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Online Accounting Software

The Pros and Cons of Online Accounting Software

For years, Online software applications have been providing companies with an effective and affordable way to outsource cumbersome administrative IT functions, while leveraging all the advantages of the latest and greatest tools and technologies.

Online accounting software is no exception, empowering businesses across all industries to utilize robust, fully-automated business financial management features and capabilities, without placing an additional burden on internal technical resources. So, they can spend less time managing their systems, and more time focusing on core workflows and processes, strategic financial planning, and other revenue-enhancing activities.

Also known as SaaS accounting software applications or Web-based accounting software systems, online accounting software packages can offer many significant benefits to businesses, including:

Minimized Technical Burden

With an online accounting solution, all software and hardware components are purchased by the third-party service provider, deployed at their own site, and overseen and administered by their own staff. So, internal technical teams won’t have to spend their time and energy implementing, upgrading, and managing the accounting software, and can devote their efforts to other critical corporate technology initiatives.

Accelerated Return on Investment

Unlike on-site applications which usually come with hefty initial price tags, online accounting software solutions are much more affordable, and don’t require large upfront expenses. Companies simply pay as they go, with monthly prices or fees based on the either the number of system users, or the volume of transactions processed.

Accelerated On-Boarding

In order to effectively compete with the on-site accounting application vendors, online accounting solution providers must make sure their offerings are simple and easy to use.  That’s why most of the online accounting software packages available today boast highly intuitive interfaces that reduce training requirements, minimize learning curves and roll out times, and enable users to get up and running quickly.

The “Cons”

As is the case with any technology solution, there are a few potential drawbacks when a company chooses a online accounting software solution over an on-site one.  These include:

  • Reduced control.  Businesses who opt to have a third-party provider manage their accounting systems must relinquish a certain amount of control over their application, and all associated data. However, if the vendor is chosen carefully, this should not pose any problems.
  • Limited customization.  Depending on the provider selected, an online accounting software application may not offer the same customization capabilities as an on-site solution, hindering a company’s ability to tailor the system to their unique financial management processes.
  • Security.  Data security is a major concern for any organization today, especially when it comes to confidential and highly sensitive financial information.

Opting for online accounting software could put the integrity of financial data in jeopardy if the service provider doesn’t have the proper security measures in place.  However, if a well-known and reputable vendor is chosen, chances are the online accounting software will provide the same level of security protection as most on-site applications on the market today.  For example, many online accounting solution providers use firewalls, data encryption, role-based and/or multi-level password protection, and other advanced techniques to maximize security and ensure only authorized access to financial transaction data.