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Dilanka Dilanka is a Business Development Manager at IceHrm. You can contact her at dil[at]

Why Is Everyone Talking About Cloud-Based Payroll Systems?

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Before payroll software came into play, businesses managed pay calculations, payslip preparation, and pay tracking all by hand. They relied on spreadsheets for some ease until the introduction of automated payroll software. These software solutions were designed by companies to handle and store crucial information vital for proper payroll management.

In today's landscape, where the workforce is diverse and dispersed, managing payroll has become increasingly challenging. Cloud-based payroll services have emerged as a solution embraced by companies of all sizes. They play a pivotal role in HR transformation by automating intricate and time-consuming processes, allowing HR managers to focus their time on more valuable tasks.

What are the Benefits of using cloud-based payroll ?

Although cloud-based payroll software simplifies operations, specific features can enhance a business's benefits. Following are essential features that your payroll software should offer to maximize its advantages:

1. Integration of time and attendance

Attendance plays a crucial role in determining an employee's pay at the month-end. Whether your team operates from an office or remotely, the Time and Attendance feature in payroll software offers a reliable way to track hours worked. This tool does more than just recording clock-ins and outs. It can remind employees to log their hours and notify them about overtime. Managers benefit by analyzing employee work hours on specific projects.

2. Comprehensive platform

HR has to juggle across various platforms that could be time consuming. Cloud-based payroll software stands out for their versatility in addressing diverse HR needs. Apart from payroll, these solutions seamlessly handle time and attendance, HR and benefits administration, all in one place. This eliminates the hassle of using multiple systems, enabling users to update employee data in one go. It saves time and ensures data accuracy, simplifying HR management with a single, efficient solution.

3. Accurate analysis and live updates

Errors in payroll often happen due to manual processing like entering data by hand. This leads to problems such as wrong time records, lost cards, or missed clock-outs, causing issues with salaries, taxes, and compliance. Cloud-based systems solve this by processing data in real-time without manual entry. They give better control over managing employees, helping in decision-making. Plus, these systems quickly generate customized reports with all the needed information, making things easier for businesses.

5. Timely deliveries/ regulatory adherence

Meeting deadlines in payroll, like paying employees on time and filing taxes promptly, is crucial. Late paychecks can affect employee morale and productivity. Also, navigating HR law changes is vital to avoid legal issues and hefty fines. Cloud-based payroll systems are lifesavers here. They keep businesses updated on law changes and compliance status automatically. These updates help in making smart decisions, ensuring companies stay on the right side of the law.

6. Staff categorization

Mistakes in payroll can mean wrong payments and even fines. Wrongly classifying employees can bring legal troubles that might harm team morale or even hurt the business. Cloud payroll systems help by automating this, ensuring everyone gets paid accurately under the correct classification.

7. Security protocols

Ensuring employee data security is a significant responsibility. Issues like data theft and system failures can seriously affect payroll tasks. On-site systems are vulnerable to data loss, but cloud tools shine in this area. Cloud technology offers a secure way to store and access data, safeguarding it while making it available to authorized users.

8. Employee permissions

Old-fashioned payroll systems often restricted employees from accessing their work and payroll details. However, with cloud-based payroll software, companies can now give employees access to their own information. This change has increased employee involvement and satisfaction. Employees can now manage their time cards, request time off, and participate in open enrollments. This also eases HR workload by reducing administrative tasks.

9. Record maintenance

Payroll isn't just about paying employees and following tax rules—it's also about keeping detailed records for audits. Proper records shield a company from audits, penalties, and employee claims. Employees can access these records too, easing the payroll team's workload. Cloud-based payroll software excel at maintaining secure and accessible records, making them a top choice for this task.

10. Cost-efficiency

Cutting IT costs: Cloud-based payroll systems remove the need for businesses to invest in hardware and software infrastructure, saving on expenses like servers and storage.

Software maintenance: These systems handle updates and maintenance, freeing businesses from costly and time-consuming software upkeep, allowing IT staff to focus on other important tasks.

No IT staff required: With the vendor managing the system, businesses can skip hiring IT staff for maintenance, ultimately reducing overall payroll costs.

Less paper, more savings: Cloud-based systems offer digital payslips, eliminating paper ones. This cuts printing, postage, and reduces paper waste, saving money.

11. Flexible distribution options

Full-Time Employees: Cloud payroll systems offer convenience by allowing direct deposit to bank accounts, ensuring timely and secure payments. They also provide digital pay stubs, simplifying the payroll process for full-time staff.

For Freelancers: These systems enable quick and easy payments to freelancers through digital wallets or other preferred methods, ensuring timely compensation for their services without the hassle of physical checks.

For Part-Time Workers: Part-time employees benefit from flexible payment methods like direct deposits or prepaid cards, giving them choices to receive their earnings conveniently, similar to full-time staff.

For Contract-Based Employees: Cloud payroll systems adapt to contract-based workers' needs by offering various payment methods, such as direct bank transfers or digital wallets, ensuring prompt and secure payments according to their contract terms.

12. Cloud rapport

Cloud payroll systems create seamless communication channels between HR and employees of all types. They enable quick access to information, easy query resolution, and transparent discussions on payments, schedules, and benefits. This fosters a positive environment, nurturing strong relationships across different work arrangements.

Advantages: What’s in it for you?

Cloud-based payroll can be easily and seamlessly integrated. But, how can cloud-based payroll give you an advantage over your HR duties?

1. Accessible anywhere, anytime:

The software is accessible with an internet connection, allowing you to manage payroll from any location at any time.

2. No need for investments:

You won't have to invest in hardware or software, saving costs on purchasing and maintenance.

3. Paperless operation:

Say goodbye to paper-based processes, reducing clutter and promoting a more eco-friendly workspace.

4. Automatic updates and backups:

The system automatically updates and backs up data, ensuring smooth management without manual intervention.

5. Enhanced data security:

Improved security measures safeguard your data, reducing the risk of breaches or data loss.

6. Scalability:

The system grows with your business, adapting easily to changing needs without disruptions.

7. Cost-efficient solution:

Compared to traditional systems, it offers a more affordable way to manage payroll, reducing overall expenses.

Cloud-based payroll system like IceHrm brings multiple benefits to businesses. Try it today!

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