AI could add AUD $4.8bn to small accounting sector

MYOB has published modelling suggesting wider use of AI and automation could add AUD $4.8 billion a year to Australia's small and local accounting sector within five years, based on full adoption across established practices.

The software company estimates the uplift would start at AUD $835 million in additional annual revenue in the first year if firms across the sector adopted the tools. Its modelling compares practices that do not adopt AI, and are assumed to grow revenue by 1.7% a year, with practices using paid AI subscriptions, assumed to grow at 5.3% a year.

The forecast covers established small, local and solo accounting practices, excluding the Big Four and national mid-tier firms. The revenue gap compounds over time and assumes a constant number and mix of practices across the segment, which represents the majority of Australia's roughly 37,000 accounting practices, according to MYOB.

The figures were released alongside findings from MYOB's latest Accounting Industry Monitor, which surveyed 304 owners, directors and senior decision-makers at accounting practices across Australia. The study found firms were using technology not only to reduce administrative work but also to shift more activity towards advisory services.

That shift comes as firms continue to report hiring pressure. The survey found 76% of practice leaders were struggling to find enough suitable candidates to fill available roles, up from 71% a year earlier.

Some respondents saw technology as one response. According to the survey, 42% agreed that using technology to free up more time for consultancy work could help address the recruitment gap.

Dean Chadwick, Chief Customer Officer at MYOB, said the results pointed to a broader change in the profession.

"Our latest Accounting Industry Monitor has shown that Australia's progressive practices - the highly technology-enabled firms which are enjoying strong growth and profitability - are realising a long-held ambition of the sector, moving from compliance-led, transactional interactions to playing a greater strategic advisory role. Supported by AI and greater use of automation, these practices are spending more time with clients and developing new prospects, providing a wider range of actionable insights, and offering more engaging opportunities for graduates entering the profession. If a similar approach was embraced across the industry, our additional modelling highlights that significant gains in economic performance are up for the taking, transforming the sector in Australia," Chadwick said.

Operational gains

The survey also found near-universal reports of commercial benefits from technology use. Overall, 98% of respondents said automation, process improvements and better communication driven by technology had contributed to higher revenue or profitability.

Among firms identified in the research as progressive practices, client contact was much more frequent than at other firms. These businesses communicated with clients more than twice as often and spent significantly more time developing new client relationships, according to MYOB.

Practise leaders also reported practical gains from AI in day-to-day work. The most commonly cited benefits were faster turnaround, named by 55% of respondents, reduced errors at 53%, and increased capacity at 48%.

Those operational changes are unfolding against a backdrop of changing client expectations. The research suggests accounting firms are facing stronger demand for faster responses, broader services and more immediate access to financial information.

Chadwick said technology was changing how teams could be deployed.

"The availability of modern, intelligent technology platforms, coupled with tools like AI, allows practices to reduce the manual burden on their teams and redeploy their people to meet the growing demand for advisory services. With a shift to focus on higher-impact client engagement and greater strategic thinking, the different type of work that practices can unlock could further enhance the appeal to the next generation of accountants," Chadwick said.

Client demands

The Monitor covered issues including AI, client expectations, evolving services, talent and compliance pressures. Respondents ranged from sole traders to practices with more than 100 staff, and included both MYOB customers and users of other accounting or practice management software.

The sample also covered a range of specialisms across the profession, from bookkeeping and financial planning to forensic accounting and insolvency. That breadth gives the findings a wider view of how smaller accounting firms are responding to labour shortages and changing workloads.

MYOB's core argument is that AI and automation could reshape the economics of smaller accounting practices if adopted broadly enough. Its assumptions rely on stronger income growth among firms using paid AI tools, with the resulting gap widening year by year across a sector under pressure to do more with limited staff.

"The expectations of clients are evolving just as rapidly as the technology. Businesses are now demanding deeper insights, faster responses and real-time access to financial information, as part of a wider range of services. As more practices look to embrace the opportunities created by AI and automation, the potential to drive tangible results in impactful areas like service expansion, employment and the bottom line is growing at pace. What's more, this shift from compliance-led work to a greater focus on strategic advisory services puts Australian businesses in a stronger position, better equipped to navigate a range of challenges with the backing of tech-enabled expertise and a deeper understanding of their needs," Chadwick said.