Cloud-Based Accounts Payable vs. Traditional Systems

In the ever-evolving realm of accounting, technological advancements have propelled the field forward, transitioning from calculators and paper accounting books to sophisticated spreadsheets and accounting software. Today, modern business owners have two options to manage their accounting operations, traditional accounting systems and cloud-based accounting. And while both options hold merit, selecting the optimal approach that aligns with business requirements becomes challenging as many struggle to understand the difference between cloud accounting and traditional accounting.

What is traditional accounting?

A traditional accounting system or software refers to a desktop-based accounting system that stores all your data on local servers or desktop hard disks and functions on your desktop without an internet connection. These accounting systems do not support mobile devices or remote access, and you can acquire information (and associated data) only from a specific computer.

What is cloud accounting?

Cloud-based accounting or cloud-based accounts payable solutions are SaaS solutions that allow you to access core and advanced finance functions and store your financial records over the cloud. Since the accounting software and financial data are not in a physical location but rather across multiple remote servers, you can access, modify, and analyse them via the internet on any device, anytime, from anywhere.*

Differences between cloud accounting and traditional accounting

Cloud-based accounting and traditional accounting systems are inherently different in how they allow you to access accounting tools and data. This difference also reflects in costs, levels of data security, and the level of collaboration between different stakeholders. The core differences between cloud accounting and traditional accounting are:


Traditional accounting

Cloud-based accounting


  • Flat upfront pricing for service bundle
  • Need to purchase a license per user
  • Need to invest in hardware, storage, and ongoing maintenance
  • Useful for small businesses, but scaling can get expensive
  • Cost-effective as you only pay for services you use
  • No need to invest in hardware or maintenance resources
  • Can get started and scale quickly without large upfront capital investment


  • Limited flexibility in terms of functionality and scalability
  • Need to purchase the entire service bundle irrespective of the services you will use
  • Need to buy new licenses and hardware to add users
  • Highly scalable and flexible
  • Subscribe to services you need
  • Upgrade your plan as your business grows and accounting needs evolve

Data security

  • Relies on passwords for data security
  • Leaves you vulnerable to cyber attacks
  • Software and financial data hosted in secure remote data centres
  • Relies on encryption and real-time updates
  • SaaS providers have visibility into and control over your security measures, making it easier to track and address security vulnerabilities


  • One person access at a time
  • Does not support collaboration between different stakeholders
  • Multiple user access at a time
  • Facilitates collaboration between teams with real-time updates to accounting data

storage, reliability,
and accessibility

  • Data accessible only on a particular desktop
  • You are responsible for regular backups
  • Data on remote servers accessible 24/7 via the internet
  • Secure and reliable data storage with data redundancies and regular automatic backups

Technical support

  • 24-48 hours average query resolution time
  • Support is available only during working hours
  • 24/7 technical support with remote support tools for quick query resolution


  • Work better independently
  • Only compatible with select business tools
  • Integration and process automation can be challenging and time-consuming
  • Easy and seamless integration with common business tools for process automation


  • Annual updates
  • May need to purchase and install a new version for an update
  • Regular and automatic updates

Audit trails

  • Complex audit trails (login information associated with each transaction) for transparency into transaction editing
  • Limited audit trails

Now comes the pivotal question: which software solution is the ideal fit for your business? Should you opt for cloud-based accounts payable solutions or traditional accounting systems? The answer hinges upon several critical factors, such as your budgetary considerations, the specific features required by your team, the desired level of integration and automation, as well as the extent of data accessibility you seek. Critically consider these factors and compare the pros and cons of both cloud-based and traditional accounting before making your decision.

How can Infosys BPM help?

Infosys BPM Accounts Payable process automation offers you cloud-based accounting and accounts payable solutions that allow you to leverage next-gen technologies, artificial intelligence, and machine learning models to deliver a value-added enhanced stakeholder experience. Building on the deep domain expertise of the Infosys BPM team, this single-layer engagement platform addresses all your invoice processing needs while improving efficiency, effectiveness, and experience across your accounting functions. This future-proof platform offers you real-time insights with end-to-end automation, saving invoice processing time, freeing up your accounting team, and achieving faster ROI with secure and reliable cloud-based accounts payable solutions.

* For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like living organisms will be imperative for business excellence. A comprehensive yet modular suite of services is doing precisely that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.

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