Closing your books in a timely manner is essential for enabling faster business decisions and meeting reporting deadlines. Yet, manual tasks can slow down this important process.
According to a 2024 Sage study, 92% of accounting professionals surveyed in 2024 agree they spend too much time on manual tasks, and 89% believe automation would free up time; however, only 37% have started automating processes. More than half worry they don’t have the right skills as the industry evolves, and 41% want to dedicate more time to upskilling.
Most finance leaders know they need an upgrade to a financial consolidation software solution like Sage Intacct, but they get paralyzed by the cloud versus on-premise decision.
What Does "Scalable Accounting Software" Really Mean?
Before diving into deployment options, let's get clear on what scalability means beyond just "adding more users." True scalability means your financial software can handle:
- Transaction Volume Spikes: Consider seasonal businesses or companies going through rapid expansion without system crashes.
- Multi-Entity Complexity: Manage subsidiaries, divisions or international operations from one central system.
- Integration Demands: Connect your CRM, inventory management and other business tools seamlessly.
- Reporting Evolution: Adapt to new compliance requirements and business intelligence needs without major overhauls.
Most traditional on-premise systems fail the evolutionary test specifically. They're often built like houses — with solid foundations — but renovations are expensive and disruptive.
Cloud-Based Solutions: Built for Growth
Cloud ERP solutions and accounting platforms, like the various Sage solutions, operate on distributed computing architectures. Here's what that means for your business:
- Elastic Scalability: The system automatically adjusts computing resources based on your needs. During month-end close, when everyone's running reports simultaneously, performance stays consistent instead of grinding to a halt.
- Automatic Updates and Features: You get major feature updates annually without downtime, compared to traditional 18 to 24-month upgrade cycles that require IT projects and budget approvals.
- Built-In Integration Capabilities: Applications like Sage X3 connect with over 200 business applications out of the box, eliminating the custom coding nightmare that plagues on-premise implementations.
On-Premise Reality Check
On-premise solutions require you to predict your future needs and invest accordingly. Need more processing power? You're looking at hardware purchases, installation downtime and hoping you guessed right about capacity requirements.
According to Aberdeen Group research, companies using on-premise accounting systems allocate 28% more IT resources to routine maintenance versus strategic projects. That's nearly a third of your technical team's time spent keeping the lights on instead of driving innovation.
Why CFOs Are Moving to Cloud: The Total Cost Reality
Numbers are what matter in the finance office. The sticker shock of on-premise implementations often blinds organizations to the real long-term costs.
Upfront Investment Breakdown
On-premise reality:
- Initial Software Licenses: $75,000 – $250,000
- Hardware Infrastructure: $25,000 – $100,000
- Implementation and Customization: $50,000 – $150,000
- Annual Maintenance: 18% – 22% of initial investment
Cloud economics:
- Monthly Subscription: Based on actual usage
- Hardware Infrastructure: No Hardware Investments
- Implementation: Typically, 40% – 60% faster
- Updates and Maintenance: Included
But here's where it gets interesting. A 2023 Nucleus Research study found that organizations moving from on-premise to cloud achieved 34% cost reductions over three years when factoring in total cost of ownership. The savings come from three key areas:
- Eliminated Infrastructure Costs: No more server rooms, backup systems or hardware refresh cycles.
- Reduced Personnel Requirements: Your IT team can focus on strategic initiatives instead of system maintenance.
- Improved Operational Efficiency: Automated processes and better integrations reduce manual work across the finance team.
Security and Compliance: Why Cloud Often Wins
CFOs often focus on whether the cloud is secure. While important, it’s the wrong lens. The real consideration is whether your organization can achieve better security than what leading cloud providers already deliver.
Enterprise-Grade Security You Can't Build Yourself
- 24/7 Threat Monitoring: Cloud providers invest millions in cybersecurity infrastructure and employ teams of security specialists that individual companies can't match.
- Automatic Compliance Updates: SOC 2 Type II, ISO 27001 and industry-specific certifications are maintained automatically, reducing your compliance burden and audit preparation time.
- Disaster Recovery Built-In: Multiple data replicas across geographically distributed centers ensure business continuity with recovery times under two hours, compared to 24 – 48 hours for typical on-premise disaster recovery.
This is particularly crucial for businesses in regulated industries. Government contractors, healthcare organizations, and financial services firms often find that cloud platforms exceed their internal security capabilities while simplifying compliance management.
Integration: The Hidden Efficiency Multiplier
Here's where cloud solutions really shine, and it's something most organizations underestimate. Modern business runs on data flowing between systems, and cloud platforms are purpose-built for this reality.
Real-World Integration Impact
- Automated Data Flow: Connect your accounting system with sales, inventory and operational systems to eliminate 65% of manual data entry and virtually eliminate reconciliation errors.
- Unified Reporting: Generate consolidated financial reports across multiple entities, departments or locations without the spreadsheet gymnastics that plague on-premise environments.
- Advanced Analytics Access: Built-in business intelligence tools provide real-time dashboards, variance analysis and predictive modeling without additional software investments.
For example, a Cherry Bekaert client in manufacturing connected their Sage X3 system with their production planning software. The result? Automated cost allocation, real-time work-in-progress reporting and project profitability analysis that previously required a full-time analyst to compile manually.
Common Implementation Concerns (And How To Address Them)
"Our data is too complex for cloud migration."
Actually, complex data is exactly why you need cloud infrastructure. Cloud platforms handle multi-entity consolidations, international currencies and complex reporting requirements better than most on-premise systems.
The key is proper data cleansing and migration planning. Most organizations discover data quality issues during migration that, once resolved, actually improve their reporting accuracy and operational efficiency.
"We need customization that cloud can't provide."
Modern cloud platforms offer extensive customization through configuration rather than coding. Sage Intacct, for instance, allows custom fields, workflows and reporting without touching the underlying code structure.
This approach provides the flexibility you need while maintaining upgrade compatibility — something traditional customizations often break.
"What about internet connectivity issues?"
Cloud platforms are designed with offline capabilities and mobile access that often exceed on-premise reliability. Most modern implementations include redundant internet connections and mobile apps that sync when connectivity is restored.
Decision Framework: When To Choose What
Cloud Makes Sense When You:
- Experience Growth Spurts: Seasonal businesses, rapidly expanding companies or organizations planning acquisitions benefit from elastic scalability.
- Need Multi-Location Support: Managing multiple entities, subsidiaries or international operations from one system.
- Want Integration Flexibility: Connecting with modern CRM, e-commerce or operational systems without extensive custom development.
- Lack Deep IT Resources: Smaller technical teams that need to focus on strategic initiatives rather than system maintenance.
On-Premise Might Work If You:
- Have Unique Compliance Requirements: Highly specialized regulatory needs that cloud providers haven't addressed (increasingly rare).
- Made Recent Infrastructure Investments: Substantial sunk costs in hardware that haven't been fully depreciated.
- Require Air-Gapped Systems: Security requirements that mandate completely isolated environments (mainly government/defense contractors).
These scenarios are becoming less common as cloud providers enhance their security, compliance and customization capabilities.
Industry-Specific Considerations
Nonprofits and Government Contractors
Cloud solutions like Sage Intacct excel at fund accounting, grant management and compliance reporting. The ability to track restricted funds, generate automated compliance reports and manage complex approval workflows makes cloud platforms particularly valuable for these sectors.
Manufacturing Companies
Sage X3's manufacturing modules provide real-time inventory costing, work-in-progress tracking and integrated supply chain management that on-premise solutions struggle to match. The cloud deployment means you can scale manufacturing operations without IT infrastructure concerns.
Healthcare Organizations
HIPAA compliance, patient billing integration and multi-location reporting requirements make cloud platforms attractive for healthcare providers. The automatic security updates and compliance monitoring reduce the regulatory burden significantly.
Cloud vs. On-Premise Accounting: Frequently Asked Questions
Cloud implementations usually complete 40% – 60% faster than on-premise projects. Most mid-market organizations go live within three to six months, compared to six to 12 months for on-premise systems. The difference comes from pre-built integrations, automated data migration tools and standardized implementation methodologies.
Yes, modern cloud platforms like Sage Intacct are specifically designed for complex organizational structures. They handle multi-entity consolidations, inter-company transactions and currency translations more elegantly than most on-premise solutions, often with better performance and easier maintenance.
Reputable cloud accounting providers offer data export capabilities and transition support. Your data remains accessible in standard formats, and most platforms provide API access for data extraction. This flexibility often exceeds what's available with on-premise systems.
Cloud platforms automatically scale computing resources during high-demand periods, maintaining consistent performance when on-premise systems often slow down. This elastic scalability means your month-end processes can actually run faster in the cloud than on dedicated hardware.
The main cost considerations are user licensing, data storage for large historical datasets and premium support options. However, these are typically transparent in pricing models, unlike on-premise systems, where hardware refresh, disaster recovery, and maintenance costs often surprise organizations.
Your Next Steps: Building a Scalable Financial Foundation
The choice between cloud and on-premise accounting isn't just about technology — it's about positioning your organization for sustainable growth. Cloud solutions, like Sage Intacct and Sage X3, provide the scalability, integration capabilities and operational efficiency that modern businesses require to stay competitive.
If you're ready to move beyond the limitations of your current system, Cherry Bekaert's Technology advisors can help you navigate the transition. We'll assess your current environment, identify optimization opportunities and develop an implementation strategy that aligns with your growth objectives.
