Singapore — 27 November, 2023 — Xero, the global small business platform, has released a new report revealing Singapore’s accounting and bookkeeping sector is undergoing significant transformation, driven by technology innovation and shifting client expectations.
Xero’s State of the industry report surveyed 300 accountants and bookkeepers working in Singaporean practices to provide insights into how economic pressures, the skills shortage, emerging technologies – particularly artificial intelligence (AI) – and small business needs are shaping advisory’s future.
The survey found that nearly three-quarters of respondents agree they now have to offer more advisory services to adapt to client and industry needs and opportunities. As a result, the majority (95%) of practices now provide at least one advisory service. However, for just under half (44%) of these firms, this was a change made within the past year.
One of the levers practices are leaning on to manage this shift is digitalisation. Almost three-quarters (72%) believe that within the next five years, AI will free up time to enable them to focus on advisory services by automating manual daily tasks. Additionally, one in three (33%) are outsourcing work offshore, with over half (52%) saying this is to enable their Singaporean team to focus on advisory.
Koren Wines, Managing Director of Xero Asia, said, “Increasingly, accountants and bookkeepers are being recognised as true advisors, offering holistic support to help Asia’s small businesses manage the challenges of today and the future. As experienced talent remains in short supply, practices must think and operate differently to meet calls for more strategic guidance.”
“With this in mind, the findings from Xero’s research show that firms are taking proactive steps to combat the supply-demand imbalance. From leaning on digital tools for workflow efficiencies to tapping into offshore teams to expand capacity, accountants and bookkeepers are powering forward.
“However, if the industry is to sustain this momentum, we need to address the skills shortage at a macro level. With AI expected to enable advisors to do more satisfying, strategic work, the education system, hand in hand with accountants and bookkeepers themselves, must take the opportunity to rebrand in order to inspire the next generation of advisory professionals,” says Wines.
Adaptability proves key to practice resilience
As Singapore’s GDP growth remains sluggish, four out of five firms (80%) expect the economic environment will impact their practice over the next 12 months. However, only 11% predict it will have a significant effect. This could be because many practices are implementing measures to protect themselves, such as increasing fees (57%) and changing their service offerings (49%).
Despite economic headwinds, it’s been a good year for practices overall. Firms added an average of 19 new clients, and more than two-thirds reported revenue increases (67%) and profit gains (68%).
“Practices are faring well in a tough environment. But more importantly, they’re finding opportunities to secure their future by providing human-centred advisory services that AI will never replace. Businesses clearly have an appetite for these offerings and are willing to pay a premium. What’s more, advisors are building client trust and confidence with these expanded services, further positioning their skills as fundamental to small business success,” concludes Wines.
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.
About the research
The State of the industry report is based on the responses from an online survey run by global insights and discovery agency One Picture between 3 July and 24 August, 2023. We spoke to 300 accountants and bookkeepers in practices across Singapore. Participants were recruited from external, independent panels.
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For all media enquiries, please contact the Xero media team.
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