Integrating Time & Attendance and Payroll

Integrating Time & Attendance and Payroll

 When companies consider implementing a time and attendance system, there are some common prerequisites in the buyer's checklist of features. Interestingly, many of the aspects of time and attendance that are most important to the end user are overlook, but that is the subject of another post.

The three most common prerequisites of any time and attendance system under evaluation are

• A biometric reader on the time clock
• A simple system
• Integration with the current payroll system.

Again, leaving the first two aside for other posts, we can explore the integration with payroll.

Integration, at least as far as the end-user generally understands it, is an automatic process that transfers the time and attendance information into their payroll software without the cumbersome process of data entry of employees payroll hours.

Here are the things that get in the way of this expectation.

Direct integration with payroll software is rare. 
It is usually done with a text file in a format required by the payroll software. This is not really a problem per se, but it is a little more "manual" than expected by many.

Entry-level products only support a few payroll products.
Budget-priced systems tend to support only the most popular payroll products.
For larger employers who tend to use more robust products, entry-level time and attendance are unsuitable. 


Software-based products generally do not support cloud-based payroll software. 
This is because cloud-based applications are built on programming foundations that facilitate communication between each other.


This is not always the case, but if you are using cloud-based payroll such as Xero, your best bet will be a cloud-based attendance system rather than a software-based product. Unfortunately, cloud products are usually subscription-based and relatively expensive over time.  

Advantages of integration are lost if the award interpretation is lacking.

Most entry-level and cloud attendance systems are lacking in flexibility in a few key areas of time and attendance. Specifically, flexible rounding of employee clocking times and balancing of daily or payroll hours.  

Entry-level systems designed in countries with much simpler attendance rules are always going to fall short in this area, leaving the operator to manually adjust the payroll hours for employees before exporting into payroll.

Insufficient Payroll Time Categories

Many companies have extensive payroll categories, and some actually have employee-specific payroll categories. Many time and attendance systems do not have the capacity to deal with more than just the basic categories such as normal time, time and a half and double time. Shift and penalty rates, and certainly individual payroll categories can push the required number out to literally hundreds of time categories that only the most advanced attendance systems can cope with.

Leave Management

The issue of insufficient payroll categories also plays out in the management of leave. Most users will expect that they can manage employee leave records in the time and attendance system. This is a nice feature because it means that leave balances and leavs applications can be handled outside the payroll system where it can be managed by supervisors. Unfortunately, entry-level products will not deal with this well due to a lack of definable leave categories.

Two-way integration

It is an understandable expectation that newly added employees in the payroll system should automatically populate the attendance system and that leave balances, for example, should automatically update from the payroll system. 

Unfortunately, this is rarely the case even in advanced attendance systems. 

In summary, while integration between time and attendance and payroll is possible, it is not particularly functional in entry-level time and attendance products. If you want relatively seamless and fully functioned integration, you will probably need to invest in a more robust ( and costly) system, which may actually be beneficial for other reasons, not the least of which it will come much closer to the time-saving system you were looking for.

Summary
Payroll integration in the product which most suits your budget and attendance rules may be non-existent or at best only partially functional. If payroll integration is high on your which list, then you may need to review expectations in some areas. In smaller companies, it must be said , the value of payroll integration is questionable.  


The Time & Attendance Consultant