How many times have you wanted to work on a simple document with a friend or colleague, only to be stopped by problems constantly sending files back and forth? Or needed to share a spreadsheet with a client, only to find their copy of Excel won’t open your file? As part of our series on web applications for small business, we’ll take a look at Google Docs as a way to save you money.

Google Docs is a free service which allows you to work on basic documents (word processing, spreadsheets and presentations) in your browser. At a basic level, it provides the most commonly used functions of programs likes Microsoft Office for free. Your files are stored online, instead of on your computer’”which means that crashes and viruses don’t affect them, but your ability to access the web does (for example, if your cable modem goes out, you can’t access your documents until you find another internet connection). This sort of online file storage is referred to as ‘the cloud’ in Web 2.0 parlance.

Google Docs’ Intro Video Explains Web Apps

Google Docs also allows for the wonderful experience of jointly authoring or editing a document. Say, for example, that you are working on a notice from the board of your neighborhood association. You could try to get everyone together in the same room to edit at the same time, or attempt to pass around a document (while tracking revisions of it) or delegate the task to just one person.

Instead, Google Docs allows you to create or import a document and then share it with other users (either in an editing or read-only capacity) to make it easy for everyone to contribute (or just comment). No downloads, installations or virus-scanning is required.

This is also a great way to work on joint budgets or other technical and rapidly-changing information. During one busy period, my partner and I used the spreadsheet function to track apartments we were looking at and the status of each rental application. It saved us a lot of ‘missed leads’ or duplicate communication. Google Docs can even send notifications to other users when a file is modified, taking out the step of emailing ‘look at this change.’

While there are a few bugs in its implementation (formatting isn’t as fluid, as, say, Apple’s iWork program, or even Microsoft Word), the convenience of shared documents and the ease of use make Google Docs a great tool for just about any user looking to either save money on Office or bring friends and co-workers into the editing process.

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MJ Petroni is the owner of Causeit, Inc., a small business development firm integrating coaching, consulting and branding in a comprehensive approach to balance personal and business life.