1. Do you see any potential disadvantages in using software to automate administrative processes such as accounting and financial reporting? If so, what are they?

2. Why is it important for users of financial accounting and other software packages to restrict access to certain kinds of information in the system?

As more businesses turn to cloud computing, they are making use of SaaS, or software as a service, instead of buying, installing, and maintaining software packages. With SaaS, a company subscribes to a Web site that leases software. The software remains on that provider’s servers. Any approved company employee can access it from anywhere—an in-office computer; an off-site notebook; or even a BlackBerry, iPhone, or other hand-held device with Internet capability. All data are saved and stored on the Web site’s servers. Smaller companies find SaaS offers many benefits. They don’t have to buy expensive software packages, administer the software and on-site servers, or hire IT personnel.

Intacct, based in San José, California, was one of the first online SaaS providers of accounting software. More than 30,000 people across 3,000 companies use its products. Intacct provides two basic packages: Intacct Accounting Edition allows accounting firms and their clients to work on the same financial data simultaneously. It is used mostly by accounting firms whose clients have from five to 100 employees. The second package, called simply Intacct, is used by businesses that have grown too large to use QuickBooks or similar applications from Microsoft or Sage. These businesses generally have 25 to 1,000 employees. In this case, the business has the software and controls access to it; the accounting firm logs in as a user.

Daniel Druker, a senior vice president at Intacct, says, “Our research with the AICPA [American Institute of Certified Public Accountants] shows a 50 percent productivity improvement for accounting firms that switch to SaaS— plus roughly doubling in proactive consultation hours. And firms can serve around 10 percent more clients with the same staff, by reducing time for travel and error fixing.”

One of Intacct’s clients is ASP Global Services (ASPGS), a warehouse management solutions provider. Intacct’s software has enabled ASPGS to modernize and streamline its financial processes. The General Ledger program has improved ASPGS’s ability to plan, budget, report, and analyze its business. The software also enables ASPGS to enter data faster and more efficiently without having to export those data into a program such as Microsoft Excel. Intacct allows ASPGS to see a real-time income statement at any given moment. As a result, ASPGS has more accurate financial reporting and has saved a great deal of time and resources.

Mike Mullane, the CEO of ASPGS, says, “Intacct is a huge time saver for us. With Intacct, there are a lot of processes you can set up once and then let them run automatically going forward. This allows us to be more effective in managing the company and enables us to spend more time looking forward instead of constantly looking at what has already happened.”

Recently Intacct unveiled the latest edition of its financial management and accounting package. The program, called Winter 2010, enables GAAP and analysis without the need for additional software. It also includes modules for such options as accounting, purchasing, business intelligence, multicurrency support, and sales-tax management, among many others. Druker says about the new edition, “Our mindset is: If you’re a small business, why run a system like this yourself. You don’t have to install or configure a thing. We turn it on for you, and you use it as you would use Google or Amazon.”