Practice management, data privacy and why the Maple Review matters for accountants

[00:00:00] Hello and welcome to another episode of the Digi-Tools In Accrual World podcast brought to you by the Digital Disruptors. Delighted to have Eriona and Lee with me this time around, but before we get to them, just very quick few little bits and pieces. First and foremost, the most important thing, our Disruptor Awards are coming soon. They will be, as usual, the night before Accountex North. The tickets and all the information is going to be available very, very soon, so we'd love to see some of you there attending. And we'd love to get the attendance even higher than last time and really fill out our venue that we've got books and stuff.

[00:00:28] As we've heard before, apparently we're starting an exciting new movement and people have said it's kind of like zero con in the early days. I'm not sure if that means we're kind of like a windy old shed or if it means that we've kind of like got a really cool vibe. But you can take from that what you will, but we are trying to do something a little bit different and celebrate what's going on in our industry because there's lots of amazing, exciting things going on. And on that point, we've got some great discussions about practice management and some of the challenges and opportunities that we're seeing in the marketplace.

[00:00:57] Inevitably, some conversations and issues around data and AI and kind of like, how do we feel about this? And where are we going in terms of like your control over data? What's being used in these models? Who has access to it? Who has access to these models as well? Off the back of some of the recent changes from Claude, which is interesting. And then also, finally, a really insightful review and analysis of the Maple Review that's just come out.

[00:01:20] She's talking about entrepreneurship and some of the challenges that certain entrepreneurs are finding, particularly things that we know about, but challenges for women, disabled people, ethnic minorities, and people that are generally growing up in poverty, about using their entrepreneurial skills to create success for themselves and how they can kind of get out of this cycle of doom and challenge that we find for some of those people. And, of course, we've got the very lovely Ariana.

[00:01:47] So, Ariana, some good stuff to talk about. What else do you think will be really interesting for our listeners to hear about? Thanks so much, John. I'm really looking forward to it. I think there's some great, interesting stories coming. I mean, obviously, we're going to be talking about AI, but different layers of that. You know, how comfortable are we with sharing information with AI? How comfortable are we with possibly allowing it to do things on our behalf? You know, where does this stop? Start or stop, to be honest. So that's going to be really interesting.

[00:02:17] And also, really looking forward to a discussion on a new software for sole traders and how we can interact with our clients with that and kind of where they're going. So, yeah, really exciting discussion. Anything else you want to add, Lee? There's some really interesting stuff going on in the practice tool space. It's becoming a bit of a battleground. And I think we're going to see a bit of a bloodbath potentially over the next year or two as these products sort of spread out with new functions. And obviously, we've got a couple of stories coming up with that. So we might see a few people being edged out.

[00:02:47] But, yeah, really interesting space at the minute. How are you, John? What have you been up to? I'm good, actually. Yeah, I am pretty busy at the moment. I've got some big projects on with work and building up to a big conference in a month's time in July in London for our members, which is going to be exciting. And I came back from a trip to South America in the U.S. a couple of weeks ago as well. So I've been a bit here, there and everywhere, which has been very nice. It's been very exciting. It's been very tiring.

[00:03:16] But, yeah, all good. And nice to start engaging with our members and stuff on a slightly different level than what I experienced when I was on the other side of the fence. So it's good. How about you? Good, yeah. Burying myself in clawed projects at the moment, just making stuff. I'm just having so much fun with that at the minute. Just making these little things. Like I've built myself a little version of Fixer because I don't want to keep paying 50 quid a month for it. And it's just great. Just so much fun to tinker with. Yeah, it's all good. How are you, Eriona? Good, thank you. Good.

[00:03:45] Just been keeping my head down, actually, for the last few weeks, I think. Just getting so much work done. Starting to kind of... Get ready for holidays and just make sure I've got everything done before I go. Because I don't want to take my lap off. I want to be a true, true holiday. But, yeah, you know what? I guess I haven't actually put out that much. I've had quite a lot of engagement, which has been really cool.

[00:04:11] But I haven't been to as many kind of events because I'm usually at every possible event, right? But I've said no to like 90% of things and really only gone to a few that I had to. But just generally, I have to say, I have been keeping my head down. For me. For me, anyway. No, no, not really. It's just been... Well, I guess that's helped in starting to look at, you know, what should I be doing? What shouldn't I be doing? But I've just been so busy. And it gets to the point where I actually need some time to get some work done.

[00:04:42] So, and... It matches your dating game, doesn't it, Ariana? You're a kid of me. Keep them keen. That's what it's all about. It's just been mean at the moment. There's like... That one's keen right now. But, no, it's just been because it's all work. And as you say, as Lee was saying with Claude, doing so much with it because the possibilities are endless. I'm just going down a rabbit hole with so many different things that I could do. But these are all things that only I can really do.

[00:05:10] And once I've got to a point where I'm happy, then I can start introducing the team to it. And they can start playing around with it. But it's almost like I've gone back to the drawing board and really getting stuck in work. Because I have been mostly on that strategic kind of layer for a while. Good. Good focus. It's fun. Actually getting the work done. Nice. Shall we jump into a couple of stories, you think? Let's do it. Hey, everyone.

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[00:06:28] That's www.sweetfiles.com forward slash digital. Awesome sauce. So the first story of this week is that FYI have added some AI features into their products. And I think, correct me if I'm wrong, this is the first bit of AI that they've put in there. And I quite admire their restraint that they've not just gone and said, oh, let's just figure something out. Let's five code something or whatever and just whack it in there to hit the buzzwords.

[00:06:57] And it looks from the release that they've been really, really considered about how they put that in there. And I really like the approach that they've done because they've added the AI around the existing automation. So it's going to reward people that have actually properly adopted the product and have built those automations out already. But it's just like gently sliding that AI in alongside that existing workflow, what people are already doing just to make it easier. Rather than just throwing another AI thing in there. So here's a chatbot. Now you've got to figure out how to use that and where it fits.

[00:07:26] It's really elegant and really subtle how they've put that in there. The other things that popped out from the story is that it's going to work with most of the AI bots. They've gone with Claude first. But it's going to work with others in the future because there's a bit of a merry-go-round about which people think is the best model, right? It's Claude. It's Claude's on top at the minute. But Gemini will come back and I think ChatGPT is in the ascendancy again now. And also it's working on AWS Bedrock as well, which is interesting because it's not really good for privacy. It doesn't retain anything. It's not training the model.

[00:07:55] So firms can be really confident in the data they're putting in there, which I think is really, really crucial. So yeah, really love what they've done on this. Have you seen much on this story? Yeah, I did. Do you know what? I absolutely love FYI. I think it's such a big kind of piece of software. There's so much you can do with it. It takes some time to really embed all of it, like truly all of it. But once it's in there, I think it's amazing. And then obviously that AI layer that everyone is expecting nowadays, right?

[00:08:24] Is it even a good piece of tech if it doesn't mention AI? But obviously these are all, I think, like good shortcuts that will just help speed up the things that can help people be more efficient. But yeah. Yeah, definitely. And the other thing I love a lot about FYI is they take the adoption really seriously. So Ian talks a lot about the change management and those sorts of things, which I think is critical when you're changing these functions inside a firm. It's hard to get that right unless you've got a lot of support. Like Ian must have noticed a lot of stuff on that side of things, John.

[00:08:55] Yeah, I have. And the key thing about a practice management solution, right, is it's kind of like the fundamental core to any accounting business. So if you get that wrong, you're going to have a whole world of pain and problems that you're going to have to deal with. So it is super critical that that change over from one system to another is really well planned, really well organized, and really effective in the outcome at the end of it. So you're right.

[00:09:20] I know that Ian and the rest of the team are all about kind of like that implementation planning phases to make sure that they get it right. And I think it's also good to see from FYI in terms of, you know, they've got lots of noisy neighbors. And I think it's good for them to kind of take it a little bit more slowly with their product releases and their development, you know, to make sure that they get it absolutely nailed down and right. Let's move on then to something else from Xero. So we know that they have pushed a whole bunch of AI into their platform.

[00:09:50] Some of it's been good, some of it's been bad. But probably one of the things that's been super effective for them, at least in the latter stages as they kind of really develop this, has been around the bank reconciliation functionality. And, you know, auto bank rec has been in the product now for, gosh, about three or four months, I think, now in various phases. I know that Ryan's tested it out a fair bit. I've played around with it a little bit. And it's good when it works. It can be a little bit weird and wacky sometimes when you're not quite clear what it's been doing.

[00:10:18] But actually, it is generally quite consistent. It's quite reliable. But one of the things that they've added, which really helps, I think, is when you kind of go through that review process of what's been going on in the bank rec side of things, you can now view, add and delete files and change the account code or tax rate for a transaction in the actual reconciled transaction screen. So it means that you can kind of address any like fundamental mistakes right there. No word on whether or not the AI kind of learns from those corrections and changes that you make. But it'd be really interesting to see if there is a bit of a feedback loop there.

[00:10:47] And I guess this is kind of almost like an embellishment of kind of like finding recode, which is one of the core features that a lot of accountants really like about Xero in itself. There are a few tweaks that they've also made related to bank records. You can have search by reference and payment reference on the account transactions tab. So it just means, again, you can start looking for specific things a little bit easier. That search functionality and the account transactions side was a little bit clunky, probably wasn't used that much.

[00:11:14] And then finally, on the accounting app itself, if you can now upload multiple files using the accounting app. So this is really helpful, whether you're putting it to the actual documents or files area of the app or whether you want to upload stuff specifically into purchase and sales. It means you're not having to kind of like go piecemeal one by one, which is a frustrating user experience. Do you know what I like about this? It's that it doesn't have to be like major introductions. It's just making the products, the bits that are really important, slightly better.

[00:11:43] And it's that incremental kind of improvement that just changes the way it's used completely. I wish all of the softwares would look into that. I have to say there are some other softwares that already had auto bank record a lot of these things already, but not going to mention it. But I do think that this is really, really important because we do get lost in all those like big releases and things like that. And a lot of people complain, yeah, but you're giving me this, but I don't need it.

[00:12:09] So what I need is for you to fix a tiny little thing that will change the way I work completely. So I think it's good that they seem to be listening. I agree. And I think, Karyona, if you look at all of the major products, particularly probably Xero and QuickBooks because they do this better, I think, than most. They're really good at garnering user feedback. And there's pages where as a user, you can go and see and upvote features and functionality that people talked about. But also there is now this long tail because these products have been around for so long.

[00:12:38] There's this long tail of features and functionality that people requested maybe a decade ago, which still haven't been implemented or developed for many different reasons. And we can't explain that away. But you're absolutely right. Your users want to be heard and they want these kind of like small frustrations in a product to be kind of ironed out. So that makes your life a little bit easier. Absolutely.

[00:13:00] Following on, actually, with Xero, I don't know if you guys have noticed there was a story where Xero sent out an email to all of its users saying your Xero numbers are now in Claude. So obviously this scared a lot of people because if you think about what that means, does that mean that Claude now has access to and does it sit inside the ledger, bank balances, payroll, supplier data, customer debt? And so many different things.

[00:13:29] I mean, Xero's official position was that the email tone suggests that Claude integration actually lets users work with Xero data inside Claude. And Xero does share financial data and it's only used for a particular session, not that it trains Claude's models. I don't know if you guys have read Lucy Cohen's Dr. Strange Ledger article. It argued kind of more about where the financial meaning is now being created.

[00:13:57] And her point is that tax outcomes are increasingly shaped upstream. And she frames probabilistic AI as a reasoning layer that may decide whether a transaction is allowable, disallowable, whether it's capital or revenue, whether it's a repair or improvement or something else entirely. So the talking point here is not that Xero is bad and AI is taking our clients, but it's more about kind of what are we looking at with data privacy and data agency, I would say.

[00:14:26] Is Xero using the data to train the model? Although they say no, the information is shared through the integration. I was going to say, Arionia, I think that point around data privacy and data utilization is a key issue. Partly because I guess as accountants, when we're dealing with these ledgers and then an additional product, whether it's Claude or whether it's Chachigatee or any of the other models or even an additional third-party integration,

[00:14:55] there is this continuing question mark about who owns the data because obviously the data technically, in many instances, is client data, even though we probably input a lot of it and manage a lot of it. And then surrounding all that, you've got issues around GDPR, data protection, et cetera, et cetera. And so I think it's a very complicated question to kind of resolve and at the same time then figure out, as an organization,

[00:15:21] if we've got a Claude subscription connecting that to Xero, are we operating with individual subscriptions? Have we got business subscriptions, enterprise subscriptions? What kind of security have we got there? And then what is fundamentally really happening with the data here and stuff? And I think this kind of just unearths a whole bunch of unanswered questions, which none of us are really not particularly clear about. And unfortunately, I don't think Xero had been particularly helpful in kind of answering these questions either.

[00:15:47] I think the other thing that is a little bit scary, so I've been playing around with Claude quite a bit. And I've noticed in a few sessions, it says, can I take control of your computer and I will do everything I need to myself? Which for me was a bit like, whoa, I don't literally want to give you access. So it actually clicks on everything for me. And then it also has a caveat. Anything that's done cannot be unchanged, like, you know, corrected. So it's your own risk.

[00:16:12] Like, will, because I know Xero have said the direction of travel is looking at, you know, turning insights into actions. Will this allow Claude to go in and make changes in Xero potentially? Will it go ahead and give clients directly information which may or may not be accurate? There's just so much here in terms of, like, where does the control sit and where, what can it do? You know, which I think is a little bit scary.

[00:16:38] I love the extra insights right now, but I just don't think it's quite there to be able to start taking on if they're looking at actions, which is what they say they are. What do those actions look like? I think, Ariana, I mean, when you kind of think about where products are going with AR, you know, and we just talked about FYI and the kind of, let's say, relatively cautious approach. But I think it's more of a logical approach to kind of what they're trying to do in terms of implementation.

[00:17:08] You know, I think also that part of this is down to a lack of education in terms of, like, what accountants, bookkeepers understand about AI and these models. You know, the logical steps for most products implementing an LLM connection, whether it's to Claude or to ChatGPT or something else, is to do it through a read-only MTP server. And so what that basically means is that, you know, you can connect your LLM to your accounting system and it can read the data in the same way that you and I can log into any of these products and see that data.

[00:17:36] And if you're like a read-only user, you then can't change that. As you kind of said, though, the next iteration of that is for these models to start to do things. And that means that you've got to be able to write that data. And then there are more fundamental potential risks there, particularly as we know that there was a marketing product in the U.S. who had been using Claude Code to build their product. And then overnight, Claude deleted their entire database and server information.

[00:17:59] And they lost the product and they had to then wait about six to seven days before they recovered the product using old backups, which meant that all of their customers were offline. There was a whole massive problem. Let's continue the AI chat then for a little bit longer. Yeah, we talked about Bright's new AI functionality called OSCAR on a recent episode. And Accounting Web picked up some feedback and stuff on what's going on with OSCAR, how it works and stuff.

[00:18:26] So maybe just a quick recap on what OSCAR is. It's basically Bright pays AI employee onboarding assistant. And they've been releasing it for some early adopters and some beta testing to a few of their customers just to see how it works and just to kind of iron out some of the inevitable creases that you get with these things. And the feedback generally is like, it's pretty good. But of course, there's some mixed things as well. One of the big ones that we got from Mark Francis, who's the director of Francis Bookkeeping Solutions,

[00:18:54] has said basically transform the way that they onboard new employees through Bright Pay. What used to take a week or two chasing employees for missing details now just takes five to 10 minutes, which is pretty staggering. And he says the process is clean, accurate and instant, which is really, really important, obviously. And it's just generally improved their turnaround time and their efficiency. So they're really enjoying that experience from Bright Pay. Lots of other comments basically saying that they're pretty convinced with what they're seeing here. And it's very, very effective and efficient.

[00:19:23] And what is interesting, though, in some of the comments is that clearly some of these early adopters have gone very cautiously into the testing. So they've really just tried it out in the demo companies or they've tried it out with maybe onboarding one or two employees. I guess the real test for this product or anything like this is you want to be able to do this at scale, not just in one payroll, but across multiple payrolls and maybe with a very, very large payroll with maybe like 50 to 100, maybe 1,000 employees,

[00:19:50] something crazy like that, because that would be the real test bed for reliability, accuracy, etc. So it's good to see that this is going out. And it's good to see that firms and organizations and vendors effectively are engaging with this process of your cautious and effective role out of AI, I think. I think this will be great. But if you're looking at a practice which has loads of small clients, so from my perspective, we do around 300 payrolls a month.

[00:20:19] And they're all small clients. Our biggest one probably has 100 staff, but there aren't very many of those. Getting the employees to do this, I think, takes a lot more work because usually it's the business owner because they're a one man band. They may have up to five staff. They do everything themselves. So in those instances, would it be as effective unless the business owner is the one that's actually dealing with the WhatsApp messages and uploading everything,

[00:20:48] which, again, helps to get rid of some paperwork and information that we're sending back and forth with them. But I just worry about how useful this will be for everyone. As a concept, I think it's amazing. It's just you need to get people to use it to make sure that it actually makes a difference, if that makes sense. And for small business owners, I'm not sure how many of them would be willing to just say to their employee, here you go, just deal with it. You provide all the information.

[00:21:15] Even though that's what they say they'd like to, but it's getting rid of that control, right, which they're used to having. Well, it's interesting, right? And I guess also it's a reliability thing as well. No matter what you do, no matter whether you're using AI or automation, the reliability and the outcomes of this are based on the information that goes in. So if the employee is late with the information or they give the wrong bit of information, then the outcome is going to be never to be wrong.

[00:21:44] So to me, the key bits of these processes is really like what are the checks and balances put into the system to make sure that either someone responds on time or if you provide the information that it's validated and it's genuine. I think that's the key thing in many of these things. I think there's an inherent balance to these things, isn't there? Because with employee onboarding and also with accountants onboarding clients as well, there's certain things that you need people to do that they're generally not very good and reliable at doing, like sending you information and ID documents and things like that.

[00:22:14] So what I really admire about what Oscar's trying to do is just lower that bar to just make it as easy as possible for people to do these things, which then means you're a lot more likely to get the compliance and get people to actually do it because you've made it simpler. The offset against that is, of course, security, because then you've got to look at, well, we're making it easier because you can send these things via WhatsApp, but what's the cost of that convenience? So it's an interesting design decision about how they come to this. But it is worth pointing out that this article on Accountant Web is actually written by Bright. It's like it's a sponsored article, right?

[00:22:43] So although it's resoundingly positive, like, of course it would be. But nonetheless, I do admire what they're doing in trying to attack this onboarding problem from a behavioral perspective by making the process easier rather than throwing more tech or training at it. I think that's a good approach. Cool. So next up, we've already talked about a little bit about practice tools. So we've got some more. So Sodium, which we talked about not too long ago on the pod, when it came out in general release, has now released billing.

[00:23:12] And again, as we touched on earlier on, just this sort of march of these tools, just adding more and more and more stuff. There's a really interesting angle to this, though, because obviously software companies need to make money and they're going to spend on things. And so when you move more towards billing and payments, you get more towards the point where you can start monetizing on payment processing and interchange and things like that. And so you look at a sort of reasonably small practice.

[00:23:39] You're looking at about somewhere between 50 to 90 quid a month for Sodium for a practice to run on. But if Sodium are able to click the ticket and, say, get like half a percent of the money that gets charged to clients, they can probably nearly double or maybe add 50 percent or even double their average revenue per customer just from that interchange. And the customer notices no difference. So from a commercial perspective, it's really interesting that they're sort of moving towards billing.

[00:24:07] Now at the moment, they integrate with, I think, GoCardless and Adfin for prices now. But presumably there's some sort of commercial arrangement in the background around that. So it's quite interesting. But the other element to this is just how quickly they've got this out, right? So they've only just gone on general lease and now they're adding more stuff. And I just wonder if there's maybe a strategic plan there just to keep them in the headline, just keep adding more stuff because we know how crowded the space is and you need to get attention somehow. And so just staying in the headlines with new functionality is really interesting.

[00:24:38] And yeah, it looks like a pretty good release. Have either of you two seen anything on this at all? I haven't seen this, but a lot of these features are similar to what's already out there, right? So I kind of agree that, you know, is this just something to keep them in the headlines so everyone knows what they're doing? But yeah, a lot of these things are already in other software. So I don't think there's anything super special. Or is that just me? I love your skepticism, Mariana. I mean, fundamentally, you're right. You know, when you look at broad practice management tools,

[00:25:08] you know, billing is just a natural part of it, right? I guess going back to the point in terms of like, you know, the development cadence that Sodium have got, well, you know, you've obviously got Dwayne who's behind this. You've got tons of experience. We're talking about fine coding, right? This is fundamentally the world we're in now in terms of, you know, the cadence and development speed of any product that's using, you know, whether it's Claude Code or Codex or one of the other products out there to kind of accelerate their development lifecycle.

[00:25:38] This is what we should expect. And, you know, frankly, if we've got vendors that we're partnering with who are not kind of meeting this kind of cadence, then they're not operating as effectively as they should be. And, you know, we talked about some of the frustrations that we had with Xero and some of the other ledgers in terms of their development lifecycle, their speed to get products out there. Well, this is a demonstration that a teeny tiny team with people can roll out functionality almost on a weekly basis.

[00:26:04] And not just, you know, simple functionality, but quite complex functionality and keep it going out there. I think it'd be really interesting. For me, from a Sodium point of view, what I'm interested in seeing is like, where are they trying to position themselves? I don't think it's particularly clear other than probably targeting the lower end of the market at the moment. But that's a very busy space. And that's kind of where every practice management tool historically has started out. Actually, I think the opportunity is at the opposite end of the market. But that probably comes down to experience and awareness of what the challenges are there.

[00:26:35] This is just proof, right, that practice management has not been solved. You know, the fact that we've got another product in the market, all of the other main competition has kind of been snapped up and bought and kind of gone stale. Why is it that in the accounting world, for the 20 odd years that I've been in this space, that we still can't fix this problem? Like there is no single product that's going to manage to win? It makes no sense. I think there's a reason behind that. It's because every single firm runs their practice differently. Even though we all produce the same thing at the end,

[00:27:04] the way that we go about that is very different. So how do you make something which allows everybody to be able to literally do what they want? But at the same time, accountants don't necessarily want to have to go in and code things and kind of make it for themselves. They just want it ready. But then once it's ready, they don't like certain things that are in it. So it's like, what do you do? Will it ever be solved?

[00:27:30] Or is it just going to be a camp of those that just want something out the box and those that are more interested in developing a little bit more and making it really their own and fit their business rather than the other way around? Well, basically, it's the worst kind of customers. I think to extend on that, even within firms, you get different workflows and processes, right? You get into beyond a single partner or sole practitioner. People have different ways of wanting to do things.

[00:28:00] And I just wonder if there's an opportunity here for a sort of new breed of software product, which is kind of like an MCP first. And it's like a Lego set, right? So you go, okay, here's your billing function. Here's this set. Grab what you want. Fix it together in your own way. Pre-set one if you want to. Or otherwise, you can kind of mix and match between things. I think the tech that we've got now, that makes that easy and accessible to do. But it's just whether that works as a commercial model for a software company to want to do it, I suppose.

[00:28:29] I mean, yeah, I guess maybe the challenge with that, Lee, right, is that we've had a modular approach in practice management before and it's never worked. Right, okay. The quick update from FreeAgent, which, frankly, I already thought they had. So I saw this press release. I was like, okay, maybe I'm conflating FreeAgent's functionality with someone else in the market. But essentially what they have just released into the product, for those of you who have landlord clients,

[00:28:55] is the ability to upload those kind of complex landlord statements and stuff and do the extraction in the product. Now, like I say, I already thought this was in the product. So either I've massively jumped ahead or someone's given me the skinny on this before and I've just not realized. Or as I said, I've conflated this with other products that already have this functionality. So basically, as we all know, people are going to comply with MTD. We've got some big challenges there for people who've got to digitize. And those thresholds as we go through the next few years are going to drop continuously as well.

[00:29:23] And also we know that probably landlords are one of the trickiest, probably, segments of these groups of people to change because they're used to their little black books and keeping a record of information fairly manually, it's fair to say. And to be fair, probably some of them don't have huge margins to invest in software. So anything that helps to kind of make this process as seamless as possible, as easy to do as possible, I think is good. And obviously, free agent are kind of like at the forefront of trying to achieve this.

[00:29:48] And particularly with some of their free service lines that they can offer in conjunction with the banking that they've got from that west as well. So yeah, like I say, this is out there in the products. This kind of brings a much parity with some of the other things in the world. And then like I say, I already thought it was there. So good news to see that they are, you know, I don't know, reaching into the depths of my mind to pull out functionality. Who knows? Coming straight off the back of the Zero Claude story, we have a story about, Plaid, which raises a punchier question.

[00:30:16] How do we feel about AI agents being connected directly to the banking data infrastructure that feeds apps, ledgers, payment tools, budgeting apps and fintech workflows? So what they're doing is that they're going to be letting companies connect open AI powered agents to its MCP server so that those agents can query Plaid diagnostics using metrics, conversion data and connection issues.

[00:30:41] So instead of a developer digging through dashboards and logs, an AI assistant can actually answer that and say, well, why is this bank connection broken? Or why are errors spiking today? That's useful. I mean, nobody enjoys debugging broken bank feeds and nobody wants to support teams bouncing between dashboards, API logs and customer tickets. But if this works properly, it could reduce friction, speed up support and make bank connection failures less painful for users.

[00:31:09] But the phrase banking data connected directly to AI doesn't sit quite, it's not as comfortable with me. Again, we're bringing AI so close to such confidential and sensitive data.

[00:31:24] But even if this particular release is mainly about diagnostics and analytics, the direction which AI is moving closer to that financial plumbing, if it were, is being placed inside the workflow where financial data is collected, interpreted, repaired and routed. So again, are we that comfortable with having this information so close to financial data?

[00:31:49] What do you think, John, if let's say you've got a client's bookkeeping, which relies on bank feeds and is connected through Plaid or a similar provider? Would you be comfortable with an AI assistant diagnosing or helping to repair those feeds? So I think if it is just doing that, Ariana, I think I am comfortable insofar as having done a bit of file coding myself and use some of these tools to kind of support my lack of ability, if you like.

[00:32:15] It is very helpful to kind of have something that you can diagnose a problem and attempt to fix it. But I do fundamentally agree with you that having it so close to financial data is potential risk. I mean, I'm a Starling Bank customer and they launched an AI helper in the app. I must admit, I think it's pretty hopeless. I think it's a bit like Jackson Zero in the early days. I mean, it just you can ask questions that probably I could find out in the app way quicker than just asking.

[00:32:41] But I think this is, Plaid have been very clear here that they said this is about diagnosing problems with the system, not having access to the financial data. And so I think that gives me some reassurance. I guess I would also say that probably from a UK accounting point of view, given that most bank feeds now go direct to the banks, you're not through third parties. You've only got the utilization of products like Plaid more broadly outside of kind of the accounting ecosystem.

[00:33:10] And it's kind of in some of the other systems. So some of the payment systems that we're using, some of the kind of like personal financial planning tools that are out there are not tapping into direct feeds. And obviously, you know, in places like the US where bank feeds are in out there, this is probably a good tool for people to kind of bring reliability back into your products that they're using.

[00:33:32] I'll move on to something from Brief as well, because they launched a whole bunch of new features and functionality into their product. And what they have is, well, there's a bunch of stuff. Well, this is going to take me a wee while to whiz through this, but they have done a massive update to their UI. So it made it make a lot cleaner and easier to kind of navigate around the system. I think that's one of the core things about any product. You know, it should be simple and easy to use. So that comes with a new navigation structure.

[00:34:02] And then indefinitely, there is an AI profile. So every client that you add to a system has a profile, a standard profile that AI enables you to kind of capture core information about. So that could be things about the relationship with your practice or business. It could be things about the conversations happening in the background. And also like anything that's going on from a regular contact point of view, you can now put clients into groups.

[00:34:28] So it just makes your organization of your practice a little bit easier from a relationships point of view. And you've also got the ability to score people, which I think is quite interesting. So we know that sort of practices sometimes like score your own clients. And this works both ways. So you can score your clients, but they can also score you and provide you like direct feedback on what's going on. And then last but not least, a few other things. Check-ins is one of the core features of Brief in terms of like regular contact with clients.

[00:34:54] They built their functionality around making that a bit more automated, but also so you can send it to multiple clients at once. So you can organize meetings en masse, which obviously makes that management a bit easier. And then some additional functionality around settings and users, which we won't go into, but it's all there on their website and their updates and stuff. But I think generally, we know the team at Brief pretty well here at the pod. And they're a good team and very much dedicated to kind of the advisory angle when it comes to the product that they've built. Do you know what? I love the feature with scoring.

[00:35:23] I think people underestimate how important it is. And in both ways, scoring clients. So at the end of each year, you could have a look at your client base and those that have got a particular score. Either see how you can work with them to improve that relationship. Or if they're not really meant to be what you're not meant to be working with them, you can cut ties there. But also with clients giving you that feedback, we need regular feedback because we don't know what could be going wrong. And a lot of people don't have time to request that feedback.

[00:35:52] And it could be one issue. If one client says it, that's probably the same issue for everyone. So it could be a quick fix that you weren't aware of that can make a huge difference. So it may be a tiny feature, but I think for me, that makes a huge difference to a practice. Right. Shall we go on to the next story? RecordOS has launched publicly after raising $2 million in pre-seed funding. It was founded by Ruv Chadda and José Luis de la Peña. I actually worked with both of these guys, so they're great guys.

[00:36:22] And the pitch here is that self-assessment is still too confusing, too manual and too easy to get wrong. But the interesting bit is not simply that they're using AI. I mean, everyone's using AI, right? But the more interesting bit is that they're not pretending that AI removes the need for a qualified human review, especially in this kind of area of accounting. So their model is software plus professional sign-off. So the user connects data, the system does its lifting,

[00:36:51] and then a qualified tax professional reviews the return before submission. For self-assessment, I think that's probably the best approach. I mean, most people don't just want to go and fill in a form and that's done for them. They need the reassurance that someone has looked at it. They've made sure that they haven't missed any relief or miscategorized any income, or they end up sleepwalking into a nasty little HMRC letter six months later. But Thru have actually spoke to Indy about this,

[00:37:18] and one of the points that stood out was that RecordOS are being quite deliberate about proving the product works. So they're not only looking through the accountant channel, but they're also looking to sell directly to businesses and taxpayers, partly because that gives them a cleaner route to show outcomes, test the customer journey, and demonstrate where the product genuinely reduces friction. But this is good in light of MTD, because for those of us that are worried about operational capacity problem,

[00:37:47] January is not going to be easy. Now, imagine pushing more taxpayers into quarterly digital record keeping. That means more data capture, more categorization, and even more questions from people who never want to become part-time bookkeepers in the first place. And that's the gap that RecordOS is trying to sit in. But I'm a bit skeptical, or very skeptical, at £125 for a standard filing with a professional review.

[00:38:13] I mean, can the economics of this hold once cases get a little bit more messy or difficult or more involved? Can they maintain the quality if that volume ramps up? And can they avoid becoming a slick front-end wrapped around an overworked review team? And I don't know how they're going to position this with accountants. Without looking like it's just another product trying to shave fees out of the market.

[00:38:40] I mean, in theory, RecordOS is testing whether self-assessment can be productized without stripping out that accountability. It's definitely one to watch. As I said, I've been working with them on this product. I really liked it from early on. I really liked what they're doing. But there is that worry for accountants as well. It's almost like bypassing accountants, going straight to the client and saying, here's a tiny little fee. We'll be able to do this.

[00:39:08] Can you guarantee that, especially where the cases are quite a lot more involved, a lot more difficult, and they need a lot more back and forth to actually understand exactly how the client works, why they do things a certain way? And those are things that we only really see from conversations and then looking at the data. So whilst I think they're on the right path, I'm not sure whether saying, yeah, it's just this fee, and some will review it at the end.

[00:39:37] The economics of it, I'm not sure how that's going to work. That's interesting. I mean, you and I both worked with the team in the build-up to the launch and the funding round and everything else. So it's very exciting for them to see that. Congratulations to them for that. I mean, I think for me, in terms of what I really liked about the product, was actually it solves a lot of that front-end challenge of engaging with clients and getting the information that you need to prepare a tax return off them. Get your data stripped from that information,

[00:40:07] whether it's an investment report or a P60, for example, and sort of standardize that in an output so that it does make it easier to review. Interestingly enough, at a global perspective, I'm seeing a lot of this kind of thing coming into fruition. And actually, there's already a couple of products in the UK doing this, but targeted at the upper end of the accounting segment and very much priced at an enterprise scale. But I probably don't have the same concerns that you have, every owner, on the kind of unit economics of this.

[00:40:37] I mean, I think at £125, for me, if you're a practice buying this product and then kind of figuring out what's my business economics for turning this into a fee to the client look like, then actually it maintains the fee level. It maybe doesn't maintain the margin, but maybe we're transferring margin from human capital to product. That might be the thing that we've got to figure out and understand a little bit more of. But equally, for me, when I've been talking to some of our firms in the US, where this is more of a challenge, I've been talking to them about how do they introduce value back into the proposition

[00:41:07] of a tax preparation service, where it is being productized and digitized, and the pricing is dropping as a consequence. And working out how the human capital in that review process adds value back in. And I think that's probably the challenge for us as accountants in the network. Oh my God. Accountants in the broader space, right? To kind of figure out like, okay, we already know that a tax return has a baseline cost that we probably select for.

[00:41:36] So how do we try and bring that cost back up to turn it into something that really is valuable? But the only thing is that, yes, the software will help us to become slightly more efficient in how we get that information from clients. But I don't know if you've noticed, but you get some information from clients and then realize there's some missing, and then you need to go back and then ask for some more. And this whole conversation back and forth, when you add all of that time up, and then the time to actually process the work,

[00:42:05] and then ask the questions of, why did you do this? It's just, it doesn't make sense to me. You know, if you want someone that's genuinely looked at what you've given them, and you give them the right advice, you need that time to be able to do this. I just, yes, some data collection is fine, but it's just going back and forth. It takes so much of that time. Yeah. Maybe that's the value prop, though. Maybe that's the opportunity. I mean, again, if you've got teams of staff

[00:42:34] not doing the kind of like that capture work and extraction work, then technically they've got more time to do that follow-up and that review work. Obviously, there's a skills challenge there as well. But yeah, that's maybe where... So you've both got more experience on RecordOS than I have, but it just strikes me seeing this story that they're one government policy change away from not having a business model anymore, because if the UK government says, actually, we'll throw all the small business owners a bone and massively simplify the tax system, which we've got probably one of the most complicated

[00:43:04] tax systems in the world anyway, suddenly, then actually, is there a need for this? And that's the same threat for accountants that struggle on... Well, focus mostly on compliance as well, right? But on that theme, we've got the Maple Review that's been published, and it's going through what are the challenges and blockers to entrepreneurship in the UK. And I think this is fantastic because, not to get too political, but we've sort of painted ourselves into a bit of a corner, I think, in the UK at the moment. Like, we can't spend on defence,

[00:43:33] we can't spend on public services, we can't really raise taxes, like, we're just sort of stuck. And I firmly believe that the way out of that is by just encouraging entrepreneurship and getting the country to grow and kind of build at grassroots level. But what this talks about is there's a lot of people that are potentially could be very good entrepreneurs, but are just excluded from it because they don't have access to digital skills, they don't have access to education. And so it's come up with seven recommendations, which I won't list, or sorry, eight recommendations. I don't list them out because it's worth reading the document.

[00:44:03] But one of the ones that jumped out to me was introducing entrepreneur and business skills to secondary school level kids, which I think, like, a lot of people I've heard, like, education's a massive issue for me. Like, we home educate our kids, and so they get to see a lot of interest in different stuff. And I've had a few conversations recently with people where they just say, look, you know, is school actually setting up kids for the future that they're going to inherit? And so even with AI and stuff like that, the world's changing so quickly, that's a question.

[00:44:32] But it feels like financial education and entrepreneurial education is a massive gap in education for secondary school kids at the moment. And then there's a raft of other recommendations in there about just making it easier and more accessible. So making financial confidence part of support, looking at underprivileged areas and how we can inspire them to start creating businesses. I think it's fantastic. I would just love to see it turn into government policy and actually go forward. I appreciate that government's in a really difficult spot,

[00:45:02] but I would just love to see it be a bit more bold and a bit more bullish on, like, let's grow our way out of it. Here's some decent, solid schemes that we can put in place to get people creating businesses. Arianna, what are your thoughts on this? I think this is key. Like, there is nothing that I think they could do that would be better than this. My daughter last year, she was in year six and they had like a business kind of project where they had to create a business idea. And then at the end of school year, they were selling things and whichever team made the most,

[00:45:31] they'd look at how much they took in, what they spent, what their profit was, and then the team with the most amount of profit would win. But just getting them to think about this, but they're doing something similar this year, but more on a marketing aspect now. So you've thought of an idea, what do you need to do? You need to create posters, how are you going to find clients? So I don't know whether this is something that all schools are doing, but it's a must if we're going to raise the next generation of people who come out into the world of work and actually have an idea how the world works

[00:46:01] and giving them financial information. Like you get a payslip when you go out and you get a job. What does that payslip mean? Because everyone just looks at it, they're like, it's a whole bunch of numbers and I see that number matches what's in my bank account. I understand nothing else. So being able to understand what's a tax code, what, you know, so many different things. Or if you have a PAYE job, but you also want to do something on the side, freelancing, a lot of people think they're not allowed. Or if they can, how do they go about that?

[00:46:31] Is there self-employment? Do you open up a limited company? But all this information is what kids should have to hand so when they go into the world of work, they have an idea of what they want to go down. Whereas right now, I've said before, my sister grew up in a household of accountants and when she got her first payslip, she was like, who stole my money? What is this? I don't understand. And she's someone who literally grew up with people talking about tax all day long.

[00:47:00] So what hope do others have who have never heard of anything like this before? And I just think we should be teaching things like that rather than some things, some equations that we will never use in our lives ever. You know? But yeah, I hope that they listen to it and they do actually make, kind of put those recommendations in place. Well, I'm not sure I'm going to stand for you throwing shade on maths, Ariana, but I completely agree with you. And I think actually off the back of this report,

[00:47:29] there was an announcement that your business and entrepreneurial skills were going to be brought into the curriculum. And I know that there's been a bunch of people in our industry who've been talking about this for a very, very long time, you know, not just the past few years, but probably, you know, at least a decade, if not longer. And, you know, people like the ICAW, the ACCA as well have been talking about the fact that this should be part of the broad education process. And funnily enough, my daughter as well, you know, literally came back from school a couple of weeks ago and said, oh, hey, we've been doing something about business. And I've come up with a business idea

[00:47:59] for like doggy daycare, but I'm not old enough to start a limited company. So I'm going to have to wait until next year until I'm old enough to do it. And I was like, it really blew me away because, you know, she didn't even consult me and she still found out all this information. So I was very, very impressed. I think the other bits that I saw from this report, which I skimmed over, I'm going to read properly in a bit of detail when I get the chance, was obviously we know about some of the challenges around exclusion and issues. You know, that's, we've heard these stories for a long, long time. But actually, you know,

[00:48:29] I think there's a lot of information in there that reflects very, very positively on the impact that the accounting industry more broadly can have in terms of, you know, providing your confidence to people who are struggling with their own confidence in terms of their capabilities and their willingness to kind of, you know, get their business off the ground. Having problems in terms of accessing capital, loans, grants, et cetera, and being able to like, you know, turn their business into a rocket ship. You know, fears about cash flow instability and like, what does that mean to them

[00:48:58] from a business and personal point of view? And actually just, you know, a lot of people not having, you know, savings to live off if something goes catastrophically wrong. All of that is kind of the stuff that, you know, myself, Arianna, a bunch of other people in the industry can contribute to massively and do contribute to massively every single day. So I think it's really, it's really interesting to see that reflected back that these are still challenges that us humans can still deliver on. I think the one thing that did worry me though was that there was a lot of, you know, there was more than half of the respondents said

[00:49:28] they didn't know where to go to for business support. So that makes me question, you know, like what is going on in the world? You know, like what are the ICAW and the AAC and the ACCA doing about that messaging? Because surely as accountants, bookkeepers, financial advisors, et cetera, we should be the first portal call for anyone with a business idea and people should be engaging with us. And the fact that 50% of people don't know where to turn to is really concerning, I think. I think that just reflects again on people not understanding our profession

[00:49:57] and us not showing the world actually what our profession is and what it can do. A lot of people just think, oh, accountants, you do taxes and stuff, yeah? And that's it. So we need to better market everything we can do rather than just a whole set of accounts. Yeah, absolutely. And just to close this one off, huge props to Zero for being massive supporters in getting this out the door and again, just demonstrating that they are champions of small business around the world. So yeah, good one to them for that. There we have it. That wraps up another episode

[00:50:27] of the Digital Tools and Accrual World podcast brought to you by the Digital Disruptors. One quick reminder about the awards. Please look out for information about that. And in case you're not sure of the date, it's going to be happening the day before, the night before, Countex North. So it's not too far away, a few months. So get your Gladrags prepped, go and find a new outfit if you need to go and buy one. If you're a little bit like me and you put a bit more timber on, you probably need to go and get another shirt fitted or something. So just make sure you're all ready to go because we'd love to see you there and we'd love to celebrate what's going on in our world.

[00:50:56] I'd just like to thank Ariona and Lee for their contributions and talking about the news as ever. I don't think we're ever going to get away from the debate about AI for at least the next few months or possibly years. But hopefully there'll be some other exciting stuff coming out from our vendors and our partners that we can talk about.