It wasn’t all that long ago that CPAs and small business owners got their accounting and payroll software on CD-ROM. These days cloud-based delivery of this type of technology is firmly the norm and a core part of how businesses work with accountants on everything from tax strategy to costing models.
Being able to use costing models to predict and assess payroll costs helps clients budget accurately. Underestimating real payroll costs can be financially devastating. Cloud-based payroll systems track all of those real costs and make it easy for clients to share the data with their CPAs for analysis and guidance. And businesses can accurately account for their payroll costs as part of their overall financial picture, compared to using paper payroll records or downloaded software.
Disadvantages of Cloud-Based Payroll Software
For all the ease of use, cloud-based systems aren’t without their risks. Data security tops the list of risks associated with any cloud technology we all use on a daily basis. Security breaches are always possible when connecting to software through the internet, especially because of human error and lax security protocols. Employees might log into payroll software through unsecured public WiFi networks, share their passwords or make other mistakes that could potentially expose sensitive corporate or personal financial data to outsiders. And users have to be able to trust that their vendors have adequate layers of encryption and other data security safeguards in place to keep cybercriminals from accessing private data.
It can be hard to know what you’re actually signing up for and who you’re signing up with. The technology landscape is constantly shifting, with new services launching and existing services evolving and merging all the time. Users who don’t do their due diligence and subscribe to the cheapest, newest or buzziest services might not realize that they’ve signed up with software vendors that have a history of exposing users to security breaches or that the software itself is glitchy and unreliable.
Advantages of Cloud-Based Systems:
Software that’s installed on physical devices has to be updated, troubleshot and reinstalled over time. Cloud-based software is maintained and updated by the provider. That’s critically important for payroll systems since tax and HR laws are constantly changing in different jurisdictions.
The costs of cloud-based systems are generally clear-cut and predictable. Subscribers can anticipate the future monthly costs of payroll services when creating budgets and financial models. With installable software, you never know when the system will to crash and need to be replaced.
Cloud-based payroll software is accessible from anywhere by anyone who’s authorized on the user’s account. That’s ideal for today’s remote workforce, but it can be equally useful in a business where everyone is usually in the same physical location. Online payroll may allow employees to use self-service tools to do things like update withholding information, request PTO and even clock in and out. All that’s necessary is an Internet connection.
Newer technology is scalable and adaptable whether an organization is growing its workforce, downsizing its operations or moving in an entirely new direction. Cloud-based payroll software can continue to meet its evolving needs week after week without any service disruptions.
Being knowledgeable about the risks and rewards of using technology is one more way for CPAs to provide value to busy clients who might not have the time or inclination to assess their options around payroll solutions. Some clients might not be well-versed or even familiar with cloud technology or the way it impacts payroll. As their CPA, you can be a source of knowledge and guidance to help them make the best decisions about choosing and using secure payroll software.
ConnectPay partners with CPAs to help them make payroll processing easy, accurate and as secure as possible for their clients. From generating all the data you could need to help clients create accurate costing models to answering your own complex payroll tax questions, we’re here to take all the guesswork out of payroll. Let’s connect.
Richard King leads ConnectPay’s technology department with 40 years of payroll software systems design and development experience. Directing a team of developers, he is always continuing to improve ConnectPay’s proprietary payroll platform to ensure accurate payroll and tax compliance when laws change and new programs are introduced. The quick addition of CV-19 earning codes and PPP reporting for clients has put ConnectPay ahead of the curve in dealing with the pandemic through payroll.
