With Sage set to launch an online version of Line 50, some are asking: is this a breakthrough moment for online accounting?

Some have questioned whether the FTSE 100 company will meet the market’s desire for online accounting applications or whether it has been slow on the uptake.

Online business applications have been around for some time, and in the UK there are already a host of businesses that can loosely be classed as providing Software as a Service (SaaS) to accounting practitioners and finance functions, including Twinfield, Winweb and Online50.

The accounting application is built bottom-up, or re-engineered, to operate on the internet. It requires no software implementation on practitioner/ client desktops, and provides real-time access between both parties to their accounting information.

‘Sage is a hugely powerful brand, and the clear majority of small businesses choose Sage software,’ says Rob Lambden, MD of Online50.

‘If they offer the product online, there’ll be a shake-up in the market. Perhaps some current [online application] users will go to Sage, but I believe they’ll enlarge the market more than they take.’

Lambden stresses that the current providers all offer potential accounting clients with a ‘viable choice’, but many practitioners are unaware of the choice available.

Andre Kwakernaat, CEO of Twinfield, believes Sage will struggle to release a version of its application online, and will eventually take the route of building a web-based application from the bottom up.

Despite his warning, Kwakernaat says Sage’s interest in the market was ‘terrific’, and will provide proof that the SaaS model works.

‘They will end up building from the bottom up, then customers will compare what they do with Twinfield and Winweb – this is how it worked for Twinfield in Holland against rival Exact, but I already had the big customers.’

In response to a lack of big clients in the UK, he says that Twinfield’s investment in the region is growing, and the company could potentially build on relationships with Dutch clients KPMG and BDO.

Sage revealed the upcoming Sage Hosted Solutions in 2005, claiming it would allow practices to share information with clients in real time over the internet.

For more go to www.twinfield.com, www.sage.co.uk and www.online50.net