Month: June 2022

If you are familiar with trading, you might have come across an important term, “matching algorithm,” that is often used in trade matching. Matching algorithms are pre-set rules in a computer configured to help traders find the right buyers and sellers for their trades, allowing them to execute their transactions efficiently and accurately. There are many matching trade algorithms.

The two commonly used matching algorithms are the standard matching algorithm and the custom matching algorithm.

In this article, we will focus on the two commonly used matching algorithms to understand them better.

The Two Major Matching Algorithms

Standard Matching Algorithm

The standard Matching Algorithm (SMA) is one of the most commonly used exchange matching algorithms. It is also known as the single price auction or the continuous double auction algorithm. The SMA works in order matching by first determining whether there is a bid or ask order in the book and then making sure that all bids and asks are matched before moving on to the next step of the algorithm.

 Custom Matching Algorithm

Custom matching algorithms are used to match trades (buy and sell orders) with different trading requirements. This algorithm will allow you to specify the rules of your trade matching process. For instance, you may choose to use a custom matching algorithm in your exchange for the following reasons;

1. You want to match different products or assets than what is currently available on the market.
2. Your exchange requires trades that have different attributes or characteristics than those that are currently on traditional exchanges.

When do you use custom Matching Algorithms?

Custom matching algorithms are used when you need to match two or more data sets that have different attributes or data types. For example, a custom matching algorithm will best suit a financial institution that has the following list of requirements.

• They need to match account numbers between their internal database and those of their bank partner.
• The bank partner’s account number format differs from theirs. It has an extra digit at the end.
• The bank partner’s accounts are stored in US dollars while they keep them in euros.

Comparison between Custom and Standard Matching Algorithm

Below is a comparison between the two major matching algorithms as proof that the custom match algorithm is a better option.

Similarities

• Both algorithms are essential services that facilitate a successful trade transaction. They match grabs and ask orders to determine the result.
• Both are done electronically.
• Both algorithms can be used with different order matching methods.

Differences

The standard matching algorithm will facilitate a match of similar orders between record books -single string matching. The custom matching algorithm matches orders from between different record books and also matches the value of each order until a match is found two strings with customization matching.

Custom matching algorithms are used to gain better results most times when compared to the standard algorithm. It gives better performance since it pays attention to specific details.

Custom matching algorithms help reduce cost without sacrificing too much quality and quantity as compared to the standard matching algorithm.

Summary

Understanding the matching programs and algorithms as it is one of the critical processes involved in trade matching. You also need to know that a matching algorithm is not something static but can be modified and customized. These changes are meant to ensure that you get the best results possible.

How does a payroll system work? Payroll is a complex process that involves collecting and compiling data from each employee and paying them their salary or wages. This data includes hours worked by non-exempt employees, exception time for tax withholding, new hires, and separations. The system calculates each employee’s gross pay and withholds taxes as applicable. Employers also accrue their tax liabilities.

Accounting for tax withholdings

Payroll systems must account for tax withholdings and liabilities. If you don’t, you’re liable for fines and penalties. For example, federal income taxes must be withheld by employers before they pay their employees. The federal government regulates these taxes and uses them to fund national programs. However, many payroll systems fail to account for withheld taxes. In addition to federal taxes, employers must also account for state and local taxes.

The basic concept behind tax withholdings is simple: deducting taxes from an employee’s paycheck removes a certain amount from their pay. In a payroll system, this amount is divided into two accounts: the expense account records the employee’s gross earnings, while the liability account records the employee’s net pay obligation. These two accounts can also record any payroll taxes owed to third parties.

Making deductions in payroll

Using a payroll software program can be a straightforward way to make deductions for your employees. However, if you do not use one, you should be careful. Many systems fail to handle deductions for employees properly and can cost you money. Here are some tips to help you with payroll. First, be sure that all of your deductions are documented. Then, you’ll know what to do with those documents.

There are several types of payroll deductions, each with its rules. In most cases, payroll deductions are pre-tax deductions, which means that money is taken out before taxes are deducted. However, some deductions, such as insurance premiums, child support payments, and uniform deductions, are voluntary. Some deductions are mandated by law, such as FICA and federal income taxes. Other deductions are optional, such as a deduction for state or local taxes.

Managing employee payments

Your payroll system will allow you to manage and calculate variable employee payments, including overtime and extra costs. It will also help you comply with tax legislation. Automated payments and bank transfers will ensure your employees receive their paychecks on time. A good payroll system will integrate seamlessly with other lines of business, so you won’t have to spend time on other tasks, such as calculating taxes. In addition, you can use the software to help you manage employee data, stay on budget, and plan for the future.

A payroll system can help you manage various tasks, including onboarding new employees. Although it eliminates much of the grunt work, it also leaves room for human error. Manually entering employee data is an inevitable risk of mistakes, especially if done incorrectly. Additionally, onboarding new employees can result in errors. So, while payroll systems can make managing employee payments much more manageable, they won’t eliminate every opportunity for mistakes.

Benefits of a payroll system

If you’re a small business owner, one of the most important benefits of a payroll system is that it can handle most of your payroll functions. These systems can store basic employee information, manage your time and attendance, and keep up with tax laws. A payroll system can save you lots of time and energy if you’re trying to handle payroll manually. The following are just a few of the benefits of a payroll system.

Integrated payroll systems are a great way to save money and improve the overall efficiency of your business. If your human resources staff had to work separately from payroll, they’d have to manage employee files in two separate locations, which would increase your costs. Using payroll integrations from offsite providers would allow human resources professionals to update files, while payroll providers would automatically access those revisions. The benefits of a payroll system are many and well worth the costs.