System: Computerized Payroll Essay Example

will lessen the errors. A payroll system maintains a list of employees and adds and deletes employees based on new hires and those dropped from the payroll for such reasons as terminations. Other employee information could include name, address, phone number, job title, job category, if the employee is hourly or salary and his rate of pay. Employee Social Security numbers are also recorded for tax reporting purposes.

Employee data includes codes to designate what type of benefits plans the employee is enrolled in such as a 401k, major medical insurance, dental insurance and stock option plans. Businesses incur a variety of expenses and must keep meticulous financial records. Since the development of writing in the ancient world, businesses have been keeping records of their financial transactions. The United States tax system requires that business keep accurate payroll records for tax purposes. Features of a Computerized System :

A computer-driven payroll system provides a means to automate and manage payroll functions within a company. Before computers, payroll was calculated manually for each payroll check generated. A computer payroll system makes it easier for employers to keep track of years' worth of employee data and payroll information. Among the many features of a payroll system are automatic calculations used for paying employees, a heightened security which includes protecting documents and report storage of sensitive company accounting information.

Because payroll is so complex, can take hours away from your core business and lead to costly errors, many small business owners rely on their accountants, automated software systems or third-party contractors to take care of it. No matter which service you choose, the features can

and should be customized to suit the needs of your business. The most effective payroll systems offer advantages in terms of time, cost, accuracy and organization.

Process of their Computerized System: Processing a payroll manually is a labor-intensive undertaking, requiring several calculations per each employee, often on a weekly basis. The system is time-consuming and prone to calculation errors. The nearly universal shift to computerized payroll systems has done much to alleviate these problems, however. Payroll software packages are available from basic, no-frills systems for small businesses for a few hundred dollars to complex, enterprise-wide systems that can cost several thousand dollars. A payroll processing system is software and related manual procedures for paying employees.

The system is comprised parts that perform required tasks to keep payroll records accurate and to process payroll in an effective manner. After all processing cycle information has been inputted and any changes to employee data, tax table and benefits data have been made, the system calculates the payroll gross and net amount for each employee. The system makes relevant deductions, such as state taxes, from the gross pay. The deduction amounts are stored for payment to such entities as the federal and state government.

It is rare today for a business to process payroll manually, although a few small employers still find this cost-effective. However, despite all the sophisticated computer technology and software, the payroll process hasn't changed. Any businessperson responsible for payroll is wise to learn the payroll process. Machines make it faster and easier to process payroll, but you still need to understand the system to properly monitor labor expenses and catch potentially costly

errors. Be sure all employees have up-to-date W-4 forms filed out before you begin to process a payroll.