Unit Payroll October 7, 2015

Far More Danger Disbursing money to employees Relatively few external checks and balances Employees feel entitled Employees are friends with each other Employees are familiar with the procedures

Payroll Cycle Far more diversity between companies – Different documents – Different job titles – Different reporting paths – Different information flows

President VP Operations VP Personnel Controller

VP Operations Production Manager Director HR Sales Manager President TreasurerController

VP Operations Production Manager Personnel Manager Sales Manager President TreasurerController

Production Manager Personnel Manager Sales Manager President Treasurer VP Operations

Human Resources Functional Supervisor Functional Manager Determines Need Budget, Strategic Plan, Etc. Executive Management

Human Resources Functional Supervisor Advertise Position, Manage Applicants Set up Interviews Interview Candidate Resume Application Etc. Selects Candidate Offer or Contract Candidate

Human Resources Functional Supervisor New Employee Registration I-9 W-4 Benefits Enrollment Employee Master File

Functional Supervisor Employee Clock Card Time Sheet Payroll Enters Data Hours Data

Functional Supervisor Employee Payroll Enters Data Hours Data Production System Production System

Functional Supervisor Payroll Hours Data Production System Time Sheet Payroll Run Employee Master File Human Resources

President VP Operations Controller VP Personnel Functional Supervisor Payroll Human Resources

Payroll Run Payroll Report Functional Manager Pay Stub Employee Pay Check Emp. Bank Payroll Budget IRS Form 941 Payroll Report Treasurer Hours Data Employee Master File Prodn System Time Sheet Withholding Deposit Payroll Report Controller

Payroll Run Payroll Report Functional Manager Pay Stub Employee Pay Check Emp. Bank Payroll Budget IRS Form 941 Payroll Report Treasurer Hours Data Employee Master File Prodn System Time Sheet Withholding Deposit Payroll Report Controller Form 941 Payroll Report

Payroll Run Payroll Report Functional Manager Pay Stub Employee Emp. Bank Payroll Budget IRS Treasurer Hours Data Employee Master File Prodn System Time Sheet Payroll Report Controller Payroll Disburse- ment File Withholding Deposit and Form 941 Net Pay

Payroll Report Bank Statement Bank Reconciliation Deposit Receipt Controller

Payroll EmployeeIRS W2 End of Year (after Dec 31 but before January 31) Payroll Records W-2 Transmit

Questions? Questions about a “batch-based” system?

Transaction Cycles Purchasing Cycle Revenue Cycle Payroll Cycle

Capital Asset Cycle

Identification of Need Justification (ROI) Authorization of Procurement Purchase or Construction Installation, Set-Up, Capitalization Depreciation Disposal Investing Cycle Capital Asset Life Cycle

Financing Cycle

Identification of Need for Money Justification (ROI) Decision of which way to raise the money (Equity vs LTL) Issuance of Stocks or Bonds, or loan arrangement “Closing” or IPO or other Compliance with Covenants and Restrictions Calculation/Payment of Interest, or Dividends Retirement of Debt Capital Acquisition Cycle

Research and Development Cycle Identification of the need Basic Research vs. Applied Research Procurement of Resources Necessary Application of Resources, Tracking, Analysis Patents, Copyrights, Trademarks, etc. ( Intellectual Property ) Determination of Accounting Treatment Amortization

Manufacturing Cycle Design and Engineering Raw Materials Delivery, Logistics, Storage, Usage Scheduling Actual Conversion Activities Labor Overhead Application and Costing, ABC Movement of Costs to Finished Goods Conversion Cycle

Accounting Cycle Open the period Reversing Entries from prior period’s accruals/deferrals Transaction recording Trial Balance Adjusting Entries (accruals/deferrals) Financial Statement Preparation Closing Entries

Transaction Cycles Purchasing Cycle Revenue Cycle Payroll Cycle Investing Cycle (Capital Asset Cycle) Financing Cycle R&D Cycle Manufacturing Cycle (*) * -- Not a true TRANSACTION cycle, but often considered one

Schedule Today Oct 12: Payroll and Minor Transaction Cycles Wed Oct 14: Units 13, 14, 15 Friday Oct 16: Group Work Day for E-E Distributors Monday Oct 19: Unit 15 ( conclude ) and 16 Wed Oct 21: Unit 17 and 18 Friday Oct 23: Unit 18 ( conclude ) and help session Monday Oct 26:Exam 2