Should I Be Bookkeeping Online Or Offline? The Pros And Cons

Changing from offline to online accounting software can seem daunting, and you may find yourself questioning whether the change is really right for you.

To help you decide which route to take, we’ve outlined some pros and cons for both.

Online bookkeeping

Pros

• Streamlined data: With cloud-based accounting software, you only have a single platform to work with. This simplifies the route to finding the data you’d like to view. Everything you need is in one place and is easily accessible by different users. This heightened collaboration also means that you can invite your accountant to review your bookkeeping, work on it with colleagues, and issue reports – regardless of location.
• Automatic settings: Online accounting software negates the need to install, register, backup and update as you have to with on-premise or installed software. With cloud-based tools, the author (e.g. Liquid) does it all for you! Additionally, it automatically updates your data, removing the need for you to manually check through tons of entries and giving you the time to focus your attention on other tasks.
• Accessibility: This is a huge advantage that bookkeeping software Going online enables you to access your information on any device that has that software installed, so if your laptop breaks, you can still access it through other means.

Cons

• Hacking: In having everything as online data, there is the potential that you could be hacked. Whilst you run this risk with almost any piece of tech, you can avoid it by choosing a good online business accounts software. Many options store your information in well-protected data centres and are programmed to effectively guard it from hackers or malware – do you believe your PC or server is more secure than a cloud server managed in a data centre by hundreds of professionals using the latest technology?
• All data is stored in one place: Despite effectively streamlining your operations, one issue with having everything stored in one place is that corruption could result in the loss of important data. To avoid this, choose a platform that offers you built-in and off-site backup so that if something does happen to your data, it is easily retrievable from another source.
• Internet-dependent: Whilst online bookkeeping prevents a laptop breakage from affecting your work, it is reliant on an internet connection. HMRC’s move to digitalisation additionally means that an internet connection is now a basic requirement of bookkeeping software, whether online or offline.

Offline bookkeeping

Pros

• Cost: Some online bookkeeping payment plans can be rigid and expensive. Offline bookkeeping, therefore, can be seen as cheaper – but bear in mind that not all accountants offer bookkeeping services, leading you to search for a separate bookkeeper and forcing you to invest more money.
• Speed: Online bookkeeping programs are fast, depending on the brand that you go with. Some offer very poor service, and it is in these cases where offline bookkeeping would be better – with the added benefit of not being internet-dependent.
• More control over your data: The reason why many businesses may put off transitioning to online bookkeeping is that they are worried about losing the control they currently have over data entry and paperwork. Handing over important and confidential information to a non-physical entity requires a lot of trust. However, the automatic updating of information can enable businesses to efficiently sort their finances – and HMRC are moving towards making this a requirement under Making Tax Digital. If you’re finding your current timing and procedures for offline bookkeeping burdensome, you should consider switching. If you don’t mind investing the time, offline is still a good method to use.

Cons

• Admin-heavy: Offline bookkeeping can be extremely time-consuming. Relying on employees to sort the information can be inefficient and requires more paperwork and data input, which also gives way to increased occurrences of human error. Even where paper is used for record-keeping, you will still need a device to input all the data onto spreadsheets and the like.
• Delays: Unlike online bookkeeping software, offline data is not presented in real time. This can lead to miscommunication and generally slows down bookkeeping practices, which is a significant issue when you have to balance numerous data-handling processes for things like tax and payroll.
• Limited accessibility: Relying on offline desktop programs means you can only sort your bookkeeping data using your computer. These are not typically designed for collaborative projects, restricting employees to meeting at specific times and places.

Despite the minor issues listed above for online bookkeeping, these heavily depend on the software and packages you decide to use. With the right platform and plan, online bookkeeping can, without doubt, offer you increased flexibility and allow for improved efficiency.

If you’re thinking about switching to online bookkeeping or want to change providers, get in touch with our helpful team on 0161 413 5050. We can tell you more about the small business accounting software solutions that we offer and how they can help you. You can also email us at info@liquidaccounts.com.