A general ledger is a recordkeeping tool employers use to document the total expense of payroll. It tracks any transaction that originates in the payroll department, including payments made to employees, independent contractors and other business entities.

What Are General Ledgers Used For?

The primary function of a general ledger is to organize and determine the total cost of payroll during a specific period. Usually, general ledgers include the following information:

• Frequency of payment
• Employees pay totals
• Tax withholdings
• Benefits contributions and other deductions
• Business-to-business expenses (e.g. payroll service charges, insurance premiums, etc.)

Automating General Ledgers

Our payroll software includes ledgers that track payroll expenses, eliminating the need for manual data entry and calculations. It also integrates smoothly with accounting programs, saving employers from the expense of developing custom interfaces. With these integrations, data is transferred from the payroll ledger to the general ledger with each payroll period.

Benefits of a General Ledger

Employers that keep their payroll information concisely organized in a ledger can expect to see the following benefits:

• Enhanced Accuracy and Compliance – General ledgers can be used to cross-reference information in payroll registers and identify discrepancies and errors before they result in tax penalties.
• Reduce Costs – Ledgers are a tool employers can use to keep track of expenses including payments to employees, tax agencies, insurance providers, etc., allowing them to have transparency on their spending and stay on budget.
• Save Time – Employers can take advantage of having all their payroll transactions in one place. With a ledger, human resources will no longer need to look through invoices or emails to find what they are looking for. The ledger provides the balances of accounts paid and received.
• Ensure Accurate Data – By using a ledger, employers can avoid manual reentries from system to system, removing the possibility of human error and ensuring an accurate and secure exchange of data.
• Automated Reporting – Receive a general ledger reporting file every payroll period that contains the expense information you need to import into your accounting software.
• Tailored Analytics – Quickly run general ledger reports organized by department, expense accounts, time frame or other ways relevant to your business with a click of a button.
• Unlimited Accounts – Map endless payroll-related accounts to tie perfectly to your general ledger accounts.

From ensuring accuracy and compliance to providing real-time insights and improving cost efficiency, the benefits are substantial. By leveraging the power of a general ledger, you can simplify payroll management, reduce risks and position your business for long-term success.

Here to Help

Using a ledger to record all payroll-related transactions, employers can continually assess the financial impact of payroll on their business. A general ledger is more than just a record-keeping tool; it’s a vital asset that can enhance your business’s financial management. By working with DM Payroll Solutions for your ledger needs, you gain access to live phone support through our support team to help with your payroll-related general ledger questions. Take the guesswork out of your payroll transactions, holding them in one easy-to-use ledger. Contact us today to learn more.