Are you thinking about automating your company’s salary management processes? Great decision. As a matter of fact, it is reported that nearly one-third of HRs time is wasted on payroll processing. When you have a powerfully integrated HR and payroll management software to automate it, you are better off with these tasks.
We used the term ‘HR and payroll management software’ intentionally here because when it comes to payroll processing, you have so many options out there in the market. Stand-alone payroll system software and those integrated with HR suites.
As you navigate the realm of these tools, you will have questions like what the big difference is. Let’s explain that and also show you why HR and payroll management software work best when they are together rather than when they are separated.
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Understand The Difference: Standalone Payroll System Software Vs HR Integrated Payroll System
The key differences between a standalone payroll system software and an HR integrated payroll system are listed below to make the comparison easier.
Standalone payroll system software
A standalone wage management system will just do the function it is primarily designed for, which is to process the payroll. To do that, you will have to manually feed it with all the necessary information, such as:
- Employee personal details
- Job titles and departments
- Attendance and leave data
- Work hours and shift schedules
- Salary structure and pay components
- Tax declarations and deductions
- Benefits and allowance
- Bonuses and incentives
- Reimbursements
- Bank account details for salary disbursa
Once you provide it with all the required information correctly and give the appropriate commands, it will proceed to process the payroll.
HR Integrated payroll system software
In an HR and payroll management software, you will have to do less manual entries than in a standalone system. Here, you have quick access to all information like attendance and leave data and employee personal details, since it is primarily an HR system with payroll as an extension.
Key Factors Affecting an Employee's Monthly Payout
To understand how an integrated HR payroll system works, we will have to consider the key factors determining an employee’s monthly payout. Whenever there is a variation in these factors, the gross pay varies, and the payroll system needs to know these changes.
- Basic salary
- Overtime pay
- Bonuses and performance incentives
- Deductions (e.g., taxes, PF, ESI)
- Leave without pay (LWP)
- Allowances (e.g., HRA, travel, meal)
- Reimbursements (e.g., mobile, fuel)
- Shift differentials or night shift allowances
- Loan or advance repayments
- Attendance and punctuality record
How Does HR and Payroll Management Software Simplify The Salary Disbursement?
The working of HR and payroll management software is quite simple. When a new employee joins the company, the HR team gathers information like their bank account details, tax filings, job details, etc. and adds them to the HR system. When the employee completes a pay cycle and their payout date approaches, the HR or the respective payroll in charge initiates the payroll processing in the system.
Since the different factors affecting the employee’s monthly payout are well maintained in the HR system and the variations are correctly reflected, the payroll admin has less manual work of transferring these into the payroll system. The well-integrated ecosystem of the HR and payroll management software makes the synchronisation go effortlessly and is fully automated in the background.
Key Advantages of Using HR and Payroll Management Software
It is beyond any dispute that an integrated payroll management solution would make the administrative overload a lot lighter than an independent payroll system. Here are some of the key advantages you could enjoy from such a system.
Faster payroll processing
Since there are fewer cases of manual data transfers, you are able to process the payroll more quickly and on time.
All records stay in one place
The system will retain every record of the payroll processing along with their respective references, linking to the determining factors like attendance, leave, overtime, etc., in one centralized database.
No challenges with compliance management
Compliance management, like tax filing and statutory deductions, will no longer pose a major risk in your payroll process when using an integrated system.
Improved reporting
You can easily generate custom payroll reports based on various criteria, such as department, pay period, employee type, or overtime hours.
The Bottom Line
Payroll processing gets smarter, easier, and more efficient with an integrated HR and payroll software for small businesses. We hope this blog helped you understand the key differences between an integrated system and a standalone version.
Looking to optimise payroll processing for your business? At Mewurk, we offer a smarter, all-in-one HR and payroll management platform. Contact us for more details or book a free consultation with our experts to decide on your choice.