Announcing Payroll Costing from Oracle Fusion HCM Analytics

September 20, 2023 | 5 minute read
Nupur Joshi
Senior Principal Product Manager, Analytics Apps for HCM
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A growing number of organizations are leveraging analytics solutions to extract valuable information from payroll data, including salary information, benefits, taxes, and expenses, with the goal of optimizing their business in areas such as cost management, workforce productivity, and employee engagement, to name a few.

But first things first - what do organizations need to understand their payroll data? Important things like:

  1. What are total payroll expenses and liabilities?
  2. What are the payroll trends?
  3. What are the projections for expenses?
  4. Does payroll cost have seasonalities?
  5. What’s the split between regular and variable costs? And how does that change over time?
  6. What are the payroll implications of full-time employees vs part-time vs contractors?

Most payroll leaders would agree that they can easily access high-level metrics. But what about visibility into the building blocks of cost composition and associated projections? How much easier it would be if they could optimize workforce and financial performance using not only the high-level metrics, but also granular performance-based metrics all the way to an individual employee. While the decision to have payroll as an HR function rather than a Finance function can vary based on the organization’s size, structure, and industry, the reason why many organizations choose to handle payroll within HR is that performance metrics from Finance are available only at the high level of the General Ledger, which doesn't offer details about benefits package, regional differences, compensation packages, leaves of absence, vacation time, hourly vs. salaried employees, which are necessary for a clear understanding of their payroll function.

The devil is in these details, and that’s where Oracle Fusion HCM Analytics delivers new assistance through Payroll Analytics.

Introducing Payroll Costing to optimize your payroll management.

Using Payroll Analytics within Oracle Fusion HCM Analytics, organizations can access cross-departmental analytics that help them optimize their payroll system, including:

  1. Quick access to both high-level metrics (such as organization-wide KPIs) and granular employee-level KPIs.
  2. Easy access and low-effort transformation of cross-departmental data into performance-based metrics and KPIs that can tie to business objectives.

Payroll Costing within Payroll Analytics is a new capability that accounts for expenses incurred and liabilities generated from payroll processing. This is aimed at both business users and payroll subject matter experts, addressing needs for people whose role is to understand the high-level business objectives of payroll processing, as well as for those who need to know the nitty-gritty details of payroll sub-ledger related to General Ledger (GL) accounting. Organizations with Payroll Costing gain access to over 30 prebuilt metrics covering both run costing and payment, allowing them to analyze and track expenses, liabilities, and more.

Some of the key business questions that can be answered with Payroll Costing include:

  1. What's the source of our largest expense in the current year?
  2. How much have we paid for overtime or any other functions to date?
  3. What natural account codes from the payroll sub-ledger contribute to suspense accounts?
  4. Which workers have been paid more bonus or overtime compared to the previous year?

Payroll Costing offers an array of capabilities for organizations to use to answer key business questions

Aggregate reporting

One of the key advantages of Payroll Costing is its ability to provide aggregate reporting. By leveraging this feature, organizations can easily analyze any volume of payroll data across time and attributes. For example, they can analyze expenses based on worker categories, departments, or tenure bands, empowering them to make analytics-driven decisions.

Payroll Costing Overview
Payroll Costing Overview

Drill-down to worker-level visibility in payroll subledger accounts

Payroll Costing also offers enhanced visibility into suspense accounts. Many organizations face challenges when it comes to identifying the components contributing to suspense account accumulations. With the ability to drill down to different attributes contributing to payroll costing generated, organizations can drill down into payroll costing data and pinpoint the specific elements associated with suspense accounts. This enables anomaly detection and facilitates better control over payroll processes.

With aggregate capability, organizations can compare current payroll expenses with previous time periods and can understand how their expenses have evolved over time. With prebuilt metrics such as Variance, Growth Rate, Period-ago and Period-to-date, they can easily compare historical payroll expenses and liabilities to gain valuable insights into their organization's financial health.

Example: Using Payroll Costing to identify the payroll elements contributing to payroll expense and period-to-date accumulations for any payroll costing segment

Natural account code is a segment of the payroll cost code combination that eventually gets posted to the GL as an input from the payroll subledger. Here we identify the top 10 natural account codes for expenses and drill-down to a specific natural account code. We also average payroll expense in the specific natural account code and find specific elements contributing to a specific natural account code. Additionally, we use Payroll Costing to find the growth rate trajectory as compared to previous years and lastly period-to-date accumulations in a selected natural account code.

Suspense Account Accumulations
Suspense Account Breakdown

As Payroll Costing enables organizations to drill-down to this information at different dimensions such as time and departments, they can see this not only at the natural account code level but also any payroll costing segments, or worker and payroll-related dimensions.

With insights into worker-level details, along with aggregate information at all payroll cost code combinations, Payroll Costing within Oracle Fusion HCM Analytics will revolutionize the way organizations manage and analyze payroll data. With its powerful reporting capabilities, retrospective reconciliation, and enhanced security features, Oracle Fusion HCM Analytics can help any organization to streamline their payroll processes and make informed decisions based on comprehensive insights.

Refer post to- understand pre-requisite setups required in the source cloud HCM environment, before enabling Payroll Costing pipeline in Fusion HCM Analytics

Watch Payroll Costing demo video on YouTube.

Learn more about Oracle Fusion HCM Analytics

Follow us on Twitter@OracleAnalytics, and connect with us on LinkedIn.

Nupur Joshi

Senior Principal Product Manager, Analytics Apps for HCM


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