Link HR and Payroll to Time Tracking, Benefits & Tax Filing

It's payroll week. You're exporting a timesheet from one system, manually keying in overtime hours into a spreadsheet, cross-referencing another file for benefits deductions, and praying you didn’t make a typo. This takes hours.

When your essential HR functions operate in silos, you create a breeding ground for manual errors, wasted time, and compliance risks involving costs. The constant back-and-forth between different platforms is a drain on your resources.

What you need is an integrated HR and payroll system that enables an automated payroll workflow, giving you more time to focus on your people.

Silos in HR and Payroll Management

Disconnected systems are a common challenge for payroll in human resource management. What starts as manageable for two or three employees becomes a significant operational risk as you scale. Relying on separate systems for your payroll and HR management might seem cost-effective. But the hidden costs of inefficiency and risk quickly add up. Here’s how:

1. Manual entries and human error

Every time a number is manually transferred from a timesheet to a payroll system, there's a chance of transposing digits or making a simple typo. An incorrect calculation or a missed deduction can diminish employee trust. You also end up wasting time on corrections. This is a common pitfall for any HR and payroll administrator.

2. Compliance woes

Suppose an employee changes their health plan. If that information is stored in a separate benefits platform that isn’t synced with payroll, you could be under- or over-withholding for months. This can lead to compliance issues with the Affordable Care Act (ACA). Miscalculations of payroll, owing to disconnected systems, can also incur penalties. 

3. Wasted hours and lost productivity

Managing siloes is administratively burdensome. Manually transferring data and reconciling it can be time-consuming. You might also need separate teams to manage disparate systems. The time spent here could be better utilized for strategic initiatives such as talent development, sales, and product innovation, rather than tedious data reconciliation.

Modern HR Payroll Management System: Core Integrations

The power of a modern HR payroll management system lies in its ability to act as a central hub, connecting different HR systems with minimal human intervention. Here are the integrations that matter most:

1. Time and attendance 

When your time tracking system integrates with payroll, all approved hours, overtime calculations, and paid leave are automatically synced for each pay run. There’s no manual entry, which means reduced chances of calculation errors.

In addition, this provides managers with visibility into labor costs and allocation of resources, helping with more accurate project budget tracking. 

2. Benefits administration 

When an employee enrolls in a new health plan, adjusts their 401(k) contribution, or has a life event, an integrated system automatically updates their payroll deductions. This not only ensures accuracy but simplifies the administrative burden of open enrollment, making the entire process smoother for both HR and employees.

3. Tax filing 

A crucial part of any HR and payroll managed service is automated tax compliance. An integrated system will automatically calculate, withhold, and remit your federal, state, and local payroll taxes without needing human intervention. Never miss deadlines as the system automatically handles the generation and distribution of year-end forms like W-2s and 1099s. 

4. Expense management 

Integrating your expense management system ensures automatic calculations and reimbursements for employees. Once an expense report is approved, the reimbursement amount can be automatically added as a line item to the employee's next paycheck.

This ensures employees are paid back quickly and accurately. It consolidates all cash outlays to employees within a single, trackable system, simplifying your financial oversight.

A Unified HR Management Payroll System

Understanding the power of an integrated HR and payroll management system is the first step. For busy founders, selecting the right platforms, migrating data, and ensuring seamless connections can be a time-consuming process. 

This is where expert guidance makes the difference. DianaHR specializes in building connected ecosystems for small businesses. We don’t just recommend, implement, and integrate software, but act as your strategic partners.

Our HR experts handle the technical complexities of integration and the ongoing management of your payroll in human resource management. So, you can get back to what you do best: building your business. Chat with DianaHR today. 

FAQs

1. How to link HR payroll to the attendance system? 

Your HR payroll is linked to an attendance system through direct integration. Most modern HR payroll management systems offer native, pre-built connections to time and attendance software. During setup, you authorize the two systems to map employee profiles so that approved timesheets, overtime hours, and leave data automatically sync to your payroll platform. If a native integration isn't available, connect the systems via an API, which may require some technical setup but achieves the same goal of data transfer.

2. Why is it essential to link time tracking, benefits, and tax filing to HR payroll? 

Integrating these systems is important to create a single source of truth and automate error-prone parts of payroll. Linking time tracking ensures that hours and overtime are calculated accurately, eliminating manual entry mistakes. A benefits integration automatically adjusts payroll deductions when an employee's coverage changes. Integrating tax filing automates the calculations of remitting taxes, ensuring compliance and helping you avoid penalties. 

3. How to know if an HRMS promotes integrations of HR systems?

The easiest way to determine if a Human Resource Management System (HRMS) supports integrations is to check for an ‘Integrations,’ ‘App Marketplace,’ or ‘Partners’ section on its website. An integrations-friendly HRMS payroll system will also claim to have an ‘open API,’ indicating it is built to allow customizations and integrations. When evaluating a new system, always ask the sales representative about potential integrations to ensure they fit your current tech stack.