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These are some examples of financial control procedures: 

Cheques over a certain amount to need two signatories 

Authorisation limits for purchase orders 

Authorisation for petty cash and expenses claims 

Effective credit control procedures 

Computer security procedures and access levels 
Weaknesses in financial control procedures may be signalled by: 

Cash or cheques going missing 

Excessive bad or doubtful debts 

Customers not paying within credit terms 

Suppliers not being paid on time 

Unauthorised purchases being made 

Failure to produce accounts or other reports at the specified time 
 
6
The main business financial systems 
6.1 Controlling the payroll system 
Key controls over payroll cover:

Documentation and authorisation of staff changes 

Calculation of wages and salaries 

Payment of wages and salaries 

Authorisation of deductions
The purpose of a payroll system is to compute the gross wages and salaries of employees and produce 
payslips, cheques and/or listings sent to banks instructing them to make payments. A computerised 
payroll system will be expected to carry out these tasks in accordance with how much employees should 
receive, how they should receive it and when it should be paid. The system should also be able to 
calculate tax deductions, national insurance deductions, savings, loan repayments, etc as well as 
printing various other outputs connected with employees' pay. 
6.1.1 Data held on a payroll file 
Payroll files will consist of an individual record for each employee. 
(a) 
Standing 
data on each employee will include: 
(i) 
Personal details (eg name, employee number, job grade, address) 
(ii) 
Rate of pay 
(iii) 
Details of deductions (including tax code) 
(iv) Holidays 
(b) 
Variable 
(transaction) data will include: 
(i) 
Gross pay to date 
(ii) 
Tax to date 
(iii) 
Pension contributions etc 
6.1.2 Inputs to a payroll system 
The main inputs into a 
wages system 
(ie into a weekly paid payroll) are as follows. 
(a) 
Clock cards or timesheets (sometimes both are used). Details of overtime worked will normally be 
shown on these documents. Sometimes payroll might be directly linked to an electronic time 
recording system. 
(b) 
Amount of bonus, or appropriate details if the bonus is calculated by the computer. 
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