Nearly three-quarters of US accountants and bookkeepers report increased profits this past year

Denver — June 9, 2025 —Xero, the global small business platform, today released its US State of the Industry Report for accounting and bookkeeping (AB) practices in 2025, revealing an optimistic outlook driven by evolving service offerings and strong performance metrics year-over-year.

The report highlights a significant upswing in the industry, with nearly three-quarters (73%) of practices reporting increased profits in the past year. This success is further supported by the fact that more than half (56%) added new clients due to enhanced operational efficiency and expanded service offerings, driven in part by the integration of innovative technologies and a deeper focus on client relationships.

Client advisory services: Deepening client relationships and driving growth

Xero’s report underscores the growing significance of client advisory services, now offered by a strong 85% of surveyed practices, a significant jump from 41% in our 2023 survey. Ranked as the second most promising industry opportunity, client advisory services – encompassing forecasting, budgeting and financial strategy – are proving vital in helping firms meet their clients’ evolving needs, strengthen client retention, and build deeper trust.

“Implementing our new advisory model involved a collaborative approach, and we started by investing in advanced technology, like Xero, and upskilling our team,” said Kelly Watson, Accounting Services Director, BNA CPA. “This included comprehensive training sessions, certifications and workshops to ensure our staff could proficiently use the Xero platform to address complex client needs. But the outcome was well worth it - we are now able to provide clients with true up-to-date financial insights and deeper, more well-informed advisory.”

The AI advantage: Boosting efficiency and expanding services

AI has rapidly become a game-changer, identified as a top opportunity by US accounting firms, with an overwhelming 80% anticipating a positive impact on their practice. Currently, the most common use cases for AI include: delivering faster and more responsive client services (33%), enhancing accuracy by reducing bookkeeping and accounting errors (33%), and streamlining workflows through the automation of routine tasks (32%).

“The widespread adoption of AI has been a turning point for the accounting profession, giving accountants an opportunity to scale their impact and take on a more strategic advisory role,” said Ben Richmond, Managing Director, North America at Xero. “The real value lies not just in working more efficiently, but working smarter, freeing up time to elevate the human element of the profession and in turn, strengthen client relationships.”

Cloud accounting: The standard for growing practices

Cloud accounting remains a critical enabler for industry success. While 85% of firms have embraced cloud platforms, a notable portion still lag behind, missing out on key advantages such as easier data access from anywhere (40%) and enhanced security (36%).

“In recent years, cloud accounting has shifted from a nice-to-have to nearly a pre-requisite, providing a clear competitive advantage to those who embrace it. The focus now turns to how firms can harness the full capabilities of the cloud to foster deeper client engagements and demonstrate the full potential of their value as trusted advisors,” said Richmond.

The strategic focus on client advisory services and increased adoption of AI are clearly driving growth and profitability within the US accounting and bookkeeping sector. However, Xero's State of the Industry Report also highlights key challenges that firms are currently navigating, including economic uncertainty (38%), the ongoing need to understand and effectively utilize AI (36%), and the continuous pressure of evolving client expectations, with clients now expecting more forward-looking strategic insights and business advice (35%). Addressing these challenges will be crucial for sustained success in the evolving landscape.

Explore the full insights and data by reading the full Xero State of the Industry Report here.

ENDS

Media Contact

Xero US | Rola Tfaili | uspress@xero.com

Survey Methodology

Between December 19, 2024 and January 8, 2025, Quadrant Strategies, commissioned by Xero, surveyed 250 accountants and bookkeepers working in practices across the U.S. Respondents were found via independent panels and data has been weighted by practice size - more details can be found in the methodology section of the report.

About Xero

Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero’s powerful platform helps customers automate routine tasks, get timely insights, and connects them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.