Internet Accounting: what you need to know!

The new buzzword in accounting software that we’re seeing more and more is cloud accounting. That is to say instead of installing QuickBooks or some other accounting software on your computer, you log into a website over the internet and do all your accounting there. There are tons of new accounting solutions that operate exclusively over the internet: Wave Accounting, FreshBooks, QuickBooks Online, Xero and many more.

All of them preach many benefits over normal accounting software however there are also some of the same pitfalls as with the existing solutions. What are those benefits and pitfalls? Read on to find out.

Strengths

• Accessible anywhere! – The great thing about accounting in the cloud is that you can access it anywhere. Anywhere you have internet access, they generally make it accessible to you, even in some cases from your iPhone or other smartphone. That kind of convenience is hard to beat.
• Your data is safer… mostly – These services provide a lot of backup for your data. Instead of worrying about your data being destroyed with your computer, it’s stored safely often in many different locations.
• Easy to work with others – Cloud accounting offers many conveniences offered by the internet and social media. You can send invoices by email or even accept payment by credit card online. In addition, sharing your information with your accountant can also be easier.
• Updated for free – Generally speaking, on these services, the service is improved for free and updated quite often. Unlike traditional software, where you need to buy a new version, the service you get online is always the most up to date recent version.

Same pitfalls

• You still need to know what you’re doing – All software likes to proclaim that they make it easy, that you don’t need to know accounting and all you need is their software. The cloud accounting services are indeed simpler but it still needs to be setup properly from an accounting and tax perspective.

New pitfalls

• Security! – This isn’t a major concern as most offer very good security, but it’s still a concern that exists. In order to make your information available to you, it’s stored on the internet. Cloud accounting providers pay a lot of money to ensure their security but it doesn’t mean their systems are perfect. This has to be a risk you are prepared to take.
• It’s less mature – Compared to older solutions which have been in development and active use for decades, these new solutions have been around for much less time. Their feature sets are even more limited and less capable than the other solutions. Wave Accounting, FreshBooks and others are more often geared towards independent professionals.
• The internet brings into a computer setup another point of failure (as if there weren’t enough already!) – While providers often promote their reliability to up to 99.999%, but it’s still a possibility that they go down. When you’re operating a business, that’s the last thing you want.

Which solution is best for you?

At the end of the day it depends on your needs. An accounting system is one of the most important parts of your business. It doesn’t matter if it’s paper, or computer software or an internet service, as long as it works reliably, and tracks your business’ growth. Moving to computers brought automation to a lot of the more tedious tasks of accounting. Cloud accounting brings a lot more convenience.

There are many options and factors to consider. It’s important to look at the features provided by each solution; most will make that list readily available so compare it to what you will need. Check for other testimonials from other customers: make sure they found it reliable and easy to use. Each different solution has it’s own strengths and weaknesses and over time cloud accounting will continue to improve.

If you have questions about accounting in the cloud or any other question, please don’t hesitate to contact us today by calling us at 416-495-1098 or email us at info@apbs.ca.