Accounting in the Cloud has attained respectability within the finance community with the publication of a guide to online applications from the IT Faculty of the Institute of Chartered Accountants of England and Wales (ICAEW).
Written by independent technology journalist Lesley Meall, the guide aims to calm fears about online accounting options by giving finance professionals enough information to decide whether the Cloud approach could work for their firms. The document includes a listing of more than 30 service providers, of which six are covered by short reviews (see below).
"Over the past year the number of available systems has noticeably increased and the number of businesses and accountants using them has done likewise," the guide notes. "In an era where the electronic filing of statutory returns is increasingly the norm, online accounting now seems less like a ‘big risk’ and more like an idea whose time has come."
The guide caters for both commercial finance managers and accountants in practice, many of whom are now using Cloud accounting systems to provide bookkeeping and reporting services to their clients. The report strikes a good balance between setting out the advantages of online accounting and airing the potential risks, and takes care not to accept all the claimed benefits at face value.
On the credit side, The Cloud offers:
- Easier access to records and data for all.
- More flexible and efficient working processes.
- Accountant has better oversight of clients' books, providing a platform more pro-active advice and services.
- Time and cost savings.
- Reduced system administration requirements and less need for in-house IT expertise.
- Lower up-front costs and predictable monthly/yearly subscription costs.
- More control over when to invest in new hardware.
- Business continuity advantages, with sensitive data backed-up off site.
The final advantage could be viewed as a risk by concerned practitioners, who are sensitive about sharing financial data and the strictures of the Data Protection Act. For every firm willing to provide open access to live accounting data, "There will be a business that is horrified by the possibilities that this could create," the author notes.
Other issues to consider on the negative side of the equation include:
- No control over upgrade timings, potentially exposing users to teething troubles with new versions and features.
- Dependance on internet connections and third party service providers for access to accounts.
- Potenial lack of upgrade paths from less well established suppliers.
- Security vulnerabilities. Cloud accounting providers offer a wide range of encryption and back-up services, all of which need to be carefully assessed. Ultimately however, you are going to have to trust your service provider, the report advises. "And if you cannot do this, then maybe online accounting systems are not for you."
Cloud accounting reviews
accountsIQ Designed for small and medium-sized enterprises and their accountants, accountsIQ can be delivered as a basic bookkeeping edition, a "controller" version for company managers and enterpriseIQ, which includes sales and purchase order processing and stock control modules. This scalability allows businesses and their advisers to grow without needing to switch accounting applications. Verdict: "A lot of thought seems to have gone into accountsIQ, and it can offer practices a really smart way of exploiting the potential value-added and revenue-generating benefits
of online accounting."
Liberty Accounts Offered as a "white label" bookkeeping and payroll system for accountancy firms, Liberty is also available direct to owner-managed businesses and sole traders. Accountants have access to a control area giving them access to cross-client views, to-do lists and a range of reports. The reporting features get good marks, as do intuitive user screens and context-sensitive help. Verdict: A tried and tested system with an established user and scalable enough to cope with companies of all sizes, Liberty "looks like a very appealing prospect for small firms and sole practitioners that want to streamline compliance work and spend more time on value-added services."
Liquid Accounts Originally designed for a national franchise operation, Liquid Accounts has two editions. The entry level version caters for small and medium-sized businesses with little accounting expertise that want to link more closely with their accountants, while Liquid Enterprise is designed for larger organisations with more complex needs. The Liquid Client Manager is provided free to accountacy firms and provides a number of features to help them track different client companies. and work on the client’s books. Verdict: Liquid Accounts has the potential to grow along with the business, which also creates revenue-generating possibilities for accountants who want to work online with clients,
Sage 50 Accounts Professional Online and Online 50 Sage 50 is the UK's most popular desktop accounting application and needs little introduction for most trained accountants. Here it is assessed in two varieties, one provided by Sage itself, and one by a third-party service provider, IT Inside Out. The pricing structures and license arrangements differ between the suppliers, which the review attempts to unravel. Accountants often need to run multiple versions of an accounts program to cater for clients who prefer not to upgrade. So Online 50 can go back several generations to Sage Line 50 version 8, while Sage itself only supports online versions of Sage 50 Accounts 2007 and 2008 (2009 edition due shortly). Verdict: The two organisations share a strong track record in accounting and provide access to systems that have withstood the test of time, providing a comforting harbour for users who still want the security of a well known brand and upgrade path. Because they offer accounting software that can be accessed online or on-premise, they can arguably provide a level of future-proofing and flexibility that is rare among online accounting systems.
WinWeb OnlineOffice OnlineOffice is intended not just to be an online accounting system, but a complete infrastructure for small, self-employed and start-up businesses with 1-10 employees. Its bookkeeping facilities are accompanied by a growing range of on-demand services, including e-commerce, credit control, data storage and social networking for businesses. The advantages of this holistic approach can be seen in its impressive approach to cashflow management, where expected receipts and payments can be entered into a cash planning tool that links to the accounting ledgers. Users can enter their expectations and and the system will automatically update the actuals as and when accounting data is posted. A summary page displays a live projection of worst and best-case cash flow scenarios for the next 30 days. Verdict: OnlineOffice 5 represents an ambitious approach with enormous potential, and it is awash with so many good ideas that it is impossible not to be impressed; but it is not without its drawbacks. Small business people could be overwhelmed by all the facilities on offer (although human OnlineOffice Assistance are available to help them). "This does not stop OnlineOffice 5 from being a great system, particularly for accountants."
The 30-page IT Faculty Online Accounting Software Guide is priced at £45, or free to members. A subscription for 2009 costs £95 and entitles members to access all of the IT Faculty's publications. More details here.
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