Whatever software you use, payroll depends on a few basic controls. Review these five points.
- Employee data changes. Changes to pay, bank details and status should be authorised and recorded.
- Calculation checks. Gross pay and deductions should be tested against approved pay structures.
- Separation of duties. The person who prepares payroll should not approve it.
- Reconciliation. Payroll totals should agree to the ledger and to the payments made.
- Records and exceptions. Variances from the previous period should be reviewed and documented.
Where one of these is weak, the process can usually be improved before any automation is considered. Automation then helps apply the controls consistently.
Written by the Rinacle team. This article is general information and does not replace advice on your specific circumstances.