Splitting pay run preparation and approval
How a payroll bureau should divide preparing and approving pay runs among its staff, which roles may touch payroll, and what to do about a wrong run.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
In a small bureau, the person who knows a client's payroll best is usually the person who prepares it every month. It is tempting to let that person approve it too: nobody else understands the client's allowances, the casual staff, the director who is paid differently. The trouble is that a run approved by its own preparer has not been checked by anyone. Errors pass, and so does anything worse.
Achekam does not leave this to the bureau's judgement. It enforces separation on every run. That makes the bureau's job one of organising people well, so that the rule helps rather than holds up payday.
Who prepares and who approves
A pay run in Achekam is approved by someone other than the person who prepared it. The preparer captures inputs, calculates and checks; the approver reviews and, by approving, fixes the run. An approved run is never recalculated.
The approver's review is the bureau's main control, so it should be more than a glance at the total. A useful minimum for every run:
- compare total cost and net pay with the previous period, and ask about any movement the preparer has not explained;
- look at starters, leavers and anyone whose pay changed;
- read every warning the run produced;
- check the list of bank accounts not yet verified;
- confirm that the client's inputs for the period were received and used.
The general principle behind this is old and well tested. AccountingTools' explanation of segregation of duties describes it as assigning the steps in a process to different people so that no one can both commit and conceal theft or error. Payroll, where a single person could otherwise add a fictitious employee and approve their pay, is the textbook case.
Nobody approves their own pay
A second rule applies regardless of who prepared the run: nobody can approve a run that pays themselves. In a bureau this matters most for the firm's own staff payroll, where every member of the payroll team is also an employee. It also matters where a bureau employee is on a client's payroll, for example as a part-time bookkeeper paid by that client.
The practical consequence is that the firm's own payroll needs an approver who is not on it, or at least not on the run being approved. Plan that in advance rather than discovering it on the day.
The roles that may change payroll
On South African payroll, only users with the Partner, Admin, Payroll, PayrollAdmin or FinanceManager roles can change payroll. Everyone else in the firm, including audit and accounting staff, can be kept out of it entirely.
A firm can also allow or deny what each role may do, and check why a particular member may or may not act. That check is useful on a busy payday: when an approver finds they cannot approve a run, the firm can see whether it is because they prepared it, because it pays them, or because their role lacks the permission, instead of guessing.
Bank details have a rule of their own. An employee's bank account entered or changed by one person must be verified by another before it is paid. In a bureau, the verifier and the approver are often the same second person, which is acceptable as long as the verification itself is real; see verifying employees' bank detail changes.
At least two people for every client
Because the preparer cannot approve, every payroll needs at least two people in payroll roles. For a bureau, the more useful question is how many people can act for each client, including cover for leave and illness.
A simple rota for a small bureau with three payroll staff might look like this:
| Client | Preparer | Approver | Cover for either |
|---|---|---|---|
| Weekly restaurant group | Staff member A | Staff member B | Staff member C |
| Monthly dental practice | Staff member B | Staff member C | Staff member A |
| Fortnightly contractor | Staff member C | Staff member A | Staff member B |
| The firm's own staff | Staff member A | A partner not on the run | Staff member B |
Each person prepares some clients and approves others, and every client has a named third person who knows it well enough to step in. A firm administrator invites colleagues by e-mailed link, gives each a role, and can suspend, reactivate or remove them; the subscription's seat limit is checked on every addition, so a bureau planning its rota should check that it has room for the people the rota needs.
A one-person bureau cannot run payroll alone in Achekam. It needs a second person in a payroll role, often a partner, to approve.
When an approved run turns out to be wrong
Sooner or later an approver will pass a run that later proves to be wrong: overtime captured against the wrong employee, an allowance left on after it should have stopped. The approved run is not reopened or recalculated. There is no separate correction run either: the correction goes in as a variable input on the next regular run.
Handle it as a small procedure, not an improvisation:
- Establish exactly what was wrong and for whom.
- Agree the correction with the client in writing, including whether an employee was overpaid and how it will be recovered.
- Capture the correction as a variable input on the next regular run, with a note explaining it.
- Have the approver of that run check the correction specifically.
- Record the error and its cause in the client's file, and ask whether the review checklist would have caught it.
The fifth step is the one that improves the bureau. Most errors repeat a pattern, and the approver's checklist should grow from the bureau's own mistakes.
For how clients are set up as separate employers, each with their own preparer and approver, see running clients' payroll as separate employers.
Write your rota down this week, one row per client, and check it against your staff's leave for the next three months. If any client has only one person who can act for it, fix that before it becomes a late payday.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
