What is Payroll Accounting?
The accounting field consists of professionals who analyze and process financial documents, laws, and guidelines in great depth. Their expertise and skills make them invaluable to a variety of industries and organizations. Depending on their employer, accountants can take on several titles and responsibilities.
As with many accounting professions, payroll accountants benefit from a strong career outlook. According to the Bureau of Labor Statistics (BLS), accounting career projections rank considerably higher than the average occupation. While job descriptions can vary dramatically, this article outlines what aspiring payroll accountants can expect. Read on to learn about the career in more detail, including some common duties, career qualifications, and industry statistics.
What is a Payroll Accountant?
Many organizations employ or contract someone to handle payroll and other finances. These professionals may work under different titles and take on a variety of roles and tasks, but they all share the responsibility of ensuring the financial needs of employees and organizations are met.
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To best prepare for this career, payroll accountants need a diverse set of skills that allow them to take on any task that the job requires. Though many of the details differ between organizations, the following section identifies some of the major components of a payroll accountant career, such as possible titles, daily tasks, and specialties.
What Does a Payroll Accountant Do?
The main focus for these accountants is preparing, generating, and maintaining payroll documentation. This typically includes issuing and processing employee pay, commissions, and benefits, ensuring the accuracy of all information and adherence to government policies and guidelines. In some organizations, these accountants may oversee finances as well. This can include the analysis, preparation, and management of finances, including investments, budgets, and purchasing.
While the ideal professional skills depend on the tasks involved in the job, payroll accountants typically have a similar skillset. Due to the nature of their work with numbers, accountants need strong mathematical skills. They also need computer skills to work with the different software and applications required. When dealing with problems, critical thinking skills come in handy, and strong communication helps in many different facets of the profession.
Due to the nature of their work with numbers, accountants need strong mathematical skills.
Payroll accountants work for nearly every type of organization. According to the BLS, 24% of accountants work in payroll services and related fields, and the profession experiences an average rate of growth from 2018-2028. A professional may work for a payroll services company that organizations contract for their services or more directly within a business. Some of the most prominent employers for payroll accountants include the professional services retail, wholesale trade, healthcare, and finance industries.
Accountants spend much of their days examining and manipulating facts and figures. They use a variety of tools and applications to make their work easier, quicker, and more efficient. Some common job requirements include familiarity with Microsoft Office and other accounting applications. Accountants may also need a working knowledge of database, enterprise resource planning, financial analysis, and tax preparation software.
More generally, payroll accountants need thorough knowledge of financial statements, accounts payable and receivable processes, and tax and labor laws. Accountants often oversee commission and benefits payouts for organizations as well, and comprehension of business fundamentals and operations can go a long way.
Payroll accountants should carefully examine intended job duties when seeking employment.
Because payroll accountants can take on so many different responsibilities, job titles vary dramatically. Some organizations call this position a general accountant, bookkeeper, or accounting clerk.Others may use public accountant, management accountant, or cost, corporate, or private accountant. While these positions can differ, the responsibilities often overlap.
Furthermore, some employers seek out payroll accountants to manage tasks outside of the standard accounting discipline. Some of the more common titles in these cases include financial analyst, auditor, budget analyst, purchasing manager, financial manager, cost estimator, and tax and revenue agent. Payroll accountants should carefully examine intended job duties when seeking employment.
Payroll accountants can also take on a variety of specialties. The formation of these specialties begins with electives, concentrations, and specializations. Accountants may specialize in tax or labor law, verifying their organizations comply with state and federal rules. They may specialize in investments to identify financial opportunities or they may focus on managerial accounting to improve organizational budgets, asset management, and performance.
What Are the Responsibilities of a Payroll Accountant?
Work With Financial Statements
Payroll accountants often oversee work with financial statements at an organization. They read, interpret, process, and submit these forms, ensuring the accuracy of all financial documents that go through the organization.
Process Staff Pay and Benefits
Accountants process and submit all employee pay and benefits, ensuring that everything follows organizational guidelines and the letter of the law. Their work satisfies the requirements for the industry, the Internal Revenue Service (IRS), and state and federal governments.
Payroll accountants may develop and present financial reports. They may need to analyze the finances of their organizations, the markets, or the industry and communicate their findings to their employers. Their financial expertise allows them to understand and translate their findings to others.
While some companies may issue this job to another professional, many accountants oversee organizational finances, including investments. These accountants can explore the market and identify investment opportunities or simply suggest investment firms to work with. They may also act as a translator for an organization’s investment data.
Accountants maintain their organization or client’s books, ensuring the accuracy of all data and spotting any miscalculations. They may also process documents according to their organization’s policies, monitor any loans, and manage all accounts payable and receivable.
Assess Financial Operations
Accountants examine the financial operations of their organizations and look for areas of improvement. This may involve budgeting and implementing industry best practices or looking for cost-cutting methods and revenue improvements. They may even assess employee performance from a financial standpoint.
What Qualifications Do You Need to Become a Payroll Accountant?
* Bachelor’s Degree Most accountants possess bachelor’s degrees in accounting or a related discipline.
* Advanced Training Some employers may seek a candidate with a master’s degree or specialized training in an area of importance.
* Certification The accounting industry offers a variety of certifications, including the certified professional accountant and certified management accountant tests, which demonstrate competence and verify that a candidate’s training meets the industry standard. Some employers may require certification.
* Mathematics Working with financial documents, accountants need to process, interpret, and analyze a variety of figures.
* Communication Strong communication skills, such as reading, listening, writing, and speaking, allow accountants to effectively work with their employers and coworkers.
* Critical Thinking Accountants use critical thinking skills to analyze problems and produce creative and effective solutions.
* Deductive Reasoning Accountants need to approach problems from a logical standpoint, applying standard rules of the profession to produce efficient solutions.
* Technology Contemporary accountants must be able to use and understand modern technologies, including communication tools and common accounting equipment and programs.
* Comprehension and Expression These professionals need to read carefully and listen to instructions while also processing and communicating information themselves.
* Accounting This profession requires a thorough understanding of accounting principles, rules, and guidelines, including up-to-date tax and payroll best practices.
* Computers and Applications Accountants use a variety of applications and computers, so they should know how to use common software programs.
* Business Operations These professionals must understand how organizations operate and many of the business-related tasks required by the job.
* Economics Accountants need general knowledge of economics, such as banking, financial markets, and the flow of goods and services.
* Laws These professionals must understand the various laws, guidelines, and policies governing their jobs, especially regarding payroll information.
Learn More About How to Become a Payroll Accountant
How are Payroll Accountants Employed?
Employment venues for payroll accountants vary considerably. Aspiring accountants can influence their future careers with the courses they choose and the specializations they pursue. With in-depth financial skills, these professionals can find employment in industries like tax and payroll services, the government, finance organizations, and trade organizations.
At tax and payroll service companies, accountants work with organizations to process tax and payroll documents. With the government, they find work as budget analysts or auditors, ensuring the compliance of outside organizations. In the finance industry, accountants may work with clients seeking investment advice or supervision. With trade organizations, accountants often manage job estimates and assess factors that can affect the cost of employment.
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Professional Organizations for Payroll Accountants
- American Payroll Association APA helps set industry standards for payroll professionals by developing and offering education and certification, hosting industry events, and establishing and promoting compliance guidelines.
- American Institute of CPAs AICPA unites CPA professionals into a large support network. The institute provides industry resources and information, certification, and career guidance for its members.
- The American Accounting Association The AAA supports accountants in academia by providing access to educational and teaching resources, in-depth research, and industry news and events. Accounting students at various levels can join the network.
- The American Institute of Professional Bookkeepers AIPB supports employed and freelance bookkeeping professionals with advocacy, access to industry news and resources, and opportunities for continuing education and professional development.
- American Association of Finance and Accounting AAFA hosts a network of many of the nation’s most reputable accounting and finance firms. This association helps connect organizations with accounting firms, professionals, and services that meet their needs.