1. Designate a supervisor or manager to check employee hours against scheduled hours. Any paid time off is reconciled to policy and employee accruals.
2. Have another team member verify the manager’s paid work time and compensated time off. This team member should also check the manager’s summary for any mathematical errors.
3. Make sure data is submitted to the payroll company, usually by direct electronic feed to its system, by e-mail to an assigned clerk, or by fax. 4. Once the payroll company has processed the payroll, it will send payroll reports back to the practice or designated recipient elsewhere. Reports can go by e-mail transmission to more than one person, such as an owner and a bookkeeper. Our firm strongly recommends that the practice owner receive reports directly from the processor. This is especially true if the processor is sending paper reports.
5. Have the bookkeeper promptly check the payroll company’s reports against the originally submitted hours. This process catches any errors made by the payroll company clerk or the team member assigned to submit information to the payroll company. The bookkeeper should also check that voluntary and required withholdings are correct for each employee and that the correct hourly pay rates have been used.
6. Once the payroll reports have been reviewed for accuracy, they should be recorded to the practice’s bookkeeping software. This may be an automated process or keyed in by the practice bookkeeper or a higher level manager, if he or she has access to payroll information. In smaller practices (five to 15 employees), a higher-level manager or owner may complete payroll recording, if the practice’s bookkeeper does not or should not have access to confidential payroll information.
7. Promptly, at month’s end, all bank accounts should be reconciled to ensure that transactions are correctly recorded. The reconciliation reports and supporting bank statements should go to and be reviewed by a practice owner as soon as possible after the month’s close.