Despite the commonly perceived threat of technology taking jobs away from accountants, new research from Xero has shown that in reality, the opposite is true.
Xero’s Accounting and Bookkeeping Industry Performance Report which surveyed 939 practices revealed that when serving more clients online, practices are experiencing a greater demand for new staff as well as a dramatic increase in year on year revenue.
The report found that 81% of small firms serving more than 100 cloud clients are actively looking to employ more staff, compared with just 49% of firms with fewer than five small business clients using online accounting. The trend continues for mid-sized firms – nine in 10 firms with more than 300 online accounting clients are looking for new staff compared with 59% for firms with fewer than five.
The demand for tech-savvy online accountants has also resulted in increased revenue per employee for cloud-based firms, as well as higher compensation packages for employees within firms that are adept at using technology to serve their clients. Practices with 6-35 online clients achieve an average revenue contribution of £65,000, while firms with between 100-299 achieved an average of £115,000.
Furthermore, technology is enabling the transformation of the role of the accountant to that of the connected business advisor. The report found that practices providing advisory services earn considerably more revenue per client than firms purely offering compliance (£6,990 vs £4,200).
By offering expertise in solving challenging business problems, these specialist services are generating a significant annual revenue per client. The accountants that take the role of personal trainer/coach, tech-loving expert and holistic coach are seeing the highest revenue per client.
Damon Anderson, Director of Partner at Xero commented:
We’re seeing an increasing number of practices embracing cloud technology, particularly in the lead up to Making Tax Digital. Our research shows that rather than putting an accountant’s job on the line, cloud technology is enabling significant growth and as a result, revenue is increasing, teams are expanding and roles are evolving.
What it means to be an accountant today is a far cry from what it was before online accounting. Practices are diversifying their offering beyond just compliance into the realm of business advisory and seeing real growth. The cloud has been instrumental in this journey, freeing up time for accountants to develop their skills further as they do more to help small businesses prosper
Xero Partner, Olly Evans, Evans & Partners commented:
Since becoming a Xero Partner we’re doing a lot of our work more cost-effectively. We’re making better recovery on our jobs, we’re not carrying so much work in progress, we’re doing the jobs faster. All those good things are happening. We’re in double figures for growth, percentage-wise
Jonathan Bareham, Raedan commented:
This year we’re hoping to hit about 75% growth. But we’re getting that out of what’s still a really small team. Xero has allowed us, in a way, to punch above our weight from day one because we’ve been able to streamline so much. We can focus on doing more interesting things that make us look like a bigger firm than we are
To coincide with the report, Xero has launched an online benchmarking tool which allows practices in the UK to compare their firm with similar businesses across the nation. More than 900 accounting and bookkeeping practices told Xero about how their practice is performing, resulting in an interactive tool to compare performance based on revenue per client and clients served by employee.
For more information and to read the full report please click here.