Software as a Service (SaaS)
John explains "Why run your accounting applications in-house when you can access the same functionality via a web browser on your desktop? Wouldn't it be good if instead of having to wait for your IT department to upgrade to the latest release of your chosen accounting application you just found it waiting for you when you open up your browser?"
The editorial caught my attention because just yesterday, BusinessWeek sent me a survey (OK, a reminder to do the survey)as a member of their BusinessWeek Alliance Panel. The survey was all about SaaS. Taking the BusinessWeek survey, most of the answer choices weren't relevant to my needs, to why I would consider using SaaS tools.
Personally, my interest in the concept started when I saw an Intuit demonstration of one of their new tools. Their Online Document Exchange  system seems like an excellent idea. Instead of emailing tax returns or other forms to your client to review, you upload them into their secure system. Your client can log in to retrieve the document to review it, or print out signature pages.
Conversely, instead of faxing or emailing documents to you, your client can upload them into their own private section of the database. You or your staff can retrieve the documents to use for their tax return.
Everything is secure. Your client's SSNs and TINs are protected. Data isn't lost or inadvertently sent to the wrong email address. We don't run afoul of Circular 230 rules about mailing or emailing client documents with ID numbers.
It cuts down on paper flow, copying, faxing, etc. And you never have to look for misplaced documents. Think of the filing time you can save - especially since the Online Document Exchange  integrates with Intuit's Document Management System  using a dual system like this makes perfect sense.
In fact, I had intended to implement these systems this tax season. (Got sidetracked with a little hospital time, but..) I still like the idea and will test it out with my clients this summer.
After all, these days, most of your clients have computers and online access. Being able to upload their documents will make them feel a little more secure than mailing you originals, where they sometimes (not often, but...) get lost in the mail. Being able to log into their accounts, they don't have to call you for a copy of an urgently needed W-2 or 1099. Or even to request a copy of a tax return. It would all be there online for them. All they need is their username and password. (So, they will call you for that...of course.)
Oh, and all the records are continuously backed up - so even if your office burns down, or collapses due to an earthquake (hey, I live in California. It's been know to happen!), you can easily retrieve all your client data - and anything else you've chosen to store in this SaaS system.
It all sounds great, right!
Then I run across this question: “What happens to my data if my SaaS service provider/remote hosting service/other outsourced service fails as a business and is forced to close?”
Uh oh! That's a very good question. A fellow named Martin Banks tackles this question for the new BusinessCloud9 site. 
Read what he as to say. Then, use your best judgment about implementing technologies like this.
Using the right tools can be a boon to your practice, and perhaps even reduce the staff you need - and reduce errors.
Be really, really cautious. Using online technologies like this you definitely want the company to be solid so they stay in business forever; to have deep pockets in case you are sued by clients for identity theft or other data-related disasters; and not to have a monopoly so they can raise their prices beyond reason.
Have you tried SaaS tools like these or others? What do you think?