Share

Payroll Reconciliation

Definition

Payroll reconciliation is the process of verifying that the amount of money paid to employees is accurate and matches the amount that was recorded in the general ledger. This process is typically done on a monthly basis and involves comparing the payroll records to the general ledger details to ensure that the correct amount of money is being paid out and recorded.

Example

For example, a company may have a $50,000 for payroll for the month of June. At the end of the month, the payroll department would need to reconcile the payroll records to ensure that the total amount paid out, and any other associated payroll liabilities for future payments related to the payroll (such as 401k contributions and benefits) to employees was $50,000.

Why it Matters

Payroll reconciliation is an important process for any business as it helps to ensure that the correct amount of money is being paid out to employees and the various cashflows associated with payroll are being managed properly. Additionally, it helps to ensure that the company is in compliance with any applicable laws and regulations regarding payroll. Finally, it helps to ensure that the company is able to accurately track its payroll expenses and budget accordingly.

Join the future of the month-end close

AI-assisted. Operationally efficient. Audit ready.