Essay On Payroll Management

760 Words4 Pages
Payroll Payroll is the total amount of money that a business must pay to its employees for a set period of time or on a given date. Payroll is commonly managed by the accounting department of a business but owners of small businesses may also directly handle the payroll. Payroll is a prime expense for most businesses, so this is where it's importance comes up. Since payroll is a large amount of money being used, it is crucial for the business to monitor and keep record of how this money is being distributed. It doesn't matter if the business has a large number of workers or a small number; payroll management is pivotal. Payroll management has major roles within a business and even possible external effects of not managed accurately. First of all, the major goal of a business is to generate profits. Payroll (employee’s pay) is an expense, therefore it directly affects the business's net profits. The payroll management needs to be as accurate and specific as possible so that the net profit is not overcast or understated. The payroll department's primary mission is to ensure that all employees are paid accurately and timely with the correct withholdings, and to ensure that withholdings and deductions are payed in a timely manner. Such deductions can include salary payments, social…show more content…
Miscalculation in employee's pay is unethical and the business it will lead the business to have problems with their workers. This is very unethical and gives the business a bad name. If employee's pays are miscalculated, that will lead to the wrong calculation of net profits. If the miscalculation leads to an overstatement in wage expense, that will lower profits. An understatement will increase profits, but the bottom line is that financial statements will be inaccurate. Along with this, employee tax, social security contributions or any other payable that is determined by the salary may lead to
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