Table of contents
- What is Cloud-Based Spend Management?
- How Cloud-Based Spend Management Works
- Key Features of a Cloud Spend Management System
- 3 Benefits of Cloud-Based Solutions for Finance Teams
- Modernize Your Software with Paystand
Key takeaways
- A cloud management strategy begins with actionable insights from real-time payment tracking.
- The cloud is a cost-effective alternative to on-premise management systems, although many companies take a hybrid approach.
- The benefits of the cloud include reducing risk, capturing savings, real-time insights into spend, and more.
Traditional finance practices, such as sharing physical corporate cards and submitting paper receipts, are no longer feasible. Finance teams that previously relied on in-person interactions are turning to cloud spend management platforms to enable their distributed teams.
In fact, it’s even fair to say most finance teams have shifted to the cloud. According to a Foundry report, 92% of organizations host at least a part of their IT operations on the cloud.. And leaders are migrating more and more functions to the cloud. The pandemic may have triggered the change, but years later, organizations have realized how advantageous the cloud is. Now, they have to optimize it.
As the dust settles on cloud usage and cost optimization, finance teams will need to operate with increased agility without increasing spend. To do so, they must embrace the full benefits of cloud spend management platforms for accounting and FinOps.
What is Cloud-Based Spend Management?
Cloud-based spend management is the process of tracking spend in the cloud. In many cases, cloud spend management involves not only tracking financial data in a cloud-based platform, but also keeping track of cloud and tech-stack spend. This is because while the cloud offers numerous benefits, it’s easy for siloed departments to overspend with multiple and sometimes duplicated cloud tools.
That said, in the course of this article, we will consider cloud-based spend management to refer to monitoring all company spend with a cloud platform.
Cloud vs. On-Premise Spend Management
While cloud software operates on remote servers, on-premise, also called on-prem, refers to keeping financial tracking and records on local servers.
According to a 2025 report on IT Cost Management from Crayon, organizations spend 49% of their IT infrastructure budget on cloud environments and 47% on on-premises environments. And there’s good reason to use both approaches. Compliance-heavy industries, such as healthcare and financial services, as well as government agencies, tend to maintain core systems and data on private clouds or on-prem.
Balancing the two offers many organizations flexibility and additional security. When managed correctly, a cloud and on-prem combination can be budget-friendly. But this is challenging, as on-prem setups are expensive to secure, scale, and maintain.
One of the biggest benefits of cloud-based solutions, whether it’s a public or private cloud, is the affordability of the software over on-prem. Not only is cloud usage cost-effective, but it also scales faster and easier. And since a third-party vendor maintains the infrastructure, companies don’t have to worry about maintenance costs.
How Cloud-Based Spend Management Works
Cloud-based spend management offers a simple setup and workflow. If we break it down into steps, we can see the simplicity:
- Centralized data enables finance teams to review all spend data in a single tab. This streamlines reporting and breaks down siloes.
- Connecting costs to projects is simple as the accounting team can monitor assets, expenses, reimbursements, and more across departments. As a result, project forecasting and budgeting become more accurate and efficient.
- Identifying waste and suspicious purchases becomes simple with a system of alerts, often based on customized rules. Your accounting team can monitor these notifications from anywhere, anytime.
- Automated approvals, receipts, and other important accounting steps reduce workloads but leave a paper trail.
- Custom rules and alerts play a part in reducing risk and preventing overspend.
All of this is achieved by integrating your ERP with a cloud-based spend management system. Your new solution will pull information from your ERP and other integrated accounting software, providing 100% visibility into spend.
Key Features of a Cloud Spend Management System
It’s easy to see the benefits of cloud usage, but every solution is different. There are some essential features you need for minimum efficiency.
For example, you’ll want your solution to integrate with your existing tech stack. This will reduce the learning curve, ensure centralization of data, and eliminate duplicated labor.
Customization is also important. The ability to customize approval workflows, vendor management, and other functions makes it easier to maintain reporting consistency.
Next, you’ll want to be sure that your platform abides by security standards and offers different guardrails to prevent internal tampering. Automation, defined user roles, tokenization, and notarized recipients are security protocols that are more than just compliance certifications—they make a difference in the workflow.
Finally, you’ll want to be sure that the program is easy-to-use. This will boost the success of a fast adoption across the organization. Ideally, it will be simple for your accounting professionals to navigate and for employees submitting expense reports.
3 Benefits of Cloud-Based Solutions for Finance Teams
There are several benefits to using cloud-based accounting software, but three stand out as the main reasons many companies switch from on-prem to the cloud:
1. Cloud systems are remote-friendly for the modern workplace
Legacy purchasing processes were developed with the idea that most employees would be in the same physical location. This was a shaky assumption in a pre-covid world; post-covid, it’s nearly impossible.
Employees can’t run over to their manager to get approval for a purchase and borrow a shared corporate card. They can’t use the office scanner to submit receipts or swing by the finance department when they have a question. Instead, they are forced to find workarounds, which are often complex, tedious, and potentially non-compliant.
Cloud spend management platforms, by contrast, issue virtual cards to employees, wherever they are. Team members are effortlessly guided through the purchasing process by a conversational chatbot. The technology ensures compliance with policy and enables business continuity in the event of a future crisis.
2. Cloud spend management offers real-time visibility for better insights and decision-making
Although it is especially suited for distributed teams, cloud-based technology has benefits far beyond simply allowing employees to work from anywhere. It also allows them to collaborate in real-time.
But what does that mean for finance teams? First off, it means no more delay in between when a purchase was made and when finance finds out about it. You can't afford to wait until credit card statements come in at month end to become aware of all the money that was spent. Nor can you wait until the end of a quarter to collect and report spend data, because your CFO might ask for this information at any given moment.
When you can see what’s happening in real time, you can respond in real time. That might mean adjusting budgets to account for unplanned purchases, curbing noncompliant spend, or eliminating zombie subscriptions.
Real-time visibility also helps you keep track of your budgets and make better decisions about spend, leveraging actionable insights in real time. For example, an employee might see that their department is nearing its monthly budget, and opt to make a routine purchase the following month instead to keep the team on track.
It’s hard for both finance teams and the broader organization to make team-oriented decisions when they can’t see the bigger picture. With a cloud spend management platform, everyone can access the data they need to collaborate effectively.
3. Cloud spend management will help you grow
Seventy percent of CFOs say they are positive about their company’s financial health and a whopping 60% see growth potential over the next 12 months. Spend management can’t be left out of that preparation. When companies grow too big too fast, before establishing a strong internal purchasing process, employee spending can quickly get out of hand.
A cloud spend management platform can scale with your business, enabling proactive controls over spend without sacrificing agility and speed. By automating an otherwise manual and disparate process into a single workflow, distributed spend management software frees finance teams to focus on more strategic work, such as growing your organization.
Modernize Your Spend Software
Shifting to a cloud-based management system offers accounting teams more than new efficiency software. It can reduce costs, streamline workloads, provide real-time insights, and support both remote and in-office workers.
But knowing the benefits of a cloud-based accounting solution isn’t just about ease of access or basic cost reduction. You also need to justify the cost of upgrading your system and evaluate your tech stack ROI and align spend with a smarter management strategy.
Don’t leave successful and profitable migrations to chance. Instead, check out our eBook, The State of Spend Management 2026, and learn how to drive higher returns with financial technology.
