Payroll Payment Method Definition

The first step to start the payroll Setup is Payment Method

In the Planning and Analysis Phases come up with the Plan of type of Payment Method the company is going to follow

Type of Payment Method

• Check
• Direct Deposit
• Cash

Check will be the default pay method for the payroll.
The Direct Deposit varies from Legislation to Legislation e.g NACHA in US, GIRO in Singapore etc..,

We need to also analysis whether we are planning to Reconcile with Cash Management,

Once we freeze the requirement, follow the below steps for defining the Payment Method

• Set the Effective date
• Enter the Payment Method Name e.g Check, NACHA
• Select the Payment Method type NACHA for Direct Deposit, Cash for Cash Payment etc
• Currency Will be defaulted to the BG but you can change it if required
• If the Payment method controls the payments to third party then select the option Third Party Payment e.g Payment for Benefit Carrier
• Country will be defaulted from the BG
• Enter the Bank Details, Bank Details field varies from Legislation to legislation. For few legislation the flexfield uses Value Set, for few other legislation it is Free Text

Now if you are in 11.5.10 CU 2 and Family Pack less then PFK.RUP1 the Next step will be select the Set of books and enter the cash account.

If you are in 11.5.10 CU2 PFK.RUP1 follow below steps.

• Select the costing Tab you can able to select various option of costing based on your needs and if you need to transfer the payment details to GL select the option transfer to GL
• Select the General Ledger Tab, Select the Set of Book Enter the Cash account and Cash Clearing account for the purpose of Reconciliation. Error Account and the Control Account are optional. These segments comes from GL accounting Flexfield
• Once we select the Cash account in the General Ledger Tab and save. Automatically the cash account and the Set of book information is populated in the Reconciliation Tab
• In Others Tab if we use the Direct Deposit as the Payment Method then we need to enter the details of the Direct Deposit In Singapore we need to enter the Company Code. In US we need to enter few details about the NACHA
• Save the work

Note:

• From PF.K.Rup1 the payment method can be costed which was not available in the previous release.
• The Bank Defined in Payroll should match with the Bank Defined with the AP otherwise reconciliation will not work as expected
• For the Third Party Payment always choose the option either Cash or Check

Try it out!!!