Update: This article was last updated on 16th July 2020 to reflect the accuracy and up-to-date information on the page.
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.
1. 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%.
2. 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.
3. Statistics – Technology Usages 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.
- 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.
4. 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%.
5. 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.
The world of accounting is a complex one. One needs to be both technically and statistically knowledgeable before foraying into the world of the industry. Knowing about trending things in accounting by these stats can significantly boost your accounting firm’s growth and be future-ready.
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