Leon Guinto Memorial College Inc.

Senior High School Department

CHAPTER I

THE PROBLEM AND ITS SETTING

Introduction

The computer nowadays is a basic need for businesses or companies. It

helps a lot in such a way that it makes work more progressive and productive. It is

an important thing that a company or small business should have because it helps

a lot in many ways such as organizing, storing and manipulating data. Having

computer programs may help a company grow bigger and be competitive in the

flow of the business world. The companies nowadays uses computer literate and

very competitive in the business (Brian Thomas, 2004).

In the sense of treasury management, payroll plays a major role in a

company for several reasons. Payroll consists of the process by which a business

pays its employees for work performed during a specific period. A payroll system

allows businesses to follow a set series of processes in order to make timely,

correct payments in compliance with government regulations. A payroll system

may be manual or computerized and handled in-house or outsourced to another

provider.

Based from the recent survey more than half of the businesses polled

stated, that the most common payroll errors in payroll management

were organizational consistency in the payroll process, over and under payments,

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as well as many other areas. While up-to-date software can enable HR, payroll,

and employee data to be less overwhelming, if storage and processes are not well

organized, you are open to errors. And this can back up your payroll department

back by several days. A company must have in place a timekeeping system that

accurately reflects the hours put in by nonexempt employees as well as the regular

salary payments for exempt workers. 

This plan will help’s a lot in such a way that it makes work more

progressive and productive. It is an important thing that a company or small

business should have.

Background of the Study

The Our Lady of Angels Multi-Purpose Cooperative (OLAMPC) was

originally named Our Lady of the Angels Credit Union Inc. (OLACUI). It was

conceived by the late parish priest of OLA PARISH Atimonan, Quezon, then

Rev. Fr. Adelino R. Imperial as a social apostolate of 20 Cursillistas. Its main

objective is to give access to credit among the low income sector in the

community at low interest and convenient mode of payment. From 1989 no

collateral is required if the amount of loan is not more than Php 8,000- and

payable in 5 to 24 months amortizations at the option of the member-borrower.

The OLAMPC has a 9 employees in the office, 3 in the store, 3 in water

station and 2 utility man. The employees who are working there also have other

deduction like SSS, Phil Health, Pag-ibig and other government taxes. The
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process of OLAMPC’s manual system to organize records for their employee’s of

each department for their payroll system. Still having a manual system can prove

useful, but as for a country in which effectiveness and time is a golden factor.

Because of manual system it consumes a lot of time than usual, due to

modernization today, effectiveness of a system they are using makes it hard for

the accountants to effectively search, edit, and produce reports through a vast

amount of data. Errors in computation of payroll are most likely to happen, since

the payroll officer that is assigned is prone to make some mistakes in computation

because the computation system is being manual.

The researchers will conduct a research study entitled “A Proposed Payroll

System through Biometrics at Our Lady of the Angels Multi-purpose

Cooperative”. Researcher’s motivation on OLAMPC’s existing system is to

improve it, secured the backup files and records. Because, this factors will lead to

faster, shorter and lessen of processes and organized of important data.

Statement of the problem

The proponent’s interest is to conduct an investigation that will led them to

understand the payroll system and at the same time propose a payroll system

through biometrics for Our Lady of Angels Multi-Purpose Cooperative.

1. What are the things to consider in computing manually the salary and

wages of employees?
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2. What are the things needed to help the accounting staff regarding keeping

their attendance’s record and the records of their salary?

3. What are the input, process, output of the system?

4. What can the system do to develop a system that is easy to use and

maintained?

5. What can the system do to avoid bias and cheating in monitoring the

employee attendance?

Objective of the study

To develop a payroll system through biometrics for OLAMPC, that is

user-friendly, more accurate, more efficient, and can easily produce reports of the

transactions faster. In order to fulfill our objectives, the researcher will observe

the following:

 To develop a system that is capable of minimizing time in searching the

names of the employees.

 To help the accounting staff to lessen too much consumption of paper and

paper works.

 To provide a database that will keep all payroll records.

 To provide a payroll system that the process is being automated.

 To provide more efficient and reliable auto-deduction and computerized

documents for payroll.

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 To build up a system that will avoid lost and tampering of the records.

Significance of the Study

To the management

Our Lady of the Angels Multi- Purpose Cooperative (OLAMPC) will

greatly benefit with the proponent’s system because this will help them to have

better service, to update their record easily and this can also keep track of the

performance of their employee.

To the employees

The Employees will benefit in the system. They will find it easier to

transact about their records since searching in the system is faster than tracking in

the record book or log book. The biometrics will give them an easier time with

their time log and they don’t have to worry about losing their time cards because

it is not necessary.

The department head will benefit from this system because of this will

make checking of employees, their payroll, and even attend to their needs in case

of problems.

Human Resources Personnel managing the time keeping will not be the

same again as they will experience relieve. It would be fast and easy for them to

handle transactions such as report making and monitoring time entries. Further

determining or computing the payroll manually will be eliminated that will lead to

faster transaction.
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Accountant will able to manage employee services, hours, pay rates. An

automated time and attendance employee system also helps in implementing and

enforcing fair pay policies. By using the Security, Time Keeping and Payroll

System employee software, actual balances, and flexible labor distribution for

projects and work orders can be maintained. Other benefits of the time and

attendance employees’ software include the elimination of time cards and

unauthorized overtimes.

To the students

The proponents will gain knowledge about the business system existing

inside a Finance office, with this; skills in system analysis will be improved and

also it helps the future researcher to have an idea about payroll system and

develop their own system. They can learn about the proponent’s system and at the

same time develop a greater system with the help of the proponent’s study.

Scope and Limitation

Scope

The proposed system Time Keeping and Payroll System for OLAMPC

covers many aspects of time keeping and payroll process. This includes the

capture of information based on the employee’s work schedule, daily time worked

and daily time rendered. The payroll process encompasses all activities necessary

to report employees’ time worked. The system will convert the current company’s

time keeping and payroll into Visual Basic Program.

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 The system will have a file management where it covers the records of

employee and system transaction log.

 The system also covers the payroll processing and reporting which includes

the pay calculation of salary slip and time off tracking.

 The employee will use biometrics to time-in and time-out for recording of

timekeeping.

 The system will have a report consist of summary of time sheet, summary of

Payroll Computation, Summary of Tax Refund and 13th Month Pay,

Withholding Tax, SSS, and Pag-IBIG Contributions.

Limitation

This proposed system does not include using automated teller machine

(ATMs) or cheques. No other currencies are computed in the system but

Philippine Peso only. The proposed system cannot be accessed online and it

focuses only on the employees’ Time Keeping and Payroll System of the

OLAMPC. This proposed system is only applicable and can only be used by the

management of OLAMPC.

Definition of terms

Accounting Staff- they maintain the financial reports, records and general

ledgers; prepare and analyze budgets.

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Biometrics- this refers to the measurement of physical characteristics such as

fingerprints and DNA, or retinal patterns for use in verifying the identity of

individuals and to verify who is actually clocking in and clocking out of work

each day.

techniques that will rely on measuring and holding the physical characteristics

that can be automatically checked by the employee

Computer software- set of instruction and its associated documentations that

tells a computer what to do.

Database -An integrated collection of data which provides a more efficient way

of storage and retrieval of data and is capable of processing large portions of data

immediately.

Department head- the person who is in charge and the head of the whole

operation.

Employee -A person employed at a wage or salary.

Human resources personnel or HR is the company department in charged with

finding, screening, recruiting and training job applicants and administering

employee-benefit programs.

Income Tax- is a government levy (tax) imposed on individuals or entities

(taxpayers) that varies with the income or profits (taxable income) of the

taxpayer. Details vary widely by jurisdiction. Many jurisdictions refer to income

tax on business entities as companie’s tax or corporation tax.

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Manual Payroll System – means calculating the payroll by hand. It does not

require an investment in payroll software.

Pay slip- a slip of paper included with your pay that records how much money

you have earned and how much tax or insurance etc. has been taken out.

Salary Computation - means computing salary base on employee’s attendance

and contribution.

System -A set of related components that produces specific results.

Work Hours- is the period of time that an individual spends at paid occupational

labor. Unpaid labors such as personal housework or caring for children/pets are

not considered part of the working week. Overtime hours- is the amount of time

someone works beyond normal working hours. Normal hours may be determined

in several ways.
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Input Process

Users: Output
Data:
 Password & Reports:
Computation of
Username
 Employee’s attendance and  Pay slip
Name/Inform deduct all taxes  Timesheet
ation refind and time  Pag-ibig
 Timekeeping keeping.
 Finger
 SSS
Registration  With
-holding tax
Salary:  Tax refind
 Basic Salary
 Loans

The paradigm shows the presentation of the concepts of the research. It

shows the input, process, and the expected output. The research lays emphasis on
the duties and obligation of a time keeper of payroll officer.

The timekeeper or payroll officer is the one who is responsible in the

inputs of the information taken from the employee’s base on their position and
duties.

Also, he/she is the one who will check if the computation of the inputted
of the information is correctly valued to finally process and make a summary and
reports.

The output of this research is the advancement and the quickly but surely
reports.