Page 111 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
prepayments will be issued, which effectively ends the extra processing
required of the payroll staff. The trouble with this rule is that a needy
employee can usually present such a good case for a pay advance that
exceptions will be made; this grinds away at the rule over time, until it

is completely ignored. Other managers will assist in tearing down the
rule by claiming that they will lose good employees if advances are not
provided to them.
The best way to support this rule is to form an association with a
local lending institution that specializes in short-term loans.Then, if an
employee requests an advance, he or she can be directed to the lending
institution, which will arrange for an interest-bearing loan to the

employee.When this arrangement exists, it is common for employees to
tighten their budgets rather than pay the extra interest charged for use
of the lender’s money. This improves employee finances while increas-
ing the processing efficiency of the payroll staff.
It’s important to arrange for alternative employee financing before
setting up a no-advance rule, in order to be certain that alternative
financing will be available to employees. Then go over the rule with all
employees several weeks before it is to be implemented, so that they
will have fair warning of the change. Also, make brochures available in

the payroll department that describe the services of the lending insti-
tution, as well as contact information and directions for reaching it.

Cost:

Installation time:

Eliminate Personal Leave Days

A common task for the payroll staff is to either manually or automati-
cally track the vacation time employees earn and use.Depending on the
level of automation, this task can require some portion of staff time

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