Leave Accrual Processing

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What is “leave accrual processing”?

Leave accrual processing refers to a method that an organization’s HR team uses to monitor the leave awards and balances of employees. Typically, an employee accumulates leaves based on their tenure or their length of service to the company. Leave accrual processing varies from company to company. It largely depends on the leaves policy and time-off plans in place. 

Why is leave accrual processing important? 

Once a company offers leaves to their employees, it is their responsibility to stay on top of it. Meaning, they must be prepared for any employee to request time off. This is where leave accrual processing comes in. Organizations need to be updated on the leave awards and balances of the workforce. By keeping leave accruals updated at all times, the employer has real-time information on how many leaves an employee has used and how many more they can request. Generally, the responsibility of monitoring this falls on a company’s HR team. 

For start-up companies, it is common to manually record the used and unused leaves of employees. However, as the business grows, monitoring and maintaining all records of leaves, time off, sick days, and leave requests of each employee will prove to be a challenge. Manual work is not only laborious and time-consuming, but it is also susceptible to human error. That is why most companies opt to merge leave accrual processing into their human resource information system (HRIS). This helps maintain updated and accurate records. 

What is the significance of a Human Resource Information System (HRIS) in leave accrual processing? 

Using Human Resource Information System (HRIS) in processing leave accruals automates the method. With this, no longer do HR team members need to manually pull up records, count the leave balance, input new requests, and consolidate information. An HRIS takes these manual tasks off HR’s plate so they can allocate more time doing other responsibilities. It also gives assurance that leave accruals are always updated and accurate. 

Also, having HRIS in place allows employees to receive access to their leave records. Employees will know how many leaves they have used and how much time off or leave requests they can still avail. Through the transparency of records, miscommunication and confusion are prevented, minimizing conflicts with HR and employees. 

What are the different leave types? 

When an employee requests to take a leave, it is not just entitled “leave.” Leave can come in many forms which an organization must define and record. The types of leave can be input in a company’s HRIS. 

There are different types of leaves that employees can take. The kind and number of leaves offered to employees are at the discretion of the employers. 

Paid time off (PTO)

: PTO is time away from work that is compensated by employers. This includes paid vacation days, sick days, holidays, or any time off for personal reasons.

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