Accounting and payroll are two of the most fundamental aspects of any business. They are intricately connected and manage two vital areas of a business: cash and people. Further, payroll and accounting are heavily regulated functions that present compliance challenges and require keeping up with ever changing laws and being audit-ready at all times.
Payroll is one of the strongest points of engagement an employer has with an employee. Miscalculating a paycheck or delivering it late can have a huge impact on employee satisfaction. Payroll also has a significant impact on cash flow.
Yet, even given the importance of payroll and accounting, many companies still rely on manual processes and disconnected systems to perform these functions.
Challenges with Separate Payroll and Accounting Solutions
- General Ledger (GL) posting delays – with disconnected systems, general ledger postings are delayed because a file needs to be received and imported manually to account for payroll costs. This process can require five to seven steps with separate log ins and could break during any of the steps. Any changes that impact the chart of accounts that were not also mapped in your payroll file, such as new GL accounts created for labor costs, could cause import errors and further delay posting. Posting payroll data to the general ledger between the two systems becomes a manual effort each and every time payroll is run.
- Manual reconciliations – with data in multiple systems, accounting and payroll professionals are constantly tasked with comparing numbers between the two (or more) systems. Whether it’s reconciling payroll liabilities to GL accounts, bank balances to paychecks or tax payments, or earning types and amounts, it can disrupt period end closing and financial reporting and lead to more compliance and audit risk. When the finance staff finds variances, they must troubleshoot in each system and then correct it manually in each system.
- Delays in reporting and analytics – waiting on files and the time to reconcile data disrupts the ability to produce accurate and timely financial reports and conduct financial analysis. This, in turn, delays important workforce decisions such as when to increase the overtime budget or whether a company can offer hazard pay with the current budget. Organizations need to make decisions in real time to serve customers and keep cash flowing while understanding workforce costs.
- Integration costs – standalone payroll providers offer integrations to accounting solutions, but often times these integrations require extra implementation time and training. Once implemented, additional time is needed to monitor and troubleshoot the integration between the two systems. If payroll data is needed in other functions, such as project management to assess true project costs, additional integration fees are usually required. Furthermore, when one of the vendors releases a new version, companies must allocate time to test the new versions before moving them into production. Over time, all of these real and hidden costs add up and could affect the bottom line.
- Issue resolution – when problems arise in either payroll or accounting during the file import or export process, organizations can find themselves in the middle of the vendors trying to troubleshoot the errors. Determining who owns the cause of the issue can take additional time away from fixing it. Depending on the severity of the issue and the time to resolve, it can stop the payroll process and prevent employers from paying their employees.
These challenges create inefficient processes, produce less accurate information and unnecessarily disrupt payroll processes. With data in multiple systems, compliance and audit risks increase because you have (at least) two systems of record that need to be manually balanced and reconciled each pay period. Implementing and maintaining integrations comes with additional costs many businesses cannot afford. Getting good insights into how your workforce costs effect cash flow, in real-time, is nearly impossible.
Unifying Accounting and Payroll
NetSuite designed and developed SuitePeople Payroll with these challenges in mind. The unified approached to business management software eliminates the need for integration to reconcile and update payroll information with the chart of accounts. Since SuitePeople Payroll is built on the same platform as NetSuite Accounting, payroll transactions and data automatically update projects, budgets and reports in real time, reducing costs, errors and keystrokes.
To learn how to take more control of your payroll and solve these problems with a unified solution, watch this webinar.