When traditional manual accounting used to be a hindrance for the business operations, stand alone accounting softwares provided an easy solution to manage payroll and invoices through local computers.
However, with the evolving technology, cloud accounting software solutions provide advanced features for better accounting. This impacts the choice of modern accounting firms shifting from stand alone accounting towards cloud accounting software.
When you have large transactions and accounting calculations to perform – profit and loss, payroll, tax information, etc., who wouldn’t want a pain-free, smooth experience while dealing with clients? Though cloud accounting offers more benefits, it doesn’t become the superior choice altogether. To understand the features and latest trends in accounting, check here for accounting software in UK.
In this article, we shall understand the pros and cons of both the systems of accounting which cater to different business needs and requirements.
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What Is Standalone Accounting Software?
It started with buying a physical product as a software solution like a CD, and downloading and installing it onto your device – computer or laptop.
It had been the best solution available in the market before cloud accounting seeped in. The standalone accounting software improved the productivity in starting, but various issues started arising with it – halts during power cuts, restricted space of working, incompatibility with transfer of files, etc. Though, the system allowed keeping the files secured to one place, which discouraged external thefts.
What Is Cloud Accounting Software?
The cloud UK accounting software not only resolves standalone and traditional accounting challenges but also provides project management and customer support services on one platform. This helps in managing different tasks online without any location and time restrictions.
This is particularly beneficial in a way that accountants can store multiple clients’ files separately and securely, with easy access later on. Though it may cost you more than a desktop standalone accounting software, you save up a lot of expenses and costs in the long-run.
While comparing both the cloud and standalone accounting software solutions, you must consider notable and important differences before making the decision.
Standalone Vs. Cloud Accounting
With cloud UK accounting software, the financial professionals can access the important documentation easily and faster, along with real-time communication with clients and team members without location restrictions. It allows you to edit, track and approve financial data of clients and deadlines, all from a centralized and secure cloud workspace.
With standalone accounting software, your access to the financial data is restricted to a specific location, which inhibits international clients communication and interactions. Also, you need password and login credentials every time you access the system.
2. Multi-platform Access
The cloud UK accounting software also provides multi-platform communication by providing easy integration with various platforms like expense management, receipt scanning, banking application, etc. This way you’re always updated with your financial information at any time or place. Also, the mobile application helps in easy tracking and management of accounts with real-time data analysis.
But with standalone accounting software, you’re limited to your desktop computer and so are your files. You need an external hard drive to store your large data, and that only becomes your source of sharing files with the clients and stakeholders. This limits your productivity and causes frustration too.
When your clients and storage requirements increase, it calls for scaling up the accounting solution too.
With cloud UK accounting, immediate subscription upgradation helps in easy storage access- leading to more space for clients accounts and employee accounts. It allows for easy business operations even with scaling the business, with least hussle.
But scaling through standalone accounting software gets tricky and rough. With the new clients and employees, new licenses are purchased manually, and more servers need to be bought for storage space.
4. Data Security
With managing financial data, security of data becomes the utmost priority for the businesses. Cloud UK accounting software may offer a minimum of cloud-grade level security for the sensitive and highly confidential documentation such as invoices, payroll, and tax information. Some businesses would want their data to be completely encrypted and under their control, and don’t want any software provider to access the data for security reasons too, for which standalone accounting would be more appropriate.
But, having a desktop computer or laptop can also be risky due to loss or accidents that may occur. Hence, it is also important to have a backup of the files for future reference. You can either store them on an external hard drive, or the cloud accounting vendors continuously backup the data in their cloud space.
Deciding whether you need a standalone accounting software or the cloud UK accounting software for your business, can be tricky. Hence, you need to understand your business requirements first, and also note down which features you require the most. With standalone accounting software, you can have complete control over your data but are limited to your desktop, and with cloud UK accounting software you have complete automation of work, but risk of security issues.