A cloud based time clock moves the punch record off your premises the moment it is made. That buys central visibility across sites and removes a server, and it makes three things somebody else's decision: uptime, export format and retention.
What you gain is one record across every site
Multi-site employers spend real time reconciling clocks that each hold their own truth. A hosted system gives one set of rules, one place where a manager approves exceptions, and one export into payroll. For an employer with more than a couple of locations that is usually the whole business case, ahead of any feature.
What happens when the connection drops
Ask precisely: does the device keep accepting punches offline, how many does it hold, and does it reconcile automatically or need somebody to press something. A cloud clock that simply refuses to work without a link turns a broadband fault into a manual timesheet day. The good ones treat the network as unreliable by design.
Export and exit are the questions people forget
Your hours are in somebody else's system. Before signing, get the export format in writing, test it against a real pay period, and ask what you receive if the contract ends: a file you can read, or a login that stops working. Recordkeeping duties do not end with the subscription, so the exit path is part of the specification.
When on-premise is still the right answer
A single site, a stable workforce, a finance team that does not want another recurring line and no appetite for a vendor dependency is a perfectly good case for software you host. The trade is that backup, patching and support become yours. Price the two over three years including your own time before assuming hosted is cheaper.
Questions people ask about cloud based time clock
Is a cloud clock more accurate?
No. Accuracy is about the reader and the rules, not where the data is stored. What it changes is who can see the record and how quickly.
Who owns the punch data?
Say so in the contract. The practical test is whether you can export a readable file at any time without asking.
Does it work if the internet goes down?
Depends on the device. Ask about offline buffering explicitly rather than assuming it.