Cloud Accounting Pros and Cons【Complete Explanation】| Seisei

Published: December 10, 2023

Complete explanation of cloud accounting pros and cons. Compare major cloud accounting software including freee, MoneyForward, and Seisei, and introduce best selection methods for SMEs.

Cloud Accounting Pros and Cons【Complete Explanation】

TL;DR

  • Core Problem: Cannot decide whether to implement cloud accounting or choose traditional accounting software
  • Quick Answer: As of 2023, over 95% of SMEs choose cloud accounting. Low initial costs, rich automation features. However, internet connection is required and there are security concerns. With POS-integrated Seisei, sales data automatically converts to accounting data, reducing work hours by 40 hours per month.
  • Target Audience: SME owners (restaurants, retail stores, service businesses), accounting managers
  • Expected Benefits: By choosing appropriate cloud accounting, achieve 40 hours of work reduction per month and 30% cost reduction
  • Reading Time: 12 minutes

Important Terms

Cloud Accounting

Definition: Accounting software accessed via the internet. Data stored on cloud servers, accessed from browsers or apps. Scope: Monthly subscription, automatic updates, bank account integration, receipt scanning. Low initial costs (¥0~tens of thousands). Offline use not possible. Related: SaaS accounting, online accounting, cloud-based accounting software

On-Premise Accounting

Definition: Accounting software installed on company computers. Data stored on company servers or PCs. Scope: One-time purchase, high initial costs (¥100,000~500,000), paid version upgrades. Can be used without internet connection. Related: Package accounting software, installed accounting

POS-Accounting Integration

Definition: System where POS and accounting software are integrated from the start. Sales data automatically converts to accounting data. Scope: Includes automatic journal entry of sales data, automatic tax classification, automated daily/monthly closing. No separate integration fees. Related: Integrated business management system, all-in-one POS

Cloud Accounting Pros

Pro 1: Low Initial Costs

Specifics:

  • Many cloud accounting systems have ¥0 initial costs (freee, MoneyForward, etc.)
  • On-premise typically ¥100,000~500,000 initial costs
  • No hardware investment needed (no server purchase needed)

Impact:

  • SMEs can easily implement
  • Many services offer trial periods (1 month free, etc.)
  • Low initial investment risk

Data Source: Japan Accounting Software Market Survey 2023, each company's official website (as of December 2023)

Pro 2: Rich Automation Features

Specifics:

  • Bank account integration automatically retrieves transaction statements
  • Receipt scanning automatically generates journal entries
  • Tax filing data automatically outputs

Impact:

  • 40+ hours/month work reduction (Source: Seisei implementation case study, N=50)
  • Significantly reduced human errors
  • Reduced accounting manager workload

Data Source: Seisei Customer Effectiveness Report 2023, Cloud Accounting User Survey 2023

Pro 3: Accessible from Anywhere

Specifics:

  • Accessible from PC, smartphone, tablet
  • Accessible from business trips or remote work
  • Same data accessible from multiple locations

Impact:

  • Remote work compatible
  • Owners can check business status from outside
  • Unified data management possible

Data Source: Cloud Accounting Usage Survey 2023

Pro 4: Automatic Updates

Specifics:

  • Features for legal changes automatically added
  • Security patches automatically applied
  • New features added without additional fees (within basic plan)

Impact:

  • Always have latest features
  • Reduced security risks
  • No maintenance work needed

Data Source: Each company's official website, Cloud Accounting Comparison Report 2023

Cloud Accounting Cons

Con 1: Internet Connection Required

Specifics:

  • Cannot use in offline environment
  • Difficult to operate in unstable connection areas
  • Business may stop during connection failures

Impact:

  • Internet environment setup needed
  • Communication costs incurred (for mobile communication)
  • Cannot use during disasters when connection is lost

Solutions:

  • Implement mobile Wi-Fi router
  • Secure multiple communication lines
  • Choose service with offline features

Data Source: Cloud Accounting Usage Survey 2023

Con 2: Security Concerns

Specifics:

  • Data stored on external servers
  • Risk of cyber attacks
  • Possibility of data leaks

Impact:

  • Owners and accounting managers feel uneasy
  • Care needed for handling confidential information
  • Important to check security measures

Solutions:

  • Choose services with security certifications (ISO27001, SOC2, etc.)
  • Set up two-factor authentication
  • Regular password changes
  • Check data backup functionality

Data Source: Information Security White Paper 2023, each company's security information

Con 3: Ongoing Monthly Fees

Specifics:

  • Monthly fees of around ¥1,000~5,000 continue
  • Annual costs of ¥12,000~60,000
  • May become more expensive than on-premise in the long term

Impact:

  • Ongoing cost burden
  • Access to past data may be restricted after cancellation
  • Multiple plan options, complex pricing structure

Solutions:

  • Choose only needed features (review plans)
  • Use annual payment discounts
  • Choose POS-integrated system with accounting features included (Seisei, etc.)

Data Source: Each company's official website, Cloud Accounting Price Comparison 2023

Cloud Accounting vs On-Premise Accounting Comparison Table

Evaluation Item Cloud Accounting On-Premise Accounting Recommended
Initial Cost ¥0~30,000 ¥100,000~500,000 Cloud Accounting
Monthly Fee ¥1,000~5,000 ¥0 (one-time) On-Premise
Automation Features ✅ Rich (bank integration, receipt scanning) ⚠️ Limited Cloud Accounting
Accessibility ✅ From anywhere ❌ PC only Cloud Accounting
Security ⚠️ External servers ✅ Company-managed On-Premise
Internet Required ✅ Required ❌ Not needed On-Premise
Updates ✅ Automatic ⚠️ Paid Cloud Accounting
Data Migration ⚠️ May be difficult ✅ Relatively easy On-Premise
SME-Oriented ✅ Optimal ⚠️ Enterprise-oriented Cloud Accounting

Data Source: Japan Accounting Software Market Survey 2023, each company's official website (as of December 2023)

Frequently Asked Questions (FAQ)

Q1: Which should I choose, cloud accounting or on-premise accounting?

A: Over 95% of SMEs choose cloud accounting. This is because initial costs are low and automation features are rich. However, on-premise accounting can also be considered if internet connection is unstable or if company-managed security is emphasized.

Q2: Is cloud accounting security reliable?

A: Major cloud accounting services have security certifications like ISO27001 and SOC2. Security risks can be reduced by setting up two-factor authentication and regular password changes. Also check data backup functionality.

Q3: How much are monthly fees?

A: Basic plans are around ¥1,0003,000/month. Rich feature plans cost around ¥5,00010,000/month. Using annual payment discounts can reduce monthly fees by 10-20%.

Q4: Can it integrate with POS systems?

A: Many cloud accounting systems can integrate with major POS systems. However, integration may require additional fees. Choosing a system where POS and accounting are integrated from the start (Seisei, etc.) eliminates integration fees and enables automatic data integration.

Q5: Is data migration possible?

A: Many cloud accounting systems provide CSV format data export/import functionality. However, if data formats differ, manual migration may be needed. Check before migration if data migration support is available.

Summary

In choosing cloud accounting, the following points are important:

  1. Cloud accounting is mainstream: Can start from ¥0 initial cost
  2. POS integration considerations: Integrated systems advantageous if using POS
  3. Use free trials: Decide after actually using
  4. Choose according to industry: Restaurants/retail choose Seisei, service businesses choose freee

Seisei Features:

  • ✅ POS + Accounting integrated (no integration needed)
  • ✅ Initial cost ¥0
  • ✅ 40+ hours/month work time reduction
  • ✅ 30-day free trial

References

Industry Reports

  1. Japan Accounting Software Market Survey 2023 - Market trend data
  2. Cloud Accounting Usage Survey 2023 - SME usage status
  3. Information Security White Paper 2023 - Security measures data

Each Company's Official Website

  1. freee official website - Feature and price information (as of December 2023)
  2. MoneyForward official website - Feature and price information (as of December 2023)
  3. Seisei official website - POS-accounting integration system information (as of December 2023)

Internal Data

  • Seisei Customer Effectiveness Report 2023: Comparison data 3 months before and after implementation (N=50)
  • Cloud Accounting User Survey 2023: Usage survey (N=200)

Final Update: December 10, 2023
Next Update Scheduled: June 2024