Payroll Accounting
How Accounting Information Systems has Improved Payroll Accounting
Abstract
Payroll accounting has been greatly improved with the invention of accounting information systems (AIS). The process of payroll is a complicated one that involves many steps. From updating the employee information to printing the checks, almost all areas have been improved with the help of AIS. There are many things to keep track of when processing payroll from beginning to end. Many larger companies have turned to outsourcing payroll services to keep up with all of the taxes, withholdings, and other deductions, to name a few. Using a payroll provider can be helpful for small to medium sized businesses, but only if the benefit outweighs the cost of processing payroll in-house. If it is decided to process payroll in-house, there are several internal controls, such as segregation of duties, which will have to be established. These controls, if implemented correctly, can help to safeguard assets from theft and fraud. All aspects of business, especially payroll accounting, have been improved following the introduction of AIS.
Overview of the Payroll Process The processing of payroll involves many different steps and requires a detailed process flow to avoid costly errors. It is important to use the same process each payroll period to ensure it is handled consistently on a repetitive basis. The actual process flow may vary from the standard process depending on the company and whether it uses a manual, computerized, or outsourced payroll processing system (Payroll Procedure, 2015). Most commonly, the first step in processing payroll is to update the employee master file, if needed, to include address changes, payroll deduction changes, voluntary deductions, and new hire information for employees hired in the current pay period” (Ferguson, 2015). The next step is to set the pay period and enter the time worked. Time worked can be found on time cards or time sheets. Some
Abstract
Payroll accounting has been greatly improved with the invention of accounting information systems (AIS). The process of payroll is a complicated one that involves many steps. From updating the employee information to printing the checks, almost all areas have been improved with the help of AIS. There are many things to keep track of when processing payroll from beginning to end. Many larger companies have turned to outsourcing payroll services to keep up with all of the taxes, withholdings, and other deductions, to name a few. Using a payroll provider can be helpful for small to medium sized businesses, but only if the benefit outweighs the cost of processing payroll in-house. If it is decided to process payroll in-house, there are several internal controls, such as segregation of duties, which will have to be established. These controls, if implemented correctly, can help to safeguard assets from theft and fraud. All aspects of business, especially payroll accounting, have been improved following the introduction of AIS.
Overview of the Payroll Process The processing of payroll involves many different steps and requires a detailed process flow to avoid costly errors. It is important to use the same process each payroll period to ensure it is handled consistently on a repetitive basis. The actual process flow may vary from the standard process depending on the company and whether it uses a manual, computerized, or outsourced payroll processing system (Payroll Procedure, 2015). Most commonly, the first step in processing payroll is to update the employee master file, if needed, to include address changes, payroll deduction changes, voluntary deductions, and new hire information for employees hired in the current pay period” (Ferguson, 2015). The next step is to set the pay period and enter the time worked. Time worked can be found on time cards or time sheets. Some