And to cope with the increasing demand from the sector, many accountants are adding extra services and technology-based solutions to their suite of offerings.
The report revealed that financial advisers such as accountants and bookkeepers are being relied upon by small businesses for services beyond traditional accounting and compliance, with app and software set-up the most frequently offered service.
Xero’s State of the Industry report, which surveyed more than 550 accountants and bookkeepers across Australia, found 85 per cent of large practices surveyed are being relied upon by small businesses for one or more services and support in the past six months.
As well as the traditional accounting and financial services, practices are offering their clients things such as support with app and software set-up (35 per cent), HR advisory (38 per cent), and start-up mentoring (33 per cent).
Will Buckley, country manager, Xero Australia said that accountants and bookkeepers are playing a more holistic role in supporting their clients and the digitisation trend that accelerated during the pandemic looks to be continuing.
“The findings from Xero’s research highlights more clearly than ever the critical role accountants and bookkeepers play in keeping small businesses up and running — not just with their finances but now in other business-critical functions as well,” he said.
However, Mr Buckley said as accounting practices take on more responsibilities for their small-business clients, they are also having to battle with staff and talent shortages.
The report found that 38 per cent of all practices surveyed said hiring experienced team members was a concern and almost one-quarter (22 per cent) of all practices surveyed reported having difficulty with hiring in general.
To try and mitigate these challenges, practices are introducing new tactics to not just attract new staff but to retain their employers.
The report found that one-third (33 per cent) of firms surveyed are now tracking staff wellbeing through surveys and performance apps while 40 per cent are offering employee benefits and the same number are providing development and training opportunities.
Only 29 per cent of all practices surveyed have increased remuneration and 32 per cent are choosing to hire new graduates/interns to support workflow.
And as the economic forecast continued to deteriorate, larger accounting practices are predicting their clients will need even more support with data showing that 44 per cent of first-time small-business clients over the last 12 months originated from newly created businesses.
To meet the challenges and ensure their own viability, the survey found that 45 per cent of practices — big and small — are anticipating they will have to increase their fees this year while 31 per cent of all practices revealed they’re likely to reduce staff due to the impact of the economic environment.
“There is no doubt 2023 is going to be another demanding year for Australia’s small businesses and the accountants and bookkeepers that support them,” Mr Buckley said.
“As advisors become even more ingrained in the small business support system, it’s imperative we get behind the accounting industry so they can continue to evolve their services to support Australian small businesses to flourish.”
