Using AI and automation to reduce admin time and deliver higher value advisory services could deliver an estimated $835m in additional annual revenue in the first year alone if adopted across Australia’s established small and local accounting practices, rising to around $4.8bn a year within five years as the growth gap compounds, according to new modelling by MYOB*.
A significant improvement in income growth is just one of the key benefits of the industry’s increasing uptake of AI and automation, with additional data from the latest MYOB Accounting Industry Monitor showing that Australian accounting firms are using technology to help reframe the role of the accountant to address skills shortages and develop a greater strategic relationship with clients.
The MYOB Accounting Industry Monitor is an annual evaluation of the sector, surveying over 300 accounting practice owners, directors and decision makers nationwide, to explore how the industry is managing key issues and opportunities, including technology, changing client expectations and evolving services.
MYOB Chief Customer Officer, Dean Chadwick, said this year’s survey highlights the opportunities being driven by AI and automation, as the sector experiences one of the most significant shifts it has seen in decades.
“Our latest Accounting Industry Monitor has shown that Australia’s progressive practices – the highly technology-enabled firms which are enjoying strong growth and profitability – are realising a long-held ambition of the sector, moving from compliance-led, transactional interactions to playing a greater strategic advisory role.
“Supported by AI and a greater use of automation, these practices are spending more time with clients and developing new prospects, providing a wider range of actionable insights, and offering more engaging opportunities for graduates entering the profession,” Dean explained. “If a similar approach was embraced across the industry, our additional modelling highlights that significant gains in economic performance are up for the taking, transforming the sector in Australia.”
Changing roles, greater talent attraction
This year’s Accounting Industry Monitor also revealed that the profession is continuing to face a significant talent shortage, with 76% of practice leaders polled saying they are struggling to find enough suitable candidates to fill available roles - up from 71% last year. While a number of factors are exacerbating the talent shortage, including increasing retirements and expensive training, 42% of respondents agreed that leveraging technology to allow for a focus on consultancy work could be an effective way to address the recruitment gap.
“The availability of modern, intelligent technology platforms, coupled with tools like AI, allows practices to reduce the manual burden on their teams and redeploy their people to meet the growing demand for advisory services,” said Dean.
“With a shift to focus on higher-impact client engagement and greater strategic thinking, the different type of work that practices can unlock could further enhance the appeal to the next generation of accountants.”
Faster results, deeper client relationships
Beyond talent appeal and retention, the insights show that the industry sees technology as key to a range of operational improvements. Overall, a significant 98% of those surveyed reported that automation, process improvements and enhanced communication driven by technology have contributed to an increase in revenue or profitability.
For progressive practices, revenue-driving engagement is particularly strong. Communication frequency with their clients is more than twice as often as other firms and these businesses are also spending significantly more time developing new client relationships, underscoring the growth potential available to practices equipped with the right tools.
Across the board, quality of work is also improving, with the key benefits of AI reported by accounting leaders including faster turnaround (55%), reduced errors (53%) and increased capacity (48%).
“The expectations of clients are evolving just as rapidly as the technology,” said Dean. “Businesses are now demanding deeper insights, faster responses and real-time access to financial information, as part of a wider range of services.”
“As more practices look to embrace the opportunities created by AI and automation, the potential to drive tangible results in impactful areas like service expansion, employment and the bottom line is growing at pace.
“What’s more, this shift from compliance-led work to a greater focus on strategic advisory services puts Australian businesses in a stronger position, better equipped to navigate a range of challenges with the backing of tech-enabled expertise and a deeper understanding of their needs."
*Methodology - Based on MYOB modelling, the estimated uplift compares revenue growth for Australia’s established small, local and solo accounting practices under two scenarios: practices not adopting AI, assumed to grow revenue at 1.7% a year, and practices using paid AI subscriptions, assumed to grow at 5.3% a year - a 3.1 x growth-rate differential. This differential is based on broader professional services income-growth analysis and applied to accounting practices as a proxy. Figures exclude Big 4 and national mid-tier firms and reflect the small-practice segment that makes up the majority of Australia’s roughly 37,000 accounting practices. The revenue gap compounds year on year and assumes a constant number and mix of practices: full adoption across this segment is estimated to add around $835 million in annual revenue in year one, rising to around $4.8billion annually by year five.