Cloud vs. On-premises AP Automation: What’s the Difference?

When it comes to AP automation, there are two main options: cloud-based and on-premises. So, what’s the difference? Cost is one of the biggest factors – cloud-based solutions are typically more affordable than on-premises software. But that’s not the only difference. Security, scalability, reliability, and mobile/remote access are all important considerations when choosing an AP automation solution.

In this blog post, we’ll take a closer look at each of these factors and help you decide which option is best for your business.

On-Premises AP Automation

On-premises accounts payable automation software is installed and runs on your company’s own servers. This option used to be the only way to get enterprise-level features and security.

One of the biggest advantages of on-premises AP automation is that you have complete control over the software and your data. But this can also be a disadvantage. If something goes wrong with the servers or the software, it’s up to your IT team to fix the problem. And if you need to scale up your AP operation, you’ll need to invest in more hardware and licenses.

Cloud-Based AP Automation

Cloud-based accounts payable automation runs on the provider’s servers. This means you don’t need to invest in any hardware or licenses, just a cloud host. And you can usually get started for a lower start-up cost and monthly price than an on-premises solution.

One of the biggest advantages of cloud-based AP automation is that it's much easier to scale up or down, as your needs change.

You can also be up and running more quickly since there’s no need to install anything on your own servers.

Read more: The Accounts Payable Glossary: Everything You Need to Know About AP Automation

So, which option is right for you? Let’s get into it.

Cloud-Based vs On-Premises AP Automation: Cost

One of the biggest factors to consider when choosing between cloud-based and on-premises AP automation is cost. On-premises solutions require a larger upfront investment. You’ll need to pay for the software, as well as the hardware and licenses needed to run it. Plus, you’ll need an IT team to manage and maintain the system. On-premises systems also have higher maintenance expenses as they are more likely to malfunction.

Cloud-based solutions are typically more affordable since you pay a lower monthly price with a minimal start-up investment.

You don’t need to invest in any hardware or licenses, and there’s no need for an IT team to manage the system.

So, if the cost is a major consideration for your business, a cloud-based model may be the better option.

Read more: The Cost of Processing an Invoice: Why Paperless AP Saves Companies Money

Cloud-Based vs On-Premises AP Automation: Security

Security is another important factor to consider when choosing between cloud-based and on-premises accounts payable automation. On-premises solutions give you complete control over the software and your data. But this can also be a disadvantage. If something goes wrong with the on-premises servers or the software, it’s up to your IT team to fix the problem.

Cloud-based solutions are usually more reliable since the provider is responsible for managing and maintaining the servers and software.

And cloud-based solutions are typically updated more frequently, so you always have the latest security enhancements. 

So, if security is a major concern for your business, cloud-based AP automation may be the better option.

Cloud-Based vs On-Premises AP Automation: Scalability

Another factor to consider when choosing between cloud-based and on-premise systems is scalability. On-premises solutions require you to invest in more hardware and licenses as your needs change. This can be a disadvantage if you need to scale up or down quickly.

A  cloud solution is much easier to scale up or down, as your needs change. You can usually add or remove users with just a few clicks. And you can be up and running more quickly since there’s no need to install anything on your own servers.

If scalability is a major consideration for your business, cloud-based AP automation may be the better option.

Cloud-Based vs On-Premises AP Automation: Reliability

Another factor to consider when choosing between cloud-based and on-premise accounts payable automation is reliability. On-premises solutions require you to invest in more hardware and licenses as your needs change. This can be a disadvantage if you need to scale up or down quickly.

Cloud-based systems are much easier to scale up or down, as your needs change. You can usually add or remove users with just a few clicks.

And you can be up and running more quickly since there’s no need to install anything on your own servers.

If your business is looking for a reliable software solution, cloud-based AP automation may be the better option.

Cloud-Based vs On-Premises AP Automation: Mobile and Remote Access

On-premises automation solutions rarely offer mobile or remote access. This can be a disadvantage if your employees need to access the system from outside the office.

Cloud-based software, on the other hand, offers mobile and remote access as a standard feature. This empowers the remote workers in your accounts payable department to approve invoices from anywhere, at any time.

If you have a remote workforce, mobile and remote access and efficiency gains are major considerations for your business. Cloud-based AP automation will deliver on those business needs.

As you can see, there are a few key differences between cloud-based and on-premises AP automation. And each type of solution has its own advantages and disadvantages. So, it’s important to consider your specific needs before making a decision. But if cost, security, scalability, reliability, or mobile, and remote access are major concerns for your business, cloud-based accounts payable automation may be the better option.

If you’re ready to take the next step in your company’s digital transformation journey, Mosaic can get you started with an all-in-one cloud-based AP automation solution tailored to your business goals. Contact us to schedule a demo.