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ICAEW runs the rule over internet accounting

13th Jan 2009
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The ICAEW's IT Faculty has published a guide to online accounting options, adding weight to the momentum that is building up around internet accounting. John Stokdyk reports.

Online systems reviewed

accountsIQ "can offer practices a really smart way of exploiting the potential value-added and revenue-generating benefits of online accounting."

Liberty Accounts "looks like a very appealing prospect for small firms and sole practitioners that want to streamline compliance work and spend more time on value-added services."

Liquid Accounts has the potential to grow along with the business, and create revenue-generating possibilities for accountants.

Sage 50 from Sage and Online 50 has withstood the test of time. Because Sage 50 can be accessed online or on-premise, it arguably has better upgrade potential.

WinWeb OnlineOffice takes an ambitious holistic approach - "a great system, particularly for accountants."

Prompted by the rapid increase in both supplier and user numbers, the report states that with electronic filing becoming the norm for statutory returns, online accounting now seems "more like an idea whose time has come".

The report sets out the pros and cons of online accounting for both business and practice users, and pays particular attention to the possibilities for practitioners who serve their clients via web-based systems. As well as listing more than 30 services, the guide includes more detailed reviews of six systems (see box right).

Accounting in "the Cloud" makes it easier for both clients and accountants to access records at any time, from any internet location. The accountant can gain a much more intimate view of clients' books and use this as a platform for a wider array of services including management reporting and "virtual FD" roles.

Report author Lesley Meall sets out other arguments for the time and cost savings of Cloud accounting and explains the benefits that come from reduced system administration requirements and up front costs.

Traditionally, practitioners have viewed the idea of putting accounts data on the Internet with suspicion, but the ICAEW guide points out that "good online service providers usually have the resources and expertise to guard your data much better than you could ever hope to".

Anyone looking into this area should educate themselves about information security and probe prospective suppliers very carefully about their security precautions. But in the end, the decision boils down to trust. If accountancy firms do not feel comfortable trusting a third party with client data, then perhaps online accounting is not the best solution.

The 30-page IT Faculty Online Accounting Software Guide is priced at £45, or free to members. A subscription for 2009 costs £95 and entitles members to access all of the IT Faculty's publications. Find out more here.

Further reading

For more coverage of the world of Cloud computing - from accountancy to CRM and HR - visit our new sister site,


Replies (9)

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By Fusion Accounts
23rd Jan 2009 15:05

I agree with Mark in that 'there is a need for this type of information in order to help practices come to terms with online accounting'

However we were disappointed to see that it did not include all online providers as we too had been excluded.

Kathryn Convery
Fusion Accounts

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By mkcdavies
19th Jan 2009 12:09

The report DOES have value
I agree with Duane about the costs. We chose to advertise, but the cost for being one of the "reviewed" products was far too high, especially as there is no assessement of each product's capability vs. the others.

However, it should not be completely rubbished. The first 15 pages of the report are useful for gaining a better understanding of online accounting. As I said in my earlier post on this thread, there is a need for this type of information in order to help practices come to terms with online accounting..

Mark Davies
UK Country Manager, e-conomic
Freedom from Evil

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By User deleted
17th Jan 2009 06:44

ICAEW credibility ......
Duane - So a truly impartial assessment based upon 'best of breed' !!!

How disappointing but sadly the way of the world nowadays - nevertheless, being an accountancy body one hopes they 'qualified their report' in the normal audit manner by failing to give a 'true & fair view'

Here is a thought - for the future perhaps ICAEW should take the Google Adwords approach and offer the best review to the highest bidder

mmm ...... Does wonders for the credibility of the ICAEW

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Duane Jackson
By DuaneJAckson
16th Jan 2009 21:35

Overpriced Adverts
Unfortunately this guide is just overpriced adverts.
KashFlow, Xero and Twinfield - all notable players in the online accounting market - aren't listed because they refused to pay to be included. More at at: ICAEW Report

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By User deleted
16th Jan 2009 15:44

Oh no! ... not citrix style apps again ...thought we had moved o
Quite right Mark

As discussions have said time & time again the SaaS approach is a fundamental redesign from the gound up and not a quick fix to port legacy apps so that the vendors can claim an 'online' status.

One would hope that the aforementioned ICAEW report makes a clear distinction between the 'Citrix' approach and genuine SaaS products

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By mkcdavies
16th Jan 2009 11:22

Get educated, don't be misled!
Diamond Online (which has been shamelessly plugged below without making a useful contribution to the discussion) is like Sage Online and a number of other solutions that include the word "online" in their name. They may have it in their name, but they are in the technological stone age.

They do the accounting and software industries a disservice by bracketing themselves with the new wave of web-based solutions, when what they provide is like the ASP services that fell flat in the first wave of online accounting, which failed because of high costs, poor performance and a quality of service not at the level needed by accountants with responsibilities to clients.

The vendors to work with are those who provide clarity about who they are, their commercial model, their security and operational arrangements, etc. It’s surprising how many refuse to provide up front clarity on their web site. What have they got to hide?

You don't need to be a geek to understand this issue. The aforementioned applications result in extra costs and poorer performance. Why? Because they can only be made available over a web-based connection via intermediate software that makes the accounting application “think” that you’re locally connected to the server. Not only do true web-architected applications not need this, they provide unparalleled low cost per client, better performance, more accessible tools and simpler data management.

A number of reliable vendors deliver the real web experience, e-conomic is not the only one. It doesn't take much research to find out who they are. See whether they provide key information on their web site and whether you can take a trial of the actual software without having to ring the vendor first, make a commitment or download any software.

Already there are tens of thousands of companies keeping their accounts in web-based accounting systems - enough (in some cases) to show that there are proven solutions. Some vendors provide accountant-focused tools enabling practices to combine improved efficiency with new client services. When up and running, this drives revenue and profitability in a way that’s simply not possible with old systems and old operating models.

Don’t take my word for it – open the white paper What Accountants Say to read the comments of others in the accounting industry with the same challenges as you.

Mark Davies
UK Country Manager, e-conomic
Freedom from Evil

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Tony Margaritelli, ICPA Chairman
By Tony Margaritelli
16th Jan 2009 09:02

Diamond Online and ICPA
ICPA members will be familiar with Diamond Online the accredited online accounting suite.

This product is available now to members with a cash back offer that means practice costs of nil whilst adding a new income stream and frankly making handling client's bookeeping and accounting so much easier than before.

We at the ICPA believe that online accounting is the future and Diamond Online is our chosen route to that future.

To find out more just checkout and

Tony Margaritelli - Chairman ICPA

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By david_terrar
15th Jan 2009 07:16

Don't forget the others
There are some solutions that decided not to be included in detail in the report, like Kashflow and Twinfield. It's also well worth checking out the Nigel Harris reviews of the various solutions here on AccountingWEB.

David Terrar
Business Two Zero and WordFrame and Twinfield

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By Richard Holmes
14th Jan 2009 10:47

Link to site
Hi John, thanks for the mention. I just thought that I would add a link to our site too. Hope that's ok.

Richard Holmes

Liquid Accounts

Online Accounting Software Since 2001
Winner 2008 Software Satisfaction Award - Web Hosted Software

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