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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 existed, companies did payroll calculation, payslip creation, and payroll tracking by hand. Until automated payroll software was introduced, they relied on spreadsheets, which provided some relief. These software solutions are developed by the companies to manage and store important information for proper payroll processing.

In today's landscape, where the workforce is diverse and dispersed, managing payroll has become increasingly difficult. Cloud-based payroll services have become a solution adopted by businesses of all sizes. They play a central role in transforming HR by automating complicated and time-consuming processes and allowing HR managers to focus their time on more valuable tasks.

What are the benefits of cloud-based payroll?

Although cloud-based payroll software simplifies operations, certain features can add value to a business. Below are the key features your payroll software should offer to maximize its benefits:

  1. Integration of time and attendance recording
    Attendance plays a crucial role in determining an employee's salary at the end of the month. Whether your team works from an office or remotely, the time and attendance feature in payroll software provides a reliable way to track hours worked. This tool offers more than just recording the start and end of work. It can remind employees to record their hours and inform them about overtime. Managers benefit from analyzing their employees' hours worked on specific projects.
  2. Comprehensive platform
    HR has to juggle different platforms, which can be time-consuming. Cloud-based payroll software stands out for its versatility in handling various HR needs. In addition to payroll, these solutions seamlessly handle time tracking, human resources management, and benefits administration - all in one place. This eliminates the need to use multiple systems and allows users to update employee information in one step. This saves time and ensures data accuracy and simplifies workforce management with a single, efficient solution.
  3. Accurate analysis and live updates
    Errors in payroll accounting often arise from manual processing, e.g. by manually entering data. This leads to issues like incorrect timesheets, lost cards, or missed billing, which in turn leads to payroll, tax, and compliance issues. Cloud-based systems solve this problem by processing data in real time without manual input. They allow greater control over the management of employees and help in decision making. In addition, these systems quickly create customized reports with all the information they need, making work easier for companies.
  4. Timely deliveries/compliance with regulations
    Compliance with deadlines for payroll accounting, such as: B. Paying employees on time and filing tax returns on time is crucial. Late payroll payments can affect employee morale and productivity. It is also important to familiarize yourself with changes in HR laws to avoid legal issues and hefty fines. Cloud-based payroll systems are a real lifesaver here. They automatically keep companies up to date on changes in the law and compliance status. These updates will help make smart decisions to keep businesses on the right side of the law.
  5. Categorization of personnel
    Payroll errors can result in incorrect payments and even fines. Misclassifying employees can cause legal issues that can harm team morale or even impact the company. Cloud payroll systems automate this process and ensure each employee is classified correctly.
  6. Security protocols
    Ensuring the security of employee data is an important task. Issues such as data theft and system failures can seriously impact payroll. On-premises systems are vulnerable to data loss, but cloud tools can shine in this area. Cloud technology provides a secure way to store and access data, protecting it while making it available to authorized users.
  7. Permissions for employees
    With legacy payroll systems, employees often had limited access to their employment and payroll data. However, with cloud-based payroll software, companies can now give their employees access to their own information. This change has increased employee engagement and satisfaction. Employees can now manage their time cards, request vacation and participate in open applications. This also relieves the burden on the HR department as there are fewer administrative tasks.
  8. Maintenance of records
    Payroll is not just about paying employees and complying with tax regulations, but also about maintaining detailed records for audits. Proper records protect a company from audits, fines and employee claims. Employees can also access these records, making the work of the payroll team easier. Cloud-based payroll software excels at providing secure and accessible records, making it the first choice for this task.
  9. Cost effectiveness
    Reducing IT costs: With cloud-based payroll systems, companies no longer need to invest in hardware and software infrastructure, saving on server and storage costs.
  10. Software Maintenance: These systems take care of updates and maintenance, freeing businesses from costly and time-consuming software maintenance and freeing IT staff to focus on other important tasks. No IT staff required: Since the provider manages the system, companies do not need to hire IT staff for maintenance, ultimately reducing overall payroll costs.
  11. Flexible distribution options
    Full-time employees: Cloud payroll systems provide convenience by allowing direct deposits into bank accounts, ensuring timely and secure payments. They also offer digital payslips, simplifying payroll for full-time employees. For Freelancers: These systems enable quick and easy payments to freelancers via digital wallets or other preferred methods, ensuring timely compensation for their services without the hassle of physical checks. For Part-Time Employees: Part-time employees benefit from flexible payment methods such as direct deposits or prepaid cards, giving them the opportunity to receive their earnings conveniently, similar to full-time employees. For contract employees: Cloud payroll systems adapt to the needs of contract employees by offering various payment methods, such as: direct bank transfers or digital wallets that ensure prompt and secure payment according to the 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 resolution of questions, and transparent discussions about payments, schedules, and benefits. This promotes a positive work environment and strengthens relationships between different employment relationships.

Cloud-based payroll can be integrated easily and seamlessly. So, Cloud-based payroll like Icehrm gives you  an advantage over your HR duties.

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