DETERMINANTS AND CHALLENGES OF CLOUD ACCOUNTING ADOPTION AMONG MSMES

Micro, Small, and Medium Enterprises (MSMEs) form the backbone of the Indian economy, yet the adoption of cloud accounting, offering real-time financial visibility, simplified compliance, and reduced dependence on manual bookkeeping, remains uneven across the sector. While institutional and market momentum toward cloud-based accounting solutions continues to grow, empirical evidence on what specifically drives MSME owners to adopt such systems, and what holds others back, remains limited within the Indian context, particularly from an owner-centric perspective. This study examines the key determinants and challenges of cloud accounting adoption among 160 MSME owners in the Ahmedabad and Gandhinagar region, grounded in a Technology-Organization-Environment (TOE) based conceptual framework, and compares perceived determinants and challenges between adopters and non-adopters. Using a structured questionnaire measuring adoption status alongside Likert-scale determinant and challenge items, data was analysed through descriptive statistics and independent samples t-tests. The results reveal a moderate overall level of perceived determinants, with regulatory/GST compliance pressure and technological advantage emerging as the strongest drivers, and a moderate-to-high level of perceived challenges, with high cost and data security concerns as the most significant barriers. A stark and statistically significant divide was found between adopters and non-adopters: adopters reported substantially higher Determinant Scores and substantially lower Challenge Scores than non-adopters. These findings confirm that adoption status is closely tied to how MSME owners perceive both enabling and inhibiting factors, and suggest that bridging the adoption gap requires targeted interventions addressing specific, addressable barriers, cost, security, and skills, rather than generic awareness campaigns promoting benefits owners largely already recognize.