It’s almost time for payroll. That means it’s time to calculate all the pre-tax deductions, new leave entitlements, and allowance earnings for each employee. Have any annual maximums been reached for contributions? Going back to find all the records, then calculating totals for each deduction and employee means you could be working late today. Luckily, there is something that could make this process a lot easier and help you leave the office on time.
What is an accumulator?
An accumulator is a tool that keeps a running total of one numerical amount increasing or decreasing over a period of time. The time period could be only for a pay period, for the tax year or indefinitely. Your payroll software might have this feature – so are you making the best use of this tool?
Accumulators are great for company, government, or worker requests for information. They let you group transactions for record keeping, reporting, calculation or taxation purposes.
How can I use an accumulator?
Accumulator are used for ongoing totals such as entitlement banks for vacation, benefits or net payment amounts. Some examples include:
- Gross earnings
- Pre-tax deductions
You can use accumulators within calculations to minimize your extra work. An accumulator is a running tally of a single value (Sally’s vacation days) going up or down. You can group together earnings and deductions that should be treated the same way, like taxable benefits. Then calculations use accumulators as operands and add, subtract, multiple or divide them.
In short, an accumulator tells you the current amount of vacation days Sally has left at any moment of time. A calculation will add Sally’s vacation days to Jordan’s to find out how many vacation days the HR department has taken so far.
Below is a diagram to show how accumulators, calculations and reports all work together.
How can an accumulator make my life easier?
Let’s say for example that company ABC wants to calculate the total amount of tax they need to pay for the year end.
- Company ABC has worksites in District 1, 2, and 3. Company ABC uses an accumulator to keep track of the amount increasing amount of tax owed in each district as it gets closer to reporting time. At the year end, Company ABC calculates its total tax owed by simply using a calculation that adds the accumulated tax values of District 1, 2, and 3 together.
Or, the benefits administrator needs to keep track of how much benefit allowance Alice has left.
- Alice has $500 to allocate to the benefits she wants this year as well as how much she wants to put towards each one. She decides to put $100 towards dental. The accumulator for her dental benefit will track the dollar amounts going to it and will automatically shut off and no longer accept any more when it reaches $100 without the benefits administrator needing to intervene.
With LOKI System’s Advanced Payroll AX, accumulators can collect data at the company, pay group, worker, or position level. You can set up as many accumulators as necessary for efficient calculations and reporting. Consider whether there are any company-level financial transactions that you should be monitoring more closely. A new accumulator might eliminate the need for a custom report or manual calculation you do now.
Accumulators are great, handy tools to have in your payroll tool belt. They update in real-time without you needing to do all of the manual calculations or hunt down the paperwork to come up with the current total. They can have a waterfall effect. Having an accumulator makes finding the current value easier, which makes calculations faster and reporting done in a fraction of the time.
- Comment: Lokisystems on September 3, 2014
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