While many CPA firms have moved to cloud applications over the years, there are still a large number that have chosen out of product functionality and comfort level to remain with desktop tax and accounting software, even in 2025.
However, with the increased demand for hybrid work, remote collaboration, and evolving security threats, many firms have gotten the message to shift whatever desktop applications they still prioritize to secure, cloud servers. They are doing this not only out of convenience, but economics as well.
But the real story goes deeper. Cloud hosting not only cuts traditional IT expenses, but also opens opportunities to improve productivity, reduce downtime, enhance efficiency, and ultimately increase revenue.
In this article, I’ll walk you through all the direct and indirect cost benefits of accounting software hosting so you can make an informed, strategic decision about your cloud transition.
1. Minimizes capital expenditure
Hosting accounting software on the cloud saves CPAs a significant capital investment in IT resources, including servers, storage, and air conditioning. However, there are several consequent cost benefits as well.
Firstly, the average hardware refresh cycle for businesses is typically three to five years. But because you procure most of your IT resources from a cloud service provider, your in-house refresh cycles can be delayed. Now, expensive in-house hardware upgrades are unnecessary as you access the accounting applications over the internet.
Cloud hosting also gives firms a flexible, scalable IT setup. Instead of purchasing high-performance desktops for every employee, providers offer on-demand user provisioning. You pay only for the resources consumed and can upgrade or downgrade virtual servers at any time.
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2. Prevents cyberattacks
According to IBM, the average cost of a data breach in the financial sector was estimated at $4.88 million. CPA firms have been the prime focus of attackers since the pandemic.
Only recently, we saw Wojeski & Co. pay a $60,000 penalty, as the accounting firm experienced a ransomware attack that exposed 47,000 personal records. Although every firm wants to deploy a robust, on-premises security infrastructure, the fact is that investing the majority of your budget in a dedicated SOC is not feasible.
In addition, the increasing cybersecurity skills gap makes it even more challenging to find the right professionals.
Accounting software hosting providers give you access to applications and data over a secure channel, shielded by a multilayered security architecture. They facilitate proactive protection through threat intelligence, network monitoring, and proactive threat hunting.
Secure transmission and access are ensured through data encryption, firewalls, and multifactor authentication. Accounting software hosting minimizes the cost of deploying an in-house security setup and prevents financial losses from cyberattacks.
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3. Enhances employee retention
A recent survey found that 67% of firms offer remote or hybrid work options, with 35% planning to increase these in the future. It is because the contemporary workforce prioritizes firms that offer a better work-life balance.
Firms today want to provide CPAs with flexible working options to reduce the stress of hectic schedules. It also helps reduce employee turnover rate, which is as high as 25%. Retaining employees for longer periods reduces the recurring hiring and training costs.
Hosting accounting software on the cloud empowers businesses to implement remote and hybrid work policies smoothly. When CPAs have the flexibility to work from any location, it increases loyalty and retention.
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4. Ensures 24/7 availability
Downtime damages a CPA’s reputation and results in lost billable hours. However, it is inevitable, as every piece of hardware is bound to have issues. Also, imagine if there is a major geographical event, like an earthquake, downtime could last for days. For instance, more than 200 professional services firms were affected by the hurricane in Florida last year.
The hosting providers ensure 24/7 availability of the accounting applications and data by implementing a robust disaster recovery plan and infrastructure redundancy. Even if there is a hardware issue or incident at the backend, you don’t lose any data and experience downtime, preventing the loss of billable hours.
5. Facilitates compliance
Whether it is the FTC Safeguards Rule, IRS Written Information Security Plan (WISP), or the California Consumer Privacy Act, every accounting firm needs to comply with various regulations, depending on its location and the clients it serves. The penalties for noncompliance can be catastrophic for the business.
For instance, under the FTC Safeguards Rule, every financial institution is expected to create a WISP. Not having a WISP can lead to penalties of up to $100,000.
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Accounting software hosting providers can help you avoid these penalties by implementing a comprehensive compliance framework. Moreover, regular monitoring, audits, and upgrades are conducted at the backend to ensure that all guidelines are being followed.
Conclusion
In addition to the above-mentioned cost benefits, accounting software hosting also offers numerous other perks. However, transitioning to the cloud is a big step. Therefore, you must consult an expert and do a thorough analysis of the current IT setup to understand the process, budget constraints, and IT bottlenecks.
ABOUT THE AUTHOR:
Dr. Sangeeta Chhabra, co-founder and executive director of Ace Cloud Hosting, is a leader and innovative entrepreneur with more than 20 years of experience in the IT sector. She has positioned the company as a leading global provider of IT and managed cloud services, celebrated for its QuickBooks hosting tailored for the accounting sector, managed security services, Desktop as a Service, and public cloud offerings for SMBs and enterprises. Under her leadership, Ace Cloud Hosting was honored as the Best Outsourced Technology Provider at the CPA Practice Advisor Readers’ Choice Awards 2023, among other accolades. Beyond her professional successes, Dr. Chhabra is a passionate advocate for women’s empowerment and is committed to fostering an inclusive environment at Ace Cloud Hosting.
Photo credit: Kulpreya Chaichatpornsuk/iStock
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