The Accounting Technology Lab

Brian F. Tankersley, CPA.CITP, CGMA 00:00
Welcome to the Accounting Technology Lab, brought to you by CPA Practice Advisor, with your hosts Randy Johnston and Brian Tankersley.

Randy Johnston 00:10
Welcome to the Accounting Technology Lab. I'm Randy Johnston with my co-host Brian Tankersley. Today we're lucky to have a special guest, Dan Pinkus from Trust, and I want you to understand that the trust product was in the AI CPA Accelerator program this year, and I had three or four reasons that I wanted to have Dan along as a guest today. So, Dan, what would you like our listeners to know about you and your background?

Dan Pinkous 00:37
Yeah, I got my background is primarily on the front lines of finance with an eclectic set of financial licenses, including a Series 65. Did some work, you know, in the wealth management space in an RIA that was connected to a CPA firm. One of those kind of you know deals where you know they were you know kind of two two parts of the same. And then before that, in mortgage, and so that's really where I got my my I became deeply acquainted with the pain of interacting with clients and just seeing how terrible that client experience was, and really what kind of set me on this journey.

Randy Johnston 01:09
Yeah. So in effect, our listeners, I think, know that your platform trust is actually a platform. And as it turns out, just a little bit of background story. I met Dan, introduced from a CPA firm who was using their product, and they wanted a simple way to gather documents. And you know, many of the portals that we have are very long in the tooth, having been around for 25 years and more in some cases, and kind of clumsy to use. So you know, at this point, Brian and I are tracking, believe it or not, 90 plus portals in the CPA marketplace today, and frequently I recommend Trust as one of the easier to use and preferred portal solutions out there. But you know, bottom line is the product has expanded well beyond PBC client request list document gathering features. Beyond that, but you know, I know Dan. In the past year or so, you've added a lot of AI features into the platform, and your co-founder Ken is just such a brilliant, bloody doggone designer and coder. Every time I talk to Ken, I learn something new. But you know, he's

Dan Pinkous 02:25
definitely the brains of our operation here.

Randy Johnston 02:26
Yeah, he's really done a lot of great stuff. So, talk to us a little bit about you know what your journey has been to incorporate AI into the trust platform.

Dan Pinkous 02:37
Yeah, well, we started at a very special moment in time, and that was at the end of 2022 when you know really ChatGPT started coming to the surface. And now back then, if you remember, it was really taboo to be using. It was very and rightly so, right? It was the privacy policy was not the same. There wasn't the enterprise agreements that existed today. But for us, as we were just starting out, we didn't have clients yet. You know, we actually had the luxury of being able to build with the with LLMs from the very outset, and so that really set us on a journey when we built trust, really AI native, imagining a world. How do we imagine the tax workflow with this new LLM paradigm that's unlocking so many different things? And so you know we've been you know very lucky to be able to you know to kind of pioneer the use of this LLM technology, thinking about how do we apply this into the workflow, and so really there is there are almost no corners of our software where LLMs are not under the hood somewhere. Whether that's renaming documents, rotating pages, you know, doing all sorts of document processing, asking you know is this is this document you know the right tax year? Is it you know password protected converting pictures to PDFs and blah you know all the way through to using AI to create custom checklists for clients. I mean I could go on and on, but what I'm most excited about is some of the more recent stuff where we're now using AI because the the first phase of what we're trying to do is to try to you know save these save these firms from the tedium right to liberate them from the compliance. Really, the second phase is now we can be free to do what we can do advisory, right? Not to do more compliance, but to do advisory. And so we've layered AI on top of all of this beautiful client context to essentially kind of, if you want to think about it kind of crudely, bringing in the ChatGPT or Claude experience into on top of your client context in a safe, contained way that's very security conscious. Where you know, imagine you know you could interact with you know ChatGPT or Claude, where it understands all your, it has access to client data in a safe way, and that's it's unlocking an immense amount of advisory opportunities, you know, tax research and planning, as well as just you know a whole host of really pragmatic, just random stuff like responding to IRS notices or consolidating you know helping them in the prep process of you know identifying issues you know things that they need to keep in mind from emails six months ago right that they should that they need to remember while in the prep process so it's just. I could go on and on about that, but super excited about where that's going.

Randy Johnston 05:03
Yeah, makes sense. And you know, Brian and I are fortunate enough that we get to sit in a lot of committee meetings. You know, we've done all of the AI CPA blockchain events and all of the AI events and so forth. But you know, I'm just picturing in the accelerator program this year where you were demonstrating this AI advisory piece, and people were very confused because you know it was like new to them, and that's generally true that this advisory interaction piece has been you know hard to help firms understand how they can get there. And you know another one of your accelerator cohort members being assistant has kind of that same you know approach in their scripting of meetings and so forth. So it was fascinating for my seat to watch the two of you present completely different platforms with similar you know here's how this tool enables you to focus on the advisory side of the world. Okay, yeah. So that was kind of a big deal. Now the other thing that seems to have happened to you over time is you've wound up integrating to a lot of the other AI-enabled platforms that are out there. Now I'm not going to try to name them all. And anytime somebody listens to this, there's probably going to be a new one because you seem to make a lot of deals. But you know, in another county technology lab, Lee Arcari have filed. You know, talked about their platforms and so forth. And you know, obviously, we've met the folks from Brian, which I think you're interfaced with. And again, I'm not trying to drop names. I'll let you tell our listeners who all you're integrated with right now.

Dan Pinkous 06:41
Oh, geez, I'm probably going to miss some, so I apologize to our partners that might be listening to this. That if I miss you, but yeah, the accelerator was great. It was kind of a matchmaking thing for us, and we're very much very bullish on the partnership approach. Frankly, we feel that the industry has you know been too territorial, and it's hurting accountants. Right, we need to be working together. We need to be collaborating. So we've really leaned heavily into these partnerships. So like Pingut is peanut butter and jelly with us. They bring in the client context of meetings and help surface those advisory opportunities and layer it and combine it with our context of all the client documents and all that to really bring a powerhouse partnership. So we're partnering with Ping, Kinsugi was another accelerator member. Where again, we're thinking about okay, we're not just about freeing you from the compliance work. We want to give you, you know, how ways that you can, you know, do more advisory. And one of those ways is with sales tax. A lot of firms haven't been taking advantage of sales tax opportunities and filing with their clients, but Kensugi is unlocking a lot of that, so we're partnering with Kensugi to do that. You mentioned Filed. We've chosen to partner on. There's one step of the tax workflow where we've decided to partner, and that's on the AI prep step because it's so deep. It's so deep. You cannot do that and other things well at once. So we're going to let guys like Filed, Biran, Magnetic to do that. You know, do that part and handle that. You know, be the expert at that, and then we'll handle all the client experience, the document gathering, and delivering around that. That makes

Randy Johnston 08:09
perfect sense. And you know, on that point, friends, you know, the depth that it takes to do extraction for tax documents, both personal and business, is greater than you might perceive we reviewed recently taxonomy 600 tax documents, which each had to have AI code written about how to extract that properly. You know, so that one little thing alone is kind of a big deal. So you know, when I think about you know what Thomas has been doing with magnetic and his approach, which is, you know, interesting, and what Leroy has done with of filed, and you know, as I just think about these different platforms, you're probably right to leave that pretty much alone. You know, I'm just thinking, you know, of Wilm and Blaze over at Biran and what they're doing there, but even beyond that, you know, you've got some additional partners with K1X, which Brian and I were around from the very beginning on that, or GruntWorks. You know, I'm so pleased that Stacy's the new president there.

Speaker 1 09:15
She

Randy Johnston 09:16
certainly deserves that promotion,

Dan Pinkous 09:18
but

Randy Johnston 09:19
she is a fine person to work with. So you know, in the big picture of things, we may have missed somebody. But what I wanted the listeners to hear from you is, you know, you've got a lot of different partners. Looks like you might have another

Dan Pinkous 09:32
one. Oh yeah, we've got more. The other two that I was thinking of were Cygnus AI, if you know a tool, who came from XCM. But yeah, he does the last mile automation as well as other, you know, other automations around CCH and others, and then Bizora is a new one, fresh off the hot off the press. That one for tax research as well, and Carbon can't forget Carbon.

Randy Johnston 09:50
Yeah, so there you are. So I just wanted to call out all those different partners because, in effect, you know, the way I'd see this is you're kind of staying in your lane if you. Will on the things that you're doing well and saying this is really a partner call on a different front. So you know one of the things that I know that you've built over time is you've thought about tax workflows, and you know this simplicity. I think most conversations I've had with you, Dan and Zach and Ken have been about how do we keep this easy to use, and you know you think about it in kind of a four-step model, and other products that we've had on the podcast docket being example has a similar four-step model for where their DMS works. So intake, doing the work paper, doing the prep, and then doing the delivery-I think-is the four steps that you use typically, and then you've been building out with other tools. So talk to me about your workflow and how you're thinking about where you're at in your workflow journey right now, where you're headed, and for our listeners, I know that you are concerned about how you manage your workflows, not only in tax, but perhaps in client accounting services, perhaps in audit, perhaps in wealth management. You know, you've got lots of workflows that you're trying to deal with. So, how are you thinking about that, Dan?

Dan Pinkous 11:16
Yeah, well, up until when we first started, you know, back in 2022, there was really there was no way to tie together that entire workflow. It was very fragmented, which affects both sides. It affects clients and the client experience. It makes for a terrible client experience when you're you know having you're sending them a portal and then they're uploading on ShareFile, going back and forth on ShareFile a little bit in the process, and then you know going back to a return delivery piece, and even you know, even experiences within the same product per se were still felt like different touch points to clients. So it felt very fragmented. And then on the firm side, it was it just you can't have efficiency when you're working across four or five different systems or you know multiple systems. And so you know it led to that kind of you know chaos of like client says they uploaded something. Okay, where did they upload it, right? And I got to go search across four or five different systems to see. I got to you know check my email and check this and check that. And so we really wanted to, as we think about the tax workflow, we've kind of taken a unique approach to our philosophy of it. There's been practice management, which tries to do everything right, and all the way into you know back into the you know firm operations, and then there's been you know more point solutions that have taken a narrow slice of it, whether that's just the intake or just the delivery or just the work papers. You know, there's you know all sorts of solutions in those categories, but nobody that's taken kind of thought about the tax workflow in this, you know, in this kind of four-step arc, right, and tying that together. So to start, we were, you know, we we were thinking about things differently and how we thought about what slice of the value chain, what part of the workflow to take, right. And so I'll leave it there. Is I'll let you ask more if there's more you'd want

Randy Johnston 13:00
to know. I I think I hear where you're at, and I was smiling while you were saying that because, you know, I think about the workflow and the competitors in workflow in the marketplace. You know, the access workflows and so forth. And I was actually thinking about an acronym we've talked about before, Botip. Yeah, that's the CCH scan predecessor name, a bag of crap digitally based process. Okay, sorry for the.

Dan Pinkous 13:27
That's right. I remember hearing that once. Yeah, probably

Speaker 1 13:29
sorry.

Randy Johnston 13:30
Sorry for the four letter word there, but you know, bottom line though is, you know, when I think about dealing with clients that are disorganized shoeboxes, if you will, of documentation, it seems to me you added a mobile app as well to the platform to capture information. Do I remember that correctly?

Dan Pinkous 13:50
Yes, but in a different way. We've actually, we actually, for the client experience, it's all web-based, and that was very much on purpose. Even though we've been asked many times for a mobile app, and that's just because mobile apps create friction, and it will significantly reduce client adoption. And number one is, it's got to be, it's got we got to get high client adoption if we want to create efficiencies back on the firm side. And I'll also draw one more. I should have said something else about kind of how we think about workflow. We think about there. There's kind of what we call capital W workflow, which is like the internal firm workflow. That would be like your carbons, right, and or your XCMs of the world, and then there's like a sub workflow under that, which is the project management back and forth with the client, and that you know small W workflow is the part that kind of how we've scoped our product is we handle all of the client interaction, so it's like a almost like subtasks, like we live in like the you know gather client documents, deliver and sign the 8879. Those two steps of the capital W workflow, where the sub workflow under that. I don't know if that's helpful, but

Randy Johnston 14:48
yeah, that does help. And I know early on, Dan, you know a lot of your focus was around tax, and clients drugged you into other areas. So. Talk to me about your kicking and screaming journey into other areas. Is that I know you didn't actually do that, but I can see it. It's like, oh no, don't throw me in the briar patch. I just, but yeah, I see. You need cat. Oh yeah, you need audit. Oh yeah, you need this. So tell me how you think about those things as you're asked to do them, and how the platform accommodates that.

Dan Pinkous 15:22
Yeah. So the way we think about that and talk about that with firms is that I mean, trust is a practice management approach with low friction of a way of managing requests back and forth with clients and managing the entire client interaction. And so we've built very you know purpose built tools for the tax workflow. We've focused on the tax workflow. That said, a lot of our firms have found, oh wait, you like you kind of like you described, like I could use this for audit, right? Well, audit does have different needs, right, and very specific. So if the firm is using SureLink, you know, trust wouldn't necessarily be, you know, SureLink is purpose built, for instance, for you know for audit, you know, intake and PBC lists, and so you know, but if the firm is using like an Excel spreadsheets, trust is a huge upgrade, right? On managing that back and forth with the clients, so we don't necessarily hold ourselves out there as an audit solution or a bookkeeping solution. But what we find is that many firms that adopt trust for their tax service lines end up also expanding because they want to keep the client experience consistent. You know they're willing to make some trade-offs to use us for you know maybe for audit and upgrade from their spreadsheet approach, or use us in their you know CAS department you know with recurring you know automatically recurring requests and such. Again, people wouldn't necessarily come to us, and we if they came to us looking for an audit or a CAS solution, we would point them to other things. But if they're coming for a tax and then they stay for some of these other things, then they do find a lot of utility there for really all manner of-I mean, you name it-tax planning, 1099, you know, generation and gathering w9 kind of stuff. I mean, you could go on and on. Really, anything where you need to request documents, trust is a pretty dynamic platform.

Randy Johnston 16:58
Understood. Now, another thing that's a clear change in the profession. We know that document management systems are changing in a radical way. We obviously have the December 31 of 27 discontinuation of file cabinet CS from Thomson Reuters, so a lot of firms have actually tried to leverage SharePoint. For example, your partner Carbon is clearly doing that, and you know I've been tracking the various platforms that have said, you know, I think we can lay documents over the top of SharePoint, or we can lay documents over the top of Google Workspace. Yes, how are you and Ken thinking about that?

Dan Pinkous 17:43
Well, I we have home rolled our own DMS. Now it's you know it for a large firm probably not going to replace you know at this point replace necessarily like a you know. But that said, and I usually don't like talking about future features when I talk about our features with trust. There's you know sadly a lot in our industry of talking about all these big dreams and visions we've got. I'd rather talk about the features that I, you know, that we have already built, so that way when people hear me talking about features, they know that they can go in and find those features usable. But I will say at least that there are things on our short-term roadmap. We do have another partner in play that we do intend on being able to sync with you know kind of overlay onto a SharePoint for document management.

Randy Johnston 18:26
Yeah, I appreciate that because what we are finding is a number of firms are just saying the big bills that I'm receiving from you know the providers of DMS systems plus the usability has become a bit of a problem, so you know I appreciate that the product managers that are trying to improve those legacy platforms have a big lift ahead of them, and I do appreciate the convenience of the SharePoint environment or the Google Workspace environment, but also recognize some of the risks that are there. So sorry to put you on the spot on that a little bit, but it was important because you know as firms have asked about you know replacement DMS, particularly in line of file cabinet CS, you know normally I'm coming back and saying, okay, are you using NetClient CS, the Thomson Reuters portal? Okay, if you're doing that, now we can talk about how we upgrade the experience for you, and that opens a whole bunch of new conversations along the way.

Dan Pinkous 19:32
So that is something that we're thinking about. You know, helping our firms with is helping them make that transition off of the file cabinets of the world for sure. That's in the short

Randy Johnston 19:39
term. So Brian, I know you worry about these things a lot too. So I probably have been dominating the conversation a little too much today. But do you have some questions of Dan or things you'd like to know?

Brian F. Tankersley, CPA.CITP, CGMA 19:50
Yeah. So Dan, you know, one of the most painful things about changing out anything client facing is that you've got to you've got to. Got to train this. You've got to have buy-in from the partners. You got to have buy-in from the staff. You got to train the staff. You got to train the. You got to train the partners. You got to then train the clients. Redo all your client-facing documentation. How does trust? You know what kinds of resources and folks and templates do you have to try to help people make this a little bit easy because this is something that that really is can be a black hole for time. If somebody want you know if if somebody makes a bad choice, doesn't do good documentation, doesn't do good selling internally, it's it can just be really tough.

Dan Pinkous 20:35
Yeah, and we going back to kind of my background, I was very much viscerally aware of that pain of that client experience, right, and that transition. And so, when we built trust, that was kind of the way philosophically. We're very took a very different approach. We kind of built backwards from the way portals historically have been built as an afterthought on you know as a you know kind of a malignant add-on to whatever software was you know was used, and and we really thought about it back the other way. We thought, what if we start with the client experience, and we really nail that? And that's our primary north star for success: is create a great client experience that clients love, and we get super high adoption rates, right? Because that's the struggle with classic portals: is like I can't build a workflow around something where only 30% of my clients are using it, right? And so, you know, we need to get, we need to push for 90% plus adoption. That's what needs to be possible. And so, when we built trust, we built with that. We built that first, right? That was our starting point, and we measure that religiously. And so, we're constantly making tweaks. and And over these last four years, we've we achieve typically around 93 to 95% client satisfaction. So, and we we give clients the chance to firms, clients the chance to leave feedback, and they 95% of the time will say, click a happy face and say, you know, love the experience. This is great. Love this better than the old portal. Whatever. And so, because of that experience, because we've removed the friction, we don't require them to create accounts. We actually kind of trust hides in the background and pushes the brand of the firm forward. Where we're using, we're inviting clients not from a no reply at get trust, but actually from the firm's we integrate with the firm's email, and it actually gets sent out. All the emails get sent out from the firm and not from trust, and so the firms don't ever even actually introduce them to trust per se. I mean, they might introduce them to this new way of uploading, but their brand is forward. It's very low friction. There's no creating accounts, no you know two page instruction or four page instructions that they need to send out of like here's how you set up your account and navigate around this. It's very intuitive, and we've designed it to be that way, so you know to try to address exactly what you're talking about to make that a smooth transition. And so far, I think if you talk to trust firms, they'll say that it was very smooth first year.

Brian F. Tankersley, CPA.CITP, CGMA 22:52
Talk to me a little bit about the size of the firms that are using trust right now and the number of firms that are using it.

Dan Pinkous 22:58
Yeah, we've got just about 500 firms that are actively using trusts. They spread. They're they're all across the market. We actually also built a little bit differently because of the way our our company was capitalized, which I could talk about as well. It's is a different, very different about our philosophy and approach. We started kind of at the lower end of the market, and then very quickly we've gotten pulled up market, and now kind of where we're living is you know in g4 100 type firms. The the typical firm that comes to us is you know kind of on the TR stack. You know the Sure Prep Sharefile Safe Send, not the Share File TR, but you know the Sure Prep Safe Send stack. You know, and so g4 100.

Brian F. Tankersley, CPA.CITP, CGMA 23:40
Cool, very cool. Okay, super. Well, Randy, I'll kick it back over to you. I guess.

Randy Johnston 23:44
Well, you know, I think we probably got the key things, Dan. It is not unusual that we would ask, you know, things like business structure, which you alluded to, or pricing. So again, don't want to put you on the spot on any of that. But if you don't mind sharing any of that, that's probably how we'll wrap today. So I'll give you that as your kind of closing thoughts and summary.

Dan Pinkous 24:08
Yeah. Well, we're really unique in that we're one of the only companies in the space that is built customer funded. We haven't taken any venture capital funding, any outside funding whatsoever. Everything has been so. The the the luxury and the beauty of that is that it allows us to build. It changes everything. It changes how we build product. It changes how we do customer success. It changes how because nobody's standing over us, holding us to you know to hit ridiculous growth rates. Right, we're not having to answer to some investors somewhere, and so really we get to serve just one master, and that's our customers. And so, we get to invest excessively in customer success to make sure it's a good experience, and then also in R and D because nobody's standing over us, you know, asking us to hit ridiculous growth rates. And kind of the irony of all that is that actually, because of the way we've gone, you know, because of our capitalization structure. It frees us to think about our and treat our customers differently, right? But then the net effect of that is that actually we're the fastest growing company in the space because we're focused on our customers and and really just doing a good job for them. And so you know it's we're not beholden to anybody, which is just you know a really great place to build from.

Randy Johnston 25:18
Yeah, I appreciate that comment in general, Dan, because Brian and I have talked some publicly, much privately about PEVC funding and public company positions and what it does to product management. And you know, if you just think about, hey, we're doing this ease of use is our north star, and we've got plenty of cash flow from our customer base, so we're just going to party on. You know that's a very interesting position, and you know is appreciated.

Dan Pinkous 25:52
There's also the question of stability. I mean, and I want to say there there's some great companies being built right now on VC funding, but I will say that operating profitably is a much more stable future, you know, way to build long-term way to build. It can be somewhat tenuous building when you're burning cash and depending on hitting your next hitting your KPIs, so that way you can make your next round. And so again, just affords us a bunch of a lot of luxuries, you know. Yeah, really appreciate.

Randy Johnston 26:20
And I'm going to call out another company, which we've talked about in other podcasts as well, Zoho, and they're privately held. And they do say this, and I've seen the numbers, so I know it to be true. But they have been profitable every quarter they've been in business. Wow! Self-funded, profitable the whole way, and you know that's kind of an interesting claim because you know when you're profitable, it's a whole lot different than not being profitable, and so I do appreciate that take on that. So do you want to comment any pricing or any other thoughts?

Dan Pinkous 27:00
Yeah, we've also kind of we think about everything differently. You know, one of the I guess the you know there's trade-offs to being an industry outsider, but one of them is that you know you get to challenge all of the the status quo. So the way we've gone about pricing, you know, historically in our space in the you know tax workflow type products, it's been a per return type of an approach where you pay you know a certain amount per return, and it's you know volume based. We actually do a one simple price for the entire firm, unlimited usage, unlimited e signs, unlimited returns, unlimited users, all that kind of stuff, unlimited AI usage, all that you know. So we just have one simple price, and then you know go crazy, have fun. If you grow a bunch, awesome, more power to you. You know we're excited for you. So that's kind of our philosophy on pricing.

Randy Johnston 27:43
Yeah, I thought that was the case, but I didn't want to put you too much on the spot on that. So, all right, well, Dan, such a pleasure to have you along today, Brian. Any other questions for Dan? We don't get this opportunity very often.

Brian F. Tankersley, CPA.CITP, CGMA 27:57
No, I think I'm good. I'm very excited about where you're going and where you are, and looking forward to seeing you know the new things and the new alliances that you all create.

Dan Pinkous 28:07
Well, thank you. It's been a huge honor to be on such a legendary podcast with Brian, the only one and only Brian Tankersley and Randy Johnston. So, thank you for inviting me on. It's been great.

Randy Johnston 28:17
Pleased to have you here, Dan. We'll see again, and for all our listeners, we'll be with you again in another accounting technology lab. Have a great day.

Dan Pinkous 28:25
Take care.