Some may consider accounting the most dreaded part of the payroll process, but at the 37th Annual Congress workshop “Payroll Accounting: How Important Is It?” on Friday afternoon, Emily Lindsay, a member of APA’s board of directors, and APA Director of Payroll Training Andy Garboden, CPP, explained how critical both departments are in working together cohesively.
“Every time we cut a check, make a tax deposit, or process an off-cycle check, we are impacting several accounts within the financial statements,” Garboden said. “As wages and benefits generally make up the lion’s share of expenses, it is critical our financial statements are accurate. As such, payroll has a huge role in ensuring the timeliness and accuracy of the financials.”
Payroll information is important for feeding the general ledger/cost accounting systems, as well as for creating management reports and financial statements in every company. During the workshop, Lindsay and Garboden discussed terminology, journal entries, accruals, reconciliations, and audits and showed their effects on the financial accounts of a company.
“Payroll plays a very important role in ensuring the accuracy of the financial statements,” Garboden added. “Yes, our primary duty is to ensure timely and accurate payrolls, but nearly as important, if not even more important, is ensuring our corporate officers are accurately portraying the financial well-being of the company.”
Garboden said more people stop considering accounting the most “dreaded part of the payroll process” when they understand the impact errors can make on a company’s financial statements.
“Once they realize that accounting is not difficult to understand and the enormous consequences of poor timing, they will begin to embrace it,” he said.