27 Jan The Upside of Integrating Timekeeping, Payroll and Accounting
To understand the importance of synchronizing your timekeeping, payroll and accounting systems, you must first identify their functions and interrelations.
Let’s start with timekeeping
If you have nonexempt employees, you’re required by law to develop a timekeeping system that’s accurate and complete.
Additionally, you must pay your nonexempt employees for all hours worked, based on their timekeeping records. It’s also necessary to monitor paid and unpaid time off, compensate employees for paid time off, and track employee breaks. To simplify these processes, you need an automated timekeeping system.
Moving on to payroll
In the context of timekeeping, payroll is about compensating your employees according to their timekeeping records and company policies and applicable laws.
To simplify the wage-payment process, you need an automated payroll system.
Next, there’s accounting
Essentially, accounting is about recording your financial transactions. To simplify your financial processes, you need an automated accounting system.
In the context of timekeeping and payroll, accounting involves recording your payroll expenses for each pay period and reconciling timekeeping data with payroll transactions.
So we have three separate functions demanding automation: timekeeping, payroll and accounting. But we must keep in mind that all are interrelated, and serious consequences can occur if they operate as disparate systems.
Downsides of disparate systems
Disparate systems require you to enter data into each system separately — which can take a lot of time. Further, they vastly increase the risk of (data entry) errors and noncompliance from timekeeping, payroll and accounting standpoints.
Reconciling timekeeping, payroll and accounting is particularly frustrating with disparate systems, as you’ll need to retrieve data separately from each one. This means more time, more paperwork and more potential for confusion. To top it off, disparate systems can be expensive to maintain.
For these reasons, employers should consider integrating their timekeeping, payroll and accounting solutions.
Why integrate?
At the very least, many employers integrate their timekeeping and payroll systems. The integrated solution automatically transports timekeeping data into the payroll system, eliminates double entries and provides easy access to timekeeping and payroll records — resulting in cost savings.
Per a 2018 study by Aptitude Research Partners, “Organizations with payroll and timekeeping in the same system exceeded their revenue targets by 7%, as opposed to only 3.2% of those without an integrated solution.”
It pays to go one step further, by integrating timekeeping, payroll and accounting, as this will:
- Routinely sync all three programs.
- Lower data entry mistakes across the board.
- Speed up reconciliation of the three processes.
- Deliver access to up-to-date timekeeping, payroll and accounting information.
- Decrease timekeeping, payroll and accounting administration costs.
From one database, you can easily manage all three functions. All you need is payroll technology that’s capable of integrating with your timekeeping and accounting systems or vice versa. A reputable payroll provider can connect you with the right technology.
Original content by © IndustryNewsletters. Copyright All rights reserved. Payroll Partners does not endorse or evaluate any advertised product, service, or company, nor any of the claims made by the advertisement.