Reviews
Part of Making sense of organization plans: who does the work, who decides, what the team cannot do
Organization plans checklist: four reconciliation passes
Organization plans checklist in four passes: reconcile the team chart with payroll, load the wages, check hours and status, confirm the documents.
This organization plans checklist is for the money side of a drafted team section. It reconciles the chart with the payroll schedule and the financial model, and its output is a short column of items you could not confirm.
What to take away
- Every box on the chart has a payroll line behind it, or it is not a box.
- Confirm hours before anything else. A misstated hours figure invalidates the cost of the whole section.
- Mark an item not applicable rather than deleting it. A reader who expects something and finds silence assumes an omission.
- Anything left unconfirmed goes into the plan as an open item with a name and a date, or it comes out.
Pass one: the chart against the payroll schedule
Work with the draft, the payroll schedule and the operating agreement open together. Most of the failures below are disagreements between those three documents rather than faults in any one of them.
- Every named role appears in the payroll schedule, with the same start month.
- Every vacancy has a date and a cost, and both appear in the model.
- Anyone whose job is selling appears in the marketing budget as well as in payroll, at the same amount, and is not counted twice in the total.
- Head count at the end of the plan period matches the chart drawn for that point, not the chart drawn for today.
- The hours cover the shape of demand set out in the operations plan.
Chart vs payroll checks
- Named roles match payroll start month
- Vacancies have date and cost
- Wages carry employer costs on top
- Owner paid or deferral end-dated
- Contractors costed, not free capacity
- Sellers in marketing budget once
- End head count matches chart
A failure here is a model problem. Fix the model before you touch a sentence. How the chart itself is laid out is covered in the format guide.
Pass two: load the wages
A wage is not a salary. Wages carry employer payroll taxes and applicable insurance costs on top, and the model has to include them. Confirm the amounts with your payroll provider and insurer rather than estimating them.
Employer payroll taxes include the employer share of Social Security and Medicare tax and federal and state unemployment tax, and IRS Publication 15 (Employer's Tax Guide) explains them.
- The owner is paid something, or the deferral is shown with an end date and the business affording it from that date.
- Contractors appear as a cost in the projections, not as free capacity, and their rate reflects what you actually pay.
- Every wage in the model matches the wage in the payroll schedule, with the loading added once.
Pass three: hours and status change the cost
Hours and worker status decide what a role costs, so confirm them before any figure is called final. Every person's hours are stated: full time, part time, evenings, or a stated day of the week.
Anyone holding another job is described as holding it, with the date that ends if it ends.
Every role treated as exempt from overtime has been checked against the Fair Labor Standards Act tests, not assumed. Section 13(a)(1) of the FLSA exempts bona fide executive, administrative, professional and outside sales employees from both minimum wage and overtime pay. An employment adviser can assess how the rules apply to your situation.
Anyone classified as a contractor has been reviewed under applicable federal and state tests. Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.
The plan says who advised you rather than asserting the answer. Check any applicable state test as well, including an ABC test where state law uses one.
Pass four: the documents behind the numbers
Confirm each document exists as a file you could send tomorrow, and note the ones that do not.
Documents to produce on demand
- Operating or shareholder agreement
- Buy-sell or tie-break arrangement
- Employment agreements
- Contractor agreements and IP ownership
- Payroll register
- Individual licenses with expiry
- Insurance schedule
Number in the model / Document that proves it
- Wages and start months
- Payroll register, if trading, agreeing with the payroll schedule
- Terms the plan relies on
- Employment agreements
- Contractor cost
- Contractor agreements, including who owns work produced
- Cover for the roles
- Insurance schedule showing the cover the roles described require
- Licensed roles
- Named holder and expiry date
- Ownership percentages
- Signed, current operating agreement, matching the company description
You are not attaching all of these. You should be able to produce any of them the day after you send the plan.
Sign-off
Write three lines on your working copy and delete them before sending: the date the chart was last reconciled against payroll, the list of items still unconfirmed with a name against each, and the single person whose departure would do the most damage.
Reopen triggers and sign-off
- Sign-offReconcile date, unconfirmed items, key person
- Someone joins or leavesReopen the section
- License holder changesReopen the section
- Ownership changesReopen the section
- Planned hire slips a monthReopen the section
Reopen the section when somebody joins or leaves, when a license holder changes, when the ownership changes, or when a planned hire moves by more than a month. For help drafting the section, see the team guide.
Common questions
How is this different from reviewing the section?
A checklist confirms specific claims against documents you already hold. A review asks whether the structure is right at all. Do the checklist first, because it removes the errors that make a review pointless.
I am the only person in the business. Which items apply?
Hours, the roles you cover, the ones you are weakest at, what you outsource, the first hire and its trigger, and who could keep the business running for a month. Mark the rest not applicable and say so in a line.
Most of my items came back unconfirmed. What now?
Work them in order: payroll against the chart, then hours, then the agreements. The first two are arithmetic and take an evening. The third may need an appointment.
Should I include the checklist in the plan?
No. Keep it with your working copy. Its value is six months later, when it tells you which parts of the section were confirmed and which were simply written.
