Table of contents
When it comes to your employee payroll and attendance, it can sometimes feel like two separate worlds. Many organizations are stuck with systems that work in a disjointed, disconnected way, which only complicates or does not improve the overall process – and ultimately wastes time and money. The good news is there are solutions that allow for a coordinated approach to payroll and attendance to alleviate all these headaches, while saving time and money.
Integrating these two key business functions results in a seamless process that benefits everyone: Your HR team spends less time on manual entering data. Your employees are paid correctly and on time. Your business operates overall more effectively.
What Does Payroll and Attendance Integration Mean?
Payroll and attendance integration is the connection to your payroll processing system to a time tracking system. Rather than manually transferring data from one program to the other, the data passes seamlessly from the time tracking system to the payroll processing system.
Think of it also as combining two rivers and following one stream. When the employee clocks into and out of the attendance system, their data automatically flows to your payroll system; the payroll system calculates wages, deductions, and taxes based on actual hours worked.
This connection also eliminates any manual data entry that may be involved. Even more importantly, it eliminates the human factor of transferring the information manually which generally always includes errors.
Why Integration Matters for Your Business
Operating two separate payroll and attendance systems means you are adding unneeded work. First, your Human Resources team exports data from attendance, formats the data in the appropriate headers, and then imports the data into the payroll system. This step of importing and formatting consumes time and is prone to errors.
Manual processes also lengthen your payroll cycle. If anyone has misplaced data, you may need to reprocess payroll fully. This process will obviously delay payday, which is frustrating for your employees.
Integration addresses manual processes by automating the movement of data and removing the human aspects. Your attendance data goes directly into the payroll calculations, eliminating all human intervention. As a result, the entire process will complete faster and with greater accuracy.
Key Benefits of Integrated Systems
Time Savings
Integrated systems can save organizations a lot of time every payroll period. When your HR team no longer has to manually re-enter data and take hours each pay period to move information from one system to another, they can spend their time on more value added activities. You multiply that time savings by the number of payroll cycles in a year.
Better Accuracy in Calculations
Manual data entry leaves room for typing errors and errors in calculations. When systems can communicate with one another automatically, these human errors are removed altogether. Your employees get paid the amount they earned based on the actual time worked.
Real-Time Information Access
Through integration, you have real-time access to active payroll and attendance records. You can see overtime patterns as they occur. You can see in real-time when there are attendance issues before they become bigger attendance issues. Real-time visibility allows you to make smarter business choices.
Simplified Compliance Reporting
Integrated systems make labor law compliance management so easy. The software tracks overtime hours, breaks and any other compliance requirements automatically. When it time for audits, you have all the documentation in one place.
Cost Reduction Over Time
Sure, integration is an upfront investment, but it has a quick payback time. You save money through savings in HR processing time. You also save costs from payroll mistakes, which can cost money related to penalties, and there can be costs associated with employee disputes as well. The ongoing savings frequently exceed any start-up costs.
How Integration Works in Practice
The integration process uses your attendance system to collect employee time data. This includes when employees clock-in, clock-out, their break periods, overtime hours, and vacation time, sick days, and any other type of leave.
The attendance information automatically flows into the payroll system. The payroll software can use this information to determine gross pay if employees are hourly or on a salary. The payroll system also uses the information from the attendance system to correctly apply the overtime rates for employees who work more than normal hours.
The payroll software tracks the deductions automatically. The payroll software applies the current federal and state tax rates correctly. It takes health insurance premiums and voluntary deductions, such as retirement contributions and processes them without anyone having to lift a finger.
Choosing the Right Integration Solution
Integration solutions are certainly not all created equal. In some cases, an integration can be an expensive and time-consuming custom development project using a formal or even informal pull of user interfaces from multiple software platforms to fill the gaps. Other solutions simply offer built-in connections between the software platforms used, and the connections work after you click set up. Ideally, the integration solution you choose will offer the ability to know when something is wrong with your integration and will have some of the following characteristics:
Consider cloud-based systems that automatically manage the integration. Not to mention, cloud systems have historically proved to be more reliable than on-premise software, and also receive regular updates that contribute to functionality and security. You want to ensure that the integration solution can accommodate your specific business requirements. If you have multiple locations you will expect to track employee attendance, how would that work? If you have multiple employees with different pay rates related to their roles the integration solution should accommodate your various pay rates.
Real-time data synchronization. Once you add or change attendance data and it has synced in the payroll system, the payroll user should be able to see the changes immediately. Real-time synchronization utilizes an event driven data synchronization. The relevant built-in connections within the solution keep you out of trouble and keeps your information current.
Read Also: AI and the Future of Payroll Automation
Measuring Integration Success
Use certain metrics to measure the effectiveness of the integration. Keep an eye on how much time your HR team spends on each payroll cycle. That time should be considerably less after the integration.
Be vigilant with payroll error rates. An integrated system should have virtually eliminated mathematical errors and errors due to data entry. If you are still having errors regularly, analyze if more training or system changes are necessary.
Solicit feedback from your employees on their satisfaction level with the new systems. They should feel that it is easier to track hours and understand their pay calculations. Happy employees are usually a good sign of successful integration.
The Future of Payroll and Attendance Integration
Integrating software solutions is continuously easier and more impactful due to technological advancements. Employees now use apps to clock in, on whatever mobile phone they want to use at whatever time. For payroll, artificial intelligence can identify unusual patterns in employee attendance that could signify an issue.
These developments will enhance the value of integration. What begins as a connection to link payroll and attendance systems can become a functional HR platform that includes recruiting and retirement planning. Wise businesses understand that integration isn’t simply a link between two software solutions. Integration is where you’ll find a better process that allows time for innovation and employee performance.
