Will the accounting software market continue to grow?

March 4th 2020 | Posted by Dave Cross

Will the accounting software market continue to grow?

Will the accounting software market continue to grow?

Accounting software varies greatly in its application. Simple software solutions can help with the completion of straightforward bookkeeping tasks. Whereas, more complex versions of accounting software are a valuable tool for accounting professionals.

The use of accounting software has helped to improve accuracy and efficiency levels. This is essential in protecting the finances of businesses and organisations. It has also helped businesses and industry professionals to expand their use of Cloud computing.

The growth of accounting software internationally

The accounting software market is currently extremely healthy and it seems likely that this will continue to be the case. According to current forecasts, there is expected to be a Compound Annual Growth Rate (CAGR) of 8.9% during the period from 2019-2025. This analysis covers major international areas including North America, Asia-Pacific and Europe.

Several factors were taken into account when reaching these conclusions including drivers for the use of software and any potential restraints that are present. The size of the market and current market trends were also considered. This information was combined in order to get an in-depth understanding of the behaviour of the market.

Interestingly, Porter’s 5 Forces Model has also been used to provide insights into the accounting software market itself. This has helped to identify potential rivalries and opportunities that exist. This is vital information for any software provider that is looking to enter the market.

The effect of Making Tax Digital on accounting software in the UK

In the UK, accounting software has expanded along with the global market. This growth has been further assisted by the introduction of Making Tax Digital (MTD). This introduction has increased the need for accounting software that delivers on the requirements of businesses and accounting professionals alike. This only makes it more likely that the demand for accounting software will continue to increase.

Increased demand for Cloud-based accounting software

Another major determining factor in the growth of the accounting software market is the increased use of the Cloud, by businesses and accounting firms.

Cloud-based software enables businesses and accountants to create real-time reports and dashboards more easily. It’s also a cost-effective solution that reduces the time required to complete comprehensive financial consolidation and reporting.

Many businesses have expressed concerns about the security of Cloud computing in recent years. However, as their fears have been addressed, they have started to embrace the value of the Cloud.

This means that the Cloud computing market is expected to continue experiencing significant growth. It’s predicted that Cloud based accounting software solutions will be adopted by many more businesses over the next 5-10 years.

This can only be a positive development for the accounting software market overall. Some businesses will continue to embrace the use of off the shelf products to help with their accounting needs. Others will work with accounting professionals whose work can only be enhanced by the continuing technological advances in the development of accounting software.

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