April 09, 2018 | Posted in:

Cloud vs. Desktop Accounting: What’s the Difference? [Infographic]

The use of cloud accounting has been on the rise in recent years, and for good reason. Transitioning from desktop software to cloud-based programs affords your business accessibility, added security, and peace of mind. As today’s businesses become more and more mobile, it’s time to consider upgrading your systems and processes from on-premise to a reputable cloud software, such as XeroTM or QuickBooks® Online.

Cloud vs. Desktop

There are primarily two platforms for your accounting and bookkeeping: Cloud-based and desktop. Cloud-based software includes Xero, QuickBooks Online, Intacct, Wave, or FreshBooks. Desktop applications include QuickBooks, AccountEdge, Quicken, Sage products, and others. There are many considerations for moving from on-premise to online-based, and we’re going to discuss the top 9 points one should evaluate to see if cloud or desktop is best for their business.

The below infographic illustrates a comparison between the two options:

Cloud Accounting Comparison for Small Businesses

Infographic: Cloud Accounting vs Desktop Software


What’s Best for Your Organization?

Cloud accounting technology is an asset for workplaces that prioritize flexibility and promote a remote work environment. Even if being remote isn’t a fit for your business, there are serious security concerns that are causing desktop software users to make the leap to cloud accounting. In addition, if you are a business owner always on the go, being able to always have a pulse on your business performance, cash flow, and tasks can be invaluable.

Last but not least, the ability to customize your accounting software is HUGE! No two businesses are alike, so why should so many businesses share the same straight-out-of-the-box software? Once you start learning how to automate, streamline, and optimize your business based on your unique mix of apps (out of an available 450+), you’ll wonder why you didn’t upgrade sooner.


Features of Both

Despite their differences, both types of accounting software will help you handle tasks that are important to running your business smoothly. From accounts payable, billing and invoicing, bank reconciliations, to better managing inventory, expenses, and sales tax, following are helpful features found in both software alternatives:


Tasks Made Easier in Both Cloud and Desktop Accounting Programs

View Full PDF of Infographic


Cloud Accounting Desktop Accounting
Users Unlimited (Xero) or up to 25 (QBO). One person at a time.
Pricing Monthly subscription or bundled with accounting fees. Flat fee up front. Renewed each year or when upgrade is required.
Accessibility All you need is an internet connection. Log on to a supported browser on any PC, laptop, tablet, smartphone, or use the dedicated iPhone or Android apps. Allows team to work remotely if needed. A license is purchased per computer, so it can be considered accessible, but only if you want to bring
that licensed machine with you everywhere you go. Not conducive to remote work environments.
Apps & Customization 450+ third-party apps to build custom tech-stacks based on your needs, industry, business type, and/or processes. (i.e. There are specific apps geared towards non-profits, law firms, construction, retail, agribusiness, restaurants, and more)

Built-in ability to create custom reports/forms.

Software is cookie-cutter with rare third-party app integrations. Depending on your business type, you may be able to purchase an industry-specific version of QuickBooks.

Built-in ability to create custom reports/forms.

Data Backup Data is backed up 24/7 by secure, state-of-the-art, off-site systems. If your computer breaks down, is stolen, or accidentally destroyed, you can log on using another device and rest assured that your data will still be there. Backups are manual. When is the last time you backed up your data or machine? If your servers do not conduct regular backups, data could be lost or unrecoverable in event your dedicated QuickBooks computer breaks down, is stolen, or accidentally destroyed. Expect significant downtime.
Sharing with CPA Your CPA can login to their own account and see the same real-time data. All of your information, questions, historical data, goals, and trends can be regularly discussed over the phone or a video conference. Sharing can be a manual and timely process. Export the data for the desired time frame and save to your computer. Then A) securely upload to a portal or B) print/save to a flash drive and mail or deliver to your accountant’s office.
Automation Go ahead and streamline those workflows! Automation is supported (and encouraged) with 450+ apps. Most bank feeds sync automatically and reconciliation is a breeze thanks to smart suggestions and matching. Little to no automation. Transactions are manually processed.
Frequency of Updates Can be as frequent as every 3-6 weeks. If there is a software update, tax change, or bug to fix, your software is automatically updated across all platforms. You are always using the most current version. Updates annually or when a migration is forced. If there is a software update or bug to fix, you have to purchase a new version to install.
Security State-of-the-art built-in precautions. Ability to set and change user permissions. No IT department required. Protect your local machine and the software login credentials. Perform regular maintenance on any servers.
Features of Both Journal entries, invoicing & billing, banking, payment processing, fully modifiable chart of accounts, expense tracking, fixed asset management, depreciation, contact management, inventory reports, budgeting, tracking categories, sales tax, multi-currency, accounts payable.



Learn More About Modern Accounting

Have more questions about cloud accounting solutions or would like to see a demo? Contact an Alloy Silverstein advisor today.

Have you outgrown outdated? Find out in our Cloud Accounting Checklist:
Cloud Accounting Checklist

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