< Intro >

– Welcome, listeners, to Count Me In.

Your go-to destination for insights

into the future of finance and accounting.

Today, we have a special guest
with us, Jesse Rubenfeld,

CEO and founder of FinOptimal.

He is an expert in accounting
automation and AI.

We delve into a conversation
that may redefine

how you perceive your profession.

How is automation shaping
the accounting landscape?

What are the new skills that
financial professionals must adopt?

And what does the full automation mean

for traditional jobs in the field?

Sit back and join us in this exciting journey,

as we explore the transformation of
accounting in the age of automation.

< Music >

Well, Jesse, we're really excited to
have you on the Count Me In podcast,

and today we're going to be talking
about automation and accounting.

And to start off, maybe, at a high level,

we can talk a little bit
about how has automation

really impacted the accounting
and finance industry,

and what benefits has
it really brought to it?

– Well, I think it's really been
a benefit to the profession,

that's the headline.

It's taken it from a place where there
was a lot of manual block and tackle.

To an elevated role where the accountant,

the finance professional,
can be a thought partner

and spend most of their time analyzing

and adding value to the message
that they provide to management,

to the CFO, to investors, to whoever it is.

Because they're spending less
time managing spreadsheets,

or uploading things, or doing data entry,

and more time being smart.

– Yes, they have more time
to focus on other things.

Maybe we can talk about what are
the specific kinds of automation,

that are really impacting those operations.

You mentioned some things that
are taking us off of spreadsheets.

But are there other things
that are really impacting it?

– Well, in this situation I like
to differentiate between

accounting practice automation
and accounting automation.

Accounting practice automation
involves task management workflow.

Facilitating review and
approval of work papers,

tracking time spent on clients.

It benefits the accounting firms, but it
doesn't, drastically, increase capacity.

And it's only beneficial for internal
accounting teams, at a certain size.

Now contrast that with accounting automation,

which involves calculating
and recording journal entries,

reconciling transactions, generating reporting.

This benefits accounting firms
and their clients directly.

It increases capacity for firms, and
it increases speed and accuracy

so the clients aren't sitting
around waiting for answers.

Internal accounting teams
can benefit from this early on.

One person can benefit from this.

One person can do the job of five,
whereas it's unlikely they'd use

accounting practice automation
in a one-person finance team.

We also like to distinguish between
automation and automation assisted.

Automation assisted means
it's faster than fully manual,

but it's still manual at lots of parts.

Whereas automated means one event

triggers all of the subsequent
actions, automatically.

And I like to illustrate this
with a side-by-side example.

Okay, let's say you're using HubSpot,
the CRM, and QuickBooks Online.

You close a sale, you
have to invoice for the deal

and then you have to account for it correctly.

And deals, sometimes, have
different payment terms.

"I'm going to pay all up front,
I'm going to pay monthly."

And they have different agreement lengths;

annual, quarterly, month to month.

An automation-assisted
process looks like this;

a deal is marked closed, one.

Accounting gets an email, they
fill out the details in a spreadsheet

that contains a revenue waterfall schedule.

They make sure the formulas are correct

and then they copy down through
all of the columns, et cetera.

And then once a month they
go book an entry in QBO.

Whereas automated, fully automated,

means the deal is marked
closed, one, in HubSpot.

Data flows from the CRM
to QBO automatically.

The invoice is sent, automatically,
and the invoice is coded in a way

that the revenue can, automatically,

be recognized in the appropriate periods.

That's what we're doing for
our clients, full automation.

Does that make sense?

– Yes, that makes a lot of sense.

And, so, as you're
describing those two things,

the full automation is almost
eliminating traditional jobs

that have been in the finance function.

So when you were talking
about these full automation.

There are new skill sets that are
involved that are needed for it,

and you've seen lots of articles.

But maybe we can talk
a little bit about that.

What are some new skills that accountants

are going to need, going into the future?

Because full automation is on
its way, in a lot of the functions.

– Totally, again, the headline
here is it's elevating

the high performers of yesterday.

So that today they can do more
better what they're already doing.

In terms of new skills, it comes down
to more systems and data analysis.

SQL, for example, in our case,
Python, if you really want to go crazy.

I long ago went crazy.

But I think that in the past,

somebody who could do the
higher level work of managing,

of communicating financial
pictures to important stakeholders

like the CFO, the CEO,
investors, they would do that,

but they'd spend a lot of time
preparing for those things.

It would be a major event to
get ready for a board meeting.

And the amount of time
that it took to do that right,

was a barrier to entry of
competitors for their job.

Whereas now they don't have
to spend that time preparing for it.

Meaning they can use
automation to do a much better job,

of keeping things ready for the board
meeting in real time, all the time.

But it also means that it's not as hard

for someone to come along with
the same skills and replace them.

Because they no longer have the luxury

of designing their own really convoluted,

excessively complicated process,

that another skilled accountant
can't come in and replace.

So it's a double-edged sword.

But, overall, it's making
everybody more productive

and therefore is good for
business and the accountant.

– Yes, it is good for business
because it helps your bottom line,

it helps get things done more efficiently.

But I can imagine that changing from
no automation or some automation

to full automation, probably, has its challenges.

And maybe you can talk a little bit about

what some of those challenges are,

and what are some of the opportunities

that come as a result of that.

– Sure, first of all, when I talk
about automation,

in response to your previous question.

I think, there's a caveat that you can't hope,

even with Chat GPT, in my opinion,
and the AI that's out there,

to fully automate any given business's accounting.

You absolutely need a person
in the loop, if nothing else,

to review and approve things
before money goes out the door.

It's about control.

Having said that, you want to
automate as much as you can

and there are challenges associated with that.

At the top of the list is, carefully,

considering what you're
automating before you do it.

This is one of the biggest pitfalls.

People just buy some software,
and they're knee-deep

in the implementation before they
realize, "Is this what we want?

Is this what we want the
process to look like?"

Sometimes software companies
are selling to someone,

the decision maker is not the user.

And I think the way to avoid that

is to consider, at once, the people,
the process, and the technology

that drive those two together, that
work together to get the result.

The challenge is about; it's not about,
"How do I fully automate this?"

It's about what do I not automate?

Where do the people fit into the
process that is optimally automated,

and what software products
are going to help us get there?

And sometimes what services
are going to help us get there?"

Because we do both for our clients.

– Yes, so it sounds like when you're
implementing something like this.

It can't just be the decision
makers making the decision.

You need a wide range of a team

to make sure that you have the people

who are going to be doing the work in there.

Looking at this thing, saying,
"Hey, this is going to help me."

Or "No, this is not going to help me."

Because, otherwise, you're going to go

into that example that you just stated.

– Absolutely, when we're pitching our software,

or our services, for that matter

we like it, I mean, sometimes we'll
get a high-level intro to the CEO.

Someone who's definitely not the user

and they'll like the idea, but
we don't want them to buy it.

We want them to have another
call with us and their users.

If it's an accounting firm, we want
the members of their CAS practice,

that are actually going to use our
software to do their clients books.

So that they see what we're doing
and say, "Wow, this technology

is going to help me improve realization fivefold.

We want the VP of finance
who's actually going to have

to use our product or consume
our services to understand,

"Wow, that's going to save
me something, so I want that.

How do I get that?"

As opposed to selling to the decision maker

and hoping it works out down the road?

It's almost like we want to start
the implementation in the discovery,

in the sales process.

We want the sales process to inform

the user not, necessarily, the decision maker.

We want the CAS practice operators

to go to the partner and say, "Please buy this."

– Yes, and it sounds like
organizations and companies

can make a better decision.

The more practitioners, the more people,

they have in that decision-making
process, at least for the review.

Obviously, one person has to
make the final decision to say yes.

But you need more voices in that input.

– Of course, you're looking for consensus.

You're looking for the users who
are going to train other users.

Who are going to advocate for you online,

where they hang out and learn about
cool products and discuss them.

And it's about getting buy-in

from the stakeholders that are using
your products and services, first.

– So you mentioned Chap GPT, and
you can't talk about automation

without talking about artificial intelligence,

machine learning, those are huge.

It's all over the news,
people are talking about it.

I just recorded a podcast the
other day, talking about it.

I'm going to be recording one in a few weeks,

talking about the ethics of it.

So there are so many things involved in it.

What role do you think artificial
intelligence, AI and machine learning,

are going to play in the automation of
accounting and financial operations?

And, obviously, there's going to be benefits,

but what are those benefits going to be?

– I think it's going to be a strong partner.

I don't ever see it replacing
an accountant, altogether.

Meaning we have no person
in the accounting function

it's entirely an AI because
every business is different

and it's generative, but it's not creative.

And I think it's going to be
about I've got a problem

that I haven't dealt with before.

Where previously I would have to do
seven or eight Google searches.

Now I can have a conversation with an AI,

get an answer that's
kind of close but not great

and say, "No, that's not what I meant."

I think it's going to be different

and better of gathering data from the Internet.

But it's the future
and therefore hard to predict.

It's going to be useful, that's for sure.

But I don't think any accountants
need to worry about their jobs.

– Huh, that's good.

Obviously you have the science
fiction that's out there,

that shows the AI is taking over

and they're making all the decisions for us.

And I hope that we never get to that future,

that science fiction has predicted.

But when it comes to things like ethics,

and fraud, and stuff like that, obviously,

you can put different elements into the AI,

and the machine learning,
and the automation,

to eliminate those steps.

But do you think people are going
to be able to find ways around that,

and find ways to still do fraud
in the midst of the automation

and the internal controls
that are put into place?

– I have no doubt.

When the cat is away the mice will play.

– Yes, and it's hard to say
how that's going to happen.

– I just think it's a cat and mouse game.

There are always going to be people

who want to operate outside of the law.

And the tools to detect it
are going to get better,

and the tools for perpetrating
it are going to get better.

Expensive software doesn't solve for
bad people and bad processes, though.

– That's true, so talking about data,
obviously, data is a huge part of this.

You mentioned that that's a skill
set that people are going to have.

And then also, obviously, quality control,

you've mentioned there's going to
have to be somebody there

who's going to have to check
things as it goes through.

But in the context of automation,
and accounting, and the operations,

what steps are going to
be taken to ensure that

there is going to be accurate
and reliable results?

What steps are we going to have to take

to make sure that that happens?

– I think you need to implement
your system with agility, iteratively.

I think the first time you try whatever
system you just implemented,

it's not going to be exactly right.

It should be a big step in the right direction,

but you're going to have to
do a lot of testing.

And you don't want to
have the expectation that,

"I'm going to implement a really
expensive large general ledger.

Have some consultants
come in for two weeks.

They're going to get it right and
then they're going to go away,

and my life will be better."

I think that's the naive way to do it.

It's got to be, "All right,
we're going to take a step

and then we're going to take another step.

We might have to take one step
back, after two steps forward."

In terms of accounting data,

quality control, reconciliations
will always be a part of the process.

It's just that the time that it
takes to do them will shrink.

I think the laborious parts, the real
rote elements of accounting work,

are going to continue to get smaller,
but they'll still need to be done.

Otherwise, how can an auditor

give an opinion that statements
are materially free of fraud.

It doesn't go all the way.

– Yes, you have to have those
internal controls in place.

Outside of the system, you have
to have those things in place

to make sure everybody stays accountable.

– Totally, 100%.
– Yes.

– And at the end of the day, the people
are at the top of those systems.

I just don't see us, you can detect
abnormalities with systems.

You can flag things.

But I don't think the IRS ever figures
out a way to, automatically, correctly,

identify everyone who's
cheating on their taxes.

It's going to flag some stuff.

It's going to get better
at flagging some things.

But the flaggings need to be tuned,

so that the people who are making decisions

can use that information
to make better decisions.

The people are always going to be at the top.

– Yes, so let's say you're somebody
in the accounts receivable

or accounts payable department,
and your job has been

to send the invoices out
and organize those things.

And your company is saying,
"Hey, we're bringing in this system

that's going to send the invoice, automatically."

What would you say to that person

who's been sending those invoices out?

What would you say to that person, today?

– I'm going to save you a ton of time

and you can learn how to do payables,

and be twice as effective with your time.

I think the accountant who fears
automation is truly in trouble.

They may stave off the automation
of that invoice process for now.

But eventually someone's
going to come along

that makes it painfully clear
that you should have done

this a long time ago,
and you're going to get fired.

It's much better to embrace the automation

and say, "Wow, I'm buying
back half of my week

that I can now spend..."
in my case, it was learning to code.

That's what I love to do.

But it could also be learning more about

a different area of the finance function
than you were exposed to before.

People who are ambitious
are going to find a way forward.

But automation is not
going to replace accountants.

Accountants who use automation

will replace accountants
who don't use automation.

So embrace it, learn the
new skills, elevate your game.

– So it's almost like if you're sitting
in there and you're listening

to this podcast, and you're like,
"Hey, my company doesn't do that."

You can be the one to bring the idea

say, "Hey, I have this new idea
to save us a bunch of time

and we can do this X, Y and Z."

You can bring that idea forward
and help elevate your company,

and then it'll elevate you
probably in your organization.

– Yes, and I think what you just said

is a role now in companies
called finance transformation.

And, by the way, if you think
that you're good at that,

please look me up because
we want you to join us.

– Definitely, well, look in the show
notes, today, and we'll have a way

to contact Jesse either through
LinkedIn or some other way.

So look at those show notes
for today's episode.

So we've covered a lot of great
things during this conversation,

and if you're a finance
and accounting professional

listening to this conversation.

What ways do you recommend
that they can stay up-to-date

to the latest technologies, the tools?

What resources are out there that
they can help them stay on top of this?

Because, obviously, like you said,

the accountant who understands
and knows how to work automation

is, probably, going to replace

the accountant who doesn't embrace that.

So how can accountants stay up to date

and then start embracing it, themselves?

– I mean, first and foremost,

if you're an accountant and
you want to keep your job,

for God's sake, listen to
Count Me In, it's an obvious win.

There are a lot of podcasts
that touch on automation

and I think it's to, a large extent,
about keeping your ear to the ground

and finding out about new things.

But there's also Slack channels like
Off the Ledger, join CFO groups,

follow people on LinkedIn.

Follow me, Jesse Rubenfeld, and
you'll hear about a lot of exciting stuff.

– That's great, well, and, obviously,
there are magazines out there.

Don't sit there and sit in the dark

and think that if you sit in the
dark nothing's going to happen.

But keep your ears to the ground

and pay attention because, otherwise,
it's just going to pass you by.

You need to jump on the train
and don't let the train pass you.

– And, hopefully, it's something
that's exciting.

Wow, we can prepare these invoices,
automatically, and send them out.

So many cool things are
happening in the industry.

So many cool software companies
are coming up with new things

that are making your lives
better, as accountants.

Elevating the profession,
giving you back time

to take your career in the
direction you want to take it in.

And the more you can embrace that
energy, the more it gives you optimism

rather than fear of,
"I'm going to be replaced."

– I agree, 100%.

Well, Jesse, thank you so much
for coming on the podcast.

It's been an absolute pleasure
talking with you, and I think

the information that you provided
will really help our audience

to really look forward to
the future and be better.

– Thank you so much.

< Outro >

– This has been Count Me In,
IMA's podcast,

providing you with the latest
perspectives of thought leaders

from the accounting and finance profession.

If you like what you heard,
and you'd like to be counted in

for more relevant accounting
and finance education,

visit IMA's website at www.imanet.org.