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Xero has released New Zealand research showing most accounting and bookkeeping firms do not expect artificial intelligence to cut jobs in the next year.
The survey of 526 senior accounting and bookkeeping professionals, part of Xero's Modern Practise Playbook for New Zealand, found that 94% of practices do not expect team numbers to fall because of AI over the next 12 months. The findings suggest firms are using AI to reshape workloads rather than reduce headcount.
The research finds that 78% of practices have tried AI, and 49% use it in daily workflows. Across all staff, practices reported an average time saving of seven hours a week and estimated annual savings equivalent to AUD $145,000 in local currency terms. For top-performing firms, that rose to 10 hours a week and AUD $200,000 equivalent.
Practises are redirecting those time savings into advisory work and client-facing tasks. Some 42% of accountants and 30% of bookkeepers said they were shifting time freed by AI into higher-value advisory services.
Bridget Snelling, Country Manager, Xero New Zealand, said firms were using the technology to reduce routine work rather than replace employees.
"There's been a lot of focus on whether AI will 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," said Bridget Snelling, Country Manager, Xero New Zealand.
"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," Snelling said.
Hiring shifts
The report also points to changes in recruitment. About 61% of practices said AI had already changed how they hire, while 35% said they were placing greater emphasis on soft skills and relationship management.
One in five practices said they were recruiting for non-traditional roles such as data analysts and tax technologists, suggesting firms are adjusting the mix of skills they want as automation takes over more repeatable work.
Firms with stronger process discipline were more likely to be active AI users. Among practices using AI every day, 89% said their core processes were well documented, compared with 30% of practices not using AI.
James Bergin, EGM of Technology Research and Advocacy at Xero, linked AI adoption to operational structure.
"AI works best when it's applied to a clearly understood process, not dropped into a practice and expected to improve everything," said James Bergin, EGM of Technology Research and Advocacy at Xero.
"Among practices actively using AI every day, 89% say their core processes are well documented, compared with 30% of practices not using AI. 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," Bergin said.
Advisory focus
Beyond AI, the research examined the economics of accounting practices. It found that 59% of New Zealand practices offer advisory services and, among those firms, advisory is their top-earning service. For firms that do not offer advisory work, 27% cited lack of capacity as the main barrier.
The study also found that practices bill an average of 66% of client engagements on non-hourly terms. Among firms using value-based pricing, 45% said that approach had made the practice more profitable.
Top-performing employing practices were 2.2 times more profitable than lower-margin peers. The report linked that gap to wider use of embedded AI, higher-value services and more disciplined pricing.
One firm cited in the research was Oxygen Advisors, which acts as an outsourced finance function for high-growth technology companies. It said 85% of its work is delivered by Chief Financial Officer partners in areas including strategy, capital raising and financial decision-making.
The firm has also invested in internal automation, with four technically minded accountants spending part of their time building tools including accounts payable automation and consolidated client summaries.
"Technology is giving accounting firms the opportunity to spend less time on repetitive work and more time helping clients make better decisions," said Matt Dold, Founder of Oxygen Advisors.
"At Oxygen, advisory has always been at the centre of what we do, and the real value comes from helping clients understand the financial consequences of the choices in front of them," Dold said.