Payroll
Variable pay owed and variable pay paid are different numbers, and most companies hold only one.
The one they hold is whatever was paid. What was earned but not yet settled lives in a spreadsheet, and what had to be clawed back after a deal reversed lives in somebody's memory and an apologetic email.
The shape
An accrual is owed. Settling it is a separate act.
Incentive plans carry participants and produce accruals as the thing that triggers them happens. An accrual is what is owed — it is not a payment, and keeping those separate is what makes the liability visible before it is discharged.
Settlement goes one of two ways: through a payroll run, or through a manual payout queue for the things that are genuinely paid outside payroll, with the external reference recorded against it.
- Quarterly incentive · Q2Through payrollsettles inside the next run
- Referral bountyManual payout queuepaid outside payroll, reference recorded
- Quarterly incentive · Q1Through payrollalready settled
- Clawback on a reversed dealReversalpoints at the accrual it undoes
- A reversal points at what it undoes —
Rather than editing the original away. Variable pay that has to come back is the case every scheme eventually meets.
- Plans can be tried before they are used —
See what a scheme would pay before anybody is enrolled in it.
- Statutory bonus is its own run —
With the parameters it was computed under snapshotted at creation, so re-reading last year's run does not silently apply this year's rules.
- Recomputable —
A bonus run can be recomputed before approval, which is what lets a late correction be a correction rather than a manual adjustment.
Where it connects
The same machinery pays a recruiter's commission.
A recruitment business paying commission on placements and a company paying a quarterly incentive are the same problem: something is earned, it is owed for a while, and occasionally it has to be reversed.
So it is the same mechanism. A recruiter's own commission book — earned, pending, paid, with what produced each figure — is this, viewed from their side.
What finance asks
Mostly about the money that has not moved yet.
›Can we see what is owed but not yet paid?
Yes — that is what an accrual is. It exists as a liability before anything settles it, which is the number most companies cannot produce.
›What happens when something has to be clawed back?
A reversal is created that points at the accrual it undoes. The original is not edited away, so the history of what was paid and why stays readable.
›Can something be paid outside payroll?
Yes — the manual payout queue exists for exactly that, with a reference recorded so the settlement is evidenced rather than assumed.
›Can we model a scheme before rolling it out?
You can dry-run a plan to see what it would pay. Designing incentive schemes without that is how companies discover the edge case in month three.
›Does statutory bonus use this year's rules on last year's run?
No. A run snapshots its parameters when it is created, so re-reading an old run shows what was actually applied.
Book a demo
Accrue something and reverse it.
The last step is the one every scheme needs and most spreadsheets fake.
- Dry-run a plan before enrolling anybody
- Create an accrual and find it as a liability
- Settle one through payroll and one through the manual queue
- Reverse one and follow what it points at