Payroll Accounting Essay

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How Accounting Information
Systems Has Improved
Payroll Accounting
Kendall Lehart
ACC 575
Stephen F. Austin State University

Payroll Process
1. Update Employee Master File
2. Set Pay Period and Enter Time Worked
3.Enter any Adjustments or other types of Income
4. Calculate Pay for the Period
5. Print and Review Reports before Printing Checks
6. Print Paychecks, or Pay Stubs if Direct Deposit is used
7. Print Payroll Registers and Distribute Reports
8. Transmit Payroll Taxes

Payroll Before AIS
MANUAL• Time Cards
• Calculations
• Lots of Paperwork
• Time-Consuming
• Mistakes
• Payroll Clerk

What to Consider
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Hours Worked
Federal Income Tax Withholdings
State and Local Taxes
Deductions (Voluntary and Involuntary)
Employee Benefits
Child Support
Overtime and Vacation Pay
Way You Pay (Hourly, Salary, Commission, etc)
Pay Rate Information
Payment Options (Direct Deposit or Paper Check)

Payroll After AIS
AIS Advantages:
• Companies can keep better track of payroll information
• Automatic Time Clocks can Directly Port Hours into System
• Print Checks Faster
AIS Disadvantages:
• Accurate Data Entry
• Danger of Hackers
• Risk of Fraud

Outsourcing Payroll
• Payroll Services
• Basic Services:
• Payroll
• Tax Obligations
• Print and Deliver Checks
• Management Reports
• Envelope Stuffing
• Direct Deposit
• W-2
• 401(k)
• 125 Mutual Fund Plans

Outsourcing Payroll
Choosing a Provider:
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High Customer Service
Within Reasonable Driving Distance
Bonded

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