Accounting firms turn to AI to lift profitability

KUALA LUMPUR, Sept 28, 2026: Malaysia’s top-performing accounting and bookkeeping practices are increasingly embedding artificial intelligence (AI) into daily workflows, expanding advisory services and adopting more confident pricing strategies, according to new research by Xero.

The findings, published in Xero’s Modern Practice Playbook, showed that top-performing practices were 2.3 times more profitable than lower-margin firms, with differences linked to their approaches to firm structure, AI adoption, services and pricing.

The study was based on responses from 327 senior accountants and bookkeepers across Malaysia between May 7 and June 23, 2026.

AI adoption was found to be widespread, with 91% of practices surveyed actively using or experimenting with the technology. Across all firms, AI was estimated to save 6.4 hours a week and RM141,000 annually, while top-performing practices actively using AI reported estimated savings of 8.5 hours and RM205,000 a year.

Accounting firms

Advisory services were also identified as a significant growth opportunity. Client advisory generated the highest profit margin among services at 43%, but only 42% of practices currently offered such services.

Xero said the growing adoption of e-invoicing could help create opportunities for firms to expand into advisory work by enabling accountants to provide greater insight into clients’ financial information.

Top-performing practices were also more than 1.5 times as likely to structure teams around defined client segments.

They charged about 32% more for tax services, 28% more for financial reporting and 26% more for payroll services than other practices.

They were also twice as likely to plan price increases of more than 20% this year, highlighting a greater willingness to price services according to their perceived value.

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