Settlement and payroll accounting

A bank payment confirmation records evidence that a pay run settled. Its run reference identifies the cycle, and its confirmation reference identifies the external event. The settlement date, amount and currency support the review. Payroll Manager matches these details to the payroll obligation after payment through the company’s connected bank process.

When the run becomes Paid, the journal-drafting process follows its employee pay items and detailed lines. Account mapping supplies the ledger targets, and the draft groups amounts by account code. Finance checks the journal’s debits and credits against the payroll before posting. The linked payroll then moves from Paid to Posted without changing its calculated amounts.

• Settlement review. Controlled intake records a linked pay run and a nonempty confirmation reference. The settlement process accepts Computed, Reviewed or Approved runs, so Payroll Manager checks the earlier approval evidence separately when reconciling the bank event.
• Account mapping. Earning and deduction codes point to ledger targets. Payroll Admin maintains the mapping, including wage expenses, employer expenses and payable accounts. Finance checks those targets against the company ledger during setup.
• Posting decision. Finance compares the draft header with its account lines and authorizes posting after review. The payroll update applies when the linked run is still Paid. Its employee amounts and source links remain available for reconciliation.

Choose how authentic bank confirmations enter payroll and assign a controlled writing identity to that connection. Agree the matching rule for the run, the amount and the currency. Rehearse repeated evidence, an empty reference and a confirmation linked to the wrong cycle. Keep the original bank evidence available to the person investigating a difference.

Finance agrees the posting date and account mapping before the first draft is accepted. If the company exports journals to another ledger, configure that connection and retain its acknowledgement. Decide who investigates an absent account target or an unexplained imbalance. Both the local journal and the external ledger response should be traceable to the intended payroll cycle.

An approved pilot run has completed the employee calculation and payslip review. The company’s bank process supplies its settlement confirmation. Payroll Manager compares the reference, amount and currency with the run’s net obligation and pay date. Controlled intake records the evidence for that cycle, and the team checks the resulting Paid state.

Finance opens the draft journal and follows its account lines back to the payroll detail. Compare total debits with total credits and inspect the account grouping. When the explanation is complete, Finance posts the journal and checks that the still-Paid run becomes Posted. Retain the bank evidence and any ledger acknowledgement used in the review.

Repeat the rehearsal with an empty confirmation reference and require no settlement transition. Also post a test journal linked to a run in another state and verify that the run remains unchanged. These cases give Finance a practical way to distinguish an authentic settlement handoff from an incorrect reference or an out-of-sequence journal.

• Unposted Journal Entries — Finance reviews draft entries and their debit-credit totals before posting.
• Pay Run Schedule — Compare expected pay dates and period boundaries with the settlement evidence under review.

Follow settlement to posting. Use integrations to agree the bank intake and ledger export, and implementation to prepare the pilot.