A comprehensive accounting software, like Cougar Mountain Software’s Denali, should accomplish the basic but critical function of payroll. Payroll for manufactures is much more than just paying employees and calculating taxes. Processing payroll in your accounting software should also be a source of information to your other accounting needs such as tax data and filings, automated and accurate tax reports and forms (i.e. W-9 and W-2 forms), tax payment generation, employee benefit tracking, and labor, overhead, and expense costs.
Companies often approach payroll as an island of processing data which is separated from other business applications. Some even cling on to time-honored manual processes while others rely on a third party to handle payroll functions. However, today’s most cost-effective payroll systems work seamlessly with the accounting software to allow even small to mid-size companies to reap the benefits of manufacturing payroll and accounting automation.
By implementing the right set of accounting functions and parameters, including payroll which automatically updates the appropriate modules throughout the system, your company can realize similar benefits large enterprises encounter, on a much smaller, cost-effective budget.
The Benefits of Payroll and Accounting Being Built Together
Here are a few of the benefits that can be achieved with a built in payroll system as part of your accounting software:
- Efficiency – employee information is maintained in one system, accessible to everyone that needs access, while controlling what is visible to each group
- Accuracy – payroll information is calculated by the software quickly and consistently
- Flexibility – payroll can be run for different time periods where necessary. Hourly employees can be paid on a different schedule from salaried personnel, and contractors may be paid on yet another cycle.
- Single Source – everyone views the same information. There are no spreadsheets or manual documents with conflicting information. Project supervisors see the same real-time information as management and human resource staff.
- Reporting – A variety of reports can be tailored to specific needs, and automated to provide critical information on a timely basis.
How our Clients Experience the Impact of an Accounting System that has Payroll Built in.
Many manufacturers still lag in getting payroll information into other systems due to manual re-keying of data into separate financial systems. This leads to multiple challenges for businesses:
- Errors – manual processes are always prone to errors
- Delays – manual entry adds time to the process, extending the time needed to prepare accounting reports and make decisions
- Expense – systems that don’t work together increase cost
How Should Payroll Work with Your Accounting Software?
Every accounting software should include a Payroll module that shares information with the rest of the system. While integration can be good, it’s not ideal. Here’s why:
These areas of your accounting system benefit most with a built in payroll module:
- General Ledger – Records financial entries from payroll processing. Captures payroll expense, benefits expense, and tax reporting/liability for use in financial statements.
- Accounts Payable – Generates payments to contractors or sub-contractors based on hours worked.
- Time Management – Tracks labor, overtime, absenteeism, FMLA, and tardiness, and can be extremely useful for government reporting requirements, project cost estimating, and human resource managers.
- Budgeting – Forecasts payroll budgets with accurate payroll information
- Tax Filing –Gathers and retains tax data automatically. Tax rates can be updated on a timely basis and deductions can be reported to meet the specific needs of every taxing authority.
What have your payroll challenges been? Please share your comments below.