Cloud Payroll Software: What does it mean?

Payroll technology has been fast-evolving. While many still use traditional on-premise software, we now see numerous web-based platforms and cloud payroll solutions. For those of us who are not very tech-savvy, distinguishing between these options and identifying solutions that can elevate payroll management can be challenging. Whether you already use a cloud platform or are considering one, this article will help you understand the basics and ask the right questions to identify if the payroll solution you are looking at is truly the real deal.

Desktop, On-Premise, Web-Platforms, and Cloud Platforms - What Are the Differences?

Desktop and On-Premise Solutions When someone mentions a desktop or on-premise solution, it means the software is physically located in your office. This could involve installing software on your computer or running it on a local server. Think of it like owning and maintaining your own car—convenient, but all the maintenance and repairs are your responsibility.

Examples: BrightPay, Moneysoft, Sage Payroll, Iris Payroll Professional. With these, you handle all backups and data recovery.

Web Platforms Web platforms are accessible online via the internet. Sometimes they come in 'hybrid' packages where the processing is done on the desktop, and the web components are used for sharing access. Web-based systems are an overarching group that also includes cloud payroll software. However, due to the fine difference to the end-user, many non-cloud systems try to pass themselves off as cloud systems.

Real-World Example: Think of a web-based platform like a storefront that’s moved online, when at every order someone needs to find those items from a shelf. Whereas a cloud solution is like Amazon a fully online service designed from the ground up, with dedicated warehouses to enable the efficient collection and dispatch of goods from the closest location.

For all web platforms, unless you are 'self-hosting,' the vendor offers it as a Software as a Service (SaaS) platform, managing all hosting, backups, and technical support. — Comparison Table below optional —

What is Real Cloud Payroll Software?

Cloud technology is something we all use every day with the likes of Amazon, Google, and Microsoft. In fact, these are the three leading providers within the cloud infrastructure space. When a solution is designed for the cloud, several technical considerations are integrated from the outset.

Key Characteristics of Real Cloud Payroll Software:

• API-First Design: The browser/user experience is decoupled from the logic of calculations, all available via an API. This allows the system to handle each user request individually, like a universal translator ensuring seamless communication.
• Big Three Cloud Providers: Solutions should be deeply embedded with providers like Amazon Web Services (AWS), Microsoft Azure, or Google Cloud. AWS, for example, offers managed cloud services that provide virtually infinite scaling.
• Microservices Architecture: Designed to work on on-demand microservices, like having different departments in a company each handling their own responsibilities.
• Serverless: The solution does not rely on traditional servers, enabling better scalability and performance, similar to using a cloud-based storage service that automatically expands as you need more space.

How Does This Differ from a Web-Based Solution That "Lives in the Cloud"?

Web-based solutions can be 'hosted in the cloud,' which some vendors use to market their products as 'cloud software.' Traditionally, these systems would have been designed to use physical or virtual servers, such as Virtual Private Servers (VPS). These have limitations, as they require additional or larger servers to handle increased capacity.

Cloud providers offer similar services to VPS under different names to aid companies in transitioning from legacy technology. Thus, an inadequately designed system can 'live in the cloud' without reaping the benefits of cloud software.

Some vendors enhance their systems to allow for scaling based on demand, but these solutions often face limitations. For example demand can increase faster than the addition of new servers, and certain elements like databases do not scale efficiently, hence as a user the system will slow down significantly.

Real-World Example: At the end of every month, the web-based payroll solution slows down, potentially grinding down to a halt. Suffering from Timeout errors and lack of responsiveness. The technical support might even suggest changing servers which may take some time from their end. Meaning that this web payroll system is a legacy platform that could be living in the cloud.

Can Non-Cloud Payroll Software Move to the Cloud?

Yes, it is possible to transition to the cloud. However, many vendors attempting this switch often struggle to do it correctly. Moving to a real cloud payroll solution means essentially starting from scratch, as old infrastructural designs and code do not translate well to the latest technology.?

Changes like these may take years to complete for feature parity, and you should be looking for change or additional of qualified people that are helping make this change happen.

How to Identify if Your Payroll Software Vendor is Truly Cloud-Based

To determine if a payroll software vendor is truly cloud-based, consider asking the following questions:

1. Where is the platform hosted? Look for responses that include Amazon or AWS, Microsoft Azure, or Google Cloud.
2. Can you explain your technology infrastructure? Look for keywords like serverless, microservices, and APIs. If none of these are mentioned, it is likely not a cloud solution.
3. How is my data stored/separated from other clients? If you hear about unique instances or 'servers,' this is a red flag. Traditional databases struggle with large data volumes, so logical separation is preferred for scalability and cost-effectiveness.
4. Is the platform performance impacted by the volume of data I hold, and how? Any system may slow slightly with larger datasets. However, understand what degrades: Is it due to having more employees in a single employer, or does it slow down across the board? Check with current users about their experiences.
5. Does the system slow down during peak payroll periods, such as month-end? This question helps identify if the vendor’s processing power is limited. If performance dips significantly during high-traffic times, it is a red flag. Cloud solutions should perform consistently regardless of the time or demand.

Ask for a Trial to Check These Things Out

Request a trial to test the software during both off-peak and peak periods. Load a business twice the size of your largest employers to see how the system handles it.

It’s Not All About Having a Cloud Payroll Software

Deciding that a cloud payroll solution is the future is just the first step. There are other considerations to keep in mind before making your final decision. Ensure that you have a list of key pain points that need addressing. Think of all the things that, if you had a magic wand, you’d love fixed or automated.

A good cloud payroll software will not only have great technology but deliver unparalleled value compared to your existing solution.

So, Is Buddy a Cloud-Based Solution?

Buddy is a 100% cloud-first payroll solution, leveraging AWS’s infrastructure to handle every request from all our clients with near-instant responses. Using microservices, different processes run key parts of our payroll, from responding to holiday requests to calculating payrolls and generating PDF reports in the background.

Our proprietary technology also allows employees to keep their profiles across multiple employers, maintaining access to their personal data, including payslips, even if their employer no longer uses Buddy. Our technology has been vetted by multiple technology leaders, from publicly listed companies to large payroll bureaus.

Why Choose Buddy?

• Customer Support: Our dedicated support team is always ready to assist you.
• Innovation: We constantly listen to what our users need to create the next innovation in payroll, we don’t just follow trends.
• Reputation: Trusted by numerous accounting firms and payroll bureaus, Buddy is a reliable choice for your payroll needs.

Conclusion

Switching to real cloud payroll software may appear scary and time-consuming. Doing nothing, while an option, carries equal risk. From disengaged employees, risk of systems grinding to a halt, backups going awry and inefficient processes. Understanding what you should be looking for to verify a solution is truly cloud-based is a key part of your search for your next payroll partner.?

Buddy stands out as a reliable payroll companion, offering an innovative cloud payroll solution that is designed to scale whether you are handling large businesses or a bureau with numerous clients.

Ready to transform your payroll services? Contact us now for a demo or try Buddy’s cloud payroll software for free!