ASP:
How to Get Your Bookkeeping
Out of the Office and Online

In 2000, Application Service Providers and out-sourcing were thought to be the "next big thing" on the Internet. It's 2006, and where is the ASP today? Does the ASP concept have value for small business, any business? "Are we there yet?"

By William R. Stocking CMC

Application Service Providers

At the height of the Internet bubble, 1999 and 2000, the ASP concept seemed to be a great idea. ASP websites sprung up all over the place. Many of those sites were devoted to handling accounting functions.

The basic accounting ASP concept is simple: Out-source your accounting functions and your accounting data to an online provider. That ASP's Web site becomes a virtual "mainframe" for its users. The benefits to small business of doing this were thought to be obvious. The ASP would provide these services on their website:

• Take responsibility for daily backups of your data
• Apply software upgrades and patches to software to insure smooth running
• Provide ever present tech support from people very familiar with the application
• Provide online training in use of the software

It hasn't caught on... yet - Or has it?

The use of an ASP for accounting functions in small businesses has just never caught on... and there are a number of reasons for that, not the least of which is trust. But, there are additional hurtles:

• Most businesses, even the smallest, have already invested in the software and the hardware to run it. Even if their operation of same is less than stellar, they own it.
• Hi-speed connections to the Internet are necessary for satisfactory performance, even then it can slow down if the Internet is very active. High speed connections are still quite limited in availability or too expensive in many parts of the world.
• Can you trust a new online company with valuable company data, particularity since so many earlier ones went bust?
• What about Internet security?
• What happens to your data if the ASP goes bust? And, again
• That matter of trust

Will accounting ASP's ever catch on? My feeling is yes, as soon as most of the above hurtles have been removed. It will happen slowly. It could become an ideal solution for companies that have outgrown current software and have diversified to multiple locations.

Luckily for the concept, there are some types of ASP that have caught on.