[Press Release] Xero research: Technology adoption brings about 140% more revenue for pacesetting accounting firms in Hong Kong
Xero, the global small business platform, has released its annual Accounting Industry Report for 2020. The report sheds light on the best practices of pacesetting firms that make up the top 15% of the market. These firms boast high growth and revenue rates and serve as a benchmark for other firms looking to achieve success in 2020 and beyond. Overall findings revealed that on average, pacesetting firms bring in 130% more advisory revenue at approximately $616,000 versus regular firms at $264,000.
Below are the three key findings from the Xero research:
• Data automation tools have made firms twice as efficient
o As much as 40% of small business clients of complex advisory firms say that they have continued the practice of recording and sharing financial data through labour-intensive methods, such as physical receipts shared physically in bags or boxes, time-intensive spreadsheets, and journals of transactions.
o In contrary, pacesetting accounting firms who have adopted technology were able to cut down client servicing hours by almost 50%; from the industry average of 518 hours to 249 hours per client.
• Organisations are increasingly asking for business advice from their accountants
o Accountants are transitioning beyond compliance services such as auditing, and are getting increasingly involved with assisting their clients in making critical business decisions.
o Repeatable advisory practices that provide routine advisory services made the most revenue in the last 12 months in Hong Kong, averaging at HK$1,250,000 per month.
• There is an opportunity for Hong Kong accounting firms to continue growing their business through value-added advisory services
o When focusing on the performance of pacesetting firms, 67% of such firms in Singapore are already using automation apps, compared to just 48% in Hong Kong.
o As a result, these Singaporean firms are seeing an average total advisory revenue of HK$1,004,710.50 (SG$176,800), HK$384,000 more than Hong Kong pacesetting firms (HK$616,000).
Kevin Fitzgerald, Managing Director for Asia, Xero, said, “Hong Kong’s economic downturn has a huge impact on SMEs, and now more than ever they are looking for advisory support to ride out the economic slowdown. This is the time for accountants to step up in their roles by utilising data automation tools to offer advice to help clients in their business decision making. By encouraging clients to run their accounting on the cloud, accountants will be able to tap into meaningful business insights to assist their clients with planning and forecasting in a timely manner.”