Management Accounting Best Practices: A Guide for the Professional Accountant

Chapter 6

Payroll Decisions

The payroll function has traditionally been highly labor-intensive, but available technology now makes it possible to automate almost every aspect of the process, leaving the payroll staff with only an oversight role, reviewing transactions for errors.

To see how simplification can be achieved, it is easiest to first break down the payroll function into three categories: inputs, processing, and outputs. In the inputs category, the payroll staff is usually burdened with manual rekeying of employee timecards, which can now be eliminated through the use of computerized time clocks, Web-based timekeeping systems, and data entry by phone. In the processing category, the payroll staff usually spends its time processing payroll deductions, issuing and receiving forms, and calculating payments. These tasks can now be automated with self-service portals, deduction management, and the outsourcing of payroll processing. The final category is outputs, or payments to employees, where the payroll staff traditionally creates and distributes checks. Instead, it is now possible not only to pay employees by several electronic methods, but also to post their remittance information on the Internet, rather than mailing it to them.

This chapter clarifies how all of these payroll simplification techniques work. The following table itemizes the section number in which the answers to each question can be found:

Section	Decision
6-1	How can I automate time clock data collection? ...