Many people who are not on payroll think that a payroll team is just a group of accountants organizing pay slips and mailing them to the respective employees. Sometimes departments do not understand the intricacies of each step in the process, every check and calculation that needs to be made so that everybody gets their due payment. It is quite a strenuous and detail-oriented task but, this is the reason why it is important to have a checklist, so that you are sure that you are not missing out any essential processes that can jeopardise the payroll.
If your main thought now is “W-WHAT IS A PAYROLL CHECKLIST?! DID I ALWAYS NEED ONE? I DON’T HAVE ONE. HOW CAN I GET ONE?”, you don’t need to worry, what follows is a payroll checklist that will ensure you have the most flawless payroll process that pays for itself in the end.
Ensure you have a company calendar.
When you have a job as complicated and stressful a payroll specialist, it is essential to be organised, as it can be easy to lose track of important dates because you are so busy with your work. When you create your payroll checklist, including a company calendar can ensure that you have control over your time and that you are aware of any important dates, like submission and approval days so that you do not upset your schedule or your work, you can plan both to correspond with the important days.
Have public holidays recorded
Recording your public holidays are especially important because at the time, you will have people who will be working during the holiday and people who will take the day off and so you will need to adjust the payment in accordance with who worked and who did not. For those who worked during the public holiday and depending on the company policy, it is advised give account for a replacement off day for the public holiday that they worked.
Variable data submission
The variable data is the most important item on the payroll checklist as it justifies the variation in pay among the employees. The employees who take sick leave will need to be paid according to the employment law of your region. The leave payment calculation must be accurate before the payslips are issued to avoid any complications and confusion. In this category also, the new joiners and leavers need to be recorded so that any final day payments and pro-rata payments can be justified.Validate variable data
Whilst on the topic of complication and confusion, getting your variable data verified is the link between a smooth payroll process and happy employees.
Validation is very important when it comes to payroll because any mistake can cause the company to lose a lot of money and it can also upset the employees in the instance of them getting paid less or receiving the wrong amount. Validating the data ensures that all the areas; leavers, joiners; sick days, etc; are covered accurately and that the funds are dispersed correctly to them.
Calculate payroll
This is usually the point that most people identify with payroll, the calculation of the pay for each employees. The final amount will always differ every month due to the variances in data such as leave, new joiners, leavers etc (which is why it is essential that your variable data is correct and validated, as it leads to the accuracy of the payroll). Once you have this, you can calculate what the gross pay, new pay, and deductions are to know what each employees take home pay is, tax calculations, company deductions, and any expense reimbursements are. If you’re unsure on the basics of payroll, you can read more in out post.
Run draft reports & check!
The most important step on the payroll checklist is the report check. The draft checking is necessary to locate and rectify errors which are always likely to occur during the completion of the payroll roster. Errors in the payroll can be very expensive for the company in the event of a miscalculation or misinterpreted data. Running draft reports of the payroll ensure that you have a chance to identify these mistakes and rectify them before running the final report. These checks ensure that the data has been interpreted with the most accuracy possible and that all the calculations correspond with the amounts and variable data.
QA
Quality assurance is essential in any process that requires a good attention to detail. By adding in segregation of duty and adding a second pair of eyes to check over your work makes sure that the errors are reduced. Adding this step to your payroll process is vital to stop any pesky fines that may occur due to miscalculations.
During this step, the quality assurance specialist reviews the report and confirms that everything is up to standard. They double check calculations, check for any errors in variable data documentation and thereafter, if the report meets the correct standards, they approve it.
Final payroll reports
During the final stages of the payroll process, it is important to check up on the additional documents that are required in your payroll process. Documents such as the WPS file, the bank file and the company general ledger report are to be included into your final payroll report so that all the calculations and fund allocations can be accounted for.
Disperse salaries into employee accounts
With all those names and amounts, it can be easy to have error plays its part in the dispersion stage. It is essential that the payroll specialist ensures that the correct amount is sent into the correct employees’ salaries – you don’t want someone getting paid less when they’ve done more work, that will put a damper on their day!
Distribute payslips.
This is the most satisfying task on payroll checklist and is the highlight of any employee’s month Is when they receive that envelope or get that notification of their payslips being sent to them because this confirms another month of hard work has come and gone. The payslips need to be correctly dated, fill out and sealed before distributing.
Now that you have what is essentially the key to a perfect payroll process, don’t be afraid to refer to this payroll checklist as often as you can or whenever you need to so that you can ensure that you and everyone on your payroll list gets a smile on their face, every month.
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