SaaS: Accounting Software Pros and Cons

Accounting software became well known in the midmarket enterprises in the mid 1980s. With easy access to personal computers due to cheaper rates, accounting also became personalized and it turned out to be a crucial tool for business and trade. Accounting software made the preparation of fiscal reports easier for the users of personal computers owing to advanced computer technology. People usually considered the computer systems time consuming, limiting and rigid but automated accounting made them use accounting software. Many companies still use those accounting software programs at the office computers. Opening of subdivision offices and improvements in technology of accounting have made shared remote computing to come forward with its advantages and people seem highly interested in such services.

But, scattered company work areas have made the access of records by the users necessary even in remote areas where mobile computing works as a solution. This mobile technology certainly requires Internet, access to which nowadays is easy and cheap. Maintaining the workstations and backup systems of software and hardware require much time and high cost, so the clients prefer using software-as-a-service.

How does SaaS work?

Software-as-a-service is usually defined as a type of hosted software which works in a same manner as that of a remote computing environment. A third party is reserved for the maintenance of a company computer and it is exclusively for the users of the company who can login to it via a remote connection. Different companies which use and share the similar software, use another type of software-as-a-service application. As such applications are shared between various companies; they can be customized by a certain company to fit its very own needs. The upgrades of such software programs are installed without any human intervention.

SaaS Limitations

If a user has no internet access, he cannot get admitted to the accounting software; this is the biggest drawback of software-as-a-service. A company may also be forced to bring its processes to an end when no internet connection is available. In other words, such software is highly dependent on the availability of internet.

Whenever there is a talk about using software-as-a-service, security also comes forward as one of the main concern. When the data of a company is stored in an isolated location, the data is not at all protected by the company against cyber theft or hacking. So the company can possibly lose accounts data as the hackers gain entry to the software.

SaaS Advantages

Whereas software-as-a-service has its advantages too and one of the chief benefits is that the enterprise does not buy any hardware and all such costs are carried by the SaaS provider. No particular memory and hardware of a computer is needed to enter into the accounting software. The company’s processes are not disturbed at all when the software is automatically upgraded and the company does not need to spend money on hiring consultants.

Because of the popularity of this model, companies switch their accounting processes to an online SaaS provider. Hybrid approach is also developing, according to which some applications are hosted remotely while others are installed locally. However, most of the small and medium scale companies still prefer using on-premises accounting software programs.