Xero, the global small business platform, has released its State of the Industry Report for Canada, revealing that accounting and bookkeeping firms in the country have seen significant growth in revenue and profit thanks to the adoption of new operating models and cloud solutions.
According to the report, 70% of Canadian accounting and bookkeeping practices surveyed experienced revenue growth in the past year, with 56% attributing this growth to an increase in clients. Additionally, 70% of practices reported increased profits, with the provision of additional services (48%) and streamlined internal processes (41%) cited as the main reasons for higher profitability.
Faye Pang, Xero’s Country Manager for Canada, praised the industry for responding to disruption with resilience and adaptability. She noted that the report’s findings indicate a shift in the value proposition offered by accounting and bookkeeping practices.
Over the past year, 22% of practices have added client advisory services to their offerings, while 32% have introduced value-based pricing to drive higher revenues and improve billing clarity for clients. The report also highlighted that practices offering these services were more likely to experience revenue growth than those that did not.
Cloud solutions were found to play a significant role in empowering employees and attracting top talent. The survey revealed that 45% of client work is now performed using cloud solutions, with reasons for adoption including flexible working support, easier data access, and improved collaboration with clients. Furthermore, 60% of respondents agreed that practices using cloud-based software have higher staff retention, and 66% believed it helps attract more new staff.
The report also showed that 74% of practices using cloud accounting solutions experienced revenue increases, compared to just 41% of non-cloud users. In fact, 32% of practices directly attributed their revenue growth to the use of cloud technology.
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