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    Finished Guide to Payroll Integration

    Finished Guide to Payroll Integration

    December 8, 2021

    The Bureau of Labor Statistics estimates roughly 20% of businesses fail in their first year, and about 50% fail by their fifth year.

    It is well known that running a business is hard work, yet thousands of people still start one each year. So what can business owners do to ensure they succeed? Amongst many things, payroll integration is one of the most important.

    Even if you're familiar with payroll, you may not understand all the benefits of payroll integration. So keep reading this article to learn all you need to know.

    All About Payroll Integration

    Payroll integration is when your payroll system links with other programs or software your business uses. It allows you to access the information you need to manage your employees successfully. 

    Thus, you improve decision-making, increase compliance, and spend less time on administrative tasks. There are several popular software programs that businesses connect via payroll integration. Let's take a look at them.

    1. Employee Information

    Payroll is much more than paying your employees. Sure, you need to track your employees' time at work. But, you could be using a time and attendance software that integrates with your payroll system.

    This means you wouldn't have to key in every new employee and their hours worked manually. Instead, they can clock in and out from a website or app.

    Then, you approve the timecards at the end of each work period and send them to payroll using the integrated system. 

    You can quickly scan the hours, approve them, and print paychecks. 

    It saves both you and your employees time. For example, you won't need to spend time double-checking the hours. Likewise, employees won't need to submit their timesheets manually. 

    Moreover, you can run workers' compensation software into your payroll. Depending on your state, you may be required to purchase workers' compensation coverage. Be sure to check if your state has state-run workers' compensation paid for via taxes or not.

    With payroll integration, you can send the data to your insurance provider. The insurer will calculate your premiums from the data they receive.

    2. Human Resources (HR) Software

    When you hire new employees, they have to go through some HR processes before starting work. For instance, they need to out their IRS documentation. But, the IRS requires you to keep the documentation on file for several years. 

    Yet, HR software lets you store those forms digitally. Each employee profile will show the correct documentation. You can keep a lot of other data in each employee profile, too, such as: 

    • Employee status
    • Identification number
    • Salary information
    • New hire paperwork
    • Employee handbooks
    • Anniversaries with the company

    This is great because using HR software with payroll allows you to follow employee changes. This includes benefits, raises, and updated W-4 IRS forms. In addition, it helps to streamline the performance review schedule for everyone.

    3. Accounting Software

    Your business is responsible for tracking taxes and benefits for your employees. With accounting software, you can select where to record payroll taxes, net wages, and benefits. Further, with payroll integration, you eliminate human error when recording accounting data.

    Incorrect data can ruin your ledger and account balances. A fully integrated payroll software allows you to deposit and file taxes automatically.

    Of course, you can still file taxes yourself. Just opt to have payroll takes on your ledger. It will show up as payroll tax liability.

    Save Time and Money

    All businesses benefit from payroll integration because it saves you money on labor and administrative expenses. Not to mention, data accuracy improves using fewer resources.

    Manuel and non-integrated processes need resources and multiple data inputs. But, an integrated payroll system automatically updates when you put in new data. Thus, as mentioned, the system reduces the time spent on payroll and the risk of human error.

    In fact, with just a few clicks, you can:

    • Track employees
    • Process payments
    • Send information to your workers' compensation provider

    Plus, the data is easily accessible. HR and other authorized personnel can access it, even across departments. This will reduce financial mistakes and accidental overpayments. 

    An integrated payroll network will increase efficiency and knowledge sharing at your business as authorized personnel always have the most up-to-date data.

    Get Better Reporting

    When you streamline payroll processing with integration, it leads to improved management reporting. For example, automated reports show real-time punch-in data, payment history, and other data required by management. 

    You also have quick access to historical data that can help make better decisions. 

    Furthermore, you can:

    • Compare payroll processing costs with your competition
    • See employee expenses compared to revenue
    • Assess worker absenteeism
    • Compare different departments to each other

    Employees still need to be held accountable for their actions. Precise data allows you accurately assess employees while keeping your business goals on track.


    The reporting from payroll integration isn't just better in-house. The software also ensures Fair Labor Standards Act (FLSA) compliance. However, it can be challenging to keep up with FLSA regulations and IRS tax rules.

    But, an integrated payroll system will help you stay on top of them without having to do hours of research. Yet, your payroll integration system will make the process stress-free if you need to assemble an audit response

    Since the data is updated regularly and historical records are easy to access, you will be able to comply with the audit without worrying about mistakes in recorded data. 

    Invest in Payroll Integration Today 

    If your business doesn't have payroll integration, then it's time to get started. The benefits for you and your employees far outway the costs. 

    To discuss your HR and payroll support needs, contact us at Ignite HCM. With more than 30 years of experience, our consultants can help businesses of any size and from any industry.

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