Difference between Cloud Accounting and Desktop Accounting

Companies need to maintain accounting details that include a piece of vast information. So instead of manual maintenance, now companies are shifting towards advanced technology. Organizations have two choices to choose between cloud accounting and desktop accounting to maintain accounting for business. Traditionally, the desktop accounting software was installed in every system in the company which needs periodic updating of license. The Desktop accounting software is not mobile and needs to maintain the increased amount of data. While using cloud accounting, the company can maintain and monitor the data of employees remotely.

What is Cloud Accounting?

Cloud Accounting helps organizations to access data remotely from anywhere either by mobile app or web browser. The application is maintained by the software vendor. The data are stored in remote servers without any physical device. The Physical installation of software is not required and the company does need not to purchase the software but has a pay for the membership fee.

Automatic data backups and accessibility of financial data from any location and device are two major benefits of cloud accounting software. Moreover, cloud-based technologies often connect with other business software more quickly.

What is Desktop Accounting?

Desktop Accounting is a traditional way of maintaining financial accounting and is still used in current organizations. In this software, the data is handled by professionals who know about handling financial data.

It is accessible without a connection to the internet. Extremely secure when not connected to the internet. Hackers can still access your software and data through your computer if it is connected. Typically, the cost is less than that of cloud accounting software. Depending on the speed of your internet connection, desktop solutions may operate more quickly.

Characteristics of cloud accounting

Trusted Backup − We cannot trust Individual employees with backup, especially when it comes to sensitive financial information. Cloud accounting services give organizations peace of mind by automatically maintaining backups of their vital data on their secure servers.

Integration with other applications − In desktop accounting, we cannot merge with any other applications for transferring data. But now, the cloud application provides a wide range of solutions to access and maintain from payroll to inventory management. We can also use particular mobile apps to access the financial data of the organization.

Cash flow − For startups, the amount of investment for the software will always have to be minimal or zero. Cloud accounting is used and may better manage the startup.

Accuracy − Using cloud accounting, the accuracy of the data in the software is high. Employees and vendors can easily access the remote server without providing any damage to the software.

Difference between Cloud Accounting and Desktop Accounting

Based on the specific need of the company, either cloud accounting or desktop accounting can be chosen. Desktop accounting is preferable for companies that face poor connectivity. The other factors which also should be considered are cost, capacity, availability, and scalability.

Basis of Parameters

Cloud Accounting

Desktop Accounting


It provides a remote server for organizations to keep their financial data.

It provides the software to keep the data in the laptop or systems.


The vendors provide the security tools to protect them from any cyber-attacks.

The Organization is responsible to protect its data from any attacks.

Automatic Update

The software’s updated automatically based on the updating of the versions. It reduces the Manuel process.

As the software work without the use of the internet, there will be no automation done.

Data Sharing

The data can be shared internally or externally with other organizations’ networks using the Internet. The financial data can be sent either in readable or editable form.

The data sharing cannot send through the network and the user needs to export the data in any form like in a USB pen drive and CD.

Data Backup

The vendor backup the data regularly and continuously. When the user’s data is lost or the laptop malfunctions, we can get the data back by using the software.

When the data is lost or the system malfunctions, data cannot be recovered and the processes are Manuel.

Software Installation

The need to install software is not required. When the vendor updates the server according to the current trend and is available to the user.

The software is manually installed and any updating should be fixed manually.

Business Structure

It supports organizations that incorporate small to multinational business which needs the internal exchange of data.

It covers the particular need of the company and when to access the multi-entity business it has to install the specific software.


The subscription amount depends on the user's need.

The Software has to be purchased initially and regularly has to pay for the license.


Conventionally desktop accounting is used for maintaining financial accounting and now companies are moving towards cloud-based accounting. Cloud accounting supports to access the server from anywhere and from any device. That makes the work easier and more flexible using applications that have the latest updates according to the environment. While desktop accounting does not provide these features and it provides high time consumption and cost.

Updated on: 26-Apr-2023


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