If you’ve landed on this page, chances are you’re curious about all the terminology around cloud accounting software.

Or, you’re already using some form of accounting software and looking for a more suitable, modern alternative – and you’ve been thrown slightly different phrases.

Either way, you probably want to understand the differences between:

• Cloud-based accounting software

• Cloud-hosted accounting software

• Cloud-native accounting software

They all sound similar, right? But are they? 

And more importantly: What’s the actual difference – and how does it impact finance and accounting teams?

First things first: what do we mean by “cloud accounting software”?

At the simplest level, cloud accounting software just means: Your finance system isn’t installed on your own servers or computers – it’s accessed over the internet.

So your team can log-in in the office or at home, from any location – whether you’re in London, Manchester, or Nairobi, using a laptop. All you need is a device and an internet connection.

From your perspective, the basics of cloud software are the same – no local installs or upgrades for your IT team, a subscription-style pricing, and easier remote work for your finance team.

So far, so good.

But how that cloud solution is built and delivered makes a big difference over time. That’s where the terms cloud-hosted and cloud-native come in.

What is cloud-hosted accounting software?

Think of cloud-hosted accounting software as:

A traditional, older on-premise accounting system that’s been moved (“lifted and shifted”) to run on remote servers in a data centre or cloud platform.

You’re still accessing it over the internet, but under the hood it’s often the same architecture that was originally designed for desktops or local networks.

It covers the basics – you get the benefit of remote access – and it can be “good enough” for small businesses where the finance operation is relatively simple and not growing fast.

What are the drawbacks of cloud-hosted accounting software?

Here are the key things to consider when deciding between cloud-hosted vs cloud-native:

• Performance and responsiveness – because cloud-hosted systems weren’t originally built for use via browsers, they can feel slow and clunky.

• Limited scalability – adding more entities, users, or data volume can lead to performance issues or higher hosting costs.

• Upgrade pain still exists – you may still face big version jumps and occasional downtime.

• Weaker integrations and automation – legacy architectures often don’t play as nicely with modern APIs, reporting tools, and automation platforms.

• User experience can lag – older software can feel dated and harder to train new finance team members on.
  
  

In short: cloud-hosted accounting software is often a half-step into the cloud. You get remote access, but not always the deeper benefits you might expect from “true” cloud.

What is “true cloud” – cloud-native (cloud-based) accounting software

Now, cloud-native accounting software (often also referred to as cloud-based) is different:

It’s accounting software that was designed from day one to live in the cloud – not adapted later.

That usually means:

• Modern SaaS architecture

• Regular, automatic updates

• Built around APIs and integrations

• Designed for browser and mobile from the start
  
  

What are the benefits of cloud-native accounting software for finance teams

This is where you and your finance team will really start to feel the difference.

• Scales with your business – add users, entities, and transaction volumes without needing new servers or complex infrastructure decisions.
  
  

• Continuous improvement – features and security updates roll out regularly, often with minimal or no downtime.
  
  

• Stronger integrations – cloud-native tools tend to connect more easily to CRMs, reporting tools, banking feeds, expense apps, and other systems in your finance stack.
  
  

• Better automation and workflows – approval workflows, rules, and integrations can significantly reduce manual work and rekeying.
  
  

• Better user experience – typically easier to learn and use, which helps with adoption across both finance and non-finance users.
  
  

• Anywhere, anytime – reliably – built from the ground up to handle teams located around the world and heavy web use.
  
  

Cloud-hosted vs cloud-native: what’s the actual difference for a CFO?

On day one, they both look similar:

You log in via the internet. Your team can work from anywhere. Job done… right?

Not quite. Over time, the differences add up – as described above.

From a CFO’s perspective, cloud-native accounting software tends to line up better with:

• Growth and acquisition plans

• Digital transformation agendas

• Data and automation strategies

• Expectations from the wider business (real-time, self-serve reporting etc)
  
  

How will your finance team feel the difference between cloud-hosted and cloud-native?

So how does the comparison between the two actually play out day-to-day?

Month-end and year-end close

Cloud-hosted:

• Batch processes, report runs, and consolidations can be slower

• You might still rely on chunky exports into spreadsheets and manual reconciliations

Cloud-native:

• More work can be automated or run in near real time

• This shortens the close and reduces fire-fighting
  
  

Remote teams and auditors

Cloud-hosted:

• Access may still rely on VPNs, remote desktops, or specific devices

• Sharing information with auditors and stakeholders can feel clumsy

Cloud-native:

• Auditors and stakeholders can get controlled, role-based access

• Your team can work from anywhere with just a browser and an internet connection
  
  

Adding new entities, regions, or lines of business

Cloud-hosted:

• New entities may require heavier configuration, bespoke work, or more infrastructure

Cloud-native:

• Typically easier to spin up new entities, standardise charts of accounts, and roll out consistent processes globally
  
  

Reporting and insight

Cloud-hosted:

• Often relies heavily on spreadsheets and manual reporting

Cloud-native:

• More likely to support real-time dashboards, flexible reporting, and easier integration with other analytics tools
  
  

How to choose between cloud-native and cloud-hosted accounting software

There’s no one-size-fits-all answer, but here are the key questions to ask yourself and your team.

1. Do you plan to grow and scale?

• Are you expecting more entities, more geographies, or more complex structures?

• Will transaction volumes and user numbers rise significantly?

If yes, a cloud-native accounting platform will typically give you more headroom and flexibility.

2. Do you need advanced capabilities and functionality?

Consider whether you need:

• Multi-entity consolidation

• Complex approvals and workflows

• Project, fund, or cost-centre accounting

• Rich, flexible reporting and analytics

• Strong integrations with CRM, banking, and payroll

If you’re pushing beyond basic general ledger and AP/AR, cloud-native tools are usually better equipped to support that complexity without resorting to endless spreadsheets or custom bolt-ons.

3. How fast do you want to move?

• Are you under pressure to shorten the close?

• Do stakeholders want faster, more visual reporting?

If you want finance to match the pace of the rest of the organisation, relying on older, cloud-hosted systems may hold you back.

4. Are you looking for a “for now” solution or to future-proof your accounting system?

This is where the mindset shift really matters.

“For now” thinking:

• Staying with a cloud-hosted system might feel easier because it looks familiar.

• It can be tempting if you’re under immediate pressure and want minimal disruption.

Future-proof thinking:

• Cloud-native accounting software is usually better aligned with where technology, integration, and automation are heading.

If you’re choosing a platform you expect to live with for the next 5–10 years, cloud-native is very often the more strategic choice.

So… what’s the bottom line?

If all you care about is, “Can my team log in from anywhere?” then both cloud-hosted and cloud-native accounting software will tick that box.

But as a CFO, you typically care about more than that:

• How agile can we be as a finance function?

• How easily can we scale without replacing the system again?

• How much manual effort can we remove?

• How quickly can we get accurate, insightful information into the hands of decision-makers?

That’s where the difference between cloud-hosted and cloud-native accounting software stops being technical jargon and starts becoming very real.

How about Aqilla?

Now that we’ve unpacked what cloud-native accounting software actually means, let’s answer the question about Aqilla.

Aqilla is a truly cloud-native finance and accounting platform – built in the cloud, for the cloud.

Long before “cloud” became the industry buzzword, Aqilla was being developed with a browser-based SaaS model in mind. We’ve been focused on accounting software for around 20 years, and that depth of experience is baked into how the product works today.

So, if you’re the type of CFO who enjoys the finer details of fintech history, our founders will happily take you on a tour of how it all evolved – and share our vision of “lights-off accounting” (spoiler: it’s much cooler than it sounds, and very much about automation, not darkness!).

What does being cloud-native mean in practice with Aqilla?

Because Aqilla is cloud-native, you get all the advantages we’ve just talked about:

• Anywhere access for finance teams

• Regular, incremental improvements without big, disruptive upgrades

• Strong integration capabilities with other systems in your organisation

• Browser-based UX designed to support busy finance professionals

On top of that, Aqilla is now AI-enhanced, helping to reduce repetitive tasks and surface insights faster – exactly the kind of support a modern finance function needs.

Why Aqilla is the preferred cloud-native solution for our customers?

We often hear from customers that Aqilla stands out for its:

• Flexibility – it’s highly configurable, which makes it a strong fit for growing SMEs and mid-market organisations that need to adapt quickly.

• Support for complexity – multi-entity, multi-currency, and more complex workflows and reporting requirements are where it really comes into its own.

• Scalability – as your business grows, you don’t outgrow the system; it’s designed to grow with you.

In other words, Aqilla doesn’t just tick the “cloud” box – it aligns with the needs of fast-scaling, modern finance teams.

What’s the benefit of cloud-native for us – and for you?

For Aqilla as a product team, being cloud-native means we can:

• Ship new features and innovations faster

• Continuously evolve the platform without major disruption

• Serve growing finance teams whose complexity increases over time

• Support more advanced workflows, automation, and reporting as standard
  
  

For you as a CFO, that translates into a system that:

• Keeps pace with your organisation’s growth

• Helps you modernise finance processes without constant need to switch to new software

• Gives you more confidence that today’s choice will still make sense in five years’ time

  
  

Ready to explore whether Aqilla is a fit?

If you’re planning to switch accounting software and are already in the process of reviewing systems, a simple next step is to request a demo.