As a solopreneur or small business owner, it’s likely you’re the one responsible for tracking your business’s revenues, expenses, payments, deposits, etc. Whether you decide to do that manually through excel spreadsheets or paper records, buy desktop accounting software, or go with an online solution, you need to maintain accurate and up-to-date accounting information.
With the convenience and level of comfort with cloud computing solutions growing, many entrepreneurs are turning to online platforms like Quickbooks Online, FreshBooks, and others to manage their financial records.
Could a cloud-based solution be right for you? Here are some of the perks and pitfalls to consider:
- Platforms are easy to access. (Because they’re online, you can access the solutions from anywhere. Some offer access via mobile apps, too.)
- Most are very easy to use.
- Software is automatically updated by the solution providers (no need to purchase updates).
- Cloud computing solutions are subscription based with a generally low monthly fee. (Payments are set up to process automatically. There’s no large upfront investment.)
- Data is automatically backed up by the solution providers.
- Data security is managed by the solution providers.
- Over time, paying for a monthly subscription may add up to more than buying desktop accounting software (which typically needs to be updated every four to five years).
- Cloud accounting software may lack some of the capabilities desktop solutions provide.
- They’re dependent on an internet connection. (If your internet connectivity is down, so is your ability to use the platform.)
- You might not be able to make a backup of your data and export it or save it to your own computer. That could make it difficult to change to a different solution. (And if you decide to close your business, you might be stuck paying the monthly subscription so you can keep long-term records as required by the IRS.)
Want to learn more about the pros and cons of cloud-based accounting platforms?
Here are two articles that provide helpful insight:
The Best Cloud-Based Accounting Services for Small Business via PC Mag
Best Accounting Software for Small Business 2015 via Business News Daily
Ultimately, it’s up to you to decide which systems of bookkeeping and accounting will work best for you. But that doesn’t mean you couldn’t benefit from a little direction. As you’re setting up your business processes and exploring options, talk with a trusted accounting professional. Also, turn to a SCORE Maine mentor for guidance. SCORE provides mentoring for free. With practical knowledge about all aspects of starting and running a business, we have Certified mentors with the expertise and business experience to help you succeed.