The Crucial Role of HR and Accounts in Business Operations

In any business, the synergy between Human Resources (HR) and Accounts is essential for smooth operations. These two departments are not independent entities but rather interconnected functions that must collaborate to ensure compliance, efficiency, and financial stability. Below are key areas where HR and Accounts must work hand in hand to prevent costly mistakes and optimize business processes.

1. SSIC Code Changes and Work Pass Quotas

The Singapore Standard Industrial Classification (SSIC) code defines a company’s primary business activities, and any change to this code can significantly impact the business, especially in terms of work pass quotas. The Ministry of Manpower (MOM) determines the number of work passes a company can apply for based on its SSIC code. If the code is changed without careful evaluation, it may result in reduced quota eligibility, affecting foreign workforce planning.

HR and Accounts Collaboration:

• HR must assess how the change will impact employment regulations, workforce needs, and compliance.
• Accounts must evaluate the financial implications, such as levies, tax obligations, and financial reporting.
• Before making any amendments, both departments should conduct joint discussions to ensure alignment with business strategy.

2. IR8A Submission and Financial Accuracy

Employers in Singapore must submit the IR8A form annually to the Inland Revenue Authority of Singapore (IRAS) for employees’ tax reporting. Any discrepancies between HR payroll records and the company’s financial reports can lead to compliance issues, penalties, or audit risks.

HR and Accounts Collaboration:

• HR handles payroll data, including salaries, bonuses, and deductions.
• Accounts ensures that financial reports match the payroll expenses recorded by HR.
• Before submission, HR and Accounts should cross-check salary records with financial statements to ensure accuracy and compliance.

3. Payroll Processing and Financial Compliance

Payroll is one of the most significant expenses in a company. While HR is responsible for managing salaries, overtime, and employee benefits, Accounts must ensure that these payments align with cash flow, statutory deductions (CPF, SDL, FWL), and financial planning.

Key collaborative efforts include:

• Aligning payroll cycles with financial reporting periods.
• Ensuring timely CPF contributions and tax deductions.
• Avoiding overpayment or underpayment through double verification of payroll records.

4. Budgeting for Manpower Costs

HR plays a vital role in manpower planning, including hiring, training, and employee benefits, while Accounts ensures that these costs fit within the company’s financial budget. Any misalignment between hiring plans and budget constraints can lead to financial strain.

Collaboration areas include:

• HR providing workforce projections and salary expectations.
• Accounts assessing the financial feasibility of hiring plans.
• Jointly deciding on cost-effective compensation structures.

The relationship between HR and Accounts is fundamental to a company’s success. Their collaboration ensures compliance with regulatory requirements, financial stability, and seamless workforce management. Businesses should foster open communication and joint decision-making between these departments to mitigate risks and optimize operations. By working together, HR and Accounts can contribute to a stronger and more resilient business foundation. For expert guidance on managing HR and Accounts efficiently, visit JWC Accounts & HR.