Time & attendance and payroll integration is a concept discussed during every time and attendance consultation session. Whether your company is implementing a new system or looking to upgrade an existing one, your integration with a payroll system plays a pivotal role in your decision of selecting both a time and attendance and a payroll system. There are however various points to consider when analyzing integration between time and attendance and payroll system.
Time and Attendance vs Payroll System Responsibilities
Many clients believe that time and attendance and payroll functionality should be provided by the same company. While there are a few systems that provide you with both modules, it is important to understand why you will see so many separate time and attendance and payroll companies. Before discussing integration in further detail, let’s first investigate as to why the two services are often provided by separate companies.
- Most countries (especially in Africa) have complex tax and labour laws. Both systems must comply with these laws and any amendments made over time.
- Time and attendance rules and calculations can get convoluted. Rules such as splits into Saturdays, Sundays, 24–96-hour shifts, shift weights or paid public holidays can get complex, and the development of such a system is costly and time consuming.
- The efficacy of your time and attendance system determines the time and workload required to successfully complete your payroll in your payroll system. As such, an effective time and attendance system must be robust in its performance and calculations.
It is therefore crucial to implement a time and attendance system that caters for the depth of your labor laws and payroll rules. Your company is legally required to implement and maintain certain rules. Failure to select the correct system will result in numerous manual data modifications being required and a resulting loss in time that could be spent elsewhere. It is therefore important that when you identified the time and attendance system that caters for your rule requirements, you also must identify whether it fulfils your payroll integration needs. Don’t miss out on all the features BioSyn has to offer, find out more here.
What is payroll integration?
Before we start to discuss payroll integration, it is crucial to understand what integration truly means. We often have a potential client enquiring as to whether we can integrate with a payroll system, such as Sage, PSIber, PaySpace, SimplePay, and many more. When we ask a client, what do you mean (or understand) by “integration”, 90% of the time the answer is: “Can you export to a specific payroll system?”.
BioSyn also owns the web application development company that develops our time and attendance system. So for our developers, “integration” can be interpreted in multiple ways. There can be either (and/or) indirect or direct integration.
Indirect Payroll Integration refers to the process of exporting an XLS, CSV or TXT file from your time and attendance solution and importing it into your payroll solution. Generally, the format of exports has been standardized by time and attendance and payroll solutions. In certain cases, a more unique or customized export file must be provided by the time and attendance provider.
Direct Payroll Integration refers to the process of building direct one- or two-way communication between the time and attendance and payroll systems. This is usually done by utilizing APIs (what is an API?). This means that if you perform an action in one system, the data is automatically “pushed” or “pulled” from one system to the other without requiring any manual intervention by the user. This eliminates numerous pitfalls not covered by manual integration.
Advantages and disadvantages of Time and Attendance and Payroll Integration
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Choosing between direct and indirect integration
In comparison, it is clear that considering indirect vs direct integration should not even be on the table with the aforementioned advantages of direct integration. While indirect integration has a few advantages above a paper-based solution, it cannot compare to the powerful benefits of direct payroll integration. Direct integration eliminates human error as well as a tremendous reduction in the possibility of fraud. The duplicate entry of data into two separate systems can also increase the number of hours required for payroll personnel to insert and maintain data.
The more employees a company has, the higher their requirement for standard data administration becomes, direct integration therefore also aims to reduce the hours spent on standard data administration. We’ve seen a reduction in payroll administration hours of 8+ hours down to a single hour or two for a small company, and a tremendous 900+ hour reduction in payroll administration for 7000+ employee clients. Not only does direct integration make your payroll run go more smoothly and accurately, but it also frees up the hands of your HR and payroll administrators.
Custom Payroll Integration
One step beyond direct integration is custom integration between your time and attendance and payroll solutions. While custom integration is generally not required, there might be instances where your needs differ from that of most companies. This could include customizations such as unique shift or labour rules specific to your company, custom escalation procedures or advanced modules such as job costing, bonus, or night out hours. When considering custom integration solutions, it is important to identify the current resource load the requirement has on your company and its employees, and what your potential return on investment would be on the integration and whether the cost would be worth it. Generally speaking, a well-priced, well integrated system, would save you a tremendous amount of time making the initial payment worth it.
In Summary
Integration, whether direct or indirect, is the ultimate goal of any time and attendance system. Your measurement on whether it is worth the price, should be based on the ability of the system to reduce manual modifications, and increase the accuracy of your payroll data. The future of time and attendance systems lie in their capability to integrate directly with payroll solutions, and you should keep this in mind as one of your deciding factors when selecting an appropriate time and attendance solution. The depth of the integration (e.g., employees vs leave and payslip data) should also bear weight in your decision.
Our Recommendation
We would recommend that you request a demonstration of the integration capabilities of the system under your consideration. The goal should be to ensure that the system has the necessary capabilities to suit your needs. If the time and attendance system that you are considering does not have direct integration capabilities, we would recommend that you request the supplier to consider integration with your payroll solution and what the associated costs and timeline of such integration would be. You should also be sure to understand exactly what the extent of your payroll integration would be and what changes would need to occur with how your staff manage these on your current time and attendance and payroll systems, so that you are aware and prepared for when you intend to implement an integrated solution.
The larger the scale of your company, the greater the impact of direct integration will be and the efficiency it contributes to your HR and payroll teams. Beyond the fact that the time and attendance system improve the accuracy and consistency of your payroll data, it also allows your staff more time to focus on their primary responsibilities rather than the mundane daily data administration tasks and the frustrations that go along with them.
Feel free to contact us if you need some advice on how to select the right time and attendance solution and integration partner