Five pains of disconnected finance and payroll systems
Are you still making do with separate finance and payroll systems? If so, the chances are that you’re doing a lot more work than you really need to, and getting a lot less out of it. There are good reasons why so many businesses are now switching to fully integrated software systems. These are just some of the ways that you lose out by doing things the old-fashioned way.
Time is wasted on re-entering data
How do you add information to your separate payroll and finance systems? The chances are that you’re manually rekeying everything. Even if you’re using copy and paste, this represents an absurd amount of duplicated effort, taking up the time of employees who could be doing something more useful. Each time data is re-entered, there’s the potential for errors to occur, and it’s a nightmare trying to work with two different data sets that don’t quite match. Whenever you need to update your records, you have to do it twice, and sometimes the message won’t filter through to both HR and finance, so you’ll end up with further confusion.
It’s hard to get a clear picture of costs
For many companies, payroll is the single biggest cost, so when finance staff can’t look at it in detail, important information about the financial health of the business is lost. It’s harder to identify areas where savings could be made and harder to predict how costs are likely to vary from month to month, hampering financial decision makers’ ability to establish what the business can afford to spend in other areas. It’s harder to generate useful metrics and perform thorough financial analysis on new ventures or project work. This leaves finance officers trying to do their jobs with one hand tied behind their backs.
Auditing is more effort than it needs to be
The reduced transparency that stems from having separate systems also makes it difficult to perform auditing tasks, from the full financial audits necessary to gauge the overall health of the company to the day-to-day business of tracking anomalies back to their points of origin. That mistakes will happen is a given, no matter how good your staff are, and when clarification requires working through two systems – often run by different teams – it’s much more difficult and time consuming. There’s a higher risk of errors going unnoticed altogether. Producing reports is also much more laborious. You have to do more work just to meet basic regulatory requirements.
Finance and HR teams don’t work together
Having separate systems may well mean that finance and HR staff are always in and out of one another’s offices chasing things up, but it also means that they’re unlikely to work together at a strategic level. While finance staff are good at identifying areas where costs seem unnecessarily high, HR staff are generally better placed to work out how those costs can be reduced without causing problems, because they understand the circumstances facing employees. Increasing their strategic input in financial policy-making helps with the development of solutions that will actually work in practice. It also makes it much easier to manage project finance, both in the planning stages and on the ground.
Employees get frustrated
What does all this look like from an employee’s perspective? A ‘MetLife Employee Benefit Trends Survey’ carried out in 2017 found that 39% of UK employees are living payday to payday and can’t afford delays in their pay being released. This means that any delays caused by data errors or, for instance, uncertainty over expenses can put them in a really precarious position, and ongoing issues like this are likely to significantly decrease their loyalty to the company. An integrated system reduces this risk and also makes submitting claims easier for them. It halves the number of queries they are likely to have to deal with in the event of a problem arising.
The integration of software allows businesses to create a more connected and effective network in which managers, employees and others can easily interact. Integrated technology has revolutionised the way that companies operate and communicate with each other, so why not put it to work in your organisation and make the above difficulties a thing of the past?