part 1
What's driving cloud accounting software adoption?
How to compare cloud accounting software for multi-entity businesses
accounting software adoption?
What’s driving cloud
accounting software adoption?
As organizations expand across multiple franchises, family offices, healthcare locations, media and entertainment businesses, or other business entities, financial management becomes increasingly complex. CFOs, Controllers, and accounting teams need visibility into financial performance across the entire organization while maintaining the ability to analyze individual entities, departments, and business units.
Traditional accounting software, separate company databases, and spreadsheets can make it difficult to manage intercompany transactions, prepare consolidated financial reports, and maintain consistent accounting processes. As the number of entities grows, finance teams often spend more time gathering and reconciling financial information instead of analyzing results and supporting business decisions.
These challenges are driving growing businesses to evaluate cloud accounting software that supports centralized financial management, accounting automation, stronger internal controls, and more timely financial reporting. For multi-entity organizations, several accounting challenges are especially important to address:
Financial visibility and budgeting
As organizations grow, finance teams need timely access to accurate financial information to evaluate performance, monitor budgets, and make informed business decisions. When financial data is spread across multiple accounting systems and spreadsheets, preparing reports and comparing budget-to-actual results can become time-consuming and difficult.
Internal controls and data security
Managing financial information across multiple entities requires consistent internal controls, appropriate user permissions, and reliable audit trails. Cloud accounting software can help organizations strengthen financial oversight through role-based access, approval workflows, and centralized financial records while supporting secure access for authorized users.
Financial reporting and stakeholder communication
CFOs and accounting teams must provide accurate financial information to executives, investors, lenders, and other stakeholders. When each entity operates in a separate accounting system, preparing consolidated financial statements and communicating financial results can require extensive manual work. Centralized financial reporting and automated financial report package distribution help organizations deliver consistent, timely financial information to stakeholders while reducing manual reporting tasks.
Managing multiple entities and locations
As businesses expand through acquisitions, new locations, or additional legal entities, accounting complexity increases. Finance teams must manage intercompany transactions, shared expenses, and financial reporting across multiple businesses. Cloud accounting software with multi-entity capabilities can help organizations streamline financial processes, reduce manual work, and improve visibility across the organization.
software landscape
The cloud accounting
software landscape
Cloud accounting software solutions vary significantly in functionality, complexity, scalability, and cost. Understanding these differences is an important first step for CFOs, Controllers, and finance teams comparing accounting software for their organizations.
Entry-level cloud accounting software typically supports basic financial transactions, invoicing, expense tracking, and reporting. Mid-market accounting solutions offer more advanced capabilities, including multi-entity accounting, intercompany transactions, flexible reporting structures, consolidated financial reporting, and accounting automation. Enterprise resource planning (ERP) systems provide broader financial and operational functionality but may require more extensive implementation, customization, and ongoing administration.
Organizations transitioning from traditional or legacy accounting systems, such as Microsoft Dynamics GP, Sage 50, or Sage 100, should also evaluate data migration requirements and integration compatibility when comparing cloud accounting solutions.
The right solution depends on an organization's size, accounting complexity, reporting requirements, and growth plans. Rather than selecting software based solely on the number of available features, businesses should evaluate which capabilities they need today and how well the system can support additional entities, users, and financial processes as they grow.
accounting software
Entry-level cloud
accounting software
Entry-level cloud accounting software is designed for small businesses, startups, entrepreneurs, and organizations with relatively straightforward accounting requirements. These solutions typically support general ledger accounting, invoicing, expense tracking, bank reconciliation, and basic financial reporting.
Many entry-level accounting applications offer affordable subscription plans, relatively straightforward implementation, and familiar interfaces. For businesses managing a single legal entity with limited reporting requirements, these solutions may provide the functionality they need without the complexity of a more advanced accounting system.
However, as organizations expand into multiple entities, locations, or business units, their accounting requirements often become more complex. While some entry-level solutions offer additional capabilities through higher-tier plans or third-party applications, finance teams should evaluate whether those options can adequately support their financial management needs.
Five challenges are particularly important when evaluating entry-level accounting software for a growing organization.
Challenges with intercompany transactions and allocations
As businesses add entities or locations, finance teams often need to allocate shared expenses, record intercompany transactions, and reconcile balances between related companies. When each entity maintains separate accounting records, these activities may require duplicate entries, spreadsheets, or manual reconciliations.
For example, allocating a shared expense across ten locations can become time-consuming when accounting teams must record and reconcile transactions separately. Organizations with multiple legal entities should evaluate whether their accounting software supports intercompany transactions and consistent expense allocations without excessive manual work.
Limited audit trails and financial oversight
As accounting operations become more complex, maintaining accurate records of financial transactions and changes becomes increasingly important. Finance teams need visibility into who created, modified, approved, or posted transactions and when those activities occurred.
Although many entry-level accounting applications provide audit logs, the depth of tracking, approval history, and available controls can vary by product and subscription plan. Organizations should evaluate whether their software provides sufficient transaction history, accountability, and oversight to support their internal control requirements.
Challenges with consolidated and dimensional reporting
Growing organizations need financial reporting that provides both an organization-wide view and detailed insights into individual entities, departments, locations, or business units.
When financial information is maintained across separate company files, preparing consolidated financial statements may require exporting data into spreadsheets or using additional reporting applications. This can increase manual work and make it more difficult to maintain consistent reporting structures.
Finance teams should evaluate whether their accounting software supports consolidated financial reporting, consistent charts of accounts, and dimensional reporting that allows them to analyze financial performance across different parts of the organization.
Limited accounting automation and workflows
As transaction volumes increase, manual accounting processes can place additional demands on finance teams. Vendor invoice processing, purchase approvals, expense approvals, and recurring transactions may require more coordination across departments and entities.
Some entry-level accounting solutions provide automation features or support third-party workflow applications. However, organizations should assess whether these capabilities can accommodate their approval requirements, transaction volumes, and multi-entity accounting processes.
Accounting automation can help reduce repetitive tasks, improve process consistency, and give finance teams more time to analyze financial information.
Managing user permissions across multiple entities
As organizations grow, more employees may require access to financial information, but not everyone should have the same level of access.
For example, a corporate Controller may need visibility across all entities, while a location manager may only require access to financial information for a specific business unit.
Although many accounting applications offer user permissions, the ability to control access by entity, role, department, or transaction type can vary. Organizations should evaluate whether their accounting software provides the appropriate security controls to support financial oversight while restricting access to sensitive information.
Accounting software for medium-sized businesses
As businesses grow beyond the capabilities of entry-level accounting software, they often need more advanced financial management tools without the complexity of a traditional enterprise resource planning (ERP) system. Mid-market accounting software is designed to support organizations with increasing transaction volumes, multiple entities, more sophisticated reporting requirements, and expanding accounting teams.
When comparing accounting software for medium-sized businesses, CFOs and Controllers should evaluate capabilities such as multi-entity accounting, intercompany transactions, consolidated financial reporting, dimensional reporting, accounting automation, business intelligence, and flexible user permissions. A consistent chart of accounts and reporting structure can also help organizations maintain financial visibility, identify financial trends, and analyze performance as they add entities, departments, or locations.
Gravity Software is designed for growing, multi-entity businesses that need to manage financial information across multiple companies within a single database. Its capabilities include intercompany accounting, consolidated financial reporting, dimensional reporting, budgeting, and accounting automation. With Power BI business intelligence, finance teams can also analyze financial performance, identify trends, and gain deeper insights across their organizations.
QuickBooks
Xero
Gravity Software
Multi-entity accounting in a single database
Intercompany transactions and allocations
Limited
Limited
Consolidated financial reporting
Limited
Limited
Advanced financial reporting
Limited
Limited
Configurable approval workflows
Limited
Limited
Business intelligence and financial analytics
Limited
Limited
Entity-level access and security controls
Limited
Limited
Inventory management across multiple entities
Limited
Limited
Multi-entity accounting in a single database
QuickBooks
Xero
Gravity Software
Intercompany transactions and allocations
QuickBooks
Xero
Gravity Software
Limited
Limited
Consolidated financial reporting
QuickBooks
Xero
Gravity Software
Limited
Limited
Advanced financial reporting
QuickBooks
Xero
Gravity Software
Limited
Limited
Configurable approval workflows
QuickBooks
Xero
Gravity Software
Limited
Limited
Business intelligence and financial analytics
QuickBooks
Xero
Gravity Software
Limited
Limited
Entity-level access and security controls
QuickBooks
Xero
Gravity Software
Limited
Limited
Inventory management across multiple entities
QuickBooks
Xero
Gravity Software
Limited
Limited
Cloud ERP software
At the more complex end of the cloud accounting software market are enterprise resource planning (ERP) systems and advanced cloud financial management solutions, including Sage Intacct, Oracle NetSuite, and Microsoft Dynamics 365 Business Central. These solutions offer varying levels of financial management, operational functionality, and customization to support organizations with more complex business requirements.
ERP systems typically integrate financial management with operational processes such as inventory management, purchasing, sales order management, and other business functions. Depending on the platform, organizations may also have access to additional applications for customer relationship management, human resources, and industry-specific operations.
For organizations with extensive operational requirements, a comprehensive ERP system may be appropriate. However, businesses primarily focused on multi-entity accounting, intercompany transactions, consolidated financial reporting, and financial visibility should evaluate whether they need the broader functionality, implementation requirements, and ongoing administration associated with an ERP system.
Although ERP systems can provide extensive capabilities, organizations should also consider several potential disadvantages:
Cost
Cloud ERP software can require a significant financial investment, particularly when organizations need multiple modules, users, integrations, or custom configurations. In addition to subscription fees, businesses should consider implementation services, data migration, employee training, and ongoing support when evaluating the total cost of ownership.
Complexity
ERP systems often support a wide range of financial and operational processes, which can introduce additional complexity during implementation and daily use. Organizations may need to redesign workflows, configure multiple modules, and coordinate changes across departments. Businesses should evaluate whether the additional functionality justifies the resources required to implement and manage the system.
Long implementation time
Implementing a comprehensive cloud ERP system can take several months or longer, depending on the organization's size, data migration requirements, integrations, and configuration needs. While implementation timelines vary, businesses should consider whether a more focused accounting solution could meet their financial management requirements with less implementation complexity.
Significant training required
ERP software often includes extensive functionality that employees must learn to use effectively. Finance teams and other departments may require training on new processes, approval workflows, reporting tools, and system configurations. Organizations should account for employee training, adoption, and ongoing support when evaluating implementation requirements.
Customization and ongoing administration
Many cloud ERP systems support configurable workflows, dashboards, integrations, and custom fields. However, implementing and maintaining these capabilities may require additional configuration, technical expertise, or consulting services. Organizations should evaluate how easily the software can adapt to changing business requirements and whether ongoing modifications will increase costs or administrative responsibilities.
How to find the best cloud accounting software for mid-sized businesses
Choosing the right cloud accounting software requires evaluating your organization's current financial management needs and future growth plans. Businesses that have outgrown entry-level accounting software may need more advanced capabilities without the complexity of a comprehensive ERP system.
When comparing solutions, consider multi-entity accounting, financial reporting, business intelligence, integration flexibility, workflow automation, scalability, and implementation requirements. Selecting software that supports your organization's needs today while allowing room for growth can help reduce manual work and avoid another costly system transition.
Watch John Silvani, President and CEO of Gravity Software, explain the key considerations when selecting an accounting system. Then, download our cloud accounting software evaluation checklist to help your team compare solutions and identify the capabilities that matter most.
Multi-entity accounting and expense allocations
As organizations grow, managing financial information across multiple legal entities becomes increasingly complex. Separate accounting databases, inconsistent charts of accounts, and manual intercompany transactions can create additional work for finance teams.
Look for accounting software that supports multiple entities within a single database, shared expense allocations, intercompany transactions, and consolidated financial reporting.
Bank account management and reconciliation
Growing businesses often manage multiple bank accounts and credit cards across different entities. Tracking transactions and reconciling accounts separately can increase manual work and make it difficult to maintain accurate financial records.
Evaluate whether the software supports centralized bank account management, automated transaction imports, bank reconciliation tools, and visibility across multiple entities. Confirm which financial institutions and transaction feeds are supported.
Multi-currency accounting
Organizations operating internationally need accounting software that can manage transactions in multiple currencies and support accurate financial reporting.
Look for multi-currency capabilities that support exchange rates, foreign currency transactions, and consolidated financial reporting in a designated reporting currency.
Budgeting and budget-to-actual reporting
Budgeting becomes more complex as organizations add entities, departments, and business units. Finance teams need consistent budgeting processes and the ability to compare actual financial results against approved budgets.
Evaluate whether accounting software supports budget imports from Microsoft Excel, budgeting across multiple entities, and budget-to-actual reporting that helps organizations monitor financial performance and investigate variances.
Business intelligence and financial analytics
Business intelligence helps CFOs and Controllers analyze financial performance, identify trends, and understand how individual entities, departments, and locations contribute to overall results.
Look for accounting software that supports interactive dashboards, financial analytics, and integration with business intelligence tools such as Microsoft Power BI. Evaluate how easily users can access and analyze financial information without relying on manual spreadsheet consolidation.
Investment management
Organizations managing private investments across multiple entities need accurate records of investment activity, valuations, and financial performance.
Look for accounting software that supports tracking equity investments, bonds, convertible notes, purchases, sales, and realized and unrealized gains or losses. Evaluate whether investment activity integrates with the general ledger and supports entity-level and consolidated financial reporting.
Inventory management
For businesses that manage physical products, inventory visibility becomes increasingly important as operations expand across multiple locations or entities.
Look for native inventory management capabilities that support inventory transactions, valuation, purchasing, and reporting. Evaluate whether the software provides the level of inventory visibility required for your organization's operations.
Purchase order management
Growing organizations need consistent purchasing processes to manage vendor relationships, control spending, and track purchase commitments.
Evaluate whether accounting software supports purchase requisitions, purchase orders, approval workflows, and visibility into purchasing activity across departments and entities.
Sales order management
Businesses managing customer orders need accurate information about order status, fulfillment, invoicing, and related financial transactions.
Look for sales order management capabilities that support order processing, customer information, inventory availability where applicable, and integration with accounts receivable.
Cloud-based accessibility
Cloud accounting software allows authorized users to access financial information without maintaining traditional on-premises accounting servers.
When evaluating cloud solutions, consider accessibility, system availability, software updates, security controls, backup procedures, and the provider's underlying cloud infrastructure.
Scalability
As organizations grow, their accounting software should accommodate additional legal entities, users, transaction volumes, and financial management requirements.
Evaluate whether the system can support future growth without requiring separate accounting databases or another software replacement. Consider the availability of additional capabilities such as fixed assets, revenue recognition, subscription billing, residential property management and advanced reporting.
Data security and internal controls
Protecting financial information requires appropriate security controls, user permissions, and visibility into financial activity.
Look for accounting software that supports role-based access, entity-level permissions, audit trails, authentication controls, and secure data storage. Organizations should also evaluate the provider's security practices, backup procedures, and disaster recovery capabilities.
Integration with existing business systems
Accounting software should work with the business applications an organization already uses, including payroll, expense management, point-of-sale, billing, and industry-specific operational systems.
Evaluate the availability of APIs, supported integrations, data import tools, and automation capabilities. Consider whether financial information can move between systems accurately without unnecessary manual entry.
Accounting automation and workflows
As organizations grow, manual accounting processes and approval requirements often become more complex.
Look for configurable workflows that support purchase approvals, vendor invoice processing, and other financial processes. Evaluate whether workflows can accommodate different approval requirements across entities and departments while reducing repetitive tasks.
AI-powered accounting automation
AI-powered accounting capabilities can help finance teams reduce manual data entry, streamline transaction processing, and improve efficiency. As organizations evaluate cloud accounting software, understanding how artificial intelligence is incorporated into everyday financial processes is becoming increasingly important.
Look for accounting software that supports AI-powered invoice processing, intelligent data extraction, and integration with AI productivity tools such as Microsoft 365 Copilot. Evaluate how these capabilities work with existing approval workflows, security controls, and financial reporting processes.
Microsoft 365 Copilot and accounting software
Training and support
Even accounting software with a familiar interface requires training, particularly when organizations are changing financial processes or migrating from another system.
Evaluate the provider's training resources, documentation, implementation support, and ongoing customer assistance. Understand how implementation partners and software providers share responsibility for training and support.
Affordability
Accounting software costs extend beyond subscription fees. Implementation services, data migration, integrations, training, and ongoing support can all affect the overall investment.
Compare solutions based on the capabilities your organization needs, expected growth, implementation requirements, and long-term costs rather than subscription pricing alone.
How to transition from entry-level or traditional accounting software
Outgrowing entry-level or traditional accounting software doesn't mean transitioning to a new system has to be overwhelming. For organizations managing multiple entities, moving to cloud accounting software can help reduce manual processes, improve financial visibility, and simplify reporting.
Dr. Tavel Family Eye Care, a multi-entity healthcare organization operating across 24 locations, faced these challenges while using Sage 100. Its server-based accounting system made it difficult to manage financial information across multiple entities, integrate with its point-of-sale system, and support remote access. The finance team also relied heavily on Excel and manual processes, contributing to a month-end close that took more than 30 days.
After transitioning to Gravity Software, Dr. Tavel centralized its multi-entity accounting processes within one cloud-based system. The finance team could enter intercompany transactions and invoices once, allocate expenses to the appropriate entities, streamline bank reconciliation, and improve financial reporting without repeatedly entering the same information.
Within a few months of implementation, Dr. Tavel reduced its month-end close from more than 30 days to just 10–15 days. The organization also reduced the time required for annual triple-net lease calculations from several days to a few hours.
Dr. Tavel's experience demonstrates how transitioning from a traditional accounting system to cloud-based multi-entity accounting software can help growing organizations simplify financial processes and give finance teams more time for analysis and strategic planning.
With all the time we’re saving on bank reconciliation, month-end close, and other routine tasks, we can do more financial analysis, budgeting, and providing valuable feedback to the company on strategic direction.”
— Tera Carpenter, VP of Finance and HR, Dr. Tavel Family Eye Care
4 tips for a smooth cloud accounting software implementation
Implementing new cloud accounting software requires careful planning, particularly for organizations managing multiple entities, locations, or complex financial processes. A structured implementation approach can help reduce disruptions, improve data accuracy, and prepare your finance team for a successful transition. Consider these four best practices.
1
Assemble a team of the right stakeholders
Successful accounting software implementation starts with involving the right stakeholders. Include representatives from finance, accounting, IT, and any departments affected by purchasing, expense approvals, reporting, or other financial processes.
For multi-entity organizations, identify team members who understand intercompany transactions, shared expenses, consolidated reporting, and entity-level requirements. Involving these stakeholders early can help establish priorities, clarify responsibilities, and reduce implementation challenges.
2
Create an implementation timeline
Develop an implementation timeline that outlines key milestones, responsibilities, and deadlines. Important activities may include reviewing existing financial data, configuring the chart of accounts, establishing entities and reporting structures, migrating historical information, and testing integrations.
Before migrating data, review existing records for duplicate, outdated, or inaccurate information. Organizations managing multiple entities should also evaluate how intercompany balances, financial dimensions, and consolidated reporting requirements will be handled in the new system.
Coordinate the implementation timeline with your accounting team and implementation partner, allowing sufficient time for testing, training, and validation before going live.
3
Create a test environment
Testing financial processes before going live can help identify configuration issues and reduce disruptions. Use a sandbox or test environment to validate transactions, reporting structures, user permissions, and automated workflows.
For multi-entity organizations, test intercompany transactions, shared expense allocations, consolidated financial reporting, and bank reconciliation. Confirm that approval workflows route transactions to the appropriate users and that financial reports reflect accurate information across entities.
Testing realistic accounting scenarios helps ensure the system supports your organization's financial processes before deployment.
4
Train your teams
Effective training helps employees become comfortable with new accounting software and understand how their responsibilities may change. Work with your software provider or implementation partner to develop training that reflects each user's role and the financial processes they manage.
Consider training finance team leaders and key users first, followed by additional employees who handle accounts payable, purchasing, reporting, and other accounting activities. Provide opportunities to practice common tasks and establish resources for questions after implementation.
Ongoing training can also help organizations adopt additional functionality as their accounting requirements evolve.
Why Gravity is the best accounting software for medium-sized businesses
Growing businesses need accounting software that supports increasing financial complexity without the cost and implementation requirements of a comprehensive ERP system. Gravity Software is designed for medium-sized, multi-entity organizations that need to streamline accounting processes, improve financial visibility, and manage multiple companies within a single database.
Gravity supports multi-entity accounting, intercompany transactions, consolidated financial reporting, budgeting, inventory management, purchasing, and investment management. Finance teams can also use Power BI business intelligence to analyze financial performance across entities, departments, and locations.
Gravity also supports accounting automation, AI-powered accounts payable processing, configurable workflows, and integration with existing business applications through its open API and data import capabilities. With Microsoft 365 Copilot integration and additional functionality such as fixed assets and subscription billing, Gravity helps organizations adapt their financial management processes as their needs evolve.
The Gravity application is seamlessly integrated with Microsoft Office (email, task, schedules), including user security (single sign-on). The system is easy to use while providing powerful capabilities, for example - easily creates intercompany transactions, multi or single company invoices, vouchers or journals.”
Our company has nine different entities and we transact interchangeably. Not having to do multiple journal entries within each set of books has saved us a lot of time and manual entry!”
I love how user-friendly the software is to navigate and how much less we are paying per month! We are integrating our logistics software to automate our A/R billing in Gravity, which will save many hours keying invoice data for over 1,000 invoices per month.” (Source: G2)
See Gravity Software in action
Watch our 11-minute demo highlights video to see how Gravity Software helps growing organizations manage multiple entities, streamline accounting processes, and improve financial reporting within a single database.
See how Gravity Software can simplify multi-entity accounting, streamline financial processes, and improve reporting across your organization when you schedule a demo.
