What are the different types of accounting software (Cloud, ERP, On-premise)?

Cloud software runs in a web browser - you log in from anywhere, on any device. Your data is stored securely online and backed up automatically. Updates happen in the background without you doing anything. Note.now is cloud-based, which means you and your accountant can access the same books from different locations at the same time.

Cloud software is now the most popular choice for small and medium businesses because it is affordable, easy to set up, and requires no IT support. There is no server to maintain, no software to install, and no update to schedule. When the vendor releases a new feature, you see it the next time you log in.

On-premise software is installed on your computer or local server. Your data stays on your own hardware. This appeals to businesses with strict data residency rules or limited internet access. The downside is that you are responsible for backups, updates, and security.

Examples include older versions of QuickBooks Desktop and Sage 50. These are becoming less common as cloud options mature. Most vendors have shifted their investment to cloud products, meaning on-premise versions receive fewer new features and less active development each year.

Enterprise Resource Planning (ERP) systems combine accounting with inventory, HR, payroll, supply chain, and more - all in one giant platform. Examples include SAP, Oracle, and NetSuite. They are powerful but expensive, complex to set up, and designed for large organizations with dedicated IT teams.

For most small businesses, an ERP is overkill. A focused cloud accounting tool delivers 90% of the value at 10% of the cost. ERP implementations routinely run over budget and over schedule - there are entire consulting industries built around cleaning up failed ERP projects. Unless your business genuinely needs multi-entity consolidation or deeply integrated supply chain management, a purpose-built accounting tool is the wiser choice.