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The human resources (HR) function;
The timekeeping function;
The payroll preparation function;
The payment preparation and pay-out function; and
The deductions: payments and recording function.
The total wages, deductions and payroll are reviewed by senior employee, and signed as evidence of this check.
There should be complete records kept for every employee, in the employee file. Further, the foreman should be aware of the number of employees working under him.
During the wage pay-out, every employee should collect only his own pay packet, and should sign once payment has been collected. Employees should not be allowed to collect payments on behalf of other employees.
There should be sufficient segregation of duties in the payroll cycle, and sufficiently documented procedures with regard to granting of staff loans.
There should be strict and tight controls over the clocking in of employees, the preparation of the payroll and the payment of the wages, as described above in the module.
The hours recorded on the payroll should be obtained directly from the clock card machine report or computer-transaction file.
The wage rates, deductions should be obtained from personnel records or master files.
The calculations and castings should be reviewed by an independent person (e.g.one wage clerk checks another clerks work/edit checks). The reviewer needs to sign as evidence of review.
Before payments can be authorised, senior personnel, should inspect the payroll and week- to-week reconciliations need to be performed.
All personnel should sign payroll as proof of functions performed.