557 2025 BOOKKEEPING Accounting Firm Tech Highlights

Today on the podcast, we're revisiting our 2025 bookkeeping technology predictions that we did a year ago. Did we hit the mark and what was the best stuff that we got this year? If you do any sort of bookkeeping work for your clients, not gonna wanna miss this one. Some pretty interesting developments that we saw in 2025. Got a lot of ground to cover. Let's get right into it. Okay, revisiting last year's predictions. Did we get much cool stuff this year for bookkeepers to help Walk us through this, today we got joining us, friend of the pod, Jacob Marley. Thanks for being here, Jacob.

Yes, yes. Let's get on with it now, shall we?

Okay. Good energy, Jacob. Jacob, if you don't recognize him, the dead business partner of Ebenezer Scrooge and Charles Dickens the Christmas Carol. Jacob Marley. Too deep of a cut maybe. Jacob, what was our first prediction last year?

More tools would live inside qbo Xero Deep ledger integrations. You said the big change in 2025 would be more apps pulling in full general ledger data from QBO or zero, the way Keeper did, so you could run month end close work without living inside every client file. You framed this as the natural path since the core ledgers weren't innovating much, so the interesting stuff would happen around the ledger.

All right, so QuickBooks Online. Zero. Not a lot of interesting stuff happening there. I would say the most interesting development in the bookkeeping space in the last decade honestly has been the tools that help bookkeeping pros automate a whole bunch of month end closes. And it's really Keeper that I feel like has defined this category and now we have a number of other companies doing a version of it. Basically it's, it's just a month end close automation tool and it connects to all of your client accounting ledgers and it gives you one place to manage all of those month end closes. And so this prediction was that like what Keeper has done, where Keeper pulls in every single transaction from the accounting ledgers of your clients, more tools would begin following this pattern. The idea of pulling in every single transaction from the accounting ledger into your platform to then be able to do interesting things with it. This, this is absolutely played out. In fact, Financial Sense announced a cool version of this at WorkflowCon a couple of months ago. This is their big push. Right now is month end close automation happening inside of Financial Sense and syncing every single transaction in. That's exactly what we described in this prediction client hub. You could argue they're maybe doing A little bit of this last year, but have gone real deep into this this year now, pulling in every single transaction. You can do a full balance sheet and profit and loss review inside of Client Hub, which historically has been more of a practice management system, like a system where you manage the work, but it's now getting deeper into workflow, pulling all of the client file transactions into Client Hub so you can review it all in one place. You could argue that Carbon has gone down this path because they acquired ator a tool that does just this. It does some cool reporting stuff, but it's also a month end close automation tool that syncs in every single transaction from the accounting ledger. So this prediction, I mean, I'm going to give this an A plus because a whole bunch of people have done exactly this in the last 12 months. And it's great news for bookkeepers. These tools, they're becoming like real powerhouses for letting us automate a whole bunch of month end closes by pulling in more of the data from the ledger and helping us manage all that work in a more centralized place. Normally the process looks like in The Accounting Ledger, QuickBooks or Xero. Usually you just get through doing the bank reconciliation there and then the rest of the month end close is managed elsewhere. And I would say the companies that are furthest along on this are probably Keeper, Client Hub, Financial Sense and ator. If you haven't experienced this yet, you do bookkeeping work and you're still just doing it in the accounting Ledger or in QuickBooks or wherever that is. I mean, to see a really compelling example of this. Keeper was probably the first one there. Just go out to my YouTube channel, Search Keeper. We've done a few different demos of their platform and you'll kind of get a taste of the power of that. Okay, Jacob, hit me with last year's second prediction.

Practice Management systems would start connecting to the ledger for real context. You said a PM system, especially one doing email, got way smarter with when it could see ledger details. Your example was if a banker asked for a P and L or asked why an expense jumped, the system should be able to pull the detail and help draft the response so work stops being trapped in silos.

Oh, this one's frustrating. Okay, on the one hand we've made progress here, on the other hand we haven't in a really frustrating way. So yes, practice management systems increasingly are now connecting to our client ledgers to be able to pull more of that information like we just talked about. Financial Sense is a good example. Client Hub Carbon is Kind I don't know if Carbon will ultimately do this themselves, but they acquired a company where this is a hundred percent what they do. But this hasn't gone as far as I hoped. It hasn't gone as far as I wanted to see in this prediction, which is to say the rest of the platform. Your practice management system is informed by what it sees in the client's general ledger. There are some workflow examples of this, you know, like trying to sort of automate the month end close inside the practice management system, chasing clients for uncategorized transactions. There's some practice management systems that do things like that. I guess my main frustration is we haven't brought this back to email yet. And the whole like email inside of practice management system is still so weak, so limited in the grand scheme of things. For most practice management systems the whole email component is literally just connect your email so that then at least you can see emails associated with the client record. But the whole email authoring experience is kind of a joke. Like it's so weak that it's like you see it and you're like, you don't really expect everybody to write their emails from this system, do you? And the big opportunity here is the future of email. Is AI writing your emails like it just is. We are not that far from a day where there will be certain messages you get that you will allow AI to autorespond to same on the client side where they can have this quick exchange based on the information that they have access to without humans having to lift a finger. And that's weird but, but it's also better than today where we send so many dumb trivial emails just for little bits of information that like really humans do not need to be doing this. And so the more information that email assistant has, the more intelligent it will be. Right. And a great example here is your client's accounting ledger. Like we get questions all the time from clients that are informed by things that are in their accounting ledger. That is just a logical extension for a practice management system where the future of practice management systems is truly we want to be the home to as much context information as possible from meeting transcripts to client communications. Well, isn't, isn't the accounting ledger a pretty big part of that? Like shouldn't you be connected to the client ledger? Because there's so many different ways that we can use that that side of it hasn't developed as far as I would like. Honestly I would. I mean the leading practice management systems today, and this is kind of an interesting whole aside. And there may actually be other predictions related to this. They've gotten so big and so successful that in my opinion, like in the grand scheme of things they're not moving that fast. Some of these conversations we've been having for several years now and there's risk in being the first one to roll out a version of this. And so everybody's kind of waiting to see what everybody else does and it's a bummer, man. And we, and we're seeing some of these workflow solutions like Keeper and stuff like that representing kind of a threat to what practice management systems do because they are willing to move faster and ship more interesting things. And I the practice management systems man, if you're going to stay relevant, like we gotta keep shipping cool new stuff. Okay, Jacob, next prediction. Notable films you may have seen Jacob in Muppet Christmas Carol the movie Spirited, a 2024 Apple TV classic.

Practice management would pick a lane. Bookkeeping versus tax. You predicted PM platforms would specialize more. Instead of trying to be half good for both tax and bookkeeping. You said the result should be a clearer shortlist of best options depending on firm type. Because doing deep bookkeeping workflow and deep tax workflow in one tool seemed very unlikely.

Yep. So I think we're taking baby steps down this path. Practice management systems, historically they've managed the work from a 10,000 foot view, but they don't do the work workflow tools on the other end of the spectrum, like you know, Keeper for helping month end close automation. On the tax workflow side, we have workflow tools like doing meaningful tax work. I consider that sort of the workflow layer. And for practice management systems there's a tremendous amount of risk if these workflow tools start shipping practice management features, then people will be like I love this workflow tool and honestly I would love it if they just added these three things that my practice management system does. Now that's a vast oversimplification. It's not as it's not trivial to overnight become a practice management system. But you could see a world where the biggest risk to practice management systems is people falling in love with their workflow tool and just not wanting to have to mess with a practice management system. So it's just a matter of time before practice management systems start shipping these workflow tools. And every single one of them have been saying it like, oh yeah, we will have what that company has in, you know, Q2 or, or something like that. They've all been saying this for years. But as soon as the practice management systems start going down that path, if they're building their own version of that product, it means they're going down the lane of either more tax features or more bookkeeping features. Like building one of these well is exceptionally difficult. In fact, none of the practice management systems have even touched workflow of the level that we get from point solutions that just do workflow really well. And I mean, I feel like a broken record because I've been saying this for like two years and people are still holding out for their practice management system to ship a good version of it. And they just keep like stringing you along saying like, yeah, we'll have it, we'll have it, we'll have it. It's like, no, it already exists. These workflow tools, they already do it really well and they've had a good version of it for like three years. So how many years are we going to wait? Because the practice management system version there is not yet an example where it's even an 80% version of the standalone tool that does it really well. And I'm talking about bookkeeping workflow like month end close automation, and I'm talking about tax workflow. And so if practice management systems start investing in this stuff, it requires them to a degree to pick a lane. And this has 100% happened this year. So we've seen Canopy ship their own tax intake solution. Now Canopy, like pretty much every practice management system with a couple exceptions, have increasingly said we're a tool for everybody. Even taxdome says we're a tool for bookkeeping firms. They literally have tax in the name of canopy used their, their domain, their web domain used to be Canopy tax. They changed away from that because they didn't want to be pigeonholed into being a tool for tax firms. Which is frustrating to me because this is the opposite of what I think platforms like this need to be doing. This category is more than big enough to where you don't need to control the entire thing. Pick a lane, be really, really good at serving a specific type of firm. And hopefully now we're starting down a path where that's more clear. So Canopy ships tax intake automation, they didn't ship any sort of month end close automation. In my mind, this is taking them more down the path of being a platform better suited for tax firms. They kind of always have been Taxdome. Similarly, they've said they're going to do month end close automation stuff, still have seen no whiff of it in the wild, and then they shipped their own kind of beginner version of automated tax intake as well. Again, none of these from the practice management systems rise to the level of what the point solutions. The tools that just do tax intake do really, really well. And, and to be clear, they never will because the tax intake solutions, that's all they're working on. But there's this whole notion that like, well if the practice management System does an 80% version of it, that'll be good enough because it lives alongside all my other stuff. Honestly right now like they're not even 50% versions of it of like that functionality. So Taxdome going more down a path of being a platform for tax firms. Interestingly Financial sense, they went the month end close automation route so they now have some of that stuff built into their product. To my knowledge they don't have anything on the tax side yet. So that has financial sense trending a little more down the bookkeeping path. Client Hub has invested a lot in month end close automation to their credit and they're a smaller player in the space so maybe it's more imperative for them. But they have from the beginning said we're great for bookkeeping and client accounting service firms and they're continuing down that path and that's great. That makes it way easier to recommend them. Carbon. Oh Carbon. Carbon has built an integration with Stanford Tax, which is one of the really good automated tax intake solutions and they bought ator. Both of those things are an acknowledgment of the power of these workflow solutions, but also a bit of an admission from Carbon to say that at least right now we're not going to build our own version of these things because we just acquired ATOR and we did this really deep integration with Stanford Tax. In the short term this is good news. If I'm a Carbon user and I do taxes like awesome. Now Stanford Tax is the no brainer choice. ATOR is not quite as easy. Stanford Tax, like they are the best at that thing. Ator like they're doing some cool stuff but they're not the best at anything right now. They're not the best at reporting, they're not the best at month end close automation. But that's absolutely a response to Keeper being a really powerful month end closed solution and Carbon being able to say like yeah, you get the same thing if you come and use ADOR and then integrate that with Carbon. To be clear, it is, it's not the same thing. Nowhere near like Keeper in terms of month end close automation, they are way ahead of anybody else right now. And so this prediction that practice management systems will have to kind of pick a lane, you go down the tax path or the bookkeeping path. It's absolutely the case. And this is great news for us because it makes it easier to decide what system makes the most sense for me and my firm. Hey, real quick attention. If you have clients that do project work, do ugly stuff like inventory, construction stuff, anything. Where you got hairy is the bills that have to go to specific destinations. When it comes to bill pay, there is a new sheriff in town. It is this episode sponsor Makers Up. Even if you don't do bill pay, this is something that is worth showing your clients. Actually we've done a number of videos on my channel. You can start sharing my videos with your clients. What fun. Gang, we are light years beyond what the old guard like bill ever did with automated bill extraction and get like getting these things through the approvals process which is oftentimes much more complex than just is this bill over $10,000 or under $10,000? Man, I worked with a church that had this like multi level like just this crazy hairy combination of approval approvals that was dependent on like a mountain department, all these different things and they had this physical thing that had to get passed around for every single total nightmare. You probably got a bunch of clients with situations like this and you can absolutely be the hero with Makers Hub. It is seriously good. Worth checking out. Learn more about Makers up with the link down in the show notes. Hey, real quick. We recently did an updated demo day of of one of this episode sponsors Client Hub over on the main YouTube channel through the really cool stuff that they're doing for bookkeeping and accounting services firms building sort of the centralized brain where you manage and oversee all of the work. But also Cloud Hub is getting more into like the doing of the work, the actual workflow itself, doing some really cool stuff around like AI month end close review and doing so with a deep integration into QBO and 0. So like pulling all the transactions into Client Hub so you're able to do more view from inside of the practice management system. And it happens right now at a time where it's kind of annoying. We've got these really cool workflow tools redefining how efficient we can be with getting the work. But then you've got your practice management system which is like disconnected from all of this workflow and seemingly just overseeing like the status management of the work Client Hub. They're kind of trying to do both of those things in one platform. It's been really interesting to follow if you are a bookkeeping firm or client accounting services firm. Client Hubs, one of those platforms that I think you just kind of have to check out. Like I said, we just did a new demo of it on the YouTube channel. I think you'll like it. How to learn more about Client Hub, check out the link down in the show notes. Doing pretty good so far. I would say two and a half of these predictions so far have been spot on.

Keeper would move into practice management. You said it felt inevitable that Keeper would become more of a PM system and you pointed to them shipping, tax, project tracking as a signal. Your point wasn't that V1 would be perfect, but that the direction was clear and it would pressure traditional PM tools to respond.

I would say Keeper. So we're talking about Keeper because it's the hundred pound gorilla in the bookkeeping space. Like for context in my online community, realize I went to the firms in that, in that community that only do bookkeeping and for context like this is arguably the most progressive collection of accounting firms in the world, my online community, I would make that argument. And 80% of the bookkeeping only firms reported using Keeper. 80%. There's no other part of the accounting industry where I see that level of saturation of any tool right now. And so that whole bookkeeping space, it's kind of working around what Keeper is doing. So the prediction here was that Keeper, which is historically a workflow tool just for month end close automation, would become more of a practice management system. And I would say they have in kind of subtle ways. In fact, if you, and depending on who you ask at Keeper, a lot of them will say like, I mean a lot of our clients are using us as a practice management system. We've got this feature, that feature, you can do a version of that. The reality is I don't see like the time and billing, the reporting, like the a lot of the bigger kind of infrastructure that firms beyond a certain size kind of insist on having in their practice management system. So I would agree here. Keeper has taken some steps to be more of a pm. And for small firms it's never been easier than it is today for a firm to just run on Keeper and not need to rely on a secondary practice management system. But they have not aggressively moved in this direction by any means. They're staying focused on what they do really, really well, which is month end close automation. And that's exactly what I want. There are so many examples in the accounting space of a tool that does this one small, very specific job, really, really well and we love it. And then they take a hard pivot and like raise more money and they're like now we're going to go and do this other thing well. And you're like no, no, no, no, no. I already have a tool for all these things. I don't want you to go do that stuff. Just do the thing I need you to do really well. There's a risk of that if Keeper goes fully in the practice management system direction. Like just keep hammering on month end close automation because that's so valuable. And so while they have taken some baby steps towards practice being a practice management, the vast majority of what they've shipped in the last year has been around month end close automation. And I think that's great news. That's exactly what I want to see. Jacob hit me with prediction number five.

Receipt plus document management would become a feature and shift into spend management. You said the case for standalone receipt document tools was getting weaker because more platforms were baking it in and because receipt capture was moving to the moment of spend cards plus mobile apps.

Yep.

You also said Dext selling was a warning sign that future development might slow even if the product stayed solid for now.

Yes. The Dexter is acquired by Iris in general. I mean I can't maybe the only example in all of accounting software industry I can think of where a company got acquired and didn't kind of either stop or trend downward was Drake. Drake Tax seems to still be doing great otherwise like this is just what happens. The company gets acquired, the founders leave or they work on some sort of earnout for a few years and the platform just kind of doesn't go anywhere. I don't hear people talking about switching to platforms just for managing volumes of documents. I know there's still a ton of happy Dex users and it's still the most powerful platform for like high volume document processing. But the reality is these days when I so we just got off this 13 city workshop tour and one of the sponsors at a number of these tours was Ramp. Ramp is kind of like a card management platform. Among other things they got a they got a free bill pay component as well and as part of the little sponsor read that we did there, I would say show of hands. How many people are using Ramp? Almost half of the room's hands would go up every single city to say that in some form or another they were Ramp users. I use Ramp for my own business, but that level of usage across firms surprised me. And the reason, I mean it does A lot of things. But the really powerful opportunity for bookkeeping firms is when your team is spending with RAMP cards. As soon as you spend, they get a text message saying, hey, give me a receipt. The system gets them to submit a receipt and then follows up with them. In fact, you can even lock their cards like it will automatically lock their cards after a certain number of days of them not providing the necessary receipt documentation. And so it's, we're now capturing the receipts from all the people doing the spend like in real time throughout the month. And their document processing is great. Like there's a level of customizability that Dext I think still has that goes beyond what RAMP does. And there's going to be client situations where you still need that. But most of the time you don't need a document as like a standalone document management system. Like, you just don't. I would say this prediction has absolutely played out as more modern sort of neo banking and card management solutions have become more popular. Mercury's one that's grown a lot more on the neo banking side. Ro Rho, they got some traction in the accounting space though I do think they're pulling back from the accounting category a bit now. But yeah, receipt and document management, not really a thing that in 2026 will justify a standalone tool in most cases.

To you, Jacob, the biggest operating change would be better trained firm owners, more free resources. You said 2025's biggest change for bookkeeping firms might be the firms themselves. More owners learning faster because high quality content and communities were everywhere.

This one's wild.

You tied this to firms getting more specialized and more confident in marketing, often driven by social media.

I mean, if I think Back to like 10 years ago, there were virtually no resources out there for people starting firms, for people choosing tech. Like for bigger firms. There were, there were like your alliances and your boomer consulting. And you know, you'd get accounting today in the mail and be like, oh, that looks like an interesting app. But the reality is everything in those magazines are paid placements. And if you compare that to today, the number of people that are sharing their firm running Journey and put it putting out information for free online. I mean the number of communities that are out there for accountants, arguably we have too many communities out there now and more folks like spinning communities up and then they will like shut down three months later, like for a bit there. I think the supply sort of outran the demand. But all that is to say there's never been more access to support and learning how to run A firm. And the big one for me, access to other people who are running firms. That was my biggest unlock was just simply being able to have a place where I could talk with other smart firm owners and see what they tried and what worked and what didn't. Especially around stuff like tech selection, where it's like, does this actually work? Like, I just saw a carbon acquired aider. Has anybody actually used it? Can you tell me how it compares to Keeper? What does it do? What does it not do? The best source for all those answers, it's not your carbon rep, it's not your ador rep, it's not even your Keeper rep. It's other people who are actual users who have actually done this stuff. And it's never been easier than it is today to have access to, to other people that do this stuff. And that's great news. And I would say where, where 2024, like what we were saying at the end of last year was this is kind of a crap year for bookkeeping tech developments and this year has been a little bit better, but not a huge amount. When we're kind of frustrated, like, shouldn't I have impacted bookkeeping tech more than it has at this point? I would say the bigger change was in the people who ran those firms in the access that you had to resources and best practices. We're all so much more connected than we've ever been before. I would say that has had a bigger impact on our firms than any specific tech developments. Few more to go here. Few more to go here. What do you got?

Jacob Ledger? Automation would grow through Chrome Extensions plus AI agents. You predicted more Chrome extension style tools would show up to automate parts of QBO0 that APIs don't really expose. You called out reconciliation matching. You said 2025 was supposed to be the year of the AI agent software that could use the UI like a human.

I didn't say 2025 would be the year of the AI agent. That's what everyone was saying. My stance has always been 26 will be more the year of the AI agent. But has this come to pass? Are there more Chrome extensions to automate stuff in our tools? Right Tool is the big example of this. They've been out for a few years now. Write Tool all one word. If you use QuickBooks online at all, Write Tool is a total no brainer. They even have a free ad supported tier that just improves upon QuickBooks online and helps you automate a bunch of stuff. Now I would say this came true to a degree. In fact, I don't know if they still have this. Keeper had like a Chrome extension that would help to automate more of the stuff in QuickBooks Online and the Ledger. My understanding is technically that's against the rules. Intuit doesn't want you doing that. And the risk, I mean the risk of you or I going out and making something and sharing it with people is not that big. The risk to somebody like Keeper is if you break their rules. I've been calling them Keeper this whole time. They go by Double now. Dang it. Gosh H, darn it. Keeper now goes by Double. They changed their name. It was a whole thing. Double D O U B L E earlier this year, Double I know at some point had a Chrome extension. I don't know if they still have it, but my understanding is that sort of thing, automating on top of the app is kind of against the rules. And the risk to Double of doing this is Intuit could shut off API access, be like, nope, you're not allowed to do this. The moment into it shuts off API access. Like that whole Double product is dead. Like they're 100% reliant upon being able to pull the transactions over from the accounting ledger to do what it does. So I don't know, maybe they worked out some sort of deal a little bit risky on the surface, I would say. The only examples I saw of exciting Chrome extensions for accounting firms this year came from a Canadian guy, Brian Claire, built a Chrome extension to automate things in Carbon. Can't remember what it's called. I know he's working on it for a while. I don't know if it's still around for a while. That was the way to get AI agents doing things in browsers was Chrome extensions. That's taken a backseat a little bit. But we have seen all sorts of AI companies shipping their own browsers to like, automate your. Whatever is going on inside the browser. So perplexity launched theirs. ChatGPT has their own browser, but there hasn't been an explosion of Chrome extensions by any means. And part of this, and I mentioned, like using a Chrome extension to automate the reconciliation screen or the matching screen, part of this is because the Ledger platforms just, they don't want you doing that. And I will say this, last year has been the biggest improvement in the matching experience both in QuickBooks Online and Xero that I ever remember. There was a time not that long ago where Xero would make a small change to like the bank reconciliation or the. The matching screen and people would just flip. And that was always annoying to me because yes, I get it's irritating for it to change, but also like they have to test stuff, they have to try new things to find the better version. Feel like they've fully ripped that band aid off now where they're like, how can we use AI to automate as much of the classification as possible? That's great news for us, but it hasn't really played out from Chrome extensions. This, I'm going to say this was a bad prediction. This one just didn't hold up. And I don't mind it because having to bodge together automation from a Chrome extension, like, I don't know that that's a world that I want to live in, but we haven't seen all that much of that in the last 12 months. Jacob.

Ledger vendors would invest in or buy month end close automation. You said the logical next build for ledger companies was a higher layer on top tools that help an accounting firm manage requests, intake and lots of month end closes at a 10,000 foot view. You predicted this could show up as internal investment or acquisitions of close automation providers.

Okay, so Intuit pulled a classic intuit move around QuickBooks Connect this year. Keeper, sorry, Double was like top tier, biggest sponsor. So what does Intuit go out and do on the main stage? They announce we're building our own version of what Double does or what Keeper does. This is a class. This is like an Intuit tradition. They did this to Bill as well when Bill was the biggest gold sponsor. They go out on stage and they're like, yep, we're, we're shipping what Bill does and all the people, nobody at Bill knew this was happening and they are just pissed, like on the expo hall floor. This is just like Intuit loves to do this. Every year. This last year they did it to Double. So they announced that, yes, they're building their own version of this. Zero. Boy, you know that meme where you poke the thing with the stick and you're like, do something that has felt like zero for the longest time. I will say they've pretty much wiped out the whole executive team there and replaced it with a bunch of Silicon Valley people. It at least feels like the last 12 months things are, things are happening. But they made an acquisition of who was it the reporting company they acquired Sift. This was in 2024 and that just felt like a headline that was ripped from 2018, 2019. A reporting company. And then this year in 2025, they bought Melio. Melio was a super cool payment platform, was literally embedded in QuickBooks Online at one point. But we're talking like 2019, 2020. What are we doing buying payment platforms in 2025? And so to bring this back to the month end close automation conversation, I mean I've been telling Xero for years, if you want the accountant user, the platform has to be the most profitable place for a person to run an accounting firm. Which means not just the ledger stuff, but how I close a whole bunch of ledgers. And so I don't, I haven't seen Zero make any moves on this whole thing. But the way they do their acquisitions, maybe they'll acquire somebody that does this, you know, seven years from now. I wouldn't be surprised if you saw them do something on this in 2026 actually, because Intuit now has made it very clear they're building this sort of month end close automation layer. By the way, this actually isn't the first time Intuit said this. They launched qboa back in 2018 maybe and it has some just very, very trivial month end close features where you are supposed to sort of manage all your clients month end closes from inside of qba. Qboa. I mean it's laughably rudimentary, but back then they said the same thing. And so this is something they just kind of do. It goes in cycles. They'll oftentimes ship a very, very basic version of it. But then it doesn't really get any love after that. So was this prediction right? Yes, I mean Intuit literally came out at Connect a couple months ago and said we're building our own version of this to help accountants manage kind of month end closes in bulk. I don't. That story's not over though. Wouldn't be surprised if we saw some acquisitions there. Okay, two left. Jacob, what do we got? Tax peeps, listen up. Do you have a tax workflow solution yet? I'm not talking about grandpappy's little auto scan, the, the awful intake OCR thing that comes with it with or dumpy old tax software. That's not what I'm talking about. There's a new crop of AI tax workflow tools that are doing some really, really cool things. One of the leaders here is this episode sponsor, Sorban. They were one of the first to this. They do a really, really good version of automated 1040 intake. A tremendous amount of the time spent during tax season is just chasing people for docs and like building out their request lists of all the things that we need when the client emails and they're like what do you need from me? And you go back to the prior year file and you look at what you already have and you just got to do all that stuff. Sorban man, it wipes out all of that complete no brainer tax workflow. Tools like this is not an exaggeration. Are honestly like a must buy right now for tax firms. I'd say they have been for the last like two years and they just keep getting better. But Sorban also they are working on pushing the data to your tax software. Really hard problem to solve. They're working on it. They're also working on automated delivery. So ingest the tax return and then gives the client like a super smooth signing and sort of to do list experience once the return is actually done. Really good product. 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Investor money would get weird because of AI fears Even if the fear was overdone, you said you were hearing investor hesitation about funding accounting tax software because they worried AI could automate a lot fast. At the same time, you argued the work often isn't truly repetitive because client context changes the right answer.

So there are some fears in 2024 around investment slowing down, funding, fundraising slowing down. That has continued in 2025. It's not an easy time to raise money. I would say the tax side has been propped up by the fact that that SurePrep was acquired by Thomson Reuters for $500 million in cash. That happened in 2023. 500 million in cash. We are still riding the wave of people seeing that acquisition and a whole bunch of companies getting funding on the back of that. Thompson Reuters also acquired Materia which is now the backbone of their co counsel research product. This is for bookkeepers. You don't care about this. This happened in October of 2024. But where has the similar investment happened on the bookkeeping side? Eh, not much like try to think of examples. There's a lot of new companies popping up on the tax workflow side, but not really on the bookkeeping side. In fact I would say the most interesting thing happening on the bookkeeping side is new potential ledgers like getting really legitimately good, potentially throwing a wrench in, you know, QuickBooks and Zero's long term plans. But I would say this prediction investor money getting weird because of AI fears. I think that's absolutely held up. There's still a perception that bookkeeping will just go away with AI and I. That's a, that's a messy one. It is not as simple as just getting the auto classifications to be better and then the month end close goes away. The month end close. Right now for a professional bookkeeper it is 80% chasing humans around and connecting this system to that system and 20% the transaction classification. Like that's just a very small part of it. And so I'd say this one has held up. I don't see a lot of money pouring into bookkeeping automation solutions right now, which is a bummer in some ways. It's a bummer in other ways. The money coming in ends up, you end up with a whole bunch of people with a pile of money and they don't know what to do with it and they just create a bunch of noise. It doesn't actually go anywhere. Seeing a lot of that on the tax side still there's people nailing it and there's people that just still have no idea what they're doing okay. Last prediction. Jacob, give it to me.

The robot closes. The book's future would start in narrow verticals and LLMs might even become the ledger you predicted. Fully automated, end to end month end close. No humans in the middle would only work first in a very specific vertical where tool stacks and inputs were consistent. Then you went full crystal ball and said a large language model could become the ledger itself. An AI interface that posts to a database, makes rules and returns financials.

That was kind of a two parter. So the first part was if we're really going to get to the point where AI can kind of close the books all by themselves, it can only happen in narrow verticals. And I would say that's still true and there's still companies working on this, but we don't feel like that's close for in order for the AI to like manage the whole month end close, it has to be like a common set of tools that it sees in every single company. And so you got to go to a very specific type of company where they're all using the same tools, they all have the same problems. And that's the only world where the AI can really like do the month end close from end to end. Right. That is still the case. A lot of money went into companies that were investing on that premise back in 2024. I haven't seen a thing from any of them. So that whole AI closing the entire books, like doing the entire month end close, honestly it's never felt more far away than it feels right now. The other part of this prediction that ChatGPT, a large language model could become the ledger. I, I mean with all the people betting on like what will the next big ledger company be? This has always been my sleeper pick. Chat GPT like, like it just becoming so good that it can manage that data and you can just throw stuff at it and we'll, it will create the double entry records and be sort of this quasi accounting system for simple use cases. Obviously it's got to start in really basic use cases and it's, I mean it's already there I would say in a way that I didn't expect. In fact, maybe you saw the video that we did on YouTube that was like chat GPT use cases for. It was, I think it was when GPT5 came out, one of the use cases was we took this spreadsheet template and this spreadsheet that we use that's like this very basic accounting system. Basically you put all the transactions in and then you code them to an account and you have this like super simple accounting ledger inside of an Excel file. Well, something I didn't have on my radar for this year was chat GPT's agent mode. Being really, really good at working in your spreadsheets. It's crazy good. Still, probably my favorite Chat GPT feature is just how good it is if I give it a, a spreadsheet template, how good it is at completing that and doing it is just as well as a human would do it. And so we tested in this video the notion that I could give it this like ledger template in Excel, like a very basic accounting system where you just have to put the transactions in and code them. I gave that to ChatGPT and then I gave it over 400 transactions and in less than five minutes it coded all those transactions as good or better than a junior would. And so with a bit of like training wheels, giving it some help, giving it this Excel file as a starting point, like, I mean there's a lot of companies, a lot of entities that have less than 400 transactions a year. In fact, I would say the majority of legal entities in the United States have less than 400 transactions a year. That stuff right now it can be done in Chat cbt, like it's not the easiest thing, it may require a little bit of know how, but I would argue we're already there where ChatGPT is a legitimate competitor to other ledgers. Now this is old Paul Graham quote, he's a software guy, he said you already dismissed. Oh, what is it? Oh no, the quote is you've already seen the future. You just dismissed it as a toy. So if I say chatgpt becoming the accounting ledger, you dismiss that, right? You're like, no, no, it's never going to be able to do all that stuff. And the reality is it starts at a super, super basic level. The most simple use cases. So like that one company where it's got a rental and they have three or four transactions a month, how sick are you of paying for a monthly subscription for some ledger platform for this rinky dink little baby entity? Chat GPT buddy, like that is the best way to get that stuff done right now. It's stuff that maybe in the past we would have done in a spreadsheet. Now Chat GPT, specifically Agent mode, you have to toggle on. Agent mode is the ultimate spreadsheet upgrade because I can give it entire jobs to do with external information inside of a spreadsheet. And it does it really, really well, every bit as Good as a junior in my experience. So this last prediction chatbot kind of becoming an accounting ledger, I'd say, I mean, I'd say, well, that's not a like real mainstream take right now. It's kind of happening in a small way now. Bigger picture for the bookkeeping space. If I had to say, like what was the one biggest thing in 2025? It would be at the mid market. Netsuite and Intact are being replaced by Rillette, by Campfire, by a new collection of solutions. And that's really, really exciting. Like they're getting huge amounts of market share this year. Where in the past it would have been hard to imagine a new ledger picking up steam. Right now on the SMB side, we've got two legitimate competitors that have gotten really good, mainly digits and kick puzzle to a lesser degree. But most of the people I talk to, they're having more success with the others than they are with puzzle. And so the, I mean the biggest thing I would say that's happened for bookkeepers in 2025 is for the first time we have something besides QuickBooks Online and Xero that we can actually feel good about putting our clients on. That is the thing that I'm hearing in the wild every day, more and more. And that's really exciting because we just need more options. We really do. We can't be stuck on these ledger tools that can just keep increasing the price on us twice a year. That is a really bad place to be for. For bookkeeping pros. That is a recap. Our 2025 predictions. Next week we're making 2026 predictions. What should bookkeepers expect and how should it influence the tech buying decisions that you're making today, Gang, I want to see you there. K Jacob. Thanks for being here, brother. I'll see you all back here next week for our 2026 bookkeeping tech predictions.