Accounting Software Market Analysis North America, Europe, APAC, Middle East and Africa, South America - US, China, UK, Japan, Canada, India, Germany, South Korea, Italy, Brazil - Size and Forecast 2024-2028

Accounting Software Market Size 2024-2028 

The accounting software market size is forecast to increase by USD 6.29 billion at a CAGR of 8.8% between 2023 and 2028.

• The market is experiencing significant growth due to the increasing adoption of IT and Telecommunication solutions among various industries. Cloud-based accounting software is becoming increasingly popular, particularly among Small and Medium-sized Enterprises (SMEs), due to its ease of use and cost-effectiveness. The rise of e-commerce platforms is also driving the demand for accounting software with seamless integration. Automated bank feeds and billing are key features that are increasingly in demand to streamline the accounting process. However, data privacy and security concerns remain a challenge for the market. In the Oil and Gas and Healthcare industries, for instance, stringent regulations necessitate strong security measures. Overall, the market is poised for continued growth, with Financial software providers continually innovating to meet the evolving needs of businesses.

What will be the Size of the Market During the Forecast Period?

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• The market is witnessing significant growth due to the increasing demand for efficient and automated accounting solutions among Small and Medium-sized Enterprises (SMEs) and other businesses. These businesses require advanced accounting information systems to manage their basic accounting needs, including general ledger, accounts receivable, accounts payable, payroll, inventory, customer relationship management (CRM), and supply chain management. Cloud-based solutions are increasingly gaining popularity in the market due to their flexibility and accessibility. Financial software that offers e-commerce integration, automated bank feeds, and automated billing are essential features for businesses looking to streamline their accounting processes.
• In addition, accounts payable and accounts receivable automation is a critical aspect of accounting software, enabling businesses to manage their cash flow effectively. Business payroll functionality is also essential for managing employee compensation and tax calculations. Invoicing is another vital function of accounting software, allowing businesses to generate and send invoices to customers, track payments, and manage overdue accounts. Project management capabilities are also becoming increasingly important, enabling businesses to manage budgets, track time, and monitor project progress. Bank reconciliation is a crucial aspect of accounting, ensuring that the records in the accounting software match the records from the bank.

How is this market segmented and which is the largest segment?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Deployment
  • On premises
  • Cloud
• Geography
  • North America
    • Canada
    • US
  • Europe
    • Germany
    • UK
    • Italy
  • APAC
    • China
    • India
    • Japan
    • South Korea
  • Middle East and Africa
  • South America
    • Brazil

By Deployment Insights

• The on premises segment is estimated to witness significant growth during the forecast period.

Accounting software refers to digital tools designed for financial management tasks, including invoicing, tax calculations, debt management, and bank reconciliation. These solutions enable businesses to streamline their financial operations and gain real-time insights into their financial data. Advanced accounting software may also offer project management capabilities and integration with other enterprise systems, such as Customer Relationship Management (CRM), supply chain management, and Enterprise Resource Planning (ERP). On-premises accounting software is installed on a business's native IT infrastructure, providing secure access to financial data within the company's network. This setup offers protection against cybersecurity threats and allows for lower long-term costs, as updates and upgrades are managed internally.

However, it requires a one-time installation and the purchase of new licenses for access to the latest features. Modern accounting software goes beyond basic financial management functions, offering customizable solutions tailored to specific industries and business needs. By automating repetitive tasks and providing real-time financial insights, these tools help businesses make informed decisions and improve overall efficiency. Additionally, cloud-based accounting software offers the flexibility of remote access and real-time collaboration, making it an attractive option for businesses with distributed teams or those seeking scalability and agility. In conclusion, accounting software plays a crucial role in financial management, tax planning, and debt management for businesses.

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The on premises segment was valued at USD 5.80 billion in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

• North America is estimated to contribute 46% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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In North America, the market is witnessing substantial growth due to the presence of numerous established providers and increasing government investments in accounting management systems for public and private organizations. The market is projected to expand at a steady pace in the US, fueled by the rising adoption of accounting mobile applications and the acceptance of cloud computing technologies and solutions. Additionally, the emergence of small businesses and increased SME investments in cloud and software-as-a-service (SaaS) are anticipated to boost market expansion. Furthermore, the trend of SMEs collaborating with e-commerce platforms and integrating with other online applications, such as automated bank feeds and automated billing capabilities, is expected to further increase the usage of accounting software throughout the forecast period.

Market Dynamics

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

What are the key market drivers leading to the rise in adoption of Accounting Software Market?

Increasing demand for cloud-based accounting software is the key driver of the market.

• Accounting information systems have become essential tools for businesses to manage their financial operations effectively. Cloud-based accounting software, in particular, has gained significant traction due to its ability to provide real-time financial visibility through dashboards and reports. This software caters to basic accounting needs, such as maintaining a general ledger, managing accounts receivable and payable, processing payroll, and tracking inventory.
• Additionally, it offers advanced features like Customer Relationship Management (CRM), supply chain management, and Human Resource Management. Medium and large businesses, in particular, have benefited from these solutions due to their extensive use of various systems. Cloud-based software eliminates the need for separate installations and maintenance in each system, thereby reducing costs and processing time.

What are the market trends shaping the Accounting Software Market?

Rising penetration of e-commerce platforms is the upcoming trend in the market.

• The market is experiencing significant growth due to the increasing adoption of IT and telecommunication solutions in various industries, including Oil and Gas, Healthcare, and SMEs. The shift towards cloud-based financial software is a major factor driving this trend, as it offers automated bank feeds, e-commerce integration, and automated billing, which are essential for streamlining the accounting process in today's fast-paced business environment. The e-commerce sector is witnessing exponential growth, with more consumers shopping online than ever before. For instance, during Amazon's Prime Day event in 2019, sales reached over USD 2 billion, with a significant portion of those purchases coming from small and medium-sized businesses.
• In addition, to remain competitive and meet the demands of online shoppers, retailers and businesses must efficiently manage their financial operations. Accounting software with cloud-based solutions is an effective way to achieve this goal. In conclusion, the need for efficient and accurate financial management is increasingly important in today's business landscape, particularly in the e-commerce sector. Cloud-based accounting software offers a cost-effective and streamlined solution for managing financial operations, making it an essential tool for businesses looking to stay competitive in the digital marketplace.

What challenges does Accounting Software Market face during the growth?

Data privacy and security concerns is a key challenge affecting the market growth.

• Accounting software plays a vital role in managing financial transactions and generating reporting applications for businesses. Functional modules such as cash flows, financial consolidation, and tax management are essential features of these software solutions. In today's business landscape, cloud-based accounting software has gained popularity due to its ability to provide real-time business visibility. However, the shift to cloud-based systems brings new security concerns. With an increasing volume of sensitive financial data being processed and stored, accounting software providers are attractive targets for cybercriminals. Data breaches can lead to significant risks, including identity theft, financial fraud, and loss of consumer trust.
• In addition, according to reports, approximately 80% of businesses globally have experienced cyberattacks. The consequences of a single breach can be substantial, with legal penalties, remediation costs, and reputational damage leading to significant financial losses. Therefore, investing in strong cybersecurity measures is crucial for firms handling vast amounts of personal and financial data. While spreadsheets were once the go-to solution for managing financial data, the complexity of modern business operations necessitates more advanced accounting software, including custom solutions and ERP systems. Tax management software is another essential tool for businesses to ensure compliance with various tax regulations. In conclusion, while accounting software offers numerous benefits, data privacy and security concerns are critical issues that must be addressed to maintain consumer trust and protect against financial losses.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Acumatica Inc.
• Assist Cornerstone
• Epicor Software Corp.
• Infor Inc.
• Intuit Inc.
• Kingdee International Software Group Co. Ltd.
• Microsoft Corp.
• MYOB Group
• Oracle Corp.
• Reckon Ltd.
• Red Wing Software Inc
• Saasu Pty Ltd.
• Sage Group Plc
• SAP SE
• Tally Solutions Pvt. Ltd.
• Unit4 Group Holding B.V.
• Xero Ltd.
• YonYou Network Technology Co. Ltd.
• Zeta Softwares Pvt. Ltd.
• Zoho Corp. Pvt. Ltd.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The market is witnessing significant growth due to the increasing demand for advanced accounting solutions that cater to the basic accounting needs of businesses. These needs include managing financial transactions through functional modules such as general ledger, accounts receivable, accounts payable, payroll, inventory, customer relationship management (CRM), supply chain management, and human resource management. Cloud-based accounting software is gaining popularity due to its real-time business visibility and accessibility. Dashboards and reporting applications provide valuable insights into financial data, enabling businesses to make informed decisions. Cash flows, financial consolidation, and security concerns are essential features that businesses look for in accounting software.

Furthermore, spreadsheets have been a traditional method for accounting, but the shift towards digital technology and cloud-based solutions has led to the adoption of accounting software. ERP systems, custom accounting software, and tax management software are popular choices for businesses, especially in industries such as oil and gas, healthcare, and IT and telecommunication. Automation, cash flow visualization, and e-commerce integration are key features that enhance productivity and reduce human errors. Cloud computing, SaaS market, and digital record-keeping are driving the growth of the market. Additionally, features like automated bank feeds, automated billing, business payroll, and project management are essential for workplace productivity. Artificial intelligence, cash flow visualization, and treasury solutions are the latest trends in the market. Remote access, financial records, and automation are essential for businesses looking to streamline their accounting processes. The market is expected to grow further due to the increasing demand for tax planning, debt management, and GST/tax system solutions from SMEs and large enterprises. Software development providers are investing heavily in accounting software to cater to the evolving needs of businesses.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market  and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across North America, Europe, APAC, Middle East and Africa, and South America
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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