What Accountex, Hg's write-down and Sage's CEO tell us about where accounting tech is heading

[00:00:00] I've just taken John's role for the day which is just like be banterous and get the news out in a very kind of like laptop and pop kind of thing, right? Exactly, that's exactly what we're going for on this episode. Alright, let me shuffle my papers together and go right, on the news this week. On the news this week, exactly. We have got, on the news this week, we're joined by Alistair who is just like my daughter's favourite TV show you said, just in time, just in time.

[00:00:29] for all of the great news that we had from Accountex this week and we've got the wonderful Ryan Pearcy as well as myself, Indi and we are missing John but that's not a problem because, you know, when you replace John with Alistair it's like literally you're kind of being promoted upwards. Enhanced, yeah, exactly that. So. I've never been called a replacement for John before. Is there one? Is there one? I don't know if it's an insult to John or an insult to me but.

[00:00:59] On that, no, you are not allowed to John-a-log. So keep everything concise, Alistair. No John-a-logging. I'll work on my Manchester, my mankit. Is he Blackburn or Blackpool? Where is he actually from? Like, I was going to say it's near, what is it called? Clitheroe, that's it. Clitheroe. Yeah, that's it, Clitheroe. Yeah, yeah. We're going to call Barlow Banter. That's what it is. Barlow's Banter Bus.

[00:01:26] That's what we're getting on today. So I'm going to kick off and say, tell me what your best bits were of that wonderful event in London that we all go to every year. So for me, I can take, so I love a can take because I like walking the halls. I like to see what's new, if there is anything new. Most of all, I like reconnecting with people and having conversations in person with people, right? So, yeah, we didn't see each other in the halls for whatever reason. But we caught up on the boat, obviously, afterwards.

[00:01:56] For me, so day one was pretty busy for me. I did three talks kind of back to back. And then I did another one the following day. So as you can imagine, a couple of them were on AI, which were really interesting talks, actually. One was on kind of this really visionary talk on AI and what happens if your client is actually AI.

[00:02:17] And the other one was kind of AI in practice, like the here and the now. And there was a bit of a debate on the kind of what I'll call the risk curve or the appetite curve between vendor, practitioner in a larger firm and kind of my view as someone that's a little bit more aggressive in terms of using it. But, yeah, as I walked the halls, it seemed big, seemed like a great buzz that was going on. I actually really like the same. What did they call it? The VIP suite? Yeah, well, first of all, they had the green room, right? So Phil and I did a talk on M&A in the green room, which was really nice and small and intimate.

[00:02:44] So I thought they did a good job there just outside the main hall. But then they also had the VIP suite upstairs where you could go get away from the noise, decompress a little bit, connect with people as well, but on a more one-to-one basis rather than the hustle and bustle on the floors. And I tell you, the bright lights just sap. For me, they sap a lot out of me because they're just like, I'm a contact lens wearer, right? And it's just my eyes just get so dry having no natural sunlight. But walking the halls, I didn't see anything that was revolutionary.

[00:03:12] I saw, I caught up with a few people that were there and it was nice to see some new vendors kind of being there for the first time. But I'm not sure I saw anything revolutionary. I had a bit of a chat with the Combine League guys and yeah, saw some vendors that I've spoken to a few times. But I'm not sure I saw anything actually revolutionarily new, but maybe you guys saw something I didn't. Well, I did see a dinosaur walking the halls. That was probably the most revolutionary bit.

[00:03:41] Yeah, some animatronic dinosaur, which was cool. Well, I saw someone almost fall over that dinosaur when I was on a panel session, which was hilarious. Yeah, it was very low down and people kind of dart through. But yeah, I agree. I didn't see any products, apps that was like, we need to go see that. And we've seen that before. We've seen like a DAS where a Genesis turned up for the first year and it just got kind of overwhelmed with it. I guess it's a new approach to data capture.

[00:04:09] But yeah, I would say the talks were generally, if you wanted to get a big crowd, you put AI or MTD in the title and then you were swamped. Any other talks that didn't have those seemed to be quieter. That was what everyone was talking about and why everyone seemed to be there. But cutting through the noise, there was a lot of overlap. There was a lot of consistency and a lot of messaging. But it did mean that I think people were jumping about and joining a session and then potentially realizing it wasn't quite what they expected moving around a lot.

[00:04:36] So I saw a lot of people sitting down, getting up in different sessions. But overall, great to catch up with people. The only bit I thought was a bit of a change, and it seemed that vendors were saying the same thing, is that that new FD show, which had the orange flooring. I don't think people really understood where the limits of that were. So there was lots of people walking around that was talking to app vendors that were nothing to do with what they were looking for.

[00:05:00] They were like FDs that kind of encroached into the main space and talking to people and going and quickly realizing this is there's no value here for us. And the vendor, there's no value from this conversation. I'm not sure how best to handle that going forward because you've got very different target audiences in the same room. You don't think there's going to be a convergence then at any point?

[00:05:20] And that's probably what like account X is seeing is there's going to be a convergence, which is why there was such a sort of vague dotted line almost between the two events. Because maybe there's some bleeding of the two. Maybe that's something that not so much the FD way into the accountant, but maybe the accountant way into the FD. So I think that's possibly why. And if that's the case, I think they need to be very strategic about what vendors sit where in the room.

[00:05:48] So I think there were some that were very close to the FD area that were never really aimed at that space. And I think that's maybe more of the challenge is how they place people around. So I think Indy raises a really good point there, really observational in terms of direction of the accounting market. So I think FD show was new this year, wasn't it? Or rather, it was new to carve out specifically as FD show, right? So I think that part was new. But I think the point that you raised is really good is this kind of, you know, we see more and more.

[00:06:15] And I'd like to say that the guys behind Flindr were the ignition that ignited this kind of more outsourced running of a finance function. And this, we see the term fractional, well, we see fractional everything these days, right? But fractional CFO or kind of that type of role that we're seeing more and more. And I think there's generally a bigger trend towards this in accounting firms.

[00:06:41] They're trying to offer and they're trying to get close to their clients and rather have that kind of, you know, one or a few times a year relationship. They're trying to be much more embedded, have a much, many more frequent touch points. And therefore, one, be more embedded within them, but obviously to sell more services to them and kind of going up that maturity and kind of deeper into the business. I guess it's what more and more firms are trying to do. So I think we will see more of that. Maybe it will be positioned as the FD show. Maybe we'll be positioned as the fractional FD or fractional CFO.

[00:07:11] Or maybe it will be positioned more as the finance function, outsourced finance function. Yeah, I think you're right. Maybe I should be buying the domain name now. I think you should. Fractional CFO show. Absolutely right. I think that Belinda did start. Give me a minute. Yeah. Do it quickly before I do it. My little agent. I just, agent. Agent. I need to call my agent something. As I said, Alistair, I'm going to name.

[00:07:39] I'm going to be one of the first person people that names my agent something that's a little bit more colourful, let's say. Just like the store names. As an example? As an example, Indy? My example was, what was it? It was Gurinderpal Jit Prichbal or something. So it's really nice and memorable. I'm glad you could say it because I had no way of saying it. I would probably have to write it down. I have it in front of me to find the URL there.

[00:08:08] But maybe others. Or maybe it could be shortened. I don't know. Maybe. I mean, I think they're one of the things we need to see. We need to see a lot more maybe AIs that come out that have some more diverse names. That's what I'm asking for. I say that and nobody can ever spell Alistair, right? And I see all sorts of weird and wonderful ways of Alistair being spelled.

[00:08:31] But there is actually Alistair.ai because my good friend Stuart McLeod, who's building Archie, obviously XFinder of Carbon, actually bought the domain Alistair.ai and gifted it to me as a present. So Alistair.ai is sitting in the wings to do something. Cool. I can't wait for that. If anyone can ever spell it, that is. Future App News article right there. And on that note, should we jump into App News? Sure. Cool. I mean, we're having such fun just chatting away.

[00:09:02] No, we were. Yeah, and actually I was going to say that I wanted to name check at least my top plug for a swag at Account X, which I feel like never gets to looking. But I am going to say, I want to say the best swag that I saw and I got there was a chilli sauce bottle from Capion. Just saying. I've eaten it. It's lovely. Everyone missed out. I didn't see that. But I also question whether you're biased, given your background. No, no, no. And your independence levels though.

[00:09:31] The best swag. If you know me and you know, like, okay, I love my chilli sauce, but this was good sauce. It's a good swag. Come on. I'll tell you one thing for the last few years at events. I've always gone over to the Sift Analytics stand because they have this amazing like braai rub. And I absolutely love having it on. You know braai is like a South African for a barbecue, a get together and eating lots of meat, right? And so they have this spice.

[00:09:59] So this rub that you put on meat and it's incredible. Shout out to Sift and the Zero guys for their spice. Oh my God. I'm going to go and try that next time. That sounds really good. Brian, how about you? Well, the best swag I saw, what seems to have gone around LinkedIn is the little bus from Free Agent. That seems to be for some reason. Yeah. Very cheap. I loved the little toys for kids. I'm a sucker for getting some for the kids.

[00:10:27] I did like also the little fidget spinner that I got on the fishbowl pen, which my daughter loves and has taken with her on her financial financials. I actually made a purpose this year of not getting swag because in years gone by, I think I did a supermarket sweep with Lucy Cohen a few years ago where we did a 30 minute walk and talk. And we went to every single stand and said, what do you have? And we picked up one of everything and put it in a bag and had this massive haul.

[00:10:52] But in the interest of being friendly to the environment and also not having to take stuff on the train home, I opted not to get anything. But that's why I love my chili sauce because like, look, I'm consuming it. It's great. And then I can recycle the bottle. How great. Here we go. No bias. Hey guys, have you heard about Free Agent, the MTD solution that will keep your practice ahead?

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[00:11:44] And they're not just for freelancers and micro businesses. Free Agent scales seamlessly to spotlight what matters and streamline admin for all your clients from startups to well-oiled machines, whether they have 20 employees or two. Perhaps you've got them on our latest episodes of the digital's in a cruel world. Free Agent are proud sponsors of the digital disruptors. So give them a look up when you get a chance. Anyway, let's kick off with that news. Brian, you're on. Zero. Zero. Cool.

[00:12:14] Well, yeah. I'll kick off with something quite small, but interesting from Zero. They have released a refreshed look of the Zero app. Now, essentially, it's got the same functionality, pretty much that, but they have redesigned the menu and the how everything's grouped together, simplifying, I guess, the navigation. I guess, why are they doing this? Why play with something that worked? Well, I wonder if the point of this is that they're slowly building, I guess, their AI tools into everything they do.

[00:12:40] And is the redesign aimed at allowing that functionality to more seamlessly come in over time? I'm speculation. They've not talked about that, but it would make sense for them to redesign. Now, also to align, I guess, with what they've been doing regarding a refreshing the main webpage as well. So, a little release, but interesting nonetheless. Alistair, it would be good to get a perspective from you on that, because I probably agree with Brian.

[00:13:05] They're getting ready to just the base layer of, okay, what is AI assist, AI infused, AI enabled, AI first. You know, so I think they are just laying the groundwork to be ready for everything that they've got now, especially with their announcement of having clawed within Xero. So, what do you think? I think Xero, on the outside, feels confused.

[00:13:34] I think they have an identity about them, if I'm really honest, right? I love Xero. We built a business using Xero, 100% Xero. So, I'm very blue in that sense. But I feel like there's a lack of cohesion in terms of what comes out. I feel frustrated as a Xero customer.

[00:14:00] I feel every time I go into Xero, it's slow to load. And all these AI insights could be incredible, but the core product is just slow. And I think they need to work on that. I mean, to be honest, at the end of the day, maybe we never log into Xero again, right? Maybe it's a headless ledger and we interact with Xero in a different way. So, we bypass the UX and the UI and it doesn't take ages to load.

[00:14:30] But I think, yeah, they're my thoughts. I love some of the things that they're trying to come out with, but I think they're kind of mediocre, if I'm really honest. And, okay, I'm a very demanding practitioner and I'm always looking at working someone, you know, be the best. And I think that some of it is just kind of like it's intended well, but I don't think it's executed very well.

[00:14:58] That's my honest view. Interesting if they come out a headless ledger, considering they were the, it wasn't that long ago, they were the beautiful accounting software, right? So, that would be one heck of a transition. Yeah. I think it's interesting, right? So, if you look at the concept of, what was it, beautiful accounting? Or beautiful accounting? That talks about the user experience. It doesn't talk about the outputs. Ultimately, we want outputs.

[00:15:28] And I guess the beautiful aspect of it was, in order to get the outputs, you have a nice journey, a nice process along the way. I just agree to some extent, because if you go, we just want outputs, we might as well go back to like a grid-like, disgusting format where it's very efficient, but it's really hard to penetrate and use effectively. What Xero essentially did, and what they lent into with that beautiful accounting software, was make it really easy for people to interact with it, to navigate it.

[00:15:56] And you can, I, you can smirk, but that was what their aim was, right, early on. And what's what they lent into? And I think that did change, I guess, how people interacted with their finance software. It took it away from being just accountants to actually business owners. And maybe they have lost their way slightly. I think some of the navigation changes probably lends into that to some extent. But that was what their call was not that long ago. Yeah, maybe I misrepresented what I meant by that.

[00:16:22] What I meant by just outputs is, I don't necessarily mean like, you know, an ugly interface if it's faster. So what I more meant is we're interested in the outcome. And if we can shrink the process in the middle via headless or whatever it might be, then it's actually what we care about is reporting to the client and having conversation with the client. We don't sit there, we don't become accountants because we can spend a lot of time tapping away at buttons on a general ledger. We actually want to do the back end part of it.

[00:16:48] That's what I meant by kind of, you know, output focused or outcome focused. I'm going to say with Xero. So they've got, they've offered Xero business coaches that will help with the onboarding piece. Yeah, it's been greeted with a lot of scepticism, maybe fear mongering, a bit clickbaity, whether Xero and then suddenly going and bypassing the business, the accountants altogether and going direct to business. The same thing that we, you know, heard way back when with QuickBooks.

[00:17:17] But I think, yeah, this is just conjecture. So, Indy, I think this is a really great example of what I was saying before about a little bit of confusion in what the strategy is. And the cynic in me says, are they pulling in these features to help their end user, end customer, the accounting firms, right? Or are they throwing AI mud at the wall for their share price?

[00:17:45] And this is the cynic in me going, like, I just, as a practitioner, someone that ran a firm, are these the most, the highest priority things that they can be doing? What do you think? I mean, you're right. They also did the benchmark thing this week. So they obviously had the benchmark on it too. I can share my thoughts on that as well. You can share your thoughts on that. And I think, like you said, maybe this is like, is it the right focus priority? We saw last year was a big year for payments. Big year with Stripe.

[00:18:14] Big year was all about zero tap to pay. Everything was all about making sure that payment piece was handled and done. This year, it feels like it's the zero, the year of kind of like shaping that AI piece. And I don't know if that AI piece is focused solely at accountants or actually just extending it right the way through to businesses as well. Yeah, I think, you know, if this was an earlier stage business, I'd be like lapping this up saying, this is amazing. This is brilliant.

[00:18:41] But I guess we all come to expect, you know, much more significant evolution or things from zero. So maybe I'm being a little bit unfair and a bit too much of a cynic. But yeah, Ryan, what were your thoughts before I kind of share a bit more about the benchmarking that's come out? I mean, I don't like the fact that they're encroaching on what I think accountants should be doing. I mean, as a software vendor, focus on the software and we focus on the advisory. But I sit in that digital transformation piece, right? And I think that accountants should be leading that.

[00:19:10] And something I've always been nervous about is what Intuit did over in the US with QuickBooks Live. I think that was the right term. Might be the wrong one. But essentially bringing in, I guess, advisors that then would roll over and do your, not quite do your processing, but be your consultant in the background. And they started to try and own that accountancy space, cause massive conflict in the US with the accountancy sector.

[00:19:38] So I just don't want zero to go down that route. And it feels like this is the first step on that. And I really hope it's not. Yeah. Yeah. Shall I share a little bit about zero benchmarking that's recently come out? So I think the last time you had me on as a guest was, we talked with John about DEX benchmarking. And I said at the time, love benchmarking. Honestly, it's fantastic because you can understand where are you relative to everyone else and where do you want to improve, right? We love heatmap, right? Yeah, exactly. Oh yeah, you remember it.

[00:20:08] I love a good benchmark. I love a good baseline heatmap. And so I think this is really good in principle. And I think it helps accountants think a little bit outside the box in terms of just maybe some core services that they're giving. Helps them think about, okay, where is my client relative to where they could be? And so I think that stimulates kind of a bit of thought process from the accountant. So I think that's good. So for those non-advisory accountants, it's a good starting point to really have a good conversation with your client.

[00:20:37] What it covers is it covers revenue, profitability, cash management. So it's got things in there like revenue growth. It's got gross margin. It's got things like debt-to-days, credit-to-days, how you compare in the same industry. So if you remember in Xero, you can tag your entity, your client as to which industry they sit in. So it could be professional services. It could be a digital agency, that kind of thing, right? So you tag that, and then it sits and compares you to 100 or so in a peer group, and you can slice and dice it by geography as well.

[00:21:04] So the main territories that Xero are in. So it can compare you. There's a bit of a visualization where you can see on a slider as well. And then you can get some AI insights to help you kind of think about how you could take to your client and have a think about it. I think you can hide a bunch of metrics that aren't relevant to you as well. And, of course, you can download it, send it to your client, all that sort of stuff. So that's what it is.

[00:21:31] I think, in principle, this is really good because it helps more of the profession shift a little bit to having more constructive conversations about overall business improvement. I don't know if you guys have tried it or not. I try to try it. So any of the Xero entities I personally have, I'm not on the right license for it. So there's a restriction there on licenses, right? And so that's one thing. It takes you over to a SIFT analytics domain with a Xero subdomain.

[00:21:53] And so I feel even though it looks the same product, I now feel like I'm in a different environment, a different product. I've been taken away from my natural environment. And it's slow. I've mentioned that before. It's a little clunky. If you want to switch companies and see a different company's benchmark in your portfolio, you have to go back to the main Xero and then choose the company and then go back out into the SIFT analytics. It just feels a little slow to low. As I say, I'm demanding.

[00:22:22] I want more and more and more. You know, if you've got an advisory background, you'll have done benchmarking, you know, long before this comes along. But I think in general, this is a good thing for the profession. I think it's a good thing they've released. I'd like it to be faster. I'd like the UX to be a bit more seamless. But I think actually the bigger question is, and maybe one of them for you guys is, what does this mean for the likes of Spotlight and Fathom?

[00:22:44] You know, when they're bringing more into the price, not my price point, but more into a bundled service that, you know, competes with some of the apps in the ecosystem like Spotlight and Fathom. And there's a data set, there's a proprietary data set there that SIFT analytics or Xero are bringing into the mix that you can take to your clients that Fathom and Spotlight don't have unless you have it in your practice. So, yeah, what's it mean for them? What do you guys think?

[00:23:14] Well, I think when SIFT was acquired, I think they must be looking over the shoulder, right? Because they knew something like this would happen. I think a good positive is actually the speed that Xero seemed to have embedded SIFT, because if you look at what happened with HubDoc, it always sat on its own. And now you've kind of got these analysis analytics, you've got benchmarking, all of those more advanced functionality that's sat in SIFT is starting to feed its way. And I agree with you, at the moment, it doesn't feel slick in certain areas. It feels like you've moved somewhere else and you kind of lose that experience.

[00:23:44] But overall, it's generally a positive. The bit I would say is you still have, in certain areas, benefits of using an app. There is always going to be a benefit of using an app if you need to deep dive or take to a new level. But reporting has definitely been a big push for SIR since the SIFT acquisition. Plus, what they're doing with the OCR, with the bills extraction, that's pushing into kind of what Dexton, AutoEntry, Data Molino, et cetera, used to do. Yeah, I mean, they're encroaching.

[00:24:12] But they're also still evolving things. So I've got something from, I guess my last bit from Xero is they have released now the Xero. It's a Xero session, isn't it? This is literally sponsored by Xero. Well, but not based on your grilling of them. An independent view of the market. That's what we are. It is indeed.

[00:24:31] And so what they have released is the Xero Partner Hub, which I think we talked about in a previous episode, but is now going live from the 15th of June, where it's essentially Xero HQ, but now embedded with Jaxx. That's my understanding of it. It's not really taking it to a new level. But once again, redesigning that core layer. So they've done it with Xero Blue. They've done it with now the app. They're now doing it with what was Xero HQ.

[00:24:56] I wonder if they're ever going to get rid of my green Xero, because that seems to have was promised maybe a decade ago. They're still there in the background because they're not moved all functionality in Xero HQ. But I wouldn't say this is a huge shift. Once again, they're rebuilding the underlying platform. Think of what Intuit have done moving from Quibbles Online to now the Intuit platform. I think they're just enabling their system to work more effectively with AI. That's my take on this one. I think they're streamlining.

[00:25:25] They're probably trying to cut loads of development out so they can make the core product faster. Well, they need to, by the sounds of it. Yeah, they do, they do, they do. If we want to bash Xero some more, I've got some feedback on the webhooks as well. Maybe we should move on. Different session, I think, that one. Alice, to tell us about Johnny Gaw and tell us about Socket. So I had a lovely catch up with Jonathan this week. And we were putting the world of accounting to rights.

[00:25:54] So that's always nice. I always love catching up with Johnny. We chatted a little bit about his new hires. And someone, specifically Simon, that's come into the business earlier this year, which has helped him and Rich get real depth in the management team. Simon's ex-PWC, ex-DEX product manager. And so he's an accountant. And I love the fact that we have accountants building technology because they really understand the pain points of their ICP. So that's cool. I don't know if you saw the post from Jonathan about

[00:26:25] where Socket will be able to take your call transcripts. And they can take it from any note taker. So granola, Fathom, vinyl, other note takers are available. And they can take that and they can ingest it into Socket. And they can actually prepare a proposal for you. And I love this, right? Because having been the one at Flinders that did the discovery calls, I'd then convert it into a proposal. And it would be a little bit laborious. And it'd always be like, if I did it straight away, it would be fine. I'd have it all there in my head.

[00:26:54] And I'd be able to write a really solid proposal, which is really relevant, really touching on the pain points of the client. But if I left it, the longer I left, it's like anything. The longer you leave it, the relevance to the client and the quality of what you actually write deteriorates significantly, right? So I love the fact, and I sent this to Luke as soon as I saw it. I was like, Ascendant, you have to use Socket. Now they've got a long list of priorities, obviously. But so I'm a big fan of this. I really see the value like personally in it. I think it's a really cool feature.

[00:27:22] You can also add in some of your own bullet points. If there are things on the call that you may be, things that weren't on the call that you think are really relevant, and that'll ingest it. It will pick up your service catalog, and it will write your proposal for you. You can enrich it after it's done that, of course. And it'll give you a confidence level as well on like a kind of rag status on the points in the proposal. It can write you an intro note. So it's much more personalized for the client as well. And I just love it. One, I love catching up with Jonathan. And two, I think this is a great feature that they've built into the product.

[00:27:51] So I think you guys have tried it or seen it. Yeah, no, I think it's super logical. I really like it. I did see it. I think that, you know, it makes sense. I've been doing this in my own life with some of the AI notetakers and then converting it straight to a proposal. Logical flow that it goes to the lesser engagement, goes straight out. And I think that's a great feature that I've done. It's a great feature that it becomes more sophisticated, that it just inhales from something like it follows it all the way through.

[00:28:20] Like you said, it's that confidence around whether that actually covers every single thing in it. And I don't think that we're 100% there yet on some of the AI outputs that I've seen because, you know, some note takers, they just miss the actual point of what the commercial negotiation should be. And it just, unless you're very explicit in making the decision on that call, then it is something that maybe, you know, you'd still need to revisit. But it's a very great first step in making sure that, you know, seamless workflow all the way through.

[00:28:50] So then getting something signed and put into practice. If it can give you 80% of a proposal and you manually top it up with 20%, that's similar to someone else preparing it for you, right? And so for me, it's a great win. So, yeah. It's cut out at least like a whole person. Like as in a whole person. Whole person. Whole person's worth of salary over the course of a year that you would then say, okay, yeah, this is what your is.

[00:29:17] You know, you don't need someone that's like suddenly by your left hand side. It's like a clone of you, right? Yeah. So this was a good feature that they launched in advance of AccountEx to have something to talk a little bit more about AccountEx and ask Johnny what's coming next. And they're very much focused on forms. And onboarding, collecting the right info as seamlessly as possible from the client and all the other stuff that has to go into onboarding a client that I used to pass off to someone else. The boring stuff. On the client.

[00:29:45] They've done the nice shiny bit now onto the boring stuff. But no, I've been waiting for a specific feature to be released from Socket for us to use it internally. And this is going to be a big game changer for me because I do exactly as you say, Anna. So we run that initial meeting. There's notes I literally refer to from the notetaker when I'm writing a proposal. I don't know why I need to do that. So big win for me. Great feature from the guys that know. Unfortunately, according to Wendy, I need to now make myself redundant. So it's going to be a challenging year for me at home. But that's... Ryan, don't you know when you run a business,

[00:30:15] that's your major win and sole focus is to always make yourself redundant? It's true. I need to work towards that. And this is the first step. So I've got something from Intuit. They have done their spring 2026 update for Intuit Enterprise Suite. Now, this is obviously a big product. We see this a lot more in the US than the UK, although it is gaining some traction in the UK, I believe. And what have they focused on? Well, they're focused now on intercompany transactions.

[00:30:43] So eliminations, bulk management of transactions across various intercompany areas. And also the auto categorization and direction of where transactions go from intercompany. Plus, they've moved into enhancing their management reports. So focusing on board packs, because obviously from an enterprise level, this should be what it looks like. So rather than just what's inside the system, client facing financial summaries

[00:31:10] and the ability to add calculated fields in a lot of their reports. So rather than just relying on what's in there, being able to code something directly inside the system. They have also, and I think we talked about this not that long ago, they've been refining QuickBooks online payroll and they have transitioned it to workforce. I don't know why they've renamed it workforce, but that's what they've done. And they've now got workforce elite inside the Intuit Enterprise Suite, which is essentially a full HCM solution. So going from HR all the way through to payroll.

[00:31:40] And then the final bit, I guess, I wanted to focus on is they released a construction version a while ago. Once again, I think we touched on, they're now really dive deep into the WIP reporting and looking at incremental metrics in construction, specific timing from WIP reporting. There's a lot more that's in there, touching on inventory enhancements and purchase orders, sales orders, et cetera. But those are the big feature releases

[00:32:06] and shows really that they're really going after that mid-tier space because that's something that the intercompany especially and the advanced board reporting, where we're seeing a lot of focus in that kind of step up from the small business space that you'd normally see QuickBooks in. Nice. That's kind of cool. Yeah, no, isn't it? Kind of cool. It's good to see. Fully covered. No comments. What does that say? They're going more into,

[00:32:34] they're seeing more of their original clients evolve. It's probably just a logical part of, you know, how long they've been around and their clients also having more complex structures. Yeah, they've evolved upwards because they had QuickBooks Online advance that they released, which is kind of pretty much the same as QuickBooks Online, but you could do a little bit more, have a little bit more granularity. Then enterprise takes it to that new level and they've really been investing heavily in this space. So I think they see this as an area of growth.

[00:33:01] They're no longer just playing in the small business space. They're really pushing hard for that mid-tier. It's quite interesting, isn't it? Because Xero have come out with their, what's it called? I can't remember the name of it. I think they've launched it initially or to a small base in Australia. Is it five to 20 million pound target audience? So yeah, it's quite interesting. Xero are coming out with that. You don't see that? Maybe. Not seen this. App News for another show. A sneak peek. Is this something that's actually been announced?

[00:33:31] I'm sure you've got some insider knowledge from all of your grilling of Xero. They give you little insights. I think after today, they may take me off their mailing list, but no, I love Xero. I love Xero. I'm saying the feedback with the fondest of heart. But no, I think it's public news. I know. Quietly while you talk. Well, I know that they have been focusing on an enterprise level. I say no. I don't know. I've assumed, because of lots of things we've seen

[00:34:01] over the last six months or so, that they are kind of building towards that. And they've got their fair use policy. And they've really been attacking, I guess, those clients that are abusing that, that have gone way beyond the transaction levels that Xero should be used for, possibly impacting the speed of the system itself. And so they've been moving them into dedicated servers to kind of help, I guess, improve functionality for them. So it's a bit unclear as to whether it's the same Xero

[00:34:30] with different functionality or not, but it's Xero Ultra. Have you come across that, Ryan? I have not. It's a top tier plan. Top tier plan launching in Australia in late June, targeting 20 to 200 employee segment. Core features are relatively market agnostic with UK being another interesting market for them to release in. So yeah, maybe watch this space to see if Xero Ultra comes to the UK anytime soon. Well, we're not that far away from Xero Con, so maybe this is where Ultra makes its appearance. I feel like we're getting into kind of Marvel studio.

[00:35:01] It does feel a bit Marvel-esque, doesn't it? It's the age of Ultra. The age of Ultra. Was it the age of Ultron? Ultron, yes. Anyway, I'm going to go the other way, actually. Sage has got something and I'm going to impress you, Alistair, with this as well, because, you know, clearly that works for you with QuickBooks. It's another way. It's Sage's MTD agent, although cost of making MTD more manageable. So they've expanded the MTD income tax agent with client matching and HMR income sourcing matching

[00:35:30] and quarterly job creation. I won't overdo the marketing angle on this, but the real story is that Sage had launched another MTD tool and the other probably even more real story is that MTD is creating enough administrative drag that I guess some of the vendors in our space now need automation just to make the policy workable at scale. So Sage's agent is trying to solve some pain points, which is identifying which clients are in scope,

[00:35:59] matching HMRC income sources and creating quarterly jobs, spotting the missing data and managing reviews all in one hub. Fairly useful. I think that it is kind of also maybe exposing a little bit of the absurdity of what we're going through or what you're, you know, what most accountants are also going through, being asked to take on some of the, again, low-fee sole traders and landlord clients through a more frequent reporting cycle. And there's a lot of criticism of kind of,

[00:36:28] you know, we're hearing a lot more noise of this and maybe that's just because it's really starting to bite now. So there's a lot more authorizations, more checks, more chasing, et cetera. And so Sage is doing some damage control, I think. And there's a little bit of a Sage-specific problem as well. I think they talk about a multi-ledger system across Sage, sole trader, Sage accounting, Sage 50 and embedded banking partnerships. But the reason for this unifying agent is needed because the underlying estate is fairly fragmented.

[00:36:57] So the agent hopefully will help, but yeah, maybe we're just moving over some of the complexity of the product. So the clearest way I can say this is that Sage has built a working layer that is to make MTD less painful, but is not yet, I guess, for like, it's not proof yet that Sage has sold its own product fragmentation. Does it reduce the cost? Does it, you know, help chasing the clients and protect the margins?

[00:37:27] I'm not sure yet. So what do we think about that, Alistair? Does MTD create enough useful real-time client insight to justify the quarterly workload? Or are most of the accountants that I've read in some of the forums asked to be automating things that are a part of a pointless process? I think Ryan's jumping at the bit to answer that, so I'll let Ryan answer. Sorry, he just came off mute. But I wasn't...

[00:37:56] Well, Ryan, you can answer if you want to. It's all right. You seem to have jumped in a bit. I've been one bald accountant on this show, and I've been... I've been sublumped. What's it called? I've been replaced by Alistair. So my viewpoint on this is... Upgraded. Upgraded. My viewpoint on this is that we're getting an interesting divide in the small business space where Sage and FreeAgent are really focusing their developments on MTD, and Intuit and Xero are focusing their developments on enterprise.

[00:38:25] Not with, I guess, exclusively ignoring the other direction, but you can see a path, and I find that really interesting. We've kind of got that natural divide now. And yeah, whether this solves a lot, I don't know. It's another one, another release that Sage for accounting, especially focusing on how do we solve for the micro-businesses? This is our key focus. This is where we're really driving our growth or our target market. It's interesting, isn't it? When you look at it, like,

[00:38:53] there are way more very, very small micro-businesses in the economy than there are larger businesses, but you think the kind of the price elasticity there, excuse me, at the smaller end, is very, very tight in terms of what you can make, and you're probably pricing what's seen by many is a must-have commodity service, and so there'll be pricing pressure on there. And so you're spreading that very small price over a very large number of clients, but then if you try and increase the price and get value out of it for the business, for revenue for the business,

[00:39:22] it's probably a lot harder than if you go upstream to more mature businesses, because you'll be able to charge a lot more and keep going, because those businesses are going to grow more substantially. So I think it's quite an interesting one, isn't it? How these kind of large corporations are looking at the market and looking at expanding their footprint in different ways. But then again, Sage have some great mid-market products already, So if you look at Intact, and well, Intact, yeah. No, no, I mean, that is their, that is their,

[00:39:52] that is like the pioneering product in their suite, isn't it? They have great traditional systems in the space as well, but actually as a modern cloud-based solution, they've got Intact and then Intact Essentials, which is just Intact, but, you know, smaller essentially. Yeah, and the other two in the UK market don't really compete with it on that same level. So if you look at Azure and Intuit. Well, you've got Intuit Enterprise now, which I guess is competing, but yeah, a newer entrant. Yeah, that mid-tier level is,

[00:40:22] there's a little bit more fragmentation, isn't there? Because you've got iPlistic, AntIQ, NetSuite, and Ryan, I'm sure you can, in your role at Digital Disruptors, can reel off a bunch more, but it's kind of more fragmented, I think, isn't it? Yeah, and I'd probably argue that NetSuite's probably bigger in general. So they're kind of, well, more enterprise level, even though you've got, I'm calling it Intuit Enterprise, it's aimed more at mid-size. So it's confusing from terminology. But yeah, if you get me going on this, Alistair, I'll be here all night. So I'll pause.

[00:40:53] Yeah, and I know that we've got to cover it. I've got one more thing on stage, but we also, in saying all of these names on this podcast so far, I did see, I've not heard anything much about Iris. So I'm going to throw that grenade in there. It just seems to have disappeared. It's cleared off the radar. Well, no, no. Iris are very focused on internal systems for accountants. So I guess what we're talking mostly around

[00:41:20] has been the underlying ledger. Front office. Yeah, whereas Iris is mostly back office. And that's probably why we're not talking about it much because it's not the space they're normally playing. But speaking of Iris, Alistair, HG. Jesus Christ. HG Capital. Love the link there, Andy. Love the link. So HG may be a set brand that people have heard of, but maybe not directly. So HG Capital are the ones that own or invest, I should say,

[00:41:50] into many of the accounting tech vendors that we see, So HG is a general partner. It manages multiple funds that invest. Some of those include the Access Group, Bright, Caseware, Iris, as we're talking about, which obviously made the DEX acquisition, I think, last year. Visma, big in Scandinavia. Azet, which is a professional services firm. A bunch you would never have heard of as well outside the accounting world.

[00:42:19] But the part here that's interesting that's been in the news recently is HG Trust, which I think is a FTSE 250. It was listed, sorry, it's certainly listed as investment company, but I think it's a FTSE 250. It acts as an LP for the funds. And so it basically invests that money that it's got from the public market into across the funds that HG manages as a general partner, right? If you don't understand private equity fund structure, then I'll try and keep it relatively simple.

[00:42:49] So anyway, the interesting part is that the underlying businesses or the portfolio companies that HG invests in actually improved since last year. But ironically and conversely, the HG Trust, the listed entity, share price actually fell. So that's kind of counterintuitive. So I guess the question is, well, why when the underlying businesses that that fund or that trust owns, why did the share price fall when what it owns actually went up? And so the reason for that is public company,

[00:43:19] public software company and comparatives. And so we've seen Intuit go down over the last 12 months. We've seen zero lose share price over the last 12 months. But so what exactly does that mean for these private companies? Well, I think my view is it means we're in a state of limbo at the moment. And there's this threat of AI. And so the private investments have to reflect the kind of the index that they are benchmarking against and what their valuation are. But nobody really knows

[00:43:48] where it's going to land. And actually, we've seen some big influx of investments into HG Trust betting against the tide of what's been happening. So I think that's just one. It's a bit of news, but more one to watch and see what's going on because I think nobody really knows. But overall, HG Trust is reflecting what's happening in the wider public markets around software as a service. So I think we've talked about this and now we get the terminology right, but a Saspocalypse, was that the right terminology? I always said

[00:44:17] the wrong thing before. It is. Someone used it. Yeah, that's cool. So the Saspocalypse have been hitting the listed companies. And what you're saying is because HG owns private companies, they've reflected that in the valuation of those private companies. Is that correct? The simplest way to explain it, yes. Yes, that's correct. And it's not necessarily that somebody can spin up and vibe code a zero over the weekend. It's more a case of, you know, what is the market share going to be

[00:44:46] of a zero? I really don't want to pick on zero, but of a public company that is more SaaS focused versus one that's more AI native and money is just shifting towards different asset classes. Yeah, makes sense. Yeah, I think it's, like you said, interesting one to watch. Say, oh, I see this just as a market rotation, right? And I think that most people are looking at the markets right now with technology in particular, you're seeing that there is more

[00:45:15] of a trend towards having a hard asset, having something that you can tangible and, you know, value. And I think that that's what we're seeing is just the same cycles that we see across all markets that, you know, right now we're kind of seeing something that, okay, the underlying infrastructure to AI and technology hard assets energy and that's why we're just seeing the market kind of move a little bit for the next, you know, for the next year or something or not year, probably a little bit

[00:45:44] longer than that. Just while we, you know, while everyone stabilizes and sees what happens to some of the big software companies in which direction that they go in really. And I'm just glad John's not on here if you're talking about hard assets but the other thing is the balance between... Nice of you to bring his energy to the podcast. I feel, I miss him, I feel. I have to bring a little bit of John back in, right? I think it's that balance between hype and trust, right? Where you've got

[00:46:14] people putting money at where we think there's a possible explosion, that hype and then also then going, actually I'm starting to lose a bit of faith here and going back into the trusted market and it kind of going in flux between the two and that's kind of where we're trying to find that balance with AI, right? We're not really sure where we sit, what's actually going to be delivered in a realistic and tangible way. Yeah. And that actually, just a nice segue back to account text for a moment actually, that was what the main message was

[00:46:43] when actually most of the AI talks were said and done. A lot of the majority of people there and I think I heard so many stats about this so it ranged between 70 and 90%. No one really knew what they were going to do with AI this next year so that's nice to know. And speaking of AI again, Sage has said that the Sage CEO, Steve Hare, has said that accountants will no longer trust black box AI technology and everyone wants more of a right to inspect. That's something

[00:47:13] I think is fairly logical. I mean, the article kind of goes into a little bit more depth. Steve's been doing like a number of different talks and I know that John met him as well a couple of weeks back as well and so did Alistair. I'm not sure Alistair, you can probably talk about it. But in accounting the problem is not whether AI can produce an answer, it's whether the accountant can inspect the answer, verify the logic, still sign their name against it because in the end I think that's what it comes down to is liability. You can't

[00:47:42] outscore that personal accountability unless there's an insurer that's willing to take the risk on. I guess that if a machine prepares all of the reconciliation and all of the things to do with the month-end or flags the outliers, the accountant has still got to be responsible for deciding whether those numbers are right so the show you're working matters more than looking at how clever each model is that comes down the track. Most of the AI hype around this falls down and it gives

[00:48:12] a confident answer that spits it out in no time but there's not always a trail that shows you the logic to get there and how to get there. I think the interesting bit is that yes, AI won't stay invisible inside the subscription forever but I think the interesting bit for me comes down to pricing and everyone talks about trust and I saw a couple of comments online trust is down to auditability

[00:48:42] and again the record keeping. For me and I think touching on what we just said about the markets and how they're changing I think the compute cost is the money so I think vendors in general are showing that they're moving towards hybrid models where you have core subscriptions output based pricing but also we're going to start seeing things like usage bands and credits premium AI tiers wherever that needs

[00:49:12] to go to because the pricing isn't fit for purpose right now. I think that's where accountants are going to pay attention more closely attention to how that impacts their own pricing model to their customers there's a gap between okay what happens with AI as native feature inside a SaaS big platform that you're already paying for or those that are specialist AI tools that are built directly on the models themselves the same task could cost pennies if you're doing it

[00:49:41] one way or another. I think people just need to have more of a closer eye on the bottom line. I think until we understand that the trust is just not going to be there. I don't care about the auditability and all of this sort of stuff. I think once you actually understand the margin that you're making and the marketplace economics and we said it last time Alice actually you said it last time is what did you say it was the double subsidy so I think the

[00:50:10] winning AI and accounting won't be the flashiest or the smartest. I think it's going to be a combination of inspectable auditable and it just gives you a much simpler version of what the pricing model is and some predictability around that. That's my view. What do you think? I think spot on most of that. I think one of the talks I did at Countex I called out for users of AI products to look for those that are publishing

[00:50:39] accuracy rates and ask them what they are. I think the thing to remember is humans don't get things right every time but we don't have automation bias when we review a human. We don't just skim over it. We review it because we know they can get things wrong and we put certain controls in place. That will happen. We shouldn't necessarily hold AI to a higher level of that but this black box that we're talking about,

[00:51:10] what is it spitting out? What are the accuracy rates and how are we making sure we don't have false positives as part of that process and being able to have some sort of rationale as to what the decisions or inverted commas decisions were. Yeah. But I'd also say that it makes sense for the SAGE CEO to say this, right? Because he's trying to get people to want to use SAGE and that's kind of the basis of what they're building and how they're building it. So I mean, it makes sense and everything you say makes sense. It's kind of like,

[00:51:40] does it need to be said? To set a point for a moment, do you think that actually now those are the CEOs in most of these tech companies and tech outfits, there's more of an expectation for them to have a strong opinion and really understand the guts of what it is that they're handling than before because in the past, I don't know if we would have expected SAGE as CEO to have a really strong stance on AI in general. I don't know. I mean,

[00:52:10] it's a core part of their product. Steve Harris is an accountant by background, right? He was a CFO before he moved into CEO rules, so he probably, well, maybe empathize isn't the right word because I'm not sure if he can empathize with us mere mortals that aren't FTSE 100 CEOs, but he can empathize with the role of an accountant and the ethics around accounting and the judgment around accounting more so than maybe someone from Silicon Valley can. Yeah.

[00:52:41] I have another thing, if we can, if I can just sneak this in, because I think something you said about liability is important and it kind of comes to one of the points that came out of Damon Anderson's report. Damon Anderson, if you don't know him, a friend of mine, is a mediocre snowboarder. He was a CEO at Xero in the UK for a while and he works in the, well, I would say the SaaS rev-ops area, but let's call it technology rev-ops area now and

[00:53:10] he's did some consulting and investing in space. He spent a couple months doing quite a bit of research across the space and accounting and mapping kind of 200 to 300 apps around the space to understand what they do, what their maturity is on an AI level and just a little bit more about what does the space look like. So he's got this really, really powerful map on his website which is I think a-to-z ai-accounting dot com if you want to go and check it out. He's also got a report in there which you can read the methodology and how he's

[00:53:40] done it. But there's lots of incredible insight there. He's really mapped the industry very, very well. I don't know if you've read it Ryan or Indy but there are three things that come out there. The first one that I really liked is this third moat at the moment that accountants really own and still own right. This liability absorption and nobody to your point Indy is from a technology perspective is absorbing that liability and that's why we still have this human interface. So clients don't hire accountants necessarily to do the numbers.

[00:54:10] He's saying they hire them to outsource the anxiety of getting it wrong with HMRC which I think we'll go beyond HMRC. It's the liability to get it wrong period. Which I think is a brilliant point that he's raised. Another one is the seams not the boxes. I'm reading this verbatim. Every vendor you can name today owns one of the boxes. Almost none of them own the lines between them and that's the orchestration layer going forward that will handle that and that's a defensible position that will be formed as time goes on.

[00:54:40] The third point I want to share is he says 80% of accounting software is at risk. The long tail point solutions, dashboard, presentational tools built on top of someone else's proprietary software or data. They have no infrastructure underneath them and most of them will get absorbed as features by orchestrators and I love this quote. They are barnacles on the whale. I think he's done an incredible job. He's got so much insight into the profession as it is today,

[00:55:11] probably more so than anyone given the conversations he's had and the report he's pulled together. As I say, you can get it at a-to-z ai-accounting.com. It's a page report, but whack it through the business and you say the tax. It's a really, really insightful report. Also, you can actually listen to it in his Kiwi twang if you wanted to listen to it on a walk rather than read it. I like that. You're right. It's a very good synthesis of all of the main areas to do

[00:55:40] with what we should expect in the space. Again, Damon's evaluated. He's got over 300 different accounting apps listed in his directory, some of which have obviously claimed their own pages. been able to add in what AI automation they already have within their product as well. You can at least have an understanding of which workflows they touch and how they're looking at being AI first or AI-assisted

[00:56:09] within the product itself. I think at the Adfin drinks, I was chatting with Damon and we found a new app that he hadn't come across which became number 304 in his directory and he added him then and there at the drink. Wow. Shout out to Adfin for putting on the drinks. Yeah. Well, shout out to the many people that put on different varying Degrees and drinks. Shout out to account actually for making sure that we all got together. Massively, massive shout out to

[00:56:39] Carrie and Rachel and the team there for putting on the counter. All right. Well, so I think that brings us to a close of this week's Digitals in a Cruel World podcast and we're very, very thankful to both Ryan and Alistair for joining on this week's podcast. If you liked what you heard, please make sure that you do subscribe, follow, whatever you need to do to make sure that you stay connected to us. We will be releasing episodes daily that are short from this main

[00:57:09] podcast, so if you catch us on LinkedIn, feel free to join in the discussion. Obviously, we went very blue heavy and very blue hard this week, actually hard on them probably. Only because we love them, only because we love them, that's all. You know, like the favourite child always has the hardest ride, so just remember that zero. And hopefully if you haven't already seen our awards nominations are now open, so if you haven't already found someone to nominate, look to the person to the left of you, to the right of you, and please put down their name and submit

[00:57:38] them for a Digital Disruptors Award later this year, which will be pre-AccountX North. And thanks again to Ryan. Thank you. And thanks again to Alistair. I will catch you soon. Catch you on the next one.