What is cloud payroll software and its benefits

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Over the past decade, cloud computing has become a key consideration for streamlining business operations. In 2020, cloud adoption increased to meet changing needs – and this trend continues as the need for technology that meets changing requirements, like remote working, continues to grow. Payroll software is just one of the many products that are starting to be modernised.


What is the cloud in simple terms?

The cloud refers to computing services (such as software) that are accessed online, where data is stored securely on the supplier’s servers. By comparison, on-premise services are installed onto your computer, where data is also sometimes stored (i.e. onto the hard drive). On-premise services can also be deployed through a server at your offices, connecting each computer onto a local network, which is often both expensive to invest in initially and an ongoing maintenance headache.

Let’s consider it in terms of music streaming to keep things simple. Spotify is cloud-based streaming software which offers a web player where there are no storage requirements. On the other hand, you may remember desktop software like iTunes where you would install it and all songs would back up onto your computer.

Many computer services are becoming cloud-based to accommodate new ways of working and to meet modern technology requirements. Both businesses and consumers have come to expect certain standards, whether that’s for music streaming or payroll processing.

The terms ‘cloud’ and ‘SaaS’ are often used interchangeably, however they have different meanings. Read more in our article on cloud vs SaaS definitions.


What is cloud payroll software?

Cloud-based payroll software is accessed using the internet, as opposed to on-premise software which is installed onto a computer. This means your data won’t be stored on your in-house computer but will instead be kept on the software provider’s servers.

Rather than opening up the system on your desktop, you’ll be able to navigate to your online portal and complete all payroll tasks from there. Codapay solutions are cloud-based meaning you can get started in a few clicks and leave behind outdated processes.

As the cloud offers a relatively new way of doing things, some are wary of making the change. However, doing so affords many benefits which we’ll cover below.


Advantages of cloud software

1. Save money

Compared to on-premise software, cloud-based products are based on monthly subscriptions that minimise upfront costs. Also, as the software can run on any desktop or laptop with an internet connection, you won’t need to invest in robust devices or security packages.

2. Scale up without a problem

The software will grow alongside you to meet your everchanging requirements. On-premise software can reach storage limitations, whereas cloud software vendors will handle this for you.

3. Meet compliance legislation

Report to HMRC in real-time to meet industry standards. Plus, security patches and compliance updates are rolled out automatically, so you’ll always be running the latest version.

4. Keep your data secure

A common misconception of cloud software is that it isn’t secure. The truth is, it’s just as safe – if not safer – as GDPR compliance and cybersecurity are the responsibility of the vendor, which is taken very seriously. In fact, the UK’s data protection regulations are some of the most stringent. This means navigating tricky legislation comes as part of the package, and you won’t have to find separate solutions.

Backups are taken so there’s no issue of losing your data. This a real concern for on-premise software where the devices could realistically be stolen at any time and your business continuity plan requires more investment if this were to occur.

5. Save time

Simplify laborious processes with automation features. Cloud-based software makes it easy to set up new employees and employers, and multiple payments can take just a few clicks.

Person writing in notebook

6. Easily use the interface

Designed to keep things easy, you’ll find your way around the software in no time.

7. Get ultimate flexibility

A major benefit of cloud payroll software is that you can access it anywhere at any time, providing you have an internet connection. On-premise software, on the other hand, can only be accessed on the dedicated devices during office hours, unless you invest in further technology and configuration through tools such as VPNs which can require additional devices or security features that cloud software wouldn’t require.

8. Keep employees satisfied

Your choice of software essentially boils down to making sure your employees are paid accurately and on time. An employee self-service web portal is becoming an important feature, allowing employees’ secure access to payslips and documentation.

If you’re an umbrella company or agency paying contractors, they will be able to upload timesheets easily.

You can also provide employers with access to add information themselves, reducing admin greatly.

9. Streamline your business

Eliminate the need for additional IT and security services, and other technical requirements. You won’t need to invest in high tech devices to support the software either. You’ll just need to ensure you’re using a compatible browser.

10. Improve accuracy

The automation of cloud payroll software limits errors which often occur from manual data entry. Mistakes can frustrate employees whose pay is affected, and you’ll also need to follow up the issue with HMRC. Some solutions use AI technology to point out potential errors, and even give you the option to correct them.


Disadvantages of cloud software

Although there are no inherent drawbacks of cloud payroll software, its suitability for your business is something to consider.

If you’re a business with specific security needs, you may prefer to be in total control of cybersecurity and data protection. As a cloud vendor takes this responsibility off your hands, you’ll need to think about the level of control your business has over this. However, some companies prefer the reassurance that the vendor will look after their data protection and security.

Another key consideration is the reliability of your internet connection. If it’s unstable and can’t be easily improved, cloud software might not be the right choice.


About Codapay

Our software solutions are cloud-based SaaS products that are designed to be feature-rich yet easy to use. We’ve helped clients all across the UK to modernise their payroll processes.


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