Companies' payroll departments face numerous issues. The last must be addressed to assure that employees are paid, contractual duties are met and tax and other withholding duties are upheld. Let's take an example. Most CPAs already know that the numerical change in dates associated with the new millennium poses a massive challenge to computer systems all over the world. What companies currently do is struggling for diagnosing and addressing the systems problems. At one multinational, CPA Patty K. Lake is spearheading an effort to assure that the computer system remains programmed to pay 15,000 workers. This project is just one of many she supervises as the payroll manager for Pillsbury, the international food processing and marketing company.
The Year 2000 challenge has the potential to affect organizations from governments to Mom-and-Pop stores. The issue stems from an economizing. Programmers were instructed to use only two spaces, instead of four, when a year was designated. But as the year 2000 approaches, the computer that has only 97 in its database is unable to distinguish between 1997 and 2097. As a result, date-dependent data could not be calculated correctly.
For assuring that those operations continued to run smoothly, payroll systems were in the middle of an upgrade that would expand their capacities. It was a massive project.
So, a new software program was used and the company has upgraded its method for routing withheld payroll taxes to their proper recipients. The new system gave us an opportunity to have taxes been paid on time. The next the company had done was transmitting tax deposits electronically for several years. But when it received electronic confirmations of deposits it was unable to download them electronically, so the confirmations had to be entered into the system manually. The new system authorized us to download confirmations automatically without human interference.