Is it time to change accounting solutions?

Is it time to change accounting solutions?


Several weeks ago we met "Same Way Sal." Sal faces several issues as a small business owner. One issue he faces is the changing technological landscape. Sal's wife has been using Quickbooks desktop for years and now has gotten an email stating the current version she is using will no longer be supported. This happens to a lot of small business owners. The financial software they use is out of date / unsupported and version of Windows it is running on is probably not supported either. This creates a dilemma for them. The new version of Quickbooks cost $700 but won't run on the computer they have. They have a decision to make, continue using the version they have (which won't have payroll or sales tax updates) or upgrade the computer and Quickbooks for $1,700. But what about a cloud based solution.

Making the Decision to Upgrade

At this point, it is obvious that an upgrade is needed. Not only would extra time be required to keep using the version they have but without the updates to Payroll and Sales Tax, they could put themselves in hot water with the local taxing authorities. But how do you decide between going back to a desktop solution or moving to a cloud solution? Lets way the cost

  • Scenario 1 (Upgrade to the new version of Quickbooks Desktop)
    • New Computer to Run the Software $1,000
    • Desktop Software $700 (including payroll)
    • Total $1,700 (with a reoccurring $700 every year to keep current)
    • That comes out to a monthly cost of $141.66


  • Scenario 2 (Switch to Cloud Based Solution)
    • New Computer $500 (Chromebook)
    • Monthly Cloud Software Fee including payroll
      •  $105 for Quickbooks Online with Payroll for 5 Employees
      • $30 for Xero with Payroll for 5 Employees
      • $94 for Freshbooks Plus Payroll for 5 Employees
    •  Total YTD for the least expensive solution would be $850
    • Monthly Cost of $71.66

It looks like the cloud based solution is the winner. But there are other considerations than cost.

Desktop vs. Cloud Security and Data Integrity

Two of the biggest worries small business owners have about moving to the cloud are, the security of their data and its integrity. Or to put it simpler can someone more easily access my data and what happens if my computer dies.

First, as a small business owner with less than $1 million in revenue it is very unlike you have any full-time IT staff and if you did they wouldn't be dedicated Cyber-security Staff. But by using any of the cloud based providers you get a team of Cyber-security Staff which ensures your data is not only kept safe but encrypted on their servers. Meaning hackers are unlikely to break in, and if they did, they wouldn't be able to access your data.

Second, most business owners don't realize what a properly backed up computer looks like, and it isn't just occasionally plugging in an external hard-drive. In the IT world a properly backup machine has a duplicate which is spread over multiple hard-drives, and that duplicate is copied onto another server in another geographical location. This is the minimum required and depending on the data and service provided more backups may be created.

In other words, unless you have the money to pay for full-time IT staff to make sure your data is secure and backup properly it is better to go with a cloud solution. Check out this post about how to keep your business safe online

Picking a solution

Right now, I recommend two main solutions to clients.

The First is Xero, a cloud based accounting software that directly competes with Quickbooks Online. It offers:

  • Unlimited users
  • Payroll at all pricing levels (starting with five employees)
  • Simple inventory management
  • Invoicing (Account Receivable Tracking)
  • Bill Management (Accounts Payable Tracking)
  • Easy bank reconciliations

Since Xero was built for the cloud, it doesn't come with the baggage Quickbooks does. As you can see for the cost analysis above it is also less expensive for the features it offers.

The second solution is Freshbooks. It is targeted for individuals who want to track hours and project but don't want to do accounting. It offers:

  • Time-tracking
  • Simple Project Management
  • Easy invoicing
  • Expense tracking

Freshbooks was created for non-financial minded individuals. It tries to make tracking expenses and sending invoices as simple and easy as possible.

If you’re a small business owner who wants to tackle payroll on their own, I recommend Xero. But if you plan on outsourcing payroll and want a less accountant friendly solution Freshbooks would be for you.


When you are faced with a decision to upgrade your accounting solution take the opportunity to see what else is available before you settle for the same experience you have been getting. You might find something with more features which is better suited for your use case. Don't just settle for what is comfortable taking the time to find the right fit.

If you are having difficulty finding the right fit let us know we can help you determine what your current processes are so you can find a solution that fits your unique business. Also contact us if you are looking into a solution we maybe able to get you a discount on your monthly cost since we are partners with Xero, Quickbooks, and Freshbooks. Checkout out about page for details

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