Altus Dynamics Blog

Key considerations for integrating payroll and HR with Financials

Posted by James Faw on Feb 9, 2011 11:00:00 AM

Traditionally HR professionals have spend most of  their time on administrative activities, but the pressure is now on for them to focus more on transformational work and to deliver more to the business. HR departments are addressing this expectation both through structural changes that enable them to standardize policies and procedures and through use of technology.

An important trend in payroll solutions is integration with HR and Finance applications. For progressive organizations Finance,  HR, Payroll and Benefit functions have tremendous overlap and sharing the data ensures that all systems are in sync and using the most recent and accurate data.

Some key questions to ask when considering integrating your Finance, HR and Payroll systems could be:

  • Do I believe that the flow of Management Information within my business can be improved?
  • Do I know whether management reports can be produce on demand, accurately on any day?
  • Does our current system save us money, enhance our employee satisfaction and contribute to improved client satisfaction?
  • Are we utilising the human capital in the HR department as effectively as possible? Does our HR and Payroll reside on different platforms?

Although Finance,  HR & Payroll are dependent upon each other, they're completely different business processes. That's why,even though they ought to reside on the same platform, they often don't.

Integrating finance, benefits and payroll on a single, enterprise-level platform, if done properly, is fast, accurate, and it doesn't require 24/7 supervision. Utilising the latest manager and employee self-service technology you can now deliver the platform's data via the Internet: your employees don't have to fill out paperwork, or trouble your HR staff on routine administrative matters. Everything they need is available via any desktop browser.

The volume of paperwork generated during the administration of traditional finance, payroll systems and your human resource management function is phenomenal - both for the employer and the employee. Automating the Payroll process with the HR  and even finance functions will result in greatly reduced paper administration – at all employee levels - and will virtually eliminate all the input errors. Additional integration benefits include the automatic update of employee records and entitlements. For example when an individual is terminated, their payroll and benefits are automatically terminated at the same time. This means that you are no longer susceptible to cashflow leakage as a result of this commonly made error.

Other benefits include:

  • No duplicate data entry – Changes made to the common Finance, HR and payroll database need to be entered only once. This eliminates errors and the need for duplicate entry of employee, pay rate, benefits and deduction information
  • Less paperwork — With finance, payroll and HR data stored in the same database you can reduce unnecessary paperwork. For example, if HR enters a new benefit for an employee, the payroll deduction amount can be automatically established as part of the benefit plan. There is no need to submit another paper document to the payroll department.
  • Integrated Reporting — Consolidated reporting is valuable to management, but is virtually impossible without an integrated database and reporting tools.

Tips for an effective integration of payroll and HR systems:

  • Prepare to re-organise as part of the project.
  • Set realistic timetables - rushing will limit the value of the benefits realization.
  • Set a benefits realisation plan for the project and monitor it during the course of the project, not just at the end.
  • Tie in resources from your supplier.
  • Ensure your policy and strategy requirements are met by the functionality of the product.
  • The best performing companies all have HR departments that have the mandate to work strategically to fulfill the overall objectives of the organization. For your company to maintain competitive edge in today's market, your corporate HR department must also be granted this opportunity.

 Submitted by James Faw, VP Product Innovation

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This Post Was Written By James Faw
James Faw is a Founding Partner at Sparkrock. With a diverse background in Systems, Development and Enterprise Application Integration, James fulfills his role as solution visionary at Sparkrock and to our customers. James’ successes have granted him recognition as a visionary within our industry. Currently, James is focused on building winning business solutions through future product development.
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