Five reasons you should consider integrating payroll with your HRMS

Payroll does not function in isolation, especially technologically speaking. Getting your people paid on time depends on data from and links to your accounting software and time and attendance system. Then consider the overlap with benefits enrollment and management, plus using salary and tax data for cost reporting and HCM analytics. The need to connect with other business intelligence systems and HR modules is clear, and this is largely why payroll is increasingly integrated with other HRMS functions.

That said, let’s lay out the specific benefits of exploring the various HRMS integration opportunities for payroll:

Single data entry

This one may be obvious but it also has arguably the biggest impact. If everything is working from a single database – or at least, a combined database with shared access to data between systems on a sort of ‘exchange’ basis – then updates and changes are made once and once only, vastly reducing the likelihood of errors and mistakes later on.

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Less paperwork

Assuming you still have some paper processes, with your HR, accounting, and payroll information all in the same or combined database, you’ll be saving both time and trees. For example changes to benefits are automatically reflected in your HRMS’s payroll operation so there’s no need to set up a new deduction ‘by hand’.

Better quality reporting

As the importance of analytics continues to grow, the expectation of management and leadership is that sophisticated data-driven insights into the workforce will lead to yet more efficiencies and boosts to productivity. Unless the reporting software and number-crunchers can integrate payroll, a significant dataset will be missing from the output.

Saving time with smoother teamwork

Even if payroll is handled within the HR department, the likelihood is that the function is carried out by a separate dedicated team within the larger HR family. Again, if everybody is accessing the same database via the same system – your HRMS – then the odds of a payroll error are minimized; especially compared to the days when the information needed for a payroll run was handed over manually and then re-input.

Seamless accounting

Employee compensation might be your biggest expense but it’s still only one budget heading among many. The finance or accounts department take a bigger picture view of organizational finances and rely on accurate data from all teams, including HR and payroll. The right payroll software with the right API (application programming interface) will interface with the most common accounting software packages, such as QuickBooks or Xero.

Finally, when it comes to HRMS payroll integration, perhaps the most basic driver is that the majority of businesses are doing it, integrating payroll functionality with ERP, accounting, and other HR software. Possibly the most persuasive argument of all is, you don’t want to be left behind by your competitors.

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Dave Foxall

About the author…

Dave has worked as HR Manager for the Ministry of Justice for a number of years, he now writes on a broad range of topics including jazz music, and, of course, the HRMS software market.

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Dave Foxall