In this episode of Controllers Classified, host Erik Zhou, CAO at Brex, dives into the world of accounting and automation with Jake Jones, Controller at FinQuery. Jake shares his journey from a decade at Cherry Bekaert to his current role, detailing his transition approach from audit to client side. The conversation then explores Jake’s approach to finding efficiencies in the accounting process through automation tools, effective team building, and cross-functional relationship building.
In this episode of Controllers Classified, host Erik Zhou, CAO at Brex, dives into the world of accounting and automation with Jake Jones, Controller at FinQuery. Jake shares his journey from a decade at Cherry Bekaert to his current role, detailing the transition from audit to client side and his 30, 60, 90 day ramp up plan at FinQuery. He also shares some background on his company, including their approach to their recent fundraising efforts and the accounting team’s role in that.
The discussion then turns to achieving efficiencies in the accounting process. Jake shares how he got their accounting close down to 5 days from 10 days, and reflects on the productivity benefits of automation. He underscores the need for ongoing collaboration with cross-functional partners like rev ops, sales, and engineering teams to ensure seamless tool and system integration, and shares how he thinks about evaluating new accounting tools and technology.
The episode wraps up with an insightful discussion on the importance of taking the accounting function from proactive to reactive through continuous process improvement. And at the conclusion, Jake closes out with some funny anecdotes from his early days in audit, including the time he had to audit medical socks as a part of inventory count.
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Announcer:
Welcome to Controllers Classified, the podcast where we take a deep dive into the dynamic world of controllers, accountants, and finance leaders, and hear how their ever-evolving roles are redefining accounting and the future of business. And now, here's your host, Erik Zhou.
Erik Zhou:
Welcome to Controllers Classified. I'm your host, Erik Zhou, the Chief Accounting Officer at Brex. And today, I'm really excited to bring on Jake Jones, the Controller at FinQuery. Now, it's not often that I get to speak to another accounting professional controller, CAO, that has a very, what I'll call a meta job, right? Because at the end of the day even for me, I work at Brex and part of Brex's product is to provide accounting solutions to some of our customers. Jake, you're an accountant and you also work in a company where you might be the number one customer.
Jake Jones:
Hey, exactly, man.
Erik Zhou:
And so, I think that's really cool. Maybe just to kick off, tell us a little bit about how you got to where you are today.
Jake Jones:
Yeah. So I went to the University of Georgia, you go Dawgs. So I graduated from there with my accounting degree. From there, I went to work for Cherry Bekaert, who is, I think, a top 25 accounting firm. And so, I did about 10 years with them in their audit practice. And so, during that time I primarily worked with SaaS companies, everything from startups, companies getting their first-year audit, all the way through some publicly traded companies, done some SOX compliance, worked for them. And so, I got to see a little bit of everything but really focused on the software side of things.
And so, after I'd been with Cherry Bekaert, made it to Senior Manager, decided to make the jump over here to, it was LeaseQuery at the time. We've since rebranded the FinQuery. And so, I've been with them now almost three years, in the Controller role. So coming in here, really trying to put in a lot of good processes and controls in place, build out the team to get us to where we are today, and to continue to grow and scale as an organization.
Erik Zhou:
Let's talk about FinQuery a little bit more in a bit. First, you left something out in your intro. You made Atlanta Business Chronicles 30 under 30. And I love being an accountant, but it's just not that common to see for folks in the profession. So just maybe tell me a little bit more about how that happened.
Jake Jones:
I'm originally from a smaller town, actually doing the podcast for me today down in Tipton, Georgia. So I live in Atlanta, but visiting my parents. And so, after I moved over from the University of Georgia - Atlanta, I knew I didn't have a great network. A lot of people going to school at University of Georgia come from Atlanta, go back to Atlanta, have a lot of connections there.
And for me, knowing I did not have that early in my career, I made a concerted effort to get out there and network, meet people. So I really started that through doing some stuff with the Technology Association of Georgia, and so led their Young Professional Group for a number of years as the chair. We have an awards show we did called the One in a Millennial Awards that we would put on and really met a great group of people through that and allowed me to network. And then, from there I've done some stuff with the Association for Corporate Growth, the Georgia Society of CPAs, I'm still ever involved with, and really just attending networking events, getting out there and meeting people. And something I'm really proud of today is building that network.
Erik Zhou:
Jake, I think that's awesome. The one thing I'll say is what I heard is that you are a community builder, and I think you're an influencer. Right? And I think for our profession, especially the last few years, all you see in The Wall Street Journal is this article about how we used to be 1.9 million accountants in the US, now it's 1.6. I think it's really important, the work that you're doing here. And I know it's off the side of your desk, that building this community, supporting the accounting profession, the finance profession in general, these are things that I think are actually necessary for the health of our industry. And so, thank you very much, honestly.
Jake Jones:
Yeah.
Erik Zhou:
That's great.
Jake Jones:
Yeah, it is great. And just saying, it's very easy to get your CPA and forget about it. But there's so much changing with it even now with the hours requirement and potentially having 150 hours, and just staying up to speed on that so you can, one, know what's going on. But two, encourage other people to get into the accounting profession because just you can see so many paths it can take you, right? Having that CPA and that accounting background too.
Erik Zhou:
Let's move on to Finquery. We used to be called Lease Query. I recall getting emails from Lease Query to, kind of help me with my ASC 842, so lease accounting, process. Maybe tell me a little bit about what you guys do now you've rebranded, what's the offering today?
Jake Jones:
Yeah, as I'm sure the ASC 842 was really a compliance driven standard for most companies. There was a deadline, private companies was way back in 2018, and our public companies, private companies, was here a couple of years ago, but we had a big push for people needing a software, needing a solution outside of Excel because Excel, if you can make so many errors, these are some complicated tables you're building out for these lease payments.
And that was our main solution. But once we've gotten past that compliance deadline, there's still people out there looking for that solution. We have a very strong product, so we're able to go up against some competitors where maybe people haven't been happy and get some additional business there. We had to really step back and say, what's next for us? And we already have a lot of the lease contracts in our system, so we said, okay, what are other contracts and span that companies have?
And so, the next product that we rolled out was our contract management tool. And so, it's built kind of off of the Lease Query platform, but it allows you to put in any type of contracts. We're primarily on vendor contracts, but you put in all the terms you put in the payments, and that way you can do forecasting based on the payments of those contracts. If they're multi-year, you can go in, all the contracts are in one repository. They have reminders they can send out to company, to the people in the company, of when things are going to renew. We actually just rolled out our pre-paids and accrual functionality, which sits on top of those contracts and will allow you to do your pre-paid and accrual entries right in the system. And so-
Erik Zhou:
That's awesome.
Jake Jones:
Yeah, we're super excited about it.
Erik Zhou:
We got to have a conversation after this on the other thing, to help my team out, honestly. Yeah, I cared actually very deeply about our procure-to-pay process and I think a wise controller once upon a time told me the key to getting your close done faster is actually getting all your expenses done as quickly as possible. And so if that's the focus, like getting the vendor contracts and frankly some of the contracts I look at, it's not just an SOW, those are easy. But there is some contract and some terms in there. And so if that's a time saver, we should definitely talk.
Jake Jones:
No, for sure. And we have our AI enabled also, so it'll go through and do that first task for you to try to pull out those terms.
Erik Zhou:
Tell me about that. Is that a change that happened over the last couple of years? Where, did you have a Lease Query product, which was focused on reading these lease agreements, but now that you have GenAI, is that what helped you expand the product, so to speak more easily? Tell me about the journey there and how technology has helped the progression.
Jake Jones:
So we were actually very early on the AI side of things. Back in, was it early '22, we had already been working with a company to build out an AI lease learning engine there that they could read and ingest these contracts and pull out terms. And so end of '22 we purchased, brought it in house and made it live on Lease Query's platform. But that model was more of a, I don't, I'm not going to know all the technical terms, but it only learned from the contracts we fed it. It wasn't like, I guess large language model, or didn't pull from the internet and other sources. And so it was right after that when things just started exploding in the AI space. And so since then we've revamped the model to use some of that more publicly available, what would you call them, like data sets and all of Google's Llama on Bedrock that they had out there and use some of that to revamp our model, keeping the same interface.
And it's really great, and I think ours is actually better than some of the other ones out there in the space because it'll actually kick back. It says, hey, these are what we think are the terms here, and it relies on the end user to have some input. Some of our competitors, it'll just pull what it thinks and you'll think it's done and it won't be the right clause, it won't be the right section. And so we really try to still have a little user interaction. You don't have to read the whole contract, that's going to use the AI to say, hey, is this right? And then you verify, which has been great for our customers. They've really enjoyed having that where it has the final check being them instead of it just trying to tell you what it thinks and be done.
Erik Zhou:
Yeah, I have a perspective on thinking through leveraging AI or generative AI for more of our processes. If I get an output from an AI, I actually look at it not as a "automated output," but as an output that I would get from another staff.
When you have a human doing manual review and pulling out terms and writing it down, there's usually a check process where you're actually going back and double checking that these terms actually make sense versus the contract. That output that I'm getting from the AI, I treat it the same way, because it's dynamic. It's making a judgment, right? It's doing some probabilistic thing based on the Llama model or whatever model that you choose to use. And as a result, but the efficiency there is that it's pulling it out and riding it out in seconds.
And so there is definitely that productivity improvement as a result. And maybe the person who used to be doing the data import, the data extraction from the contract, now they can be the reviewer. Now they're doing a little bit more impactful value-added work with the time saved, et cetera. So that's kind of my views today on where AI is trending in terms of helping out our processes. One more question on just where FinQuery is. You guys recently raised it around?
Jake Jones:
Yep, yep. Back in April, 25 million. That was from Parafos and LaVelle Capital. So yeah, that was super exciting. We've had just still slowed down a little this year, but it's still just been really putting a lot of R and D into the Lease Query project itself. We released earlier this year like point in time reporting, which was a big feature at least for us. We're still developing that prepaid and accruals. And then one product I didn't mention earlier, we also have is our spend management, financial spend management that really digs in and once it's your license, user account, like your SaaS spend, more focusing on that side of your spend.
And so that's one that we purchased back actually about a year, a little over a year ago in August of '23 and really been putting some R&D into that to get it to where we want it to be. And so needed to raise a little cash to keep the company moving forward and also pay off a little bit of debt, line of credit we had. And so yeah, it was really exciting to get to go through that process, meeting with these companies, telling them what our future plans are, and really excited to have some good partners come in and give us some funding. We could pay off some of that debt and also continue the growth we're seeing here.
Erik Zhou:
Can you walk me through your end-to-end process with the round? What role did you play? How did it all come together? What are the things that you would tell somebody else that's working through something like this to look out for?
Jake Jones:
Yeah. Well, we'll start with my role. So we're very lucky. Our CFO is ex-Goldman Sachs, and so he came in May of 23 and replaced our previous CFO. They brought him in, just to raise his wealth of knowledge around this whole process. And so we've learned so much from him. He knows what buttons to push, what they're going to be looking for. And for us going through that process, really it was being sure you have that good bridge between your accounting and then your actual FP&A team and those deliverables. Because some of the stuff we went through was, here's the audited financials. Maybe there's not a direct bridge to the internal FP&A financials and forecast. And so it's figuring out how do you bridge that gap? Is there a walk across? How are you going to explain that to these investors when they're trying to get back to the audited numbers from the results you're giving them?
And so, that was definitely a learning process and something I was very involved with, working with the FP&A team on the results they were giving them and bridging that gap. I mean it all reconciled in the end, but there was just some work to get there to show some of that. And then, also just being sure you said even for us in close expenses are always the last thing, and those are also your harder thing to model, a lot of times, right? Because revenue, you can look at historicals, get trends, things ad expenses can be a little tougher.
And so just getting input from me and my team on different spin categories, future amortization of spend, how we're seeing things trending along those routes. And then on the tech side of things too, there's some questions always come up, we're an LLC pass-through, but they want to be sure everything is good to go there when they're coming in or investing and knowing what their future tax obligations could potentially be from that side of things. So that was a lot of my involvement. But like I said, we were very lucky to have a great FP&A team and also having someone with that ex-Goldman experience who has been through this many times.
Erik Zhou:
Tell me about that bridge. So you were at a CPA firm for nine years.
The main focus is GAAP reporting, right? Maybe there's some public companies where you have to do some non-GAAP to GAAP reconciliation on disclosures, but by and large, when you audit a set of financials, it's based on the US GAAP standards by the FASB, et cetera. Not cut and dry everywhere, but definitely a little bit more black and white than what an FP&A team would put together for investors. So tell me about your transition there, and do you ever push back on the FP&A team about whether or not, hey, I don't know if this totally makes sense because just because of your... You know GAAP and there are dirt... As much as people don't fully understand the rationale for GAAP, there is an investor stakeholder in the GAP financials and the FASB comes up with rules to look out for investors.
Jake Jones:
Exactly. They're trying to get them all to be comparable, right on the same playing field. And so, I'd say our FP&A team actually does a very good job, especially in the place we're at now. But some other things like one thing is because software companies are all about annual recurring revenue, but that doesn't line up with your GAAP. Because for GAAP, it wants you to take your contract value and allocate it to the different things in the contract. So you may give away your implementation services, but you can't really not have any revenues for those, because it is a performance obligation. So carving out things like that for the GAAP side of things as compared to your ARR and having some type of walk across of, this is your ARR number, what are the differences to get you to your GAAP number is I think a very important one that you're going to have to deal with there.
And the other one that took us a while to get on the same page and also for my team to be doing it, a lot of those more technical ones, capitalized software, capitalized commissions. My team is in a good spot now where we're doing those monthly and quarterly truing up our estimates, but previously we weren't recording that monthly. We were wait until year-end or quarter-end to get an entry in to book those, and that can really mess up your FP&A team if they don't know to strip out that amortization. And so, getting on the same page with some of those things, and it can make it look really wonky if you're only doing it as a December entry, or instead of having some type of monthly estimate where it's trending the same there.
But I'd say that the bigger piece on that was as far as the GAAP and recognition, we've had to work a lot like our rev ops team and just getting them to know, hey, when you change products and items and Salesforce, that impacts us.
We need to know what is this type of item? How is the recognition, is a service item or software item, how long is it taking to do these services? Those sorts of things. But that's one that actually took a little longer, but they always loop us in early now, if we're going to have new product codes or this new prepaid and accruals, how are we going to sell it? Are there going to be different pricing tiers, things like that. So I'd say both sides, those kind of go into that AOR GAAP number, but those have been two that we've really spent a lot of time wrapping our head around and cleaning up.
Erik Zhou:
You just talked about a lot Of things that, well, I think they have a common thread in that you're working at FinQuery, you deal with non-accountants all the time, and you have a deep understanding of, actually, of the day-to-day process and the systems that support those processes. Where did you learn that? Is that something you looked at when you were doing audit? Or tell me about your transition from being an auditor to actually working through the day-to-day as you just described.
Jake Jones:
As an auditor, you're coming in and if anyone has audit experience was missed. There's a lot of checklists, a lot of just checking the box, things you're going through. But I think a lot of the work I did really with those first year companies, first year startups, maybe it was their first year having an audit, because they got some bank debt or some investor debt, coming in and working with-
Erik Zhou:
And just clarify, sorry, just to clarify, you're saying that when you were at Cherry Bekaert, you actually had a group or a lot of experience working on first year audits for early stage companies?
Jake Jones:
Yeah, so our partner's really good at going to a lot of venture events and things like that. I'm bringing in these companies that had never been audited before, be the first year they were having an audit. And we would come in, they would think they were audit ready, and we would get there and we'd kind of be like, well, it was really the technical, they would do the day-to-day kind of billing, collecting disbursements, but it was the technical 606 revenue, lease accounting, capitalized software, capitalized commissions, where we would have to, hey, this isn't where it needs to be.
This is, we can kind of give you an idea of how to get there, but we have to maintain our independence. And so it would be working through those processes with them, that really taught me a lot about these technical and kind of all the different areas that play in. Because we would have to, maybe the accounting team didn't fully understand it, so we'd say, hey, we'll hop on a call with y'all and the sales guy.
How do you sell this? How does the product actually, the product team, how does it get implemented? How does the customer utilize this? When do they maintain access to the system? A lot of that. So knowing all of those points, but then also coming over to FinQuery when I joined, the team needed to be kind of reshaped a little bit, and so that left me with an accounting manager position up under me that was open for about six months before we were able to find our amazing accounting manager we have today.
So that really forced me to have to dive down into the weeds a lot.
Erik Zhou:
And had you been audited before?
Jake Jones:
So we had never issued an audit, so we had started some, but it was really the 606 that even held us up when I joined the company because we had tried to do it outside of the system, and it just wasn't able to get there. So we implemented it into NetSuite and used their revenue recognition module. And so that was one of my first tasks when I joined. But yeah, shortly after we got it issued and have had a clean opinion ever since, which has been really exciting.
Erik Zhou:
Tell me about wealth of knowledge, audited lots of companies, early stage. I'm sure you also audited more mature companies, but what was your 30, 60, 90 day plan? What was your ramp up plan when you joined FinQuery, by the way, without an accounting manager? How did you think about that ramp time?
Jake Jones:
Yeah, so 30-day was really just getting to know the team. I was at that point, you have to let them do what they're doing, because you're still learning, you have to figure out where the gaps are, and really coming in. So it's really that 30 days is getting through your first close, I would say. And I quickly realized that our close process was in a Google Drive doc with just check boxes, like cash, check, AR check. I learned that some reconciliations on the balance sheet were just running balances, right? There was no detail of what makes up this total. It was just, oh, this was activity this month from last month, sign off. And so it was really teaching the team and doing some investigative work myself to figure out some of these reconciliations of what made them up and cleaning up. So that was lower level.
And then also getting some better processes around some of the really business-important things. We were having some issues with billings going out that we had to get. We were having multiple credit memos, so figuring out what those issues were. And it turned out it was between the sink between Salesforce and NetSuite. We were having some integration issues that needed to be fixed. And then on commissions we weren't getting those calculated as timely as we should, so getting a lot better processes around there.
So that first 30/60 was kind of around learning and also business critical. And then I would say once you got past the 60 was more around GAAP, technical, 606, start looking at the capitalized software, commissions, and building out a plan for those. That stuff is very important, but what you don't understand as an auditor that you quickly understand when you come over as controller, is they're really worried about running the business and getting cash in and deals closed. As an auditor, you sit there, why aren't they getting me my PDCs? I gave them the list. They aren't sending anything over yet, because they're trying to make the most money they can for their business, and the audit is red tape that they have to comply with. So you have to prioritize and get done what needs to be done for the company.
Erik Zhou:
Tell me a little bit about, you came in at FinQuery and you actually provided a lot of this technical expertise. And then there's this other side of it where there's all these other folks with just experience at the company. One of the things that I've always, I don't want to say struggled with, but I always just keep an eye on it. I try to make sure I have some resiliency within the staff, in case there's turnover or people move on to another job, et cetera. I'm curious at FinQuery, how did you try to approach that?
Jake Jones:
Yeah, and I think that's very important. Also, I have a team of five, and so I've got a billing collections specialist and they both roll up to their accounting manager who reports to me, and we've got a staff accountant and a senior accountant that roll up to me. And that's been something the whole team has worked very hard at is cross-training, being sure we're all on the same page and looping each other in. And I've really tried to do that. When I first started, the accounting manager came on and filled that role and his two people reported to me for his first six months to give him time to acclimate. The senior accountant we have now was a staff accountant when I joined, and we've since promoted him and then hired that staff accountant under him. And when we first hired her, they reported to me.
I gave him some time to understand management, learn, and then we eventually rolled them under them. So it's kind of been a slow transition from kind of a flat org where I had everyone reporting directly to me, and I was having weekly check-ins with everyone, and kind of be in everyone's direct boss to say, okay, I'm going to empower y'all to take these people under you. I'm going to move my one-on-ones to every other month, or monthly and they can bring issues to me through y'all, and I'm going to allow y'all to manage them and grow, and then I'm going to continue to take tasks and delegate them to y'all, pull you into additional meetings to learn.
And they have, the senior accountant and the accounting manager have both been great about taking additional responsibility, delegating things themselves, which I know can be very hard when you first get into those roles to let things go. And just really allowing me to push more to them and allow me to take more from the CFO and other parts of the organization.
Erik Zhou:
And how many employees does the company have in total, if you don't mind me asking?
Jake Jones:
Full-time around 235. And then we've got a lot of development contractors and all that we utilize also.
Erik Zhou:
And tell me, man, when Brex was around 250, I think I had around the same size, maybe a couple more. Maybe I have six or seven. That's a lot to get done. I remember those month end days when we were, it is just a lot to get done. How have you managed to keep the team relatively lean, so to speak?
Jake Jones:
It's a lot of support from the CFO, with the previous one we had and the current one around really relying on automation and tools, has been very important. So since I've been here, we implemented Flowcast once we realized the closed process was quite a mess. And so that's been really great on helping us.
We were closing in probably 10 days when I first started. We've got that down to five, and that's five days with having everything done, like I said, some estimates for cap software commissions, having that revenue ran all of that in there, which has been great. And then it's really so step back and what are other areas where we could potentially save time or save from hiring another person, by having solutions in place. And another one I mentioned was our billing was a little bit of a mess when I joined. And so, collections by default start getting aged and you start having issues.
And so at one point we had two contractors in here trying to help clean it up and it was like, okay, this is working either, it's just too much of a manual process. And so we implemented a tool called Tesorio, which is like an AR CRM that kind of sits on top of your Salesforce and NetSuite and pulls in the data and is really easy to build out campaigns, and they're watching all kind of new AI features and functionality. But that has allowed us to only have one collections person who is doing all the collections and using that system every day to send out those campaigns, to do outreach, to do tags in there for customers. You put in promises to pay, and it uses its own little AI algorithm on collection issues and to tell you how much it thinks you're going to collect.
So using that, and then even from the travel spin, like looking at platforms like Brex, who actually had a call with your team today, demoing y'all's premium product from the Essentials. So by using things like that for expense management, travel, just having one more around that in addition to, that sync with NetSuite is invaluable, having that sync over and be able to be approved in the system there from that. And then, so it's really just looking at that value proposition, is it worth the dollars to spend for the time you're going to save for these different tools? And in all these cases, they pay dividends so far.
Erik Zhou:
So let's dig into that a little bit more. What you're essentially asking yourself, when you're looking at all these processes, are you getting the right ROI in exchange for paying for some kind of service, et cetera? What are the markers for that? Do you think if you didn't have these services, you would therefore need two extra headcount, for instance, for your AR process and then the Tesorio cost X this is less, and so obviously it's a no-brainer. Is it just that simple in how you think about it or, you know what I mean?
Jake Jones:
Yeah, no, for sure. I mean, there's different, I guess ways we've used. The Tesorio was definitely a no-brainer, from what they said it would do, and we talked to some of the customers, but it is decreased our day sales outstanding from 55 to 35 days.
Erik Zhou:
Oh, wow.
Jake Jones:
Yeah. So that's a very easy to see ROI, right? If we're pulling in cash that much sooner from these customers and having that outreach, that one was kind of a no-brainer once we heard some other people saying they done similar things for them. So yeah, getting rid of that second contractor was, that contract was supposed is way more than the annual cost of the software. So for some of the other ones-
Erik Zhou:
You got to double solve there. Because oftentimes when I talk to people about putting in some automation, they have some process in place and all they're thinking is, okay, I have this many costs to run this process manually. It's a lot of work, but if I automate it, then I don't have to spend so much. It's just like straight ROI on the cost side, where you're talking about is that you use automation to actually improve core business KPI, right
I think that's actually really interesting. And how do you guys go up? Do you find that you're in charge of more of that stuff and so therefore there's all these opportunities across the board there? Or how extensive is the automation practice within FinQuery?
Jake Jones:
I mean, we're always looking at different tools. I mean, I'm sure you also get reached out to vendors every day, right, and I'll give them a quick glance and if it looks interesting, I have my team. We're not scared to take a demo to see what are the new tools out there, what is the new functionality? You can't look at every one of them, or we would just spend our whole day on demo calls and things we weren't really interested in. But always up to seeing what's out there, being sure we're on the latest, the cutting edge of things. I mean, one thing that has really helped us too, which actually came in as more of an, it was an engineering and an accounting, but we use a tool called Jellyfish for our software capitalization. And so it plugs in with Jira and GitHub and actually looks at what the users are working on.
And so for any hands-on keyboard developers, that takes out, took out all the time we used to do with analyzing tickets, like pulling that data and trying to make these estimates right around, but what is the average capitalizable time for this group of people, or what is their average salary? Now we can just throw in the salary data, pull the Jellyfish report that shows how much of their time was spent on capitalizable tickets, and we can run that capitalized software for the hands-on keyboard people much quicker than we could if it was a very manual process. And we've gotten through our audit two years in a row with that, having that software with no issues. And so, that was a no-brainer to keep that software, even when our engineering team decided they didn't need it, we still kept it for it, the capitalized software side, just because it made it so much easier having that kind of algorithm as opposed to having to do some big ticket analysis and look at all the Jira tickets and go through that.
Erik Zhou:
I got to get this straight, because I get a lot of emails. I know, maybe it's just I'm not going to give out my email on this podcast, but I have a relatively easy email, and I guess maybe people just get it right. And so I get a lot of emails from vendors trying to sell me this automation, this AI, blah, blah, blah. I'm just curious, what are the things you look out for that makes you pick one vendor, or take a call for one vendor versus another?
Jake Jones:
Is it a problem? Is it a problem that has came up? And sometimes these guys get lucky, right? It's something top of mind. And I'm not going to say I read every, I'm not afraid to hit the spam button on them either, for sure. But also I know I can't look at all these, so my accounting manager, senior accountant, I can say, Hey, I only glanced at this, but it looks like something that could be interesting. I'll port it to them and put it in their port. Hey, if y'all think this is worthwhile, we will take a look.
And we're not on demos all day every day, but I'd say probably two a month, maybe, we'll check out new products just to see what's out there. And then even if it's functionality that maybe a product we don't have, then we can reach out to our current provider and be like, Hey, we saw this. It was really cool. Was this on y'all's product roadmap at all? Just to get it out there that, hey, this is something we're interested in.
Erik Zhou:
Maybe that's a good KPI, actually. We always talk about KPIs for the team to like, [inaudible 00:32:30], or time to process an invoice, and these more operational things just for the data they work. But maybe a KPI that I need to actually think about for team is, hey, did you do your two demos this month? Right?
Jake Jones:
Yeah. I don't think it could hurt. I mean, just see it because there's always these new startups, right? I mean, I know y'all deal with it just like we do, right? As competitors, but also some of them that we could utilize on the accounting side, and especially with AI moving as quick as it is today.
Erik Zhou:
So Jake, we've spent a lot of time thinking about different ways to automate your processes. Obviously there's ROI if it's successful. I mean, I actually have scar tissue from, yes, there's been a couple of implementations at Brex that just aren't as successful as I would've hoped. Sometimes those implementations aren't actually, I would say they're just not anyone's fault. We kind of thought that the process would be X. you automate the process as X, and then what happens is a business changes, or something changes with the process that you can't help.
And then what it will take is a huge reconfiguration of your automation, and you don't know if it's worth the ROI to re-implement something for this change. I don't know. How do you try to balance those aspects of, needing to be dynamic with the process that you're automating, but then thinking that, okay, if I automate this, I've, set it and forget it kind of thing. You know what I mean?
Jake Jones:
Yeah. No, I mean that's a big risk. And that is where I think that, I mean, we're a good size company. We're not as massive as a Brex or some of these other ones, but I think that's where it's really important for your accounting team to be. We have a meeting every other week with our rev ops team talking with the sales team. It's that once you get these things in place, like the revenue recognition in NetSuite, you have to make these other teams very aware of the processes you have and how their decisions could impact those or cause issues. And so our rev ops team is very aware of that. I would say that our sales team, not as aware, does not care as much around our commission software we have. We utilize Spiff for our commissions calculations, and I don't if anyone on the call is familiar with them.
I mean it's user-friendly as in the fact that it uses kind of Excel-like functionality. But if you have some complicated commission plans, they can be hard to build out in there and you can end up having to hire a third party to assist. And so, it's really around making sure that the leaders on those teams know the consequences of making material changes and what that could cause downstream.
And I think that as long as they're aware and if they think it's still worth making that change, it has to be an entity-wide conversation of, okay, well that's going to give additional cost on the downstream if you still want to utilize the software for its intended use. And I think as long as you're open in having those conversations, everyone's on the same page, it turns out much better than if they just made the change without communicating to us, and then it all breaks and it becomes a useless software at that point.
So I don't know if that directly addressed the question, but I think that the only way to really keep that from happening, is to try to have those periodic or more scheduled conversations and knowing those downstream impacts.
Erik Zhou:
I think what you're talking about is setting the right expectations with all the different stakeholders, and there's a little bit of, before you implement something, and if you're already meeting with all these cross-functional folks and setting those expectations, maybe there's this risk of "unnecessary changes" or requests for changes that might impact the overall streamline process to begin with. Maybe taking it the other way, do you ever run into pushback even as you're meeting with folks, you're generating ideas or sharing ideas on how to automate something, do you ever get pushback from folks that like, oh, I don't know if we're ready for that yet, et cetera?
Jake Jones:
I would probably say, our product and our sales team, they actually like to probably run faster than I would prefer. So it's usually the opposite. It's usually my team that's doing the pushback. I mean, it was a group, now it's just more kind of a saying, but it's still got its leaders called, we got to get scrappy. We make things happen quick. Our competitors are doing that. That's why we try to roll out new products quickly, try to roll it out, the marketing materials, roll it out in Salesforce.
Now we're looking at some different ways that we could get that prepaid and accruals functionality out there quicker as self-sign up, as opposed to having to talk to sales rep and different things like that. And so usually it's my team that I'm telling them all the ways it impacts us and slowing down the process probably more than someone else slowing down the process for us, because a lot of the stuff we do, I would say is more internally housed and we can deal with it amongst our team as opposed to things touching a lot of different systems.
Erik Zhou:
Just one last question, just to clear out this segment of the show. Can you share with us what your plan, I don't know if you're like me, but I'm going through my annual operating plan process for Brex right now, and we're thinking about bigger projects that the accounting and finance team wants to work on, not just through the end of the year, but also next year. What are you guys thinking at this point for next year, especially with all these new tools and AI coming up?
Jake Jones:
As a team or as a company, or both, maybe?
Erik Zhou:
I would say that your team, let's focus on your accounting team. What are your main goals for the next year?
Jake Jones:
Yeah, I mean, I don't know why this usually happens, and I've seen it a few times. So we're actually doing an office move now, so we're downsizing our space, moving to a new space just right across the highway actually, but it should be a lot nicer. So somehow that has fell on me and my team to manage a lot of that. And so, we're just actually moved to our temporary space, moving into our permanent space once it gets built out, probably May or June of next year. And so, get a bit around that for my team as far as we got the new lease because that's our software, so we wanted to do that right away. But doing the build out, different things along those lines will be some work for my team.
But really for us, it's just continued process improvements. Every time I talk with my senior accountant or accounting manager, it's okay, what other processes can we go ahead and pull forward, can we get ready for the audit earlier, be ready for the tech step lines earlier, continuously just checking our compliance in these different areas. So we're proactive instead of being a reactive organization. So we're in a great spot now, as long as the team maintains, which I hope they will, but it's more of a process improvement, trying to be very proactive in dealing with these things, as opposed to waiting until there's a fire to put out later.
Erik Zhou:
I'm a big proponent of being proactive and what I'll call flattening-the-spike. And because if you end up working X, Y, Z hours, quote/unquote "just lesser hours," then you maybe could, if you just move more work to the left, then you all of a sudden get this huge spike of work at month end, or a huge spike of work during the audit. And frankly, the more of the work that you can flatten, and you can flatten the spike over a longer period of time, especially if you do interim testing earlier, if you are preparing for month-end earlier or preparing for these changes that you're talking about earlier, frankly, people will have a better quality of life because it's just more consistent. And so-
Jake Jones:
I love going into Flowcast on day one and seeing sign-offs of, they [inaudible 00:40:09] stuff on the 31st or the 30th. I'm like, go team. Y'all are great.
Erik Zhou:
That's right. So we always end off our show with this last segment. We call it Finance Leaders Are Fun Too, but everyone's got a random story or an accounting joke. And I'm curious if you have any accounting debacles that you could share or an accounting joke that you could share?
Jake Jones:
Yeah, I was trying to go through, I went through the couple of things to discuss. So the first one I think was funniest or worst accounting debacle. So a couple of things, two really came to mind on that one. So I know everybody's probably got their inventory count story if they ever did audit, but there was one where we had to count medical SOX, like the SOX at the hospital with the treads on the bottom. And-
Erik Zhou:
Were they used SOX?
Jake Jones:
No, they were new. They were manufacturing them. But these people had no inventory management. It was rough. And so there's a semi parked there and we're missing, I don't know, a hundred thousand SOX at this point, they're just unaccounted for. And I was like, well, can we get those off? Oh, the forklift driver went home. No. And so, I ended up having to crawl through this semi, I'm in this, there's like this much room at the top of the semi, and I'm like, yeah, I'm a staff. I'm eager to get the count right. I'm like, oh, I got to get in here. So I'm crawling in a semi to the back, like counting the pallets of SOX, and we still were like a hundred thousand short. So it was not even helpful, but that was probably one of my-
Erik Zhou:
They don't tell you that in college you're Your accounting degree, you're going to go out and do some good accounting work, get your CPA. They don't tell you that you're going to have to count SOX in a semi truck, right? And I never even got a pair. I always was like, you think they would at least offered me a pair of SOX for all this work I'm [inaudible 00:41:48].
I'll share a story on this. So I was in New York, I was audited in New York for a long time, and we would get these staff every year. And one year there was a staff on this job and it was a hedge fund client. And so everyone comes in, sometimes a full suit, but definitely at least business casual. And we're doing the audit. It's late nights, and then one day we come in and one of the staff, exact same clothes as the day before, exact same clothes. And I'm like, what happened? Because everyone actually went home and he had some work to do, and he's, oh, I just slept here.
I was like, he goes, what? He's like, yeah. It was like one o'clock, and I just finished doing this recalculation of this realized gain loss, and I had to track it all the way back to Westchester. So I was like, aw screw it, I'll just sleep here because I knew I'd have to be here at 8:30. So I'm like, where'd you sleep? Oh, I just put my head down on the desk here. I'm like, what? I hope that folks who are thinking about the accounting profession don't take that story and further decrease the count of numbers. If you do, you should look up Jake and join his community and he'll treat you right.
Jake Jones:
I mean, public accounting or audit. Yeah, I mean, there's always some of those. There's busy times and there's slow times. So you're going to have some of each, and I think that having those stories is part of what makes... I mean, not saying that that should be the norm, but you're going to have a couple of those stories, and they're always fun to share, for sure.
Erik Zhou:
Jake, it was a pleasure talking to you today. Thank you for sharing your insights and your stories. Yeah, not a problem. And you got to let me get in my accounting, Jake, because I spent a lot of time on this one.
Jake Jones:
Oh, you got to a joke. I want to hear it. Yeah, so this one is, I mean, everyone's always joking about this topic. But so why is it hard for accountants to make a New Year's resolution?
Erik Zhou:
Why?
Jake Jones:
Because at work everyone's always telling you to do the same as last year.
Erik Zhou:
That's nice.
Jake Jones:
Glad that you got a laugh.
Erik Zhou:
I like that. I like that. Okay. Jake, you're a comedian.
Jake Jones:
I appreciate it. Thank you very much.
Erik Zhou:
Yeah, thank you.
Jake Jones:
Yeah, it sounds good. Thank you, Erik. Thanks for having me.
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