What are payroll integrations?

Businesses usually have a whole range of tools and software programs they use to manage their workforce. Since many of these tools collect and manage data that is needed for payroll or work with data that is generated by the payroll system, it makes sense to connect and sync the different applications to make internal workflows more efficient. 

But which systems and tools should be integrated with an organization’s payroll software? And what are the benefits of the different payroll software integrations?

Put simply, payroll integration means connecting payroll software to other tools and software applications to enable automated data exchanges and synchronization across systems. The most common workforce management software that integrates with payroll is a business’s HRIS, HRMS, or HCM system. But there are many other payroll software integrations that are available.

The purpose of payroll integration is to reduce the amount of manual work involved in payroll to a bare minimum by not only automating the payroll process itself but also the work that needs to be done before and after each payroll run. 

Payroll software can be integrated with many different software applications that are used by businesses on a daily basis. Integrations enable seamless workflows across the organization, which is why they are also an important criteria when choosing a payroll software. Different providers offer different payroll integration capabilities, but here are some common business software applications that integrate with payroll.

Time and attendance

Payroll software can carry out many processes automatically which would otherwise have to be handled manually; however, there are still many tasks in the different stages of processing payroll that need to be done manually. One of them is gathering and entering the necessary data on hours worked, overtime, PTO, and more into the payroll engine for the calculation of wages and salaries.

That’s where integrating the payroll software with time and attendance management comes into play. If both applications are synchronized with one another, payroll managers don’t have to worry about the tedious task of manually entering the number of hours worked by each employee during the respective pay period. Instead, the data is uploaded into the system automatically where it only has to be validated before starting the actual payroll process.

HRIS, HCM or HRMS

Regardless of whether a business uses an HRIS, HCM or HRMS, integrating the human resources system with the payroll software allows the organization to leverage numerous benefits, including: 

• No need to keep duplicate files since both systems will use a joined database centralizing all the information

• Improved employee experience if employees can access all their employment and payroll information via one integrated payroll system

• No more updating employee information in two systems since updated information will be synchronized across all systems

• Faster payroll setup for new hires since employee data will be added to the payroll system automatically once the employee is registered in the HRIS

• Improved data accuracy which leads to less payroll errors and happier employees

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Accounting

Payroll data is an important source of information for the Finance and Accounting departments. Not only do they need to record and track all the different payroll transactions, but they also rely on detailed payroll data to create financial reports, forecasts and projections.

Integrating the accounting software with the payroll system eliminates the need to extract data from one system and add it to the other manually. It also ensures that Accounting and Finance always have the latest data at their fingertips.

Expense reporting

It’s not unusual for employees to incur expenses in their work, for which they have to be reimbursed with the next payroll run. Expense reimbursements are an additional payroll component that needs to be managed manually; unless the business uses payroll integration to connect the expense management software with its payroll system.

Integrating the two systems allows information on employee expenses from the last pay period (mileage, entertaining clients, supplies, and more) to be fed into the payroll database automatically. This way, the organization can ensure all recorded expenses are taken into account in the next payroll run.

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