Over the years, businesses have evolved. From using manual methods in the early 70s to becoming more technical in the 21st century.
Various Industries worldwide have increased efficiency and reduced workforce hassles. Accounting is one such industry that saw an enormous evolution in the recent past. From being a mere part-time backend job to one of the high-profile careers, accounting has enormously progressed.
It is the heart of the financial stability of any company or an individual. Hence, businesses and accountants must be aware of the rapidly changing and evolving accounting world and adapt accordingly.
Individual accountants or businesses (small or large) can up their accounting game by understanding the accounting industry’s current trends. It will also help them minimize their expenses but also provides a method of efficient time management.
Let’s take a look at some accounting statistics compiled for you to understand the impact of accounting for your business.
Table of Contents
Top Accounting Statistics & Facts for 2023-24
General Accounting Statistics
- In 2020, the global market value for accounting services reached an impressive $544.06 billion, as reported by Research and Markets. What’s even more compelling? The industry is on a steady upward trajectory!
- Anticipated to hit $735.94 billion by 2025, as projected by Research and Markets, the expansive accounting market is undergoing notable shifts. Change is on the horizon!
- In 2019, Sage reported a cultural shift in accountancy recognized by 90% of global accountants. This shift poses challenges for accounting firms.
- As per the Accounting Today 2022 Year Ahead Survey, 51% of firms identify keeping up with regulatory change as their primary challenge.
Additional significant challenges include talent management, client acquisition/retention, technology adaptation, economic factors, and client financial health. Stay tuned for insightful stats addressing these concerns.
Addressing Changing Regulations
The world of accounting is constantly evolving, especially with changing regulations. For many firms, keeping up with these changes is a persistent challenge due to their rapid pace.
- Over 50% of surveyed firms faced difficulties in keeping up with legislative changes, as reported by Wolters Kluwer.
- Despite these challenges, 36% of small firms and 45% of large firms reported an improved tax season compared to last year, according to Wolters Kluwer.
While staying updated on legislative changes can be challenging, leveraging automation for time-consuming tasks allows firms to focus more on crucial activities for both the firm and clients.
Crucial to Accounting Success
A key determinant of accounting firm success lies in having the right team. A major hurdle faced by accounting firms is the recruitment and retention of talented employees. Ensuring the right personnel has never been more crucial, yet it has never been more challenging. Factors contributing to this challenge include evolving demographics and the necessity to resonate with the younger generation.
- According to Sage’s 2020 report, 84% acknowledge that prospective employees from younger generations, deemed ‘digital natives,’ bring progressive expectations, attitudes, and talents. Accounting firms must reflect and nurture these qualities to attract them successfully.
Both the upcoming and existing accountants need to adapt and acquire new skills not traditionally covered in accounting programs. This adaptation is crucial as the industry undergoes transformation propelled by technology and evolving client expectations.
- A substantial 62% agree that today’s accountancy training programs won’t suffice for a successful practice by 2030 (Sage, 2019).
- An overwhelming 82% of accountants are considering recruitment from non-traditional backgrounds (Sage, 2019).
- A noteworthy 51% believe that modern accountants require financial business advisory skills like cash flow and growth modeling (Sage, 2020).
- 57% emphasize technology literacy as the primary additional skill for accountants (Sage, 2019).
Fostering Job Satisfaction
- Only 36% of finance and accounting professionals express overall satisfaction with their jobs (Monster).
- 41% find problem-solving most satisfying in their accounting careers (Robert Half).
- 60% of large firms credit technology for enhancing staff engagement and morale, critical factors for staff retention (Wolters Kluwer).
- 30% of firms actively seek to diversify their workforce (Sage, 2019).
- 40% of new staff choose a practice over competitors based on its reputation (Sage, 2019).
- The average salary for accountants stands at $55,459 per year, while a designated CPA earns an average of $65,289 per year (Indeed).
- Accountants and auditors earned a median annual wage of $73,560 as of May 2020, according to the U.S. Bureau of Labor Statistics (BLS) report.
Yet, it’s crucial to note that these figures can vary significantly based on factors such as your industry, experience, skills, and location.
In the aftermath of the pandemic, accounting firms are shifting towards a more virtual work environment. Let’s see some exciting accounting statistics on this evolving trend.
- A notable 81% of firms anticipate a moderate to significant increase in remote work post-pandemic, as revealed by ConvergenceCoaching’s 2020 Anytime, Anywhere Work Survey.
- This year, the majority of tax returns were prepared without in-office contact with taxpayers, and on the audit side, there was a considerable reduction in in-person interaction with clients, according to Wolters Kluwer.
- A substantial 43% of firms are actively downsizing their physical presence, either downgrading brick-and-mortar locations or transitioning to a virtual-only presence, as indicated by Wolters Kluwer.
It’s worth emphasizing that companies embracing virtual work reap numerous benefits, including heightened productivity, increased employee satisfaction, and reduced operating costs.
- 70% of small businesses operate without an accountant, with over half relying solely on owners or managers to handle finances, as indicated by Onpay.
- Onpay reports that 23% of small businesses are likely to switch accountants within the next year.
- For small business owners, 49% consider recommendations from other professional advisors as the most crucial resource when seeking an accountant (Onpay).
- A striking 50% of millennials are contemplating replacing their accountants, and one in five wouldn’t recommend their current advisor (Xero).
- Among millennials, 39% prioritize an advisor who is “enjoyable to work with” (Xero).
- Sage Practice of Now 2020 reveals that 87% believe clients expect more flexibility and improved service levels from accountants without an increase in rates.
As the next generation steps into business ownership, the dynamics of client expectations are evolving. Your accounting firm’s digital marketing and communication strategy should align with this demand for flexibility.
Consider incorporating features such as online appointment booking and user-friendly software for gathering client information. Adaptation to these changing expectations is key to staying ahead in the accounting landscape.
Adapting to Client Needs
- Onpay notes that only 61% of small businesses express satisfaction with the range of services offered by their accountants.
- According to Sage, a substantial 82% of accounting firms acknowledge that clients today anticipate a broader spectrum of services and resources compared to five years ago.
Forward-thinking firms recognize the imperative to meet evolving client needs. The shift towards expanding advisory and consulting services demands a departure from a mere compliance mindset. Instead, it calls for empowering professionals to make informed decisions and add substantial value for clients. This strategic evolution positions accounting firms to thrive in a dynamic and demanding market.
- According to Sage 2020, a significant 79% of surveyed firms express confidence in providing business management and advisory services, including cash flow management for business owners.
- Sage’s report reveals that 75% of firms feel confident offering industry-specific advice, such as establishing standard profit margins for small business owners.
- An impressive 73% of surveyed firms are confident in providing technology implementation recommendations, including AI and accounting automation (Sage, 2020).
While many firms, especially larger ones, anticipate a heightened focus on advisory services in 2022, they also expect an increase in compliance work. To balance this, firms plan to reduce time spent on client administrative work, as reported by Accounting Today’s 2022 Year Ahead Survey.
- 63% of firms are either currently training or planning to train their staff in financial business advisory services, as indicated by Sage in 2020.
In summary, expanding your business involves strategic considerations, confidence in offering diversified services, and recognizing the need for ongoing employee training to enhance expertise in the evolving landscape of financial advisory services.
Technology Trends in Accounting
With automation making its way into accounting, there will be better technology utilization and faster application of business decisions. The integration of AI with the accounting software offers an automated categorization of data and data entry.
Below are some accounting automation stats that will help all the accountants keep up with the industry’s demands.
- Sage’s 2019 survey indicates that a striking 85% of accountants believe that the accounting profession in their country needs to accelerate technology adoption to remain competitive internationally.
- As revealed by Sage in 2020, 45% of professionals express an intention to automate repetitive and time-consuming accounting tasks, including data entry.
- Sage’s 2019 report anticipates that within the next three years, 58% of accounting professionals will be automating tasks using artificial intelligence solutions.
- Sage’s 2020 findings show that 58% of professionals acknowledge that updating technology has significantly improved efficiency and productivity. This improvement is crucial for creating the space needed to add the service offerings demanded by clients.
- An overwhelming 91% of professionals state that technology enables them to focus on clients or enhances overall productivity (Sage, 2020).
- According to Wolters Kluwer, this year sees 90% of small firms and 94% of large firms leveraging technology to enhance productivity, staff engagement, and overall client experience. This shift toward technology is a strategic move, especially as firms aim for an improved tax season.
Your firm may have adopted technology early on, but it’s worth evaluating whether you’re fully leveraging its potential.
- Almost 40% of all firms identify themselves as either innovators or early adopters of technology, according to Wolters Kluwer.
- Surprisingly, only 7% of small firms and 2% of large firms believe they are fully maximizing the value of their current technology (Wolters Kluwer).
- 78% of finance professionals predict that all the future accounting methods will be automated, reports Thomson Reuters.
- According to the Journal of Accountancy, the percentage of accounting executives who believe that AI leads to competitive advantage is 80%, and 79% of them believe that it can increase the productivity of their company.
- 56% of future accounting jobs will need a skill of automation, reports PwC, a British accounting giant.
- According to Forbes, the RPA (Robotic Process Automation) has reduced the processing time for contracts and audits from a handful of months to just a few weeks.
- 36% accountants agree, while 22% strongly agree that Artificial Intelligence will automate accounting tasks, improving productivity and efficiency, reports Sage.
- According to Accenture, the percentage of clients who preferred getting advice from both a human and a Robo adviser is 68%.
- 59% of accounting professionals believe that the accounting industry will require data science and analytics in the near future, according to a report in the Business-Higher Education Forum.
- According to Sage (Sage Practice of Now 2018 Report), the percentage of accountants who are ready to invest in AI is 66%, out of which 55% plan on using it in the next 3 years.
- Robotic Process Automation increases efficiency by 44% by automating manually repetitive tasks, reports RPA consultancy company Digital Workforce.
- According to ACCA, over 50% of the accounting executives expect that the development of automated and intelligent accounting systems will have a significant impact on accounting businesses over the next 30 years.
Budget Constraints and Strategic Decision
- According to the Accounting Today 2022 Year Ahead Survey, tech budgets for small and midsized firms increased by approximately 2% from the previous year. Conversely, large firms saw a 1.6% decrease in their tech budgets. Interestingly, large firms are more likely to anticipate increased tech spending in 2022 compared to small firms.
Preparing for the Future
The tech trend, especially in accounting, is not fading away. Whether you’re constrained by budget concerns or strategic decisions, it’s crucial for your firm to be well-equipped to handle upcoming changes.
- Despite challenges, 32% of respondents express extreme confidence that their firms are well-positioned to navigate future technology advancements and information challenges, considering current market conditions (Wolters Kluwer).
As the new remote work lifestyle becomes more prevalent, and the demand for accessing information from anywhere at any time rises, the accounting software industry is increasingly shifting towards cloud accounting software.
- The global accounting software market is anticipated to achieve a value of $735.94 billion by 2025, according to Research and Markets.
- The cloud accounting market is on an upward trajectory, expected to reach 4.25 million by 2023, as projected by Flexi.
- A significant 67% of accountants express a preference for cloud accounting, believing that integrating cloud technology enhances the success of their businesses, according to Sage.
- Sage’s findings also reveal that 53% of accountants have already embraced cloud-based practice management solutions for efficient project management and communication with clients.
Accounting Statistics For Small Businesses
99.7% of all businesses are small businesses. Small Businesses are the one which drives the economy of a nation. Let’s see how small businesses have evolved with accounting in their businesses.
- According to Smallbiztrends, 86% of Small Business Owners feel that their accountant is a trusted advisor.
- According to the Small Business Report Accounting, 60% of the small business owners feel that they might not have enough knowledge about finance and accounting.
- As reported by PCMag, US Business of Bureau Index, 20% of Small Business Enterprises without accounting software, struggle to last in their 1st year.
- According to Statistia, the percentage of small business owners using accounting software is 64.4%.
- According to ICAS, the percentage of small businesses placing accountants at the peak of their list for trusted advisors is only 30%.
- In the USA, there are 30.2 million businesses, reports com.
- According to PayPie, 70% of the small business accountants view their advisory roles into becoming more strategic.
- According to an SBA research paper (the United States Small Business Administration), Small Businesses have plummeted down to 27.5% in the USA due to the ongoing COVID-19 pandemic.
- According to Arbitrue, small businesses that do not expect a meet with their respective accountants face-to-face are 58%.
Cloud Accounting Statistics
Cloud accounting is bringing a shift in the accounting process (from local desktops to the cloud). Companies can save money, effort, and time by allowing its employees to remotely access the data anytime from any part of the world via the internet. This eliminates the need to install the software application on every desktop system.
These stats below illustrate the trends and benefits of accounting in the cloud:
- According to a resource of Capital Counselor, companies using Cloud Accounting will add five times more clients than companies not using these tools.
- According to Sage (Sage Practice of Now 2018 Report), the percentage of accountants who prefer cloud accounting is 67%.
- According to Accounting Today, 58% of large companies are already using cloud accounting.
- 87% of companies have felt an acceleration in their businesses by incorporating cloud in their business processes, a McAfee Report.
- According to Xero, the companies that use cloud accounting exclusively saw a 15% growth in the year-over-year revenue pattern and were also able to get five times the total number of customers than the companies that don’t use cloud accounting exclusively.
- According to Verified Market Reports, The Cloud Accounting Software market will reach an estimated valuation of US$ 4320 million in 2024.
- According to Forbes, the cost of labor is reduced by 50% with the help of cloud accounting.
- 94% of Accounting Managers are using cloud services in the USA in 2019, reports Robert Half.
- According to Accountancy Age, the percentage of small businesses that will solely rely on cloud accounting by 2020 is 78%.
- According to Flexi, the global market size for cloud accounting was $2.62 billion, and by the end of 2023, it is estimated to be $4.25 billion.
Statistics For Accounts Payable and Receivable
Accounts Payable may seem to be a tedious task for most businesses as they need to keep track of numerous bills and payments. Accounts payable and receivable have progressed significantly in recent years. It has changed from mere manual invoice management to a major factor in strategic business growth.
Here are some insightful statistics in the “payable and receivable” arena of accounting.
- In a report of Versapay, 400 billion invoices are produced in the United States each year, with the number growing 5 to 15 times each year.
- According to iPayables, over the years, 39% of the AP professionals have reported that the total invoices that they work on have seen an increase of about 10%.
- In a survey carried out by APQC (American Productivity and Quality Center), considering about 997 companies, it was revealed that the top performers spend $4.98 for an invoice, while the number significantly increases to $12.44 for those companies which do not use Account Payable tools.
- According to Vanguard Systems, depending upon the size of the company, $16/invoice or more can be saved via AP automation, and it starts paying for itself within an average of 6 to 18 months.
- 39% of AP professionals feel that there has been a significant increase in invoices over the year 2017-2018, according to research data of ipayables.
- According to MineralTree, one hour can be saved per day by AP professionals who automate their payments and invoice capture.
- According to data by Tradeshift, the total B2B payments in the US in invoices will reach $23 trillion.
- In a data report, automating an Accounts Payable process reduces 90-95 percent of Paperwork and increases efficiency by 20-27%.
Accounting Jobs Statistics
These stats will help you know how job disruption is coming to the accounting industry as technology such as AI, automation, etc. are creating opportunities for skilled professionals.
- Statista reported that the big 4 accounting firms like PwC, KPMG, Deloitte, and EY have created over 1 million jobs worldwide and generated total revenue of 56 billion US Dollars in 2018, while 148.24 Billion US Dollars globally.
- A research paper from Sage has suggested that 83% of Accountants in the US think that companies are more demanding today than they were 5 years ago.
- According to CapitalCounselor, In 2019, the accounting industry in the US has reported a surge of 0.121% in the number of accountants with the total number reaching 1.28 million.
- According to the Bureau of Labor Statistics, U.S. Department of Labor, the median annual wage for accountants and auditors was $71,550 in May 2019.
- According to Roger CPA, the highest paying cities for an accountant is San Francisco with a median annual salary of $96,099, followed by New York, Houston, Atalanta, and Dallas, which make the top 5.
- According to a study by AICPA, the percentage of CPAs who believe that they are not entirely future-ready is 92%.
- According to Sage (Sage Practice of Now 2018 Report), the percentage of accountants who believe that the demand of clients has increased over the past five years is 83%, and out of them, 67% feel that the accounting profession has become more competitive than ever before.
- According to Arbitrue, by the year of 2020, the auditors will grow in population from 1.2 million to a vast number of 1.44 million.
- According to Accounting Today, the value of the accounting software global market will be $11.8 billion in the next 8 years.
So, summing it up—accounting is always changing, and the numbers show that. From fancy tech like cloud accounting to the crucial work of CPAs, it’s clear things are moving.
What we learn? Well, keeping up with tech and getting smart advice matters big time. Whether it’s tax season or just getting your money game on point, paying attention and adapting is how you win in the accounting world.
Let the numbers be your guide, keep learning, and rock the accounting game!