Person with laptop using online accounting software

What is online accounting software?

June 28, 2021
With the world becoming increasingly digitalised, more people are choosing to take control of their own finances online, rather than going directly to an accountant or doing their accounting in a spreadsheet themselves.Accounting software is helpful for startups, small business owners and freelancers who want to be in charge of their own accounts without spending too much of their time doing so.Some of the main features of online bookkeeping include tax registration, payroll, expense tracking and financial reporting and forecasting.There’s a wide range of small business accounting software available on the web, and once you’ve got your head around the basics you that online accounting software can save time in the long run, making managing your business a whole lot easier.

What is online accounting software?

Also known as ‘cloud accounting software', online accounting software allows you to keep your business’ books on a remote server, and because the information is encrypted, only those who have the login details can view the data.Most systems have features like filing, invoicing and customer support, so you can keep a record of your expenses, set reminders to file tax returns and VAT returns, manage bills and more.If you’re thinking about using online accounting software for your small business, read on for more information.

How online accounting software works

As mentioned above, web-based accounting software is hosted on a remote server, allowing you to send financial data – such as records of income and expenses – to the cloud, where it is processed before being returned to you. All you need is a strong internet connection and you're good to go.Traditionally, the hard drive on your computer would have been the core accounting system for your business books, but with the cloud data is accessible anytime, anywhere and on any device. Small business owners can access the software applications either via the Internet or another network and because all staff members can access the cloud on their own devices, the company doesn’t have to install software locally on individual desktops. It also means that remote teams can access the same information and the same version of the software.Most systems have tools for invoicing, recording expenses and creating financial reports, filing a tax return, managing bills and payroll and come with a monthly or yearly subscription fee.

Problems with traditional accounting services

Overhauling the way you do your accounting can sound like a daunting task and it can be tempting to stick with what you know rather than finding the time to learn something new.If you're still unsure about making the leap to a new way of doing your accounting, here are some of the most common problems founders encounter with the 'old school' method of accounting:

It isn’t always optimised

Rather than taking a consistent and methodical approach to your finances, the state of your books comes down to how knowledgeable your accountant is.

It’s much slower

Since everything is done manually, it usually takes a few days a month to keep on top of your accounts. If, for example, you want to create a report to give to your accountant, you have to sift through pages of information, much of which will be irrelevant or out-of-date.

You have to wait for a response

Smaller businesses sometimes find that accountants don’t come back to them straight away. It’s normal to wait a few days or a week for an answer to your question.

There’s more margin for error

It is likely that your financial information will be recorded in a variety of ways and in different places, meaning data is harder to make sense of. Also, if you’re using an Excel document to record data, you need to make sure the formulas and shortcuts you’re using are correct, otherwise, you could find yourself at a complete loss.

Other drawbacks

    Hiring an accountant can be expensiveMany accountants use financial jargon that's difficult to understandYou don't have full control over your financesAccessing real-time data instantly can be tricky

The benefits of online accounting software

Available any time and anywhere

You have the flexibility to run your business remotely, whether you’re at work, at home or on the move. With a cloud-based software system, you also don't need to worry about all the time-consuming downloads and updates that come with traditional software.

Your finances in one place

All of your business's financial information is kept together and well-organised. Navigating where you want to get to from your homepage is quick and easy.

Security

The cloud is one of the safest ways to store information, and you can trust that your data security and privacy will always be protected from hackers and loss. Because your information is stored on a secure server rather than on your hard drive, you don’t have to worry if your laptop is damaged or gets stolen.You can also invite other users to view your data and control their level of access, making it more secure than emailing your information or sharing it via an external hard drive. Your online accounting software package includes data backup and recovery if things go wrong too.

Real-time data

When your information lives on the cloud, you can get a completely up-to-date view of your business finances, which can in turn help you to make informed financial decisions about the future of your business.

More interaction

Online accounting software makes it easier to collaborate with other people, like your employees and advisors, as it allows for multi-user access. You can easily generate any reports you may have been asked for and employee portals can encourage communication and collaboration. Online payments make it quicker for you to pay bills to vendors and receive money from your customers.

Greater accuracy

As long as you’re entering your income and expenses on a regular basis, you should be able to generate an accurate report at any time. The margin for error is lower with web-based software because all your financial information is being entered in one place.

Easy and cheap to install

Cloud-based accounting software is hosted online, so all you need to do is simply download and install an app to get the most use out of the product.What’s more, all the maintenance, including routine backups, is done for you, to save you time and money. Software updates can also be delivered faster and more easily in the cloud, allowing you to have instant access to new features without worrying about installing the latest version.

Saves on office space

It can be stressful handling your own finances when you have paperwork and files everywhere. Sifting through receipts, invoices and bank statements can be a time-consuming task, but with online accounting software, you can import all the relevant data to view everything more clearly.

The benefits of using Ember

As well as benefitting from all the features listed above, our customers experience an even higher level of service with us:

Access from any device

Ember allows you to install the software on both your desktop and your handheld device, all via a mobile app.

Clever features

Connecting the software to your business bank account can save you a great deal of data entry, as the transactions can be automatically recorded from the bank to your books, while automation means you can send out invoices to recurring customers and pay a vendor on the same date each month.

Help and support 

Unlike most online accounting software, Ember isn't just a faceless website for inputting data. As well as being there to help you with the software itself, we also give you access to qualified accountants; meaning you can ask all the accounting questions you want to and get answers from fully qualified professionals.With Ember, you're getting knowledgeable accountants who can give instant feedback in easy-to-understand language via our in-app chat, combined with the benefits of online accounting software. Your books are easily accessible and available in real-time, so you can spend minutes doing the things that would usually take a lot longer.