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5th December 2023

How To Leverage Payroll Integration for Business Success

Payroll is a business-critical function, yet it’s massively underestimated and often treated as something completely siloed.

However, more companies are realising the benefits of integrating payroll with other functions such as HR and time and attendance tracking. When managed properly, integrated payroll can have a significant impact on your business. For example, integrated payroll can help you:

●       Streamline processes.

●       Save money.

●       Decrease the need for admin-heavy tasks.

●       Reduce the chances of errors occurring.


What’s the problem with in-house payroll?

In-house payroll requires businesses to either complete their payroll tasks manually (through using a spreadsheet) or by implementing payroll software themselves. This can be time-consuming and lead to data breaches if documents aren’t password protected or paper files are left out. This can be manageable for a small company, but once you start to employ a larger number of people this can be hard to maintain.

In-house payroll comes with several pain points, including:

Incorrect data management

As there’s so much admin and manual data entry, it can make it hard to manage data effectively. This often results in incorrect employee details or holiday and sick days being recorded incorrectly.

Reduced security and GDPR

With strict GDPR policies, storing sensitive information including passwords and personal data on spreadsheets and physical paperwork may result in a fine, if you fall victim to a data breach. 

Decreased compliance

Due to its admin and time intensive nature, it's easier to make mistakes with in-house payroll, which can result in non-compliance issues, fines, penalties or even business closures.


In-house payroll vs integrated payroll

We already know that in-house payroll usually requires a form of manual data entry either on a system or spreadsheet. In terms of integrated payroll, it allows other systems or software such as HR and time and attendance tracking to be integrated with your payroll system. This stores everything in one place, giving you one central location for your payroll, HR and time tracking data and tasks.

While a lot of integrated software will still require admin heavy tasks and manual entry just like in-house payroll, outsourced software could be the way to go if you want to free up some of your time. When you outsource your software it means that the company you purchased it from will set up and manage your system for you, giving you the time to focus on more critical tasks.

Here at Payescape we offer both individual outsourced software and integrated outsourced software where we can combine your payroll, HR and time and attendance software for you. This can help you streamline processes, cut costs and reduce errors. 


The benefits of integrated payroll

More efficient processes overall

When all your systems are integrated, there are fewer data points to stay on top of, and everyone has access to the same data at any given moment.

This reduces the need to upload the same datasets to several different sheets, helping to remove duplicates that cause confusion and errors to be made. It also reduces the overall time spent on admin giving finance and HR teams time to focus on other areas like business strategies.

Improved employee retention

The reality is that bad payroll practices can cost you employees, and hiring new employees isn’t cheap. Continually making mistakes can have a massive impact on employee retention and attraction. One of the most basic things you need to get right is staff’s salaries. Getting these wrong, even if it’s just once, can significantly reduce satisfaction causing them to jump ship.

Compounding this with the fact that millennials are now the largest segment of the workforce, and are pushing for technological change in the workplace, it highlights the need to close down spreadsheets and fire up the software.

Reporting and data-driven decision making

When payroll is automated and integrated with other business functions, reports and dashboards can be consolidated from several data points. This makes it easier to pull accurate data and create custom reports.

Additionally, having quick access to employee information helps business leaders make fast and flexible workforce decisions. These reports cover areas including total earnings, who the employee's manager is, their latest performance rating, and can help with performance reviews.

Similarly, when employees who leave the company get their last payment, it automatically updates their status in reports about employee count and benefits, ensuring records are always accurate.

Remaining compliant

Organisations must remain compliant with HRMC’s strict payroll regulations, as well as balancing GDPR. Failure to do so can result in fines, which can damage brand reputation and profits.

When you choose a reputable managed payroll provider and integrate payroll with other systems, remaining compliant is a simpler, more transparent process. This is because payroll software providers have the knowledge and expertise needed to stay up to date with the latest rules and regulations.


How does integrated payroll affect your business strategy?

Every business aims to successfully scale whilst keeping employees happy, and integrated payroll can help you do just that. Here are a few ways you can utilise payroll to help you become more strategic.

Aligning your payroll with your company’s goals and visions

Aligning your payroll with company goals enables Finance and HR to closely track and devise strategies for goal achievement. Given that workforce costs take up 40% to 70% of operational expenses, it makes sense to integrate processes where possible, as it saves time and money, freeing up your team to think more strategically.

Make your payroll more employee-friendly by introducing self-service functions

Employees expect to be able to access HR and payroll data online at any time. With people being on the go and travelling to and from work, it’s important to make personal payroll functions easily accessible. Whether they want to check their payslips via desktop or update their personal information on their mobile, the workforce is digitally savvy, and demanding employers follow suit. 

Integrate your payroll, HR, and time-tracking systems

Integrating payroll, HR and time-tracking systems can help you avoid time-consuming manual data entry, as everything is in one place, helping you avoid duplicate efforts and errors.

This also reduces the need for back-and-forth between different departments as everyone should be able to access information in the same place. 

Leverage your technology and software to receive more detailed payroll reporting

A substantial amount of data is collected during Payroll, HR and time and attendance keeping, and more often than not, this data is underutilised, and sits dormant without contributing to any significant insights.

However, by leveraging integrated payroll solutions, your business can transition from mere data accumulation to a strategic utilisation of data insights. Instead of relying on assumptions and generalisations, you can base decisions on concrete and well-informed conclusions drawn from the data.

This shift empowers your business to extract valuable information from the payroll data, enabling you to optimise operations, enhance efficiency, and drive effective decision-making across various aspects of your organisation.


How to transition to integrated payroll 

Conduct an analysis report on your payroll

When you transition from in-house to integrated payroll, it’s essential to start by conducting an analysis report on how your payroll processes are currently performing and any areas of improvement.

You want to thoroughly look into how your payroll model works, how many people are involved in its processes and how or if it works alongside other departments. You should also ask staff how they think processes currently work and if they think anything needs improving. This will give you data-based information as well as opinion and experience-related insights.

You’ll also want to gather information on the size of your company, how many people you employ, the complexity of your current payroll and how it can be simplified. This is where asking for staff feedback on processes can really help as you can pin down pain points ready for you to find actionable solutions.

With this information in mind, you can start creating a plan of action to ensure you implement your software accurately. You can also get relevant stakeholders involved as well as HR and Finance to help the implementation process run as smoothly as possible. 

Research different payroll software

When looking for payroll software you need to consider what outcomes you want to get from it. This could include things like:

●       Greater control over accurate payroll data

●       Automated tasks

●       Reduced mistakes

●       Greater security

When it comes to introducing integrated payroll, you’ll want to search for companies that can integrate things like your payroll, HR and time and attendance software, as this will keep everything in one place and make it easy to access accurate data.

Here at Payescape, we can easily integrate our payroll, HR and time and attendance software, giving you:

●       Greater security

●       Improved efficiency

●       Greater compliance

●       Improved retention

●       Better insights

●       Prevention of time theft 

Prepare for the transition

When preparing for the transition you should create a detailed timeline for the introduction of your integrated payroll. This will help keep things on track, making the process as simple as possible.

It would also be a good idea to put together a dedicated team that will work solely on the integration project ensuring there are no hiccups throughout. It’s also important to communicate any upcoming changes to employees and offer system training to showcase how integration will help the business and make tasks easier to complete. You should also stress the importance of migrating data accurately, as importing incorrect data into your new system will lead to major issues. 

Implement a testing process

Testing software before going live is essential, as it can help you pinpoint any issues within the software, such as the integrated software not syncing properly or data not being correct. This can prevent any drastic issues occurring once you go live.

During this process, you should also talk to staff about any common issues that may arise and how to solve them so that problems can be fixed quickly in the future. Providing training can help things run smoothly during and after the implementation takes place. 

Post implementation

After you’ve introduced the integrated software it’s vital that you stress that there will be ongoing support if staff have any issues or queries about the software after it’s been installed.

Staff should also be encouraged to continue learning about your payroll platform so that it’s simple to use and problems can be solved quickly in-house rather than needing to contact your provider for help.

It should also be highlighted to staff that if they see any issues they should report them immediately so that they don’t grow and can be sorted efficiently.

If you’re looking to introduce integrated payroll in your business, get in touch with Payescape today to see how we can make it work for you.

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