Payroll Accounting: What Are The Common Mistakes?

By Author: Loreign Hampton
Total Articles: 1
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Can you find anything more worse than making ordinary mistakes in carrying out your payroll? You keep wondering what went wrong and now you have to work again, matching up the hours worked with the payroll. Where is the mistake? Now you have a displeased worker waiting for you to make the corrections. You may already be pondering about your payroll software.

Simple miscalculation of hours worked is one of the common mistakes in carrying out your payroll. It is indeed sometimes confusing when you are adding up fractions of hours. There might be times when the logged hours of an employee is not the same with the number of hours which an employee thinks he has worked. Did the payroll software fail to record an hour or a fraction of hours being worked?

Overtime can throw a wrench into payroll accounting. Normally, an employee gets time and half for every hour worked past forty hours a week, unless there is a different company policy. Again you find yourself working with fractions of time worked. Most of the time, in payroll accounting, instead of overtime pay, regular pay has been logged. You may not catch the error ...
... but if it slips past your payroll software you can guarantee that the employee who is expecting the extra income will catch the mistake and be at your office for an explanation of the wage shortage.

Glitches in payroll accounting may also be caused by company paid time. It might be that you had company paid mandatory meetings that were not logged in your accounting system. Unrecorded reimbursements can also cause some problems. Reimbursements include basically anything that a company will repay an employee who has paid something out of his own pocket, such as tolls, scales, uniforms, postage.

Also, simple transposing of numbers can cause nasty mistakes in your payroll accounting. For example, you may mix two numbers like twenty-four and eighty-four. You were not able to notice the error and then you proceed to calculate the payroll. Then you will only find that you either had an overpayment or you have caused a shortage on someone's paycheck. If you have over paid an employee they will not be happy when they either have to give the overage back or it is deducted from a future paycheck. If on the other hand, you have shorted an employee of his paycheck, you will find him suddenly at your door demanding that the correction be immediately made. Whichever way, it is not a wonderful situation to find yourself in. Payroll accounting must be perfectly accurate and is not merciful towards errors.

Author Bio:
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