Explorations on a theme: "What is a transaction? "
7. Approaches to Web Accounting
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Explorations on a theme: "What is a transaction? "
7. Approaches to Web Accounting
Internet accounting solutions fall into two broad categories:
Hosted on ASPs such as WebLedgers (eLedger, NetLedger, Intacct, etc.) or hosted ERP systems (e.g. SAP, Peoplesoft)
Local accounting applications - LAN or standalone ledgers, conducting business by exchanging single-purpose transactions with remote 3rd parties. Examples: EDI, XML.
The key question is where is the database and transaction processing logic? If they are BOTH on a managed host or ASP on the internet, there are scenarios which could actually eliminate some classes of redundant data stores. There are innumerable software products which reduce reconciliation costs but let's focus on a quantum leap, to eliminate the root of the problem: these always require a server someplace 24 hours x 7 days visible to both parties to a transaction:
A single transaction repository on a secure host, providing a final point of reference for all parties to each transaction, or
A hosted accounting system co-located with one of the trading partners involved in the duplicate stores. For example if your bank hosted a WebLedger, one class of redundancy would disappear. If you hosted a webledger for your trading partners, you and they would always be in perfect synch on Accounts Receivable and Payable. Consolidation of transactions from multiple ledgers is well understood by any competent accountant.