Accounting Best Practices, Fifth Edition

18–12. Payroll Policies for Best Practices (Chapter 17)

• The company will not issue advances on employee pay. This policy allows the accounting staff to avoid making paycheck prepayments to employees, thereby avoiding a number of subsequent payroll transaction steps.

  Impacted best practices:

  • Disallow prepayments

• The company does not make purchases on behalf of employees. This policy keeps the accounting staff from making a series of deductions from employee paychecks to pay the company back for purchases made by the company on behalf of employees.

  Impacted best practices:

  • Prohibit deductions for employee purchases

• Employees can carry a maximum of __ hours of unused vacation and sick time forward into the next calendar year. This policy caps the carryforward of vacation and sick time, so the risk of incurring an excessive vacation accrual is minimized if the accounting staff switches to an honor system to track this information.

  Impacted best practices:

  • Use honor system to track vacation and sick time

• The company will provide access to computer kiosks for all employees. This policy allows employees to more easily gain access to payroll information over the Internet, which can include pay stubs, W-2 forms, all internal payroll forms, and direct maintenance of their own payroll information, flexible spending accounts, and pension information. Managers can also access self-service functions if this policy is implemented.

  Impacted best practices:

  • Create employee self-service for payroll changes ...