We Bought the Bridge | Robots Beat the Humans (?!) | Be in the Loop.

[00:00:00] Welcome to another episode of the Digi-Tools In Accrual World podcast brought to you by The Loop. It's our new brand that we're working with in the community, having decided to refresh what we've been doing for the last few years because the world has changed. Everyone knows that technology, particularly AI, is starting to take over. And we just thought that it was really good to focus in on the people that make the business world tick. And especially when we think about how difficult and challenging it is to navigate the technology and AI spaces, the pace of change changes so much.

[00:00:28] We're here to serve you, to help you keep on top of the news and the latest updates. And also super exciting news at the same time as we have just acquired the early adopters hub. And we're going to roll that into the things that we do. So not only are we going to bring you news and updates on what's happening in technology, we're also going to be bringing you a whole bunch of exciting throughput from the starters in our field as they try to come to market with new products, new technology. And Ryan and I have been well involved with that hub for a long time, helping to shape the technology of the future.

[00:00:56] So we're hoping to get even more hands on with it now. I'm also delighted to be joined by Billy and Kendrick, who have been on podcasts with us before, our new guest presenters. And Billy, you've got your own super exciting news, which I'd like to hear about as well.

[00:01:10] Yeah, well, first of all, congratulations, guys. That is brilliant news. So yeah, I have recently launched AI Accountancy, which is a self-serve platform to help accountants and bookkeepers learn all around AI. So things like workbooks, training webinars, fictitious data that they can put into large language models about risk, that type of thing. So it's a really exciting time. And yeah, it's great to be here as always.

[00:01:35] Amazing. And I know you've been working on that for a while, Billy. So is this now where we're going to see the future from you? I know that you love to talk about AI and everything else, and obviously you've been doing lots of fun stuff. But how long has it taken you to get up and running with us?

[00:01:47] Yeah, it's been a couple of months in the works for sure, especially to like kind of build a platform to do it on. And it's only so far that vibe coding can take me. So I've tried my best with that. But yeah, the platform itself is up and running. And, you know, speaking to conferences and getting that feedback on what people want and where people are struggling has been really valuable recently.

[00:02:08] So hopefully, there's a few things coming on the website, like feed forward forms where people can put forward what they want to hear as opposed to sort of giving feedback on what was something was missing. And then that way, hopefully, it's really helpful for accountants and it's going to be exactly what they want.

[00:02:26] Sounds amazing. Well, I hope you have lots of success with that going forward. And Kendrick, you're joining us from the other side of the pond. And I'm surprised you don't get your football shirt on as you join us in the middle of like the World Cup. So how are things over there? So good. First off, congrats, you know, both on In The Loop and Billy and AI Adventures. So exciting. You know, speaking of football, John, I just spent last week in Toronto. And I tell you, the city is a mess with everything that happened with FIFA.

[00:02:54] The Intuit Get Connected Conference was going on. They actually moved us out of our typical venue downtown, out by the airport. And it was good because we could still get around, but certainly a lot happening with the FIFA World Cup. So exciting times. Lots happening on the fishbowl front. We've been pushing forward with our AI manufacturing and then rolled that into our inventory product as well. And so, you know, you should think through businesses that just want quick, easy interaction with an agentic solution.

[00:03:23] And then, you know, alongside that, standing up MCP servers with Intuit and Xero both to get that data back and forth from inventory manufacturing over into the financial world. So some super exciting things happening on that front. One of our clients have been with Fishbowl kind of through the evolution of things for coming up on 15 years now. And they're like kids in a candy shop when you hand them AI tools and just let them run with it.

[00:03:49] So kind of a really interesting time and some exciting things at Fishbowl. Are you struggling to attract the right talent? Are you needing to shift the busy work? Are you finding you don't have time to speak to clients? Trusted for over 20 years, the advanced track outsourcing model provides immediate access to accounting and tax experts who understand your local regulations and seamlessly integrate into your team.

[00:04:15] Digital transformation, robust security measures, top tier talent, no recruitment fees, no wait time. Focus on what truly matters, growing and improving your business and positively impacting the lives of your clients. Be more than just number crunchers, be life changers. Amazing. Well, I suppose we should launch Strange the Inquiries and see what's going on in our world.

[00:04:39] Yeah, so I'll start with some AI news naturally around AI beating human bookkeepers. I always feel like I can almost feel people roll their eyes listening already. But it's not as bad as it sounds. It's actually a LinkedIn post that Jeff Siebert or Cybert, I think is how you pronounce it. Jeff Cybert, who is a CEO of Digits. He posted last week on LinkedIn and it went pretty viral because he said that the AI that they've produced is more accurate than human bookkeepers.

[00:05:08] Digits ran a benchmark report and they battled out outsourced accountants versus Digits bookkeeping products, their agent within their product. And they did this across 2000 business transactions. Now, the numbers are pretty mad because the agent had an accuracy of 97.8% and the humans had an accuracy of 79.1%.

[00:05:35] I think this is mad because I don't know many bookkeepers that get one in five transactions wrong. I'm just saying, like, if you're a good bookkeeper, one in five is a lot to get wrong. But what was also interesting is that he was saying that when you pair this against the general LLMs, so your ChatGPT, Claude, Gemini, etc., they also platter around 79 and 80% accuracy. So pretty much bang on the same as a human. But the accuracy isn't the only thing that they were talking about.

[00:06:04] They were also talking about the time it takes to input these transactions or work on them. So the Digits agent took 0.04 seconds per transaction and the humans take 34 seconds. I think that's probably about accurate, but they're saying that that means that their product is around 1,600 times faster and uses fewer tokens. I think it was like 300 times less tokens.

[00:06:30] So tokens, for those of you that don't know, is basically AI breaks down chunks of text into a token. And then that's what you essentially pay with when you're using an AI model. They've built this on training 180 million transactions. And across that, there's about a trillion dollars, because it's a US company, worth of activity. But I think what this is going to do is, and I think more so on the time than the accuracy here,

[00:06:58] is change the narrative of like, should we be using AI to should we be paying a junior to do some of these jobs? Because I do think there is now going to be this narrative of, do we need to essentially train our juniors on bookkeeping or just to be reviewers? To play it a little bit risky, I would say, don't forget this is a vendor talking about their own product.

[00:07:24] So we have to definitely raise an eyebrow when it comes to their statistics and also look at the data set. Because a lot of the time you hear statistics around AI, when you actually look at the testing volume, they've probably tested on like a dozen accountants. And actually, does 10 accountants or 12 accountants represent the entire industry? Probably not. I don't think that's particularly reflective. So I think that's something that we need to be aware of.

[00:07:50] And as I said, I do question the ability of the accountants that they tested if they were getting one in five wrong. So, you know, I'm not judging them. I'm just saying. So, yeah, I don't know. John, what are your thoughts? Do you think that we're going to have to kind of throw juniors straight into the reviewing stage? Or do you think we're going to still train them how to do bookkeeping? I mean, this is a conversation that's been going around for a while. I mean, I probably take a different view from maybe a lot of people in the industry.

[00:08:19] And so far, you know, I do think that kind of learning some of the fundamentals of bookkeeping and accounting may well have to shift out of like the normal standard roles that we currently have at the moment. You know, and one of the reasons I kind of say that is that, you know, if you go to, say, one of the big four and speak to someone in their audit or tax team who has only ever worked in that team, they don't know how to do bookkeeping. They don't know how to prepare a set of accounts. You know, they don't have too much knowledge in that part of our world.

[00:08:48] But what they are is they're exceptional at doing their job in a way that probably most generalists like me are not. And so I think it's maybe just one of these things about, you know, we need to figure out where do we start and stop. I think what's more interesting for me is, you know, this element of accuracy that we're starting to see more and more talk of. How do we measure the accuracy of our own staff, right? You know, digits have seemingly done this with the bookkeeping side of things.

[00:09:14] But when it comes to audit, tax, accounting, financial statement preparation, your corporate finance, et cetera, et cetera, we have no benchmark for measuring accuracy from our staff, really, I don't think. And the only time that you find that accuracy hasn't been reliable is when you have a client complaint. But does that mean that firms are operating at 99% accuracy or 80% accuracy or 60% accuracy? See, I just don't know.

[00:09:40] And I think we're quite often using accuracy coupled with some kind of complex ROI calculation when it comes to AI to kind of like overrule what we do with human capital and our human resources. So I don't know what the answer is, but we kind of need to figure out some benchmarks, I think, with this. And we work out when we're comparing a human being against a tool, what are the objective outcomes that we rely on? It always just seems to be on data input that we have this statistic.

[00:10:08] No other part, like what you're seeing with the financial accounts and stuff like that. Like we only ever seem to measure accuracy on that part of the job. And there is so much more to it, isn't there? Yeah, absolutely. And I mean, Kendrick, I mean, you obviously sit on the other side of this as a vendor and you'll bring to market a bunch of interesting stuff when it's marketing sales collateral. And obviously, you've got to kind of pick up your own product. So what's your kind of view on this? Yeah, it's interesting, John and Billy, as I hear this story and another one I picked up around digits and continuous close,

[00:10:38] I'm really of the opinion that this isn't really an AI story. It's more capacity and delivery. And for the U.S. market, U.S. profession has changed so much. And I think that's true globally, right? There's a shrinking talent pool. You have fewer CPAs entering the profession. There's all this increased workload and all this growing pressure. But digits is coming at the market very differently than what some of the others are. And to me, that's super exciting.

[00:11:06] Now, Billy, you mentioned one in five and it's the vendor calling that out. And certainly that's true. And perhaps I'm biased. But when I look at what's going on, especially in the U.S. market, it's brutal. You know, we've got so much more work that's going offshore. We've got firms that are trying to close books and they're just burning people out. So when I see digits coming out with a month end close and trying to clean up something that has been so difficult,

[00:11:35] to me, I think it gets really exciting. You know, the month end process is something that everybody struggles with. And digits approach to have the ledger collect, book, reconcile, maintain everything, run quality checks, and then just push exceptions up to the accountant seems so much more scalable. Now, for the U.K. side, I think you've all seen automation closed tools that sit alongside Xero and QuickBooks and other tools. And I think maybe this is different.

[00:12:02] What digits is doing maybe isn't massively shifting, but at least it's not a bolt-on that's trying to work in tandem. If digits can do this natively, that makes it a pretty good path, right? At the same time, it creates an uncomfortable question for apps, add-ons, and, you know, Fishbowl, obviously in the inventory manufacturing space. But for those who are focused on month end close, what are they going to do to differentiate and to lift and help? If the ledger can do the bookkeeping and the reconciliation schedules of checks and reporting all in one place,

[00:12:32] then there's a lot of apps that may have to really pivot and shift in how they deliver on it. And while, you know, there's a ton to unpack as far as where and how AI looks and how efficient it is, whether it's really that much better to the point of accuracy, I think it's awesome that it's simplifying that workflow and creating that capacity that accountants can really leverage and get back.

[00:12:57] And John, I don't know how you feel about that, but for me, it's dangerous for the app partners, but really empowering for any of the accountants that really need to leverage that. I mean, anything that helps our lives, right, is always welcome, you know, when it comes to automation process and things like that. I do agree with you, Kendrick, you know, I'm hearing similar messages from the U.S. markets, particularly around, you know, just the amount of work and the challenge of that.

[00:13:22] I think the U.S. probably feels it a little bit more acutely than anyone else at the moment. But equally, there's a lot of work offshore as well to other places. And there are mixed messages coming back from the U.S. in terms of some people onshoring that or stopping the offshoring teams because AI can take over. Other people actually kind of, you're going back to Billy's point, actually moving those offshore teams up a level. And so they're not really doing the doing anymore. And they're actually more around a management and review role, which I think is quite interesting to see.

[00:13:51] So, yeah, it's fascinating to kind of see how different countries and different regions are adapting to this challenge that's going on at the moment. I think just finally on the Digits thing broadly, you know, it's really interesting for me. Digits has got some technology baked into their product, which for me is 25 years old because I saw it as a trainee in accounting over here. But that's a challenge around bank reconciliation and bank feeds in the U.S. So they're addressing a specific problem in that region.

[00:14:19] The other thing, though, that you say, Kendrick, around the add-on marketplace and what sits around the periphery is that for me, add-ons and sort of the ecosystem apps have always been really good at kind of taking a baseline functionality and then adding on to that and being more effective and more efficient at what they do. You know, fishbowl, your classic example, right, in terms of being able to, you know, do something that's simple in inverted commas and then add all of the complex layers that need to go on with it.

[00:14:49] If it rolls out right, Digits is raising the bar. Yeah, for sure, for sure. Okay, I'll move on to something else, which is also on the realms of agents and sort of talking about what you can do, which has come from Adfin. Adfin are big fans of theirs over here, the payments technology that plugs into a bunch of products, not just the accounting systems anymore, but also practice management and other solutions. And, you know, essentially, I guess the background to this is that Adfin have been using agents for a very long time

[00:15:17] to kind of like build their connections and their automation. So rather than just relying directly on APIs, they have actually been employing MCP servers to do some of the payment automation historically. And so this feels like a natural development for them to move on to adding your agent functionality, which sits on the customer side. And what we've got in here is your agents that effectively help you to manage the payment cycle and the collections, such that, you know, whether it comes to sending an invoice in the first instance or getting around to something else where it's like chasing that debt,

[00:15:46] they can do all of those things. They're in an early stage rollout with this, but it's going to be baked into product going forward. I think it's really interesting, exciting. Again, going back to your point, Kendrick, you know, it takes away from the busy work, if you like. And Billy, I think you've seen this product as well a little bit before. Yeah, definitely. I do think that with these, with some of this is brilliant that they're moving forward with the agents, but I think there's still a huge gap between practices that maybe are still billing annually or they don't really,

[00:16:14] there's still a long way to go for a lot of businesses. And I think it's really great to see all the shiny new products and see where we could go. And I love that they're creating agents to do these things, especially in an area that is just a sunk cost, isn't it? Like us raising an invoice is not creating any value for that client. Us chasing that invoice, that payment is not giving any value to that client again and again. So it's sort of helping us save time

[00:16:43] and therefore become more profitable per client, which is brilliant. But I still think there's a huge educational gap between like, how do we get to a point where the firm's ready to use those agents? And there still needs to be some support for the accountants that are not there because they feel left behind. They're probably too scared to ask for help because they think everybody else is using them and they're not. And so I think that when every time something like this gets released, there almost needs to be like a release of this like counter product of like,

[00:17:13] but if you're not there yet, don't worry. We can support you and help you get there if that makes sense. Yeah, I think there's an element of like the emperor's new clothes with some of these things sometimes, isn't there? And also, again, your practices, certainly here in the UK, are all shapes and sizes. And Adfin is a great piece of technology. But when I was at Bearing Shothers last year, we looked at doing some implementation with them to bring it into our practice management solution at the time. And, you know, we were going to have to commit, you know,

[00:17:41] a reasonable amount of time and effort and some finances to kind of make it work because it's not baked in from the store, which for other products and other integrations it is. So I think that's one of the big challenges. So next up, we're going to talk about Starling, who if you were on LinkedIn at all over the past few weeks, you've seen lots about these guys. Starling Bank launched a Starling accounting back in March. And this tool, it used to be called Ember. They bought it. It was a bookkeeping and tax tool. They bought it last year.

[00:18:11] And when they launched the product, accountants didn't have access to it, which naturally the profession had something to say about that. And so what they're doing is they're backtracking and they're adding a partner portal. So existing Starling partners can actually access the test for that now. And from the end of the month, if you're an approved partner, you can get read-only access. And then what they've said is the full version is coming eventually with no date given,

[00:18:38] which I just think if every product had like an eventually on the roadmap, I just think it's brilliant. But yeah, so if you are a Starling partner, you can log in and download the client statements and then match them in your own accounting products, whatever you're using to do the bookkeeping. It's worth noting that Starling, they're not a small player in the market. I think they've got about half a million small businesses, around 9% of the UK market. They sent, the reason why there was a bit of an uproar was that they sent an email to limited company customers

[00:19:07] and they said, make bookkeeping a breeze, which made obviously accountants feel very, like they're not potentially needed. I don't know if anybody saw Lucy Cohen, but she called this out and said that actually it was just a polished interface on top of incomplete information, but just pointed at HMRC. And I think their pitch of kind of being like a self-serve system for MTD submissions and they would only really need accountants at the year end

[00:19:37] is probably the issue here. I mean, to play devil's advocate slightly, I would say that the market that Starling are marketing to in this kind of campaign and product probably don't have an accountant anywhere. So I feel like they are kind of going to a market that the accountants are not going to lose because they don't have them. But what I would say is what happens at the year end when these businesses have listened to the marketing, they've taken on board the product

[00:20:05] and they come to the accountant at the year end to do that final submission and everything's just a mess. Because I know from my time in practice, it actually costs a lot more in time and money to fix a mess than it does to just do it properly the first time around. Again, like who's liable? If they accidentally code something wrong and the client does it incorrectly and they submit that to HMRC, are Starling going to accept responsibility for that? Because they've said that they can do that auto-coding

[00:20:34] or is it the client? Or is it then the agent at the year end when they are not getting paid enough to review the entire lot? So they kind of submit it and there's a few errors. So I think it's going to lead to a few issues in terms of who's responsible for what's being posted as well as this outcry for the marketing. But I mean, John, this is not the first time we've seen this, is it? Like just think back to the amount of TV adverts of click a button, the VAT return goes. We've seen this in products all the time. Yeah, we have.

[00:21:03] And I think from a Starling point of view, for me, this is just, you know, it's good marketing and it's probably a little bit of a quality management flag, like you said, Billy, insofar as there was uproar from the account community. It was unnecessary uproar because this has been going on for a long time and this isn't anything new. And, you know, I think there is a quality management thing to this insofar as that they probably are a little bit concerned about what their exposure looks like in terms of, let you say, someone doing a bad filing or putting bad information into a system

[00:21:32] and then feeling responsible for it or potentially being responsible for it. I mean, interestingly enough, you know, Kendrick, you know, we've had people do this in the US before where they're trying to help with, you know, tax filings or banks have taken on kind of more responsibility and it's always fallen down a little bit, hasn't it? It's never quite worked out. Yeah, I was just going to say, and Billy, you nailed it. It's ironic because the utopian vision for so many AI tools is just do it all for me. But nobody ever thinks through, you know, what is the root person

[00:22:01] that when do it all for me doesn't land exactly what I want to. And we could cite numerous examples of it's just going to happen. And then at the end of the day, there's always somebody who has to pick that up to be back in the loop and make sure everything is going directional. AI is great until it's not, right? But and yet we're so focused on what and where are the tools that really help us. On that front, I've got one that is really exciting to me because there's so many places

[00:22:30] where AI can get us to a rough spot and, you know, you've got to unwind that. There are a lot of tools out there, though, and agents that help. And in my opinion, make it really easy for us to get more done. And one of those is with Vinyl. They've launched an email integration. So after a client meeting, it drafts a follow-up, you have a conversation, and then it pushes it over into your mail client, you know, Gmail or Outlook or whatever it may be. Save it as draft, edit it, and then it sends from your own address. So you're not jumping in

[00:22:59] and just trusting AI. It's not some weird robot that is sending it along, but it's from you just helping out as a digital assistant. For me, why it matters is that it's solving a workflow problem rather than an intelligence problem. There's so many AI announcements out there today that are generating content and summaries and insights. And Vinyl, taking a step back to taking a more practical issue, like let's maintain momentum after we have a client interaction. How great is that? And so it's not about the AI generation,

[00:23:28] but keeping clients directional and, you know, using that to leverage what matters most in my mind. I saw this the other day, actually, and I think at this point, I probably sound like I work for Vinyl because I talk about them a lot because they're doing a lot of updates, thick and fast. And I think they're doing a lot in the space of like what does actually make a difference very quickly. So the practice is seeing a narrow eye on it very, very fast. And one of the things that they'd done was they'd had a transcript from a meeting and said

[00:23:56] any potential opportunities for like services that we could provide. What I thought was if you were the client and you'd left the meeting and then an hour later that accountant then emailed you and said, here's five other ways that we can help you. We need to do an R&D claim, blah, blah, blah. It feels like you're forefront of that accountant's mind even when you're not in the room as well. So that what you're saying, Kendrick, in terms of being that client experience, it feels as though you're putting the client at the forefront and they feel special and valued

[00:24:25] even when they're not in the office. And I think it helps with the speed of that. Yeah, I also echo what you say in terms of the client experience that it's a system. Yeah, I think one of the coolest parts about it is in my mind it's one of the better examples of AI disappearing into the workflow and making the user more effective rather than simply generating content. There's so much out there. And building to your point at the end of the day the outcome is the client feels heard. Hey everyone, give me two seconds to tell you about Sweet Files. The intelligent workspace built specifically

[00:24:54] for firms like yours removing the friction from every step of your workflow from your very first client interaction right through to delivering their final work product. Document management, client collaboration and workflows all in one place sitting on top of the systems you already use. And now with smart templates create your perfectly branded pre-populated documents in seconds. Sweet Files has done the heavy lifting on building in AI so your templates and workflows are even smarter. And with the Sweet Files Outlook adding

[00:25:23] you can save emails and attachments directly from your inbox into the right client folder. So no switching and no double handling. Sweet Files connect seamlessly with Xero, Microsoft 365, Iris and more. Ready to see what an intelligent workspace looks like for your firm? Book a demo at www.sweetfiles.com That's www.sweetfiles.com forward slash digital. We've already done one controversial news story so let's try another one which is the announcement

[00:25:53] that profit and loss account filing for small companies and micro-hosties is back on the agenda but this time a little bit delayed perhaps unsurprisingly because the government went a little bit quiet on what they were proposing to do. So just in case anyone had been hiding under a rock for the last 12-18 months or so this is the news that effectively we're winding the clock back about 20 years to when every company used to publish their profit loss account at companies' hands and effectively the government had consulted on this and as part of various things

[00:26:23] around openness anti-fraud measures a bunch of other stuff they decided that this should come back and this is one of the Brexit dividends right because this is one of the things that we can do now not that we're outside next year of 2027 it's now being pushed back to April 2028 but it is definitely going to happen subject of course to some of the change or U-turn in the not too distant future but the one the one's very very small allowance that has been committed is that although small and micro

[00:26:53] companies will have to file P&L at companies' house it does not necessarily have to go on the public register so there'll be an opt-out for that publishing on the public register which kind of seems to me almost like defeat the point of this objective really because the whole purpose of this was to kind of have full openness about what the public register of companies has in terms of information and if that information kind of sits behind a paywall that only I don't know

[00:27:22] like a credit agency can see in the same way that they can see certain personal information about directors which is different and understandable why that's gated it does kind of beg the question what's going on and we've seen investigative journalism over the last couple of years looking at various things where it was quite clear that the accounts that were being presented at the company's house were not like fully reliable but without the context of being able to see the P&L it was quite difficult to kind of figure out precisely what was going on so for me you know I was a big proponent of the changes that were originally

[00:27:52] proposed to come in for April 2027 which is just it happens for everyone no matter what we're only talking about a statutory P&L not the detailed P&L here so in terms of the information particularly if you're a micro entity you're basically giving away absolutely bugger all and if you're a small company well so what this is what your mum and dad used to do they were running the company before you took it over and they never suffered any inconvenience as a consequence so from my point of view I think it's a shame I think it's disappointing that they changed this requirement I'm hoping that

[00:28:21] somewhere sense will prevail and they'll revert back to what was originally proposed as an individual I'm also disappointed because I'm really nerdy but I do think as well there is this aspect of as a small business do you want to give you feel like you're giving away your trade secrets giving away that information so I think from a small business point of view speaking to some small business owners they were worried that the same business down the road would then have information that they wouldn't want them to have I think again

[00:28:51] lack of education of understanding what would be published was the reason I think so sorry Billy just specific on that as well like I say if you go to a credit agency and ask for information about one of your competitors you're going to get way more from them than you actually see in the financial statements so it's just nuts right yeah absolutely so moving on then we're going to talk about Suite Files who have created an Outlook add-in so Suite Files for those of you that don't know they're a document management platform built for

[00:29:20] accounting and professional services so they integrate with the likes of Xero, QuickBooks, Carbon, Iris they claim that auto-filing saves their team on average something like 200 odd hours per year per firm so obviously having something like this built-in to Outlook is as Kendrick was talking about at a moment is something that is going to kind of be embedded into a workflow and not something that feels like it's an add-on or you don't have to open another tab or another window so the key features here

[00:29:48] in the Outlook add-in are that it saves emails and attachments straight from Outlook into the right client folder it automatically saves entire conversations as well into the Suite Files and auto-save rules means that you can also make it happen autonomously so you're not having to go into each one individually if you see this work what I do like about it is when you've got a list of all of your messages in your inbox it actually has a little colour-coded little tag on there that says it's being saved so you don't have to click into each individual email

[00:30:18] to realise you can really quickly scan down with your eyes and kind of see what is and isn't moved into your Suite Files so as I said this sits on top of Microsoft 365 which means it's already inside the apps that your team uses a lot of the conversations I'm having at the moment around adoption and getting the team on board around like how can we get people to use something and I can tell you now the adoption rate of a product that is already in something that you use or a feature in something that you already use is so much higher so I would say

[00:30:48] this is less of kind of like a headline but more of a productivity win which I think a lot of people can learn from as a lesson because we don't always have to talk about the new shiny things it's sometimes just the small quick wins that make a big difference to the practice and if you're not autofiling you don't have something like this the question I would ask you is what happens if a key personnel leaves the firm unexpectedly or often sick or are the handovers actually airtight enough for people to gauge everything

[00:31:18] so it's worth thinking about that and potentially as well how long does it take you each day to just look for something because I know me personally if I'm looking I find Outlook search probably one of the most frustrating things on the planet I don't know about you guys so the thought of having to like search in that for previous emails and attachments would just drive me mad and I'm sure if you've got you know a team of anything over like 5, 20, 100 staff you are going to see huge wins in there

[00:31:47] I love those tools that are just baked right into that workflow like you say it's less of a headline but it's so impactful on the day to day so super exciting to see that kind of stuff and yeah the Outlook search is rough I think there's three of us that agree on that it's a nice little update as well from Sweetfiles because it brings them back up they're booked parity with some of the products they're going head to head head to head with as they kind of go up market with the bigger firms moving on to something else and quickly so we've had an announcement from Inflow and HubSync and a direct integration

[00:32:16] between those two products this is kind of like part of a kind of slow and steady rate of development that we're seeing from Inflow which is an audit audit platform originally started out with analytics now moves into work papers and does some other functionality and features where they've been building in integrations and they've been building in integrations probably on a fairly strategic manner in terms of like looking at the markets they serve and where the opportunities lie and HubSync is another one of these platforms that works with them from a strategic point of view HubSync to be fair very much kind of like a US North America

[00:32:45] like product broadly although they do have some customers here in the UK and essentially what it is is a combination of kind of like client portal engagement letter management platform document collection e-signatures those kind of things that you'd expect to see all wraps up in like a single workflow and so you can see how as part of the normal audit processes when you're going through an engagement and having to request information to get it sent back and forth that kind of like oughts me to be fixing with kind of like what Inflow are trying to achieve a couple of things like e-signing

[00:33:15] and engagement letters as well and you can see that kind of wraps around a lot of the process this isn't the first integration Inflow which kind of lines up with something similar like this and it also complements their pre-existing like document exchange product that's baked into their products and I think it's a really cool late development and I'm hoping to see more of this kind of stuff for Inflow every time I see Mark and Graham and the team behind it there I'm always pushing them for more integrations because I think audit technology broadly probably lags behind the rest of the account ecosystem in terms of

[00:33:44] integration and the opportunity that comes with that John quick one on Penfold as you talk about lagging on innovation Penfold just recognized or just recognized Deloitte to me at technology fast 500 they were ranked 160 across Europe Middle East and Africa and you know pensions aren't exactly the sexiest corner of the accounting tech side either I think a lot of people just overlook that and you know it's really easy for folks to ignore until the problem becomes really painful

[00:34:13] I think a lot of pension platforms out there have the challenge of making that whole process feel more understandable usable and you know particularly on the business side and the savers who don't want another black box financial product just sitting in the background where they can't see anything or do anything where and how does that fit in from a technology standpoint so exciting to see you know where they've been recognized less of a trophy and maybe more interesting as a validation that pensions can also be modernized at scale there's so much there that hasn't

[00:34:43] really been done and on the accounting side for those who are accountants teams employers there's probably something to watch for here because pensions really sit in an awkward triangle compliance and benefits and the administrative burden that goes into that and a penfold can really make the experience cleaner you know they truly can make it more visible easier to engage with it's not just nice fintech there's a lot of meat there that really improves the business flow and that friction is something that I think a lot of folks

[00:35:13] just deal with in certain areas of life it's amazing we're just talking about outlook and how that friction impacts us so broadly and then we go over to pensions and like yeah it is the way it is so if they can move the needle on that definitely a good thing there so is this kind of technology something that's prevalent in the US and sort of 401ks and stuff like that or is it not as well yeah not so much this is more the UK market there's an adjacent to it but we really haven't seen much innovation over on this side either so you know what Penfold's

[00:35:42] doing it's great if they keep the ball moving and maybe it'll spur some folks over on this side of the pond to improve that whole process because 401k is really lagging there you know you think through the employee side of it and like I said the ranking is nice but what's more interesting to me is really about the category and whether we're talking 401k or pensions they're complicated and modernization would be awesome staying on that line with the employees and pensions and 401ks

[00:36:12] employment hero has also published some research based on the you gov data commission and interestingly enough saying that full-time employment costs in the UK are up 10% in a year I haven't seen US numbers yet but I would imagine there's probably a similar trend and that's a pretty heavy number to see a 10% lift across the year you know we're seeing that naturally in the market businesses are slowing their hiring their limiting roles or freezing on positions that maybe were open

[00:36:42] and then a pivot to avoiding permanent roles altogether when you start adding up that 10% lift in a year's time so many components to it national insurance a wage increase and employment law reforms that are happening and having a permanent headcount I think is becoming harder for a lot of businesses to justify would love your thoughts on kind of where that sits for me I think I do think it's a worrying time and I think as well accountants having to advise their clients now on you know other things that have been around for a long time but when we

[00:37:12] think about making sure that contractors are by by setting rules and that they've been employed by more than one person and things like that and then where do we store it all so I know you just mentioned employment hero they've obviously now got their hero force so they can have their contracts in the same place as their payroll team members and things like that but I think one of the big challenges here is who's missing out so is it the people that need the part-time work is it the older workers that are going to retire so if we're going to

[00:37:41] employ contractors who are the people we're not actually employing but it's a big it's a big it's a worrying time for small businesses we are frightened to employ because of the day one rules which I totally understand why they're in place but it leaves businesses wide open to additional costs that they just can't afford and it's very quick for them to go under if that's the case but I've got to think there are questions coming the way of the accountant clients and businesses

[00:38:10] are wanting to talk about who should I hire directly who should I try to contract with how should I find them what's the tax impact how does compliance fit into all of this that's a wild ride if you're not familiar with the advisering on those types of things yeah I'd agree I think it would be really interesting to do a comparison with the US and other countries as well in terms of what our costs look like broadly compared to other countries I mean Billy and I probably know better than you Kendrick

[00:38:40] we had some tax changes that came in which have had an impact on employment rates and have increased the cost but ironically their anticipated costs were probably broader than the growth that we've seen so maybe it is having a bit of an anchoring effect on employment but you're also right in terms of that cultural experience I think we're less less let it's going to lean into freelancers and consultants unless it's more they're generally perceived to operate in a fairly sophisticated world and because of some of our

[00:39:10] requirements we generally struggle to engage with freelancers and contractors on a long term basis at least because of the tax risks and the implications moving on to the last little bit of news and this is something we're going to have an interesting healthy debate about because it's going to have an implication for pro practices across the UK but also I think Kendrick from your point of view listening to this where the IRS might be going in the next 20 or 30 years will be also really interesting as well

[00:39:39] so for those people that missed this HMRC put out an announcement on the tail end of May now basically saying that they've become aware of lots of businesses and lots of accounting practices and others you're logging into their agent services accounts which for those of you just in case you don't know your agent services account is the way as an accountant as an advisor you can log into multiple account all of your clients accounts as long as they give you authority you can go in and there's some

[00:40:09] long publicized challenges around what agent services accounts can and can't do compared to what their customer accounts can and can't do and HMRC have promised to level all of these up so that as an agent you can see all of the things that are super relevant to you so that your clients or your customers can totally hand off broadly all of their responsibilities now what's been happening in recent times and a couple of apps in the marketplace doing some of this is that people have been sharing their agent credentials with some of these apps they've been logging in and screen scraping some of this

[00:40:39] data to then pull back into an app or pull back into some kind of automation and again when I was myself and my team had built something that did exactly that because one of the pain points around the agent services accounts is that they're all operating at different levels of maturity so as we've gone through things like making tax digital here in the UK the VAT accounts have had to be modernized and because there's a

[00:41:08] return of information not just a filing offer requirement from a lot of these products that's obviously then rolled into making tax digital for income tax but then that leaves things like corporation tax and a bunch of left behind and whilst we don't have a roadmap and a plan a whole time

[00:41:39] being whilst we get a handle on exactly what the most appropriate approach this is we I

[00:42:08] got wind of this before it was announced but also I'm aware that they are consulting with various people to understand what are the challenges that people are facing how do we get across some of these challenges and at the challenges with agent services accounts is they're walk

[00:42:38] away with the client list or access to a client list and a whole bunch of confidential information so they're also adding in multiple layers of additional security so MFA is coming hopefully they'll move to some sort of token based security in the future as well but that creates an additional layer of challenges as well because for most practices they're not used to having more than one login again HMRC don't make it really easy to create multiple logins from multiple staff with multiple access to multiple tax users and multiple clients and a whole bunch of other stuff that they've never fundamentally addressed so there's

[00:43:08] a big challenge here it's a bit of a mess to be perfectly honest it's come about because of a combination of modernization and a lack of integration between the systems and services they have and of course it's hit a crux point right now where they've said we're going to put the brakes on guys because it's actually causing us way too many issues and stuff so a lot of accountants understandably are a bit up in arms and a bit upset about this because it does mean that in some instances you're going to have go back to more manual processes but

[00:43:51] and I think as an accountant although I'm not in practice anymore to have somebody like you on an advisory board with HMRC is we're very

[00:44:21] asked for the code and a mass email goes out across the practice it is honestly carnage and all it is it

[00:44:51] do and this will help with accountants and also HMRC is not just think they can fix every single part of it so just try and tackle one part at time so like you say when you acquire a practice or even if you don't acquire a practice and you've got five different logins let's tackle that aspect first then let's tackle the two factor authentication I think and this is a completely made up figure I would say less than five percent of firms would change their password when somebody leaves in terms of them having access to that

[00:45:21] client list again it's we know the best practices and all best intentions we would love to have time to change the passwords but then getting that communication out to the team and all things that come with it so I think if they tackled each of these issues in silo it would move a lot quicker and firms would see progress and see benefit and feel like HMIT are on their side through the whole process rather than it

[00:46:04] I have find a physical check and send that along on our side so we're different problems to deal with here I have the ability to

[00:46:33] remove your agent account and obviously that would be fundamentally sort of catastrophic to a practice if that happens so your practices want to avoid that from happening my own feelings and my understanding although don't take this as gospel is that the revenue are probably about three to six months away from rectifying this problem what that really means in reality I don't know that because I guess one of the things that we were using scraping for was when it comes to personal tax payments and for us we have to do that twice in a year and

[00:47:03] at the moment even with MTD for income tax there's a few weeks away from July tax payments there is no quick and easy way of picking up

[00:47:33] 100 clients or 1000 clients tax payments doing that super simply and getting an email out to your clients and say hey by the way just to remind you you're going to make your second payment account and here's the information here's the details here's the amounts etc and that is one of the automations in the short term so it has to be a priority in my opinion from HMRC hopefully they are

[00:48:03] listening and taking notes and you're building in other things like single side would make the process of adding your staff to these products so much easier to fill out individual emails every time there's a bunch of stuff that needs to happen here hopefully HMRC coders are also using Claude and everything else to vibe code the way out of this so the development time might be quite sure fingers crossed

[00:48:33] awesome well there we go that wraps up another episode of the Digitals and a cool podcast as I mentioned brought to you by the Looch our brand new go-to-market brand and imagery for where we're going with this I'd like to say thank you very much to Billy thank you Kendrick as well for joining me and hopefully we'll see you on the next one thanks so much