FREE online courses on the Basics of a Computer - COMPUTER APPLICATIONS - Payroll and Personnel Records

 

Payroll accounting was the first commercial area to become widely computerized. The calculation of wages or salaries involves a number of variable but common factors which relate to the personal details of each employee, such as gross pay or rate for the job, tax code, national insurance, etc.

 

These facts are retained on backing store together with information which accumulates each time the payroll is run, such as pay-to-date and tax deducted for the year. Hours worked, overtime and any other information relating to the pay package being processed forms the input data for the particular run. The program contains formulae for calculating all the deductions to arrive at net pay. It will also build up records of tax-to-date, pay-to-date, etc. It computers these details, prepares a wages slip for the employee (and perhaps, a copy of the firm's pay office records) and writes up-dated information on the backing store for future use before moving on to consider the next employee. All this is integrated into one payroll system which may be made up of number of related programs. They are not programs involving lengthy or complicated calculations but they save a considerable amount of repetitive manual effort.

 

If pay is made in cash, a program can include an analysis to calculate the exact number of notes and coins of each denomination required for the total pay out and for each individual wage packet. Another program might print out checks to the individual bank account of each employee. Files generated by payroll are frequently enlarged to include such additional information as length of service, qualifications, training, attendance, sickness and vacation records, thus providing comprehensive personnel records.

 

The overall payroll system with attendant personnel details and records may comprise tens or even several hundreds of different though related programs. Collectively they form a package or a number of packages. A package may be a standard software development for a particular range of computers or be produced entirely within the business concern. Increasing use is being made of standard packages. Remember, computers essentially process information and it is only information (or data) which has to be provided for a package to operate successfully. A package is designed to accept information according to a specified format and the general aim is that it should be readily usable non-programming personnel.

 

The expense of a computer and the attendant system is unlikely to be justified for payroll and personnel records alone. The firm would probably use the computer (its own or one shared through a bureau) for further analyses based on the payroll program, e.g. the relationship of total wage costs (weekly, monthly, etc.) to jobs in hand, total costs to date, individual job costing, etc. This kind of information if quickly available and up-to-date makes it easier for management to improve its efficiency by promptly pin-pointing areas of weakness and strength.