Choosing the right type of accounting software can maximize productivity and minimize stress.
Perhaps you’re currently working with traditional installed software and feel it could use an upgrade. Or, maybe you’re looking for software for the first time, and just don’t know what you need.
It’s the classic paradox: how can you find the right accounting software platform, if you don’t know what you’re looking for?
Luckily, the Capterra blog is here to help you understand if SaaS accounting software is right for you, or if you should stick with an installed platform.
What is Saas accounting software?
Software-as-a-Service (SaaS ) is both a viable and increasingly popular option for many businesses. But, is SaaS accounting right for your company? To answer this question, let’s examine the benefits and shortcomings of SaaS, and which business models fit best with it.
To put it simply, SaaS software differs most from traditional in three main ways:
There are many more differences, but on a basic level, these categories show the best contrast. They are also the categories that will most influence your choice.
Imagine the difference between the types of software as being like the choice between buying or renting a house. A SaaS accounting system is like renting; it’s faster, less expensive in the short term, and doesn’t tie you down. However, if you don’t like the layout, you’re sort of stuck.
On the other hand, traditional installed software is more along the lines of buying a house. It’s a large cost (upfront), a long term investment, takes a while to set up, and is altogether yours to customize to your liking. If you don’t like the wall, you just take a sledgehammer to it.
When is opting for installed accounting software a better option?
If you’re in a company with a large budget and scope, you may want to look into buying the house. You need something you can customize to your own demands and integrate with your own systems.
Large corporations have hundreds of smaller systems running in the background, and getting them all to talk to the accounting department is an important detail. Sure it takes lots of work to integrate, but you have an IT team for doing just that.
You’ll also be taking security into your own hands, as all of your sensitive data remains on your own servers.
This security issue can be hugely important for businesses that have to conform to federal privacy guidelines such as HIPAA or those imposed by the FTC. Accounting is especially important, as you often store very sensitive information alongside invoices.
When does SaaS accounting software win out?
Small and midsize companies may do better with a SaaS model. Buying a house is expensive and time consuming, and Smash Mouth has taught us that you have to hit the ground running if you’re going to be an all-star.
Cloud-based systems make it easier to input data from multiple devices. And due to economies of scale, SaaS vendors can more often than not handle the security of your data better than you can on your own.
In fact, one of the main benefits of SaaS is the ease of regulatory compliance. All businesses hold some sensitive information, and storing it all on your local machine can be asking for trouble. Cloud-based accounting systems store and transmit data in an encrypted form, making it more difficult for hackers to access.
If you think you might have special privacy requirements, check with any provider—local or cloud-based—before making a purchase.
SaaS vs. installed software: What’s the verdict?
So, should you switch to SaaS software? Well, in case this blog post hasn’t already illustrated it for you, the answer is a little bit complicated.
Instead of giving your magic eight ball a shake, here are a few things to consider to make an informed decision:
1. Time to market. How quickly do you need to get your software up and running? In a rush? The long integration of traditional software might not be right for you. SaaS software will get you going faster than you can say “traditional installed software integration!”
Have a big budget and time to spare? Installed software’s integration may be a better choice.
2. Customization. What are your needs? While you may find the perfect SaaS accounting solution, others may require modifications to suit your needs. Check existing third-party apps and integrations to see what you can manage easily.
Installed software is exceptionally customizable, but again, it takes more time to set up.
3. Integration. Some SaaS platforms are exemplary at integration with other software. Others…not so much. Make sure you check before you buy SaaS if it meets your integration needs. If it doesn’t, try another SaaS or an installed software option.
4. Security. How do you want to protect your data? Keep it yourself, have your SaaS provider watch it—or cast a voodoo curse upon those who take it? These are important questions you need to ask yourself before you make a decision.
5. Short- or long-term solution. Are you renting or buying? If you want to make a long-term investment, installed software will ultimately be less expensive.
On the other hand, nobody with proper financial sense would buy a house just to live in it for half a year and then try to sell it again.
6. Scalability. Related to the previous point, how big do you need this system to be? Are you going to hit 13 employees and just cruise from there, or are you going to grow to 750 folks? Thinking about future scalability can help you forecast future accounting software costs.
7. Remote access. Do you need your system to be cloud-based? If so, a SaaS system would be better. Not a problem? Then installed software is still on the table.
Over to you
So, is SaaS accounting software right for you? Hopefully this article has informed you about the subject, but there’s only one way to know for sure; try it for yourself!
Most SaaS providers are more than happy to give you a free trial to let you get accustomed to the software. Make sure you try it before you buy it.
If SaaS software isn’t for you, that’s okay!
No matter what type of software you’re looking for, Capterra’s accounting directory has you covered. Please feel free to tell us what you think in the comments below. How have your experiences with SaaS or traditional software been? Which is the best for your business?