Does SaaS Make Sense for Your Small Business Clients?
We’ve been talking about software-as-a-service (SaaS) for years. For the uninitiated, SaaS is web-based software that users basically rent or subscribe to, as opposed to owning it on CD or on an actual computer (on premises). There is more to the definition of SaaS, of course, and there’s a lot of subjectivity in those definitions.
Note: This review covers SaaS/Web-based accounting systems. Click here for our 2011 review of locally-installed (on-premise) small business accounting systems.
A frequent argument has to do with whether a program is simply a regular product that’s been installed on a computer owned by the vendor or a service provider (“hosted”) and that the user then remotely accesses; as opposed to a program that was built from the ground up as a web-based system and doesn’t exist in any other format.
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Regardless of these and other points of debate, the end result for most users is the ability to access the program anytime and from anywhere, with no manual installation or updating required. They also have the knowledge that the program and data is safe from local potential disasters (flood, fire, theft, etc.), and can be made accessible to others if desired. Many vendors also offer integration with other web-based tools and applications to extend the reach of their products.
When it comes to web-based small business accounting programs, there are many benefits to these remote access capabilities, foremost being the convenience and instant accessibility to data. But it also simplifies collaboration with staff, vendors and customers, and providing them with the ability to allow their outside accountant the same anytime/anywhere access.
This could very well spell the end of write-up as we know it. In this model, businesses will no longer copy or otherwise transfer their transactional data to their accountant, which eliminates data sync issues and many other headaches. The accounting firm’s service may change to a diagnostic analysis of a company’s files or to assist the client with occasional procedures such as minor adjustments, reconciliations or other tasks.
This change could even help strengthen client relationships and can greatly expand the potential for clients, since they no longer need to be local. Some new practices, such as New Vision CPA Group (www.NewVisionCPAGroup.com), Blumer CPAs (www.blumercpas.com) and Kara Haas (www.DeductMe.com) are even building this into their model, preferring clients who use SaaS so that they are able to service them remotely.
Additional benefits from true web-based systems for small businesses include the ability to work with clients in a more digital/less paper way, such as having portals through which customers can check on orders, exchange documents, pay invoices electronically or browse an integrated e-commerce section. Vendors, too, can be offered access to their histories and other data. Other web-based features can even allow for automated integration with financial institution data, simplifying the account reconciliation process.
Although web-based business management software offers many benefits, and systems are generally available for large and small entities, some industries are not yet quite suited for this model. Industries that may find SaaS solutions do not currently meet their needs include heavy store-front retail/point-of-sale environments, those who work with multi-part items and manufacturers.
For most small businesses with a few locations or remote staff who are focused on professional services and consulting, SaaS solutions may be a great fit. Common benefits include lightened IT requirements, greater productivity and an improved relationship with their outside professional accountant.