HR has traditionally been an administrative and mundane business function. It includes endless excel calculations, stacks of paperwork and handing out paper payslips.
Today, technology has reinvented the HR function by automating administrative tasks. This allows HR professionals to focus on becoming a strategic contributor to the organisation and business instead of merely serving an operational role.
Thanks to the rapid advancements in technology, HR functions can be centralised on a single platform for easy access. However, there are times whereby HR software and payroll are located on separate platforms, with some even arguing that the latter should be parked under Finance.
What happens when HR and payroll are on two separate software?
A HR and payroll system that is not integrated on the same platform can result in data entry errors and inaccuracies. As data needs to be transferred from one platform to another, this may result in duplicate entries and miscalculations. This in turn affects payroll and may ultimately disrupt daily payroll processes and HR functions. Late salary disbursements can also result in unhappy employees.
There are plenty of benefits associated with integrating your HR software and payroll.
Accurate payroll reporting
With your HR software and payroll integrated on a single platform, customizing and generating payroll reports can easily be done with a few clicks. For instance, there may be times whereby you need to track expenses payments made to employees as part of internal auditing. Suppose your expenses tracking were made on your payroll software and you need to update these records manually on your payroll software. This may result in inaccurate data entries and risk incorrect calculations during salary calculations or tax filing.
By integrating key HR functions such as expense management and claims submission with your payroll software, it ensures real-time update of your payroll records. Concurrently, this data will be synchronized with your employees records and eliminates the risk of inaccurate payroll records.
Ensures payroll compliance
Ensuring payroll compliance with the multiple labour laws can be stressful particularly when you are processing payroll for several countries. An integrated HR and payroll platform can help to take away that stress by ensuring accurate salary calculations and tax deductions based on each country’s labour laws. This can be done by configuring your payroll software to calculate salaries and tax deductions based on the individual employee’s profile that is extracted from your HR software. Not only does this ensure that your payroll is compliant with the respective country’s labour laws, it helps you to easily generate historical payroll data during internal or external audits.
Improves communication and drives transparency
A unified HR and payroll software can empower your workforce, improve internal communications and drive transparency. Timely and accurate salary disbursements plays an important role in employee engagement. Concurrently, implementing an integrated HR platform that is equipped with self-service tools for employees further enhances the employee experience.
Tools such as e-payslips, online leave balance and applications, e-claims submission and reimbursements allow for seamless access to payroll and employee’s personal details without having the need to constantly go through the HR department. It also provides employees with a sense of ownership as they are able to take charge of their own HR needs.
An integrated payroll and HR software allows both HR and payroll teams to access the same information, sensitive payroll data and employee records, on a single platform. Not only does it help to drive internal efficiency and data accuracy, it helps with payroll compliance as well.
As HR and payroll gradually intertwine to play a more strategic role within the organisation, it would make more sense to pool together the department’s resources and seek as much integration between HR and payroll where possible.
Also human resource personnel is answerable to employees’ queries about salary considerations, wage increase, payroll processes and tax deductions clearly and confidently to deliver convincing answers. Hence matters such as these which consume a lot of productive man hours of HR personnel is entrusted to payroll service providers externally.