How Does Cloud Payroll Work? Advantages Of Cloud Payroll Systems

Until recently, many small businesses were hesitant to adopt new software because they balked at the upfront costs associated with setting it up. Only large companies could really imagine introducing software to optimize their processes. However, the disruption in cloud technology has made enterprise software easily affordable for businesses of all sizes.

Companies are able to improve efficiency by introducing new software with minimal risk and reduced internal staffing requirements. They can also combine higher reliability, security and data protection with higher productivity, lower costs and a faster return on minimal investments.

In this guide, we'll look at what cloud payroll is, the benefits of cloud-based payroll software, and what it does to streamline your payroll operations.

What is cloud payroll software?

Cloud payroll software is a payroll system that allows you to access, operate and control your payroll, from employee onboarding to compliance to, through a remote system - the cloud - using nothing more than a computer connected to the Internet towards the handling of exit processes.

Benefits of cloud-based payroll software

• Savings in upfront costs
• Companies can work faster and more efficiently
• Centralized employee data
• Simplified compliance
• Reduced workload for payroll employees
• Unified business processes
• Data in real time, anywhere in the world

Saving on upfront costs

Adopting cloud-based payroll software frees businesses from the complexity and costs associated with purchasing, maintaining and upgrading older, on-premise systems. From your CFO's perspective, there are no capital expenditures and huge cost savings, regardless of the size of your company.

Cloud systems are also easier for your IT department. Unlike traditional on-premises systems that require significant internal effort to be updated every few years, cloud payroll systems are updated by their providers as often as necessary, often multiple times per year, without requiring your internal IT department to spend time implementing them.

Add to that the huge cost savings that come from not having to invest in servers and other hardware to run on-premises systems or the staff needed to maintain them.

Centralized employee data

Payroll is about more than just calculating your employees' paychecks. Failing to organize all employee data in one central location from day one can impact payroll accuracy. For example, an incorrectly entered or incorrect start date can result in an employee missing out on an entire day's wages. This is a nightmare for the employer when it comes to compliance.

With cloud payroll software, you can keep track of information about all events in your employees' lifecycle, such as: Track and manage information such as entry, benefits, salary changes, vacation and investment declarations via a central data source. Plus, you can manage all employee communications from one central location.

Reduced workload for payroll employees

Maintaining employee data, collecting evidence and reviewing submitted evidence takes up a large portion of the HR department's time each month. Additionally, answering queries with back and forth emails is extremely time-consuming. With cloud-based payroll software with self-service employee portals, you can delegate some of the routine work back to your employees. Employees can submit their evidence themselves, while employers can validate it online and approve or reject the submitted evidence.

Uniform business processes

It's common knowledge that a company's HR, payroll and finance teams must work together to successfully complete monthly payroll. Your employees' personal data, tax data, vacation and attendance data, bonuses and other information must flow automatically into your payroll system to ensure error-free billing. Previously, corporate departments worked in silos to bring all this information together, but with cloud technology, integrating complex business processes is much easier. A tightly integrated HR, payroll and accounting system enables true collaboration.

Thanks to single sign-on, your employees can switch between multiple systems without having to remember multiple passwords. Secure access controls improve cross-departmental collaboration without compromising security or usability. Information flows effortlessly and in real time between departments.

Data in real time, anywhere in the world

Cloud payroll software delivers real-time information, insights, and consolidated payroll metrics without the need for separate business intelligence systems or data warehouses. From overview of consolidated payroll costs to total tax liabilities, the information is available with a single click.

Cloud payroll systems like IceHrm offer numerous advantages over traditional systems such as spreadsheets or on-premise payroll software. With the future of return to work uncertain, many companies would benefit from considering remote work options for their employees, including managing payroll remotely.

IceHrm Payroll is also capable of managing a distributed workforce with ease, allowing your employees to perform payroll from anywhere.