Best Cloud Based Accounting Software in 2024

What is Cloud Accounting Software?

Cloud accounting software functions similarly to traditional on-premises or self-install accounting software. However, in this scenario, the online accounting software resides on remote servers, following a Software as a Service (SaaS) business model. Data is transmitted to the cloud, processed, and then returned to the user. Accounting software for saas companies eliminates the need for installation and upkeep on individual desktop computers since all application functions occur off-site.

In cloud computing, users remotely access software applications via the Internet or another network through a cloud application service provider. This arrangement allows businesses to benefit from the flexibility of accessing accounting data from various locations and devices connected to the internet.

Online accounting systems broaden accessibility to employees in different departments, remote locations, or branch offices, enabling them to access the same data and software version. This fosters collaborative work and efficient sharing of information.

How Does Cloud Accounting Work?

Online accounting operates by utilizing secure web-based software to streamline business operations. Accounting software for small business helps business owners and their finance teams to conveniently access all essential data from their respective locations. This facilitates collaboration and simplifies financial reporting.

Users access the software applications via the internet or other networks through a cloud application service provider. With online software, a company avoids the need to install software on individual desktops since everyone within the company can access the cloud on their own devices. Whether it's the finance team or accounts receivable, remote teams or branch offices can access the same critical data and financial records. This fosters both time and cost savings by ensuring everyone is on the same page.

Furthermore, online accounting ensures data security; data backup and disaster recovery are typically included in your account. In the event of a fire, natural disaster, or technical issue with a company computer, your data remains securely stored in the cloud.

Difference Between Cloud Accounting and Traditional Accounting Software

The distinction between cloud accounting and traditional accounting software lies in the remote hosting aspect of cloud accounting. With cloud accounting, you and your team can access files from any location, unlike traditional software that ties you to the office. Collaboration in cloud accounting is simpler due to convenient multi-user access, reducing the paper clutter often associated with traditional accounting software.

Key Features of Cloud Accounting Software

Cloud accounting software is gaining increasing popularity day by day. Have you ever wondered why businesses are transitioning their accounting operations to the cloud? Well, the answer lies in the multitude of benefits offered by online accounting systems, making it a much more cost-efficient option. Here are some essential features of cloud-based accounting software that make them a worthwhile investment;

• Work from Anywhere, Anytime: Unlike traditional desktop-based accounting software, cloud accounting software hosts your files and information on the cloud, allowing you to access them from any device with an internet connection. Whether you're using a Windows PC, Mac, Android, iOS device, Chromebook, or any other device, you can always access your data from anywhere. This flexibility is one of the primary advantages of cloud accounting applications over their desktop counterparts. Moreover, cloud systems offer cross-platform compatibility, operating within a virtual machine environment.
• Automatic Data Backups: Subscribing to a cloud based accounting software suite ensures that your data is automatically backed up at regular intervals. In the event of a disaster, you can easily restore your data from a backup without experiencing any business disruptions. This is a much safer option compared to desktop accounting software, which relies on manual backups and leaves you vulnerable to data loss if backups are not performed regularly.
• Pay-as-You-Go Model: Unlike traditional software applications that require a lifetime license purchase, online accounting software operates on a pay-as-you-go model. You only pay for the features and resources you use. If you decide to discontinue using the software, you can simply cancel your subscription with the solutions provider. Similarly, you can upgrade your version of cloud accounting software as your business needs evolve.
• Scalability: Online accounting systems offer flexibility in scaling up or down according to your business requirements. You can start with a single user and gradually add more users as needed. Likewise, you can decrease the number of users when the requirement decreases. Additionally, there's no limit to scaling up resources such as RAM, vCPU, or vGPU with cloud accounting software.
• Enhanced Malware Protection: Desktop-based accounting applications are susceptible to malware attacks, which can corrupt or destroy your data. In contrast, online accounting systems provide better protection against malware because your files are not hosted on your device. Even if your device is compromised, your data remains secure in the cloud.
• Real-time Data Access: Cloud based accounting software enables you to access real-time data, ensuring that you always have up-to-date financial information for reporting purposes. Integration with financial systems allows for automatic updates, eliminating the need for manual data entry.
• Workflow Automation: Cloud accounting software can be integrated with other applications to automate workflows, improving efficiency and productivity. For example, you can configure your cloud-based QuickBooks to integrate with Office 365 Exchange Online, automating tasks such as customer record creation based on incoming emails.
• Easy Collaboration: Online accounting systems facilitate collaboration among multiple users, allowing them to work on the same file simultaneously. This functionality is particularly useful when you need to collaborate with colleagues or professionals, such as chartered accountants, on financial tasks. You can share files securely, assign privileges, and control access as needed.

8 Benefits of Cloud Accounting Software

Transitioning accounting operations from desktop to cloud represents a significant advancement in financial management, eliminating many of the drawbacks and cost implications associated with traditional accounting methods. Here are the benefits of cloud accounting software;

• Access Your Finances Anywhere, Anytime: With online accounting systems, you can access your financial data from any location at any time. Unlike regular software that requires downloads and updates, cloud-hosted systems offer remote accessibility, often supplemented by mobile apps for on-the-go access. This flexibility allows you to check your accounts or monitor cash flow without being tied to your office.
• Real-Time View of Your Business: Cloud based accounting provides an up-to-date snapshot of your financial status, enabling informed decision-making about your business's financial future. Unlike traditional accounting methods where accessing real-time data was cumbersome, cloud accounting offers quick access to financial reports, meeting the needs of a rapidly growing business.
• Time-Saving Automation: Online accounting software allows for workflow automation, saving valuable time. For instance, you can automate vendor payments on set due dates or schedule recurring customer invoices, streamlining your financial processes.
• Enhanced Collaboration: Collaboration with your accountant becomes seamless with cloud-based accounting. Generating necessary reports and granting access to financial data is simplified with cloud technology. Additionally, you can control employee access to financial information, ensuring data security while facilitating collaboration.
• Improved Accounting Accuracy: Online accounting systems reduce the risk of accounting errors by centralizing financial data entry. Regularly inputting expenses and income and categorizing transactions ensures accurate reporting without the need for complex accounting practices or formulas.
• No Installation Required: Cloud accounting software eliminates the need for individual installations on each computer. Accessible via web browsers or mobile apps, cloud-based systems negate the requirement for in-house IT support for software upgrades or technical issues.
• Access to Tech Support: Cloud accounting users benefit from access to technical support via telephone or chat, providing instant assistance from knowledgeable professionals. This eliminates the need for an in-house IT representative, saving time and costs associated with software management.
• Paperless Operations and Office Decluttering: Cloud accounting streamlines paperwork management by facilitating easy data importation and storage. By digitizing paperwork, you minimize manual errors, reduce the risk of data loss, and create a more efficient method of financial management.

Is Cloud-Based Accounting Safe?

You might be concerned about the security of your financial data when using a cloud-based system. Cloud accounting providers utilize encryption, which converts your information into a secure, unbreakable code, ensuring the safe transmission and storage of your data. Cloud solutions employ the same robust security measures used in safeguarding financial data and online banking.

The best cloud based accounting software includes the following security features;

• Secure premises
• Trained security personnel
• Off-site automatic backup servers
• Regular security audits
• Advanced digital security software with both inbound and outbound encryption
• Multiple segregated networks
• Various built-in user authentication methods
• Dedicated anti-malware personnel
• Customer service and technical support
• Automatic updates

Best Cloud Accounting Software Comparison

Find the comparison table of 5 best cloud accounting software with features and price;

Best Cloud Accounting Softwares
Softwares	Features	Cloud Accounting Softwares Pricing
QuickBooks Online	Budgeting/Forecasting, Direct Deposit, Expense Tracking, Mobile Access	Starts at 36/month
FreshBooks	Automatic Time Capture, Deferred Billing, Expense Claims, Visual Analytics	Starts at 19/month
Zoho Books	Cataloging/Categorization, Multi-Company, Mobile App, Tax Management	Starts at 15/month
Bonsai	Appointment Scheduling, Due Date Tracking, Overtime Calculation, Web Forms	Starts at 24/month
NetSuite ERP	Automatic Billing, CPA Firms, Financial Analysis, Inventory Management	Starts at 20/year

Factors to Consider When Buying Cloud Accounting Software

Choosing the best cloud based accounting software for small business can be a challenging task given the multitude of options available. Exploring various options before making a purchase is advisable as it allows you to make an informed decision. Here are some factors to take into account;

1. Assess Your Business Needs and Accounting Skills: Prior to selecting accounting software, assess your business requirements. Various software options are available, but it's essential to choose one tailored to your specific business needs. For example, specialized software exists for retailers and restaurants, among other commercial enterprises. As a business owner, your primary goal is to effectively manage finances, track payments, expenses, invoices, and generate reports to analyze business performance. Selecting the best cloud accounting software can be daunting due to the array of features and pricing plans offered.
2. Consider Cloud Applications: Embracing online accounting for small businesses can elevate your business to new heights. Cloud applications offer numerous benefits, including remote accessibility from any location with an internet connection. Installation is streamlined on servers, eliminating concerns about software updates. Cloud-based systems ensure data security through robust safety measures. Integration with accounting software on the cloud offers significant advantages, making cloud business applications an appealing choice.
3. Budget: Online accounting software options cater to various budgets, allowing you to select software within your financial constraints and customize it to suit your business needs. Choosing a more expensive option typically provides additional benefits. Factors such as skill level, business size, and record-keeping requirements influence software selection. Basic accounting software can handle financial reporting, billing, and invoicing, meeting the majority of accounting needs.
4. Security: Data security is paramount when considering accounting software, especially for cloud-based solutions. Robust security measures are essential to safeguard sensitive financial data.
5. Automation: Many accounting software solutions offer automation capabilities, such as automated invoicing and reconciliation, saving time for small business owners. Automation streamlines mundane tasks, allowing focus on business growth. 
6. Scalability: Anticipate your business's growth potential when selecting online accounting systems. Opt for software that can accommodate future business needs and offers progressive versions. User-friendly software enhances team productivity, enabling focus on critical tasks.
7. Add-On Features: Additional features enhance accounting software functionality, such as remote accessibility, online payment acceptance, and e-commerce software integration. Customization options cater to specific business requirements. Investing in the right accounting system is crucial, as it serves as a valuable tool for business management and offers a competitive edge.

Cloud Accounting Software Trends

Here are the latest trends in cloud accounting software;

1. Swift Adoption of Cloud-Based Solutions: The increasing recognition of the advantages offered by cloud-based solutions is fueling the adoption of cloud accounting software. Cloud accounting eliminates the need for on-premises software installations, enabling access to financial data anytime, anywhere. This trend reflects a fundamental shift in organizations' approach to financial management, emphasizing accessibility and collaboration in the digital age.
2. Integration of Artificial Intelligence (AI) and Machine Learning (ML): The cloud accounting software market is witnessing a significant trend involving the integration of Artificial Intelligence (AI) and Machine Learning (ML). AI and ML algorithms analyze financial sector data, automate repetitive tasks, and provide intelligent insights. This trend enhances accounting efficiency, enabling data-driven decision-making and deeper financial performance understanding.
3. Emphasis on Cybersecurity and Data Protection: Cybersecurity and data protection have become increasingly important in the cloud accounting software market due to the growing reliance on cloud-based solutions. Vendors are implementing rigorous security measures to safeguard financial data from cyber threats. This trend addresses concerns about data breaches, ensuring businesses trust online accounting systems to protect the confidentiality and integrity of their financial information.
4. Rise of Mobile Accounting Applications: Mobile accounting applications are gaining traction in the cloud accounting software market, offering users the flexibility to manage finances on the go. These applications enable real-time financial data access, invoice creation, and expense approval from mobile devices. The popularity of mobile accounting apps aligns with the needs of a mobile workforce, emphasizing seamless connectivity.
5. Real-Time Financial Reporting and Collaboration: Real-time financial reporting and collaborative features are shaping the cloud accounting software market. Cloud solutions facilitate simultaneous access and updates to financial data by multiple users, fostering real-time collaboration across departments. This trend streamlines communication, reduces reporting delays, and enhances financial insight accuracy, enabling informed decision-making.
6. Customization and Scalability: The cloud accounting software market is witnessing a trend toward customization and scalability to meet diverse business needs. Cloud solutions offer flexibility in features and functionalities, allowing businesses to customize tools according to their specific requirements. Scalability ensures adaptability to evolving business needs, catering to startups and large enterprises alike.
7. Automation of Routine Tasks: Automation of routine accounting tasks is revolutionizing the cloud accounting software market. From invoice generation to expense categorization, automation reduces manual efforts, minimizes errors, and accelerates financial processes. This trend enhances efficiency and enables finance professionals to focus on strategic tasks, driving overall productivity.

What is the future of cloud accounting software?

The future prospects for cloud-based accounting are promising, with the market expected to grow by 14.2% in 2024, reaching a value of $832.1 billion by 2025. The convenience, accessibility, and flexibility inherent in cloud accounting and its software solutions have catapulted them into the spotlight. Let's explore what lies ahead for cloud accounting software;

AI & Machine Learning

Artificial Intelligence (AI) plays a crucial role in accounting software, aiding in error identification and detecting discrepancies in data. It can flag inaccuracies or processing errors that could potentially lead to financial losses if overlooked.

AI is being leveraged in innovative ways, such as predicting and mitigating future issues with suppliers or customers, thereby minimizing disruptions caused by unforeseen events.

Blockchain

Blockchain technology has the potential to revolutionize business operations by providing an immutable ledger that records all transactions transparently. Unlike traditional data systems, changes to blockchain data are permanent and cannot be tampered with.

By maintaining a transparent and unalterable record of transactions, blockchain enhances trust within organizations and ensures accountability. It also streamlines financial record-keeping and verification processes, enabling immediate payment settlement upon transaction completion.

The integration of blockchain and AI could automate auditing processes, allowing for comprehensive transaction monitoring and analysis.

App Integration

Cloud-based platforms have facilitated on-demand access to a wide range of applications, including specialized tools like inventory management and payroll/CRM systems.