Working with 401(K) brokerages may drive some payroll clerks to early retirement.
Most companies provide some form of investment or company loan options to their full-time or salaried employees. But many of these organizations didn’t expect to be investing the time and effort that it takes to manage data between the investment and payroll systems. Not only does the extra work create headaches, it creates legal risks as well.
Incompatible Systems Demand Heavy Investments
Typically on a weekly basis, investment providers (such as Fidelity) send employers an export file of each employee’s loans, deferrals and stock information that needs to be entered into payroll. But these files use predefined formats that don’t match the payroll system’s requirements. So payroll staff must manually enter the same information from a report into the payroll system or create a program in-house to exchange this precise information between systems.
For many organizations, this adds up to hundreds of hours manually creating checks and entering deductions. It creates tremendous opportunity for human error, which also puts companies at risk for litigation. Some of our clients have spent as much as $60,000 on “pseudo-automating” a link between their investment company and their payroll company by setting up a series of off-cycle pay periods.
Investing in Automation Pays Off
IDI’s Time Bank Investment Link solution is designed for organizations that use an investment firm for employee retirement, stock options or other investments. With the Investment Link, Time Bank reads and processes export files from the investment company system, applies logic and mappings, and creates import files in the format required for payroll.
Time Bank can even manage the logic that stops automatic deductions for loan repayments once the loans are paid off.
The following table shows the types of investment data and vendors IDI has worked with to transfer data.
*If an investment company isn’t listed, talk to IDI about reviewing for feasibility and costs.
With Time Bank, integrating investment data and payroll systems becomes a simple, automatic process that reduces cost, risk and labor. Partnering with IDI may be the smartest investment you make!
- Get more information about Time Bank.
- Learn how we work with you to implement Time Bank.
- Read about the hidden costs of building your own integration system.
- Contact us to ask about partnering with IDI.