One of the products that is finding real success in moving to the cloud are accounting systems. Offerings from people like Xero are really cashing in on the power that the cloud can deliver, however you still need to consider carefully whether these systems are right for your business.
A traditional on premise accounting product has the challenge of being updated and shared amongst a number of users not to mention the challenges of accessing remotely. However, one major benefit is that backup and migration is relatively easy as you have full access to the whole system. However, chaining the system to on premise equipment has a number of downsides.
Modern cloud based systems like Xero allow the connection to banking systems which they can automatically reconcile accounts. They also generally automatically update both he software and things like tax tables. Remote access is a breeze since you can access these systems where ever you have access to the Internet. Most also have a fantastic range of online training.
One of the biggest challenges many find with cloud based accounting systems is maintaining a full backup of the data. Typically with on premise systems you can copy the accounting data file to a USB key or backup drive, however with cloud based systems you need to run some form of export routine to dump the data into text file format. This really isn’t a backup, it is more of an export.
Cloud accounting providers certainly do their own backups but it makes good business sense to always have your own backup for such critical business information. This typically means developing an automated exported routine for cloud based accounting systems.
The other major difference between cloud based systems and their on-premise equivalents, is that the cloud based systems work on a subscription model, whereas on premise systems are usually an outright purchase. Many on premise systems also include optional annual maintenance, generally this is included in the monthly subscription cloud offerings provide.
In the long run most accounting systems will move to the cloud because they provide so many benefits for the suppliers. This means that most users will also follow. However, not matter what system you choose make sure you know the advantages and disadvantages of both and importantly how to retain a copy of your data.