If you already use accounting software on a desktop PC you’re probably wondering what makes online accounting software so different.
Online vs On Your Desk
The biggest difference between desktop software and online software is where the software is located. Desktop software runs on your desktop or laptop computer (no surprises there).
Online software runs on a bunch of large computers called servers sitting in a big data centre. You need an internet connection to view your online software which you do with your internet browser.
This change makes a huge difference from a practical perspective and frees up users from a number of responsibilities. Here are the top four.
Easier to keep updated
Desktop model: The user is responsible for maintaining the software. That means any upgrades or patches to the business software must be downloaded and administered by the user or a colleague. If an update goes awry it is up to the user to restore from a backup and try again. And if you use the same program on your laptop, your home computer and your work computer you need to update it in all three places.
Online model: The software company is responsible for upgrading the software. Updates tend to happen invisibly without users knowing. All users are instantly upgraded to the latest version. (A caveat: Businesses moving from desktop software can sometimes find unannounced improvements disruptive when they alter established processes.)
Easier to run
Desktop model: The user must ensure that their computer is powerful enough to run the business software. This forces the user to upgrade their machine regularly to keep up with the requirements of more sophisticated software.
Online model: The software company must ensure that its servers are powerful enough to run the business software. This is much easier to manage in a data centre which has tons of spare computing power on hand. A user only needs enough computing power to run a browser. This is why you can use complex and powerful online programs through your smartphone. As noted previously, an internet connection is essential.
Easier to secure
Desktop model: The user is responsible for protecting the accounting software and its data. This means physical security such as locking the office door as well as backing up the software. Few businesses follow correct backup procedures which recommend on-site and off-site backups in multiple formats, or test whether restoring from those backups will work.
Online model: The software company handles all security of the software, including backup. Much of the cost of the security is split with the data centre which provides a base level of protection to all servers inside it. The software company also makes regular backups of all users’ software and restores the data as quickly as possible in the event of a major outage.
(A caveat: The terms and conditions for online software typically exclude software companies from compensating users for loss of data. Some users download key data from their online accounting software at regular intervals as a precaution.)
The end of versions
Desktop model: The user is responsible for maintaining compatibility between files and software. For example, accountants must maintain several versions of one desktop accounting program so they can open files sent to them by clients.
Online model: There are no compatibility issues with online software because only one version of the software exists at any one time (per country or region). Instead of sending files between two or more people you invite others to look at and work with your file containing your live business data.