Whereas Xero increased its share to 3% on a 28% rise in revenues. In 2020, Intuit QuickBooks had the largest market share at 24.5% with revenues growing 14%. The trend of rising adoption among this target group is owed to cost advantages and AI enabled technologies. Intuit and Xero both target small and medium businesses (SMBs) as they have greater flexibility to adopt cloud software. The market consists of major companies including SAP ( SAP), Microsoft ( MSFT), Intuit, Oracle NetSuite ( ORCL ), Infor, Xero and more. This is driven by the growing demand for advanced solutions to increase the efficiency of managing a company’s financial operations. In 2020, the global accounting software market is estimated to be around $16.5 bln and is forecasted to grow at a 5-year CAGR of 8.5%, by Mordor Intelligence. Maintenance costs, set-up cost and capital investments are cut to a minimum. Cloud accounting software is also more cost efficient. Users can work anywhere anytime as long as there is an internet connection.
The benefits of using cloud-based software include enabling businesses to access and operate the entire accounting suite anywhere and anytime across any device. In the past decade, software vendors have shifted their focus on cloud-based solutions with a SaaS model as businesses embrace digitization. It enables users to easily manage their accounts payable, accounts receivable, business payroll, general ledger and more. Cloud Accounting Software MarketĪccounting software assists a business’s bookkeepers in recording and processing their financial transactions. We find that Intuit is a more profitable company with solid margins while Xero has only just emerged as profitable but is trading at stretched valuations. We then utilize financial analysis to contrast the profitability differences between the two companies. This analysis examines the differences between both companies in terms of product offering differences, geographic concentration and acquisitions. Xero operates primarily in Australia and New Zealand but is also expanding in the UK. Intuit is based in the US, serving over 57 mln customers with its wide product range of accounting (QuickBooks) and taxation (TurboTax) solutions.
Intuit ( NASDAQ: INTU) and Xero ( OTCPK:XROLF) are leading cloud-based accounting software providers accounting for 27.5% of the global accounting software market share combined.
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