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Payroll Cycle - Coggle Diagram

- - - - Documents
        
        Authorised payroll
        
        Payroll signed by employees
        
        Payslips
        
        Paypackets
        
        Unclaimed wages register
  - - - Documents
        
        Blank clock cards
        
        Hours recorded on clock
        
        Batch control sheet and batch register
  - - - Documents
        
        Clock cards
        
        Updated list of employees
        
        Payroll (wage journal)
        
        Week to week reconciliation
  - - - Documents
        
        Employee’s file
        
        Payroll amendment forms
        
        Updated list of employee details
  - - - Documents
        
        General ledger
        
        Payroll (wage journal)
        
        Cash payments journal
        
        Return form
- - - - Internal Controls
        
        Interviews should be conducted with all applicants; the head of department in which the applicant is going to work should also be present.
        
        All appointments and dismissals/resignations should be authorised and approved by a senior official on supportive documentation.
        
        Changes to pay rates, promotions to higher employment grades and any other changes in service conditions should be decided upon by the human resource department after consultation with all interested parties, e.g. unions, and consideration of relevant laws and regulations, e.g. minimum wage regulations.
  - - - Internal controls
        
        Clock cards should:
        
        be numerically accounted for
        
        be issued by the personnel department and prepared from personnel
        records/master file
        
        be kept at clock machine, under supervision, not with the employees).
        
        Entry and exit points to the work area should:
        
        be limited to one
        
        protected by a “turnstyle” type mechanism
        
        supervised during clocking periods
        
        Clock procedures:
        
        clocking machine should be situated at the entrance to ensure that
        personnel may not leave premises without clocking in/out;
        
        supervision over clock (prevent employees to clock in for absentees).
        
        The foreman should:
        
        keep a record of personnel present and time worked
        
        sign clock card as evidence of approval of hours worked by the employee
  - - - Internal control
        
        A strict monthly schedule should be developed for:
        
        Posting the entries to raise the liabilities for the deductions,
        
        Making the necessary payments on a timeous basis, and
        
        Supervisory checks on the above activities
        
        The payroll and return forms should be presented as supporting evidence to
        the signatories before the deductions cheques are signed
  - - - Internal controls
        
        Wages cheque should be cashed at bank
        
        by two or more persons;
        
        not at regular times/routes;
        
        It is preferable to make use of security company to do wage payouts.
        
        The make-up of wage packets should:
        
        be done by two wage department members and physical security over all aspects of cash handling should be extremely tight.
        
        preferably be done by an independent persons not involved with the preparation of the pay-roll;
        
        the wage details should appear on the wage-packet (gross wage,
        deductions);
        
        The wage cheque should be signed by two signatories, one of whom must be
        senior management:
        
        The wages cheque together with the current and previous payroll and supporting documentation in respect of appointments, dismissals and increases should be presented to the cheque signatories for authorisation.
        
        A senior employee should compare the payroll to the wages cheque
        
        The current payroll should be compared with the previous payroll and check the validity of all changes to supportive documentation
        
        The payroll and documentation should be signed/stamped to cancel after approval.
        
        The payout
        
        should be done by personnel not involved with make-up of wages
        
        The foreman must identify all employees, however the payout must not done by himself
        
        the employees should sign payroll as proof of receipt;
        
        the foreman should signs payroll after payout as proof of supervision and identification of employees.
        
        Unclaimed wages at the end of the payout, the paymaster and the foreman who conducted the payout should agree all unclaimed pay packets to the payroll. Once all employees who have not claimed the pay packets have been identified, details of unclaimed wages should be entered in an unclaimed wage register.
        
        unclaimed wages and payroll should be retained by the paymaster who should lock them away
  - - - Internal controls
        
        The hours recorded on the payroll should be obtained directly from the clock
        card 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);