A new study by Xero reveals that more than half (57 per cent) of Aussie small businesses that grew their revenue use AI weekly. While 54 per cent say their business wouldn’t notice if those tools disappeared.

It’s a paradox at the centre of Xero’s new white paper AI for small business: Bridging the gap from inertia to action.

The study surveyed 500 Australian small businesses (out of 1,100 globally) and revealed that many are experimenting with AI, but few are relying on it for the crucial, time-consuming parts of their business.

Angad Soin, Xero’s Managing Director ANZ and Global Chief Strategy Officer, says Aussie business owners who adopt AI are reaping the benefits.

“AI-savvy small businesses are seeing improved revenue growth, but Aussie entrepreneurs are still hesitant to fully embrace the technology,” Soin said. “There is a difference between surface-level confidence and the deep trust needed for critical adoption.”

Time is the real enemy

If there’s one thing Aussie business owners always complain about, it’s time. Xero’s study shows we’re especially strapped when it comes to adopting new tools.

A full 23 per cent of Australian small business respondents say they don’t have time to learn AI. That’s more than double the rate in the UK (11 per cent) and nearly triple that of the US (8 per cent). Meanwhile, major concerns linger: 42 per cent cite data privacy and security as a barrier, and 35 per cent say it’s the accuracy and reliability of AI tools that give them pause.

“The main challenge for Australian small businesses isn’t just adopting technology, it’s finding time,” said Soin. “A gap in trust and, most acutely, a lack of time is holding them back from moving AI from a ‘nice-to-have’ to a critical part of their business.”

AI and growth

While time may be holding some Aussie businesses back, failing to prioritise AI is limiting opportunity. The numbers from Xero reveal a pattern: businesses that use AI weekly are more likely to grow revenue.

Among the Australian small businesses surveyed, those that reported revenue growth used AI weekly at a rate of 57 per cent, compared with about 45 per cent across the board. So, it’s not just how often you use AI, it’s about using it meaningfully.

While over half of business owners are confident (about 56 per cent) in using AI, confidence alone hasn’t turned into effective usage. Many business owners still treat AI like a shiny new gadget rather than a core business tool.

From gimmick to essential

Currently, AI shows up most often in the creative corner of the business: marketing and content. About a quarter of Australian small business owners say they use AI weekly for these tasks.

However, within six months, 31 per cent of businesses plan to expand AI into bookkeeping and accounting. That’s a leap from ‘help me write a caption’ to ‘help me balance the books’.

“The role of accountants and bookkeepers is evolving as small businesses look to move AI from the edge of their business into their core operations,” Soin remarked.
“Becoming the strategic partner who can help them navigate this change and safely integrate AI into their financials will be a critical role.”

It seems the back office might be the next frontier for AI, and for business owners, that means the potential gain is serious.

Two-speed economy

So, while this all seems like good news, there are some issues. If the readiness gap doesn’t shrink, Xero warns that the small business sector might split into two camps: those who adopt AI and accelerate, and those who don’t and fall behind. Soin says businesses don’t need to reinvent the wheel, but they do need to be agile.

“The solution isn’t about adopting every new tool overnight. For time-poor businesses, the easiest way to start is by building new habits and exploring AI within the platforms they already use every day,” Soin said.

How to take advantage of AI

The report delivers some practical advice for business owners wanting to take advantage of AI.

First, adopt an AI mindset. Start by viewing AI not as a far-off dream but as a piece of tech that could help you reclaim time. Next, take action. Pick one process you despise. Maybe it’s expense classification, invoice chasing, or bank reconciliation—and test out an AI tool or automation workflow.

Lastly, Soin advises, don’t do it alone. Lean on your accountant, bookkeeper or financial advisor to help with safe, trusted tools that integrate with what you already use. That way, you should see the biggest transformation with the fewest issues.

Xero’s report shows Aussie business owners have an appetite for AI. They’re curious about what it can do for their business, but most lack the time and trust to adopt it into their day-to-day. Yet the numbers don’t lie. Businesses that use AI regularly are seeing growth. So while some say they’d barely notice if AI tools disappeared, perhaps the bigger question is how long before their business vanishes if they fail to incorporate AI?

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