Though it may not be apparent at the outset, the functions of accounting and human resources (HR) teams are closely intertwined for modern businesses. Each department plays a pivotal role in the overall success of an organisation. And in fast-paced business environments, such as that of New Zealand, accountants are becoming more than just financial custodians—they’re now considered key players when it comes to the efficient management of human capital.
An accountant’s expertise extends far beyond simply working with numerical data. It also helps to shape and sustain the workforce, which is the heart of any enterprise. Effective financial management underpins successful HR practices to a significant extent, and these two facets, working together, are key drivers of organisational growth. Fortunately for businesses in need of accountants, Dunedin and other major cities in the country are home to a wealth of reputable accounting firms that are more than capable of providing top-tier support.
Let’s explore five common HR issues that organizations can stay on top of with help from competent accountants:
1) Employee Contracts
Accountants can ensure that employee contracts are both financially sound and compliant with the myriad regulations governing the workplace. More specifically, the meticulous analysis of salary packages, bonuses, and benefits falls under their purview.
As modern markets grow increasingly competitive—and as the legal landscape evolves and becomes more inscrutable to entities like family companies and small businesses—accountants can help devise attractive compensation packages that also take the organization's financial health into consideration.
2) Organizational Restructuring
The ever-changing, highly unpredictable nature of the modern business world makes the need for organisational restructuring inevitable for many businesses at some point in their lifetime. A call to restructure may arise due to market shifts, technological advancements in the field, or a company’s own strategic pivots towards new ventures. Whatever the cause, accountants can leverage their skills to help facilitate a smooth, seamless transition into a new organisational structure and ensure that no staff member is left behind.
In particular, accountants can conduct in-depth financial analyses to forecast the outcomes of various restructuring scenarios, which will provide them with a solid foundation for decision-making. Accountants can also comprehensively evaluate the financial impact of a restructuring on the business’s bottom line and on multiple stakeholders, such as the company’s employees, investors and creditors.
Overall, their insights help determine the viability of different restructuring strategies and give company leaders a clearer sense of how to maintain financial stability, all while addressing the urgent need for change.
3) Budgeting for HR Activities
Any organization, regardless of its size or industry, will need to allocate funds toward HR activities such as recruitment, training, and employee benefits. Accountants are indispensable in the budgeting process, as they ensure that the HR department’s budget aligns both with its strategic goals and the company’s financial constraints.
However, accountants involved in HR budgeting can do more than simply allocate funds. They can also advise HR teams on how to utilise these funds effectively and how to produce the best possible returns on the company’s investments in human capital. They work closely with HR professionals to understand the needs of the workforce and to align these needs with the financial capabilities of the organisation. This collaboration ensures that the company's human resources are managed efficiently, without compromising its financial health.
4) Tax Compliance and Optimization
Tax regulations pertaining to employee compensation and benefits are issues that require specialized knowledge and expertise. HR teams will benefit from working with accountants to maintain compliance with tax laws and optimize their tax strategies. In the process, accountants will help safeguard the organization from potential legal and financial penalties.
Moreover, accountants can strategies to optimize tax benefits both for the employer and the employees. This is where their understanding of various tax laws and regulations come in. A competent accountant can help HR professionals uncover critical savings opportunities that the company can take advantage of, which keeps companies protected legally and also contributes to the financial well-being of both the organization and the members of its workforce.
5) Risk Management
Risk management in a human resources context involves a broad spectrum of concerns, from financial risks related to payroll and benefits to compliance risks associated with changing labor laws and regulations. Accountants can identify, assess, and mitigate these, as well as other risks associated with HR activities.
Accountants bring a unique perspective to risk management in HR, as they combine their financial insight with a deep understanding of human capital dynamics. They are instrumental when it comes to developing strategies to manage risks such as financial loss, reputational damage, or legal penalties that can arise from HR decisions. In detail, this includes forecasting potential financial impacts of HR policies, conducting cost-benefit analyses of employee programs, and verifying that robust internal controls are in place to prevent fraud and errors in HR processes.
Now that data security and privacy have become increasingly pressing concerns for companies of all sizes, accountants are now also involved in managing risks related to employee data. Their involvement includes developing data protection policies and rolling out robust internal controls to safeguard this information, as well as securing the company’s compliance with relevant data protection regulations. Through avenues like audits and even staff training on data privacy protocols, accountants do their part to mitigate risks like data breaches and keep an organization in line with legal and ethical standards in data management.
The part accountants play in human resources management is a testament to the multifaceted nature of their job, as well as how modern business operations work. Beyond mere number crunching, a good accountant can contribute a lot towards the human side of operations management and a company’s goal to stay true to its business goals and code of ethics.