Cash in the clouds - the pros and cons of SaaS-based payroll

Payroll is a prime candidate when it comes to moving apps from on-premise but what are the issues of moving to SaaS delivery?

Payroll was one of the first areas of business to be simplified and streamlined with in-house software and outsourced solutions, and numerous variations on these twin themes had already emerged before cloud computing came along and broadened the range – so much, that you may feel spoiled for choice.

Myriad payroll software and services now use cloud software and services in one way or another. Developers of traditional ‘on-premise’ software have web-enabled some or all of the functionality in their payroll systems and some also provide them as a service, some payroll bureau services accept (or require) online data input, there are software as a service (SaaS) solutions limited to features such as online payslips, and much more fully featured on-demand payroll software is available from both SaaS providers and traditional managed service providers, though offerings from the latter can range from basic online payroll software to fully outsourced payroll.

When the lifestyle brand Gant decided to replace a bureau service that relied on spreadsheet-based data input, it opted for a managed service (from Trace Payroll Services), that falls part way between the two. "Store managers now submit payroll data online," says Sue Evans, head of human resources, which has improved the quality of information. "The manual system was time consuming and mistakes were easy to make," says Evans, and as the online payroll is integrated with online HR, ease of use and access to payroll data have also been improved. "Information is easier to access across the organisation, so it’s easier to make decisions quickly," says Evans.

How involved in payroll a business is after it opts for a managed service varies widely. The range, resources, and functional scope of multi-country providers such as ADP and Ceridian is very different to the national payroll services offered by smaller providers such as Just Payroll and PAYE People, and there are myriad variations on the types and level of service available – which all impact on the service rates charged. So finding a managed payroll service that meets the needs of a particular organisation, within its available budget, will involve some difficult judgment calls, and can be as complicated as payroll itself (on which more, later).

But in some scenarios, cloud payroll can be as simple as accessing online payslips that use data sourced from (one of a number of) traditional on-premise payroll systems. When Basingstoke and Deane Borough Council wanted online payslips that looked like its printed payslips, and this wasn’t possible with its existing payroll software, it supplemented this with the Epayslip SaaS from Prolog Print Media. Robert Crawford, the council’s payroll, transport and insurance team leader says: "Using data files from our existing payroll system made the transition process quicker, smoother and more cost effective than investing in new payroll software."

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