This article is part of a larger series on Accounting Software.
Accounting is a $110 billion industry in the United States. In addition to providing great career opportunities, accounting firms provide small businesses with much-needed support, such as financial audits and tax compliance services. Accounting firms also stepped up in a major way during the COVID-19 pandemic, with almost 80% of firms providing COVID-19-related consulting services.
To understand the state of the accounting industry better, we’ve compiled the most relevant accounting statistics around accounting software, accounting jobs, accounting industry trends, and small business accounting.
General Accounting Statistics
1. The percentage of accounting and finance teams that worked in the office prior to the pandemic was 85%.
This percentage dropped to only 22% at the peak of the pandemic and is expected to return to 47% in 2022.
2. Staff at accounting firms are much more likely than other accounting and finance professionals to work in the office, with 66% of them working in the office full-time in 2022.
This high reliance on in-office employees could be driven by the necessity for auditors to be present physically at the client’s premises to perform an audit.
3. According to the 2019 AICPA Trends Report―the most recent available―76,542 students graduated with a bachelor’s or master’s degree in accounting in 2018.
While the number of accounting graduates is up sharply, there has been a steady decline in accounting graduates since the number hit its peak of more than 80,000 in 2011.
4. There are 1.27 million accountants and auditors employed in the US.
This number is split fairly evenly between certified public accountants (CPAs) and non-CPAs, with 669,130 actively licensed CPAs as of August 2021. There are relatively few enrolled agents, which are tax professionals licensed directly by the IRS to represent taxpayers.
(Statista – Number of accountants, NASBA, NAEA, Surgent)
Accounting Job Statistics
5. The average base salary for an accountant in the US is $56,032, but this varies by education level.
(Indeed and Salary.com)
6. Salaries for accountants also vary significantly by field, with CPAs earning the highest average salaries.
7. In 2020, California was the state with the highest number of accountants and auditors, with 150,050.
New York has the next-highest number of accountants, with 112,360, followed by Texas, with 109,470.
(Statista – Employment by State)
Accounting Software Statistics
8. 64% of business owners do their own bookkeeping with small business accounting software.
Cloud-based accounting software that can transfer transactions automatically from bank accounts has taken much of the time-consuming work out of bookkeeping.
(Statista – Software Usage)
9. QuickBooks Online dominates the market for small business software, with 5.5 million subscribers worldwide and a 62% market share.
10. Xero is the second largest accounting software provider worldwide, with 2.3 million subscribers.
(Xero Limited FY20 Annual Report)
Are you interested in learning more about popular accounting software in the US? Check out our article on the best small business accounting software.
Accounting Industry Statistics
11. In 2020, the revenue for the accounting industry in the US reached more than $110 billion.
More than 50% of the US revenue ($66 billion) was generated by the four largest accounting firms.
(Statista – Accounting Industry, Statista – US Firms)
12. The four largest accounting firms in the world are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and Klynveld Peat Marwick Goerdeler (KPMG), with total global revenue of $157 billion in 2020.
(Statista – Big Four Firms)
13. The average time it takes for an employee to become a partner in a Big Four, national, and regional accounting firm is 10 to 15 years.
Smaller firms can often provide a quicker path to becoming a partner.
(Journal of Accountancy – Path to Partner)
Accounting Services Trends
14. Auditing services and tax services are the two biggest generators for accounting firms in the US.
(IBISWorld Industry Report)
15. While not the biggest revenue generator, Coronavirus-related consulting is the most widespread service offered by accounting firms, with an expected 79% of firms offering these services in 2021.
This is very widespread, considering that only 58% of firms offer client accounting (bookkeeping) services. Accounting firms have played a key role in helping clients receive their COVID-19 relief.
16. The majority of accountants, 51%, report that the biggest issue facing their firms in 2022 is keeping up with regulatory changes.
- Keeping up with regulatory change: 51%
- Recruiting/retaining good employees: 35%
- Acquiring and retaining new clients: 26%
- Keeping up with technology: 24%
- The overall economy: 19%
- Economic health of clients: 18%
Small Business Accounting Statistics
17. 31% of small businesses in the US spend more than $5,000 on administering their federal taxes each year.
(PR Newswire – SCORE)
18. The most common type of business in the US is a sole proprietorship, with 27.8 million small businesses filing tax returns on Schedule C in 2019.
The schedule C is a relatively simple income statement for nonincorporated, single-owner businesses to file with the personal income tax return, Form 1040.
(IRS SOI Tax Stats)
19. The average Schedule C business in 2019 reported $58,947 in gross revenue.
The average expenses reported were $46,179, for an average net income of $12,768.
(IRS SOI Tax Stats)
20. Schedule C businesses in 2019 paid average wages to employees of only $5,175.
Schedule C businesses cannot pay wages to owners, so any wages paid are to nonowner employees. The fact that wages paid by Schedule C businesses are so low is consistent with most small businesses forming a corporation or limited liability company (LLC) if they have employees.
(IRS SOI Tax Stats)
21. 4.7 million small businesses filed tax returns as S corporations in 2017, according to the most recent data available.
4.3 million of these S-corps had total assets of less than $1 million.
(IRS SOI Tax Stats)
22. The average S-corp in 2017 reported 1.7 million in gross revenue and $101,572 in net income. Only $62,000 of the $1.5 million in average expenses were paid to the shareholder officers as salaries.
(IRS SOI Tax Stats)
Accounts Payable & Automation Statistics
23. 58% of finance professionals believe that COVID-19 and the resulting trend of employees working remotely was a catalyst for moving from paper to digital processes for back-office tasks.
Back-office tasks include processes, such as invoicing customers and processing check payments to vendors.
24. Only 29% of companies with less than $250 million in revenue have adopted an automated accounts payable process.
More than 48% of larger companies have made the switch to an automated accounts payable (A/P) process.
25. 45% of businesses make the majority of their payments with a paper check.
Automated clearing house (ACH) payments are leading the way as the growing alternative to paper checks, with 50% of companies reporting an increase in ACH payments from 2020 to 2021.
We hope these statistics have provided you with insights into the importance of accounting in the US economy, particularly as it relates to our workforce of young professionals and small businesses.
References: MineralTree, AccountingToday, AICPA 2019 Trends Report, Statista – Number of accountants, NASBA, NAEA, Surgent, Indeed, Salary.com, Zipia.com, Statista – Employment by State, Statista – Software Usage, ZDNet, Xero Limited FY20 Annual Report, Statista – Accounting Industry, Statista – U.S. Firms, Statista – Big Four Firms, Journal of Accountancy – Path to Partner, IBISWorld Industry Report, PR Newswire – Score, IRS SOI Tax Stats