Payroll accuracy after SAP updates: How does this affect you?

As part of our series on payroll accuracy, following our blog on 2025 payroll readiness: Are you prepared for SEA’s new regulations?, we now look at how software updates impact payroll accuracy, including in Southeast Asia (SEA) and beyond.

Payroll systems are constantly evolving to keep pace with legislative changes and advances in technology. These changes can arise from legal compliance changes, system-level technical adjustments, or the introduction of new functionality. Even when these updates are applied successfully from a technical standpoint, they still require functional payroll testing to ensure real-world accuracy.

The SAP payroll landscape is no exception. Regular updates, support packs and enhancement – such as SAP Notes, HR Support Packages (HRSPs) and Country Legal Changes (CLCs) – can directly and indirectly affect payroll accuracy.

For example, SAP has announced that they will be Modernizing SAP SuccessFactors Employee Central Payroll (ECP). From the second quarter of 2025, SAP ECP Installations will be changed from SAP ECC 6.08, SAP NetWeaver 7.40 and SAP MaxDB database, to SAP S/4HANA 2023, ABAP Platform 2023, SAP HANA database. This SAP Community Blog article explains what will change, and calls out that "...the ECP modernization is not just a technical upgrade—it’s a transformation toward a more advanced, scalable, and future-ready payroll solution. While SAP handles most of the technical conversion, customers and partners play an active role in testing and validation."

As part of the SAP ECP modernisation, the database and payroll software will change, and clients will be responsible for testing the system. EPI-USE Labs’ Variance Monitor is approved for use with SAP ECP, and is an excellent accelerator in this process, helping to speed up testing, and lowering the risk that any unforeseen changes will impact payroll calculations. Learn more in our blog about how SAP SuccessFactors Employee Central Payroll (ECP) is modernising. Are you prepared?

Implementing SAP updates that may affect payroll always requires thorough testing and validation. Payroll is not just about whether the system runs; it is about whether it runs correctly.

Many people assume that software updates are safe once technically applied. However, any software change can introduce unexpected payroll risks if not properly validated. It could significantly impact payroll accuracy, causing incorrect salary and third-party payments, frustrated employees, legislative non-compliance, costly penalties from local authorities and a loss of trust.

What HR and Payroll professionals can do

Even small changes can lead to significant disruptions in payroll accuracy. Rather than assuming everything is fine, HR and payroll professionals should take ownership of payroll accuracy after each system change. Here’s how:

• Stay informed about software updates
• Monitor HRSP and country-specific legal changes. Ensure they are tested in a project system using anonymised Production data before being implemented in the live system.
• Test beyond the basics
• Avoid relying on spot checks or limited sample testing. Ensure that payroll and time management calculations are validated across the entire employee population to confirm that no unintended discrepancies have been introduced as a result of the system changes.
• Compare before and after results
• Run parallel payrolls or test cycles to compare the payroll results generated before and after the software updates. Ensure there are no unintended variances, while accommodating intentional differences due to any known system and configuration changes.
• Identify discrepancies in payroll, time and FI Postings on a Wage Type level, not just the totals.
• Monitor post go-live
• Continue to test and validate payroll runs after go-live, as part of the regular payroll process. This validation could be a step that speeds up the regular payroll process and reduces payroll errors.

Finding the right solution

Tools such as the Wage Type Reporter, bespoke Payroll Results Comparison Reports, and manual spreadsheets can be combined and used for comparisons; but they are not fully automated, are slow and tedious to use, and often pose security risks – especially when data is exported outside of the SAP system. In today's world of cybercrime and identity theft, this is not an option.

Variance Monitor is specifically designed to run comparison of payroll results before and after updates, within SAP, without disrupting operations. Benefits include:

• Variance Monitor enables comparison between two systems at the same point in time; in other words, before and after the software update.
• Variance Monitor reads SAP data directly from the system without the need to export data. It also applies SAP Authorizations to control access to data and product features. This means it is more secure than exporting data to files for spreadsheet comparisons.
• Variance Monitor is able to process a large volume of data very quickly. This means it saves you time and allows for more test runs and for all employees, instead of executing only a few test runs for a small sample set of employees.
• The Variance Monitor 3 Export program creates encrypted data files that can be used as a data source for the control system in a comparison. This means it makes it possible to use only one system to test the impact of a transformation if the data is extracted before the changes are made. This is a very handy feature that supports efficient utilisation of computing resources and infrastructure.
• Comparisons can be set up and re-used again, or copied and changed. Either way you win by saving time and gaining a repeatable, consistent analysis process.
• Variance Monitor comparison runs can be scheduled to run outside office hours and send you a notification when it is done. This means you could leave the office in the afternoon and have the results ready the next morning for your analysis.
• Variance Monitor’s List View Display supports forward navigation to Payroll Results in support of drill-down analysis.

As payroll systems evolve alongside SAP updates and legislative changes, a proactive approach to monitoring and validation becomes increasingly important. For HR and payroll professionals, regular checks throughout the year not only simplify year-end reconciliation but also minimise disruptions to payroll processing and reduce the likelihood of costly errors.

Early identification of discrepancies in the payroll cycle is essential for maintaining accuracy, reducing risk, and ensuring regulatory compliance.