Why deductions go wrong
- A new loan was approved after the payroll list was sent.
- Someone left, changed job or went on unpaid leave, and their deduction was missed or taken in full.
- A salary change meant there was not enough pay to cover the instalment.
- A typing mistake, a missed row or a cut-off date passed before the list arrived.
- Payroll deducted correctly, but the money was recorded against the wrong loan.
The monthly routine
- Produce the expected deductions: for each person with a loan, the instalment due this cycle. This is the list payroll should work from.
- Send it to payroll before their cut-off, with the cycle it covers.
- After payroll runs, get the actual deductions from the payroll system, in a file you can compare line by line.
- Compare the two, person by person. Anything that does not match falls into one of three groups: missed (nothing was deducted), short (less than due), or extra (more than due).
- Find the reason for each difference. A leaver, an unpaid-leave month and a data error all need different follow-up.
- Record what happens next: collect the shortfall in the next cycle, ask payroll to correct an error, or follow up with the borrower.
- Report the month: how much was due, how much came in, and what is outstanding.
Make it a habit
- Do it on the same day each month, soon after payroll closes, while the facts are fresh.
- Give it one owner, and a named backup.
- Keep the expected and actual files together, so you can answer a question from an auditor or a borrower later.
- Treat a shortfall as information, not blame. Most are process problems.
What to watch for
A month with no deductions at all is the clearest warning: payday passed and the list never reached payroll, or the file never came back. Check for that first, before you look at individual lines.