DESIGN AND IMPLEMENTATION OF COMPUTERIZED PAYROLL SYSTEM

CHAPTER ONE

1.0          INTRODUCTION

Payroll is an accounting activities dealing with preparation and payment of employee salaries for services rendered .A lot of items or elements form a typical payroll session and these include: Basic Salaries, Allowance and Deductions. 

 A payroll system involves all the calculations of amount due to an employee, comprising wages etc. Salaries differ in accordance with certain factors such as level of education, technical skills required for task, and so on. All monies are paid to the employee as salary is obtained after all deductions have been made from the gross pay for that month. The gross pay is the Basic Salary plus Allowances. The amount left after deducting all the deductions from the gross pay is called the net pay; this is the employee’s salary for the month ended. This may be deposited into the employee’s account or given to him in cash. He can collect his pay slip from the Accounts Department.                

1.1STATEMENT OF THE PROBLEM

 The recurring reports about paying ghost workers salaries have been so disturbing and as such call for some way of curbing the situation if it cannot be totally removed. It is on this note that the need for this project came about in order to design and develop a formable computerized payroll system. This system shall be developed using the modern software development tools-such as-Visual Basic 6.0.

1.2AIMS AND OBJECTIVES

The aims and objectives of this project are as follow:-

The designing of payroll system software to produce paychecks for the employees.

a)   To handle all collections including deductions and account billings for the employees.

b)   To provide access to employee profile.

c)   Putting up a suitable environment for the management and workers.

1.3    SIGNFICANCE OF THE RESEARCH

The significance of the research includes:

a)    Helping to overcome and reduce the problems of the manual method of payroll preparations.

b)    Support for the day-to-day administrative tasks.

c)    Recording and reporting on accounting data.

d)    Minimization of errors when preparing paychecks (i.e. increased accuracy).

1.4        SCOPE OF THE STUDY

An employee payroll system covers large information about the employees in the organization. Apart from the basic salaries, the employee is entitled to some allowances and certain taxes, which will be deducted from employee salaries. These are some of the allowances an employee is entitled to:

·              Housing Allowance

·              Transport Allowance

·              Feeding Allowance

·              Medical Allowance

Apart from above benefits an employee is entitled to loans in the organization; there are also deductions, from the employee salary to make it a complete payroll system. These deductions are:-

·              Income Tax

·              Union

·              Insurance

The Income Tax is included in the deductions because an employee has to pay government tax which will be deducted from his salary, also insurance for his/her properties (i.e. car insurance, house insurance etc), Union are also deductible.

At the end of the month, a payslip will be issued to the employee with full details of all expenses the employees made for that month ended.

An employee payroll system as earlier said is limited to basic salary; total allowances deductions, net pay to get the gross pay. Any other expenses will no longer reflect because the above are the income an employee will earn.

1.5   RESEARCH METHODOLOGY

This is the process where investigations will have to be carried out about the system to be designed in this case- a payroll system. You ask the organization question to know the problems of the existing payroll system they are using, whether manual or automated.

There are different ways which you can obtain information from the organization, and the methods are: Interview Method, or Questionnaire or Direct Observation Method:

Interview Method: - Interviews are conducted in the whole of the departments within the organization to gather facts or information about the organization. This type of method is based on face to face interview with staff of the company that works in the Accounts Department especially.

Questionnaire Method: - This process has been found to be reliable to work on your research.

Sample Questionnaire:

1.              What existing business problems could computerization solves or minimize?

2.     What type of information does the organization need from the computerized payroll system in order to answer business or management questions and make management decisions?

3.     Is funding available for computerization?

4.     What is the current information technology capacity of the organization and can it support computerization?

5.     How will computerization contribute to achieving organizational goal?

6.     What are the causes of waste of time in the current payroll system?

7.     Is the likely impact worth the cost of implementing the new system?

 Personal Observation Method: - Time was taken in going from department to the other observing what went on in each department.

 Examples of the Observations are as follow:

                I.            How total hours worked is calculated.

             II.            How dedicated are made.

          III.            How the paycheck finally arrive.

1.6   DEFINITIONS OF TERMS

We need to understand some terms as related to our topic so as to aid better understanding of   the use within the write up. We define them as follow:-

1. Management: - Management is the core of all operations in any organization. It is very central to all organizational activities. Management therefore, is the process by which superiors and subordinates create, direct, maintain and operate purposeful modern organization through systematic, coordinated and cooperative effort, so as to accomplish the desired objectives.

It is a social process that consists of planning, controlling, coordinating, motivating, directing, staffing, etc.

2. Organization: - Organizations are formal, social unit of system of behaviors designed to enable humans and their machines to accomplish specific goals.

3. Manager: - This is a person who is in charge of running a business or a similar organization, According to Henry Mint big, the role includes the behavior that is expected of a person in fulfilling a job. In managerial job, there are several roles that are required from a manager. They include:

§     The leader role

§     The person role

§     The spokesmen role

§     Disturbance handler role

§     The resource allocator role etc

4. Monthly Salary: - This is the actual amount that the employee is entitled to earn in the month. This is known as the Basic Salary.

5. Tax: - This is the compulsory amount that goes to the state treasury from the employee’s salary, and it is used by the government to provide social services such as water, light and hospital for its people or citizens.

6. Gross Pay: - This is the total amount due to the employee before any deductions.

7. Net Pay: - This is the amount due to the employee after all deductions have been removed.

8.  Project Design: - The phase where you create a blueprint about the software (i.e. how it will look like and the phases of design), you decide what software to use to design your project and what software is suitable to use for the object.

9.  Feasibility Study: - This is the phase for establish whether or not the proposed system is desired for the organization before resources are committed in full scale on the project.

10. Conversion and Project Operation: - After the design phase, you cannot test  before you convert; you run it for the organization to know its usefulness if it is possible or suitable; you then convert from the old system to the new system and also check the operations of the software if there are any recommendations for the organization for adjustments.

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