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Hi Moazzam
Do you mean to say that you created a company code in SAP just in order to
maintain Provident Fund accounts?
As each of your employees may have a different date of birth, do you mean
to say that you would be creating hundreds of payment terms? Determining
each such payment term with a pre-fixed expected date of retirement (viz.
from the date of birth to completion of 60 years ) as the due date and
working back the baseline date. ( I presume that the baseline date would
also be varying with each employee since you would be considering the date
of joining and not the date of birth for provident fund computation
purposes ) could be cumbersome, is it not ? How would you be handling
monthly provisions/ accruals with such payment terms ( a multitude of them
) each with a distant due date and a derived (?!) baseline date? The
payment terms may not be of help in periodic accounting ( even their help
in settlement of PF , I guess , may be minimal and may not be cost
effective ).
Obviously, the payment term could become useless for employees whose
services are terminated prior to the date of retirement ( may be through
resignation / dismissal / death etc.). Likewise, a payment term
after the retirement of the employee becomes meaningless and may
have to be discarded for ever since it is not reusable. Do you consider the
method to be really efficient ? In fact, maintenance and update of payment
terms becomes a major task, perhaps a more important task than the
maintenance of provident fund accounts themselves?
Did you have a word with your HR team to see if their module has a better
means of handling the problem ?
Did you consider using the recurring entry / accrual engine for maintaining
provident fund accounts for making periodic accruals in terms of monetary
values ? ( of course, actual employee related individual working papers may
have to be maintained in another system such as an Excel worksheet and
computed values updated into SAP via recurring entry / accrual engine , I
suppose ).
Regards
VidhyaDhar
| | | ---------------Original Message---------------
From: Moazzam Mubarak
Sent: Tuesday, November 22, 2011 11:51 PM
Subject: Substitution of Baseline Date in AP Invoice Entry
Hi Vidhya
Good questions :)
I have created a company for maintaining Provident Fund (PF) of our employees (treated as vendors in PF books). As you may be aware, PF is payable at the time of separation from the company which is normally the retirement date (let's ignore resignations for the time being as we never know who resigns when). Lets take an example of Mr. A who joins the company today and will attain his retirement age (60 years) on 31-Dec-2020.
In PF, the employee and the company keep contributing the money every month which is recorded as an invoice in to the vendor account (that employee account in AP). Also, interest is credited to his account periodically. Currently we enter or upload the baseline date manually which is of course 31-Dec-2020 in this case and use payment terms Immediate. This is done to reflect project cash flows in the correct period as any fund requires projected outflows for each month in advance so that surplus funds could be invested somewhere.
This is the reason I am trying to fix a baseline date for all transactions of a particular employee. Of course, this will be different for each vendor due to which I want to maintain it once in the vendor master and derive baseline dates of all future invoice from that fixed date.
I think it makes sense.
Regards
Moazzam |
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