Cloud solutions in accounting: benefits and security

In summary:

• Cloud-based accounting solutions provide access to financial data anytime, anywhere.
• They help automate accounting processes, such as importing bank transactions and preparing reports.
• Modern solutions ensure high data security through encryption, access control, and backups.
• When choosing a solution, it is important to evaluate functionality, integrations, security certifications, and regulatory compliance.

Cloud-based accounting solutions include accounting software and financial data systems that operate online, allowing data to be accessed at any time from any device. This means that any accounting task—such as recording income/expenses or issuing invoices—can be performed without installing local software on a computer. Although the software itself is hosted online, it performs all the same functions that would be available locally.

The main differences between local and cloud-based software are:

• Local software can only be accessed on a specific device, whereas cloud-based software can be accessed from anywhere with an internet connection;
• Locally, software must be updated manually, while in the cloud, this happens automatically;
• Locally, IT involvement is required for maintenance, whereas in the cloud, everything is managed by the service provider.

Consequently, the company no longer needs to maintain its own servers and programs—everything is provided by a cloud-based service.

Cloud solutions are not new; they have been widely available for several years. However, digitalization does not happen overnight; in 2025, only about 53% of European Union companies were using paid cloud services. Nevertheless, this represents significant growth, considering that in 2023, the figure was around 45% of companies (Eurostat, 2026). Latvia is also not far from the EU average—in 2025, 44% of Latvian companies used cloud services (by comparison, in 2023, it was 35%). For example, 86% of Jumis solution clients use the cloud version of the program.

Why use cloud solutions in accounting?

Cloud solutions have introduced many different possibilities into our daily lives. We can easily store photos and videos in the cloud and share information without the need to send dozens of emails. These are features we each experience when using our phones or computers. But cloud solutions offer much more—the ability to work faster and more efficiently, including in accounting.

Data storage and online access

Thanks to cloud solutions, accounting is now a role that can be performed remotely. This offers the opportunity to avoid storing financial data on a local computer or company server. There is no need to invest funds in their maintenance—data centers take care of that. Furthermore, all data can be accessed at any time, from any location. There is no need to rush to the office every time an urgent solution is required—it can be handled immediately.

Automated banking and payment integration

Cloud solutions also streamline banking transactions. For instance, it is possible to automatically import bank transactions, perform bank reconciliations, and reduce manual data entry. Such capabilities lower error rates and administrative costs while enabling faster report preparation. International studies show that automation can reduce manual accounting tasks by up to 30% (Gartner).

Real-time financial reporting

Previously, data and reports for a specific period were only available upon request or at year-end. Today, using cloud solutions, cash flow is visible in real-time, automatically generated profit and loss statements are available, and management can easily track KPI performance. According to McKinsey & Company analysis, companies that use automated financial tools make decisions faster and rely on data rather than retrospective analysis.

Data security and backups

Although cloud solutions allow access to data anytime and anywhere, this does not mean they are accessible to everyone. These same technologies provide data encryption, multi-level access control, and two-factor authentication. They also protect against data loss by creating regular backups.

Integration with other business systems

In the past, all programs and systems existed on separate devices, and connecting them was highly complex, if not impossible. With cloud solutions, however, this is now easily achievable. Accounting software can be integrated with e-commerce platforms, warehouse systems, payroll tools, and CRM systems. Such integrations reduce data duplication and ensure a unified financial flow.

Security in cloud solutions

One of the most common arguments against using cloud solutions is data security. In reality, however, properly selected cloud accounting solutions often provide a higher level of data security than locally installed software, as they are maintained by specialized data centers that adhere to international security standards.

A high-level cloud solution provides:

• Data encryption during transit (SSL/TLS);
• Encryption at rest;
• User role and access rights control;
• Two-factor authentication (2FA).

It is also common for service providers to indicate that the solution is compliant with ISO 27001(Information Security Management Standard). This means that the cloud solution provider conducts regular security audits, has implemented risk management, and documents incident management processes. Furthermore, full compliance with GDPR requirements is currently mandatory, which is particularly critical in accounting, where sensitive information is handled.

Features such as automatic backup generation are also part of the security system when using cloud solutions. They protect against total data loss and help restore necessary information even in the event of a cyberattack.

However, no matter how hard cloud solution providers strive to ensure absolute security, it is impossible if the service recipient does not also take care of their own company's data security.

For example:

• Improper management of access rights;
• Weak passwords or failure to use 2FA;
• Insecure internet connection;
• Choosing an unverified service provider.

Therefore, it is important that a company not only uses cloud solutions in its daily operations but also educates its employees on all the necessary steps to keep data secure.

How to choose the most suitable cloud solution for accounting?

If a company has decided to start using cloud solutions for accounting, it is necessary to conduct research to find the one most suitable for its specific needs. Not all programs are the same, and their offerings can differ significantly. Let us look at the most important factors to consider before purchasing a program.

Compliance with Latvian legislation

The most important factor when choosing a cloud-based accounting program is whether it complies with the specific country's legislation and regulatory requirements. All the benefits a cloud solution can provide are meaningless if the program cannot prepare legally compliant reports, correctly account for VAT, etc.

Functionality and automation capabilities

The main advantage of cloud solutions is the ability to automate processes for more efficient work. Therefore, attention should be paid to the functionality of the specific manufacturer's program. Not everyone needs every possible accounting function or report. However, in the long run, a company will benefit if the program offers automatic bank transaction imports, VAT calculation, the ability to create and send e-invoices, and generate financial reports.

Integration with other company systems

Rarely does a company today use only one program that can provide absolutely everything. Considering your field of operation and necessary functions, it is important to ensure that the chosen cloud-based accounting program offers sufficiently broad integration capabilities. For example, with banks, e-commerce platforms, warehouse systems, CRM tools, and payroll systems. However, it is important that not only are broad integration options offered, but that they are also simple to implement. Therefore, pay attention to the requirements for integrating other systems.

Data security and certification

When evaluating a cloud solution, it is essential that the service provider ensures comprehensive data security and has obtained the necessary certifications. Any cloud-based accounting software must:

• Use data encryption
• Provide two-factor authentication
• Create automatic backups
• Comply with ISO 27001

Cost model and scalability

Before making a final decision on which cloud accounting software to use, it is worth examining the provider's pricing model. Most operate on a subscription basis. There are often several tiers to choose from, based on the number of users, level of functionality, number of integrations, and other additional modules.

Initial costs are often very attractive, but as a company grows, the cost-effectiveness may change. Therefore, it is worth paying attention to how the price scales as requirements increase. An excellent solution for growing companies is accounting software that offers a transaction-based pricing model – pay for what you use.

Cloud solutions in accounting are already widely available and are changing the way accountants work. They not only help reduce manual labor and improve data processing speed but also ensure more secure, flexible, and transparent financial process management. By adding artificial intelligence, they become a powerful ally for any business. Cloud solutions are no longer just a technological innovation: they have become a practical business tool that helps companies work smarter and more securely in the digital economy.

Frequently Asked Questions (FAQ)

Is cloud accounting secure?

Modern cloud accounting solutions typically provide a high level of data security by using encryption, access control, and regular backups. Many service providers adhere to international security standards, such as ISO 27001, established by the International Organization for Standardization. Furthermore, data processing within the European Union must comply with GDPR requirements, which are overseen by the European Commission.

What are the main advantages of using cloud solutions in accounting?

Cloud accounting solutions provide access to financial data anytime and anywhere, and automate various processes, such as importing bank transactions and preparing financial reports. This helps reduce manual labor and the risk of errors.

Is cloud accounting suitable for small businesses?

Yes, cloud-based accounting solutions are often particularly well-suited for small and medium-sized enterprises, as they do not require significant initial investment in IT infrastructure. These systems typically operate on a subscription basis, allowing companies to pay only for the features used and the number of users. Furthermore, cloud systems facilitate seamless remote collaboration with accountants or financial specialists.