Technology and leadership discussion with René Lacerte

It's great to be here, Eric. Always good to talk to you and the members of the ICPA. And hard to believe that you and I have been doing this now for over two decades, working together and we've seen a couple of things. So, happy to talk about AI and what that means for everybody out there.

Really great setup, Eric. Everything that has changed because of AI is because of the models. There's an acronym that some of you probably heard, some of you probably use, called MCP. Stands for Model Context Protocol. What that does is it actually eliminates the need for any structure around the data flow that happens between systems. Unstructured data becomes structured, that simplifies how we might connect to all the other systems that are part of every one of the firm's businesses and their clients. There's a lot of stuff that has to be connected, a lot of stuff that individuals are connecting behind the scenes and making sure that all the data is where it needs to be. Just to give you an example, yesterday I was feeling annoyed about not being able to keep track of all the things that I ask people to do. In about 10 minutes, I created an agent that reads all of my email and all of my Slack messages every day and creates a list of things I've asked people to respond back on. I woke up this morning and that list was there. There were five things I hadn't heard back on. Think about that efficiency. I'm not worrying and wondering where things are. It's because of this ability to take unstructured and make it structured. I've worked with EDI and lots of APIs over the years, and that stuff is hard because the structure was required to be perfect for data to flow. That's not true anymore. Unstructured to structured is a huge game changer. That's why people want to integrate, why things are accelerating, why the models are learning and getting better at taking that unstructured to structured approach. It's something that all of us need to be thinking about because that has accelerated. I do think you should be running in some respects, but you should also be very thoughtful. Don't just randomly run somewhere. Be thoughtful about what it is that you want AI to do for you and your firm.

I believe in software. I believe in the process of writing software. It takes expertise and commitment and resilience and a non-stop focus on executing on a vision. So the verticalization of those applications is still going to happen. AI is going to enable more software, and if it enables more, there's going to be more of a need for this MCP protocol layer that connects all the different packages that people have. If there's something you can build for yourself like I just did, that's a simple hack. If it was built inside my email and Slack integrations already, I would use that because there will be improvements. The dedication of a vertical provider like what we do at Bill: we care about one thing, eliminating friction for SMBs and the accountants that serve them. That friction is real; we hear about it from close to 10,000 accounting firms and hundreds of thousands of businesses every day. All that friction funnels into our team, and we're able to make a better solution. A company or accountant may not even know there's a friction point they're experiencing because they don't know how to codify it, but we're going to fix that. So it depends on how folks are thinking about how important the task is. For deep things around operations, people should look for vertical solutions like what we're focused on—automating financial operations—and use AI capabilities for research and for their own efficiency inside the firm.

The cost one is maybe the easiest to address. We're all accountants here; have a budget, make sure people don't go over it. It can run away from you. We've heard that from businesses and you see it in the industry. Make sure you have a budget and you will find that some folks on your team are very good with the AI tools, they manage their budget, they get great efficiency, and others will be less good. Just like any other tool inside the firm, you need to manage that. Pay attention. There are many tasks that are repetitive and mundane, and that limits the capability of expertise to come out from everybody on this call. We went to school and go do our jobs not just to push paper all day. We go because we want to impact the clients we work with, make a difference for our firms. If we can use AI to enable us to have more time to be strategic and creative, that's the power. We talk about moving to AI-native. If you inside your firm stop and say, 'If I could do everything over again, what would I do with the AI capabilities that are out there?' That's a good question to ask. At Bill, we're making a significant shift in how we think about building solutions for accountants because we believe AI is going to do a lot more on this mundane layer. Be thoughtful about what you want to shift away from so you can leverage your expertise. One example I've shared recently: in college, getting the B was 20% of the work, getting the A was 80%. With these models, we'll get to B very quickly, but the accountant is what's going to make the experience for the client an A. That's the expertise. As time goes on, the models will be able to do more, but your expertise will get more refined and better. I believe it's going to be an unlock for creativity and expertise and make work far more interesting when folks can do the things they love versus the things they can't stand.

100%. The asset that I think every accounting firm has is trust. Trust is not something that comes out of thin air; it's built over time with expertise and relationships. That trust matters. At Bill last year we had over 8 million fraud attempts; we stopped them all because of our technology. That's something our clients and firms don't have to worry about. Ultimately, trust is going to be the ultimate moat. Firms should feel very good that they have these trusted relationships. As you pointed out, the firms need to pull together the capabilities and help clients understand what they can do from an efficiency perspective because the client wants to get back to making pizza or building a house, whatever they do. They don't want to do financial operations, taxes, or payroll. They want to get back to their creative passion. Trust is key, and it's why I've always been a huge fan of the accounting profession and a huge supporter, because trust is essential to every piece of work accountants in this country do.

Absolutely. One area to focus on from a building perspective with AI inside the firm is if there are no tools out there that you need to move your practice forward, that's a good example of something to build. If you're going to invest a tremendous amount, make sure it's something you want to invest in for a long time because once you build something, you're always supporting it. It grows, people have needs. Ask that question. If it's likely to be built by others, work with your partners. Every firm here has relationships with their providers. Work with people like Bill and say, 'This is what we need to get more efficiency.' We're in the business of making software and making it easier for you. That's going to be true with every software provider. If there's nothing in the market today that could help you, then it's probably good to play with. That's a good way to think about it.

We just did a survey to find out, and this shows that accountants are leaning in. They want to do more with AI. Their ambitions are high: 87%. Among those who are really high on it, there are two categories: ones trying to transform their firm practice and others optimizing. You can see the percentages, 40% and 53%. Firms that are actually transforming, putting in additional effort—probably 20% of their time—are seeing much stronger outcomes. They are one and a half to two times more likely to get meaningful progress. Client responsiveness is better, 34% versus 22%. All these things show that if you care about your practice and want to take advantage of technology to serve and advise clients, you need to embrace the technology and figure out how it's going to be part of your practice today, not five years from now. One thing I'll leave from a recent talk by a Stanford economist: there's a thread about AI eliminating white collar jobs. He went through the data and there have been multiple transformations in the US economy over the last 200 years. All of them had a massive start and then slowed down. His argument was that there's always a weak link, and the people who are the weak link have the most value. The expertise that accountants have will become that weak link. That's the thing you need to enable to shine. That expertise, knowledge built across clients, time, and industries, is very hard to replicate. All these things lead to a different opportunity to serve your client. Everything else gets automated, but your expertise can't be automated. That expertise will be the differentiator in the future. It's really important that we as a profession continue to work on that expertise. It's something I'm passionate about and feel strongly that we have opportunities there.

Thank you, Eric, for having me. To sum it up: it's go time, people. Let's make it happen.