Reading and using your reports¶

A payroll report is only useful if you actually read it and act on it. The good news is you do not need to be an accountant to get value from one. With a few simple habits you can check your figures look right, notice when something has changed, and use the numbers to plan the money you will need. This lesson pulls the module together into a practical routine.

Why this matters¶

Payroll is usually one of the biggest costs a small business has. If you never look at the reports, you are running that cost blind — you can be surprised on pay day, caught short on your tax, or slow to notice a mistake. A quick, regular look at your reports turns them from paperwork into a tool for running the business.

What you will learn¶

• How to sanity-check the totals on a report
• How to compare periods and spot a pay that looks wrong
• How to use the figures to plan your cash

Understanding the concept¶

There are three simple things to do with a payroll report.

1. Sanity-check the totals. Before you trust a number, ask whether it looks about right. If you have three staff on similar pay, does the total gross look like roughly three normal pays? Does the tax withheld look like a sensible slice of the gross, not almost nothing and not almost all of it? You are not doing precise maths — you are checking nothing is wildly off.

2. Compare periods. A single number in isolation is hard to judge. The trick is to compare — this fortnight against last fortnight, or this quarter against the one before. When you compare, an outlier stands out: a pay that is much higher or much lower than usual. An outlier is not always a mistake (someone might have worked overtime, or been on unpaid leave), but it is always worth a second look. If you cannot explain why a figure jumped, that is your cue to check the underlying pay.

3. Use the figures to plan cash. Payroll reports tell you the money you will need, and when. Three amounts matter most: the net pay you must have in the bank on pay day, the tax withheld you will need to pass on to the ATO, and the super you must pay to your employees' funds. Seeing those numbers ahead of time means you can set the money aside rather than scramble for it.

Example¶

Deepak runs a small business and looks at his payroll report every fortnight. This fortnight the total gross is noticeably higher than last time. He compares the two periods and sees one employee's pay is the outlier. He checks and remembers that employee worked a block of overtime — so the higher figure is correct, not an error. While he has the report open, Deepak notes the net pay he needs in the bank for pay day, sets aside the tax withheld ready for the ATO, and puts the super amount aside for the funds. Ten minutes with the report and he knows both that his figures are sound and what cash he needs.

Common mistakes¶

• Looking at a report but never comparing it to another period, so changes go unnoticed.
• Treating every outlier as an error, or treating none of them as errors — each one just deserves a quick check.
• Planning only for net pay and forgetting the tax and super you also have to pay out.
• Filing reports away without ever reading them — the value is in acting on them.

How this works in myaccountant¶

Key points¶

• A report is only useful if you read it and act on it.
• Sanity-check the totals — ask whether each number looks about right.
• Compare this period to the last to make changes and outliers stand out.
• An outlier is not always an error, but it is always worth a second look.
• Use the figures to plan cash for net pay, tax withheld and super.
• A short, regular review turns payroll reports into a business tool.

Learn next¶

• Payroll reports for your business
• Year-to-date figures and reconciliation
• The pay run report

General information only — not tax, super or financial advice.