Key Takeaways
- Disconnected time tracking and ERP systems create costly labor allocation errors that undermine financial accuracy and compliance.
- Integrating time tracking with ERP enables real-time data flow, clearer accountability, and more reliable labor costing.
- When selecting the right time and attendance system look for strong policy enforcement, real-time validation, and deep integration capabilities.
- A government agency’s experience shows how incomplete time management requirements and fragmented systems can be corrected through reassessment and proper alignment.
For many organizations, labor is both the most scrutinized and least understood cost. Time tracking systems capture the hours. ERP systems allocate the costs. But when those two systems operate in silos, finance and operations leaders can lose trust in the data.
From an ERP advisory perspective, we are seeing a growing number of organizations asking how to fix labor costing issues at the source. The answer involves rethinking how time tracking integrates with ERP.
A Failed Payroll System Implementation
Panorama’s Expert Witness team was retained to provide a forensic analysis and written report to the court regarding the failed implementation of a major software developer’s ERP/payroll system.
The Real Cost of Disconnected Systems
Disconnected time and attendance systems may seem manageable at first. After all, manual reconciliation or batch uploads between systems can “work”.
However, we have seen errors in labor costing lead to multi-million-dollar reporting discrepancies that require restatement of financials and reimbursement of funds. Many of these issues begin with manual time tracking errors that snowball due to inconsistent policies, legacy systems, and poor integrations.
The Strategic Role of ERP Integration
To fix labor costing issues at their root, organizations must integrate time tracking with ERP in a way that enables real-time data flow, cross-functional accountability, and audit-ready reporting.
This is where ERP implementation services must go beyond technical integration. Leaders need to think in terms of process orchestration and governance. This means hiring an ERP consultant who can help map labor categories and business rules, while ensuring alignment among all departments.
Fixing Labor Costing Requires Process Discipline
Most labor costing errors stem from process inconsistencies:
- Supervisors approve time inconsistently across departments.
- Funding sources are assigned manually, often after the fact.
- Union rules and policy changes are not reflected in system configurations.
Our ERP advisory teams often recommend a readiness assessment before any integration begins. This assessment identifies gaps across people, processes, and data, including data governance issues that could compromise labor costing even after technical integration.
This is where business process management and change management consulting services become critical. You’re not just implementing new tools; you’re redefining how work is recorded, approved, and audited.
Selecting the Right Time and Attendance System
Executives and IT leaders should evaluate systems based on:
- Policy enforcement: automatic flagging of out-of-policy entries
- Real-time validation: live cost center and project code checks
- Integration depth: true bi-directional ERP data exchange
- Mobile access: accurate time capture from field and remote workers
- Role-based approval workflows: routing based on project, funding source, or department
An experienced ERP implementation consultant can help you pressure-test these capabilities. Popular ERP systems can optimize labor costing, but only when fed consistent, real-time data from time tracking systems configured to match organizational realities.
Lessons from the Field: Time Tracking Errors in Government
In a project recovery engagement with a state government agency implementing a new HRMS, our team uncovered that the Time Management component, along with Payroll and HR Administration, had been designed without fully capturing critical business requirements. Requirements related to accurately classifying and tracking employee time had been missed at the outset, which contributed to testing failures and raised concerns about whether the system could support the state’s workforce.
Panorama’s assessment further revealed that the delivered software was not a single integrated system as the agency expected. Instead, the vendor had provided three separate subsystems housed in different databases, creating inconsistencies that directly affected the accuracy and reliability of labor and time data.
By identifying these issues and re-evaluating requirements, we helped the agency to select a new solution better aligned with its needs for HR, payroll, and timekeeping. This shift laid the groundwork for more accurate labor costing and more dependable workforce reporting going forward.
Learn More About Fixing Labor Costing Issues
For organizations working to improve labor costing, time tracking integration should be part of the earliest planning discussions. This is where finance, technology, and operations intersect.
When time tracking and ERP work together, organizations gain the transparency and control needed to improve compliance, strengthen financial accuracy, and restore trust in their labor data. Contact us below to learn more about how we can help.
