Xerocon 2024: Where technology meets tradition

The accounting industry is experiencing significant changes due to several key factors. New technologies are altering how accounting is done and enabling novel capabilities.

Client expectations are also shifting, with demands for more real-time data, proactive advice, and seamless digital experiences. Additionally, ongoing merger and acquisition activity is consolidating the market and changing the competitive landscape.

Xerocon 2024, the biennial conference that brings together accounting professionals from around the world, focused heavily on these transformational forces.

The event, which took at the Excel Center in London on June 12, featured a keynote address that outlined strategies and tactics for accounting firms to adapt and thrive amidst the changing environment.

Shift to Advisory Services

One of the central themes of the keynote was the industry’s ongoing transition from traditional compliance work to advisory services.

“By our count, 70% of accountants and bookkeepers have already moved to advisory services,” noted Alex von Schirmeister, managing director of Xero’s UK & EMEA business.

This trend is reshaping the role of accountants, as firms increasingly provide strategic advice to help clients navigate the complexities of modern business, from regulatory changes to economic uncertainties​.

The benefits of this shift are evident in the data. Firms that have adopted advisory services report a 133% increase in average billing for new clients and a 113% increase for existing clients within the first year, according to Thomson Reuters.

This transition not only strengthens client relationships but also opens new revenue streams, making firms more resilient in a rapidly changing market​/

Von Schirmeister emphasised the importance of leveraging existing skills within firms to expand service offerings. “How do you reinvest the capacity that you have generated in your practices through your investment in technology and digitalization and use that capacity to start offering value-added services?” he asked.

This approach allows firms to enhance their value proposition and remain competitive, even as automation and AI transform the industry.

Market Consolidation and Private Equity

The keynote also addressed the wave of consolidation sweeping through the accounting industry, driven largely by private equity investments.

“According to consulting firm Bain, private equity is currently sitting on 3.9 trillion U.S. dollars of dry powder,” von Schirmeister said. This influx of capital is reshaping the landscape, offering opportunities for firms to scale their operations, acquire new capabilities, and provide exit strategies for retiring partners.

For smaller and mid-sized firms, this trend presents both challenges and opportunities. On one hand, it increases competitive pressure, requiring firms to differentiate themselves through innovation and superior client service.

On the other hand, it provides access to resources that can drive growth and expansion. “It’s putting real competitive pressure on you. But also, it’s putting a real premium on that human connection,” von Schirmeister observed, underscoring the need for firms to innovate while maintaining strong client relationships.

Digital transformation

Digital transformation remains at the heart of the accounting profession’s evolution. The keynote underscored how technology, particularly AI and cloud-based solutions, is revolutionizing accounting practices.

“Technology has been at the heart of it for a long time. It will not slow down. It will only accelerate,” von Schirmeister said, highlighting the critical role of digital tools in driving efficiency and productivity​.

The impact of digital adoption was further illustrated by data showing that small businesses that embraced digital tools during the pandemic experienced higher productivity compared to the national average.

This productivity boost translates into greater profitability, which can be reinvested in competitive pricing, talent acquisition, and further technological advancements. “Small businesses who embrace digital and especially the ones that did so during the pandemic have increased their productivity versus the national average,” von Schirmeister said.

However, the transition to digital platforms is not without challenges. Many small businesses resist change due to established processes and time constraints. The keynote emphasised the critical role of accountants as technology consultants, helping clients navigate digital adoption by assessing existing processes, identifying opportunities for automation, and ensuring scalable, profitable implementations​.

The road ahead

The keynote at Xerocon 2024 painted a picture of an industry in the midst of profound change. As firms navigate the shift to advisory services, embrace market consolidation, and harness the power of digital transformation, they are redefining their roles and value propositions.

“The challenges will keep coming. But we all know that a challenge is an opportunity,” von Schirmeister  concluded, urging firms to adapt and innovate to thrive in an increasingly complex and fast-paced business environment​.

The commitment to continuous innovation and client-centric services, as demonstrated by Xero’s latest product developments, positions the platform as a vital tool for accountants looking to stay ahead.

As the keynote concluded, the call to action was clear: embrace change, leverage technology, and focus on delivering unparalleled value to clients.