How Accounting and HR Intersect in Businesses
While the success of any business cannot be pinned down to a single reason or factor, it can't be denied that inter-departmental collaboration greatly contributes to it. As departments continue to communicate and work together, they are not only building trust within the organization — they're also paving the way for better customer service, greater efficiency, less conflict, and more opportunities for professional advancement.
Given the importance of collaboration between departments, this article will zoom in on two equally important business divisions: accounting and human resources, exploring their key functions and the ways they intersect.
The accounting department
The accounting department is the group responsible for providing accounting services and financial support to the organization (per SmallBusiness.chron). Its main functions include recording accounts, managing payroll, keeping track of critical tax documents, tracking assets and expenditures, paying bills, and billing clients and customers. Like any other department, the accounting division is composed of different specialists that manage the finances of an organization.
There’s the accounting manager, who directs and organizes all general accounting activities along with the accounting staff. This type of manager is responsible for preparing accounting and financial reports, ensuring their accuracy and that they are delivered on schedule. Accounting departments also have an internal audit manager that establishes and implements internal control mechanisms. They are also tasked to assist in developing and improving accounting policies.
Accountants, too, run different functions for payroll, reporting, and cash flow — all important details that keep the cogs in your organizational machine turning. Their expertise is crucial for business, and this overview of the online education received by students taking accounting degrees highlights how their skills run the gamut of business skills: from software and hardware to business law, communications, and management.
The HR department
If the accounting department deals with finances, the human resources (HR) department handles everything that has to do with employees. From recruiting, hiring, and onboarding, to training, firing, and administering employee benefits — the HR department is very much involved in managing the employee life cycle. For most small businesses, HR departments are usually just composed of the HR director, the HR specialist, and the recruiting coordinator.
Like most department leaders, HR directors do a bit of everything. They oversee benefits, compensation, and recruitment, as well as handle employee relation issues. HR specialists, on the other hand, are much more focused on payroll processing, and other administrative tasks such as employee orientation, training, and pre-screen interviewing. As the name suggests, recruiting coordinators are the individuals who are responsible for acquiring new talents. They also maintain the applicant tracking system data and reports.
The intersection between accounting and HR
With accounting and HR representing and dealing with two very different components of business, it can be quite difficult for some to see how the two intersect. However, in reality, they actually come together in a variety of ways. For instance, they do so when dynamic recruitment schemes must be put into action to attract top-notch talents. Together, they come up with a competitive salary offering for potential employees and figure out the benefits that should come with it.
Insurance applications are highly complex and tedious, especially given the confidentiality of the information it requires, so a team effort between accounting and HR is also needed during this process. These departments also work hand-in-hand in reducing employee turnover, which is a big expense for companies. Usually, accounting and HR address this problem by identifying employee motivations, improving employee retention, ensuring employee recognition, and auditing workers' compensation.
With the pandemic revolutionizing the way corporate wellness should be perceived and implemented, the collaboration between HR and accounting is more important than ever before. After all, supporting the overall well-being of each and every employee entails a variety of costs. For example, if a company is thinking about having the employees return to the office, workplace design must be altered in such a way that social distancing is possible. The company will also be expected to invest in contact tracing software and, of course, revamp the employees’ healthcare insurance to take into account the ongoing crisis.
Overall, paying attention to the intersection between accounting and HR can help in ensuring that businesses not only run in the most cost-effective way possible but also provide support to their biggest asset — its workforce.
Article exclusively submitted to thehrlady.com
Written by Rachel Jane
C.O.R.E. - Communicator, Observer, Relator, Enabler | Supply Chain Management | Key Account Manager
1moHello Wendy, I just came across your article from 3 years ago. While your article talks about how the two functional departments intersect, these are really two separate professions in which the professionals are trained in very different ways. What do you suggest a company should do when the two functions have been fused together since the company's early days, such that its accounting manager is bogged down by HR work, or HR manager is bogged down by bookkeeping tasks?
I'm not an Architect or Engineer, but I help them make money through project-based accounting services | Project Accountants | ERP Business Consultant
3yHuman resources and accounting have traditionally operated in separate silos. However, businesses are recognizing the critical role that employees play in a company's financial success or failure.