Who signs off payroll? Separating duties so mistakes get caught

In many small companies, one person prepares payroll, checks it, approves it and sends the bank file. It works until it doesn’t: a salary keyed in with an extra zero, a leaver paid for three more months, or worse, a “ghost” employee nobody else knew about.

Splitting the work between people isn’t about mistrust. It’s about making sure every payroll is seen by at least two pairs of eyes before money leaves the account.

The four steps

1. Prepare. Someone sets up the run: new joiners, leavers, salary changes, overtime, bonuses, deductions and attendance for the period. Then they calculate.

2. Review. A second person checks the numbers. Not every line, but the things that tend to go wrong:

• the total compared with last month, and an explanation for any big change,
• new joiners and leavers, so the right people are on the run,
• large individual changes, such as a salary that doubled,
• statutory totals (PAYE, pension, social security) that look sensible for the headcount, and
• any warnings the system raises.

3. Approve. Someone with authority over the money (often a finance manager or director) authorises the payroll for payment.

4. Pay. The payment is made, usually by bank transfer, and the run is marked as paid. Payslips go out, and the statutory remittances are scheduled.

If something is wrong at review or approval, the run is rejected, goes back to the preparer, and is recalculated. Nobody edits numbers at the approval stage.

What if we’re a small team?

You may not have four people. That’s fine. Combine steps, but try to keep preparing and approving with different people. Even a business owner glancing at the summary before payment catches most big mistakes.

A month-end checklist

Before the run

1. Attendance for the period is closed, and corrections are done.
2. Leave and overtime are approved.
3. New joiners have bank details and statutory numbers. Leavers have their last working day recorded.
4. Salary changes for the month are confirmed in writing.

During review

5. The total is compared with last month, and every big difference is explained.
6. The headcount matches HR’s list.
7. Statutory deductions are checked.

After payment

8. Payslips are sent to every employee.
9. Statutory payments are made by their deadlines (in Ghana, SSNIT by the 14th and PAYE by the 15th; in Nigeria, pension within seven working days of salary payment and PAYE by the 10th).
10. The approved run is filed as the month’s record.

Questions we often hear

What should happen if a mistake is found after payment?

Don’t edit the paid run. Correct it in the next payroll, with a clear adjustment line on the employee’s payslip (an arrears payment or a recovery), and keep a note of why. That way the paid run stays an accurate record of what actually left the bank.

How long should review and approval take?

Plan for one working day each. Build the calendar backwards from pay day: if salaries go out on the 25th, the run should be prepared by the 20th, reviewed by the 21st and approved by the 22nd, leaving time for the bank.

Who should be the approver in a small business?

Usually the owner or managing director, and ideally not the person who prepared the run. Even five minutes on the summary and the comparison with last month catches most serious errors.

How Eban handles payroll sign-off

A payroll run in Eban moves through draft, review, pending approval, approved and paid, and each step has its own permission, so you can give preparing, reviewing, approving and paying to different people, or to the same person if your team is small. Eban records who did each step and when, and a rejected run goes back for recalculation instead of being edited in place. Reviewers can compare the run with the previous month and see warnings for each employee. When a run is marked as paid, payslips go out to employees automatically. Corrections to a month that’s already been paid are carried into a later run as adjustments, so a paid run is never rewritten.