1. Unit 12 -- Payroll October 7, 2015

3. Far More Danger Disbursing money to employees Relatively few external checks and balances Employees feel entitled Employees are friends with each other Employees are familiar with the procedures

4. Payroll Cycle Far more diversity between companies – Different documents – Different job titles – Different reporting paths – Different information flows

6. President VP Operations VP Personnel Controller

7. VP Operations Production Manager Director HR Sales Manager President TreasurerController

8. VP Operations Production Manager Personnel Manager Sales Manager President TreasurerController

9. Production Manager Personnel Manager Sales Manager President Treasurer VP Operations

10. Human Resources Functional Supervisor Functional Manager Determines Need Budget, Strategic Plan, Etc. Executive Management

11. Human Resources Functional Supervisor Advertise Position, Manage Applicants Set up Interviews Interview Candidate Resume Application Etc. Selects Candidate Offer or Contract Candidate

12. Human Resources Functional Supervisor New Employee Registration I-9 W-4 Benefits Enrollment Employee Master File

13. Functional Supervisor Employee Clock Card Time Sheet Payroll Enters Data Hours Data

14. Functional Supervisor Employee Payroll Enters Data Hours Data Production System Production System

15. Functional Supervisor Payroll Hours Data Production System Time Sheet Payroll Run Employee Master File Human Resources

16. President VP Operations Controller VP Personnel Functional Supervisor Payroll Human Resources

17. Payroll Run Payroll Report Functional Manager Pay Stub Employee Pay Check Emp. Bank Payroll Budget IRS Form 941 Payroll Report Treasurer Hours Data Employee Master File Prodn System Time Sheet Withholding Deposit Payroll Report Controller

18. Payroll Run Payroll Report Functional Manager Pay Stub Employee Pay Check Emp. Bank Payroll Budget IRS Form 941 Payroll Report Treasurer Hours Data Employee Master File Prodn System Time Sheet Withholding Deposit Payroll Report Controller Form 941 Payroll Report

19. Payroll Run Payroll Report Functional Manager Pay Stub Employee Emp. Bank Payroll Budget IRS Treasurer Hours Data Employee Master File Prodn System Time Sheet Payroll Report Controller Payroll Disburse- ment File Withholding Deposit and Form 941 Net Pay

20. Payroll Report Bank Statement Bank Reconciliation Deposit Receipt Controller

21. Payroll EmployeeIRS W2 End of Year (after Dec 31 but before January 31) Payroll Records W-2 Transmit

22. Questions? Questions about a “batch-based” system?

23. Transaction Cycles Purchasing Cycle Revenue Cycle Payroll Cycle

24. Capital Asset Cycle

26. Identification of Need Justification (ROI) Authorization of Procurement Purchase or Construction Installation, Set-Up, Capitalization Depreciation Disposal Investing Cycle Capital Asset Life Cycle

27. Financing Cycle

28. Identification of Need for Money Justification (ROI) Decision of which way to raise the money (Equity vs LTL) Issuance of Stocks or Bonds, or loan arrangement “Closing” or IPO or other Compliance with Covenants and Restrictions Calculation/Payment of Interest, or Dividends Retirement of Debt Capital Acquisition Cycle

29. Research and Development Cycle Identification of the need Basic Research vs. Applied Research Procurement of Resources Necessary Application of Resources, Tracking, Analysis Patents, Copyrights, Trademarks, etc. ( Intellectual Property ) Determination of Accounting Treatment Amortization

30. Manufacturing Cycle Design and Engineering Raw Materials Delivery, Logistics, Storage, Usage Scheduling Actual Conversion Activities Labor Overhead Application and Costing, ABC Movement of Costs to Finished Goods Conversion Cycle

31. Accounting Cycle Open the period Reversing Entries from prior period’s accruals/deferrals Transaction recording Trial Balance Adjusting Entries (accruals/deferrals) Financial Statement Preparation Closing Entries

32. Transaction Cycles Purchasing Cycle Revenue Cycle Payroll Cycle Investing Cycle (Capital Asset Cycle) Financing Cycle R&D Cycle Manufacturing Cycle (*) * -- Not a true TRANSACTION cycle, but often considered one

33. Schedule Today Oct 12: Payroll and Minor Transaction Cycles Wed Oct 14: Units 13, 14, 15 Friday Oct 16: Group Work Day for E-E Distributors Monday Oct 19: Unit 15 ( conclude ) and 16 Wed Oct 21: Unit 17 and 18 Friday Oct 23: Unit 18 ( conclude ) and help session Monday Oct 26:Exam 2