On-line Accounting: Which way to go?
It can be a tough decision whether to use a PC based accounting system or an on-line accounting system. Obviously, on-line accounting is trendy, much hyped, and so it takes all the publicity. No business or software magazine, print or on-line, really wants to talk about PC based applications. But there's a problem. Actually, there's quite a few problems, and frequently all those people that bleat on about 'on-line' are happy to gloss over them. As a business owner/manager, I'm sure you'll want to form your own opinion.
Here I've presented the advantages and disadvantages of on-line accounting. I'll be the first to admit I may be biased! After all, I'm distributing a PC based application. But I've tried to be reasonably balanced. I'm not some sort of on-line Ludite. I think the internet is an fantastic development, and has a HUGE future. After all, I couldn't distribute Adminsoft Accounts without it. All the points I cover below you'll find on other web sites enlightened enough to discuss the issues.
On-line accounting advantages:
- Ease of access. It's available on any device from anywhere in the world, where ever there is internet access. This can be really useful, especially if you travel a lot and/or need to work from home.
- No large initial outlay to buy software as it's normally a monthly subscription service. Of course Adminsoft Accounts can be used for free if you wish, so not sure if this counts as an advantage. Especially as the purchase cost of Adminsoft Accounts, if you decide to go that route, would be less than the cost of one years subscription for most on-line accounting providers. But most other web sites discussing the issue point this out as an advantage, so hear it is.
- Backups at least once a day are usually done for you, useful if you forget or are too busy to backup yourself.
- The software is updated for you on a regular basis. So no download or installation hassles.
- You don't have any hardware worries. If the device you're using to access your accounts fails, you can just use another device. Your accounting software and data is unaffected. You won't lose any data if your hardware fails.
On-line accounting disadvantages:
- The ability to access your accounts from anywhere does come with a couple of security issues: how do you know one of your employees is not accessing the data form home, perhaps showing it to someone else? What's to stop a disgruntled or dishonest employee from passing login details to a competitor? What if someone accidentally leaves a note of the login details lying around, at a public library, bar/restaurant, exhibition/conference, on the plane/train......
- The internet was never designed for running applications. So application development for the internet tends to be awkward and very time consuming. As a result, on-line accounting applications tend to be rather more primitive that PC/Mac based applications.
- A reasonably fast and reliable internet connection is vital. If internet access is an issue, and it often still is in many areas even in 'developed' countries, then on-line accounting will be difficult if not impossible.
- The cost of the monthly subscription over a few years can end up far exceeding what you would have paid for a PC based solution. And of course, you can never stop paying it.
- If you stop paying the monthly subscription, you will lose the ability to operate your accounting system, you may even lose access to your accounts altogether (depending on the terms of the on-line accounting provider).
- Backing up usually involves copying the data from one location on the on-line accounting platform to another on the same platform. Few on-line accounting products allow you to backup your data to your own physical device, such a memory stick. Why would they? They want to lock you into using their on-line service.
- You have no control over where your data is kept. It may be on a server in the USA, or somewhere in Europe, or it may be India, China, Russia......
- You have no control over who has access to your data. The system could be hacked, it could be accessed/copied by a disgruntled or dishonest employee from any one of several companies that are often involved in providing the necessary support and infrastructure. It could be accessed by a government agency , depending on the regulation in force where ever the data happens to be stored.
- If the on-line accounting company fails financially, you could suddenly, perhaps without any warning, lose all access to your data. For ever.
If you're a big fan of on-line applications, you might find some of this uncomfortable. But it's the background to a connected world. For all the great many advantages the internet brings, it also bring some problems. There are things you should and shouldn't do on the internet. I think businesses critical applications like accounting is one of the things most businesses/organizations shouldn't be doing on-line.