Human resources and accounting both play a vital role in most businesses, yet it’s easy for them to operate in silos. Accounting tracks costs and revenue, reports on financial results, and allocates resources to support an organization’s goals. HR manages people, hiring and recruiting talent, and motivating employees to advance those goals.
While their primary responsibilities are different, finding the overlaps between these operations can create value for businesses as they grow more sophisticated. Despite their natural tension—HR tends to spend, while accounting pinches pennies—building a strong collaboration between these functions can reduce administrative burden and deliver strategic advantage.
Here are five areas where HR and accounting intersect in your business. When you outsource both of these functions to a single provider, you gain not only efficiencies, but also opportunities to put your company on a path to smarter growth.
- Trend Tracking. From headcount growth to projected healthcare increases, HR and accounting professionals keep their eye on trends inside and outside your company and understand the factors driving them. They know how to apply these analytics and insights to your business in strategic ways and can help you make more accurate projections between expected outcomes and actual results.
- Workers’ compensation audits. Audits can be tedious for businesses, but they can go much more smoothly with HR and accounting working together. Accounting can help organize and interpret the payroll documents you need to provide, while HR can help ensure that claims are handled quickly and fairly and employees are properly classified so you can get the best premium rate.
- Insurance applications. Applying for health insurance plans and other types of insurance often requires a team effort between HR and accounting. Both are privy to confidential employee data and can collaborate on the financial and personnel info requested. HR understands what kind of plans best meet the needs of your employees, while accounting can help you keep premium costs in check.
- Recruiting and retaining talent. Bad hires and high job turnover can cost your business precious time, energy and money, so it’s important for accounting and HR teams to work together to evaluate the cost of recruiting and replacing employees versus retaining them. By collaborating on compensation reviews and programs and perks for employee engagement, accounting and HR can also help you identify and retain top performers and build stronger teams and morale throughout your company.
- Budgeting and investing. Accounting should always consult with HR when making budgeting decisions or financial projections to make sure headcount projections are accurate, and your business has the proper resources in place to meet needs for recruiting, training, etc. Likewise, any HR initiatives should include financial input from accounting, such as how adding vacation days or moving from a set number of holidays and sick days to a paid time-off balance will impact your bottom line. By strategizing together, HR and accounting can help you make the best investment decisions, such as whether to spend more on training, staff and internal improvements or customer-centric activities like product development and marketing and sales.