Originally published in September 2015

To ensure a successful year-end which is right around the corner, SAP Payroll customers in the United States need to get prepared for this critical process.  Year-end not only encompasses the end of year compliance filings and forms, it also includes the new year’s taxation changes. This challenging task requires a joint effort between both the IT and business teams. In preparation for each year-end cycle, the website SAP Marketplace provides an excellent resource that keeps customers up to date on relevant year-end OSS notes, process and functionality, documentation and Frequently Asked Questions (FAQ’s). 

Typically, the IT team consists of the following members:

  • BASIS – they help with the application of SAP HRSPs and OSS notes that impact reporting, taxes (Tax Factory TUBs) and other system related issues.
  • Functional/Technical – they handle changes via configuration and/or processes which impact year-end.
  • Consultants - if you expect to use additional consulting resources, please make sure that they have the following credentials:
    • Experienced in US payroll.  At a minimum, have been through multiple year-end and quarter-end processing.
    • Possesses adequate communication skills and resilient troubleshooting skills. 

The Business team usually consists of the following members:

  • Subject Matter Experts – they usually handle the day-to-day operations and fully understand the business requirements.  They are also the resources who usually interact with governmental agencies.
  • Processors – they usually handle data entry responsibilities and make year-end adjustments.  They also process payroll as well as review and audit payroll reports.

Both teams should be responsible for testing of the year-end changes.  The IT team should start the testing with unit testing scenarios.  When unit testing is completed, the Business team should follow with their regression and user acceptance testing cycles.

Once the teams have been identified, roles and responsibilities should be assigned along with a timeline in the form of a project plan with clearly defined milestones. A project plan can be a very helpful tool to keep resources on track.

Primary planning points to focus on the project plan are:

  • Tax Updates (TUBS) 
  • SAP updates that will come in via HRSP/OSS notes 
  • Configuration changes
  • Testing
  • Payroll schedule  

The following link is a great place to start for year-end planning - http://service.sap.com/hrusa. This link is where SAP posts their past, present, and future year-end updates.  In addition, any important OSS notes and HRSP applications are listed on this site.

A key item in year-end planning which is dependent on the release dates will be to determine when to apply the relevant SAP HRSPs and TUB updates to the system. After the updates have been applied, you will want to account for any additional customized items to configure.  An example would be any new wage types that were added during the year that need to be shown in reporting. Another example would be custom programs that were initially copied from standard SAP programs which are affected by the new OSS notes.  Finally and most importantly, complete and thorough testing is an essential ingredient to any year-end project.

The level and depth of testing depends on the number of updates that are being applied along with other areas of the system that are being impacted.  A good practice is to regression test such changes. Additionally, as part of the testing plan, clients will want to have a line-item for running all of the relevant Year-End forms. This will ensure that what the employee receives is an accurate reflection of the SAP data. Please make sure to account for adjustments that may have been applied throughout the year.  Ignoring adjustments such as relocation and tax adjustments may skew the reconciliation process. 

Awareness of the Payroll Schedule is an important element for all teams.  The Payroll Schedule outlines not only the defined payroll periods, but most importantly, the timing of the final payroll run of the year; thus allowing the team to stage for the commencement of the year-end process.

Another aspect of year-end is to review next year’s calendar. This allows for attention to be given to payroll begin, end, and check dates. Doing such pre-work allows for a smooth transition for payroll in the upcoming year.  Reviewing when check dates occur in regards to bank holidays as well as reviewing payment models and the potential for additional periods (i.e. 53 periods for weekly payrolls) will mitigate potential change management nightmares.

Another aspect of planning is to ensure that resources are formally allocated to each task. This allows team members to understand each group’s (BASIS, IT, Business or Consultant) responsibilities. Individual resource can clearly see their workload and accountability.  This will ensure a consistent way to track progress and streamline communications. 

SAP Service Marketplace
As mentioned earlier, the following link to the SAP Service Marketplace - http://service.sap.com/hrusa is the best way to see what changes SAP is releasing, as well as HRSP release milestones.  The marketplace should be referenced continuously (at least twice a week) throughout the Year-End project. This is where you will find the latest news and updates as they pertain to year-end.  In September or early October, SAP sets up a Year-End section under the Country Information > USA > HCM (Human Capital Management) that is just for Year-End news and developments. Also during this time, SAP provides a customer letter for clients to kick off their Year-End activities. The customer letter will include important information on any new legal requirements/functionality and also the HRSP delivery schedule. Once you commence your Year-End activities, be sure to check the SAP Service Marketplace site on a regular basis to guarantee that you are aware of any updates or changes as soon as they become available. Doing this will help with planning and ensure a smooth and accurate year-end.

2015 Year-End

As of this writing, SAP has released the following items of note:

ASUG Webcast: Affordable Healthcare Act (ACA)
Schedule
Start: September 17, 2015 12:00 PM (CT), 1:00 PM (ET), 11:00 AM (MT), 10:00 AM (PT)
End: September 17, 2015 1:00 PM (CT), 2:00 PM (ET), 12:00 PM (MT), 11:00 AM (PT)
Description
This webcast will contain an overview of the SAP functionality delivered for Information Reporting for Employer Sponsored Coverage and Minimum Essential Coverage.

SAP Note 2060131 has been updated with the numbers of the SAP Notes that deliver the functionality for Information Reporting for Employer Sponsored Coverage and Minimum Essential Coverage. Please refer to the References section of the Note. Within this note, it mentions:

Delivery Roadmap
Due to the recent release of IRS publication 5165 Guide for Electronically Filing Affordable Care Act (ACA) Information Returns (AIR) for Software Developers and Transmitters on August 18, 2015 and the pending release of the final 1094 and 1095 forms and instructions for 2015, SAP is planning the following delivery schedule to address upcoming legal changes and corrections for Information Reporting for Employer Sponsored Coverage and Minimum Essential Coverage:

Delivery Scope
The delivery for this new legal change includes the following new programs:

  1. Collect Data for Employees program: this program will extract employee-related data required for ACA processing and will store this data in new database tables. This program will provide a log in an ALV output.
  2. Collect Data for ALEs program: this program will extract company-related data and will store this data in new database tables. This program will also provide a log in an ALV output.
  3. Print Forms 1095-B and 1095-C and Generate XML program: this program will generate the 1095-B and 1095-C forms for the data processed in the Collect Data for Employees program for printing.
  4. Print Forms 1094-B and 1094-C program: this program will generate the 1094-B and 1094-C forms for the data processed in the Collect Data for ALEs program for printing.
  5. Check Results and Set Data for Submission to IRS program: this report will display the information stored in the new database tables. This report will enable you to validate the data and the print processing of the data collection and print programs.

The delivery also includes new configuration views and features. This configuration will enable you to do the following:

  • Configure ALE data for your existing tax companies in the SAP System
  • Configure employee ACA Status (Full-Time, Part-Time or Non-Employee)
  • Configure if a B or C form should be printed
  • Configure benefits data for eligibility and enrollment for ACA purposes
  • If you outsource benefits processing for your employees, you can create a custom program to fill employee-related data in the new database tables. SAP will provide ABAP classes as well as documentation to create a custom program for this purpose. Note: an existing personnel number in the SAP System is required.

Employee Self Service:
Employee Self Service is not in the scope of this delivery

Benefits Module:
If you use the Benefits module, this may be a good note to start from  
2167502 BEN: Main Note - Affordable Care Act (ACA)

Also related to year-end:
SAP Note 2205020 contains information on the delivery schedule, enhancements, training, communication, and support planned for Year End 2015. This note alludes to what HRSP/CLC level you should be at when applying year-end notes.

To implement year-end legal changes for tax year 2015 in these releases, use either of the following:

  • CLC Option:
    • Apply the Synch. HR Support Package (HRSP) delivered in May 2015, then
    • Apply the CLC delivered for U.S. country version in October. Or the
  • Base Option: apply the Base HRSP delivered in October 2015.

In Year End 2015, the Minimum HRSPs and CLCs and their release dates are as follows:
Release

You are required to have installed the minimum levels of the Synch. HRSP and CLC, applicable, as specified for your release in order to run Year-End 2015 processes successfully and for SAP to provide support. Installing the Base HRSP from October effectively also provides those minimum levels.
For the U.S., the year-end 2015 page has the following references:
Important SAP Notes for Year-End 2015 (August 12, 2015)
Year-End Reference Materials (August 20, 2015)
Year-End Newsletters (August 7, 2015)
Support Packages (August 7, 2015)
SAP ERP 6.0 Customers (August 7, 2015)
Tax Reporter FAQ and Related User Guides (August 7, 2015)

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