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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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Summary

This chapter primarily dealt with a variety of techniques for streamlining an existing payroll system. The key improvement concepts are the use of automated timekeeping systems, shifting some of the data-entry burden to employees and managers, reducing the number of payroll cycles, and issuing electronic payments. These changes leave the payroll staff in a monitoring role, which varies substantially from its existing data-entry orientation. Though few companies would implement all of the best practices listed in this chapter, given the variations in how payroll is processed in some industries, there are still many techniques listed here that a payroll manager should strongly consider installing.

Some of the best practices noted in this chapter work to the detriment of employees. For example, in order to streamline the payroll function, a company may do away with employee purchases and payroll advances, since these require extra monitoring work from the payroll staff. However, if a company is in an industry or geographical region where qualified employees are in short supply, it may be a reasonable decision by the management team to allow these inefficiencies to continue, rather than run the risk of losing employees over such minor streamlining changes. Because of the impact on employees of many payroll best practices, it is wise to consult with senior management prior to making any significant changes and not to be surprised if the decision handed back is to retain the ...

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