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CHAPTER 3
Payroll Procedures
and Controls
After reading this chapter you will be able to
• Understand which procedures to use to process a payroll
• Know which controls to impose in the areas of employee
advances, payroll checks, and payroll expenses
• Know when controls are not necessary, and can be safely
eliminated
he payroll function is largely driven by procedures that should be
followed consistently to ensure that work is completed properly and
T thoroughly. This also enables a payroll manager to exercise proper
control over the function,since anyone following a procedure is also fol-
lowing the control points that have been built into them. In this chap-
ter, we will cover the various types of procedures that should be used to
run a payroll department, as well as address many of the control weak-
nesses and recommended control points that can offset them.
Payroll Procedures 1
A payroll procedure is a written statement that itemizes the reason for an
activity,notes who is responsible for it,and describes exactly how the activ-
ity is to be completed.It is highly applicable to the payroll function,which
is full of activities that must be completed the same way, every time.
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