Payroll has a way of placing small- and medium-sized businesses under great duress. So, they tend to acquire cut-rate, off-the-shelf technologies. Inexpensive, these solutions seem straightforward and adequate, but they’re too basic. They can’t handle the complexities of payroll at most SMBs, whose growth quickly overwhelms these systems. SMBs should prepare with the right technology, from the start. Relief comes in the form of cloud-based solutions delivered via software-as-a-service (SaaS): Your payroll system resides on the provider’s server. Through SaaS, the subscription model, you have access to payroll anywhere you have an Internet connection. Following are two big reasons the cloud plus SaaS is the way to go for SMB payroll.

Reason #1: Payroll Technology Will No Longer Be Your Headache
Cheaper, one-size-fits-all payroll technologies tend to be inflexible. You have to run payroll a certain way. Exceptions necessitate that you conduct manual workarounds in order to get employees’ pay right and remain compliant with the law. As the company gets bigger, the number of these workarounds gets bigger, too. Plus, many of these systems are not cloud-based. They’re on-premise, which can make upgrades rigid and time-consuming. Contrast all this with cloud computing. Through best-in-class vendors, you have access to the latest version of their software, reflecting the latest labor laws. Tailored systems make payroll intuitive and accommodate the needs of your workforce, as opposed to someone else’s. New features are easy to add, and good vendors offer these at no extra charge. Expensive software purchases and costly, time-consuming upgrades become a memory. A mobile app may be available, too, so you can manage payroll via smartphone.

Reason #2: The Cost of Running Payroll Will Become Predictable
Unpredictable operational costs can disrupt any business. This is especially true for SMBs: Investors have the ability to place tight controls on operational budget. Profits may not be there yet. For these and other reasons, cloud computing’s billing structure helps SMBs. Basic technologies for payroll may appear to have just one cost: the purchase price. However, they make payroll unnecessarily complex, saddling SMBs with an array of operational costs that are tough to predict from pay period to pay period. Best-in-class vendors of cloud-based payroll technology, on the other hand, charge a flat rate per employee, per month. This transforms payroll’s cost of operation into a budgetary line item—key for companies keen on constraining budget dedicated to operations. And remember: In the cloud, experts are in control of how your payroll technology functions. Mistakes are rare. SMBs easily comply with employment law governing pay—and avert costly penalties.

Vendors Matter
Without a good vendor, cloud plus SaaS won’t be enough. For one thing, some vendors make it a practice to ding their customers with hidden fees over time. To determine whether this has happened to them, do your best to identify and talk to a vendor’s other customers. These fees can easily negate any potential cost savings. Make sure your vendor understands labor law, too, and regularly updates its solution to reflect current regulations. It’s critical, as well, to work with a vendor whose cloud-based, SaaS-delivered technology for payroll, time and attendance rests on one platform. Otherwise, a lack of real-time communication between these moving parts can lead to the same mistakes in payroll that convinced you to retire your cut-rate solution.

Resist Temptation
Basic payroll technologies are tempting. But what seems basic will complicate payroll and exacerbate your worries. These systems almost always demand more of your attention than you can spare, and for all but the smallest of small businesses, they just can’t compare to the cloud plus SaaS.