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Payroll System

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Colegio de San Juan de Letran – Calamba Calamba City Computerized Payroll System Camacho, Juliet C. Cartano. Merriane Vi S. Valdez, Charmaine A. A Thesis Proposal Submitted to Ms. Precious A. Daytia In Partial Fulfillment of the Requirements in ENG 113 Scientific Paper Writing For the Degree of Bachelor of Science in Information Technology 17 March 2009 TABLE OF CONTENTS Chapter I INTRODUCTION 1. 1 Background of the Study 1. 2 Overview of the Current State of technology 1. 3 Objectives of the Study 1. 2. 1General Objectives 1. 2. 2 Specific Objectives 1. Significance of the Study 1. 5 Scope and Limitations Chapter II REVIEW OF THE RELATED LITERATURE 2. 1 Review of Related Literature 2. 1. 1 Review of Related Foreign Literature 2. 1. 2 Review of Related Local Literature 2. 2 Review of Related Studies 2. 2. 1 Review of Related Local Studies 2. 2. 2 Review of Related Foreign Studies 2. 3 Conceptual Framework 2. 4 Operational Definition of Terms Chapter III METHODOLOGY 3. 1 Project Planning and Management 3. 2 Project Design 3. 3 Project Development 3. 4 Testing and Evaluation Procedures CHAPTER I INTRODUCTION Background of the study Processing payroll can be one of the most complex tasks facing an organization. Aside from simply paying employees, companies will need to file taxes, submit reports and process year-end data for tax-reporting purposes. These problems are being encountered by several organizations. The manual payroll system they are currently using calculates the payroll for each pay period entirely on paper. They will need to calculate taxes, over time, under time and any other applicable deductions and additions to each employee’s actual earnings. The problem with the manual payroll system is if ever one had committed mistakes, whatever input was made from the start will automatically affect the whole calculations, and it will probably consume a lot of time to repeat the whole process again. In addition, there is high possibility that there will be mistakes when processing payroll manually. For example, when one had calculated a wrong amount of tax to be deducted and the result is higher than the supposed total salary, it can be very costly and a big problem of the business Overview of the Current State of technology Manual computation of salaries given to the employees, deductions and withholding taxes, are some of the stressful works the system currently implements. These works are very critical and costly to the employer or owner of the company due to errors brought by wrong computation of salaries, the “cheating machine” which is the Time Clock, and also the calculation of the net pay the employee shall receive tfor his work reduced by the amount that she should pay for tax together with the SSS and Pag-Ibig. The manual payroll system cc calculated the payroll for each pay period entirely on paper. They will need to calculate taxes, over time, under time and any other applicable deductions and additions to each employee’s actual earnings. The problem with the manual payroll system is if ever one had committed mistakes, whatever input was made from the start will automatically affect the whole calculations, and it will probably consume a lot of time to repeat the whole process again. The current solution being implemented by most companies with regards to manual computation is still unidentified or unchanged. They still stick to manual computation with the application of double, and maybe triple checking of its computation to make sure that their computation is accurate and precise to prevent doubtful costs and losses. As people all know, having the bundy clock as the source of data is not trustworthy. Anyone can “time-in” an absent employee if he/she wants to or absent employee asked his co-employee which is not supposed to be-right salary the employee should receive. It’s just like paying for an employee who really hasn’t done his job. A computerized payroll system has a Log-In information as well as Log-Out information to prevent semi-ghost employees. Wages depending on the hours of work will be given to the employee. Cheating will be lessened and maybe gone because of the much more monitored time for hours of work. Calculations for the net pay lessen by deductions and others can easily be determined through the help of the computerized payroll system. Taxes and other more are easily decreased to the employee’s salary. Computation tables report (SSS Contribution table, Witholding tax table, etc. are not needed at all when you have determine the reduction to your employee’s salaries because it is programmed automatically in the payroll system. Objectives of the Study General Objective The main objective of this study is to develop a Computerized Payroll System to ensure that the payroll processes are adequately controlled, maintained its accuracy, and effectively and efficiently operated. Specific Objective • To develop a module that will process the payroll transactions for the purpose of computing and paying an employee. • To develop a module that will secure the employee’s payroll information. To develop a module that will automatically print the pay slip so the employee can easily check the deductions in their salary. Significance of the Study A certain advantages and benefits are to be observed to those who will be using the new system. For the Company The system will simplify monthly preparation of payroll. It has a faster and less resource consuming generation of pay slip. It also ensures integrity of the payroll data and information. For the Accountant The system will allow faster and more accurate computation of payroll. The system will lessen the time spent by the accountant in payroll processing. For the Employee The system provides employee’s timely, accurate automated generation of pay slip. The pay slip includes breakdown of details of hours worked and deductions. Scope and Limitations of the Study This study focused on computerized computation of the payroll, employee’s personal information, pay slip which can be printed with its breakdown of details, employee’s detail will be secured to avoid unnecessary changes, and automatic generation of payroll summary. This study limited only to the system run only on Windows not lower than Windows 98, limited numbers of users can only access, system is not capable of adding another employee position, user still have to input each employee’s hours manually, and system has to be updated whenever new tax laws go into effect. THEORETICAL FRAMEWORK The researchers proposed the Computerized Payroll System, which are based on some studies that can help to come up with a good result. One of this is about database which is primary form of storage in both today’s online and offline worlds. Databases are used to store different types of information; however, you must understand the concepts and theories of why databases are used and how they are created. Conquering what databases are, and the several varieties of database designs are what this article intends to introduce. You will not find advanced database theory anywhere. The most basic of database concepts, or the building blocks are what we must all first master. Thanks to the World Wide Web, databases of all kinds have found themselves in the spotlight as the technology emerges as quite an effective means for storing and managing data. Database developers hold a unique and specific realm of skills not common to most computing professionals. Because of this, salaries for database administrators (especially those who offer Oracle skills) are quite good. An in-depth knowledge of database systems and design is essential for the future of technology and the continued emergence of data processing applications. Why databases were created? Databases keep track of, and organize, data. Data is the essence of any business or organization. The processing of data keeps companies rolling down the road of business at an increasingly speedy rate. A database is sometimes referred to as a “DBMS”, or Database Management System. Microsoft Access, for example, is a DBMS, along with Microsoft SQL Server, MySQL and Oracle. DBMS's, however, have not enjoyed an existence of flawless execution. In fact, many years ago, some databases were simply infeasible. Databases use queries. Queries interact with the database to extract, insert and delete records, or otherwise work with the database's data. As with any process the computer must complete, it takes some processing resources. Databases, however, happen to take a lot more resources that a typical application, as queries can become rather large. CONCEPTUAL FRAMEWORK Preparing a payroll slip needs a lot of work and time. The preparation of payroll employees needs the application of double, and maybe triple checking of its computation to make sure that their computation is accurate and to come up with a succeeding payroll slip. The conceptual paradigm represents how a particular output occurred from the processed input. INPUT PROCESS OUTPUT [pic] Proposed Payroll System In this proposed study, information about employee’s records such as daily attendance, daily computed hours, end of period computed hours, employee’s frequently report (e. g. punctuality, tardiness, absences, over time) and printing of pay slip will result and avoid errors and mistakes are possible with a computerized system. INPUT PROCESS OUTPUT [pic] Existing Payroll System Chapter II REVIEW OF THE RELATED LITERATUTRE Data gathering is an initial step necessary to continue designing a system. Gathered information is considered necessary to start the development of the system for a certain business establishment. Related literatures such as books, magazines, news papers, periodicals, local and foreign dissertations are great source of ideas and concepts related in system designing 2. 1 Review of Related Literature 2. 1. 1 Review of Related Foreign Literature Payroll Payroll is a paymaster’s or employer’s list of those entitled to receive compensation at a given time and of the amounts due to each. (Gove, 1993) Payroll control in recent years salaries, wages and fringe benefits have risen steadily. In the hospitality service industries this rise, which has out-paced increases in industrial wages been a result of greater unionization, federal and state minimum wage legislation and realization on the part of operators that in order to attract and hold better employee wages are necessary. (Fay, Rhoads & Rosenblatt, 1971) Payroll is extremely complex. In a large organization, it is one of the most complex procedures in operation. All levels of government impose payroll taxes of one sort or another; regulations and rates are constantly changing, with the result that a payroll system usually requires frequent modification. Payroll processing is one area in which the law imposes not only a fine but a jail sentence for willful negligence in maintaining adequate records. As with any law, ignorance is no excuse. The responsibility is on the system analyst to keep current in this area. (Bodnar & Hopwoul, 2001) Payroll System The Payroll System maintains a record on each employee in your company, storing such information as name and address, Social Security number, deductions, pay type, pay period; and a month, quarter, and year to date record of each employee's pay and deductions. The system uses these records to calculate the payroll, including all deductions for each employee, print checks, and print reports and government forms. The paycheck records can optionally be loaded with hours and pay by the Labor Distribution system. Alternately, they can optionally be loaded with hours by the Time Clock system. Four types of information files are pooled to calculate the payroll and prepare reports: • The Payroll Control file, which tells the Payroll System which General Ledger accounts its various entries, should be posted to. It is created and maintained by the "Control file maintenance" program. The Tax Information file, which contains tables for federal, state, and local taxes. It also contains the General Ledger accounts for the state and local entities. It is created and maintained by the "Tax file maintenance" program. • The Employee Master file, which includes the employees' pay rate, type of pay, number of exemptions, and so forth. It is created and maintained by the "Employee file maintenance" program. • The Employee Deduction file, which (optionally) defines adjustments, up to eight miscellaneous earnings, and up to twenty misc. deductions for each employee. It is created and maintained by the "Deduction file maintenance" program (http://www. starrcs. com/soft/am/proview. htm) Purposes of Payroll System The purposes of a payroll application are to calculate the pay due employees, to print paychecks, and to maintain cumulative earnings records. In theory, an organization could process transactions by the cash disbursements application in the expenditure cycle. In practice, however, most process them by a separate payroll system for two reasons. Accountants sometimes consider the payroll cycle to be a part of the purchase cycle. The payroll cycle can also be integrated into the production cycle in manufacturing firms. However, treating the payroll cycle as separate from both purchasing and production cycles helps us highlight some of its interesting and unique characteristics. Designing and implementing a full-pledged integrated human resources payroll system is a complex undertaking to which entire books have been devoted. All but the very smallest manufacturing, merchandising, and service firms have payroll cycle activity. In service and merchandising firms, payroll cost appears an expense item on the income statement. In manufacturing firms, the portion of payroll expenditures that is related to manufacturing activities becomes a part of the cost of goods manufactured. This cost appears on the financial statements on the cost of goods sold and in the cost of finished goods and work in progress inventories. (Perry & Schneider, 2001) First, payroll systems must withhold amounts for deductions and taxes and summarize these in cumulative earnings reports. Such withholding and reporting are unnecessary when processing purchases transactions in the expenditure cycle. Second, payroll systems produce paychecks made out to employees. This makes fraud payroll systems easier to conceal than in those systems that produce checks for vendors. Establishing a separate system for payroll allows greater control over these transactions. (Boockholdt, 1996) Even the most meticulous and experienced human resources professionals find that handling payroll can be a headache. Slap on potential stiff penalties for tax filing omissions, and now we are suddenly talking about a full-blown, financially induced migraine. In addition, the person who handles your payroll system needs to keep up to date on changes in personnel, deadlines, and tax requirements on an ongoing basis. Payroll outsourcing can be an affordable way. A payroll service can be a timesaving and cost-effective alternative to internal processing. Even if payroll expenses are quite stable, companies with more than 10 employees may find that the time saved by an outsourcing payroll system easily makes up for the low costs. Payroll services include the practices of making accurate and timely payments to State employees and organizations on their behalf; Meeting information requirements of governmental and non-governmental organizations; managing payroll operations in a cost-effective manner. The primary customers are State employees. They benefit in the process because the company is the one responsible in much of the activities such as; paying them accurately and on-time; maintaining an accurate and confidential record of their employment payment history; Helping them understand their payments, benefits and deductions; Helping them pay their bills and meet other financial obligations; Helping them save for the future. (http://www. osc. state. ny. us/payroll/index. htm) Different companies benefit from the use of outsourcing payroll management service. It asserts that outsourcing non-core business functions is a strategy that aims to reduce costs, improve efficiency and increase the productivity of the workforce. It mentions some of the advantages of offloading tasks to payroll services firms including lower costs, greater accuracy and more labor hours to concentrate on what really counts. Moreover, Rod Friedman of Stonefield Josephson provides a checklist for companies that are considering hiring a payroll outsourcer (Fortune, September, 2003). Types of Payroll Systems Processing payroll can be one of the most complex tasks facing an organization. Besides simply paying your employees, you will need to file taxes, submit reports and process year-end data for tax-reporting purposes. To determine the best payroll system for your company, consider the following points: 1) Three basic types of payroll systems. a) Manual payroll means that you, or another employee within your company, calculate the payroll each pay period entirely on paper. You will need to calculate taxes, insurance, 401K, and any other applicable deductions in addition to each employee's actual earnings. The advantage of using a manual system is that it is very inexpensive, with virtually no start-up costs. The disadvantage is that whatever you save on start-up costs will probably be eaten up by the amount of time it takes to process payroll. In addition, it's very easy to make mistakes when processing payroll manually, and the penalty for mistakes, especially mistakes in taxing, can be very costly. b) Computerized payroll system. Many companies offer computer software that will assist you in processing payroll. You will need to input information for each employee when he is hired, but after that, the software will calculate taxes and other deductions automatically. The advantage of this type of system is numerous - fewer potential mistakes and less time spent processing payroll. In addition, employees can be trained to run the program more easily, so you won't need to depend on just one person to process payroll. The disadvantages are that you still have to input each employee's hours manually, and the software has to be updated annually or whenever new tax laws go into effect. There can also be additional charges if the software has to be configured specifically for your business. c) Payroll system with an external payroll service. Companies will process your payroll for you, including submitting all necessary tax payments and generating year-end reports. Although this is the most expensive type of payroll system, it can pay for itself in larger companies, which might otherwise have to hire a full-time employee dedicated to processing payroll. A payroll service may also offer a direct-deposit option to your employees, which is very popular. When you are researching payroll services, check to see what services they offer, and if the reports that they provide to you are helpful. If not, see if they can customize their services to better suit your needs. Another important consideration is to find a payroll service that is bonded. This protects you from liability in the case of mishandled finances. Check with any potential payroll services to be certain that they will pay any applicable penalties if they make mistakes in remitting tax payments, and that they can re-process payroll quickly if there are mistakes. The main disadvantage to this system, besides the higher cost, is that security can be an issue if your payroll computer is on the same network as all of the other computers in your company. To avoid this, you should have a computer which is used only for payroll that can go online without using the same connection as your other computers. Also, keep in mind that you will still have to transmit employee payment information to the payroll service each pay period. If your payroll is quite complex - for example, if you have many employees at different pay rates, and on different pay scales, possibly even with different insurance packages from which to choose, you may spend a lot of time processing payroll, and on trying to keep up with changes. Such a task may be better suited to an external payroll service. However, be certain that you understand what is included in your basic fee, and what is considered extra. (http://www. howtodothings. com/business/a3975-how-to-choose-payroll-systems. html) Payroll software: Automated payroll software advantages Automated payroll is simple compared to manual data collection and processing. • Simplified data entry saves time and helps reduce errors. Automated payroll can make employee record setup easier and faster with templates that can be modified for each individual. Processing pay runs is a snap compared to manual systems. Streamline the process of recording, collecting, reviewing, and approving timesheet data with online self-service options delivered through a personalized Web portal. Automated payroll processing helps eliminate many routine transactions, freeing staff to focus on higher priorities. • Direct deposit saves time for everyone. Automated payrolls systems can provide reliable, confidential direct deposit of payroll checks to unlimited accounts and financial institutions, as well as split deposits between multiple bank accounts. Employees will be happy to save the hassle of having to deposit their checks at the bank, and there will be less chance for lost or stolen checks. Plus, your company can offer the convenience of direct deposit with minimal overhead costs. • Employee self-help tools help enhances productivity across the board. Online self-service options enable employees to quickly and easily update their own personal information, enroll in direct deposit, view vacation time, and submit timesheets. This saves them the time of having to contact staff with requests and details. The system updates requests automatically upon approval, saving time for payroll and other human resources staff. • All payroll information is in one place and accessible at your fingertips. Increase your flexibility and gain more control over your payroll information, keeping track of it easily and maintaining a comprehensive, up-to-date perspective on your payroll expenses. • Taxes are less taxing. Taxes, deductions, and benefits are calculated automatically. You can also manage variable tax deductions for employees working in multiple states. Government reporting and requirements can be delivered easier and on time. Produce the government reports and other tax statements with little additional administrative cost or trouble, in both printed and magnetic media formats. (http://www. microsoft. com/dynamics/product/automated_payroll. mspx) Programming language A programming language is an artificial language that can be used to write programs which control the behavior of a machine, particularly a computer. Programming languages are defined by syntactic and semantic rules which describe their structure and meaning respectively. Many programming languages have some form of written specification of their syntax and semantics; some are defined by an official specification, while others have a dominant implementation. Programming languages are also used to facilitate communication about the task of organizing and manipulating information, and to express algorithms precisely. Some authors restrict the term "programming language" to those languages that can express all possible algorithms; sometimes the term "computer language" is used for more limited artificial languages. (http://en. wikipedia. ofg/programminglanguage) Database Management System (DBMS) A DBMS is a complex set of software programs that controls the organization, storage, management, and retrieval of data in a database. DBMS are categorized according to their data structures or types. It is a set of prewritten programs that are used to store, update and retrieve a Database. The DBMS accepts requests for data from the application program and instructs the operating system to transfer the appropriate data. When a DBMS is used, information systems can be changed much more easily as the organization's information requirements change. New categories of data can be added to the database without disruption to the existing system. Organizations may use one kind of DBMS for daily transaction processing and then move the detail onto another computer that uses another DBMS better suited for random inquiries and analysis. Overall systems design decisions are performed by data administrators and systems analysts. Detailed database design is performed by database administrators. (http://en. wikipedia. ofg/databasemanagementsystem) 2. 1. 2 Review of Related Local Literature Computerized Payroll System The Computerized Payroll System is a window-based program especially designed to facilitate and simplify the monthly preparation of general payroll and related reports. It is a standard computerized payroll system for use in all offices. It allows faster and more accurate computation of monthly gross income, deductions and net salary. It is faster and less-resource-consuming generation of General Payroll and other payroll related reports. It has Security and integrity of payroll data and information. (http://doh. gov. h/r_ims/cps. htm) There are lots opportunities taken from using information technology. Payroll processing can be made more efficient by collecting employee time and attendance data electronically, instead of on paper documents. This can reduce the time, and potential errors, associated with manually recording, verifying, and finally entering employee time and attendance data. For example, badge readers can be used to collect job-time data for production employees. That data is then automatically fed to the payroll processing system. Similarly, electronic time clocks can transmit time and attendance data directly to the payroll-processing program. (Ronney & Steinbart, 1997) In relation with the study, it also shows in the how tax work for a payroll system in a company. Under this time keeping system, employee receives a timecard which the time worked is recorded manually by the employee or automatically by a time dock. The timecard is designed to fit various lengths of pay periods. The card provides space to record the hours worked, the rate of pay, deductions, and net pay. The payroll department inserts the handwritten figures to be used in computing total earnings deductions, and net pay for the payroll period. (Bieg, 1999) An adequate records management program coordinates and protects the companies record sharpens the effectiveness of records as a management memory, controls the time, equipment and apace allocated to records, and helps to simplify intra-organizational problems. (Place and Popharm, 1966) The advantage of an adequate record is the possibility that they may be quickly found again. Even smallest office has files, whether they are comprised of correspondence, order bills, card catalogs, blueprint, clippings, bills of lading, tear sheets, electros or checks. (Weeks, 1964) For most office networks, a single file server is more than adequate. This is known as a centralized server. It functions very much like a minicomputer; one unit handles all file serving, with each workstation waiting its turn. If the LAN is designed to handle several different departments, then adding more file server to the network is usually more efficient. Payroll clerks, also called payroll technicians, screen timecards for calculating, coding, or other errors. They compute pay by subtracting allotments, including Federal and State taxes and contributions to retirement, insurance, and savings plans, from gross earnings. Increasingly, computers perform these calculations and alert payroll clerks to problems or errors in the data. (http://www. bls. gov/oco/ocos149. htm) Overtime wages must be paid no later than the payday for the next regular payroll period after which the overtime wages were earned. Labor Code Section 204 only the payment of overtime wages may be delayed to the payday of the next following payroll period as the straight time wages must still be paid within the time set forth in the applicable Labor Code section in the pay period in which they were earned; or, in the case of employees who are paid on a weekly, biweekly, or semimonthly basis, not more than seven calendar days following the close of the payroll period. (fhttp://www. dir. gov/dlse/FAQ_Overtime. htm. ) Personal Exemptions: Personal exemptions are arbitrary amounts allowed by law to an individual taxpayer, theoretically, to provide for personal, living and family expenses. “For each dependent child (not exceeding four) to be claimed by a married person or head of family. In the case of married individuals, only one the spouses can claim the additional exemptions. For legally separated spouses, the additional exemption shall be allowed t the spouse who has legal custody of the child or children (but the total amount for the spouses should not exceed the limit for four)”. (Foz, 2007) 2. 2 Review of Related Studies . 2. 1 Review of Related Local Studies Their study is to “develop an automated process that will be used for payroll of the department of education that would not only be technically and economically optimal, but would also pave for more efficient, defendable and faster way of transaction. It will benefit the management of the department of education for this system will ease the previous complication they encountered from the older system. (Arizala, 2004) The primary concern of this study was the improvement of payroll and personnel record of James L. Gordon Memorial Hospital. Through studies, computer based payroll and record management system. Their primary objective are: to have a more effective and accessible means of record management preparing a payroll. To minimize the time and reduce the effort in manually computing, to lessen the amount of time in computing deductions due off every employee, to establish a computer based payroll personnel record management system to have system in record keeping so to avoid repetition in reviewing every name on the payroll sheet are their aim (Bayani, 2005). The aim is to develop an automated payroll system that would aid the company in resolving their payroll activities. As reported, the company was encountering a main problem during their employee logs and payroll activities these problems are: buddy punching, payroll related data and other complicated files are prone to human manipulations and intervention due to slow-security measures miscalculating their employee’s salaries and deduction and thus takes time to finish (Abucayon, 2005). The Norkis Yamaha genuine parts and accessories uses manual approach in managing the attendance of the employees that produces low quality of output due to slow and inaccurate way of computing and recording of time and attendance. The human resource department views it as tiring and burdensome for they have to take time cards just to record the tardiness being made by their employee. Date gathered is encoded to the computer, which will be forwarded to the accounting department for payroll computing, which is also done manually since this study is considering the impact on a feasible computerization of the manual Daily Time Record and Payroll system of the company, the proponent are therefore concerned is enhancing their current manual system into a computerized one. These proponents will be using the database approach, which offers a potential advantage compared to a manual system for it integrates, separates data files into a single, logical structure (Agustin, Madrigal, Simbulan, 2002). 2. 2. 2 Review of Related Foreign Studies Payroll System The Crewsoft payroll system is a powerful, user-friendly program that uses of all the best windows features like ‘drag and drop’, sort by column list controls and right mouse button menus. This allows one to work flexibly, efficiently and to customize the programs user interface to suit the way one work. The program is designed specifically for the needs of the global shipping company with multiple tax jurisdictions and is built on the solid foundation of our experience in this market. (Crewsoft Generic Payroll System. 2003) The module is designed to process all types of payroll transaction for the purpose of computing and paying an employee. The payroll module provides multiple methods for expensing the payroll cost to the appropriate sub ledger and includes all associated employer burdens. The payroll module is entirely “user file driven”; defines tall possible categories of earnings, contributions and deduction and their associated computation methods. This means that the system can easily add another earnings, contribution, or deduction code as the payroll processing requirements change without modifying any existing programs within the payroll module. Construction Information System, Inc. 2001) HR and Payroll System Bearingpoint will replace North Carolina’s antiquated 30 years old human resource and payroll computer systems with advanced technology that will eliminate most papers forms and give state employees the ability to view and change personal information online. They will be able to change items such as home address and phone numbers and emergency contact information. State employees will be able to view and print both current and past paycheck retails online. As the systems integrator on the project, Bearingpoint will be responsible for program management and implementation for the new system, which will be built using SAP’s mySAP product. ( Bearingpoint to Install New HR and Payroll System for North Carolina. North Carolina, USA. 2005. ) Attendance System The employee attendance system is designed to automatically add sick leave, personal/business leave, vacation leave and other leave time to the employee’s records. In addition, it will automatically accumulate substitute days for sub teachers for the annual report to the state board of education. If an employee takes more sick leave or other leave time than he/she has accumulated, the system will automatically deduct the corresponding salary amount from the next pay, leave status and balances. (Berrien Country Intermediate School District, 2006) Programming Language The program was developed using Visual Basic 6. It provides the needed graphical user interface for easier programming and conceptual interaction between the user and the program itself. Having the interface shown, the needed action buttons are placed where it could be easily accessed by users in a comfortable way. It would also provide a user – friendly impression for the first time users of the program. DBMS (Database Management System) The database of the system relies on Microsoft Access 2007, a database program that enthusiastically supports the Visual Basic program. It would also hold a million records, which is enough for the company. Using a larger and more sophisticated database could only increase the needed memory allocation for the system. Payroll Process This is a financial process of wages, net pay, paid vacations, and deductions for an employee. Basically, anything that relates to giving money or benefits to an employee. This is one of the more complex tasks in terms of accounting, simply because there are many different accounts, people, and agencies involved in the act of paying an employee's salary. 2. 4 Operational Definition of Terms Payroll – the list of the salaries of the employees of Fastel Company. Company – is a contractor company. Fastel Services Incorporated provides telecommunication services. Employee – Employee of the company that will receive a pay slip every pay period. Accountant – An employee that manages the payroll of the company. Pay Slip – A paper given to an employee that includes the details of earnings and deductions within a particular pay period. Computerized Payroll System - is a window based program developed to facilitate and simplify the monthly preparation of general payroll of the company. Database - A collection of information of the employees of the company. Visual Basic 6 – A programming language that was used in developing the computerized payroll system of the company. Visual Basic 6 was used because it is good to use in making a software prototype. Microsoft Access 2007 – A database management system that was used in designing the database of the employee of the company. Microsoft Access was used because it is good partner of Visual Basic. Chapter III METHODOLOGY Different kinds of methods are used in conducting the study, from planning and management up to testing and evaluation. 3. 1 Project Planning and Management Preliminary investigation and data gathering is important in a study. These are the steps to be done first to be able to come up with a proposed system. Different methods could be used in researching for the needed data. In this particular study, certain methods are used. Interview Through interviewing the company, the group had able to acquire accurate information needed for the making of payroll system. Problems occurred in the company’s payroll process are discussed likewise the possible conclusions and solutions to these. Internet Research Data gathering using the internet provide sample problems that possibly occurred in manual payroll system. Also the possible solutions to these are also found in the internet. Some systems with special functionalities related to the study are also discussed in the internet which gave ideas and concepts to the programmer. Book Research Books provide different kinds of data, from payroll systems to the newest programming languages. Historical background is the primary data that could be gathered from books 3. 2 Project Design 3. 2. 1 System Flowchart System flowchart is a flowchart of how the system would possibly operate with the different inputs and processes needed for the system to run in accordance to how the payroll system operates. Figure 3. 2: System Flowchart 3. 2. Data Flow Diagram 3. 2. 2. 1 DFD Existing System – Context Diagram 3. 2. 2. 2 DFD Existing System – Diagram 0 3. 3 Project Development The group used Prototyping because it can be done quickly. Prototyping is the creation of a working model of various parts of the system at a very early stage, after a relatively short investigation. The model then becomes the starting point from which users can re-examine their expectations and clarify their requirements. A. Preliminary investigation. The group conducted a research to come up with a process that would need modern help or solution to make an operation easy. The company relies on manual filing & computation. Computerization of their system would greatly affect their operations. B. Data Gathering. The stage wherein the group gathered or collect important data needed to develop the basic functions of the system such as the computation of salary and other payroll processes. C. Interview. Interviewing the beneficiary of the system gives a broader look for the group. It gives managerial outlook of how the system should run, in accordance to the policy of the company D. Research. Possible problems could arise in the programming process, as well as in the implementation procedure of the program. However, researching gave the group ideas on how to avoid these problems. E. Layout design. In designing or making the interface of the system, the group heeds on how they would like the system looks like. It is important that the end users are at ease with the look of the system. F. System programming. This is the coding of the program using a reliable programming language. G. Testing & evaluation. Certain bugs and problems are required to be fixed. Evaluation of system’s acceptability is also a must to show the approval of the possible end user. H. Implementation. The completed development of the proposed system will be implemented by company. The preparation for installing and configuring will be facilitated by the management and users. 3. 4 Testing and Evaluation Procedures Testing and evaluation of the system will be conducted in order to be recognized by possible end user. This procedure will valuate the system’s reliability, accuracy and security. Respondents There will be 30 respondents for testing and evaluation of the program. It includes 20 students, 5 IT professionals, and 5 possible users of the system. Evaluation Instrument The system’s capabilities, design and security will be also evaluated. The purpose is to prove the acceptability of the system. ACCURACY 1. Accuracy of the System – How accurate is the system in accordance to the rate it is being used. 2. Completeness – Is the system complete depending on the need of the management and the payroll itself. 3. Ease of use – Is it easy to use. RELIABILITY 1. Clarity of the interface – Is the lay out user friendly and not cluttering the program itself. . Appropriateness of the system’s options – Are the options present in the program needed in operations. 3. Clarity of error messages – A program that displays errors that occurs on the running program. 4. Reliability of the system to the data – Is the data being used efficiently by the program itself. SECURITY 1. Capability of the system to protect the information – Are the needed business information protected by the system. 2. Capability of the system to protect the business – Is the business itself being protected by the program. Statistical Treatment of Data Computation of the respondent’s answers to the previous test should be computed with its Mean and Standard Deviation. This shows the total acceptability of the system. Formula of mean and Standard Deviation: Mean = Xn = X1 + X2 + X3 + Xn n Standard Deviation = (X-X) 2 n In evaluation purposes, the respondents filled up a form in which criteria are given with different level of rating for system’s acceptability. 5 – Highly acceptable The system is highly accepted with its processes and uses passed the criteria for a payroll system. It shows that the system could give a high rate of success in that criterion. 4 – Moderately acceptable The program doesn’t comply as highly as needed for a criterion, yet it still manage to do the needed task or process. It could still be implemented and would still give a satisfactory output of work. 3 – Slightly acceptable The program needs a bit of an upgrade because it doesn’t comply with what the criterion is looking for. It could still be implemented yet the system could not give a satisfactory as needed in the business. 2 - Acceptable The program could be doubted in those criteria given this rating. The program doesn’t comply with the needed work it is intended to do. 1 – Not acceptable The program failed to do the work needed for a criterion. |Rating |Equivalent | |4. 1 – 5. 0 |Highly Acceptable | |3. 1 – 4. 0 |Moderately Acceptable | |2. 1 – 3. 0 |Slightly Acceptable | |1. – 2. 0 |Acceptable | |0. 1 – 1. 0 |Not Acceptable | ----------------------- Computerized Payroll System -Fast access of database -Fast processing of payroll slip -Basic Rate -Employees record -Basic Pay -Tardiness -Under Time -Absences -Pag-Ibig -SSS -GSIS -Health Care -Witholding Tax -PERA -bonus -medicare -over time -others Manual Computation of employees’ salary -Long process of payroll -Manual retrieving of records -Time consuming -Basic Rate Tardiness -Under Time -Absences -Pag-Ibig -SSS -GSIS -Health Care -Medicare -Witholding Tax -PERA -bonus -others Monthly Attendance Record Print Monthly Payroll Report Pay Slip Produce Pay Slip Payroll Record Compute Employee Gross Pay Employee Database Employee Master File Monthly Payroll Report 0 FASTEL MANUAL PAYROLL SYSTEM Computed Salary Accounting Department Attendance Record Human Resources Department Employee Record Salary Report Employee Pay Slip Employee Figure 3. 3: Context Diagram of the Existing System Figure 3. 4: Diagram 0 of the Existing System Figure 3. 5: Prototyping Diagram
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