Page 77 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
The first step in creating a set of payroll procedures is to construct a
flowchart of the overall process, so that you can identify all activities,
thereby ensuring that a procedure is written for each one.Also, each box
in the flowchart contains an identifying index number for each proce-
dure,which is later listed as the procedure number in the header for each

procedure. Thus, you can first refer to a process flowchart for the specific
procedure needed and then trace the index number to the detailed pro-
cedure. A sample payroll process flowchart is as shown in Exhibit 3.1.
The remainder of this section contains six payroll procedures that
correspond to the activities noted on the payroll process flowchart. For
consistency, they all have exactly the same format.The header contains a
notation box on the right side that lists an index (or retrieval) number,the

page number,the date on which the procedure was created,and the index
number of any procedure that it has replaced. The main body of the
procedure is in three sections: the “Purpose and Scope” section summa-
rizes what the procedure is all about; the “Responsibilities” section item-

EXHIBIT 3.1

Payroll Process Flowchart

Payroll
(PAY)

Collect and Add or Delete Alter Process Issue
Reconcile Employees Employee Payroll Payments
Time Cards (PAY-02) Deductions Transactions to Employees
(PAY-01) (PAY-03) (PAY-04) (PAY-05)

Archive
Payroll
Records
(PAY-06)

50