Tax and Accounting Software Market

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0in; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Roboto Condensed"; mso-ascii-font-family:"Roboto Condensed"; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:"Roboto Condensed"; mso-hansi-theme-font:minor-latin;} The global tax and accounting software market is expected to grow at a CAGR of 7.9% from the year 2019–2025. The market is driven by increasing demand for automated solutions across various industry verticals, globally. Also, since tax and accounting software offers several benefits including efficient planning and management of financial data in a cost-effective manner, it is being widely deployed across industries including manufacturing, retail & consumer goods, BFSI among others. Tax and accounting software are basically two different types of software solutions that are used by enterprises as well as independent financial consultants to manage the entire process of financial transactions. Tax software is designed to help enterprises and individuals to effectively file various taxes including income tax, corporate tax, and state & regional taxes. Accounting software, on the other hand, manages the accounting transaction including accounts payable, accounts receivable, bank reconciliation statement, journal, ledgers, and payroll among others. Both tax and accounting software have become a key solution for small-, medium- and large-sized enterprises. Companies operating in the market are offering integrated solutions in the form of ERP as well as independent solutions like invoice and billing software and payroll software.

With the growth in several enterprises in the developing regions like Asia-Pacific, South America, and the Middle East and Africa the demand for such solutions is significantly increasing. Also, with the introduction of various amendments in taxation policies in countries like India (GST), EU countries (VAT), the need for affordable tax software is increasing. Individual professionals are also using various cloud-based accounting as well as tax software for managing accounting and taxation transactions. For instance, according to the annual report released by FreshBooks (2018), a tax and accounting software provider, in 2019, an estimated 24 million people would be self-employed in the US. This basically means that the self-employed population will demand cost-effective and easy-to-use accounting and tax software which in turn will lead to an increase in cloud-based tax and accounting software. This trend is visible in other regions like Asia-Pacific and the Middle East and Africa. Solution vendors, with this opportunity, are therefore investing in research and development to offer easy to operate and affordable software. For instance, key players like Xero limited, Sage and MYOB, provider of accounting solution shifted to Amazon Web Services (AWS) in the year 2018.

Further, these companies are focusing on completely automating bookkeeping services of collecting documents in order to make it easy for enterprises and individual professionals to perform accounting. Xero Limited is moving towards automating bank reconciliation processes. For the same, the company acquired Hubdoc Inc., a company that develops document collection and management software Xero Limited is also using optical character recognition technology to extract and analyze data such as due date, amount and taxes.

The global tax and accounting software market is fragmented with a number of small- and mid-size players offering tax and accounting solutions to the enterprises. However, irrespective of the fact that the market is fragmented, few key players dominate the market with significant market share and portrays intense rivalry. Few of these players are Intuit Inc., Sage Group plc., Xero Limited and SAP SE. These players compete with each other on the basis of price, software features, and market presence. Apart from these big players, few of the small- to mid-size players have emerged as a market innovator. These players include Xero Limited, FreshBooks Reviso Cloud Accounting Limited among others. These players have a strong regional presence, for instance, FreshBooks Inc. has a significant subscriber base in the US, Tally Solutions Private Limited has a stronghold on the Indian market. Also, these players are now striving to expand their geographic reach to opportunistic markets like Asia-Pacific and the Middle East. For instance, Xero limited is extensively focusing on the UK market and is directly competing with Intuit Inc. It is targeting small- and mid-sized enterprises operating in the country.

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· 2018: USD 18,643.6 Million

· 2024: USD 31,590.1 Million

CAGR (2019–2024)

· 7.9%

Key Market Drivers

· Increasing demand for an automated solution by financial institutions

· The rapid adoption of cloud-based accounting software

Key Market Opportunities

· Integration of artificial intelligence with accounting and mobile/app-based accounting software

Key Vendors

· Intuit Inc.