A guide to cloud accounting practice management software

What is the difference between cloud accounting and on-premise accounting software?

If you're considering moving to the cloud, you may already have an on-premise (or traditional) accounting practice management software for your accounting firm.

The main difference between on-premise and cloud accounting software for practice management is where they are hosted. This determines how they are implemented and maintained.

On-premise accounting practice management software involves practices purchasing licences and installing a system on internal servers that are physically located within a building. This requires a specialist in-house IT department to build the system and oversee day-to-day maintenance tasks - such as running updates, managing back-ups and security procedures.

Cloud practice management software is a much different solution. Rather than being managed on-site, cloud practice management software is a web-based application. It is outsourced to a provider, hosted on their servers (aka, the ‘cloud’) and can be accessed remotely, providing that you can connect to the internet. It doesn’t require a local server or installation on a computer.

Also known as ‘software as a service (SaaS), a cloud accounting practice management software solution usually requires a simple monthly subscription fee to the respective provider in exchange for their services.

Key considerations for choosing cloud practice management software

Now that you understand the difference between the two systems, the next step is to weigh up important factors that will help you understand the benefits of cloud-based practice management software.

More and more practices are opting for a cloud-based practice management software solution, but there are several important considerations to think about, such as your budget, practice size and long-term scalability.

Asking yourself the questions below will help you to make sure that cloud based practice management software is the right choice for your practice.

What features should I look for in cloud-based accounting practice management software?

The best-in-class cloud accounting practice management software will contain the following features:

Client management software

Client management software enables accountants to access all client information from one central location.

Accounting client management software is an essential tool enabling you to connect with your clients on a level you've never experienced before. It can benefit your accounting practice in a number of ways, including:

• Reducing double handling of data entry.
• Increasing the visibility of your clients, prospects, business prospects, business partners and suppliers.
• Enables you to segment your database to target a specific region, industry, market or audience to increase communication effectiveness.
• Building long-term advocacy and loyalty by better managing your existing and new client relationships.
• Accessing all your client information in one place.

Workflow management software

Accounting workflow software saves your accounting practice valuable time through workflow automation that you can configure to suit how you want to work.

Accounting workflow management software will help your accounting practice with end-to-end control over creating, managing, and organising workflows for your team.

Accounting workflow software can help boost overall productivity, help your team stay organised, improve how team members collaborate with one another and change how you connect with your clients.

Accounting practice reporting and insights

Accounting practice reporting and insights software is designed explicitly with accountants in mind. This vital solution will give you complete visibility of how your accounting practice is performing.

Through reporting and insights, practice owners and team members access reports and empowered insights to make faster data-driven decisions that will make accounting practices operate in a more responsive, meaningful way.

Using smart dashboards, you'll have value-adding KPI data presented as smart dashboards and summaries. Reporting and insights software will help accountants get in front of clients with crucial information that can influence decision-making.

Time and billing software

Time and billing software can help accountants run their entire practice with complete visibility on time tracking.

Time and billing software for accountants helps practices optimise their resources, report on productivity and provide options for flexible billing for clients.

Time and billing software for accountants comes with many benefits:

• Through time tracking you'll understand where you're spending your time in your practice more accurately.
• You can create customised reports that help increase your overall productivity.
• You can optimise your practice resources through a complete view of all work in progress by partners, managers or team members.
• You'll be able to create and reiterate a new habit of time tracking within your practice.
• Billing clients based on time spent on jobs or fixed fees.

Is cloud-based accounting practice management software affordable?

Cost can be a huge deciding factor for accountants looking to implement new accounting software and the payment models of on-premises vs. cloud practice management software differ significantly.

With on-premise accounting practice management software, accountants typically have a higher up-front cost than a cloud-based solution. As on-premises software is managed internally, you are responsible for every aspect of implementation and maintenance of things like:

• The accounting management software
• All the required hardware and servers
• Maintenance costs

Not only can maintenance be one of the most expensive factors to consider but ensuring that the servers and hardware run consistently can require around-the-clock attention. As the energy put into this task could be prioritised elsewhere, ‘time’ can go hand-in-hand with financial cost and is therefore a crucial factor to consider.

Alternatively, the SaaS model associated with a cloud practice management system means that the software is paid for on either a monthly or annual pay-as-you-go basis. The up-front costs are much less when compared to an on-premises practice management system, there will likely be hidden costs. These will derive from factors such as the number of users that require the system, ongoing customisation, and staff training.

However, as there are no hardware, physical infrastructure or maintenance requirements, a cloud practice management solution is a very cost-effective option.

Will my client data be secure?

Security is arguably the most crucial factor when choosing online accounting software to run your practice management. Accounting practice client databases can contain highly sensitive information about clients and their finances and must always be protected and secure.

For some, on-premises accounting practice management systems are considered more secure than their cloud counterparts. This isn't necessarily true. The reality is, that the level of security can be perceived to be better as in-house management provides access to your own servers, meaning that you always have transparency and control of where your data resides.

While cloud accounting practice management software is managed by a third-party provider, this doesn't mean that your data is any less secure. Most providers are especially vigilant where security is concerned about adhering to internationally recognised standards such as ISO 27001, and your data will be stored off-site in a highly secure data centre. It’s important to acknowledge that the providers' reputation is also at stake, so it is clearly in their best interests to providers to run a secure operation.

Experts in the field have also played down the theory of on-premises practice management software being more secure and reliable. Especially as they can be susceptible to data loss from events such as flooding or fires. One of whom is Dell Technologies' founder, Michael Dell, who states that security issues essentially occur due to human error.

“Public cloud is no more or less secured than on-premises. The reason is that security is about people, and people on both sides can make mistakes and compromise security.” - Dell Technologies founder, Michael Dell. [1]

Gartner also supports this notion, as they predict that through 2025, 99% of cloud security failures will be down to the fault of the customer [2].

If you move across from on-premise to cloud-based management software, you can do so with sound knowledge that there are no changes to the safety of your data.

Will cloud based practice management software help my continued scalability?

Another consideration is whether your practice has long-term plans to grow and develop. If the answer is ‘yes’, then this may involve continuous upgrades and customisation of your platform.

Cloud practice management software is well suited to any developments you may require. Upgrades, technological patches and customisation are managed by the provider and can be deployed within a relatively short period of time. In some instances, this can almost be instant.

The cloud will also make this simple when you're looking to integrate new features as your team develops. Integrations involve connecting the software with third-party applications such as your website, social media platforms and analytics accounts to expand the functionality and insight of your system. A seamless connection will be made, as all your provider needs to do is simply apply the correct APIs.

This is much a more straightforward process than any on-premise practice management software. With traditional practice management software, the customer is limited to the confines of the hardware and software they initially implemented, so any additional upgrades could come at a substantial cost. In addition, this may not align with the timeframe of any software upgrades the provider has planned, causing delays.

Is cloud practice management software accessible?

Providing that you can connect to the internet, the best accounting practice management software options in the cloud will enable remote access using any device. Once an online accountant is signed into the software, you will receive real-time data across your practice, regardless of destination.

This means an online accountant can access the required insights to make swift, informed decisions. For example, this could be an accountant who is out of the office but needs to view the details of a particular customer before contacting them.

If it is essential for you to have remote accessibility, then moving to the cloud is a no-brainer.

Is cloud practice management software easy to deploy?

Whether you’re implementing cloud practice management software for the first time or updating to a new and improved version, you’ll want a seamless transition. Avoiding long delays will enable you to learn the critical features of your system from the outset and hit the ground running.

As cloud-based practice management software is hosted by a supplier, there should be no disruptions to your existing infrastructure whilst preparing for the new system. Once you’ve decided on a solution, it should be as simple as making several potential amendments to your business processes and supplying your team with their login details.

However, you should also factor in a transitional period for training for your team, especially if you are moving from on-premise to cloud practice management software. This may take your employees some time to get accustomed to the new setup. Thankfully, most providers will offer team training and customer support to ensure you fully understand the new system.

The best accounting practice management software is in the cloud

It is clear that cloud-based accounting practice management software has many advantages that have been spurring significant changes in how an accounting firm operates.

Cloud practice management software is just as secure as its on-premise counterpart, and it is considered more cost-effective, more suited to continued scalability, easier to deploy within your practice and more accessible for busy accounting firms who are on the go.

At Access, we're specialists in supporting practices of all sizes in implementing the best accounting practice management software.

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References & citations

[1] CRN (2021). Michael Dell: Public Cloud Isn’t More Secure Than On-Premise

[2] Gartner (2019). Is the Cloud Secure?