AI Transforms UK Accountancy, Boosting Profitability and Economic Growth

AI adoption by UK accountants is increasing productivity, saving nearly half a workweek per employee, reshaping hiring strategies, and driving £1 billion in GDP growth, while enhancing client financial health and advisory services.

AI adoption within UK accountancy and bookkeeping practices is enhancing sector profitability, driving a major boost to the wider economy and reshaping hiring across the industry. This is according to a new study by Xero, the small business platform, in partnership with Cebr (Centre for Economics & Business Research) and Censuswide.

It shows that extensive AI implementation has yielded productivity gains for 46% of UK accountants and bookkeepers, increasing industry profitability by £338 million. This enhanced productivity has prompted broader economic growth, allowing accounting practices to contribute an additional £1 billion to UK GDP and adding £1.6 billion in Gross Value Added to the wider economy as their clients also benefit from efficiencies.

Half a working week reinvested

98% of practices reported using AI in some way to complete day-to-day tasks, with around half (47%) using AI at least once a week for an average duration of two hours and 53 minutes per day. As a result, accountants are completing these tasks in 31% less time on average, resulting in significant time savings: 18 hours and 53 minutes per week for the average practice – half the typical working week of one employee. 

Reinvesting time saved on routine administration and accounting tasks into revenue-generating work  is enabling increased profitability. Despite the tangible impact, practices recorded an average annual spend of just £1,746 on AI tools and employee training.

The changing face of accountancy

The positive impact of AI adoption is shifting the attributes that accountants look for when recruiting new staff as the trend for elevated advisory services continues. Three quarters (76%) of practices said the emergence of AI has influenced their practice's hiring strategy, with 62% of these saying their practice is hiring more non-accounting professionals. 

In particular, practices said technical specialists (65%), advisory specialists (63%), those with strong communications and interpersonal skills (63%) and creatives (61%) as focus areas for new hires. However, a lack of training (36%) and experience (32%) were cited as the top barriers to introducing more AI, indicating many are still being held back by a lack of resources and skills.

Stuart Miller, Director, Public Policy & Technology Research at Xero said: “AI is driving the greatest reorganisation of human capital in the history of accounting. It will help with the industry’s talent shortage, and it will amplify human potential within practices, elevating their services to higher level advisory. Accountancy practices are adapting fast and already seeing huge productivity gains by automating routine tasks. But beyond unlocking improved client service with fewer errors and more time to offer strategic advisory, greater efficiency is also driving economic growth by more effectively supporting the UK business community.”

AI boosts clients financial health

Additionally, more than half (56%) of accountants and bookkeepers believe AI has driven a breakthrough in their clients’ financial health. This is supported by improved service levels. Practices say AI has reduced the number of errors in client work (56%), allows them to complete work faster (32%), and enables faster and clearer communication with clients (31%).

Dave Sellick, founder at Sidgrove, an accounting practice, said: “AI is elevating our workflows as accountants and these findings prove it. It’s transformational in its own right, but it’s also breaking down the steep learning curves in the tools we’ve been using for years. Three-quarters of firms are now hiring for human skills over technical ones, which aligns with my belief that AI should automate and augment so we can double down on what humans do best: build trusted connections and deliver genuine advice that leads with empathy.”

Glenn Collins, head of policy, technical and strategic engagement at ACCA, said: “It’s clear from our research and from Xero’s study that AI is reshaping the accountancy profession by changing how tasks are completed at all levels. Firms can look to integrate AI, understanding that it will change how they work and deliver value. However, it is increasingly clear while AI can help make processes more efficient, human intervention needs to be retained at critical junctures.

“Inevitably there will be an impact on talent strategy: firms need to continuously evolve their skillset and knowledge base. However they also have strong foundations in place which they can use to position themselves for success in this new era.”