4 Things That Go Wrong in a Payroll Department without HRMS

A payroll department is often seen as critical by employees. If you do not pay someone properly, nothing else matters. If you don’t have HRMS payroll software, you’re missing an opportunity to improve your payroll operations. As well as missing an opportunity to improve, your payroll department is setting itself up for a fall. Here are some scenarios which demonstrate the importance of HRMS to the payroll department.

No HRMS Equals No Centralized Database

Often, factors that relate to pay are found in other systems. While some of these such as time & attendance may integrate with payroll, other systems probably won’t. For example, if an employee passes a course, there can be an additional bonus or pay increase. If you do not have learning management tasks integrated with HRMS payroll the risk increases that this pay element will be missed by your payroll department.

Without an HRMS, Managers Are Left in the Dark

Today’s generation of HRMS offer managers access to employee job details as well as providing organization charts universally throughout the company. Stand-alone payroll systems often do not have such options for transparency as their focus is solely to calculate and generate pay. We all shudder when we hear about the employee who was accidentally paid for years due to a clerical error of getting set up in the payroll system and then not starting the job. HRMS payroll helps you to avoid such errors by giving managers access to the data which will help to improve accuracy and integrity of payroll processes.

Data for Reporting and Audits Will Go Missing

As payroll systems are usually covered under SOX auditing, the payroll department often has their own policies and procedures in place to pay a person. But a payroll system doesn’t always have the additional data elements found in an HRMS which can prove helpful in an audit situation. Additional payroll data is also crucial when sending reports onward from payroll to a receiving system, such as financial systems.

International Growth Will Meet Resistance

Few payroll systems are truly global in nature. Historically, certain products have prevailed in different countries due to a variety of reasons such as tax complexity and local use. What if you want an overall headcount? Without HRMS payroll your only chance is to contact multiple payroll systems and hope that it can be delivered in a standard format that will be useable. Long term, it’s not an operational model that can thrive due to the effort and time required to complete basic tasks.

Payroll systems and HRMS payroll both have their strong points and there can be a need for them to co-exist. If you only have the payroll piece of the puzzle, you’re missing out on an opportunity to do more and to better support your payroll operations.

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Heather Batyski

About the author…

Heather is an experienced HRMS analyst, consultant and manager. Having worked for companies such as Deloitte, Franklin Templeton and Oracle, Heather has first-hand experience of many HRMS solutions including Peoplesoft and Workday.

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Heather Batyski