Steps to Proper Payroll Management  

What information should be part of your company’s payroll function? Anything that impacts directly on the amount of salary or benefits awarded to employees in compensation for services must be included.We assume, first of all , that your business office is diligent about having each new hire complete and sign the appropriate paperwork, including a W-4 form. Then, for every pay period, there are specific steps for your payroll manager to follow:

1. Gather all records of money earned and work performed. These can include time cards, piecework description sheets, sales commissions and bonuses, or straight salary records.
2. Compute all payroll changes. These may include new-hire information, salary increases, bonus awards, holiday or overtime pay adjustments, and the like. In the same vein, you’ll need to process all payroll deduction, including various taxes, union dues, charitable contribution, and so forth.
3. Compute the actual payroll and draft the appropriate checks to employees and federal agencies. This may mean processing this information electronically for direct deposit.
4. Complete the payroll journal to bring the current record up to date.
5. Make the appropriate entries to the payroll section of the general ledger.

That’s assuming that, as part of its payroll function, your company has also established the necessary record-keeping for the accumulation of sick time, vacation days, personal holidays, family-leave time, and anything else required by company policy or state and federal laws.