Early days
Before the 1990s, accounting primarily relied on manual, paper-based systems that were maintained by bookkeepers who had to be meticulous in their tracking. Physical ledgers were used to record every transaction and these thick bound volumes of ledgers occupied many shelves in offices. Storage was not only bulky, but also vulnerable to theft, fires or water damage.
Things took a digital leap in the 1980s and 1990s with the advent of on-premise accounting software. Tools like the early versions of QuickBooks were installed on local PCs and servers. Data entry could now be speeded up via keyboards and automation made it much easier to handle basic calculations and get reports printed. However, real-time insights were missing and scaling required additional licenses. Security remained a challenge.
Over the years, internet bandwidth and security improved. This led to a proliferation of cloud platforms and subsequent movement of on-premise software to the cloud. Today account keeping has been revolutionised further with cloud accounting. In simple words, cloud accounting involves the use of software hosted on the cloud to perform essential accounting tasks. This means that users can access software that sits on the cloud rather than having to install and maintain the software on the local server or device. As a result, businesses can manage all business-related transactions, accounts payable (AP), and accounts receivable (AR) in a remote manner. Key features include automation and AI for tasks, real-time analytics, mobile access, app integrations, rich reporting, and automatic compliance.
So, what are the benefits that cloud accounting software brings? Why are a vast majority of companies choosing to move to cloud accounting software? Here is a brief look at the benefits.
Real-time Financial Visibility
With cloud accounting software, the finances of a company are updated in real-time. This provides instant information on the company’s crucial financial data — be it cash flow, profit and loss, or balance sheet health. Thus, the need to wait till month-end to tally the accounts is eliminated, and any critical business decisions can be taken with the most up-to-date financial data available on the cloud accounting software.
Enhanced Security and Scalability
When organisations need increased computing resources, they can take advantage of the resources on the cloud. This eliminates the need to make investments in on-premise hardware or software. The cloud accounting software is also more secure since the data is stored at a remote location, is backed up on different data servers, and is not vulnerable to risks from fire, floods or theft.
Speed and Efficiency
On-premise software setup takes time. The software needs to be purchased, installed and personnel need to be trained to use the software. In contrast, with no such requirements for accounting software on the cloud, the setup is quicker allowing organisations to get started much faster than with on-premise software.
Easy access
With on-premise software, employees responsible for accounting need to be at a specific location in order to access the software. Cloud accounting has changed that completely. All that is needed is an internet connection and login credentials for authorised users to access the software and complete the required tasks. Needless to say, this is one of the most impactful advantages of cloud accounting. This also improves the collaboration among accountants and finance teams since the relevant data is easily available to all authorised users.
Lower expenses
Organisations that choose to adopt cloud accounting software do not have to spend on hardware and personnel to manage the system. Maintaining software on premises is also a more expensive proposition since companies need to spend on upgrades and maintenance of the software, which often comes with hefty bills. With usage-aligned pricing, cloud solutions help organisations control costs while planning budgets with higher confidence.
Conclusion
The global cloud accounting software market was valued at $3.5 billion in 2023, and is projected to reach $7.0 billion by 2032, growing at a CAGR of 7.8% from 2024 to 2032. It is clear that with all the benefits that a cloud accounting software offers, businesses that have not taken this step yet, should invest and adopt it at the earliest to avoid being left behind!
How Infosys IBPM can help
Infosys BPM’s Accounts Payable on Cloud (APOC) SaaS platform modernises the invoice-to-pay process using an Agentic AI framework and AI agents to deliver faster time-to-value and an improved stakeholder experience. It enables organisations to strengthen the three core business levers — Efficiency, Effectiveness, and Experience — while providing real-time visibility and insights to stakeholders.
