What's the difference between unified and integrated payroll systems?
Payroll is full of tedious tasks, and modern payroll systems are a must-have for any business seeking to automate and streamline payroll’s workload. When payroll doesn’t have to waste worker hours on manual data entry, they can better focus on more pertinent decisions, working with HR, and communicating with employees.
A large portion of payroll is gathering, managing, and exporting data. Payroll not only has to work with other departments to acquire employee info, but other departments may find themselves in need of information that payroll possesses. Depending on the type of payroll software your business has implemented, this exchange of information can be simple and fluid, or complicated and slow.
Increasing efficiency within payroll shows benefits in almost all aspects of your company, so it’s in every business owner’s best interest to research and consider implementing payroll solutions. Because there may be some confusion on the differences between unified and integrated payroll systems and the effects each can have on a business, this article will focus on explaining how the two systems work and the benefits or detriments they may bring to your company.
Unified system: A unified system denotes a system that is united into a whole. In regards to payroll, this means using a human capital management (HCM) solution with one developer that covers various different departments of your business (human resources, payroll, and management) and makes for a shared database, one employee record, and a simple and combined communication network.
Integrated system: An integrated system denotes a system that is composed and coordinated to make a whole. In terms of payroll, this means using a number of HCM solutions with different developers and varying offerings and attempting to use them all in conjunction with one another to cover the needs of your business. This means several communication pathways and multiple databases with potentially redundant and duplicate employee information.
This could mean having one system for HR, one for payroll, and another for management, and then mixing and hopping between the three systems to share information, communicate, and update employee files.
Differences in action
Streamlined and consistent design: In a unified system, every department is using a similarly designed program, which promotes familiarity across a workforce and boosts efficiency.
This sense of familiarity will be present regardless of the department using the system and allows for greater accessibility and collaboration. When all of a business is using the same framework, they won’t be tripped up by system differences and have to waste time finding needed information across separate applications and multiple login pages.
In an integrated system, consistency is rarely found. Multiple applications means an abundance of differences that departments have to work through when working together. Overtime, this could lead to a decrease in collaboration with departments opting to work separately and avoid the extra work required with using an unfamiliar system. If taken to the extreme, this could make for inaccurate or incomplete employee data being shared, which could result in unaccounted overtime, incorrect pay, payroll non-compliance, and employee lawsuits.
Decreased errors: A unified solution will better house and manage the seemingly endless amount of files a business can accumulate. From employee records to tax information to compliance ordinances, the information pertinent to each department will be centralized and easily located to assist in a multitude of situations.
One of the most obvious examples of a unified system reducing errors is seen in time-keeping. Time-keeping applications track and store employee’s clock-in/clock-out information. With payroll and time-keeping working under the same system, payroll will be working with the most accurate and up-to-date information to calculate worker hours and any applicable overtime.
Compare this to an integrated solution in which time-keeping is often left to management, who are then tasked with manually sending this data to payroll. In an integrated system, every exchange of information is a chance for something to go wrong. Data can get lost, mis-inputted, or be undeliverable across different solutions. When departments are working with inaccurate or with different information from other departments, disastrous results could ensue.
Combined reporting: It’s crucial that payroll be able to easily access, analyze, and create reports. Any hurdles blocking this goal can lead to hours wasted searching for information, correcting inaccuracies, and combining spreadsheets across HR, management, and payroll.
An integrated system manufactures many of these hurdles. After payroll determines what information it needs and what information it has, they’ll then have to set out and find what information they’re missing across multiple systems. This means having to take multiple trips to HR or management, waiting on email replies, and lots of frustration. Even after finally acquiring all needed info, it has a higher chance of being inaccurate due to only being supervised and looked over by one department.
In a unified system, reporting is made collaborative, accessible, and automated. Payroll will have all the information laid out and the power to create customized reports all in one place. In the event there are inaccuracies or lost data, departments can quickly communicate, fix, and edit data all in real-time. Furthermore, applications within the system (time-keeping, employee requests, etc) will keep info automated and up-to-date at no workers expense.
Payroll productivity: On the topic of automation, some systems benefit more from automation than others. In an integrated system, automation is fractured across multiple applications and solutions, therefore defeating much of the point of even having it.
Payroll will have to wait for the data across the different systems to sync, and oftentimes there’s a delay between when data is updated and when the changes show on screen for payroll. Or, if information doesn’t update, payroll will be left with incomplete data and have to manually acquire and input it.
A unified system, on the other hand, is able to maximize the benefits that automation brings. Staff information, timesheets, employee requests, reports, and various other resources are kept updated at all times.
For payroll services, this is a crucial benefit as they’ll be able to look over and audit pay data at any time during a pay cycle, rather than have to wait for systems to sync after the end. Ensuring your payroll is informed and has easy access to the most up-to-date information goes a long way in increasing productivity and freeing up time for payroll to focus on other business matters.
Making a decision
Unified and integrated systems are commonly spoken of interchangeably, but as this article discusses, their differences are vast. When researching and deciding on a payroll system, here are some tell-tale signs of an integrated system:
- Employees or management are required to download various apps, each with a specific use
- Information is unavailable across certain sections
- Design inconsistencies across different departments (different fonts, colors, animations, etc.)
- Needing to create and manage multiple tabs to access different departments (HR, time-keeping, payroll)
For growing businesses, a unified payroll system is a worthy and beneficial long-term investment. Certain small businesses may be able to get along with an integrated system, but as a business grows more complicated, this decision can come back to haunt you. Remember to do your research and consider the scope of your company and what your specific needs are both at present and in the near future.
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