Multi Entities, Cold Showers (and John’s still gone)

[00:00:00] Probably the biggest opportunity for big wins in the account space. It's a huge challenge to resolve. It is such a different world from when I first went into the world of work. Why is it that there's been such a shift towards multi-entity, intercompany, group? Has it just been something that has had no innovation for so long? You're seeing a lot of businesses now migrate downwards. So I know that, yeah, migrate my accounts have been migrating businesses from NetSuite.

[00:00:29] It's the huge system, down to zero. I'm still in recovery from the Christmas period. Are you doing dry January this year? I have never done dry January. Actually, though I was quite ill on New Year's Eve, I enjoyed staying at a shepherd's hut. Pardon? Down in the Witterings, actually, over the Christmas period. I dipped my feet in the very, very cold West Wittering water. Yeah, this sounds like torture, self-torture. It's only because the shower doesn't run cold in my house. Right, shall we crack on? Let's crack on.

[00:00:58] Tap news. Tap news. Truewind have raised $13 million in Series A funding to enable accountants to harness the full potential of generative AI. Translucent have released extra tracking categories, active work papers released into entity data linking. Shopify is set to depreciate AvaTax for Shopify Plus on April 30th, 2025. Big news here, rights have lodged a new accounts production tool.

[00:01:28] So is this basically BTC to the cloud? Well, that's what I'm trying to find. I think it's quite a good release list. They've already thought it out, but not rushed it. Workflow Max and Airwallets have teamed up to streamline payment processes and improve cash flow management. Hello and welcome back to the DigiTools and the Crawl World podcast, the place to go for all your app news insights and general information for the world of accounting tech.

[00:01:53] I am joined by the wonderful Indy Tatler, but we're missing our other co-host, John Toon, who is still gallivanting around the southern hemisphere, picking up information, insights about tech down south. Hopefully he'll come back with some news or at least a tan. We'll find out. But Indy, how are you doing? Yeah, I'm good. I'm still in recovery from the Christmas period.

[00:02:18] Well, I'm drying myself out over January. Dry January? Drying myself out. God, it was a very liquid year, wasn't it, for me last year? So I did enjoy a tipple too many, I think. So I'm quite happy that January month allows me to just reset and restart. Are you doing dry January this year? No, I'm not. I have never done dry January. I've gone through periods where I don't drink. I just don't pick a month to do it.

[00:02:45] But as well as drinking, Indy, you were very wet because of all those tepid baths you were having as well. So just drying in general, I guess. No, I still, I've switched to, you know, it's only because the shower doesn't run cold in my house. There's a problem with that. So I have switched to just throwing jugs of water at myself, which are cold. That's a new one.

[00:03:09] I enjoyed staying at a shepherd's hut down in the Witterings, actually, over the Christmas period. And I dipped my feet in the very, very cold West Wittering water, which was super nice. But I just couldn't go any further than like the knees into the water. I just, it was bone cold. But yeah, I enjoyed it. I think that we should all try and like make sure that we have a couple of minutes cold showers every single day if you can.

[00:03:39] If you can, if your shower allows you to change your temperature and not mine. So I think that's on my vision board to replace this year and get myself a new bathroom. I'm gifting myself that. And actually, though I was quite ill on New Year's Eve, I spent the entire evening with my daughter vision boarding for 2025. So we've got ourselves some really interesting vision boards for the next year. Have you planned anything on yours, Ryan? I've never done a vision board either.

[00:04:09] These are things, or dipped my feet in, what was it, West Wittering water? Is that right? West Wittering water. Very cold. Really lovely part of the world. It's like such a nice long beach. If you've never been, it's a good walk out to the beach. And then on a sunny, clear day, I think you can see the Isle of Wight from there. So very, very pretty. But it's like one of the most, I think it's an award winning beach. The other good thing about going to West Wittering, if, you know, not that I'm being paid to promote it,

[00:04:39] but there's a sauna that is on the beach. So you can literally book a sauna and then run down to the water, run back as well and get warm again. But it's fully booked. I did try to book myself in, but it's very popular. So you do have to book head. Yeah, this sounds like torture, self-torture. So I might skip that one. But no, I've got lots of plans for 2025, but it doesn't, at the moment at least, involve cold showers.

[00:05:09] Maybe your 2026 New Year's resolution. I think you should set yourself a vision board. It's not, you know, it doesn't take long. Go and grab a load of magazines and just start planning for the next year. It's January. If you haven't already done it, I suggest you do it. Is this a physical board you've created? Yeah, you could, it's a piece of paper and you make it as big as you possibly want.

[00:05:35] And then you stick a load of things on there that mean something to you that you would like to put into your life for the next year. And then put it on the wall in front of you so you can see it every single day and keep yourself, you know, centred on your goals. So it's like the reverse scrapbook. Scrapbooks go backwards. Vision boards go forwards. Same mechanism. Exactly. Cool. Now I understand. If you said reverse scrapbook, I'd totally know where you're going. I don't think anyone would understand that. It's an insight into my mind.

[00:06:05] Right. Should we crack on? Let's crack on. Tap news. Tap news. Speaking of taps, the tap has been opened on True Wind as they have raised $13 million in Series A funding to enable accountants to harness the full potential of generative AI.

[00:06:29] Now, there's not a lot that I could find on True Wind when it comes to this news article in particular. But if you have not come across True Wind, then it is a digital staff accountant that automatically pulls financial information from a company's various data sources like the bank accounts, credit cards, payroll systems, and allows a human to make the final check using machine learning and Gen AI.

[00:06:52] The platform then categorizes the transactions based on the company's historical data according to accounting standards and analyzes the changes in the company's financial statements from period to period. At the end of the month, True Wind generates a report to help the companies close their books and do the show up.

[00:07:12] So, the businesses and founders and accountants that are trusting True Wind at the moment to deliver the solution to speed up the month-end close and deliver better insights. In partnership with their customers, True Wind has developed a holistic solution that absorbs 47% of the month-end close toss and accelerates the close. So, I'm not sure how they quantified that other than maybe looking at the amount of time that someone was spending on doing this.

[00:07:40] And then, again, we don't know how many companies that they've got in their first cohort of this release. But with the new funding, the company aims to expand its accountant community network, scale, and build out a multidisciplinary team, build out the suite. Very, very broad in terms of what they're hoping to cover. It looks like it was a Y Combinator graduate. So, congrats to the guys behind it, Alex Lee and Tennyson and the whole team.

[00:08:08] So, we will, I guess we've seen some of these different AIs on the horizon anyway. And we had a good chat with Ruben just before the end of last year with Briefcase. And then we've also seen David Tuck with Mayday doing quite a lot in this space as well. So, Ryan, what do you think? Is there space for another player to come into the market and then disrupt? But 13 million is not a small amount of cash. So, hopefully enough to make some waves in this model.

[00:08:37] Definitely. So, period end close or year end close is probably the biggest opportunity for big wins in the account space. It's a huge challenge to resolve. And that's why I think a lot of apps have not tried to solve it yet. And I think we probably do need AI to some extent to automate that. So, there is a huge opportunity. It's not easy to do. And because it is, as I guess the pessimists would say, taking the jobs of accountants,

[00:09:06] it's going to have some resistance of trying to convince others in this space, the accountants in this space, to adopt it. So, yeah, I think it's got huge potential if it can make it work. We know of others, as you say, that are developing the solution. And, yeah, good luck to Truewind. They've now got some big financial backing to make it a success. And so, from Truewind, let's move to Translucent. So, Translucent, big power in this market for multiple entities,

[00:09:32] bringing those entities together into a single suite, I guess, for reporting and adjustments. What they have released is extra tracking categories. So, different ways to splice your data. So, you've got the ability to bring in information spliced in Xero, Intra QuickBooks, and Penny Lane. But they've added six more ways of slicing that data. That could be departments, cost centers, projects, whatever you want to do to slice it. If you're looking at mid-tier solutions, this is a big differentiator for those because the more complex businesses really want to get into the granularity

[00:10:02] of how a transaction has been allocated. Now, inside each dimension, there's over 250 options. If you compare that to Xero, they generally say the soft limit is about 100. So, it more than doubles what you can do if you are connecting Xero entities. But you're probably thinking, well, if I'm putting my underlying transactions into the finance system, such as Xero or QuickBooks, how the heck is Translucent going to know where to allocate this? Well, they're brought in rules, essentially.

[00:10:30] So, what you can do is you can train the rule based on supplier, customer, entity, account, whatever that you've got as a marker inside your underlying finance system to say, well, if this supplier is combined with this tracking option with this nominal account, it needs to go to this additional data dimension inside Translucent. If you don't then have that pre-populated, you can then search and filter down

[00:10:55] and then bulk allocate to those dimensions so you can still get your grant team reporting. And as Translucent is focusing critically on reporting, condensing all that information down from multiple different finance ledgers. This is a great add-on, I think, from them. Sounds good. Sounds good. As well as Translucent's release, we've also had a release from Active WorkPapers at the end of 2024. And that is also about intercompany data.

[00:11:24] So, what they've released into their platform is what they call inter-entity data linking, essentially a loan matrix. So, you can allocate across your multiple entities different loans and then it will reference those into a grid-style matrix and you can see via color coding, do these match or do we need to do something about it? Is there a difference that we need to investigate? So, when you're trying to do your end of period reconciliations that you could use a tool such as Mayday or Translucent for, if you're already using Active WorkPapers or need that for end-of-year processing,

[00:11:55] you can now essentially very easily and visually see if you've got differences across your different loan accounts and then drill into them and find those differences and make the adjustments. And alongside that, when you are making those adjustments, you can now push memos back into the source files. So, say it's come from the likes of Xero, et cetera, you can kind of push that memo information back in to accompany the journal information. So, a couple of, I'd say, quite good improvements

[00:12:22] and releases that have come out from Active WorkPapers at the end of 2024. Why is it that there's been such a shift in the focus in the last two years towards multi-entity, intercompany, group? Has it just been something that has been, there's had no innovation for so long and then suddenly there's a splurge of it that needs to take place for it to keep a pace?

[00:12:48] Because looking at something like Translucent and now, you know, the fact that it's based on Xero customers, is it just that, you know, we're seeing that the businesses that are adopting those offers have grown so much and then becoming much more complex in nature and therefore need this type of production service that didn't exist and in the past maybe would have migrated away from Xero? Yeah, essentially that. So, those that needed the additional complexity would have had to have moved up to a mid-tier or even enterprise-level solution.

[00:13:17] But you're seeing a lot of businesses now migrate downwards. So, I know that, yeah, my accounts have been migrating businesses from NetSuite, you know, a huge, huge system down to Xero. So, it shows you that because of that ecosystem, the likes of Xero, QliketsOnline, et cetera, have built around them, you can do a lot more within the platform as long as your transaction volume is not stupidly extensive. But that does create problems. So, it does create challenges if you've got multiple entities and how you consolidate those in.

[00:13:47] And one thing that I guess has followed is that you've got the release of such as Mayday now translucent to fill those voids. But the other thing that's driving it is that more and more businesses are now, I guess, diversifying what they do. And to manage risk across that, it makes sense to create a group structure with multiple entities. That structure, that kind of setup is growing in, I guess, interest and in volume. And so, you're seeing now more structures like that.

[00:14:16] You're seeing businesses that had those structures move downwards into simpler software. So, it's just more opportunity. Hence, why we're seeing more apps in that space. And you're saying that's just, again, a means of removing risk at a corporate level. So, in the past, I barely started to have a holding and then like an operational. But now you're saying holding, operational, maybe one that's then responsible for the IP, another one that might be responsible for like the technology. Yeah, asset management. Asset management.

[00:14:44] And you also slice different operations. So, you might have something that's doing direct to business in one and direct to customer in another. It depends on how the operational slice works. But if you're going into what is probably more risky for you, you might do that in a separate entity as part of the group structure. It is such a different world from when I first went into the world of work because in that world, you did have, to an extent, group structures.

[00:15:12] But you use sub-branding strategies for that instead of like having a whole company assigned to it. But it does feel like, and we are guilty in bankable of it. We have multiple entities, multiple jurisdictions. And it's often the legal component of it, the complexity of the jurisdiction, how it's governed. And I find that challenging. So, I think, yeah, it's just interesting to see that there's a shift towards

[00:15:41] this type of complex structure. Right, moving on. Shopify is set to depreciate AvaTax for Shopify Plus on April 30th, 2025 of this year. Meaning that anyone that's relying on Avalara for tax calculations must switch to the new Avalara for Shopify integration before that date. The new integration is offering direct support from Avalara and includes features like exchange functionality, partial refunds, and calculations for global taxes, including US sales tax and B2B VAT.

[00:16:11] It will also handle exemption certificate management during checkout and allow daily syncing of the product catalog between Shopify and Avalara. So, the current Avalara tax settings can be transitioned into the new integration. But for full details, you can check out the help articles and they've given you some instructions on that. But again, something that you may want to pay attention to if you are a customer of Avalara tax. Yes, definitely.

[00:16:38] I mean, it's, as I guess the platform's built out, it makes sense to build their own. And so, they've pulled them off of the other system. But I've got something where they've released something new. So, Bright, big news here, have launched a new accounts production tool. So, Bright seems to be mostly down, been from acquiring and kind of merging building systems together. But they've now brought in Bright accounts production, which is a standalone, if I can say the word, cloud product. Now, this has been spun out of Surf Accounts,

[00:17:08] which is a brand in Ireland, which effectively did already cater for UK businesses, which relationship with, I guess, some Northern Ireland entities and how it's worked over there. But Bright accounts production will offer templates for sole traders, partnerships, charities, farmers, and then going into credit unions as well. It integrates into Bright's tax products. So, it means that you can do your filing, essentially with IOX viral conversion as well, and e-signing.

[00:17:35] Plus, you can import trial balances from other finance software. So, that doesn't have the direct integrations that you do experience with some tools, but you can import trial balance. I would say that's probably not a benefit at this point. But if you want to keep your bookkeeping inside, I guess, one tool, you can use Bright Books. So, they have released this, and they've released it in a way where it's integrated heavily into other products in the Bright space. I think it's quite a good release of this. They really thought it out. They're not rushed it. It'd be good to get some feedback from actually listeners on it. Are they using,

[00:18:05] or have they started to explore Bright accounts production? Is it something that looks really powerful? Is it something that they would advise others to use? I've not played with it myself yet, but yeah, it's something that I guess is aimed more at those mid to large accounting firms where there's limited options in the cloud space. We've waited for a lot of the big vendors to release something. Bright now has released Bright accounts production. Interesting. Interesting. Is it?

[00:18:35] I mean, is it big news? I suppose they had acquired BTC. How many years ago was that now? Two years at least? Well, they were waiting for some time to move all of that into the cloud. In fact, even from memory, BTC had been working hard to move a lot of their modules to the cloud, but we never saw something. Well, I don't think we saw something released. I know it was one of the reasons that they were locked in.

[00:19:03] The existing management team were locked in and one was exited out. So is this basically the BTC to the cloud? Well, that's what I'm trying to find. Is this just BTC rebranded and restructured? There's absolutely no reference to it in anything that I can see. So, yeah, if anyone knows that, please do write in. Let us know. We want to hear your thoughts on it.

[00:19:30] And it's something that I can't see if they built it from scratch or that they've... I mean, it seems to reference they built it over a surf. So I would assume it's not direct to BTC. Well, there are a lot of BTC customers, which from memory was a customer base where they had a lot of established small practices. So there was not a lot of new age, new accountants that were generally coming into space using BTC,

[00:20:00] but instead they had customers that had been there for like decades. So perhaps, you know, the root of the innovation, it lies on, you know, what they already have and what they already know. But great news for them all the same because it's something that was missing in their stack. Some other big news for small businesses and accountants. Workflow Max and Airwallex have teamed up to streamline payment processes and improve cash flow management.

[00:20:27] Here's how the integration may benefit you. Airwallex payments are processed fairly instantly, which improves the cash flow speeds of invoicing. And you can now add a pay now button directly to your invoices, giving clients multiple payment options like credit cards, Apple Pay and Google Pay, all within Workflow Max. So for accountants, it means automated syncing of payment details, reducing manual reconciliation and saving time in sort of like the processing and the updates, et cetera, of capturing that information.

[00:20:57] So you'll get real-time updates to the financial data, seamlessly flows into the accounting system that you might use like Xero, for example, which should make it a little bit more accurate, efficient, et cetera. And you will have the ability to then look at how the business can handle multiple currencies. So Airwallex has been known to be like, you know, it's international in terms of how it's streamlines payments. This is a great way of them making sure that they can handle complex types of payments

[00:21:26] and manage the fees on it. A pretty good game changer, I think, in terms of how the two are going to work together. Hadn't seen anything else that's similar to like this on that level of like Airwallex and some other platform. But yeah, all right. What do you think? Good one? A good one? Well, what I love is that Airwallex seems to be integrating into everything. They are becoming the payment platform for every other app, really. And I think that's obviously a play they're going down the route of. Makes sense.

[00:21:55] The fact they work across multiple financial jurisdictions. So yeah, I think it's a good one from Airwallex. It'll be interesting to see how good the integration is. They vary across every different platform. So yeah, I think it's a good one. It's just the ability to think in something that's at the like very core of being able to where the customer or the business needs to go and collect. So I think, yeah, I'm quite, it's a deeply embedded finance technology,

[00:22:25] which is what you need. And I think that there's some great synergies with a lot of different accounting techs that are in this space that they've already integrated into. So that brings another Digital Tools and the Cruel World podcast to a close. Thank you for listening. Please do review, rate, and if you've got any thoughts or comments on anything we talked about, write it in. We always like to hear them. Catch you on the next one. You need to hear them You take two careers