UNIVERSITY OF LUZON COLLEGE OF ACCOUNTANCY SY: 2011-2012 A PROPOSED AUTOMATION OF PAYROLL SYSTEM A PRELIMINARY INVESTIGATION REPORT (PIR) FOR FREEPORT SECURITY AGENCY (FREESA) IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS IN SYSTEM ANALYSIS AND DESIGN (CSC36) Presented by: Khristine Margie G. De Guzman Presented to: Arnold D. Azurin Introduction: A payroll system involves everything that has to do with the payment of employees and the filing of employment taxes. This includes keeping track of hours, calculating wages, withholding taxes and other deductions, printing and delivering checks and paying employment taxes to the government.
A computerized payroll system saves on time and lowers your error ratio. You can enter payroll payment information quicker than with a manual system, and run payroll registers to double-check your information before printing the checks. This allows you to detect errors and adjust them beforehand I have completed a preliminary investigation of the payroll system. This investigation was the result of a systems request from Victor GorospeJr, manager of Freeport Security Agency (FREESA). PHILOSOPHY “Our business is to exceed Client’s expectations, every time, all the time” MISSION
The FREESA guard shall enforce rules and regulations of the clients, prevent the commission of crimes, maintain peace and order, and ensure public safety within his area of responsibility with the active support of the community. VISION We envision FREESA GUARDS as a highly motivated, well disciplined and properly trained security guards armed with the most modern equipment and working in active partnership with our clients living up the qualities of: Professionalism, Reliability and Trustworthiness. GOALS securing and providing protection to the lives, properties and assets of our clients; * training and enabling qualified and professional security guards to find gainful employment, thus making it possible for their families and communities to meet their basic needs; and * fostering relationships to increase security awareness and responsibility. OBJECTIVES To serve and protect CLIENT staff, dependents, visitors and property. • To ensure CLIENT staff and visitors feel that their workplace is a safe environment. • To respect and protect the dignity, rights and privacy of CLIENT staff and their families. To recognize the importance of focusing on customer service that our job is not simply showing up, that what counts is being actively involved in quality tasks and good customer relations. To serve and protect CLIENT staff, dependents, visitors and property. • To ensure CLIENT staff and visitors feel that their workplace is a safe environment. • To respect and protect the dignity, rights and privacy of CLIENT staff and their families. • To recognize the importance of focusing on customer service that our job is not simply showing up, that what counts is being actively involved in quality tasks and good customer relations.
System Request Summary: There are problems arise from the current process system of the said agency. These are the following: * long hours for updating and computing payroll * unorganized system design * untimely distribution of wages * incorrectdeductions from employee paychecks * payroll department overtime to perform manual processingtasks and make corrections. Preliminary Investigation Findings: The following problems were found during the investigation: 1. Employee deductions are reported to the payroll department in the form of asummary list from the human resources department.
Data entry errors may occur during thisprocess. 2. The payroll processing requires aconsiderable amount of manual effort on FREESA part. The FREESA does not provide summary reports required for verification, reporting and application in any employee deductions. These tasks are handled manually by payroll department staff at the end of each pay period. 3. Payroll overtime because of large number employees which averages about six hours per week, plus an additional eight hours at the endof every month when deductions are applied. This totals about 408 overtime hours.
The following factors contribute to the payroll system problems: 1. The current payroll procedure is in manual form and salaries of 98 guards are computed by hand. Recommendation * Acquisition of new computer units. * Adopt and use of automated payroll system. * Acquisition of new printer for printing salary reports. * The system should have a security code so that the system would be protected. * An agency with 50 employees or more should go with an external payroll service. Accordingly, the FREESA recommends that a system analysis project be performed. The analysis would include the following areas: Manual processing done at Software, Limited * Computer processing Time and Cost Estimates It was estimated that two weeks will be required for an analyst to perform the recommended systems analysis. Also, we will nerd to conduct approximately 20 hours of interviewing and discussions with people outside the information technology department. The following is an estimate of costs for performing the system analysis; Salary of System Analyst: 2 weeksSystems Analyst Php5, 000/week Php10, 000 Hardware: Two (2) Computer set (Php45, 000 each set) Software: PayWindow Payroll Software (Php4, 000)
Other Expenses: Development Cost: 25,000 Operation and Maintenance Cost: 10,000 Expected Benefits: 250,000 in about 5 years Time Range: 2-3 months Expected Benefits: At the end of the systems analysis phase, the Freeport Security Agency will define, in detail, the problems that exist in the payroll system. We will propose solutions that will eliminate overtime costs, and reduce processing errors. A. Tangible Benefits: * a computerized payroll system often has the ability to automatically transport employee punches/swipes from the timekeeping system into the payroll system automatically. A computerized payroll system has direct-deposit capability, which saves money spent on live checks and reconciliation. * A computerized system enables hard-copy printing of payroll registers pertaining to each pay period. It also saves the information in the system indefinitely. * No more overtime. * Can create presentable salary report. B. Intangible Benefits: * This saves on time spent manually calculating the hours and reduces errors. * They save you the burden of learning and understanding complex payroll legislation. * This helps in forecasting and planning staff costs and budgets. Convenient and easy to access. LETTER OF PERMISSION University of Luzon Perez Blvd. Dagupan City Pangasinan July 14, 2011 Freeport Security Agency A. B. Fernandez Ave. Dagupan City Pangasinan Dear Madam / Sir My name is Khristine Margie G. De Guzman and I am a student at the University of Luzon taking up Bachelor of Science in Accountancy. I am writing to request an interview to discuss about your company operations and about problems that you are encountering in your daily/weekly/monthly activities. I would like to take some of your time in answering my questions.
Your answers will help me in my Preliminary Investigation Report as a partial fulfillment for my requirements in our subject System Analysis and Design (CSC36) and will enable me to have relevant information about your company and for me to offer you a new system. I would therefore be very grateful if you could grant me a short interview of about 20 minutes. It would be my honor if you can share some information with me to assist me in my paper. The information which you provide me shall be used in the strictest confidence. I will telephone you tomorrow to arrange a convenient interview time.
Thank you in advance for your kind cooperation. I look forward to meeting you. Thank you for your time. Please feel free to contact me by phone at 09483659290 or by email at [email protected] com Yours sincerely Khristine Margie G. De Guzman 4th year B. S. A Student University of Luzon Interview Questionnaires: 1. What are the philosophy, mission, vision, goal, and objectives of your business? 2. What are the services offered by your company? 3. What kind of system you are using? 4. What are the hindrances or problems that you encounter in a manual payroll system? 5.
Are you in favor of transforming your manual payroll system into an automated payroll system? Why? 6. How many hours/days will take you to prepare/compute the salaries of your employees? 7. Is the distribution of salaries on time? 8. What will be the benefits of an automated payroll system on your perspective? 9. Does error occurs regularly when you’re computing salaries on a manual payroll system? 10. Do you have an idea about the cost of acquiring and installing the new system? Organizational Chart of Freeport Security Agency (FREESA) Board of Director Gerald E. Cuison Board of Director
Ruby C. Samson Chairman Gertrudes C. Samson Corporate Secretary Dra. Esther B. Vedana President Elisa C. Lagdameo VP Administration Felipe Cuison,Jr. VP Operations Mac Arthur C. Samson,Jr. Branch Manager Victor B. Gorospe,Jr. Inspector/Collector Ariel E. Callang Cashier/Paymaster Deby T. Narido Bookkeeper/Logistics Dodina N. Lumahan Marketing Officer Mario Delos Reyes Time Table Date July 12Search for a business entity July 13Making a letter of permission July 14Request approval and asked them to signed the letter of permission July 15Interview of the branch manager of FREESA Philosophy * Mission * Vision * Goal * Objectives * Organizational Chart * Different Questions (found in my questionnaire paper) July 16Making my Title, Introduction, Systems Request Summary, and Findings July 18Recommendations and I consulted the agency about my proposed system July 19Surfing the net for the time and cost estimate of hardwares and softwares July 20Expected benefits and encoding appendix or attached records and informations (letter of permission, interview questionnaires, organizational chart, time table) * Edit , Edit , Edit