If you’re a developer or SaaS product owner, payroll API integration can make your products more valuable to consumers. FinTech companies offer services such as earned wage access and income verification, which require reliable data on consumer paychecks.
In addition, API integration creates a single source of truth for workforce data that streamlines processes and makes reporting faster.
Accessibility
Using an API system to connect payroll and ERP data is valuable for businesses to streamline their workflows. It can reduce desk staff members’ time navigating different systems to locate and update employee information. Additionally, it helps to minimize errors and improve the overall accuracy of information.
A unified payroll API makes it easier for businesses to extract salary information, benefits, and deductions. It records how the employee has been paid and other information from various systems. This type of API solution allows for data normalization and integration across multiple platforms, which can help improve efficiency and save money for the company.
This type of API is also beneficial for companies using consumer-permission data. For example, a lender can use payroll data to derisk loan applications or improve credit quality by reducing fraud and mitigating charge-offs. It can also reduce administrative costs by streamlining the lease application process and simplifying income and employment verification. Additionally, lenders can utilize payroll data to enable more flexible repayment options. For a financial product to work, it must have recurring access to payroll and income data. This can be accomplished through a unified payroll API. This solution enables credit, insurance, and other financial services to verify consumers’ income and employment with minimal risk while maintaining compliance with the Fair Credit Reporting Act.
Efficiency
Payroll integration APIs are a way to connect multiple systems used in HR, payroll, and time management to create a unified platform. This enables automated data synchronization, decreasing the need for duplicate entries and eliminating the risk of human error. This results in reduced processing times and cost savings for companies.
A unified payroll API system allows HR and staff to focus on other duties and projects, freeing them from manual data entry and time-consuming spreadsheet work. This frees up more time for them to work with the business to improve productivity and employee satisfaction. A unified payroll API enables companies to streamline processes, reduce costs, and increase compliance with regulatory requirements.
One of the most significant benefits of a payroll API is its ability to help other applications use consumer-permission payroll data innovatively. This can be used for identity verification, derisking loans, and more. These capabilities make it easier for lenders and insurance agencies to offer credit and loans to more people while also keeping consumers safe from fraud.
A unified payroll API also makes it easier for employees to change their direct deposit or switch to a new bank account. This helps them avoid dealing with inconvenient branches or waiting two weeks for their paycheck. It also enables employees to access their earned wages sooner, which can be a huge advantage for some consumers.
Security
Payroll APIs can connect different software platforms, reducing the need for human interaction. This increases efficiency and minimizes error rates as fewer staff members have to transfer data between systems. This also reduces the time it takes for a company to process payrolls.
Streamlining data entry also reduces the potential for security breaches. This is because data from HR and payroll systems contains personal information such as salary, SNS, and addresses. Using one system for all functions makes employees’ files less likely to be misplaced or otherwise compromised.
Many fintech companies leverage payroll APIs to offer consumers new services and applications. These services can range from deposit switching to credit verification. For example, a lender can improve its underwriting processes by linking loan repayments to a consumer’s paycheck (payday-attached lending). It can also derisk loans and boost credit quality by verifying employment and income in a shorter period than traditional methods.
A unified payroll API enables these products to tap into the rich consumer financial data. This type of API will normalize and funnel all payroll information into a consistent, predictable, and easy-to-understand format that other applications can access. It can also connect different ERP, payroll, and time management systems, enabling them to share data more efficiently without the time-consuming process of building an internal integration.
Integration
Payroll APIs have helped to streamline data flows for businesses in the financial space. For example, consumers can connect their payroll and financial accounts using one seamless flow, allowing them to verify their income and employment for lenders in minutes. This will enable lenders to process lines of credit and loans at much higher processing speeds than in the past. This is a win for both companies and consumers alike.
The benefits of payroll integration include improved data security and less manual work for human resources and finance teams. The integration also reduces annual licensing costs since a company must only pay for one system instead of two. Additionally, it improves transparency and accuracy by creating workforce-related data.
In the context of a payroll API, employee data is stored as a set of Employee objects. These objects contain information such as the employee’s social security number and bank account information for direct deposit. The Employee object also includes demographic information such as the employee’s date of birth, government ID, and address. In addition, the Employee object can have one or more Employments that define their current role and compensation, including their job title, wage rate, and deductions.
This data is then synchronized with other systems that support employee management, such as time and attendance systems or accounting software. This allows the systems to exchange data and provide a consistent experience for employees.