Payroll Audit & Troubleshooting

Updated on 12 Jul 2024
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This article reviews auditing R365 Payroll and troubleshooting discrepancies.

Payroll Audit Overview

A full Payroll Audit will confirm that all areas of R365 are configured properly for payroll purposes and will assist in tracking down the causes of discrepancies.

A Note About Rounding

While auditing and reviewing reports related to payroll, be mindful of the system that calculated the report. Often, different systems round partial minutes and percentages differently. This can result is small discrepancies in earning, deduction, and tax amounts.

Typically, discrepancies of less than 10 cents are caused by differences in rounding.

Audit and Review Descriptions

Audit/Review	Description	Data Reviewed	Discrepancy Troubleshooting
POS Data Audit	The POS Data Audit compares POS punch and pay rate information to the punch and pay rate information in R365. This audit is done first, as punch and pay rate information from the POS is one of the main sources of earnings information used for payroll.	Employee Names Punch Dates Punch Times Jobs Pay Rates Regular Hours OT Hours Total Hours Regular Earnings Overtime Earnings Tips	Inaccurate calculations by the POS Incorrect POS settings Incorrect R365 settings for a Location Incorrect R365 Overtime Rule settings Missing or duplicated Employee Records Edits to Punches or Tips made in R365 after POS data is polled
R365 Employee Record Audit	The R365 Employee Record Audit compares the list of employees expected for payroll to the list of employees onboarded for payroll in R365.	Employee Names Payroll Status Primary Location Jobs Employment Status (Active, Leave, Terminated)	Missing or duplicate Employee Records Incorrect work Locations Incorrect Jobs Employees who have not been fully Onboarded to Payroll Employees with the incorrect Employment Status
Benefits and Deductions Review	The Benefits and Deductions Review reviews the list of configured deductions per employee.	Employee Names Deduction Names Deduction Amounts Contribution Amounts	Incorrect Deduction configurations on Employee Records
Gross to Net Calculation Audit	The Gross to Net Calculation Audit reviews the calculated earnings, deductions, and taxes within Workforce. During onboarding, this audit is often compared with the payroll register from an existing payroll system to confirm calculations in R365 before go-live. It is recommended that this review be performed for each payroll batch prior to approval.	Employee Name Primary Location Regular Hours Overtime Hours Double Overtime Hours Earning Amounts per Earning Gross Pay Deductions Total Tax Net Pay	Missing or duplicate Employees Incorrect Earnings Incorrect Deductions Incorrect Taxes Incorrect ER Contributions

Areas and Configurations for Troubleshooting Discrepancies

The following areas and configurations within R365 will impact earning, deduction, and tax amounts after POS data has been polled in. Issues found in the data provided by the POS must be fixed in the POS before data is polled.

Discrepancy	Area/Setting	Impacts to Payroll
Overtime Hours or Earnings	Fiscal Calendar: Operational Calendar	The operational calendar for a location determines the first day of the week. The first day of the week is used for overtime calculations.
Missing Employee Tax Location	System Preferences: Employee Master	The Employee Master setting should be set to 'R365'. This ensures that employee information such as address, name, hire date, and so on that was updated in R365 is not overwritten nightly by POS data.
Tax Location	Payroll Location: Address	The address for each payroll location is used to determine required taxes.
Overtime Hours or Earnings	Location Record: Overtime Tracking	When overtime tracking is set to 'R365', overtime is calculated in R365 using R365 overtime rules. Overtime calculations provided by the POS are not used.
Punch Date or Time Regular Hours Overtime Hours	Location Record: Punch Edits	When punch edits are enabled in R365, changes to punches made in the POS after the DSS is polled will not be imported. Punch edits must be maintained in R365.
Penalty Earnings Overtime Hours Overtime Earnings	Labor Admin: Labor Rules OT Rules Break Penalties Shift Differential Spread of Hours Tip Makeup	When labor rules are configured, additional earnings will be calculated and automatically added. These earnings will not appear in POS reports.
Overtime Hours Overtime Locations Punch Date	Operations Admin: Start of Day Time	Overtime calculations use business days to determine the hours worked by an employee in a business day. By default, business days in R365 start at 12:00 am. Start of Day settings determine the start time for a location's business day. It is recommended to align a location's Start of Day Time to the POS End of Day Time.
Punch Date or Time Regular Hours Overtime Hours	DSS Punch Edits	When enabled, punches must be edited directly in R365. Edits made to punches in R365 are not reflected in reports from the POS.
Regular Earnings Overtime Earnings Penalty Earnings	DSS Pay Rate Edits	When enabled, pay rates can be edited per punch in R365. Changes to pay rates are not reflected in reports from the POS.
Tips	DSS Tip Import	Tips can be redistributed via import in R365. Tips re-distributed in R365 are not reflected in reports from the POS.
Tips	Tip Automation	Tips can be redistributed via Tip Automation. Tips re-distributed in R365 are not reflected in reports from the POS.
Earnings	Adding and Editing Earnings	Earnings can be added or edited directly in Workforce. Edits made to earnings will not appear on POS or DSS reports.
Earnings Deductions Taxes	One Time Payments	One-time payments can be used to add earnings or deductions in Workforce. One-time payments will not appear on POS or DSS reports.
PTO Earnings	Labor Admin: PTO Accruals	PTO Accruals allows for managing employee PTO balances in Workforce. Balances can be viewed on the Time Off tab of Employee records. Approved time off requests will add PTO earnings to the DSS. If PTO Accruals is not enabled, the legacy PTO Policy is used to configure paid time off within Workforce and automatically add PTO earnings to pay cycle payroll batches. These earnings will not appear on POS or DSS reports.
Taxes	Workforce: Unemployment Rate	A payroll location's unemployment rate is used when calculating taxes.
Payroll Batch Date Range	Workforce: Pay Cycle Setting	A payroll location's pay cycle is used to determine the date range of each pay cycle payroll batch.
Tax Location	Employee Record: Employee Address	The home address for each employee is used to determine the required taxes for that employee.
Tax Location	Employee Record: Primary Location	The primary location for an employee is used to determine the required taxes for an employee's work location.
Salary Earnings	Employee Record: Salary Jobs & Pay Rates	The jobs and pay rates of salaried employees are used to automatically populate salary earnings per pay cycle payroll batch. Salary earnings will not appear on POS or DSS reports.
Deductions	Employee Record: Deductions	The employee-specific benefits and deductions configurations are used to calculate deductions per payroll batch.
Missing Employee	Employee Record: Payroll Status	Only employees who have been fully onboarded to Payroll will be included in payroll batches.
Missing Employee	Employee Record: Employment Status	Only active employees will be included in payroll batches. Employees with the status of 'Leave' or 'Terminated' will not be included.
Missing Employee Duplicate Employee	Employee Record: Integrations	POS Employee records are linked to Employee records to connect the Employee record to employee-specific POS data. Incorrectly matched POS Records and incorrectly merged Employee records can result in missing employees. Employees with multiple POS Records will appear as duplicates and will need to be merged.

POS Data Audit: Step-By-Step

The POS Data Audit compares POS punch and pay rate information to the punch and pay rate information in R365.
This audit is done first, as punch and pay rate information from the POS is one of the main sources of earnings information used for Payroll.

Select a data range to compare.
R365 recommends comparing all dates within a single full pay period.
From the POS: Run a punch report for the selected date range that shows all punches, pay rates, hours, and tips.
From Workforce: Run the Workforce Preview Report with the following report settings:
- Start Date and End Date - Set to the selected date range for the pay period.
- Pay Frequency - All Employees.
Compare the following key fields for each employee and punch:
- Employee Name
- Punch Dates
- Punch Times
- Jobs
- Pay Rates
- Regular Hours
- OT Hours
- Total Hours
- Regular Earnings
- Overtime Earnings
- Tips
Troubleshoot discrepancies.

Employee Record Audit: Step-By-Step

The R365 Employee Record Audit compares the list of employees expected for payroll to the list of employees onboarded for payroll in R365.

Compile a full list of employees expected from Payroll.
The punch report generated from the POS can be used as a basis for this full list of expected employees. Salaried employees and employees who otherwise do not punch in through the POS will need to be added from another source.
From Workforce: Download the Employee Census Report with the following settings:
- Employee Status - Active.
- As of Date - First date of the pay period being audited.
Compare reports and confirm all expected employees are listed on the Employee Census:
- Employee Names
- Payroll Status
- Primary Location
- Jobs
- Employment Status (Active, Leave, Terminated)
Troubleshoot discrepancies.

Benefits and Deductions Review: Step-By-Step

The Benefits and Deductions Review reviews the list of configured deductions per employee.

From Workforce: Download the Benefits and Deductions Report with the following settings:
- Start Date - First day of the pay period being audited.
- End Date - Last day of the pay period being audited.
Confirm the following key fields:
- Employee Name
- Deduction Type
- Employee Deductions
- Employer Contributions
Troubleshoot discrepancies.

Gross to Net Calculation Audit: Step-By-Step

The Gross to Net Calculation Audit reviews the calculated earnings, deductions, and taxes in Workforce. During onboarding, this audit is often compared with the payroll register from an existing payroll system to confirm calculations in R365 before go-live.

Perform this review for each payroll batch prior to approval.

Select a pay period to audit.
From Workforce: Run the Payroll By Pay Period Report for the selected pay period.
If completing a parallel audit prior to go-live, run a Payroll Register Report for the selected pay period in the existing payroll system.
Review the following key fields:
- Employee Name
- Primary Location
- Regular Hours
- Overtime Hours
- Double Overtime Hours
- Earning Amounts per Earning
- Gross Pay
- Deductions
- Total Tax
- Net Pay
Troubleshoot discrepancies before approving the associated payroll batch.

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What's Next

Payroll Corrections Guide

Table of contents

Payroll Audit Overview
POS Data Audit: Step-By-Step
Employee Record Audit: Step-By-Step
Benefits and Deductions Review: Step-By-Step
Gross to Net Calculation Audit: Step-By-Step