Course: 0034M - Information and

Business Process

The HR management
and Payroll Cycle
Week 8

Learning outcome
Students are able to structure and design DFD and
system flowchart of revenue cycle, expenditure cycle,
the production cycle, HRD cycle and general ledger
and financial reporting.

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Outline materi
HR management and Payroll cycle
overview and key objectives
REA HR management and Payroll Cycle
DFD HR management and Payroll Cycle
System Flowchart of HR management
and Payroll Cycle

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What are the key objectives and strategic

implication of the HR management and payroll
cycle?
The HR management and payroll cycle consists of two
phases : The HR management phase and The payroll
phase.
The HR management, where the organization interacts
extensively with employees, management and production.
The objective of this phase is to ensure that the correct
employee details are used and the correct hours worked
are input for an employee.
In order to achieve this outcome, these inputs need to be
properly approved and authorised.

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The payroll phase, where the objective is to pay the

right employees and payroll expenses the right
amount at the right time.

The accounts payable process ensures that payment

are both accurate and timely.

In order to ensure the integrity of financial reporting

all accounts payable liabilities must be recorded
accurately and promptly.

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HR management
business decisions

and

payroll

cycle

When the HR management and payroll cycle is originally

designed, or subsequently reviewed, a number of
strategic decisions need to be made.
These decisions are typically made by senior
management within the organization, and create the
framework within which the policy operates.
To be effective, strategy-level process decisions should
be congruent with the overaching business strategy.

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Strategy-level decisions would include the creation of

policies such as:
Rate at which differing employees are paid.
Pay periods employees will be paid on.
How IT can be used to improve both the efficiency
and accuracy of payments to employees.
In addition to these strategy-level decision, there are a
range of operational decisions that will be made
every time the HR management and payroll cycle is
enacted.
These operation decisions are typically made by middle
management or operational staff and relate only to a
specific instance of the cycle.

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HR management and payroll diagrams ove

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REA Model of the Human Resouce Business

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HR management and payroll cycle

context diagram

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HR Management and Payroll cycle

activities:
Maintain personnel records
Alter employment status
Authorise employment detail changes
Calculate payroll
Update pay records

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Calculate payroll
Prepare payroll

The payroll is prepared based on the information in

the employment master files and the timesheets
master file.
These files have been updated previously by
authorised individuals: the employment master
files by the HR management staff and the
timesheets master files by the production
supervisor.

Prepare account payable

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Account payable staff check the payroll for

accuracy and then establish the due dates for
payment.
Payments to employees may be made on different
dates than those to taxation authorities and for
employee deductions.

Update pay records

Prepare cash disbursements

Cheques could be printed based on a batch file generated

from the payroll, or they may be hand written.
Alternatively a direct debit is actioned by the bank to pay
employees and other payroll expenses.

Distribute payslips

The payslips are distributed to the employee.

Update general ledger

Totals of the payroll and expenses yet to be paid are

accrued and then paid and updated in the general ledger

Reconcile payments

Ensuring that the emount to be paid has been deposited in

an emprest account and the correct amounts of the
employee salary and payroll expense yet to be paid.

Distribute leave forms

Ensuring all leave applications are updated.

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HR management and
payroll cycle
Level 0 logical
diagram
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Level 1 Diagram Process Calculate Payro

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. .

Tabel Narasi Terstruktur Calculate Payr

No
Entity
.
1 HR
management
staff

Inputs
- Commission
details
- Timesheet
details
- Taxation
details
- Employee
details
-Payroll details

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Account
- Payroll
Payable staff

Process/Activity

Outputs

- Update employee
employment
master file

- Payroll

- Update payroll
master file

- Updated
timesheets
master file

- Updated
employee
- Update timesheets
employment
master file
master file

- Calculate payroll

- Updated payroll
master file
- Process of process - Account
account payable
payable

. .

System Flowchart Proses Calculate

payroll

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Thank you

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