This article explains why it is important to approve the preliminary payroll regularly to ensure that data changes, which are highlighted in a different color, are displayed correctly, and no information is lost.
Understand the color coding in the preliminary payroll table
There are several highlights indicating certain changes in the preliminary payroll:
- Green: When an employee joins your company, the start of their row is highlighted with a green New for the first payroll month. So you can see at a glance which employees need to be newly registered and paid for the first time.
- Black: When an employee leaves your company, the start of their row is highlighted with a black End during their last month.
- Orange: Employees that have new or modified employee data that is relevant for the payroll process will be highlighted in orange. This allows both you and external stakeholders like your tax advisor to identify all employees whose data has changed.
The contractually agreed last working day appears as the termination date in payroll, rather than the last day that was actually worked.
How color coding works
To ensure that changes can always be highlighted correctly, we recommend the following:
- Confirm on a monthly basis / for each payroll period that there are no further data changes to the current status.
- Once confirmed, approve the payroll. This way, the color-coded flags from this date are refreshed, and those for the next payroll only the relevant changes are highlighted.
Changes to attributes in your employees’ profiles in the preliminary payroll table at the beginning of each payroll period or after the table is approved, are automatically highlighted in orange.
If you create the export before the last day of the payroll period without approving payroll, attributes that change between the export date and the start of the new payroll period may lose their color-coded flags at the start of the new payroll period.
What happens when you approve the preliminary payroll, and why is it beneficial?
Approving the preliminary payroll on a monthly basis allows you to fix the current status of the employee data in the preliminary payroll table at that point in time. Changes made after the approval are still visible in the drawer of each individual employee, with the following benefits:
- Changes will be highlighted in the preliminary payroll table in the following month.
- An export is automatically generated. Exports can be downloaded at any time and forwarded to internal or external stakeholders like your tax advisor.
- The export will contain highlighted information that has been changed until this point within the employee data.
- Monthly preliminary payroll ensures consistent highlighting and that no employee information is lost.
Use case 1: You approve the preliminary payroll regularly
If you regularly approve the preliminary payroll, the color-coded flags will be updated each time and all new data changes will be highlighted in the following month. So even if the payroll date shifts due to operational reasons and thus deviates from your defined payroll period, the flags will be reliably reset each time payroll is closed. In this way, you will always have an overview of the current payroll-relevant changes.
In the graphic below, the defined balance date for payroll is the 20th day of each month. The yellow bar shows the period for which data changes are flagged. If you approve payroll before the balance date, for example on the 18th, the system will flag all changes occurring between that date and the next time preliminary payroll is closed, regardless of the payroll period. No flags are lost, even if you do not close your payroll until after the balance date, for example on the 21st.
Use case 2: You never approve the preliminary payroll
If you create an export at the end of your payroll period but never approve the preliminary payroll, the flags will be updated on the first day of each defined payroll period. This means that if the payroll date changes, you will lose all flags for changes made between the export date and the start of the new payroll period. The graphic below illustrates what happens when payroll is not closed.
In this example, the balance date for the monthly payroll is again the 20th of each month. However, payroll was never approved. If the payroll date now changes to the 18th, for example, and an export is created without payroll having been closed, the system automatically refreshes on the 20th, and flags for data changes made between the 18th and the 20th will be lost.
If you then approve payroll at some stage, all subsequent changes will be highlighted and not refreshed until the next time payroll is closed. If you do not approve payroll again in the subsequent months, the flags will no longer allow you to identify which of the data changes are, in fact, current.
What happens if payroll was approved and another change happens?
Once payroll is approved, the preliminary payroll table is finalized and will not reflect any subsequent data changes. This ensures that you will always know which information has already been transferred to internal or external stakeholders, like your tax advisor. If there are any subsequent changes that need to be included in the current payroll period, you need to create another export. While the changes will not be flagged in the preliminary payroll table, the refreshed export will show them highlighted in yellow. Once the export has been created, these changes will no longer be flagged as new in the subsequent month.