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Accounting SaaS versus Purchase
Accounting software vendors offer several purchase options: hosted, SaaS (Software as a Service), licensed purchase, or both. If you purchase your accounting system products, you will maintain your data on your own servers. With hosted applications, you maintain the software on your hardware, while the data is stored remotely. Accounting SaaS systems allow the customer to maintain their information and use the software on the provider’s server and access that data remotely.
Advantages of Accounting SaaS Products:
· Contingency Planning
Your data can be compromised or damaged by any number of threats. In addition to the occasional technical malfunctions, there are intentional acts of destruction (such as hacking) and natural disasters such as floods, tornados, hurricanes, and earthquakes can affect almost all of us. It is important to have a disaster recovery contingency plan in case of one of these disasters. This is one of the advantages an Accounting SaaS system can offer; the data is not on your server, so as long as you have Internet access your data will be available to you.
· No IT Involvement
Other advantages are automatic updates and freed server space at your location. Your IT staff won’t have to maintain or house the data or software with a SaaS solution. They won’t have to install updates either, since the provider maintains all such details.
· Lower Up-Front Costs
With Accounting SaaS applications you will usually pay some type of minimal setup cost, but once the system is live you will pay a monthly amount. Costs vary, but you can do the math to determine what the break-even time frame will likely be. The upfront cost is less but over time (usually a couple of years) you may end up spending more for a SaaS solution than if you’d purchased the product outright. With that in mind you need to weigh the importance of the other benefits.
Advantages of Purchasing Your Product
The disadvantage of SaaS system is that over the long term, they can be expensive when compared to purchasing a system outright. If your company plans to use the accounting solution you pick for the long run, it may be more cost-effective to actually purchase the application. And if your company is looking to lower the upfront investment and pay over time, remember that most companies will offer a lease to own option on the software.
About the Author
John S. Francis graduated with his MBA from Southern Illinois University- Carbondale in 1985. Since that time he has worked in various accounting professions. From 1996 to 2009, he was founder and President of one of the country’s leading accounting software implementation firms. Acknowledged as a “Top 100 Technology Pacesetter” and a “Killer VAR” by Accounting Today magazine, and a “Top 100 Value Added Reseller” by Accounting Technology magazine, his firm successfully managed accounting system implementation and training engagements for thousands of clients worldwide. In 2009 he began working on accountingsoftwaresuccess.com, a site dedicated to assisting accounting professionals with their search, selection, implementation and use of accounting systems. The site contains several tools to assist accounting professionals with their accounting software research including an Accounting Software Selection Tool and an Accounting Software Articles Library.
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