Cloud Solutions in Accounting: Benefits and Security

In brief:

• Cloud solutions in accounting allow access to financial data anytime and anywhere.
• They help automate accounting processes, such as bank transaction imports and report preparation.
• Modern solutions provide high data security through encryption, access control, and backups.
• When choosing a solution, it is important to evaluate functionality, integrations, security certifications, and compliance with legislation.

Cloud solutions in accounting include accounting software and financial data systems that operate online, enabling access to data anytime and from any device. This means that any accounting tasks—such as tracking income/expenses or issuing invoices—can be performed without installing local software on a computer. Although the software operates 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, while cloud-based software can be accessed from anywhere with an internet connection;
• Local software requires manual updates, while cloud-based software updates automatically;
• Local software requires IT involvement for maintenance, while cloud-based services are fully managed by the provider.

Thus, a company no longer needs to maintain its own servers and software—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 used paid cloud services. Nevertheless, this is significant growth compared to 2023, when it was around 45% (Eurostat, 2026). Latvia is also close to the EU average—44% of Latvian companies used cloud services in 2025 (compared to 35% in 2023). For example, 86% of Jumis solution clients use the cloud version of the program.

Why use cloud solutions in accounting?

Cloud solutions have brought many possibilities to our daily lives. We can easily store photos and videos in the cloud and share information without sending dozens of emails. However, these are features we experience personally when using phones or computers. Cloud solutions offer much more—the ability to work faster and more efficiently, even in accounting.

Online data storage and access

Thanks to cloud solutions, accounting has become a profession that can also be performed remotely. This offers the possibility of not storing financial data on a local computer or company server. There's no need to invest in maintaining them—data centers take care of that. All data can be accessed anytime, anywhere. There's no need to rush to the office every time an urgent solution is needed—it can be done immediately.

Automated bank and payment integration

Cloud solutions also simplify transactions with banks. For example, it is possible to automatically import bank transactions, perform bank reconciliation, and reduce manual data entry. These features lower error rates, administrative costs, and allow for faster report preparation. International studies show that automation can reduce manual accounting work by up to 30% (Gartner).

Real-time financial reports

Previously, data and reports for a specific period were only available after creating reports or closing the year. Now, with cloud solutions, cash flow is visible in real-time, automatically generated profit/loss reports are available, and managers can easily monitor KPI performance. According to McKinsey & Company, companies using automated financial tools make decisions faster and base them on data rather than retrospective analysis.

Data security and backups

While cloud solutions allow access to data anytime and anywhere, this does not mean they are freely accessible to everyone. These technologies ensure 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

Previously, all programs and systems existed on separate devices, and connecting them was very complicated, if not impossible. With cloud solutions, this is now easy to achieve. Accounting programs 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. However, properly chosen cloud solutions in accounting often provide a higher level of data security than locally installed programs, as they are maintained by specialized data centers with international security standards.

A high-level cloud solution ensures:

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

Service providers often indicate that their solution complies with ISO 27001 (Information Security Management Standard). This means the cloud solution provider conducts regular security audits, has implemented risk management, and documents incident management processes. Additionally, all GDPR requirements must be followed, which is especially important in accounting, where sensitive information is handled.

Features like automatic backup generation are also part of the security system when using cloud solutions. They protect against complete data loss and help restore necessary information even after a cyberattack.

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

For example:

• Improper access rights management;
• Weak passwords or not using 2FA;
• Unsecured internet connections;
• Choosing unverified service providers.

Therefore, it is important that a company not only uses cloud solutions in its daily work but also educates its employees on all necessary steps to ensure data security.

How to choose the most suitable cloud solution for accounting?

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

Compliance with Latvian regulations

The most important factor when choosing an accounting program based on a cloud solution is whether it complies with the legislation and regulations of the specific country. All the benefits a cloud solution can offer are meaningless if the program cannot prepare legally compliant reports, correctly calculate VAT, etc.

Functionality and automation options

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 program. Not everyone needs every possible accounting action or report. However, in the long term, a company will benefit if the program offers automatic bank transaction imports, VAT calculations, the ability to create and send e-invoices, and generate financial reports.

Integration with other company systems

Few companies today use just one program that can provide everything. Depending on the business sector and required functions, it is important to ensure that the chosen cloud-based accounting program offers extensive integration options. For example, with banks, e-commerce platforms, warehouse systems, CRM tools, and payroll systems. However, it is important not only that extensive integration options are offered but also that they are easy to implement. Therefore, attention should be paid to the conditions for integrating other systems.

Data security and certification

When evaluating cloud solutions, it is crucial that the specific service provider ensures comprehensive data security and has undergone the necessary certification. Any cloud-based accounting program 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-based accounting program to use, it is worth looking at the pricing model of the specific service provider. It is usually subscription-based. Often, there are several tiers to choose from based on the number of users, functionality level, number of integrations, and other additional modules.

Sometimes, the initial cost is very favorable, but as the company grows, the cost proportionality may not be as advantageous. Therefore, it is worth paying attention to how the price changes as requirements grow. An excellent solution for growing companies is accounting programs that offer a transaction-based pricing model—pay as you use.

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

Frequently Asked Questions (FAQ)

Is cloud-based accounting secure?

Modern cloud solutions in accounting generally provide a high level of data security because they use data encryption, access control, and regular backups. Many service providers comply with international security standards, such as ISO 27001, set by the International Organization for Standardization. Additionally, data processing in the European Union must comply with GDPR requirements, monitored by the European Commission.

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

Cloud solutions in accounting provide access to financial data anytime and anywhere, as well as automate several processes, such as bank transaction imports and financial report preparation. This helps reduce manual work and the risk of errors.

Is cloud accounting suitable for small businesses?

Yes, cloud solutions in accounting are often particularly suitable for small and medium-sized businesses because they do not require large initial investments in IT infrastructure. Systems usually operate on a subscription basis, allowing companies to pay only for the features and number of users they need. Additionally, cloud systems make it easy to collaborate with accountants or financial specialists remotely.