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Disadvantages of online accounting: A review

disadvantages of online accounting

Are there any disadvantages of online accounting?

In an increasingly internet dominated age, many companies turn to online accounting software to help their finances stay in order.

The process requires less effort than traditional accounting and can sometimes save money over time.

However, in many cases, the drawbacks of online accounting can actually become a burden for businesses, especially start-ups and smaller companies.

If you’re considering investing in online accountancy software, you should first contemplate some of the possible downsides they can bring.


Despite what can seem like initial savings in the short term, some accountancy software requires minimum requirements in terms of your computer software, i.e. processor speed and hard drive memory. In addition, online accounting may tie your company down to paying ongoing service fees, which can end up costing you more in the long run. Furthermore, hiring any technical support for this new, unfamiliar software may cost you to call out an engineer.


With using automated software comes the responsibility of protecting data from security breaches, power failure or viruses. There could also be a threat from hackers accessing delicate account information. As the company owner, you are personally liable for the prevention of all these possible outcomes.


With new accounting software comes the necessity of learning how its operating system works, and also how to deal with maintenance issues. Picking up new accounting terms and layouts can be a complicated matter and an unnecessary distraction for a company owner. This may also include updating the software package on numerous occasions and also ensuring your own computer remains up-to-date with upgrading system requirements.

Human Restrictions

Although most of the manual effort is removed with using automated online software, the risk of mistyping data can have detrimental circumstances. One small mistake entered into the computer algorithm will offset the results and be hard to pinpoint through a minefield of numbers. New staff also need to be trained in how to operate the accounting program who then can also be culpable to making mistakes themselves.


Any information stored electronically has a danger of being fraudulently accessed by third parties if the proper security measures are not installed. This can become a constant worry for business owners to ensure crucial and personal financial information is sufficiently protected.

Although there can be many benefits, there are also some disadvantages of online accounting which need to be taken into consideration before investing in a program. However, by utilising the experience of a contract accountant, these risks can be reduced and a more personalised service offered.

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