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Traditional Accounting Software Vs. Cloud-Based Accounting Software: Which Is Right for Your Business?

Choosing the right accounting software is a pivotal decision for any business, setting the tone for how financial data is managed, analyzed, and utilized. 

In the competitive landscape of business, the right tool can mean the difference between a ledger that’s merely ‘kept’ and one that offers actionable insights, propelling business growth. 

Traditional software may have been the mainstay for years, but the advent of cloud-based solutions has revolutionized accessibility and functionality. The choice between the two can affect everything from workflow efficiency and real-time decision-making to long-term scalability. 

It’s a decision that merits careful consideration to ensure your financial infrastructure aligns with your business objectives and growth trajectory.

What Is Traditional Accounting Software?

Traditional accounting software, like QuickBooks Desktop, Sage 50 cloud, and MYOB AccountRight, is installed on individual company computers or on-site servers. 

Users purchase a license upfront, and the business is responsible for maintaining the software, including managing data backups and software updates. 

The advantages include established track records, in-depth customization, and the ability for businesses to keep full control of the handling and storage of their financial data within their own IT environment.

Well established businesses are generally the  mainstay, continuing to use such softwares because they established themselves on this software years ago.

What Is Cloud-Based Accounting Software?

Cloud-based accounting software, such as Xero, QuickBooks Online, and FreshBooks, is hosted on the vendor’s servers at data secure centers and accessed from anywhere through a web browser. 

This SaaS (Software as a Service) model provides businesses with the benefit of regular updates, scalability, and remote access from anywhere with an internet connection. Users typically pay a monthly subscription, which includes automatic updates, data backups, and customer support. 

These systems offer real-time collaboration with accountants, easy access for your bookkeeper,  and growing integrations with a multitude of other cloud services, streamlining financial operations and enhancing data accuracy.

How Does Data Accessibility Compare?

Data accessibility is a key differentiator between traditional and cloud-based accounting software. With traditional systems, like those from Reckon or MYOB’s on-premises solutions, access is typically confined to the computers or local network where the software is installed. 

This can limit flexibility, as accessing data remotely often requires setting up a virtual private network (VPN) or remote desktop services.

In contrast, cloud-based systems such as Xero or QuickBooks Online offer far greater accessibility. They allow users to securely log in and access financial data from anywhere via the internet, using various devices like smartphones, tablets, or laptops. 

This can increase productivity, as employees and accountants can collaborate and update financials in real time, regardless of their physical location.

What About Security?

When it comes to security, traditional software can be both a blessing and a challenge. The data is stored on local servers or computers, and while this can mean greater control over the security environment, it also places the onus on the business to secure and back up its data effectively.

A hard drive crash, a destructive virus, a fire, or theft with no recent backup can result in weeks of rework and sometimes no recovery at all. 

Cloud-based accounting platforms, meanwhile, utilise the security measures of large-scale data centers operated by the service providers. These typically include advanced encryption, multi-factor authentication, and continuous security monitoring. 

Providers invest heavily in security protocols to protect against breaches, and data is continually backed up across multiple locations, ensuring redundancy and recovery options. However, the responsibility also lies with users to ensure they follow best practices for password security and access control.  Most also now enforce 2 factor authentication to reduce risk further.

In both cases, ensuring software is up-to-date is critical for maintaining security. Cloud-based services have the advantage of automatic updates, while traditional software may require manual updates.

How Does Each Option Scale with Business Growth?

Traditional accounting software can sometimes struggle to keep pace with rapid business growth. Scalability often means purchasing additional licenses or server upgrades, which can be costly and time-consuming. These solutions may suit businesses that have a stable size or grow at a manageable rate.

Cloud-based software, on the other hand, is built for scalability. Services like Xero or NetSuite are designed to grow with your business, allowing for easy addition of new users and features. With cloud services, you can scale up (or down) instantly as your business needs change, without significant disruptions or infrastructure investments.

What Are the Cost Implications?

In terms of cost, traditional accounting software generally involves a higher initial outlay. For instance, the cost for an on-premise solution like MYOB AccountRight can range from around $70 for a basic version to over $100 per month for more advanced features. There’s also the additional cost of IT infrastructure and personnel to maintain the system.

Conversely, cloud-based software typically operates on a subscription model with a lower entry cost. Xero’s plans start at approximately $25 per month for a basic plan, with more comprehensive plans reaching up to $65 per month. 

You’ll also need to consider the data migration costs, downtime costs if any, and staff training costs if migrating from traditional to cloud solutions.  For this see our other post on “How Much Does It Cost to Migrate To Cloud Accounting Software”

While the subscription costs may add up over time, the lack of maintenance costs and flexibility in scaling will likely make it a more cost-effective option overall for businesses that are growing or have fluctuating demands.

Key Takeaway

SEER Financial Group is a guiding force to help businesses navigate the complex landscape of accounting solutions. Their expertise lies in evaluating a company’s specific needs and aligning them with the most efficient software choice. 

SEER’s approach is holistic — they don’t just recommend a software; they integrate it into the business’s broader financial strategy, ensuring that the chosen solution fosters growth, efficiency, and compliance. 

By partnering with SEER, businesses can trust that they are not only equipped with a state-of-the-art cloud-based accounting solution but also supported by a team of experts dedicated to maximizing their financial potential.

Other Article


How Much Does It Cost to Migrate from Desktop Accounting Software to Cloud-Based Accounting Software?

Migrating from traditional desktop accounting software to a cloud-based system is an investment in your business’s future scalability and flexibility. 

However, the costs and processes involved can vary widely depending on several factors, including the size of your business, the complexity of your existing financial data, and the specific cloud solution you choose. 

Here’s what you should consider when estimating the cost and planning the migration:

Cost Breakdown

Subscription Fees: 

Unlike the one-time purchase of traditional software, cloud-based systems typically operate on a monthly or annual subscription basis. Costs can range from as low as $25 per month for basic plans to over $100 per month for premium services.

Data Migration Costs: 

Transferring data from a desktop to a cloud environment will almost always involve additional costs. Some cloud accounting software providers offer free basic data migration tools, while others may charge for this service, particularly for more complex migrations.  There are migraine experts but they will need to spend time on the migration process.

Training Expenses: 

Staff may need training to effectively use the new system. This could involve online courses, in-person training sessions, or hiring an expert to train your team, which can add to the cost.

Implementation Costs: Setting up the new system with customizations, integrations with other systems, and configurations to meet your business needs may require professional services.

Additional Features: 

Add-ons for enhanced functionality like advanced reporting, inventory management, or additional user access can increase the cost.

Downtime Costs: 

There may be a temporary loss of productivity as you switch systems. While not a direct cost, it is a potential financial impact to consider.

What’s Involved in the Migration Process?

Assessment: Start by reviewing your current accounting processes to determine what you need from the cloud-based system. This will guide your choice of software and the scope of migration.

Choosing a Provider: 

Select a cloud accounting software that fits your business needs, considering factors like cost, features, and scalability.


Develop a migration plan that includes data cleanup, mapping out how data will transfer, and timing the migration to minimize disruption.

Data Cleanup:

Before migration, it’s essential to clean up your existing financial data, which may include correcting errors, removing duplicates, or archiving outdated information.

Data Transfer:

The actual migration can range from simple export-import procedures to more complex data conversion processes that might require technical assistance.


Once the data is migrated, thorough testing is crucial to ensure everything is working as expected and the data integrity is maintained.


Train your team on the new system to ensure they are comfortable and proficient in using it.

Go-Live Support: 

Have a support plan in place for the initial period after going live with the new system to address any issues quickly.

Review and Optimize:

After the migration, review the processes to identify and address any gaps or areas for optimization.

The Upshot

The cost of migrating from desktop to cloud-based accounting software is not just measured in monetary terms; it also involves 

  • time, 
  • effort, 
  • and changes in business processes. 

For a successful transition, businesses must plan meticulously, allocate adequate resources, and be prepared for a period of adjustment.

While the initial cost and effort may be significant, the long-term benefits of flexibility, efficiency, and scalability will far outweigh these initial investments.

At SEER Financial Group we have the expertise and streamlined processes to make a transition from older clunky softwares to easy to use cloud based softwares easy for you. Talk to one of our team to see what’s involved.

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