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How Integrated Time Tracking and Payroll Can Help Your Business

  • Human Resources
  • Article
  • 6 min. Read
  • Last Updated: 05/18/2023

an employee using an integrated payroll and time tracking solution at work

Table of Contents

Integrating payroll and a time tracking solution in your business can help you save money and increase efficiency by eliminating unnecessary redundancies in key business systems.

Integrating a time and attendance system with payroll software can have a positive impact on your company's budget and level of employee engagement. For many leaders managing employees' time and attendance is a significant and time-consuming task related to operating a business. Companies that are currently using separate, non-integrated systems for payroll and time tracking are likely still experiencing inefficiencies and added costs that an integrated system can help alleviate.

What Is Time Tracking and Why Is It Important?

Time tracking is the process of collecting information related to the time worked, for each employee, as well as paid time off. Accurate time tracking is an essential function needed to complete the payroll process. Additionally, well-maintained time records serve as a foundation for a company's budgeting, planning, staffing, and compliance efforts.

The Disadvantages of Manual Time Tracking

When the time and attendance process is manual entry and it functions separate from payroll, the potential for errors and inaccuracies can be high. For instance, employees who use paper-based time and attendance systems may forget to complete their time sheets by the deadline, and then may make errors when rushing to submit their hours. They also might not recall precisely what time they came to work, the length of their lunch breaks, or the exact time they left for the day.

This opens the door to businesses either not paying employees for all time they've worked — a significant area of risk for businesses — or overpaying them. Issues revolving around payroll (such as not being properly paid) can negatively impact employee morale, which in turn can affect productivity in the workplace. It can also result in fines/penalties from an enforcing agency.

Using Separate Systems for Time Tracking and Other HR Tasks

Even if HR departments use software programs to track various HR tasks, different systems can lead to inefficiencies, increased costs, and frustrations.

For example, a company may have purchased a standalone license for a payroll processing software package, but that software doesn't integrate with electronic time clocks or other tools. When an employee has an address change, it may be processed in one system but not the other, leading to a paycheck being sent to an outdated address. HR staff may also be frustrated with the inefficiencies of having to enter this information into various systems multiple times and the difficulties they encounter trying to find and correct mistakes.

Integrating time tracking, as well as other systems like payroll and accounting, into your HR systems can save everyone time and headaches.

Benefits of Integrating Time and Attendance With Payroll

Integrated payroll time tracking systems can help ensure that information is consistent across all systems. When information is transferred and updated automatically, it also reduces the workload on HR staff from having to input changes multiple times in different work systems.

A well-integrated system that leverages the intelligent logic of automation allows companies and their employees to reach maximum efficiency. For example, electronic time tracking software can collect, track, and manage employee work hours, freeing up HR staff to work on higher-level tasks that cannot be automated. Data is analyzed on a real-time basis, enabling managers to review and approve employee time for payroll processing with greater efficiency and accuracy.

Automated systems can track time in several ways, such as reading:

  • A magnetic stripe or bar code on an employee's company ID card
  • Biometric information (eliminating the problems of lost badges or of one employee clocking in and out for another)
  • Times logged in and out at the employee's computer

Additional core benefits of an automated time and attendance system can include:

Managing an Efficient Workforce

Automated time and attendance solutions give managers the ability to align scheduling to workload projections. This can help increase efficiencies, meet production goals, and manage costs. An analytics dashboard also can allow managers to review data over time, watch for opportunities to be more efficient, and head off problems that can derail productivity. Integrated solutions can then import those projections into other scheduling or budgeting systems, allowing managers to make more effective decisions with all the available data at hand.

Less Paperwork

A significant reduction in paperwork is another immediate benefit to employers and their workforce. With an integrated payroll system, there's no more printing of paper time sheets or data entry into the payroll system. Once the data from electronic time clocks is added to the system, it can automatically calculate and process payroll for the current period. With some solutions, records can also be integrated into individual employee portals, giving workers access to payroll records and providing an alternative to physical paper checks.

Freeing Managers and HR Staff From Repetitive Administrative Tasks

Relieving supervisors and HR staff of time-consuming administrative tasks is another big plus for employers. Information from tax forms, benefits data, and performance reviews only needs to be entered one time and into a single interface. In this way, your HR staff can turn their attention to broader and more strategic activities, such as new and more efficient ways to recruit and retain valued employees.

Advanced Reporting

Payroll can be a large expense that can affect many areas of a business. Given the relationship between hours worked and metrics like productivity, employee satisfaction, or employee retention, a fully integrated payroll system offers the ability to dive into the data. For instance, you can use time tracking information to identify seasonal trends, or to evaluate the efficiency of different business lines.

Protecting Against Non-Compliance

An automated time and attendance system can help your company maintain its compliance with wage and hour laws. For example, depending on applicable federal, state, and local laws and regulations, staff members may have to be paid at specific rates of pay after working a certain number of hours per shift or per week. An integrated system can, for example, help with this by automatically applying a different rate when the hour mark is reached.

Time and attendance software can help you maintain compliance with laws like these by providing daily and weekly overtime functionality which is integrated with the payroll system to help ensure hours are paid at the appropriate rate.

Archived time records and policies (and more consistent data collection overall) can help make complying with various wage and hour laws and regulations much less onerous for employers. In the event your business is audited for allegations of wage and hour violations, the data accuracy generated through an integrated payroll system may help facilitate the audit process.

Improving Employee Engagement

Scheduling and handling time-off requests are important elements in maintaining an engaged workforce. When employee engagement increases, issues like turnover may decrease. Companies that offer staff enough hours to maximize their incomes, while being flexible enough to accommodate vacation requests or scheduling needs, generally foster a desired employee experience. With automated systems, it's possible to quickly review, approve, or address such requests and manage planned absences to minimize their effect on your company.

Employee reviews and pay increases can also have a significant impact on employee satisfaction. Automated alerts within the system can notify HR staff of upcoming employee anniversaries, benefits eligibility dates, and other important milestones. Once reviews or pay increases are entered into the employee's file, an integrated system can automatically update the employee's pay rate, enabling the raise to go into effect at the appropriate time designated by the employer. When HR has the tools to act quickly on these types of actions, employees can feel valued and more satisfied at work.

Fully integrated systems also give employees expanded self-service opportunities. When they log in to enter their time, they can also access payroll data, tax deductions, and benefit selections. Connected payroll and time tracking increases efficiency and helps to provide employees with the information they need, all in one user-friendly platform.

Boosting Data Access and Security

Streamlining data entry can also help increase the accuracy and security of your payroll and HR information across platforms. Because fewer authorized people are entering information and accessing the system, data is more likely to be accurate and there is less chance of unauthorized changes or incompatible information across different platforms. This can ultimately help prevent costly errors and save the time and money it would take to correct inaccuracies.

An integrated interface can also help improve data security, since payroll and HR benefits systems contain highly sensitive company and employee information, such as salary and Social Security numbers. By integrating these systems into a highly secure HR platform, you can help lower the chance of data breaches. By reducing the number of access points into the system through an integrated platform and eliminating disparate systems, companies can help reduce the opportunities for internal or external hackers to gain unauthorized access to sensitive information.

What To Look For in an Integrated Time & Attendance and Payroll Management System

Depending on your company size and the complexity of your payroll, there are a number of features within integrated payroll management systems that work to reduce errors, streamline reporting, and provide useful information. When evaluating integrated payroll systems, look for the following items:

  • Cloud-based software with automatic updates
  • Employee self-service capabilities
  • User-friendly reporting dashboards
  • Ability to set up alerts and reminders
  • Compliance tools

Time Tracking as Part of an Integrated Payroll and HR System

When payroll and HR information are available together through a single interface, self-service features are much more effective. Employees can log into the system and quickly access information about payroll, available vacation and sick time, current tax deductions, and benefits. This allows employees to find answers to basic questions themselves, which can boost satisfaction and decrease the amount of time that management and HR spend resolving simple issues.

Using an integrated payroll service can also make it easier for HR staff and managers to access employee information on demand, saving time and enabling them to make more informed decisions. Managers can also feel more confident that the information they are viewing is accurate and up-to-date.

Don't let outdated, manual, or separate time tracking processes drag down your productivity. Switch to a payroll system that is fully integrated with a powerful online timekeeping solution to help you effectively manage HR processes while minimizing inefficiencies.


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* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

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