December 2021

Employee payroll costing

Easy to manage employee cost allocation

Whether a commercial or not-for-profit organisation the issue of cost allocation can arise. Where it becomes particularly complex is in regards to payroll cost allocation!

What do we mean by payroll cost allocation?

Essentially we're talking about allocating employee costs across multiple dimensions of analysis to facilitate a better understanding of staff deployment for control and management purposes. Terminology will vary for these dimensions of analysis according to your organisational needs and the software in use but may include any of accounts/funds/branches/activities/departments/projects etc. hereafter called cost centres.

If this is a requirement for your organisation you will appreciate that this usually requires the use of a spreadsheet with complex calculations that are then manually input into your finance system - hard work and prone to error. For churches, charities and other not-for-profits this is particularly important for accurate analysis of employee costs to restricted funds.

What have Liberty Accounts done to address the requirement?

As well as allowing for the allocation of various elements of payroll to user specified accounts Liberty Accounts has also provided for further analysis of payroll costs at 3 different levels:

  • Organisational level - With the ability to split across multiple cost centres if required.
  • Employee level - Organisational level will apply unless some different cost analysis is specified at employee level.
  • Pay element level - If there is a requirement to override for an individual pay element (e.g. overtime on a particular project) this can be done for a particular pay period.

Payroll journals are automatically generated based on your cost allocation without the need for any off-product calculations - saving hours of frustrating and complex spreadsheet calculations.

Journal end flourish


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