Like so many other occupations, accounting has now become a career choice with specialized fields. There is specific training for areas including construction accounting, tax accounting, and one of the most security sensitive: payroll accounting. When teaching students payroll accounting, it is important they understand how having a separate payroll accounts and an accountant assists in maintaining proper internal controls:
- One reason to separate the payroll account is for reconciliation simplicity and time management. When payroll checks and taxes are paid out of the same bank account as routine general ledger invoices, it generates numerous transactions which in turn makes monthly bank statement reconciliation more complicated and time consuming.
- Internet identify theft and online scams in relation to payroll services is rampant these days. By creating a separate payroll account, which is linked to the company’s main banking account, money can easily be transferred to cover payroll with an additional protective layer of security guarding against fraud and theft.
- A payroll accountant is privy to personal information including social security numbers and financial legal proceedings such as wage garnishment. Employing a separate payroll accountant who understands the confidentially requirements helps keep internal controls in place and ensures only authorized personnel have access to private payroll files.
For accounting instructors, Labyrinth Learning has a new solution available: Payroll Accounting: A Practical Real World Approach by Eric Weinstein. For information on our other outstanding curricula and teaching aids, please contact us today.