If you are researching accounting systems for your startup or looking to update your current accounting system the choices can be overwhelming. Should you choose desktop software or a system in the cloud? What is accounting in the cloud anyway?
Purchasing software, installing it on your computer, and constant upgrading is quickly becoming a thing of the past. Most major producers of accounting systems have multiple versions of their accounting system online (i.e. in the cloud). You pay a monthly or yearly fee and log into your accounting system from the Internet. No more upgrades or new versions to buy. They are included in your subscription. Several of these cloud accounting systems have phone apps and integrate with apps that offer additional features such as integration with popular products like Square, payroll, and Bill.com.
Which system is best for you? There is a lot to consider, but here are the first things that I consider when helping my clients make this decision.
- System needs – Do you want to access your accounting system anywhere, anytime? Or, do you need a robust inventory tracking system? Not all desktop or cloud accounting systems do the same things. Create a list of what you absolutely need your accounting system to do, for example, track inventory using the first in first out method, integrate with your customer relationship management system, send invoices remotely, pay bills online, integrate with your bank, etc. After you list your “must haves” in an accounting system look closely at the desktop and cloud systems that offer those functions. Then, contact the company and ask to see a demo of the most important functions. I cannot stress this enough! Sometimes these functions are not what you expect. Cloud systems have a reputation of having limited functions. This has changed in the past few years, so if there was a function only a desktop version of your accounting software had, be sure to check with that company often. That feature might be available in a cloud version now.
- Internet Connectivity – When using an accounting system in the cloud you rely on your connection to the Internet to access your account. If your connection is intermittent, slow, or unreliable you will not be happy with an accounting system in the cloud. It’s best to make improvements to your Internet connection before switching to a system in the cloud.
- Security – Think your computer or server is secure from hackers? Maybe so, but it’s not likely to have the level of security a cloud accounting system has. If you maintain sensitive client or customer information in your accounting system a cloud system might be a better option for securing that data.
- Backups – I cannot tell you how many of my clients call me asking if I have a backup copy of their QuickBooks file. Their computer crashed, and they lost everything. You will never have to worry about this happening to you if you use a cloud accounting system, because the companies storing your information are backing it up for you. Rarely, and very rarely, you may not be able to log into your account due to the cloud system being down. I have only had this happen once in five years, and I work in cloud accounting systems every day.
There is more to consider when deciding cloud versus desktop such as cost, your technical savvy, office workflow, and the ability to convert your system data into a new system, however these four considerations will help you get started.