Almost 3/4th of US Accountants report increased profits last year

Xero, a global small business platform, has 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.

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.

The AI advantage: Boosting efficiency and expanding services

“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

“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.

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

Murph's Exclusive Insightful Accountant Follow-up:

I had the opportunity to follow-up with Xero US concerning certain implications of their Industry Report. I ask them how quickly they foresaw AI freeing up Accountant time for Advisory work: "How long do you foresee it is before Agentic AI functions in accounting platforms like Xero assume 80+ percent of the computing requirements so as to provide guidance for the approximate 15-20% of the accounting that's advisory in nature?"

Lisa Huang, SVP of Product Management - Direct, Insights & AI at Xero responded, "The scenario you're outlining, where Agentic AI takes on the bulk of computational requirements in accounting platforms like Xero, is precisely the transformative vision our 'State of the Industry 2025' report explores.  Accountants already see AI as their #1 industry opportunity, with 80% expecting a positive impact."

Huang went on to say, "Our overall goal is to leverage AI to help accountants serve their clients better – automating manual or time-consuming tasks to free up accountant time to focus on higher level activities, whether advisory, client relationship management, or other value-added services. While our report doesn't pinpoint a specific year for 80%+ computational consumption by AI, it’s clear we're in the 'early innings' of this transformation.  The trend is strong — AI will continue to take on more processing, enabling the critical human advisory role to expand. This evolution is about enhancing human capabilities and client value."

Xero is clearly on 'the cutting edge' of providing AI tools to enable Accountants and Bookkeepers to transition successfully from "crunching the numbers" and preparing the reports, to serving their clients with meaningful advisory services.

Disclosures: 

Xero feature content made available by Pepper Communications (peppercomm.com). Content, including applicable graphics, is reproduced or adapted, with permission, by Insightful Accountant for informational and educational purposes. 

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 connect 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.

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