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Advantages and Disadvantages of Desktop-Based Accounting

11 mins read

We know reading about accounting is boring yet is also very important to understand for the success of business. So, tape your eyes open, or do whatever you have to do to get through this invigorating information on the advantages and disadvantages of desktop accounting software.

We get it, very few people truly enjoy reading about financials, let alone accounting…. Yet here we are, as we understand the importance of accounting for businesses success! For accounting software, desktop-based is the traditional method that was developed and used primarily for business’s accounting needs. As the world has progressed, cloud-based has become the preferred choice for many businesses’ software options. However, there are still some reasons why desktop accounting software is around and sometimes chosen as a viable option to meet businesses’ accounting needs! Let’s take a look at what exactly desktop accounting is, as well as the advantages and disadvantages of using desktop accounting software.

What is Desktop Accounting?

Desktop accounting software is the term used for accounting programs that are installed on a specific computer. However, don’t allow the word “desktop” to mislead you, as desktop software does not mean it can’t be installed on a laptop! This means all of the business’s accounting data is kept within the software installed on that individual computer, with the option of storing the data in a secondary location as well, such as on an internal server. As businesses grow and have more data storage, it is likely that they will need to get an internal server to be able to store all of the data securely. Depending on the requirement of the business, desktop accounting software can be developed in-house or purchased through a third-party vendor.

Advantages:

1. No Internet Required: A BIG advantage of desktop accounting software is no internet connection is required to access or work within the program. As long as you have the computer that the program is installed on, you are able to use it anywhere, whether or not you have access to internet. If your business is based somewhere with poor internet connection or regular outages, it may be worth considering a desktop-based accounting software. This can be especially useful for businesses that require travel or are in different remote locations where it may not be known if the internet connection will be good quality or poor.

2. Fast: No internet connection also means the program works fast, as you are not dependent on bandwidth or internet speed! Desktop-based accounting software will give instant access to all features within the program. This becomes vital when you are needing a financial report created and printed immediately. Faster programs also mean the accountant and bookkeeper will be able to use the features quicker with less time wasted waiting on the ever-dreaded loading icon. Who likes staring at a screen helplessly while it is loading?! We sure don’t! Less waiting can reduce frustration and consequently increases productivity and efficiency, and let’s be honest, nobody wins with a frustrated accountant…

3. No Ongoing Cost: Desktop-based accounting software is paid for upfront, which means you may end up spending less than the ongoing costs of a cloud-based accounting software subscription. When you pay for most desktop software, you own it! While the upfront cost is more than a cloud-based accounting software, over time it will end up cheaper as you are not paying a monthly subscription or any other ongoing costs. This is beneficial for BIG businesses that have a large amount of data to store, and also businesses that know they will continue to grow and require more data storage. Desktop accounting software also allows multiple users to use the software simultaneously, however the upfront cost will usually vary depending on the amount of users you would like to be able to access the software.

4. More Customization Options: Another great perk of desktop accounting software are the different features you have access to. There are even versions that include industry-specific features, such as retail, non-profit, construction/contracting, manufacturing, or even an accounting practice! Some of the added and customizable features you are able to use in desktop accounting software include inventory tracking, sales orders for complex fulfillment processes, calculating job costs, setting specific discount rates for customers, and customizable invoices. While some features may be available on cloud-based accounting software, desktop will have higher functionality and more customizable options within those features.

Disadvantages:

1. Accessibility: One disadvantage of desktop-based accounting software is the fact that you need to have the computer where the desktop software is installed to be able to access anything. If you are on the go and need to see financial information, or a specific report, you are unable to access it on the web or a mobile app. To share reports, they will need to be exported then sent in an e-mail or printed out to view. This can be very inconvenient when the reports are large and are unable to fit in an e-mail, especially if you are needing to get that report to someone fast!

2. Manual Updates and Data Back-Ups: With desktop accounting software, you need to back-up your data regularly to protect it. If the computer that holds your software were to crash, you could lose all the information within the accounting software as well. This is why back-ups are essential, as your data will be transferred to a secondary location such as an internal server within the office. Along with the data back-ups, you will need to manually update the software in order to keep it up to date with the latest version. Without these updates, certain features may not work within the software, or you may start to notice a decline in the speed of its functionality. Both of these aspects require more time spent on the tech side of things and are also not something you want to make an error with. This means companies using desktop accounting software, especially larger companies, will most likely need to have IT maintaining the desktop accounting software updates and back-ups.

3. Security: With accounting software being directly hosted on a computer, this can increase the risk of accessing their sensitive financial data through malware or ransomware attacks. The risk of  malware and ransomware also significantly increases if the software is not updated. This is extremely dangerous, as hackers would try to access sensitive information in hopes of getting something (usually money) for you to have your information back or would skip that altogether and sell your information on the dark web.

Businesses must also consider how they are sharing the financial data with others, such as sending bank statements or tax documents as e-mail attachments. It is recommended that businesses sharing sensitive financial information leverage proper e-mail encryption, where the e-mails and attachments encrypt automatically.

Encryption basically converts the original information, known as plaintext, into an alternative form knows as ciphertext. Once converted, only authorized users are able to convert the document back to plaintext to access the original information. Authorized users would be those that have the secret password, known as the decryption key.

4. Difficulty: Desktop accounting software is definitely not the less-complicated choice. When starting up with new accounting software, it is essential that the initial setup is done right and meets the needs of the company’s financials. With all of the in-depth features and customizable options, desktop software would be a lot more difficult for a first-time user to learn. This would be especially difficult for a small business owner who is looking to start off doing their own bookkeeping and accounting. Learning the accounting terms, different layouts, and determining the right setup could be more difficult and possibly outweigh the benefits of using the software.

Is Desktop Accounting for Your Business?

Congratulations – you made it to the end without nodding off! (Or was that just wishful thinking on our end?) We hope that this article has given you valuable insight on the upsides and downsides of what desktop accounting software has to offer. When choosing the right fit for accounting software for your business there are many factors to consider including what features you require, how many users will be accessing the software, and how much data you will be storing. Now, the important question left to ask: “Is desktop-based accounting software for my busines?”

Looking for the alternative? Read our article on the “Advantages and Disadvantages of Cloud-Based Accounting”.

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