The Advantages of Cloud Payroll Software (And the Limitations You Should Know)

The Advantages of Cloud Payroll Software (And the Limitations You Should Know)

The Advantages of Cloud Payroll Software (And the Limitations You Should Know)

Cloud payroll software can provide small to mid-sized companies with advantages central to efficiency, costs, and growth. As a result, many companies are opting for SaaS cloud payroll systems rather than outsourcing these responsibilities or managing them in-house with dedicated accounting personnel.

While a cost and user-friendly cloud payroll solution in the cloud can be highly advantageous to all types of companies looking to take a professional approach with their cloud payroll while keeping costs in check and efficiencies high, cloud payroll systems do have some limitations you should know about as you decide on whether to make the move to a cloud payroll system.

We’ll cover many of the cloud payroll software pros you can expect to experience when adopting new cloud payroll software and also point out some of the limitations you should know about to make the best decision for your company and cloud payroll needs

Cloud Payroll Pros

Cloud payroll software solutions offer a suite of tools designed to help you handle your payroll activities more efficiently by replacing manual (and error-prone) processes with streamlined systems you can automate. Using a cloud payroll software system can also provide your business with these great benefits.

  • Minimal Upfront Investment and Reduced Costs

With cloud payroll software in place, you’ll eliminate manual tracking and payments which will help your teams work more efficiently and save time processing payroll. This time can be reallocated to other areas of your business to drive even more productivity.

  • Various Payment Methods for Employees

Most cloud payroll management systems give you the ability to offer your employees a choice in how they receive their paychecks. You can save preferences in the system to make sure employees are paid using their preferred method each time.

  • Automated Payment Disbursement

In addition to offering various payment methods, you can also automate the payment disbursement process using cloud payroll software. You can customize for hourly or salary employees and remove a lot of the manual work of calculating hours and paychecks using cloud payroll software.

  • Automatic Tax Calculations

Cloud payroll software is designed to automatically apply tax deductions and track payments fluidly, so all of your records are updated and ready for tax time, with as little hassle as possible.

  • Reduce Errors and Limit Liability

Because cloud payroll software helps eliminate errors and automatically accounts for taxes and compliance, you’ll reduce your risk of error and limit your liability.

  • Insightful Reporting

Cloud payroll software solutions typically offer to report tools that you can use to create reports from the data in your system, such as cost summaries and tax remittances.

  • Quick Implementation and Ease of Use

SaaS cloud payroll applications are incredibly quick and easy to implement. Usually, within a day or so, a company can have a cloud payroll solution up and running and ready for immediate use. Cloud payroll software systems are fully loaded with an array of different tools and features that companies can choose to use, and accessibility and use are typically very intuitive and user-friendly, even for employees who are not accounting professionals. 

  • Flexible Options and Advanced Features

Cloud-based software solutions are a continuing trend in business as they offer mobility and flexibility demanded by an ever more mobile business landscape. Cloud payroll software is no exception. 

More businesses are choosing to embrace SaaS cloud payroll solutions that provide an all-in-one cloud payroll solution that is convenient and mobile-accessible tools to support a business on the move. This also means that small companies can afford payroll systems much earlier than in the past, simply due to the lower cost and barrier to entry on cloud payroll software versus a more expensive on-premise system.

The core, must-have features of any cloud payroll software solution include:

  • Payroll Processing
  • Payment Disbursement
  • Tax Calculations
  • Tax Filing Options
  • Compliance System
  • Self-Service Portal
  • Mobile Access
  • System Integration Capabilities
  • Calendar Integrations
  • Reporting

  • Limitations of Cloud Payroll to Know as You Plan

While there are numerous advantages to using cloud payroll software in your business, there are also some limitations that may impact your company. Understanding these things will help you choose the best system for your business, and know what you need to account for (or navigate around) when implementing a cloud system for payroll. 

  • Lack of Proprietary Customization Options

While many SaaS cloud payroll systems provide you with options to customize and use the system as your company desires, the overall format for these vendors to market and monetize these types of cloud payroll solutions lies in keeping them fairly consistent and easy to host and support.

This means that while you’ll have access to all the most updated cloud payroll solutions features available, there may be things that you cannot fully customize. The options provided by most SaaS cloud payroll providers should encapsulate the needs of most companies, but if your company has some specific requirements or specifications needed in your payroll system, it’s a good idea to see how those things can (or cannot) be accommodated in a cloud payroll system. 

  • Vendor Dependence

Cloud payroll systems are completely hosted and managed by the vendor, which means a reduction in costs and resources for your business. But it also means that your system and the ability to process payroll accurately and on time is completely dependent on the vendor having their system updated and working. Most providers offer SLA terms guaranteeing uptime and updates so that you know your solution will always work well when you need it, so it’s worth looking into the uptime and options your chosen cloud payroll solution provider offers. 

  • Security

Cloud-based security is getting more robust with each iteration, and all cloud payroll vendors will have security features in place to protect your data. However, you need to stay savvy and make sure that your employees are always adhering to proper security protocols in your business and back up your data regularly to avoid any losses or instances of compromised data.

After considering all of the above factors, it is clear that the benefits outweigh the drawbacks, and your company probably can take the stress out of payroll accounting by using a cloud payroll software solution. If you want to know what are the popular cloud payroll software on the market currently, consult with our buyer's guide and you’ll be able to compare all the options.

About Wheelhouse

Like what you just read? At Wheelhouse, we are passionate about all things software, and our specialty is connecting software buyers to a solution that perfectly matches their needs. 

Please visit our Payroll Software page for a complete list of all the solutions we have on offer. 



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