12 - Payroll Cycle Flashcards
how are transactions triggered in the payroll cycle?
by the hiring of employees who will be paid remuneration
how do salaries work?
- fixed, predetermined amount
- usually not affected by hours worked
- paid monthly by EFT
how do wages work?
- paid for productive hours only
- usually paid weekly/fortnightly
- EFT, sometimes cash
what does the Labour Relations Act do?
- sets out laws that govern labour in SA
- establishes duties and rights of employees and employers
through which bodies will labour disputes be resolved?
- CCMA
- labour court / court of appeal
- SCoA
- constitutional court
what does the Basic Conditions of Employment Act contain laws about?
- minimum wages
- overtime and public holiday rates
- leave, sick days
stages of the payroll cycle?
1) personnel
2) timekeeping
3) preparing the payroll
4) payment preparation and payout
5) recording
risks for personnel?
- unauthorized appointments / dismissals
- fictitious employees included
- unauthorized wage rates / salaries, benefits, deductions, changes
- not all changes included
source documents used by personnel?
- employee register/list/masterfile
- payroll amendment forms
- employment contracts
controls for personnel?
- perform background checks
- financial mgr can authorize recruitment by signing employment contract
- financial mgr can review changes to list/masterfile
- payroll administrator must update employee list/masterfile after each employment/dismissal
functions of personnel?
- administrate hiring
- ensure correct pay rates are paid
- maintain VAC employee records
types of systems in timekeeping?
- clock-in system for wage earners
- time allocation for salary earners
function of timekeeping?
- keep VAC record of hours worked
- issue clock cards; supervising clocking process
documents used in timekeeping?
- clock cards (w)
- weekly time record (s/w)
- batch control sheet / monthly summary (s)
risks regarding wage earners? (timekeeping)
- employees paid for hrs not worked
- clock cards made for fictitious employees
- hrs calculated incorrectly
risks regarding salary earners? (timekeeping)
- incorrect amts billed to clients
- employees claim unauthorized overtime
- employees paid incorrect bonuses
controls for wage earners? (timekeeping)
- security guards to verify identity of all employees entering the premises
- employees to swipe staff card in clocking machine when clocking in and out
- factory mgr supervising the employees should perform spot checks to ensure employees are present during working hours
controls for salary earners? (timekeeping)
- mgmt to review timesheets
- mgmt to approve overtime billed
- comparison of actual hrs to budgeted
functions of preparing the payroll?
- creating the payroll and calculating net wages
- correctly recording normal vs overtime pay
documents relevant for preparing the payroll?
- clock cards
- batch control sheet
- employee register
- deduction tables
risks when preparing the payroll?
- dismissed/fictitious employees are paid
- salaries/wages calculated incorrectly
- unauth/inaccurate deductions
- employees left out due to human error
controls for preparing the payroll?
- payroll clerk to authorize deductions on the payroll listing
- second payroll clerk to agree the authorized hours worked on monthly timesheet and verify hourly rate on employee list
- financial mgr to reperform wage calculation and do reconciliations; sign as evidence of check
risks in payout for wage earners?
- unauth/incorrect s/w amount included in the payrun
- incorrect payslip prepared
- wrong amount of cash put in envelope
- wage paid to non-employee
- unclaimed wages stolen
controls for payment?
- financial mgr to review payroll listing before pmt is made
- employee to sign register as evidence of collection when collecting their payslip
