Hosted Tax Software: Beware the Fake Cloud

Many firms switch to hosted tax software hoping to take advantage of all the benefits the cloud has to offer. Whether they want to hire full-time remote workers or simply offer office-based workers the opportunity to work remotely now and then, firms are attracted by the offer of mobility, flexibility and convenience. However, many of these firms are not aware that their hosted software is not a true cloud-based solution.

Remote access is an important benefit of the cloud, but different types of remote access offer different levels of convenience. And there are other benefits as well.

Know the differences

Cloud  Hosted
 Built to run in the cloud.  Built for on-premise; run in a hosted environment.
 Accessed directly from your device.  Accessed through a VPN, which is difficult to set up and maintain.
 Can “talk to” other programs and devices in your office or elsewhere in the cloud.  Creates barriers between programs and devices.
 IT management and support handled by software provider.  IT security, management and support falls on firm’s IT staff or third party host.

The cloud provides more measurable benefits than on-premise or hosted tax software

The distinction between the cloud and hosted software is important because the cloud creates more opportunities for efficiency. On the other hand, hosted solutions put up barriers to efficiency.

A 2015 whitepaper called “Laying the Foundation for Firm Success” found that firms using a true cloud solution experienced more measurable benefits than firms using on-premise or hosted tax software. These benefits included:

  • 8% improvement in the time it takes to complete a tax return.
  • 9% improvement in number of clients
  • 15% fewer challenges related to timeliness

These are real benefits to using a system built for the cloud. Firms with integrated solutions in the cloud consistently reported better outcomes than firms with on-premise or hosted tax software. Read the whitepaper to learn more.


Aimee Hall

Product Marketing Manager at Wolters Kluwer Tax & Accounting

All stories by: Aimee Hall

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