Online Accounting - Background Briefing
Online Accounting - An Internet Natural
Accounting and bookkeeping provides a perfect example of an application where there is a requirement to share access to accurate and up-to-date information unconstrained by location; something for which the Internet was purpose built. Even a one-person business will at the very least need to share information with their accountant at year end.
Online Accounting - Beware Imposters
Many accountants and bookkeepers claim to offer "online" accounting services but in fact do little more than operate a website and use email to send data files for PC accounting packages back and forth. A real online accounting or bookkeeping service can be recognised by the following characteristics which all make for a much more efficient accounting process from capture of transactions through to year end accounts production:
- Inherent multi-user access
- Inherent multi-site access
- A single, shared database
- Zero system administration for end-users
Online Accounting - Technologies
Purpose Built Browser Solution
Our preferred
solution...
The most efficient approach to delivering online accounting software functionality is to develop an application from the ground up to deliver standard HTML to the user's browser. The service provider manages the database and runs the code that deals with user interactions. This is the approach taken by Liberty Accounts and it allows us to pass significant savings on to customers when compared to the costs of using solutions based on alternative approaches.
- Pros
- Works immediately in any modern browser
- Specifically designed for concurrent multi-user/multi-site access
- Zero administration for users
- Very economic to provide service to large numbers
- Enhancements and fixes continuously developed and installed by service provider
- Cons
- User interface restricted by what is possible using HTML
Centrally Hosted PC Applications
Technology
Misapplied...
Another method of providing online accounting involves taking existing PC Accounting application software and making it available over the internet using Citrix or other similar intermediate technologies. This means hosting the application on a central server and relaying the screen image to the remote user in their browser via an activeX component, sending any user keystrokes and mouse-clicks back to the application running on the server.
- Pros
- OK if you need to stick with a familiar software package and are prepared to pay a price premium
- Cons
- Typically only available for Windows environments
- Not always ideal for multi-user concurrent access to data (depends on capabilities of underlying software application)
- Licencing issues add significant expense
- Memory requirements add significant expense
- Bug fixes/enhancements restricted to updates of underlying product by the software supplier
- ActiveX download and configuration required on each PC where it is used
- Security and installation issues with activeX components
Downloadable Application Modules
Speed bumps...
Another approach is to provide an application with code that is downloaded to the users' computers. The application runs on the user's PC but stores data on the service provider's database server. We are aware of one java based example of this approach in the UK market.
- Pros
- Easier to build GUI interfaces like those in Windows applications
- Cons
- Takes time to download and configure initially
- Download and configuration required on each PC where it is used
- Any updated software modules need to be downloaded before user can continue.
- Often has requirements such as installation of specific versions of Java Runtime Environment
Online Accounting - The Future
In the recent past many businesses have saved time and money and gained greater control of their finances by moving from paper records to PC installed computerised accounting software.
In the years to come businesses will seek to enjoy those same benefits while additionally gaining from multi-user/multi-site access without the drawbacks and hidden costs associated with owning and running their own software. Online accounting services will be the primary vehicle for this transformation.
When accounting applications "live" on the Internet new functionality will become possible: Transactions that affect your bank account could be sent automatically to your accounting package, approving items with a simple mouseclick before posting as appropriate. Equally it could become possible for a business to send sales invoices direct to another business's accounts for the recipient to approve without having to rekey data.
