A payroll accountant is responsible for administering the company’s salary and wages system and ensuring that employees are properly paid. The payroll accountant may work closely with the personnel or human resources department, but is generally a member of the accounting, finance or controller’s department. This is due to the need to segregate duties and responsibilities as part of an adequate internal control system.
In a large company with a significant number of employees, the payroll processing function may constitute a separate department, or there may be one person in accounting who spends all or most of his or her time performing payroll functions. In a smaller business, with fewer employees, the payroll function may be combined with other administrative duties such as accounts receivable, accounts payable, and the cashier function. These duties may be performed by just one person, in an office manager or similar position. And, in many companies the payroll function is outsourced to another company that specializes in payroll services. In a company that provides payroll services, the different payroll functions may be broken down, with different persons specializing in different areas of payroll.Ã?Â¯Ã?Â¿Ã?Â½
What Does a Payroll Accountant Do?
The duties of a payroll accountant can be grouped into input functions, processing functions, and output functions. In a small company with only a few employees, the payroll may be done manually, or basic payroll software may be used. In this case, the payroll system may be a module of the overall accounting software package. In a larger company the payroll system may be a program specially developed for the company. Regardless of the payroll processing methods used, there needs to be an administrative control and review system in place to ensure that the payroll is being processed correctly, in accordance with established parameters and legal requirements.
The following are some examples of the types of duties a payroll accountant will perform, which can vary depending on the type of system used.Ã?Â¯Ã?Â¿Ã?Â½
Ã?Â¯Ã?Â¿Ã?Â½ Entering and updating employee master file data.
Ã?Â¯Ã?Â¿Ã?Â½ Keeping individual and/or electronic files for each employee, including the job application form, personal resume, offer letter, contract, W-4 withholding tax statement, insurance and other benefit plan application forms, and action forms from the personnel or human resources department.
Ã?Â¯Ã?Â¿Ã?Â½ Collecting time accounting data from time cards, time sheets, time clock, time reports or other media.
Ã?Â¯Ã?Â¿Ã?Â½ Collecting, assembling and entering, or controlling the entry of data such as sick time, vacation time and other paid time not worked.
Ã?Â¯Ã?Â¿Ã?Â½ Inputting payroll variations, such as overtime hours, bonuses, profit sharing and other payments.
Ã?Â¯Ã?Â¿Ã?Â½ Entering data for employee payroll deductions, such as for health insurance and other benefit plans.
Ã?Â¯Ã?Â¿Ã?Â½ Updating data used in payroll calculations, such as employees’ income tax withholding rates and the employer’s payroll tax burden.
Ã?Â¯Ã?Â¿Ã?Â½ Updating employee payroll data for pay increases such as raises in salary or wages.
Ã?Â¯Ã?Â¿Ã?Â½ Assigning general ledger and cost center numbers to payroll expense components.Ã?Â¯Ã?Â¿Ã?Â½
Ã?Â¯Ã?Â¿Ã?Â½ Carrying out the internal controls designed for the payroll system to ensure accurate processing.
Ã?Â¯Ã?Â¿Ã?Â½ Reviewing preliminary payroll reports for accuracy before generating the payroll run, in a computerized system.
Ã?Â¯Ã?Â¿Ã?Â½ Calculating the payroll in a manual system.
Ã?Â¯Ã?Â¿Ã?Â½ Making the necessary arrangements, communicating requirements, and coordinating with a payroll service if the payroll function is outsourced.Ã?Â¯Ã?Â¿Ã?Â½
Ã?Â¯Ã?Â¿Ã?Â½ Preparing the checks or bank transfers, and payroll stubs or statements in a manual system.
Ã?Â¯Ã?Â¿Ã?Â½ Receiving paychecks or bank transfer notices from a computerized payroll system, or from an outside payroll service.
Ã?Â¯Ã?Â¿Ã?Â½ Reviewing payroll reports and paychecks for accuracy and completeness.
Ã?Â¯Ã?Â¿Ã?Â½ Distributing paychecks or bank transfer notices, and pay stubs or pay statements to employees.
Ã?Â¯Ã?Â¿Ã?Â½ Preparing the accounting entry, or reviewing the computer-generated entry to record the payroll.
Ã?Â¯Ã?Â¿Ã?Â½ Arranging for bank transfers to cover the payroll cost.
Ã?Â¯Ã?Â¿Ã?Â½ Answering employees’ questions about their paychecks.Ã?Â¯Ã?Â¿Ã?Â½
What Are the Working Conditions Like?
A payroll accountant works in an administrative capacity, in normal office conditions. While the payroll accountant will normally report to the controller, finance manager, or to a senior-level accountant in the accounting, finance, or administration department of a larger organization, the payroll function may be part of a multi-task administrative position in a smaller organization. In this case, the payroll function may be combined with accounts receivable, accounts payable, bookkeeping, and other administrative duties.
The payroll position carries with it a great deal of personal responsibility, and the payroll accountant must be capable of assuming this responsibility, often working under pressure to meet deadlines for having all payroll entry data posted in time to run the payroll process and pay the employees.Ã?Â¯Ã?Â¿Ã?Â½
What Are The Requirements?
The person in charge of payroll must have general knowledge of labor laws, payroll taxes and benefit plans, and specific knowledge of company policies and procedures regarding salary and wages and benefit plan administration. A working knowledge of computer systems as a user is needed. If the company has a specialized payroll computer system, the payroll accountant must clearly understand the procedures and steps to be followed in using the system.Ã?Â¯Ã?Â¿Ã?Â½
An accounting degree is not necessarily required to be a payroll accountant, although many times the person in charge of payroll may be a degreed accountant or may be pursuing an accounting degree. But it is possible for a person with knowledge of the company’s payroll system and the associated administrative internal control system, to make a career in payroll without having a degree.Ã?Â¯Ã?Â¿Ã?Â½
One of the most important qualities for a payroll accountant is discretion in handling confidential information. The payroll accountant has access to information on employees that few other persons have, and this information must be protected.Ã?Â¯Ã?Â¿Ã?Â½
Another important trait is organization and the ability to handle and process information in a timely, complete, and orderly manner. While payroll procedures are repetitive by nature, the payroll accountant must ensure that all changes are properly handled each pay period in order to ensure that all employees are paid the correct amount. In this sense, the payroll accountant must possess a well-developed sense of responsibility and self-initiative.Ã?Â¯Ã?Â¿Ã?Â½
People skills are important in coordinating with other members of the accounting department, with the personnel or human resources department, and with members of other departments, at different levels in the organization. The payroll accountant will also deal directly with employees when questions arise regarding their pay, and there may be occasional contacts with insurance companies, outside benefit plan administrators, and other receivers of payroll deductions and employee obligations, such as court-ordered withholding. The payroll person may also have contact with governmental taxing authorities.Ã?Â¯Ã?Â¿Ã?Â½
What Are The Prospects?
There is always a need for qualified payroll accountants, no matter how automated the payroll system may be. The payroll process requires human intervention to input new hires, update the files for terminated employees, input changes in levels of remuneration, promotions and other changes for existing personnel, changes in personal data that affect benefit plans, tax withholding and other deductions. And there must be a person responsible for ensuring that the payroll process is carried out in an effective and timely manner, according to pre-established criteria and procedures, and satisfying internal controls.Ã?Â¯Ã?Â¿Ã?Â½
Payroll accounting can be a career in itself, especially in a large company with a payroll department, or in a payroll service company. And, experience as a payroll accountant can lead to a higher-level position in the accounting or finance department of a larger organization.Ã?Â¯Ã?Â¿Ã?Â½
A person who has worked in payroll could also take a different direction, leading to a career in human resources. The experience gained in working with the company’s salary and wages administration system, time-keeping, employee deductions, and benefit plans, can be good preparation for working in human resourcesÃ?Â¯Ã?Â¿Ã?Â½
If the payroll function is performed as one of several administrative functions, experience in payroll will make the person more experienced and qualified, and therefore more valuable in any overall administrative role. Combining payroll experience with experience in accounts receivable, accounts payable, and bookkeeping is very good preparation for an office manager or similar position.