It’s no secret that the accounting industry is facing a series of challenges and is rapidly trying to evolve. There are myriad reasons for this: client demands are ever changing, talent shortages present a struggle and revenue growth remains high on the agenda. The key to turning these challenges into opportunities lies in understanding how AI can augment your expertise and win back your most valuable asset: time.

Early research shows it is a large and growing opportunity for the industry. Data from Mordor Intelligence reveals AI in accounting has an estimated value of US$6.68 billion, and this is expected to reach US$37.6 billion by 2030, largely due to its ability to support smarter, faster and more accurate financial processes.

While many associate AI with simple information retrieval, Xero’s Angad Soin says its capabilities are now far more advanced and AI can augment the role of accountants. “It’s gone beyond information retrieval,” says Soin, adding that with human oversight, “AI can do work on your behalf, freeing up your time for high-value-adding activities”.

Leveraging AI to focus on what matters

When it comes to high-value activities, advisory services rank high on the list, so it was no surprise when new Xero research revealed small business owners and entrepreneurs look to their accountants for valuable business insights. But almost two-thirds of practices (65%) cite a lack of time and resources as the main obstacle to expanding their advisory offerings, showing the true potential of AI.

Entrepreneurs say 87% work closely with their external adviser and 91% say their internal adviser influences their decisions. More than 85% say they rely on an adviser, and those who do are more likely to feel confident and report revenue increases, compared with those who don’t work with an adviser.

Why is this so important? This is where the human element becomes critical, as Soin says the human side of accountants’ relationships with their clients can boost business success.

“Advisory services are so important for small businesses, and the judgement that their accountants and bookkeepers provide influences the decisions they make in their business,” he says. “AI not only addresses some of the pain points that an accountant may have in their own practice, it also gives them back more time to provide clients with the advice they really value. We’re always thinking about how we can save accountants more time, and we know that small businesses and entrepreneurs really value the human side of their relationship with their accountants.”

This has been a starting point for Xero’s AI-powered tools like Just Ask Xero (JAX) and Syft Analytics.

An AI business companion

Currently in beta, JAX is designed to help small businesses and their advisers operate more efficiently. It can complete tasks like generating invoices or editing quotes, either in Xero or other commonly used apps that businesses use daily, such as WhatsApp and email.

Adhering to Xero’s data privacy policy and its commitment to responsible data use, JAX provides instant responses to financial questions based on data within Xero and also has the ability to answer questions by sourcing information from the web, such as tax-related information in Australia.

“We think about JAX as a superagent,” says Soin. “It allows an accountant and small businesses to invoke other smaller agents in the background to complete a series of tasks. Our aim was to build an intelligent business companion that intuitively addresses and adapts to their unique needs, challenges and opportunities to, ultimately, elevate their potential.

“By automating some of these routine tasks, AI can help accountants overcome capacity limits, amplify their expertise and turn client relationships into strategic partnerships.

“JAX can help accountants to scale their business without having to scale headcount,” Soin adds.

“For example, you can ask JAX to give you a summary of clients that have the most outstanding expenses, or to give you a summary of the clients with the greatest cash flow challenges.

“This helps you to focus on the small businesses that need the most help, rather than going through a series of files or waiting for clients to call you when they identify a problem. It also helps create a summary of a client file to help you prepare for client meetings. The information is credible and reliable, and it will save a lot of time.”

 

Insights you can see

AI can also help accountants transform data into clear insights that are easily understood. Syft Analytics, for example, transforms Xero accounting data into visual reports and dashboards, and offers AI Assist to summarise insights, set alerts and recommend next steps.

Using the power of Syft’s AI Assist to surface insights allows advisers to free up time, so they can deliver even more value during meetings with their small business clients. Xero’s also pulling key small business-focused features of Syft into Xero, empowering clients to stay closer to their business performance and open up more conversations with their adviser.

Soin explains that Syft Analytics removes manual workflow that used to happen offline. “A pain point for accountants is how to drive growth and additional services,” he says. “Syft Analytics has built-in AI capabilities to save accountants time by automating the creation of visualisations and reports, and reducing manual data manipulation. It equips them with the insights to provide advisory services.”

Harnessing the opportunities ahead

AI has the potential to supercharge accounting skills, streamline tasks, boost productivity and enhance service offerings, but like any new technology, it takes time to fully understand its potential and harness it in a safe, productive way. AI Simplified: Xero’s AI Guide for Accountants and Bookkeepers, offers tips on how accountants can use AI in their practice and explains how Xero is building more AI into its platform.

As AI continues to transform the world and every other industry, Soin stresses that embracing it today can be the set-up for future success. “AI has huge potential to help accountants scale their teams, improve margins and drive new revenue streams,” he says. “Now is the time to evolve alongside the industry. Whether it’s researching what’s out there, adopting a new AI-powered tool or experimenting with an existing one, the smallest adaptations could create huge opportunities in the near future.”

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To find out more about Xero’s AI-powered tools, visit the JAX and Syft Analytics homepages.