Accounting correctly for payroll expenses is a large part of the responsibility of any accounting department, in business all over the country and world. Accurate financial records are required in any number of situations, such as when reporting accounting numbers to financial regulating agencies, applying for grant money and for loan applications. Keeping accurate expense records will also help management make viable budgeting decisions and will help drive hiring cycles. Though few people think about payday until it finally arrives, preparing for payday is a full-time job for others.
Gather time sheets or punch-in/punch-out detail records and input these into a payroll software application. These will also include requests for sick/personal pay, vacation pay and time adjustment sheets. Be certain that time sheets are approved by the appropriate manager before entry.
Double-check time records to be sure they are reasonable and accurate. This process will rule out any possibility of time clock fraud.
Gain final manager approval before cutting checks and submitting EFT (Electronic Funds Transfers) to banking institutions.
Cut checks and authorize EFT transactions.
Keep payroll records on file for five years from the time employees were paid.
Track live check activity, including when they are deposited into the employee's account, when it clears the bank and when you have access to an electronic image of the cleared check. Keep a copy of the cleared check on hand.