Cloud Accounting for Startups and SMBs: Blog Series [4/10]

Cloud or Desktop? Decide Which One is Right for Your Accounting

In the previous article of the series, we discussed the practical convenience of using cloud solutions for accounting. For a number of factors, the cloud seemed to be an easy-to-use and comfortable option. However, the convenience of use is not the only thing to consider while choosing a solution for your business accounting. You need to compare the performance of cloud version with the desktop version on various factors before making any final call.

A general definition of accounting is simply the process of maintaining financial records. Financial proceedings are numerous for businesses, which makes accounting a complex and time-consuming task for human capabilities. Accounting applications help in reducing the efforts by maintaining the accounts with simplicity.

However, business needs are insatiable and the past decade brought in a more advanced solution in the form of cloud accounting.

Most of the leading accounting applications, such as – QuickBooks, Sage, etc. have adapted with the cloud. Some accounting applications are now entirely hosted in the cloud. But does that make cloud a worthy solution for your business?

Comparing Cloud With Desktop

Let’s see if the cloud fits your business needs better than the desktop-based accounting solutions.

1. Cost and Investment

Desktop Accounting: In the first article of the series, we mentioned that because of the confidentiality reasons of the data dedicated local hardware (that cannot be shared with other departments) are required. So, the accounting hardware becomes a major expense.

If your business is opting for on-premise or desktop accounting, then these expenses are inevitable for you. Apart from the purchase of hardware set, their maintenance, and real estate consumption is another costly and inevitable expense.

Cloud Accounting: Cloud accounting ensures that you do not have to spend in hefty one-time for the purchase of hardware. Cloud allows you to make payments on the pay-as-you-go model, which means you a repeated rent for the services that you use. With certain providers, data migration, and other support needs might add more to the regular bills at times.

Verdict: Cloud is regular but smaller payment option. On-premise seems to be a one-time large payment option. The maintenance requirements of hardware will need you have to spend regularly as well. Initial hints say cloud is helpful in the short term, but most calculations say cloud is more cost-effective even in long term.

Since we are more concerned about startups and small businesses in this article, cloud scores better on cost challenge.

2. Speed and Performance

Desktop Accounting: With the local desktop, the speed and performance of accounting application will totally depend on the configuration of your machine. A beast of the machine can perform the accounting actions amazingly fast. But that’s a story for one user requirements.

When you have a number of users (say – accountant, partners, and you) working on the same accounting data or file, the desktop version will face performance challenges.  Sharing files frequently via emails is messy and can bring down the pace of operations.

Cloud Accounting:  Speed and performance of accounting over the cloud will depend on a number of factors, like – hosting provider, internet connection, cloud resources chosen, etc. Maintaining a fine balance of them may take a little doing initially. But, once it goes fine, the performance delivered is good enough.

Verdict: Most accounting applications perform accounting over the cloud in real-time. But when compared to the local machine one might feel slight lagging. The power of cloud rides in serving multiple users and cross-devices.

Different local machines of different users will slow down the accounting operations while cloud remains unperturbed with increasing number of users. So, for the individual user with one device on-premise accounting is the way to go and multiple users needs will call for the cloud.

3. Futuristic Needs

Desktop Accounting: Updates with the desktop-based accounting software may arrive every day to keep your accounting in the best shape. But the hardware will not survive with all those updates forever. Since upgrading hardware is expensive and full of hassles, on-premise accounting applications are not going to sail your business appropriately for long.

Cloud Accounting: Cloud is still growing with its abilities, which means that it has a lot more to offer for your business accounting than what is already on the shelf. With no resource or device restriction, the cloud is able option to support the updates that may arrive in the future for better accounting.

Verdict: Cloud is the clear winner on the futuristic grounds. Desktop accounting has a number of restrictions that do not exist in the cloud. Moreover, upgrade with on-premise requires a complete makeover while cloud upgrades without asking for much on your end.

Hence, for businesses looking for long lasting and reliable solutions, the cloud seems to be a better choice.

4. Add-on Software for Accounting

Desktop Accounting: Accounting applications solely may not be the best fit to deliver the complete accounting for every business because of industry peculiarity. So, you might require add-on software to solve those peculiarities. The configuration of your local machine is the only way to determine how easy (or tough) it is going to integrate the add-ons. Go for the high-performance configurations and add-ons are expected to work fine.

Cloud Accounting: Cloud is flexible and agile. You can change the resources within minutes to accommodate with any add-on when needed. Integrating on the cloud is not always easy and it might ask for the customer support in some cases.

Verdict: Accounting applications are usually a generalized solution to solve the accounting hassles for businesses. So, it is hard to live without add-ons for accounting software. Neither on-premise nor cloud has a clear edge over other with add-on integration.

For the add-on, you would either require healthy hardware or excellent customer support. Since most hosting providers (and even add-on makers) are available with the support, the cloud can be a slightly better choice.

5. Storage Capacity and Security Challenge

Desktop Accounting: Hardware restrictions with the on-premise accounting again play the spoilsport. The accounting data keeps on increasing and you cannot even delete the older files. Therefore, an abundant storage capacity is a necessity.

Local machine has a limited capacity with space and will run short, sooner or later. Additionally, the security of this data is of prime importance. To stay secure a dedicated system is required in form of firewall, antivirus, etc.

For businesses grappling with data storage constraints or security concerns related to their on-premises accounting systems, collaborating with reliable internet removal companies can provide a secure and scalable solution by facilitating the migration of sensitive financial data to cloud-based platforms.

Cloud Accounting: With scalable plans on offer, you can keep on increasing the storage space whenever you want. Moreover, modern hosting providers follow secure end-to-end encryption to ensure that only authorized users are able to access the accounting data.

Verdict: With endless storage space, sound security, automated backup and simplistic recovery of data on offer, the cloud is an easy pick for the businesses. Desktop accounting will demand great complexities to match the level of cloud with data storage and security. It is better for entrepreneurs to avoid those complexities by choosing the cloud and stay focused on the core business.

Coming Up Next

In the coming articles of the series, we will look more precisely into the steps involved in moving to the cloud with the business accounting. The next article will explain the best practices for managing data on the cloud.

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