Cloud-Based Payroll: The Game-Changing Technology Every Accountant Must Know

Decade over decade, payroll has seen a massive shift in technology and has evolved remarkably. What was traditionally a job largely based on Excel sheets has now gone completely digital, thanks to modern payroll software and cutting-edge technologies.

Companies, HR professionals, and payroll outsourcing providers had already begun using modern-day software to maintain employee records and compile salaries back in the 2000s. However, the 2010s proved to be game-changing for payroll with the advent of cloud computing.

Cloud technology has revolutionised the way businesses and accounting firms look at payroll. Cloud payroll software offers numerous advantages to HR professionals over legacy payroll systems. But what really is cloud-based payroll? Let’s dig into the technology.

What is cloud-based payroll?

Cloud-based payroll refers to a centralised digital payroll system that allows users to access and manage data solely via the internet. Since a lot of companies adopted remote and hybrid work models in the aftermath of the pandemic, the technology is highly viable for businesses with a globally spread workforce.

Payroll is a collaborative effort. Multiple teams, such as payroll, HR, and finance, work together to compile data and calculate employee salaries ahead of the payday. Traditionally, this was done within the confines of an office as the payroll software could be accessed only from a company’s official workplace. However, in the remote working scenario, this option became redundant.

This is where cloud-based payroll comes into the picture. Since cloud computing allows users to store data digitally, it can be accessed from any location whenever required. Consequently, teams can collaborate digitally to collate and manage required data, making the technology one of the key payroll trends to look out for.

Why is cloud-based payroll important for accountants?

A 2022 research report by Market Decipher predicted that the cloud-based software market will reach $13,137 million by 2028. The industry is expected to grow at a remarkable CAGR of 6.8% between the forecast period of 2021 to 2028.

With a growth prediction of this magnitude, cloud-based solutions will become an integral part of payroll in the coming years. Along with enterprise-level organisations, cloud-based software is already being used by many smaller businesses too.

Companies, therefore, look for a firm’s technical expertise when partnering with a UK payroll service provider. In fact, technology has become a crucial parameter for businesses when choosing a payroll partner, catalysed by the global pandemic.

Having up-to-date knowledge and significant expertise in cloud-based payroll can only increase accountancy firms’ chances of attracting new clients. It also helps accountants stay ahead of their competitors and provide clients with a complete package of services.

Benefits of cloud-based payroll

Although legacy payroll systems have worked well for businesses for several years, these systems were invented decades ago and are aging poorly. As technology evolves, payroll administrators must revamp their processes to accommodate clients’ changing needs.

Cloud-based software offers several advantages to accountants and HR professionals, as opposed to legacy payroll systems. Let’s look at some of these in detail.

Centralised data storage

The greatest advantage of cloud-based payroll over traditional systems is its ease of accessibility. Cloud payroll systems store data digitally, which can be accessed anytime, anywhere. Thus, organisations working remotely or on a hybrid basis can process payroll efficiently without being physically present in an office.

Moreover, cloud-based payroll systems provide self-service features, allowing managers and employees to access their timesheets, apply and manage attendance, raise leave requests, view payslips and pension details, and more online.

Simplified compliance

Compliance is fundamental to payroll. Yet, it is among the most despised aspects of the job by HR professionals and UK payroll providers. Since the government regularly changes legislation relating to employee wages, income taxes, and special grants, payroll administrators are expected to track and manually incorporate them into the following payroll cycles.

Cloud-based payroll software is designed to track the latest legislative changes and implement them automatically. This makes the entire process faster and more efficient.

Cost savings

It is no secret that maintaining and upgrading legacy systems is a cost-intensive affair. On the other hand, cloud-based payroll systems go easy on your pocket as there is no capital expenditure involved. Besides, these systems are updated periodically by their vendors, which means you do not have to spend any additional time and costs on upgrading them.

Better security

Another decisive factor for companies to delegate payroll to an external service provider is data security. Legacy payroll systems store your data on your computer’s hard drive or a local network. Although companies employ stringent security measures, this data is prone to risks.

With cloud-based payroll software, this risk can be averted. Cloud payroll systems use heightened security measures such as SSL certificates to ensure complete safety of all your employee data.

Are you ready to switch to cloud-based payroll?

With the demand for cloud-based payroll constantly rising, it is time accountants added the service to their portfolio. But how prepared are you for the transition? Consider answering the following questions.

• Do you offer payroll services? If not, are you planning to add them to your offerings?
• Does your team struggle to manage the payroll for clients with a global workforce?
• How well-versed are you and your team with cloud technology?
• Do you have the in-house expertise to switch to cloud-based payroll?
• Do you have the financial capacity to add a new service to your portfolio?

If your answers suggest that you may be short-staffed or lack the capacity to implement such a huge tech change, it is time to look beyond in-house payroll management.

Outsourcing allows accountants to scale their teams and add new technologies or services to their offerings without doing the core work themselves. Outsourcing payroll to a global service provider like QXAS opens a vast pool of global talent to hire from. These professionals are trained in the latest technology, such as cloud-based payroll software, thus helping you provide high-quality services to your clients.

To learn how outsourcing can help make your practice technologically efficient, book a free consultation with one of our outsourcing experts today. To explore more of our services, call us at +44 208-146-0808 or email us at [email protected].