Cloud accounting software helps businesses manage finances online, automate bookkeeping, track expenses, create invoices, and access real-time financial reports. Learn about its key features, benefits, and limitations, and discover how to choose the right cloud accounting solution for your business needs, budget, and growth.
Key Takeaways
|
Cloud accounting software is accounting software hosted on remote servers and accessed through a browser or app, instead of installed on one office computer. It lets businesses manage invoicing, expenses, payroll data, and financial reporting from any device, with the vendor handling updates, backups, and security. You will also see it called cloud-based accounting software or cloud-based accounting solutions; all three terms describe the same category. Adoption is still climbing: in Wolters Kluwer’s 2025 Future Ready Accountant report, 52% of accounting firms surveyed had adopted or expanded cloud-based solutions. The gains can show up in hours: KPS3 saved 60+ hours a week on billing and month-end close after moving from NetSuite to Accounting Seed.
With cloud accounting, you outsource to a data center that stores accounting software and your financial information on its own servers. That way, you don’t have to buy extra computer equipment for your business. It’s also easy for authorized users to access the tools from anywhere, on any device. The vendor runs the servers, applies updates, and backs up the data, and you pay a subscription instead of buying licenses and hardware. Your team logs in to the same live ledger, so a sales rep entering an expense in Denver and a controller closing the month in Chicago see the same numbers at the same time. The software is the system itself; when an outside bookkeeper logs in to it remotely to record your day-to-day transactions, that service is called cloud-based bookkeeping.
| Cloud accounting software is accounting software that runs on vendor-hosted servers and is accessed through a browser or app, with the vendor managing updates, backups, and infrastructure. |
The first decision most finance teams face is whether to leave on-premises software at all. On-premises accounting software is installed on servers or computers your company owns, so your IT staff handles every update, backup, and hardware refresh. The table below compares the two deployment models on the points that drive that decision.
| Dimension | Cloud accounting software | On-premises accounting software |
|---|---|---|
| Access and location | Any device, anywhere, through a browser or app | Tied to the office network or the machines where it is installed |
| Setup cost | Low upfront cost; subscription-based | High upfront hardware and license cost |
| Maintenance and updates | Handled automatically by the vendor | Managed by internal IT with manual updates |
| Scalability | Add users and modules on demand | Requires new hardware and licenses |
| Data backup and security | Shared responsibility on vendor-managed infrastructure | Fully the company’s own responsibility |
| Collaboration | Real-time, multi-user, remote-friendly | Remote collaboration available when configured |
| Total cost of ownership | Predictable and spread over time | Hardware, maintenance, and IT support costs; total varies by deployment |
| Which type of cloud accounting software fits your business? Answer a few questions about your size, CRM, and billing model. |
Cloud-based accounting solutions fall into four categories. Knowing which category you belong in narrows a long vendor list to a short one before you compare features.
| Category | Product focus | Example use case | Key tradeoff |
|---|---|---|---|
| General SMB cloud accounting | Freelancers, micro businesses | Simple invoicing and bookkeeping | Limited scalability as complexity grows |
| Mid-market/enterprise cloud ERP | Larger finance teams needing depth | Multi-subsidiary consolidations | Higher cost, longer implementation |
| Industry/vertical-specific | Businesses with specialized needs | Nonprofit fund accounting, healthcare billing | Narrower ecosystem, fewer integrations |
| Salesforce-native cloud accounting | Businesses needing connected project or subscription billing and multi-entity accounting | Revenue recognition tied directly to CRM opportunities | Best for Salesforce orgs; in return, sales and finance share one source of truth |
Use this checklist to score each vendor on your shortlist. Each item includes the reason it belongs on the list.
The right cloud accounting software depends less on feature counts and more on where your business is today and which system your revenue data lives in. Find the scenario below that matches yours.
Compare invoicing, expense tracking, setup effort, and total cost. At this stage, setup speed, fast invoicing, and a low monthly bill matter more than multi-entity consolidation or CRM-native data. Accounting Seed is built for growing, multi-user finance operations on Salesforce, so it is not the right fit for a one-person business. Look for bank feeds that categorize transactions automatically, mobile receipt capture, and an accountant login so your tax preparer works in the same books. Revisit the decision when you hire a finance person or add a second entity.
Choose a mid-market cloud accounting suite with room to grow. Score vendors on automation depth (AP approvals, recurring billing, bank reconciliation), reporting flexibility, and whether the platform supports your next two years of growth without a full re-platform. Ask each vendor how customers your size handle a second entity or a new currency. Include Accounting Seed when you need AP and AR automation, flexible reporting, or multi-entity accounting on a shared data model.
Choose Accounting Seed. It is built natively on the Salesforce Platform and shares the same database as your CRM, so no connector sits between sales and finance. Native is different from integrated: a connector copies data between two systems on a schedule, while a native app reads and writes the same records. That means real-time data, no sync failures to troubleshoot, and no integration to maintain when either side updates. An opportunity can generate billing records directly, and every posting lands in the same general ledger your executives already report from in Salesforce.
Consider Accounting Seed for connected multi-entity and project accounting. Its multi-company and multi-currency accounting keeps financials for several entities in a single database, and project accounting tracks engagements alongside revenue, expense, and time. Unified platforms outperform connector-dependent setups for consolidated reporting because every entity posts to the same data model. There is no reconciliation lag while a sync catches up and no intercompany discrepancy created by two systems disagreeing. Controllers can run a consolidated P&L the day a period closes instead of rebuilding it in a spreadsheet.
Choose a dedicated ERP suite if production planning, bill-of-materials management, or multi-warehouse logistics drive your operations. Accounting Seed is an accounting platform, not a full manufacturing or warehouse ERP, and businesses with heavy physical-inventory or supply-chain complexity need those operational modules. Accounting Seed can serve as the financial layer alongside a suitable operational system: the ERP runs the shop floor, and Accounting Seed handles the general ledger, billing, payables, and financial reporting with connected customer and financial data.
Four platforms illustrate the main categories.
| Field | QuickBooks Online |
|---|---|
| Product focus | Invoicing, expense tracking, and general accounting |
| Key Features | Invoicing, expense tracking, basic reporting, payroll add-on, large app marketplace |
| Pros | Widely used; low learning curve; most accountants already know it |
| Cons | Salesforce reporting connection on Advanced; limited multi-entity support |
| G2 Rating | 4.0/5 from 3,885 reviews |
| Implementation Time | Days to a few weeks |
| Field | Xero |
|---|---|
| Product focus | Cloud accounting with customization and integrations |
| Key Features | Bank reconciliation, invoicing, multi-currency, large integration marketplace |
| Pros | No per-user license fees; strong mobile app; flexible customization |
| Cons | Also requires third-party connectors for CRM data; add-ons increase cost |
| G2 Rating | 4.4/5 from 1,838 reviews |
| Implementation Time | Days to a few weeks |
| Field | NetSuite |
|---|---|
| Product focus | Accounting, inventory, and order management in a cloud ERP |
| Key Features | General ledger, inventory, order management, financial reporting, CRM module |
| Pros | Deep functionality for complex, multi-subsidiary organizations |
| Cons | Quote-based pricing; longer implementation; its CRM is separate from Salesforce, so Salesforce users need a connector layer |
| G2 Rating | 4.1/5 from 4,963 reviews |
| Implementation Time | Several months is typical for mid-market |
| Field | Accounting Seed |
|---|---|
| Product focus | Businesses needing multi-entity accounting and project or subscription billing |
| Key Features | 100% Salesforce-native accounting, AI agents and Hosted MCP, project accounting, multi-entity and multi-currency, automated billing, real-time reporting |
| Pros | No middleware or connectors: one database with Salesforce, so no sync errors; AI-native features work on that unified, live data |
| Cons | Nothing in particular |
| G2 Rating | 4.2/5 from 171 reviews |
| Implementation Time | Scoped per customer during the demo and implementation planning |
Side-by-side summary
| Platform | Category | Product focus | Salesforce Integration | Implementation Time |
|---|---|---|---|---|
| QuickBooks Online | General SMB | Invoicing and general accounting | Separate Salesforce integration | Days to weeks |
| Xero | General SMB | Cloud accounting and customization | Third-party connector required | Days to weeks |
| NetSuite | Mid-market/enterprise ERP | Multi-subsidiary accounting and ERP | Separate Salesforce integration | Several months |
| Accounting Seed | Salesforce-native | Multi-entity accounting and project billing | Native; no connector | Scoped per customer |
| Noticing a pattern? QuickBooks Online, Xero, and NetSuite all require a third-party connector to sync with your CRM. Accounting Seed runs natively on Salesforce: no connectors, no sync errors. |
Cloud accounting software offers a variety of product features. Take the time to figure out what you need from a system before you go shopping. Keep in mind that cloud-based accounting systems can also manage many routine accounting tasks, freeing up your time for the fun parts of running a business. These are the core features to compare:
Invest in cloud-based accounting software that not only meets your needs today but tomorrow, next year, and ten years from now. The ideal software package is flexible enough that you can configure it to suit your bookkeeping methods and scale up as your business grows. With cloud accounting, growth doesn’t require buying added computers or servers.
Having lots of customers is good, but staying on top of the billing takes work. An automated, cloud-based accounting software tool can deliver an invoice right after a sale, authorize a project as soon as you receive payment, or set up an automated recurring billing plan for regular customers. Cloud-based accounting can also update accounts receivable once a bill’s been paid.
Tracking your accounts payable becomes harder the more your company grows. You have more vendors, more expenses, more bills. You have to enter them in accounts payable, update the ledger as bills get paid, and remember to pay vendors on time. If more than one person at your company handles payments, it’s even easier to lose track.
Cloud accounting makes the process simpler. You can update your accounts anywhere, any time, whenever it’s most convenient. Whether you’re closing a deal out of town or paying off a bill while on the road, you can log into the system and enter the data. An integrated cloud-accounting system can even update the ledger automatically when you use your business credit card. AI tools now handle data entry too: Accounting Seed’s AI Invoice Capture extracts details from vendor invoices and turns them into ready-to-review payables.
Learn more about how you can improve your vendor payment processes.
Cloud-based accounting systems can connect your sales and inventory process. If a salesperson closes a deal, they can create a sales order on the phone, reserve inventory for the order, create a purchase order for replacement inventory, and set up packing and shipping details.
Cloud accounting makes it simple to track inventory levels even if you have multiple warehouses storing your product. You can check how much inventory you have on hand, where it is, and how long it will take to bring in more.
General ledger accounts (cash, assets, accounts receivable, and depreciation) are the basis for all the financial analysis or projections you make. Even with good accounting workflows, keeping the figures up to date requires time and thought you could spend elsewhere.
Cloud solutions for accounting can reduce the work significantly, automatically adjusting multiple accounts when you enter data for a financial transaction. If your company does business outside the U.S., good software can handle all the currency conversions from pesos, yen, pounds, or francs to dollars and back.
The best cloud-accounting services generate financial reports automatically. If, say, you’re meeting with an investor who wants to see your income statement for the current quarter, you can log in from your phone and generate a real-time statement with a button click. Whether you want information on cash flow, revenue, or short-term liabilities, it’s easy to get it with cloud accounting.
Learn more about the best financial dashboards and reports:
If your company has multiple projects running, that can complicate the accounting in a big way. You and the project managers need to track expenses, revenue projections, and other details in a separate budget for each project. You also need to track them as part of your overall budget.
The automatic features of cloud-based accounting software simplify project budgeting. When you enter expenses or revenue in the system, it can simultaneously record them in the project ledger and in the general ledger. When you close out the project, the software reconciles the two ledgers with less effort than with a human accountant handling the closing.
Read on for everything you need to know about Mastering Project Accounting.
Tax is another aspect of business that gets more complicated the bigger you grow. For example, if you expand a retail operation into multiple sales tax districts, sales at each store will involve a different sales tax calculation. It’s a lot easier to have the software crunch the numbers than to track and figure them yourself.
The 21st century has been full of companies suffering expense, embarrassment, and lawsuits due to someone hacking confidential information. When you compare cloud-based accounting systems, ask about the quality of their cybersecurity. You need a service that can keep your data safe. At minimum, expect encryption for data in transit and at rest, plus role-based permissions that limit each user to the records their job requires. The full security checklist appears in the security section below.
Most feature lists skip this category, yet it decides how much reconciliation work your team does every month. With CRM-native accounting, sales and finance data live in a single database, so there is no middleware to sync and no mismatch between what the CRM says was sold and what the ledger says was billed. Revenue recognition ties directly to CRM opportunities: when a deal closes in Salesforce, billing and revenue schedules start from that same record instead of a re-keyed copy.
Cloud-based accounting services aren’t the only way to handle your bookkeeping. Installing accounting software on your computer is one option for small businesses, but it doesn’t reduce the workload the way automated cloud services do.
Going with the cloud offers considerable benefits. If you install accounting software on your company’s own computers, you or someone on your team will have to apply security patches and see that everything gets backed up. You’ll need to pay for added licenses as you install the software on more computers. You may eventually need to buy servers to hold all your data.
With cloud accounting solutions, the hosting company handles patching, updating, and the data backup process. You pay for software access through a subscription rather than purchasing installed copies. Nor do you have to buy additional servers; that’s the cloud company’s responsibility.
Telecommuting has become a fact of 2020s life. Thanks to Zoom, Slack, and similar tools, you can staff your company with employees scattered from New York to Baton Rouge to Seattle. With a cloud-accounting system, authorized employees can enter bills or submit expense vouchers without having to contact someone in your office.
Even if employees come into the office, there’s no guarantee they’ll be there when they need to enter a payment or an expense. Remote access also lessens the burden on you, as you don’t have to process everyone’s paperwork.
If you feel keeping everything in-house offers better cybersecurity than the cloud, you’re wrong. A server in a keypad-locked office is still exposed to hacking and password phishing, and a disgruntled employee with office access can reach the data physically.
Good cloud-based accounting systems provide solid security, including data encryption and real-time monitoring for hacking attempts. Because the data is centralized, access is controlled from the start. Ask vendors for specifics: TLS encryption for data in transit, AES-256 or equivalent encryption at rest, multi-factor authentication, and an independent audit report such as SOC 2 Type II. Confirm the backup cadence (daily or continuous) and how long backups are retained.
Storing your data offsite also protects it from fire, flooding, accidental damage, and theft, any of which can destroy your computers or leave you unable to reach them. With cloud computing, you don’t have to worry about maintaining a regular data backup or how to protect your files when a hurricane is looming.
The investment pays off beyond risk reduction. In Wolters Kluwer’s 2025 Future Ready Accountant report, over 74% of cloud-enabled accounting firms reported profitability growth.
Here’s a guide to Accounting Cybersecurity.
In the first year or so of your business, you can record all your transactions in the ledgers without much effort. A few years of growth later, you may be wondering whether you should set up an accounting department and a couple of servers because income and expense items are coming in faster than you can record them.
Cloud-based accounting systems scale up easily. You can set up for multiple employees or managers to access the system without buying copies of the software for each one. You don’t have to worry about added computer power or servers because your cloud-based accounting service handles that.
Cloud-based accounting software automates financial functions easily. For example, some software connects with your bank or credit card company and records purchases as soon as you make them. The more you automate, the less chance human error will throw off your accounts.
Yes, cloud accounting software is secure when the vendor encrypts data, controls access by role, and backs up data automatically. The stakes are high: IBM’s Cost of a Data Breach Report 2025 puts the global average cost of a breach at $4.44 million, more than most small and mid-sized companies can absorb. Check these five areas before you sign:
Accounting Seed runs on the Salesforce Platform, so it inherits Salesforce’s infrastructure security, sharing model, profiles, permission sets, and field-level security, along with the platform’s audited compliance program. Finance data follows the platform’s configured access rules. Standalone SaaS accounting tools manage their own infrastructure and maintain a second set of user permissions, which is one more system to audit.
This is a different comparison from cloud vs. on-premises: it is about how accounting connects to your other systems, natively or through a bolt-on integration. The cloud is about keeping your data somewhere other than your physical premises. Integration is about tying data together: ledgers, stock counts, inventory orders, bill paying, and requests for payment.
Keeping sales data in the cloud is great. Having your cloud accounting integrated with your bank and credit cards to update data instantly takes your processes to another level. The best cloud solutions for accounting do both. Better still is a solution offering sales and accounting options built natively on the same platform, as opposed to those on different platforms requiring the purchase of a sync tool to track and update data in both systems. For a deeper look, read what an integrated accounting system is and how it works.
Accounting Seed is cloud accounting software that is Salesforce- and AI-native. It runs inside Salesforce, and its AI works directly on that live, unified data. It also connects to hundreds of trusted integrations for payments, banking, tax, and spend management, including Stripe, Plaid, and Avalara.
Accounting Seed is built on the Salesforce Platform rather than synced to it. Accounting objects sit beside opportunities, accounts, and orders in one database, and it connects with Sales Cloud, Revenue Cloud, and Service Cloud, with purpose-built connectors for Field Service and Salesforce Nonprofit. Upgrades on either side do not break an integration, because there is no separate integration to break. See the full Accounting Seed product overview.
Because postings happen where the transactions originate, balances update as work happens. Teams run trial balances, P&Ls, balance sheets, and cash flow statements with drill-down to the source transaction, and the drag-and-drop Financial Reports Hub lets them analyze P&Ls and balance sheets across locations, product lines, and periods. Close Hub lets controllers monitor open periods and track close progress across ledgers.
Admins configure accounting workflows with Salesforce point-and-click tools: fields, validation rules, approval flows, page layouts, and reports. Finance teams change approval paths or add a reporting dimension without opening a development ticket.
Accounting Seed’s AI works on unified, live ledger data rather than an exported copy. Its AI agents cover collections (invoice analysis, payment prediction, real-time aging inquiry), bill pay (early-payment discounts, duplicate payment detection), and the general ledger (transaction querying, posting and unposting); the company says the agents can reduce monthly close cycles by 50%. The AI Assistant answers questions such as what is driving a revenue change from the company’s own ledger, and Hosted MCP gives Claude, ChatGPT, Gemini, and other compatible assistants governed access to live Accounting Seed data through more than 20 purpose-built tools, with every action running under the user’s own Salesforce permissions.
Avado, a training provider, reports an accounting lifecycle that runs 75% faster than its previous system, saving roughly 40 hours per close and closing books three to four days after month-end. KPS3 replaced a 400-row spreadsheet that patched NetSuite, Salesforce, and payment data together. “Now everything lives in Accounting Seed and Salesforce. We’re no longer chasing spreadsheets,” says Bob Whitefield, CRO at KPS3.
Cloud accounting software is not the answer to every finance problem. These situations may call for a different category of tool or a broader system:
The first step to switching to cloud-based accounting software is to research the many options out there. The most important criterion is that the software delivers on your specific business needs. Whether your biggest concern is cybersecurity or saving time spent on bookkeeping or connecting your front and back office, keep your needs in mind when you compare services.
Talk to your team, too, and find out what their concerns and needs are. You need buy-in and commitment to get the best results.
Once you have chosen a platform, follow these steps:
The more of your operations you can integrate into the cloud, the greater the efficiency. Accounting Seed has a huge advantage here because it’s native to the Salesforce Platform. If you’re using Salesforce for CRM, Accounting Seed works inside the org you already have and connects with other Salesforce apps, so the integration step above shrinks to banks and payment processors.
If you want to see what a difference Accounting Seed can make, contact us today and ask for a demo. We’re happy to showcase the power of connected, automated, cloud-based accounting systems.
Yes, cloud accounting software is safe when the vendor uses encryption, role-based access controls, and regular automated backups. Reputable vendors spend more on security staff, monitoring, and audited infrastructure than a single small business can on its own. Ask for current SOC 2 reports and backup details. Accounting Seed runs on the Salesforce Platform, so it inherits Salesforce’s platform-level security and permission model.
Cloud accounting software is the platform; cloud-based bookkeeping is a service. In cloud-based bookkeeping, a bookkeeper (often working remotely) uses cloud accounting software to record and reconcile day-to-day transactions on a business’s behalf. A business can run cloud accounting software with its own staff, with an outsourced bookkeeper, or with both, because everyone logs in to the same live ledger.
Yes. Connection options vary by vendor and plan and can include vendor-built connectors, third-party apps, or middleware. Accounting Seed is the exception: it is built natively on the Salesforce Platform, so accounting and CRM records share one database and there is no separate integration layer to maintain.
Yes, but capability varies widely by platform. Look specifically for multi-entity and multi-currency consolidation and project-level revenue recognition rather than assuming any cloud label covers them. Unified, Salesforce-native platforms such as Accounting Seed keep every entity and project in one database, which avoids the reconciliation lag common with connector-based multi-entity setups.
| See how Accounting Seed connects billing, payments, and reporting. Schedule a personalized demo today. |
See how accounting on Salesforce can eliminate the need for costly integrations—and silos of mismatched information—by sharing the same database as your CRM.
