Why is payroll usually the first aspect of accounting?

Payroll is typically the first aspect of accounting because it directly impacts a company's cash flow and overall financial health. Accurate payroll processing ensures that employees are compensated promptly, which is crucial for maintaining morale and productivity. Additionally, payroll involves compliance with tax regulations and labor laws, making it essential for businesses to manage it effectively from the start. By prioritizing payroll, companies can better track labor costs and budget for expenses.