An Overview of Web-based Bookkeeping Solutions

Web-based accounting first came on the scene in the late 1990s as an alternative to desktop accounting. Today there are myriad solutions to help you manage your books online, including QuickBooks for the Web and ePeachtree

When you use an online application (sometimes called a hosted solution), you contract with a service provider to securely store and back up your financial information. You access your financial records online by entering a password, and the service provider is responsible for providing software updates, security and data storage. 

Most providers let you pick and choose from a menu of features, but basic service generally includes double-entry general ledgers, invoicing, accounts payable, accounts receivable and financial reporting. Some applications also include time sheets and expense reports, as well as payroll, check writing, credit card and inventory features. Basic service costs between $5 and $20 per month for a set number of users, and you can choose the level of access each user receives. Advanced features, available for an additional cost, include tools to help you manage e-commerce, sales, and customer and vendor relationships.

Online applications certainly aren't the right solution for every business. First, hosted applications are slower than locally stored applications, unless you're using a high-speed Internet connection. And second, because they're newer than desktop applications, many online applications aren't as feature-rich or as user friendly as higher-end desktop software.

But for some businesses, especially e-commerce shops, the advantages of using an online accounting solution might outweigh the drawbacks. Consider some of the ways these Web-based applications can help your business:

Anytime, anywhere accounting. Internet accounting lets you and your employees do a variety of tasks — update financial records, complete expense reports and record hours — from any computer with an Internet connection. This is a big benefit if you or your employees work from home or travel frequently. For businesses that work with outside accounting firms or deal with consultants who need access to company financial data, online programs make it a snap to share information.

Hassle-free technology. When you use a Web-based accounting system, you don't have to install software or upgrade it each time the vendor releases a new version. And as your company grows, you won't need to worry about outgrowing your system's storage capacity or setting up a network to accommodate multiple users. The service provider will handle these things.

Integrated features. Several of today's online accounting packages bridge the gap between offline and online transactions, automatically transferring data from e-commerce transactions into accounting records. But when you use a desktop application, e-sales information usually has to be rekeyed into the accounting system.

You'll need to do some homework to determine whether or not an online accounting and bookkeeping solution is worth your investment. Visit the links in this article to get more information about online accounting solutions and decide if you should keep your books online.

Want to learn about other aspects of business financial management? Our plain-English guide to cash flow management tools explains the numbers you should watch, and it also tells you how to choose a program that can help you analyze your cash flow. Check out The Scoop on Cash Flow Management Tools now!