|ONLINE ACCOUNTING – the perfect solution for the smaller business
by Marnus Coetzee, Director at FinFive
Software as a Service (SaaS) is a trend that has seen phenomenal growth within the IT sector, and one of the most recent products to be offered as a service is that of online, or web-based, accounting. Offering the same features and functionality as traditional accounting software packages, but with a much reduced price tag, online accounting is a SaaS that holds particular relevance for the South African market.
Small and medium enterprises (SMEs) thrive in the local business environment, and while these enterprises have many of the same requirements as larger organisations, they have other considerations, such as price tag, to factor into the equation. Added to that the growing move towards a completely mobile workforce, especially with smaller businesses, and the appeal of online accounting packages becomes evident.
Online accounting packages offer hosted websites where clients and bookkeepers can log onto the company books via the web, negating the need to buy individual software licenses for each user and dramatically driving down costs, as the payment model often allows users to pay only for the time they are using the service. And because the service is hosted online, the functionality of the accounting package is available anytime, anywhere where the user has internet connectivity, and mobile workers can scan and upload documents wherever they are, making working on the move an even more viable option.
Another major benefit of hosted accounting software, especially for the SME, is access to the latest and most up to date packages, without the need to continually purchase costly upgrades to the system. Storage is also taken care of, as the service provider will handle the necessary space requirements, allowing for cost saving in terms of storage hardware.
Among small businesses it is common practice to outsource the accounting side of the business, but this can create issues all of its own. When the company’s books are kept on one or a couple of machines, and problems arise, the accountant has to drive out to the client to sort out the problem, a practice that can be time consuming and costly. However with a hosted accounting package the accountant can log on to the company books from anywhere, streamlining the process considerably and making it more time efficient and cost effective.
However, perhaps one of the most attractive features of an online accounting service in this country is the ability it creates to easily back up financial data. All of the data entered into the online accounting system is stored elsewhere on a third part server, and not on the physical machines of the business, meaning that if the business is the victim of theft, and computers are stolen, all of the financial data is safely stored and can still be accessed by the business, instead of being lost along with the physical assets of the organisation. In a time when robbery abounds, especially among small and home offices, this ability cannot be understated.
It is important to bear in mind though that data is only useful if it is relevant and applicable to the organisation. Online accounting enables an enterprise to save money on software, freeing up this cash and enabling the business to hire an external accountant to help effectively analyse and interpret financial data. With all of the benefits online accounting provides, it is important to choose a reputable service provider or consultancy, as downtime due to data corruption or data loss could be detrimental to a business.
Consultancies like FinFive, who are experts in the field with a reputation for excellence, will add value by enabling companies to use this relevant interpreted data to make better management decisions. Clients will have access to their financial information and can help accountants to pinpoint queries or problems, which the accountant can then resolve quickly and easily. Having this type of information at your fingertips is an important tool to help manage a business proactively, something which becomes increasingly important in tough economic times.
While the concept of online accounting is fairly new, international trends show that the ability to make quick decisions based on relevant and up-to-the-minute financial data can give companies significant competitive advantage. In South Africa, internet connectivity issues and cost may have been barriers to entry for this type of service, however with the Seacom cable due to be online in the country in June, bandwidth speeds are expected to increase and prices to drop considerably, removing this hurdle and making the possibility of online hosted services even more attractive.
The SME market is one that is growing and will continue to grow in the country, and with the expected improvements in internet connectivity, as well as the numerous benefits in terms of price, ease of use and improved efficiency of online accounting packages, this SaaS is sure to see growth in South Africa in years to come.