Every business needs an accounting system. Paper and pencils are no longer enough, and neither are spreadsheets. Your financials reflect your business. Running a business is no small feat and neither is maintaining your books. Business owners need to carefully choose an accounting system that fits their needs.
There is a plethora of accounting systems available. Some are software you buy at a store and download onto your PC, such as QuickBooks Desktop or Quicken. Others are available as an online service, such as QuickBooks Online or FreshBooks. The debate between using a desktop versus online accounting system is something I will explore more fully in another article. Right now, I will demystify what an online accounting system is.
An online accounting system is a website you log onto and work within. Accounting is accounting, so there is no difference between using a desktop software or an online service, as far as the accounting is concerned. In an online accounting service, your data is stored in the cloud. The business model is software as a service, which is the same as any app you purchase on your smartphone. Also, online accounting systems are like an app because they can be downloaded onto multiple devices including your smartphone and tablet.
Since the software is embedded in a website, you can access your financials anywhere you have Internet access. All cloud accounting software I use is protected by bank-level security. If you are comfortable checking your bank account online, then you can trust the security measures a cloud accounting system has in place.
In my practice, I prefer cloud accounting systems because I am more in tune with my clients and can provide better, faster service. QuickBooks Online is my primary tool, but I am open to using other software. If you have used a cloud accounting system, please add your thoughts in the comments section below. Would you recommend it?