Thanks for coming back for another episode of Count Me In,
MA's podcast about all things affecting the accounting and finance world.
This is Adam Larson,
and I'll be bringing you right up to the start of our conversation for episode
167 of our series.
Today we hear of from the co-founder and CEO of SoftLedger,
Ben Taylor.
SoftLedger provides real time visibility to critical financial data with their
cloud native business management platform and APIs. And in this episode,
Ben talks about some of the specifics relating to APIs that can truly benefit
today's accounting and finance professionals working on current accounting
systems. To learn more,
stay tuned as we turn our attention to the main conversation now.
So Ben,
I know our conversation today is around accounting systems and I first want to
give you an opportunity to share a little bit of background about you and your
company and then, you know, how it all came about.
So my first question really is what are some of the limitations with current
accounting systems?
Hi, yeah. Thanks for having me on we view like accounting systems,
as we think of them, you know,
the ones you use in your job at a corporate accounting department is it's a
general purpose system.
And so general purpose accounting systems started in the early eighties or
I guess late seventies, but then came to market broadly in the early eighties.
And essentially that brought together a bunch of specific purpose systems in one
place where you could form financials in, you know, in your general ledger,
from your general ledger.
And then that progressed over time to when
cloud accounting became or cloud computing became a thing,
then these became cloud based systems, then you could access them from anywhere.
And that that's great,
changes it so that you don't have to worry about running your own servers and
some other things like that and use a subscription model,
but it didn't fundamentally change how those systems work.
They're still somewhat rigid in that it makes it tough to connect to
other systems and it,
makes it tough to configure things in certain ways that are, you know,
unique to your business. And so that's what we've done is, you know,
early eighties was version one of an accounting system.
And then late nineties is when the cloud accounting systems came out
initially now, or 20 years later.
And the cloud's been around for enough that if you design a system
specifically with cloud computing in mind,
you'll design it differently and that's what we've done,
and there's just a number of benefits,
but I'd say that ease of configuration to unique business cases and
then connecting to other systems are among the biggest benefits to that.
So let's dig into that a little bit deeper now, as we talk about, you know,
connecting the accounting system with different systems and you know,
how we can do that more efficiently,
I understand the reasoning behind it or the capabilities come from APIs.
So give us a little background on APIs for those who may not be familiar and
really talk about how they help in this scenario that you've described so far.
Sure. Yeah,
that is a big part of this API is application programming
interface. That's what it stands for.
And it's essentially a way of communicating with a software application
if you're using browser based application and you're clicking on buttons and
to create journal entries, for instance, what that's doing is that's,
that's programming the application and API allows you to do that
programmatically. So it allows you to do that via
just setting up code to automate your processes.
And so the more stuff you can do via API,
the less you need to actually really key things into the application yourself.
And so the better,
the more available a software application is to being programmed via API.
The more you can automate.
So, you know, again, APIs, they work between a number of systems,
and I understand that legacy accounting systems have APIs as well.
So what is the differentiating factor?
What is it really that we're talking about here?
So it's a great question that the difference between legacy
systems and how they've approached APIs and us is for legacy
software accounting software providers, the API was kind of an afterthought,
it happened after they already built the system initially.
And what that means is you can't access everything in the same way
as as you can via the user interface. There's just,
it's really tough to do that after the fact,
whereas we've constructed our system to use the API
with the user interface, from the get go.
And so what that means is it's, everything is programmable via API.
If you're building an integration with another application,
you can use our application programmatically in the same way as you can as an
end user. And that just, it, you know,
it removes friction essentially in the process of creating integrations in a way
that that can really make new integrations possible in a way that you couldn't
do before.
I got it. So,
based on your experiences and the ease of use,
I suppose you could say, right, as far as the, the benefits over your system,
compared to APIs being added after the fact, right,
how has this API driven accounting system really
gained traction? You know, what are some of the, you know,
do you have any examples or some business cases that outline improved
efficiencies or whatever goes into your target users?
Yeah, absolutely. So there there's a, a few different cases we work with.
The first one is, you know, a CFO and controller or,
or controller trying to automate their transactions for their,
their internal business processes. And if you,
if you have internal systems that you need to bring a high volume of
transactions in, for, or at least, you know,
complex transactions in from then having access to an API
allows you to bring those in automatically just remove the manual work from that
process.
And then what's something that's interesting also is that we have some
customers where the first person to reach out was a software engineer because
our platform and our API are constructed in a way that that is
what you'd want to use if you're working with it as a software engineer.
And so it's interesting that as engineering's more involved in decision making
process for internal systems, that's you know,
that's something that we only see increasing in importance in the in the coming
years.
So I wanna kind of follow up on that for just a moment here. I know you started,
you know, looking at CFOs controllers,
those who are looking for certain information,
and my understanding is with these APIs and the ability
to integrate allows for more real time data.
Right? So how again, does the, you know,
API driven accounting enhance real time data available to them
compared to some other accounting softwares or other, you know,
dashboards that may come across as real time?
Sure. Yeah.
APIs are what enable real time financials that that's just
mentioned removing friction in the process of getting data into
or operational data into your financials.
That's really what it's all about is the more steps that you have in
between, whatever the thing happened in your,
and the relevant financial impact being reported in your financials,
that that just makes it take longer.
And so if you can directly connect the underlying transactions to what the
financial impact is,
then that's how you start chipping away at the process of getting a financial
data quickly.
And I think of it as you go down your chart of accounts and you just see, okay,
my cash account, what, where is this coming from?
Is it coming automatically from the bank?
Can I code the transactions automatically use some logic to get them in? Okay,
great. Next, get down to your accounts receivable account,
and maybe there's a another system that you're using for invoicing and that
directly feeds into there. And you just, you know, tick down the list and,
and figure out how to automate every, every account.
And how much code or, you know, you were talking about engineering a little bit,
how much of those,
that knowledge or skillset is required in order to utilize these
systems?
Is this something that the everyday accountant would be able to essentially
build out or, you know, what kind of assistance is required?
So it depends, you know, you can use, you know, our, our system, for instance,
standalone, as an end user can pick it up pretty easily.
It's fully easy to learn. It's built for accountants,
but then if you want to get really into the technical details and
automate things, you can, so those are both, you know, sides are available.
And then in between, you know,
there's some integration platforms that help to make it so that non-accounting
users can get more involved in the integration spec design.
So there's a number of different ways you can, you can do it,
but having an easy to use platform and then easy to use
APIs, only help to enable all that.
So APIs, real time data, you know, new technology,
all this is part of the profession. And then, you know, step by step,
you kind of gave us how things have progressed, you know, real time today.
One of the big trends in accounting is crypto assets, right. And,
and everything that's out there in,
in the crypto world and how that's going to impact accounting and finance now
just poking around your website.
And I see that you do have some crypto companies under your use cases.
So I'm just curious,
how does this system work with crypto and what is it that you're doing for
these companies?
Sure. That's been a big area of interest. So in 2017,
Jeff, my co-founder and I got interested in crypto and we
saw these companies doing ICO's - initial coin offerings - and other complex
transactions. And we realized, you know,
these are small companies that don't have full accounting and finance
departments that are doing this very complex thing,
that there's gonna need to be a system to track this.
And we realized that there wasn't cuz we, you know,
many companies reached out to contact us and asked if we could help.
And so we decided in,
in 2018 to release a crypto specific module,
and we did that in August of 2018. And so over the past few years,
we've been working with a variety of,
of companies that have cryptoassets in their operations to it's the same problem
we're solving.
We're just helping them get those transactions into their financials quickly,
but they're very complicated.
And there's a lot of considerations that are unique to crypto.
And so that's why having this,
this specific set of functionality for these companies has been helpful.
So my last question is, you know,
obviously you were able to identify a gap, right,
or opportunity where we could take these systems to the next level and,
you know,
enhance the use of data and everything else that goes with API driven accounting
systems.
So I'm just wondering if you have any other thoughts or ideas for your system,
for your platform, for the profession, really, you know,
what other opportunities in line with what we're talking about today could be
out there for, you know,
our listeners to think about and consider down the road.
Oh, sure. You know,
I've learned a ton going through the process of started with the idea of
there could be a better way to do this,
a faster way to get financial data and then listening to iterating on
feedback as Jeff and I were building the product and realizing, okay,
here are some limitations with designing computer applications or software
applications.
And here are some benefits that I didn't even realize could exist and, you know,
taking the time to understand what's available, what the options are.
And you know,
I think there's something great that comes from having somebody who's an expert
in an architecting software application.
And then somebody with the accounting experience on the accounting side,
figuring out what the best overall solution is.
And so I think the more we can integrate what's available from a
technical perspective, you know,
starts with understanding what's what's out there.
The more experts in corporate accounting can, can do that.
The more they can apply it to solving the pain points in their jobs. And so,
you know,
sometimes it's a tough balance to have to think about both sides of it,
but I think there's a lot of benefits to doing so.
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.