How Online Accounting Works
Online accounting is a software service that is delivered over the internet. Unlike the typical packaged, there is no program to buy and install on your computer. Instead, users log in and access the system over the internet. Online accounting services are provided by companies like Intacct or QuickBooks Online, who maintain and upgrade the system automatically. In tech parlance, these companies are called "application service providers (or ASP's)."
The biggest advantage of online accounting (as with any web-based application) is that it provides anytime, anywhere access. This is particularly useful for companies that have multiple locations or business owners who travel a lot.
In addition, online accounting does not require a large up-front investment in software or support contracts (which can get quite expensive). Finally, online accounting eliminates many of the usual IT hassles like installing upgrades, networking users to the system, and making backup files.
As far as disadvantages go, there are a few things that companies should bear in mind. First of all, online accounting is relatively new and may not yet have the same functionality as desktop or client-server programs that have been around for many years. Many of these programs have been custom-tailored to specific industries and/or companies. (However, at least one of the online accounting providers appears to be catching up in a hurry: Intacct.) In addition, as with any new system, switching to online accounting requires time and experience for people to become comfortable using it.
Finally, there is the security issue. However, that turns out to be a no-brainer because online accounting is vastly more secure than traditional software. To make a long story short: application service providers like Intacct and Intuit/QuickBooks have far greater data protection measures than most companies' in-house systems. Anyway, this is an important subject and I will explain it in further detail in another posting.
Being an entrepreneur, you should know every twist and turn of accounting and tax liabilities, and your Tax Attorney provides both business legal support and tax law support.
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