You have decided to bring the Sage 50 Accounts software into your business. However, the decision making doesn’t stop there. You also need to decide whether a subscription licence or a perpetual licence is better for your business. Let’s take a look at each option and discuss the pros and cons.
With a perpetual licence there is a large initial one-off cost and you own the software indefinitely. If you opt for a support contract, need to upgrade to the latest version of the software or need to be Making Tax Digital-compliant, there will be additional charges for these.
With a subscription licence you pay a smaller monthly, annual or biennial cost. The subscription licence always ensures you are on the latest version of the software as all upgrades are included, as well as the Making Tax Digital (MTD) module. The support contract is also included at no extra cost.
Why Choose Subscription Software Licencing?
Making Tax Digital - As of April 2019, businesses with a turnover above £85,000 will have to submit VAT returns through the HMRC gateway using commercial accounting software. You will need to purchase/update your commercial accounting software to an MTD-ready version before April 2019. The subscription licence includes the MTD module at no extra cost. On the perpetual licence there is an additional charge for the MTD module.
Always on the latest version — Upgrades are included in the subscription cost. If you need to have the latest version of your software, this is a huge benefit to subscription licencing. You can relax knowing that you will always be using the most technically advanced version of the software at no extra cost!
Reduce Capital Expenditures — There is no expensive up-front cost with a subscription software licence. You simply pay on a monthly, annual or a biennial basis, instead of paying hundreds of pounds upfront for an expensive perpetual licence. In addition, software upgrades and the MTD module are included at no extra cost.
Why Buy a Perpetual Software Licence?
There’s a reason perpetual software models have become less common. Software updates are at a much quicker pace today than they were a decade ago. That requires agility in both hardware and software.
As you can see there are more advantages to purchasing a subscription licence. The subscription model will ensure you are compliant with Making Tax Digital and all future HMRC legislation changes, as well as ensuring you are always using the latest version.
If you are under the VAT threshold and not subject to MTD then perpetual could be suitable (but remember all the product investment is going into Sage 50cloud).