Without a solid financial foundation, no firm succeeds. A successful firm is built on current and accurate payroll, bookkeeping, and accounting procedures. Therefore, it’s critical to comprehend the distinctions between bookkeeping services and payroll as well as how they work together to support your financial well-being.
Although some of the process has been streamlined by software, bookkeeping, payroll, and accounting duties have not been entirely automated. Any mistake can affect financial records, whether it involves preparing payroll payment register summaries incorrectly or issuing payslips, so it’s critical to work with a qualified professional.
What are Payroll Experts Responsible for?
Payroll is all about examining and distributing payments to workers at the mentioned rate. The process can be easily automated, however, it can get complicated and at that time, it needs a skilled financial expert to ensure it is completed without any error.
The payroll tasks that a payroll expert does may vary slightly based on if you are hiring someone in-house or outsourcing payroll. It is also based on the details of your work/service agreement. Moreover, the following are a few tasks and responsibilities:
- Ensure all payroll transactions have been processed efficiently and at the right time.
- Calculate, gather, and maintain data to track balance sheets and payroll information.
- Compile summaries of earnings, disabilities, benefits, deductions, leave, taxes, and non-taxable earnings for audits, financial statements, and more.
- Resolve payroll errors.
- Follow payroll policies and procedural operations for compliance.
- Reconcile payroll tax.
- Set up STP.
- Manage PAYG withholding.
- Contribute to super on behalf of employees.
Businesses are required to gather and confirm details of employees to keep payroll accurate. Employee details that need to be collected are listed below:
- legal name and address
- Start (and termination date) of every employee
- Details of account they used to receive wages
- Track pay details such as gross wage, allowances, hourly award, etc.
- Tax file number
- Date of birth
Why is it Important to Hire a Bookkeeper?
Bookkeepers are responsible for managing various financial requirements of a business, from tracking cash flow and bank account reconciliation to updating your business books and making financial reports. Although the responsibilities of a bookkeeper are different from accountant or payroll experts, bookkeepers may perform some accounting or payroll tasks. Although, tax return lodgment should be done by an expert tax return accountant. If you are looking to hire a bookkeeper, you need to know what tasks they will perform.
Here are some tasks that bookkeepers handle:
- Pay vendors, suppliers, subcontractors, etc.
- Produce, maintain, and track invoices for offered services to clients
- Bank reconciliation
- Document client receipts
- Prepare financial reports like income statements, balance sheets, and cash flow statement
- Manage accounts payable and receivable
- Track depreciation
Payroll Vs. Bookkeeping
Although a bookkeeper might perform some payroll tasks, the two positions are distinct. We have now thoroughly discussed each, so let’s examine their differences. Payroll and bookkeeping are fundamentally distinct from one another because they oversee various organisational functions.
Payroll: The procedure for disbursing and controlling personnel award rates.
Bookkeeping: The day-to-day supervision of a company’s financial affairs.
Payroll and bookkeeping are also occasionally used interchangeably with accounting. It is crucial to comprehend these distinctions as well, particularly if you are thinking about hiring a professional to assist you with your company’s finances.
Why do You Need to Hire Payroll and Bookkeeping Professionals?
A mistake in your financial records might have an effect on your entire operation and make your company less competitive. Your business understanding can be improved by working with a competent Melbourne bookkeeper who can assist you in selecting the best accounting software or in reviewing your financial data to find potential development areas. It can be quite difficult for you to manage payroll and bookkeeping. Therefore, it is advisable to hire a bookkeeper and payroll expert.
The blog shares differences between payroll and bookkeeping. If you are looking to get payroll and bookkeeping solutions for your company, you can get in touch with a Reliable Bookkeeping Services provider.