Accounting Services Market Definition
The accounting services market consists of the sales of accounting services and related goods by entities (organizations, sole traders and partnerships) that provide recording and analysis of financial transactions and other financial values pertaining to businesses and other organizations. Accounting services are the processes of summarizing business transactions and reporting the analysis to regulators, and government entities.
Accounting Services Market Size
The global accounting services market reached a value of nearly $574.4 billion in 2019, having grown at a compound annual growth rate (CAGR) of 5.7% since 2015, and is expected to grow at a CAGR of 6.3% to nearly $734.7 billion by 2023.
Growth in the historic period resulted from globalization, outsourcing back-end operations to low-cost economies. Factors that negatively affected growth in the historic period were accounting scandals, regulatory challenges, and unstable political and social situations.
Going forward, changes in standards of financial reporting, technological development and regulatory reforms are expected to drive the market. Shortage of skills could hinder the growth of the accounting services market in the future.
Accounting Services Market Drivers
The key drivers of the accounting services market include:
Regulatory reforms in the financial sector have heightened the demand for accounting services such as accounting and tax advisory. For instance, the Basel-3 standards will be implemented in 2019, increasing the demand for accounting services globally. Over the next five years, further major changes, such as the UK’s exit from the EU will create additional demand for accounting consultants, driving the accounting services market.
Accounting Services Market Restraints
The key restraints on the accounting services market include:
Shortage Of Skills
Lack of people with adequate levels of the skills required for accounting services is expected to be a major restraint on the accounting services market in the forecast period. An accountant is required to be an expert in dealing with financial statements and should be able to track the transactions made in order to trace the anomalies in transactions. A shortage of specialized professionals who possess these technical skills and a decline in the number of people taking up accounting as a career option is decreasing the supply of accounting professionals. According to a research report by Association of International Certified Professional Accountants (AICPA) in 2019, examination candidates for CPA has decreased 7% between 2017 and 2018 and the number of candidates who passed their 4th section of the exam in CPA decreased 6% in the same period. Decrease in the number of accounting graduates limits the growth of the accounting services market.
Accounting Services Market Trends
Major trends influencing the accounting services market include:
Increase In Outsourcing At Accounting Firms
Some accountants are outsourcing basic accounting tasks such as payroll accounting, accounts payable and accounts receivable to allow their employees to focus on higher value activities such as becoming vertical experts in their customer’s markets and analyzing their clients business data. This extra attention and analysis is transforming the role of a traditional accountant into a business advisor and takes customer service to the next level by developing strong counsel-focused relationships. QX Accounting Services (QXAS) Ltd provides outsourced accounting, finance and other services to accountants and accountancy firms in the UK.
Accounting firms should consider outsourcing basic accounting tasks to reduce operational costs and focus on high value activities.
Accounting Services Using New Communication Technologies
Technology is driving collaboration between accountants and clients in the accounting services market. It is being driven by portals, tools and technology that promote simple flow of information between accountants and businesses. New communication technologies are replacing traditional communication platforms such as email. For instance, chat platforms such as Slack, HipChat and Basecamp are speeding up communications and enabling real time interactions.
Accounting service companies should consider using instant chat applications to enable real time interactions with the clients and ensure faster resolution of issues.
Opportunities And Recommendations In The Accounting Services Market
Opportunities – The top growth potential in the accounting services market segmented by type of service will arise in the bookkeeping, financial auditing and other accounting services, which will gain $424.2 billion of global annual sales by 2023. The accounting services market will gain the most in the USA at $50.7 billion.
Market-trend-based strategies for the accounting services market include investing in cloud based accounting software, blockchain technology, communication technology, and artificial intelligence and companies should try automating the redundant processes that involve manual labor. Business strategies adopted by major companies in the accounting services market include investing in technology to digitalize the business, expanding in other geographies, integrate and gain competitive advantage and in acquisitions and mergers to strengthen their service offerings.
Recommendations – To take advantage of the opportunities, The Business Research Company recommends that accounting services companies consider focusing on use of latest technologies, focus on expanding through collaborations, expand in emerging markets, value-oriented billing, leverage social media to maximize reach and increase visibility through a high-performance website.
Accounting Services Market Segmentation
The accounting services market is segmented by type of service.
By Type Of Service-
The accounting services market can be segmented by type of service
The bookkeeping, financial auditing and other accounting services market was the largest segment of the accounting services market segmented by type of service, accounting for $424.18 billion or 73.8% of the total in 2019 and is expected to be the fastest-growing segment going forward at a CAGR of 6.6%.
- a) Bookkeeping, Financial Auditing and Other Accounting Services
- b) Payroll Services
- c) Tax Preparation Services
The accounting services market is segmented into
North America was the largest region in the accounting services market, accounting for 42.6% of the global market in 2019. It was followed by Western Europe, Asia Pacific, and other regions. Going forward, the fastest growing regions in the accounting services market will be South America and Eastern Europe, where growth will be at CAGRs of 8.4% and 7.7% respectively from 2019-2023.
- o North America
- o Western Europe
- o Asia Pacific
- New Zealand
- Hong Kong
- South Korea
- o Eastern Europe
- Czech Republic
- o South America
- o Middle East
- Saudi Arabia
- o Africa
- South Africa
Accounting Services Competitive Landscape
Major Competitors are:
Other Competitors Include:
- • PWC (PricewaterhouseCoopers)
- • Ernst & Young
- • KPMG
- • Deloitte
- • ADP (Automatic Data Processing, Inc.)
- • BDO (Binder Dijker Otte) International Limited
- • RSM
- • Grant Thornton
- • HRBlock
- • Baker Tilly
- • Pan-China CPA
- • Ruihua CPA
- • Moore Stephens UK
- • Rodl Partner
- • Champion Accountants
- • DSG Chartered Accountants
- • RWT
- • Spira Twist & Associates
- • Italian Accountants Studio Del Gaizo Picchioni
- • Studio International Tornambè
- • KML Bookkeeping Services
- • Accenture
- • Alvarez & Marsal
- • Picco Accounting
- • Charles Ghadban Accounting
- • Crowe Horwath
- • Mazars