Electronic transfer - an electronic file is sent to the bank with instructions for the amount that is to be transferred electronically to the employee’s nominated bank account. Some organisations will offer both options to employees and some, depending on size and management policies, will just use one payment method. The internal controls surrounding cheque and electronic payments are the same as other cash disbursements discussed earlier. Wherever possible, organisations should avoid making payroll payments in cash. However, this is sometimes unavoidable for hospitality and tourism organisations because often people are hired as needed. For example, if a number of guests check-in to an accommodation venue without prior reservations, housekeeping may need to call on additional staff to service rooms more quickly than planned. It would be unfair to ask these employees to wait for their wages until the next pay period which could be a week or two away. In cases like this, establishments use a pre-prepared cash payment form that details hours worked, pay rate and employee details. This form is authorised by the supervisor and manager and forwarded to the employee assigned with cash disbursement duties such as the cashier. It is important that the authorisation and payment duties remain separate. Distributing payroll Internal control measures should always require the duties of payroll processing and payroll distribution to be carried out by different personnel. This minimises the opportunity for fraudulent activity such as a pay cheque being written to a fictitious employee but cashed by another genuine employee. When payroll cheques are prepared, cheques should be handed to employees or mailed to their home address. Any cheques that cannot be delivered should be given to senior accounting personnel or the general manager who have no responsibility for preparing the payroll cheques. If electronic transfers are made, a pay slip is prepared summarising the monetary amount and bank account details for each employee. This should be distributed under the same guidelines as cheques. In smaller hospitality and tourism establishments, employees may pick up their pay cheque or slip from the payroll office.In larger operations, department managers may distribute them. Usually, in these cases, the payroll office or managers know each employee. Sometimes, pay cheques and slips are issued only when photo identification or a signature that matches the original job application is shown. To take this internal control measure one step further, this responsibility is assumed by a member of the accounting department that has no other involvement with the payroll function.
Electronic transfer - an electronic file is sent to the bank with instructions for the amount that is to be transferred electronically to the employee’s nominated bank account. Some organisations will offer both options to employees and some, depending on size and management policies, will just use one payment method. The internal controls surrounding cheque and electronic payments are the same as other cash disbursements discussed earlier. Wherever possible, organisations should avoid making payroll payments in cash. However, this is sometimes unavoidable for hospitality and tourism organisations because often people are hired as needed. For example, if a number of guests check-in to an accommodation venue without prior reservations, housekeeping may need to call on additional staff to service rooms more quickly than planned. It would be unfair to ask these employees to wait for their wages until the next pay period which could be a week or two away. In cases like this, establishments use a pre-prepared cash payment form that details hours worked, pay rate and employee details. This form is authorised by the supervisor and manager and forwarded to the employee assigned with cash disbursement duties such as the cashier. It is important that the authorisation and payment duties remain separate. Distributing payroll Internal control measures should always require the duties of payroll processing and payroll distribution to be carried out by different personnel. This minimises the opportunity for fraudulent activity such as a pay cheque being written to a fictitious employee but cashed by another genuine employee. When payroll cheques are prepared, cheques should be handed to employees or mailed to their home address. Any cheques that cannot be delivered should be given to senior accounting personnel or the general manager who have no responsibility for preparing the payroll cheques. If electronic transfers are made, a pay slip is prepared summarising the monetary amount and bank account details for each employee. This should be distributed under the same guidelines as cheques. In smaller hospitality and tourism establishments, employees may pick up their pay cheque or slip from the payroll office.In larger operations, department managers may distribute them. Usually, in these cases, the payroll office or managers know each employee. Sometimes, pay cheques and slips are issued only when photo identification or a signature that matches the original job application is shown. To take this internal control measure one step further, this responsibility is assumed by a member of the accounting department that has no other involvement with the payroll function.