Pilot, Not Autopilot

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Alicia Katz Pollock: Hey, everyone, this is Alicia Katz and welcome to this week's episode of the unofficial QuickBooks accountants podcast. This week, my guest is Jessica McKellar, the CEO and founder of pilot. Pilot is one of our new podcast sponsors, and I am really excited to find out what is pilot and why are they here. So welcome to the show, Jessica.

Jessica Mckellar: Thank you so much.

Alicia Katz Pollock: It's great to have you. [00:00:30] So let's go ahead and dive right on in. What is pilot? What is Meridian and how does it relate to our whole QuickBooks world here?

Jessica Mckellar: Yeah, absolutely. So pilot is a and at the end of the day, a tech company that's been around for about ten years. But we started pilot, my, my co-founder and I started pilot with a hypothesis. And that was, we thought it was possible to substantively [00:01:00] automate, automate bookkeeping in software. And that that was something worthwhile to try to do. Because if you could have a reliable autonomous month end close, basically there's a lot that you could scaffold off of that that could be really beneficial to end business owners, that could really change the day to day experience of accountants and could really change the experience for firms. And, [00:01:30] and so what we, when we set out this is like circa 2016 when we got started. Yeah. So it's like pre all of the AI stuff that's been happening. So we set out to, to try to, to try to see if this was possible. And, and, and it was always motivated by an end goal of we want to live like, okay, so like the head and the heart of this, we think that we could build a business around this. But it was motivated at the end of the day by our personal experience with our friends and family who are small business owners and wanting to see [00:02:00] if we could advance the cause in the world of.

Jessica Mckellar: We want every small business owner in America to have access to high quality finance and accounting support. And today, this is just simply out of reach for a lot of business owners. And we just think it's of tremendous community impact and economic impact and societal impact. If small business owners have a strong a chance as possible of surviving and thriving in the modern economy and having a strong financial back office is, is a key part of that. So that was the why, [00:02:30] like kind of the heart behind it. And then our approach to this was, well, if you can automate bookkeeping, what tools does that give you in the service of that mission? So that's like the ten zero zero zero foot view. And so we built pilot as a tech company to see if this was possible. And then pilot, like pilot HQ was sort of the test lab for this. So we kind of presented the interface to the market of being an accounting firm, like a full service accounting firm [00:03:00] doing bookkeeping and tax and CFO advisory, but where it was all scaffolded off of this tech foundation that we were building. And then like kind of getting our reps in, uh, by just having to go through the daily grind of serving clients day in and day out.

Alicia Katz Pollock: Yeah. I mean, that whole mission is transformative. And especially coming from like back in 2016 when, you know, that was you really were a pilot in that whole concept. Um, and, you know, here we are ten years [00:03:30] later and still trying to meet those same goals. And so now when you talk about, uh, when you were talking about that goal of being able to have autonomous books, is, is pilot meant for the, the accounting firm and the bookkeeper or is it meant for the business owner?

Jessica Mckellar: Yeah. So I think, um, I would describe pilot as the tech company and the kind of test lab for this software that we've been developing over the past decade. And then Meridian is [00:04:00] like the, the, the software that a firm would use or like an accountant would use to. Benefit from or to like to, to, to execute that autonomous month end close or to be able to direct the system to execute complex accounting tasks on your behalf. So pilot is sort of the company and Meridian is the product. And it's, it's an AI accounting platform for firms.

Alicia Katz Pollock: And is Meridian is new though, right? Like I keep just seeing announcements about it.

Jessica Mckellar: Yeah. Well, [00:04:30] so we so I mean, this is the platform that we have been building, testing and refining across. I mean, at this point, over 8000 businesses in a wide range of industries, uh, various ledgers. We've been so we've been like stress testing the system at scale across hundreds of thousands of month end closes for the past decade. And then what? What is new is that we are now. I think we're ready to make this platform available for other [00:05:00] firms to use. So that is new. We publicly launched in in June, and it's been really exciting to see the interest in the uptake on it.

Alicia Katz Pollock: I actually really like the fact that you did the ten years of development across 8000 firms and then came to market, because right now the whole thing is like, hey, let me build an autonomous ledger using AI, and I'm going to put it out there even if it's not necessarily ready. So I love the fact that this has been vetted and developed and all of [00:05:30] that. So is it designed for now? We have listeners that range from solopreneur bookkeepers all the way up to top 100 firms. So like, what's the ideal firm size that would be for this product or for this approach?

Jessica Mckellar: Yes. So because it's been kind of put through the ringer for so long. It's actually quite, um, it, it, it's quite versatile, um, as a platform and it is actually a great, it can be [00:06:00] tremendously useful in leveraged for top 25 firms as well as, uh, solo firms. And we can get into kind of what that might look like, um, in a bunch of detail if you want, but it's, it's, it's, it's like vertical agnostic, it's ledger agnostic. It, um, has some pieces to it, which I can decompose and talk about and the different kind of modules. Some of them [00:06:30] are more relevant to firms of different sizes. But Meridian at its core is, I would say, first, the ability to articulate recurring work in a set of checklists that are executed autonomously, in particular the month end close, but also other kinds of work. It's the ability to direct the system to do complex, ad hoc tasks, but it also has the client management piece of this for firms who want that. Um, and so you, [00:07:00] you know, you're, it's able to be kind of the full tech stack for a firm and particularly for smaller firms who want that. Or for larger firms that are really looking to just plug in the automation of the production work, and they already have their own kind of client management and firm management tools, it can plug into those as well.

Alicia Katz Pollock: Oh, that's great that it's kind of modular and extensible, so everybody can look at it and figure out exactly what pieces it is that they need. Yes. And, you know, I've been I've been doing QuickBooks [00:07:30] training now for 15, 15 years. And the whole idea of SOPs and checklists actually really just kind of surfaced in the last couple of years. And now I'm seeing it everywhere. And I love the idea of having that systematized books closed checklist, and it seems like one of those no brainer things like, why doesn't everybody have that? But, you know, I just talked to I just got a new member of Royal Eyes the other day who came to me because she doesn't have it, and that's what she wants to put into place. [00:08:00] So the whole books closed process. I mean, even Intuit is like now putting together their own books, clothes and the but they're brand new. You've been doing it. You've got the expertise in it. So if somebody is adopting Pilot or Meridian, if somebody is adopting Meridian, um, what does that kind of look like in their, in their day? Like, how would they, when they sit down at their desk and turn on their computer [00:08:30] for the day? Well, where does Meridian take them?

Jessica Mckellar: Okay, so, and first, I think it's maybe worth saying a couple of sentences more on the tech of Meridian. And then let's talk about what? Like the daily like the daily life of an accountant on Meridian is. So first, this is a purpose built accounting platform. This is not a generic agent harness that requires you, the individual or you the firm, to input a bunch of [00:09:00] accounting context into the system so that it knows what it's doing. This is a purpose built accounting like AI accounting operating system that has a native understanding of all of the things that you would want it to have a native understanding of. So when I say, oh, you can do the month end close autonomously on Meridian, it has a first class understanding of supporting schedules. Those are maintained in Meridian. You can inherit update, roll forward supporting schedules autonomously in Meridian. [00:09:30] It understands reconciliations like that, like you have a pane of glass that you can look at if you want to. I mean, the agents doing this usually on your behalf, but you it understands The reconciliation of the balance sheet accounts has a longitudinal view of that understands if a reconciliation is broken and what is appropriate for remediating a broken reconciliation in different context.

Alicia Katz Pollock: So let me just dig into that for a second. So, um, [00:10:00] are you saying, for instance, that you can take your ledger and take a statement and it will just, instead of you having to go check off all the transactions, it'll just go, oh, these are different over here. And these are different over here.

Jessica Mckellar: Totally. So yeah, so there, if you are in, in, in reconciling a bank account or credit card account, say, um, you know, there was a, the balance in that account at the end of the prior period and like what needs to happen for that account to be updated [00:10:30] for this next closed period? Well, we need to import the appropriate activity, which can be sometimes we all know it can be complicated sometimes because maybe there are client workflows that are polluting the bank feed. You've got payroll entries that are posting to the bank feed, you've got bill payments and invoice payments. But there's like, what should be laddering to that month, like the, the statement closing balance. And, you know, in importing the, it's like what activity is missing or [00:11:00] that needs to be imported. Uh, or, and, and if there's a reconciliation discrepancy after you've done that import, what, what is the likely source of the discrepancy? It has a native understanding of all of this and strong reasoning about what to do. And it's not going to do something that's dangerous. It's like this is a prior period issue. We need to go potentially have a conversation with the client about a prior period issue that they somehow introduced and regressed. So, so, so yeah, when I, when we talk about it as a native understanding of reconciliation, [00:11:30] it, it's both happening on Meridian and then it has this longitudinal view of whether recon should have been across all time. If something is broken, it understands the kind of thing or tic and tying process to try to understand if what is driving a reconciliation discrepancy.

Alicia Katz Pollock: So the way that you're describing it, it's got me curious that, you know, typically I think of doing the work in QuickBooks and then using the supporting software [00:12:00] as the checks and balances. Um, are, does Meridian actually give you the ability to just run the whole bank feed from inside it?

Jessica Mckellar: Yes. And let me so let me give you a, a little bit more of like the 10,000 foot view and we'll just walk through a month end close together. Okay. So it has, it has like a native understanding of supporting schedules and will import, you know, you can ingest, maintain, roll forward supporting schedules. It understands Recons. Um, it understands like longitudinally vendor [00:12:30] categorization histories and has an understanding of firm level as well as client level preferences around categorization. Um, it also understands like firm level or client level, uh, policies and preferences are kind of back on the balance sheet side. So you have, you know, your fixed asset capitalization threshold and materiality thresholds and, you know, your [00:13:00] bad debt policies. And like you're able to articulate a bunch of firm level or client level customized policies, and it understands all of those natively. And it's going to tie that context as part of executing the clothes or as part of executing ad hoc tasks on your behalf.

Alicia Katz Pollock: I just want to reflect that, that that's really value added because, you know, like in QuickBooks is introducing new policies, but that level of materiality, for example, that's something [00:13:30] that it would be really handy to be able to, do, but that's individual expertise. But then brought into the software and I really like that.

Jessica Mckellar: Well, I think it's also it's in practice, it's necessary for the work product to be easy to review and understand and to have confidence in over time. Um, like, as opposed to if you were just, I don't know, trying to [00:14:00] feed a month end close process directly into ChatGPT or to code into or to cloud code. You, you want all of this structure in place. Um, okay, so a little bit of a high level. And there's also like, yeah, for other, let's say, just clearing accounts on the balance sheet. Let's say, okay, you have like a payroll liability account, it's supposed to, and your 401 K liability, a bunch of other stuff. It's supposed to clear cyclically. Another example of where Meridian has a native understanding [00:14:30] of accounting is it like understands tick and tie counts? There are some accounts that are supposed to have that property, and it knows that. And in going through and booking payroll for the month, it's going to group up the cash out against the liabilities from gusto or rippling or ADP or whatever. And if there's a discrepancy, something isn't clearing. It's like, what do we think is going on? Do we think that this is about to resolve it? Just the cash hasn't left the bank account yet? Or [00:15:00] do we think that this is an actual underlying business issue, or it's like a true outstanding liability that maybe we need to flag to the business owner as an actual problem? I mean, yeah.

Alicia Katz Pollock: Yeah, that I that's really cool to hear because one of the things that I preach all the time is reconciling all of your payroll liabilities, which is something that beginning bookkeepers don't even know that they're supposed to do. They're like, oh, I'm going to reconcile my checking account, my savings account, my credit card. But they don't realize that all of your payroll and sales tax liabilities need [00:15:30] to be reconciled as well. And I can't tell you how many cleanups I do where somebody posted an expense to the liability, and it's been carrying a $23 balance for the last five years that nobody even knew was there. And so it would be super handy.

Jessica Mckellar: Yeah. And sometimes these are really material discrepancies actually. It's like, you know, there's something that's gotten screwed up in the rev rec schedule that's actually caused revenue to be overstated materially. You know, for the past two years. That's a real problem. [00:16:00] Right. Um, okay. So you're getting like a little bit of a vibe here, which is like, we have been accounting nerds about this stuff for ten years and we have like done the work to deterministically actually execute a bunch of these core kind of universal pieces of accounting, like the month I enclosed. And actually like an analogy briefly that can be helpful here. One way to think about what we've built is for about ten years, we built the Iron Man suit for accountants and we, like, got our reps [00:16:30] in building out the kind of industry level understanding and the the like, the vertical specific understanding and the institution level, uh, depth of integration and like doing all of those things for the Iron Man suit that enabled accountants in the test lab to do the work. And then the thing that has changed in the past basically 18 months is AI advances have [00:17:00] gotten to the point where you actually can put an LLM into the Iron Man suit and have it execute that month end close process from beginning to end fully autonomously. And, and it has enough structure that it is able to do the work, check the work, kind of prove the work efficiently to, you know, the person who is ultimately responsible for the client, the client, and the client relationship. And so [00:17:30] that is the thing that got unlocked with recent technical advances. That is what is allowing us to now make this available to other firms, because then it gives you this really clean abstraction, which is Meridian does the close, like from beginning to end, from transaction import and recon through all of the production steps, the roll forward of the supporting schedules, the production of the client reporting package, it does all of that [00:18:00] posting directly to the ledger. And then all the person has to do is the review. And that's a really clean hand-off.

Alicia Katz Pollock: I'm super surprised you didn't call it Jarvis for those, for those of you more geeks. Um.

Jessica Mckellar: And we can make this really kind of like really, uh, concrete by just like talking through an example. If that if that's.

Alicia Katz Pollock: Yeah. Um, so I really appreciate the, the, the [00:18:30] way that you're talking about it and the languaging that you're, that you're the way that you're expressing it because it's, it's very clear that it's got that, that high tech end on it, that the way that you're speaking about these closes is really refreshing. Just the terminology and the language that you're using. So yeah, so let's, let's go kind of go back to where I started with, um, with, you know, you sit down in front of it and how does your clothes run? What is your day look like?

Jessica Mckellar: Totally. And [00:19:00] so, and one of the things that's cool about Meridian is because of kind of the bounding box on this, like, because Meridian is designed to be able to execute these recurring processes, like the month end, close, end to end, and that it's been designed to be able to kind of receive and execute ad hoc tasks. It's actually really simple to set up, and it's really simple and delightful [00:19:30] for the accountant to experience. And I want to highlight that because, I mean, for my own experience, I don't think anybody wants to be like babysitting a bunch of AI agents. Like people don't want to be having to. Like putting the responsibility on an accountant to like sort of precisely articulate every single task and check and balance. And it's like, that's not saving me time and it's not [00:20:00] making my day more productive or enjoyable. It's like, I want to have a system that I, I trust is going to like, given the kind of given the tasks is going to execute them correctly and it's going to make it really easy for me to review. Okay. So against that backdrop. Uh, so first, a firm getting set up on Meridian has some easy kind of one time setup stuff usually. Um, which is optional, by the way. I mean, it's a very batteries [00:20:30] included experience. So it's like you can actually just use Meridian out of the box and say, hey, I just want to use the kind of the default close experience.

Jessica Mckellar: Uh, and it will produce a really high quality, clean set of accrual basis books that are, um, kind of carrying forward the existing, um, policies and procedures in the, in the ledger. So like if you, if you're like, hey, meridian, just have at it and like, try to just kind of roll forward what's been happening. It'll just do that. But [00:21:00] most firms have kind of like their firm wide default checklist that they want to articulate. They have their kind of firm, wide policies and procedures. We use this capitalization threshold. Here's how we deal with bad debt. Here's, you know, how we think about accruals. Um, so you can articulate that easily as like a one time kind of setup, get kind of the firm level kind of checklist template and the firm level policies in [00:21:30] place. And this can be as simple as you just like feed the papers or feed some sample work papers into the system and it can configure the checklist for you. So you don't have to like articulate every step in a closed checklist de novo, but so there's like one kind of one time firm level setup. And then for a specific client, um, if there is any client specific checklist steps, uh, you know, articulate those. And again, if there's like an existing document somewhere, just upload that and it'll configure the checklist [00:22:00] for you. But let's say they have some really kind of particular process that requires X, Y, and z inputs. And then they like the breakout in this way.

Jessica Mckellar: You articulate that in a checklist step. They want to do this parallel allocation. They want stuff classed in QuickBooks in this way. Great. Okay. So there's some client level checklist steps that you, you, you add once and the checklists are like fully configurable down to the task level in the client level. So it's like out of the box, totally great, totally serviceable accrual basis accounting. Or [00:22:30] you can customize this to your heart's content. Okay, so you do that setup, you've done it once for the client. Uh, and then okay, it's like, uh, September 1st and, or maybe it's September 3rd because you're waiting for the bank statements to post, but it's like early is early in the new month and it's time to close a set of books. Like what's the experience? Um, well, uh, different firms like to manage the data flows differently. Meridian supports all the common ways you'd want to do this. So if [00:23:00] you're using the QuickBooks bank feeds, great. Continue doing that. If you want a third party bank sync via Plaid, you can do that through Meridian, which you might want to do because with many institutions, Plaid will also pull the statement balances. And so you can do the transaction import plus recon with nobody, you or the client having to pull any reporting that can be really beneficial. And some firms want full control and they just want to do it via statement uploads. So. [00:23:30] Oh yeah.

Alicia Katz Pollock: Yeah, that got me thinking. When you talked about an integration with Plaid, is that is, is it specifically Plaid as a payment processor, or does it do the same thing with stripe or some of the other rails?

Jessica Mckellar: Let's talk about stripe in a second because we have actually some very special stripe integration. This is this is Plaid as a bank feed alternative to the QuickBooks bank feed. And it's sort of like QBO bank feed plus extra stuff, because it will give you the bank transactions with the usual, [00:24:00] just like memo kind of metadata. But then sometimes you can also get statement balances.

Alicia Katz Pollock: Oh, okay.

Jessica Mckellar: Yeah. Okay. So your big three options are like, use the QBO bank feeds if you want, use a Plaid hookup. Use a bank hookup via Meridian or use statement uploads. Great. And so there's, you know, it's been there's some configuration that has happened once that says, okay, this is like the way that the data gets into the system because if you need statements to be uploaded, then the statements need to be uploaded. [00:24:30] Otherwise it's like a live bank feed. But okay, so the, the, the data dependencies for the clothes need to be satisfied. And that includes the bank and credit card data, which again, might be a sink or it might be a statement upload. There may be other input files that are necessary though, right. Maybe it's a payroll export or like a loan schedule or the input data from the point of sale systems because you need to do the rev rec. Um, again, sometimes these are these are feeds directly into QuickBooks, which is great. And we do have some institution specific integrations [00:25:00] as well that some firms find super beneficial. So an example of this going back to stripe is, you know, if you, if you've worked on a, a business that has like a complex, high volume stripe setup, maybe they've got a bunch of multi-currency activity. It's going to be a real pain in the butt to do the full rev rack on this. We've actually built what's essentially like a feature complete copy of stripes rack module, and that's built into Meridian. [00:25:30] So if you want to kind of use our stripe hook up, um, you can have that set up as well. And it'll just, it'll like do the full bottoms up rev rack with like full fidelity at like arbitrary scale and like book the role of journal entries. And it's registering all that with the supporting schedules in Meridian as well.

Alicia Katz Pollock: So for example, with my clients who have stripe integrations with e-commerce systems, we usually have to turn to a third party app like cinder. Sure. This would be this would then eliminate that need for that [00:26:00] third party app because it happens in natively.

Jessica Mckellar: Yeah, yeah. I mean, it depends on the specific institutions, but generally speaking. Yes. And I mean, I've personally I've, I've inherited a lot of books that have various e-commerce, in particular e-commerce hookups. And I think the thing that can be really interesting and requires some strategic thought about doing the accounting for e-commerce businesses is it's like, what do you actually want in the books? Like, do you what you do or [00:26:30] you don't want the transaction level data? Like what is like the hygiene in the ei-ms and like, how much do you want flowing directly into the books? Meridian has like a bunch of capabilities to sort of meet you where you are on that transaction level workflow, some kind of kind of more work, like kind of booking the workbook style workflow. You can do either. Um, but yes, in general, um. If you want the source of truth [00:27:00] to be like a data feed from the e-commerce platform or from an aggregator like A to X or sender. You can do that. Meridian has its own functionality for a lot of this, or many firms find that like the you kind of wish that you were on like a workbook oriented fool that's doing some rolled up journal entries anyway, like that's also supported.

Alicia Katz Pollock: So basically you can do summary entries or transaction level.

Jessica Mckellar: Totally. Yeah. And because at high transaction volume, you can get.

Alicia Katz Pollock: You don't want.

Jessica Mckellar: The interesting [00:27:30] situations. Yeah. Yeah. Um, okay. So sorry. We're going through a month end close for a business and maybe it's a SaaS business, or maybe it's like a growing e-commerce business or maybe it's something else. Um, okay. There's, there's this idea that there's input data that we need to complete the close. There's at a minimum bank and credit card data, but probably also other data sources. It's potentially payroll. It's potentially your data, it's the loan schedule, it's whatever else is going on. You feed that data into the system. And if it's not already a live feed, and [00:28:00] then you can push a button or it can be configured to actually just happen autonomously. Once the data dependencies are satisfied, Meridian is gonna get to work and it's going to do the transaction import and reconciliation and categorization and.

Alicia Katz Pollock: Interest splits.

Jessica Mckellar: Dealing. Sure. Yeah. I mean, if that's like a, you know, a step for this client is some kind of complicated. I mean, if you're like, again, booking some kind of loan schedule or you're doing a payroll allocation or you, [00:28:30] yeah, you're, you have some complicated process that requires a bunch of input data and then a bunch of math to figure out kind of what the, you know, you post the splits to the buckets, you know, in the revenue and Cogs accounts, it's going to crank through all of that. It's going to do it's remember that it has a strong understanding of the balance sheet and is, you know, in doing the rev rack or doing any other accruals or recognition, it's registering all of that with the supporting schedules. [00:29:00] And then we'll roll them forward. It's going to, you know, detect and, uh, like register fixed assets with the fixed asset module within this and, and, and like roll those forward as well. If it, um, you know, thinks it needs additional information before making a decision, it will summarize that as part of a review process, which I'll get to in a second. But so it's really doing everything from transaction import and recon through all of the accrual basis adjustments, all the recognition. Oh, it [00:29:30] also has like a very strong understanding of the, it's like, oh, here is like, uh, vendors who are paid on a recurring basis. If there's like explicit service period data on a bill or invoice or in an expense memo or whatever, that like means that the transaction needs to be amortized, it's going to do like detect and do that, or even just like inferring from the vendor payment history. It's like, hey, this is all there's, you're supposed to be paying this or historically, you've paid this vendor every month. There's like [00:30:00] highly likely to be an accrual here. That's missing in case the relationship with the vendor is changed. That's the kind of thing where it would it like, well, maybe flag as an opportunity to like book a cruel for you.

Alicia Katz Pollock: Meaning like if you go from monthly payments to annual payments, it notices.

Jessica Mckellar: Yeah. General. And usually there's like a spike in the size of the payment as well. So it'll be like, oh, probably it'll be like, it looks like you've switched potentially to maybe it was a 12 month payment or a, it might, it might need to ask about the service [00:30:30] period. But if it's like, it looks like this is a prepayment, um, it can surface that as a question that you may want to push to the client. Or actually, if you're using the client facing portion of Meridian, recalling that Meridian can be a totally behind the scenes like firm internal tool. Uh, or it can be client, there's like a module that is client facing that, um, is like a place where all the reporting and dashboarding happens, but where you can also [00:31:00] push structured client questions and open ended questions.

Alicia Katz Pollock: So there's a communications area option.

Jessica Mckellar: Yes, yes. For firms who want that. Um, so yeah, if it's like detecting um questions that may need to be kind of promoted to the end client about service periods or vendor categorizations or, you know, just really kind of noteworthy, uh, transactions that may need some additional context. It's going [00:31:30] to summarize all of that and what ultimately is like a review summary, what it did, what's noteworthy here are these open liabilities that are getting old, that potentially someone needs to have a conversation with the client about, um, here are other kind of noteworthy events in the underlying business. Uh, and then like, uh, you know, maybe decisions that the system made in case you want to review them.

Alicia Katz Pollock: So that's the like the review list where you [00:32:00] step in after creating all of the guidance, then this is the your task to go through and make decisions about all the things that it found.

Jessica Mckellar: Yeah. And it's usually the way that this is set up. It's actually, you know, it's, it's applying a fair bit of judgment on like normal course of business, uh, activity, you know, it's, it's booking the rev rec, it's booking the, you know, it's, it's updating the supporting schedules. It's, it's doing the fixed asset, you know, it's like, you know, I'm pretty sure this [00:32:30] is, this is a new fixed asset. I'm going to go register it and, and like, roll forward the schedules. It's doing all of that. Um, you can always configure the system to ask for permission more. I think most firms find that then if they see it in action, they're like, actually, I want you to do it. The judgment of the system is actually totally fine. It's like we've articulated the process. We've articulated, the firm policies have at it, and then all the team has to do is, [00:33:00] you know, kind of pull up that review summary when it's ready, probably pull up the month over month balance sheet and P and L, uh, if there's any other custom client reporting that the system is also generating as part of this, like if the client workpapers, you can pull those up if you want, and then you do your holistic review with that review context in place, but it makes for a very efficient review. Um, and that's it. And I cannot tell you how fun it is to know that the [00:33:30] super annoying, like important but mechanical work of the clothes was done for me. And all I have to do is a review. It's not that I can't do the mechanical work, but I'd rather do other stuff.

Alicia Katz Pollock: Yeah. I mean, that's one thing that's really shifting in the industry is that, you know, people who have been doing it for 30 years cut their teeth on transaction by transaction, and some of us back in the day used to actually type in the date and type in the vendor and type in the dollar amount. And so the fact [00:34:00] that, um, most of that routine work can now be automated by the system is really fabulous. And to the level that you've taken, it is a step above where most of the other solutions live, which is really cool. Now you mentioned it.

Jessica Mckellar: Is a really distinct. It's, I think it's architecturally very distinct from anything else that's in market that I'm aware of, at least because it really has been. It's like a purpose built accounting platform. And it has, again, this these native understandings [00:34:30] of these major accounting systems, like the supporting schedules and like, like reconciliation, like fixed assets, like the vendor history, etc..

Alicia Katz Pollock: Now a couple of times you've mentioned the core product versus add on modules. So can you, can you speak to that? Like what, what does it come with at the base core? And then what can you add on if it's appropriate for your use case?

Jessica Mckellar: Totally. So the the heart of Meridian is I'd say two things that, uh, work together. [00:35:00] The first is the ability to, uh, you know, set up or import a set of basically a checklist, a set of steps for some kind of recurring task, which could be a month end close process. It can be other stuff too. I mean, you could, you know, it's like tax prep or AP and AR work, uh, that's you're doing outside that you're doing daily or weekly. You. So if you have like a recurring task on [00:35:30] a client, there's like the infrastructure to kind of set up that workflow. And then, um, you know, as long as you can get the input data for that, that workflow, then Meridian is going to run that, that checklist Autonomously. So there's the kind of recurring task piece of this. And then importantly, there's the surface suggests direct it to do ad hoc tasks. So I mean, maybe two main ways where this is [00:36:00] useful. So first, let's say in doing the review for the month end close. Okay. Like delightful that Meridian did all the production close work for me and I can just do the review. I do my holistic review. And maybe in doing that, I'm like, oh, you know what? Big picture seeing how this business is evolving. You know, I think we actually want to make some refinements to the chart of accounts. I think we need to like kind of add these new categories. I think we, I think like in retrospect, maybe these [00:36:30] vendors should really be considered Cogs vendors instead of opex. You know, let's like make some changes here.

Jessica Mckellar: I would just articulate that at that high level that I just described to you basically to Meridian via chat interface, and then they'll just go execute that work for me. Oh. Um, or if there's like an ad hoc task that's been initiated by the client, perhaps like, you know, uh, two real examples from my recent memory. Um, [00:37:00] you know, a client comes to me, this is like a SaaS business. They say, I, we, I, we, we would like to restate our revenue for all time urgently because we're doing some unexpected financing and we need revenue broken out according to these buckets now. And like, here's a bunch of input data. And, you know, we haven't really been using like an invoicing system. So here's just like a bunch of PDFs of like the contract terms. And I just like, we need to like [00:37:30] go book this, but it's like urgent. Great. If you need to do like a revenue restatement, you can just upload the data to Meridian, describe those high level objectives, and it's going to very capably execute that. And again, it's not just like doing this in isolation. It's like, oh, you actually need to re you're going to need to like remove a bunch of stuff from the supporting schedules and like repopulate the supporting schedules with this new information and then like reroll them forward for this like long [00:38:00] period of time. Like it's doing all of that so that it's not just that the books are correct, it's that all of the associated machinery and documentation and evidence is updated.

Alicia Katz Pollock: So it's really taking into consideration the context of the business needs and their outcomes, as well as just recording reality.

Jessica Mckellar: Totally. Yeah. Or like another example that literally happened was like a client woke up and was like, I've decided that I want a departmental view of spend using classes in QuickBooks [00:38:30] again for all time. Here's like some, you know, like, here's like the departments that I want basically like, can you go do this? And again, it's not that I can't do it, but. I would rather just let Meridian, you know, kind of use those heuristics to do the classing on the, you know, 5000 transactions that were in the books for this business.

Alicia Katz Pollock: That actually is particularly interesting to me because, for instance, as Royal Wise [00:39:00] has grown, now we have a need for departments, whereas all of it was one big bucket for ten years. And now we actually have a publishing department and we have a podcast department, and we have the individual services department and the bookkeeping incubator department. And all of that has existed for ten years, but it was never broken out. And so I've always kind of recently I've been like, well, I wonder like what the actual progression has been of the, of the growth of these areas. And I've never really had the ability [00:39:30] to go backwards in time to break them out and being able to say to Meridian, hey, can you take everything that had to do with these subscription levels and break that into a department would be really fascinating.

Jessica Mckellar: Totally. And yeah, it makes it like it makes restatements, like it lets you say yes to clients more is like part of what's so nice about this because something that is like, well, okay, they're asking for a thing, but it's like it's [00:40:00] complicated and time consuming. Like I need to say no, because now I'm going to be like upside down.

Alicia Katz Pollock: Or it's really expensive because it's going to take you the actual hours to, to put it into place.

Jessica Mckellar: So it lets you say yes to clients more in a way that is going to, you know, improve client satisfaction and retention and referrals and all that good stuff. And then there's also the whole thing about like the economics to like the individual accountant or the to the firm that we can get into if you want, but there's like so much margin that [00:40:30] gets reclaimed by this work being done on Meridian and like those margin dollars, You know, I mean, well, usually a firm is going to keep some of them, but like some of those should flow to the accountant too. And so I'm like really excited that I think we're about to enter an era where, you know, like, I mean, I know that today there are individual accountants who are serving $1 million revenue portfolios on Meridian. And, [00:41:00] and so it's just like my, my guess is that accountant salaries are for good. Accountants are going to start going up, up, up because you're going to be so leveraged on this work. And like some of the, yeah, some of that leverage is going to flow back to, to, to the accountant in terms of how they're compensated, which is really exciting.

Alicia Katz Pollock: So that changes incentives, that changes, um, even what the value is to the person that it's no longer the value is no longer data entry. The value is now [00:41:30] opportunity.

Jessica Mckellar: Totally. And I think that like the majority of Of accountants spend a lot of time on mechanical work to get to the. Forensics and the judgment and the advisory and all these other things. And so that lets accountants. That's. If your time can be focused [00:42:00] on these other areas, you're going to commit. You're going to be able to capture some of the value that is being delivered with that time. And that's just like, I'm excited to live in a world where accountants are making more than software engineers. And I think that's actually about to happen.

Alicia Katz Pollock: Oh, I love the idea that Meridian actually changes the bottom line, um, at a whole different level that it's not, you know, it's, it's enhancing the client's bottom line, it's enhancing the firm's bottom line. And that trickles, I don't even want to say trickles down, but trickles across [00:42:30] to the, the individual practitioners.

Jessica Mckellar: Totally.

Alicia Katz Pollock: Yeah. Well, I'm completely fascinated. So everybody, if if any one part of what Jessica has been talking about is interesting and relevant to you, definitely check out Meridian and we have a specific URL for it from this podcast. It's you QBO dot promo forward slash pilot. And then that lets Jessica know that [00:43:00] you heard this interview and that you want to follow up on the conversation. So again, it's ukb dot promo forward slash pilot and I definitely want to go check it out myself and see how I can apply this. You know, I have a bookkeeping incubator. How can I apply this to my clients at all my different levels? So thanks for taking the time to, to share and congratulations on your, on the, [00:43:30] the new software release.

Jessica Mckellar: Yeah. Thank you so much. I mean, I love nerding out. Clearly, I love nerding out about this stuff. And I'm also just like extremely optimistic about what is ahead for the industry. And I think like the, the solo firm owner up through to the top 100, I there's just like, there's just so much opportunity to, for us all to be like building and living in a world together where it's like better for the end business owner. [00:44:00] It's better for the individual accountant, it's better for the firm. And I'm just really excited to get to see it in action.

Alicia Katz Pollock: Yeah, geek Girls unite. It's been great for me to have an opportunity to, to geek out with another woman about this kind of stuff. Totally. Thank you. Well, so Jessica, we end every one of our episodes with a what's going on in your world? So tell us, Jessica, what's going on in your world?

Jessica Mckellar: Yeah, I mean, a lot of Meridian stuff, honestly, I'm like I [00:44:30] to stay close to the tech I like. I maintain my own client portfolio and I'm playing with a bunch of different ledgers. And I mean, that's all very fun. Um, I do have a two year old and a four year old. And so like wanting like an example of a project I was working on last night was I have been like, so delinquent on making baby books basically, or like family photo albums. And so I like wrote some software to [00:45:00] help me be less delinquent on this by like basically producing some candidate photo and video albums in Apple photos that I can then do some additional curation on top of. This is like directing an AI agent to do some stuff, but, um, well, it's basically it's like lowered the activation energy for me on producing family photo albums to the point where now it's really easy. And so now it's like you get a photo album, you get a photo album, you get a photo. Like my now there's like [00:45:30] the photo album of like, all the great photos of my kids with their grandma and grandpa and like, we went on a family vacation and we got like the photo album for that. And I just think it's really sweet that, you know, sometimes technology does not make our lives better. But like, this is an example where I like, really like that I'm living in this world where I can do this.

Alicia Katz Pollock: Yeah, I can completely relate. And actually myself, um, when we've been doing Apple photo albums for my family from like, my kids each have a birth book with literally [00:46:00] the photos of their birth. And then every year we did the, the highlight photo albums. And so for the first ten years of my kids lives, we have annual albums and special event albums. And then my life got busy and I stopped curating the photos. And I like, I look at those books on my shelf and think to myself, man, what happened to the last ten years? And I love the idea that I could actually now have an agent go in and pick those photos for me of those highlights.

Jessica Mckellar: Yeah, I'll share as open [00:46:30] source. I'll share it with you so that.

Alicia Katz Pollock: Oh yeah.

Jessica Mckellar: Get caught up on your album.

Alicia Katz Pollock: Yeah, that'd be great. My kids and what's going on in my world is that my kids are both going to college in the next three weeks. Oh my God. My son leaves on Sunday and he's moving to Canada and going to the University of Alberta. So my son's actually leaving the country, and my daughter is going to University of Oregon Honors program and leaves in three weeks. So I'm actually losing two part time employees. And [00:47:00] my my shipping and receiving department. I no longer have anybody to send out my swag. And so we now have to bring somebody else on locally.

Jessica Mckellar: Wow. Well, I mean, congratulations to them and to you. And also it's probably I, I can't believe how quickly the first four years of my kids lives have flown by. So I just, I can't even begin to think about.

Alicia Katz Pollock: Yeah. On the one hand, it's felt like forever. And on the other hand, it absolutely is a blink. And I will let you know that the first five years, [00:47:30] once they both hit five, your life's going to change. It's there. That's the big milestone year where just you don't have to white knuckle it quite so hard.

Jessica Mckellar: I love him to death, though. They're so great.

Alicia Katz Pollock: Yeah. Well, excellent. All right. Well, Jessica, this was a ton of fun. Thanks so much for geeking out with me. I know that there are definite double handful of listeners out here who will hinge on every single word we just said. So thank you all to the audience for joining [00:48:00] us at the unofficial QuickBooks accountants podcast. I'm Alicia Katz Pollack from royalties.com.

Jessica Mckellar: I'm Jessica McKellar from pilot, the maker of Meridian.

Alicia Katz Pollock: And we will see you in the next.

Jessica Mckellar: In the next one.