Cloud Financial Data

What’s the Difference Between Cloud Accounting Software and Traditional Accounting Software?

What is Traditional Accounting Software?

Traditional accounting software requires you to have a dedicated hard drive where your software is installed and financial data is stored. The end user accesses their data through a desktop application that can’t be accessed from any other device or network.

What is Cloud Accounting Software?

Cloud accounting software provides the same functionality as on-premise accounting software. However, cloud accounting software connects using the internet to run on remote servers. The end user accesses their financial data and works through a web-based interface, instead of an installed desktop application.

The Top 3 Differences Between Traditional & Cloud Accounting Software


The most obvious difference is truly the defining factor: With cloud accounting software, you log in and access your financials securely through a web-based interface; while a traditional accounting system only allows you to access your financials from the computer on which your software is installed.

In other words, cloud accounting software is off-premise while traditional accounting software is on-premise. You can use your credentials to access your cloud-based financials from any connected and compatible device, at any time, regardless of your location. With traditional software, you can only access your financial data from that specific device and location, restricting your mobility and schedule.

Additionally, cloud software keeps all data sources updated in real time, and provides options for redundancy with data backups. With traditional software, you have to manually update your information files or copies in every location where the data exists.


Due to its remote capabilities, cloud accounting software is naturally supportive of business growth because it’s not limited to the storage or bandwidth of the local servers and user devices you can afford to purchase and maintain. Software (like Intacct) includes multi-entity and role management to ensure you can add resources as needed.

Traditional accounting software, on the other hand, requires installation and access granted to each new user (if multiple users are allowed).


Because cloud accounting software stores your data on a remote server, it reduces the overhead associated with hardware. Your monthly or annual subscription fee includes as much server storage as you need. It also covers any automatic software updates.

With traditional accounting, you’re responsible for maintaining your servers, increasing your storage capacity by investing in new servers, and updating your software.

Is Cloud Accounting Software or Traditional Accounting Software Right for You?

Security is a bigger concern with cloud accounting than with traditional accounting, as your data can be accessed from anywhere at any time. Despite there being many cybersecurity tools for guarding against malicious access and attacks, traditional accounting software may be the better choice for enterprise companies who want tight control over their financials and want to avoid open wireless access or direct monitoring.

However, for small and mid-market companies seeking to improve their bottom line, agility, and scalability – cloud accounting software is likely the better choice. The cloud also provides the aforementioned layer of data backup for redundancy, which is ideal for business continuity purposes.

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