Improving the method of payment processing in our nation and
establishments today has been a task to which the researcher attaches great
importance. Employees of various establishment expect to receive a certain
amount at the end of a stipulated period of time as a result of their
continuous input to the establishment.
A payment system is expected to gather all Police financial
data, hold the data, and process the data into the required wage or salary
information. Due to the sensitive nature of wages and salary computations, the
system should be structured to carefully handle and calculate police financial
data, in other to arrive at an accurate, acceptable and correct output.
In finding solutions to the problems arising from the use of
manual payment system, computer-aided payment system that uses computer sources
to gather, processing, stores and retrieve police financial data for accurate,
reliable and timely information is inevitable (merle, 1997).
1.1 THEORETICAL
BACKGROUND
In the Nigerian Police Force Ikot Ekpene, the researcher
observed that the existing system is manual system. The account officers
in-charge of salaries do their calculations and record keeping on paper. They
achieved these by using of calculator and sheet already structured by
organizations. The sheet has a well-structured table having column headings
containing calculate salaries. The account officers fill in the financial
information of each employee row by row under each column. Figure or amounts
are calculated using a calculator and entered into the table.
In manual systems, there are bound to be set backs arising
from errors due to imperfection or in-accuracy. Also, a lot of time and human
efforts are being wasted in the process which makes payment processing boring
and tedious, these can lead to delay in payment of salaries.
Due to the above researcher deems it fit to embark on the
design of a database “Computer-aided payment processing System” with the hope
that this project when fully implemented will increase efficiency and
effectiveness, proper record keeping, reduce time wasting and improve the
accessibility to Police financial information.
1.2 STATEMENT OF THE PROBLEM
Problem associated with the manual system of the Nigerian
Police Force Ikot Ekpene is stated as follows:
(a) Errors from
manual calculation
(b) Laborious
nature of the manual system
(c) Waste of time
resulting in delay in payment of salaries ‘
(d) Loss of vital Police
financial information due to the bulkiness of files
1.3 AIM AND OBJECTIVES OF THE STUDY
The aim of this project is to design a computer-based
program that will handle payment processing in Nigerian Police Force Ikot
Ekpene for the computation of Police salaries. This shall be achieved by using
visual basic (6.0) programming language. The following are the objectives of
this research work:
1. To create a
better database that will hold financial information in other to solved problems associated with accessing and
retrieving of information.
2. To design and
implement a system that will facilitate accurate salary records keeping in the police
force.
3. To enhance
effective storage and retrieval of payment relates information in police force to aid vital decision making.
1.4 SIGNIFICANCE OF THE STUDY
There would be a lot of benefits that will be derived from
the computer-aid payment system. The Police of the Nigerian Police Force Ikot
Ekpene will enjoy these benefits. The significance of the proposed system is as
follows:
a) Reduce cost
b) Enable the
timely retrieval of salaries records
c) Accuracy and
efficiency in payment record keeping
d) Eliminate the
laborious nature of present system
e) To allow
flexibility in payment processing when the need arises
f) Adequate
storage of Police financial information
1.5 SCOPE OF THE STUDY
This study is restricted to Nigerian Police Force Ikot
Ekpene, because of limited resources available.
1.6 ORGANIZATION OF THE RESEARCH
In this research, chapter one surveys the background of the
study. Here, emphasis is on the statement of the problem, significance of the
study Aim and objectives of the study, scope and function of terms.
Chapter two deals with review of related literature. This is
subdivided into the basic introduction and some subheadings.
Chapter three dwells on the system design. This includes the
introduction, algorithm, flow chart, input and output formats. Chapter four
deals with system implementation. This consists of the system design flowchart,
choice of programming language and analysis of modules. Chapter five is
concerned with summary, conclusion and recommendation.
1.7 DEFINITION OF TERMS
a) Earnings:- These can be defined as
entitlements (Stated amount of money)
that make up the gross pay of individual employees which they are to receive.
b) Deductions:- These can be defined as
certain amounts of money that is
subtracted from the gross pay of individual employees to obtain their Net pay.
c) Salary:- This can be defined as
compensation paid regularly to employees
for their services rendered.
d) Gross pay:- This is the total amount an
employee earn before any dedication such as tax withholdings are
subtracted.
e) Net Pay:- This is the remaining pay
when deductions have been subtracted
from the gross. It is also known
as the take home pay of employees.
f) Table:- This can be defined as a list
of facts or number or data arranged
in a special order usually in rows and columns.
g) Database:- This can be defined as
collecting organization and inter- relation
of records or files related to a subject matter.
h) Database management System (DBMS):- This can be defined as a set of powerful, comprehensive programs that
makes it possible to access information and manipulate data, quickly and
easily.
It takes citations of various authors, scholars and
professionals. With this payment system, payment section will be able to keep a
record of employee including their personnel data, pay slips, allowances, deductions
and taxes etc.
Net pay of each employee is calculated by his allowances and
educations mentioned according to the company rules. The individual pay slips
are printed out. Pay bands, grade pay, allowances, deduction and taxes
information are updated if there is any amendment in salary structure.
A Payment system is a collection of several sub-systems as
regard to Police earnings. In contemporary Nigerian Society, there is less
consideration of effective payment system as a result of frequent Omission of Police
salaries in Nigerian Police Force Ikot Ekpene payment system.
A payment system is indeed the backbone of an organization.
This is because implementation of payment depends on accurate, competent and
timely processing of payment. Lack of adequate training in the Nigerian Police
Force Ikot Ekpene contributes a lot payroll processing in an organization.
Although payment system policies defer from one organization to other, the book
compiled a list of what should be considered in other to increase productivity.
They are as follows:
1. Transport
allowance
2. Housing
Allowance
3. Dressing
Allowance
4. Meal subsidy
The book further recommended that it is necessary to update
an organization’s payment for effective and efficient payment system (Cohen,
1994).
2.2 MANUAL PAYMENT SYSTEM
In a manual system, payment procedures are done by hand and
with the assistance of various simple aids such as fax table, adding machines
and calculators. It is estimated that 95% of Nigerian business 30% or fewer
employees, and may have fewer than half a dozen. Thus it is natural that the
majority of such business would use manual payment procedures which includes:
2.2.1 STAND PAYMENT FORMS
The financial information that constitutes Police salaries
that must be recorded in any payment system included each employee’s name,
marital status number of withholding etc. in addition, for each payment period,
a business or organization must have detailed information about the hours worked,
earnings deductions and net pay for each employee. Although an organization may
design its own payment for recording the information, standard forms are
available that meets the needs of many organizations.
One of the advantages of such forms is that they are
designed to permit the record of the payment information in an efficient way,
thus reducing the possibility of errors and omissions. Stand payment forms have
column with preprinted heading that clearly identify the major types of
information that must be entered. A variety of different types of standard payment
forms are sold by many stationary store and office supply companies. The forms
are commonly available in paid, bound in a book, or as loose sheet punched for
use in a three-ring binder.
2.2.2 CUSTOM-MADE PAYMENT FORMS
Payment laws and regulations differ from one organization to
another. For example, the state and local taxes to be withheld from employee
earning can vary considerably. Also, policies and procedures differ from
business and from one organization to the other.
2.2.3 PEGBOARD SYSTEM
A manual payment system that greatly increases efficiency in
recording payment data is the pegboard or one-write system. This system makes
it possible to enter data for an employee in payment register, the earning
record, and the voucher portion of payment cheque at one time.
A electronic calculator is commonly used as an aid when a payment
is prepared manually because it can quickly and accurately add, subtract
multiply and divide amounts.
2.3 COMPUTERIZED PAYMENT SYSTEM
The basic procedures used in a computerized payment system
are quite similar when the work is performed by a business or by a service
bureau.
Typically, a computerized payment system operates as
follows:
The payment master is setup on a magnetic disk or tape. This
file contains the same kind of data or basic payment information as the
employee earnings records in a manual system. This basic information includes
the employee’s name, pay rate, marital status, Deductions, Earnings, and Net
pay etc.
Before the end of each year period, the master is update to
reflect any necessary changes that might occur.
In the system, the computer follow the step-by-step procedure of program
to calculate earnings deductions and net pay of the employee for the current
period and enter the information in the master file. The computer also
calculates and records the new year-to-date total for employees. The system
produces an updated’ master file on disk or tape, a printed payment register
and printed par-cheque (Merle, 1995).
2.4 DETERMINING GROSS EARNING
At the end of each payment period, it is necessary for a
business to determine how much money employees have earned. There are different
methods used for computing gross earnings.
These methods, when used for each employee depends on type of pay plan
under which the employee works. The hourly-rate plan and the salary plan are
based on the amount of time an employee spends on the job. The piece rate plan
and the commission plan are based on the amount of work an employee does.
2. 4.1 THE HOURLY RATE PLAN
Employees who are paid according to the hourly-rate plan
receive a fixed amount for each hour they worked. Under this plan, gross
earnings are found by multiplying an employee’s hourly rate by the number of
hours worked during the payment period.
2.4.2 THE PRICE-RATE PLAN
Here, employees who are paid according to the piece-rate
plan receive a certain amount for each item they produce. To determine gross
earnings under this plan, it is necessary to multiplying the rate per item by
the number of items completed during the payment period.
For example John works with a computer hardware
manufacturing company, where he assemble parts of computers. His piece rate is
N500. During the month, he assembled 150 computers and has gross earnings of
N75,000. As the computation shows below:|
STATUS
|
HOURS
|
RATE(N)
|
EARNING
|
|
Regular overtime
|
40
|
150.00
|
6,000.00
|
|
Overtime
|
3
|
170.00
|
510.00
|
|
TOTAL
HOURS
|
43
|
Gross Earnings
|
6,510.00
|
2.4.4 THE COMMISSION PLAN
The commission plan is an incentive plan that some firms
used for their sales people. In this payment plan, the amount of earning
depends on the amount of good sold during the payment period. Each sales person
receive a certain percentage of his or her sales for the period. This
percentage is called the commission rate. Here is an illustration: John sells
computers for Omatech computers, he has a commission of rate of 6% within one
week, and his sales total is N 50000.00
and his gross earnings wasN3000. This
implies N50000 x 6% = 3,000.00
2.4.5 THE SALARY-COMMISSION PLAN
Here, the commission plan encourages high-level sales.
During the period of low sales employee may find it difficult to take care of
their basic living expense and meet their obligations. Due to this, many firms
pay both salary and commission to their sales people. The salary commission
plan provides a certain amount of security for storing selling efforts. For example:
John is a sales manager OF OMATECH computers. His Job consist of selling and
administration duties. Because of his mix of work, he receives a salary of N500 a week and sales quota of N4000. This means that he must make N40000 in sales each week before he can
draw any commission. During one week, John sold goods worth N8000. His gross
earnings for the period is illustrated below
Step 1
Step 2
X 0.6 commission rate
Step 3
N500 sales + N240 commission
N740 gross earning
2.4.6 BONUS AND PROFILE-SHARING PAYMENTS
Also, some firms pay their employees other amount beside
regular wages or salaries. These amounts are usually in the form of bonuses of
profit sharing payments. To ensure correct payment treatment of bonuses and
profit-sharing payments, it is right for businesses to make good research and
consult necessary bodies (Tukuns, 1997).
2.5 PAYMENT DEDUCTION
The amount of money an employee receives as take home pay is
usually less than the amount the employee earns. The difference between these
two figures is the result of deductions made from the employee’s gross
earnings. Some deduction such as federal income tax and social security tax are
required by law but other deduction is voluntary (Merle, 1994).
