Planning for the road ahead: Key insights from the NZ ‘State of the industry’ report 2023
We are pleased to share the key findings from our study of the accounting and bookkeeping sector in Aotearoa New Zealand.
The State of the industry report 2023 is the first of its kind in Aotearoa New Zealand and benchmarks the industry, highlighting key trends, challenges, and opportunities faced by accounting and bookkeeping professionals.
Despite a recession being declared midway through 2023 and rising inflation, the sector has shown incredible progress and resilience during these challenging times.
Take a look at some of the key highlights from the report below.
Growth
The report showed encouraging signs of growth across the whole industry – nationwide, almost two-thirds of all practices reported revenue growth over the past 12 months.
This comes down to demand driving the bottom line. For many practices, increased client numbers, raised fees, and requests for more services has impacted growth in revenue margins.
This positive result is strongly linked to operational changes like streamlining internal processes, increasing automation of manual tasks, and expanding the number of services they provide.
Trusted advisory
Across the country, almost all accounting and bookkeeping practices are finding themselves embracing the role of advisors for Kiwi small business owners.
As the small business sector continues to digitalise, there’s an increasing demand from business owners for help and support to implement these tools into their businesses. In fact, 70% of accountants and bookkeepers surveyed have supported this space over the last year.
At Xero, we have more than 1,000 apps in our ecosystem – all designed to improve efficiency and productivity for small businesses and sole traders.
These digital tools are designed to help small businesses working in all types of industries – whether that’s construction, hospitality, retail or even agriculture.
Advisory services also include business performance analysis (62%), and planning and budgeting (62%). By offering broader services, Kiwi small businesses are increasingly recognising the true value of strategic counsel.
Preparing for economic uncertainty
New Zealand is experiencing economic turbulence which can be tricky to navigate. As a result, 73% of practices feel their clients will need more support as they face increasing financial pressures.
With four in five practices expecting to feel the continuing effects of this over the next year, this shows many expect these challenging economic conditions to persist.
This means it is likely practices will raise their fees, consider wage increases to retain staff, or in the case of medium and large practices, consider reducing their team.
Navigating the new world of work
The talent market is still feeling the pandemic’s ripple effects, with hiring experienced workers proving to be a struggle.
Practices of all sizes are investing in employee development and training (40%), raising wages and offering remuneration packages (37%), as well as offering flexible ways of working, like work-from-home or different working hours (45%).
During this period, it’s important for advisors to prioritise their own growth and resilience, by planning ahead for their practice, finding their niche, and expanding their services.
Utilising cloud-based software
Nearly all practices we surveyed are already embracing technology, with 92% utilising cloud-based software, and 74% considering cloud-based tools very important to their business.
Digital tools enable all practices to spend more time on what matters most – building relationships with their clients and meeting their evolving needs. Cloud-based software essentially improves business efficiencies, which often ladders on to better job satisfaction.
By embracing these tools, not only will advisors be able to better support their clients but they will also have more time to focus on their own growth and development.
Digitalisation plays a fundamental role in driving success for small businesses and advisers alike. By ensuring every hour spent working is spent doing something only a human can do, this will help strengthen our small business community and economy as a whole.
Embracing growth and efficiency
Despite persisting challenges with the likes of the talent shortage and economic uncertainty, small businesses are turning to their trusted advisors for more support.
Now is the perfect time for advisers to take charge of their future by embracing digitalisation and expanding services to build a stronger client base.
If you’re interested in learning more, download the full State of the industry report 2023 for all the key data and insights to help you embrace growth and efficiency in your practice.
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Source: Xero Blog
