The combination of AI and accounting might sound counterintuitive; why would the profession of numbers require silicone-grade data analysis and deep learning?
The misconception about AI probably stems from sci-fi movies that feature talking computers that mimc human behavior. The “real” AI technologies out there are, in most cases, far less human-like. They actually meant to take over from us human the kind of tasks we are simply not good at – repetitive, details-laden, error-prone and simply boring. Now, accounting all of a sudden sounds ideal for some AI intervention.
Trullion realized that and has developed an AI-powered platform that automates the financial and compliance processes around lease accounting. I spoke with Isaac Heller, Trullion’s CEO to learn more about their product.
Trullion, the name of your company, can you explain how you got to it?
Trullion is a combination of Truth and Millions (or Billions!), which is what we stand for. We’re trying to bring truth to millions of dollars in companies’ books. Trullion is creating business transparency by using software to power real-time visibility into company financials and form a single source of truth.
Since I was a kid I was a truth seeker. I have always believed that you can make life more fair, more true. Trullion stands for accuracy and truth in the accounting world, which is the universal language of business.
Do you have a background in accounting? If so, how did you make the transition to fintech?
I’ve always been fascinated by accounting. For my whole professional career, I’ve been surrounded by accountants, CFOs, and controllers. In the past, I worked for some high-growth, pre-IPO technology companies and some real estate technology companies. During my time at these companies, I spent a lot of time with contracts and PDFs and spreadsheets as well as working with auditors and checking numbers.
Diving in – very briefly, please explain what lease accounting is all about.
Lease accounting is the workflow in which organizations record the financial impact of their leases. Every audited company has at least 1 lease. In recent years, new lease accounting standards and regulations have been introduced and accounting teams are experiencing an incremental increase in their workload.
Why lease accounting – what made you say to yourself “I have to fix this”?
After working for years at companies pre-IPO, working with the accounting and finance teams to get all of the reporting and numbers in order – I realized, there must be an easier way to do this. There has to be some sort of automation that will streamline these painful processes and ease up accountants’ work.
I looked at the new revenue and lease accounting standards, I looked at the accountants and auditors, and I saw that while they may have different goals in mind, their workflows and pain points are largely the same and are often rooted in having to manually collect information across systems and emails to generate reports.
So Trullion’s mission is to automate the work being done around the implementation of leases and contracts in enterprise-level organizations?
We have developed our platform to the point where CFOs, Controllers, and Auditors leverage our technology to extract data from source documents and connect it to the audit trail all the way down to the entries. Trullion unifies the unstructured and structured worlds of accounting by reading PDFs and Excel, and translating them into financial workflows, such as Lease Accounting and Revenue Recognition.
Are there other solutions that ‘solve’ the manual work required for lease accounting and if so, how does Trullion’s approach differ?
We have a few competitors, but none of them are using AI and machine learning to automate lease accounting workflows. The biggest benefits of using AI is how it improves the accuracy and efficiency of reporting, and how the audit trail connects you back to the source data.
Is there a timely element to your product? I guess what I’m trying to ask is, why now?
For decades, leases were handled as an expense, basically, off of the balance sheet. An office lease got signed, or a truck got leased, and you paid the regular expenses monthly. When the new lease accounting standards were mandated in 2019, they came with 3 major changes: leases go on the balance sheet, more data required from lease contracts, and annual disclosures required.
The new compliance requirements are adding to accounting teams’ workloads and we are helping them ease the burden of sifting through endless contracts and data entry by streamlining compliance and reporting.
Do you have plans to expand Trullion to other aspects of accounting?
Awareness of AI and ML in the accounting space is still building. Just like bookkeeping, if there are aspects of the job that are repetitive and maybe a little less strategic, AI can help with those.
The next step is to start thinking of all the ways auditors can be more strategic and advisory with their clients if they don’t have to review contracts for compliance anymore. For example, helping clients with the way they write contracts or helping them reduce risk and identify opportunities for cost savings. Whatever the next wave of value looks like, whether it’s from the perspective of an internal auditor or external CPA servicing clients.