I made a big jump back in 2010. I decided to try out a few online bookkeeping services...just for fun. I had never considered them a viable alternative to my QuickBooks, but thought it would be an interesting experiment.
Fast forward almost 4 years and I'm using Xero, Freshbooks, Kashoo, and Wave every day. I still use QuickBooks, but it doesn't represent the majority of my time anymore.
That's not to say this change didn't come with some trade offs. Working almost entirely online is very useful, but there are going to be some features and conveniences you will give up when making the switch.
Before you make the jump, here are a few things you'll need to be prepared to give up or change.
Data entry speed
This one isn't maybe. If you do a lot of data entry in a desktop app like QuickBooks, you are going to find it slower working online. The app you have installed on your computer doesn't care if your internet is slow. You can work at home or at a campground and you'll get the same performance. Unless you're running a seriously old computer, you are going to find working online slower than what you're used to. This is especially true for bookkeepers and accountants. If you're used to ripping through a stack of receipts like it was nothing, you are going to feel the difference. I've tried a ton of bookkeeping services, and no matter how good their interface is, they just can't replicate the speed of a local application. Some of the reasons are found in my second point.
This will be more for the power users out there. QuickBooks has a few really useful keyboard shortcuts to help you speed through large stacks of paperwork. Once you learn them, you will really miss them when you move online. Some online services incorporate them. So far, Kashoo is the only one to incorporate my favourite...Ctrl+Enter. In QuickBooks, when you're ready to save a bill or invoice, you press Ctrl+Enter and it saves the invoices and starts a new one. I hate having to take my hands off the keyboard to click the Save and New button. If you enter one or two bills into your software every day, it's not a huge deal. If you have to get through hundreds of bills each day, it quickly takes a toll on your productivity...not to mention the RSI issues. So, if you're used to hitting Ctrl+W to write a cheque, or Ctrl+Del to delete a line...I'm sorry to say those days are now behind you.
Powerful, customizable reports
QuickBooks, at least the version I use, has spoiled me on reports. If you really fill in all the details into every bill or invoice, you can pull out some really great information for yourself or your clients. And, what you can't do directly from a one-click report can be achieved by combining the results of a couple in Excel and working some magic. The point is, QuickBooks lets you track a lot of details. One big example is Class Tracking. If you want to split up your company into departments, and track each one's profitability, you won't find that in many of the online options. Xero has a version of it, which is nice, and Netsuite (more suited to bigger businesses) also has the feature. It's out there, but just don't expect that it will be the norm. Most online options will give you a list of reports you can pull...some better than others. The big problem you'll come across is that most of them aren't as customizable as the one's you'd find in QuickBooks.
Backup I've got all of my client's QuickBooks files set to backup automatically whenever I close the app. It keeps the last 10 (date stamped) versions of the backup somewhere safe, and that folder gets backed up automatically each day. Of course, the reason for that is that QuickBooks used to have a problem with data corruption...especially on large client files. I haven't had a big problem in years, but it's nice to have those backups just in case. Online, your backups are handled by the company hosting the service. I don't get a backup file saved locally from FreshBooks or Xero. And, to be honest, I've only had to deal with an issue once where I needed something restored. I do wish I could have those local backups though. If there was ever a problem, or if the service shut down, I would prefer having a file on my computer that I could restore from. Maybe there are some out there that provide that option...I just haven't come across it yet.
This isn't a loss, but more of a change. If you (and your accountant) are used to sending them a copy of your QuickBooks file at year end, this new system will be different. There's no "file" to send. In this case you can either download reports or give them access to your account. More modern accountants won't have a problem here. Some accountants are fine with this change...others aren't. Make sure to speak to them before making the change so you know how to handle year end.
"There's no free lunch"
Gaining the ability to collaborate in real time with your clients and their data is incredible for both sides. Bookkeepers don't get a frantic call on the weekend demanding that reports get sent over from the local QuickBooks file. Owners don't have to remain in the dark until the next meeting with their bookkeeper. And, with the ability of many services to download your bank transactions automatically, you gain a lot by going online.
I just want to make sure you're aware of the cost you pay for this convenience.
If you know of any other points that you found when making the change, let me know in the comments. I'd also love to hear from companies offering these services if you have been able to address all (or some) of these issues.