Everyone in business today knows the value of efficient processes and systems. Duplication of efforts hits the bottom line hard, making good processes an important part of business success. Payroll is a perfect example of a good system to target for efficiency with integration.
What Is an Integrated Payroll System?
Employees responsible for human resources and payroll often deal with the same information, such as employee identification information, employee salary information, and employee status. Two separate departments gathering, storing, and using the same information independently makes for duplication of efforts, possibility for human error, and more liability because of the sensitive nature of employee information. An integrated payroll system is one that allows both human resources and payroll staff to access the same information without duplicate paperwork or files, creating efficiencies that save time and money and reduce liability.
Reduction in Costs
One of the obvious benefits of integrating payroll with related systems is a reduction in administrative costs. When duplication of paperwork, data, and efforts is eliminated, your company is saving money on salaries, supplies, and system resources such as storage space.
Accessibility and Efficiency
But a bigger benefit of integrated payroll is the jump in accessibility and efficiency. When the payroll files are locked up in a payroll department across the building or on a different floor, human resources staff who may need to get something out of the file have to plan to either make a call or make a trip to get to the files they need. Even if those files are electronic, that information may still need to be requested from the other department. An integrated system opens up the access to authorized staff from different departments that need to work with the same data.
Along with better access and efficiency, an integrated payroll system also comes with better management information. Quicker, easier access to accurate payroll information means better management reports for improved decision-making on costs and planning. Management reports from integrated payroll systems provide multiple formats of reporting. Comparisons of personnel costs with competitors and industry peers, or an eyeball on staffing expenses compared to revenues are easier to compile with reports formatted in an excel format.
When a company’s payroll system is integrated with their human resources information system (HRIS), data entered or changed in payroll is automatically updated in HR, and vice versa. It’s the same information. Employee new hires, raises and bonuses, terminations, and benefits are all related and integrated without the necessity of duplicate files. Electronic records are kept in an easy-to-access audit history and do not require the purging of data. The amount of work and room for error are greatly reduced while the quality and security of the information is improved.
What to Look for in a System
When you want to integrate your payroll and human resource systems, consider doing it with online payroll services. Entrepreneur senior writer Kim LaChance Shandrow recommends asking what services are offered, what the pricing structure is, how setup is handled, what the security infrastructure is, where the data center is, what accounting/HRIS systems they can integrate with, and what kind of customer and technical service is available. Also ask about employee self-service, which is a part of many online payroll services, allowing self-onboarding and lifetime employee accounts for access to pay details and W-2’s.
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