What could be more exciting than accounting statistics?
No, really. We’ve been serving accountants for more than 20 years and, as a result, we find the industry pretty dang interesting. We keep an eye on industry trends and patterns over time, pulling insights from conversations with clients and accounting statistics like these.
Bob Dylan said it best when he belted out the famous line: “the times, they are a-changin’”. While this is true in many different industries and businesses, this sentiment is readily apparent in the accounting world. As you will find in the following list of accounting statistics regarding the industry, technology is changing the game in unimaginable ways, and its use will only increase as time goes by.
1. Nearly 60% of accounting firms report that they will, or already have invested in artificial intelligence software to meet client demands. Businesses are continually demanding more out of their accounting services. As a result, more than half of the accounting field has begun to see the benefit of incorporating AI software into their practices, and it is only a matter of time before the rest of the field catches up. (Sage)
2. Just shy of 70% of CFO’s use spreadsheets to create financial reports. Using outdated technology such as spreadsheets for such important business information is a recipe for disaster. Like it or not: mistakes happen. The use of appropriate software can help to eliminate some or all of these errors and free up CFO’s to perform other job-related tasks. (Accountancy Age)
3. 21% of small business owners feel uninformed about their company’s accounting practices. The complicated world of finances and taxes can sometimes leave business owners feeling as if they are out of the loop when it comes to these areas. Accountants can ease these fears and feelings of insecurity by providing excellent service through the mixed use of software and customer support through a real person. (Wasp Barcode)
4. Over 64% of small businesses currently use accounting software. It can’t be overstated: technology is the way of the future. This is as true in accounting as it is in every industry and every part of our lives. The number of businesses incorporating accounting software is only expected to rise as the technology improves and traditional accounting methods can no longer keep up with client demands. (Statista)
5. An average 1.5% of receivables are written off by companies as bad debt, which would amount to roughly $750K each year in a $50M company (Atradius). That’s a considerable dent in a company’s cash flow! An accounting practice management system like Cloud Axis will help to automate and optimize your AR and billing.
6. Tax preparation, management of payroll, and account audits are all expected to be fully automated or at least automated to some degree in the next few years. This will bring about massive benefit, but also some interesting considerations to the accounting industry such as the role accountants will play moving forward. Though it should be said: accountants will always be necessary in some capacity, even if their roles change as technology evolves. (Forbes)
7. By the year 2026, the total value of industries involved in accounting software will be nearly 12 billion dollars. This massive market is projected to reach 11.8 billion dollars in value by the year 2026. With this much money being involved in the accounting software field, it should be obvious to any companies who are continuing to hold out that they should strongly consider incorporating accounting technology into their business plans. (Accounting Today)
8. 90% of accountants report a noticeable benefit in using cloud-based software. Cloud-based services (like TPS Cloud Axis) reduce the amount of time accountants need to spend on certain tasks, thus enabling them to serve more clients and spend more time on the difficult processes involved in the profession. (Journal of Accountancy)
9. 93% of businesses experience late payments from customers, with an average payment period of 34 days whereas the average payment term is 27 days (Tsico). While a few extra days may not sound like much on the surface, these delays in payment add up and can reduce your annual profitability and wreak havoc on cash flow.
10. Over 42% of small businesses maintain an expectation that their accountants will offer advice on business. With almost half of small businesses trusting their accountants above almost any other advisor, accounting professionals need to be up to the task. Automating services and allowing technology to share the workload can allow accountants to have more time to spend with their clients and provide them with better, more in-depth advice. (Sage)
11. 60% of business owners are not comfortable with their accounting knowledge and ability. This statistic, of course, can vary widely depending on a number of factors. However, on average, business owners tend to rely on other professionals and advisors to guide them in making accounting decisions. (National Business Capital and Services)
12. The “big four” accounting firms generated a total revenue across America of nearly 72 billion dollars in 2020. The big players in the field: KPMG, Deloitte, EY, and PwC are massive businesses that clearly serve many companies in the U.S. and abroad. With these giants serving so many accounts, it becomes almost impossible to avoid incorporating the newest accounting software into their practice, in order to eliminate errors and improve efficiency. (Statista)
The major theme throughout our 12 accounting statistics listed above points strongly toward technology advancements being one of the biggest factors affecting the accounting industry in the years to come. While accountants will always have a place in the world, their roles will be rapidly changing to adjust to new technology, and these professionals will need to be fluid and accommodate these changes. Accountants are still going to be heavily relied on in an advisory role and the ability to speak to a knowledgeable professional when problems arise is incredibly valuable.
One easy-to-use, cloud-based accounting service that our customers have found great value in is the TPS Cloud Axis. This service enables our clients to manage and organize their business needs wherever they are.
If you are considering incorporating accounting technology into your business, consider the TPS Cloud Axis. Should you have any questions, our team is standing by and is ready to help.