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< Intro >

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– Welcome, listeners, to Count Me In.

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Your go-to destination for insights

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into the future of finance and accounting.

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

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CEO and founder of FinOptimal.

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He is an expert in accounting
automation and AI.

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We delve into a conversation
that may redefine

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how you perceive your profession.

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How is automation shaping
the accounting landscape?

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What are the new skills that
financial professionals must adopt?

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And what does the full automation mean

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for traditional jobs in the field?

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Sit back and join us in this exciting journey,

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

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< Music >

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

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

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

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we can talk a little bit
about how has automation

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really impacted the accounting
and finance industry,

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and what benefits has
it really brought to it?

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

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that's the headline.

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

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To an elevated role where the accountant,

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the finance professional,
can be a thought partner

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and spend most of their time analyzing

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

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

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Because they're spending less
time managing spreadsheets,

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or uploading things, or doing data entry,

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and more time being smart.

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

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

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that are really impacting those operations.

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

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But are there other things
that are really impacting it?

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– Well, in this situation I like
to differentiate between 

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accounting practice automation
and accounting automation.

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Accounting practice automation
involves task management workflow.

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Facilitating review and
approval of work papers,

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tracking time spent on clients.

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

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

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Now contrast that with accounting automation,

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which involves calculating
and recording journal entries,

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reconciling transactions, generating reporting.

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This benefits accounting firms
and their clients directly.

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

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

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Internal accounting teams
can benefit from this early on.

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One person can benefit from this.

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

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accounting practice automation
in a one-person finance team.

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We also like to distinguish between
automation and automation assisted.

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Automation assisted means
it's faster than fully manual,

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but it's still manual at lots of parts.

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Whereas automated means one event

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triggers all of the subsequent
actions, automatically.

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

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

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

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and then you have to account for it correctly.

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And deals, sometimes, have
different payment terms.

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

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And they have different agreement lengths;

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annual, quarterly, month to month.

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An automation-assisted
process looks like this;

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a deal is marked closed, one.

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

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that contains a revenue waterfall schedule.

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They make sure the formulas are correct

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

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

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Whereas automated, fully automated,

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

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Data flows from the CRM
to QBO automatically.

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

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that the revenue can, automatically,

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be recognized in the appropriate periods.

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

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Does that make sense?

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– Yes, that makes a lot of sense.

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

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the full automation is almost
eliminating traditional jobs

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that have been in the finance function.

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So when you were talking
about these full automation.

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

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and you've seen lots of articles.

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But maybe we can talk
a little bit about that.

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What are some new skills that accountants

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are going to need, going into the future?

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

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

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the high performers of yesterday.

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

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

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

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I long ago went crazy.

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But I think that in the past,

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somebody who could do the
higher level work of managing,

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of communicating financial
pictures to important stakeholders

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

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

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

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

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was a barrier to entry of
competitors for their job.

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

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

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

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But it also means that it's not as hard

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

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Because they no longer have the luxury

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of designing their own really convoluted,

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excessively complicated process,

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

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So it's a double-edged sword.

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But, overall, it's making
everybody more productive

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and therefore is good for
business and the accountant.

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

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it helps get things done more efficiently.

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

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to full automation, probably, has its challenges.

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And maybe you can talk a little bit about

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what some of those challenges are,

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and what are some of the opportunities

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that come as a result of that.

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

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in response to your previous question.

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

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

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to fully automate any given business's accounting.

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

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

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It's about control.

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

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and there are challenges associated with that.

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At the top of the list is, carefully,

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considering what you're
automating before you do it.

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This is one of the biggest pitfalls.

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

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

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

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Sometimes software companies
are selling to someone,

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the decision maker is not the user.

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And I think the way to avoid that 

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

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

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

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It's about what do I not automate?

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

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

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

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Because we do both for our clients.

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

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

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You need a wide range of a team

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to make sure that you have the people

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who are going to be doing the work in there.

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

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

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Because, otherwise, you're going to go

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into that example that you just stated.

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– Absolutely, when we're pitching our software,

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or our services, for that matter

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

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Someone who's definitely not the user

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

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

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

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

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

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is going to help me improve realization fivefold.

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

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to use our product or consume
our services to understand,

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

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How do I get that?"

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As opposed to selling to the decision maker

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and hoping it works out down the road?

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

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in the sales process.

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We want the sales process to inform

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the user not, necessarily, the decision maker.

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We want the CAS practice operators

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

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– Yes, and it sounds like
organizations and companies

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can make a better decision.

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The more practitioners, the more people,

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

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

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But you need more voices in that input.

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– Of course, you're looking for consensus.

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

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Who are going to advocate for you online,

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

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And it's about getting buy-in

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

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

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without talking about artificial intelligence,

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machine learning, those are huge.

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

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

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

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talking about the ethics of it.

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So there are so many things involved in it.

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

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

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

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but what are those benefits going to be?

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

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

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Meaning we have no person
in the accounting function

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it's entirely an AI because
every business is different 

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

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

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that I haven't dealt with before.

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

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Now I can have a conversation with an AI,

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

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

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I think it's going to be different

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and better of gathering data from the Internet.

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

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

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

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– Huh, that's good.

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

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that shows the AI is taking over

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and they're making all the decisions for us.

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And I hope that we never get to that future,

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that science fiction has predicted.

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But when it comes to things like ethics,

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and fraud, and stuff like that, obviously,

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you can put different elements into the AI,

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and the machine learning,
and the automation,

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to eliminate those steps.

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

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

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and the internal controls
that are put into place?

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– I have no doubt.

242
00:12:11,690 --> 00:12:13,662
When the cat is away the mice will play.

243
00:12:13,662 --> 00:12:15,995
– Yes, and it's hard to say
how that's going to happen.

244
00:12:15,995 --> 00:12:18,828
– I just think it's a cat and mouse game.

245
00:12:18,828 --> 00:12:19,990
There are always going to be people

246
00:12:19,990 --> 00:12:21,995
who want to operate outside of the law.

247
00:12:21,995 --> 00:12:26,160
And the tools to detect it
are going to get better,

248
00:12:26,160 --> 00:12:28,828
and the tools for perpetrating
it are going to get better.

249
00:12:28,828 --> 00:12:33,328
Expensive software doesn't solve for
bad people and bad processes, though.

250
00:12:33,328 --> 00:12:37,995
– That's true, so talking about data,
obviously, data is a huge part of this.

251
00:12:38,050 --> 00:12:41,662
You mentioned that that's a skill
set that people are going to have.

252
00:12:41,730 --> 00:12:43,328
And then also, obviously, quality control,

253
00:12:43,328 --> 00:12:44,890
you've mentioned there's going to
have to be somebody there

254
00:12:44,890 --> 00:12:48,019
who's going to have to check
things as it goes through.

255
00:12:48,019 --> 00:12:51,328
But in the context of automation,
and accounting, and the operations,

256
00:12:51,328 --> 00:12:52,995
what steps are going to
be taken to ensure that

257
00:12:52,995 --> 00:12:54,570
there is going to be accurate
and reliable results?

258
00:12:54,570 --> 00:12:55,495
What steps are we going to have to take 

259
00:12:55,495 --> 00:12:57,370
to make sure that that happens?

260
00:12:57,370 --> 00:13:02,810
– I think you need to implement
your system with agility, iteratively.

261
00:13:02,810 --> 00:13:08,161
I think the first time you try whatever
system you just implemented,

262
00:13:08,161 --> 00:13:09,828
it's not going to be exactly right.

263
00:13:09,828 --> 00:13:11,828
It should be a big step in the right direction,

264
00:13:11,828 --> 00:13:14,060
but you're going to have to
do a lot of testing.

265
00:13:14,060 --> 00:13:15,828
And you don't want to
have the expectation that, 

266
00:13:15,828 --> 00:13:19,995
"I'm going to implement a really
expensive large general ledger.

267
00:13:19,995 --> 00:13:22,160
Have some consultants
come in for two weeks.

268
00:13:22,160 --> 00:13:24,430
They're going to get it right and
then they're going to go away,

269
00:13:24,430 --> 00:13:25,661
and my life will be better."

270
00:13:25,661 --> 00:13:28,050
I think that's the naive way to do it.

271
00:13:28,050 --> 00:13:30,730
It's got to be, "All right,
we're going to take a step

272
00:13:30,730 --> 00:13:32,260
and then we're going to take another step.

273
00:13:32,260 --> 00:13:35,750
We might have to take one step
back, after two steps forward."

274
00:13:35,750 --> 00:13:37,661
In terms of accounting data,

275
00:13:37,661 --> 00:13:42,870
quality control, reconciliations
will always be a part of the process.

276
00:13:42,870 --> 00:13:46,459
It's just that the time that it
takes to do them will shrink.

277
00:13:46,459 --> 00:13:50,494
I think the laborious parts, the real
rote elements of accounting work,

278
00:13:50,494 --> 00:13:54,161
are going to continue to get smaller,
but they'll still need to be done.

279
00:13:54,161 --> 00:13:55,994
Otherwise, how can an auditor

280
00:13:55,994 --> 00:14:00,161
give an opinion that statements
are materially free of fraud.

281
00:14:00,161 --> 00:14:01,529
It doesn't go all the way.

282
00:14:01,529 --> 00:14:04,994
– Yes, you have to have those
internal controls in place.

283
00:14:04,994 --> 00:14:07,994
Outside of the system, you have
to have those things in place

284
00:14:07,994 --> 00:14:10,661
to make sure everybody stays accountable.

285
00:14:10,661 --> 00:14:12,327
– Totally, 100%.
– Yes.

286
00:14:12,327 --> 00:14:16,161
– And at the end of the day, the people
are at the top of those systems.

287
00:14:16,240 --> 00:14:20,300
I just don't see us, you can detect
abnormalities with systems.

288
00:14:20,300 --> 00:14:22,327
You can flag things.

289
00:14:22,327 --> 00:14:26,994
But I don't think the IRS ever figures
out a way to, automatically, correctly, 

290
00:14:26,994 --> 00:14:29,161
identify everyone who's
cheating on their taxes.

291
00:14:29,161 --> 00:14:30,994
It's going to flag some stuff.

292
00:14:30,994 --> 00:14:32,994
It's going to get better
at flagging some things.

293
00:14:32,994 --> 00:14:35,220
But the flaggings need to be tuned,

294
00:14:35,220 --> 00:14:38,161
so that the people who are making decisions

295
00:14:38,161 --> 00:14:41,494
can use that information
to make better decisions.

296
00:14:41,494 --> 00:14:43,494
The people are always going to be at the top.

297
00:14:43,494 --> 00:14:47,994
– Yes, so let's say you're somebody
in the accounts receivable

298
00:14:47,994 --> 00:14:52,161
or accounts payable department,
and your job has been 

299
00:14:52,161 --> 00:14:55,161
to send the invoices out
and organize those things.

300
00:14:55,161 --> 00:14:57,827
And your company is saying,
"Hey, we're bringing in this system 

301
00:14:57,827 --> 00:14:59,750
that's going to send the invoice, automatically."

302
00:14:59,750 --> 00:15:00,827
What would you say to that person

303
00:15:00,827 --> 00:15:02,660
who's been sending those invoices out?

304
00:15:02,660 --> 00:15:04,327
What would you say to that person, today?

305
00:15:04,327 --> 00:15:05,994
– I'm going to save you a ton of time

306
00:15:05,994 --> 00:15:07,827
and you can learn how to do payables,

307
00:15:07,827 --> 00:15:10,940
and be twice as effective with your time.

308
00:15:10,940 --> 00:15:16,829
I think the accountant who fears
automation is truly in trouble.

309
00:15:16,829 --> 00:15:21,660
They may stave off the automation
of that invoice process for now.

310
00:15:21,660 --> 00:15:24,160
But eventually someone's
going to come along

311
00:15:24,160 --> 00:15:26,630
that makes it painfully clear
that you should have done

312
00:15:26,630 --> 00:15:31,380
this a long time ago,
and you're going to get fired.

313
00:15:31,380 --> 00:15:33,494
It's much better to embrace the automation

314
00:15:33,494 --> 00:15:36,494
and say, "Wow, I'm buying
back half of my week

315
00:15:36,494 --> 00:15:40,327
that I can now spend..."
in my case, it was learning to code.

316
00:15:40,327 --> 00:15:41,327
That's what I love to do.

317
00:15:41,327 --> 00:15:44,493
But it could also be learning more about

318
00:15:44,493 --> 00:15:49,827
a different area of the finance function
than you were exposed to before.

319
00:15:49,930 --> 00:15:53,327
People who are ambitious
are going to find a way forward.

320
00:15:53,327 --> 00:15:56,327
But automation is not
going to replace accountants.

321
00:15:56,327 --> 00:15:59,180
Accountants who use automation

322
00:15:59,180 --> 00:16:01,310
will replace accountants
who don't use automation.

323
00:16:01,310 --> 00:16:04,850
So embrace it, learn the
new skills, elevate your game.

324
00:16:04,850 --> 00:16:06,993
– So it's almost like if you're sitting
in there and you're listening 

325
00:16:06,993 --> 00:16:10,327
to this podcast, and you're like,
"Hey, my company doesn't do that."

326
00:16:10,370 --> 00:16:11,930
You can be the one to bring the idea

327
00:16:11,930 --> 00:16:14,310
say, "Hey, I have this new idea
to save us a bunch of time

328
00:16:14,310 --> 00:16:16,269
and we can do this X, Y and Z."

329
00:16:16,269 --> 00:16:19,160
You can bring that idea forward
and help elevate your company,

330
00:16:19,240 --> 00:16:21,493
and then it'll elevate you
probably in your organization.

331
00:16:21,827 --> 00:16:23,350
– Yes, and I think what you just said

332
00:16:23,350 --> 00:16:27,493
is a role now in companies
called finance transformation.

333
00:16:27,493 --> 00:16:29,730
And, by the way, if you think
that you're good at that,

334
00:16:29,730 --> 00:16:33,326
please look me up because
we want you to join us.

335
00:16:33,326 --> 00:16:36,993
– Definitely, well, look in the show
notes, today, and we'll have a way

336
00:16:36,993 --> 00:16:39,660
to contact Jesse either through
LinkedIn or some other way.

337
00:16:39,660 --> 00:16:42,779
So look at those show notes
for today's episode.

338
00:16:42,779 --> 00:16:46,160
So we've covered a lot of great
things during this conversation,

339
00:16:46,160 --> 00:16:48,660
and if you're a finance
and accounting professional

340
00:16:48,660 --> 00:16:50,769
listening to this conversation.

341
00:16:50,769 --> 00:16:53,493
What ways do you recommend
that they can stay up-to-date

342
00:16:53,493 --> 00:16:55,910
to the latest technologies, the tools?

343
00:16:55,910 --> 00:16:59,160
What resources are out there that
they can help them stay on top of this?

344
00:16:59,160 --> 00:17:01,470
Because, obviously, like you said,

345
00:17:01,470 --> 00:17:04,826
the accountant who understands
and knows how to work automation

346
00:17:04,826 --> 00:17:05,660
is, probably, going to replace

347
00:17:05,660 --> 00:17:07,520
the accountant who doesn't embrace that.

348
00:17:07,520 --> 00:17:09,326
So how can accountants stay up to date

349
00:17:09,326 --> 00:17:11,493
and then start embracing it, themselves?

350
00:17:11,493 --> 00:17:13,010
– I mean, first and foremost,

351
00:17:13,010 --> 00:17:15,289
if you're an accountant and
you want to keep your job,

352
00:17:15,289 --> 00:17:19,826
for God's sake, listen to
Count Me In, it's an obvious win.

353
00:17:19,826 --> 00:17:23,799
There are a lot of podcasts
that touch on automation

354
00:17:23,799 --> 00:17:27,826
and I think it's to, a large extent,
about keeping your ear to the ground

355
00:17:27,826 --> 00:17:29,110
and finding out about new things.

356
00:17:29,110 --> 00:17:33,659
But there's also Slack channels like
Off the Ledger, join CFO groups,

357
00:17:33,680 --> 00:17:35,480
follow people on LinkedIn.

358
00:17:35,480 --> 00:17:40,159
Follow me, Jesse Rubenfeld, and
you'll hear about a lot of exciting stuff.

359
00:17:40,159 --> 00:17:44,659
– That's great, well, and, obviously,
there are magazines out there.

360
00:17:44,659 --> 00:17:46,059
Don't sit there and sit in the dark

361
00:17:46,059 --> 00:17:49,250
and think that if you sit in the
dark nothing's going to happen.

362
00:17:49,250 --> 00:17:50,590
But keep your ears to the ground

363
00:17:50,590 --> 00:17:53,993
and pay attention because, otherwise,
it's just going to pass you by.

364
00:17:54,070 --> 00:17:57,159
You need to jump on the train
and don't let the train pass you.

365
00:17:57,159 --> 00:17:58,992
– And, hopefully, it's something
that's exciting.

366
00:17:58,992 --> 00:18:05,826
Wow, we can prepare these invoices,
automatically, and send them out.

367
00:18:05,890 --> 00:18:08,690
So many cool things are
happening in the industry.

368
00:18:08,690 --> 00:18:12,326
So many cool software companies
are coming up with new things 

369
00:18:12,326 --> 00:18:15,492
that are making your lives
better, as accountants.

370
00:18:15,492 --> 00:18:19,010
Elevating the profession,
giving you back time

371
00:18:19,010 --> 00:18:22,159
to take your career in the
direction you want to take it in.

372
00:18:22,159 --> 00:18:27,992
And the more you can embrace that
energy, the more it gives you optimism

373
00:18:27,992 --> 00:18:31,159
rather than fear of,
"I'm going to be replaced."

374
00:18:31,159 --> 00:18:32,326
– I agree, 100%.

375
00:18:32,326 --> 00:18:34,720
Well, Jesse, thank you so much
for coming on the podcast.

376
00:18:34,720 --> 00:18:37,826
It's been an absolute pleasure
talking with you, and I think 

377
00:18:37,826 --> 00:18:41,159
the information that you provided
will really help our audience

378
00:18:41,159 --> 00:18:43,992
to really look forward to
the future and be better.

379
00:18:43,992 --> 00:18:44,992
– Thank you so much.

380
00:18:44,992 --> 00:18:47,159
< Outro >

381
00:18:47,159 --> 00:18:49,992
– This has been Count Me In,
IMA's podcast,

382
00:18:49,992 --> 00:18:52,992
providing you with the latest
perspectives of thought leaders

383
00:18:52,992 --> 00:18:54,825
from the accounting and finance profession.

384
00:18:54,825 --> 00:18:57,490
If you like what you heard,
and you'd like to be counted in

385
00:18:57,490 --> 00:19:00,010
for more relevant accounting
and finance education,

386
00:19:00,010 --> 00:19:06,159
visit IMA's website at www.imanet.org.