The Company Saves Money When HR & Accounting Work Together
Is there a division between your human resources department and your accounting department? In many businesses, these departments are divisive, and each believes it can function without the other. Today, businesses are encouraged to bring these departments together in order to tackle new tax law changes and payroll issues. Synchronicity between HR and accounting almost guarantees greater harmony in the workplace, as well as fewer payroll mistakes and compliance with new tax laws.
The PATH Act and Other Tax Considerations
One of the major ways HR and accounting can be brought together is through hiring. The PATH Act (Protecting Americans From Tax Hikes) is a new tax break affecting businesses. Among HR’s primary functions is hiring new employees, and the PATH Act provides tax breaks when employers hire members from particular groups, including veterans and welfare recipients. In truth, there are more than 3,000 federal and state tax incentives available to individuals and businesses. 50 percent of those credits go unclaimed. But when departments work together to ensure compliance, the business saves money, and in some cases a lot of money. For more information on tax credits and incentives, check out the ADP SmartCompliance Tax Credits Module.
Healthcare, Payroll, and More
HR and accounting both have a hand in providing healthcare to employees. Accounting makes decisions on costs and weighs the pros and cons of a plan based on what it will cost the business. HR is more employee focused and will weigh the pros and cons of a plan based on what it offers the employee. In most cases, the employee pays for healthcare, but businesses who don’t provide coverage will be penalized under the Affordable Care Act (ACA). The ACA rewards businesses that offer healthcare, especially small businesses. If a small business employs less than twenty-five workers and covers 50 percent or more of their premium costs, the business will qualify for the Small Business Health Care Tax Credit. It’s important that HR and accounting come together to make proactive choices in regards to healthcare.
Payroll is chief among ways HR and accounting should meld minds. HR is often in charge of handing out salary increases and doling out bonus payments. The two departments will need to determine how much the company can afford to pay employees while still rewarding the best employees for their jobs well done. It should also be noted that HR is in charge of employee relations. HR will need to check with accounting to determine payroll processing times, as many financial matters are time sensitive. This information will then be passed from HR to the employee. This will help avoid financial discrepancies between employees and the company. It should also be noted that there are many ways HR can save the company money, but the department may not realize it. Accounting should be encouraged to provide other departments with money saving opportunities. For example, HR can switch to automated processes to save on manpower hours and reduce paperwork costs.
Both departments deal with an employee’s confidential information. This data is highly private, and shouldn’t be openly discussed in order to maintain employee privacy and there are laws protecting employees in this regard. It’s up to both HR and accounting to ensure privacy, including protecting confidential data from unauthorized people. This also includes the IT department, which will have to work with accounting and HR to ensure cyber security which also protects this data. Overall, when Accounting and HR work together, it benefits everyone in the business. It ensures the automatic and accurate updating of employee records, compliance with new tax laws, and the possibility of tax breaks. A great way to help these departments work together is to set up regular meetings where they can work cohesively to ensure ongoing success.
