When Accounts and Human Resource Departments are involved in Payroll management, it’s very necessary to define the responsibilities clearly. You can make changes in this process suiting to your organization’s requirements.
Step 1:
Collecting timesheets with attendance sheets
If the online system is maintained, then it will ensure automatic checking with the attendance register and timesheets. Otherwise, the attendance sheets and the timesheets are to be compared manually.
Timeline: Maximum by 1st working day of next month
Involved: HR Department
Step 2:
Receiving salary details
Ø Terms of appointment
Ø Entering details of salary structure
Ø Entering details of Promotion, Increment, and Confirmation.
Promotion
Changes in Grade, Salary Structure, Department, etc.
Ø Details of disciplinary action taken
Every disciplinary action is based on certain terms and conditions.
That terms and conditions, if it has any effect on salary, the same to be incorporated in the system.
Ø Receiving details of Resignation
Resignation
The final settlement is to be disbursed, based on the notice period.
Timeline: Maximum by 2nd working day of next month
Involved: HR Department
Step 3:
Receiving the details of Employee Advance, deductions & reimbursement
All details pertaining to employees, their deductions (Other than phone bills), advances & reimbursement details are to be settled by the Accounts department & send it to the HR department for further action.
Timeline: Maximum by 3rd working day of next month
Involved: Accounts Department
Step 4:
Phone Bill Deduction
As phone bill generation takes three days’ time, entries regarding phone bills have to be done accordingly. The phone usage limit is decided at the time of joining/ increment. Any excess amount will be deducted (excluding service Tax)
Timeline: Maximum by 4th working day of next month
Involved: HR Department
Step 5:
Final sheet preparation
Once all the entries are done, the final sheet shall be sent to the Director for necessary approvals.
Timeline: Maximum by 5th working day of next month
Involved: HR Department
Step 6:
Disbursement of Salary
Once the final payroll sheet is prepared, it will be sent to the Director for final approvals. Once it’s done from Management’s end, mail from Management shall be marked to the accounts & HR department. Salary will be disbursed either online, in cash, or by cheque by the accounts department.
Timeline: Maximum by 6th working day of next month
Involved: Accounts Department & Management
Step 7:
Other formalities
Once the salary is disbursed: ESIC, EPF & Phone bill details will be sent to the Accounts department
Timeline: Maximum by 7th working day of next month
Involved: HR Department
Step 8:
Payments
After getting the details of Phone Bills, ESI, and EPF, the accounts department will make payments according to the time frame.
Timeline ESIC: Maximum by 14th of next Month
Timeline Phone Bills: Maximum by 16th of next Month
Timeline EPF: Maximum by 18th of next Month
Involved: Accounts Department
