Why You Should Switch to Cloud Accounting Software in 2025

More than 70% of mid-sized firms are using cloud accounting software in 2025.

The reasons are clear: increased efficiency, compliance, security and for half the money.

But how does it work exactly?

What is Cloud Accounting Software?

Cloud accounting software is a financial tool or app that is hosted entirely online, rather than being hosted on a local server.

This means that you can access your financial data from anywhere in the world (as long as you have internet access), but it also improves collaboration with team members or clients.

A cloud accounting software will allow you to handle accounting tasks such as recording transactions, generating invoices, reconciling bank statements, and preparing reports.

Essentially, all you need to do is log in through a web browser or a mobile app, and you’ll get instant access to up-to-date financial information wherever you are.

Data is stored securely in the cloud, meaning there is no risk of losing records due to a hard drive crash or misplaced backups.

Additionally, the newer and more modern cloud accounting platforms go beyond basic bookkeeping.

They often integrate with payment processors, eCommerce platforms, payroll systems, and customer relationship management (CRM) tools. This creates a centralized ecosystem where financial data flows automatically, reducing manual entry and human error.

Types of accounting software

As with most tools, there is no one-size-fits-all.

Every accounting firm and accountant will have different needs, therefore it’s important to take into consideration your needs, business type, size, and level of automation you want before choosing an accounting tool.

While the goal of all tools is to manage finances efficiently, the features and scope can vary. Some accounting tools include:

• SMBs accounting software

These tools are designed for freelancers, startups, small companies, and growing businesses.

If this appeals to you, you’ll need a solution that is simple and straightforward but that is also scalable, so your business can continue to expand without having to switch from one platform to another.

Some features you’d be looking for include invoicing, expense tracking, bank reconciliation, basic reporting with an advanced reporting option, payroll, inventory tracking, and that integrates with your current tool stack.

Some example may include Zoho Books, Sage Business Cloud, QuickBooks Online, or Eleven.

• Enterprise-level ERP (Enterprise Resource Planning) Systems

If you have a large enterprise, you will need a tool that can handle as much as possible and combines seamlessly with other business functions.

Some must-have features include multi-currency support, complex consolidations, compliance automation, customizable workflows, and enterprise-grade analytics.

An example could be NetSuite.

• Industry-specific cloud accounting software

The same tool probably won’t work for an accounting firm, an NGO, or eCommerce store. So it is important to define your industry’s need ahead of time.

Some examples according to industry include:

→ Accounting firm: Eleven

→ Construction: Procore

→ NGO: Aplos

→ eCommerce: QuickBooks Commerce

• Hybrid accounting software

This means that you deploy your accounting software both on the cloud and on local servers.

Hybrid systems are particularly useful for businesses who need to handle very sensitive information, and have a good IT department or id you’re transitioning from an on-premise system to a cloud-based platform.

Generally, most of the data stored locally will be synced with your cloud app.

A good example of this type of accounting software is Sage 50cloud.

• AI-powered cloud accounting software

Last but not least, the most advanced and useful type of accounting software.

AI-powered cloud accounting software is desgined with artificial intelligence and machine learning that will automate and optimize all of your financial processes.

Some processes you can automate include expense categorization, transaction matching, or anomaly flagging.

Additionally, this type of tool offers predictive insights such as cash flow forecasting, revenue predictions, and risk analysis, which gives you a competitive edge by being able to advice your clients on the best financial moves.

The best AI accounting tools include Eleven, Vic.ai, and Botkeeper.

Cloud Accounting Software vs Traditional Accounting Software

You may still be wondering how a cloud accounting software is any different from the traditional accounting tools.

The truth is there are many challenges when using a traditional accounting software. Especially in this day and age where everything happens online and results are expected to be delivered almost immediately.

In the first place, a traditional system offers limited accessibility, which can lead to limited efficiency. As the system is hosted on a local server, transfers have to be done manually, which can ultimately lead to missed or outdated information.

Hosting financial documents on a local server also means that in case of power outage or hardware crash, you are likely to lose all information or have to go on with outdated backups.

Finally, a major issue that comes with a traditional system are the additional costs on updates and maintenance from  specilized IT team.

This leads to a complete lack of scalability as well. It is expensive and complicated for your system to grow effectively with your company.

If you wish to compare both systems, take a look at this comparative table:

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What Can a Cloud Accounting Software Do?

A cloud-based accounting system goes beyond traditional bookkeeping.

Instead of simply recording transactions, it offers many features to help you centralize financial data while automating routine processes.

Some features include:

• Automated bookkeeping

When you automate bookkeeping, bank and credit card transactions can be imported directly into the system through live feeds, where they are automatically categorized and matched.

Many modern tools use machine learning to suggest classifications, significantly reducing manual data entry and minimizing human errors.

• Invoice and billing

Cloud accounting software allows you to create and send professional invoices instantly, set up recurring billing for ongoing services, and accept online payments through credit card processors or gateways such as Stripe or PayPal.

You can track the status of each invoice in real time, seeing immediately which are paid, pending, or overdue.

• Automated accounts payable and receivable

For AP, the system can capture invoices from vendors, extract details such as due dates and amounts using OCR technology, and schedule payments automatically while keeping track of outstanding bills.

For AR, automation simplifies generating and sending invoices, applying recurring billing for subscriptions, and providing customers with online payment options.

The software can track the status of each invoice, send reminders for overdue payments, and automatically reconcile incoming funds with outstanding balances.

• Payroll management

If you have employees, you can use this feature to automatically calculate salaries, deductions, and reimbursements, allowing you to pay your employees accurately and on time in order to stay in compliance with labor and tax laws.

Some systems also support international teams with multi-currency payroll and integrate directly with HR platforms.

• Tax compliance

The software automatically calculates sales tax, VAT, or GST according to jurisdiction, prepares tax-ready reports, and keeps a full audit trail of transactions and user activity.

• Document management

Some tools, such as Eleven, also offer a DMS that will store your receipts, invoices, and contracts in the cloud.

OCR technology can extract data from documents and link them directly to relevant transactions.

• Financial reporting and analytics

Cloud platforms can instantly generate profit and loss statements, balance sheets, and cash flow reports, often displayed in real-time dashboards with visual charts and KPIs.

More advanced tools include forecasting capabilities, allowing businesses to project revenue, expenses, and cash flow based on historical data.

Reports can also be exported for investors, lenders, or internal teams.

Cloud accounting software is more than a didigtal general ledger. It is an intelligent system that transforms financial management into a proactive tool for business growth and strategic decision-making.

Benefits of a Cloud-Based Accounting Tool

As you can imagine, switching to a cloud-based system offers many benefits. These are just some of our favorites.

For starters, your accounting firm will be saving money by not having to invest in expensive serves, updates and qualified IT teams.

Cloud solutions work on a subscription model so you can plan your expenses on the tool accurately. Plus, you only pay for what you use. Maintenance, security, and updates are included in the service.

Cloud platforms also allow more accurate insights that will lead to better and smarter decision by offering access to real-time financial data.

You no longer have to wait for monthly or weekly reports that may be based on outdated data.

Instead you can generate and receive completely updated  insights into cash flow, expenses, and profitability. Many systems also offer visual dashboards and advanced analytics, making it easier to identify trends, forecast future performance, and respond quickly to financial challenges.

Another major benefit is time efficiency.

By automating repetitive tasks such as data entry, bank reconciliation, and recurring invoicing, cloud accounting software drastically reduces the hours spent on manual bookkeeping.

This frees up time for you to focus on strategic work, like planning for growth or improving profitability.

Additionally, your team becomes much more efficient by improving remote collaboration with a cloud system.

In other words, it doesn’t matter that your team or clients are scattered all over the world, cloud accounting software allow multiple users to log into the same system and files simultaneously and work together on updated documents without having to wait around for the latest version of a file.

Finally, a cloud accounting system ensures high-level security and compliance to guarantee your firm is protected at all times.

To avoid security breaches and cyber attacks, cloud providers use encryption, multi-factor authentication, and automatic backups to safeguard sensitive financial information.

What is the Best Accounting Software?

If you’re looking for the best cloud accounting software you can’t go wrong with Eleven.

Eleven is a modern cloud-based accounting platform designed for growing businesses.

It combines automation, scalability, and advanced reporting into one streamlined system, making it easier to manage multiple clients and high transaction volumes.

Some of its most popular features include:

• Multi-company and multi-currency support
• AI-powered automated bookkeeping
• Real-time bank reconciliation
• Customizable reporting and dashboards
• Built-in business intelligence (BI) tools
• Secure document management
• Role-based multi-user access
• Cloud-hosted on AWS with encryption
• Scalable general ledger capable of handling thousands of entries
• Per-accountant pricing model with unlimited clients

Move your finances to a cloud accounting software

If you’re still using a traditional system you’re missing out.

Let’s go over what a cloud-based accounting tool can do for you:

• Access client books anytime, anywhere, enabling real-time collaboration
• Reduce manual data entry with automation, saving time on repetitive tasks
• Handle multiple clients and entities seamlessly from one platform
• Gain real-time financial insights with dashboards and analytics
• Enhance security with encrypted cloud storage and automatic backups
• Ensure compliance with constantly updated tax and accounting regulations

And much more...

Ready to give Eleven a go? Start your test drive now!