HCPM User Manual V2.0

MICROSOFT D365 F&O
HCPM User Manual
January 16, 2024
Version 2.0
Table of Contents
Contents
1. Introduction .................................................................................................................................................. 4
1.1. Document Purpose...................................................................................................................................... 4
1.2. Process Overview ........................................................................................................................................ 4
2. Organizational Structure ............................................................................................................................... 5
2.1. Legal entity, department, hierarcy.............................................................................................................. 5
2.2. Departments: .............................................................................................................................................. 6
3. Human Capital Management ........................................................................................................................ 7
3.1. Grade structure ........................................................................................................................................... 7
3.2. Compensation Plan ..................................................................................................................................... 7
3.3. Titles ............................................................................................................................................................ 8
3.4. Jobs.............................................................................................................................................................. 9
3.5. Positions ...................................................................................................................................................... 9
4. Employee Dossier........................................................................................................................................ 11
4.1. Employee Profile ....................................................................................................................................... 11
4.1.1. Basic information ...................................................................................................................................................................... 11
4.1.2. Address and Contact Details ................................................................................................................................................ 12
4.1.3. Identification documents ...................................................................................................................................................... 13
4.1.4. Personal Contact ....................................................................................................................................................................... 14
4.2. Employee Bank Account............................................................................................................................ 15
4.3. Worker Group ........................................................................................................................................... 16
4.4. Employee Calendar ................................................................................................................................... 17
4.5. Employment (Payroll) Setup ..................................................................................................................... 18
4.6. Employment details (Date effective versioning) ....................................................................................... 18
4.7. Payroll / Benefits Pay-elements ................................................................................................................ 19
4.8. Air Fare Entitlement .................................................................................................................................. 21
4.8.1. Air Class setup ........................................................................................................................................................................... 21
4.8.2. Air Ticket Setup ......................................................................................................................................................................... 21
4.8.3. Worker Air Fare Entitlement ................................................................................................................................................. 22
5. Loan Management ...................................................................................................................................... 24
5.1. Loan Types................................................................................................................................................. 24
5.2. Loan Application........................................................................................................................................ 24
5.3. Loan Installment Creation and rescheduling ............................................................................................ 25
5.4. Cash Settlement ........................................................................................................................................ 26
6. Employee Self Service ................................................................................................................................. 28
6.1. Personal information ................................................................................................................................ 28
6.2. Leave Applications .................................................................................................................................... 30
6.3. Leave resumption...................................................................................................................................... 32
User Training Manual Pag e |2
6.4. Employee Pay slip...................................................................................................................................... 33
7. Absence / Leave Management ................................................................................................................... 35
7.1. Employee Absence Configuration Assignment ......................................................................................... 35
7.2. Accrual update Process ............................................................................................................................. 36
7.3. Close Period Process ................................................................................................................................. 36
8. Payroll Process ............................................................................................................................................ 38
8.1. Ledgers ...................................................................................................................................................... 38
8.1.1. Absence Ledger......................................................................................................................................................................... 38
8.1.2. Pay Adjustment Ledger .......................................................................................................................................................... 38
8.2. Leave and Timesheet Process ................................................................................................................... 40
8.2.1. Timesheet Process.................................................................................................................................................................... 40
8.2.2. Leave Process ............................................................................................................................................................................. 41
8.3. Pay Loan Process ....................................................................................................................................... 41
8.4. Payroll Arrear Process ............................................................................................................................... 42
8.5. Benefit Encashment .................................................................................................................................. 42
8.6. Master Process (Pay Process) ................................................................................................................... 42
8.7. Finalize Payroll........................................................................................................................................... 44
8.8. Pay Ledger Post ......................................................................................................................................... 45
8.9. Payroll Disbursement ................................................................................................................................ 46
9. Employee Separation .................................................................................................................................. 49
9.1. Worker Termination.................................................................................................................................. 49
9.2. Resignation ................................................................................................................................................ 50
9.3. End of Service run ..................................................................................................................................... 50
9.4. Posting EOS to ledger ................................................................................................................................ 51
10. Financial Posting ......................................................................................................................................... 53
10.1. Payroll Parameters........................................................................................................................... 53
10.2. Cost Distribution Basis ..................................................................................................................... 53
10.3. Cost Distribution Basis Setup ........................................................................................................... 53

1. Introduction
1.1. Document Purpose

This Training Manual Document refers to Alfazance Consulting Project for implementation of Dynamics
365 Finance and Operations for Masaar and is prepared based on requirements specified by the users
during the discussions with Alfazance Consulting consultants throughout the Conference Room Pilot
(CRP) and User Acceptance Training (UAT) phases. This Document aims at addressing Masaar
functional areas of operation with specific reference to their fitment to the provided solutions.
The solutions provided in this document have been discussed extensively with relevant users and their
views have been sought and incorporated into this document. Alfazance Consulting team has made
every effort to fit the requirements of users within the ambit of Microsoft Dynamics 365 as either
standard feature or workarounds. Wherever required, Alfazance Consulting team has provided multiple
options for workarounds and these workarounds were discussed comprehensively with users during the
meetings. However, due to the nature and distinct business functioning that is unique to Masaar there
remain certain areas of business process that could not be mapped directly to Microsoft Dynamics 365
and need to be customized. These customizations are mentioned at appropriate places.
1.2. Process Overview
Organizational
Structure
Human Capital
Financial Posting
Structure
Employee
Separation
Administration
HCPM
Payroll ESS
Leave
Management

2. Organizational Structure
2.1. Legal entity, department, hierarcy

Legal entities attachments:
Go to Organization administration> Organizations> Legal entities
you can view current legal entities.

Attachments related to existing legal entities can managed by clicking on “Registration IDs”
To add new attachment (like VAT ID) you can click on Add
Remove: to delete an existing record
Edit: to modify details of an existing record

2.2. Departments:
Go to Human resources> Departments> Departments
you can create new / edit existing / view current departments.

To create new department, click on New and fill the Name, select the “Operating unit type” as
department then Save
Hierarchy:
click on “View in hierarchy” to view the organization structure chart
Department head count report that shows the number of positions in respective departments can be
accessed in HCPM> Reports> Department head count report

3. Human Capital Management
The standard system has provision for capturing the Grade Details, which includes band & step, and
then creating compensation plan based on the combination of grade, band & step. On compensation
plan, there is an option to define assignment (Min, Max, and Average) for each pay element.
On Position level, Grade will be assigned & based on the assigned grade, system will check the defined
compensation plan for the same grade & allocate compensations to the new employee.
Grade / Band Compensation

Titles Jobs Positions
/ Level Plan
3.1. Grade structure

Grade/Band/Step (Level) Creation:
1. Click the Human Resources> Compensation> Fixed Compensation> Level
2. Click the on the New Button
3. Enter the following details as per below screenshot
• Level
• Description
• Type – Select the type (Grade, Band, or Step)
3.2. Compensation Plan
1. HCPM> Setup> Compensation plan> Compensation plan> New

2. Enter all required information in the initial screen (Compensation plan id, Description,
Grade, Effective Date etc.) then save.
3. Click on Payroll button on top for adding payroll type pay elements and its
compensation
4. Click on New then select the pay element and define other required values along with
min, max and average compensation.
5. Repeat step 3, 4 for all applicable payroll pay elements

6. Similarly, click on Benefits button on top for adding benefit type pay elements and its
compensation
3.3. Titles
Go to Human Resources > setup> titles to view the list of all available titles

To create new title: click New
To edit existing title: click Edit
3.4. Jobs.
Go to Human Resources > Jobs> Jobs
You can create new, edit or view the existing Jobs, and you can duplicate job by using “Copy From”
feature.
3.5. Positions
To create position, the following 3 components should be created previously in the master: title,
compensation plan, and job.
Positions can be managed in the HR module Human resources> Positions> All positions

The position can be seen in hierarchy by clicking “View in hierarchy”
User Training Manual P a g e | 10

4. Employee Dossier
4.1. Employee Profile

4.1.1. Basic information
To create the basic information of new employee:
• Click Area Page node: HCPM> Workers> Employees
• Click New
• Enter FirstName, Middle name, Last name
• Enter Employee Start Date
• Select Employment category: (default value is STAFF)
• Enter Nationality, Gender, Passport and other personal information
• Click on Hire and add details. (alternatively you can click on “Hire” and add the details later by
Edit)
• To edit worker information: HCPM> Workers> Employees Click on edit to activate the
worker information fields

• MS D365 maintains basic employee information, such as contact information, demographic
information, identification information, family information, and personal and emergency
contacts.
4.1.2. Address and Contact Details
• Click Add
• Enter Address Details and Click OK

• Same way Enter Contact Details like Phone and Email and make Primary YES

4.1.3. Identification documents
List of all personal legal documents attachment documents with related expiry date can be managed at
the employee level
HCPM > Workers> Employees then click on Person tab > identification numbers
Create new or click on the list to edit existing saved records

4.1.4. Personal Contact
• Click on Person tab> Personal Contacts for adding dependent information like
child/spouse.
• Enter dependent details

• Relationship: Make sure to select correct Relationship type (Child/Spouse) for
activation of dependent toggle button
• Click on Pay element to setup the dependent eligibility for Air Ticket Provision
• Enter Effective Date and select Air ticket Provision from pay element dropdown.

• Save and Exit
4.2. Employee Bank Account
• Click Area Page node: HCPM> Workers> Employees

• Double-click on the selected record in form Employees.
• Switch to the Compensation tab on the Employees form.
• Click the Bank accounts button.
• Enter the details of the bank account:

• Bank Code (Account identification) [Can be selected from Drop down]
• Bank Name
• Account Holder (Name)
• IBAN Number / Bank account number
• Bank Account Type (if required): Current / Saving
• Close the Worker bank accounts form.
• Click the Bank account disbursements button from same location (the
Compensation tab on the Employees form).

• Make sure the Bank account disbursements form is updated.
The Bank Account Disbursement functionality allows the disbursement of salary into one or more Bank
accounts of Employee. For example, if an employee has two bank accounts and wants to disburse an
amount of 10,000 to one bank and the remaining to another bank account, then the following setup
would be done:
Bank code Routing Bank account type Amount Currency Remainder

number
ADCB Current Account 10,000.00 AED No
HSBC Current Account 0 AED Yes
Note: This will ensure that any amount above 10,000 will be disbursed to HSBC Account.
4.3. Worker Group

The worker group defines the “posting profile” which is the integration point between the sub ledger
and the general ledger.
Setup of worker group is explained in the “Setup Manual”
To Attach Worker Group to Employee:
1. Click Area Page node: HCPM> Workers> Employees.
2. Double-click on the selected record in Employees form.
3. Switch to the Employment details tab under Work history tab on the Employees form.

4. Assign Worker group as required.
4.4. Employee Calendar

The Calendar attached against the worker would be used for Time and Attendance Management. In
calendar we can define the planned working days and hours. Also, we can define holidays and
weekends as explained in the setup manual.
To Attach Calendar to Worker:

2. Click the Edit Record toolbar button.
3. Switch to the Employment details tab under Work history on the Employees form and
select the Calendar
4. Close the Employees form.
4.5. Employment (Payroll) Setup

In order to run the payroll for an employee, payroll-related fields need to be setup in the Employment
section. Below are the additional fields which required to be setup
• Payroll Disbursement Mode – Used for defining the salary disbursement mode
• Default Payroll Period – Used for defining the salary processing cycle
• Default Payroll Currency – Used for the defining the default currency in which salary will be paid
• Cost distribution basis – Used for defining the distribution mechanism of salary
• Absence Configuration – Used for linking Absence allocations to employee
• Worker sponsor – Used for linking Worker sponsor to employee

2. Select & Record & Click the Edit Record toolbar button.
3. Switch to the Employment details tab under Work History on the Employees form and fill the
required details as explained above.
4. Close the Employees form.
4.6. Employment details (Date effective versioning)

Any changes in the fields of Employment (Employment details) section will be treated as date effective
changes and by default system will create a version in the Employment details section. From the setup
point of view, we need to make sure records created in employment details form should be effective
from the date of joining of the employee (Specially for new hiring & if it is past dated hiring).
1. On Employee form click the Work tab> Employment history button.
2. Click on Date manager button.

4.7. Payroll / Benefits Pay-elements
Payroll pay elements refer to the components of an employee's salary or wages that are directly related
to their work, these pay elements are paid on a regular basis according to the defined “Payroll Period”
Examples of Payroll pay elements:
• Basic Salary
• Other Allowances
• Food Allowance
• Gratuity
• Pension Deduction for Emiratis
Benefits pay elements refer to additional components of an employee's compensation package that
provide non-wage forms of compensation, aimed at enhancing the employee's overall well-being and
providing additional incentives, these benefits Encashment can be triggered either at the due date or
End of service.
Examples of benefits include:
• Annual Leave
• Gratuity
• Pension- Employer Contribution for Emirati employees.
Payroll / benefits setup and the determination of eligibility for pay-elements are both handled in Human
resources. Workers can be enrolled into pay-elements from either Human Resources or Payroll. Before
enrolling workers in Payroll / benefits, you must create the components of each payroll / benefit type
pay-elements. These elements establish default settings and accounting details.
Payroll Period used to define the frequency of employee payment and to set up conversion factors to
convert compensation between monthly, weekly, biweekly and hourly pay frequencies into an annual
pay frequency.
Payroll / benefit Pay elements are initially migrated from the position grade setup (Compensation plan),
however, if manual amendment / review is required at the employee's level then the following steps can
be performed:

1. Click Area Page node: HCPM> Workers> Employee then click on HCPM tab then Payroll
2. Click the New button to add new elements or to amend the existing element starting from a
new date
3. Select Pay element.

4. Select the Payroll period to determine the frequency of payment of this pay-element.
5. Select Currency in which this pay-element is to be paid.
6. Navigate to the Pay rate tab
7. Enter the value.
8. Close the Payroll form.
Similarly, you can add / edit benefits in HCPM> Workers> Employee then click on HCPM tab then
Benefit

Note: “Pension employee” should be added as payroll pay element for eligible employees and “pension
employer” should be added as benefit for the same employees; system will deduct the employee
contribution from the payroll based on the defined formula, similarly the system will calculate employer
contribution and will create the related benefit provisions / journals.
4.8. Air Fare Entitlement
The Air Fare eligibility of the worker will be set up on the Worker Master. The system allows to select
the Origin City, the Destination City and the Class of Air Fare against each Worker but before defining
these details on the Worker master, the following setup should be in place.
4.8.1. Air Class setup

1. Click on Navigation pane: HCPM> Setup> Air ticket> Air class.
2. Air Class can be defined based on requirement by entering Air class code & Description.
3. Close the Air class form.
4.8.2. Air Ticket Setup

1. Click on Navigation pane: HCPM> Setup> Air ticket> Air fare.

2. Add new line and fill the required details like Origin & Destination city and then click on Fare details
3. Add new line and fill the required details like Effective from, Amount, Currency, Air class & Air fare
type. Once updated rate received from vendor then a new line can be created with new effective date.
4. Close the Fare details form.
5. Close the Air fare form.
4.8.3. Worker Air Fare Entitlement

1. Click on Navigation pane: HCPM> Workers> Employees.
2. Double-click on the selected record in Employees form.
3. Switch to the Employment details tab under Work history tab on the Employees form.

4. Set up Air ticket related fields (Origin city, Destination city & Air class) as required.
In case Air fare is not maintained sector wise, we can skip above setups and directly assign the Air
ticket benefit on the employee level with annual quantity and amount & system will provision from
there.

5. Loan Management
Loans and advances are a functionality where an employee can take a financial advance from the
company and then choose to pay the same back in equated monthly installment.
5.1. Loan Types

1. Go to HCPM> Setup> Loan> Loan Type
2. Click New
3. Enter following details & Click OK

• Loan Type – Enter Loan Type code
• Description – Enter Loan type description
• Disbursement Payroll – Select the payroll pay element by which loan is going to be disburse
• Recovery Payroll - Select the payroll pay element by which loan is going to be recover
5.2. Loan Application

1. Go to HCPM> Loans> My pay loan / All pay loan
2. Click New
3. In the Worker field, enter or select employee for which loan is being requested. By default, it
will show current logged in worker.
4. Add Description
5. “Immediate Disbursement” can be checked in case of disbursement is required immediately
and cannot wait till salary process
6. Go to Pay Loan Lines & Click on Add line
7. Enter following details
o Payroll Period Line – Select period in which Loan disbursement is required
o Loan Type– Select type of Loan
o Date – request Date
o Description – comments / details
o Amount – the value of requested Loan

Eligible Amount will be displayed based on the expression defined in eligibility rule.
8. Scroll down to line details and update number of installments and the installment start date
9. Submit to workflow for approval

10. Once approved Post and disbursement record can be checked from the Pay loan ledger
5.3. Loan Installment Creation and rescheduling

To create the recovery installments schedule,
1. Go to HCPM> Loans> My pay loan / All pay loan and select the required loan request
2. click on the Create or reschedule installments under the Post tab (this option will be
enabled for posted loans only)

3. Enter following details & click OK
o Start date – Enter start date of the recovery period
o End Date* – Enter end date of the recovery period
o Installment period – Select recovery as “Monthly”
o No. of installments* – Enter number of installments need to be created
(* End date or No. of installments, only one field need to be filled)
System will create the recovery installment in the Pay loan ledger.
From the same screen installments can be rescheduled as well if required.
5.4. Cash Settlement

Cash settlement is a functionality that has been created in cases where the employee chooses to settle
the loan outside of the loan cycle and payroll processing.
Cash settlement would have two parts
1. When the cash is paid to finance
2. When the cash is settled by the payroll team and the loan is rescheduled.
The first part of the transaction is out of scope of this document. This would be a finance entry which
would be handled using a finance voucher.
The Cash settlement in the payroll would be done using the cash settlement option: -
1. Go to HCPM> Loans> My pay loan / All pay loan Select Loan> Click on Cash Settlement
under Post tab

2. Enter following details & click OK
• Remaining amount – It is a display field to show the remaining Loan amount
• Settlement date – Enter settlement date
• Settlement period – Enter settlement period
• Amount – Enter value of Cash amount
• Description – Enter Description for cash settlement

6. Employee Self Service
Employee Self Service is an important tool to help employees and line managers perform daily human
resources-related tasks. By having employees update information directly into the system using a web
browser, it helps enable them to provide fast, accurate, and current information about human resources
(HR) activities and employee base data.
Employee Self Service helps transform the way HR departments receive and process information. HR
professionals can empower line managers with HR responsibilities, and thereby push base data
collection and maintenance to the source. These are the employees and line managers in the line
structure.
Below is the list of some activities that can be performed by the Employee self-service of D365
Employee Personal Information
•Personal Information
•Team Information (Manage Team)
•Certificates
•Skills, Course, Education etc.
•Attachments
Leave Application
•View Leave balances

•Create and manage leave applications
Pay slip
•View Pay slips
HR Requests
•Create and manage requests addressed to HR
6.1. Personal information

When an employee logs on D365 and accesses the Employee Services area, the page provides access to
personal information such as training, benefits, courses, emergency contacts, goals, loans, and resume
qualifications.
1. Click the Workspace> Employee Self Service

2. Click on Edit Personal Details
3. The following details can be amended:

• Addresses
• Contact Details (email, phone no)
• Personal Contacts (Spouse, family details)
• Identification Number (Visa, Passport no.)
• Bank Information
• Image

6.2. Leave Applications
The employee can see the leave balances against each type of leave and details such as:
• Opening Balance
• Leave accrued
• Leave Balance
• Leave availed
To Apply for a leave the following process there are 2 methods:

Method 1:
1. Click on Apply under the preferred Leave type.
2. Fill in the First day and Last day of leave.

3. Click OK
Method 2:

1. Click on Workspace> Employee Self Service then Click on My leave Application
2. Click on New Application

Note: For new leave request leave application number will be generated automatically and employee
name and id will be defaulted.
3. Attach supporting documents to the Leave application:
Click on the “Attachments” icon highlighted in yellow below
On the attachments form click on New> File

Browse for the file and attach the document:
4. Click Save and Close window

5. Click on leave application Lines> Add Line

6. Select Absence Code, First date of Leave, Last date of Leave then Save
7. Click Refresh to verify Attachment is entered as highlighted below
8. Submit through Workflow for Approval
6.3. Leave resumption

Once the leave application is approved, the “service resumption” button will be enabled allowing the
leave applicant to resume (on time, early, or after the planned date.
Click on Workspace> Employee Self Service then click on My leave Application and open the
approved leave then update “Actual first day of leave”, “Actual last day of leave” then click on “Service
resumed” which will trigger another workflow for confirmation / approval.

6.4. Employee Pay slip
1. Click on Workspace> Employee Self Service then click on My Payslip
2. Select Payroll Period Line, Send mail: Yes, if you want the Pay slip mailed to your registered
email

Pay slip as per Masaar format will be customized

7. Absence / Leave Management
Absence management is set up through the following processes:
• Set up absence codes
• Set up absence configuration & validation rules
• Assign workers to the absence setup
• Leave Application
• Accrual update process
• Close Period
First 2 points are explained in “Setup Manual”
7.1. Employee Absence Configuration Assignment

There are 3 ways to assign Absence configuration to the employee level
• From Employment setup – Absence configuration can be directly set up in the Employment
section of the employee form.
• From Compensation plan – Absence configuration can be attached to the Compensation plan
level & compensation plan is linked with position so, whenever a new employee is hired on a specific
position the system will read all compensation along with Absence configuration details and assign it to
the employee level.
• From Worker Absence config update – In case Compensation plan is not being used then there
is a utility in the HCPM> Periodic> Absence> Worker Absence configuration update
Enter following details

• Select Worker – Employee can be filtered or selected for whom required to run
• Legal entity – select current company
• Absence Configuration – Select Absence configuration
• Effective date – Effective date can be entered manually as entitlement start date. In case it
needs to be started from Joining or original joining date then it can be done from radio buttons.
After successful run of the above process, it will allocate leave entitlement on the employee level. It can
be viewed from Absence Configuration link in the HCPM section on the Employee form

7.2. Accrual update Process
Accrual update process is used for allocating the yearly / monthly balance to employee for leave
application. In this process system read setup / records attached on the employee’s Absence
configuration & based on that it creates line of the leave allocation in the Absence ledger.
1. Go to HCPM> Periodic> Absence> Accrual update

• Select Worker – Select the employees
• Legal Entity – Select current company
• Period from – Period can be annually or monthly based on the leave entitlement type
• Period To - Period can be annually or monthly based on the leave entitlement type
In case AL entitlement is monthly then in “Period from” and “Period to” monthly period need to be
selected & for other leave types (like sick leave, maternity leave, etc) Annual period need to be selected
for yearly entitlement.
Accrual update process should run 2 times: one for monthly entitlement provision (like Annual leave
type) and another for yearly entitlement provision (like sick leave, compensation leave, etc.)
3. After successful run, it will create records in the Absence Ledger with source “Accrued from
Configuration”
Note:
When new employee is created, accrual update process should run twice (monthly and annually)
7.3. Close Period Process

Every year at the end of the accrual period, there are some business rules that need to be triggered.
The common business rule that is mostly used is the carry forward limit. In this rule the leave balance
at the end of the year is validated against the maximum limit that is configured by the system and only
the minimum of leave balance/ maximum limit is set as the opening balance for the next year.
1. Go to HCPM> Periodic> Absence> Close period
2. Click on Close period, a new form will pop up

• Select Worker – Select the employees
• Legal Entity – Select current company
• Payroll Period line – Only Annual period can be selected
System will create the closing entries for the select year and automatically create opening entries for the
next year leave entitlement based on the carry forward rules defined.
If carry forward configuration is not defined for some leave types, system will create closing entry to
nullify the remaining quantity, and the opening entry will be zero.

8. Payroll Process
Before the final payroll run, all the adjustments, absences, OT journals, loans and deductions should be
updated.
The input to the Payroll run is from the following Ledgers:
INPUT
Payroll Adjustments
Absence Ledger Overtime Ledger Pay Loan Ledger
Ledger
PAYROLL PROCESS
OUTPUT
Payroll Ledger Benefit Ledger
8.1. Ledgers
8.1.1. Absence Ledger
The Absence ledger is updated by 3 major factors: when a leave application is approved and when
absence or benefit journal are posted.
1. At the time of Leave resumption, entry should be recorded with the Actual Start Date and
Actual Last Date of Leave; accordingly, the absence ledger is updated with the actual days of
absences.
2. Absence Journal: If the employee is not able to fill the leave application or for any adjustment
related to the leave balance, the Absence can be recorded through the Absence journal. When
Absence journal is posted, the Absence ledger is updated.
3. Benefit Journal: this journal can be used for any adjustment of leave codes attached with
benefit like Annual leave. When Benefit journal is posted, the benefit ledger along with Absence
ledger is updated for AL.
Absence ledger can be accessed in HCPM> Inquiries> Ledgers> Absence Ledger
8.1.2. Pay Adjustment Ledger

The Payroll Adjustment journal is used to update any pay adjustments or deductions amount to the Pay
for a specific worker and a specific period. When a Payroll Adjustment Journal is posted, the Payroll
Adjustment Ledger is updated.
Payroll adjustment journal can be made against specific pay element, and it can be positive or negative
(addition or deduction).

Pay elements setup should be performed before being able to create any adjustment journal (including
deduction types, allowance types, etc.) in HCPM> Setup> Pay element> Pay element as explained
in the “Setup Manual”
For Creating Payroll Adjustment Journal:

1. Go to HCPM> Journals> Payroll Adjustment Journal
2. Click the New button & Enter Description for the Journal
3. Click the Lines button then Go to Journal lines & click on Add Line
4. Enter the details:

1. Payroll Period
2. select the Worker
3. Select Pay element (deduction type/ benefit / payroll element)
4. Enter Description
5. Enter Amount (if it is deduction, then amount should be negative -)
6. Select Currency
5. Add additional lines if required
6. Submit the Journal for approval (if workflow is activated or manually change status to
approve).
7. Once journal is approved post it
When Pay Adjustment Journal is posted, all posted entries will be available in the Payroll ledger.

Payroll Process
Payroll processing steps in the system shall be performed in this order:
Leave and Payroll journal Disbursement

Arrear process
timesheet Pay Process Finalize creation and creation and
/ Loan process
process post to finance post to finance
8.2. Leave and Timesheet Process

This process consists of 2 system activities and can be included in the Pay process
8.2.1. Timesheet Process
When “timesheet process” runs, the time is calculated from all the approved timesheets for the period.
To start the process:
1. Go to HCPM> Periodic> Payroll> Master process
2. Click Worker to select worker/s -This window would let you to select the employees by any
criteria for whom the payroll process has to run. If no criteria is selected, all the active
employees are selected for the payroll run.
You can select multiple worker by separating with comma sign (,) or else if you want to select
all workers do not make any selection, just click ok.
Alternatively, you can use Add line and select employees.
3. Click Leave and timesheet Process under Process tab
4. Select the Legal Entity, Payroll Period

5. Click OK to run the process.
8.2.2. Leave Process

Leave process create records for the leave encashment in the Benefit Ledger for the approved annual
leaves applied by employee. This process syncs Absence and benefit ledger in terms of the leave
availing.
8.3. Pay Loan Process

Loan application and installment creation process has been described in the loan management section.
Once Loan is approved, posted & installment created then it will create records in the pay loan ledger.
While the payroll run, system will check for the disbursement or recovery amount based on the loan
schedule defined in the pay loan ledger.
1. Go to HCPM > Periodic > Payroll > Master Process
2. Click on Add Line & then select Worker/s
3. Click on Pay loan process and enter the following details:
• Select entity
• Payroll period line – The period in which arrear is to be run
• Transaction Date
After you run pay loan process you can see the detail in HCPM> Inquiries> Ledgers> Pay Loan
Ledger

8.4. Payroll Arrear Process
1. Go to HCPM> Periodic> Payroll> Master Process
3. Click on Arrear Process and Enter the following details:

• Select entity
• Arrear period from and Arrear period to – The period for which arrear must be run
• Payroll period line – The period in which arrear is to be run
• Transaction Date
After running pay arrear process you can see the detail in payroll ledger, the detail of each entry can be
seen by clicking on Details
Note: This process can be included in the Pay process
8.5. Benefit Encashment

1. Go to HCPM> Periodic> Payroll> Master Process
3. Click on benefit encashment and Enter the following details

▪ Select entity
▪ Payroll period line – The period in which arrear is to be run
▪ Transaction Date
8.6. Master Process (Pay Process)

The Master process is run for the selected workers to calculate the final payouts and benefits for the
period.
HCPM> Periodic> Payroll> Master Process

1. Click Select > Worker - This window allows you to select the employee by any criteria for
whom the payroll process must be run. If no criteria is selected, all the active workers are
selected for the payroll run.
You can select multiple worker by separating with comma sign (,) or else if you want to select all worker
do not make any selection, just click ok and all active workers will be considered. Alternatively, use Add
Line to select workers
This query can be used to select worker groups, type, name, etc..
2. Click Pay Process
3. Enter relevant details

• Legal Entity – Select the current legal entity
• Payroll Period line – Select the period for which payroll need to be processed
• Transaction Date – Trans date will be auto populated based on the cutoff date
• Enable trace – Select YES in case of trace is required
• Include Timesheet process – if you prefer to run leave and timesheet process
along with pay process (if not selected, the leave encashment will not be reflecting in the
benefit ledger unless the leave and timesheet process is run separately)
• include Pay arrear process – if you prefer to run arrear process along with pay
process (if not selected, system will not consider any arrear in the current payroll period)
• include pay loan process – if you prefer to run loan disbursement / recovery along
with pay process (if not selected, system will not consider any loans unless the loan
process is run separately)
Once the process is completed, the system updates the following:

• Payroll Ledger – It will contain records related to payroll (salary)
• Benefit Ledger - It will contain records related to benefits
To verify:
• Click inquires> Payroll ledger
• Verify all the Payroll components of the selected employee for Payroll Process are shown
• Click inquires> Benefit ledger
• Verify all the Benefit components of the selected employee for Payroll Process are shown
To check history of employee in previous months:

HCPM> Inquiries> Ledgers> Payroll Ledger
or
HCPM> Inquiries> Ledgers> Benefit Ledger
8.7. Finalize Payroll

Master process (Payroll process) can be run multiple times if required. Data can be verified by payroll &
benefit ledger or Salary / Benefit register report. Once data is OK for the month, then payroll can be
finalized by below process:
1. Go to HCPM> Periodic> Payroll> Master Process then click on Finalize under Process tab
2. Select current legal entity & payroll period line and then Click Ok
8.8. Pay Ledger Post

Once the Payroll Process and the End of Service Run is completed and finalized the values are posted
into the General Ledger.
INPUT OUTPUT
•Payroll Ledger
•Benefit Ledger •Payroll Journal
1. Click Area Page node: HCPM> Periodic> Payroll> Master Process then Pay Ledger
post.

2. Select payroll period line and enter journal description then click OK
3. The Pay Ledger Post would create Payroll Journal as the output. On completion of the Pay
Ledger post, the system would display the Journal number which was created.
4. Click Area Page node: HCPM> Journals> Payroll journal
5. Click the Lines button to open and review the lines.

6. The Payroll Journal needs to be approved and posted. On posting it creates a General
Journal which is then reviewed by Finance and posted to impact the General Ledger.
7. Cost distribution will be done at the time of creation of Payroll Journal based on the setup
defined on the employee level. It can be viewed from the HCPM> Inquires>
Distribution> Payroll distributions
8.9. Payroll Disbursement

The Payroll disbursement will be based on the Disbursement mode defined on the worker master.
• Cash
• Bank
The Bank file / WPS can be generated in the Bank instructed format by the system.
Disbursement Ledger Post
After Finalizing Payroll, it needs to be posted and the last step is Disbursement Journal posting of the
Employees.
1. Click HCPM> Periodic> Payroll> Master Process then select Employees

2. Click On Create Disbursement Journal
3. Select Month from Payroll Period From field
4. Enter Journal Description
5. Click Ok
6. Click HCPM> Periodic> Bank> Bank file generation.

7. Enter the following details
• Payroll Period From
• Payroll Period To
• Date
• Journal Description
8. Click Ok
9. Verify the message on successful creation of journal
10. Click HCPM> Journals> Disbursement Journal
11. Select the Disbursement Number and Click on Lines
12. Click Workflow & then Submit

13. Based on the workflow defined, it will go for approval.
14. Click on Generate File
15. Select Salary from Salary Type
16. Enter Last date of Month in Value Date
17. Click Ok
18. Bank File will be downloaded.

9. Employee Separation
9.1. Worker Termination

When a worker is terminated, you end the worker's assignment to all positions and the relationship to
any legal entities.
1. Click HCPM> Workers> Employees
2. Select the Employee for termination
3. Click Terminate in Action Pane, in the Personnel actions group Under Work tab
4. In the Termination date field, enter the date when termination is effective (Based of the
EOS will calculate)

5. In the Last day worked field, enter the date on which the worker stops working in the
current legal entity.
6. In the Termination reason field, select a reason code for why the worker was terminated.
9.2. Resignation
Employee can submit request for resignation from his / her employee self service by using My HR
Requests
The request will be submitted to workflow for approval, and HR team should change employee status as
explained in section 9.1 if the request is approved.
9.3. End of Service run

1. Click HCPM> End of service> All end of service run
2. Click New.
3. Click the Select button and select the terminated employee
4. Select Legal entity current legal entity in the Legal entity field then Click the OK button. The
system creates the End of Service record for the selected employee.
5. Click on the newly created EOS record to view the details of EOS

6. Switch to the Payroll details tab on the End of service run form. The Payroll details section
lists the Payroll pay-elements prorated based on the Termination day updated in the system.
7. Switch to the Benefit details tab on the End of service run form.
The Benefits Sections lists the following:
• Accrual: Benefits accrued for the period prorated against the Last working day.
• Encashment: Benefits Accrued for the employment duration is suggested by the system
for encashment.
8. The system updates the encashment into 2 fields:
• Transaction Currency Amount
• Disbursement Amount
9. For benefits where there is no encashment, the user should update the disbursement amount
as 0.
10. If the benefits where the system suggested encashment is to be adjusted, the disbursement
amount will be set to the final value. When the disbursement amount is updated, the system
automatically calculates the variance into the Transaction currency PnL Amount.
9.4. Posting EOS to ledger

1. Click on HCPM> End of service> All end of service run select the EOS Post> Post to
Ledger (Status of the EOS should be approved before being able to post)

Select Month to Post and Click Ok
3. Navigate to Payroll and Benefit Ledger form Inquiry tab to verify the entries in respective
Ledgers
4. Click on Pay ledger Post and enter Description
5. Click Ok
6. Click on End Employment after the Payroll Journal is Posted.

10. Financial Posting
For the Financial Posting, the following setup needs to be ensured:
• Pay Element Account Setup – as explained in “Setup Manual”
• Payroll Parameters
• Cost Distribution Revenue Account
• Worker’s Cost Distribution Basis
10.1. Payroll Parameters

It is important to define how the payroll cost must be distributed and posted to GL and against which
dimension. This setup is done in the Payroll Parameter:
1. Click on HCPM> Setup> Payroll Parameters then go to Cost distribution tab
2. Select Payroll Journal Dimension Source.

If “Fixed” is selected the system allocates the payroll cost without any dimension distribution
If “Distribution” is selected, the system allocates the payroll cost against the dimension attribute
selected on the payroll parameters.
10.2. Cost Distribution Basis

If the Payroll Journal Dimension Source is “Distribution” it is mandatory to define the Cost distribution
basis against the workers. The Cost Distribution Basis defined on the worker master would determine
how the Payroll Cost is distributed against the selected dimension attribute.
Following are the Cost distribution options available:
• Timesheet:
The system allocates the payroll cost based on the number of hours booked against the dimensions
• Split by Revenue:
The allocation percentage is setup by Dimension Total. At the first level, the payroll cost is distributed
based on the percentage against each dimension total. At the second level, the cost allocated
against dimension total is again distributed based on the Revenue booked against the dimensions
in the selected Dimension Total.
• Split by Dimension:
The allocation percentage is set up by Dimensions. The workers' payroll cost is allocated to each
dimension based on this percentage.
• Split Equally:
The payroll cost is distributed equally against the dimensions.
10.3. Cost Distribution Basis Setup

1. HCPM> Workers> Employees then select the Worker
2. Click Edit Record
3. Switch to the Employment details tab on the Work history

4. Select the Cost distribution basis.
5. If cost distribution basis is not timesheet, click on the Cost Distribution Percent to set up
the dimension’s/dimension totals and the respective percentage.

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MICROSOFT D365 F&O

HCPM User Manual

January 16, 2024

User Training Manual Pag e |3

1.1. Document Purpose

1.2. Process Overview

User Training Manual Pag e |4

2.1. Legal entity, department, hierarcy

you can view current legal entities.

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you can create new / edit existing / view current departments.

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Grade / Band Compensation

3.1. Grade structure

3.2. Compensation Plan

1. HCPM> Setup> Compensation plan> Compensation plan> New

User Training Manual Pag e |7

5. Repeat step 3, 4 for all applicable payroll pay elements

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User Training Manual Pag e |9

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4.1. Employee Profile

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4.1.2. Address and Contact Details

• Enter Address Details and Click OK

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Create new or click on the list to edit existing saved records

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• Enter dependent details

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4.2. Employee Bank Account

• Click Area Page node: HCPM> Workers> Employees

• Enter the details of the bank account:

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Bank code Routing Bank account type Amount Currency Remainder

HSBC Current Account 0 AED Yes

4.3. Worker Group

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4.4. Employee Calendar

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4.5. Employment (Payroll) Setup

1. Click Area Page node: HCPM> Workers> Employees.

4.6. Employment details (Date effective versioning)

2. Click on Date manager button.

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3. Select Pay element.

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4.8. Air Fare Entitlement

4.8.1. Air Class setup

3. Close the Air class form.

4.8.2. Air Ticket Setup

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4.8.3. Worker Air Fare Entitlement

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5.1. Loan Types

3. Enter following details & Click OK

5.2. Loan Application

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