Cloud-based vs Traditional Methods

Invoices

Recently more and more people are looking at cloud-based accounting systems and moving away from the traditional desktop based systems.

People prefer to know a bit more about their business than they used to. Especially Sole Traders and Entrepreneurs who need to be aware of exactly where they stand financially to make informed business decisions.

Cloud-based Accounting

  • Most times cheaper than traditional methods.
  • Usually updated automatically and regularly.
  • Can usually function across any system without any specific functionalities or requirements.
  • Uses the cloud/internet to store all the financial data.
  • Can be accessed by the owners and staff so long as they have an internet connection via their laptop, desk computer, tablet or even from a mobile phone.
  • Usually automatically backs up all data.

Traditional Methods

  • Works out more expensive and regular updates may be needed which could cost more.
  • You buy the software which needs to be installed on a PC, usually at an accountant’s office.
  • May require certain platforms to work effectively.
  • Data is entered onto that PC and can only be accessed on it.
  • Usually this info is kept on the Accountant’s premises. If the owner requires any info, it will have to be collated and forwarded onwards.
  • Back-ups of the system need to be made regularly.

Which is better? To Cloud or not To Cloud?

Each system has advantages and disadvantages. It all depends on the who is using it and what they want to get out of it. Personally as an entrepreneur myself, I chose a cloud-based system. Various reasons for these include:

  • I am a Virtual Assistant who works for many clients. I work in a different location to my clients. A cloud-based system allows for us both to have access to the financial info at any time. We are able to view the same information in different locations at the same time, so long as the internet is working of course! A cloud-based system will therefore suit businesses who have staff based in various locations or homeworkers. However, the nature of some businesses require a tighter control over their data, especially their financial data. In this case, it would be best to use the Traditional method as data is only accessed in one location and can be better monitored.
  • Everything is on the internet! If I dropped my PC on its head or I had a fire, my info is always safe!
  • Another reason is the cost of a cloud-based package compared to a traditional system was more affordable when I first started my Virtual Assistant business. Most Sole Traders and Entrepreneurs do not have upfront cash to invest in a system, but may be able to afford regular payments. I have found that it worked out cheaper in the long run as well.

So will you jump and float on a cloud or you prefer to be tethered? The decision is yours!