May 30, 2024

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What You Should Know About Accounting Payroll

2 min read
What You Should Know About Accounting Payroll

The most important fact about accounting payroll is that it involves financial statements and not filing tax returns. It requires a detailed description of fringe benefits and payroll for employees which is necessary in the management of employee time. Employer paid benefits, taxes and costs as well as wages, salaries, bonuses and commissions are only a few of the items included on a business´s balance sheet and income statement. If you only have a couple of employees, using a general ledger will be sufficient to record all such information, but if you have more than just 1 or 2 employees or expect to have many more in the future, automating your payroll system can make your it simple and efficient.

When keeping track of it using journals, there are two journals that are used in this system. A Payroll Journal records it that is due to be paid to employees. When it is time to disburse payments, a Payroll Disbursement Journal records amounts when it is finally paid to employees. Journals must be kept with detailed information on hours worked, amounts to be paid, dates and to which employees. Automating this process makes data entry very simple, and any errors can be caught early rather than searching paper journals to catch mistakes.

Computerized one allows for the printing of hard copy journals as well as payroll ledgers and calculates employee taxes to be withheld automatically with a few simple settings. Paying attention to detail is crucially important, as errors can cause problems for the accounting of your business. Keep individual files for your employees with their time and payroll information in them to make pulling information later an easy task. Be sure to keep a list of your employees and employee numbers handy if you choose to list employees by their number in your accounting payroll.

Employee time sheets are also called payroll source documents, and are required for audit use when accounting payroll. These documents should be put into a document source folder for easy access when requested. The Labor Department is one organization that requests these source documents on an audit basis. It is important to keep documents well organized, whether they are in paper form or computer form. Use software which will allow you to customize your fields to accommodate your particular needs, as well as software that will make it easy for you to transfer your information to other accounting programs.

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