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The Ultimate Guide to Payroll Integration

Managing HR workflows can seem like building a complex irrigation system with various apps and manual data entry looking like scattered pieces that don’t quite fit together. Getting all the parts to function properly for HR professionals can be frustrating without a well-designed plan. Payroll integration serves as a skilled irrigation specialist, meticulously connecting each channel to ensure that every drop of water reaches its intended destination.

What is Payroll Integration?

Just as irrigation efficiently delivers water to various parts of a farm, payroll integration ensures that employee data, time-keeping, benefits, tax deductions, and expense reimbursements are accurately sent to your preferred payroll system—paying every employee without error and managing finances properly.

Like good pipes preventing water contamination and leakage, payroll integration protects HR workflows from data errors and security breaches. Payroll integration connects the various HR apps in your HR ecosystem and delivers accurate results, harmonizing HR operations and allowing your organizations to grow efficiently.

How to Integrate Payroll Systems

There are two ways to move data from other HR apps into your preferred payroll system:

  1. Manually: You can manually transfer employee data between HR apps and your payroll app. This is tedious, time-consuming, and can lead to manual double-data entry errors—akin to hand-carrying buckets of water from a well with occasional spills rather than having pipes.
  2. API-to-API data connector: You can add a simple API-to-API data connector that shares data automatically between HR apps and your payroll app in near-real time. Adding data connectors unleashes the power of automation, giving your business enhanced precision and efficiency.

Streamlining workflows with automation makes sense. The average HR department saves 15-20 hours a month just by adding the simplest of payroll data connectors: new hires from an ATS or Core HR app to your payroll app. That’s a huge productivity increase!

As Cristi Johnson, Compensation/Benefits Manager, EOS North America explains: “With data integration, we no longer manually duplicate work in both Workday and ADP. Our HR administrator saves about 15 hours a week by not doing manual updates. We now have data integrity and never worry about mismatched data between systems because everything connects. I definitely recommend data integration to anyone in HR.”

Payroll Integration

The Six Most Popular Payroll System Integrations

According to the HR data integration experts at Flexspring, the six most popular payroll data integrations are:

    Payroll with an ATS or Core HR System

  1. New Hires from an ATS or Core HR to a Payroll App

  2. Employee Updates from an ATS or Core HR to a Payroll App

  3. Payroll with a Time Tracking App

  4. Time and Attendance from Your Time Tracking App to Your Payroll System

  5. Payroll with an ERP System

  6. Payroll to ERP Journal Entries

  7. New Hires and Employee Updates from Payroll to an ERP

  8. Expense Reimbursement from an ERP to Payroll

How do these integrations work? Imagine data integration as a bustling airport, where various flights of information seamlessly converge and depart, ensuring a smooth data flow across your digital landscape. Let’s look closer at more details:

Payroll with an ATS or Core HR System

1. New Hires from an ATS or Core HR to a Payroll App:

With the new hires from an ATS or Core HR to payroll integration, when a hiring manager presses the new hire button in your ATS or Core HR, new hire data automatically syncs in payroll in near real-time with the essential information needed to process payroll. The data duplicates instantly!

2. Employee Updates from an ATS or Core HR to a Payroll App:

When combined with employee updates, as soon as current employee data changes in your ATS or Core HR, employee data automatically refreshes in payroll in near real-time.

Payroll with a Time Tracking App

3. Time and Attendance from Your Time Tracking App to Your Payroll System:

Time and attendance from your time tracking app to your payroll acts like a magical conveyor belt moving clock-in and clock-out data automatically, sparing HR professionals the tedious task of manually inputting timesheets and ensuring accurate records of hours worked. This use case also manages vacation and leave time.

Payroll with an ERP System

4. Payroll to ERP Journal Entries:

The payroll app to ERP journal entries integration extracts weekly or bi-weekly payroll data from your payroll app and sends the data across the bridge to your ERP. Instead of sending each piece of data separately, it combines different types of payroll information, like earnings, deductions, and taxes, to create one journal entry per payroll run per subsidiary.

The integration also can group the summarized amounts based on departments or locations, similar to how different elements of a story might be grouped into different chapters.

This integration also acts as a vigilant accountant. It double-checks the debits and credits, ensuring that the balances are correct. If any errors are detected, it promptly raises a flag to alert you, like a watchful guardian making sure everything adds up correctly.

HR and Finance teams typically save 30-40 hours monthly with a payroll-to-ERP journal entry connector. What an incredible time-saver!

“The biggest pluses for us with our NetSuite integrations," said Iryna Sukhanovska, Roostify's Corporate Controller, "are that they save time and eliminate human error in data entry. Before, we needed one person dedicated to manually making changes and updates into NetSuite, which took them about 8 hours per week. Now we’re saving a day’s worth of time every week!”

5. New Hires and Employee Updates from Payroll to an ERP:

As soon as an employee is hired or updated in your payroll app, employee data automatically syncs in your ERP in near real-time with the employee data needed for workforce management.

6. Expense Reimbursement from an ERP to Payroll:

The expense reimbursement from an ERP to payroll integration takes all approved expense reimbursements from your ERP that are beyond regular compensations—for example, travel deductions, mileage, or cell phone— and imports the expense data into payroll’s pay data batch module.

More details about these time-saving payroll integration use cases for specific payroll apps such as ADP, Paychex, Paylocity, Paycor, and more, as well as ERP apps like NetSuite, are available at Flexspring.

What are the Benefits of an Integrated Payroll System?

Payroll data integration has many benefits, including:

  1. Time savings: Payroll data integration is a game-changer in boosting efficiency and productivity. Data integration lets HR professionals work smarter, not harder, by streamlining processes and maximizing the value of every minute. It’s like having a secret weapon in your arsenal that empowers HR professionals to accomplish more in less time, unleashing their full potential. Payroll data integration saves time and money. According to Jeffrey Laymon, Executive Consultant for Integrated Dermatology: “We’re no longer in the manual payroll journal entry business. With automation, we’re positioned for substantial, profitable growth without adding any strain or headcount to our back office.”

  2. Improved data accuracy: Payroll data integration answers data accuracy woes. Automating the data integration process, eliminates the payroll risks associated with manual data entry. No more headaches, data inconsistencies, or inaccuracies. Just reliable data that you can trust.

    Before Ann Martin from Credit Donkey chose payroll integration, she said “Handling all of that in-house, with whatever spare time our leadership team could find, led to multiple mistakes on things like payroll and health insurance, which definitely led to some employee discontent. One of the greatest things about payroll integration for me personally is that I don't have to be the bad guy anymore.”

  3. Better reporting and analytics: By effortlessly merging data from multiple sources, HR professionals gain the insights needed to spot trends and make informed decisions. Consider it the key that unlocks your data’s full potential, helping you thrive in the ever-changing business landscape.

    Dan Dillon from CleanItSupply.com mentions that “Payroll data is a goldmine of insightful analytics. With integration, we were able to better track labor costs, align HR strategies with business goals, and improve decision-making based on real-time data.”

    In addition, Simon Bacher from Ling comments that “the availability of detailed reporting and analytics allows us to identify any mistakes promptly and make informed decisions. For instance, identifying payroll trends can help optimize budget allocation and minimize unnecessary expenditure.”

  4. Increased security: With payroll data integration, sensitive information remains in the hands of only those who truly need access. Payroll data integration perfectly balances convenience and privacy, simplifying your operations while protecting your HR data fortress.

    The increased security that payroll integration offers benefited Guillaume Drew and his company, Or and Zon. “A robust payroll system upholds the security and confidentiality of employees' data and helps us comply with financial regulations. We have reduced potential security risks significantly since integrating our payroll system.”

  5. Improved employee morale: It's all about creating an environment where HR professionals can truly shine and unleash their talents. Everyone is happy to give up the manual grunt work. Payroll data integration frees people to focus on the strategic things that grow your company.

    Gianluca Ferruggia from DesignRush highlights that “An intuitive, streamlined payroll system leads to timely and accurate salary disbursal, ultimately contributing to maintaining high employee morale. It shows staff that the organization values their hard work and ensures they are compensated accordingly.”

Overall, payroll data integration helps organizations optimize their HR processes, avoid payroll risks, improve decision-making, and enrich the employee experience.

Conclusion

In the business world, time is a precious currency. Streamlining HR workflows acts as a profitable investment towards achieving efficiency and growth. Just like a smart financial strategy, payroll integration lets HR professionals focus on strategic initiatives that fuel the company's success and avoid the pitfalls of manual data errors that damage financial reporting and management.

Payroll data integration yields substantial returns. With each stride of your business journey, payroll data integration is a smart choice, empowering your team to seek new vistas and to reach new frontiers of success.

For help with payroll integration with any software app in your HR ecosystem or a data connector for your payroll software, contact the data integration experts at Flexspring.

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