This article explains why it is important to approve the preliminary payroll regularly to ensure that data changes, which are flagged in a different color, are displayed correctly.
Understanding the Color Coding in the Preview Table
One of the core features of preliminary payroll is that new or modified employee data is flagged in a different, orange color. This allows both you and your payroll accountant to identify at a glance all employees whose data has changed in a manner that is relevant for payroll accounting.
There are two other forms of color coding in the preliminary payroll:
- New: When an employee joins your company, the start of their row is flagged 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.
- End: When an employee leaves your company, the start of their row is flagged with a black End during their last month.
Please note: 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 new changes are correctly flagged from month to month and payroll period to payroll period, it is important to approve the payroll after exporting the data. This is because doing so also initiates a new payroll period and refreshes the color-coded flags from this date. In this way, you can ensure that only the current changes showing a difference to the previous month are highlighted.
If there are any changes to attributes in your employees’ profiles which are included in the preview table, these are automatically flagged in orange. The preview table is automatically updated at the beginning of each payroll period and then identifies all changes made since the first day of the new payroll period.
If you create an export without approving the payroll, Personio will use the payroll period that you defined in the settings as the reference point for refreshing the flagged attributes. Any modified or new data regarding extra payments, additional compensation, bonus payments, and onboarded and offboarded employees will be flagged irrespective of your defined payroll period.
Important note: If you create the export before the last day of the payroll period without approving the payroll, attributes that change between the export date and the start of the new payroll period may lose their color-coded flags.
Case Study 1: Regularly Approving the Preliminary Payroll
If you regularly approve the preliminary payroll, the color-coded flags will be updated each time and all new data changes will be flagged 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 the 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.
Case Study 2: The Preliminary Payroll Is Never Approved
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 the payroll at some stage, all subsequent changes will be flagged and not refreshed until the next time payroll is closed. If you do not approve the payroll again in the subsequent months, the flags will no longer allow you to identify which of the data changes are in fact current.
Can Subsequent Changes Be Taken Into Account?
Once payroll is approved, the preview 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 your payroll office. If there are any subsequent changes that need to be included in the current payroll period, you need to create another export for your payroll office. While the changes will not be flagged in the preview 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.