Today, online business accounting solutions have been replacing desktop accounting software for a number of reasons. Although online accounting solutions work best for small business owners and home offices, they have both advantages as well as disadvantages. Here are the pros and cons of online accounting packages.
Pros of Online Business Accounting Solutions
Online accounting software does not require paying huge amounts for purchasing the software. A certain fee is charged on a monthly basis. Moreover, this online software does not require any additional hardware installation like file server, network software, replacing hard drives, adding RAM, etc. The need for hiring either an accountant or an employee to handle the accounting software system is also eliminated since everything is done online.
Web based accounting software is easy to use and does not require any special training. Back-ups are made frequently in online accounting packages, and in case of a hard drive crash, data recovery can be done easily. Hence, there are less chances of loosing data.
With the growth of the business, the financial data that needs to be stored also grows, and therefore so does the storage space. A number of online accounting software programs provide unlimited data storage at no extra cost. This eliminates the necessity to find the means of data storage.
The use of online accounting solutions makes it easier to work from any location. One can access the records, make payments, view transactions, etc., from either home, the office or any other place.
With online accounting, producing financial reports as well as data storage is all done automatically, reducing the necessity of manual work. This greatly reduces the occurrence of errors.
Cons of Online Business Accounting Solutions
Even with good encryption techniques, there is a risk of data being stolen over the Internet. This is not a serious disadvantage, because there are chances of data being stolen even when using traditional methods of accounting.
When using the Internet for accounting solutions, there are chances that a virus or other worms may infect the system. Hence, without antivirus software and firewall protection, it is unsafe to use the online accounting software.
Online solutions are less customizable as per the requirements when compared to traditional accounting methods, and they often have less features.
Online accounting software depends on an Internet connection. In case the connection fails, the work cannot be continued. This may sometimes affect the growth of business, especially when the Internet is down frequently. Also, the speed of the Internet affects the working of the online accounting software. To obtain high performance, a DSL, cable or high speed Internet is preferable.