AI adoption drives efficiency gains for UK accounting firms

By Milan Rojan

UK accounting and bookkeeping firms that have embedded artificial intelligence (AI) into daily workflows are achieving greater time and financial savings, according to new research from accounting software provider Xero.

Xero’s Modern Practice Playbook has found that AI saves the average UK practice 7.1 hours a week, equivalent to an estimated $268,000 annually across its workforce. Among top-performing firms, the savings have risen to 10.6 hours a week and approximately $237,000 a year.

The research has also highlighted a link between structured processes and successful AI adoption. Among practices using AI in daily workflows, 87% have reported having well-documented and regularly updated processes, compared with 18% of firms that are not planning to adopt AI.

Despite the increased use of AI, only 5% of UK practices have expected the technology to reduce headcount over the next year. Instead, three in five practices have redirected time saved through AI towards advisory services, which Xero has identified as the highest-margin service offered by UK firms, at 51%.

Kate Hayward, UK Managing Director at Xero, has said: “The data speaks for itself when it comes to AI. It’s about freeing up time to bring this industry’s most valuable skills to the surface, it’s not about replacing people.”

The research has also shown changes in hiring strategies, with 63% of firms changing the skills they seek when recruiting. Relationship management and technology fluency have increasingly been prioritised, while top-performing firms have been nearly twice as likely to hire specialists such as data analysts and tax technologists.

Pricing has emerged as another differentiator. Two in five practices using value-based pricing have reported improved profitability, while higher-performing firms have been more likely to plan significant price increases.

The survey has covered 520 independent senior accountants and bookkeepers across the UK between 7 and 26 May 2026. Xero has defined top-performing employing firms as those with net profit margins of 41% or higher.