The Problem: Your clients need to update their accounting books each time they run payroll. But, downloading payroll reports as spreadsheets or jotting down payroll data on scrap paper and manually typing the numbers in your cloud accounting is, well, annoying and time-consuming.
The Solution: It’s the 21st century. That means it’s time to eliminate unnecessary data entry. If you sign up for accounting software and payroll that integrate together, you can automatically share information between the systems. Cha-ching. That’s the sound of you saving time by getting rid of manual data entry (and using that time to make more money).
So, how does accounting and payroll integration work? And, what can it do for you and your clients?
How does accounting and payroll integration work?
If you use both accounting and payroll software, you may be able to integrate the two. That way, your payroll software automatically sends payroll details to the accounting system after a payroll run.
Accounting and payroll integration is possible if the provider you use:
- Offers both systems that integrate with one another (e.g., Patriot Payroll & Patriot Accounting)
- Has an integration with another provider (e.g., Patriot Payroll & Intuit Quickbooks Online)
So, what does accounting and payroll integration do exactly? After integrating the systems, a journal entry is automatically created in your or your clients’ accounting software each time you run payroll.
What gets sent over?
When you or your clients run payroll, the following gets sent to the accounting software as a journal entry:
- Gross pay: The total amount an employer pays their employees.
- Net pay: The total amount employees take home after taxes and deductions.
- Employee and employer taxes: The taxes withheld from the employee’s gross pay and contributed by the employer. How these are recorded in your accounting software depends on if you will handle tax deposits or if you use full-service payroll that withdraws them immediately for remittance.
- Deductions: Any amounts deducted from an employee’s pay for things like 401(k) plans, health insurance premiums, garnishments, etc.
- Contributions: Any amounts the employer contributes for employees, like 401(k) contributions and health insurance premiums.
Remember to update your integration settings if you add new deductions or contributions for accurate journal entries.
How do you integrate the two systems?
If the accounting software you use is able to integrate with the payroll software you use, integration shouldn’t be difficult. But, you do have to set it up.
Generally speaking, here’s what you do:
- Check to see that your accounting and payroll software can integrate with one another
- Integrate the systems (e.g., go to the integration settings page in your payroll account)
- Authorize the integration (if using separate accounts)
- Choose how you’d like the payroll details to be sent to your accounting software (e.g., which accounts in your chart of accounts do you want to use when recording journal entries from payroll)
At least one of the providers, if not both, should have instructions on the integration process. If not, contact them for more information on integration specifics.
What do you and your clients get from accounting and payroll software integration?
Having an accounting software that integrates with your payroll software can do wonders for both your accounting firm and your clients’ businesses. Automatically getting payroll data sent to your books:
- Saves you from having to log into another platform (if applicable) to update your books after running a payroll
- Helps you avoid spending unnecessary time manually entering payroll information
- Eliminates the potential of misentering values into your books after running a payroll
- Updates your accounting books in real-time (talk about fast!)
This kind of streamlined process gives you more time to focus on your clients, and it gives your clients more time to focus on their businesses.
Don’t use cloud accounting and payroll yet?
When shopping around for accounting and payroll partners, look into what kinds of integrations they have. And, there are some leading providers, like Patriot Software, that offer both accounting and payroll under one login, with seamless integration.
What other integrations are out there?
Integrations and time savings don’t have to stop at accounting and payroll. You can integrate other tools with your payroll system, like:
- Workers’ compensation insurance: Employers can have their payroll data automatically sent to their workers’ insurance provider, who then uses the information to calculate premiums
- Time and attendance software: Employees can enter their hours, which are sent to payroll after employer approval (ta-da!)
- HR software: Employers can track and manage employee documents and share information with employees (e.g., handbooks)