Maintaining Treasury and Payroll Agency Fund for US and Local (Optional)

It is common practice in public sector organizations to pool the cash of different funds into one fund called a Treasurer's or Treasury Fund. Cash relevant transactions, such as cash receipts, payments, and investments are transacted in the Treasury Fund. Using the equity in the pooled cash account (zero balance clearing account) each fund’s equity in the pool is identified. The Treasury Fund has a negative equity in the pool and an equivalent positive balance in the bank.

When the Treasury Fund is enabled and respective funds balances are established, each participating fund has its equity in the pooled cash. Treasury Fund has a negative equity in the pool for the equivalent positive balance at the bank.

When the Library Fund makes a payment of $50 to a supplier, payment is accounted in the Treasury Fund in the bank account and the Library Fund’s equity in the pooled cash is reduced. 

*Example shown for fund: Treasury and payroll agency are applicable for all document splitting characteristics, for example, grant and segment.

Accounting entry for supplier payment posting.

Constants from document splitting are used to post to the treasury fund. There are options for three different zero balance clearing accounts (equity in pooled cash) available, one for each of the following:

• Cash relevant transactions, such as cash receipt and payments
• Financial transactions
• Postings from controlling transactions

In this way, you have the option to differentiate real cash transactions, such as cash receipts and payments, from cash equivalent transactions, such as interfund charges.

The general fund receives a payment of $100 from a customer. Payment is accounted in the Treasury Fund in the bank account and equity in the pooled cash is increased for the general fund.

When the Internal Service Fund charges the General Fund $25, equity in the pooled fund for the internal service fund increases and the general fund decreases by $25.

*A separate zero balance clearing account (equity in pooled cash) is maintained for FI transactions that are not cash receipts and for CO transactions that are not cash payments. This helps identify real cash from cash equivalent transactions.

If it is not necessary to manage payroll payables in the actual fund where expenditures are incurred. You have an option to use the payroll agency fund. The payroll agency fund is a clearing fund in which all balances posted from the SAP SuccessFactors Employee Central Payroll are accounted in the agency fund. It serves as a temporary bearer of payroll liabilities.

Payroll and benefit expenses are posted to the actual fund where the expenses are incurred. All payables are posted using the payroll agency fund. Equity in pooled cash (zero balance clearing) is generated between expending funds and the payroll agency funds.

The content of this course is only applicable for postings such as payroll, third-party remittances, and payment postings from SAP SuccessFactors Employee Central Payroll.

SAP SuccessFactors Employee Central Payroll system posting programs (payroll, third-party remittances, and employee payment posting) would check the settings in SSCUI ID 180045 (Activate Pooled Funds) for payroll agency fund active status. If active, constants from SSCUI IDs 120100 (Edit Constant for Nonassigned Processes) and 180017 (Edit Constant for Expense or Revenue Account) are used in the balance sheet and vendor accounts in the postings. If the Treasury Fund is active, cash flow relevant accounts are posted to constants from 0CASH.

The accounting entries in the table illustrate a payroll posting when an agency fund is active. Expenses such as payroll and benefits are posted to the fund to which the employee belongs and balances are posted to the payroll agency fund. Technical clearing accounts would also be posted to the agency fund.

The accounting entries in the table illustrate third-party remittances posting from SAP SuccessFactors Employee Central Payroll. Both general ledger balances and vendor items are posted to payroll agency fund.

The accounting entries in the table illustrate general ledger balances and the bank clearing posting when both payroll agency and Treasury Fund are active.

When active, Treasury Fund posting is invoked for accounts that are set as cash flow relevant in cash payment and receipt document types.

• Use self-service configuration UI ID: 180045 to Activate Pooled Funds.
• Select TrsryFndAc for Treasury Fund
• Select PayFndAct. for Payroll Agency Fund

• Use self-service configuration UI ID: 120100 to Edit Constant for Non-assigned Processes.
• Assign document splitting characteristics constants in 0PYRL for payroll agency fund and 0CASH for cash pooling with Treasury Fund.