Thursday, May 25, 2017

The truth about online accounting

I don't see personal computers going away any time soon, so as long as you have and maintain a desktop or laptop, why not utilize it to the fullest?

#1 Security - If you are using your laptop or mobile device on a public wi-fi you are opening yourself up to security breaches. If you are using a "cloud based" solution, all of your financial data is being hosted on a web server, and you don't have control over the security of that server. Many use Amazon servers, and we all know Amazon has been hacked. IT professionals may tell you that the "cloud" is more secure because they have a team of professionals fighting off hacking attempts. Yes, they are being attacked because they are the keepers of the "honey-pot".

#2 Connectivity - You MUST be connected to the internet to access your accounting. While internet is much more stable than it was in the past, but depending upon your network and your bandwidth you will experience inherent latency, slowness and at times simply waiting for your data to refresh and update. Many online accounting software is designed to be used with point & click, or screen tap rather than keyboard input. This will slow your capability to input data efficiently.

#3 Cost - Online solutions are subscription based, usually an annual or monthly fee. You don't have to remember to pay this bill, they auto debit your credit for debit account. One of the most popular programs for small businesses is QuickBooks Pro (QBDT), which costs $200 or less and each version is currently being supported for 3 years. If you look at QuickBooks Online (QBO), "Compare QuickBooks Online to Desktop" Simple Start is basically worthless, you're limited to 20 Vendors (people you spend money with), QBO Essentials cost $24/mo., $288/yr., $864/3 yrs.. Costing you nearly $700 more than QBDT. Essentials is still very basic. Then you look at their QBO Plus offering that one costs you $35/mo., $420/yr., a whopping $1,260/ 3 yrs. That's OVER $1,000 more than QBDT! WoW!

#4 Features - You'd think that if your spending over $1,000 for a 3 year period you'd have a ton of features. NO! Below are the report menu view from QBO Plus and QBDT Premier.

QuickBooks Online Report Menu

QuickBooks Desktop Report Menu

As you can see the QuickBooks Pro/Premier have many more financial reports. (Premier only adds some industry specific reports.) Another major features that is NOT available for QBO is Job Costing. That alone makes this unusable for anyone in the construction industry.

Finally, bookkeepers and accountants are making more money using this software. They can now bill by project rather than hourly. When a bookkeeper comes on-site you receive personalized attention, we delve into more questions than just simply reconciling or processing your A/P, and you pay us by the hour that we're there rather than a flat project fee. I've seen some accounting firms charging $250/mo. for simple bank reconciliations and payroll tax processing. Something I can typically do in an hour or two for $50/hr.