consider the following: Southern Company pays its employees weekly by issuing ch
ID: 2465373 • Letter: C
Question
consider the following: Southern Company pays its employees weekly by issuing checks on its regular bank account. The owner thinks it would be too much trouble to have a second checking account for payroll only. explain to the owner why having a separate payroll account might be worth the additional effort. Use the Internet to search for good payroll control. You only have to make (1) one post but make sure it is substantial. One to two sentences will not receive credit. Be sure to cite your source(s) for this post.
Explanation / Answer
It is always advisable to have a separate checking account for payroll for control and business advantages .
The main advnatages of separate payroll checking account are ;
1. In a separate payroll account the monthly salary payable account may be transferred and the employees will withdraw the salaries from this seaparte account. This avoids the requirement of keeping a tab on the account balance if the salary is paid from a common business account. In a separate payroll account the required fund remains available whenever the employee withdraws the amount.
2. The reconciliation of payroll paid and payroll expense becomes easy as the records are avaible from the separate dedicated payroll account.
3. If the business wants to keep the main business account no secret from the employees , the separate account can solve the purpose as the main business account no ( available on the check ) is not avaiable to employees and the separate salary account check details is available to them.
These are the main advantages of keeping a separate salary checking account.
Acknowledgement : Source http://smallbusiness.chron.com/pros-cons-having-separate-payroll-checking-account-3581.html
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