Cloud Accounting Software: Why Australian Businesses Are Making the Switch

What Is Cloud Accounting Software?

Cloud accounting software is accounting software that runs on remote servers and is accessed through a web browser or mobile app, rather than being installed on a desktop computer. Your financial data is stored securely in the cloud, backed up automatically, and accessible from any device with an internet connection.

For Australian small businesses, cloud accounting has become the standard approach. The shift from desktop software like MYOB Classic and QuickBooks Desktop to online platforms has been driven by the need for real-time data, remote access, and automated compliance features like BAS calculation and STP reporting.

Key Benefits of Cloud Accounting

Access Your Books Anywhere

With cloud accounting, you're not tied to a single computer. Check your cash flow from your phone, send an invoice from a job site, or review reports from home. This flexibility is particularly valuable for tradies, consultants and service businesses who spend most of their time out of the office.

Real-Time Financial Data

Unlike desktop software where data can be days or weeks old, cloud accounting connects directly to your bank accounts and updates in real time. You always know your current cash position, outstanding invoices and upcoming expenses. This is critical for making informed business decisions rather than relying on outdated figures.

Automatic Bank Feeds

Cloud platforms connect to Australian banks through secure data feeds, importing transactions automatically. Instead of manually entering every receipt and payment, you simply review and categorise imported transactions. Smart matching rules learn your patterns over time, making reconciliation faster with each passing month.

Collaboration with Your Accountant

One of the most practical advantages of cloud accounting is shared access. Your accountant or BAS agent can log in to your accounts at any time to review transactions, make adjustments, or prepare lodgements. There's no need to email backup files, hand over USB drives, or schedule in-person visits just to share your financial data.

Automatic Updates and Compliance

Tax rates change. Super guarantee percentages increase. Reporting requirements evolve. With cloud software, these updates are applied automatically by the provider. You don't need to download patches, install updates, or worry about running an outdated version. When the ATO changes STP requirements or GST rules, your software stays current.

Data Security and Backups

Cloud accounting platforms use bank-level encryption (typically 256-bit SSL) to protect your data in transit and at rest. Automatic daily backups mean you'll never lose your financial records to a hard drive failure, theft, fire, or ransomware attack. For Australian businesses, reputable providers store data on local servers to comply with data sovereignty requirements.

Cloud Accounting and Australian Tax Compliance

The Australian tax landscape has specific requirements that cloud accounting software is well-positioned to handle:

GST and BAS

Cloud accounting software automatically tracks GST on income and expenses, categorising transactions as GST-free, input-taxed, or subject to the standard 10% rate. At the end of each BAS period (monthly or quarterly), the software generates a pre-filled Business Activity Statement showing your GST collected, GST paid, PAYG withholding and PAYG instalments. You review the figures and lodge — either directly through the software or via your BAS agent.

Single Touch Payroll

If you have employees, your cloud accounting platform should include integrated payroll with STP Phase 2 reporting. This means every pay run automatically reports wages, tax withholding, super and income breakdowns to the ATO. Having payroll integrated with your accounting eliminates the need for separate payroll software and keeps your financial reports accurate in real time.

Superannuation

Cloud platforms calculate super guarantee contributions on ordinary time earnings and can submit payments to employee super funds via SuperStream-compliant clearing houses. With the super guarantee rate continuing to increase (reaching 12% from 1 July 2025), automated calculations prevent costly under-payment errors.

What to Look for in Cloud Accounting Software

When evaluating cloud accounting platforms for your Australian business, consider these factors:

• Australian compliance features — GST handling, BAS generation, STP Phase 2, super calculations and ABN validation should all be built in, not available as add-ons or third-party integrations.
• Bank feed support — Check that your bank is supported for automatic transaction imports. Most major Australian banks are covered, but some smaller banks or credit unions may not be.
• Invoicing capabilities — Professional invoicing with automatic payment reminders, online payment options and aged receivables tracking.
• Reporting — At a minimum: profit and loss, balance sheet, cash flow statement, aged receivables, aged payables and GST reports.
• Scalability — Can the platform grow with your business? Check limits on transactions, users, employees and connected bank accounts.
• Pricing transparency — Understand the total cost including base fees, per-employee charges, and any add-on costs for features like payroll or multi-currency.
• Data export — Ensure you can export your data in standard formats (CSV, PDF) if you ever need to switch providers or provide records to the ATO.

The Cost of Cloud Accounting

Cloud accounting subscription fees in Australia typically range from $15 to $80 per month depending on the feature tier. Payroll functionality often costs extra — sometimes $10 to $30 per month plus per-employee fees. Over a year, even a mid-tier plan can cost $500 to $1,000 or more.

However, free alternatives exist. Gimbla provides a complete cloud accounting and payroll platform at no cost for Australian small businesses. It includes invoicing, bank reconciliation, BAS preparation, payroll with STP Phase 2, and financial reporting — all without subscription fees. For businesses watching their cash flow, a free platform that covers all the essentials can be a significant advantage.

Making the Switch from Desktop Software

If you're currently using desktop accounting software, migrating to the cloud is a structured process:

1. Export your existing data — Most desktop software allows you to export your chart of accounts, customer list, supplier list and transaction history as CSV files.
2. Set up your cloud platform — Configure your business details, chart of accounts and tax settings in the new system.
3. Import historical data — Upload your exported data to establish opening balances and maintain continuity.
4. Connect your bank feeds — Link your bank accounts so new transactions start flowing in automatically.
5. Run both systems in parallel — For one to two months, process transactions in both the old and new systems to verify that everything matches.
6. Cut over — Once you're confident the cloud system is accurate, decommission the desktop software.

Summary

Cloud accounting has become the default for Australian small businesses, and for good reason. Real-time data, automatic bank feeds, remote access, built-in compliance features and seamless collaboration with accountants make it a clear upgrade over desktop software. The key is choosing a platform that's genuinely built for the Australian market — with GST, BAS, STP and super handled natively — rather than a global product with Australian features added as an afterthought. Whether you choose a paid subscription or a free platform like Gimbla, the move to cloud accounting will save you time and reduce compliance risk.