Who is in charge of a company’s payroll?

14 of October, 2022

One of the most frequently asked questions is who is in charge of company’s payroll variations. This is a question that may be asked by employees, but also by managers. Is it an accounting matter? Is HR responsible for payroll? Is there an external consultant for this?

You should keep in mind that payroll is one of the most sensitive issues for the job satisfaction of any company. Workers must be paid on the agreed day since their stability depends on their payment. In addition, it is confidential information, which requires us to be extremely careful with it.

Who creates employees’ payrolls? 

Before payroll is sent to our staff, it must be created. Normally, external accountants or consultants are in charge of payroll. We usually use a third party to create payrolls. Except in very large companies, with more than 500 or 600 employees, where payrolls are created internally. 

This does not mean that they are going to manage them, but that they create the document on which the payroll is managed. In this sense, having a payroll management system such as Sesame HR covers this need. By automating the creation of payrolls online, this process can be streamlined and the workload can be significantly reduced.

Using this type of resource not only helps in the creation of payrolls. It also helps in the next stage, payroll management. Once we have the payroll structure, we only have to complete it by adding data. And this information can be directly collected in Sesame HR.

Who manages employees’ payroll?

The HR task is to “only” manage the staff’s payroll. We must use quotation marks since they are responsible for managing all payroll issues. This includes everything from overtime or holidays to new hires and sick or maternity leaves or changes in the employee’s bank details.

This is information that HR transfers to the company’s accountant or to the payroll software. The need to keep the information flow between both parties up to date calls for using HR software such as Sesame HR to streamline this process.

Otherwise, they would have to constantly make calls or send e-mails. Needless to say, this multiplies the chances of error. Something similar happens when SMEs prepare their payrolls in Excel format. We can overlook data, and the result is an incorrect payroll.

Payroll accounting responsibility

We have already gone over who is in charge of payroll, but there are other departments involved in the process. In this case, we are talking about the company’s accounting department.  In the end, they are in charge of the organization’s financial resources and they give the order to pay employees. 

Beyond this, they must record the payroll tax liability of both the employer and the employee. Also ensure that the company receives payment of withholdings, or reconciles the total amount paid to employees. They will track liabilities and payment dates to ensure that payments are issued.

For this reason, a strong collaboration between human resources and the accounting department is key. The former handles employee data and the latter handles money. This cooperation is even more important when calculating bonuses or when there are new hires in the company.

It is also true that some tasks overlap. This is the case with data entry or answering employee queries and questions. That is why many organizations – especially large ones – have a payroll department that includes HR and accounting profiles.

Internal payroll control

Another department that may be involved in the payroll process is internal control. Having staff from several teams – HR and accounting – can help with interdepartmental supervision. 

In this way, the company ensures internal control to maintain accuracy and compliance with deadlines. It is also a way to avoid payroll mistakes. Although not always easy to take on board, these internal control measures are necessary to ensure stability and avoid malpractice.

At this point, we already know who is in charge of a company’s payroll. It seems logical to have HR software such as Sesame HR which, among other things, allows us to collect payroll-related data. For example, hours worked, overtime or employee absences.

A further interesting feature is the one that allows the payroll to be downloaded from the employee portal. This way, employees have a reference about where their pay slips are stored monthly. This makes it easier to analyze them, detect mistakes and report issues about them. 

Do you want to know more about payroll preparation and management? In the Sesame HR blog, you will find a lot of information related to this topic. Also, all software features that help you create and manage payrolls and improve your staff’s experience.