How to reconcile payroll with your accounting?
The reconciliation of payroll with accounting is an unavoidable step in companies from any country. If you have employees, you must make sure that the deductions, medical insurance and salary perceptions correspond to what is actually recorded in your accounting data, your payroll and your bank receipts.
If there are imbalances, this can lead to multiple issues: with the employees, with the tax authority and also with your own business management, since it is more difficult to make correct decisions when there are errors and lack of precision in the data.
Why do you need to reconcile payroll?
There are several reasons why reconciliation of payroll and accounting data is critical to business management.
The main victim of not doing it is the company itself. If the data is not correct, you take unnecessary risks. Perhaps you are paying more than what the employee is due according to the payroll or, on the contrary, you have not made the withholdings correctly.
A difference in the numbers can cause you to have a wrong perception of your treasury, which can lead to poor decision-making, since you would not be effectively managing a fixed expense as you are not considering the weight of payroll.
Declarations and procedures
In practically all countries you have to carry out different procedures related to payroll, such as the Multiple Informative Declaration (DIM) in Mexico. If there are discrepancies between what you declare to the administration or what the employee perceives and your accounting data, this can lead to various problems. For example, the tax authority may consider you are not declaring correctly and audits you, with its consequent sanction. Or for employees to make sure that you are not properly meeting your payroll obligations.
How to make an accounting payroll reconciliation?
Procedures may differ from country to country depending on the tax obligations indicated by law.
But what is certain in all cases is that the conciliation of the staff is important before presenting any declaration since imbalances may be taking place.
This is a process that is normally done in the Accounting Management Department of companies. It is about verifying that the data of payroll, withholdings and social insurance in charge of the company, or any other type of labor cost, corresponds with the data included in your registry books and in the bank accounts of the company.
Even with few employees, this process can be complex for many companies. Each payroll can be different, with salary incentives or perceptions, which make the data change from month to month, which makes the process much more tedious and difficult.
Even more so if the number of employees is very high, since doing the manual reconciliation of payroll can become an impossible mission. Having your Accounting Department busy with payroll reconciliation can delay other hugely important tasks.
The best option for you to reconcile payroll with accounting is through a reconciliation solution such as Conciliac, with which you can save time, avoid errors and ensure that you can file returns without errors, preventing possible penalties or unforeseen costs.
There is a way for you to start reconciling payroll quickly, safely, and efficiently, without spending hours and hours on repetitive and tedious work. Find out how by contacting us.