DRAW a payroll BPD or DFD Flowchart

Although most medium and large companies have implemented

sophisticated payroll and HRM systems like the one described in this chapter, many

smaller companies still maintain separate payroll and HRM systems that employ many

manual procedures.

Typical of such small companies is the Kowal Manufacturing Company, which em-ploys

about 50 production workers and has the following payroll procedures: The factory

supervisor interviews and hires all job applicants. The new employee prepares a W-4

form (Employee's Withholding Exemption Certificate) and gives it to the supervisor. The

supervisor writes the hourly rate of pay for the new employee in the corner of the W-4

form and then gives the form to the payroll clerk as notice that a new worker has been

hired. The supervisor verbally advises the payroll department of any subsequent pay

raises.

A supply of blank time cards is kept in a box near the entrance to the factory. All

workers take a time card on Monday morning and fill in their names. During the

week they record the time they arrive and leave work by punching their time

cards in the time clock located near the main entrance to the factory. At the end

of the week the workers drop the time cards in a box near the exit. A payroll

clerk retrieves the completed time cards from the box on Monday morning.

Employees are automatically removed from the payroll master file when they

fail to turn in a time card.

The payroll checks are manually signed by the chief accountant and then given

to the factory supervisor, who distributes them to the employees. The factory

supervisor arranges for delivery of the paychecks to any employee who is absent

on payday.

The payroll bank account is reconciled by the chief accountant, who also

prepares the various quarterly and annual tax reports.