Revenue Cycle Expenditure Cycle Production Cycle Human Res./ Payroll Cycle Financing Cycle General...

Integrating GP Payroll into Accounting Information Systems ClassMike CanniffMIS FacultyUniversity of the Pacific

Academic Alliance Pre-Conference : Business Decision Making Track

Topics

Background and MotivationCurriculum Details

Business Process PedagogyGP Requirements

Future Enhancements

What was I Thinking???History

ERP Course within MBA Program 2003-2006Covered All Aspects of ERPVery Light on Accounting Content

AIS Course 2007-2009Focused on Primary Accounting Modules (GL, AR, AP)Covered Human Resources/Payroll at High Level

GoalsIntroduce Students to Detailed Accounting Related Transactions within PayrollExplore Dynamics GP PayrollAdd to Course Lab Sequence

Typical AIS PedagogyBased on Text Book Reviews

Text Book Allocation25% Devoted to Audit and Control20% Devoted to System Development and Documentation20% Database Modeling15% Traditional Accounting Functions (GL, AP, AR)5% Manufacturing5% Human Resources and Payroll

Training Material FocusPrimarily on Core Financials

RevenueCycle

ExpenditureCycle

ProductionCycle

Human Res./Payroll Cycle

FinancingCycle

General Ledger

and ReportingSystem

Silo Based Instruction

Funds

Labor

Commissions

Payroll Dr/Cr

Existing AIS Lab ScopeLab Scenario

Adopted from Kim’s Flower Shop (small Retail company)Stacy Kovar, Kansas State University

Lab SequenceGL SetupOrder ManagementProcurementBilling / ARAccounts PayablePeriod End Closing and Reporting

Lab EnvironmentSingle MS SQL Server environmentRunning on Virtual MachineEach Student is Assigned their own DB

Topics

Background and MotivationCurriculum Details

Business Process PedagogyGP Requirements

Future Enhancements

9

High Level ERP Functions

10

Human Capital Management

DefinitionHiring, developing, assigning, and retaining employees

Why do Accountants Care?Estimates value of human capital > $500,000 per personAverage cost of replacement is 1.5 times the employee’s salary.Company costs represent 43% of operating expenseEmployee Value = job-related knowledge, skills, and motivationMuch of HRM is NOT captured by GAAP – Accounts need to recognize implicit value

TrendsSelf Service, eHR (automation)Workforce

graying workforcevirtual teamstelecommutersConsultants and contractorspart-time and temporary employees

11

Human Resource ProcessesHire to Fire

Pay

RetireRehire

DeployDeploy

Develop

Recruit

Hire

Enterprise Management

HR

Retiree

Applicant

Person (Workers,

Dependents, Beneficiaries)

Employee

Identify

12

Recruiting Components

Recruit WorkforcePart of Human Resources productApplicant tracking functionality

eRecruitSelf Service for Employees and External Applicants

Wally Looks for a Job!

13

Time and Labor Processes

14

Payroll Process Data Flow DiagramContext Level

15

Accounting Entries in Payroll

16

Payroll Has High Fraud Potential

Types of payroll frauds:Ghost employees Falsified hoursCommission schemesWorker’s comp schemesExpenses Fraud – Altering receipts, personal expenses

Payroll ControlsSegregation of duties between HR (employee record creation), payroll (prepares payroll) and AP/cashier (disburses cash)Direct deposit (eliminates opportunity for check fraud)Review of employee master data for duplicate names and/or social security numbersComparison of actual payroll to budget

Topics

Background and MotivationCurriculum Details

Business Process PedagogyGP Requirements

Future Enhancements

Payroll Lab DetailsAssumptions

Single Hourly EmployeeNo Medical BenefitsDeduct only Federal TaxesDefault Hours Worked

Payroll Lab SequenceGL Account DefinitionPayroll SetupHire Employee and Assign Pay CodesRun PayrollPrint ChecksPost to GL

Payroll Installation Note

Request Payroll License Key from MSFT AA

Login to ServerNavigate to Dynamics GP Tools Setup System RegistrationUpdate License Key

Restart Dynamics You will be prompted to download the latest Payroll tax updatesProceed with tax installation

GL Setup for PayrollRequired Accounts for Payroll

Other Payroll Setup

DefinitionsDepartmentsLocationsPositionsShift CodesPay Codes

Additional SetupLink Pay Code to PositionCreate Employee Class – sets defaults for an employee (Department, Position, Pay Codes)

Hire and Assign Employee

Add the Employee CardAssign New Employee to pre-defined ClassThis defaults all of the setup information

Specify Legal Information (I-9 data)Set Up Tax Records

Federal Filing Status (Single)Exemptions = 1Tax Withholding State

Run PayrollBatch needs to be

defined for computer checks

Enter the transaction values – note the

different types

Build Checks to collect all transactions for the

period

Print Checks

Run Pre-Check ReportVerify All CalculationsRequired Step before printing

Print ChecksStudents get to see basic payroll checkUpon exiting report, results will be posted to Payroll subsidiary ledger

Perform a Series Post to GL

Topics

Background and MotivationCurriculum Details

Business Process PedagogyGP Requirements

Future Enhancements

Lessons Learned

Payroll ModuleShould Really be Integrated with Time and AttendanceEntering transactions is too simplifiedAfter completing setup, payroll execution is relatively straightforward

Human Resource ModuleNot required to demonstrate impact on GLWould be useful, if faculty desires to use in an HRMS class

Plans for Next YearInclude Deductions

State TaxesBenefits or other Deductions (United Way)

Employee HoursCreate Multiple transactions for different types of hoursPossible Overtime

Highlight GL Transaction Flows for New DataReduce Setup Requirements

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