the ATO
The best approach I can suggest is to ensure that your Payment Summary Reconciliation is up to date so you can compare the original Payment Summary values to the STP values (in the STP tables). NOTE: This is not a 1 to 1 mapping, but should give you an indication that the STP configuration and calculations are correct.
II Normal Pay Runs
Once you have gone live, you would want to have a process to check your STP figures back to what the employee has been paid. Keep in mind that even if everything balances at Go Live, during the normal year, there can be new configuration put into your system, new wagetypes used during payroll, and new scenarios too. (eg. You may have a retrospective pay over the last 2 years that might not report correctly)
Much like Payment Summaries, when customers need to print the final year statements, there is the need to verify the figures in the STP file. It is so easy to miss a wagetype, have a wagetype that is configured to be included in the wrong STP catagory or not flagged for inclusion in STP reporting.
In order to reconcile, most customers have a process where they want to validate the Payments made to the Employee at leave match to what is reported during the STP processing.
Some examples of the reconciliation process include:
Verifying the STP Figures
- Identifying wagetypes that are paid to the employee (running wagetype reporter is a common process to get these)
- Mapping these to the STP payments calculated – You might download the STP report data to an excel file
- Including STP Override values
This is quite a manual process however, as there is the need to keep registers of what wagetypes have been paid to the employee, and build up an extensive Excel Spreadsheet or create other processes.
Either way you reconcile, it is important to have a method to verify your STP figures and of course, the simpler you can make it, the less overhead to you on a per pay period process.
The following items are some things I would recommend when looking to create a reconciliation process.
- Think about the aim here and ensure you are following a smart repeatable process
- Keep in mind that you need to do this for every pay period so try to make it an easy process
- Consider all of your payroll areas and their various frequencies
- Remember, employees might transfer payroll areas so make sure your process will cater for this
- If you have multiple ABN’s then ensure your process considers this
- Ensure that you include terminated employees
- Decide on whether you will include the ability to override figures and include this in your process
This is an area that SpinifexIT has worked in for many years, and as part of the new STP solution, we have altered our Easy Payment Summary Reconciliation Solution to also cater for STP.
Meet Easy STP
Some of the areas our Easy STP solution supports include:
- Configuration Validation – Check the STP Wagetype Configuration and Report ABN Configuration
- Pre Checking of Master Data – Checks against the employee to ensure data is correct prior to creating STP file
- Reconciliation Reports – Reconciliation reports for go live (Checking of the STP conversion) and also ongoing Pay by Pay Reconciliation Reports
- Reporting on STP – Further reports are delivered to report the STP and help reconcile across the entire company
- Analysis of STP values – Reporting at Employee level with drill down into how the STP values are calculated and from where (Includes overrides)
Existing Easy Payment Summaries customers will receive our Easy STP solution as part of the normal upgrade of our solutions.
SAP’s STP solution will be released on the 11th October 2018. Now is the time for you to start to plan for your solution’s upgrade and implementation Whilst as a SAP customer, you do have a deferral until May of 2019, we would not recommend waiting too long as there will be quite a lot of work to do.
As part of this preparation, we recommend that you discuss with SAP the option to use their SAP Cloud Platform Integration and also ensure that you involve your technical teams in regards to the SAP HR Support pack upgrade.
For many customers, this also is a large project as upgrading the HR Support packs can take in much new functionality on top of the STP solution, so testing can be quite extensive to ensure that there is no impact on your production payroll.
I will continue to create blogs such as this during the next 6 months. Please visit our STP page on the SpinifexIT website to keep updated with any relevant information.