Traditionally, bookkeeping involved the recording of all invoices received or issued by a company. These invoices and related information were stored in a special folder or on a hard drive. After computers replaced pen and paper, traditional business accounting software was developed. The software may be installed on one computer and used to store financial data. The end-user can access the data, its storage, and services on only one specific computer.
Long and Expensive Updates – On-premises systems are notorious for frustrating updates that drag on for months (or more), forcing customers to reinstall or reschedule customizations. The bills for these projects, which rarely go as planned, quickly add up. Because of this, many companies avoid upgrading, which means they can't take advantage of the latest features and functionality that their competitors may have access to.
Bad Security Practices: Securing all data in your accounting application is not an easy task. Setting up backups can be expensive and time-consuming, so organizations often rarely or never perform this process. This means you are constantly at risk of losing important data for weeks or months due to a successful ransomware attack or natural disaster.
Restricted Access – Traditional accounting software often requires users to be on the corporate network or logged into a VPN to access the system, which can limit where and how they use it. This is not only cumbersome but also involves additional costs: the company has to purchase a VPN or similar software. This can limit the ability of key stakeholders to view data that could impact their strategy and decisions.
End of Life (EOL): As cloud accounting becomes the norm, many on-premises accounting software vendors are dropping support for their solutions. This poses a significant risk because using an end-of-life solution forces you to migrate to the cloud or take full responsibility for unsupported and outdated on-premises software. With cloud accounting, the software is constantly updated and unlikely to be discontinued.
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