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40+ Essential Online Accounting Statistics: 2019 Analysis of Trends, Data and Market Share

Category: B2B News

The accounting field is one of the most cutthroat industries known globally, and any company that specializes in this field needs to stay ahead as much as possible. With the dawning of the digital era, however, skills and experience alone may not be enough. One way to remain a standout among the competition is by implementing the right accounting software solution.

While choosing the right platform to use for your business can give you the technological advantage you need, it doesn’t hurt to gain insight into what’s going on in the industry. Paying attention to accounting software trends cannot tell you what the future holds, but it can give you a sense of what to prepare for. With a better view as to where the industry is headed, you will be able to prepare your business for the future, not the least use the right accounting tool. Below, you’ll find the latest data on accounting and accounting software, how the market is shaping up, the users are behaving and the vendors responding. This guide is designed to help you see the big picture at once in one sitting.

online accounting statistics

General Accounting Statistics

Traditional accounting practices like the use of spreadsheets or ledgers may be tried and tested but they aren’t exactly the most efficient methods for modern businesses. They tend to take up more time and they are error-prone compared to the current technologies available. In addition, they may not be enough to help you keep up with the increasingly difficult demands of the industry.

This is why it comes as no surprise that the accounting software market share has seen a steady revenue growth over the years. In fact, it seems that more and more accountants are gearing towards adopting technology in the near future to remain competitive or to satisfy client demands.

  • The global accounting software market size was valued at $5,715.9 million in 2017.
    By 2026, it is expected to reach $ 11,771.6 million. (Transparency Market Research, 2019)
  • 90% of accountants feel that there is a cultural shift in accountancy that leans toward technological adoption. (Sage Practice of Now 2019)
  • Majority of accountants today feel that traditional accounting is no longer enough to remain competitive. (Sage Practice of Now 2019)
  • 83% of accountants say companies are more demanding today than were 5 years ago. (Sage Practice of Now 2018 report)
  • One of the biggest contributors to the evolution of accountancy is the ongoing digitization of processes. (Sage Practice of Now 2019)
  • 56% of accountants say that technology accounting technology has increased their productivity. (Sage Practice of Now 2019)
  • 58% of accounting firms invest in accounting solutions to satisfy client expectations. (Sage Practice of Now 2019)

Cloud Accounting Data

The cloud has proven to be one of the best platforms for all sorts of programs ranging from communication to business management. In the case of accounting, it can do wonders to make ledgers more accessible and collaboration among accountants simpler. What’s more, software providers are still finding ways to make their products more efficient. With that said, we can expect that more companies will realize the value of cloud accounting in the next few years.

  • The global cloud accounting market share is projected to increase up to $4.25 billion by 2023. (AB Newswire, 2018)
  • Companies that rely solely on cloud accounting has 5 times the number of customers than businesses that do not. (Xero, 2017)
  • Businesses that utilize cloud-based accounting have a 15% year-over-year growth in revenue. (Xero, 2017)
  • 90% of accountants say that cloud accounting and digital business processes can be the key differentiator among companies in the near future. (Journal of Accountancy, 2015)
  • 67% of accounting professionals prefer cloud accounting. (Sage Practice of Now 2018 report)
  • 58% of large companies utilize cloud accounting for their operations. (Accounting Today, 2018)
  • 78% of SMBs will rely exclusively on cloud accounting software by 2020. (Accountancy Age)

However, it is best to note that the abovementioned accounting software facts do not mean cloud-based solutions will replace on-premise platforms any time soon. Many companies still believe that while cloud-hosted accounting can be more convenient, there are still many benefits to be had by using legacy systems.

Small Business Accounting Trends

SMBs represent 99% of businesses globally however, only a small fraction of SMB owners are equipped to perform accounting on their own. So, they often rely on their accountants to perform all their bookkeeping, tax calculations, and other accounting tasks.

While there is nothing wrong about outsourcing professionals for this job, it often leaves business owners frustrated once things go awry. This is because not all accountants can be on call 24/7 to help them keep their finances in order. The silver lining here is that there are plenty of free accounting software available to help them perform some basic accounting on their own and take control over their companies’ money matters. Consider these findings from various accounting software research:

  • 21% of SMB owners feel that they are not knowledgeable enough about accounting and finance. (Wasp Barcode, 2016)
  • SMBs outsource the following accounting tasks: tax preparation (71%), payroll (50%), auditing (48%), tax planning (30%), personal finances (16%), and bookkeeping (14%). (Wasp Barcode, 2016)
  • 30% of SMBs regard their accountants as their most trusted advisors. (ICAS, 2016)
  • Companies with less than 25 employees feel that their accountants are more reactive than proactive (41%). (Wasp Barcode, 2016)
  • 82% of small businesses use some form of accounting software, be it on-premise or cloud-hosted. (Viewpost)

Accounting Automation Facts

Accounting automation offers a number of benefits that are simply too good to pass up. However, it is perhaps one of the biggest hurdles that businesses have to overcome in the next few years.

As of late, accounting software solutions have become more sophisticated in terms of automation and it is expected to continually evolve. However, many accountants are not equipped to operate the systems currently available, so this means that they will have an even harder time keeping up with the changes. With that said, companies should anticipate that they need to provide ample training before reaping the benefits of accounting software solutions

  • More than 50% of C-level accounting executives expect that the development of more sophisticated automated accounting systems will have a big impact on the industry in the next 3 years. (ACCA study)
  • 50% of accounting tasks can be automated through the currently available technologies. (McKinsey Global Institute, 2017)
  • Labor-intensive processes like tax preparation, payroll, management, and auditing will be fully automated by 2020. (Forbes, 2018)
  • AP automation can help businesses save at least $16/invoice. (Vanguard Systems, 2017)
  • Professionals who automate the invoice capture and payments for their accounts payable processes can save an average of 1 hour/day (MineralTree)
  • Most accounting professionals don’t have the necessary skills to operate accounting automation and AI tools. (McKinsey Global Institute)
  • 37% of business owners think that they can complete more accounting tasks on their own as processes become automated. (Xero State of Accounts)

AI and Big Data in Accounting

Artificial intelligence has become an asset to companies from various industries—accounting is no exception. Be it for bookkeeping platforms, invoicing software, tax management tools, or other types of accounting solutions, AI is being used to optimize processes. Hence, it is best that businesses apprise themselves about the utilization of this technology in order to make the most out of it.

  • 80% of executives believe that AI in accountancy gives them a competitive advantage. (Journal of Accountancy, 2017)
  • 79% of business owners say that accounting AI is the key to increasing their company’s productivity. (Journal of Accountancy, 2017)
  • 66% of accountants say they are more than willing to invest in artificial intelligence while 55% are already planning on using it. (Sage Practice of Now 2018 report)
  • Robotic process automation (RPA) can reduce the time spent on auditing and contractual from several months to only a few weeks (Forbes, 2018)
  • 58% of accountants believe that AI is helpful in automating accounting tasks and improving overall operational efficiency. (Sage Practice of Now 2019)

Similarly, big data and analytics will soon become prevalent in the accounting industry. This is primarily because companies are slowly headed towards proactive than reactive strategies when it comes to handling their data. With accounting software big data, it would be much easier to see trends in your earnings and expenditures and plan for the future of your company.

  • 52% of senior executives report that they discounted data they didn’t understand. (PWC)
  • 25% of accounting professionals lack the skills or expertise to make greater use of data. (PWC)
  • 59% of finance and accounting professionals say that by 2020, data science and analytics skills will be required in the industry. (Business Higher Education Forum, 2017)
  • An increasing number of firms are prioritizing accountants who have knowledge on data science and analytics rather than those who only know core accounting. (Journal of Accountancy, 2018)

Accounting Challenges

From data input to processing, accounting can be tedious. So it makes sense for many companies to use technology to optimize their operations. However, while accounting software has undoubtedly grown in the past few years, it has yet to become the norm for all businesses worldwide. This is because many companies are still on the fence about using software solutions due to the challenges related to its implementation.

  • The top accounting challenges facing SMBs are accounts receivables/collections (51%), cash flow (44%), paperwork (33%), closing the books each monthly (28%), payroll management (27%). (Wasp Barcode, 2016)
  • 66% of companies in the United Kingdom are at risk due to mismanaging accounting paperwork. (The Accountancy Partnership, 2018)
  • It takes at least 5 days for companies to retrieve accounting documents. (The Accountancy Partnership, 2018)
  • 64% of small businesses in the US spend $1,000 annually on tax preparation. (NSBA Tax Survey, 2018)
  • 26% of US companies take up to 10 hours per year in order to handle tax-related duties while 40% claim it can add up to 40 hours per year. (NSBA Tax Survey, 2018)
  • 69% of CFOs rely on spreadsheets to build reports. (The Future of Financial Reporting Survey, 2017)
  • Some businesses don’t use accounting software due to security issues (38%), high cost of programs (35%), and the long period of time required to learn a software (18%). (Viewpost)

What Do These Accounting Statistics Mean for Your Business?

The implications of these accounting software statistics are clear: the future of accounting is headed towards technological adoption. Meaning, you will eventually have to bid farewell to your good old spreadsheet-based accounting processes to reap the benefits of accelerated AI-powered operations. So, despite the obstacles to user adoption, it is important to keep up with the times by understanding how to leverage new innovations in the industry.

However, you should note that this use of technology doesn’t necessarily lead to less work for you and your accountants. The evolution of accounting software may allow you to get rid of repetitive tasks but this is only to help you focus more on process optimization. After all, with more software solutions offering big data functionalities, you will be able to get more substantial insights on your financial performance or a more proactive accounting approach.

If you have yet to make use of SaaS for accounting, you might want to start checking out reliable accounting software providers. Be sure to pay attention to what kinds of accounting tools each vendor offers as well as what functionalities are included in their subscription packages. This includes choosing accounting software designed for Mac, if device deployment is a factor for you. This way, you will know if you are getting the best value for your money.

By Louie Andre

B2B & SaaS market analyst and senior writer for FinancesOnline. He is most interested in project management solutions, believing all businesses are a work in progress. No stranger to small business hiccups and drama, having been involved in a few internet startups. Prior to his for-profit ventures, he has had managed corporate communications for a Kansas City-based Children International unit.

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