Full Project – Design and implementation of employee information and payroll system in a manufacturing setup

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CHAPTER ONE

INTRODUCTION

Over the last few centuries, human beings have experienced two major revolutions: the industrial revolution and the electronic revolution. The former transformed our society from being agriculturally based, whereas the latter transformed our society from being mechanically based to electronically based. In 21st century a lot of manual techniques is now being implemented electronically. Payroll is not an exemption. Implementation of this in Manufacturing Organizations is the goal of this work.

1.1 Background of the Study

Payroll is a company’s list of its employees. It is mostly being referred to as the company’s records of its employees’ salaries and wages, bonuses, and taxes, company’s department that calculates and pays these and so on. Payroll design, testing and implementation of a Manufacturing Company is the goal of this work. The present payroll system is the manual systems of payroll. As employee increases, there is need to have a computerized payroll system. Therefore, the aim of the project is to develop a computerize payroll software for the company.

1.2. Statement of the Problem

Manual systems of payroll always put pressure on people to be correct in all aspect of their work. It is too easy to accidentally switch details and end up with inconsistency in data entry or in hand written orders. It can be time consuming and expensive. The function of this work is to design and implement a payroll system owning to the fact that there exist no automated means of managing employees’ salaries, records and so on in the organization.

Other problems caused by the manual payroll system are:

1. Inconsistent data entry which makes it prone to errors information.
2. Cost of training employee on payroll management is expensive

• Reduction in sharing information and customer services.

1. It is time consuming and costly in reports production.
2. Data is not secure.
3. Duplication of data is possible.

This project builds a computerized payroll system that will reduce and take care of problems associated by manual method of managing and processing employees’ salaries, records and so on in the organization.

1.3. Aims and Objectives

The aim of this study is to develop a computerized payroll system for a Manufacturing Organization. The specific objectives are to:

1. design a computerized payroll system replacing the manual one.
2. implement the designed payroll system in (i)

• evaluate the performance of the implemented payroll system in (ii) qualitatively

1.4. Significance of the Study

This study will aid in reducing errors and fraud associated with the manual processing of employees’ salaries and records, increase speed and also enhance the technology edge in a typical manufacturing organization if successfully implemented. Manual payroll systems in such manufacturing companies will be totally eliminated with MPS in place.

1.5. Scope of the Study

This payroll system is developed for Manufacturing Organizations only and might not fit into other similar systems perfectly and would be called MPS (Manufacturing Payroll System).

1.6. Definition of Terms

This section gives a definition and explanation of some of the terms used in the project.

Employee Data: This consist of employee’s information in the organization. It consists of the employee identification number, employee name, pay rate, bio data, contact information, payment information, personal information, employment information etc.

Net Pay: This is the total salary amount that would be paid to an employee after all the deductions are subtracted from the gross pay.

Gross Pay: The gross pay is the amount an employee earns before the deductions are subtracted.

Payroll: A payroll is a company’s list of its employees. It term is mostly refers to as the amount of money that a company pays its employees, the company’s records of its employees’ salaries and wages, bonuses, and taxes, company’s department that calculates and pays these etc.

Payroll System: This is a software which keeps the organization company’s list or records of its employees. It is often referring to the total amount of money that a company pays to its employees. It is organizing and arranges all the tasks of employee payment and the filing of employee taxes.

Pay Slips: a note given to an employee when salary is being paid, detailing the amount of pay given and the tax and insurance deducted.

Employer: a someone or an organization that employs people in the organization.

Employee: a someone that is employed for wages or salary, especially at nonexecutive level.

W-4 tax form: This is a form filled by an employee to specify his or her tax status to the employer. It tells the employer the amount of tax to withhold from employee’s paycheck.

Internal Revenue Service (IRS): A states government agency that is responsible for the collection and enforcement of taxes.

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Full Project – Design and implementation of employee information and payroll system in a manufacturing setup