Online accounting

What it means

Online accounting is a way of working with an accountant in which the client sends documents electronically, the books are kept in cloud software and results are visible to the client in an app at any time. No more carrying binders or waiting for reports at the end of the month.

Documents are uploaded by taking a photo with a phone, forwarding them by email or importing them automatically from an online shop or bank. Systems with OCR extract data from invoices, which the accountant then only checks and posts. Bank transactions are loaded via open banking without manual entry.

Online accounting is the most common form of outsourced accounting for small and medium-sized businesses. The client gets a real-time overview, and the accountant saves time on data entry and can focus on review, advice and optimisation.

How it works in practice

When switching to online accounting, the parties agree on how documents will be submitted, deadlines and system access. The client should send documents continuously rather than once a month, so that it has an up-to-date picture of sales, costs and payables and the accountant can process everything on time.

After digitisation, paper documents may be kept electronically provided the Accounting Act's rules on conversion to electronic form are followed and their authenticity and legibility are ensured for the whole retention period. Electronic invoices are kept in their original form.

When choosing accounting software or an accounting firm, check where the data are stored, how they are backed up, who has access and whether they can be exported if you change provider. It also matters how well the system handles tax returns and statutory reports.

What to watch out for

Going online does not change responsibility. The reporting entity, the company, is responsible for keeping the books and for the correctness of documents, even when an external accountant does the work. The client must provide complete documents and the accountant must process them correctly; the split of responsibility belongs in the contract.

Access security is critical. Accounts for the accounting system and bank should have strong passwords and two-factor authentication, and access must be revoked as soon as an employee leaves. A leak of accounting data can harm both the company and its clients.