Payroll Outsourcing Services And Payroll on Cloud - Know The Difference

July 13, 2017

Payroll Outsourcing Services And Payroll on Cloud - Know The Difference

Earlier; there was a pre-mindset that Payroll outsourcing services is just one part of the process and that would be a costly affair. Security of data, too, was a major concern back then, with companies feeling in-house processing was much safer and also gave them options to alter processes whenever there was a need to. Before the advent of newer technologies and better capital management systems, companies of all sizes deemed payroll processing to be an in-house function.

In-house payroll processing was considered the best utility option because it essentially completed the whole cycle, from hiring employees to releasing them. The companies had the flexibility of changing the structure and system, while also customizing their reports.

Payroll outsourcing services were considered clunky, and moreover, costly. Companies felt there was a lack of flexibility and processing payroll in-house would lead to better efficiency. Today, all of these concerns are no longer valid. The rapid advancement of technology has made it easy for companies to adapt to with cloud payroll, filling a gap that was long left empty.


Technology has become a big part of the picture, present in every function carried out by your business today. Cloud computing has made it possible for companies to streamline their processes, much quicker than before. Payroll is a critical function for every business out there, which is why you need to choose the best option in front of you.


Cloud is simply outsourcing in a new manifestation, disrupting every industry piece by piece. Unlike the traditional outsourcing industry, cloud computing is newer, with many entrants still learning the capabilities this industry has to offer. There can be seen a paradigm shift, with many features now being deployed over cloud alone. There are subtle differences between these two approaches, some of which we have outlined below.


Key Differences Between Payroll Outsourcing Services Vs Payroll on Cloud


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1.   Ease of access

There is no questioning the accessibility cloud payroll offers to its clients. Since all the data is on cloud, it can be accessed from anywhere, altered from anywhere, and transferred anywhere, which is the epitome of flexibility. Traditional payroll outsourcing services cannot provide data and information with such ease because of the lack of necessary infrastructure. While payroll on cloud allows your changes to take place in real-time, outsourced services would require you to go through a hoop of changes, bound to frustrate you.

2.   Flexibility

Cloud computing
and flexibility might as well be synonym to each other. With cloud computing, you get the flexibility of doing what you want in real time. You can make changes to report forms, systems, and even processes on the go, something outsourcing fails to offer. Because of the number of processes and people involved in payroll outsourcing services, the flexibility there goes for a toss. To make revisions, the employer has to go through some stiff paperwork and process cycles, enough to deter the employer or even postpone such changes.

3.   Degree of control offered

The degree of control with both approaches, payroll outsourcing services or payroll on cloud, is of critical importance to the user, that is you. Because outsourcing generally involves giving out instructions as per company standards to the agent, the degree of control offered here is captivating. You set your own rules, own payroll systems, and also your own guidelines necessary for the agent to follow, thus giving you optimum control over your environment.

Cloud computing offers a varied types of services, each coming with its own degree of control. The general believe, however, with cloud payroll services, is that there is a loss of control because of standardization of packages offered my companies. Although a ‘one size fits all’ cluster is wise, it is not recommended. Each organization, be it big or small, has the opportunity to customize offerings according to their surroundings, making it easier to gain control over certain functions. Much of the control here depends on how individual services are designed, while also keeping the nature of such services in mind.


4.   Direction of travel


Payroll Outsourcing Services


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Cloud Payroll Report 2015
The direction of travel refers to the sequence of events which take place. In traditional payroll outsourcing services, the provider of outsourced services has his own ‘sub-providers’, carrying the chain of command down the line. This ‘down the chain’ movement offers tailored processes, which can be altered easily both in terms of time and degree of control. However, the deeper the chain goes, the more difficult it gets to make alterations, sometimes taking up a lot of time for the message to be communicated to the sub-providers right at the bottom of the chain.

Meanwhile, for cloud payroll services, this is just the opposite. With providers offering pre-packaged standardized services, there is no chain of command to be followed. Such packages are usually built on existing platforms provided by ‘sub-providers’, with the ‘sub-service’ being based on many such external services. This makes it close to impossible to change or customize for each customer the sub-services being offered by such sub-providers.

Automation has played an important part in cloud computing, making it worthwhile for managers to consider this as a real option. With automation, human error is marginalized, if not completely driven out. Another aspect cloud computing offers to its customers is that of data security. With servers that cannot be breached easily, you are in the comfort of knowing your data is safe and is not going anywhere. Because of automation, your payroll is processed much faster, keeping your employees happier too. All the necessary tax information is visible to the firm as well as clients, keeping both parties updated.

Cloud payroll helps in simplifying otherwise complex processes, which saves up time and money. It can perform the same amount of functions an outsourcing company would, sometimes offering the same degree of control too. Red-tape is completely cut off because of cloud computing, and setting up new processes is easier. Because of the increasing complexity of payroll regulations, payroll professionals have become a necessity for organizations, but cloud computing could soon cover that aspect too, offering you a full-fledged package you cannot refuse. Payroll Outsourcing Services, on the other hand, take you away from the management perspective of it while the outsourcing company manages everything for you. Which one will you choose for your business?




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July 13, 2017

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2 thoughts on “Payroll Outsourcing Services And Payroll on Cloud – Know The Difference”

  1. Thanks for posting the useful information to my vision. This is excellent information,.

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