April 4, 2024

By Cheryl R. Olson, CPA, CGMA, Director, Solutions Strategist and Sarah Petrone, Chief Human Resources Officer

In a not-for-profit organization, staff are primarily the number one asset and can make up 50-80% of overall expenses that includes compensation, taxes, and benefits. Technology in operations enhances human capability, so your people can be focused on carrying out the mission.

There are many types of functionalities available in a payroll system that go beyond processing payroll and can enable employee staff service, handle multi-state filings, reimburse employee expenses, integrate with the accounting system, process 1099s, allocate labor costs, and more. There isn’t a one-size fits all solution, otherwise every organization would be using it. It’s important to determine which functions are most important to your organization by identifying the problems that need to be solved.

What pitfalls are organizations facing?

The common problems surrounding HR processing in not-for-profit organizations include growth without integrated process infrastructure, data entry errors, inefficiencies with manual or dual entry, on-premise solutions that don’t support remote work, and staying on top of HR and payroll compliance.

The risk of not taking advantage of technology to integrate your accounting and payroll systems has to do with manually entering information into multiple systems, which is prone to data entry errors. This leaves two systems with inconsistent information, so it’s unknown which is the system of truth and what information to believe for decision making.

Integrating your cloud-based payroll and accounting systems can happen in three different ways: importing payroll information into your general ledger, using a middleware connector, or building a direct connection. No matter what you choose, eliminating manual duplicate entry is a goal.

Why should I use automated processing?

The benefits of integrating accounting and payroll are many, and here are the top three:

  1. A better employee user experience by building trust with correct and on-time pay and W-2s. The icing on the cake is to have an employee portal to change personal information and reduce HR staff time with this self-service option.
  2. The ability to allocate staff time to departments, programs, and grants in the payroll system that is transferred into the accounting system without re-entry, and the ensuing ability to run budget to actual financial reports.
  3. Reducing demands on staff by increasing efficiency through automation.

A robust payroll system has the ability to move beyond just entering time and processing payroll, especially for a small organization growing to a mid-size one. A comprehensive system allowing for a smoother transition in growth and efficiencies can be found through automation. The system can provide an opportunity to collaborate effectively and focus on life/work balance. Examples include getting notifications if people are working too much or employees are not taking time off.

Whether the HR department has one employee or 15, streamlining processes through technology will allow the HR leader to focus on people and culture rather than the processing. Technology can provide the needed lift for HR to ensure their focus is on more value-added work.

This starts at the beginning of the employee lifecycle with the job application process.  An electronic tracking or submission process is pivotal to allow transfer of data and information to HR and the hiring teams. Even a basic system can help you track and manage applicants for current roles and the pipeline for future roles.

How can technology improve my organization overall?

Candidates often expect a mobile-friendly experience to apply and interact with organizations. Some companies forget that the application process is the first experience with the organization and reflects its brand and the expectations set for employee experience. If the application process is clunky, what can people expect once they are in the organization? The mobile experience is also a basic enhancement that allows for more inclusivity to ensure an equitable, consistent process. This technology enables HR leaders to dive deeper into hiring and pipeline analytics that can help assess future ability to attract and make adjusts. Without this metadata, it becomes a manual process or anecdotal guess.

Technology enhances not only the hiring process but also the post-hire employee lifecycle, from ease of maintaining employee data to more complicated people analytics. Sometimes in the busy HR world, we forget that we have the pulse and information to bring powerful data to life – from the basics of tracking tenure and turnover to predicting when people leave an organization. These are critical pieces of information to assist leadership teams build a stronger, organization, which in turn, can be ready do the work for the communities we serve.

While your HRIS system reflects your brand and employee experience, it can also serve as a portal for internal staff communication. Many platforms have a home page or interface for employees.  You can utilize this page to serve as a communication portal for your team and send critical messages that are important for that week, day or month. This can provide a one-stop shop for your staff and take one more system or point of information to track for your operations team members.

Next Steps

Given our new normal working environment accounts for remote and hybrid employees, now is the time to evaluate your existing infrastructure and technology to support your organization’s human capabilities.

If your organization has been thinking about changing payroll systems, adding an HRIS system, or creating an all-in-one payroll/HR/accounting experience, reach out to Clark Nuber to talk.

© Clark Nuber PS, 2024. All Rights Reserved.

This article contains general information only and should not be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. Before making any decision or taking any action, you should engage a qualified professional advisor.