SaaS vs IaaS vs PaaS Simple Definition & Best Features

Cloud computing has been a heated topic in today’s technology industry. Actually, cloud computing is not a new concept. It was invented in the early 1960s and it came into use in the modern context about 15 years ago when Google first introduced the term to the industry.

However, there has been a rapid shift towards cloud computing in business operations in recent years. Although in the past, only large companies could deploy cloud computing solutions due to high investment cost, the current expansion of cloud service models including SaaS (Software-as-a-Service), PaaS (Platform-as-a-Service), and IaaS (Infrastructure-as-a-Service) has allowed businesses of any size to access the clouds. Shifting to the cloud is a big decision and a deep understanding of the different features of these three cloud services is always highly recommended. 

What kinds of computing services can these models offer to your business? Interestingly, the answers lie in their names. SaaS (Software-as-a-Service) provides access to third-party software on the Internet. In terms of PaaS (Platform-as-a-Service), cloud providers handle the platforms where you build your business data and applications. IaaS (Infrastructure-as-a-Service) brings you computing and storage infrastructure, assisting you to create your platform. Nevertheless, there are many more important things you need to know about these models than just their names.

SaaS vs PaaS vs IaaS

What is SaaS?

SaaS (Software-as-a-Service): Out of the three models, SaaS applications can be the most familiar to you. To understand more about this model, now let’s take a look at Gmail. Are you aware that it is a software service that can store all your data and allow you to get access to it anytime you want and from any devices that you are using (web browsers, cell phones, etc.) as long as there is an Internet connection?. Generally speaking, SaaS delivers a software application that can be used and purchased on-demand via the Internet. As the software runs on the cloud, it does not require any specific installation on your devices. Now let’s think a bit more. If many people can use the service on the same cloud, how can the data of different user experience be segregated? Actually, for each subscribing cloud user, there is also a corresponding instance of the SaaS application running on the cloud. Therefore, SaaS can perform what is known as application customization, letting customers alter the configuration and store their data. 

Example: The embracement of SaaS products can range from personal use to business deployment. Some popular SaaS products that can be listed are Netflix, Facebook, Google Workspace apps, Microsoft 365, Shoeboxed, Zoom, Adobe Creative Cloud, Amazon Web Services, Slack, etc. 

What is PaaS?

PaaS (Platform-as-a-service): Instead of providing you specific and finalized on-the-cloud apps that you can directly consume as SaaS, PaaS offers a cloud deployment platform so that you can freely write and develop your own applications, regardless of whether they are completed or still in progress. A PaaS is a great tool for your company’s in-house developers to create more customized applications for your customers. These PaaS platforms present you with a high level of abstraction. In addition to creating software by using the tools and libraries from the cloud providers, you can set up the configuration and get control over the software deployment. Your developers do not have to be concerned with the needed quantity of memory or processors your application will consume as the cloud vendors will handle all data center resources assisting the tools. All your company needs to manage is the data and applications. This can save your company a lot of time and money because you do not need to purchase and manage the underlying hardware and software. There are many different types of PaaS platforms, but they all provide you with app hosting, deployment environment, and other related services. 

Example: Window Azure, Rollbase, Google App Engine, Long Jump, etc. 

What is IaaS?

IaaS (Infrastructure-as-a-service): In the IaaS model, you are provided with a virtual server for a while and charged based on the amount of resources you have used. You are allowed with the accessibility of infrastructure via the Internet that includes server, storage, other peripherals devices as well as managed services assistant operations and applications instead of buying infrastructure outright. If you need storage or virtual machines to develop your own platform, you can count on the IaaS model. Moreover, as you can use a Web-based interface regarded as a console to manage your IT operations, you are able to self-provision this infrastructure. In simpler words, you can scale the infrastructure up or down depending on your need after installing the needed operating systems and applications. 

Example: One famous example is Amazon EC2, providing its customers even with virtual resources that can be listed as CPU, memory, OS, and storage. Others are Flex Metal Cloud, Cloud Infrastructure by Google, Cloud Services by IBM, Digital Ocean, Linode, Cloud Services by Alibaba, Hitachi Enterprise Cloud, Hewlett Packard Enterprise, Open Cloud by Rackspace. 

The Differences Between SaaS, PaaS, and IaaS

1. Different users

SaaS model: Business sectors or individuals who are seeking to complete a business task without owning any IT equipment. For example, startups and small businesses tend to use SaaS apps because of the lack of time, capital, or expertise, or large companies seek short-term software. 

PaaS model: Companies that have efficient developers and deployers. They usually want to create customized applications and services to meet the needs of their customers. 

IaaS model: Most IaaS model users are system managers who want to create a platform for their service test, development, integration, and deployment.

2. Different cloud services

The cloud vendors will handle all of the tasks in the SaaS models, fewer in the PaaS models, but the least in IaaS models. To understand more about the relationships of the services offered by SaaS, PaaS, IaaS are offering to you, you can take a quick look at the diagram below: 


Just imagine this. You want a new house. There are usually three options for you. The first option is the least time-consuming. You just buy a completely built house. You do not have to do anything. Everything you need to do is to pay, move into the house and start your life there. However, as the house was built by others, sometimes you may not be satisfied with some features of the house. It is just like the way you use SaaS applications. Some of the currently available SaaS services are Email, Office, Automation, CSR, website testing, Wiki, Blog, Virtual Desktop, etc. You do not need to manage anything when using these services. The cloud vendors will take care of the system management from A to Z. You just purchase the applications and get your tasks done. However, you may find some of the applications’ features not yet match what you desire due to the different needs of your business.


The second option for you is that you have to design the house by yourselves, but someone else will gather all the needed materials, build the foundation of the house and build the rest for you. This time, you get a little more control over how your dream house will look like. However, you do not need to worry about how many bricks you are going to need. This is like when you use the PaaS model which can offer you greater flexibility and facilitation in operations. You are assisted with Service and application test, development, integration, and deployment, platforms on which you can build your own apps. You need to manage the data and the apps only.


The third option is the toughest one for you. You have to start from scratch. Luckily, some people can get you all the bricks, cement, all other materials you need, and they are kind enough to help you finish the foundation of the house. But then, you have to take care of the rest. You have to design the house, build walls, build the whole house by yourself. The building materials, as well as the foundation here, represent what IaaS offers to you: Virtual machine, operating system, Message queue, Network, Storage, CPU, memory, and backup services. IaaS can give you the infrastructure of cloud-based technology, direct control over the IT operations so that you can start building your own platforms and everything else.

Advantages and Disadvantages of SaaS vs IaaS vs PaaS

Advantages of the SaaS: 

  1. Time-saving: As mentioned before, you just need a device and Internet connection to get access to the SaaS. Moreover, as the cloud vendors take charge of the management and maintenance process, SaaS services can save you from many working hours.
  2. Cost-efficient: A lot of costs including hardware, software license, and maintenance can be cut down due to multi-tenant cloud environments.
  3. Scalability: the pay-as-you-go model can facilitate the user experience and offer you flexibility. As the third party hosts the software, switching usage plans is hassle-free. 
  4. Customer-friendly: Saas applications are easy to use and equipped with the best practices. Moreover, you can test the software before purchasing. 

Disadvantages of SaaS:

  1. Data insecurity: Embracing the SaaS model also means that you let the third party keep your data, exposing your business to security risks. 
  2. Difficulty in Regulation Compromise: As your data resides in the vendor’s data center, it may be difficult for you to agree with the vendor in terms of protection terms and conditions as both parties have different interests. 
  3. Low Speed: As the software runs on the cloud, a distant data center, you may have to endure lower performance. 
  4. Lack of customization: SaaS apps have been completed in advance of the purchase, which makes cloud vendors hesitate to make adjustments as you request. 

Advantages of PaaS: 

  1. Cost and Time savings: cloud-based services save up costs and times from hardware/ software or maintenance. 
  2. More control over schedules: As your developers will create new apps for your business, you can adjust the speed of the app development process. 
  3. Customization: It is easier for you to make changes to apps to meet the demands of your customers. 
  4. Continuous updates: you can get automated updates and security patches from your vendors, minimizing incompatibility. 

Disadvantages of PaaS: 

  1. Data insecurity: Even though you can run your own apps, the data is stored in the third party’s cloud servers. There is still a level of data risks. 
  2. Requirement of coding expertise: your developers must be competent at coding to make the best out of PaaS. 
  3. Limitation in the operations: Some customization processes may not perform best on PaaS platforms, causing inconvenience to end-users.

Advantages of IaaS: 

  1. Operational Flexibility: IaaS is the most flexible cloud service model, allowing your employees to get access to hardware, computing power, and software applications used on a daily basis. 
  2. More Control: you can retain complete control of your infrastructure 
  3. Scalability: Speaking of industries suffering from seasonal fluctuations, IaaS is an ideal choice to adjust the data storage, virtual machine, or software app needs. 
  4. Cost savings: IaaS offers lower infrastructure costs, making IaaS appropriate for startups.

Disadvantages of IaaS: 

  1. Higher requirement of internal resources and HR training: As your company needs to be responsible for multiple tasks, the workforce must acquire skills to manage the infrastructure. Inhouse resources are also needed to maintain stable control over the infrastructure. 
  2. Data Security: Threats can still be imposed by the host or other virtual machines (VMs), or even the data communication exposure between the host and VMs. 
  3. Complicated legacy systems: incompatible infrastructure may fail to secure legacy apps.


If you are considering scaling up your business, moving your business to the cloud is of paramount importance to ensure facilitation in operations as well as improvement in data security. Especially when your company has unpredictable demands, bounded resources, or a small size team, cloud computing provides solutions to all your addressed concerns. The real question you need to ask yourself is not whether to perform cloud migration, but which types of cloud service models among SaaS, IaaS, and PaaS you should embrace into your business. 

Accounting Solution Hack Now Financial Accounting in Business

Financial Accounting as an Accounting Solution? 

Financial accounting is an accounting solution that undertakes the work of recording, synthesizing data, and building financial statements to serve those who need to use accounting information. Information on the status and fluctuations of capital, assets, or physical and monetary flows will be synthesized by a financial accounting team based on data.

The finance and accounting team will include general accounting and data accounting, with a clear and transparent division of work to ensure work efficiency, specifically:

  • General accounting: Collect and process general information about the economic and financial situation of the unit. Through monetary units, general accounting provides data reflecting the use of assets and sources of asset formation of the enterprise.
  • Detailed accounting: Collect and process information according to a specific object on each unit. In detailed accounting, accountants must ensure accuracy to avoid affecting when resuming the data.

Financial Accounting for Businesses

A financial accountant is one of the positions that play an important role in the business, supporting businesses to perform tasks such as:

  • Provides information for those who need to use accounting information such as business leaders, external partners. Therefore, all financial accounting data provided should ensure accuracy, objectivity, and compliance with accounting principles and standards, which is the basis for managers to make appropriate and timely business decisions.
  • The information provided by a financial accountant is information about financial-accounting activities that have arisen, of a general nature, expressed in the form of value. Therefore, businesses can regularly monitor the status of their production and business activities.
  • Makes general financial statements about the business’ performance results of in the reporting period, including clear financial results and effective cost management that help businesses optimize costs and cut unnecessary expenses.
  • Manages risk and insurance for businesses when there are financial fluctuations.
  • Supports business leaders to regulate the financial situation of the business. The information from the financial accountant is also a legal basis to help businesses clearly resolve complaints, disputes, bank loans and investments.

Important Principles to Remember

Financial accounting should comply with the general corporate accounting rules. For instance:

  • Assets and liabilities are initially recognized at cost
  • Consistently apply the selected accounting regulations and methods in each annual accounting period. If there is a change in the method, the accountant should make a detailed explanation in the financial statements
  • To reflect in an objective, factual, complete, and correct manner in the accounting period in which economic, financial, and accounting operations arise.
  • For the preparation and submission of financial statements, accountants must do so accurately and submit them on time. The information and data in the financial statements of the enterprise should be disclosed according to the provisions of Articles 31 and 32 of the Law on Accounting.
  • Accountants evaluate assets and allocate expenditures and receipts in a uniform, careful and accurate manner with no deviation.
  • Preparation and presentation of financial statements must reflect the true nature of each transaction rather than its appearance

Financial accountants need to make monthly, quarterly, and annual reports such as: 

  • Monthly report: Provide VAT report, PIT report
  • Quarterly reports: Provide VAT reports, PIT reports, reports on the use of invoices
  • Annual report: Financial report, PIT finalization, CIT finalization, license tax
  • Accounting book:
    • General diary
    • General ledger
    • Receivable and payable report
    • Consolidate inventory report
    • Management of cash receipts and deposits
    • Management of raw materials, goods, finished products
    • Manage business revenue and expenses

In addition, a financial accountant also performs other tasks such as announcing the issuance of invoices, checking payment papers, etc. 

Management Accounting vs Financial Accounting

ContentManagement AccountingFinancial Accounting 
Purpose Provide information to serve the management of production and business activities.Provide information for the preparation of financial statements. 
Target customerCorporate managers (Board of Directors, Board of Directors). Business managers and external entities (Investors, banks, tax authorities, financial authorities, statistical agencies).
Providing information principlesThere is no obligation, managers are free to decide and adjust in accordance with the needs and management capabilities of the business.Respect the generally accepted and used accounting principles. In other words, financial accounting must ensure consistency according to certain accounting principles and standards so that everyone has the same understanding of accounting principles. Accounting information, especially financial statements, and financial accounting must comply with the provisions of applicable laws, especially the requirements of financial management and the requirements of society through disclosure. mandatory data.
Information’s scopesRelated to the management on each department (workshop, department) to each relevant individual.Involves financial management on an enterprise-wide scale.
Report timelineManagement accountants have more reporting periods: Quarter, year, month, week, day.Financial accounting has a reporting period: Quarterly, annually.
Information featuresEmphasize the relevance and flexibility of data, information is aggregated from many different angles.Reflect past information that is objective and verifiable. 
Statutory CompulsoryManagement accounting is not mandatory.Financial accounting is required by law. It means that the books and reports of financial accounting in all enterprises must be unified.

For small businesses and micro-enterprises to set up a complete and effective accounting system is quite difficult because of resource and cost constraints. Therefore, choosing an accounting service provider is currently the optimal solution for businesses today. Enterprises do not need to spend too much on paying staff salaries, office rental costs, or recruiting full accounting positions such as financial accountant, chief accountant, tax accountant, but still have a reporting system of reports and books in accordance with regulations.

At Shoeboxed, we provide the best receipt tracking and management system. As accountants and business owners using the Shoeboxed system, there is no need to worry about manage paper receipts as well as extracting transaction details from these invoices. Sign up now to use Shoeboxed for free or reach out to our representative for a demo and customized business plan. 

Going Cashless? 3 Free Simple Key Must-Know Electronic Payment

Thanks to booming technology and the wide use of smartphones and laptops, it’s so simple and easy to go cashless with various electronic payment options. 

Electronic payment is any kind of non-cash payment that doesn’t involve a paper check. Methods of electronic payments include credit cards, debit cards, and the ACH (Automated Clearing House) network. The ACH system comprises direct deposit, direct debit, and electronic checks (e-checks). 

Types Of Electronic Payment Transaction

There are three types of transactions related to electronic payments. 

1. The one-time customer-to-vendor payment 

This method is used when customers shop online at an e-commerce site, such as Amazon. They click on the shopping cart icon, type in their credit card information, and click on the checkout button. The site processes the credit card information and sends out an e-mail notifying that the payment was received. On some websites, the customers can use an e-check instead of a credit card. To pay by e-check, they type in their account number and their bank’s routing number. The vendor authorizes a payment through the customer’s bank, which then either initiates an electronic funds transfer (EFT) or prints a check and mails it to the vendor.

2. The recurring customer-to-vendor payment 

This method is used when customers pay a bill through a regularly scheduled direct debit from their checking account or an automatic charge to their credit card. This type of payment plan is often offered by car insurance companies, phone companies, and loan management companies. Additionally, long-term contracts normally require this type of automated payment schedule such as gym memberships. 

3. Automatic bank-to-vendor payment 

This method can only be used when customers’ banks offer a service called online bill pay. Customers log on to their bank’s website, enter the vendor’s information and authorize the bank to electronically transfer money from their account to pay their bill. In most cases, customers can choose whether to do this manually for each billing cycle or have their bills automatically paid on the same day each month.

Benefits of Electronic Payment

1. General benefits

  • Complete and develop e-commerce: In many different ways, online payment can perfect e-commerce in the true sense of online transactions. With safe and convenient e-commerce payment, the development of global commerce is inevitable for a large and constantly increasing population.
  • Increase the circulation of money and goods: Electronic payment helps the payment process to be quick and safe, ensuring the interests of all parties, and minimizing risks.
  • Modernize the payment system: Electronic payment creates a new kind of money (Cryptocurrency) that not only satisfies banks but also meets the needs of buying ordinary goods. The transaction process is simple, fast, and transaction costs are significantly reduced.

2. Benefits for banks and businesses

  • Increase revenue: Electronic payment not only helps to expand the customer system but also increases access to the world market. Additionally, it helps to get more sales from existing customers and other value-creating services.
  • Reduce business costs, selling expenses, transaction costs, and at the same time increase business efficiency.
  • Reduce office costs, shorten operation time, standardize procedures, improve the ability to search and process documents.
  • Reduce staff costs, reduce sales and marketing costs.
  • Expand the market through electronic payment methods. Banks, instead of spending more money to open branches, can provide Internet Banking services to expand the scope of service provision.
  • Diversification of services and products: Banks can develop and provide new services to customers such as phone banking, home banking, Internet banking, money transfer, withdrawal, automatic payment.
  • Implement the globalization strategy without having to open more branches, saving money, and serving a larger customer base.
  • Trade promotion, brand promotion to the world: Through electronic payment, banks and businesses can post all financial information for foreigners to know, in order to increase their brand’s value. Intellectual properties and services serve the purpose of advertising promotion.
  • Facilitate the establishment and strengthen business relationships.
  • Create conditions to spread and popularize images and product brands with international customers.

3. Benefits for Customers

  • Fast, convenient: This is probably the first benefit to mention of the electronic payment method. In the past, to top up a phone, top up a game card, and pay the utility bills, customers had to go to a store or to a specific address to pay. Now, with just a computer or smartphone connected to the Internet, customers can pay for everything 24/7.
  • Save cost and time: Not only fast and convenient but an online payment service also helps to save money and time. Customers just need to sit at home, perform a few simple steps and it’s done. Moreover, online payment services at banks often apply promotions to help customers enjoy the best service at the cheapest price.
  • Information security: Online payment service providers all have the best information security mechanism for customers. So customers don’t need to worry about their account information being leaked out. Compared to using cash, online payment is much safer and more secure.
  • Flexible payment: Customers are provided with many different payment methods such as e-wallets, domestic bank accounts, international cards, making it more convenient to make online payments according to their needs. 

Disadvantages of Electronic Payment

Besides the benefits and advantages, electronic payment methods also have certain disadvantages such as:

  • Tampering and technical risks: Nowadays, counterfeiting is becoming more and more sophisticated and is an organized activity. Although the number of forgery cases did not increase much, the size of each case increased by a large amount. This is a potential risk for banks and their customers.
  • Need reinforcement and vigilance from many sides: Experts say that the risk of information insecurity coming from devices connected to the Internet is increasing. Therefore, customers themselves need to pay attention to strange points in cash machines, card machines, When using e-wallets, Internet Banking, users need to pay attention to their devices with programs installed. anti-virus program or not, be careful not to click on strange links.

Above are the key benefits of electronic payment methods. Hopefully, the article has brought you a lot of useful information.

We would love to hear your thoughts and questions on electronic payment in the comment section below.

Shoeboxed can help

Bookkeeping management software developed by Shoeboxed is an ideal tool for professional accounts and small business owners. With Shoeboxed, you can turn your receipts into data and organize, make reports and analyze your current financial position at any time and anywhere. To get the most out of your bookkeeping management, get started with Shoeboxed for free!