Recently, the State of Kansas faced an overwhelming problem on the finance side of their PeopleSoft system.  At BLUEPRINT 4D 2023, Sarah Tongier, Assistant Manager of Statewide Payroll & Accounting for the State of Kansas, shared their PeopleSoft story of what they did to speed up payment processing time.

The Problem

The State of Kansas went live on PeopleSoft Financials/Supply Chain Management in 2010 and added an external-facing portal in 2018. The organization also uses Human Capital Management 9.2 with Payroll for North America, Employee Self-Service, Time and Labor, and Candidate Gateway.

However, each month, the state of Kansas pays out 80,000 retiree payments. These payments get sent to the central PeopleSoft system by the Kansas Public Employee Retirement System (KPERS).

On the nights that these payments hit the PeopleSoft system, the team would experience extremely poor performance during the voucher and payment processing. Payments were bogged down at every step through accounts payable, from budget check, to voucher post, to paycycle, and payment post.  The State of Kansas needed to speed up payment processing time.

Initially, they tried a band aid fix of bypassing Budget Check for retiree payments. This required a SQL update to set the Budget Status field to ‘valid.’

But the band aid fix didn’t solve the problem.

The nightly batch kept running long, delaying opening the system to users the next morning.  This closed the system overnight to users from 6 pm to 7 am for an average nightly batch run time of 13 hours.  On monthly retiree payment nights, the time averaged two additional hours.  Meaning that once a month, they weren’t open to their user community until 9 AM, which became a big problem with the finance staff in state agencies.

First Approach: Tuning

Moving forward, the State of Kansas kicked off a system performance improvement project. They hired a well-known and talented consultant to review and tune processes system wide. This was a 12-month project that significantly improved overall processing times but did not alleviate the issue on high-volume payment nights.

Not There Yet: Requirements Moving Forward

Once the consultant fine-tuned as much as possible, the team realized they needed to define requirements for their next solution. If they couldn’t make AP any faster, they needed to do the following:

• Reduce the number of KPERS monthly retiree payments to process in Accounts Payable
• Record the required accounting entries in General Ledger
• Ensure the accuracy of payment information going to the bank

Solution: The Balancing Routine

In the end, the team adapted a solution they were already using in the HCM process for payroll for public university staff, which allowed them to speed up payment processing time.

Coined The Balancing Routine, the approach works like this:

• Each university has its own payroll system, but paychecks are issued centrally by State of Kansas Payroll department.
• Universities send interface files to Central containing paycheck data, including taxes & deductions, along with a GL file with accounting entries.
• Balancing routine compares filed by EE before loading.

On the finance side, The Balancing Routine works like this:

Monthly, KPERS, the retirement agency, sends the following to the central accounting office monthly:

• ACH payment file (destined for the bank)
• General Ledger file with accounting entries for those ACH payments
• Email confirming expected totals

Once this happens, the developers created a custom process compares two files using temp tables to ensure they “balance” based on payment counts and payment amount totals.

If the files don’t match, the following happens:

• Files are automatically re-named to prevent further processing.
• Retirement Agency notified via email and new files must be submitted.

If the files match, the following happens:

• The system automatically generates email confirming a successful match.
• GL file releases for posting in the FSCM system on Release Date specified on run control page, and accounting entries related to the payments are captured.
• ACH Payment file is transmitted directly to the bank so that vouchers/payments are never recorded in Accounts Payable, which bypasses the performance issue entirely.

You can see what this process looks like in the images below.

Problem Solved!

The finance team felt fortunate they could leverage a process that had already been vetted and used successfully on the HCM side to speed up payroll processing for the retirees’ payments.   In fact, The Balancing Routine was so successful that it’s now been implemented for two other high-volume scenarios: tax returns in the Department of Revenue and unemployment payments in the Department of Labor.

To get more details on how the State of Kansas implemented The Balancing Routine, watch part two (begins at 23:55) of this BLUEPRINT 4D presentation recording: ERP PeopleSoft Ignite Session.