Section 12 - Payroll systems and Technology Flashcards
What is the main objective of any payroll system?
Provide for compliance with federal, state and local withholding, depositing and reporting requirements.
What are other objectives of a payroll system?
- Issue timely and accurate paychecks, direct deposits and other disbursements
- Maintain adequate records of all data and transactions
- Prepare internal reports
- Satisfy cost-saving objectives
- Guarantee the security of the system
What is Interfacing?
When multiple systems use an interface, important data is moved or copied to a center repository.
-Data for multiple systems is shared
Ex: TBA and PeopleSoft
What are some of the internal and external systems that typically require a direct interface with payroll?
- Human Resources
- Benefits
- Time and Attendance
- Tax Deposits
What is Integration?
A system that provides a shared database for human resources, payroll and benefits information. This eliminates double data entry.
What are reasons for Integration?
- Eliminates double data entry
- Makes better use of available staff
- Eliminates timing issues
- Greatly reduces data discrepancies
- Streamlining the payroll, HR and benefits functions
- Complete data in one location
- Reduces the time spent interfacing
- Establishes a foundation for employee and/or manager self-service applications
When the payroll team is looking for new Payroll hardware and software what alternatives do they typically consider?
- Service Provider (outsource the process)
- In-house computer with custom-designed software
- In-house computer with vendor-supplied software
- A combination of the above
What are the advantages to outsourcing the Payroll to service providers?
- Low fixed costs
- No extra space or employees needed
- New services can be added
- Reduction in processing delays
- Variable processing costs
- Fewer research problems
- Networking possibilities
- Training and support
What are the disadvantages to outsourcing the Payroll to service providers?
- Lack of control over security
- Responsibility for filing errors
- Unique needs create problems
- No control over breakdowns
What are the advantages to In-House Payroll systems?
- Control of the system
- Convenient access
- System security
- Scheduling flexibility
What are the disadvantages to In-House Payroll systems?
- Sufficient secure space needed
- High fixed costs
- Additional staffing
- System may be working below capacity
- Shelfware/not all aspects of software being used
- Disaster recovery planning a must
- Wrong computer may be chosen
What process is taken to select a computerized payroll system?
- Build a Project Team
- Analyze what the system needs to do
- Prepare a Request for Proposal (RFP)
- Select a System
- Implement the System
- Evaluate the System’s performance
What are the steps for Implementing a system?
- Prepare for implementation
- Train team members and the payroll staff
- Conduct a ‘gap’ analysis (determine if there are any gaps in functionality)
- Convert old data and add new data
- Test the new system
- Parallel testing (the final test before going live
- System Conversion
What controls are put in place for the automated payroll system?
Putting Controls into the Process - System Edits - Periodic data auditing and sampling - Batch Controls - Correction procedures - Balancing Reconciliation System Documentation - Process documentations - Step-by-step procedures
What are system edits?
A warning or alert built into the system that checks for errors and either corrects the error or notifies the operator that something may be wrong.
