How moving payroll to the cloud simplifies payroll processing

Specialised tech can be a strong ally in overcoming payroll complexities. That's something we all agree on. But the top-performing countries for the payroll proficiency driver 'Technology' must be on to something: many companies there are combining on-premises software with cloud-based payroll technology, and an increasing number have already switched entirely to the cloud.

That's no surprise, as the many benefits of cloud-based payroll solutions below only add to a smoothly functioning payroll. 

1. A single, easily accessible way of working

One of the many traits of handling payroll in the cloud is that every payroll officer has access to the same payroll process and data setup, wherever they are. If they’re connected to the internet and have authorisation, they can log onto the payroll platform and do their job. In times of hybrid working, the cloud offers a flexible way of working that on-premises software simply cannot.

What’s more is that the identical user experience and single source of truth – through centralised data – makes global collaboration easier, while sprucing up efficiency and consistency.

2. Higher accuracy through automation

While working with on-premises software sometimes entails performing many error-prone manual tasks, modern cloud-based payroll systems are usually winners at automation.

From your employee's personal information to time and attendance, tax information and all other forms of data – cloud tech can collect, process and calculate everything in real time. This doesn't only dramatically cut down on the workload, but also reduces the risk of errors, inconsistencies and, as a result, faulty pay slips and non-compliance issues.

3. Insightful payroll reporting

In a cloud-based payroll system, you always have the latest employee, tax and reward data readily available, which simplifies informed decision-making. But that's not all. The software can automate many of the laborious reporting tasks that would otherwise take hours, which – once again – saves you valuable time and reduces errors.

For example, instead of manually drawing up reports for each pay period, the system can automatically generate reports based on predefined parameters. This way, customisable reporting features can provide more targeted insights into employee compensation across countries.

4. Improved security & data protection

In handling sensitive payroll data, you want to ensure that it is kept secure – both from system crashes and data theft. Don't let your concerns about cloud tech's reliability cloud your judgement: your data is often safer hosted in the cloud than on premises.

To comply with data protection regulations, cloud providers invest heavily in security measures that protect their infrastructure, encrypt data and guarantee regular back-ups.

5. Faster response to legislative changes

Meeting compliance requirements and tackling legislative challenges when managing payroll is easier said than done. According to our research, legislation is considered the number one driver of payroll difficulties. This especially rings true in countries like France and Belgium, where regulatory changes tend to succeed each other at the speed of light.

With cloud-based payroll software, addressing them properly is easier – and way faster than with on-premises systems – as payroll providers can issue system updates to address changes as they happen. In addition, automated compliance checks can be built into your payroll process, giving you extra peace of mind.

6. Benefit from innovation

In working with a cloud-based payroll system, you're less dependent on your internal IT systems – and the colleagues who can use and maintain them. As many participants in the 2022 Payroll Proficiency Index stated, the risk of losing the expertise of seasoned professionals – either to retirement or the tight labour market – increases their willingness to either outsource their payroll or use external IT systems.

Technology changes fast, and payroll technology is no exception. While on-premises software is quickly outdated and optimising processes is mostly a complex and costly endeavour, cloud-based systems come with automatic updates which can be installed at a mouse click. Staying on top of innovations and futureproofing your payroll is easy and requires no new investments.

7. Smooth employee experience

Another key innovation is employee self-service – a feature that is built into modern cloud-based payroll solutions. With direct access to their personal information and payslips, and the ability to request a day off or file expenses online, your employees don't have to disturb your HR team anymore for tasks they can easily do themselves.

In this way, tapping into self-service tools increases employee engagement while lifting some of the administrative burden from your payroll professionals' shoulders.

The accessibility, improved security, user friendliness and frequent updates of cloud-based payroll solutions are important benefits that make your organisation’s payroll processing easier. And the best part: moving from on-premises to the cloud is likely to be a true cost saver for payroll.

As opposed to working with on-premises systems, where you need to invest in expensive hardware and software just to get going, cloud-based solutions usually require no large upfront investments.

Cloud providers typically offer a pay-as-you-go model, which means that you only pay for the resources you need for a set number of active users. Upgrading and customising your payroll solution as your organisation grows takes little effort and doesn’t disturb your operations.