This study investigates the adoption of cloud accounting among small and medium-sized enterprises (SMEs) in Enugu North Local Government Area (LGA) of Enugu State, Nigeria. Grounded in the Technology Acceptance Model (TAM) and Diffusion of Innovation (DOI) theory, the research explores the key drivers, implementation challenges, and strategic benefits associated with cloud-based accounting systems. A descriptive survey design was employed, targeting 200 registered SMEs, of which 186 valid responses were analyzed using both quantitative and qualitative techniques. Findings reveal that perceived usefulness, perceived ease of use, and organizational readiness are significant predictors of cloud accounting adoption, in line with TAM’s theoretical constructs. Despite a growing awareness of digital tools, major implementation challenges persist. These include poor internet connectivity, high subscription costs, and limited technical expertise. The study also highlights notable benefits among adopters, such as improved financial reporting accuracy, faster decision-making, enhanced tax compliance, and reduced paperwork, which align with DOI’s attributes of relative advantage and observability. The findings have practical implications for SME owners, software vendors, and policy-makers. Recommendations include strengthening digital infrastructure, subsidizing cloud solutions for microenterprises, and implementing training programs to build digital capacity. Software developers are encouraged to design context-specific, mobile-friendly applications suited to the Nigerian business environment. The study concludes by suggesting further research across multiple LGAs or economic sectors to assess broader adoption patterns and long-term impacts. Ultimately, expanding cloud accounting adoption could significantly enhance the financial sustainability and transparency of Nigeria’s SME sector.