Cledara's 2025 Software Spend Report found that surveyed tech companies with 0 to 20 employees spent an average of $121,336 annually on software. At the same time, based on Chase Business Banking transaction data, the cumulative share of sampled small businesses that had paid for an AI service increased from 5.2% to 17.7% between January 2023 and December 2025.
No-code platforms like Hercules let businesses build custom software while reducing reliance on fragmented software stacks. Teams can build customer relationship management (CRM) systems, enterprise resource planning (ERP) systems, and operational tools by describing what they need. For suitable projects, this may reduce dependence on outside developers and separate software vendors. The statistics below explain why more businesses are rethinking how they spend on software.
Key takeaways
- Software spending is substantial: Cledara's 2025 Software Spend Report found that surveyed tech companies with 0 to 20 employees spent an average of $121,336 annually on software.
- Accounting software investment is growing: Dataintelo estimated the global small business accounting software market at $17.8 billion in 2025, with a projection of $42.6 billion by 2034.
- Software spending raises concerns: In Cledara's survey, 45% of respondents believed they were overspending on software.
- Paid AI adoption has increased: The JPMorgan Chase Institute found that cumulative paid AI adoption among sampled small businesses rose from 5.2% to 17.7% between January 2023 and December 2025.
- Custom applications may reduce software costs: The Hercules app builder lets businesses build custom CRMs, ERPs, and operational tools. Kingdom Construction reports $30,000 annual savings from replacing separate software vendors, although subscription and usage costs still apply.
1. Small business accounting software market valued at $17.8 billion in 2025
The global small business accounting software market reached $17.8 billion in 2025. This includes cloud-based and on-premise solutions for invoicing, expense tracking, payroll, and financial reporting. The estimate covers the small business accounting software market, not software spending by businesses of all sizes.
2. Market projected to reach $42.6 billion by 2034
The same market is expected to grow to $42.6 billion by 2034, representing a 10.2% compound annual growth rate (CAGR). This projection accounts for increased cloud adoption, AI integration, and the growing number of small businesses worldwide. Sustained growth suggests businesses will continue investing in financial tools.
3. North America represents 38.2% of global market revenue
North America held a 38.2% market share, equivalent to $6.8 billion in global small business accounting software revenue in 2025. The United States had approximately 36.2 million small businesses as of February 2026, contributing to demand across the region. North America is projected to grow at 9.4% CAGR through 2034.
4. Asia Pacific projected as fastest-growing region at 13.6% CAGR
Asia Pacific represented 24.1% of the global market in 2025 and is projected to grow at 13.6% CAGR through 2034. India's Udyam Registration and Udyam Assist platforms together recorded more than 73 million enterprise registrations by December 17, 2025. Rapid digitization and government support for small businesses drive growth in this region.
5. Cloud deployment reached 61.7% of accounting software revenue in 2025
Cloud-based financial tools accounted for 61.7% of revenue in the small business accounting software market in 2025. This deployment model lets businesses access software through a web browser without managing servers or installations. Cloud-based deployments are projected to account for 74.3% by 2034 in market revenue.
6. 67% of small businesses migrated at least one financial function to the cloud
In developed economies, an estimated 67% of small businesses migrated at least one core financial function to the cloud by 2025, according to Dataintelo. Core functions include invoicing, accounts payable, accounts receivable, and payroll. Cloud migration often reduces IT maintenance costs while improving access for remote teams.
7. Surveyed tech companies with 0 to 20 employees spend $121,336 annually
Cledara's 2025 Software Spend Report found that surveyed tech companies with 0 to 20 employees spent an average of $121,336 annually on software. This figure comes from software transactions and research involving technology companies in the U.S., U.K., and Europe. The total includes subscriptions, licenses, and platform fees across all business functions.
8. Surveyed tech companies with 50 to 100 employees spend $193,716 annually
Mid-sized tech companies with 50 to 100 employees spend an average of $193,716 per year on software, according to the same Cledara research. The increase from smaller companies reflects the need for more seats, additional integrations, and specialized tools as teams grow. However, the same study found that software spending per employee fell as company size increased.
9. Surveyed tech companies with 100 to 200 employees spend $251,119 annually
Surveyed technology companies with 100 to 200 employees spend $251,119 annually on software in the Cledara study. At this size, companies typically use multiple platforms for finance, HR, sales, operations, and project management. Consolidating these tools into unified systems can reduce both costs and complexity.
10. 45% of surveyed tech companies believe they overspend on software
In Cledara's 2025 Software Spend Report, 45% of surveyed companies believed they were overspending on software. The finding reflects respondents' perceptions rather than independently measured wasted spending. Unused licenses, overlapping tools, and duplicate features can add unnecessary costs. Reviewing subscriptions and actual usage can help businesses identify where their software budget may be reduced.
11. CFOs expected finance software spending to reach $54,308 in 2023
In a 2023 Datarails survey, U.S. CFOs expected average spending on finance software to reach $54,308 in 2023, nearly 14% above the reported $47,758 for 2022. The survey covered CFOs at companies with 50 to 1,000 employees. The survey measures planned finance-software spending, not the share of total software spending allocated to finance.
12. 61% of U.S. SMBs experienced regret over a technology purchase
In a 2022 Capterra survey, 61% of U.S. SMBs reported regretting a technology purchase made during the previous 12 to 18 months. The leading reasons were inadequate support (39%) and higher-than-expected costs (34%). Building custom software on a platform like Hercules lets businesses tailor applications to their workflows. Check integration requirements before assuming an application can connect to existing systems.
13. Cumulative paid AI adoption among sampled small businesses rose from 5.2% to 17.7%
Based on Chase Business Banking transaction data, the cumulative share of sampled small businesses that had paid for an AI service increased from 5.2% to 17.7% between January 2023 and December 2025. This research from the JPMorgan Chase Institute tracked payment data to AI service providers. The measure counts businesses that have ever paid for AI and excludes free AI usage, custom development, and embedded AI features.
14. Paid AI adoption reached 26.1% of employer firms versus 15.3% of nonemployer firms
Businesses with employees that had paid for AI services reached a cumulative adoption rate of 26.1% versus 15.3% for nonemployer firms (solo businesses without employees) by December 2025. Companies with staff may have more complex workflows that benefit from automation. They may also have more resources available for adopting new tools.
15. 63% of small businesses paying for AI services spent $1 to $40 per month in 2025
Among small businesses using paid AI services, 63% of users spent $1 to $40 monthly in 2025. Median monthly AI spending peaked at approximately $80 in 2022 and declined to approximately $30 by 2025 as lower-cost services became more accessible. This low starting cost makes AI tools practical for businesses testing new capabilities.
16. An estimated 41% of leading accounting software platforms had AI capabilities in 2025
Dataintelo estimated that, among leading accounting software platforms, approximately 41% had integrated AI capabilities by 2025, such as automated categorization, anomaly detection, and predictive forecasting. The same publisher estimated that AI-enhanced subscription tiers commanded 25%–40% price premiums over standard plans. These figures are market-research estimates rather than a census of all accounting software products.
17. Information sector shows highest AI adoption at 39.3%
By industry, the information sector led with 39.3% paid AI adoption among sampled small businesses by December 2025. Professional services followed at 30.3%, and educational services at 29.5%. Construction (8.9%) and transportation and warehousing (5.4%) had the lowest adoption rates among the highlighted sectors, showing substantial differences in paid AI adoption across industries.
18. Finance teams spent 28% of resource time on manual, automatable tasks
PwC's 2024 Finance Effectiveness Benchmarking Study found that finance teams spent a median 28% of resource time on manual tasks that could be automated, based on 2023 benchmarking data. Top-quartile teams recorded 19%. This broader finance-function benchmark is not limited to small businesses. The gap represents an opportunity to redirect staff time from data entry and reconciliation toward analysis and strategy.
19. 72% of finance teams at medium-to-large enterprises spent up to 520 hours annually on accounts payable
A 2020 Censuswide survey of more than 250 CFOs found that 72% of finance teams at medium-to-large enterprises spent up to 520 hours annually, roughly 10 hours per week, on accounts payable-related automatable tasks. This includes invoice processing, payment approvals, and vendor management. Automation can reduce the time required for these processes, although the survey does not establish a specific reduction for small businesses.
20. 96% of surveyed financial planning and analysis professionals use spreadsheets for planning
The 2025 AFP survey found that 96% of surveyed professionals in financial planning and analysis use spreadsheets for planning. Spreadsheets remain familiar and flexible, but they can create manual work and version control challenges. Many businesses maintain spreadsheet workflows alongside their other software.
How Hercules helps businesses reduce software costs
The Hercules app builder lets businesses build custom software by describing their needs. For suitable projects, this can reduce spending on outside development and separate software vendors.
- Replace multiple vendors: Kingdom Construction replaced four tools and reports $30,000 in annual savings.
- Avoid developer costs: Petony Transportes avoided a $230,000 development quote by building its ERP on Hercules. This was an avoided quote, not independently audited net savings.
- Automate manual work: Imjomat reports saving 2,000 hours monthly across its team through automated task management and client onboarding.
Hercules provides a managed app database, backend, authentication, email, and hosting. Its AI Gateway capabilities support text generation, image creation, transcription, and chatbots without separately configuring AI model API keys. AI Credits apply to building and editing applications, while Cloud Credits cover hosting overages and live-app AI inference.
Commercial use, including internal business operations, requires a Business or Enterprise plan. Review the Hercules pricing page and account for subscription, integration, and ongoing usage costs before building.
Frequently asked questions
What are the typical software expenses for a small business annually?
Cledara's 2025 Software Spend Report found that surveyed tech companies with 0 to 20 employees spent an average of $121,336 annually on software. This includes subscriptions across all business functions, not just finance. In a 2023 survey, U.S. CFOs at companies with 50 to 1,000 employees expected average finance software spending to reach $54,308 per year. Your actual spending depends on your industry, team size, and which tools you use.
How can I determine the ROI of new software for my small business?
Compare the software cost against the time and money it saves. PwC's 2024 Finance Effectiveness Benchmarking Study found that finance teams spent a median 28% of resource time on manual tasks that could be automated. This finding comes from a broader finance benchmark, not a small-business-only study. If a tool lets your team redirect that time to revenue-generating work, the return may exceed the subscription cost. Track hours saved and processes eliminated when evaluating.
What are common mistakes small businesses make when spending on software?
Common software-purchasing mistakes include failing to check total costs, vendor support, and integration requirements. In a 2022 Capterra survey, 39% cited inadequate support as a reason for technology purchase regret, while 34% cited higher costs than expected. Evaluate total costs and integration requirements before purchasing.
Can custom software truly be more cost-effective than off-the-shelf solutions?
For businesses with specific workflows, custom software can reduce costs by eliminating unused features, consolidating multiple vendors, and automating manual processes. MMA Plumbing received developer quotes of at least €250,000 for a custom system, then built it on Hercules instead. This was an avoided development quote rather than a measured net saving. Custom solutions work best when off-the-shelf products do not fit your operations.
What ongoing costs should I budget for when using an AI app builder?
Budget for your subscription, additional AI Credits used while building or editing applications, and Cloud Credits for hosting overages or live-app AI inference. Third-party services may have separate fees. Hercules includes managed infrastructure, but commercial use, including internal business operations, requires a Business or Enterprise plan under its current Terms of Service. Compare the full cost of building and running your application with your existing software subscriptions and development expenses.