Variance Analysis is conducted to assess the difference between the two figures. In Payroll, we compare the components and the previous month values to the current month. Effective variance analysis can help identify the accuracy of payroll processing, Moderate fraudulent activities on the payroll, identify any change or command requested by the client as well as identify system regulated or unregulated changes.
To complete a variance, you will need to have the following basic foundations in place:
Navigate to the reports screen – Component Variance Report
Selecting the Parameters required:
Parameters |
Explanation |
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The are 8 formats available on Payspace, ensure your select to extract the report in Excel (.xlsx or .xls)
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This is optional, you can select for the report to be emailed to you by ticking the allocated box, by default this will extract the report.
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By electing this option, this report will be automatically linked to your scheduled reports.
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Runs_ Compare the multiple payrolls runs for a selected Period. Monthly_ Compares Total Monthly figures for a selected period. YTD_ Compares the previous months YTD figures against current month YTD figures.
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select a start date: |
Select the previous month – start date 1st |
select an end date |
Select current month – End date 31st |
tick here if you want to view this report in the employee’s home currency: |
If the company is set up in multiple currency, select home currency to check the payroll. |
tick here if you want to view this report without formatting: |
By selecting this option, the org unit and department categories fall away. |
Select Difference – so you can account for the difference in values between the selected period.
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This by default should be left unticked, the reports will then populate all components including components with no changes for the month. By Ticking this, the report will only show components that have differences for the month. |
exclude organizational unit grouping? |
This refers to grouping of companies – this option should always be ticked as we check payroll per frequency. |
Organization Levels:
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By default, you should select “All levels”, however if you are conducting specific checks for variance differences on Cost centre or department etc, then you would use this option to further breakdown the parameters of the report. |
Organisation Unit:
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By electing this, use can narrow down on specific org units requiring variance validation. |
components:
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By default, the reports select all components, however you can select the components you wish to validate to narrow the parameter search. |
payslip actions:
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By default, the reports select all components, however you can select the components you wish to validate to narrow the parameter search. |
position:
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By default, the reports select all positions, however you can select the Job titles you wish to validate to narrow the parameter search. |
report fields: |
By selecting data from the report fields this will be added to each person line for the variance. Standard Selection Criteria should include: Join date & Termination date. |
Many times, people copy the additional reports and input sheets into the variance report, not considering the links from one workbook to another. This may result in error reads or a corrupt report.
To rectify this error, ensure that when you copy and paste the sheets you paste them as values. And all data you are referencing is in the Variance Analysis booklet.
2. Naming the tabs
During the variance you will have multiple source documents included – remember to name your tabs, this helps identify where you are pulling the information from.
3. Label the Headings.
As you progress in the variance, there will be a lot of back and forth, so naming the heading ensures there is a clear indication of what information is being held in a particular column.
4. Version Control
Often client sends additional information or input after the prelims and this requires additional checks. This should be checked using version control.
Variance -1st checks
Variance – 2nd Check -Amendment Run
Variance –3rd Check – Final Check
5. Deleting the Totals Per Component
When you pull a variance report, an additional report pulls through on a second tab, this refers to the difference in totals from one month to the next. This should not be removed; its purpose helps sign off the recurring values or components that have no changes for the month.
Timing is critical to ensuring we have a structured approach to how this should be tackled is important. Below is a suggested list:
Once all the tabs are copied over into the Variance Booklet, complete the following checks: