Payroll and finance need to work with each other. Payroll is usually a company’s largest expense and finance must understand the business’ cost drivers and their impact on the company. With a disjointed system it can mean more manual entries, more opportunities for unaccounted expenses, and a difficult time maintaining a clear audit trail.
Why is it worth considering?
All of your payroll costs need to be reported, so why not make the process smoother by creating a direct connection between payroll and your financial reporting? By automating the process of collecting payroll data for financial analysis, you’ll be able to reduce the number of entries to be made and ensure consistent reporting of numbers.
A solution that unifies your payroll and financial reporting can also provide functionality for a deeper financial analysis on your payroll costs. This means more informative financial forecasts, faster generation of metrics, and more accurate analyses of your day-to-day operations.
How can a unified system help me?
An integrated payroll and finance system simplifies a variety of tasks such as:
- General ledger and accounts payable posting of benefits, payments, projects and more
- Automatic handling of account exceptions
- Invoice creation for benefit providers
- Complex financial analysis of people costs
In software solutions like Advanced Payroll AX for Microsoft Dynamics AX, you can post transactions to the general ledger with the click of a button avoiding manual data entry and reducing work effort. This way, you’ll know that all of your expenses are accounted for and which accounts they’ve been applied to.
When a transaction is posted in the General Ledger for a benefit or deduction, it is automatically associated with a supplier account for accounting and bookkeeping. These transactions, once posted, are unchangeable and help to maintain transparency for auditing purposes.
From there, an unpaid invoice for the amount can be automatically generated in Accounts Payable without manual intervention. This ensures accuracy and timeliness in producing payments to your employees and benefit providers, whether those amounts are garnishments, insurance premiums, tax remittances, or employer-paid, taxable benefits.
With a joint payroll and financial reporting system, you can assign a cost, or a portion of a cost, to a department, project, or cost centre. This allows you to perform more detailed analyses on your financial data to see where your biggest cost drivers and bottlenecks are, and potentially gain new insight on areas to improve.
What are my options to combine the two?
You can connect your existing payroll and financial reporting system with a software interface between your existing systems, or migrate to an integrated solution where payroll and finance are both part of a larger ERP system. To find out more about a software interface vs. an integration, check out our blog post to learn more about the differences between an interface and integration.
With a combined payroll and financial reporting system will save your accountants, and ultimately, your company time. Time that can be spent better elsewhere, such as analyzing your financial data to look for cost-savings improvements, creating a strategic plan to continue to grow the company, or getting back to other projects that were put on hold.
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