Accounting Conundrum: Cloud Computing vs Desktop Software
Accounting dates back to a time long before computers were invented, yet, it’s so important to business that it often rides on the leading edge of technology.
The profession relies on the ability to create, manage and retrieve records and build financial reports at the drop of a hat. At one time, this was all managed manually, however, those days are thankfully behind us. Although we’re well into the digital accounting era, the next big leap is already upon us.
The era of cloud accounting.
What is Cloud Accounting / Cloud Computing / Cloud Services?
Referred to by several names, cloud computing enable us to access data through an active internet connection, meaning you’re no longer tied to a specific computer. Using the cloud untethers you from those restrictions. Simply log into your account on nearly any connected device and you can access your data. This new paradigm means flexibility, efficiency, reliability and security…and much more power. (More on that later…)
There are several reasons to why we think you should consider taking the dive into cloud computing for accounting tasks.
Using cloud accounting over desktop:
Access to data is possibly the greatest advantage over desktop accounting.
With cloud accounting, you can access data and information wirelessly and from nearly anywhere. As long as you have an internet connection, an increasingly ubiquitous situation, you can access your data. You don’t even need your own device. You can securely login on any device you can get your hands on, complete your tasks and securely logout. Done.
The traditional desktop software model requires that you buy the package with a large, up-front cost. Generally, small bug fixes and modest updates for a short time period (often a year) is followed by an expensive upgrade to keep your software up-to-date and performing reliably. These yearly costs can be significant for multiple ‘seats’ in a business and somewhat chaotic as a company of users are all attempting to get the latest version up and running.
In the cloud accounting model, users each pay a modest monthly charge. The service can be turned on and off as necessary so you’re only paying for what you use. There are usually different feature and performance levels that allow users to move up and down as necessary and software updates are seamless.
3. Software Updates
Todays companies have massive amounts of data and to maintain the data, along with reliable and secure backups requires carefully maintained hardware. Keeping desktop software up-to-date is even more costly and clunky. New releases for desktop tools are infrequent, labour intensive to update and can often render hardware obsolete.
With cloud tools, updates roll out on an ongoing basis and are generally invisible to the user… at least until a great new feature simply appears. The software is up-to-date when you login. Since the cloud services only require a browser, the software generally runs fine on even somewhat older browsers and the latest browser is only a short, free download away.
Backups fall on your shoulders (or at least your in-house IT staff) when you are using desktop software. Often, when things are running fine, there can be a tendency to forget about backups. That is, until something goes wrong. A hard drive dies, panic ensues and the victim frantically tries to recall the last time there was a backup.
And then there’s the backup system itself. Is it just another drive sitting on your desk? Do you have offsite backups? How regularly? When you are in control of the backups and it’s worked ok, there’s tendency to think that there’s very little risk. Unfortunately, that’s not often the case. Unless you have a well-defined and automated backup system and includes offsite storage, you are only one incident away from a huge mess.
With cloud software, your backups are taken care of for you. That’s a big part of their business and the world’s leading cloud tools are hosted on the world’s leading servers with top engineers at the helm. Backups are automatic, frequent, reliable and redundant. Is there some risk? Of course. But I suspect that it is infinitely smaller than the do-it-yourself model and significantly more cost effective (since it’s simply included in the monthly cost) than tasking an internal IT team with buying, upgrading and maintaining a top-notch, in-house backup solution.
Are cloud services reliable? Well, it’s true that you need an internet connection to use the tools. But, in many places, it’s easier to find a web-connection than it is a water fountain. Personally, the very occasional time my office Internet connection has gone down, I simply swapped over to my phone and used the cellular connection to finish whatever I was doing.
Of course, issues with cloud services and data breaches reach the news on a weekly basis. But, to offer a little perspective, downtime of an hour for a massive, online company can become international news but it’s actually pretty rare.
It’s true, losing an hour of work can be frustrating and infuriating, but coming from a small business that I started in the late 90s, I can tell you that technology issues appear in a blink of an eye. Often, the problems would plague us for days. I remember driving across town and spending hundreds of dollars to try and recover data off a back-up drive. Ironic, since the data was backed up – unfortunately, the data was no longer on any of our production computers, and now it was needed.
Cloud services are often known for their support. For many tools, getting support is as quick as clicking on a chat link from right inside the software. Service is most often included in your subscription and there’s generally numerous ways to get in touch.
One of the greatest benefits is that the support team can access your account and backups if needed. When you’re on a desktop, the most they can do is talk you through some steps, and those steps often come to a grinding halt when they ‘leave’ the software. For instance, if you ask about a backup, they will be quick to point out that the backups fall on your shoulders and in your equipment.
Further, support for desktop tools often expires within a given time frame. Don’t have the latest release? Well, you could be on your own.
Whether your team is all under one roof, or scattered across the globe, cloud services are built for collaboration. Everyone can access data from nearly anywhere and work on files at the same time. For accountants, this is even more essential, since both you and your clients can access key data at anytime from anywhere.
The cloud brings ground-breaking and business changing power all packed into three letters – API, an “application program interface.” Plainly speaking, when cloud software, such as Xero, QuickBooks Online and other leading cloud accounting tools, offer an API, they are offering a way to connect other cloud apps to their system so that they can all work together.
Modern cloud tools aren’t attempting to be all “things to all people” they are specializing in what they do best. Think of it this way: instead of hiring the local handyman that is competent in a wide variety of areas but not an expert in anything particular vs. hiring a team of the worlds top engineers, each able to tackle a highly specific and high priority job.
With the cloud, not only do you get your team of world-leading tools connected together, you get a package that offers unprecedented power that is tailor-made to your individual business needs – and for a price that is manageable for nearly any business.
Is it Time to Jump to the Cloud?
It’s no real surprise that, for us, the cloud is the clear winner in this epic battle with desktop. With that being said, making the right decision when choosing accounting software is extremely important. More than anything, you have to choose the software that offers the capability that you need.
Dryrun is cloud-based, financial forecasting software for small business. Our unique, scenario-based approach and highly flexible system offers the ability to connect to Xero, QuickBooks Online and Pipedrive.
Find out how Dryrun can help you supercharge the service you offer your clients.