Every business requires some kind of accounting system to manage expenses and determine profitability. As with HR software, businesses can generally benefit from automating accounting systems as opposed to using manual paper systems or spreadsheets.
While most businesses kept accounting systems and HR systems separate in the past, many businesses are now beginning to realize that integrating these systems can sometimes be beneficial.
Difficult to Find Pre-Integrated Solutions
One difficulty that companies may face is that it is currently rather tricky to find single software solutions that offer both HR management options and accounting capabilities. Even if companies offer both types of software, the software usually comes separately and may or may not have the capability to be integrated. This issue will most likely be resolved in the future, but it can currently pose a dilemma for companies that wish to manage these aspects of their business together.
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Provides a Big Picture View
If companies can overcome the obstacles to initial integration and either find a single software solution or effectively integrate two programs, it is much easier to get a big picture view of the health of the company. Managers can see how labor is effecting sales, how turnover is effecting the bottom line, how recruiting is effecting overhead expenses. Being able to compare accounting figures and human resources information can help with budgeting and decision making in a profound way.
May Cause a Shift in Perspective
Integrating financial systems and HR systems can cause a shift in perspective in some organizations. When human resources information is viewed side-by-side with financial data, it is easy to lose the human element and only see how A impacts B as it relates to revenues. This can unfortunately have adverse effects on company culture if organizations aren’t careful to retain the human perspective even while viewing figures.
Can Help to Show Trends
When it is possible to view financial figures and human resources data together regularly, it is easier to spot trends and to see how changes affect figures. This can allow managers to see how changes in labor constraints affect revenues, but they can also bring it back and see how these changes have affected turnover and how turnover has impacted hiring costs. Not only is it possible to view a snapshot of company data, it is possible to track data and see how changes impact the whole business over time.
One Solution May Not Fit All
While advocates of integrating human resources software and accounting software may say that moving forward with the integration is bound to help the company, this may not be true for every company. For some companies, the cost of obtaining the single or compatible solutions may outweigh the benefits of being able to view the data side by side, especially if the company is small. For other companies, however, integrating the data may make sense and provide a superior solution and basis for decision making.
It is important for companies to cost out how much it would be to integrate HR and accounting systems and figure out the expected gains in order to make an informed decision. If you’re an accountant, check out this article on finding HR software for Accountants.