Why payroll variance shows up before the bank does

Revenue Rounds editorial

Which dates explain a change in payroll cost before cash leaves the bank?

Start with the source and period

Start with the payroll register for the pay period, approved time records and the bank’s settlement dates. Separate when work happened, when payroll was processed and when the payment cleared. Those dates answer different questions. A current bank balance cannot establish the cost of work already performed.

A worked synthetic example

Synthetic example: September 1–15 includes 640 approved hours at an average resolved rate of $28, giving $17,920 of direct hourly labor. The preceding comparable period includes 600 hours at the same rate, or $16,800. The $1,120 increase comes from 40 additional hours. If the bank debit clears on September 18, reviewing cash on September 16 will miss that payment. Employer taxes, benefits and salaried allocations are excluded from this example.

Review steps

1. Match the payroll period and timezone to the hours being reviewed. Do not compare one fortnight with an entire calendar month.
2. Check overtime, missing rates, leave and salary treatment. Ask payroll to explain the change in hours and rates separately.
3. Compare activity over the same working period using suitable source records. Higher activity does not by itself prove that the additional hours were necessary or unnecessary.
4. Have the practice manager and bookkeeper record the expected cash date and the owner of any unexplained variance.

Limits to keep visible

Revenue Rounds labor views need suitable source data and resolved pay rates. They do not promise bank-debit forecasting or payroll approval. Native Gusto is gated in the current interface; confirm the supported input path before relying on payroll coverage. Compare any product total with the payroll register before treating it as a complete employer-cost figure.

Bring this to the next review

Bring one reporting period, its payroll register and the unresolved question to your next review. Recheck after the expected payment date; a timing explanation should become observable rather than remain an assumption.

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