Question

Internet-based accounting software is a recent trend in business computing. Major software firms such as Oracle, SAP, and NetSuite are running their core products on the internet using cloud computing. NetSuite is one of the most popular small- business internet-based accounting systems.

1. Identify 3 advantages and 3 disadvantages of using cloud-based, not just computerized accounting systems, accounting compared to running software on a company's internal computer network.

Answer 1

Advantage of Cloud-based computerized accounting system

1. When using Cloud-based computerized accounting system users can access data from anywhere with internet connection. This gives more flexibility to end users to access accounting system from anywhere in the world
2. Since Cloud-based computerized are developed by global companies they have utmost security protocols which are world class. Latest security features will be implemented for remotely stored data.
3. Cost investment will be lower as there will be no initial capital investment but regular cost in terms of usage agreed with the service provider

Disadvantages of Cloud-based computerized accounting system

1. If there are issues in Internet connection Cloud based Accounting system cannot be accessed and may lead to complete stoppage of accounting. There may be other technical issues also for example login issues, server maintenance, etc
2. There may be online attacks on data stored in server. This will be compromise on integrity of data. For example , hacking is common now a days for remotely stored data
3. Cloud-based software may not have customized feature required for each business. They are standard software and customization is ignored.