What is the difference between Payroll and HR (And Do You Need a Bookkeeper)?

by | Aug 19, 2019 | 0 comments

When you’re just starting out as a business owner, Payroll is something that can get pretty confusing. What is it and where exactly does it fit into the business? Can your HR person manage it, or do you need a bookkeeper, or payroll specialist?

In this post, I’ll go into detail about what’s different, what’s the same, and what you should do about it!

 

What is Payroll?

Payroll refers to the process of paying your employees (which I’m sure you already knew!). However, it is involved in a lot more than that. In fact, Payroll handles balancing and reconciling the relevant data, reporting taxes and so much more. It also involves wage deductions, verification of pay data, record keeping, payroll checks, paperwork records, and helps to ensure tax compliance laws are met. On top of that, it is also responsible for calculating things such as holiday pay, bonuses, re-imbursements and more.

There’s a lot of information that needs processing in all this, and all of it is absolutely critical to the success of a business (and avoiding real legal trouble!).

 

What is HR?

HR is an important part of an organisation, and it typically deal with hiring and managing new employees. Managing the expectations of a certain position or employee, motivating employees, developing compensation packages, training programs and more. HR also helps its employees stay up to date with company goals and policies. 

 

Where is The Confusion?

At times, there are instances where these two divisions tend to overlap. Both departments tend to have access to confidential and sensitive data. It is common for both divisions to handle staff onboarding documents. Typically, the bookkeeper would do the set up in the accounting software, while the HR person would prepare the contracts.

When it comes to recruitments, payments, salary increases and more, it is valuable for both the HR and Payroll division to co-ordinate and work together to ensure the success of the business. 

Typically done by an experienced payroll specialist, or bookkeeper, who is aware of the proper processes, laws and software. As payroll is often more number-driven than HR, it calls for a high level of knowledge of tax laws, and bookkeeping. 

Payroll is not typically considered to be the responsibility of HR, but it is important to ensure that fair work laws and contracts are consulted. For example, maternity laws and anti-discrimination laws must be adhered to at all times. This is knowledge that the HR department will likely have.

Most HR people are not qualified to do payroll, and that’s okay! They have another important role in the business, after all.

 

So, when you’re thinking about whether or not you should hire a professional for your payroll, I highly suggest that you do (it will save you a lot of trouble later on).

I know what it’s like to build a team, and I understand how tempting it can be to cut a few costs at the start. I’m also here to tell you (from experience) that it’s never a good idea for long term success. That’s why it’s so important to get clear on the differences between a payroll specialist (bookkeeper or accountant), and HR.

You only have to do a quick only search to find plenty of employers who got into trouble for incorrectly paying wages. Payroll can topple a whole business (if done incorrectly), and I really don’t want that to happen to anyone out there.

If you want to get clear on where your business position is on payroll, don’t hesitate to engage me for a payroll health check, where I take a look at your payroll and make sure that everything is in good shape >>> Click here to make an appointment now!

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