Value Proposition: Payroll Reconciliation is a Month-End step that prevents the “Payroll account” from remaining as a stuck balance within the TB. The recurring scenario: Payroll produces a summary (Gross/Net/Deductions), Treasury executes payment via bank and/or WPS, and GL receives the payroll entry (or batch) — then gaps appear: an employee not paid due to bank rejection, a late adjustment (Retro) not reflected in the entry, discrepancies between the WPS file and the bank statement, or the payroll account (Payroll control/clearing) not zeroing out. This Payroll Reconciliation Template makes the process “auditable”: bank reconciliation + GL reconciliation + a record of payroll variances with clear reasons + payroll account reconciliation (rollforward) + a deliverable file that can be included in the Closing Pack.

In 20 Seconds: What Will You Get?

• Payroll Reconciliation Template connects 3 sources: Payroll summary + bank/WPS + GL.
• Bank reconciliation: List of net payments + rejected/unpaid + timing differences.
• WPS reconciliation: Matching the WPS file/approvals against bank execution (especially when there are Rejects/Returns).
• GL reconciliation: Ensuring that the JE batch equals payroll totals (Gross/Deductions/Net) according to your entry design.
• Payroll variances: Differences log with reasons (Retro/Joiners/Leavers/Manual payments/Bank rejects) and a closing plan.
• Payroll account reconciliation: Rollforward of the Payroll control/clearing account prevents stuck balances.
• Closing Pack: A deliverable file ready for monthly/annual closing (Sign‑off + Evidence index).

CTA related to outputs: you will receive Bank/WPS tie-out + GL tie-out + Differences log + Control account rollforward + JE Log + Closing Pack.

Suitable For

• Payroll / HR Ops: Establishing the impact of each Payroll run and quickly identifying unpaid/rejected before Month‑End.
• GL / Controller: Closing the payroll account and linking the entry to payments while producing deliverable Reconciliations.
• Treasury: Matching actual payments with payment orders/WPS and identifying bank discrepancies.

Not Suitable For

• If you have a Payroll system integrated with ERP that produces Reconciliation automatically + rejected/unpaid reports + ready control account reconciliation — you may only need to format a pack for delivery rather than a complete Template.
• If payroll is fully managed by an external party and provides you monthly with a GL tie-out report + bank proof + WPS reconciliation ready and signed — the use of the template will be limited.

Without Reconciliation / With Reconciliation (Short Comparison)

Before Use: 5 Symptoms That Payroll Will Leave Stuck Balances at Month-End

• The payroll entry is posted as a total, but there is no link between the payroll run and the JE batch reference within GL.
• There is no clear report on rejected/unpaid in the bank or WPS, leading to monthly discrepancies with no “owner” to address them.
• Late adjustments (Retro/Adjustments) are applied in Payroll but do not immediately reflect in the entries or vice versa.
• The Payroll control/clearing account accumulates a balance (Credit/Debit) with no rollforward explaining the retention.
• Upon review: there is no evidence file linking payroll totals to actual payments and postings in GL.

How Does Payroll Reconciliation Work Practically from Payroll Run to Month-End?

The reconciliation is managed as an operational journey with three pivot points: (1) Payroll summary (Gross/Net/Deductions) as a reference for “what should happen,” (2) bank/WPS as a reference for “what was actually paid,” (3) GL as a reference for “how it was recorded accounting-wise.” The process begins by gathering outputs from the payroll run and linking them to the payment reference. During the operation, bank reconciliation and WPS reconciliation are executed to reveal rejected/unpaid and timing differences. Then, Payroll reconciliation with GL is performed through JE batch references, ensuring that the control account moves as it should. Finally, payroll variances are documented with clear reasons and a closing plan, and a payroll account reconciliation file is produced and linked to the TB/Adjusted TB within the Closing Pack.

Implementation Method (3 Steps)

Step 1: Preparation and Report Gathering

• Extract Payroll summary for each run: Gross, Deductions, Net pay + Employee list (or summary by cost center).
• Extract Bank/WPS: bank statement for the period + WPS file/approval results + any rejected/returns.
• Extract GL: trial balance for payroll accounts (Payroll expense, Payroll control/clearing, bank) + JE batch reference for payroll.
• Determine the entry design within your company: Is the entry Gross/Deductions/Net? Or just Net with details in the sub-ledger? (The template supports documentation for both).

Step 2: Reconciliation + Payroll Variances + JE Log

• Execute bank reconciliation at the payment run level: Net paid vs bank outflow + identify rejected/unpaid and the reason for each case.
• Execute WPS reconciliation: Match the approved (or partially rejected) WPS file with the bank and the employee list.
• Execute Payroll reconciliation with GL: payroll totals vs posted JE(s) + verify that the control account captures movements correctly.
• Open payroll variances in the Differences log:
  • Timing differences (run at the end of the month and payment at the beginning of the next month)
  • Bank rejects/returns
  • Retro adjustments/manual payments
  • Reclass/Allocation on cost centers
• Produce JE Log for adjustments (if needed): Reclass/True-up/Accrual/Reverse so that each entry has a clear reference in the log.

Step 3: Payroll Account Reconciliation + Adjusted TB + Closing Pack

• Output payroll account reconciliation (rollforward): Opening + payroll JE + payments + rejects/adjustments = Closing.
• Match the Closing in the rollforward with the TB balance (Adjusted TB if there are reconciliation entries).
• Output Closing Pack: bank/WPS proof + GL tie-out + differences aging + JE refs + sign‑off.

Product Components (Clear Inventory)

1. Payroll Run Summary Import
   • Practical Purpose: Standardizing payroll run outputs (Gross/Net/Deductions) and linking them to the period and support references.
   • When to Use: After each run and before payment/closing.
   • Resulting Evidence: Payroll summary snapshot + run ID.
2. Bank & WPS Reconciliation Tracker (Payroll reconciliation with bank + WPS reconciliation)
   • Practical Purpose: Matching actual net payments with payment/WPS files and identifying rejected/unpaid and returns.
   • When to Use: After executing payment (or upon receiving confirmation from the bank/WPS).
   • Resulting Evidence: Paid vs Expected + list of rejected/unpaid with reasons and dates.
3. GL Posting Tie‑Out (Payroll reconciliation with GL)
   • Practical Purpose: Linking payroll totals to the JE batch reference within GL and showing any posting/classification discrepancies.
   • When to Use: At Month‑End and Year‑End or immediately after posting the entry.
   • Resulting Evidence: GL tie-out schedule + JE references.
4. Payroll Control Account Rollforward (Payroll account reconciliation)
   • Practical Purpose: Explaining the balance of the payroll control/clearing account and preventing its accumulation through a clear rollforward.
   • When to Use: Month‑End as part of Reconciliations.
   • Resulting Evidence: Rollforward + open items listing.
5. Differences Log (Payroll variances)
   • Practical Purpose: Turning variances into a worklist (owner + reason code + action + ETA for closure).
   • When to Use: As soon as a variance appears + Week‑4 review before closing.
   • Resulting Evidence: Differences aging + status tracking + decision trail.
6. Payroll JE Log (Adjustments / Reclass / Accrual / Reversal)
   • Practical Purpose: Documenting any adjustment entries related to payroll with their reference (reason/support/date).
   • When to Use: When needing to reconcile variances or reclassify or accrue.
   • Resulting Evidence: JE batch list + supporting refs.
7. Month‑End Payroll Closing Pack
   • Practical Purpose: Compiling and delivering reconciliation evidence within the Closing Pack (Prepared/Reviewed sign‑off).
   • When to Use: Month‑End and Year‑End.
   • Resulting Evidence: Reconciliation pack + evidence index + sign‑off.

What Should Be Included in the Delivery?

• 01-Payroll-Reconciliation-Template.xlsx: The main file (Imports + tie-outs + reports).
• 02-Payroll-Run-Summary-Import.xlsx: Payroll summary import template (Gross/Net/Deductions + run ID).
• 03-Bank-Statement-Import.xlsx: Bank statement/MT940 import template (outflows + refs).
• 04-WPS-Reconciliation-Tracker.xlsx: WPS reconciliation (file status/accepted/rejected/returns) + mapping for employees.
• 05-Bank-Payroll-Matching.xlsx: Payroll reconciliation with the bank (Expected vs Paid) + rejected/unpaid list.
• 06-GL-Payroll-TieOut.xlsx: Payroll reconciliation with GL (payroll totals vs JE batch) + variances.
• 07-Payroll-Control-Account-Rollforward.xlsx: Payroll account reconciliation (opening/movements/closing) + open items.
• 08-Differences-Log.xlsx: Payroll variances (reason codes + owner + action + aging).
• 09-JE-Log-Payroll-Adjustments.xlsx: JE Log for adjustments/reclass/reversal of payroll entries + references.
• 10-Exceptions-Decision-Form.docx: Exception decision form (Bank reject/manual pay/retro) + approval.
• 11-Evidence-Index.xlsx: Evidence index (Payroll run → WPS/bank proof → JE refs → tie-out).
• 12-MonthEnd-Payroll-Closing-Pack.xlsx: Delivery pack: Summary + tie-outs + differences + sign‑off.
• 13-Runbook.pdf: Step-by-step operation (Collect → Bank/WPS → GL → Control account → Pack).
• 14-Controls-Checklist.pdf: Control checklist (completeness/rejects/GL posting/clearing/aging review).
• 15-Archiving-Map.docx: Archiving tree (Year/Month/Payroll/Bank/WPS/GL/Pack) + naming convention.
• 16-Signoff-Page.docx: Prepared/Reviewed/Approved + period scope (e.g., Dec‑2025).

After Implementation (Two Points Only)

• Operational Outcome for the Team: Any rejected/unpaid or WPS discrepancies appear immediately as a worklist with Owner and ETA instead of being discovered at month-end closing or when an employee complains.
• Control/Audit Outcome: The Payroll control/clearing balance becomes explained and reconciled to the TB through rollforward + tie-out (Bank/WPS + GL) within a testable Closing Pack.

FAQ — Questions Before Purchase

Is it suitable for any Payroll system?

Yes. It is essential to be able to extract Payroll summary (Gross/Net/Deductions) and link it to a period/run ID.

Does it support payroll reconciliation with the bank if payment is in multiple installments/multiple banks?

Yes. The reconciliation can be divided by Payment run/Bank account and produce a tie-out for each account and then consolidated.

Does it include WPS reconciliation?

Yes. There is a Tracker for matching the WPS file/approvals against bank execution and a report of rejected/returns and their impact on the balance.

What is the minimum data required to get started?

Payroll totals for the period + bank statement/MT940 for the period + balance of the payroll account in GL + JE batch reference (if available).

How does it handle payroll variances resulting from Retro or Manual payments?

They are recorded as a specific reason in the Differences log with their reference and closure plan, and a JE Log can be issued for reconciliation if needed.

Is it suitable for monthly closing only or also for annual closing?

It is suitable for both. Year‑End typically requires clear visibility of open items and aging, and the Pack provides that within the Month-End/Year-End Closing Pack.

Can it be used for multi-entity/branch companies?

Yes, by adding Company/Branch/Cost center at the import or report level, and producing a tie-out for each entity and then consolidated.

Is there a delivery template for internal/external auditors?

Yes: Month‑End payroll closing pack + evidence index + sign‑off, which can be attached with Reconciliations within the Closing Pack.

Ready to close payroll with the bank and GL and zero out the payroll account instead of a stuck balance?

Outputs: Bank/WPS reconciliation + GL tie-out + payroll variances + payroll account reconciliation + JE Log + Closing Pack.