Businesses around the world have turned to online and desktop software for accounting and bookkeeping, with abundant options to suit every need. QuickBooks is one of the most popular software solutions for businesses, and Intuit’s cloud-based QuickBooks Online has fed much of that growth. Meanwhile, other accounting software options include Sage, Xero, FreshBooks and Wave.
With so many different accounting software options to choose from, it may be tricky for a company to decide between online or desktop. It’s a bit like heading to the ice cream counter with flavors, toppings, cones and cups to choose from. Luckily, much like picking out your ice cream, picking an accounting software is only a matter of finding the best choice out of many good possibilities. Here is a breakdown of the similarities and differences between online and desktop solutions.
Many of the core offerings from accounting products are very similar. Most are a good choice for bookkeeping and basic accounting needs like invoices and tracking sales and invoices. The services help with compiling sales and tax reports, tracking miles and managing accounts payable. Businesses sharing their data with CPAs for detailed reports and financial analysis will have no trouble using the software.
There are several notable differences that will determine whether online options or desktop software are right for your business. While the majority of small and mid-sized businesses will find that a cloud-based online software meets all their needs, desktop programs may be the right choice for some companies as well. Costs, users and data in the cloud are important factors that will likely play a role in a company’s choice of software.
The pricing models of the two softwares vary considerably. For example, QuickBooks Online is a monthly subscription that starts at $25 per month for the Simple Start Plan. The highest subscription, the Advanced Plan, will run $180 each month. Other online options like Wave have a basic free plan, while Sage Accounting, Xero, and FreshBooks are around $5 to $10 for their basic plans and offer more advanced plans for about $25 to $30.
QuickBooks Desktop users, on the other hand, pay for a software license to install the product on a computer. Desktop users pay a yearly fee, which can include a subscription “Plus” plan with product support and software upgrades. Costs for Desktop range from $300 a year for Pro up to $1,275 per year for Enterprise. Other desktop choices include Sage’s 50cloud Accounting, a desktop-based program with cloud support. Sage 50cloud starts at $340 per year for Pro Accounting and up to $876 per year for Quantum Accounting.
Number Of Users
Desktop products like QuickBooks Desktop and Sage 50cloud Accounting are installed on individual computers. QuickBooks Desktop Pro users can install the product on up to three computers, while Premier can be installed on up to five computers. Larger companies can purchase the Enterprise product for up to 40 computers. Sage 50cloud supports one user on its Pro Accounting plan and up to 40 on its highest Quantum Accounting plan.
The cloud-based QuickBooks Online plans have similar limits on users, though the number caps out at 25 users for the advanced plan. Other online options, such as Wave and Sage Accounting, can support unlimited users.
Using The Cloud
The ability to use cloud technology may be the biggest difference between these two options. Desktop users have the software downloaded on individual computers and must use those computers to update financial information. They cannot access the data remotely as cloud users can. While this can seem burdensome, it can be a preferable option when internet speeds and reliability are a concern. For additional fees, QuickBooks Desktop users can use remote access to take advantage of the cloud.
Online users can access their accounts from anywhere using any device. The cloud offers the ability for businesses to update their information in real time. Using the cloud is far more than just a matter of convenience, though; it allows constant communication and collaboration with CPAs and takes away the time and hassle of creating and sharing individual files or even paper documents.
Protecting a company’s financial data is critical for businesses of any size. Losing important data can be crippling, and it often happens when it is least expected. A malfunctioning computer, a fire or another catastrophe can overwhelm a business that is unprepared.
If you are looking for online software, keep an eye out for data security features that can automatically back up data and possibly even have company data restored to a specific date and time. Some desktop users can also have automatic data backups as an add-on service.
There is really no wrong answer as to whether to use online or desktop accounting software. You can have your ice cream in a cone or in a cup, and it will be just as delicious. It just comes down to your preferences and which option will work best for your company.
This article was written by Justin Hatch and sourced from Forbes
Justin Hatch is the founder and CEO of Reach Reporting, a leading visual reporting software supplier.