Cloud Accounting Software vs Desktop Solutions: What’s Best for Your Practice in 2022?

by | Jan 12, 2022 | Accounting Tech Trends | 0 comments

Cloud accounting solutions are booming, and it’s no surprise. With cloud apps, companies of all sizes can keep their finances organized without purchasing and maintaining expensive IT systems. When it comes to SMEs, smart cloud solutions are already taking over the work of professional accountants and accounting firms, since the apps are so easy to use that sooner or later some clients learn to do the books on their own. 

So as a professional accountant, how do you make the right choice between cloud accounting software vs desktop solutions? In this article, we’ll help you choose the best software to provide exceptional service and scale your practice.

 

What is cloud accounting software?

 

Cloud software (also known as online, web, cloud-based, serverless, on-demand, or off-premises software) refers to applications that are available in the cloud—in other words, on third-party servers that you access through an internet connection. Compared to on-premise desktop solutions like Excel, cloud apps are not stored on your computer or your company’s servers. Instead, you can access them from any device via an internet browser.

Some examples of popular cloud-based software are Google Drive, Salesforce, Zoom, and Asana. In the accounting software ecosystem, there are cloud apps for general accounting, payroll, invoicing, inventory, and document management. Some of these apps (such as Quickbooks) have both desktop and cloud versions, while others are cloud-first or cloud-only (Eleven, Xero).

 

Examples of popular cloud accounting software vs desktop solutions according to technology type and target market

While most of the best-known enterprise ERP solutions began as desktop-first, they now offer desktop, hosted, and cloud solutions. In comparison, most SME cloud apps are cloud-first or cloud-only.

The state of cloud accounting software in 2022

 

Thanks to changes in business practices, the rise of remote working, and the need for operational agility during the pandemic, cloud apps and cloud providers like Amazon AWS and Microsoft are growing amidst the crisis. 

However, research from Synergy Research Group and PwC shows that companies were favoring cloud over desktop software long before COVID-19. The reason? Cloud-based and pay-as-you-go solutions offer a transition to a more flexible variable-cost model, allowing organizations to move expensive computing assets from capex to opex. 

For instance, if we look at technology adoption among accounting firms in a booming business hub like Singapore, cloud solutions have seen rapid and steady growth over the years:

 

 A graph showing changes in the adoption of cloud accounting software vs desktop solutions among accounting firms in Singapore

Technology adoption levels for accounting firms in Singapore. The share of cloud accounting software is growing, while desktop solutions are facing a decline. (Source: 2020 SAC Accounting Entity census)

 

What’s more, the trend is picking up: 75% of US finance leaders say they are looking forward to investing more in an agile business environment, and 66% of them are looking to the cloud for growth and innovation.

It’s no wonder, then, that if you Google the best accounting solutions for 2022, cloud-based software comes out on top. After starting out as a smart cost-saving solution for small businesses, it’s now a true game changer for companies of any size. 

However, as always, there are pros and cons to bear in mind, especially if you’re a professional accountant working with multiple clients. 

Let’s compare cloud apps with their desktop alternatives, so you can see which solution fits your clients and tasks best.

 

Cloud vs desktop accounting software comparison for accounting professionals

 

Here’s a detailed comparison based on 12 parameters that are important for accounting professionals who work on their own or contribute to small and medium-sized accounting firms. 

  • We deliberately didn’t cover the needs of large accounting firms and their clients, as most ERP providers already have both cloud and desktop versions.
  • The items marked with ❌ show disadvantages for professional accounting practices.

 

A comparison of cloud vs desktop accounting software for SMEs

Desktop solutions, including Excel Cloud solutions for SME
Pricing model Pay per license: the license stays with the accountant. ❌ Pay per entity: the license can stay with the accountant or the client.
Payment frequency One-time payment. Monthly or annual subscription.
Overall cost ❌ Software license plus capital (hardware, server space) and operational (maintenance) expenditure. Subscription fee only.
Data Stays with the accountant. Stays with the accountant and/or the client.
Data accessibility ❌ Data is stored on a dedicated device and can be hard to migrate. Data is available from any device with an internet connection and it is relatively easy to migrate.
Data safety ❌ Backups are manual. The data is stored on a physical device and can be lost in case of theft/natural disaster/accident/malware. No data encryption by default. Backups are made 24/7 in the background. Data is stored in the cloud and can be easily restored. Automatic encryption is provided by default.
Functionality Limited to the product version.  ❌ Limited to the pricing plan.
Interface ❌ The interface is designed per entity, so you have to log in and log out to switch clients. ❌ The interface is designed per entity, so you have to log in and log out to switch clients.
Scalability and speed Can handle a large volume of transactions. The speed depends on the hardware capabilities. ❌ Designed for SMEs, so can only handle a relatively low volume of transactions.
Collaboration ❌ You can’t invite your client or colleagues to collaborate. To share data, you need to send separate files to clients. You can invite your client or colleagues to collaborate in real-time.
Integrations ❌ No integrations, or only pre-built ones.  Easy to integrate with any other accounting software via API.
Updates ❌ Manually updated when the publisher decides. Is constantly updated in the background.

It turns out that although cloud apps are more flexible and affordable, they’re ultimately designed for your clients and don’t take into account your needs as a professional accountant or accounting firm. This is why you’re probably familiar with having to juggle several accounting apps in order to stay client-oriented in your practice, and falling back on Excel to fill in the gaps.

 

Which accounting software is best for accounting professionals and firms?

An accountant who chooses perfect automation software

Let’s imagine an ideal app for a professional accountant doing the books for 20 or more SMEs on a monthly and yearly basis. Getting back to our comparison, this app should combine the advantages of both desktop and cloud solutions. In other words, it should:

  • Be reliable, flexible, and fast
  • Provide value for both accountants and their end-clients
  • Help accounting professionals retain their clients and scale their practice
  • Empower accountants by allowing them to offer new, high-value services

With these things in mind, we created Eleven: a cloud-based accounting automation platform for professional accountants and accounting firms. With Eleven, you can enjoy all the benefits of cloud and desktop accounting apps in one solution—and even more.

Here’s how Eleven tackles the disadvantages of cloud SME apps we highlighted:

 

Cloud solutions for SMEs Eleven for accounting professionals and firms
Pricing model ❌ Pay per entity: the license can stay with the accountant or the client. ✅ Pay per accountant. The number of entities an accountant can manage is unlimited. The license stays with the accountant or firm.
Functionality ❌ Limited to the pricing plan. ✅ We don’t paywall any of our features—they’re available to everyone!
Interface ❌ The interface is designed per entity, so you have to log in and log out to switch clients. ✅ The interface is designed per accountant, so there’s no need to log out to switch clients.
Scalability and speed ❌ Designed for SMEs, so can only handle a relatively low volume of transactions. ✅ Designed for scalable accounting practices. Eleven can handle thousands of transactions effortlessly.

 

What’s more, with Eleven’s additional BI and reporting capabilities, you can create custom reports and distill valuable insights for your clients’ business innovation, improvement, and sustainability. We believe that there’s huge power in numbers, and the future of accounting is not about replacing people with DIY software but about turning them into strategic finance business partners.

 

Wrapping up

 

In 2022, the choice between cloud accounting software vs desktop solutions seems clear. Cloud-based software definitely has the edge over desktop solutions when it comes to features, usability, and cost. However, most cloud solutions are designed for end clients, not for the needs of accountants who actually do the books. 

At Eleven, we decided to tackle this problem head-on. We created a platform that combines the advantages of a desktop and cloud solution in terms of licensing, interface, and feature availability. Book a demo today to see Eleven in action!

Book a demo

 

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