Board members demand transparency in financial statements and benefit from access to timely information. Staffers want easier ways to process transactions, such as publication orders, meeting registration fees, and dues payments. Chapter affiliates want reports faster. Think of all the accounting functions your association handles daily: budgets, order entry, dues, expense reports, accounts receivables and accounts payable, asset management, payroll, chapter or affiliate reports, and investments. You wonder how it all gets done.

Many associations are turning to Web-based accounting systems to simplify financial processes, save money, and create a customer-friendly environment. If your association is considering upgrading its accounting software, now is the time to investigate Web-based systems. They've been around long enough to get the bugs worked out, and if you are able to integrate them with your association management system in the process, you'll see even more benefits. The primary benefits of Web-based accounting systems are

* Access to real-time information. Multiple staff members are able to access financial information from anywhere, at any time.

* Increased security. The encryption used in Web-based systems provides more security, and backups of the systems are routine.

* Enhanced functionality. Web-based systems make integration with other software programs that an association may be using easier, providing the opportunity to streamline financial operations.

Even with all the benefits, here are some important questions to address in evaluating whether a Web-based accounting system is right for your association.

1. WHAT'S THE DIFFERENCE BETWEEN SERVER-BASED AND WEB-BASED SOLUTIONS?

Carlton Collins, an Atlanta-based Certified Public Accountant and consultant, compares Web-based and hosted systems with this analogy:

AVIS rents you a car, but it also rents the same car to other users. The users share the car, while AVIS maintains it. On the other hand, a leasing company leases a car to one individual and maintains it for that individual; it is not shared. Web-based systems work like AVIS, while hosted solutions operate like leasing companies.

Web-based accounting systems generally work on a subscription basis. An application service provider (ASP) provides the software applications, hardware, operating systems, and whatever tools are needed to run the system.

2. HOW MUCH WILL IT COST?

After you identify the accounting system and ASP you prefer for your association, you negotiate a contract for two or three years. Your rates depend on the number of users for whom you want to provide access to the system and the level of sophistication you need. NetSuite, a Web-based solution provider in San Mateo, California, serves more than 7,000 customers and has an accounting module with prices starting as low as $99 per user, per month. Langan Associates, Arlington, Virginia, estimates typical rates for the Langan Intacct Financial Environment (LIFE) range from $250 to $750 per month.

3. WHAT DO YOU GET FOR YOUR MONEY?

Web-based accounting solutions offer most of the features of stand-alone accounting software, but not always all of them. List the shortcomings of your existing system and shop to fill your current and anticipated needs. Some Web-based systems may have limited customization or add-on features. Maintenance, security (firewalls, virus protection), backups, upgrades, and technical assistance are usually included in Web-solution contract prices.

4. IS IT SAFE TO PUT FINANCIAL DATA ON THE WEB?

Collins says, "Sending your data over the Internet is probably far safer than whatever you are currently doing." Server-based systems are subject to theft, fire, and unauthorized access. The encryption used in Web-based systems results in more security, not less, and backups are routine.

5. HOW CAN YOU TELL IF A WEB-BASED SYSTEM IS A GOOD OPTION FOR YOUR ORGANIZATION?

For associations that have offices in several locations, including international sites, Web-based solutions are appealing, since there is easy access from anywhere, at anytime. Web-based systems replace the need for in-house server systems, resulting in lower up-front costs. Because all service, maintenance, and upgrades are included, Web-based solutions are attractive to associations with little money to spend on salaries for in-house information technology staffs. "LIFE is a good fit for trade associations or professional societies with annual budgets of $1 million to $15 or $20 million," says Nat Bartholomew, partner, Langan Associates. "It might not be right for AARP, but for 95 percent of associations, it can be a good fit."

"Bigger associations have a more pressing need to efficiently manage paperwork and more members," says Jonathan Falker, director of sales for ARC Solutions, Inc., Washington, D.C., a provider of Web-based association management solutions that include accounting modules. "But smaller associations can benefit, too, and the long-term return on investment is good, sometimes allowing an association to recoup its investment in only a couple of years through new cost efficiencies."

The American Association for State and Local History, Nashville, has been using Association Anywhere, an association management package from Association Consulting Group, Inc., headquartered in Columbia, Maryland, for more than 18 months. Terry Davis, president and CEO of AASLH, says that being able to implement remote access accounting was important because her director of finance telecommutes half the week. Although this might seem like a special case, the popularity of telecommuting and the need for staff to access systems while traveling or while working from multiple offices makes remote access an important feature.

6. WHAT ARE THE TRAINING ISSUES FOR CURRENT STAFF?

Using a Web-based accounting system is really no different from using a stand-alone software package. Like using any new software, you can expect an adjustment period. Steve Cathcart, a Langan Associates Certified Public Accountant who serves as manager of the financial services center for the American College of Obstetricians and Gynecologists (ACOG) in Washington, D.C., was an early adopter of the LIFE system. He admits to "agonizing over the decision, mostly because of retraining issues," but it took only two monthly cycles to get comfortable with the new system and he's had no problems in the year he's used it.

Steve Sitrin, director of the National Society of Collegiate Scholars(NSCS), Washington, D.C., and a NetSuite user, says his association had a half-day training session for the staff who would use the system, and everyone was comfortable with it in a couple of days.

AASLH's director of finance had an "immediate comfort level" with Association Anywhere's accounting package, Davis says. About two thirds of the AASLH staff trained on the accounting module, and staff members were cross-trained in other modules they use. "You don't need an IT person necessarily," Davis says, "but it helps if there's someone on staff who can learn the system in depth and understand how your work fits into the system's capabilities."

7. WHAT HAPPENS IF THE INTERNET CONNECTION IS DOWN OR UPGRADES NEED TO BE LOADED?

An Internet disruption results in the same thing that happens if your server is down with a traditional application. You temporarily lose access to your Web-based software. Cathcart says before switching to an online solution, he had trouble with his accounting software every time a change or update was made to ACOG's network. With the new system, he says, "we've had essentially no down time at all, and when the supplier makes upgrades, there's no interruption in service."

8. WHAT ARE THE REAL PRICE DIFFERENCES BETWEEN TRADITIONAL AND WEB-BASED ACCOUNTING SOFTWARE?

Sitrin says that for an association like NSCS, with a $5 million annual budget, the up-front price difference is significant. "It would cost me maybe $100,000 [up front] to invest in and customize another system, when I can have a user-friendly Web-based system for a few thousand dollars a year," he says.

Zach Nelson, president and CEO of NetSuite, adds that most analysts estimate maintenance costs at one to four times less than the original license price for traditional software. "Since NetSuite is a service, that means we handle all the maintenance, upgrades, and so forth, so NetSuite saves customers enormous amounts of money."

Collins agrees that in apples-to-apples cost comparisons--including software, consultants/technologists, maintenance, file servers, firewalls, virus protection, and backups--Web-based systems are "always cheaper up front to get started." Bartholomew adds that initial costs depend on the complexity. "But you can have a Web-based system up and running for an average of $5,000-$10,000 depending on the amount of customization and integration required," he says.

9. WHAT'S INVOLVED IN MAKING THE SWITCH TO A WEB-BASED ACCOUNTING SYSTEM?

"The biggest problem is taking the leap of faith," says Sitrin. "Some people still fear a control issue. We used the opportunity to modify some of our reports. It was not a complicated issue to transpose data. It took just a few hours."

Bartholomew agrees that transferring data from another system is not a problem. "Generally it's as simple as extracting the data, often to Excel spreadsheets, and importing it to the new system. Depending on the amount of data that has to be moved, it may take as little as a few hours and probably no more than a couple of days."

10. BESIDES PRICE, WHAT ARE THE BIG ADVANTAGES OF HAVING A WEB-BASED ACCOUNTING SYSTEM?

"Transparency is a word you hear often these days," says Bartholomew. "With a Web-based system, the CEO, CFO, and board treasurer can log on from anywhere and be looking at the same reports together in real time. That's something you can't get on a server-based system."

Cathcart says ACOG is saving the costs involved in printing, sorting, and mailing monthly financial reports to its district and section components

and international affiliates. "And what's more, it's an improvement from a client service standpoint," he says. "The reports are e-mailed as PDF files. They arrive a week to 10 days earlier than before, and they're not as intimidating as a heavy stack of paper."

The biggest advantage for AASLH, says Davis, was the opportunity to create e-commerce and to merge the numerous individual databases her staff was using. "We are just now able to quantify the massive cost savings in staff time, and we're seeing other revenues from e-marketing as a result of going to a Web-based system."

ARC Solutions' Falker thinks one of the main benefits of a fully Web-based accounting solution that is integrated with an association's association management software system is the reduction of staff time spent on data entry by encouraging and facilitating members' ability to do it themselves online. Associations essentially outsource to members the time involved in dues payments, purchases, record updates, and other transactions that used to include paper trails. "And rather than making members feel burdened, it helps them feel involved and important," he says.

Linda C. Chandler is a freelance writer and editor based in Tyler, Texas. E-mail: linda.chandler@earthlink.net.

ILLUSTRATION BY DAN W. AUSTELL III