Deciding on what type of software system to invest in depends greatly on your comfort level with technical control, your need for customization and your purchasing power.
For example, when you purchase your software system, there is a heftier price tag upfront, but in the end, you will own the software. Buying your accounting software allows for the ability to customize it if needed and puts you in charge of security controls. It also means you have additional maintenance responsibilities.
With hosted software, you rent your accounting system from an Application Service Provider (ASP) instead of buying it. Although your initial price is low, you will have monthly rental fees which provide access to the software, regular updates and technical support. This reduces the need for employees to install or maintain the software. However, since you don’t own the software, it’s likely you’ll not be able to customize it to meet your specific needs. You also do not have as much control over any security issues you may encounter. Finally, with hosted software, your accounting data does not reside on your computers but resides on your ASP service providers computers. Before making your decision, either way, be sure to consider all of the following points.
Benefits of Buying Your ERP Software
It’s a one-time purchase investment
You invest in one payment for the software at the time of purchase (note: various financing options exist to decrease the initial expense). Although, when buying the software there are still ongoing upgrade and support costs you won’t need to make additional payments to use the software…you own it.
It can be customized to meet your specific needs
When you own the software, you can tailor the configuration, change pre-set defaults, and decide when to install upgrades. Only your company will use the software, and it’s common that some standard features will need to be customized to best compliment your business processes.
You can prevent security and accessibility failures
Since you have control over your system, you control the measures to prevent unauthorized users from entering your system. You also determine the security of your data since it doesn’t ever need to travel outside of your company’s secure network.
Find multiple local IT companies that represent the software
Simply because of the commonality of purchased software, you will likely find local companies that offer and support a variety of software solutions. This can be an advantage with training new employees on the software use.
There are more software options available to buy
The opportunity to purchase software has been open for longer than the ASP option. Therefore, there are thousands of software options from which to choose. Often, you will even find a software solution designed specifically for your industry.
Benefits of Renting or a Hosted Software Solution
Pay a low monthly service fee to access the software
For companies that do not have as much capital available, paying a small monthly service fee per user lessens the financial strain of software investment. You can also add modules and users as your business grows, which eliminates the possibility of outgrowing your system.
Rental fees include support, upgrades, security and data back-up systems
All of the upkeep responsibilities are in the hands of the ASP, and they are all included in the monthly fee. You will always have access to the newest version of the software, and your ASP typically provides daily data back-ups of your data.
Decrease the need to hire and train employees to maintain the software
Since your ASP will do tech support responsibilities, the staff time needed to maintain the system is not required.
Reduced time needed to install your software
Since the ASP provider already has the software loaded on their server, you won’t need to install it on yours. That means less time spent getting your company started using the system.
Access your data from anywhere with an Internet connection
If you have access to the Internet, you have access to your accounting system. All you need to do is find an Internet connection and log into your system.
With most ERP vendors, you either but the software license outright or pay a monthly subscription for the license. There are advantages and disadvantages to both. Unlike traditional ERP vendors, the Acumatica price is NOT based on the number of users. Acumatica believes that companies that charge per user do a disservice to their clients because there is a temptation to limit access to the ERP system to certain staff to save money.
For more information on Acumatica’s modern, consumption-based ERP cost model, see Acumatica ERP Pricing.