Best Cloud-Based Bookkeeping Software for Growing Businesses

Every growing business eventually gets to a point where the bookkeeping setup they had when they first started is no longer able to keep up. As your business acquires more customers, works with more suppliers, and adds more employees, your accounting system must keep pace. Too often, though, this aspect of the business gets deprioritized in favor of other tasks such as product development or growth until it’s too late, as the following statistics indicate:

• 38% of failed businesses in the US failed because they ran out of cash and were unable to secure funding
• 47% of businesses say they spend too much time fulfilling compliance requirements, with 51% outsourcing to third-party providers

These problems all have their roots in improper bookkeeping, which is why cloud bookkeeping tools have become popular in growing businesses, with studies showing that over 75% of small and medium-sized businesses in the U.S. use cloud-based bookkeeping tools. This guide explains the online bookkeeping benefits, some of the best cloud bookkeeping software options for growing businesses, and how to choose a cloud bookkeeping tool for your business.

What is cloud bookkeeping?

Cloud bookkeeping is the process of managing a business’s financial records using cloud-based accounting software, which allows users to access the system on any device with an internet connection, rather than relying on fixed hardware. These systems usually integrate with banking and payment platforms, automate processes such as transaction recording, and allow you to define your own workflows for operational tasks, including invoicing, expense tracking, and cost approval.

The main features of cloud bookkeeping tools typically include the following:

• Cloud-based access from any mobile device, as long as there is internet connectivity
• Access control, with various access levels depending on who needs to perform which tasks
• Importing bank statements/credit card statements and recording transactions captured within them without any manual input, as well as reconciling these inputs with ledger entries
• Transaction classification based on a chart of accounts
• Document storage to provide proof of transactions
• Publishing of standard reports such as P&L reports, balance sheets, and cash flow projections, as well as easy-to-understand dashboards that business leadership can view from anywhere
• Integration with taxation structures so that any changes in these structures are automatically reflected in the system with a single update

Best cloud bookkeeping software for growing businesses

If you’re looking for cloud bookkeeping software for your growing business, it’s always tempting to search for the single best software that’s available. However, there is no single definition of “best” when it comes to bookkeeping software. You need to evaluate alternatives based on their features, pricing plans, and fit for your business before deciding which one is most compatible. Here are some of the best cloud bookkeeping software alternatives:

1. Zoho Books

Zoho Books lets users easily create custom quotations and invoices with multilingual and multicurrency support. You can also accept online payments across payment methods by sharing payment links with your customers. Revenue recognition in Zoho Books is automated, allowing you to recognize revenue upon delivery of your product/service, which is especially useful for service businesses with milestone-based payments or longer delivery cycles. Other features include:

• Sales tax, vendor payment tracking, sales tax, and 1099 report
• W-9 form management
• An inventory management module that allows you to restock proactively
• Project management module with budgeting, timesheets, and project profitability analysis

Zoho Books offers a free-to-use plan with limited functionalities, with paid plans ranging from $15 to $60. Zoho Books offers a free trial, a great way to evaluate whether it suits your business.

2. QuickBooks

QuickBooks offers all the basic features that cloud bookkeeping apps usually do, but where it stands out is in its high-level features. QuickBooks provides an easy connection to e-commerce sales channels and syncs data from spreadsheets, decreasing manual effort. It tracks movement via GPS, so you have easy access to how much you traveled for business, which is a nifty addition during tax season. Other advanced tools include:

• Configurable dashboards
• Batch invoicing
• Batch expense tracking
• Automatic backups, so your data can be easily recovered

QuickBooks premium features, however, come with a slightly higher price tag, with monthly plans ranging from $19 for the single-user plan to $137.50 for the 25-user plan. If you want to learn more about QuickBooks Online tips for use, the tool features a well-stocked help center that can resolve any doubts you may have.

3. Xero

Xero allows users to accept payments via a variety of methods and is integrated with over 21,000 banks, making reconciliation easy. You can easily invoice in Xero from any device and set the system to send reminders, which helps when following up on payments. Xero also features inventory tracking, multi-currency accounting, sales tax integration, and an easy-to-understand dashboard for reporting. An added bonus of using this tool is that Xero bookkeeping guides first-time users through a vast repository of knowledge, helping them get up to speed on the platform. Xero is priced between $29 and $75 per month, depending on the plan, although there may be significant promotional pricing from time to time.

4. FreshBooks

FreshBooks is often used by service-based businesses that want reliable invoicing, expense tracking, time tracking, and client-oriented workflows. It is a great cloud-based accounting software for small businesses, with invoicing, expense tracking, and receipt management as core functions. It’s a great fit when:

• You run a service business where you bill clients based on time
• Invoicing on time and getting paid faster are key priorities for you
• You want simple bookkeeping workflows
• You want a seamless experience for estimates, proposals, and billing

5. Wave

Wave is a cloud-based bookkeeping tool used by over 350,000 small businesses seeking a low-cost solution. Some of the features that Wave offers are:

• Income and expense recording
• Cashflow projection
• Easy invoicing with customers having the option to pay via credit card, online banking, or Apple Pay
• Payroll module

Wave has a free-to-use option and a PRO plan that costs $190 per year when billed annually.

6. Sage Intacct

Sage Intacct is used by over 30,000 finance teams of medium-sized businesses and offers AI-powered accounting. It offers AI-powered features such as the following:

• An agent that helps close books up to 70% faster
• A quality assurance agent that helps flag off errors
• An AP automation agent that processes invoices up to 2x as fast
• Multi-entity accounting

Sage Intacct can also be integrated with tools like Salesforce, features a payroll module that works in all 50 U.S. states, and has an interactive visual explorer that helps you make decisions based on easy-to-understand dashboards. Pricing for Sage Intacct is available only on request, after a consultation with a company advisor.

Does implementing cloud bookkeeping tools guarantee great bookkeeping?

Many growing businesses choose cloud bookkeeping software but still struggle because they lack the discipline to execute bookkeeping tasks. Bookkeeping is not the core operation of most businesses, and it is therefore unreasonable to expect teams to treat it with the same degree of commitment they would, say, to product or customer experience. However, third-party outsourced bookkeeping service providers make bookkeeping their core service, and hence their teams are great at maintaining discipline, which is why such services tie in so well with cloud bookkeeping tools.

Some of the services offered by outsourced bookkeeping providers include:

• Transaction recording, with categorization as per the chart of accounts
• Reconciliation of books with bank statements
• Managing accounts payable (AP) and accounts receivable (AR)
• Month/year-end closure of books
• Reporting to senior leadership

Most third-party service providers have teams comfortable with a wide variety of cloud bookkeeping tools, and the burden of training their staff on the tool you use lies with the service provider. If you’re still using spreadsheets for bookkeeping, an outsourced bookkeeping service provider such as Atidiv will happily integrate a cloud bookkeeping tool within your workflows so that your system becomes error-free and scalable.

Final thoughts

Cloud bookkeeping tools are a key addition to growing businesses and help them manage multi-location operations. They offer features such as system-driven workflows, role-specific access, and dashboards for reporting, which reduce manual work, improve record-keeping accuracy, and reduce stress due to compliance failures. Businesses can benefit tremendously from such tools if the choice of tools matches well with the business’s lifecycle stage and growth path.

If your business is struggling with bookkeeping and wants to implement outsourced technology integration, Atidiv can help you build a reliable bookkeeping system, powered by the cloud bookkeeping tool that is best suited for your business. Get in touch with us today, and let’s discuss how we can add value to your growing business.

FAQs

1. What is cloud bookkeeping?

Cloud bookkeeping is the process of managing bookkeeping using online accounting software that allows access from any device with a secure login. Cloud accounting tools enable businesses to manage multi-location operations at scale, eliminating manual effort and helping business leaders make data-driven decisions.

2. What is the biggest advantage of cloud bookkeeping for growing businesses?

The biggest advantage of cloud bookkeeping is that it helps businesses deal with increased transaction volume. Pre-defined workflows for invoicing, expense tracking, and bank reconciliation reduce manual work significantly and improve the business’s overall financial condition. Business owners/leadership also benefit from accurate information at the tap of a screen, resulting in better decision-making.

3. How do I choose the best cloud bookkeeping software for my business?

There is no single best option for cloud bookkeeping software, but you should evaluate the features and pricing plans of various alternatives before deciding which one best suits your business. When choosing software, a key consideration is not just how much the tool costs today, but also how it enables scalability and fits your business’s expansion path.

4. Is QuickBooks considered cloud bookkeeping software?

Yes. QuickBooks is a cloud-based accounting platform that supports invoicing, tracking income and expenses, and capturing mobile receipts. It can be accessed online rather than installed locally, a key feature of cloud bookkeeping software.

5. Is Xero good for bank reconciliation in cloud bookkeeping?

Xero is widely associated with bank reconciliation workflows, including tools for matching statement lines, setting bank rules, and handling bulk reconciliation. These features are useful for businesses that want to reduce manual matching and keep their cash records up to date. Xero also supports integrations that extend bills and expense workflows through connected apps.

6. When should a business upgrade from basic cloud bookkeeping tools to more advanced platforms?

A business should consider upgrading when transaction volume grows, reporting requirements become more complex, or it expands from a single entity to a multi-entity/group business. Common triggers to upgrade include frequent delays in monthly closing, repeated manual corrections, and a return to spreadsheets for approvals or consolidation.