New company codes to accomadate payroll in another country?

[Former Member]

Hi all,

I am a finance IT person, don't know too much about how the SAP payroll -HR is configured. Recently we received some requests to create some additional(dummy) company codes to facilitate payrolls in another country. Would like to verify if there is any other better way to handle this.

This is the situation: One of our company headquartered in the US and US Dollar is the company code currency. This company recently employed 5 empoyees in Taiwan. For some legal/tax reason that these 5 empoyees have to be paid in Taiwanese currency. For this reason we were told by HR IT folks that a new company code need to be created for Tainwan and define Tainwanese currency as local currency in this new company code to facilitate the payroll functions in SAP HR module. Would like to confirm how other global companies handle this. company codes are mapped to our "true" legal entities in our today's world, it became a big issue in our organization to create some dummy company codes to accomadate the system design need. Not sure if this is the common practice, is there any workaround?(not to create additional company codes?)

Your comments/suggestions are greatly appreciated.

Nancy

[Former Member · Accepted solution]

Hello Nancy,

If you have employees in Taiwan, I am pretty sure you have to show some kind of operations over there, which in turn necessitates to have some kind of entity in Taiwan. I also think that your company would be obliged to do some kind of reporting to the local authorities in Taiwan.

We have good number of locations in Asia-Pacific including Taiwan and we have created them as separate company codes. Previous to this, all these various locations were embedded in our Corporate company code and we had to created distinct cost centers to track spend for these locations.

Such a setup creates lot of confusion and extra workload for the F&A group. Thus the best solution is to have them separate company codes with the correct Co.Cd currency. You can then also specify your group currency as USD in your case and take benefit of the Foreign Currency Valuation (F.05) program compliant with FASB 52.

Also in the long run, your company will benefit by this setup based on my experience.

Regards,

Vishal.

Edited by: Vishal Thakur on Jan 15, 2009 6:05 PM

Edited by: Vishal Thakur on Jan 15, 2009 6:06 PM

[Former Member]

Thank Vishal for your quick response. Your answer is greatly appreciated.

Nancy