We use Gusto for our payroll system and don't have any plans of changing that. Gusto handles payroll, a very complicated business process, seamlessly. Xero, a Zoho Books competitor killed off their own payroll product and recommended that their customers use Gusto instead.

An initial integration (without Zoho People) would be quite simple, as Gusto would simply need to post Bills to Zoho Books with the appropriate Books Accounts tracked, that could then be reconciled with debits from the business bank accounts.

To further the integration, Zoho People could allow the posting of hourly employees' attendance records to Gusto for simpler payroll calculations each week.

Lastly, this would allow Zoho Books to market Payroll integrations as a good option for customers who need that. There are a lot of posts in this community forum asking why Payroll doesn't exist yet, and I get that-- Payroll is overly complicated to build. Integrating Gusto would be a win-win, imho.