| There is no more critical aspect to a business | | | | Payroll is probably the most important |
| than to implement an effective accounting | | | | responsibility or process in a company. It is a big |
| program. Businesses will pay thousands of dollars | | | | job, but all payroll activities must be recorded and |
| in fines if they fail to monitor their system. Smart | | | | journalized in the company books for each and |
| business people understand this. | | | | every employee. All appropriate federal, state and |
| So what goes on in accounting and bookkeeping | | | | local taxes must be deducted by the people in the |
| departments? What kind of duties do this folks do | | | | payroll department. The pay stub attached to |
| when at work? | | | | your paycheck records these taxes. First the |
| If payments are received from customers, than | | | | appropriate governmental forms must be |
| accounting departments are responsible for | | | | completed and then the correct amounts of |
| recording those transactions. The accounting | | | | income tax, social security taxes plus employment |
| department has to make sure that the money is | | | | taxes have to be paid to the federal and state |
| sourced accurately and deposited in the | | | | government. There are other deductions that will |
| appropriate accounts. They also decide how | | | | usually be deducted on the pay stub. These |
| money is spent and budgeted. They manage to | | | | included things like retirement, vacation, sick pay |
| see if enough funds are kept on-hand for the | | | | or medical benefits. It's a critical function. Some |
| payroll area. They also verify how much money | | | | companies have their own payroll departments; |
| goes out to pay what the company owes its | | | | others outsource it to specialists. |
| banks and vendors. Some should also be invested. | | | | Bookkeepers perform all manner of |
| Contrary to what most people may think, | | | | record-keeping tasks. Some functions are: |
| accounting and bookkeeping is not the same thing. | | | | -They design and construct spreadsheets that |
| Bookkeeping is really one function of accounting. | | | | outline entire business processes which are critical |
| Accounting is considered a science, because it | | | | to the business - the buying, selling, transferring, |
| involves managing the overall affairs of the | | | | paying and collecting. |
| enterprise. When an accountant enters the picture | | | | -Good bookkeepers compile daily transactions and |
| he is usually preparing financial reports based on | | | | input that information into computerized |
| the findings of a bookkeeper. | | | | accounting programs. |