Melbourne — 12 February, 2024 — Xero, the global small business platform, today released its State of the industry special report: Leveraging the app advantage, detailing how Australian accounting and bookkeeping practices are utilising cloud-based apps.
Xero’s latest report highlights that firms powered by integrated app stacks are more likely to grow, experience more benefits and feel more positive about the future of the industry than their non-app-using counterparts. It found:
- Firms powered by integrated app stacks are more likely to have experienced financial gains in the past year.
- Firms utilising at least one of the Xero practice apps added an average of 24 new clients in the past 12 months, compared to an average of 15 new clients at firms that do not use any Xero practice apps.
- Practices leveraging an app stack are more likely to feel positive about disruption from emerging technologies (such as blockchain, AI, and cryptocurrency), compared to non-app users.
“From potential revenue and profit increases to winning new clients, this report shows how utilising apps can make a big difference for accounting and bookkeeping practices,” said Theo Konstantas, Interim Country Manager, Xero Australia. “We do know there’s a lot of choice when it comes to finding the right apps, making it tricky to identify what’s best for your firm. The report is a great resource for those looking for a place to start and outlines some steps you can take today, including identifying key pain points that are hindering efficiency, trialling apps and speaking to the experts.”
Delving deeper into the report, it identified three categories of app users to highlight how their practice compares to others, and how they can level up in the years ahead.
*App Masters (use at least five apps that integrate with Xero, and likely rely on their tech stack to keep their practice running smoothly):
- 81% of survey participants have experienced revenue growth and 61% have experienced profit growth in the past 12 months.
- Almost a third (32%) cited app usage as a reason for revenue gains, while over half (51%) said the same for profit growth.
- App Masters state their app stack has enabled them to save time on manual daily tasks (82%), enhance their clients’ experience with more collaboration (74%) and spend more time on billable tasks (73%).
App Adopters (use one to four apps that integrate with Xero, and likely lean on digital tools for a variety of practice tasks):
- 67% of survey participants experienced revenue growth in the past 12 months – with one in five (20%) able to directly link using Xero integrated apps as a reason – among others – for these gains.
- 62% experienced profit growth in the past 12 months – 29% attributed app usage as a reason - among others - for this growth.
App Delayers (yet to embrace integrations within their practice — they do not use any apps):
- While 65% of survey participants experienced revenue growth, only 50% experienced profit growth in the past 12 months.
“Apps have made digitalisation more accessible, and regardless of size and resource, any Xero practice can use best-in-class apps and integrations to support its goals, streamline processes and unlock new opportunities,” added Konstantas.
App Masters and Adopters feel more optimistic about the future and positive about industry changes, including the evolution of the accountant’s role from accounting compliance to advisory services, compared to their Delayer counterparts.
Jolene Lutman, Director of bookkeeping specialist firm Centegrity, said her practice had experienced greater efficiencies and boosted revenue after adopting an integrated app stack: “Technology has had a huge impact on Centegrity; it’s helped us quadruple our revenue. We started with Xero Practice Manager and Xero Tax, and added to this over time. Now, apps are essential to our operations. The right app stack can be instrumental to growth; it's all about finding the right tools to help you become the best version of yourself – personally and professionally.”
You can find the State of the industry special report: Leveraging the app advantage in full and its methodology here.
 Apps refer to Xero integrated software that is web-based that helps practices complete jobs/tasks.
 A group of apps (software that is web-based that helps practices complete jobs/tasks) connected through workflows and data.
 Apps within the Xero platform, such as Xero Practice Manager and Xero Tax.
Findings based on the anecdotal responses of survey participants and their financial performance is not indicative of all accounting and bookkeeping firms. Firms should seek independent advice to suit their particular practice needs.
Xero is a global small business platform with 3.95 million subscribers which includes a core accounting solution, payroll, workforce management, expenses and projects. Xero also has an extensive ecosystem of connected apps and connections to banks and other financial institutions helping small businesses access a range of solutions from within Xero’s open platform to help them run their business and manage their finances. Xero is a FIFA Women’s Football partner.
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