The Philippines business highly depends on accounting systems for proper financial management as well as regulatory compliance. One of the options presented is an on-premise Accounting System Philippines which entails the use of software that is installed and run on the company’s fixed servers and computers. Though cloud-based solutions are getting a niche in the market, on-premise accounting systems are still applicable to firms that need control over financial data and unique business accounting processes.
What is an On-Premise Accounting System?
A traditional accounting software solution is one that an organization buys and deploys on its hardware and systems as opposed to accessing the software over the Internet. Unlike cloud-based systems, where a user’s data is stored on remotely located off-site data storage facilities, an on-premise type of system holds business data physically within the organization’s servers. This allows organizations to have more control over data protection, adjustments, and administration of the system.
Key Features of On-Premise Accounting Systems
Data Security and Control
One of the key benefits of on-premise accounting software for businesses is the opportunity to exercise full control over financial data. Since all the data is retained within the business premises, it gives the organization the power to enforce security problems and even restrict other users from accessing it. It may be of even more significance in the Philippines, where concern over the protection of personal information about the online access of information is stringent with the Data Protection Act of 2012.
When organizations opt for an on-premise solution, they can deploy unique security tools, or firewalls, encryption policies, or access control policies that suit them. This may be crucial for businesses that deal with sensitive monetary data, like banking, financial services, insurance, or even health care.
Customization and Flexibility
When it comes to accounting system Philippines, on-premise systems are more flexible in nature than their virtual counterparts. Businesses can modify the application to suit their business processes, reporting needs, and local legal requirements. For example, such modifications are applicable to companies operating in the Philippines that also include impositions like Value Added Tax (VAT) and particular accounting practices.Â
A business can link its other systems such as stock management and employee remuneration processing along with local accounting software to form a complete management system. The provision of modifying certain features of the software allows the users of the system to incorporate modifications on the system to address their needs as they change with time.
One-Time Licensing Fees
In contrast to the cloud accounting package which is usually based on a subscription model with periodic payments, an on-premise system generally incurs a one-off licensing cost. Once the purchase is made, companies retain ownership of the software and there are no future fees incurred for usage of the system. This could be advantageous in the long run, particularly for organizations that plan to stick with the same system over an extended period.
Considerations for Using On-Premise Accounting Systems in the Philippines
High Initial Setup Costs
Concerning the use of on-premise systems, one obvious merit is a one-off license fee. On the other hand, on-premise systems tend to be more expensive in the early stages than cloud-based systems. This is because there are computers like servers and storage devices that have to be purchased by the organization. Also, one has to pay for the installation and configuration of the software. Such initial costs are quite heavy on small and medium enterprises (SMEs) operating in the Philippines.
In addition, routine servicing and upgrades will call for IT resources, which may consist of recruiting specific staff or outsourcing such services to guarantee that the system runs smoothly.
Complex Maintenance Requirements
When a company uses an on-premise accounting system Philippines, it is expected to take care of the hardware and software components that come along with it. This includes but is not limited to, updating the software whenever necessary, backing up the data, and carrying out any necessary repairs on the system. In the Philippines for instance, where some regions may be averse to technology for various reasons, this may become an economic disadvantage for many enterprises especially those which cannot hire IT personnel.
Updating the software regularly for the accounting system Philippines is not only important in securing the system but also in ensuring adherence to prevailing economic regulations. The absence of proper maintenance of the system by the organization may lead to risks such as loss of data, uncontrolled financial records, and wrongful tax compliance.
Scalability Limitations
Unlike accounting software that allows you to pay for your use of the service without the need for installation, on-premise solutions use more hardware. In addition to hardware, on-premise software solutions also require that the user invest in the purchase of software licenses to be able to use the installed software. For Philippine-based companies pursuing aggressive growth strategies, continuously updating the systems infrastructure is not only expensive but also quite inconvenient.
Also, adding functionality for off-site users or multi-site connectivity on a local framework can be intricate. Companies that have multiple areas of operation within the Philippines and have employees working from home may face challenges in data coherence across various locations.
Key Takeaway
On-premise accounting system Philippines have various merits for companies in the Philippines, such as data management, personal alteration, and only one-time payment for the license. These systems are most appropriate for those organizations that insist on a high-security level and wish to customize the accounting process. Nevertheless, they have drawbacks like the need for high initial investment, upkeep costs, and poor scalability.
The selection of an on-premise or cloud-based accounting solution is largely dependent on the needs, budget, and plan of the business. By knowing the advantages and disadvantages, companies can choose the most appropriate accounting system Philippines that fit their financial management objectives.
