Thinking about making the switch to the cloud for your accounting software? Wondering what the difference is between desktop accounting software and online accounting software?
Here’s some pros and cons of each:
Desktop Accounting Software
- It’s the standard, and the major small business software provider QuickBooks has a lot of documentation and infrastructure built around it
- It’s in general more powerful than online software
- It’s accessible without an Internet connection
- You only pay once (although you probably need to upgrade every few years)
- It needs to be installed, updated, and repaired
- You need to have the computer that the software’s installed on to use it
- You have to back it up
- It’s hard to share files (too big to email, only one person can work at a time, hard to network computers together, have the same version of software)
Online Accounting Software
- Accessible anytime, anywhere (provided you have access to an Internet connection)
- It can connect directly to your online banking, cutting down on data entry
- It’s easy to collaborate with others (you just need a login) and multiple people can use at the same time
- No installation necessary
- Automatic backups
- In general, it’s not as full featured as desktop software
- You have to pay on a monthly basis
- If you stop paying, you lose access to your data
So, desktop or online?
The above pros and cons lists are just that, a list. There are many subtleties between desktop and online that aren't discussed, and there are also multiple software providers and versions to consider.
My advice in general is that if online has the capabilities you need to operate, go with it. The entire software world is going online, whether you like it or not, so might as well jump on the bandwagon now if you’re able to do it. The benefits of anytime, anywhere access, automated backups, and superior abilities to work with bank data are such big improvements over desktop software.
The advice is even more poignant for those new businesses who don’t have any accounting system in place. For those businesses who are already entrenched in a desktop based accounting system, the switch over costs (both in terms of $$ and learning curve) may not be worthwhile enough to swallow at the moment.
I don’t want to go online!
These are some of the top objections to online accounting software that I've seen.
If I don’t have or lose an Internet connection, I don’t have access to my accounting software
That’s true in the most part. Some software may have a mobile app that you can enter data into and sync with the software when there’s an Internet connection, but in general, you’re out of luck with no Internet connection.
You have to ask yourself though, what are you more likely to encounter? A situation where you don’t have an Internet connection, or a situation where you’re not in front of your desktop (or laptop) computer.
I feel that people’s access to Internet is up 99% of the time, and the same can be said for the online accounting software providers. So yes, stuff goes down and is inaccessible, but it’s the exception, not the rule.
How often does your laptop run out of batteries, your software crash, or need to be updated? That’s down time as well.
Online applications are slow
Yes, online applications are in general slower than desktop applications, but the gap nowadays is much smaller than you think. I’m a bit of a speed freak when it comes to getting things done on my computer and don’t feel that being online slows me down. That’s not to say I don’t curse the occasional slow down that happens when using online accounting software, but the speed difference is negligible and a worthwhile trade off for the ability to access my books anytime from anywhere.
I don’t trust my data online
I’m sorry to say this, but your data is probably already online. Whether it’s because you have online banking or because your government stores your data in online servers, we’re already living in an online world.
Unless you’re quite knowledgeable with computers and know how to safeguard your data properly, your data is probably more insecure on your desktop or laptop than it is with an online accounting software provider.
Whatever you choose, desktop or online accounting software, do make sure you spend a bit of time figuring out the needs of your business and which software best fits those needs. Since a typical setup of software - including learning it - takes many hours of time, it’s better to spend the extra time in advance picking the one that’s the best fit.
About the Guest Writer:
The above article is written for LedgerDocs.com by Greg Lam of smallbusinessdoer.com, "an online small business education site that focuses on the money and tech side of things."