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Cloud vs Desktop Accounting

Accounting has been around for 7,000 years, and during that time, a lot has changed. We’ve moved from simple accounting techniques to scalable cloud solutions, such as QuickBooks Online or Xero. These solutions improve an accountant’s productivity and do the work much faster than an abacus ever could. However, there’s still a debate about cloud accounting versus desktop accounting.

Which solution is best for you?

We’re going to dissect the key differences between cloud vs desktop accounting, see which one is our preferred choice, and learn more about how these two types of “software” work.

What is Cloud Accounting?

Cloud accounting software works very similarly to your desktop software. However, there’s a very low barrier of entry when using cloud accounting because

  • You use the service provider’s servers
  • There’s a lower upfront cost

You can use cloud software anywhere you go so long as you have an Internet connection available. Some 53% of accountants use cloud software of some kind, and 78% of small businesses use cloud accounting software.

So, now that we know what cloud accounting is, it’s time to look at desktop accounting solutions.

What is Desktop Accounting?

Desktop accounting is using accounting software on your own company’s systems. You’ll install the software on your own servers, and you have to handle everything, from updating the software to ensuring your system can handle software requirements.

Cloud and desktop accounting solutions often have similar functions and features. However, there are major differences between cloud vs desktop accounting software that pushes most of our clients to use cloud accounting.

Cloud Accounting Versus Desktop Accounting

Accounting technology changes, and since desktop accounting was first, it only makes sense that cloud accounting is the next step up from desktop solutions. But how true is it that cloud accounting surpasses desktop software?

It’s evident with the ease of use and ability for teams across offices to use the same platform seamlessly.

A few of the main differences between cloud vs desktop accounting include:

Easy Access

Businesses are expanding to new cities and even globally. Easier access and accessibility are the main selling points of cloud accounting. If you have an Internet connection, you can access the cloud software on:

  • Desktops
  • Apps
  • Smartphones

You don’t need expensive servers, IT teams, or anything similar to run cloud accounting software. The low overhead of cloud accounting makes it an economical and attractive solution for small and large businesses.

Collaboration Between Offices

If you have multiple office locations, it’s difficult to share data across personal servers and requires an immense amount of IT support. Cloud systems use user-based systems and trusted groups to allow people from across the world to access the cloud software and all of the data that you enter.

When you work with cloud accounting, you can:

  • Manage accounting organization-wide
  • Generate reports faster
  • Maintain data consistency

If you have multiple offices, cloud solutions make using the software organization-wide faster and easier.

The same holds true if you work with a virtual accountant – a cloud solution makes working with a virtual accountant possible!

Lower Entry-level Costs

Software-as-a-service (SaaS) solutions have a very low cost of entry. When you use desktop software, you have to worry about:

  • Setting up servers or desktops
  • Updates
  • Managing the software
  • IT teams

Desktop accounting has a lot of overhead. While big businesses don’t have an issue with this overhead, small companies may. SaaS solutions come with a monthly fee, and the team running the SaaS handles all of the rest.

You don’t even need to set up SaaS solutions.

However, cloud accounting does come with recurring subscription costs.

Hands-off Installation and Updates

Hands-off installation and updates are two main features of cloud accounting. The company offering the accounting solution will provide you with hands-off installation, maintain their servers, and push updates automatically.

You will need to set up the system to work for your business by adding certain company information, such as bank account, name, etc.

Automatic Backups and Redundancy

Do you have a robust backup system in place for your office? How about any form of redundancy across databases and servers? If not, your data is at risk. Cloud accounting providers have complex systems in place to:

  • Backup data
  • Create redundancy systems

In fact, cloud accounting can be very reliable. But is it more reliable than desktop accounting? Let’s find out.

Reliability

When it comes to reliability, many people assume that the desktop is the clear winner. It’s always there and available when you need it, even if you don’t have an Internet connection. But if something does go wrong, fixing the problem can be a pain because the issue can’t be resolved remotely.

Cloud services are often viewed as less reliable because you need an Internet connection to use them. Furthermore, there are concerns about data breaches when using cloud accounting.

But in today’s modern world, needing an Internet connection isn’t as limiting as it once was. If your office connection goes down, you can turn your smartphone into a hotspot and keep working. Yes, things may go wrong from time to time, and you may have downtime. However, these instances are rare and often fixed quickly (within an hour or two).

Data breaches are still a concern, but cloud accounting services go to great lengths to prevent them.

Although it’s a close call, both desktop and cloud accounting services are reliable.

Easy Online Support Systems

Cloud accounting services generally have easily-accessible support that’s available whenever you need it. Help is often just a chat link away. Support is typically included with your subscription, and you may have multiple ways to get in touch:

  • Live chat
  • Email
  • Social media
  • Telephone

Customer support may be able to access your account or activate backups if needed, which can save time and frustration if you come across a major issue.

With a desktop account, however, support may be more limited. You may have to pay an additional fee for access to their help team, and they may not be available at convenient hours. If you do get someone on the line or in a live chat, all they can do is walk you through the steps of resolving the problem.

Depending on the software, support may be limited only to the latest release.

Overall, cloud accounting services tend to offer more robust support that’s easy to access and use when you need it most.

Cloud accounting versus desktop accounting is quickly becoming a debate of the past. While desktop accounting once made sense for businesses, there’s been a sharp transition to cloud accounting. In fact, we recommend and prefer using the cloud in our business.

Do you need help setting up cloud accounting for your business? Contact us – we can help

Levy | Lauter LLP - Tax and Accounting Firm in Los Angeles, CA

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