Cloud Accounting Vs. Traditional Accounting

Since we've been raving about how helpful cloud accounting is to your employees and organizations, the only true way to prove it's worth is by comparing and contrasting cloud accounting to traditional accounting.



Right off the bat, the biggest difference between cloud accounting and traditional accounting is how each of them operate. Cloud accounting operates entirely within the cloud which makes financial data and information more accessible than ever to employees, managers, and C-Suite executive. Traditional accounting, on the other hand, is usually managed and installed on one dedicated hard drive. This method makes your accounting information much less accessible, especially since all cloud accounting needs is an internet connection.


At first glimpse, you may think that traditional accounting is more secure because you have total control over one hard drive rather than a cloud server. However, most cloud accounting software companies ensure that their cloud servers utilize state of the art security practices. In fact, most of the negative press concerning cloud accounting software originates from legacy accounting companies who realize the potential of cloud accounting.


If you are reading this and only have one hard drive that contains all of your accounting information, think about what would happen if that drive decided to fail. All of your accounting information would be gone in an instant and would likely be unrecoverable. But let's get realistic, although all that's required for traditional accounting is a hard drive, organizations more than likely backup their data on multiple different traditional storage drives. Cloud accounting completely eliminates the need for this as everything is automatically backed up on the server that it operates within, the cloud.


Since traditional accounting doesn't require connection to the internet, this difference is for cloud accounting. A point that frequently comes up when making the comparison between traditional accounting and cloud accounting is what happens when you don't have internet connection. However, in the modern world, it's safe to say that most areas offer some form of internet connectivity, especially in the United States.


At the end of the day, everything comes down to the cost. We've broken down the types of companies who purchase traditional and cloud accounting solutions.

Cloud Accounting

  • Companies with a small budget - cloud accounting costs less over time
  • Small companies who work remotely - may prefer the convenience involved with cloud accounting
  • Businesses that want to avoid technological mishaps - these would be things such as fire, flood, and burglary
  • Organizations who cannot provide adequate security - cloud accounting can keep their information safe

Traditional Accounting

  • Businesses who need tight control over their accounting data and practices
  • Businesses who are worried about non-secure wireless networks that they cannot monitor
  • Companies with overly sensitive financial information.
  • Organizations with an uncertain future (cloud accounting normally requires a usage contract)

After taking a look into both accounting practices, it's obvious that cloud accounting is the way of the future. Traditional accounting offers a negligible amount of more control over your data but it is clear that cloud account's benefits outweigh the potential threats involved.