Sections Syndication |
Home : Essentials of Payroll : Automate Vacation Accruals
Automate Vacation AccrualsAutomate Vacation AccrualsThe accounting topic that is of the most interest to the greatest number of employees is how much vacation time they have left. In most companies, this information is kept manually by the payroll staff, meaning that employees troop down to the payroll department once a month (and more frequently during the prime summer vacation months!) to see how much vacation time they have left to use. When employees are constantly coming in to find out this information, it is a major interruption to the payroll staff, because it happens at all times of the day, preventing them from settling down into a comfortable work routine. When numerous employees want to know about their vacation time in a single period, it can mean a considerable loss of efficiency for the payroll staff. A simple way to prevent employees from bothering the payroll staff is to include the vacation accrual amount in employee paychecks. The information appears on the payroll stub, showing the annual amount of accrued vacation, net of any used time. By providing this information to employees in every paycheck, they have no need to inquire about it in the payroll office, thereby eliminating a major interruption to staff. There are, however, several points to consider before implementing this best practice. First, the payroll system must be equipped with a vacation accrual option. If not, the software must be customized to allow for the calculation and presentation of this information, and this may cost more to implement than the projected efficiency savings. Another problem is that the accrual system must be set up accurately for each employee when it is originally installed; otherwise, there will be a number of outraged employees crowding into the payroll office, causing more disruption than was the case before. This is a problem because employees have different numbers of allowed vacation days per year, or may have unused vacation time from the previous year that must be carried forward into the next year. If this information is not accurately reflected in the automated vacation accrual system when it is implemented, employees will hasten to the payroll department to have this information corrected at once. Another problem is that the accruals must be adjusted over time to reflect changes. Otherwise, once again, employees will interrupt the staff to notify them of changes, thereby offsetting the value of the entire system. For example, an employee may be raised from two to three weeks of allowed vacation at the fifth anniversary of his or her hiring. The payroll department must have a schedule of when this person's vacation accrual amount changes to the three-week level or the employee will come in and complain about it. If these problems can be overcome, then showing vacation accruals on the paychecks becomes a relatively simple means of improving the efficiency of the payroll department. To achieve this goal, have a schedule available in the payroll department that itemizes the dates on which employees with sufficient seniority are scheduled to have increases in their allowed vacation amounts; include a review of this document in the monthly departmental schedule of activities, so that accrual changes can be made in a timely manner. Also, train the payroll staff to properly enter data into the payroll system for any vacation hours taken by employees. Finally, create a procedure for making changes to the data in the automated vacation accrual system, so that the staff can correct errors in the system. 936
times read
|
|||
|
|||
