Seize the shift – how to thrive in the great accounting shake-up

The accounting industry is at a pivotal juncture. Technology is broadening its parameters, but also burdening accountants who need to rapidly upskill themselves to keep up – let alone take advantage. At the same time, Advancetrack’s Accounting Talent Index shows enrolment in accountancy degrees fell by more than half since 2010, while graduates that do pursue it often opt for careers in adjacent financial disciplines.

However, accountants are adapting to these challenges – and it looks like it is working. Xero’s Accounting and Bookkeeping Industry Report 2025 found advisory services now contribute nearly a third (32%) of accountants’ revenue, while four in five (79%) accountants and bookkeepers reported increased revenue compared to the previous year. This indicates a set of successful adjustments that are meeting client demands.

To maintain these positive trends, accountants should lean into the shifting foundations of the industry. This requires a focus on digital literacy, finding new ways of attracting talent and being agile to new commercial opportunities to match the turbulence of the small business economy.

Pivoting to growth areas

A volatile business landscape is keeping accountants on their toes. Last year, 200,000 UK businesses closed – the most in two decades. This reducing pool of potential clients has prompted them to tap into other areas of growth.

One way forward is to identify thriving sectors and meet the needs of new businesses. According to Enterprise Nation, the property sector saw the largest percentage increase in 2024 with 44,000 businesses registered, a 38% increase on the previous year, while the food sector added 22,000 new takeaway shops and food stands. Accountants can use this momentum by reviewing their client base and specialising in industries that align with these growth areas.

Growth segments don’t have to be defined by sector.  the Making Tax Digital for income tax (MTD for IT) rollout, whether as a way of seeking new clients or offering new advisory services to existing ones. These changes will further digitise the landscape for business owners and accountants alike.

Driving digital literacy

As practices integrate more AI in their workflows, manual data input and compliance tasks are increasingly becoming automated. This does not mean accountants’ roles will be replaced by AI. Instead, they will spend more time interpreting financial information to help drive business decisions, rather than focusing on mechanical accounting processes. Digital literacy and data interpretation is quickly becoming as important a skill as traditional ‘number crunching’.

MTD for IT is accelerating this trend. It requires small businesses to keep records digitally and submit returns online, which will be a learning curve for many. While this will be beneficial in the long run, it will increase the reporting burden initially – especially in the first year when the quarterly report for MTD for IT overlaps with the final self-assessment period.

However, according to Xero’s Accounting and Bookkeeping Industry report, only 49% of small businesses use accounting software, just 59% of bookkeeping services are cloud-based and only 40% of clients benefit from connected bank feeds.

These figures underline the need for greater digital adoption to help automate manual tasks, free up time for accountants to deliver deeper insights and help clients comply with MTD regulation. By improving technical proficiency, accountants can offer new services and drive growth.

Preparing for the new image of accounting

This digital shift is accelerating an adjacent evolution towards advisory services, changing the image of accounting. And accounting bodies are already responding through education. By focusing on tech know-how, alongside softer consultancy skills, those learning the profession today are approaching it from a different angle than previous generations.

Importantly, this isn’t compromising core competencies. ICAEW pilots found a 36% improvement in students’ analytical skills with the addition of technology, while technical calculation skills remained unchanged. Accountants must reflect this in the workplace, aligning their services with how new entrants are being trained.

The future of accounting will require a more diverse skill set. With fewer students choosing accountancy degrees, the industry must broaden its appeal and position itself as a career grounded in critical thinking and analytics to attract the talent it needs.

Accounting is an age-old industry in transition. With its core tenets in flux, disrupted by technology, practices must continue to upskill their workforce, update their services and align their with growth areas to maximise new commercial opportunities. Failing to do so will result in falling behind the competition during the great industry shake-up.