Payroll, being a repetitive and number intensive process, would have usually been automated in some form or another in most organizations, either through spreadsheets or using a software package. However, very few organizations automate the integration between the payroll and external processes, despite some major benefits accruing. Some of the integrations and their benefits are detailed here
Leave integration:Leave finalization is an important input to payroll. When employees exceed limits as per the policies applicable, the deductions that accrue based on loss of pay rules have to be accurately calculated. In cases of contract workers, often worked days is equal to earned days, and accurate finalization is vital. When volumes are high, manually deducting loss of pay for all employees in the payroll can be cumbersome, error prone, and also liable for misuse. A direct integration to the payroll saves time, effort, improves accuracy and leaves a clear trail and basis for the deduction. An organization changing pay for many employees based on loss of pay or earned days should definitely plan for integration of the leave with payroll.
Employee Self Service:Employee Self Service capability is known to save time and employees viewing and printing their pay-slips is a very powerful feature for employees. This can be achieved only if the payroll is integrated to the HRMS and the Employee Self Service Portal.
Employee Life Cycle in HRMS:Payroll usually comes to know of changes that occur in the employees life cycle of movements very late. New joiners, transfers, promotions, increments, retirements, notice for separation and actual separation are all aspects that impact payroll. If the Employee Life Cycle features are not integrated to the payroll, these changes are known only in the last minute in a manual form. This usually leads to errors, and related corrections later. Payroll processing and finalization have further implications in taxation and benefits related payments and hence mistakes in communication can lead to complications in downstream areas, and results in arrears processing. Significant effort reduction in effort related to communication and avoidance of errors occur, if payroll is integrated to Employee Life Cycle Tracking.
Traceability from Attendance to Pay:Increasingly, organizations are realizing that all data from attendance to pay need to be automated without manual intervention. Automation leads to traceability, and also avoidance of possibilities of manipulation, and better compliance to audit and other statutory regulations. Without the integration of the attendance, leave and payroll this is not possible.
Tax Planning by Employees:If employees can enter their tax declaration, and output of payroll in terms of taxable pay and tax already deducted are known, intelligent workings can be given to employees on their projected tax levels. This gives them the opportunity to plan their tax better. Without the integration of the payroll module with the Income taxation module, it is not possible to provide employees with this valuable capability.
Stress during the end of period:Payroll processing is a stressful activity, usually done with very little time left and hence stressful. Any integration significantly reduces this stress due to lower effort, lesser error and quicker completion of a very time bound task.
Sheer reduction in effort and other benefits:Reduction effort enables HR and Accounts staff to focus on more critical accounts and finance related activity or scale up operations without equivalent increases in number of people involved.
In short, the benefits of integrating payroll to other HR processes is very vital, yet many organizations run standalone payrolls. Full suite HRMS software, with Employee self service functionality like KServeHRMS comes pre-built with these integrations, enabling you to rapidly gain from it. Do reconsider upgrading your standalone payroll to Integrated HRMS suite if you think that the above make sense for your organization.