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What is Online Accounting & Bookkeeping?

Over the last few years a number of different online accounting & bookkeeping services & products have arisen.   This page takes a general look at these.  It’s generally accepted that online accounting & bookkeeping is the process of undertaking accounting or bookkeeping work over the Internet using software. There are several different versions of this based on how the software is accessed.   The company that provides access to the software may well be different to the company that actually does the accounting/bookkeeping work.

 

Web Based

This is where the software is hosted on a web server on the Internet & the user accesses the software via their web browser.    Examples of this are:

 

Quickbooks Online  

http://oe.quickbooks.com/complete_features.cfm

 

ePeachtree

http://www.peachtree.com/epeachtree/

 

Application Service Provider (ASP) Hosted

This is where standard desktop accounting software is run on a remote server and the user can access, a live terminal session (or remote desktop).  For Windows this is referred to as Terminal Services & the user would see a normal Windows desktop with their software installed.   The only difference is that the Windows session is running on the remote machine instead of the user’s computer.   Often the hosting is provided by a specialist hosting company & the accounting/bookkeeping is done by another:

 

http://www.terminalserviceshosting.com/TSHserver.htm


http://www.itx.net/QuickBooks_Hosting_FAQ_113.asp?Id=7


Remote Access
This is where the software is hosted at the client premises and accessed remotely via the accounting/bookkeeping provider. This is the model that Online Accounting Services uses. Also see:

Sage Remote

http://www.bookcheck.ltd.uk/48/Services/BookCheck-Online-Sage-Remote.aspx

ONLINE ACCOUNTING & BOOKKEEPING MODELS COMPARED

Web Based ASP Hosted Remote Access
Access From Client Premises Requires Internet Requires Internet Only local network required, high reliability
Data Management Data may be saved in more specialised software.  May be difficult to change later Data can be saved in more commonly used software e.g. MYOB, Quickbooks etc. Data can be saved in more commonly used software e.g. MYOB, Quickbooks etc.
Remote Access Reliability Requires Internet but normally hosted in a high reliability data centre Requires Internet but normally hosted in a high reliability data centre Requires Internet but only as reliable as client’s connection.

Remote Access Software

 

No special software required, just web browser Client software normally required such as Windows Remote Desktop client and/or VPN client. Client software normally required such as Windows Remote Desktop client and/or VPN client.
Software Cost Normally no up front software charge but a monthly subscription fee for the software only Either provided by client or provided via monthly subscription fee. Uses client’s existing software.  Client responsible for upgrades.

 

Here's another excellent overview from Liberty Accounts:

http://www.libertyaccounts.com/online_accounting_software_briefing.jsp

Here's a review of serveral online packages:

http://www.readwriteweb.com/archives/online_accounting_state_of_the_market.php