The cloud could be poised to take over payroll automation

March 20th, 2015 | Posted by Kevin Corley in Business Process Automation | Information Management | Workflow

By most guesses, the majority of companies use payroll software, but a wave of change may be coming as cloud-based content management systems vie with in-office modules for business supremacy. 

Automation already prevalent among businesses
Many businesses have gone paperless with their payroll processes and for good reason, it's simply better than the alternative in their eyes. The American Payroll Association estimates that by going paperless businesses can cut payroll processing costs by up to 80 percent. Not only do the majority of companies take advantage of electronic payroll processing these days, but just over half of them also offer employees the capability to enter their personal information into payroll systems themselves. 

Legislation also drove businesses to switch over to payroll software, a transition which many of them found to be advantageous not long after. Laws such as the Sarbanes-Oxley Act of 2003 have helped many companies discover the benefits of automated payroll, according to Inc. While the legislation itself – and the penalties that come with it – may make life difficult for some businesses, the benefits of removing paper from payroll processes are undeniable. And with 90 percent of organizations using a paperless payroll distribution, according to the APA, in association with the Hackett Group, it seems the vast majority is in agreement on the benefits of automation. A new division has emerged, between in-office payroll software, and systems that are based in the cloud. 

"Most of the large software companies aren't putting many resources into on-premise solutions any more," Brian Jacobs, a partner at Emergence Capital, venture capital firm, told Forbes contributor Gene Marks. "They are basically pushing their customers into a software-as-a-service environment."

Marks, who owns a customer relationship management consulting firm, Marks Group PC, noted that many businesses seem poised to move on from on-premise payroll software toward cloud-based automated systems. He explained that the majority of businesses are ready to dump their in-office software for online applications because the systems based in the cloud have finally caught up with the one installed on your PC. 

On-premise automation, and why it may soon give way to the cloud
On-premise automated accounting solutions offer a number of benefits to the business owner who still operates with paper. The thing is, not many of them are still using paper. Most companies have switched over to some sort of automated payroll software by now and these systems offer a number of benefits to those that do. Paperless payroll makes it easier for employers to take care of payroll, both by reducing processing time and cutting the costs typically associated with paper – paying for printing, ink, copying, filing and other similar supplies and tasks. 

Now, paper has been pretty much forced out of the picture when it comes to how businesses complete their payroll. And with on-premise software now dominant, cloud-based automated solutions have caught business owners' eyes. Some online services offer to assist your business with payroll processing, while others allow your company to outsource the operation completely. Cloud-based services can also provide access to the system around the clock, which can be useful. 

Either way, the benefits of automating payroll are clear to most business owners. Whether companies are utilizing cloud-based services or on-premise solutions, the advantages over paper payroll processing are clear. It remains to be seen whether Mark's prediction that cloud-based solutions will soon sweep in and end on-premise software's reign over payroll processing will come true, but one thing is for sure, paper-based payroll operations are coming to an end fast. 

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