integrate payroll time labor sheet

Why Integrate Your Payroll with Time and Labor?


Time and labor (also referred to as time and attendance) tracks your employees’ work start and end times, early departures, late arrivals, breaks taken, and absenteeism. If you’re not familiar with payroll processing, it comes across like a simple mathematical equation, where you multiply the number of hours worked by the hourly rate and voila! Your employees receive paychecks. Ultimately, payroll has to make sure employees are paid correctly, based on their time-labor records. However, it’s not that simple when you have to calculate tax deductions, benefit elections, and overtime. It all starts with you, the employer, knowing how many hours your employees have worked. The most common/universal way to do this is time tracking.

Because employees are the life blood your business and drive it, it’s critical for them to be set up for success, in order to attract, recruit, and retain the best in your field. Did you know that 49% of U.S. workers leave a job after experiencing two problems with their paychecks? This leads them to think, if their time and pay can’t be accurately configured, why would they trust you, their employer, with their development, performance, and management?

Historically, the functions involved with paying your employees were blended, making it difficult for employers who relied on stand-alone systems to manage each function. Today, thanks to software developers, these functions can now be merged into a single system. And, with fewer working parts, there’s less of a chance an error will be made. Plus, when time-labor is integrated with payroll, employers can now increase their efficiency, save time and money, and make the process less stressful for employees and the payroll staff.

Why Merge Time and Labor with Payroll?

When you use a solution that incorporates timekeeping and payroll capabilities, you increase your chances of not having a payroll error rate by 44%. This saves payroll administrators, managers, and other employees hours of administrative work tracking the origin of errors, in addition to not having to reissue checks or incur expensive compliance fees. Another benefit to creating efficiency in the process is that it allows your payroll team to focus on other projects and devise new ways to add value to your company’s operation. It’s been reported that businesses with integrated timekeeping and payroll exceeded their revenue targets by 7%.

More reasons include:

  • An integrated system captures and stores your employees’ time-labor data electronically, thus eliminating the need for timesheets and the physical space to store it.
  • Reduces timecard fraud. The American Payroll Association reports that more than 75% of U.S. employers lose money annually due to “buddy punching” (the fraudulent practice of coworkers punching in and out for each other). This is a serious, costly issue that can be addressed by integrating a biometric time-labor system with your payroll software, because it identifies a specific individual.
  • Helps keep your timekeeping and payroll errors to a minimum, thanks to an integrated system that lessens the chance of errors. This means that your payroll staff no longer have to manually calculate timesheets or enter timekeeping data into the payroll system. An integrated system enhances accuracy by digitally collecting time-labor data in real time and automatically transfers the information to the payroll system, which then calculates it based on the data entered, plus any subsequent edits. The system calculates employees’ time and ensures that the time is rounded up or down, accordingly.
  • Requires less staff to manage timekeeping and payroll data entry. As mentioned earlier, this frees up supervisors to better focus on mission-critical tasks and spend less time tracking attendance.
  • Keeps you, the employer, in regulatory compliance. Today’s regulatory environment constantly changes, which makes it difficult to keep up with compliance. Irrespective of the size of your business, managing workforce compliance is a complex, high stakes undertaking. Any time you can maintain compliance with federal and state wage laws, it lightens your burden, because when accuracy is improved, employees register fewer wage and hourly complaints, which result in fewer penalties from the government. Noncompliance penalties can cripple your company financially and in terms of time and resources. You run the risk of damaging your company’s reputation in the instance these violations become public. By replacing timekeeping and payroll tools with a single technology system, your employees’ data is secured in a single location, providing you with consistent, accurate, and a real-time opportunity to reduce your compliance risk. Another benefit is that your payroll administrators are free to analyze data, rather than enter it.
  • Enhances reporting. With an integrated solution, you have more dynamic reporting options compared to a stand-alone system. Since your data is centralized, there’s no need for your payroll staff to log into different systems to generate reports. One login can create reports on work hours, break times, absences, regular wages, overtime, and more.

Is it Worth Integrating Payroll with Time and Attendance?

Integration is a time-saver. It can streamline your time and attendance process. For example, payroll and timekeeping errors can be extremely costly, especially when labor is your largest expense, particularly for service contractors, such as janitorial and security businesses. One way to reduce these kinds of errors is to move to a system that integrates your time and attendance process with your payroll system. You can only get away with using a subpar system for a limited time before you’re forced to keep up with the times. According to the IRS, these kinds of errors are costly, often in the range of billions of dollars annually. The American Payroll Association shows an error rate of between 1-8% of total payroll in companies that use traditional timecards, with roughly 40% of small businesses incurring an average of $845 a year in IRS penalties due to mismanaged payroll processes. What if you could reduce those numbers? How much money would your company save annually? In addition to cost savings, here are a more benefits of having your time and attendance fully integrated with your back-office payroll system.

  • Simplifies your timekeeping and saves you money. By automating your timekeeping processes, you eliminate paper time sheets. You can better control your labor costs, because you can quickly identify over-budget jobs or projects. You also have a better handle on overtime. If you use a solution that offers tools like location and voice verification, you can confirm your employees arrive onsite and on time.
  • Lets you address attendance issues immediately to make sure all shifts and sites are covered, and your contract requirements are being fulfilled. This can also help prevent issues, such as ghost employees, which could be extremely costly.

Reduce Data Entry Time and Errors

When your time and attendance is a stand-alone process, you spend more time on redundant data entry, compared to integrating your timekeeping information with your operations and workforce management solution. If you’re process falls short, your software probably isn’t doing its fair share of the work. Every company reaches a tipping point where the processes and technology it has relied on for years are no longer sustainable. Your company grows, markets change, and software ages. However, with an integrated system, you could reduce your payroll processing by as much as 90% if your data is integrated with a holistic Enterprise Resource Planning (ERP) solution. Timekeeping information is immediately ready for seamless payroll, invoicing, and reporting, so you can spend more time on high-value activities. Plus, it’s easier to meet IRS requirements for retaining employee tax records when they’re stored digitally in your back-office payroll system.

Lower Your Compliance Risk

Compliance requirements are very likely to increase. No matter the size of your business, managing your workforce’s compliance is essential to maintaining the success of your business. When you have messaging features as part of your time and attendance system, you have a trail of timekeeping records and message responses should you ever need them in the instance of an audit. You can also lower your wage fraud compliance risk when you integrate your time and attendance with your payroll system, because you can ensure that you’re paying your employees for the exact amount of time they’ve worked.

Based on your experience as a business owner, you know that there’s no single, simple equation or fundamental task that guarantees the success of your business. Think about your payroll as a set of dominos. Striving for perfect paychecks, accurate timekeeping, compliance, and a positive employee experience can keep those dominos standing. However, if a single domino falls, it can ripple down and have a negative impact on other areas of your business.

When you integrate your timekeeping and payroll, you’re not merely addressing a solution to a business problem. You’re taking a proactive step to avoiding problems with employee morale and compliance. You need to constantly evaluate these processes to make sure that your employee data is accessible and accurate and that you’re eliminating the possibility of human-error that can occur by handling payroll manually. With this in place, you can now focus on enhancing the experience of your multi-generational employees and reduce their chances of looking or considering leaving your company by 52%, because of compensation.

Looking for Personal Service, Customized Solutions at a Competitive Price?