What is factoring in SAP PY - Payroll?

SAP Term: factoring

• Component: PY

• Component Name: Payroll

• Description: Multiplication of an amount fixed quantity by a factor variable quantity. Factoring is used in 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

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• Key Concepts: 
  Factoring is a process used in SAP Payroll (PY) to transfer the payroll liabilities of an employee from one company to another. This process is used when an employee moves from one company to another and the new company takes over the payroll liabilities of the employee. The process involves transferring the payroll liabilities from the old company to the new company, and then the new company pays the employee's salary. 
  
  How to use it: 
  In order to use factoring in SAP Payroll, you must first set up a factoring agreement between the two companies. This agreement will specify which payroll liabilities will be transferred and how they will be paid. Once this agreement is in place, you can then use the factoring process in SAP Payroll to transfer the payroll liabilities from one company to another. 
  
  Tips & Tricks: 
  When setting up a factoring agreement, it is important to ensure that all of the necessary information is included. This includes details such as the employee's salary, any deductions or benefits that are applicable, and any other relevant information. Additionally, it is important to ensure that all of the necessary paperwork is completed correctly and that all of the necessary signatures are obtained. 
  
  Related Information: 
  Factoring can also be used in other areas of SAP Payroll, such as for tax payments or for other types of payments. Additionally, there are other processes that can be used in SAP Payroll that are related to factoring, such as payment reversals and payment adjustments.