Online Accounting

By Gerry Morris

An Alternative to Traditional Workstation Installed Programs

Over the years I’ve tried several different accounting packages for my practice. The various brands of accounting software have faded in and out of prominence and market share much as have word processing programs. For the past several years Quckbooks from Intuit has been a leader in the field.

I’ve used Quickbooks in one form or the other now for about 15 years. For the first 10 years or so I used Quickbooks Pro, a version of Quickbooks that was loaded on an individual workstation at my office dedicated primarily to accounting. One staff member was assigned to make accounting entries and to perform tasks such as reconciliation of the checkbooks and general maintenance of the accounting records.

The problem with a one computer installation is that access to the accounting records was limited to the user of that computer. In order for me to monitor the finances of my firm I had to request that reports be generated, or go to the computer where Quickbooks Pro was loaded and peruse the program myself. A networked version of the program to allow multiple user access would have cost another few hundred dollars.

Additionally, at year end when it was time to prepare tax returns, we had to load a backup copy of our data onto a CD and mail it to our accountant. Our accountant would reconcile our records and send a disk back to us to correct our data. The system was fairly cumbersome.

About five years ago when I decided to go back to a solo practice, I explored different alternatives to traditional Quickbooks. I discovered that Quickbooks had begun offering an online version of its accounting program. I found that it was a good fit for a practice the size and type of mine.

Quickbooks Online is a subscription service that costs from around $25.00 to $50.00 per month depending on which features you sign up for. The $300 to $600 dollars per year may seem high at first glance. However, I decided it was worth it for the extra convenience and considering that I was usually paying about $200 to $300 per year for upgrades to my computer installed version.

The Online addition operates entirely through your web browser. Once you’re signed up and signed on, the home page automatically downloads java script to your computer to format the browser to display the interface. The program has many of the features familiar to traditional Quickbooks users and to users of other accounting programs. Accounts for income and expenses are set up by the user with templates available for different business types including law offices. Lists of venders are created either one by one or on the fly when bills are paid. Likewise, a client list is created with new entries either added manually or with new income transactions. Check registers are integrated so that when checks are created and printed; entries are made in the appropriate journals. Bills can be generated and printed for mailing or can be emailed to clients. A payroll module can be added that will automatically calculate withholding. The report module provides easy generation of standard reports and is easily configurable for custom reports.

In short, most features available on Quickbooks Pro and on most popular accounting programs are available on Quickbooks Online Edition. The advantage of the online version is convenience. I can access my accounting records from any Internet connected computer at anytime. I frequently access my records to check account balances, payables and receivables. I can generate financial reports quickly from my office or home. I often look at my “books” after hours from home after all the transactions of the day have been entered and make financial decisions in the less hectic atmosphere there.

Communicating my firm’s financial information to my accountant is much easier with Quickbooks Online Edition. The basic monthly rate includes access for three users plus your accountant. My accountant has the password to my accounting records and can access them from his office. His staff can reconcile our banking records and make corrections that appear in real time to the users in our office. We can easily outsource periodic bank account reconciliation and other routine tasks because there is no longer a need to physically transfer the electronic data.

More than one person can easily make accounting entries within the office, if desired, or the same person can use any Internet enabled workstation to work on the books.

With Quickbooks Online Edition, you accounting data is kept by Intuit in its data center. It is secured in accordance VeriSign®, the leading secure sockets layer (SSL) Certificate Authority. I’m not entirely sure what that means but I’m told it’s good enough. The server on which the data is stored is backed up and protected by an uninterruptible power supply. There is hardware redundancy and a host of high tech safeguards that keep the data secure and accessible. I think it is safe to say that Intuit is better at preserving and protecting data than most of us. The data is available 24 hours a day 7 days a week except during short periods of shutdown for periodic maintenance usually scheduled for late evenings. Information on data security can be found at
http://oe.quickbooks.com/security.cfm.

There are some drawbacks to the online edition. Some time keeping and billing packages as well as some case management programs integrate with Quickbooks Pro and other workstation loaded accounting programs. There are no links available to enable those programs to exchange data with Quickbooks Online Edition. I generate my hourly billing statements with Amicus Attorney and enter the total in Quickbooks Online Edition to generate an invoice and bill. Also, I have been told that practices subject to the privacy restrictions of HIPAA cannot use online accounting programs. I am not sure what types of practices have accounting data subject to HIPAA, but if you have that type of practice, online accounting isn’t for you.

After five years of use of the system, I can recommend Quickbooks Online Edition for a small practice. The convenience factors outweigh the drawbacks. You can check out this product at http://oe.quickbooks.com/index.cfm.