Digi-Tools In Accrual World

Ryan Pearcy is joined by Billie McLoughlin and Kevin Fitzgerald from Employment Hero for a fortnight of app news, from a quieter year for accounting startups to who gets to pull the plug in an app ecosystem. Kevin opens with Y Combinator, which backed seven tools for accountants last year and only one so far this year. His view is that accounting software is one of the stickiest products in the cloud, and few businesses or firms are itching to rip it out for something new. Billie thinks the money is moving from the tools to the people who use them, and that “AI-powered” has stopped meaning much. The better question is simply whether it’s any good. Ryan covers Xero’s quieter work on user permissions, including the long-requested option to hide bank statement lines and feeds from standard users, with purchase orders and inventory permissions on the way. Billie’s advice is to charge clients for setting it up, and Kevin sees it as a sign of bigger, more sophisticated businesses using Xero. Billie then brings the story of Xero removing the GovReports integration in Australia overnight, with no grace period, leaving firms with what she calls AI-powered copy and paste. Kevin calls it systems continuity risk, and Ryan follows with Briefcase being cut off from Xero after launching its own ledger. The panel debate whether Xero should publish a page explaining who it disconnects and why. On payroll, Kevin shares a scoop: Employment Hero will launch an integration with Crezco in the coming weeks, so employers can pay staff from the platform using faster payments, at no extra cost. BrightPay has also added pay by bank through Crezco, though Ryan questions beta pricing of 60p per employee per run when 25p per payment seemed to be the going rate. Also covered: Engager, now part of the TaxCalc family, bringing multiple offices into one login, and Billie’s question on whether billing and WIP follow. Digits shipping multi-entity without consolidation, and its partnership with Reach Reporting. And Combinely’s AI co-worker Coco, which leads to a debate on what happens when you need to let an AI employee go. Don’t forget our AI hackathon on 18 November. Follow The Loop on LinkedIn to grab a place. Chapters 00:00 Intro 02:48 Ad: Employment Hero 03:26 Y Combinator backs fewer accounting startups 08:04 Xero user permissions get granular 13:59 GovReports switched off overnight 21:42 Briefcase cut off from Xero 25:32 Employment Hero payroll payments with Crezco 29:35 BrightPay pay by bank through Crezco 33:21 Ad: Joiin 34:28 Engager: multiple offices in one login 37:55 Digits multi-entity arrives 41:49 Combinely’s AI co-worker Coco 53:18 Outro

Indi Tatla, John Toon and Leigh Stallard work through a week where the ledgers kept reaching outwards, into practice tools, the bank and even the phone. FreeAgent has added tofu as a practice integration, pulling line items out of invoices and receipts and learning how each client codes things. John thinks extraction is table stakes now and the firm knowledge is the interesting part. Indi likes FreeAgent bringing in specialists rather than building everything itself, and Leigh explains how he used Claude to connect Adfin to FreeAgent without writing any code. That takes John somewhere bigger: if Claude can do the work, why log into Xero or ApprovalMax at all? Leigh isn’t ready to call the death of the interface just yet. mika has raised €6 million with a headline about making German tax advisers optional, building on top of DATEV. Indi questions whether investors know what they’re buying, and John has a theory about mika’s pop music namesake. Then an analysis from Diligent Capital of 30 AI-native finance startups suggests standalone month-end close becomes a feature within a couple of years. John isn’t sure it was ever a category, Briefcase is already heading that way, and Indi asks him about Anthropic’s finance agents. QuickBooks and Revolut have deepened their partnership into bills and payment status. Indi sees a door opening for lenders and private credit who have never been able to see small businesses properly, with Sage and FreeAgent with Mettle on similar paths. John has heard this before with open banking and asks who actually drives it forward this time. Intuit Intelligence is rolling out internationally in beta, and over at AccountsOS you can now phone Finn, its AI accountant. John isn’t sure how often anyone wants to ring their ledger. Leigh remembers when nobody did bank rec at a bus stop either, and raises a newer worry about prompt injection. Gusto has launched AI agents for payroll prep under Gusto Pro. John sees a scale play rather than an advisory one, Indi wants to put it to Kevin Fitzgerald at Employment Hero, and the hosts look at what BrightPay, Joiin, FirmCheck and Plaid are doing with agents. RevealOS, from founder Miles Udemezue, starts from the transaction that’s missing evidence and goes looking for it in the client’s approved inbox and supplier portals. Will clients let a tool into their inbox? Leigh thinks it beats getting them to send everything themselves. John thinks it’s easy to copy, remembers Dext trying supplier portals, and tells Miles to go broad and go fast. Also covered: the AIR Network’s MTD for Income Tax readiness scores for 171 products, with FreeAgent and Clear Books near the top and Sage, TaxCalc, Bright and IRIS Elements further down than you’d expect, plus The Loop’s first hackathon with Xero, GoCardless and Lovable in London on 18 November, free for accountants in practice. Chapters 00:00 Intro 02:37 Fishbowl 03:44 FreeAgent: tofu and the ecosystem play 12:24 mika: making tax advisers optional? 17:58 Month-end close: a feature, not a category 22:45 QuickBooks and Revolut: where the bank meets the ledger 33:24 Intuit Intelligence goes global 40:28 AccountsOS: phone your ledger 46:15 Gusto: AI agents for payroll 52:07 RevealOS: ending the document chase 59:57 MTD: the software readiness scorecard 1:07:41 Outro and The Loop hackathon

John Toon, Ryan Pearcy and Heather Smith work through a busy week of accounting tech news: assurance for AI, a run of Xero releases, three MCP launches, Joiin’s Q3 deck and a lot of Briefcase. Heather opens with the AICPA’s new service for assuring AI systems and agents. John likes the opportunity and doubts the practice: the people who build these models say they can’t fully explain them, and the work could easily end up with the Big Four. Ryan's line is that if nobody can assure AI, that’s the bigger problem. Ryan goes through Xero’s latest product updates, including bill approvals due in November. He thinks it lands on ApprovalMax’s patch, with Dext and Apron nearby. John says rules-based approvals are already behind where AI tools are going. Heather asks vendors to announce features in plain English. She’s also an active Google Gemini user, so she has views on Xero’s new Gemini connection: when it’s good it’s very good, and when it’s bad it’s horrid. Xero’s remote MCP is now generally available, and John explains what that means and what still needs a developer plan. WorkGuru’s MCP server is in beta and can write but can’t delete anything. Heather covers Digits’ Write MCP, which former Xero CTO Craig Walker says solves the locked period problem: an edit to a locked period goes into a queue for an admin to approve. The hosts make the case for proper backups now that agents can write to the ledger. John walks through Joiin’s Q3 release: forecasting out of beta with group consolidation and an Excel round trip, forecasts out to 60 months, a KPI library, a performance map, and new connections including FreeAgent and Fortnox. Fathom, they’re coming for you. Briefcase gets three stories. Ryan covers Briefcase on your phone. Heather covers payments and approvals at 25p a payment, and Ryan explains why payments are the biggest fraud risk in a business. John covers Xero pausing Briefcase’s integration soon after Briefcase launched its own ledger, and asks why Xero didn’t just buy them. Ryan closes on Dext and the idea that data quality now matters more than the ledger. Also covered: the Digi-Tools hackathon with Xero and GoCardless in London, with Alastair Barlow, Billie McLoughlin and Alexis Kingsbury. Chapters 00:00 Intro 01:14 FreeAgent 02:15 AICPA: assurance for AI 11:13 Xero: approvals are coming 18:45 Xero: Gemini joins the party 22:20 Xero: remote MCP goes live 26:56 WorkGuru: an MCP that can’t delete 29:09 SuiteFiles 30:06 Digits: Write MCP and the lock period 37:19 Joiin: the Q3 deck 42:47 Briefcase: on your phone 44:10 Briefcase: payments and approvals 48:23 Briefcase: the Xero pause 52:53 Dext: data quality over the ledger 57:05 Outro and the Digi-Tools hackathon

No studio again this week. John Toon and Indi Tatla took the microphone round day two of the Digital Accountancy Show at ExCeL and sat down with the vendors on the floor, one at a time, to hear what they are shipping. Dext gets two chairs. Sabby Gill, fresh from Dext Insiders Day, explains how three separate systems (Receipt Bank, Xavier Analytics and Greenback) became one platform, why everything starts with the source data, and why he thinks the system of record now comes second to the experience a business has with its numbers. Asked about the doomsday clock that says accountants are done by 2028, he gives the Y2K answer: nothing happened then either. Paul Lodder picks up the product detail with John: AI Assist, the new AI connectors to ChatGPT, Claude and Copilot, the delayed index and time-spent-per-document insights, and an optimisation score on the way. John asks the VAT question nobody likes answering, and they get into whether the general ledger is becoming a repository rather than a place you work. Stu McEwan at FreeAgent says MTD numbers have doubled what they expected, with 200 to 300 of HMRC’s 700 beta testers running a full year end through FreeAgent, and unrepresented customers getting on with it better than anyone predicted. Tracking groups and management reports are the move upmarket. “Not AI native, but AI in it.” Paul Sparkes from iplicit talks through the all-new UI and a single prompt inside the software, and why iplicit is a restaurant rather than a sweetie shop when it comes to AI and your data. Chris Downing shows Indi Sage Period Review: the Sage ledger consumed by banking partners, Tide first, so a sole trader categorises in their banking app and the accountant reviews, fixes and files from Sage for Accountants with no bank feed to set up. Indi’s question: when did Sage turn into such a speedboat? Tushir Patel at Capium has gone from baby steps to adolescence, with Capium 365 as the data capture layer for sole traders and landlords and a largest client running about 20,000 clients through the system. Henrik Grim at Mimo has spent 18 months all in on Mimo Associate, agents for the financial close that sit on top of whatever ledger a firm already runs. His bet is the shift from doing the work to reviewing it. Asked if accounting ends in 2028, his answer is one word. Jonathan Gaunt from Socket, Release of the Year at the Disruptor Awards, wants deeper handoffs into Senta, FYI and Karbon, runs Socket through Claude himself, and thinks MTD is battleships waiting to sink practices that are not charging for it. Then the microphone changes hands. Kendrick Hair from Fishbowl interviews Ryan Pearcy on the Fishbowl stand about why Ryan’s firm partners with them: 25 years of inventory and manufacturing software rebuilt for the cloud, an agent called Juno on top, and a UK inventory market that had gone quiet until someone turned up to disrupt it. Kendrick’s observation from the US side: UK business owners lean on their accountant in a way American ones don’t. Johann Gorée closes with Engager’s latest releases (multiple addresses synced with TaxCalc, hyperlinks in checklists, dynamic date formats) and a warning about firms feeding client data into the free tier of ChatGPT. A car can do more than 70 miles an hour. That does not make it legal. Chapters 00:00 Intro, day two at the Digital Accountancy Show 02:21 Advancetrack 02:59 Sabby Gill, Dext: the ledger comes second 11:30 Stu McEwan, FreeAgent: MTD is a numbers game 16:42 Paul Sparkes, iplicit: a restaurant, not a sweetie shop 21:53 Paul Lodder, Dext: too much time chasing clients 28:39 Chris Downing, Sage: Period Review and Tide 33:30 Tushir Patel, Capium: the dark horse in purple 38:35 Henrik Grim, Mimo: from doing to reviewing 48:03 Jonathan Gaunt, Socket: MTD is battleships 55:59 Kendrick Hair and Ryan Pearcy, Fishbowl: disrupting, not going anywhere 63:51 Johann Gorée, Engager: AI, responsibly

No studio this week. Indi Tatla and Alastair Barlow took a microphone round the Digital Accountancy Show at ExCeL London and stopped anyone who would talk to them, with Ryan Pearcy waiting at the end on The Loop stand. Yogesh Patel opens with a phrase he had just heard on the main stage: the AI discount. If AI makes the work faster, how does a firm stop the saving going straight to the client as a lower fee? Indi then brings back the idea Dext pushed at its insider day, that the system of record does not have to be where the work happens. Alastair calls it the headless ledger, and Damon Anderson later tells us the AI-native ledger was the big story of the day, name-checking Digits, Light, Campfire, Rillet and DualEntry. He also gives the market a three to five year runway, because real firms have real people, real trust and HMRC to work with. Paul Layte from Ascendant walks through four versions of the firm delivery model, ending with a question nobody was asking two years ago: do we need offshore at all, or can AI agents do this? Andrew Douthwaite from Alliotts, part of the Shaw Gibbs Group, talks about life after a private equity deal and what he would build with a war chest. Daniel Rock from SuiteFiles previews the new connect portals and the agentic chasing on the way, and Trent McLaren from Vinyl explains why the real gain from an AI note taker is the mental load it lifts. Kate Hayward, Xero’s UK Managing Director, and Kendrick Hair from Fishbowl talk through a family-run yoghurt maker that has grown threefold in 18 months on Xero and Fishbowl. Kate brings the number of the day, two in five UK small businesses did not know if they were profitable last month, and news of a Xero and The Loop hackathon in November. Kendrick explains Fishbowl’s new accountant’s ledger. Katie Hawking from TaxAssist comes off a women in accountancy panel with SilverFin and a line worth taking back to the office: be the women we want to walk behind. Ryan closes it out at The Loop stand, giving compliance four years before the way firms deliver it changes completely. Also covered: James Howell and Dan Cockerton on putting on the show and taking it to the US and Barcelona, Phil Hobden on what Sage has been asked about Intacct and MTD, a new firm owner five months into practice, Lisa Marshall flying in from Canada and discovering FreeAgent, and why they walked straight past John Toon. Chapters 00:00 Intro, live from the Digital Accountancy Show 01:33 Employment Hero 02:10 Yogesh Patel on the AI discount 04:50 First time at the show 06:40 Why come to DAS, and skipping John Toon 07:47 James Howell on building the show 10:16 Dext and the headless ledger 12:21 £4m in fees from LinkedIn 15:57 People and agents in one org chart 18:36 Andrew Douthwaite on PE and a war chest 24:31 SuiteFiles and agentic chasing 26:06 What Baker Tilly does differently with AI 30:56 Phil Hobden at Sage 32:56 Five months into a new practice 35:56 Fractional CFO or outsourced finance function 38:06 Dan Cockerton on DAS in the US and Barcelona 42:56 Trent McLaren, Vinyl and the mental load 45:26 Paul Layte: do we need offshore at all? 48:26 Katie Hawking: be the women we want to walk behind 52:16 Damon Anderson and the AI-native ledger 55:09 Joiin 56:16 Xero and Fishbowl: two in five didn’t know 66:40 Lisa Marshall, all the way from Canada 69:35 Ryan Pearcy: plan now or have it thrust upon you 73:25 Outro