Agree a cut-off for changes
Most payroll mistakes start before anyone opens the software. A starter form turns up on payday, a pay rise gets agreed in the corridor, overtime hours sit in someone’s inbox. So set a monthly cut-off for starters, leavers, salary changes, hours, overtime, commission and expenses. Name who sends each one and who signs it off. Anything that arrives after the cut-off goes through a simple late-change step, not a text message.
Check the draft before anyone’s paid
Once the inputs are in, the draft payroll gets checked against them. Does headcount match last month, plus starters, minus leavers? Are there big jumps, odd deductions or new bank details? A changed bank account is worth a quick call to the employee, because a fake request is an easy way for wages to go astray. Decisions about pay stay with you. The team makes sure what you approved is what gets paid.
File, pay and post it
HMRC expects pay and deductions to be reported through payroll software on or before payday. So the submission, the payslips and the bank payment need a set order, and one named person who authorises the payment. Then the payroll is posted to your accounts in Xero or whatever system you use, with PAYE, National Insurance and pension amounts in their own balances. Pensions get their own check against the provider’s schedule.
Tidy up after payday
Check the payment went out as approved and sort any rejected payments straight away. The PAYE and pension balances should clear when they’re paid, so anything left over gets looked at. If you report staff costs by site or department, check everyone was coded to the right place. Keep a note of what changed this month, so next month’s draft has something to check against.
Example: a café group with 28 hourly staff used to send hours by WhatsApp the day before payday. Two people were paid for the wrong week and a leaver was paid twice. Now site managers send hours on one template by the 20th, the operations manager approves them, and the draft is checked against the template before the owner authorises the bank payment. Payday questions have almost stopped, and the accounts show staff costs by site every month.
How we run it
We run payroll in BrightPay as part of running your finance function. You get a portal with the payroll reports for each run, and your staff get their own portal for payslips and P60s. Because the same team keeps your accounts, payroll is posted and reconciled in the same month, not tidied up at year end.
What to check
- A cut-off date everyone knows
- One named approver for changes
- Draft checked against approved inputs
- Bank detail changes confirmed by phone
- PAYE and pension balances that clear
Where to start
Start with a simple input template, a cut-off date and one person who approves changes, then check the next draft against them before anyone’s paid. HMRC’s guide to running payroll is worth a read too.