How should a payroll approval procedure be put into Practise?

You may think that payroll processing is just about the calculation of salaries for employees. But it’s much more than just that. The Payroll: This payroll software process can be pretty complicated, yet it’s essential in any organization.

This is the process of determining the net amount of pay for an employee once all deductions have been made. If a company is looking for a smooth , it must ensure that the payroll manager plans the entire process carefully.

Payroll process, in general

Here are a few steps that a payroll manager follows to ensure a smooth payroll approval process:

The first stage is the management of the company’s pay policy. This includes the flexible benefit arrangements for the leave policy, the encashment policy, and other benefits.

Once you’ve completed this, now is the right time to calculate the additional pay slip components, like LTA, HRA, variable pay, etc.

In this process, the payroll administrator would collect the various payroll inputs in case they’re available.

In the end, they calculate the gross pay and the non-statutory and statutory deductions resulting in the net salary.

Then, the administrator pays employees.

The Payroll Processing Process has several critical phases.

The payroll process is a subject with a greater chance of errors made by the payroll department as the finance department comes up with continuous changes. This could affect the flow of Payroll. If any changes are made, the payroll worker must take action immediately. To make the entire process of paying employees easier, organizations have divided it into three main stages. The three stages are as follows:

Pre-Payroll Process

The name implies”pre-payroll process “pre-payroll procedure” is the entire process that takes place before the beginning of the final payroll process. There are a few steps within the same. We will learn more details about them in the following sections:

Defines the most notable Payroll policy:

Many factors can affect the total amount of money that you pay. The most common reasons include pay, attendance, leave, etc. Therefore, the management needs to approve and define the factors to ensure compliance with the standard payroll procedure.

Inputs to HTML0:

Before the final Payroll is determined, communication with the various departments and employees of the organization is conducted. The payroll department can gather precise data on salary revisions and attendance records in this way.  The process for obtaining the data is also contingent on the significant dimension of the organization.

This procedure could be complicated as it involves contacting each department and collecting the relevant information. The company should have an efficient and technologically-savvy payroll system in this scenario. It must have integrated features such as leave management, attendance, employee self-service portals, etc.

For input validation:

After receiving the essential inputs, the company must examine the inputs and data for validation. The organization is responsible for ensuring that the inputs adhere to its policies.  The data must be formatted correctly. There shouldn’t be any records of an employee who is not active on the salary payment. Furthermore, no employee should be absent during the entire payroll process.

Read Also: Benefits of an online payroll system for businesses

Payroll Process

Calculation of the pay:

At this point, the data validated during the “pre-payroll process “pre-payroll procedure” is transferred to the renowned payroll system. What exactly is a payroll system? It is a program that records employee activities like salary, leaves, working hours, taxes, deductions, etc. The idea behind this system is to help employers reduce their efforts. It can also make the payroll process more efficient.

The Post-Payroll Processing

Compliance with the law. Compliance:

This process implements legal deductions such as ESI, TDS, and EPF when the payroll process is completed. The amount is later given to the government agencies by the company.

Payroll Accounting

The cost of paying the salaries of employees is a necessary operating expense. So, the salary amount should be added to the organization’s financial statements. Since it is an essential component of the management of Payroll, recording the information regarding salary and reimbursement within your payroll management system is crucial.


The salary can be paid via cash, cheque, and bank transfers. Additionally, many companies offer employees to have a substantial bank account. After completing the payroll process and confirming the details, you must check your company account. It should be a good amount to pay salaries to employees.


When you have completed the payroll run, and the payroll run is complete, it’s time to report the results to higher authorities. The report includes details such as the expenses of employees determined by department and location. It is the responsibility of the payroll staff to gather the data and then share it with the management.

Read Also: Payroll Software – What It Is and 10 Key Benefits

Different Payroll Methods for Small-Scale Business

There are three methods for Payroll that you can employ for managing your Payroll. The three methods are as follows:

Excel-based Payroll Management using Excel

Excel-based payroll management is explicitly designed for start-ups or newly established companies. In this type of payroll management, the business employs Excel to calculate its Payroll. A template for Payroll is used to calculate.

Payroll Outsourcing

Payroll outsourcing is when a business has to seek assistance from an outside company to handle the payroll process. This means that the company’s management employs external support to manage the payroll function within the business. Most companies do not have an internal team for managing payroll. Instead, they rely on outsourcing to manage this.

Payroll Software

To ensure that the calculation of Payroll within an organization is smooth, it is essential to ensure that the information collected is correct. Payroll software can assist in the same way. It is an instrument that reduces friction while achieving the inputs. The software for payroll management can provide a variety of advantages. This includes attendance and leaves management, pay computation, HR administration, etc.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button