As a CEO, you know how crucial it is to manage company finances well. Payroll, even though it's handled by HR, is a big part of that picture. Ensuring payroll accuracy is vital—not just for staying compliant but also for keeping your team happy and maintaining trust.
In this guide, we’ll walk you through the key steps and best practices for managing payroll efficiently. It all comes down to clear documentation and automation with the help of technology.
It’s important to keep in mind the goal of the process, which will drive the necessary actions:
Accuracy: Ensure all payment records are correct.
Timeliness: Make sure employees get paid on time.
Transparency: Keep the process clear and easy to understand.
And for these three goals, it all starts with having the right inputs:
Detailed Records: Employee attendance, work hours, and leave data.
Updated Information: Salaries, wages, bonuses, and deductions.
Compliance: Adherence to legal requirements to avoid any issues.
Now, this is an example of a payroll process. It may vary in different businesses.
Payroll Process
Payroll Step-by-step Instruction
Basically, the payroll process can be broken down into some key stages:
Data collection (stages 1 to 4): Gather time and attendance records, commission table, and any other relevant employee data and confirm it with the employees.
Payroll Calculation (stage 5): Calculate gross pay, deductions, and net pay using the collected data.
Get Approvals (stages 6 to 8): Get the calculated payrolls approved by finance managers.
Payroll Distribution (stages 9 and 10): Ensure timely salary payments to employees’ bank accounts.
This process documentation is often used to clarify the steps and provide detailed instructions. A visual reminder can help you see where those annoying bottlenecks and opportunities for improvement often arise.
Learn how to compile one here.
As stated in the document, each step involves some particular material. Let’s look at some examples we have also prepared for you.
This is your go-to form for gathering all the essential details about your employees when they first join your company.
Things you may want to include in the Employee Information Sheet:
Personal Info: Name, address, phone number, social security number, bạn info – the essentials.
Job Details: Title, start date, salary or hourly rate, any recent change regarding their salary that may affect their take-home.
Tax Info: Filing status (single, married, etc.), number of allowances, any special deductions they claim.
Direct Deposit: If they want their paycheck deposited directly into their bank account, you'll need their bank info
Employee Payroll Information Template
A timesheet is your record of how much time each employee works in the month. Make sure you keep track of paid and unpaid leaves of the employees.
Both this and the employee information sheet are essential inputs for the payroll calculation.
Download Now: "Simplify Time Tracking with Our Downloadable Timesheet" (Link to Rework).
Timesheet Template
This is the document where your C&B team combines all the information and finishes the calculation. The finance managers will need to take a look at the report, and also, each row should be sent to individual employees as their payslips for the month.
Monthly Payroll Report Template
As your business grows, these sheets and templates can be overwhelming, and even one single mistake can be costly. So this is where software with automation features can come in handy, to improve the accuracy and efficiency of the payroll process.
Some automation features you may want to look for:
Time and Attendance Tracking: Automate the collection and recording of employee work hours using time-tracking software.
Time-off Tracking: Manage employee leave balances, including vacation, sick leave, and other types of paid time off.
Payroll Calculation: Automatically calculate gross pay, taxes, deductions, and net pay. Capable of setting up rules for different policies.
Update Employee Information: Implement a self-service portal where employees can access their payroll information, view pay slips, and update personal details.
Streamline Approval Process: Standardize the approval process and also keep track of the payroll report. This is what Rework can help you with.
Automate your Payroll process