How Canadian accounting firms are governing AI to drive advisory growth

Andrew Kanzer is Managing Director of North America, Xero. Read Xero's Canadian 2025 State of the Industry Report.

MOVING further into the AI era, where adoption is becoming inevitable for businesses of all sizes, questions about its role for accountants and their clients are more pertinent than ever. According to Xero’s Canadian 2025 State of the Industry Report, 90% of firms believe AI will have a positive impact, and 84% reported that they are ready to start using the technology in their workflows. 

But readiness is different from application. To discuss what AI will actually take on — and where its limitations lie — I sat down with Sophie Dillon, Co-founder at Orbit Accountants, a Toronto-based accounting firm.

Andrew: What are the biggest hurdles facing accounting firms when it comes to integrating AI into their workflows?

Orbit Accountants: The hardest part of adopting AI isn’t the technology; it’s the people, the data, and the processes behind it. I think many firms rush to automate messy workflows and end up amplifying their inefficiencies. At Orbit, we take a slower, more structured approach. We start with clean data, consistent SOPs, and strong internal controls. Every AI output is treated like staff work that needs review and sign-off, and we prioritize privacy and compliance through PIPEDA and other relevant regulations. I believe the key is to automate what’s low-risk, measure what actually makes a difference, and never let technology outrun good governance.

Andrew: What’s driving the push for AI-powered services, the desire for increased efficiency or customer demand?

Orbit Accountants: It’s a bit of both, but for very different reasons. I believe firms are motivated by efficiency and capacity, trying to do more with smaller teams, while clients are motivated by outcomes, faster answers, clearer insights, and fewer surprises. Most clients never ask for “AI” specifically; they just want better, more responsive advice. For us at Orbit, AI is really just the tool in the background that shortens the time between data and decision. What matters most is the quality of the conversation that happens afterwards and what we do next, not how we got there. 

Andrew: What’s your approach to managing the relationship between innovation and the personal touch that comes with advisory-driven client relationships?

Orbit Accountants: I think technology should make space for more meaningful human interaction, not replace it. AI can analyze data, draft variance notes, or point out trends, but it can’t replicate the intuition or empathy that makes advisory valuable. Every client conversation ends with clear next steps, not a flood of dashboards. By letting technology handle the repetitive parts, we free up time to actually listen, interpret, and guide. That’s where real trust and long-term relationships are built, in those human moments.

Andrew: As AI becomes more commonplace in the industry, do you expect we’ll see a proportionate increase in the demand for strategic advisory services as a result?

Orbit Accountants: Absolutely, and I think we’re already seeing it happen. As automation takes care of compliance and reporting, clients still need someone to make sense of what the numbers mean. They’re coming to us earlier, looking for perspective on pricing, cash flow, and strategic decisions. In a world where AI can generate endless insights, the true value lies in knowing which ones actually matter. That’s where human advisory steps in, turning information into direction. So yes, I believe demand for strategic, human-driven guidance will only continue to grow.

Andrew: Looking to the future, what do you anticipate will be the biggest shift for most practices in the next year? In the next five years?

Orbit Accountants: Over the next year, I suppose we’ll see firms move from experimenting with AI to governing it more seriously, setting data policies, reviewing vendors, and tightening internal controls. Month-end closes will get faster as automation matures, and advisory will become more structured and outcome-focused. 

Looking five years ahead, I think the shift will be even more significant. Real-time accounting, continuous forecasting, and explainable automation will become the norm. The firms that thrive will feel less like compliance providers and more like intelligence partners, blending financial insight, data literacy, and human perspective into one cohesive service. That’s exactly the direction we’re building toward at Orbit.

The new standard for Canadian firms

Sophie’s insights mirror the broader trends we uncovered in our 2025 State of the Industry Report. The industry is moving past the "hype" phase of AI and into a period of strategic application, where technology is directly fueling growth. 

The data supports the Orbit approach: 80% of Canadian practices are optimistic about their future, coming off a year where 76% saw an increase in profits. This growth is being driven by firms that—like Orbit—are pairing technology with human insight. In fact, advisory services are now offered by 87% of Canadian practices, pulling ahead of tax services as a primary offering. 

The takeaway for accountants is clear: AI isn't here to replace advisors; it's here to elevate them. As Sophie noted, the firms that succeed will be those that transition from compliance providers to intelligence partners. By leveraging AI to handle the data heavy-lifting, accountants can focus on what clients value most—strategic guidance that helps their businesses thrive.

Andrew Kanzer is Managing Director of North America, Xero. Author photo courtesy Xero. Title image: Stock photo ID:1404061030. Read Xero's Canadian 2025 State of the Industry Report.