Accounting Best Practices, Fifth Edition

17–20. Eliminate Personal Leave Days

A common task for the payroll staff is to either manually or automatically track the vacation time employees earn and use. Depending on the level of automation, this task can require some portion of staff time every week on an ongoing basis. Some companies then take the additional step of accruing and tracking the usage of personal leave days, which are essentially the same thing as vacation time, but tracked under a different name. By having both vacation and personal leave days, the payroll staff is reduced to tracking data in both categories, which doubles the work required to simply track vacation time.

A reasonable, and easily implemented, best practice is to convert personal leave days into vacation days and eliminate the extra category of time off. By doing so, the payroll staff can cut in half the time it devotes to analyzing employee vacation time. The only resistance to this change usually comes from the human resources department, which likes to offer a variety of benefits to match those other companies offer; for example, if a competitor offers personal leave days, then so should the company. Though only a matter of semantics, this can cause a problem when implementing the simpler system.

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