If the software doesn't automate your work, should you have to pay for it?

[00:00:00] Hello and welcome to another episode of the Digi-Tools In Accrual World podcast, brought to you of course by us, the Digital Disruptors. And we've got the full crew here for a change, which is very exciting. After we've been mixing it up with some of our guest presenters and stuff, it's the OG back together. So I'm delighted to be joined by Indi Ryan and we've been having a little bit of a fun chat, a remnant about our old school days and the kind of TV that we were watching back then. But before we go into that, let's just have a quick look at what we're going to be covering today. So we've got some updates from QuickBooks, quite a few updates actually.

[00:00:30] So it's a change from the usual kind of zero and free agent stuff that we seem to have been banging on about quite a lot recently. Also some quick updates in terms of like product releases from Active Work Papers. At WorkGuru we've got some new inciting stuff as well coming out. And then inevitably there's probably going to be some AI chat because of course you can't go through a podcast episode now without talking about AI. So there you go. Ryan, how about you tell me? How are things?

[00:00:54] I mean, we haven't spoken properly for a while and I know you've been super busy, but as we were having a little bit of fun before we were talking and reminiscing about, you know, little mice on the moon and the magic roundabout and God knows what else. So it was a eclectic mix of updates that we were going through, wasn't it? Yeah, I've definitely reached the age where when I catch up with people, it's, you know, reminiscing about the past. The good old days. The good old days.

[00:01:18] Because once you have children and you run a business, that feels like that just consumes your life and not your enjoyment was what happened before all of this. But no, I've been super busy to be honest. We've been taking on and hiring new people, taking on some big projects and it just means that I've had my head down and grinding. But as well as that, we've been planning for some exciting stuff for the digital disruptors as well. Why are you too smirking? I don't understand why are you too smirking?

[00:01:47] I'm just wondering, have you taken up twerking as well as grinding? All kinds of erotic dance. Right, indeed. Let's see if we can bring this back to normal. How are things? Yeah, much better in my world. No need for any kind of exotic dancing business as usual, really. No, it's very good. I think, you know, the world is sort of opening its doors again to events. And I think we're going into that season now.

[00:02:13] I went to a really good event held at the Arsenal Stadium. And it was with the Hello AI Collective. And there was some interesting talks there. Definitely, you know, we're seeing that there's an appetite for people to explore a bit more where it comes to how they can implement and how they can actually get started on the first meaningful steps, moving from a frontier model to a local model.

[00:02:41] And I think that's really important to then see, you know, we're all kind of learning. We're all trying to figure out, you know, where we fit in this space. So, again, we've seen a few hackathons that are now being advertised and then coming down the track. We've also got Dan and Dan Cockerton and his crew holding something that's a little bit of a hackathon with a few others. You know, Lovable, I think, are sponsoring it. And then we've got our plans as well coming down the track later in the year. So I'm very, very excited for what's to come.

[00:03:10] Well, shall we do some news? Shall we? Yeah. Probably should. Are you struggling to attract the right talent? Are you needing to shift the busy work? Are you finding you don't have time to speak to clients? Trusted for over 20 years, the advanced track outsourcing model provides immediate access to accounting and tax experts who understand your local regulations and seamlessly integrate into your team.

[00:03:35] Digital transformation, robust security measures, top tier talent, no recruitment fees, no wait time. Focus on what truly matters, growing and improving your business and positively impacting the lives of your clients. Be more than just number crunchers. Be life changers. I should probably kick us off. So I've got something from QuickBooks.

[00:03:59] They've been busy as ever and they have, how would I put this, revitalized their payroll products. They've restructured this and grouped this together. And I know if we go back into the history of QuickBooks payroll, they had their own system and then they white labeled an employment hero system for a while. And while the key payroll engine, which I'm not sure if everyone was aware of. And they were kind of running parallel. But I believe what they've got now is their own again. Not certain.

[00:04:27] So if anyone, I guess, understands differently, please do write in and correct me. But yes, they have released core, premium and elite plans. And essentially core is for those very simple payrolls where you've got now that automation you can do for directors and small teams. So if you've got salaries, nothing's really changing. You can automate processing that payroll. Premium adds on time tracking and brings in a lot of self-serve tools.

[00:04:50] And then elite is that essentially complete payroll solution looking at bringing in interacting project and project profitability. And also geo-fencing. So they'll be able to tag when people are in certain locations and automatically correct those timesheets off the back of it. So I guess revamped, revitalized their payroll offering and restructured how it's been presented to their clients.

[00:05:15] The one thing that I'm not entirely certain on is how much elite really builds on top of premium. Because I understand from elite that you can allocate against jobs. But then you're talking about project-based collaboration in elite. And I'm not really fully understanding how that much is kind of over the top of just allocating time against jobs in the premium plan. But yeah, the geo-fencing makes sense. If you need that specific functionality, I think most clients and most businesses will only either need the core or the premium options.

[00:05:45] There is a lot of revitalization of payroll in general at the moment. Is that because it's this time of – is this the payroll revitalization time of year? Is this because people are so close to being able to switch around this time of year? So they're all just pulling their – putting a little bit of leg out to show how enticing that payroll offering is. I just feel like I'm hearing much more around payroll at the moment. That's my only observation. I'd say it's probably not the best time of year for that, to be honest.

[00:06:14] Because people normally want to have been on a new payroll package before you get to April. So releasing things in April, you're potentially deferring that decision until much later on in the year. That said, I don't think there's a bad time to bring out new releases, especially if it does take the product forward. I know nowadays it's a lot easier to switch mid-year with payroll systems because of the way that the new payroll systems ingest data. There used to be risks of incorrect data being sent to HMRC.

[00:06:42] That risk has reduced as long as obviously you're going through and being methodical in the way you transition. Yeah, I'm excited, I guess, about what they're doing. And the other reason I'm excited about this is, as you say, once one product starts revamping payroll, the other one kind of has to react and it just elevates everything in the marketplace. So I'm excited to see what else kind of evolves over time. Interesting. I've got something also from QuickBooks and it is they're introducing an Intuit Intelligence Chat Plus.

[00:07:13] What a catchy name. It's a new conversational experience built directly into QuickBooks. It's designed to change how you understand, manage and act on business performance. So instant answers, you can ask any business question from how do I turn leads into sales to what's my projected profitability and get data backed answers and customized recommendations. Again, data backed answers is this.

[00:07:39] Again, I assume this is data, your data rather than just generic data and customized recommendations. Take with a pinch of salt because I'm sure that there's not some, you know, expert salesperson that then has come in and thought of the best strategies for depending on which sector. So there's some strategic brainstorming, great for if you're a small business, you can use it as a sounding board. You can have some growth strategies grounded in your actual business data.

[00:08:07] I think of people like way back when my dad, when he was setting up a business the first time, you feel quite lonely and actually you don't know what you're doing. This is this would have been invaluable for people of that generation. So I think that it will still have some good, good, meaningful insights to deliver to small business owners today. They're going to roll it out in phases.

[00:08:27] So they will expand how automation insights and expert guidance work together to help businesses operate more efficiently and stay competitive, competitive in this space. Is this an extension of some of the stuff that Heather was talking about with Xero and obviously some of the concerns arising from Jack's and Xero's kind of semi-pivot towards offering advice and then pivoting back away because obviously they scared a lot of the accounting segment. Is this the same kind of thing? Potentially.

[00:08:55] I think that this is something that, you know, they're going to, it's a start, but haven't QuickBooks always just been a little bit different and always try to then market directly to the business anyway? So is it really different from a QuickBooks strategy? I know Xero has always tried to play it as we're your friend. We're your friend. Accountants, we are the accountant's friend. You guys are our friend. We have an ecosystem. We have an ecosystem.

[00:09:20] And actually now we've changed and now we have an operating system and you are an operator of that system now. But QuickBooks has always just sort of said, hey guys, we might go and eat your breakfast. You know what? Yeah. We might damn well close down the canteen as well while we're at it. So basically what you're saying is, you know, that QuickBooks are like the normal sharks in the water that we'll see and Xero are kind of like the fish are friend sharks out of like, you know, finding Nemo. Yes. Okay.

[00:09:49] No, I'm joking. I think that in the end, you know, we're in a really pivotal moment. And do I think that every business needs to be defensible in its forward strategy? Yes. And Xero is no different from that. But I think that, yes, what I am saying is QuickBooks has always been much more overt about its plans and its strategy. And it's in other countries has, you know, pretty much, I think in America there was a big campaign, wasn't there, where it said like the accountants are dead or something for a while.

[00:10:17] I can't remember which of their intuitive softwares that they did. It was a Quicken or something. Anyway, you know, we've seen it in other jurisdictions is what I'm saying. So do I, is it a surprise? No. Are they, you know, will it work straight away? Probably not. Is it going to be the best advice on day dot that then means that you don't need an accountant anymore? Absolutely not. Come on. You know, we've got a few years. Yeah.

[00:10:42] I think the only difference from QuickBooks to a Xero side is because the Intuit platform has now embedded MailChimp and QuickBooks Online together. It's much more heavily focused on sales and the data that you can get from the sales cycle where Xero, you've not got that data to pull from. So you'd think it'd be more reliable on that side and more insightful on that element. Actually, you're right on the MailChimp side. I missed that. That's a very good point. You know, the question is when they're going to acquire, do they already have some sort of CRM based tool, do you think?

[00:11:12] They have links, don't they? But I don't think they've got a proper CRM. No. That's an opportunity. Someone build a CRM just for QuickBooks clients and you make a fortune and they'll acquire you. Well, they probably have in their ecosystem. But all I would say is their Intuit acquisition strategy has generally been pretty good. And they would only go and acquire something if they could see a very profitable long-term gain. I mean, the MailChimp thing, everyone was like, well, that was out of left field.

[00:11:41] But actually, so much of what they've done since then has been about bringing those two products together. And obviously, they had that strategy when they went after acquisition because it was a big amount of money they paid for MailChimp back then. Yeah. Who'd have thought it? You know, a general ledger system with an acquisition strategy that seems to be paying off. I mean, they must be the only ones in the market, right? Anyway, one quick last update from QuickBooks as well on what they're doing.

[00:12:06] So they've now just introduced autosave, which I was a bit surprised about seeing this news because I kind of thought it was already in there. And, you know, I think this is really just an extension of the ability to kind of save your work as you go along, whereas this is kind of just it is doing good. Like it says on the tin, it's autosaving. And this has been launched into invoices and estimates at the moment. We'll shortly then come into projects, journal entries and general transactions and some more of the functionality. But you'll have seen this in other products.

[00:12:34] You know, this is where you're in the middle of doing something on one screen. You might then try and potentially navigate away through the menu or pressing the back button. And you'll just get a little pop-up warning saying, hey, you know, you're in the middle of a piece of work. You haven't saved it. Are you sure you want to navigate away? So that's basically what they're building in, which is, you know, nice little catch all just to make sure you don't lose something. Is that right then that they're actually building in that alert? Because if we compare it to zeros, it just saves as you go and you don't need that alert because it's doing it in real time.

[00:13:00] And that was what I assumed QuickBooks would do is just kind of react to the zero. Well, that's what I thought was surprising. But yeah, I mean, this is essentially what they've built. And I mean, like I say, it is present in other products, other apps. So maybe just a different way of achieving the same goal, maybe. I guess so. I'm not sure I'd class that as autosave though. Maybe prompt, but yeah, whatever. Well, moving away from QuickBooks, I've got something on WorkGuru.

[00:13:28] Now, it's not, I guess, a product we talk about a lot. But WorkGuru is in that kind of trade sector and has been, although very much a Australia and New Zealand focused product, it's been in the UK for a while. And they have released two brand new hubs. I wasn't entirely sure what hub meant in this initial case. But what they're focusing on is AI-assisted selling. Obviously, you need AI in the term. And percentage-based pricing for focus. But they've also rolled out a full new visual refresh of the product.

[00:13:58] So what I love is they had a little tagline with this. You know, a lot of the marketing, I just kind of glance over. It doesn't get me. But I like where it said, whether you're chasing leads, monitoring project delivery risk, or just want your dashboards to look great. I thought, yep, it's got me. I'm hooked. So let's dive into some of the detail of what they're actually doing. The sales hub is essentially what they define as a new selling command center. You can see your entire pipeline at a glance. It's kind of focusing on now activity-driven selling.

[00:14:26] So looking at your lots of calls, emails, meetings, site visits against each lead. So it's really enhancing and turning, I guess, this fully into that CRM from a sales perspective. And you can easily flip between your activities and your team to expand and look across, I guess, the wider remit of everything that's going on. And you can also, right at the top, look at highlights of what's going on across quotes, drafts, and expected close value.

[00:14:50] So it's bringing in that, what I guess we talk a lot about, if you've got a hub, bring in that key data at the top that you want to see. As it is AI-powered, you have to have an AI element. And they've brought in AI-drafted emails, which I still haven't really used. I still like to write stuff myself, but maybe it's something that other people use and find a lot of power in. But the other thing they've got is the ability to have sales recommendation settings. So configuring exactly what you want to do and how you want to follow that up. So it triggers that if we send a quote, what do we do?

[00:15:20] When do we want to follow up and when do we want to chase anything that has been quoted and not necessarily won? You can add key account management into it now. So you're, once again, building out who's focusing on what and who should be, I guess, divide and conquer within your team on how you are searching for work. And then moving, I guess, away from the sales hub into the operations hub, as they call it. It's all about that delivery. So looking at snapshots of where you are at any given time.

[00:15:50] And so highlighting, I guess, risk of maybe failure if you're not moving jobs along at the speed they're supposed to do, is anything late or approaching due dates. And it's color coded as well, which is what you want to be seeing and the ability to kind of tailor that and edit that through your needs. So, yeah, that's kind of the main focuses that they brought in. They've got some tweaks to handling surcharges and discounts, which isn't, I guess, that shiny thing, but is a key element if you're focusing on the sales element and enhancing that.

[00:16:18] But the final bit is, yeah, bringing in that ability to customize your branding. So bringing your color themes, but also have dark mode, which I'm surprised it didn't have at this point because virtually everything has dark mode nowadays, doesn't it? Absolutely. Weirdly, just a random aside, right? But dark mode is very good for ESG, right? Because it doesn't burn through quite as much energy when you're looking at stuff. Oh, no. Never consider that. Little tidbit from John there. Little tidbit. I can't believe I'm so often. It's a miracle.

[00:16:47] I do wonder, though, have you become our AI Luddite on the show, given your position on all of these things? Are you going to start bashing computers and going into data centers and start hammering away at servers and stuff? Well, yeah, I mean, that's a bit aggressive. I can be a Luddite and not use it, not necessarily go and destroy everything for everything else. But no, I mean, I use AI in many different ways. We have an embedded AI note taker across all our team at Digital Transformers, and we use that very heavily.

[00:17:17] We use AI to draft reports and to do data cleansing. I just find the email side is just not something I love. A spotlight. That's why your emails are so boring. Cheers, mate. Well, I think I bring passion and energy. But yeah, fair enough. I think it's good that you don't use it in your emails because actually you need to make sure that you're kind of, you know, you're understanding. I think that's the personal part, right? Yeah, yeah. The core part of the equation now is that communication between the greasing, the soft skills. You know about that, John. Greasing.

[00:17:46] I do focus on the greasing, especially when I'm going back to that pole exercising that we were talking about. Oh, yeah. You don't want to grease the pole. Makes it harder. It's a challenge, mate. That was a challenge. So many comments I can make right now. Anyway, let's move on to Active Work Papers who have launched an absolute bucket load of updates and things. So I try and rattle through these as quickly as possible because there's so much in here. And this was in the early April release a couple of weeks ago from when we were recording.

[00:18:14] But all right there in the product right now for you to use. So they have added the functionality. And I'm going to have to keep referring to my notes because there is so much going on here. But they have added the functionality to import journals into kind of like one centralized place. So it's really easy to review as you're kind of going through that work papers process. Because typically for anyone doing this, you'd start with a trial balance and maybe start to make some incremental adjustments. Different work paper solutions take a slightly different approach to this.

[00:18:40] But effectively actively decided to kind of bundle this into one central review hub so that you can then see everything that's going on before it's kind of posted. Or even if it has been adjusted, you can then see what's going on. So it means you're not having to kind of double enter information in two different places. They've added, and I'm going to whinge about this because I really hate this phrase, but they've added something called the binder information sector. And they refer to files as binders. This is such an Americanism for a product that's come out of Australia. And I absolutely hate it.

[00:19:09] I'm really sorry, Active. But like the referencing of binder, it's like, it's so like 1980. It's like, Jesus Christ. You know, come on. Anyway, the purpose of the information section that they've added to this is that you can add like knowledge place references. You can kind of add a bit of a walkthrough. So as you're in a particular section in the work papers and in the file, not the binder, you can then get a little bit of information about what that workflow process should look like and how you should follow it. So that's what it's there for.

[00:19:36] You have also the ability when it comes to balancing journals and the corrections that you come to at the end of the year to kind of wrap that up into kind of one big master journal, which nets everything off. I guess my feelings on that are a little bit mixed. I kind of like that because it's kind of neat. But I also don't like the fact that you lose some of the granularity of sort of changes, which makes that kind of the audit trail a little bit more challenging potentially to follow. Particularly, I guess this would be more challenging for a firm taking on a client that had been looked after in active work papers and then maybe not being able to see all of the granular detail under all of the adjustments.

[00:20:05] And maybe just being able to understand that. So that's there. And then a really cool little thing that they've added is an opening balance wizard. This isn't Ryan with a pointy hat, but this is designed to help you kind of reconcile those opening balance differences that you might get, particularly as you kind of roll over from one year to the next. I think that's a really cool little function because that can be quite challenging to pick up. You're depending on different accounting systems, tracing kind of your differences between last year's financial statements, opening balances, a bit of a pain.

[00:20:33] And then some other changes, iXbrale stuff. No one looks at iXbrale, so fine, whatever. One day we'll actually be mandated to do this properly. Some changes to the way that you get notifications in the files. And then also just added some additional charts of accounts and some other functionality and the ability to do more in some of the reports in terms of editing and tailoring some of those. And then a whole bunch of bug fixes, which you don't need to worry about. And then finally, on the general platform itself, you've got some bulk changes that you can make now.

[00:21:03] So if you've got a bunch of clients that have become inactive, you lost them or maybe you're not doing the work for whatever reason, you can now just bulk deactivate those, which is, again, just makes life a little bit easier, particularly from an admin perspective. So there you go. That's kind of pretty much everything. There's one or two other things in there, but I'm not going to labor the point too much because you'll see these in the product and you can find them on the blog. What I took from that update is wizards, binders. It's very, you know, it's of its time, isn't it?

[00:21:32] I think like 90s, like you said, 90s-esque vibe. I feel like that's quite fashionable these days. I wonder if it's even older. Do you not think it's even older? I was listening to a podcast the other day and it was talking about the whole kickback against Dungeons & Dragons in like the late 70s and early 80s and how terrible that was. For anyone that's watched Stranger Things, you'll have seen elements of that, right? Because I think it's in season four or season five where they have like a big kickoff about D&D.

[00:22:00] So yeah, it feels like really retro. And like we had something in the, you know, in Orion's bit as well. And I was like, when he was talking about the command and control center, all that made me think of like was Red Alert, you know, that old game. I was like, oh man. Well, this is such a reminiscing episode, isn't it? We're talking about everything from the past. Yeah, starting with the old school TV episode, kids TV, which didn't really go into your favorite kids TV show.

[00:22:26] But by the way through to now, like the binders, the wizards, some sort of weird geeky red alert thing that you guys are talking about. Those school people never really had to listen to. The school people played that game. That's the thing. It was a game. Not a listen. Right. Maybe we need to move into something more modern or futuristic. I have got something more modern. I've got something that's going to sober us back up.

[00:22:51] So tax systems, boy, tax systems goes after the hardest problem in AI, cross-border tax. They've not tried to roll out some other generic chat bot or, you know, their AI assistant here, which has been built by LockTax. LockTax is a business they acquired. Focus specific, focuses specifically on cross-border tax intelligence across 220 jurisdictions.

[00:23:18] So it's a very different proposition to the usual AI for accountants narrative. And what's interesting is, if I remember rightly, let me just reference. So they are the AI assistant they've used draws on verified legislative content from the IB, a nonprofit organization with 90 years of expertise and more than 1,000 researchers and authors. It's the gold standard for international tax launch.

[00:23:44] The reason I want to just pick that out is because in most kind of like AI things that we've seen, we've always said you've got to have things like the data. You've got to have the context layer and the expertise. And that's what they've done is, you know, they're talking here about drafting tax memos, analyzing contracts, validating, structuring decisions, and using that verified content layer from the International Bureau of Fiscal Documentation.

[00:24:11] Say that very quickly is like a load of wasabi peas in your mouth. But that is key because the biggest problem with AI isn't AI in tax, isn't the speed, it's the trust. And it's being sure that we've got that trusted information. So cross-border tax has always been one of the most expensive, time-heavy areas in finance, where you've got multiple jurisdictions, you've got constant rule changes within those jurisdictions, and you've got huge risk exposure if you get it wrong.

[00:24:38] So if you can genuinely reduce research time, then this is meaningful. And they are quoting up to five hours per user per week in terms of time saving. So again, really helping with, you know, the context, the interpretation and the liability aspects. But, yeah, we've got to wait and see how this kind of comes through the wash.

[00:25:02] I think the final take on that is what it shows is that, you know, AI actually has some huge legs here in this accounting tax space, not in generic general advice, which we speak about with some of the stuff that, you know, with all the other AI chatbots or directions that people could take. But in this domain-specific, data-rich, high-trust, high-risk environment,

[00:25:29] where you're combining the proprietary data, the verified context and the workflow integration, I think they've got something really defensible here. What do you think? Can I ask a nerdy question? When they talk about cross-border taxation, what are they talking about there? Are they talking about transfer pricing? Are they talking about international sales taxes? Are they talking about Pillar 2 stuff? I mean, there's so many things that kind of come into, you know, cross-border taxation.

[00:25:57] This isn't the first kind of AI-powered research product. You know, we've got things like Blue Jay out there and a few others. But, yeah, so I'm just interested in, like, what particular issue are they trying to fix here? Because I guess tax systems is a really interesting product, right? Because this is the old alpha tax guys. You know, they have a very mixed customer base. You know, they typically go after the larger accounting practices because they've got a very specialist product. But they also do go direct to business where they are typically serving, like, multinational entities, for example.

[00:26:27] They don't go into which, you know, in specifics. They say a range of tasks. So drafting, reviewing text memos, analyzing contracts and documents, exploring structuring scenarios, and validating existing advice.

[00:26:41] So it could be that you are almost adding to that and that layer that maybe you need to have some sort of validation for your already, the thinking that you have already put into that, has some sort of, like, context to say, you know, where most of the time we know AI is going to say, yes, you're right. Maybe this is going to give you a, it's got something behind it that actually says, yes, you're right or no, you're wrong.

[00:27:10] I think the big question with a lot of these products, you know, see this in the US in particular, you know, where people are using these kind of products to help with the research is that, you know, those firms generally are still offering hourly-based billing, right, for the work. So, you know, I need to do some tax research. It takes 10 hours. I charge you 10 times whatever my hourly rate is. And all of a sudden I get one of these products and like you say, it says five hours or more. That hourly rate, that hourly charge is completely diminished or the ability to do that effectively is diminished.

[00:27:40] And firms in the US in particular are genuinely struggling with that. I guess the challenge more broadly for maybe in a country like the UK where firms don't generally do tax advice wrapped around hours spent all that much. I mean, it does depend. We're more in kind of fixed fee. Maybe you could argue elements of value pricing. I guess the challenge there then is like, how do you make sure that we maintain a level of value in that relationship without having a race to the bottom and turning this into a commodity?

[00:28:07] Because that's the perceived challenge for me as I see is you bring more of these products in, it becomes much more accessible. It's much quicker. It's much easier to do. And so without the firm or the practice or the tax specialist being able to create and articulate value in that relationship, which let's be perfectly frank, we're not always very good at. You end up with a race to the bottom as a consequence. I think early on, Parv, it's going to be the ability to ask the right question at the right time in the right way.

[00:28:35] Because you can ask something and it's not necessarily going to give you the answer if you've not asked it or given it the correct prompts, right? So you're not validating exactly or the breadth or all of the possible things that can have an impact. And I think that's where our experience still kicks in is that, yes, we can use these tools to speed up how we deliver, but it's also a pricing element. I agree with you. If you go back a while, in the UK, we still did it on hours.

[00:28:59] It's only been over the last decade at the most that we've kind of transitioned into fixed price and value price ways of charging our clients. And I think that if we're already there, we're able to deliver more.

[00:29:12] And maybe, yes, we might want to reduce our fees in certain areas, but I don't think everyone's going to do it because we're also seeing that general trend of, you know, as PE-backed accounting firms grow, fees going up, which is elevating value or at least, you know, potential profitability in a business. So I'm not certain. I'm not sure we're going to see a race to the bottom at this point. I think it'll take a while if any, if you happen to talk to get there. Okay.

[00:29:37] So moving on from that then, I have an interesting sort of aside here where there is an influencer. Let's call him an influencer. I'm not really sure exactly his background, but there's a guy that I think Indy picked up on LinkedIn called Darrell Orr, based over in Singapore, who's been doing a whole bunch of research and work around the utilization of AI and where it can and can't be used in practice.

[00:30:02] And he put a video out there showing how he was able to use Claude to teach a group of people how to basically produce a set of financial statements. And he's got a five-minute video that's out there if you find him. Maybe we'll put the link in the show notes and stuff, which shows what he was doing, how he's going to work his way through this and stuff. But I've seen a few of these. You know, there's a few of these knocking about. It's very, very similar in their output. I must admit, I haven't done any sort of due diligence over these to see how reliable, how accurate they are.

[00:30:30] I know from my own personal experience, if you're trying to use a large language model, not to create financial statements, but to validate financial statements and make sure that all of the right things are included. You know, as a standalone product, very, very difficult to do because you start to lose context very, very quickly without putting some guardrails around it. And there have been some improvements since I did that experiment. So maybe this is more robust.

[00:30:51] But I think, you know, this again, for me, it's not really a demonstration of the challenges that we're potentially going to face, but it's really more of a demonstration of if you can kind of think it at the moment, you can almost try it and do it with AI. And then really, it's a matter of being willing to continue to experiment to kind of iterate and refine these things. Does Daryl have kind of like the secret sauce to this? Absolutely not, because pretty much any accountant can do this. Does he have a robust kind of process and a defensible position on this? Absolutely not. No, either. He's just a few steps ahead of some of us.

[00:31:21] I think the other thing here is like, how would you go about systemizing this? You know, if you're thinking about what you do with your current set of systems and products and everything else that you're doing, there's a range of potential inputs that come into producing a set of financial statements. And again, depending on the complexity, because here in the UK, we've got everything from FRS 105 all the way up to IFRS, you know, a real broad range of things. And that's before you get into specialist areas as well. But I do think, you know, we will start to see more and more of this.

[00:31:50] And the question for me really is in the long term is like, are we going to be using a large language model to kind of basically create these things? Or are we going to be using the capabilities of a large language model tied into kind of some kind of agentic experience to operate the tools that do this for us such that we're kind of coordinating them to get the output rather than us kind of having some kind of conversational input into, hey, I want to produce a set of accounts. This is what I expect, you know, here's the inputs, blah, blah, blah, here's the outputs, and then I can moderate it. Yeah.

[00:32:18] What I do is compare this to a similar post I saw on LinkedIn, but based on tax returns in the US where they went, I think QuickBooks or TurboTax is dead. I've just created my tax return fully using AI and submitted it across to the tax authorization. But as someone pointed out in the comments, if you scroll right down to the bottom of his giant article where he said how he's done this, he then said, but I did have to submit it via paper.

[00:32:44] I was like, well, it kind of, you know, detracts a bit from the whole we've become digitized because there was limitations in what the AI could achieve, right? It could fit in a paper form essentially or, you know, so you print it, but then you have to send it in. You have to wait longer for it to actually be uploaded. You've then got the thing if there is any problems that's going to come back to you later and you can't go back to your accountant or tax advisor to support you on that. I think, yeah, great, you can do this. We can do this.

[00:33:13] People in the UK have been able to create their own account strategies. You can do that on Word if you really want to, but yeah, we can do it more faster. And probably slightly more accurately with AI. I'm not sure that that still creates trust around is it going to be right for anyone. That's the main thing, right? Well, I'll move on to something a little bit different, which is Satinia have launched a system called VADER. This is not Darth Vader, just VADER. We don't know if it's using the force, but we are going to assume it is not evil.

[00:33:42] This is an AI operations engine for service enterprises. So I guess what we refer to a lot of time now is PSA. Professional services automation over in the UK. And it's built to sit alongside the other products, which is focusing on professional services, customer success and financial management, all based in the cloud. So what is this operations engine? Well, essentially, it is focusing on a couple of areas.

[00:34:11] One is on assisting resource managers. So it automates staffing analysis, benchmarking, and then work reallocation. So looking at capacity planning and how you do that a lot more effectively. So how do we become a lot more productive or how do we better utilize our teams, which is obviously very critical in service-based industries? It's also aimed at assisting project managers.

[00:34:35] So providing on-demand summaries across all project financials, staffing levels, risks, deliverables, and where they are to eliminate, I guess, that administrative overhead where people are doing that on a regular cadence. And they state that this can return up to 20 hours per month, which is quite significant. And it's also there to assist customer success teams.

[00:34:54] So it automates that time-intensive workflow around success planning, like account and activity summaries, doing that kind of business review preparation and creating a tailored playbook specifically for the work with that client. And I think that's quite unique in the way that's operating. This is aimed at enterprise level. So this is aimed at kind of that small professional services business. And so I'm assuming it's not necessarily going to be cheap.

[00:35:19] They've got no announcement on pricing on this, but they do state that they are focusing very heavily on return on investment. So delivering that, I guess, the efficiency savings that will overcome any price that comes with this utilization of their new VEDA tool. And I'm just going to point out for anyone who is going to look this up, it's VEDA spelt the way that you would associate with the ancient Sanskrit roots.

[00:35:49] It's a collection of Hinduism, not Darth Vader. So it's more about, you know, the collections of VEDA that are the original texts of Hinduism, VEDA. Just as a correction. I mean, given that Ryan is our mangler of language, I was going to question whether it was VEDA or VEDA. I pronounce it's VEDA, but I understand if others would pronounce it VEDA.

[00:36:16] Again, if it was VEDA, it doesn't have a double E. Just think of Hinduism. VEDA. But it's not as funny. We're multicultural here. Well, sorry. Sorry that Hinduism is not funny to you, Brian. Well, in this context, it isn't. I'm bringing the force. There's no difference of lightsabers, is there, in the Holy Boy. Yeah, I know. Come on. We're reminiscing here. Yeah, true. Lightsabers. No Ewoks and the... This is our retro episode. I get you, okay? Yeah, yeah, yeah.

[00:36:45] I've got nothing retro about my next story. So it's all about digits. And actually, again, I'm driving us back to the future, baby. Which is retro. Yes, retro. Digits flips the SaaS model. So they're saying no automation, no fee. So it's a bit of a bold move. It's a pricing shift. We saw a similar outcome-based pricing model in Unleashed that was launched earlier this year.

[00:37:12] But in simple terms, Digits is saying that if AI doesn't do the work, you don't need to pay. So they're charging firms only when 95% of transactions are fully automated. And that's what they call zero touch. So there's no per seat pricing, no license fees for underperforming clients, and no paying for potential. You're paying for the results.

[00:37:38] And it cuts to the core issue in accounting tech right now, and in particular with AI and technology in general, because, you know, there's a lot of claims out there of, you know, the automation and the time savings. But very few are able to prove that. And also we're seeing, like we said, this double subsidy of technology and this worry about, like, how much we're paying for that technology. So what Digits is saying is we'll put the revenue on the line, we'll put the revenue on the line to back that claim. And that's a very different level of confidence.

[00:38:08] So it's a signal of, I guess, where we've seen pricing will move towards. So seat-based, moving away from that seat-based pricing model to usage-based pricing and now to outcome-based pricing. And software then becomes a bit more of a worker. But again, I think that it only works if the automation is genuinely reliable. If not, then this could be a huge problem for their revenue model. So they must really back themselves on this because if it's below that 95% threshold, then the revenue will disappear.

[00:38:38] Depends what the clause is, right? If it automates 95%, but you have to then edit 85%, is that still ticking the box for them for charging? Well, if you've got to make sure that the data cadence is in the right state in the first place in order for you to get the outcome you want, then you would have had to do that work anyway, arguably. So if it was me and I was in the US and I wanted to use Digits, I'm immediately putting all of my most complex clients on the Digits platform because I can guarantee you that none of them would hit that threshold and I'd never have to pay for them.

[00:39:07] I mean, what I view this is, they're either incredibly confident or desperate. They need to get that kind of growth up. They're like, well, we're not getting the growth at the level we need, so we need to do a kind of crazy pricing strategy to get people on. But we think we can back it. Because if I look at most PE-backed businesses, they want assurance or reassurance of what that growth is like. They love that monthly recurring revenue model because it provides that confidence to their financial backers.

[00:39:36] But they've stripped that completely out of this and they've gone, we are putting all our chips in, right? That's essentially what they're doing. I mean, you can understand that in some respects, right? Because they're basically tying their own consumption because they'll be paying for consumption in the back end to utilization at the front end from a customer perspective.

[00:39:55] But, and I've talked about this before, I think from an accountant point of view, utilization pricing is really tough because it's so difficult to predict what your utilization might look like. Even in a fairly static, your organization or a business where you kind of know what your volumes are going to be, you still don't know if you're going to get unexpected spikes. And I'm sorry to say, but as accountants, we don't like ambiguity. We don't like unexpected shocks. We don't like to not know what things like.

[00:40:24] And so, you know, we do tend to shy away from usage-based pricing. You know, and I know there have been products in the market that have gone down that route. You know, we've had, you know, quoting systems and engagement like systems and stuff that have done this in the past. But the cutoff point for those products when you compare them to some of the other competitors that have a fixed price or a per seat price or a per client price is that you always have this arbitrage between where does my volume pricing then become so expensive for this client because of volume.

[00:40:53] And actually going to a fixed price model is better, more efficient, more effective for me. And then potentially you've got the other way around, haven't you, in terms of like, is a fixed price model too expensive for a low volume utilization, your customer or client? And yeah, I just think it's really tough to manage that. You know, the only reason that I think this works when you're talking about things like LLMs and the utilization of LLMs through an API is at the moment, and Alistair, you referenced this on the previous part, is that the pricing is so low that it's almost irrelevant.

[00:41:21] When you're charging 0.0001 cent or penny or whatever it is per API call, you've got to do a huge amount of volume for that to become like massively relevant. But if that pricing was to change, you know, that's the reason why it's really easy for us to go out and buy ChatGPT or Copilot or Claude and pay $25, $30, $50, $75 a month for it because we know exactly what it's going to cost us.

[00:41:46] You know, whether we use, whether we take that, take it to its full advantage or not, you know, we're comfortable with that price because it's known and it's a known entity. There we go. There wraps another episode of the DigiTools and a Copilot podcast. I hope you enjoyed the content. As always, we really want to hear from you. Any feedback, any advice, any news that we've missed, we'd love to hear from you and know about all about it. And one last final really important thing is we are going to be running our awards again this year. It's going to be wrapped around Countex North in Manchester as has been for the last couple of years.

[00:42:15] So look out for notifications from us around what those award categories are going to be, the dates and everything else. You can start lining up your diaries, thinking about getting some tickets. And if you want to sponsor us or want to get involved with us and support us, we'd love to hear from you as well. So yeah, look forward to another exciting night. And for anyone that doesn't know, we've had feedback to say this is like zero comm 10 years ago when it was like really cool. We're creating something exciting in the community and really bringing people together. And that's what we're all about here with the podcast and the team.