Page 67 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
As illustrated in Exhibit 2.4, it is also useful to include a column
that identifies the department in which an employee works, for over-
time utilization frequently varies considerably by department, given the
different workloads and capacities under which each one operates. By

sorting in this manner, you can readily determine which departments
are consistently under- or overutilized.In the exhibit,it is readily appar-
ent that the Lathe Department is being overworked, which will require
the addition of more equipment, more personnel, or both.

Problems with Timekeeping and Payroll

Despite your best efforts to create an accurate timekeeping system, there
are several types of errors that will arise from time to time and that require
special controls to avoid. One is the charging of time to an incorrect
job. This is an easy error to make, typically caused by incorrect data
entry by a direct labor person, who, for example, transposes numbers or
leaves out a digit. To keep this problem from arising, the timekeeping
system can be made an interactive one that accesses a database of cur-
rently open jobs to see if an entered job number matches anything cur-
rently in use. If not, the entry is rejected at once, forcing the employee

to reenter the information. This control can be made even more pre-
cise by altering the database to associate only particular employees with
each job, so that only certain employees are allowed to charge time to
specific jobs; however, this greater degree of precision requires addi-
tional data entry by the job scheduling staff, who must enter the
employee numbers into the database for all people who are scheduled
to work on a job. If there are many jobs running through a facility at

one time, this extra data entry will not be worth the improvement in
data accuracy. If the existing data entry system involves only a simple
rekeying of data from a paper-based time card submitted by employees,
the data must be interpreted and then entered by the data entry staff.

40