Step by step payroll process
Thinking about outsourcing your company’s payroll? This article provides insight into what the payroll process looks like at Accountor, from the start of the process to ongoing reporting and payroll runs.
Almost 100 payroll consultants currently work at Accountor, issuing a monthly total of around 34,000 payslips, i.e. over 400,000 payslips per year. Our large volumes mean that we can offer lower prices, streamlined routines, as well as secure staffing and skills. This is how we manage your payroll.
Start of the payroll process
The partnership begins with us agreeing on and planning an annual schedule with all the key dates. The planning includes:
- Submission date for payroll input data
- Date for preliminary salary list
- Final response date to Accountor
- Final date for bank filing
- Payment date
- Reporting date
Once set up, the employees in your company provide ongoing reports of their working hours in the pre-system used. This is usually a system provided and maintained by Accountor. However, there are also other set-ups if you already have a system you wish to keep when outsourcing. If Accountor’s pre-system is used, we will set up the employees to use it. Log-in details are then issued, so that the staff can report their hours and any deviations. It is an easy process for the staff to learn to correctly report their working hours. Each systems looks slightly different, but generally, the employees make their choices in the drop-down menus and can only see the options they are authorised to. For example, an employee cannot select overtime if they are not entitled to it.
Step 1 – Changes and reporting
If there have been any changes since the previous month, the payroll manager uploads new supporting documentation to your company via the Accountor portal. This is done using ready-made templates that are easy to fill in. This is for 'personnel events', such as changes to employment contracts, termination of employment, applications for leave of absence, etc.
Whatever is reported on an ongoing basis is called ‘payroll events’ and includes health care, bonuses, specific benefits, parking fines, etc. This data is provided to Accountor and input directly into the payroll run.
In terms of travel expenses, high-quality pre-systems and apps are available, allowing the employee to take a photo of receipts, which then adds the amount of expenses to the payroll system.
Step 2 - Authorisation
Once everything is ready in the pre-system, the payroll manager checks and authorises your company. All information is then loaded over from the pre-system for further processing with Accountor.
During the payroll process authorisation stage, the relevant manager at your company may need to perform a reasonability check on reported data. There should be checks on sickness absence, overtime, leave of absence, as well as checks ensuring that expenses and travel are correct and have been added to the right cost centre. If something is not correct, the manager will request feedback from the employee, who then corrects the report and sends any missing proof/certification.
Step 3 – Checks before running payroll
The Accountor payroll consultants go through all salaries to check that everything is correct in accordance with SALK. SALK is an industry standard that the SRF consultants have created for the quality assurance of payroll work for authorised payroll consultants, but which everyone at Accountor adheres to. Based on SALK, we have created a comprehensive list of checks that are made during the payroll process: To name a few:
- Searches for unreasonable values.
- The payroll supporting documentation is submitted by authorised persons and inserted correctly.
- Remuneration is paid out in accordance with the collective agreement.
- Any supporting documentation previously submitted (such as current applications for leave of absence) is taken into consideration in the payroll.
- Searches for 0 values and missing cost centres.
After everything has been checked, a preliminary salary list is sent to your payroll manager for approval. In the event of urgent changes, e.g. if it is discovered that a new employee has not been reported, it can be added at the point of the payroll run, as long as it has not yet been approved and sent to the bank. A new salary list is sent for approval after the addition is made.
The salary list contains all the raw data for salary calculations per employee. You will receive this from Accountor, usually as a PDF or Excel file, depending on what you prefer. As the employer, you are responsible for ensuring that the material sent in is correct. Before your company’s payroll manager approves this, they should perform certain checks, e.g. that any bonuses are included, that sickness absence and individuals no longer in employment have been reported, etc. Put simply, it is the responsibility of your company to double check that everything is correct. Creating a routine for this saves time.
Step 4 - Payments
Once the salaries are approved, payroll files are created, which are either sent for payment to your company’s payroll manager, or paid out by Accountor’s consultants, with authorisation from the client.
The format depends on which bank your company uses and how you want to manage the payments. Either, Accountor supplies a payment list that you yourself provide the bank or Accountor creates a bank file and uploads it to the bank.
In conjunction with the payroll files being sent to the bank, payslips are also sent to all employees. In most cases, this is done through the pre-system or a special application specifically for payslips.
Step 5 - Reports
The last step is when all the reports are created: standard reports and agreed special reports, along with statistics and pension reporting supplied as agreed with you. This may include supporting documentation, employer declarations, and holiday pay liability.
If something goes wrong in the payroll process
If, for example, an employee discovers that their overtime hours are missing from the payslip, we will look into what has gone wrong. Often, this is because it was reported incorrectly, or the working hours were not authorised in time. We then calculate what the salary should have been, so that your finance department can make an advance payment. Overtime hours will then be added into the next payroll run, with a deduction for the advance payment.
Tips for successful payroll outsourcing
Our absolute best tips for effective payroll management is to try and stick to the agreed deadlines for submitting supporting documentation. This is key for the payroll consultant to have time to carry out all the checks and maintain a high level of quality. If the material is constantly being updated, and the delivery date is constantly getting closer, there is less time to perform checks.
To obtain the best flow in your payroll administration, we at Accountor recommend that you as a client set up clear internal routines for:
- Submitting applications for leave of absence and information on sickness absence
- Submitting extensions to part-time employments and termination of existing employments
- Submitting tax forms for new employees
- Notifying employees company car replacements
- Authorising working hours and travel expenses in time
Clarify who is responsible for reporting the various events and create an active document (e.g. in Excel) where all staffing and payroll events are added as a note. Before delivering to Accountor, your responsible contact must go through the list and fill in the documents that need to be sent in. The document should also be checked off when working hours are confirmed. Feel free to create reminders in Outlook to check the various supporting documentation so that everything is ready for the agreed day.
With well-functioning routines on your side, Accountor can deliver incredibly even and high-quality payroll administration, lowering your company costs.
In addition to payroll outsourcing, we are happy to help you streamline payroll work within your company. Get in touch if you want to get started with payroll outsourcing or streamlining your company’s internal payroll tasks.
