Costing in Oracle Payroll: Concept

This is one of those topics which has often eluded us from understanding it in a better way than any other part of Oracle Payroll. But, this is one of the most important and vital feature of Oracle Payroll and HRMS on the whole.

It’s through the Costing that Human Resources interact with the Oracle Financials (GL) out of the box.

Let take an insight into this concept of Costing.

Costing as a concept is to account the cost incurred on an employee in terms of compensation provided to him/her by the organization. Oracle achieves this through three processes;


Costing
Costing of Payment
Transfer to Ledger(GL/SLA)
 We'll see each of these briefly;

Costing
Generates accounting entries for elements processed in Run/Quick Pay
Debits the Costing account and Credits the Clearing/Control account.
Accounting Entries are determined by the values of Cost Allocation KFF at different levels.
Whether to transfer to GL or not is determined by the “Transfer to GL” checkbox at Element Link level.
 Costing of Payments
Generates accounting entries based on the Prepayments. If no prepayments, no Costing of Payment for the employee.
Debits the Clearing/Control Account and Credits the Cash Clearing Account.
Accounting Entries are determined by the values provided at the Payment Method level.
Whether to transfer to GL or not is determined by the “Transfer to GL” checkbox at Payment Method level.
Transfer to Ledger (GL/SLA)
Based on whether the “Transfer to GL” checkbox at Element Link and Payment Method Level are checked.
Will transfer all the entries generated by the Costing Process to the GL_INTERFACE table.
Will transfer only those entries generated by Payment of Costing for whom there is a payment process (Cash, Cheque, Direct Deposit, etc) to the GL_INTERFACE table.