Sage Research: Accountant AI Trailblazers to Boost UK Economy by £2 Billion

LONDON, 23 July 2024 - A groundbreaking study by Sage, the leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses (SMBs), and Demos, reveals that the accounting industry is on the brink of significant transformation as widespread AI adoption in UK accounting practices could add £2 billion to GDP, boost exports by £238 million and create almost 20,000 jobs.

The research, produced by the cross-party think tank Demos and supported by globally recognised professional accountancy body, the Association of Chartered Certified Accountants, shows that accountants and bookkeepers are emerging as AI trailblazers, adopting the technology at a faster rate than other sectors. Data shows that AI-enabled practices expect to hire ten times more employees and triple their revenue growth compared to non-users.

All three organisations are urging policymakers to introduce supportive policies to unlock this potential and drive economic growth, showing the critical need for a proactive digital adoption strategy.

The research highlights that the accounting industry, already a major contributor to the UK economy, adding £33.3 billion to GDP and employing 323,000 people, could see significant growth through AI.

The Department for Science, Innovation and Technology has discussed the need for greater tech and AI adoption to boost economic growth and Sage’s report indicates that AI adoption could double in the next five years if the remaining 51 % of accountants and bookkeepers take on the technology.

Key findings :

• AI is set to become a driving force for growth. Practices who are leading the way on AI  expect to hire ten times more employees and expect their revenue to increase three times faster than those not currently using AI.
• Accountants and bookkeepers are technology optimists. 61 % believe AI will create more opportunities than risks with nearly two-thirds (68 %) feeling confident that they will be able to adapt to AI.
• 56 % of surveyed companies believe AI adoption is crucial for attracting next-generation talent, especially for improving work-life balance.

To help achieve the potential of AI, all three organisations are calling on the new UK Government to implement four key policy initiatives :

1. Invest in boosting AI skills across the industry through a larger, long-term AI Skills Fund and reformed Apprenticeship Levy. Extend the AI Skills Fund to last five years to support a transition to effective implementation of AI.
2. Extend full expensing of capital investment to digital technology. This would allow businesses investing in digital tech, like AI tools, to reduce their tax bill by 25p for every £1 invested.
3. Introduce e-invoicing to support Making Tax Digital. The government should collaborate with the private sector to enhance productivity, reduce late payments, and boost international trade through e-invoicing, which also provides real-time data for better AI solutions.
4. Establish a supportive regulatory framework. The government, regulators, professional bodies, software developers, and accountants should collaborate to create strong standards and ethical principles for AI use

Aaron Harris, Chief Technology Officer of Sage, said : "Our research shows the prize for the UK economy if the accounting industry adopts AI. However, the UK currently trails behind other OECD countries in digital technology investment, risking future growth and competitiveness.

"AI adoption in accounting promises economic advantages, improved workplace well-being, and enhanced job satisfaction by automating routine tasks and attracting new talent. Without action to help the industry take advantage of the opportunity, there is a risk to future economic growth, competitiveness, and the UK’s status as a potential science and technology superpower."

Andrew O'Brien, Director of Policy and Impact, Demos said : "If the government wants to achieve its 'first mission' of delivering sustained economic growth, it must have a plan for accelerating digital adoption across key sectors of our economy, like accounting.
 
"This research shows that if we get the policy environment right, we can create investment, jobs and exports for the UK economy by backing our accountants and bookkeepers to make the transition towards greater use of AI."
 
 
Alistair Brisbourne, Head of Technology Research, ACCA :
 
"It’s really exciting to see that AI adoption is gathering pace amongst UK practices and that it is not just large firms reaping the benefits.
 
“As the report attests, professional accountants have a firm grounding in the risks associated with AI, data use considerations, and potential efficiency and productivity benefits. As an industry, it is evident that the accounting profession is well placed to utilise these skills to create clarity for businesses and support the development of appropriate frameworks."

Download the report, ‘Going for Growth : Creating an AI-first future in accounting’ today.

Methodology  

In partnership with ACCA and cross-party think tank DEMOS, Sage conducted a survey of over one thousand accountants and bookeepers to identify how AI can transform the accounting industry, which is already ahead in terms of adoption.  
 
This report is based on an online survey of 1,126 decision makers at accountants and bookkeepers with responsibility for strategic decision making and practice-wide knowledge carried out by Strand Partners. This survey was carried out between 03/04/24 - 08/04/24 and was weighted through the use of data from the Office for National Statistics data on the number, turnover and size of accountancies to ensure the representativeness of the sample.
 
Economic analysis

The economic analysis was carried out by Demos in April and May 2024.  

The inductive analysis used data from the Office for National Statistics (UK Business, activity, size and location published 27th September 2023) to identify the size and scale of the accounting sector.  
 
This was then combined with data from Oxford Economics’ "The Accountancy Profession in the UK and Ireland" - published in January 2024 - to develop economic contributions for the accounting and bookkeeping profession. Our research focused on accountant and bookkeeping practices rather than in-house accounting and bookkeeping practices.