Cloud Based vs Desktop Based Accounting Software (Part 1)

12 November, 2018
cloud-based-vs-desktop-based-accounting-software

Cloud Based vs Desktop Based Accounting Software (Part 1)

We are seeing more and more cloud based accounting software such as Xero, Quickbooks Online, Financio mushrooming in the Asian countries such as Singapore, Malaysia, Hong Kong, Indonesia, Philippines and Thailand. The rising of cloud based accounting software has created great impact on traditional desktop based (or on premise) accounting software such as MYOB, UBS, Peachtree, Autocount, SQL Accounting & etc.

 

Let’s take a closer look on the pros and cons of both.

 

  Cloud Based Desktop Based (on premise)
Installation Nature Hosted on Cloud Need to install on PC/Mac
Internet Dependency Must have internet Internet is optional
Multi-user environment Connection speed is usually good as it is controlled by the server May be slow as it depends on user’s own local area network (LAN)
Licensing User doesn’t own but subscribe it Owned by users
Software Upgrades Always in the latest version, upgrade automatically Need to pay for upgrade, usually yearly
Fee $$$ Monthly Subscription One time payment
Annual Maintenance Inclusive in the subscription Have to pay separately, usually yearly
Example Xero, QBO, Financio,Wave, SAP Online MYOB, Autocount, SQL Accounting, Quickbooks (desktop version)

 

Subscribe or Own it! How much will it cost?

Let’s look at this question from a different angle. Should you rent or buy a house? I believe the answer is “depends on situation”.


The capital outlay for cloud-based software (eg. Xero Accounting) is usually lower comparing to buying a desktop based software such as ABSS (formerly known as MYOB). Xero accounting software starts with US$30 per month while ABSS Accounting version starts with S$829 (one-time payment).

Asian’s culture usually prefer to own it instead of subscribing (or renting), nonetheless, there are hidden cost such as annual maintenance and upgrades that you have to take into consideration.

 

When you include all the associated cost, the total cost for both cloud and desktop-based are actually very much similar. You will only save when you purchase the one time off desktop based accounting software and do not intend to upgrade it annually.

 

Does it make sense for not upgrading it? Mature software like ABSS is very stable and accounting software rarely needs to upgrade for compliance purpose. Hence, it may work for you if budget is really your big concern. Just take note, you will eventually need to upgrade it when you change to a new PC, as older software normally does not compatible with new windows operating software (eg. MYOB Premier 10 does not compatible with Windows 10).

 

As a professional accountant and veteran in software industry, I will recommend user to carefully choose and subscribe to a good cloud-based accounting software such as Xero Accounting software. A good software does not mean it is easy to use and packed with features (this is a prerequisite, why would you want to use a not-so-uesr friendly software?). More importantly, we have to look at the situation holistically.  

 

Some of the questions that you need to ask are?

 

  1. Is the software support good and fast?
  2. Are the people implementing software a seasoned accountant and experienced?
  3. Can the software integrate with other add-on software?
  4. Will it be easy to migrate to another software? Just in case I change my mind.

 

So coming back to the question of should you subscribe or own it? I guess the answer is very dependent on your preference. At the time of writing this article, the market is divided into 50/50, but I estimate cloud-based supporter will gradually surpass desktop based community very quickly, probably in a year or 2.

 

There are other important factors for you to consider too. Those are coming soon in second part of this article.

 

(to be continued)