Accounting Information Systems: The Processes and Controls, 2nd Edition

IT SYSTEMS OF PAYROLL PROCESSES (STUDY OBJECTIVE 4)

The preceding presentation demonstrates the importance of information technology in the payroll processes. Without computerized records, the human resources and payroll departments would be forced to search all personnel files in order to obtain the data used to generate a payroll register. Numerous mathematical computations would also need to be performed in order to figure the amount of net pay for each employee. This manual process would be nearly impossible for medium- and large-size companies that disburse hundreds, or thousands of employee paychecks each period. It is clear that computer technology can be a necessary ally of the payroll process. Because of the modern pressures to cut costs and competitive nature of the business world, many companies require their human resources and payroll departments to process massive amounts of employee data in extremely short periods. Therefore, even the smallest companies may find it worthwhile to enhance their payroll processing with computerized systems.

Routine payroll processing occurs at specified time intervals—namely, the weekly, biweekly, or monthly pay dates. Because of this infrequency and the sequential nature of the payroll process, many companies find that batch processing is well-suited for payroll activities. With batch processing, the human resources department is responsible for keying employee information into a personnel master file, and the timekeeper can accumulate ...