TL;DR
- Map engagement models (PAYE/Umbrella/Outside IR35/CIS) with documented checks.
- Run to a published calendar with approvals, remittances and reconciliation packs.
- Keep a searchable audit trail: RTW, assignments, PO references and decision logs.
Start with engagement mapping
Create a register for every worker/assignment with model, SDS/verification, RTW & assignment details and client references (PO, project code, cost centre).
Publish a payroll calendar
- Cut-offs: timesheets/expenses due; approval deadlines.
- Run & pay dates: weekly/fortnightly/monthly.
- Exception windows: how disputes are handled and when they roll.
Approvals that stand up to audit
- Named approvers per worker/cost centre with escalation rules.
- System evidence attached to each payment event.
- Change control for rate/role/scope with dates and approvers.
IR35 & CIS essentials
- IR35: keep SDS and reasoning; ensure payment routes match determinations; retain confirmations.
- CIS: verify subcontractors; correct deductions; issue monthly CIS statements; reconcile to HMRC returns.
Remittances & invoicing finance will love
- Consolidated invoices with PO refs, project codes, dates worked and VAT positions.
- Remittance advice with line-item clarity for fast reconciliation.
- Dispute handling with documented timeline and corrections process.
Reconciliation pack (every run)
- Pre-run check: headcount × rate × hours = expected total.
- Post-run report: actuals vs expected; variance notes; corrections queued.
- Liability summary: PAYE/CIS totals; payment confirmations.
- Sign-off: finance/ops approval timestamps.
Data protection & retention
- Least-privilege access to payroll data and documents.
- Retention schedules for what is stored, where and how long.
- Secure transmission (prefer portals over email spreadsheets).
Common pitfalls
- Status decisions undocumented → IR35 risk.
- No single source of truth → arguments at month end.
- Approvals in inboxes → impossible audits later.
- Remittances without PO/codes → finance can’t match payments quickly.
Procurement-ready checklist
- Engagement register + SDS/verification evidence
- Payroll calendar (cut-offs, run/pay dates)
- Approval workflow map + escalation rules
- Sample remittance + consolidated invoice
- Last run’s reconciliation pack (pre/post/variance)
- Data protection & retention statement
