What Is Traditional Accounting Software?
Traditional Accounting software implies on-premise accounting software that necessitates having one devoted hard drive where the accounting software is installed on the office premises. For this software to work, all the financial and transactional software is also stored on the hard disk for access. The end-user of the traditional software accesses the software and the associated database through an application that is installed on the PC / laptop located in the same premise.
Not everyone connected to the internet can access the data or software. Users from specific locations where the desktop application is installed and configuration of connecting to the hard disks are made can access the software and the associated database. Associating with the company offering comprehensive accounting services in Singapore can help you to effortlessly maintain your books of accounts and documentation.
What Is Cloud-Based Accounting Software?
Cloud-based accounting software on the other hand is accounting software that can be accessed over the internet through a set of applications. In cloud-based software, all your data is stored on multiple servers known as a cloud in contrast to traditional software where data is stored on company servers. This cloud-based accounting software provides the same functionality as traditional software through the internet meaning you can work at remote locations easily.
Difference Between Traditional & Cloud-Based Accounting?
Traditional accounting requires you to first purchase the software, install the system on all the machines that will use the software, purchase hard drives where the software and the financial data will be stored and so on. You thus need to purchase both hardware and software, whereas for a cloud-based accounting system you do not need to purchase the expensive hardware. All you need are machines and an internet connection and you are good to go. The cloud-based accounting software can work even on mobile phones with the internet. You have to pay for a monthly subscription for using cloud-based accounting software. A professional accounting company in Singapore is well versed with both types of accounting solutions.
As a company grows in size, the amount of transactional and financial data increases exponentially. To incorporate all the data, for traditional accounting software, you need to install larger and faster servers, thereby entailing a cost for expansion; whereas, for cloud-based software, additional data can be easily incorporated in the clouds without any costs. This makes a cloud-based accounting system easily scalable.
Since traditional accounting software is installed on machines directly connected to servers, the speed for traditional accounting software works faster compared to cloud-based accounting software where data transfer happens over the internet. However, a faster internet connection can easily improve speeds for the cloud-based system.
Real-time Data Updates
One of the important advantages of a cloud-based accounting system is access to real-time data for everyone. So, anyone located remotely can access data in real-time and help in decision making which is not possible for traditional software to do. Access to real-time data can easily improve the collaborative working of different teams in your business.
For a traditional system of accounting, there is always a risk of building collapse, loss of data due to power fluctuations, fires, thefts, hardware malfunctions or floods. The cloud-based accounting system is less vulnerable to such physical damages since the data is stored in multiple locations and generally there are back-ups taken. Cloud-based data is also protected from chances of attacks by viruses and data thefts. An accounting service provider company in Singapore will always take care of your personal data.
Which System Is A Better Option?
From the above differences, one can easily see that the cloud-based accounting system is much better compared to traditional accounting software. Shifting to the cloud-based accounting system is the current trend. Numerous accounting companies in Singapore provide a transition to cloud-based based on your requirements.