When job search service Indeed.com released new data last year about the top professions being sought after by small business employers, the stats suggested something surprising.
“Small business accountant” was not among the top 10 phrases searched for by those hirers, Indeed.com found. Instead, titles like “business analyst,” “data analyst” and “business development manager” topped the list.
But that doesn’t mean accountants are no longer in-demand among small business owners. Rather, analysts suggest that SMBs are looking for more sophisticated, tech-savvy professionals to aid in their growth and strengthen their bottom lines.
Separate research from software firm Right Networks points to small business accountants’ embracing of this demand for tech-friendly professionals. According to data published last September, SMB accountants agree that accounts software is now the most important innovation to their industry, and nearly two-thirds said they feel motivated to upgrade their own technologies and embrace automation to meet SMBs’ demands.
One small business accounting software provider, Xero, has found new evidence that SMB accountants are reaping the benefits of technology innovation and adoption. The company published its “Accounting and Bookkeeping Industry Performance Report” last week, surveying 939 accountancy practices in the U.K.
As Right Networks’ report found that accountants embrace automation and software – rather than fear that the technology will replace the need for human talent – Xero similarly concluded that small business accounting technology actually increases demand for human capital.
“We’re seeing an increasing number of practices embracing cloud technology, particularly in the lead-up to Making Tax Digital,” said Xero director Damon Anderson in a statement, referencing the U.K. government’s tax digitization initiative. “Our research shows that rather than putting an accountant’s job on the line, cloud technology is enabling significant growth and as a result, revenue is increasing, teams are expanding and roles are evolving.
“What it means to be an accountant today is a far cry from what it was before online accounting,” he added. “Practices are diversifying their offering[s] beyond just compliance into the realm of business advisory and seeing real growth. The cloud has been instrumental in this journey, freeing up time for accountants to develop their skills further as they do more to help small businesses prosper.”
In this week’s B2B Data Digest, PYMNTS explores the stats from Xero’s latest report that led Anderson to draw these conclusions.
14 percent average revenue growth fueled accountancy practices in the U.K. last year, while on average, an advisory service clocked more than $539,000 in total revenues. Xero calculated that the average employee – including contractors – provided about $159,500 in revenue for each practice.
49 percent of accountancy firms landed a new SMB customer because that business switched from a different provider, highlighting the opportunity for accountancy practices to remain competitive as entrepreneurs and small businesses seek enhanced services. Nearly a third (30 percent) said they landed a new customer in the form of a new business startup, which, according to Xero, are seeking accounting and advisory services to navigate the complex and confusing regulatory landscape.
81 percent of small accounting firms with more than 100 cloud clients are actively working to expand staff levels, while 49 percent of accounting firms with fewer than five small business clients that use cloud accounting tools said the same. According to Xero, the accountancy firms with more than 100 clients landed higher revenues per employee, which is also fueling their motivation to expand staff levels.
$9,850 is the average value of revenue per client for accounting practices that offer advisory services to SMBs. That compares to the average revenue per client for accounting practices that don’t provide those advisory services – about $5,900 – and highlights the role that technology can play in helping practices develop their advisory services, Xero said.