So you have decided to take your accounting online. You are always on the go and it makes life easy for you. Here are some things for you to consider.
1. Some online systems are not as robust as the desktop. Wave for example doesn’t let you put in a closing date, so it’s easy to change information in a prior year. Think that’s a good thing? Just ask your accountant what they think about prior year changes. You may find that using a tool like Wave increases your year end fees.
2. Many online systems don’t use account numbers. While this makes the accounting system seem more friendly, the accounting systems that your accountant uses, has account numbers. It makes setting up your year file just a bit more difficult, and more difficult often means more expensive.
3. Many of these online systems are subscription based, so as soon as you quit paying you lose access to your data. Except for printing all the transactions to PDF or exporting to excel, there really isn’t an easy way to back up your information.
4. You don’t know where your data is, nor who has access to it. It seems like everyday there is a report of a ‘data’ breach somewhere. Once you put your data online you lose control of it.
5. CRA hasn’t yet come around to online accounting systems, see the following from the CRA website site.
Your obligations for maintaining, retaining, and safeguarding books and records when conducting business on the Internet are the same as for any other type of business operation.
These records must be sufficient to determine and verify your tax obligations.
You must keep your business records for a minimum of six years from the end of the latest year to which they relate unless written permission is given by the Canada Revenue Agency (CRA).
- must be maintained in Canada unless permission is granted by the CRA to maintain them elsewhere;
- must be made available to CRA officials upon request; and
- include electronic records that are maintained and created by computerized record keeping systems.
So yes the online accounting systems can be convenient, but like anything in the cloud — just be cautious.