Businessman In Front Of Modern Computer With Colorful Pie And Ba
Credit: Businessman in front of modern computer with colorful pie and bar graphs analysing business performance accounting data
Allow me to take a punt. If you had the choice to drive a 2019 Toyota Prius you probably wouldn’t choose to get behind the wheel of a 1987 Ford Cortina instead. As we approach the next decade, the choice between deploying desktop accounting software or cloud-based accounting software to manage your businesses’ finances should be a similarly simple choice.
For a long time, desktop software was the only method of managing your books. At the time it far exceeded the alternative, but it’s now outdated for a few key reasons. Only cloud-based software provides the relevant, real-time ecosystem a small business needs for its financial management and decision making.
The benefits become even more clear in light of situations like the recent scenarios like the deactivation of pre-purchased desktop software, which has left some companies in an unexpected and tricky situation. For many businesses, this should be a wake-up call: abandon your desktop solution before it abandons you.
1. The risk of losing it all
The underlying data is kept on your computer. This means that if your computer crashes, is stolen or upgraded, you often lose your data, unless you back up daily. This disastrous data loss happens to businesses more often than you think.
2. Connectivity challenge
Desktop software was built on old technology, meaning that you cannot benefit from connecting to the world of cloud-based apps or add-ons to desktop software. It is often these apps, that provide greater efficiency and clarity for your business when partnered with cloud software.
Due to manual processing often required for desktop software you may have a higher bookkeeping fee. Your accounting fee will also be higher, as extracting data from old desktop systems to guide your business or even lodge your tax return is time-consuming for accountants.
The cloud comparison
Compare this to a cloud platform which will allow for you to streamline the majority of your accounting and financial management process. Cloud software is always up to date without you having to do any updates or deal with CDs or patches.
Access your data more quickly and easily. You do not have to backup or worry about putting your data onto a USB sticks to share with your bookkeeper and accountant. You can grant access so they can log in directly to review and advise in real-time on what is happening in your business. Remember that quicker, easier access also means lower fees. The data is also safer. It’s stored and encrypted in virtual servers, rather than on an in-house server, laptop or desktop that can crash or be stolen.
Cloud accounting software is also much easier for you to use, except in cases where you have a slow internet connection. But even this is no slower than launching an outdated piece of desktop software on your computer and remember: your internet can be fixed more easily than ancient software.
Your decision should come down to what’s best for your business. Small decisions, like which accounting software to use, can help drive your business forward in big ways.