The Comparison: Cloud-Based vs On-site Accounts Payable

The automation and digitisation of accounts payable processes have been a widely discussed topic of conversation over the last couple of years. There has been a lot of discourse about which of the two main options is more beneficial to consider. These options are either on-site or cloud-based solution strategies. These strategies have unique pros and cons, but which of the two is more advantageous? This analysis will explore the differences between on-site and cloud-based accounts payable automation to determine the best option for your business.  

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ON-SITE

On-site solutions mainly involve the installation of software to internal company servers and maintaining them within the company servers and hardware. Businesses will typically purchase software and hardware and hire IT staff to manage and support them. The benefit of on-site accounts payable automation is the customisation and control it offers. This includes tailoring software to specific needs, such as payroll for a large company. Although on-site solutions are customisable, they require more upfront and ongoing costs to manage the hardware, such as hiring staff, purchasing hardware, updating existing servers and software.   

There are some disadvantages to on-site processes. These include the limited ability to scale with company growth due to requiring manual adjustments to keep up with new business locations and a growing customer and staff base. When a school chooses on-site processes, auditing is unable to be done offsite. This contributes to paper usage and a high carbon footprint, creating costly procedures by requiring staff dedicated to the auditing process and losing time as manual auditing requires many hours to complete. The need to manually generate audit trails could create legal problems for businesses when specific audits get lost or damaged without backups. The most significant disadvantage to on-site processes is the manual updates required, these could be data or finance driven that need to be regularly kept up to date manually by a dedicated IT department.  

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CLOUD-BASED

The second option is cloud-based accounts payable automation. Cloud-based automation is the cost-effective option, it offers easy set-up and access to users from anywhere with an internet connection. This option allows you to add or remove users as your staff base grows and offers built-in security features such as encryption and multi-factor authentication. There are many benefits to cloud-based accounts payable processes, such as saving on costs, increased security and automated updates.  

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Cost   

Compared to on-site operations, cloud-based accounts payable automation is more cost-effective in the world of accounts payable automation. Firstly, cloud-based accounts payable automation reduces the need for expensive software and hardware. Reducing the need for more staff as growing schools will inevitably expand their student and staff base, resulting in more invoices and processes. Instead, cloud-based automation is run through a monthly or annual subscription fee for an end-to-end accounts payable solution that is easier for businesses to budget for.  

Automation can take the manual work out of processes and allow one or two staff members to complete daily accounts payable tasks rather than expanding staff base as your school continues to grow. The implementation process of cloud-based automation is reasonably fast and stress-free with implementation taking up to 3 weeks as compared to manual systems that require manual installation and frequent updates and manual maintenance from IT departments. Cloud-based solutions are also flexible, allowing staff to access the software from anywhere with an internet connection, automatic delegations of approval and real-time audit trails. The overall benefit of these solutions is that they provide value to businesses that outweigh those of on-site solutions, making them more beneficial in terms of cost and the value for money spent. With cloud-based solutions offering a user-friendly and easy set-up, they are generally more cost-effective for education institutions.  

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Security

Cloud-based accounts payable automation offers an extra element of security. Security is a huge concern for schools. As the world continues to digitise, the risk of scams and fraud attempts will continue to adapt to new technological landscapes with new strategies and techniques to breach your data security. Luckily, with the assistance of cloud-based automation, these risks are minimised. Cloud-based software includes multiple built-in and expanding features such as encryption, multi-factor authentication and integrity checks. The ACCC’s Scamwatch reported that in 2021 upwards of $300m was lost to fraud. Cloud-based automation run by experienced IT professionals helps to minimise the risk of data breaches, giving businesses the peace of mind to run their accounts payable processes efficiently and fraud-free.    

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Automated updates   

Automated updates are a huge advantage for cloud-based processes. With software updates, businesses can be sure that they are using updated and managed software that considers all technological advances, giving access to the latest features and functionalities. Cloud developers can do this all within a patch or software update, unlike on-premise software, which often requires manual updating and integrations with other software to keep up with technological advances. Cloud-based accounts payable automation is also able to update in terms of new accounting laws and processes to ensure financial compliance quickly and easily for their customer base. Real-time updates also assist in convenience for staff and customers by having all data up to date within seconds of logging.  

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Cloud-based accounts payable automation has many benefits and can continue adapting to changing technological landscapes. Cloud-based automation experiences many benefits not seen with on-site processes. These include offering real-time updates to the platform, automated security and saving costs by using subscription-based services.   The best option for your business is to choose an easy-to-implement, cost-effective solution that can streamline your processes and protect your data. Cloud-based automation can effectively protect your data by providing frequent updates and data security measures.