Accounting Saas versus Purchase

SaaSThe products on the market today offer Hosted, SaaS, purchase, or some combination of these pricing options. If you purchase your accounting system products, you will maintain your data on your own servers. SaaS systems allow the customer to maintain their information on the provider’s server and access that data remotely.

Advantages of SaaS Software Products:

  • Contingency Planning

Your data can be compromised or damaged by any number of threats. In addition to the occasional technical malfunctions, there are intentional acts of destruction (such as hacking). And natural disasters such as floods, tornados, hurricanes, and earthquakes can affect almost all of us. It is important to have a disaster receiver contingency plan in case of one of these disasters. This is one of the advantages a SaaS system can offer; the data is not on your server, so as long as you have Internet access your data will be available to you.

  • No IT Involvement

Other advantages are automatic updates and freed server space at your location. Your IT staff won’t have to maintain or house the data with a SaaS solution. They won’t have to install updates either, since the provider maintains all such details.

  • Lower Up-Front Costs

With ASP applications you will usually pay some type of minimal setup cost, but once the system is live you will pay a monthly amount. Costs vary, but you can do the math to determine what the break-even time frame will likely be. The upfront cost is less but over time (usually a couple of years) you may end up spending more for a SaaS solution than if you’d purchased the product outright. With that in mind you need to weigh the importance of the other benefits.

Advantages of Purchasing Your Product

The disadvantage of a SaaS systems is that over the long term, they can be expensive when compared to purchasing a system outright. If your company plans to use the accounting solution you pick for the long haul, it may be more cost-effective to actually purchase the application. If your company is looking to lower the upfront investment and pay over time, remember that most companies will offer a lease to own option on the software so SaaS isn't your only alternative.