Despite workflow savings, 94% of New Zealand practices don’t expect AI to reduce team numbers over the next 12 months.
Xero New Zealand country manager Bridget Snelling said there had been much focus on whether AI would replace accounting jobs.
“What this research shows is a different kind of change: technology is taking pressure out of routine work, while practices are putting more time into advice, relationships and growth,” Snelling said.
“The opportunity for practice leaders is to be deliberate about where freed capacity goes. If the time simply disappears into the working week, the benefit is limited. If it’s redirected into higher-value work, training or new services, it can change the economics of the practice.”
Xero New Zealand country manager Bridget Snelling says the research’s findings will support practices deciding how they want their firms to work.
With a switch in the work being performed in practices, 61% said AI was changing how they hire.
More than a third (35%) said they were prioritising soft skills and relationship management, while one in five (20%) were recruiting non-traditional roles such as data analysts and tax technologists.
Xero executive general manager of technology research and advocacy James Bergin said AI worked best when applied to an understood process, rather than being expected to improve everything.
“Among practices actively using AI every day, 89% say their core processes are well documented, compared with 30% of practices not using AI,” Bergin said.
“This discipline makes it easier to identify the right use cases, build in review and control, and keep the professional judgement and accountability with the people.”
The research also looked beyond AI to structural choices shaping modern practices, including firm design, service mix and pricing.
The findings showed 59% of New Zealand practices offered advisory services, and among them, it was their top-earning service. For non-advisory firms, 27% cited a lack of capacity as a barrier.
Practices billed an average of 66% of client engagements on non-hourly terms. Of practices using value-based pricing, 45% said it has made their practice more profitable.
Top-performing practices were 2.2 times more profitable than lower-margin employing practices, with the report showing stronger use of embedded AI, higher-value services and disciplined pricing among these firms.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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