Most local governments don’t have ACFR software. They have Excel, Word, and a lot of late nights.
Your ERP handles transactions just fine. Tyler Munis, Oracle, SAPโthey do what they’re designed to do.
But when it comes to assembling your Annual Comprehensive Financial Report? That’s where the patchwork begins. Export data to spreadsheets. Build schedules manually. Write narratives in Word. Send everything to a consultant or designer for layout. Chase version after version until the deadline forces you to stop.
Cloud-based ACFR platforms are changing this. But “cloud” raises questions for finance directors responsible for sensitive government data.
This post covers why a shift to cloud is happening, what your real options are, and what to look for if you’re evaluating alternatives.
For broader context on modernizing your ACFR process, see our complete guide to ACFR modernization.
What’s Pushing Finance Teams to Cloud ACFR Tools
Three forces are accelerating a shift to cloud for government account tools.
Workforce pressure. Retirements are accelerating across government finance. When experienced staff leave, decades of institutional knowledge walk out with them. The manual processes that worked when one person knew every formula and every file location don’t survive turnover. GFOA is reporting that a wave of retirements is expected to exacerbate the shortage of public finance officers, and uncompetitive compensation remains a top reason staff leave. Many teams are already running lean.
Rising compliance complexity. GASB 87 changed lease accounting. GASB 96 added subscription-based IT arrangements. The Financial Data Transparency Act will require machine-readable financial data by 2027. Each new standard adds disclosure requirements, calculations, and places to make mistakes. Spreadsheet-based processes struggle to keep pace.
The security reality flip. Security used to be the argument against cloud. Now it’s often the argument for it. A 2024 Sophos report found that 99% of state and local governments hit by ransomware had attackers attempt to compromise their backups. Fifty-one percent of those attempts succeeded. On-premise systems are targets. Cloud providers with government certifications invest more in security infrastructure than most local IT departments can match.
This isn’t early adoption territory anymore. Forrester research finds that 80% of government cloud decision-makers now use hybrid cloud environments. Finance teams still relying entirely on manual processes or legacy on-premise tools are increasingly the exception.
What You’re Actually Choosing Between
The question isn’t “cloud vs. on-premise ACFR software.” Most governments don’t have dedicated ACFR software at all. The real comparison looks different.
Option 1: Status Quo (ERP + Manual Assembly)
Your ERP handles transactions. ACFR assembly happens in Excel, Word, and InDesign. Consultants fill the gaps for GFOA compliance and professional layout.
This approach works, but it’s fragile. Version control is a constant battle. Knowledge concentrates in one or two people. Consultant fees run $50,000 to $200,000 annually, and when they leave, the expertise leaves with them. Every year feels like starting from scratch.
Option 2: Enterprise Reporting Platforms
Some governments evaluate large, enterprise reporting platforms originally built for corporate and regulatory disclosure. These tools offer comprehensive, security-forward capabilities and are commonly used by state governments and very large agencies.
The trade-off: these platforms were designed for corporate filings like 10-Ks and quarterly disclosures, then adapted for government use. Implementation can be complex, and for mid-sized local governments with 2โ6 person finance teams, they can be more platform than you actually need.
Option 3: Budgeting Platforms with Reporting Add-ons
Other governments look to budgeting platforms that added ACFR publishing as an extension of their core budgeting and transparency tools.
The trade-off: this approach often focuses on publishing rather than restructuring the underlying reporting process. If your data still lives in disconnected spreadsheets, version control and consistency issues remain. Youโre solving the presentation problem without fixing how the data flows..
Option 4: Purpose-Built Government ACFR Platforms
Purpose-built ACFR platforms like Disclosure Studio were designed specifically for local government fund accounting. It’s cloud-native with government security certifications (SOC 1, SOC 2, TX-RAMP). The modern ACFR platform connects data from your ERP through schedules and narratives to the final published report.
The trade-off: It requires adopting a new workflow. But that’s the point. You’re not just changing where your files live. You’re changing how data flows from source to publication.
The key question when evaluating options: Are you solving for publishing, or solving for the entire data-to-report process?
Why Cloud Security Often Beats the Alternative
Government financial data is sensitive. The instinct to keep it on servers you control makes sense. “Someone else’s computer” feels risky.
But consider what “your servers” actually means. It means your IT team is responsible for security patches, vulnerability monitoring, backup integrity, disaster recovery, and incident response. For most local governments, IT staff have dozens of other priorities. Security is one more thing on the list, not someone’s full-time focus.
Cloud platforms with government certifications operate differently. Security is the product. Dedicated teams monitor threats around the clock. Updates deploy automatically without waiting for your next maintenance window. Third-party auditors verify controls continuously.
What to look for:
SOC 2 Type II is the baseline. This certification means an independent auditor has verified the platform’s security controls over an extended period. It covers security, availability, processing integrity, confidentiality, and privacy. Banks and healthcare organizations require it. Your financial data deserves the same standard.
TX-RAMP and StateRAMP are government-specific certifications. Texas created TX-RAMP to standardize cloud security requirements for state agencies. StateRAMP serves a similar function across multiple states. These certifications signal that a vendor understands government security requirements specifically.
FedRAMP is the federal standard. It’s more rigorous than most local governments require, but it signals top-tier security investment.
Gravity maintains SOC 1, SOC 2, and TX-RAMP certifications. You can review our security documentation at trust.onegravity.com.
The bottom line: Ask any vendor you’re evaluating what security certifications they hold. If they can’t answer clearly and specifically, that’s your answer.
What to Ask Before You Buy
When evaluating cloud ACFR tools, these questions will surface the differences that matter.
Corporate reporting tools don’t understand fund structures. They don’t know GASB requirements. They treat government finance as a special case to adapt for rather than the core design principle. Ask whether the platform was built for government from the start or retrofitted later.
You’re not replacing your ERP. You need a reporting layer that pulls data from your existing financial system. Ask about specific connectors for Tyler, Oracle, SAP, or whatever you run. Ask how data flows from your general ledger into report schedules.
Enterprise platforms often require 6+ months of implementation work. Modern tools with AI-assisted setup can go live much faster. Gravity’s AI Importer reads your prior-year ACFR and builds your report structure automatically. That changes implementation from a multi-month project to a matter of weeks.
Look for SOC 2 Type II certification at minimum. Ask where data is stored and whether the vendor offers US-based data centers. Ask about data portabilityโyou should own your data and be able to export it if you ever need to leave.
If the Certificate of Achievement matters to your organization, ask whether the platform includes GFOA compliance guidance. Gravity’s GFOA AI Checklist validates your report against award criteria in real time, catching gaps before submission rather than after rejection.
The Real Question
Most finance teams aren’t choosing between cloud and on-premise ACFR software. They’re choosing between continuing the Excel/Word/consultant patchwork and adopting a connected platform that solves the underlying problem.
Cloud isn’t about being cutting-edge. It’s about not rebuilding your ACFR from scratch every year. It’s about institutional knowledge that survives turnover. It’s about security that’s someone’s full-time job rather than one more item on an already full plate.
The governments winning GFOA awards and finishing ACFR season without the late nights have already made this shift. They’re not working harder. They’re working from connected data.
See how Gravity’s Disclosure Studio connects your financial data to award-ready reports.