Key Differences: Cloud-Based vs. Desktop Accounting

4 mins read

We know reading about accounting can be boring but it is also very important to understand for the success of your business. So, tape your eyes open, or do whatever you have to do to get through this invigorating information on the differences between cloud-based and desktop accounting software.

We get it, nobody truly enjoys reading about financials, let alone accounting… Yet here we are, as we understand the importance of accounting for a business’s success. All of the tasks required to create, manage, and retrieve information for financial records and reports were once done manually, all by hand – what accrual world! With the development of digital accounting, there is an ongoing debate with bookkeepers and accountants when it comes to choosing between cloud-based and desktop accounting software. While it would be nice to be able to say one is definitely the right choice over the other for everyone, accounting software is not a one-size-fits-all situation. When it comes down to it, choosing the right accounting software for your company depends on the needs of the business. The good news is this doesn’t need to be a taxing task! Let’s look at brief explanations of what cloud-based vs. desktop accounting software are, as well as 5 key differences between the two.

For a more in-depth explanation of cloud-based accounting and desktop accounting, see our articles on the Advantages and Disadvantages of Cloud-Based Accounting and the Advantages and Disadvantages of Desktop-Based Accounting.

What is Cloud-Based Accounting?

Cloud-based is a term used to describe data that is stored on servers that are connected to the internet. This means all data is stored on remote, external servers rather than internal servers. The software isn’t hosted on one physical computer that you have in your office, it is stored in an entirely different location and is accessed through the internet. When users interact with cloud-based accounting software, their data is processed and then immediately stored on the remote server.

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 their data securely. Depending on the requirements of the business, desktop accounting software can be developed in-house or purchased through a third-party vendor.

Key Differences:

These are the 5 main differences between Cloud-Based and Accounting software:

Choosing a Software that Adds Up for Your Business

Choosing the right accounting software for your business is an important step in maintaining your financial records. There are key differences between cloud-based and desktop accounting software that can help in making the right decision that adds up for your company, as well as for the bookkeepers and accountants. After all, the bookkeepers and accountants tend to work their assets off! With an understanding of cloud-based vs. desktop accounting, it is good to consider and ask yourself “what accounting software meets the needs of our company?”

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