Is it Acceptable for My Accountant to Take Care of Payroll?
The payroll function is somewhat of a conundrum. How it operates is certainly financial, but it’s also employee-facing. The result is that payroll neither fully sits in the financial department, nor does it the HR department.
In many cases, what happens is that you have either finance or HR taking sole responsibility.
However, the problem is that HR professionals lack the financial expertise to ensure payroll is executed properly. Moreover, your finance team probably doesn’t want HR making inexperienced changes to a financial system where accuracy is paramount.
On the other hand, accountants have other important jobs to fulfill, and dealing with payroll takes up a huge amount of time and resources.
What to do? Is it really acceptable to land the responsibility of payroll on your accountant? Or is there a better solution?
Let’s find out.
Roles of an Accountant
An accountant is responsible for managing financial records, ensuring tax compliance, and providing financial advice, the role is both vast and intricate and requires problem-solving skills and the ability to provide accurate insights.
Given their intimate involvement with financial data, software, and tax obligations, it could be determined that their skill set might overlap with that of payroll management.
The Pros of Letting Your Accountant Handle Payroll
Let’s say you did decide that your accountant is to handle payroll going forward. What are the advantages of this?
Experience and Expertise
With their grasp of financial data and tax regulations, accountants are often well-positioned to manage payroll. They are also adept with financial software and understand how to use it effectively.
Given their vast experience, learning the nuances of payroll wouldn’t take an accountant too long to grasp, and given their meticulous nature, you know it would be handled promptly and correctly.
Having a single point of contact for financial matters, including payroll, ensures a seamless flow and integration of financial data.
This consolidation can potentially foster better financial decision-making and reduce the likelihood of errors and miscommunication from occurring.
Why employ two people when you can just have one? Employing the same professional for accounting and payroll might be more economical than hiring separately.
Additionally, an accountant’s expertise might minimize payroll errors, subsequently avoiding costly penalties.
The Cons of Letting Your Accountant Handle Payroll
Now let’s look at the drawbacks of using your accountant for payroll.
Like accounting, payroll is a complex field. An accountant, regardless of their financial prowess, may not be well-versed in specific payroll regulations or practices.
Compliance is so important for payroll and mistakes are not well tolerated. This can quickly lead to penalties and other issues if your accountant is not able to handle them effectively.
Overburdening the Accountant
If an accountant is already managing several financial facets of a business, adding payroll to their plate can quickly become overwhelming.
Not only will your accountant start suffering from burnout, they’re not going to be able to fully concentrate on the tasks they were initially hired for.
Let’s not forget that accountancy is a very specific and important job function. If your accountant’s time is taken up dealing with payroll, your business can start to suffer financially as a result.
Lack of Human Resource Skills
Remember, payroll is straddled between financial and HR functions. A lot of it is employee-facing and requires the handling of delicate or stressful situations. Accountancy on the other hand doesn’t deal with the larger employee population and instead has close relations with business owners and stakeholders.
These are two very different dynamics that require specific interpersonal skills. It’s likely that your accountant will lack these skills or simply not feel comfortable interacting in this way.
Finding a good accountant is not an easy task. They have to not only be great at their job but also possess the right knowledge and skills for your business niche.
If you start piling on payroll responsibilities, it won’t take long before your accountant starts looking elsewhere for a more desirable post. Especially if you don’t offer any additional compensation for taking on the role.
Recruitment is expensive, and you’re going to struggle to find an accountant who will want to deal with payroll as well as accounting.
What’s the Solution?
All in all, we don’t recommend asking your accountant to take care of payroll. Despite the advantages, the negatives cannot be ignored, and the last thing you want if for your business to suffer as a result.
Therefore, there are three things you can do:
- Hire a dedicated payroll professional: You get the proper expertise for the job, but the downside is the additional hiring costs.
- Use specialized payroll software: Today’s market offers an array of payroll software, tailored to handle payroll intricacies efficiently. However, you still need someone to learn, use, and update the system correctly.
- Outsource to a payroll service provider: Arguably the best solution since you only pay for the service you need and they will already use dedicated software.
EvolveCFO for Payroll Expertise
Outsourcing has exploded in recent years. Businesses now realize the benefit of hiring remote professionals and only paying on a “needs” basis.
This means you avoid the costly process of hiring and onboarding a full-time worker, and you don’t have to worry about salary and benefits because you only pay a fixed monthly rate.
At EvolveCFO we have been providing financial, HR, and Payroll professionals to startups and small businesses for many years. We understand that most of our clients have a need for these functions, but not on a full-time basis.
Therefore, we offer access to our team of experienced individuals at a level of service that suits your business. As you grow, you can scale that service, or dial it back if needs be.
Suddenly, having a dedicated payroll expert isn’t so out of reach, and you can avoid pressuring your accountant to do the job. Everyone is happy!
For more information about our payroll services, please feel free to reach out to EvolveCFO.