![]() This is a general ledger account that is used in a two-step process to check the accuracy and completeness of recording payroll costs and their subsequent allocation to appropriate cost centers.Ī payroll service bureau maintains the payroll master data for each of its clients and process payroll for them. If it does not, an error occurred in processing that needs to be promptly investigated and corrected.Ī payroll clearing account. The total of the net pay column should equal the total of gross pay less total deductions. It also means that data input was accurate, and no bogus time cards were entered during processing.Ĭross footing the payroll register. If the original and subsequent hash totals of employees numbers agree, it means that all payroll records have been processed. There are three types of data processing integrity controls that can mitigate the threat of payroll errors.īatch totals. Flexible benefit plans place increased demands on a company’s HRM/payroll system. Many employers offer their employees flexible benefit plans, under which each employee chooses some minimum coverage in medical insurance, retirement plans, and charitable contributions. Both methods provide a means to document the amount of wages paid.Ĭalculate and disburse employer-paid benefit taxes and voluntary employees deductions. Most employees are paid either by check or by direct deposit of the net pay amount into their personal bank account. This statement lists the amount of gross pay, deductions, and net pay for the current period and year-to-date totals for each category.ĭisburse payroll. This register lists the miscellaneous voluntary deductions for each employee.Įarnings statement. This register lists each employee’s gross pay, pay deductions, and net pay in a multicolumn format.ĭeduction register. Their employers use the time sheets to assign costs and accurately bill clients for services provided. Professionals in such service organizations as accounting, law, and consulting firms similarly track the time they spend performing various tasks and for which clients, recording that data on time sheets. For employees paid on an hourly basis, many companies use a time card to record the employee’s daily arrival and departure times. It’s also necessary to reflect changes in tax rates and deductions for insurance. An organization need to update their master database to reflect various types of internally initiated changes. We explain the controls necessary to ensure not only the reliability of that information but also the safeguarding of the organization’s resources. The payroll system produces a variety of reports for internal and external use. A payroll check is sent to the bank to transfer funds from the company’s regular accounts to its payroll account. Employees receive individual pay checks in compensation for their services. The checks are the payroll system’s principal output. The HRM department provides information about hiring, terminations, and pay-rate changes due to raises and promotions. The payroll system has five major sources of inputs. ![]() These systems can significantly improve productivity. Knowledge management systems not only serve as a directory identifying the areas of expertise possessed by individual employees, but also capture and store that knowledge so that it can be shared and used by others. To more effectively use employees’ knowledge and skills, many organizations have invested in knowledge management systems. The HRM/payroll master database provide descriptive information. The actual processing of payroll occurs only periodically because in most organizations employees are paid on a weekly, biweekly, or monthly basis rather than every day. The HRM-related activities and the collection of information about the use of employee time occur daily. ![]() The more important tasks include the following: recruiting and hiring new employees, training, job assignment, compensation (payroll), performance evaluation, and discharge of employees due to voluntary or involuntary termination. The human resources management (HRM)/ payroll cycle is a recurring set of business activities and related data processing operations associated with effectively managing the employee workforce.
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