Cloud vs Desktop Accounting Software for NZ Businesses (2025)
The accounting software world has shifted dramatically toward cloud-based solutions. But is cloud accounting right for your NZ business, or should you stick with traditional desktop software? This comprehensive comparison covers everything you need to know to make an informed decision in 2025.
Quick Summary
Cloud accounting (Xero, QuickBooks Online, MYOB Business): Best for most NZ businesses in 2025. Accessible anywhere, automatic updates, real-time bank feeds, accountant collaboration.
Desktop accounting (MYOB AccountRight Desktop): Still viable for specific situations: poor internet, complex inventory, preference for one-time purchase over subscription.
Cloud vs Desktop: Key Differences
Understanding the fundamental differences between cloud and desktop accounting software is essential before making your choice:
| Aspect | Cloud Accounting | Desktop Accounting |
|---|---|---|
| Access | Anywhere with internet (computer, phone, tablet) | Only on installed computer |
| Installation | No installation (browser-based) | Software installed on local computer |
| Data Storage | Stored in secure cloud servers | Stored on local computer/server |
| Internet Required | Yes (most features) | No (works offline) |
| Pricing Model | Monthly/annual subscription | One-time purchase (+ annual support fees) |
| Updates | Automatic and free | Manual installation (sometimes extra cost) |
| Multi-User | Easy (simultaneous access) | Complex (network setup required) |
| Backups | Automatic daily backups | Manual backups (your responsibility) |
| Mobile Access | Full mobile apps | Limited/no mobile access |
| Accountant Access | Instant remote access | Requires file sharing or remote desktop |
Market Shift: Cloud is Winning
In 2025, approximately 85% of new NZ business accounting software purchases are cloud-based. Desktop software still serves a niche but is declining. Most accountants now prefer (or require) clients to use cloud accounting for easier collaboration.
Cloud Accounting: Pros & Cons
Advantages of Cloud Accounting
- Access Anywhere: Work from home, office, or on-the-go. Check financials on your phone while traveling.
- Real-Time Bank Feeds: Transactions import automatically from NZ banks (ANZ, ASB, BNZ, Westpac), saving hours on data entry.
- Accountant Collaboration: Your accountant can access your books remotely, reducing fees and making year-end smoother.
- Automatic Updates: Software updates happen automatically. You're always on the latest version with newest features and tax table changes.
- Automatic Backups: Data backed up daily to secure cloud servers. No risk of losing data if computer crashes.
- Multi-Device Sync: Start invoice on computer, finish on phone. Data syncs instantly across all devices.
- Scalability: Easy to add users, upgrade plans, or add features as business grows.
- Integration Ecosystem: Connects with hundreds of apps: payroll, POS, inventory, CRM, e-commerce.
- Lower Upfront Cost: No large initial purchase. Start for $25-35/month.
- Mobile Apps: Full-featured mobile apps for iOS/Android. Scan receipts, send invoices, check cash position on phone.
Disadvantages of Cloud Accounting
- Internet Dependency: Need reliable internet connection. Poor/no internet = limited functionality.
- Ongoing Subscription Cost: Monthly/annual fees forever. Over 10 years, costs more than one-time desktop purchase.
- Data Security Concerns: Data stored on external servers (though major providers have excellent security).
- Vendor Lock-In: If you stop paying, you lose access to data (though you can export before canceling).
- Less Customization: Can't modify software to your exact needs. Must work within platform constraints.
- Performance Variability: Speed depends on internet connection quality. Can feel slower than desktop on poor connections.
- Feature Changes: Vendor can change/remove features without your consent (rare but possible).
Popular Cloud Accounting Software in NZ
- Xero: $25-$95/month. NZ's most popular, excellent bank feeds, huge integration ecosystem. Best for most businesses.
- MYOB Business: $35-$110/month. Strong inventory/job costing, integrated payroll. Good for retail/manufacturing.
- QuickBooks Online: $35-$100/month. Good for US parent companies, multi-currency. Smaller NZ market share.
Read our detailed comparison: Xero vs MYOB NZ 2025
Desktop Accounting: Pros & Cons
Advantages of Desktop Accounting
- Works Offline: No internet required. Perfect for rural areas with poor connectivity or businesses wanting offline access.
- One-Time Purchase: Pay once, use forever (no monthly fees). Better long-term cost for businesses planning 10+ years.
- Full Data Control: Data stored on your own computer/server. Some businesses prefer this for security/privacy.
- Faster Performance: Usually faster than cloud (no internet latency). Better for large transaction volumes.
- More Customization: Can customize software extensively (with developer help). Tailored to specific needs.
- Advanced Inventory: Desktop MYOB has more sophisticated inventory management than most cloud options.
- Complex Job Costing: Better for detailed job costing in construction/manufacturing.
- No Vendor Dependency: Software continues working even if vendor goes out of business.
Disadvantages of Desktop Accounting
- Single Computer Access: Can only access from installed computer. No working from home/on-the-go.
- Manual Backups: You must remember to back up data. Many businesses lose data due to failed backups.
- Manual Updates: Must install updates manually. Easy to fall behind on tax table changes.
- Complex Multi-User Setup: Requires network configuration, server setup. IT support needed.
- Accountant Collaboration Harder: Must export files or set up remote desktop access. Slows down accountant, increases fees.
- No Mobile Access: Can't check financials or send invoices from phone.
- Limited Bank Feeds: Bank feeds less reliable or non-existent. More manual data entry.
- Fewer Integrations: Limited integration options compared to cloud ecosystem.
- Upgrade Costs: Major version upgrades often cost $200-$500 every 2-3 years.
- Computer Dependency: If computer crashes and no backup, you lose everything.
Popular Desktop Accounting Software in NZ
- MYOB AccountRight Desktop: $699-$1,799 one-time purchase + $350-$700/year support. Strong inventory, job costing, payroll. Most popular desktop option in NZ.
- Reckon: $499-$999 one-time purchase. Australian software with NZ version. Smaller user base.
- Sage: $600-$1,200 one-time purchase. Enterprise-focused, complex setup.
Note: MYOB now focuses on cloud (MYOB Business). Desktop versions still sold but innovation has slowed.
Cost Comparison: Cloud vs Desktop (5 & 10 Year View)
The cost difference between cloud and desktop isn't straightforward. Let's compare total cost of ownership:
Scenario: Small Business (5-10 Employees)
Cloud Accounting (Xero Standard Plan)
- Year 1: $70/month × 12 = $840
- Year 5 Total: $840 × 5 = $4,200
- Year 10 Total: $840 × 10 = $8,400
- Assumptions: No price increases (unlikely), no add-ons (payroll, inventory apps)
Desktop Accounting (MYOB AccountRight Standard)
- Initial Purchase: $1,200
- Annual Support/Updates: $400/year
- Year 5 Total: $1,200 + ($400 × 4) = $2,800
- Year 10 Total: $1,200 + ($400 × 9) = $4,800 (possibly one upgrade $500 = $5,300)
- Plus: IT support for multi-user setup ($500-$1,000), backup hardware ($200-$500)
Cost Winner:
- 5 Years: Desktop ($2,800-$3,500) is cheaper than Cloud ($4,200)
- 10 Years: Desktop ($5,300-$6,500) is cheaper than Cloud ($8,400)
- BUT: Cloud saves time (bank feeds, mobile access, accountant collaboration). Value of time saved often exceeds cost difference.
Hidden Costs to Consider:
Cloud: Price increases (3-5% annually typical), add-ons for features, internet costs
Desktop: IT support, backup systems, server hardware (multi-user), computer upgrades, major version upgrades every 3-5 years
Feature-by-Feature Comparison
| Feature | Cloud (Xero) | Desktop (MYOB) |
|---|---|---|
| Bank Feeds (Auto Import) | Excellent (daily updates) | Limited (less reliable) |
| Invoicing | Excellent (online payments) | Good (email/print only) |
| Inventory Management | Basic to Good (via apps) | Excellent (advanced features) |
| Job Costing | Good (via add-ons) | Excellent (built-in depth) |
| GST Returns (IRD) | Excellent (one-click filing) | Good (manual export) |
| Financial Reporting | Very Good (customizable) | Excellent (highly detailed) |
| Payroll | Add-on ($5-10/employee) | Built-in (included) |
| Multi-Currency | Excellent | Good |
| Third-Party Integrations | Excellent (1000+ apps) | Limited (20-30 apps) |
| Mobile App | Excellent (full features) | None |
| Ease of Use | Very Good (intuitive) | Moderate (steeper curve) |
| Accountant Preferred | Yes (75%+ NZ accountants) | Declining preference |
When to Choose Cloud Accounting
Cloud accounting is the right choice for approximately 85-90% of NZ businesses in 2025. Choose cloud if:
You Work Remotely or Have Multiple Locations
Need to access accounting from home, client sites, or multiple offices? Cloud is essential. Access from any device, anywhere with internet.
You Want Accountant Collaboration
Most NZ accountants now prefer (or require) cloud accounting. Real-time access means they can help you year-round, reducing fees and making year-end smoother. Read more about accountant collaboration.
You Value Time Savings
Bank feeds, automated GST calculations, mobile receipt capture, and instant invoicing save 5-10 hours per month compared to manual data entry. For most business owners, time saved >> subscription cost.
You're a Service Business or Freelancer
Professional services, consultants, trades, and freelancers benefit most from cloud. Simple invoicing, expense tracking, minimal inventory needs = perfect for Xero or QuickBooks Online.
You Want Mobile Access
Send invoices from job sites, photograph receipts while traveling, check cash position from your phone. Mobile-first business owners love cloud accounting.
You're Starting a New Business
95%+ of new NZ businesses should start with cloud. Low upfront cost ($25-35/month), scales with growth, and you won't need to migrate later.
When to Choose Desktop Accounting
Desktop accounting still makes sense in specific situations. Choose desktop if:
You Have Poor/No Internet Connectivity
Rural areas with unreliable internet or frequent outages make cloud accounting frustrating. Desktop works offline, only needing internet for bank feeds (optional).
You Have Complex Inventory Management Needs
Manufacturing, wholesale/distribution, or retail with complex inventory tracking (serial numbers, batch tracking, multiple warehouses, bill of materials) benefit from MYOB AccountRight Desktop's advanced inventory features.
You Require Sophisticated Job Costing
Large construction companies or manufacturers with detailed job costing requirements (labor vs. materials, subcontractors, multi-stage jobs) may find desktop MYOB superior to cloud alternatives.
You Prefer One-Time Purchase (Long-Term View)
Planning to use accounting software for 10+ years without changing? Desktop's one-time purchase ($1,200-$1,800) + support ($400/year) is cheaper than cloud subscriptions over long term. However, weigh this against time-saving benefits of cloud.
You Have Data Control/Privacy Concerns
Some businesses prefer data stored on their own servers for perceived security/privacy. Note: Major cloud providers (Xero, MYOB) have excellent security, often better than small business on-premise security.
You're Already Heavily Invested in Desktop
Been using MYOB AccountRight Desktop for 10+ years with customizations, complex chart of accounts, and staff trained on it? Migration cost and learning curve might outweigh cloud benefits (unless you're growing rapidly or accountant requires cloud).
Reality Check: Even if you match 2-3 "desktop criteria," still evaluate cloud. The benefits (mobility, accountant collaboration, time savings) often outweigh traditional desktop advantages. Most businesses switching from desktop to cloud never look back.
Migrating from Desktop to Cloud Accounting
Thinking about switching from desktop to cloud? Here's how to make the transition smooth:
Migration Timeline (4-8 Weeks)
- Week 1-2: Choose cloud platform, sign up for trial, test core functions
- Week 2-3: Clean up desktop data, finalize last desktop GST return
- Week 3-4: Import opening balances into cloud (start of financial year ideal)
- Week 4-6: Set up bank feeds, configure settings, enter customers/suppliers
- Week 5-7: Train staff, run parallel with desktop for 1-2 pay periods
- Week 6-8: Full cutover, close desktop system, grant accountant cloud access
DO: Start at Financial Year Beginning
Migrate at start of financial year (April 1 for most NZ businesses). Simplifies year-end and avoids splitting financial year across two systems.
DO: Get Accountant Involved Early
Your accountant can help choose the right platform, assist with data migration, and set up chart of accounts correctly. Most offer migration assistance (2-5 hours billable time).
DO: Import Opening Balances Only (Not Full History)
Don't try to import years of historical transactions. Import opening balances (one journal entry) as of migration date. Keep desktop system as read-only archive for historical reference.
DON'T: Rush the Migration
Allow 4-8 weeks for proper migration. Rushing leads to data errors, misconfigured settings, and frustrated staff.
DON'T: Cancel Desktop Immediately
Keep desktop system accessible (read-only) for 12 months after migration. You'll need to reference historical data occasionally. Back up desktop data file to external drive.
Migration Cost: Budget $500-$2,000 for professional migration assistance (accountant or bookkeeper). DIY migration is possible but takes 20-40 hours and risks errors. Read our detailed guide: How to Switch Accounting Software Without Losing Data.
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