What should I ask about the error-checking steps a payroll firm runs before each pay run?

Start with the sequence. Ask the seller to describe a normal pay run from the moment client changes arrive to the moment payment files go out. Every step where a person types or approves something is a place to look for controls. Ask what the firm checks before release: new hires, terminations, rate changes, hours that look unusually high or low, and totals that move sharply from the previous run.

Then ask about the second pair of eyes. Does someone other than the preparer review each run? What do they actually look at, and is the review written down or just a quick glance? Ask for a sample checklist and a few completed ones.

Finally, ask about misses. How often does an error reach a client, how is it found, and who pays to fix it? A seller who keeps an error log shows a firm that learns. A seller who says errors never happen has either not looked or is not being direct. Ask your accountant to read the log with you. Ask too what the checks look like in a rush, such as the day before a holiday, when staff may feel pressed to skip steps.

Key takeaways

• Ask for completed review checklists, not just a description of them.
• Check that someone other than the preparer approves each run.
• Ask for the error log and how each problem was fixed.