1. Cloud Accounting : In cloud accounting both the accounting system and business data is stored in the cloud means on internet. It is a cloud based approach of performing accounting activities. It is a newer concept and it is based on cloud computing. It provides more number of features to user than the desktop accounting.
Advantages of Cloud Accounting :
- Allows multiple users to use at a time.
- No need of any software installation.
- Provides automatic update and backup.
- Allows accessing data from multiple devices.
Disadvantages of Cloud Accounting :
- Requires internet connection to work.
- Cost is typically higher.
- Doing work may be slow if your connection is slow.
- Requires regular fee in advance or later.
2. Desktop Accounting : In desktop accounting both the accounting system and business data is stored within user’s desktop or laptop. It is a desktop based approach of performing accounting activities. It is an older concept and it is based on traditional computing. It provides less number of features to user than the cloud accounting.
Advantages of Desktop Accounting :
- Without internet connection work can be done.
- Secure when not connected to internet.
- Price is lower.
- Desktop software may run faster and no connectivity issue may arise.
Disadvantages of Desktop Accounting :
- Only one person can use the software at a time no multiuser possible.
- Only accessible in the computer in which it is installed.
- It can not be used in a tablet or mobile.
- Requires manual installation and update.
Difference between Cloud Accounting and Desktop Accounting :
| S.No. | CLOUD ACCOUNTING | DESKTOP ACCOUNTING |
|---|---|---|
| 01. | In cloud accounting both the accounting system and business data is stored in the cloud means on internet. | In desktop accounting both the accounting system and business data is stored within user’s desktop or laptop. |
| 02. | Cloud accounting is a cloud based approach of performing accounting activities. | Desktop accounting is a desktop based approach of performing accounting activities. |
| 03. | Cloud Accounting is a newer concept and it is based on cloud computing. | Desktop Accounting is an older concept and it is based on traditional computing. |
| 04. | No need of manual backup of data files as its automatic. | Data files requires manual backup as there is no auto-backup. |
| 05. | Multiple users can use the accounting software at a time. | A single user is allowed to use the accounting software at a time. |
| 06. | It can be accessed from anywhere just with a laptop or desktop and internet connectivity. | But it can not be accessed be everywhere, it can only be accessed within the desktop in which it has been installed. |
| 07. | For cloud accounting, a good internet connectivity is required to access the software and use. | For desktop accounting no need of constant internet connectivity, without internet also software can be accessed and used. |
| 08. | Cloud Accounting software does not require manual installation and updating as it is automatic. | Desktop accounting software requires manual installation and updating of the accounting software. |
| 09. | Use of cloud accounting software will cost more. | Use of desktop software will cost less. |
| 10. | Cloud Accounting supports for multi-entity business structures, including companies with subsidiaries and international operations. | Desktop accounting is designed for a single business entity. |
| 11. | For cloud accounting, Pay-as-you-go monthly subscription based on the number of users and features required. | For desktop accounting, An up-front license cost, plus an additional cost for upgrades. |