Cloud Migration Highlight: Balance Conversion Considerations

cloud migration balance conversion

One of the key decisions project teams need to make when implementing any system is the date you will cutover (go-live) to the new system. Depending on project budget and resource availability, many factors will contribute to determining an appropriate go-live date. The date you choose when implementing a payroll system can add significant time and complexity to the project because of payroll balances and the potential need for a balance conversion.

What do we mean when we talk about balances? In Payroll, there are Earnings (salary, bonuses, cell phone allowances), Deductions (medical or dental insurance, 401k contributions, and pensions), as well as Taxes (Federal, State, FICA, FUDA) that accumulate and all included.

There is potential for hundreds of balances that need to be tracked for each employee, which, in a large organization, can easily add up to hundreds of thousands or even millions of balances in your payroll system. All of those balances accumulate throughout the year and must be recorded and reported. 

Most balances reset at the beginning of the year, making the beginning of the year the easiest time to go live when implementing a new payroll system. The key benefit of going live at the beginning of the year is that you do not have to convert the accumulated balances. Whenever feasible for a payroll implementation project, Elire recommends selecting a go-live date that corresponds with the beginning of the calendar year.

Due to federal and state quarterly reporting policies and monthly or periodic reporting requirements in various states, systems also track balances on these various time dimensions. Any other go-live date requires an extensive conversion effort due to the need to convert balances between systems for reporting purposes. While all together avoiding the need for conversion is preferable, the next best time to go live with a payroll system is the beginning of a new quarter, where the quarterly balances reset.  

Each payroll system has its own mechanism for tracking these balances and time dimensions as they accumulate. However, suppose you do end up needing to do a quarter edge balance conversion. In that case, it is crucial that your organization has a clear understanding of how your current system stores these balances, the way the new system stores them, and the process for initializing these balances at the time of go-live. 

Elire’s unique set of Accelerator Tools can greatly assist with this process and shorten the conversion timeline, particularly with PeopleSoft to Cloud implementations. However, a massive testing effort is still required.

If it’s impossible to go live at the beginning of the quarter, balance conversions are still possible. Elire is one of the only known consulting firms that successfully attempted and completed two mid-quarter Oracle Cloud HCM balance conversions. Mid-quarter conversions are much more complex because we have to convert year-to-date (YTD) and quarter-to-date (QTD)  balances. Beyond the sheer scale of data and balances that will need to be converted in this scenario, additional testing is also required.

It’s worth noting the complexity of the testing process. It requires programming, loading, and mapping all balances. Testing will likely be the most time-consuming phase of this process. With 200+ balances per employee for a beginning of the quarter go-live, this will likely be doubled for a mid-quarter cutover. Some of the tests you will need to perform, include running year-end payroll reports and validating statement outputs. With sensitive information like payroll data, accuracy, data security, and discretion is of the utmost importance.

As an experienced payroll implementation partner, Elire is here to help with your payroll software conversion. Reach out to [email protected] to schedule a time to speak with our team about your unique situation. In the meantime, check out our post on “5 Strategies for Transitioning Payroll Reporting to Cloud” here.  

  • Ms. Caron serves as Elire's Marketing Associate, specializing in content writing and digital media communications. Maddie works to deliver relevant industry updates and technical blog posts to educate and engage Elire's audience.

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