Accounting and bookkeeping firms are growing faster than before the pandemic, according to insights from global small business platform Xero. The company's data shows 51% of firms growing their customer base at a faster, or a similar pace, to pre-pandemic levels.
To continue supporting businesses as they recover and rebuild, 30% of firms stated that they are looking to hire more full-time staff in the year ahead. Just 4% of firms claim their client base is declining, since the start of the pandemic.
54% of accounting firms said that supporting their clients as they rebuild post covid is a main focus in the coming years. Harnessing the power of technology (37%) and providing continued support for clients as they get ready for the next phases of Making Tax Digital (43%) are seen as the biggest opportunities in the next five years.
Throughout the pandemic, technology has played a vital role in supporting small business survival. This has had a huge impact on the sector. Firms with 75% or more business clients using online accounting software have had the greatest average revenue per client. What’s more, practices growing faster than they did prior to the pandemic are most likely to have 100% of their clients using online accounting software (17%).
The sector is however impacted by resourcing issues, with smaller firms in particular experiencing a lack of resourcing capabilities. Amongst the industry, sole practitioners (19%) and small practices (16%) were most likely to experience no growth or a decline in growth over the last 12 months. Accounting practices can compare their performance with similar businesses over the past year, via a recently launched Xero online benchmarking tool.
Glen Foster, Director, Accounting Partners & Small Business at Xero commented: “Behind nearly every resilient small business there’s a diligent accountant or bookkeeper. They’ve played a huge role in supporting business survival and growth. Against a challenging backdrop, many firms have adopted new ways of working and have prospered as a result."
Xero is a cloud-based accounting software platform for small businesses with over 2.7 million subscribers globally.