Since the inception of cloud computing, the debate of on-premise vs. cloud has been going strong. So, how do these technologies function in the case of accounting business models?
Nowadays, the accounting operations rely on different software like Sage, QuickBooks, ATX and many more such accounting and tax applications that can be hosted on the servers, either on-premise or remote locations. These are used to manage balance sheets, invoices, and transactions among other functions.
Now the question is do you want to install the accounting software on an in-house infrastructure or a remote one?
Broadly speaking, “On-premise” implies that the accounting firms set up their infrastructure in their office itself. The accountants and other officials can access the software only from the office. Since the infrastructure is in the office itself, there is less scope of increasing your server capacity or adding more servers.
In comparison, the cloud computing is advanced technology. All you need is an internet connection to access your software from any part of the world. The software like Sage or QuickBooks is hosted on a cluster of servers kept in remote locations.
You can order a change of configuration as per your requirement, and it is available almost instantaneously.
“I don’t need a hard disk in my computer if I can get to the server faster… carrying around these non-connected computers is byzantine by comparison.” – Steve Jobs
Here are some aspects that will help you distinguish between on-premise and cloud hosting.
Cloud means accessibility!
Although the cloud technology is a versatile domain and has innumerable benefits, in my opinion, the feature of easy accessibility distinguishes it from on-premise server hosting.
In the modern age, mobility is an essential part of the business. Being in the accounting industry, you have to be in different places at different times. The good part about cloud hosting is that you can access your business process from anywhere.
So even if you are sick and don’t want to go to the office, you can manage balance sheets, invoices and receipts on your mobile, laptop or tablet through an Internet connection.
On-premise server is just that! You can access your process from the premises only. Hence, your productivity gets hampered if you step out of the office.
No Capital Expenditure
In broader terms, Capital Expenditure (CAPEX) is the revenue that the company spends on infrastructure at the time of the first setup.
The CAPEX can get out of hand in the case of on-premise hosting. You must incur charges on setting up servers, cables and other network equipment like router and switches. You also must rent a space to host those servers.
Cloud hosting providers offer you their existing infrastructure, so you don’t have to buy your own. You pay only for operational costs which you already incur when paying for the IT staff.
How often do you keep facing IT-related issues? While running an accounting business you want to focus all your energy on your process rather than on the underlying infrastructure. The last thing you need is not able to access your software at any given time.
On-premise hosting involves employing an IT staff that maintain your hardware and all the related inconvenience that comes with it.
Cloud Hosting providers take all the hardware-related hassles away from you. As the hardware is looked after by them, all you have to do is focus on your accounting related tasks.
Accounting is a dynamic domain. The number of users involved in your process keeps on changing. As a part of the accounting industry, whether you are using Sage, QuickBooks or any other software, there is always a scenario where you will have to scale your resources up or down depending on the process requirement. Also, there is an influx of data onto the servers daily.
In the on-premise scenario, either you will have to buy an infrastructure way beyond your requirement to meet future needs, or you are caught up in a vicious cycle of replacing the hardware every time you need upscaling or downscaling.
Cloud hosting has no such issues. As hardware restrictions do not bind the cloud technology, scaling in cloud technology happens almost instantly.
As an accounting professional, imagine all the inconvenience you can avoid by scaling your process without any hardware replacement.
Security is a significant factor in any industry, let alone accounting. Most people argue that on-premise servers are more secure as you host them on-premise itself. The cloud is a cluster of servers shared by numerous users.
However, the cloud hosting providers deploy advanced security practices and protocols to keep your data safe. These undergo various security certifications and are more than capable of hosting your application securely.
Most cloud providers charge by “pay-per-usage” policy. It means that you can pay as per your business process demands. For instance, if you require Sage hosting for ten users, you can contact the cloud hosting provider, and they will provide the necessary configuration. If your requirement changes at any given time, you can request the provider to upscale or downscale your configuration.
On-premise hosting is less flexible than the cloud. If your requirement changes, you must upgrade your server by replacing the hardware yourself.
Redundancy and Disaster Recovery
Redundancy is the process of replication your data so that it can be recovered in case of data loss. Loss of data can occur due to many factors, either natural or human. Your data can be lost due to any natural phenomena that disrupt that activity in your location or due to a server crash.
All renowned cloud hosting providers replicate your data to alternate servers in different locations. This way your data is recovered within seconds in case of a crisis.
They also deploy a disaster recovery plan in which the data is stored in multiple geographic locations thus avoiding the data loss due to any issues in the data centre.
On-premise servers have no such facilities. Of course, you can have multiple servers in your premises, but any infrastructure issue in your location like power or cooling will cause data loss.
As the accounting software like Sage and QuickBooks are evolving, so is the hosting industry. “Cloud” is a technology that most of the accounting community has adopted. It is a convenient way to access your software from anywhere at any time.
It gives you the power to upgrade or downgrade your capacity as per your requirement. You can focus on your business and not worry about the infrastructure.