R365 Payroll Process Overview

This article provides an overview of the steps to complete a standard pay run in R365 Payroll, including reviewing and approving associated journal entries. It is intended for payroll administrators and accounting managers responsible for processing regular payroll. For payments outside the standard schedule, see Off-Cycle Pay Runs.

Prerequisites

Before running payroll, the following setup must be complete:

Payroll company is configured in Payroll Admin
Payroll calendar is set up with pay periods and pay dates
Employees are onboarded to payroll
GL account mapping is complete for payroll accounts

Payroll Process Steps

Phase 1 — Prepare the Pay Run

Pay Run is created — either automatically at the end of the pay period or manually via Off-Cycle Pay Runs.
Salary earnings are automatically added to the Pay Run.
Hourly earnings are reviewed on the Daily Sales Summary (DSS) and verified using the Payroll Preview Report.
Punches are adjusted in R365 or in the POS, if needed.
DSS is approved. Hourly earnings are automatically imported into the Pay Run and an Estimated Labor Journal Entry is created.
Additional earnings not captured by the DSS — such as bonuses or tips — are added via One-Time Payments or a Payments Import at any point before approval.

Phase 2 — Calculate and Approve

Pay Run is calculated and reviewed for accuracy.

Approving a Pay Run is irreversible.
Once approved, a Pay Run cannot be unapproved, no further changes can be made, and funds will be disbursed automatically. Payroll must be complete and accurate for all employees before proceeding.

Pay Run is approved.

Approval deadline

Pay runs must be approved before 11:00 am MT two days prior to the selected pay date to allow adequate time for processing and fund transfers. Funding for pay runs will be withdrawn from the funding bank account two days prior to the selected pay date.

All pay dates must be at least two business days after the pay period end date, unless a one-business-day submission schedule has been approved.

To avoid delays and potential issues with payroll disbursement, ensure that funds are available in the funding bank account on file before submitting payroll.

Example
A pay run with a Friday pay date must be approved before 11:00am MT on Wednesday.
Funding for the pay run will be pulled from the funding account on file on that Wednesday.
If the funding transaction cannot be processed due to insufficient funds, payments to employees cannot be processed and the pay date will be delayed.

Phase 3 — Paycheck Run and Journal Entries

Paycheck Run and Payroll Journal Entry are created automatically.
Physical paychecks are printed, if applicable. Funding Journal Entries are created automatically.
Payroll Journal Entry is reviewed and approved.
Funding Journal Entries are reviewed and approved. Funding Journal Entries are also found in Accounting > General Ledger. The pay run process is complete.

Multi-location payroll (Beta)
For organizations with employees working across multiple locations, paycheck runs and journal entries are grouped based on the payroll clearing setting — Per Location, Per Legal Entity, or Per Common Payer.
This feature is in beta; contact your CSM to learn more. See Payroll Companies and Payroll Clearing Settings for full details.

Pay run workflow

Journal entries

Setup and reporting