Cloud accounting and its swiftly growing market has garnered quite a bit of attention over the last couple of years, and it looks like things are just getting started.
And the potential market is vast. Consider that there are more than 11.5 million small businesses (1-20 employees) in the United States and another 20 million independent contractors, and it’s clear to see that the cloud accounting market has barely tapped the market.
The cloud accounting leader, Intuit, for example, has just about 575,000 under its QuickBooks online system (1.57 million users), while Xero accounts for another 250,000 businesses and Kashoo coming up third, with about 150,000 businesses.
Although some of the market for businesses such as Intuit, for example, will come from customers transferring from desktop accounting systems, the majority of the growth of cloud accounting has actually been from non-desktop users, according to the latest Intuit data. In fact, Intuit reports that 70 percent of QuickBooks Online users are actually new customers to the company.
Everyone seems to agree on one thing: that the market for cloud accounting is wide open. One of the only obstacles of companies like Intuit is to make those small businesses that use nothing more than a spreadsheet to keep track of their numbers actually become comfortable with trusting that their data will be secure in online environments.
Cloud computing vendors aren’t just focusing their marketing efforts on small businesses, either. Professional accountants and financial advisors may be the key piece of the puzzle for companies like Intuit when encouraging cloud accounting adoption.
Many vendors, in fact, are reaching out to CPAs and other public accountants who often serve small businesses. Their programs, which are developed to help not only clients but their accountants, as well, are designed to forge stronger relationships with the very professionals who are often quite influential over small business accounting purchases.
Many cloud accounting systems even offer professional versions, such as QuickBooks Online Accountant, which allows CPAs to access their clients’ data, thereby allowing them to enjoy better collaboration and eliminate the hassle of IT problems and data transfers.
For many vendors, it just makes good business sense to attract professional accountants and financial advisors, as these professionals are often ahead of the curve when it comes to adopting cloud technologies within their own accounting firms. In fact, according to a recent survey by the American Institute of Certified Public Accountants, about half of all respondents used some type of cloud-based services for their own business within the past year.