There are in general two ways in which accounting and bookkeeping can be handled. One is by using desktop accounting software and other ids through cloud accounting software.
Before getting into basic similarities and differences let us first understand what is the meaning of these two accounting software and how and where they are used and so on.
What is Desktop Accounting Software?
Desktop Accounting Software is one that is used to store all the accounting data or bookkeeping data in a desktop. These kinds of software are used to store all the data in a single hard disk. Accounting in such software doesn’t require any internet connectivity. If a person wants to use that particular data, they are bound to use it from the same desktop.
This kind of software is used in call centers, in shops, in offices for reception use and many such places. In such places, people are employed to work on particularly accounting or bookkeeping only. Thus there are no many people using or are in need of the same data.
What is Cloud Accounting Software?
Cloud Accounting Software is quite different from Desktop Accounting Software. This kind of software, data is stored in the cloud, unlike desktop accounting software. Data is stored in the cloud thus it requires stable internet connectivity throughout uploading, downloading, and data usage processes. This data can be used by anybody who is approved to use the data by the admin. This helps to maintain the authenticity of the person and the security of the data.
Cloud Accounting Software is generally used in places where there is a large amount of data that is to be handled and data is to keep secure for a large span of time. As the data is stored in the cloud the access to the same data can be provided to anybody all day long.
See this, 5 Features To Consider While Choosing Accounting Software.
These two software are designed to fulfil different purposes but still, they have few similarities as well.
The first similarity is both this software has a purpose to fulfil that is accounting or bookkeeping. Hence all the methods through which data is recorded, collection of data, managing data in tables and segregating data, and so on are managed by the software itself.
- Data Storage is one of the biggest and most important differences between both kinds of software. In Desktop Accounting Software data is stored in a hard disk of the system itself whereas in Cloud Accounting Software data is stored in the cloud that is in servers.
- The next thing is internet connectivity. As in cloud accounting software, data is stored in the cloud and that requires a good stable internet connection while accessing the data. So in remote areas where there is no good connectivity using cloud accounting software would not be a wise choice. Internet is required and that too stable one because if the internet is flickering one then that might result in loss of sensitive data from the system.
- Data Usage is more flexible in cloud accounting software. This kind of software provides access to data whenever and wherever required. The problem with desktop accounting software is that data stored in such software can not be used remotely. Thus this is one point that makes cloud accounting software more in demand than desktop accounting software.
- Data Security in both software has its own issues. In cloud accounting software data is stored in the cloud, it is safer as compared to desktop accounting software. But in the case, if any problem occurs on the server-side then there are chances that data might be lost or miss used.
- In cloud accounting software, the best advantage is at a time many people can simultaneously work on the same data whereas in desktop accounting software only one user can access the data at a time. This is the reason why companies with large data prefer cloud accounting software over desktop accounting software.
- Accessibility in cloud accounting software is more flexible as compared to desktop software because what cloud system requires is stable internet and an electronic device like PC, tablet, laptop, etc.. Whereas in desktop software only accessible desktops can use the software.
- In cloud accounting software data backup is managed by server handler or the company managing the server whereas in desktop accounting software data backup is to be done manually. In cloud software, data is backed up already by the server through different techniques.
- In cloud accounting software one can use any third-party app for automation whereas no such system or app is available for desktop accounting software. Many processes can be scheduled using a third-party app in this way.
- Data is protected by the server managers and the company handling them in cloud accounting software. Whereas if a company desktop cloud accounting software over cloud accounting software then they need to have a different IT department that manages the data and security of the data.
- The best thing about using cloud accounting software is that you need not install it whereas, in desktop accounting software, installation and updating are done manually.
- Monthly fees are available in cloud accounting software and in desktop accounting software you only pay ones while purchasing the software.
- Cloud accounting software is accessible in any device whereas desktop accounting software is accessible in a specified device only. If there occurs any technical fault in the device then it might lead to data loss or software damage.
Also read, How To Track business accounting records Via Accounting Software.
How to choose which platform is better according to you and your business needs?
Choosing one from cloud accounting software or desktop accounting software totally depends upon the personal needs or needs of the company. If a company has to manage critical data and need to maintain privacy, then cloud accounting software is a good choice. Also if the quantity of data is large then storage can be an issue in the desktop system. If needs are very less and security is the major issue, then desktop accounting software can be a perfect choice. Also, desktop accounting software is a cost-effective product for small businesses or small scale uses.