INTRODUCTION
In the previous chapter, we have learned about the spreadsheet and its several features that can be used in business applications. In this chapter, we shall discuss the applications of spreadsheet (using Excel) to Payroll Accounting and some other select applications (Asset Management, and Loan Repayment).
3.1 PAYROLL ACCOUNTING
Every employee is paid salary on a pre-determined date within the framework of employee contract and related personnel policy in force from time to time in an organisation.
The computation of salary payment is based on the number of days an employee has worked, rate per grade of pay, rate of applied allowances and deductions to be made therefrom.
The preparation of salary bill should provide for the following :
• Maintaining payroll related data such as Employee No., Name, Attendance, Basic Pay, applicable Dearness and other Allowances, deductions to be made.
• Periodic payroll computations: the payroll computation includes the calculation of various earning and deduction heads, which are to be derived from basic values (such as basic salary, number of days under leave without pay (LWP) and unauthorised absence, etc) as per the formulae.
• Preparation of salary statement and employees salary slips
• Generation of advice to bank: It contains the net salary to be transferred to individual bank account of employees and other salary related statutory payments such as provident fund, tax, etc.
3.1.1 PAYROLL COMPONENTS
Every employee is under contractual relationship of service with an organisation, and is paid salary accordingly. The following elements are important for salary computation and its payment:
• CURRENT PAYROLL PERIOD (MONTH AND YEAR)
• EARNINGS
• Basic Pay (BP) : It is the pay in the pay scale plus Grade Pay, but does not include Special Pay.
• Grade Pay (GP) : It is the pay to be added to the Basic Pay according to the Designation of the employee and applicable pay band or scale of pay.
• Dearness Pay (DP) : It is that portion of Dearness Allowance, which has been declared and deemed to have been merged with the Basic Pay.
• Dearness Allowance (DA) : It is a compensation for erosion in the purchasing power of wage earner due to price rise. It is granted by the Government periodically as a percentage of (Basic Pay +Dearness Pay, if applicable).
Click on the below link to download NCERT Class 12 Accountancy Computerised Accounting Use Of Spreadsheet In Business Applications
