Topic 52: Factoring/Pro-ration

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Monthly Factoring and Storage (Cumul.of Gross Amount)

Multiplication of an amount (fixed quantity) by a factor (variable quantity)
Factoring is used in Payroll to determine a proportional payment for the employee for a period. (partial period calculations).

Example
Reasons which lead to a reduction in the payment for a period include the following:

• Employee being hired/leaving during the payroll period
• Unpaid absences
• Employee transferring from part time to full time work and his/her basic pay being changed accordingly
• Change in basic pay within a period
• Changes to work relationship and resulting changes to basic pay (for example, if a trainee enters a work relationship)

Use

After all the payroll elements from Master Data and Time Management and the bases for monthly factoring (pro rata reduction of monthly Wage/salary by multiplying it by a partial period factor (number between zero and one) from the personal work schedule (including absences) have been set, you can use this subschema to perform the valuation. Any pro rata payroll elements, for example, due to the fact that the employee has not worked the whole month if he/she joined or left the company or had other unpaid absences during the month, are then grouped in gross buckets for further processing. (Cumulation of gross amount) In addition to the typical task of "reduction" of the monthly wage/salary for partial periods, monthly factoring can also be used to distribute monthly lump sums and hourly rates to Cost Accounting (CO).

Structure

The schema comprises the following main steps:

• 1. Generation of secondary wage types /801 to /8nn for partial period factors
• 2. Creating partial period factors in line with specific regulations
• As different payroll elements are subject to different reduction regulations, there also have to be different monthly factors.
• 3. Calculating monthly lump-sums for Cost Accounting,
• 4. Evaluating salary elements, for example, multiplication of an amount (in user wage type Mnnn) by a factor (which is in the BPE field of a secondary wage type /8nn).
• 5. Calculating hourly rates for Cost Accounting
• 6. Processing standard wage maintenance (Schema XWM0)
• 7. Gross input and storage of the wage types no longer required during the course of further processing
• 8. Cumulation of gross amount and cost distribution for Cost Accounting (CO). Cost Accounting needs to know which part of the monthly wage/salary was used up for "non-work" (paid leave, paid sickness, other paid absences, public holidays) so that redistribution to other cost centers can be effected where necessary (social cost center, overheads cost center).

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For simply understanding the following steps config needed.

1. Schema: Monthly Factoring and Storage (Cumul.of Gross Amount) INTERNATIONAL

2. PCR: XPPF Determine Partial Period Factors

3. PCR: XVAL Valuate Payroll Elements using Partial Period Factors

4. Processing Class: Assign the Processing Class 10 to respective Wage type.

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Schema

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Take example of International Schema X000

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To Change or Modify