2024 State of Affairs: Accounting Software Market Size & Leaders
If you’re in the market for some new accounting software, it's good that you've come looking for help; the choice can be pretty overwhelming. There are a huge number of options available, ranging from trusted names that have been around for years, to new upstarts promising cutting-edge features and tools.
However, taking the time to find the right software is likely to be well worth the effort. With plenty of uncertainty in our recent past (and, let’s be honest, our near future), the benefits are clear.
In this guide, I’ll go over the current accounting software market size to show you the platforms you should be paying attention to in 2024.
Accounting Software Market Information
We’re going to get into some specifics on the accounting software options available to you, but first, we need to consider the competitive landscape. The accounting software market size is already huge, and it’s projected to continue to grow at a staggering rate over the rest of this decade.
But just how big is it? Let’s see.
Current Global Accounting Software Market Size
The global accounting software market size is estimated to be worth around $15 billion, with estimates ranging from slightly below this figure on the downside, to almost $20 billion on the upside.
To put that into context, accounting software makes up around 2.5% of the global software market, which includes some of the biggest companies in the world, like Microsoft and Google.
North American Market Size
The North American market makes up the largest portion of the global figure, representing around 35% of the total. For those keeping score, this puts the North American accounting software market size in the region of $5.25 billion.
Projected Global Accounting Software Market Growth
What’s arguably more interesting than the raw numbers of the size of the accounting software market, is the rate at which it’s projected to grow. Estimates of the compound annual growth rate (CAGR) over the next 6 to 8 years range from 8.02% to 12%+.
That sets the stage for the market size to grow to somewhere between $30 - $40 billion over that time frame.
This growth rate is significantly higher than the CAGR expected from the broader software market as a whole, which is projected to be 5.27% over the coming years.
North American Market Growth
With the rapid uptake of cloud-based accounting software happening in North America, we could see even higher growth in this market. One research report estimates a CAGR of 17.9% between 2024 and 2028, while others suggest more modest growth in the region of 7-9%.
Types of Accounting Software
The term accounting software is actually a catch-all for a range of different specific use cases. The accounting and finance department has a lot of different roles, and there are software solutions that offer an all-in-one solution and others that specialize in one specific need.
Here’s a breakdown of the different types of accounting software.
Accounts Payable Software
AP software helps companies make payments to suppliers efficiently, as well as offering insights and analytics on their spending. Modern solutions even offer options that automate much of the accounts payable process.
Some of the most popular options in this category include Bill.com, Freshbooks, and Centime.
Accounts Receivable Software
As you might guess, accounts receivable software does the opposite. Most accounting solutions, including those listed above, offer both AR and AP functionality.
Financial Reporting Software
Understanding your data is one of the most important aspects of the finance team’s role. Financial reporting software improves this process by centralizing your company’s financial data and offering automated reporting with detailed analytics. This makes preparing financial statements much quicker and easier.
Vena is a well-reviewed example for companies looking for an Excel-based solution, while Workiva has a lot to offer for companies with complex reporting needs.
Forecasting Software
Where financial reporting looks at historical data, forecasting software is all about the future. The ability to look ahead to the next forecast period gives finance teams the ability to assess how different assumptions might impact their bottom line, to help prepare for any eventuality.
This is a large market segment, with Workday Adaptive Planning and Anaplan earning notoriety as two of the biggest names in the space.
Billing Software
If you’re looking for software that primarily helps you create and manage invoices, billing software is what you’re after.
You’ll often find billing features built into other software categories on this list, such as within accounts receivable solutions like Bill.com. However, there are more targeted solutions out there, such as Stax Pay and Chargebee.
Expense Report Software
As the name suggests, expense report software helps manage a company's expenses, allowing employees to submit expense reports, automating the approval process, and offering tools to analyze and control expenses.
Rippling is one of the most well-known in this category, with Brex, Divvy, and SAP Concur as other notable options.
Expense Tracking Software
The final category — expense tracking software — is very similar to the previous one, with a focus on gathering expense data.
Rippling is arguably the market leader here too, though many large companies opt for ERP integrated options like SAP Concur.
Accounting and Bookkeeping Software
There are a number of large accounting software providers that offer a little bit of everything on this list. The most well-known example is Quickbooks, which has over 75% market share in the US.
In some cases, this will be enough for your needs, so you only really need to look into the others if you want something more specialized.
Best Accounting Software on the Market
The best accounting software will depend on the specific needs of your company and the biggest pain points you’re dealing with. However, there are some standout performers in all of the above categories, as well as solutions that offer software features that cover multiple different areas of accounting.
Our team has gone over the best — not just the most popular — accounting tools and ranked these as the top options:
There are also software platforms, known as enterprise resource planning (ERP) systems, which go beyond accounting, providing tools and features across your entire business. Choosing between an ERP vs. accounting software is a broader discussion that will need to involve all the wider management team.
Accounting Software Market Trends
As outlined earlier, the accounting software market is expected to grow substantially in the coming years. So, where is that growth coming from and what are some of the trends in the accounting software market that go beyond the accounting software basics we now expect?
Drivers
First, let’s take a look at some of the trends that are pushing the sector forward.
Cloud Adoption
The shift towards cloud-based solutions continues to be one of the most transformative trends happening in the industry, replacing on-premise solutions. Cloud computing offers several advantages, including real-time access to financial data, scalability, and reduced IT overhead. This trend has accelerated dramatically over the past few years, with the majority of companies now either using cloud-based solutions or looking to make the switch.
Automation and AI Integration
Gartner expects spending on automated invoicing software alone will more than double to reach $1.9 billion by 2025, up from $850 million in 2020 at a CAGR of 17%.
Automation and artificial intelligence are revolutionizing the accounting software industry. AI-driven tools can automate routine tasks such as accounts receivable matching, data entry, invoice processing, and reconciliation, freeing up accountants to focus on more strategic activities.
According to a recent generative AI guide from McKinsey, “For many finance functions, gen AI will be table stakes—one among several of the essential tools that every effective, forward-looking finance function will use.”
Advanced-Data and Analytics
Advanced analytics are now influencing everything from ecommerce to sports and entertainment, so it’s no surprise that finance and accounting are seeing some major benefits. Nearly 50% of finance executives are seeing improved employee productivity as a direct result of advanced analytics.
Regulatory Compliance and Standardization
As global markets become more interconnected, the need for accounting software that can handle multiple regulatory environments grows. Solutions that offer compliance with local and international accounting standards (such as GAAP and IFRS) and can adapt to changing regulations are in high demand. This trend is particularly relevant for multinational corporations and businesses expanding into new markets.
Restraints
The race to implement new technology isn’t without its drawbacks. There are restraints which are limiting the pace of software uptake and development, including:
High Implementation Costs
While many of the software options I’ve touched on in this article come with limited implementation costs for smaller businesses and modest subscription pricing, large companies face significant expenses to integrate new software. These costs include not only the software itself but also training, customization, and integration with existing systems.
This is particularly true when dealing with enterprise-level solutions such as SAP or Oracle’s Netsuite.
Resistance to Change
Organizational change can be difficult, and this can slow down the adoption of new accounting technologies. Many finance professionals are accustomed to traditional methods and may be hesitant to transition to new software systems. This resistance can be mitigated through effective change management strategies and comprehensive training programs.
Data Migration Challenges
Migrating historical financial data from legacy systems to new accounting software can be a complex and time-consuming process. Data integrity and accuracy during the migration are very important, and any issues can lead to significant disruptions. This challenge often deters organizations from upgrading their accounting software, particularly those dealing with high-value data such as financial institutions.
Future Trends and Predictions
While those trends have been running hot for a while, there are a few others that look to be increasing in relevance over the coming years.
Data Visualization
Much of the recent trends in the accounting software market have centered around gaining access to more and better data. This is the foundation for more informed decision-making in the finance function, but there needs to be continued improvements in the way this data is understood and reviewed.
Data visualization tools have a pivotal role to play here, with technology such as AI and machine learning able to help bridge the gap between the practically endless sea of data points and usable graphical representations of what that means for companies.
Research shows that the data visualization market is expected to grow at an even faster rate than the accounting software market.
Market Consolidation
The low interest rate environment of the 2010’s saw an explosion of SaaS businesses, and the accounting software market was no exception. And while 80% of CFOs surveyed by Deloitte in Q4 2023 said they expect to increase their automation and digital technology use, a key driver for this is to reduce costs.
Obviously with that in mind, there is going to be a close eye being kept on software spend in the coming 12 - 24 months. This, along with the increase in M&A activity that began in late 2023, means we’re likely to see higher levels of consolidation in the market.
Finance leaders will be looking for solutions that offer the best value, delivering a wide range of features and capabilities without the need to run dozens of platforms concurrently.
Current Market Leaders
According to an accounting software market report from financial data provider Codat, 99% of businesses in the US are small businesses, with 75.3% having 10 employees or less. With that in mind, it’s not too much of a surprise that the most popular accounting software in the region is directed more toward small businesses.
Here are the 5 biggest market players in the US accounting software sector:
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