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3 ways to tell your accounting software is truly in the cloud

Feb 19, 2020

Although software built to use the cloud is becoming more popular and sought-after, there’s still confusion over what the cloud actually is. And to top it all off, some software purports to be cloud-based when it technically isn’t. There’s a difference between a hosted solution and a true cloud solution.

Because there are quite a few benefits that come with the cloud, you may be wondering if your financial accounting software is truly in the cloud. Here are the top three ways to tell: 

1. Multi-tenancy vs. single-tenancy

The main distinguishing feature of a cloud solution is that it’s multi-tenant. This means the provider maintains a single, current version of the software for all of its clients. 

Comparatively, in a hosted solution, the provider maintains multiple versions of the software, each one customized for a client and using separate infrastructure (e.g., servers and firewalls). This is called single-tenant. 

Software is usually single-tenant because it was not originally built to be a cloud solution, and enabling a true cloud solution would require the provider to significantly rework the software. 

One big benefit to multi-tenancy is in the significant cost savings that comes from having clients on the same servers, using the same software. Infrastructure costs are shared, and security is more easily managed because there are fewer servers to monitor. Single-tenant clients often have to worry about backing up and restoring their data in the event of a disaster (whether natural or cyber), which further drives up costs.

2. Seamless upgrades vs. complex upgrades

Because true cloud solutions are multi-tenant, upgrading the software is seamless for each client. The provider does not have to upgrade each customized version for each client, as in a single-tenant solution. 

This means cloud solution upgrades are not only faster to deploy but also far more cost effective. Every client is running the same version of the software, so the provider can upgrade to a new version in just one short period of downtime. Additionally, many cloud software providers, like Sage Intacct, provide quarterly upgrades for free. 

Upgrades for clients of single-tenant solutions aren’t likely to be free. In fact, they’re typically expensive.

3. Configuration vs. customization

As we said above, single-tenant solutions are customized for each client. This may seem like a benefit — after all, shouldn’t the software do exactly what you need it to? 

But with customization comes complexity. The more complex your software, the harder and more expensive it is to upgrade. Some clients even get stuck on an old version of software because it becomes impossible to upgrade to a new version without spending a lot of money.

But being on a true cloud solution doesn’t mean you can’t have anything customized to your needs. True cloud solutions use configuration to address specific needs. The software is actually designed to be configurable, so it doesn’t compromise future upgrades. 

The best cloud accounting software for your nonprofit

The cloud has enabled financial accounting software to be deployed, managed and upgraded easier than ever before. On top of that, cloud-based solutions are faster and more efficient, delivering real-time data that helps leaders make proactive, strategic decisions. 

A top cloud-based accounting software, Sage Intacct helps nonprofits automate complex financial processes, satisfy compliance, and gain more time and money back to focus on achieving their missions. 

Click here to learn more about Sage Intacct. Or continue reading on:

How nonprofits are solving big challenges using the cloud

Three signs your nonprofit organization is outgrowing its accounting

Gain a competitive edge with a tech-savvy finance team

Author(s)

Mahoney_Shereen
Shereen Mahoney, CPA
Partner
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