Cloud Accounting Software (Main Disadvantages)

cloud Accounting software  disadvantages of using

The main difference between online accounting software and traditional accounting software system consists of where financial data is stored.

"Online," "web" and "cloud" are terms used to data that are stored on remote, external servers connected to the Internet. Whenever users interact with their financial data in accounting software online, their data is processed and, then immediately stored on the extern server(s).

You can find on the Internet many articles and posts, including on our website, about the advantages of web-based accounting software. However, to decide if accounting software online is the right solution for your company, you should be informed of the disadvantages of cloud accounting software too.

Main disadvantages of using the cloud accounting software:

  • Accessibility is only possible with an Internet connection. Web-based accounting software makes your business dependent on the reliability of the Internet connection. In the case of your internet service suffers from outages or slow speeds or a provider of your online accounting software suffers prolonged server outages (even the most reliable cloud accounting service providers sometimes cannot provide their service because of problems with the Internet connection), you will be not able to work with your important financial data. 
  • Security is always the main concern. Online accounting software vendors assert that they use the latest, most sophisticated data security systems. However, even the best-in-class security system does not mean that it is invincible. Otherwise, we would not have observed scandals arising periodically because of the data breach that occurred via hacking. Moreover, you should always remember that with the accounting software online, your financial data is accessible from anywhere on the Internet and can be vulnerable. So, the confidentiality of your sensitive accounting data may be in question when you are sharing your business data with a third party. 
  • The inflexibility of cloud accounting software can be a serious problem. The web-based accounting software system may not support all the functionality you need; its owner may provide a standard accounting package he/she has. You should be careful when are choosing a web accounting vendor that you will not become a "forever" client because the chosen software does not allow easy transferring of the information into other systems. Contact someone who has already gone through the painful process of moving from one accounting system to another. 
  • The cost is not an easy question. At first sight, the accounting software online may seem to be much cheaper than a traditional accounting software system installed on the company's computers and servers. At the same time, having customized web-based accounting software to meet your specific business needs can add highly to the software price. In addition to functionality, the cost may be influenced by the number of users and the amount of data storage.
cloud accounting software

It is the right of every business owner to decide if it is comfortable for him/her to have the company's financial data on the Internet. Before you jump into cloud accounting and start to account online for the results of your business running, consider how the disadvantages of web-based accounting software could affect your business.