Payroll reconciliation: follow the data, not just the grand total.
Payroll reconciliation compares the records behind a pay period: approved workforce inputs, payroll results, exported records, accounting totals, and any separately managed provider confirmations. The goal is to explain differences before relying on the handoff.
By Phi HCM · Published
This is a software-evaluation and workflow checklist, not tax, legal, or accounting advice. The example below is invented to explain a reconciliation technique; it is not a PHCM customer result.
The employee count matches. The export is still wrong.
Assume a simplified hourly-earnings example with no overtime, premiums, deductions, or taxes. Two sample employees belong in the handoff. An export created before a two-hour correction contains the same employees, but it no longer matches the approved time.
| Sample record | Approved hours | Exported hours | Rate | Expected earnings | Export earnings |
|---|---|---|---|---|---|
| Sample A | 40 | 38 | $25 | $1,000 | $950 |
| Sample B | 30 | 30 | $20 | $600 | $600 |
| Total: 2 records | 70 | 68 | — | $1,600 | $1,550 |
Find the difference
Both versions contain two records. Hours differ by 2 and illustrative earnings differ by $50: 2 × $25. Employee-level comparison identifies Sample A.
Explain the cause
Compare the export timestamp and version with the correction and approval history. In this example, the file predates the approved correction.
Close the loop
Follow the agreed reapproval and replacement-file process, reconcile again, and verify receiver acceptance. Do not send a replacement blindly and risk duplicate processing.
Six checks for the time-to-payroll handoff.
1. Match the population and period
Compare the employee identifiers, pay group, period start and end, and included records. A matching grand total can still hide an omitted employee and an unintended duplicate. Record counts are a control, not proof that the records match.
2. Reconcile time by earning code
Compare approved hours and units with the payroll inputs for each employee and earning code. Check missing punches, late corrections, leave entries, and whether the receiving system expects hours, amounts, or both. Preserve the original source and the corrected version.
3. Reconcile calculation results
Compare configured earnings and deductions with the reviewed payroll result. Investigate changed rates, assignments, and calculation inputs. Statutory tax rules and jurisdiction coverage need separate validation by the responsible provider and implementation team.
4. Recheck approvals after changes
Identify who prepared, reviewed, and approved the run. If source data changed after approval or export, follow the agreed correction and reapproval process. Do not assume an earlier sign-off covers a later version.
5. Compare the actual exported records
Open the file or transfer result used for the handoff. Match identifiers, earning codes, row counts, hours, and amounts with the approved version. Confirm that the receiving system accepted the records and review its rejection report. Generating a file is not confirmation of acceptance.
6. Reconcile accounting and provider confirmations
Where Finance is in scope, review mapped costs, liabilities, labor allocations, and payroll-to-GL differences. Track any separately contracted tax-filing, remittance, or payment confirmations in their own workflow. A funding report or balanced journal does not establish that money moved.
What evidence should your team keep?
Define a review record with the pay-period identifier, source version, export version, reviewer, approval time, control totals, unresolved differences, and receiver acceptance status. Keep access and retention aligned with your organization’s policy; do not copy sensitive employee data into public documents or demonstrations.
Where PHCM fits
PHCM has workforce-input, configured calculation, payroll-review, export, and finance-reporting workflows. Evaluate the proposed scope with your own rules and a representative period. Production use requires implementation validation, parallel-payroll reconciliation, and release approval. Tax filing, remittance, and payment delivery require separately contracted, configured, and validated providers.