TECHNOLOGY
W hen building out a use for a longer than the actual build. While I wholly support integration between platforms and making the payroll cycle from end to end as streamlined as possible, in some instances, just because two systems can interact with each other, do they need to? Initial steps The first step of any potential integration within a business is to identify the system integration, the planning stage of the project can take departments that need to exchange data. For payroll, this typically involves human resources (HR) and payroll systems, so connecting these directly is a logical start. However, payroll impacts all areas of a business, and integration can extend further to include systems like time and attendance and bonus trackers too. This ensures that overtime and performance bonuses are captured accurately and timely, no longer relying on a manual spreadsheet to be updated across all departments before finally being sent to payroll. This prevents last-minute data entries just as payroll is being finalised, which no doubt we’ve all experienced at some stage. Once the integration types have been ascertained, the four key areas to concentrate on are: ● integration benefits ● data being transferred ● data changes ● data validation. Integration benefits A key element of any project is building a clear use case. What purpose will the integration serve and what benefits will it bring to both internal and external stakeholders? The main reason for an integration into or out of payroll is to reduce the amount of data duplication and minimise the requirement for human interaction with data when transferring from one system to another. Consider not only the cost impact on the business but also the potential risk reduction. Seamless system integration can significantly lower risks, both for your business and, in the case of a bureau, for your clients.
pension and payment providers? Identifying these pathways early is essential for a smooth process. Determine which data elements are critical for the integration’s success and which are simply ‘nice to have’. In payroll, specific criteria must be met to add employees correctly and report accurately to HM Revenue and Customs (HMRC), making these data points indispensable for any HR integration. Additional information, such as bonuses or overtime, can further streamline payroll processing and improve team efficiency if included in the integration. When exporting data from payroll to pension or payment providers, identify the information necessary for each party to perform their role in the payroll cycle. For payments, this includes verifying beneficiary details, payment amounts and dates; for pensions, review each provider’s data requirements and ingestion methods to ensure compliance. Considering these requirements early on ensures that the integration is well designed from the outset, minimising future development needs and enabling an efficient final solution. “Links to payment platforms will receive the correct bank information, ensuring employees are paid accurately and on time each period – exactly what everyone involved in payroll strives to achieve” Data changes Think about where and how the data will be updated. One system should serve as the primary source to prevent data misalignment and eliminate confusion about which information is accurate. The HR system is often the preferred choice for data maintenance as it allows employees to ‘self-service’ their information, making them responsible for keeping it current. Establishing a defined cut-off date for changes is essential in payroll as you want to prevent updates to bank details, addresses
or other critical information after payroll has been calculated. Late changes can lead to issues for employees, so, if possible, locking this data from further edits can help ensure consistency across systems. This data flow can then extend to any systems that receive updates from the payroll system. Links to payment platforms will receive the correct bank information, ensuring employees are paid accurately and on time each period – exactly what everyone involved in payroll strives to achieve. Data validation One area that is sometimes missed when integrating systems is the validation of the data being input. Within HR systems, a large amount of the data being entered is not fully validated. One example I always remember during an integration I worked on was around National Insurance (NI) numbers. The HR system had the field as a free text field and this led to the payroll software being sent a NI number of “I am sorry I have forgotten my NI number but have asked HMRC to resend it to me”. As you can imagine, this didn’t pass any validation check in the payroll software and obviously caused the application programming interface call to fail. Another area to be particularly wary of is bank details, as there are limited numbers of systems that validate bank details in any way. If the HR system and payroll system in no way validate the details they can be pushed into a payment platform – Bacs, Faster Payments, etc – and at this point it be discovered the account details are invalid and the employee not able to be paid until it’s rectified. This always leads to manual intervention from (generally) the payroll team to find out the accurate details and update systems to ensure the employee does get paid on time. If you can speak to the various system providers upfront, all parties can be made aware of the levels of data validation and ensure that all information being transferred is checked for accuracy at some stage of the process. This then enables the payroll to be calculated accurately, resulting in smooth end to end processing. Overall, if you can ensure your various systems accurately feed into payroll and are properly managed then you can benefit from greater accuracy, more time efficiency, improved employee morale and ultimately lower costs for the business. n
Data being transferred Identify the data requirements for
integration. Which systems are involved in the data flow? Is it HR to payroll, or payroll to
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| Professional in Payroll, Pensions and Reward |
Issue 106 | December 2024 - January 2025
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