What should I write down about custom pay rules I set up for my payroll clients?

Custom rules are where payroll quietly becomes fragile. Walk through your clients one by one and list every rule that departs from the standard setup: special overtime handling, tiered rates, bonus formulas, shift premiums, unusual pay cycles. For each, record the plain-language description and the date it was created.

Then record the reasoning. Why did the client need it? Who at the client approved it, and where is that approval kept? Add one worked example, with made-up numbers, that shows what the rule produces. This helps a new processor spot a wrong result quickly.

Finally, note the dependencies: which rules rely on a manual step, a workaround or one person’s knowledge. Flag any that are no longer used. Keep the file in one place and say who updates it. Ask your lawyer whether any rule touches obligations to the client’s own staff, and your accountant how to present the documentation to a buyer. Test your notes before you share them. Ask a colleague, or a trusted bookkeeper, to read one entry and explain it back to you. If they cannot, rewrite it. Fresh eyes will find the missing steps you stopped noticing long ago. Date every entry, so a reader can tell which version is current.

Key takeaways

• List every non-standard rule by client with its purpose and approval.
• Add a worked example so a new processor can check results.
• Flag rules that rely on manual steps or one person’s memory.