Common Problems With Payroll

The most common problems with payroll are all the result of the operator failing to check current information before moving to the next step.  For example:

•        Once Gross Pay is calculated, the totals should be checked, and verified, by each employee, or against a manual system.

•        Once Deductions are calculated, the totals should be checked for omissions, or possible errors in calculation.  Problems here will usually be readily apparent.

•        Checks should not be prepared until the figures for Net Pay ( after deductions are checked ) are clearly correct.

•        Accounting should not be performed until the checks are correctly printed.

When people rush these steps, they will encounter errors which are hard to correct later.

The other primary problem area for payroll is incomplete employee data.  For example, the state tax is calculated based on the employee's state of residence.  If it is not filled in on the employee data screen, the state deductions will not be figured.  In addition, employee witholding numbers must be accurate.

Finally, when payroll is based on work entries within the system ( commission or flat rate ), if the data is not entered in during the pay period, it will not be calculated.