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5 Things to Consider With Online Accounting

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Online accounting can help your business.

There are many good reasons to use online accounting, but any decision to adopt a cloud computing method of working brings risks, so what are the things you should look for when choosing an online accounting partner?

You should be looking for:

1. Some proof of service levels and clear charges.

It is essential to choose a service provider who is able to demonstrate their service to you and to reassure you that what they are offering matches your needs. When you use the cloud for your accounting you will normally pay a monthly subscription according to the service level you choose. In most cases, subscriptions can be increased and in some cases may be decreased as your needs change. Although you will not be able to gain access to the technical side of the arrangement, your service provider should be able to give you all the peace of mind you need through physical demonstrations and a written service agreement that they take their technical responsibilities seriously. The agreement should include information about service availability, response times if there are problems and history of downtime. It should also give you some commitment to the amount of notice you will have if there is planned downtime.

2. A clear license agreement.

In most cases, when you get involved in accounting on the cloud, or online accounting, you’ll be provided with a license for the software you have paid to access. Normally, this license will apply to you and only to you and is almost certain to reinforce that you will be in breach of contract if you copy or amend the software in any way. In certain cases however, for example, where open source software is being used, you’ll be allowed limited rights to copy, modify or redistribute the software.

3. Peace of mind regarding overall security.

When it comes to online accounting, it’s important to know that your data is secure. You need to know that the physical location where your data will be stored is secure and that the technology itself is secure. While few providers will give information about the physical location of their servers, they should be able to reassure you by providing some sort of evidence that they have made every effort to ensure that it is safe and secure. When it comes to logistical security, it’s best to look out for impartial, third party certification, accreditation or compliance to the likes of ISO or IEC information security standards.

4. Evidence that your data is being well managed.

Data management takes into account things like data protection and data storage and processing. In an online accounting arrangement, you, the client is deemed to be the data controller and the service provider the data processor. Service providers reserve the right to remove data from their servers that is deemed to be illegal, offensive or defamatory and won’t normally take responsibility or accept liability for data loss or data corruption. It is the responsibility of the client (or customer) to make sure that they respect any data protection rules that apply to the data that they hold and process and it’s up to the service provider to ensure that the security procedures they have in place are sufficient. At this moment in time, data protection regulation isn’t particularly suited to cloud computing, but The European Commission is currently studying ways of making it more suitable.

5. Your contract.

The contract between you and your online accounting provider should reassure you that the provider you’ve selected is financially sound, reputable and reliable. It should also include some element of indemnity in the event of data loss. You’re likely to find that the contract that you enter into is fairly standard across the board, unless you have negotiated a high value, bespoke deal with your provider. Before signing any contract, it’s worth double-checking that it makes appropriate and acceptable reference to liability, service commitment, data protection, intellectual property rights and how to get out of the contract should you need to.

When you’re choosing the best online accounting solution for you, the most important thing to establish is that the service on offer matches your needs perfectly. Once you have satisfied yourself that this is the case, it’s a case of drilling down to find out more about security, data protection and contract details.

About the Author

This article was written by business contributor Paul Marsden.

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Author:Paul Marsden

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

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