Determinants of Cloud Accounting Adoption in MSMEs: A TOE Framework Approach and Its Impact on Operational Efficiency

Abstract

The digital transformation of financial governance among Micro, Small, and Medium Enterprises (MSMEs) has accelerated through the deployment of cloud-based accounting software. Migrating from manual record-keeping to cloud systems promises real-time financial reporting access and mitigates internal discrepancies. This study investigates the determinants of cloud accounting adoption utilizing the Technology-Organization-Environment (TOE) framework and assesses its subsequent impact on MSME operational efficiency. An explanatory quantitative survey was administered to 175 financial managers, business owners, and bookkeepers of MSMEs across Manado. Data were evaluated via Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4.0. The empirical results reveal that Technological Readiness (β = 0.334, p < 0.001), Organizational Readiness (β = 0.295, p < 0.001), and Environmental Pressure (β = 0.248, p < 0.001) exert significant positive effects on cloud accounting adoption. Furthermore, cloud accounting adoption substantially and positively enhances MSME operational efficiency (β = 0.562, p < 0.001). The TOE framework accounts for 57.8% of the variance in cloud accounting adoption (R² = 0.578), while adoption explains 31.6% of operational efficiency (R² = 0.316). These findings indicate that technological readiness and internal organizational alignment are the foremost drivers of cloud accounting, directly expediting financial reconciliations and reducing administrative accounting overhead.