The Future is Finally Here: How Web 2.0 & SaaS are Shaping Your Profession & Your Firm

Technology thought leaders and pundits have been extolling the virtues of web-based applications for more than a decade, boldly proclaiming that the benefits to end users and software developers would completely change how we use the Internet and technology.

Many in the tax and accounting space were, as is their nature, skeptical, and more than a few were concerned about the security implications of client data being outside of the firm’s physical control. These were legitimate questions, of course, but professionals soon realized that their data was often safer in a secure and encrypted data facility than it was in their office, where fire, theft or natural disaster could wipe it out.

The result of this eventual, if reluctant, embrace of remote data tools is that in 2010 there are now web-based options for virtually every professional tax and accounting application. Likewise, while many professionals scoffed at the business value of social interactive sites, a few found ways to use Twitter, LinkedIn and Facebook to their advantage, and are now counseling their peers on how to achieve the same digital success.

Some Brief Definitions
The term SaaS is still not an automatically recognizable acronym by many professionals, even if they may be using it. Simply put, Software-as-a-Service is a different method for software companies to deliver their products, and a different way for professionals to use them. Instead of receiving a program CD or downloading system files and installing them on a computer or server, the programs are essentially installed on a secure server run by the software company, with professionals logging into the program either through a web browser or through a web-synched interface. For payment, instead of paying up front for the current version of the software, users essentially rent the programs, usually for a monthly fee based on the number of users.

Another acronym that’s been around for a couple of decades is ASP, or application service provider. It is a form of SaaS, but one through which traditional, non-web-based programs are offered through a secure hosted network.

Web 2.0 is a much more modern phenomenon, but with a less specific definition. Where basic (or Web 1.0) websites offer information, news and other resources, Web 2.0 sites offer some form of interactivity and collaboration. Facebook and Twitter are often pointed to as examples, but Web 2.0 extends to online banking, blogs, wikis, RSS feeds, GoogleDocs and many other personal and professional applications. They can also be tools, gadgets or widgets that are add-ons to an otherwise static website, creating a more dynamic and useful environment.

The Benefits
The SaaS model holds many benefits for both users and vendors. These usually include anytime/anywhere access, client collaboration tools, and relief from having to install the programs and keep up with updates, since all of this is handled on the back end by the software vendor. Firms can also ramp up very quickly, adding more users or system functions and modules, usually within a few minutes. For the technology vendors, there is no longer a need for shipping, printing and CD costs.

Chicago CPA Jody Padar says the benefits she gets the most value from come in the following order: Client collaboration, anytime/anywhere access, no IT headache, and the savings of her professional time.

  • Client Collaboration
    With a web-based or remotely-hosted program, options such as client portals are often available that let the professional firm share documents and other information with their clients. This is a great productivity boost for tax engagements, but also to other client services.
  • Anytime/Anywhere Access
    Because the bulk of most SaaS systems are hosted on the technology developer’s secure servers, users are usually able to log in and work with their programs and client data from work, home or other computers. However, some programs require small parts or “applets” to be installed on the computer, while a few don’t have this benefit because their locally installed components are too large.
  • Less IT
    Large professional practices often have technology staff on their payroll, but for small and mid-sized firms, installing, reinstalling, updating and generally keeping up with detailed technological issues and other IT stuff is not an expertise they have in-house. So they either waste time troubleshooting it themselves or hire an outside consultant. But with SaaS, almost the entire program is on the vendor’s secure servers, so there’s little if anything to install, and users can access many SaaS programs through their web browser.
  • Time Is Money
    The lessened IT responsibility is probably a greater benefit to small and mid-sized practices like Jody’s, because every hour spent working on IT stuff is an hour that can’t be billed.

The SaaS model offers many more potential benefits, depending on the particular program and the firm. For accounting programs, one of the emerging areas is increased integration with other online systems and data, such as linking live banking account data into the financials for more automated reconciliation. And for web-based professional tax systems, direct integration with advanced online research tools is now standard.

Web-based programs for small business accounting is also a fast area of technology adoption, providing business owners and managers with many of the same benefits above, while allowing their professional accountant to access live client accounting data, which can greatly ease write-up tasks and remove the need for data synching or transfer. Look for our 2010 review of SaaS small business accounting products at and in our June issue 2010.

Web-based programs are also more likely to offer mobile applications for smartphones like the iPhone and BlackBerry, allowing users to access some, or even all, of their program data while visiting a client’s office, eating lunch, waiting on a flight or riding in a taxi.

The Benefits of Web 2.0 & Social Media
Client portals are somewhat of a bridge between the concepts of SaaS and Web 2.0, allowing the professional firm to extend collaboration capabilities and sometimes even program features to their clients remotely. Interactive social websites have become marketing tools for the Facebook and Twitter-inclined, as well as a method for professionals to establish themselves as an expert on particular accounting, taxation or small business management specialties. Our own Scott Cytron has been helping tax and accounting firms use social media strategically, and writes frequently on the topic. (See Social Media in Accounting Firms:; and Leveraging Social Media to Build Your Business:

Looking to the Future
As technology invariably marches onward, the SaaS model will gradually become the predominant way we use computer programs for our professional and social lives. From there, it will be just a very short step to the full cloud-based infrastructure, where all of our data and programs are hosted. Yes, it can seem a little scary, but reliance on technology is not necessarily risk-prone, so long as proper security and rules are maintained. The benefits will far outweigh the risks, especially in terms of professional productivity.

SaaS Programs Available for the Professional Tax & Accounting Practice

Professional Tax Compliance/Research/Planning

Document Management

  • Virtually all professional document management and storage systems are now available in SaaS models. Please see the latest review of these programs at (Please also note that we will be covering document storage products in our upcoming July 2010 issue.)


Trial Balance

Practice Management

Time & Billing




Fixed Assets

Many traditional programs can also be used as a hosted SaaS program by using an application service provier (ASP), including professional tax and accounting programs not on the list above, plus general business and productivity tools like Microsoft Office.

If you know of other programs that belong on any of the above lists, please send an email to my attention at so I can add it right away.