How to Build a Payroll Approval Workflow
A payroll approval workflow is the routine that checks every payroll run before the pay leaves the bank. One person prepares the run, a second person reviews it, and a third person approves it, so a wrong pay rate, a missed deduction, or a wrong net pay is caught before it reaches the employee. This guide walks through how to build a payroll approval workflow, from the roles you assign to the steps that turn a draft run into a confirmed run, with two real examples and a clear set of checks so your next payroll run starts from a run that already agrees.
A payroll approval workflow is the routine that checks every payroll run before the pay leaves the bank. One person prepares the run, a second person reviews it, and a third person approves it, so a wrong pay rate, a missed deduction, or a wrong net pay is caught before it reaches the employee.
This guide walks through how to build a payroll approval workflow, from the roles you assign to the steps that turn a draft run into a confirmed run. If you are newer to the run side of payroll, it helps to start with our guide on how to prepare payroll before each pay period before you build the workflow. For a fuller look at the report the reviewer checks, see our guide on how to review payroll reports for accuracy.
What a Payroll Approval Workflow Means
A payroll approval workflow means a run moves through three checkpoints before the pay leaves the bank. The preparer builds the run from the source records. The reviewer checks the run against the source records. The approver signs off and releases the pay. Each checkpoint is a chance to catch a mistake before it reaches the employee or the bank.
The goal is a run where the gross pay ties to the hours and the rate, the deductions tie to the setup, the net pay ties to the bank, and the run is signed off before the pay leaves. When the workflow runs the same way every time, the run is checked before it is paid and the next run starts from a routine that already agrees.
The Roles You Assign
Most payroll approval workflows turn on the same small set of roles. Knowing them helps you assign each one before the run so the check is real.
- Preparer. The person who builds the run from the source records, enters the hours and the pay rates, and sets the run up for review.
- Reviewer. The person who checks the run against the source records, confirms the gross pay and the deductions and the net pay, and sends the run to the approver.
- Approver. The person who signs off on the run and releases the pay to the bank, which is the final checkpoint before the pay leaves.
- Source records. The timesheets, the pay rate records, the benefit setup, and the withholding forms the run is built from, which the reviewer checks the run against.
- Approval record. The record that shows who prepared, reviewed, and approved the run, which is your proof the run was checked before the pay left the bank.
Why Payroll Runs Go Wrong Without a Workflow
Payroll runs go wrong when one person builds the run and sends the pay with no check in between. A pay rate entered from memory, an overtime hour missed on the timesheet, or a deduction that fell off the setup makes the net pay wrong, and the wrong pay reaches the bank before anyone notices. The correction costs another run and another set of records to fix.
The drift also repeats. A run that skips the review once will skip it again unless the routine changes. Running the same workflow every time is the difference between a run you trust and a run you hope is right, which is why the workflow is worth building for every run, not just the big ones.
What You Need Before You Start
Before you build the workflow, gather three things: the source records the run is built from, the payroll system the run runs in, and the people who fill the roles. The source records are the timesheets and the pay rates. The payroll system is where the run lives. The people are the preparer, the reviewer, and the approver. The goal is a workflow where each piece is assigned before the run, so the run is checked before the pay leaves the bank.
How to Build a Payroll Approval Workflow
Most payroll approval workflows follow the same small set of steps. Knowing them helps you build the workflow in order and keep every run checked before the pay leaves.
- Assign the preparer, the reviewer, and the approver. Name the person who prepares the run, the person who reviews it, and the person who approves it before the run starts, so each checkpoint has an owner.
- Gather the source records for the run. Collect the timesheets, the pay rate records, the benefit setup, and the withholding forms before the preparer builds the run, so the run starts from the records that are actually on file.
- Prepare the draft payroll run. Build the draft run in the payroll system from the source records, enter the hours and the pay rates, and confirm the gross pay calculates the right amount for each employee.
- Confirm the gross pay ties to the hours and the rate. Check the gross pay for each employee ties to the hours on the timesheet and the pay rate on the record, so the run starts from the right pay.
- Confirm the deductions tie to the setup. Check the benefit deductions and any employer paid benefits tie to the benefit setup, so the right amounts come off the gross pay.
- Confirm the withholding ties to the form on file. Check the federal income tax withheld ties to the withholding form on file, so the withholding matches the form the employee signed.
- Confirm the net pay ties to the bank. Check the net pay for each employee ties to the direct deposit details on file, so the pay lands in the right account.
- Review the run against the source records. Have the reviewer check the full run against the source records, from the gross pay to the net pay, and fix anything that does not tie before the run goes to the approver.
- Send the reviewed run to the approver. Send the reviewed run to the approver with a note that the review is complete, so the approver signs off on a run that was already checked.
- Approve the run and release the pay. Have the approver sign off on the run and release the pay to the bank, so the pay leaves only after the run was reviewed and approved.
- Record who prepared, reviewed, and approved the run. Keep a record that shows who prepared, reviewed, and approved the run, so the approval history is easy to follow and the run has proof it was checked.
- File the approval record with the payroll records. File the approval record with the payroll records for the period, so the workflow has proof and the next close starts from a run that was signed off.
Quick tip. Keep the prepare and approve steps with different people. When the same person builds and signs off a run, a wrong pay rate can pass straight through to the bank. A real review is the checkpoint that catches it.
Example: A Cafe Catches a Wrong Pay Rate
Consider a small cafe where one owner built the payroll and sent the pay with no review. One pay period, the owner entered a barista pay rate from memory and ran the pay. The rate was wrong, the net pay was wrong, and the wrong pay reached the bank before the owner noticed. The owner spent the next pay period correcting the run and explaining the fix to the employee.
The owner built a payroll approval workflow. The owner became the preparer, a manager became the reviewer, and the owner stayed the approver. The next run, the reviewer caught a wrong pay rate before the run went to the approver, the preparer fixed it, and the approver signed off on a run that already agreed. The example shows how a review catches a wrong pay rate before the pay leaves the bank.
Example: A Shop Catches a Missed Deduction
Take a small retail shop where one office manager built and approved every run alone. One period, a health benefit deduction fell off the setup, and the net pay ran too high. The wrong pay reached the bank, and the office manager spent the next period pulling the deduction back and correcting the records.
The shop owner split the roles. The office manager became the preparer, the owner became the reviewer, and the owner signed off as the approver. The next run, the reviewer caught the missing deduction before the run went to the approver, the preparer added it back, and the approver signed off on a run that already agreed. The example shows how a review catches a missed deduction before the pay leaves the bank.
Common Payroll Approval Mistakes
- One person prepares and approves the same run. A run that one person builds and signs off has no real check. Keep the prepare and approve steps with different people, or at least different checkpoints, so the review is real.
- Skipping the review when the run is small. A small run skipped once is skipped again. Run the review on every run, not just the big ones, so the workflow stays a habit and the check stays real.
- Approving before the review is done. An approver who signs off before the reviewer finishes sends the pay unchecked. The approver signs off only after the review is complete, so the run is checked before the pay leaves.
- Not checking the net pay ties to the bank. A run where the gross pay is right but the net pay is wrong still sends the wrong pay. Confirm the net pay ties to the direct deposit details before the approver signs off.
- Not keeping an approval record. A run with no record of who prepared, reviewed, and approved has no proof it was checked. Keep an approval record with the payroll records so the history is easy to follow.
- Building the run without the source records. A run built from memory instead of the source records starts wrong. Gather the timesheets and the pay rates before the preparer builds the run, so the run starts from the records on file.
Getting Started
Building a payroll approval workflow comes down to assigning the preparer, the reviewer, and the approver, then running every payroll through prepare, review, and approve before the pay leaves the bank. When you run the same workflow every time, the run is checked before it is paid, the net pay ties to the bank, and the next run starts from a routine that already agrees.
Want help building a payroll approval workflow? Explore our payroll services to see how we assign the roles, check the gross pay and the deductions and the net pay, and sign off every run before the bank sends the pay. We handle bookkeeping and payroll. We do not prepare income tax returns, offer tax planning, or perform audits, but we keep your payroll accurate and your records organized so your tax preparer can do their part efficiently.
Frequently Asked Questions
How do I build a payroll approval workflow?
Assign a preparer, a reviewer, and an approver, then run every payroll through three steps, prepare the run, review the run against the source records, and approve the run before the bank sends the pay. Confirm the gross pay ties to the hours and the rate, the deductions tie to the setup, and the net pay ties to the bank before the approver signs off.
What roles do I need in a payroll approval workflow?
You need a preparer who builds the run, a reviewer who checks the run against the source records, and an approver who signs off and releases the pay. The roles can be people or clearly labeled checkpoints, but the same person should not prepare and approve the same run, so the check is real.
What should the reviewer check in a payroll run?
The reviewer checks the gross pay ties to the hours and the rate, the overtime ties to the timesheet, the deductions tie to the benefit setup, the withholding ties to the form on file, and the net pay ties to the bank. For a fuller look at the run the reviewer checks, see our guide on how to review payroll reports for accuracy.
When should the approver sign off on a payroll run?
The approver signs off only after the reviewer confirms the run ties to the source records and the bank. The approver never signs off on a run that was not reviewed, and the pay never leaves the bank until the approver signs off. For a fuller look at the run before the sign off, see our guide on how to prepare payroll before each pay period.
Does a payroll approval workflow mean I am preparing income tax returns?
No. A payroll approval workflow is part of bookkeeping and payroll, which is the work of checking every run before the pay leaves the bank. Income tax return preparation is a separate service. Chess Bookkeeping & Payroll does not prepare income tax returns, offer tax planning, or perform audits, but we keep your payroll and bookkeeping records accurate and organized so your tax preparer can do their part efficiently.
Can the same person prepare and approve a payroll run?
It is possible, but it weakens the check. When the same person prepares and approves a run, a wrong pay rate or a missed deduction can pass straight through to the bank. Keep the prepare and approve steps with different people, or at least different checkpoints, so the review is real and the run is checked before the pay leaves.
Can Chess Bookkeeping & Payroll help me build a payroll approval workflow?
Yes. We handle bookkeeping and payroll, including building a payroll approval workflow, assigning the preparer, reviewer, and approver roles, checking the gross pay and the deductions and the net pay, and signing off the run before the bank sends the pay. We do not prepare income tax returns, offer tax planning, or perform audits, but we keep your payroll accurate and your records organized so every run is checked before it leaves.
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