The AIgents are coming! || Plus all the latest tech news from the accounting world

[00:00:00] LinkedIn, I think that in the next five years, 70% of the skills that the workforce have are going to be replaced or removed as a consequence of AI. 80% of the bookkeeping workforce will just be completely replaced. The ability of AI is doubling every seven months. You just have to get a few disruptors out there and the entire model gets shifted. Oh, don't worry, accountants will be disrupted by AI, but accountants using AI won't be disrupted. I just don't believe that.

[00:00:23] It's the bread and butter of all accountants. An interesting integration that I have picked up from creation is one with Turbo Inventory. We're running the automation station at AccountEx again this year. It's the space for you to go to if you have a query you're not sure how to resolve on the morning of the first day of AccountEx. We'll be diving into building relationships with software vendors. Come along, have a nice breakfast. We've been building that out over the course of the last year.

[00:00:47] Before that, they were using an Excel with 25, 30 tabs to consolidate with error messages everywhere. And just by putting in this reporting tool, it enabled him to think strategically and really be able to support his organization moving forward. Hello and welcome to another episode of the DigiTools and Accrual World podcast brought to you as ever by the Digital Disruptors.

[00:01:10] We are sponsored this time around by Approval Max and we also have an episode, sorry, a series sponsor from Xledger. Because as I'm sure you know, we've been doing a few interviews with some of the Xledger team and some of their customers as well, just to get a real deep insight into what the product's all about. As always, I'm joined by Ryan Pearcy and no indie, unfortunately, this time around. She's been on an all-night bender, so she couldn't make it today for the recording. But Ryan, how are you doing, mate?

[00:01:40] I'm good. She's going to kill you for that, by the way. Making up what she's up to. But no, I am good. I wasn't here for the last recording, so I feel a bit out of the loop. Like I need to be educated in what's been going on. Yeah, well, you know, this is what happens. It's a warning to our listeners, isn't it? You miss an episode and that's it. You're completely out of date and out of touch. So yeah, Ryan, it's something to make sure we nail down. I mean, of course, I can't say much because I kind of missed everything in January

[00:02:09] because I was away for pretty much the entire month. But I'm more than make up for it now at the moment, so it's all good. You do, John. It's hard to stop you talking nowadays, to be heard. Yeah, that is true. That is true. We've got a busy few weeks coming up, haven't we? Because we've got AccountEx coming up. And of course, we've got our own events and bits and pieces going on. Training, a training session. I mean, there's a lot happening before the summer closes out and event season finishes for the year.

[00:02:39] What are you looking forward to most over the next few days? We're running the automation station at AccountEx again this year, second time running. And it's the space for you to go to if you have a query you're not sure how to resolve. So if you've got a problem, either for you or your clients, a tech one, preferably, please do come over and say hi, and we'll be able to help navigate you to possibly the vendor that you can talk to or the process or scenario that may help you overcome this.

[00:03:06] We'll be supported by other members of the Digital Disruptor community throughout the two days. And we'll be there to make sure that you do not leave the show feeling that you've not had your questions resolved. So please do come and find us. We'll be there for the full two days. And if you didn't, if that's not enough, we always do AccountEx. Not at ActRowing this year, though, John, is it? No, not this time around. No, we couldn't go ActRowing because, unfortunately, they've got into liquidation. So we're going to fair game instead.

[00:03:33] So we're going to have a slightly different theme, but it's still going to be fun. And that's all that matters, really. Yeah, it's a perfect way to start the conference by talking to people that are in the space over a beer with some fun games, fun entertainment. And we generally pack it out, and it's a very rowdy night before. So if you are at a loose end, you're down in London area the night before AccountEx, look at our site, sign up for it, come along.

[00:04:01] Be good to say hi, meet you, and talk a little bit about accounting tech. Why not? Yeah, we get a little bit of conversation in there. And I mean, as I said, I think on last time's episode, I think it's a great way of just meeting some new people in the industry. And maybe if you're really lucky, making some friends that you'll kind of carry through your career for a wee while. So that's one of the great opportunities. And of course, we're doing a training session with Billy from 2020, which is going to be exciting as well.

[00:04:27] That's a little bit of a peek inside the digital transformation certification that we're going to be launching, isn't it? So I think that's going to be fun as well, isn't it? It is. Yeah. So we've been trying to break it down. When we first announced that we were going to be doing an accreditation, people said, well, how do we skill up? How do we train and make sure that we can actually pass this thing? Very good point. We should probably make sure we build that as well.

[00:04:54] So we've been building that out over the course of the last year and we'll be diving into a small element of that on the morning of the first day of account techs with a breakfast. So, you know, if you're going to be there early, come along, have a nice breakfast and listen to us talk to you about building relationships with software vendors.

[00:05:11] So their side, our side and how to ensure that you're building a long term strategic relationship rather than the frustrations when you say hi and then they hassle you for five months afterwards, which is no gain to them or us. No, absolutely. It's all about being in the right space, isn't it? And being very clear about your intentions. I think that's one of the maybe that's one of the early takeaways you can get. But of course, it'll be more of that over that breakfast session, like you say. And the lovely Billy will, of course, bring her own insights and viewpoints on that as well.

[00:05:41] So that'd be marvellous. Shall we get into the news? Because there's plenty to go at, isn't there? I'll kick us off then. So we've got The Accountant 2 that's come to our screens, cinemas. And I was thinking, well, you know, The Accountant 1 was a perfect showcase of exactly what we do in the profession. It's all action. You know, there's lots going on.

[00:06:07] But what could they bring in The Accountant 2 that would emulate the change, the evolution of the accounting market? I'm surprised. Surely it's about AI, right? It's just a whole episode about AI and AI agents. Yeah. Do you think he's going to have some way of utilising AI to shoot many more weapons than previously encountered in the first episode? Probably. He'll talk to his weapon early on and give it the framework of who it should be shooting.

[00:06:37] And then just let it go off into the world and kill all the enemies that he doesn't like. It's going to be quite boring because he just sits in his armchair at home while the weapons are going off and doing all the work. Sounds amazing. I mean, at least that's a reflection on where the future lies for us all, I think. That's probably the most important thing, isn't it? Yeah. I don't know if it will be kind of a bit like Ready Player One where we just never leave our room, but we're in a fully immersive world.

[00:07:05] I guess that's going slightly off-piste. But yeah, I mean, I've not seen the film. I've not seen The Accountant 2. I hear it's good. It's worth going to see. But hearing it was coming out did make me think, I wonder what they're going to do to make it feel still like he's an accountant and not just a hitman. Looking forward to some tech-enabled double entry. That's what you're saying, Ryan. Yes. Always up for a bit of that. Yeah. Marvellous.

[00:07:32] Well, talking about AI agents and their impact, not just on The Accountant 2, but maybe on the real accountants like ourselves. And of course, bookkeepers, because we're all in the same place, I think, in terms of the potential disruption. There's been not one, not two, but three articles in the various accounting press in the last week or so, probably, talking about agentic AI. So it's clearly the flavor of the month. We've been touching on it a few times previously on the podcast already.

[00:08:02] I know that it was talked about briefly at some of the events as well. I think particularly DAS, and I'm sure it'll be mentioned at AccountX as well. But I guess there's a few interesting things to think about. I mean, there's lots of, I guess, what's the word? Sort of people trying to forecast what the future looked like and talking about this is another one of these technological transformative shifts that we're going to be seeing.

[00:08:27] And of course, we talked about this when we heard about cloud accounting and this weird product called Xero and QuickBooks Online and stuff. And yet still, here we are sort of 15 years later almost and haven't quite tipped over the precipice in terms of full cloud adoption and things. But I do, you know, personally, from my point of view, I do think that, you know, agentic AI, you know, is going to have a more broad impact just simply because, you know, you don't have to be in the cloud to utilize it. You can still be on desktop and various other things.

[00:08:56] And, you know, we're increasingly seeing, you know, a whole host of vendors, you know, investing in AI and AI agents in particular to try and help themselves. Some of them with limited success, let's be perfectly honest, but others, you know, with a little bit more success. And we know, you know, just simply talking to or hearing from some organizations and admittedly, some of them are very, very big like Google. They have fully automated their forecasting functionality away from their human beings. And it's more accurate than they've ever managed to do it historically.

[00:09:27] You know, that might be an ambition that's way too off for some small businesses at the moment. But this is kind of where we're heading to. And I guess, you know, what we've got to be thinking about, particularly in the context of skills, because that's a discussion that constantly arises in our market, is that, you know, LinkedIn released a survey or the results of a survey done fairly recently, which looked at the impact on skills more broadly, but also really sort of aimed at professional services or at least office based people.

[00:09:56] And, you know, the results of that was that they think that in the next five years, 70% of the skills that the workforce have are effectively going to be replaced or removed as a consequence of AI. Now, you know, take that with a pinch of salt, if you wish, but, you know, that is a significant change for us. And if even sort of just part of that affects the bookkeeping accounting space, that's going to be an incredible transition for us, don't you think, man?

[00:10:22] Yeah, definitely. And I remember going back for five, six years when the whole start of AI and automation was talked about and the BBC said 80% of the bookkeeping workforce would just be completely replaced. And it's not happened, but we have had to evolve. So the traditional bookkeepers that would just type things in have basically been replaced by those that are, you know, powered by cloud automation tools. And we'll see similar, I think, in the accounting space regarding AI.

[00:10:50] The bit that I find most worrying is the speed that this is happening at. So we are not the fastest to adopt anything in our industry. We love to say that we will, but we like to go look at the shiny tool and then think about it, come back to it later. And that, you know, that's why there's a lot of frustration from the software vendors is that we say good things, but never quite find the time to do it.

[00:11:15] But with agentic AI, you just have to get a few disruptors out there that are automating everything they do and the entire model gets shifted and you have to jump on and do something about it. And I think that's what we will start seeing as agentic AI starts hitting period end, tax compliance, financial auditing. Even the advisory side can be disrupted because it's bringing to the fore all the information you need. So all of this time we normally spend out there talking to people will completely be eroded.

[00:11:42] And those firms that are still charging on the time model, well, what time are you going to be spending right now? Because all the information you've sent to you, you're just having the meeting. We're going to need to inflate our prices to account for that. So, yes, I think there's going to be a huge shift. Do I believe what happened overnight? No, not because of tech, just because humans and businesses and we take a while to adapt. But we shouldn't be terrified of this. We shouldn't be worried about it. But we've been through it with other systems when computers came in.

[00:12:10] You know, Excel dominated when cloud came in and slowly took over exactly how we've been operating. I just think we need to find the right way to embrace it and make sure you're educated and know where it's going and how it's going to have an impact. Yeah, I mean, I think the only thing I would probably slightly disagree with you on there is that I do think it's going to have a big impact on accounting in particular. And I think if you just look at some of the stats and again, we are talking about starting from a very low base here.

[00:12:40] But we know that, you know, agentic AI or the ability of AI models to undertake and complete tasks, you know, that capability is doubling every seven months, which is just, you know, absolutely mind blowing when you think about it. So we're talking about, you know, being here early May by the end of the calendar year, that the capability will have doubled, you know, and we'll be able to do twice as much, twice as accurate, et cetera, et cetera.

[00:13:05] And, you know, we've had a lot of people talk about the fact that, you know, this is sort of common thing that we've heard, which is like, oh, don't worry, you know, accountants, you know, accountants will be disrupted by AI, but accountants using AI won't be disrupted. Well, I'm afraid, I just don't believe that, you know, what will happen is accountants utilizing AI will make better margins for a short term. But the longer term play for this is that, you know, as you said, Ryan, you know, the likelihood is that, you know, because we still do really bill on time based outcomes, you know,

[00:13:34] for most of the work that we do, whether we're fixed fee or whether we're linked to the volume of transactions being processed or whatever it is, it is still relatively connected to the time that we charge, is that we're just going to find the commoditization of services that we deliver is just going to have an impact on pricing and probably drive pricing down. You see it in payroll, you see it in bookkeeping in particular at the moment, you know, you can't get above maybe 40, 45 pound an hour for bookkeeping max, irrespective of the kind of impact that you have.

[00:14:02] And, you know, that will just come more broadly to tax and, you know, mainstream financial reporting and things like that. So I do think in the medium term, this is going to have a bigger impact. And the big issue is, like you say, what's going to happen with the disruptors? And I think the one thing about the UK market in particular is it's really primed for disruption from a non-accounting base because we're not regulated in the same way that a lot of other geographic locations are. And that just exposes us to more risk.

[00:14:31] Yeah. And I think you've alluded to where we'll probably end up going is that the software vendors being frustrated at the slow pace for currency firms will start to bring in tools that start to automate the compliance sector. There's already been threats, hints of this over in the US with what Intuit have been doing regarding like turbo tax and personal tax. We'll end up seeing this for period end close. I mean, that's a prime area for disruption.

[00:14:57] It needs something like an AI tool, but it's, you know, the bread and butter of all accountancy. And if that starts to be being eroded, well, then that does change how an accountancy firm operates and delivers. So, yeah. But the main thing I think is we're trying to get the balance between being very honest and open of where we think things are going without scaremongering. But it's hard to kind of get that balance when we think there's going to be such a dramatic change.

[00:15:21] And the thing I say to everyone is don't focus on getting a clear plan of how to utilize AI. Because as you say, John, it's changing so quickly that if you get a plan in May, then by July, that plan now is not as effective. You just have to start using tools. You have to start making sure you know how to work with AI assistants, AI agents as they come through so that you're not fully left behind.

[00:15:49] This will not be like cloud where, you know, you can leave it a few years and dive in. You need to be aware of what's going on. So don't leave it too late. I agree. And I think that's a real cultural shift for a lot of organizations, including ours, you know, requiring people to adapt and be much more agile than we've ever been before when it comes to technology adoption and, you know, that trial and error that comes with it as well. So, yeah, it's going to be an interesting time over the next few years to see where this goes. It is indeed. But let's move on from AI.

[00:16:20] Everyone talks about AI. We talk about tech in general. So let's go back to some of the software vendors and what they've been doing. We've brought to you over the last probably couple of months how much that FreeAgent have been doing regarding their integrations, constantly building new connections with market leading tools. And I know that we've touched on things such as Mimo, Data Molino, Xamr they've integrated into. But one that I had missed, I don't think I talked about. At least if I did, I have killed that part of my brain.

[00:16:48] But an interesting integration that I have picked up from FreeAgent is one with Turbo Inventry. And why I think this is interesting is that Turbo is quite a powerful inventory management tool and is more akin to those businesses that are more complex and growing. And so by FreeAgent integrating with this system, they're really demonstrating that they are pushing up into that realm, competing with the likes of Xero and QuickBooks Online and Sage.

[00:17:16] They're no longer the tool of the micro business, they're the micro and small business financial system. And I think that's what I picked out of that integration with Turbo. If you've not come across Turbo Inventry before, they're relatively new to the UK, an Irish originating inventory management system that's similar in feel or look to Unleashed, but with niches and functionality that work across different industries.

[00:17:45] And then the other thing that I've seen that FreeAgent done is they've connected into Stripe. So you've got a deeper integration with Stripe and that's changed over the April period. So if you were integrated with Stripe with FreeAgent before, you need to change how that integration works. And if you've not, please explore this tool. Obviously, if you've been working in the likes of Xero, QuickBooks Online, a powered by Stripe, I guess, receipting functionality inside the finance system is not new. But this is something that is now inside the FreeAgent system.

[00:18:17] Yeah, it's very exciting times, as always, from FreeAgent with their rapidly expanding marketplace. And, yeah, that stock management integration in particular with Turbo is definitely one to watch, I think. Moving on, I know we said we were going to move on from the AI conversation, but I'm really sorry, but we're coming back to it. But it's not my fault. It's Dex's fault.

[00:18:37] And I'll blame Stephen Edgington because I think he's possibly the most active chief product officer in the accounting space, certainly in the big tech space, that's for sure. Because the guy and his team just keep pumping out loads of exciting things, which are kudos to Dex and what they're doing there. But, yeah, so they've launched a brand new AI-powered document storage feature called Vault. Vault. It comes in two flavors.

[00:19:06] There's the basic vanilla Vault, and then there's Vault Plus. And the whole purpose of this is they know that people are looking to or maybe wanting to expand the way that they can kind of keep on top of their documents and how they manage those. And I guess this isn't new from the accounting tech vendors. Of course, with Xero, we've had the ability to store files in there, similar capability in QuickBooks Online as well and stuff.

[00:19:32] But this is taking it on a little bit further insofar as, you know, as an organization, as a business, you can upload all sorts of different things. So, for example, maybe copies of leases or legal agreements and other information in a standardized way. And then the AI will do a number of things. So it will review the documents. So it will try and categorize those in a particular way so it makes the storage a little bit easier.

[00:19:57] It also extracts some of that information as well so that maybe you can put deadlines around, for example, a lease expiry or a contract expiry so that you can flag that within Vault. Now, of course, the press release, and I will criticize Dex a little bit here, the press release says, oh, this is brand new and very exciting and no one else does this. I'm afraid that there's plenty of people on the market already doing this. Box in particular, which is like one of the really big document storage products, has been doing this for a good long time now.

[00:20:23] And it's very, very interesting to see how they're rolling out AI in their products. And some of the other storage features like OneDrive and others have the ability to utilize Copilot and do similar things as well. If you're in the Microsoft suite and similar, I guess, with Google as well. So there's plenty of competition out here in the market. And there's plenty of other players that do that kind of list prepared by client or client request functionality, which is a little bit different from what Dex are doing here with Vault, I guess.

[00:20:50] But a lot of these, I guess, document request and document storage systems are now being powered by AI and whatever that means, but in a way that is functional and is adding some value to the product. Yeah. I mean, you can't escape it anymore, can you? And you alluded to it with Stephen in that it's crazy how much and how fast that Dex are releasing more new, well, not even updates, new functionality inside this system.

[00:21:17] And I thought I'd touch on what was released in April to give you a feel for what this was. So as well as what you just covered, John, they've now enhanced their supplier statement import tool. So it doesn't need to just be PDFs anymore, it could be JPEG or PNG files, which you can scan it, take pictures and send it in. They've got AI-generated document detection.

[00:21:41] So with, I guess, you know, the negative side of AI in the fact that people now can create really realistic images with actually no hassle whatsoever, and that's becoming a massive problem with fraud. Well, now Dex can spot or identify those images that have been created by AI, or at least much, much better at spotting those.

[00:22:01] And we'll highlight that and flag where they believe this to be a falsely created document, which means it helps protect you, which is something that a lot of these document scanning systems are not doing. They're not looking to protect the end user. They're more about efficiencies and getting the document through as quickly as possible. And then you've got the solo element of Dext, which we don't talk about much, but was a release ready for MTD.

[00:22:25] They've now brought in rental statement extraction, which is something I've wanted for years and has been a massive frustration when I've been working with landlord businesses, because so many businesses outsource or individuals that have landlords outsource their management to an external business and sends a document in that no document extraction tool could do anything with. But now you can with Dex solo. And then you've also got CIS built into the tool as well.

[00:22:53] And yeah, those are not small releases. Those are big releases that have all come just in April. And this isn't like an anomaly. This has been constant. So although we, as part of the app news, we always try and cover, we try and bring you what is, I guess, the most interesting, the biggest releases. Please be aware there's so much more that goes on in the background. And those are things that we're going to be trying to expand or cover more in our newsletter.

[00:23:22] So if you're not following that, but you do listen to the podcast, do check out the newsletter because you might be missing stuff that doesn't make it to the pod.

[00:23:59] Yeah, absolutely. So if you're not familiar with Bill, you know, they're going to be able to do in the earlier days. But yeah, moving on to another really big established player in the market, Bill, which is probably not used as much in the UK, but really massive in the US market, has completely blown themselves out of the water in terms of their expansion. Because they're now moving into procurement and also cash flow management as a consequence of releasing a whole bunch of new features and functionality to their products.

[00:24:27] So in case you're not familiar with Bill, you know, they started out as an AP solution, a little bit like Idex with Receipt Bank, and then moved more broadly into managing debtors and receivable side of things. Then they moved into expenses and then added a little bit of insights or sort of reporting around that. So you kind of had an element of oversight and management of everything that was happening in the platform, particularly as it kind of grew legs with all of those additional layers of functionality.

[00:24:59] And of course, you know, I guess for Bill, you know, it makes sense for them to move into the cash flow management because now they can see the operating cash cycle of a business. You know, they've got accounts payable, they've got accounts receivable, they've got expenses, and they plug into most of the major accounting platforms. And so they can draw that data up. And so they've got this functionality in there that now allows you to do a little bit of forecasting, you know, and as they call it, eliminate the busy work, which is very American, isn't it?

[00:25:26] But that's all it, you know, that's what it's all about. But you're really about, you know, taking some of that data. And I guess they're in the perfect place to do that because as you and I know, Ryan, you know, just because an invoice says pay in 30 days doesn't mean that it will get paid in 30 days. And being able to analyze that data and be a bit more insightful with that helps you to predict more accurate cash flows. And then very quickly, just the final thing is all about procurement.

[00:25:51] So I guess this is probably leaning in towards slightly larger organizations where, you know, you might have a slightly more complex way of managing things like purchase orders in particular, because that's where procurement really focuses in on and also around price listing and other things. But again, allows you to upload a whole bunch of information and then go through that process in a really seamless fashion with layers of steps for approvals and other things like that.

[00:26:19] So again, treading on a lot of people's toes here with this big, big update for Bill. But yeah, very, very exciting. And as always, they will continue, I'm sure, to do more and more with their product. In the same way that we've got a whole bunch of exciting stuff here in the UK payments market, which we covered last week's episode with Xero. We also have Bill have announced an integration with Xero to power their online bill payments, which I think is very exciting.

[00:26:49] I mean, this is a revelation for a country that's still using checks to make payments, right? So now you can suddenly, if you're utilizing Xero, make payments online. My word, this is like so early 2000s. It's very exciting. But, you know, without being too cynical about this, you know, I think this is a great idea. It's a great opportunity. Very familiar for people in the UK because we've been doing this for donkeys. You know, not always with great success. It has to be admitted.

[00:27:15] You know, Xero have kind of toyed around with a few payment platforms to make this work. They seem to have settled pretty well on Cresco now to make it work themselves over here in the UK. And that does work pretty well as there's maybe not some of the challenges that we faced previously with some of their platforms. So hopefully Xero have learned from that with their integration with Bill in terms of this US release. But it's now there and you can pay. You can do all the things you kind of expect. So you can pay multiple bills at once. You can have authorization payment limits and things like that in there.

[00:27:45] You can track the status of payment. And, of course, it does all the reconciliation and everything in the background for you. So, you know, great little update for Xero US. And that integration with Bill, I'm sure, will be of use to a lot of people who want to play around with it. Yeah. And I think for me, this would be a massive release in the US. But it isn't the one they like the most. The one they like the most is the ability to reconcile the bank statement, which still baffles us, John.

[00:28:15] Although I say that with bank feeds still being, you know, a bit unreliable. Yeah. In any jurisdiction, as I still experience with my clients on Xero. And, you know, it's not we're not blaming Xero for this. It's the banks, which are just horrific in their back end technology. It means that actually a bank reconciliation feature is kind of understandable, especially where I'd expect to be even worse over in the US.

[00:28:40] But it would be remiss of me as we move into May to not talk about the Xero App Store releases in April because I love doing so. So let's run through some of these. And there have been some releases or integrations officially on the App Store that go across quite niche industries. So we've got a release from or integration with Drum, which I never come across before. This is across many regions, including the UK. But this is a platform built specifically for consultants.

[00:29:07] So generally pretty simple tool is focusing on invoicing and time tracking. So maybe it's similar to a harvest over in the UK. We had that released in April. You've got Billing Boost 1, which is specifically for telecoms billing. So very niche in this area. And that's combining both billing, but also voice data and SMS information all in one. You've got a system called Muzik. Muzik? Maybe Muzik.

[00:29:37] Definitely Muzik because it's for the music professionals. So Muzik would not make any sense whatsoever. Muzik that has been integrated into Xero in Australia, New Zealand and the UK helps with booking workflows, calendars and documents and contracts as well. So you can, if you are a music professional, you can integrate that directly into Xero. You've got some others. Weirdly, we still have automated receipt processing systems that come out.

[00:30:05] Pixie Books is one that's specifically just for the UK and seems to be focusing a lot on WhatsApp integrations. And then a lot across other jurisdictions. But one other is for the UK is AR Collect. As you'd probably expect, a debtor management tool because we also don't have enough of those. Oh, well, there we go. I feel like we should vet these updates before you start them, Ryan, just to make sure that we're all comfortable with the pronunciation.

[00:30:32] Or maybe, you know, like when you see words in the dictionary, it kind of gives you a way to sound it out. Maybe that's what Xero should do for future updates just to help you out. Yeah, but it should say it in any bracket just say for Ryan. I think that would be very helpful. So if Xero, if you are listening to that, please add that feature. Yeah. Yeah. Then we don't have any more of like mangled app updates. It's like we should apologize, obviously, you know, to any apps that are offended by your terrible pronunciation of their names.

[00:31:01] It's like any guest that comes on. I seem to get their names horribly wrong as well. So just if you talk to me and I say your name wrong in any context, my apologies. My brain just doesn't work like normally. Yeah. Maybe we should just call everyone Dave. That'll make it really easy for you. I would. I'd probably go with that. Right. Right. Here we go. So I'm delighted to say we've got another session talking about Xledger.

[00:31:28] And actually, we're going to pivot away from Xledger, particularly as a product. Talk about how Xledger or another could be utilized for business finance outsourcing. And in particular, how that might be more suitable as we sort of see an opportunity with larger, larger organizations and larger businesses who are increasingly demanding this kind of service from accountants like myself and also our guests, who I'll introduce in a second.

[00:31:54] But briefly, before we do that, I'm going to pass over to Laura just to introduce herself again, just in case you've forgotten who she is. And give us a quick reminder of what Xledger is all about. So over to you, Laura. Thanks, John. Thanks for having me again. Yeah, Laura from Xledger.

[00:32:08] So we are a mid-market finance solution suitable for scaling businesses, more complex businesses suited to businesses that are multi-entity, multi-currency, those bigger organizations from smaller organizations that are more complex, but to bigger organizations that need something that scales with them and can tick a lot of those boxes. Excellent. Thank you, Laura. And I'll pass over to Dom, Dom Gibbs from S&W.

[00:32:39] Newly rebranded and sort of spilled out of their previous organization. So we were talking about the fun, exciting times that that's creating in terms of like IT challenges and a whole bunch of other things. But Dom, would you give us a little bit of background about yourself and what you're kind of doing at S&W, please? Cool. So Dom Gibbs, I'm a director at S&W in our Bristol office. I lead our Bristol business outsourcing services team where we offer support to a varying number of entities along the growth scale.

[00:33:07] So everything from small medium entities all the way through to global groups where we support them with an element of their business process outsourcing. So for one client, this could look like bookkeeping and management accounts preparation. And on the larger end of the scale for these global groups, these could look like consolidation reporting or accounting adjustments to consolidate into IFRS if they're accounting under UK GAAP here in the UK. So it really runs the gamut of the whole scale from SME to groups. Amazing. Awesome.

[00:33:36] And I guess, like I said in the intro, one of the things we're talking about really is like we're starting to see increasingly larger organizations demand or ask for some kind of outsourced financial support. And I guess you're perfectly positioned as a firm to do this. You're currently doing this at the moment. And it'd be really interesting to sort of see, you know, what do you think the drivers are for that in terms of why we're sort of seeing this?

[00:34:03] Because I guess traditionally the view is as you scale up as an organization, you recruit more accounting staff, you know, finance director, CFO, et cetera, bookkeepers. The whole gamut, as you said, of a range of people that you would expect. And maybe is it because the challenges of recruitment or is it just because it's actually easier to outsource some of these things? Both, to be perfectly honest with you, John. I think both of those answers are true. I think we're seeing a lot of business. We're seeing a lot of traction from businesses who are struggling to recruit.

[00:34:30] So they're struggling to find that right talent at the level. And it's also the cost of a bad hire for businesses, too. We're hearing a lot from businesses that they've put someone in a role and they've given individuals the time, six, nine months to really develop into that role. But it's just not been the right fit. And that's happened two or three times.

[00:34:48] And that's kind of really triggered them to consider business process outsourcing and how an organization like S&W or another accountancy firm can really come alongside them and provide support in those times of turmoil and really act as a safety blanket whilst they're looking to recruit and find that right talent. So that's one position where we come in. I think another reason that outsourcing is really flourishing at the moment is that we can bring the full S&W.

[00:35:14] So by bringing full S&W, I mean bringing all our service lines to the table through our outsourcing services team. So whilst you might engage with us from an outsourcing perspective, that means we can act as that cog and loop in our R&D tax credits team or our global mobility team or our corporation tax team and truly provide a 360 service just by plugging in from an outsourcing perspective. So I think businesses are really seeing the value there in outsourcing and business process outsourcing being that first entry point.

[00:35:45] And I think that's a really interesting kind of thing to talk about and to really sort of set aside as a strategic opportunity, right? Isn't it? Is that I guess traditionally outsourcing has been more about the functional like transactional management of an organization, maybe a little bit of reporting. But as you kind of said, there's so much more that you can do.

[00:36:04] Have you got any particular sort of success stories or anything that you can sort of talk about that kind of demonstrate, you know, how you're moving on to that more strategic alliance helps to, you know, helps a business to either grow or get over some of the stumbling blocks of scaling out? Yeah, definitely. So a good example of this was last year we supported a clean energy business where we were initially contracted to provide secondment style services.

[00:36:30] So we entered into the business on a very temporary basis for three months, for three days per week to provide essentially management account solutions. Whilst we were in that business, we realized that the finance function wasn't running as efficiently as it could be. There were some hiccups with the year end accounts. There were some hiccups with the corporation tax return. And actually what that enabled us to do, like I just said, was bring the whole of S&W to the table and really support this client.

[00:36:57] So what started as a smaller engagement for us over a small period of time actually enabled us bringing in all our different service lines at S&W and really supporting the client to grow. So where they were having trouble with their current providers or just being honestly having trouble with their finance system and the efficiencies that that was bringing them, that enabled us to undertake other projects that freed up finance time now because we've put in the efficiencies in place.

[00:37:22] So when I look at something like Xledger, it's a really efficient product to be able to make that finance team run smoothly, efficiently and free up day to day time in the finance team so that they can focus on more strategic tasks. And when I look at that case study, that's what we were able to do with this particular client was enable the FD and the financial controller to really get their heads out of the weeds and look more strategically into the future.

[00:37:48] Now, I love the idea of bringing the whole of S&W to the party, as it were. I think that's a great way of talking about this rather than kind of just sort of saying, oh, it's just outsourcing. This is like a real, you know, really incredible opportunity to sort of like get your fingers into lots of different pies and be able to do a whole plethora of different things. I wonder, you know, who in an organization like this are you normally kind of dealing with or normally reporting to?

[00:38:17] So would an organization that you're providing this breadth of services to have a finance director or CFO and I guess elements of a finance function and you're just kind of dovetailing into that? Or how would it work? I mean, are you able to kind of do that full CFO role for a really large organization? Yeah, that can be mixed, John. So we have over 250 individuals in our business outsourcing services team nationally, and that's across a wide variety of experience levels.

[00:38:44] So we can provide resource at the AP and AR level all the way through up to I'd say we really come to our strong point is FC plus. So financial controller plus, so likely reporting into that CFO or the FD who's providing real strategic input and valuable insight to that client. And we're reporting into them to support them. So we can run the whole gamut of ranges from a secondment style experience.

[00:39:11] And we're seeing a much higher demand for that, even internally with people and businesses that weren't outsourcing at all. You know, they had a kind of full finance function. But, you know, we mentioned it earlier about kind of resourcing other challenges. And we're putting people like S&W on the table and they're like, actually, they can help us with so many other areas.

[00:39:36] And actually ends up being, you know, exactly like the example that was given earlier starts off as a small engagement, you know, maybe three months. But actually, it ends up being a very long term relationship. You know, we've seen it where, you know, it was they just keep bringing things to the table for the partners to deal with. And we've seen, you know, really positive feedback with the S&W engagement that the way that it's put on the table at all of those services kind of really benefits those end clients.

[00:40:06] So they know that I might not need that service today, but, you know, I know it's there just in case. And I think that really reassures those clients. That's a really interesting point, actually, Laura. And I guess if you're seeing that need or the opportunity inbound to X Ledger, you want someone to signpost that out to effectively because that's not what you do. You know, you're a software business, not an outsourcing business.

[00:40:29] So to partner up with you guys presents that opportunity as well, I guess, for furtherance of the offering of services. Yeah, definitely. And our customer success team, you know, are very strong advocates of our partners. You know, we're you know, we don't we don't offer those services. We can offer consulting and the kind of X Ledger side of it. But it's working with people like S&W that can really add that value in areas that we aren't looking to go into.

[00:40:59] You know, we could do those services. You know, there's so many of us that are accountants. You probably see my certificate behind me, but it's not our core business. So we work with our partners and we know what skills they have and kind of approach them appropriately. You know, and S&W kind of tick all of those boxes. So coming back to you, Dom, I mean, obviously, you say you've got you've got a fair few number of people in your outsourcing team now.

[00:41:28] And I guess that started off from a fairly small acorn and an idea of what you wanted to try and achieve before you sort of scaled out. But how have you sort of seen that seen that growth at S&W? And I guess how have you managed to differentiate yourself in the market? Because there are there are lots of firms offering this kind of service. And I guess from the outside looking in, sometimes it could look very, very same if you don't kind of do sort of show how you can do something different. Yeah, great question.

[00:41:54] I think we truly are differentiator is we truly get to know our clients and we understand that each client has different needs. So each client starts with a scoping project. What are you aiming for? What's your five year plan? Have you got an exit plan? We really want to get under the bonnet of that client and find out what's keeping them up at night and how can we help? And a lot of the time, John, that can be through technology. So a lot of the time clients will come to me and say my finance team are really stressed.

[00:42:22] They aren't giving me regular management information. And actually, I'm putting a lot of pressure on them and we're coming to loggerheads. Well, to me, that's a great opportunity to get someone like Xledger in the room because we can look to automate a number of those processes within a finance team, take some stress off of that finance team and ensure that the owner or the CFO gets regular, reliable information.

[00:42:45] And I think a key part of our job is to explain to businesses and finance teams that technology and AI isn't taking your job. It's going to take your job to the next level. That's something we're really passionate about here at S&W. And I know Xledger are too. It's about how can we take someone's job into more advisory space rather than their transactional role. Yeah, I think that's a really fascinating way of thinking about it.

[00:43:10] And I find it quite interesting that you start off with that scoping concept, because I think quite often a lot of firms just jump into, I guess, bookkeeping and then sort of scale up and up and up in terms of doing that. And maybe not always sort of asking those kind of questions. What else is it that you do in terms of making sure that you stay aligned with your clients' business goals or opportunities? Because, I mean, those are always going to constantly shift. The economy is constantly changing.

[00:43:37] The global economy is constantly in a state of flux, particularly at the moment. And also, your clients will have things that they want to achieve over a period of time. And that will differ as they achieve those things and move on to the next goal and objective. And that's truly how we add value to our clients is that we understand that their needs are ever changing. So it's constant communication, John, to be honest with you. It's we have newsletters. We have events. We have webinars. We keep in touch with our clients on a quarterly basis. We'll arrange meetings.

[00:44:07] We want to know what they're doing and we want to know what their plans are. Their plans are changing every single day. And we want to understand those so that we can truly come alongside them, partner them and help them to meet their strategic goals. That's our aim. And that's what we do well. Yeah. Yeah.

[00:44:24] And as you've kind of moved along this journey and you've started to grow and develop this outsourcing function that you've got, how important has a product like Xledger been to you to be able to offer that opportunity to these larger organizations? Because, you know, that would be almost impossible, for example, probably to do in a Xero or a QuickBooks, for example, just due to some of the inherent limitations of the system. It is really important. So I think we can sit here and I'm a huge fan of Xero. I'm a huge fan of QuickBooks Online.

[00:44:54] But we know that at some point that taps out and that might be transaction levels or that might be, as we were talking about earlier, Laura was mentioning group consolidations. These kind of things. Xledger has been invaluable to our clients where they're ready to make that next step from a Xero or a QuickBooks Online. But actually, they don't need a NetSuite. That's not for them. They need a mid-tier system that can provide them with efficient, reliable, consolidated reporting.

[00:45:19] And Xledger has been a perfect partner there in that they have the support and they really are a white glove handheld service to support clients with this onboarding. And I think that's great for us because that's the kind of service we provide to our clients as well. It's very much a partner led white glove concierge service. And Xledger and us go hand in hand in that. Imagine. Go on, Laura. Yeah. And that's, you know, as Dom said, we do that internally.

[00:45:46] You know, we do it with our clients, but we do it with our partners as well. We are always there, you know, in the background, you know, or, you know, on the face of it if we need to be. We are, you know, very. We work very closely with our partners to ensure that they are successful as well. It's not just about, you know, you've signed a contract. You've, you know, you've ticked a box. It's, no, how can we help you? How can we, you know, what's missing?

[00:46:12] What's, you know, we get all the feedback to ensure that we are supporting them so they can best support their end clients. Amazing. Amazing. Very quickly, I just want to sort of wrap this up with, you know, what are some of the really big wins that you've had, Dom, in terms of, you know, being able to help one of your clients, you know, scale or maybe, you know, if you work with charities, you know, help them to sort of achieve something that they weren't able to do before you guys got involved.

[00:46:36] I think one that stands out for me was a highly acquisitive business we had that had a central finance system. And as I said, they were highly acquisitive. So they had funds to grow. They were buying these businesses. They would buy one business on Xero. They would buy one business on Sage. They would buy one business on QuickBooks. Suddenly, that finance team became so jumbled and stressed where they were having to consolidate in multiple different reporting softwares.

[00:47:03] There was US, there was UK, all built into this similar system. And what our team did was kind of came and broke through the cloud, kind of sat on top of the system, put in place a reporting, a consolidation reporting tool that enabled the CFO to, in real time, see from all different systems what their figures were like and get an accurate numbers. What this enabled us to do was really enable that CFO to act strategically because he had real time information at his fingertips.

[00:47:33] So before that, they were using an Excel with 25, 30 tabs to consolidate with error messages everywhere. And just by putting in this reporting tool, which was a pretty simple fix for us, to be honest, it enabled him to think strategically and really be able to support his organization moving forward. Amazing. Amazing. Well, thank you very much for your time, Dom.

[00:47:54] Great to speak to you and really interesting to hear about how you've managed to kind of grow and formulate this incredibly impressive outsourcing function and bringing S&W to your clients. I really like that. That's a great phrase. And clearly, you know, having a product like Xledger that you can rely on as well makes a huge difference in terms of being able to offer something different that allows you, again, to scale up into a sort of a slightly larger client base. So, yeah, what an opportunity, I guess. It's just amazing. Thank you, John. Appreciate it.

[00:48:24] And thank you, Laura, as always, for your support with Xledger.

[00:48:48] Thank you, Laura. We'll check out on the old socials as well, and we'll try and make sure that we correct any mistakes or fill in any blanks that we've missed. And, of course, you can like and subscribe to us on all the major platforms. There's a whole host of other things going on. We said we've got events going on. We've got, obviously, all the shows that we're going to be at, and, of course, the newsletter and the live stream that goes out.

[00:49:17] So there's plenty of us to keep us out of mischief, isn't there?