Page 115 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
have so many salaried employees that it becomes a minor cleanup issue
to convert the few remaining hourly employees to salaried positions.
Cost:

Installation time:

Minimize Payroll Cycles
Many payroll departments are fully occupied with processing some
kind of payroll every week, and possibly even several times in one

week. The latter situation occurs when different groups of employees
are paid for different time periods. For example, hourly employees may
be paid every week, while salaried employees may be paid twice a
month. Processing multiple payroll cycles eats up any spare hours of the
payroll staff, leaving them with little time for cleaning up paperwork or
researching improvements to its basic operations.
To alleviate this problem, all of the various payroll cycles can be
consolidated into a single, companywide payroll cycle. By doing so, the
payroll staff no longer has to spend extra time on additional payroll pro-

cessing, nor does it have to worry about the different pay rules that may
apply to each processing period; instead, everyone is treated exactly the
same. To make payroll processing even more efficient, it is useful to
lengthen the payroll cycles. For example, a payroll department that
processes weekly payrolls must run the payroll 52 times a year, whereas
one that processes monthly payrolls only does so 12 times per year,which
eliminates 75 percent of the processing that the first department must

handle. These changes represent an enormous reduction in the payroll-
processing time the accounting staff requires.
Any changes to the payroll cycles may, however, be met with oppo-
sition by the organization’s employees. The primary complaint is that
the employees have structured their spending habits around the timing

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