Managing People: Powerful Payroll Processing
BY Phaedra Hise
A treasurer explains how he moved from calculating payroll by hand through a couple of computer system upgrades.
As Priester Supply began expanding into other states, doing payroll by hand became tedious and potentially error-ridden
Problem: Keeping track of complicated tax requirements and payroll
Solution: A special software module for tracking payroll
Payoff: Rapid calculation of payroll, taxes, and reporting requirements
When James Bush joined Priester Supply Co. as treasurer, in 1984, payroll was calculated by hand for 34 employees on three pay schedules. "It took half a day just to type the checks," Bush recalls. The company, based in Arlington, Tex., sells equipment to electric utilities and employs hourly and salaried workers who are paid weekly, biweekly, or monthly. By bringing in software to process payroll, Bush has delegated a tedious task to the computer, saving time and minimizing math mistakes.
Within a year of starting at the now more than $20-million company, Bush was pushing for software to handle the time-consuming payroll process. "It took three years to get a real system," he says. He finally got a $4,000, 40-megabyte 286 PC for his desk. For $225 he bought a copy of Lotus 1-2-3 to structure a database for calculating payroll, withholding, and deductions. The system printed checks in an hour but took a day to post the numbers to the ledger.
In 1988 Priester Supply started adding salespeople based in other states, says Bush, so "I'd spend a few days investigating each new state's tax laws, and then I'd have to figure out the tables and program them in." Keeping all that information in Lotus grew unwieldy. In 1990 Bush tested a human-resources software product called Abra 2000 (from Abra Software, 800-847-2272; $695 to $1,895) and abandoned Lotus 1-2-3 for the package. Abra handles the different tiers of payroll, as well as state and federal taxes and withholding.
A procedure that used to take at least a day now takes Bush two hours. The software processes payroll, taxes, and withholding for all employees, and then posts all that information to the company ledger. Bush spends half a day each week processing payroll, and prints out FICA or withholding reports while the software processes the paychecks. He files the reports to use later in preparing the company's quarterly tax statements. -- Phaedra Hise