Payroll Computation and Preparation. The payroll is prepared from clock cards. The final computed payroll is recorded in a payroll journal or payroll record. The record shows total wages, deductions, and the net payroll. A cumulative record of individual employee earnings and deductions also must be maintained.
Some companies pay employees by check. Payroll checks are drawn against the regular checking account or, if the workforce is large, a separate payroll bank account. When a payroll fund is to be deposited in the special account, the payroll department certifies the amount required for a particular payment date, a voucher is drawn for the specified amount, and a check is drawn against the regular deposit account and is deposited in the payroll bank account. Using this method, only one check drawn on the general bank account appears in the cash payment journal each payroll period. For each employee, the paymaster prepares a check drawn against the payroll bank account.
When electronic methods are used for payroll accounting, the payroll journal, checks, the check register, and employees’ earnings records are commonly prepared in one simultaneous operation. In many companies, employees may authorize direct electronic deposit of their net pay to their individual checking account, which completely eliminates the individual hard-copy paychecks.