Accounting firms are reporting stronger numbers across the board, according to a new Xero report. Nearly three-quarters of firms saw increased profits over the past year, and more than half gained new clients. This growth is driven largely by operational improvements and expanded services. 

Accounting Today reports that one shift stands out: 85% of firms now offer client advisory services, up from just 41% in 2023. The work isn’t just about reporting what happened last quarter, it’s about offering forward-looking advice. That’s become a baseline expectation for many clients. 

Artificial intelligence is also playing a role. Eight out ten firms say they’re confident it will positively affect their practice. Right now, the most common uses include faster client responses, fewer manual errors, and more streamlined workflows. But the point isn’t just efficiency. As Xero’s North American managing director Ben Richmond put it, “The real value lies not just in working more efficiently, but working smarter.” 

Yet not every firm is keeping pace. While most have moved to the cloud, some still haven’t, missing out on basic advantages like easier data access and improved security. And while AI has promise, mastering it remains a challenge for more than a third of firms. 

While a large majority of firms (85%) have adopted cloud platforms, some are still not leveraging their potential. Among the reported benefits, 40% cited easier access to data from anywhere and 36& pointed to improved security.