There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Isaac Heller: Hey, everyone, this is Isaac. I'm CEO at Trillian. And today on AI, accounting, intelligence. We'll be talking with real people about real things related to AI and the impact on the accounting industry. Stay tuned. Welcome, everyone, to AI. Accounting. Intelligence. Our podcast today. I'm Isaac Heller, CEO of truly and excited for [00:00:30] for a fun one today with M Daigle founder of automates. M how are you doing?

Em Daigle: I am great, Isaac. Thanks so much for having me. I really appreciate it.

Isaac Heller: Likewise I've got I've got my, you know, my Trillian hoodie on. I'm feeling comfortable. I'm excited to talk. Where are you today?

Em Daigle: Today I'm in Los Angeles. I always joke, have laptop, will travel. So I'm always here, there and everywhere.

Isaac Heller: Very nice. Um, well, you know, M and I have [00:01:00] talked in different cities, you know, in these conversations. So here we are in Los Angeles today. And I mean, I, you know, I'm introducing you as founder of automates, which we'll get into automates. We've got a lot to get into. We'll come back to automates. But are you the CEO of automates. Are you the the CMO are you the are you everything. Is that how it works?

Em Daigle: I'm kind of everything at the moment. So official title TBD. Um, but yeah, just trying to get this up and running and excited [00:01:30] to do it. But learning a lot along the way about things I have no business knowing about, like websites and all of those types of things that I traditionally did not have my hands on keyboard for. So it's been really humbling. I'll say.

Isaac Heller: Very interesting. Well, I can relate. It's it's the life of an entrepreneur. It's something that I think a lot of people strive for, maybe mistakenly, you know, it's a little bit more glamorous on LinkedIn than it is I actually [00:02:00] I had to figure out how to to to clean the our bathroom at the office today, you know, so you could you could be CEO you could, you could you know, be anything one day. And that's kind of just getting the job done. But I guess before we get to automates and all the fun stuff in between, um, like, you know, you started off as an auditor, I guess. Tell us a little bit about your background and, uh, I don't know you a little bit as a person.

Em Daigle: Yeah, absolutely. So, you know, I think I took a similar start that many people do. So [00:02:30] started in public many, many moons ago when Arthur Andersen was in business, um, as an auditor. So started out there, you know, my professors in college said, this is the way you got to go. So I did, um, public really wasn't for me. So then I went into industry, um, and did all things general accounting, uh, into Rev Rec, where I really got a lot of, um, interest on, on more of just the Operational side, but thinking about how we can change how we do things. [00:03:00] And so about the time that we saw a shift in how companies started offering their products, SaaS, subscription managed services, the traditional models and ERPs that we had weren't really able to handle the complexity that those required. So I ended up starting my own consulting business, which I had for a number of years, about eight years, actually, where I helped companies automate their manual processes to be able to handle those types of new offerings, [00:03:30] and in that time ended up implementing Rev Pro, which is now Zorra revenue a number of times. So at the time that Zorra had acquired Rev Pro, they had asked me to come on board from a go to market.

Em Daigle: I'll say strategist perspective to try and figure out how we can put the solution in the hands of accountants. So I did that for a little over six years, made my way over to clarity also to do something very similar go to [00:04:00] market strategy, getting the product from in-house to the accountants so that they can really embrace it, automate their processes and that sort of thing. So I loved all of that. However, I never loved having to focus on one solution. I'm a firm believer that there's not a perfect tech stack out there. I think that there is the right solution for the right problem at the right company at the right time, and I think that evolves. I think people [00:04:30] move around. So what might be a problem for somebody one day at a public company might look very different than a problem they have if they shift over to, say, a startup. So I think it's been an interesting road, but got me into this space where we kind of bring all of that together and figure it out as a group with automates.

Isaac Heller: That's awesome. From from auditor to to automates. And I will say, you know, for for those of you listening, if you want a brief history of the software [00:05:00] industry, I think there's no one as qualified as M to write some of the things you were mentioning. Rev Pro is a product of Zora. If I recall, they acquired a company called Leo. Is that correct?

Em Daigle: Correct. Yep.

Isaac Heller: And and which became Rev Pro I at the time was working at a pre-IPO tech company doing 606 implementation, you know. So for those of you that assumed it was always 606, it wasn't. It was 605 [00:05:30] and then it became 606. It was a lot of fun. And then, you know, kind of after Zora clarity is a company that does a lot of document automation related to revenue and order management. So you're kind of at the crosshairs of all these different changes. And and exactly. I would I would read the book about the history of Rev Rec, I you know I would, I would, I would, I would definitely promote it for sure.

Em Daigle: I love that, I love that maybe someday we can write that I, [00:06:00] I'm not sure there's a huge audience for it, but maybe it's bigger than we actually think.

Isaac Heller: Yeah, definitely. Um, okay. Awesome. So maybe I guess I'm like, kind of curious. What do you think it is about you? You know, starting as that Arthur Andersen auditor that that CPA and accountant and then really almost like it's a pretty strong pivot into, well, I'm a technologist and I'm applying this to my trade of accounting. What do you think it is about you that made you gravitate [00:06:30] much more towards the latest and greatest technology? Whereas sometimes, you know, auditors and and accounting professionals kind of stay in the lane of the tools that they, they use. What's that? What's that nature? What's the quality?

Em Daigle: That's a great question. You know, I think there's I have this innate curiosity around, um, I'll say problem solving. And so I always found myself, rather than being focused on the financials and stuff, it was going through the process. I'm [00:07:00] like, there's got to be a better way. There's no way this is the best we can do. Um, and I'm a big fan of Excel. It has its place. But that being said, I definitely have a love hate relationship with it where I found myself trying to make a template out of everything in a spreadsheet because I'm like, I'm doing the same manual task, I'm doing the same pivot table, I'm doing the same Vlookup. Like, there's got to be a better way to do this. So as all of these technologies started to kind of come [00:07:30] to life, um, when our standard ERPs weren't, weren't really handling it, and now I feel like with AI and everything that is going on, the barrier to entry is so much lower because we can really start to I'll say, uh, you know, expand the bounds of what we can do with it. Um, I've just always been drawn to that. So, you know, anytime I see a new solution out there, the first thing I do is like, jump online, try and figure it out. Then, like, Google a bunch of things about it and then [00:08:00] reach out and try and understand what they do. But I've just always been drawn to that sort of problem solving way of doing things, as opposed to, I've got this process to do, and I'm going to do it this way today, and I'm going to always do it that way. Not to say that that's a problem, right? Like, we all need somebody to do all of the different things. But when it came to the financials, I was never really fully interested in that, but always interested operationally, like how can we make that better?

Isaac Heller: Interesting. So it's like, I love that problem solving. It's a little bit of the challenging of [00:08:30] the status quo, which it's it's not as common in accounting. There are some, some great ones. But accounting and other industries tend to be risk averse. And so it's, it's it's going with the status quo. You know, it's interesting. This week I had three conversations that were very similar. They were folks that were reaching out online. They were accounting professionals at, you know, in a corporate accounting [00:09:00] role or in one case, an auditor. And they were looking at starting their own thing. Right. And that's that's three more last week than I had last month and definitely last year. And you know, both like in every case, they were playing around with AI and they were realizing they could kind of get to market or get to demo or get to POC faster with AI and it. I don't know, it was just it was just fascinating to me. So I guess, you [00:09:30] know, you almost think like maybe AI is is bringing out the, the problem solvers and the people that were maybe on the fence but needed a little bit more horsepower.

Isaac Heller: And I also I was also thinking of you, you know, you started talking a little bit about your career. It was like started as an auditor, worked in corporate accounting, then went and did your own thing, which is kind of like entrepreneurial consulting, then went back to corporate accounting, then then worked for a couple of companies, then went back to entrepreneurship. And I have to, um, [00:10:00] you know, I have to, to figure out, like, what are the reasons that you went from, you know, big company, big audit to do your own thing and then wanted to go back and then like, what? What are those kind of feelings you should feel? And then maybe like good jumping points because I can just tell everyone right now it is so much harder than it looks and sounds and there's so much more than like, oh, I could use ChatGPT and start a company, but what? How do you [00:10:30] find, you know, find how are you able to jump in and jump out? You know, what are those moments like?

Em Daigle: Yeah. So I think the my when I had the my own business before, it was more consulting. So it was kind of like teasing out what companies were doing and I was guiding them toward a particular solution, trying to help with the evaluation of that and then trying to define all of the as is to be processes what that looked like, and then help them through the implementation. [00:11:00] The reason I went back, and it wasn't even in a corporate accounting role, it was more the strategist role. And I was really interested. And this was both at Zora and Clarity. I really loved being on the go to market side, which is kind of taboo, I think, for accountants, given that, like we always are in this push pull with like the go to market, you know, sales and marketing, especially spending money and. Yeah, exactly, exactly. Like, what are they doing? This is they [00:11:30] can't do that type of thing. But what I found is being on the opposite side. I had a different kind of appreciation that I didn't have before for some of the challenges that they have. I now understand why, you know, at month end and quarter end when they're trying to get like un. Well, let's just call them creative deals across the line. Um, creative kind of leaves room for interpretation. Um, but we've all been there. Yeah, exactly. Exactly. Um, but I have a new appreciation [00:12:00] for that now. But there's something about being on the competitive side that I really love. Um, which maybe is a little atypical of accountants who are a little more structured and just, you know, like to, you said risk averse, right? I think that's the perfect sort of description.

Em Daigle: Um, whereas I'm actually a little bit on the edge of that. I love the competitive edge. I love the winning aspect, but I also really love that, that problem solving. And so when I had the intersection of the competitive [00:12:30] nature of it, the winning, the challenge of winning and going after something that was difficult, but then also being able to connect the dots and make these lives better for accountants. Like I truly believe that things like Sora, clarity, where I worked so many others to write like, truly in, um, there's tabs, there's numeric, there's right REM, there's there's so many. Right. Like, I could go on and on about all the different solutions that do all these different things. But when you can, like, actually make a difference [00:13:00] and you see it working, there's no better feeling than that. So I think that kind of pulled me on to that go to market side. And I think if you put strategy on there, it feels a little more safe than like being in sales, even though I kind of was um, at the time. Uh, but then, you know, the shift back to entrepreneur kind of came from, like I said, I don't believe in a perfect tech stack. And I see all these great solutions that are great for a [00:13:30] point in time for somebody or to help somebody grow. But there's all these different. It's sort of like I'm a matchmaker, I guess. And so being able to take sort of the go to market side and working with vendors and solutions and service providers and being able to figure out where the value lies there, but then connect it with the accounting profession in a safe space, because nobody likes being sold to, especially accountants.

Em Daigle: And I can say that because I was one [00:14:00] and still am always at heart. Right? But I think there's something to accountants are so busy, there's so much they have to do. So if I can help kind of, um, navigate some of the things that are more difficult, like when there are so many solutions, it's hard to figure out what you need. It's hard to figure out, where do I go for X? Like I'm having this problem, who can help me? And sometimes you go to a website and it can take you a couple hours. I was actually talking with one of the members recently. She was very [00:14:30] sweet about it, but she's like, I don't want to go to a website, try and get through all of like the buzzwords and figuring out what they do just to get a demo to figure out it's actually not a good fit. But then I have to deal with them for the next 12 to 18 months. Um, calling on me. So this is sort of meant to be a space where everybody can kind of come together, build these relationships, get some trust under their belts between the two. Take the sales aspect out of it, but really like line up the right solutions with the right problems so [00:15:00] that people can get somewhere with it.

Isaac Heller: That's amazing. It's, it's and it's nice how you came at it so organically. Right. And I you know, I think what, what I find that's interesting is the fact that you became interested in the other sides of the business side or sides, whether it was go to market or accounting. It's also interesting in the era of AI because, you know, like these, these three accountants that I talked to, like you're sitting here saying like, hey, I'm [00:15:30] a really, really good accountant. And there's and technology is so easy to build. And so I'm going to go build this, but have you ever talked with the engineer or the product manager? Right. Because there's someone on the other side saying, wow, product and engineering is so hard, but you know, it's easy accounting. They're just in an Excel all day. Let's go automate that. And and so in an era of AI where there's this assumption that you could just about [00:16:00] automate everything, especially if you're going to be an entrepreneur. Like if you're going to take that jump, having a good knowledge of the other areas of business, not just like a lunch or a coffee with them, like sit in the deal desk, you know, ask the sales guy to bring you. So that I think that's super interesting. So being an accountant and an auditor, but also understanding the different areas of the business, go to market engineering and stuff, not only good internally, but I guess sets you up for more paths, more entrepreneurship, [00:16:30] whatever it is down the line. So now that you say that I can I can see how that that kind of help your success. Now I want to talk about, like, you know, game changing technology, right? So are you are you at automates now? Um, and again, just for everyone automates is a matchmaking service for accountants and software companies. Is that fair to say?

Em Daigle: I like that. Yes. I think we just came up with it here. But yes, I love it.

Isaac Heller: I have to say, I [00:17:00] know it's a play on words on automates, but it's spelled ot t o. And I think of, um, I think of otters, which I love. Sea otters. They're really, really cute. Um, I think of a family member of mine whose kid is named Otto, which I really, really like that name. Yeah. And so, you know, just this, I don't know, this. There's. I just feel like a warm and fuzzy stuffed animal, like, automates. Like, it's got. It's got a nice little, like, we're all, you know, we're all we're all [00:17:30] friends. But anyway. So matchmaking service for accountants and software companies. Are you are you jumping in here because the world needs a the service? Or are you jumping in here because AI is happening so fast? And the question is like, is there some sort of game changing technological shift happening or is this just inevitable?

Em Daigle: I think it was sort of, um, I'll say a blessing in disguise, meaning it came along at the right time. This has sort of been a passion [00:18:00] project of mine, I'll say on the back burner for quite a while, where I always had this idea where I was like, I would love a space where everybody can play, but without the salesy approach, without pressure, without like, really just opening it up and making it very transparent for everybody. Um, I think I then just like launched it into like hyper mode because it was sort of like, like you said, there's so much you can do with it now. I mean, I'm figuring out how to code some things, [00:18:30] and I'm not trying to act like I know coding by any means. But that being said, like I'm actually doing some coding stuff, which I would never have been able to figure out before. So I think AI is a game changer. But I also think you're coding.

Isaac Heller: Come on, you gotta go. What is it? Python or these coding assistants?

Em Daigle: Python. It's very simple. Very. Well, I don't want to say very simple. I don't know if it's simple, but it's like, you know, you got to start somewhere, I guess. Um, yeah, but I have to give AI and ChatGPT and some other, [00:19:00] um, platforms all the credit in the world. I cannot take any of it. But, you know, I think AI is really changing the rules around what it means to be in accounting and finance. Like, I think there's we I've kind of mentioned this before to anybody listening who's listened to me speak, but I think we went through these phases of like, you know, skeptical when when it just was starting to come out really a few years ago with ChatGPT. I feel like, yes, AI has been around for a long [00:19:30] time, but that's where people started to really feel it in their everyday lives and everyone was skeptical. And then we moved into like this curious phase of like, okay, it's here. I have to figure something out. I a lot of companies now have AI initiatives where you've got to be able to figure out some capacity that you are going to pull that in. And then there's like this adoption phase that I think we're in, and I think it's really shifting how everybody can work. I think there's, you know, I think [00:20:00] of like AI driven decision making. So like, we don't have to wait for month end anymore to be able to like, understand where our business is at.

Em Daigle: It's more of this continuous, close kind of concept where you've got the ability to make real time strategic decisions that we couldn't necessarily do before. Um, I think there's so much around taking the manual, uh, very data driven, like I think of data reconciliation or anomaly detection [00:20:30] around data that took so much time and energy and everybody would have to spend all this time just going through these manual tasks. And now AI is really just pulling out what I call like the needle in the haystack, rather than having to go through and find the needle in the haystack. You're just given all the needles, and you can go figure out what needs to be done with those. So there's still a human element that's needed, but it's just shifting how how humans are needed. And I think it's becoming a lot more interesting. And [00:21:00] I think there's it's a better way to be a better partner to the business than maybe it meant before. So I'm hopeful that, you know, I hear all these things about there's less and less accountants coming out of college with a with an accounting degree or accounting and finance. And it breaks my heart because I think this is probably the most exciting time to be an accountant. Um, which sounds kind of funny to say, but it's true. Like, I think there's so much more. And now it's shifting what the whole profession is going to to really mean [00:21:30] and redefining the role of accountants.

Isaac Heller: That's awesome. Well, it feels it definitely feels game changing for me. And I can I can understand why you get a few extra calls and they want to talk to it. They want to talk to a CPA. You know, a former former auditor. Um, okay, I got to I got to ask you a few tough questions. Since you're the since you're the matchmaker and you went through a few use cases, I heard, like, continuous close. Um, I heard data reconciliation. Give me, give me a give me a software company or a [00:22:00] use case, or just give me the name. Like who? Who have you seen recently? Do a cool, continuous close use case. Who should we check out?

Em Daigle: Oh, gosh, that's a great question. You know, I think, um. Oh gosh, do I have to pick just one? I think, um, if you think about like, okay, I was going to say, I feel like I need to to have a couple here. I think there are definitely I mean, I'm going to say numeric right now, I think they [00:22:30] are at the forefront of really figuring out a lot of the, um, that true, like close management, uh, process around that. You know, I think I've heard lots of things around, uh, close management. Everybody's got these spreadsheets, right. Like, you've got a spreadsheet that, uh, a checklist spreadsheet. Um, everybody goes through it. It doesn't feel that tough to just go through and do it, but I have heard from customers [00:23:00] of numeric that they are just blown away, that they didn't even know how easy month end close could become and how seamless it can be. And now that they're using numeric, they're like, oh, you know, now I can just it's like, I don't want to say set it and forget it. There's obviously a human element there. But they didn't know just how good, uh, the actual close process could be. And that's just like scratching the surface of what they do.

Isaac Heller: That's awesome. Okay, good. So shout out to numeric. [00:23:30] Parker is a great entrepreneur. Good group.

Em Daigle: That was a whole group. I love them all.

Isaac Heller: This is not a paid plug. I know them on the spot.

Em Daigle: But yeah, that's why I'm trying to teeter. Yeah, trying to teeter, but I really love numeric. Yeah. Okay.

Isaac Heller: Now I'll ask a harder question because here's what's going to happen. Like you're you know, you're going to you're going to be the the de facto matchmaker. You know, just, you know, those matchmakers on the reality TV shows that just always, you know, you know, [00:24:00] get the right setup done and everyone's going to come to you, you know, who should I go to? And you're going to build up a bigger profile, more credibility. And then there's going to be a big, big software vendor that comes to you and they're going to pay you like half a million bucks. And then I'm going to see on LinkedIn this is sponsored by IBM, you know, or something like that. So so who is that. Is that going to happen. Is there are there just are there just ERPs out there that you will [00:24:30] never be able to get behind unless they completely change the way they do things? Or is there something for everyone?

Em Daigle: I think there's something for everyone, I really do. Like it goes back to the right problem. I it's sort of like my go to that I've kind of developed here, but it's like the right solution for the right problem at the right company at the right time. I think that evolves, right. Like, I even think now like you could be here on what are we at February 26th, which hopefully this doesn't screw up the airing of the show. And then [00:25:00] it shows like the delay. But here we are on February 26th, 2025, three years down the road. A problem that is here today for someone may look very different. And so I think there's always this evolution of what it means. I think companies themselves may try and go up market, may want to try, you know, developing new offerings. All of those things shift what kind of technology is needed. And so I think there's just sort of like always [00:25:30] space for new players, um, or different players, different solutions. What I will say, what I'm really trying to do at automates, and we're trying to figure out the balance of all of this is it's I don't want to call it pay to play because it is not.

Em Daigle: I think of it as more like, how can you provide the value? That's really where I believe we can keep it that that sort of, um, non-biased area. It's I mean, gosh, I hope somebody comes to me and says, hey, I want to give you a half $1 million. And then I have to figure [00:26:00] out what that means. That'll be a great problem. And we can do a whole podcast on that if and when it happens. That being said, um, my intention here is really to just make sure we're elevating all solutions in a way where if those solutions are willing to come support the the community of accountants, be able to really show their value, prove their value and be there and be willing to be part of that conversation. Those are the vendors that I would want in this space, [00:26:30] because I know they're willing to be able to, you know, open up a little bit and be able to, you know, feel confident enough that there are those accountants out there that will come to them if they are given the right information and also feel safe in that space to do so.

Isaac Heller: That's awesome. Spoken like someone who knows a thing or two about independence or who grew up, you know.

Em Daigle: Exactly.

Isaac Heller: It's true. I think that's I think that's a hallmark of, you know, accounting and audit. I can say that that it truly. And what's [00:27:00] interesting to me is, um, you know, we have a lot of partners, right? Whether it's software companies or advisory or accounting firms or audit firms, and we actually don't exchange any money. You know, there's no resellers, there's no commissions. And that's very unique. I mean, I was at previous software companies, you know, travel I was at in travel everything is commissioned. Agency commissions, codeshares airlines and everything like that. And so we just, you know. Yeah. Talk about revenue accounting.

Em Daigle: For like, yeah.

Isaac Heller: Yeah, [00:27:30] I'll tell that story another day. But um, but it was very interesting because and you know, payments is like this too, where there's like a percentage going to everyone, you know, it's it's all about like, you know, who, who referred who, who had the gateway, who had the other end. And what I like about working in the accounting industry is software. Is it there's a lot of integrity. There's a lot of just made the made the best and the highest integrity firm and software win. Right. [00:28:00] And so ultimately there is there is a cream that rises to the top that you can't get away with an accounting solution or accounting service that puts out, you know, crap. So I've really I've really enjoyed that aspect of the industry. So anyway, keep it up and, and I hope, I hope I don't see that that big whale up there you know. But a 500 cab wouldn't. I wouldn't turn out. We probably. We'd probably send you some cookies or something. But anyway. Anyway. Okay, so we'll do a little bit more [00:28:30] about AI. You talked about some of the things you're seeing now. You mentioned continuous cloze risk and anomaly detection. Do you have a how is your crystal ball five years from now? Are there things that you have seen or would like to see within AI on the horizon, or have we arrived?

Em Daigle: Oh, you know, I wish, you know, actually, I'd probably not even need that $500,000 offer if I could figure out where AI is going to be, because I'd be [00:29:00] set and retired somewhere on a beach. But that being said, um, you know, I think there is something and I kind of mentioned like the the evolution of what accounting is, is looking like. And I think there's something to rather than like it won't be just about like keeping up anymore. Now it's going to be like getting ahead. So it's this shift from being like a backward looking reactive function to more of like a forward thinking powerhouse that like, can really partner [00:29:30] with the business. Um, I think if I had to make a prediction, though, or like go out on a limb and say something outside of the norm of what everyone's like, yeah, you know, that makes sense. I think there's going to be a big shift in auditing. And what I mean by that is, you know, and none of the big four have really come out and taken a stake, none of even the, the maybe, um, regional or smaller, uh, auditing firms have taken [00:30:00] a real stake yet as well. You know, they're writing it into their audit letter, you know, like making note that, you know, it's not financially, uh, I forget exactly what they're writing in there, but basically saying, like, these financial statements have a minimal amount of AI that has gone into the creation of these financials.

Em Daigle: That being said, though, I don't think there's a way we can get around it. Sort [00:30:30] of like if you think back to way back when there was paper that people were doing accounting on, and then IBM created this computer. There's like, you can actually go and do accounting on a computer. That was like mind blowing to people. This is sort of, you know, I'll say, uh, some sort of, uh, parallel there, but I think it's really going to shift how the auditing happens, because if you think about AI, [00:31:00] it all stems from some level of, uh, prompting, whether it's code or written prompt or something. But there is a prompt that drives the outcome of that. And a lot of times it's hard to recreate that. And so audit firms are struggling with. How do we recreate what you calculated if it was done with AI, which is a really interesting way to kind of look at it, um, and make sure they're coming up with the same answers.

Em Daigle: Now, sometimes if you have [00:31:30] like one equals one, that's easy. But if there are any kind of, uh, judgment decision making type of things that went into that accounting, it'd be really hard to recreate that. So I think there's something that's going to need to shift dramatically for auditors to somehow embrace it, because, like it or not, it's getting into the financials. It's it's now everywhere. It's in the generation of them. It's in the calculation. It's in the data validation and reconciliation. So [00:32:00] there's going to need to be a shift. I don't know exactly what that is or what it will look like, but I think we're going from auditing on a sample basis to 100% coverage, which is wild. Like we never thought about that, but I think it'll I'm hopeful and hope is not a strategy, but I'm hopeful that, you know, that can really shift the accuracy and fraud detection as well. So I think all around it'll be great. But I think there's going there's going to have to be a shift in how auditors [00:32:30] actually perform their audits and what it means to sign off on those.

Isaac Heller: That's super interesting. Maybe we'll unpack that a bit because, you know, when I started at Trulia and we started with this lease accounting workflow and and, you know, that was the new standard in 2020. It was it was Rev Rec and Lisa County. But Lisa County went faster. And um and then the audit firms. Well first of all I, I thought that if you went from document [00:33:00] to disclosure, so we're talking the initial agreement all the way down to the journal entry and even the disclosure. I thought that that was like the A to Z of a balance sheet workflow. And I was, you know, I thought we were clever because then we could just give that to the auditors and they could go Z to A, right? So they they didn't need a sample. They didn't even need a recreate or reperform. They could just look in the system. Right. Because we had every little step from document to disclosure and then from [00:33:30] disclosure to document what. Well, we learned a lot, right? We learned a lot. Um, well, first of all, they did not auditors did not want to fully reperform, uh, certain accounting workflows, certainly not leases. Right. Because ultimately, then you're responsible for for any of those mistakes. So Reperformance was kind of out the window.

Isaac Heller: Second of all, the ones who were willing to go into truly. And so about 30% of the auditors went into the lease accounting Subledger. So their, their, their, their client had bought the Subledger. [00:34:00] And then, you know, we had we all of a sudden we saw PwC logins on our client's database and stuff like that, but instead of going in there and kind of parachuting into the data. Deeper and deeper. They were just downloading the journal entries with our Excel output and then going and putting them in their Excel tool or their Excel. A lot of people are using Excel add ons as well. Yep. And so so that was interesting [00:34:30] to me. It was like, well, how are we going to opt into this if you still need to do both sides, no matter how automated it gets. Then we um, then they started saying, well, if you can go from unstructured data structured, there's more use cases that you could help us with. And that's when they showed us the sampling and the testing. Right. And I mean, we knew that I spent a lot of time with the auditors. We have a lot of auditors here, but they weren't even [00:35:00] automating that at the time. This is just 2021, 2022. But then around 2023, it was really like ChatGPT was announced at the end of 2022.

Isaac Heller: People were starting to use a little more. Now. One of our fastest growing product lines is not to the corporate side, it's actually to the audit side. So the auditors are using truly in to not just do leases, but they're doing, you know, HR, payroll expenses, inventory, employee benefit plans, equity, all these things [00:35:30] because all they they need to do, they don't need A to Z. They just need A and Z, right. They just need that initial GL sample and then the the data dump of the unstructured documents. So it's almost like we have these capabilities to do a full coverage sample. Yet the auditors for for various reasons are still, you know, wanting to sample. And I kind of get it after speaking deeply with a lot of our clients. So I just thought it was really interesting. You mentioned that. [00:36:00] I think the way it goes, I'm curious your thoughts. I think the way it goes is ultimately, look, if you if you give your auditor an output and it's a black box, meaning they can't trace it back to source because I generated it. I don't see that passing into audit, at least anytime in the next five years. I don't know about you, but.

Em Daigle: I would agree with that. Yeah, right.

Isaac Heller: So like.

Em Daigle: People.

Isaac Heller: People forget that. It's like, no matter what you say about audit, as if it's 99, [00:36:30] that's not good enough. It's got to be three nines, four nines, whatever the heck it is. You know, you're getting sued or fined if you get it wrong. So we can't rely on the black box. So to me, at some level, the accountants and the auditors actually have to opt in to a to a single platform, right. So you keep your system of record, you keep your documents, your whatever you want to keep, and maybe your other systems like a CRM or something. And then you need to vacuum [00:37:00] all that data. I don't know if it's reconciliation, I don't know if it's truly and I don't know if it's merit. Maybe it's both of us, you know, but like, you need to be able to vacuum all that data and then allow the auditors to do the sampling and the things they need within that data, but then go, you know, go kind of click into the source data because I just don't see I don't know about you, but I don't see the black box of AI, you know, moving the needle anytime soon. You got to go back to the system or the document. Really.

Em Daigle: I agree, you know, I think [00:37:30] there's something to be said for what I can do, but it needs something in place to do something with it. If there's nothing there, how are you ever going to prove it? So I definitely agree. And I think, you know, what I'm seeing is solutions. Um, and I love that like with Julian, you've got the ability to go in there and give access to your auditors, but it's role based access, right. So you can say like auditor, go ahead, have at it. Like come in and see everything carte blanche. You go in and [00:38:00] look at what you need. The nice thing there is then you don't have somebody on your team that has to sit there with the auditors for the three weeks they're on site or whatever it might be, and be pulling stuff for them. Instead, you're granting them access. They can see any and everything. They don't even need to give you a selection in advance. I think that actually, um, leads to an even higher level of trust and accuracy, because rather than having this pre-set, um, list of, of selections that they want to go through, [00:38:30] they can go look at anything. Right? And, and they have the ability to do that openly because they can't change anything in the system. You've got the rule based, uh, the or the role based access in place, which is huge.

Isaac Heller: Yeah, absolutely. And just a little, little sneak peek. 2025 is the year for auditors with I and I, you know, I've been in this for six years now. This is the first time where the audit firms are really, really highly motivated and really, [00:39:00] really comfortable. It did take it did take a couple of extra years than the corporates. But I can just tell you that the Big four is moving. I think traditionally they were moving internally, which is another thing I've seen is, you know, they would they would build things internally. And part of that was by strategy, part was by design. And now they're they're reaching out to vendors. And so that's been that's been exciting exciting for Trulia because ultimately you [00:39:30] know that you mentioned the regional audit firms. We work with probably 100 regional audit firms. And then you walk into the big four and it's it's it's like NASA versus like, you know riding a bike. No, it's just another level of audit and complexity and kind of esteem I would say. So that that's been fun. Um, yeah. It's so interesting. I, I.

Em Daigle: Have a question then for you. So I'm curious, like, which one of the big four do you think will come out [00:40:00] with like a statement really owning something around. I first, like, I sit here and I've got my own, like just by what I'm seeing and you know, the, the departments that they're setting up around I versus like, what they're publishing like nobody knows. To your point a lot of it's internal. So we don't really know. But I'm so curious if you have like some sort of viewpoint on what you've seen, like just out there.

Isaac Heller: Um, my bets on [00:40:30] E to be the most forward thinking, um, in AI, um, you know, we have partnerships with all the big four, so I shoot from the hip.

Em Daigle: I know it's hard. Yeah, well, and that could be good or bad, right? Like. Yeah. It doesn't mean it's good or bad.

Isaac Heller: We do our we do our SoC one and two with KPMG. Um, you know I know they've done a little bit with a third party vendor in the audit around like anomaly detection and stuff like that, but I'm betting on E! And I'll tell [00:41:00] you why.

Em Daigle: All right.

Isaac Heller: I think that in order to really adopt AI internally at these these companies, probably two things need to happen. Well, three, but let's just talk about two. One, there needs to be a macro event or a couple of macro events that really kind of accelerate the internal look to say, how do we how do we evolve this business model. And then I would say the second is [00:41:30] leadership. So EA has got a great new CEO in Janet, and I've heard some of the things she's talked about. And um, and I think that when UI, um, the Project Everest was there split a couple years ago or attempted split, I think that really opened up the Komodo around the business model and the operating margins. And you know what it takes to run a great audit and great advisory practice. And that took some self-reflection. And I'm not quoting anything. I'm not quoting anyone. But I, I feel like what came [00:42:00] out is a lot of motivation to think about the next stage of the business model. So I would I would bet on EY, Deloitte and PwC are, you know, creme de la creme. I think they might be one and two, maybe one and three in terms of revenue, but there could be some complacency there. You know what, if it ain't broke, don't fix it. The other hand, KPMG as as number four, which is not a bad consolation prize, you know, 3040 billion.

Em Daigle: Yeah.

Isaac Heller: Like KPMG in their audit. They did go to some third party tools earlier. And that's because that the event [00:42:30] for them was trying to keep up and trying to stay competitive. So I felt like there was an, you know, at least in the US, there was an underdog mentality. So KPMG has that event of like being the underdog and wanting to climb up. Ey has this event of like, hey, if we want to split or shift or, you know, we've got to really improve our margins and be more competitive. And so that's my bet. What about February 2625? Yep.

Em Daigle: Here we go.

Isaac Heller: That's that's my that's my bad. I've been really impressed with them. But [00:43:00] what about you? Do you have a sense of the big four or anything you've seen you liked?

Em Daigle: So it's funny you say this and for anybody listening, I swear we didn't come up with this in advance that you said all of these things. But I would completely agree with you on that. Just from what I'm seeing out there. Some of the conversations I've had, but I think their ability to sort of be open to figuring out what it means to be the most profitable and like, what does that mean? Like shifting and being a little more edgy, [00:43:30] I'll say. I mean, you know, I think that that sort of they've got the ability to go out and make a stance. Now, what I will say, though, is I think the second one of them comes out with some sort of bold statement or stance or position. The other three are going to be hot on the heels, because they just don't want to be the first one out of the gate, but they definitely don't want to be the last one over the line. So I think when we see something every day, though, I'm like looking online, like, who's going to say something like, really [00:44:00] earth shattering today? Like, what's the line in the sand that they're going to take on? I and I think everybody's sort of dancing around it and waiting for it, but it's like we're right there. We're right on the precipice of it. So I'm curious what it's going to look like.

Isaac Heller: Yeah, it's such a it's such a big it's such a big and dominant piece of our economy. Right. Yeah.

Em Daigle: It's so cool though. I love it I think it's like super exciting for the accounting world. Like I, you know we always joke that like, oh, the big shift or along the [00:44:30] way the 605 to 606 like wow, it's crazy. But like that's peanuts compared to things that we're seeing with AI and all of the things how it's shifting and changing.

Isaac Heller: Right.

Em Daigle: Across the board, I think it's really, really exciting.

Isaac Heller: I think that's super exciting. You know, maybe we'll kind of we'll kind of end it on that note. I mean, I think this has been super interesting, you know, going from Arthur Andersen, which could be a whole nother podcast wanted her to, you know, running rhetoric [00:45:00] internally and then externally a software vendor and now automates. But m like just being excited about the future I think is something we we all can really hang on to maybe is there. Let's, let's let's say this if you're listening right now, if you're an aspiring accountant or earlier in your career, what's the what's the advice that you would give that listener to maybe be excited about the future?

Em Daigle: I would say embrace it. Embrace the change. [00:45:30] Embrace the opportunity and think about what that really means. Like, you know, myself, where my journey and what that looks like. I never thought that I would be a founder of my own company in this capacity. Um, consulting was a little bit easier to get into just because those are services you provide. But really like having an established company like automates right now is really exciting. But I think there's so many different avenues. So yes, you can do so much with [00:46:00] your accounting career in accounting. You can also take at other places, like there's Cody Leach over at Happify. He has shifted from accounting and now he's like leading product. Um, and someone similar Jeff Allie over at Everest, very similar. He and I actually worked together many moons ago at RSA, um, where we implemented Rev Pro. Um, but he now is owning the product over at Everest. And so it's so interesting how I went into go to market there [00:46:30] in product. Like there's all of these different areas and places where everyone can go. I've got a lot of my members right now asking like, well, what what can I do with this? What can my career look like? And there's so many opportunities. So I would say embrace it, but don't get overwhelmed by it. It can be very easy to try and figure out, like, okay, so what are all the ways I can use it? Just figure out where can it make the greatest impact right now, whether it's in a process. Don't try and or automate everything all at once. Just find the things that can make the greatest impact. [00:47:00] And if that's either in a process or in your career, whatever it is, embrace it. But just focus and and you know, don't don't get overwhelmed.

Isaac Heller: I love it, I love it. Yeah. You know, social media, all those those podcasts and TikToks.

Em Daigle: There's so much coming at us.

Isaac Heller: There's a lot. Well, I hope this was an interesting one to everyone listening or watching. I guess you could say. So we've got we had em. Daigle, founder of automates. [00:47:30] Otto. Matt's correct find you online, I'm sure, in all the usual places. Um, I'm Isaac, CEO of Trillian, and, yeah, I mean, it was great. Great talking with you today and hopefully more in the future.

Em Daigle: Yeah, likewise. Thank you so much, Isaac. I appreciate it.