Yes, as long as there's plenty of storage space (I have tons of documents) and a secure environment.

I already use an on-line service (instead of software) to do all the processing for my payroll service.  It's completely paperless (for me and my clients) from start to finish, including direct deposit and electronic filing of all tax returns. 

Using on-line applications and services allows  entrepreneurs to gain access to features and functions that were previously out of their reach.  It saves money by facilitating outsourcing and collaboration.

Effective use of technology levels the playing field and allows small business owners like me to compete with the larger firms.  There's no way that as a sole practitioner I could afford the infrastructure that the on-line service gives me.

By the way, Joel, I just recently wrote an article about this in my ezine.

Sheryl Schuff, CPA

They are great but let me warn everyone that I am biased because I like Google.  If you are using multiple computer platforms like Mac’s and PC’s they are great.  You can work on a project at work, on your phone and at home without lugging PC’s around or worrying about compatibility.  You can intermix them with locally installed software and share your documents with others that use installed applications like MS Office with no hassles.   Best of all the documents can be shared, private or stored locally.  That is totally up to you.  This is the future.  I am sure the problems people are experiencing today will soon go away.