I read an interesting viewpoint about Xero - their terms and conditions (which like 99.9% of people I'd never read) are a bit worrying. However looking at the subject a bit closer, it seems the same basic issues apply to pretty much all on-line systems - although I haven't sat down and read them all. So I thought I'd pass this on to those who use, or might use, on-line systems. And for those who think that's irrelevant to them, think on.

 

Reckon (QuickBooks) has launched it's "new and improved" on-line system. Their base product will only cost $5 per month - substantially less than Xero's $50 per month. Of course that's the base product - it's likely to cost an extra $5 per month for each extra feature - and I'm not sure which features are chargeable - but it could include invoicing, stock, FX, on-line banking, job-costing and payroll. So could cost nearer to $25 per month. That's still 1/2 Xero's fee - and probably still cheaper than MYOB.

 

The article about these terms and conditions pointed out that there could come a day when these systems are suddenly unavailable. In theory you could have no access to your data, and no enforceable rights to get it. Now these suppliers are not using Megaupload type suppliers, so it's not highly likely. If they got into financial trouble, they'd probably negotiate a way out - perhaps a sale to a third party or some alternative. So realistically the chances of losing data are remote - but it's still a possibility.

 

I have a similar situation with this (and another) website. The last major upgrade I did means the site is now only on the Internet. Previously I'd develop it locally, and then update it on the Internet when it was ready to go. Now it's all done on the Internet.

 

While internet-based suppliers generally have robust systems and backups, they're not 100% guaranteed to meet your needs in all situations. My recommendation is the opposite of what we do with off-site backups of PC based data. I suggest saving regular backups of your data on your local PC.

 

You could do this daily, but usually monthly is probably adequate - after all, these suppliers aren't likely to vanish overnight. But the key is to ensure the data is readable in other systems. This might be CSV files - especially of the raw transactions, which can at least be read into spreadsheets, and hopefully then into whatever new system we adopt. PDF files might be more readable to us, but can't easily be extracted into other systems.

 

So if you're using software in the cloud, you might think it's good to have someone else look after your data - but please, just in case the worst happens, back up your data to your system. Like normal backups to off-site locations, you'll probably never need it - but if you do you will be very glad you have it.

 

Of course if the data can be used in a traditional accounting system as is, then at worst you'd have to buy an up to date version of the software, and of course, if you have multiple users, provide access to them.