B2B Accounting Software Industry

Part
01
of four
Part
01

B2B Accounting Software Industry: Tech Trends

Leading tech trends defining the B2B accounting software industry include cloud computing, automation, integration, block chain, and cloud computing,

CLOUD COMPUTING

AUTOMATION

BLOCK CHAIN

INTEGRATION

MOBILE

  • Mobile is the dominant internet access point rather than desktop devices. Businesses have already embraced the trend and are increasingly mobile to promote increased flexibility for employees as well as to ease the management of their businesses.
  • Accounting software is catching on the trend of going mobile with accounting software such as Xero having mobile accounting for management of business finance on the move.

RESEARCH STRATEGY

In order to determine, your research team undertook an extensive review of news sources, industry reports, and company websites such as Xero and Forbes. Importantly, your research team validated top trends by corroboration across credible trends. Further, we provided insights, statistics, and examples to back up our identified top trends.
Part
02
of four
Part
02

B2B Accounting Software Industry: Accounting Trends

Some major trends impacting the accounting industry in the United States include cloud-based services, automation, outsourcing, and collaborative accounting.

CLOUD-BASED SERVICES

AUTOMATION

OUTSOURCING

COLLABORATIVE ACCOUNTING

RESEARCH STRATEGY

We commenced our research by searching for media reports, published articles, blogs and databases that gave an insight into the trends that are impacting the accounting industry in the United States. We then gathered the trends that were mostly repeated in our findings. With these, we were able to come up with the major trends being used by the accounting industry in the United States. Going forward, we searched for companies in the US that had successfully implemented these trends on media reports, articles, blogs and other databases. It is important to note that we included some information from beyond the past 24 months because it was still relevant and vital in completing the present research.

Part
03
of four
Part
03

B2B Accounting Software Industry: Pain points

The accounting industry is experiencing rapid changes. The impacts of those changes are affecting accounting professionals from all directions and producing a series of serious challenges. Typically, accounting professionals encounter the impact of new technology, adapting to rapid change, the downward price pressure on services, the Tax Cuts and Jobs Act, and cybersecurity as major pain points in their work.

THE EFFECT OF NEW TECHNOLOGIES

  • Rapid shifts in technology, such as data automation, artificial intelligence, and blockchain, are causing extensive changes to the operations of businesses, employment practices, clients demands, and have particular impacts on accountants.
  • New online technologies and mobile internet have resulted in cloud-based accountancy software, and they are rendering professional accountants unqualified. Some businesses consider it unnecessary to solicit accounting services from professionals because they can opt to use technology to handle several accounting functions by themselves instead.
  • Data analytics and innovative technologies offer a chance for high-level changes in the accounting profession.
  • Technology commoditizes basic services such as audit, tax preparation, and bookkeeping necessitating the radical reshaping of the entire role of accountants.
  • Technologies like cloud computing are transforming what accounting professionals do and the practices they should know. The existence of accounting professionals is dependent on their capacity to learn new skills and to be able to work alongside machines by handling the tasks the machines cannot yet perform.
  • Accounting professionals are not only concerned with keeping up with drastically changing technology and automation, but also being substituted by technology.

ADAPTING TO RAPID CHANGE

  • The dramatic change in the accounting field presents a serious problem for accounting professionals and they must adapt to these changes to stay relevant.
  • The rate of change in the accounting profession is exponential, and the time for adapting to these changes is limited. The pace of change, particularly from AI, blockchain, and big data, assumes an exponential change curve that requires a better understanding of risk, controls, and data analytics.

DOWNWARD PRICE PRESSURE ON SERVICES

  • Downward price pressure entails the necessary reduction in the charges for accounting services by accounting professionals for them to continue operating.
  • Commoditization, automation and increased competition, are among the factors driving the downward price pressure on accounting services.
  • Accounting professionals fight downward price pressure by making their high-value expertise increasingly visible in the marketplace. Accounting professionals are forced look for ways to make their skills in order to acquire wide industry recognition to boost their perception among clients.
  • Those who portray themselves as industry experts can command higher billing rates and stand out against pressure from technology and competition.

THE TAX CUTS AND JOBS ACT

  • New tax laws and regulations can complicate things when everything seems to be in place. Accounting professionals spend much of their professional life keeping up with emerging regulations.
  • The Tax Cuts and Jobs Act came out as a source of tax reforms, and it affects everything including expenses and depreciation aspects.
  • Accounting professionals have experienced serious problems in reading through voluminous documents concerning the tax reforms and changes brought about by the Tax Cuts and Jobs Act. Some resolve to have an accounting and tax software to sort out the new rates.

A BIGGER THREAT OF CYBERSECURITY

RESEARCH STRATEGY

We began our research by searching for a direct answer to the serious problems that accounting professionals encounter in their work. To come up with major pain points, we consulted trusted accounting websites, articles, and reports. From the research in these resources, the impact of new technology, adapting to rapid change, the downward price pressure on services, the Tax Cuts and Jobs Act, and cybersecurity were identified as the major pain points that accounting professionals encounter in their work.

Part
04
of four
Part
04

B2B Accounting Software Industry: SWOT

The accounting services industry in the U.S. is continuously growing and new opportunities might help to increase this growth. On the other hand, many threats and weaknesses, such as changes in regulations and decreased number of accountants, might cause this industry to destabilize.

STRENGTHS

WEAKNESSES

OPPORTUNITIES

  • An increment in number of households boosts productivity and income, which leads to more new businesses and more customers making use of accounting services. The number of households is expected to grow in 2019, which would mean a "potential opportunity for the industry".
  • Since accounting services are a luxury, people with low incomes are unlikely to use accounting services. In the next five years, incomes are expected to get higher due to the new tax law, enabling people to increase their income, representing an opportunity for the industry.

THREATS

  • As the number of adults grows (which represents around one-fifth of this industry's revenue), "the customer base in the market for individuals grows", increasing the demand for accounting services. In 2019, the number of adults between 20 to 64 years old is expected to increase at a static rate, which would mean a "potential threat to the industry".
  • In the next five years, many industries "are expected to become less regulated" as the ongoing administration has decided to taper regulations. Through the upcoming years, the Accounting Services industry may experience a threat to "demand from corporate clients" due to these changes.
  • Accounting software offers industry services at home "without generating brick-and-mortar revenue" and have become more affordable and popular. As the new tax law simplified tax preparation, competition from software grew, representing a big threat in the following years for brick-and-mortar companies.
  • Some factors posing threats to the industry are, inflationary pressures from labor costs, raw materials and interest rates.

RESEARCH STRATEGY

In order to carry out this analysis, we consulted industry reports, statistics, and facts in credible sources like IBISWorld, Statista, and AnythingResearch.
Sources
Sources