Welcome to part 3 of Enterprise Accountancy Month. To read Part 1: 'DIY Bookkeeping' click here and to read Part 2: 'Choosing Your Accountant' click here.
This week we look at the pros and cons of online bookkeeping software. Our resident accountant, Liz Pirrie, says she is old enough to remember when online packages didn't exist so she's going to share some of her thoughts on the subject...
.JPG)
You'll also hear from a couple of other accountants with differing views on the online accountancy revolution and the part online book keeping software plays.
Head in the cloud?
Online software of any kind stores your information "in the cloud". I.e. there is a big server out there that is connected to the internet and you can access the information on any device from anywhere that you have an internet connection. It all sounds very Dr Who, but in actual fact, when you are working with it you really won't notice any difference from a package that isn't online... unless you have a really slow Internet connection!
We spoke in week one about some of the features of the various packages, but let's have a look at some of the advantages that are exclusive to online packages.
Anywhere, anytime access.
With online book keeping software, as long as you have internet access you can access your books. This means you can use that long train journey to process some invoices instead of reading The Metro (other good reading materials are available).
When you are out and about at customer meetings and they place an order you can process their invoice straight away and email it to them, there and then.
I've seen this put to good use time and again in client meetings where they have whipped out their iPad and shown me their profit and loss with a few swipes of their finger.
Access for anyone.
You can set up as many users as you want/need and they can all access the books from whereever they are. Don't worry about them messing things up, you can restrict access as 'read only' or allow users to access only certain information. For example, I know of a charity that gives the board members read only access, so they can see how the accounts are looking but can't make any changes to the figures.
You can give your accountant access, so no more sending them discs with data and then discovering that your accountant has a different version of the software and it's not compatible with yours.
You are still in control, most packages can give you a user log that will show you who logged in when and what they did.
Back up.
Of course you'll have a back up of your offline system, but you have to remember to take back ups regularly and store them somewhere safe and hope that they will restore ok if the worst happens.
Online packages are backed up constantly. Every time you enter a transaction it is saved on the cloud and all the reputable providers will have their servers backed up several times probably in different locations around the world.
Always up to date.
Offline packages are updated, generally once a year. To get the update, there is normally a cost and then the agony of installing that update.
Online packages are always up to date, with providers introducing new features and tweaks sometimes as often as weekly. Of course, you pay a monthly fee for the package that includes these updates.
It's not all good.
Of course there are drawbacks. One big consideration is security. Any information that is stored online is vulnerable to hackers but you can minimise the risk of this by having good strong passwords and not sharing your password with anyone. You must also consider what would happen if the company that provides the software goes bust. Before you sign up to their software, check out their terms and conditions to see how they would deal with this and how you would be able to access the software.
Or feet firmly on the ground?
Offline packages have their advantages too and many people feel happier storing their accounting information somewhere well away from the world wide web.
Online packages are fairly new and whilst they are evolving all the time, some of the desktop packages have been around for years and have been developed to, almost, perfection. I think the online packages have yet to catch up, especially for extremely large volumes of transactions or if your business is a little out of the ordinary. However, as I've already said, the online packages are updating all the time and it won't be long before they do catch up.
What do other Accountants say…
FOR Online Software
Marion Thomson of Embarc Accountancy Support (now a silver partner of Xero online book keeping software) is a clear advocate of online book keeping solutions. She said:
"When we talk of accountants the word 'traditional' often springs to mind. Being traditional can go hand in hand with being less willing to adapt to change. So it's no surprise that according to a recent survey only 30% of UK accountancy practices are using cloud computing compared to 70% of businesses overall (Reuters). I have personally been using Xero online software for the last year and despite having 20 years experience with desktop software prior to then, have never looked back. The 3 main benefits of moving to Xero for my clients have been:
1) Time saved by having bank transactions fed in automatically on a daily basis.
2) The ability to manage your business finances from wherever you are.
3) The ease with which the workload can be shared between accountant and client. You can work with your accountant on the same data, even at the same time, sharing the load."
FOR Offline Software
Alan Moir of Fyfe Moir Accountancy practice said:
"We are told that the answers are in the Cloud and that may be true.
At Fyfe Moir & Associates we have technology coming out of our ears be it PC's, Laptops, tablets or smart phones. We also use state of the art IRIS software for our end of year accounts and tax and Sage for our book-keeping needs.
So why no online software solution?
The answer is twofold.
Firstly the old computer adage of "Rubbish in, rubbish out" is as true today as it was when first coined.
The second is that we choose to invest in our people. Well trained, well paid and highly motivated individuals who get it right first time and who can when it is requested, provide monthly accounting KPI's to our clients.
The answer may well be in the cloud but we must just remember not to stick our heads there."
Don't forget to send us your accountancy questions (to Michelle.Barclay@enetrust.com) and we'll do our best to answer them in next weeks blog entitled 'Your Common Questions'
Happy St Matthews day when it comes!
by Liz Pirrie
Back to all blogs