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Transcript (Note: There may be typos due to automated transcription errors.)

Brian F. Tankersley, CPA.CITP, CGMA  00:00

Welcome to the accounting Technology Lab sponsored by CPA practice advisor. With your hosts, Randy Johnston and Brian Tankersley.

Randy Johnston  00:10

Welcome to the accounting Technology Lab Podcast. I’m Randy Johnson with co host, Brian Tankersley. This year has been a release year for a lot of AI products in the AI CPAs accelerator cohort this year, which was the seventh one at a variety of products that were AI based. You had to actually have an AI component or you could not be invited to this year’s cohort. Well, it turns out that a product by the name of Laurel was in this year’s cohort and I thought it was worth speaking to you about because Laurel is a timekeeping product that uses a AI for passive timekeeping. Now, Brian, I know you’ve talked about passive timekeeping with a variety of products before and you have used passive timekeeping for a long time as of as of i, and why understand the emotional argument about Oh, you shouldn’t be billing by the hour. And I’m okay if you do flat rate billing, but I do like to keep track of my hours from a costing basis. Laurel is venture backed, they have about 55 million to date that we’re aware of. And they’ve been building their AI for quite a while, five years or more. And they got their start in law firms, but they then went into Ernst and Young and several other law alliances. So you know, when you look at the the Laurel approach, they’re really trying to break through into a variety of industries. Now, they have, you know, made alliance relationships with BDO with the Aprio group, which you know, where is where a lot of the RSM flat firms landed, and they’re working with ITA, but most importantly, is I think they are headed down market. Because of timekeeper efficiency, where you can get improved staff experience and time savings, and so on and so forth. What else would you want our listeners to know about? LAUREL Bryan?

Brian F. Tankersley, CPA.CITP, CGMA  02:25

Well, let me just first say from a passive timekeeping perspective, the beautiful part about it is that it tracks things in the background and does and really keeps up with all the files you’ve touched. And it really is going to have the most improvement, I think on your bill ability for your managers, partners, directors types, as opposed to your staff simply because your staff are more task oriented. And there’s so many different things that you have to touch as a manager, partner director in in an organization, but with them, they you know, again, the the thing that I like about it is that is like about about passive timekeeping and moral as well is that is that it gives me an insight into how I’m actually spending my time as opposed to how I think I’m spending my time. So it may not affect how much I charge the client in the short term. But from my perspective of staying on target and not getting not getting diverted, and not, you know, giving, giving somebody that’s paying for copper level service, Platinum level service and giving somebody that’s paying for platinum level service, copper level service, you know, keeping those two separated, I think see a important thing. I do find that it’s it helps me track the number of billable hours. And it keeps it helps keep those numbers up to where up to where they need to be. So I know when I’m working when I’m not working so I can redirect myself with the data as opposed to having to get somebody else to recruit somebody else to manage me.

Randy Johnston  04:06

Yeah, and as it turns out, we’ll talk more about how it watches applications that you’re running. How tracks that but you know for years, Brian, I have said that if you keep track of your time daily, you can have as much as a 25% uplift in fees Laurel has slightly different numbers. But still, it is important because having an intelligent timekeeping solution helps you build more time taking less time, or it gives you the cost basis without any real effort. And realistically, just like you and I right now recording podcasts, it can watch and you may not exactly remember what you were doing in this window but Laurel will identify this window. You were doing this thing it’s oh sure I was doing this or you wander down the hall to have a discussion with a colleague and all of a sudden, everything’s inactive. But you can see that you were out of your office for 17 minutes. And again, I’m not trying to track every little minute. It’s just like, What did I do with that? 17 minutes. And if you’re thinking about it, just once a week, it’s so easy to drop those time slots. So it keeps track of your Go ahead, Brian. And

Brian F. Tankersley, CPA.CITP, CGMA  05:23

the other thing is that even though you’re not married to rate per hour, I think rate per hour even in the value pricing world is an important thing to have. Because while it’s not a, you know, the downside to to hourly billing is that you put a maximum value on what you do. On the flip side to having to tracking the time here, the thing that I think is advantageous, is it tells me when I’m throwing money down a rat hole, and I need to rethink the relationship with somebody or I need to reprice that engagement going forward, if they’re going to use this much of my resources. So I think it’s I think, you know, it gives you is good, I don’t know about you, Randy. But when I’m pricing engagements, I have in the back of my mind, it’s going to take me X hours to do this. And the value of it is this, and this is what it’s going to take. And if I get a surprise, and it takes twice as long to do something, and it’s not a fixed price, I need I need data, so I can factor that into the next bid. So I don’t make the same mistake over and over.

Randy Johnston  06:28

Yeah, or, you know, as we’ve been coaching, many firms actually issuing a change order to say, hey, look, we came in with this expectation, it’s that, therefore, I need to have additional fees. And we’re seeing that successfully done by a lot of CPA firms in the market today.

Brian F. Tankersley, CPA.CITP, CGMA  06:45

And it’s much easier to have that conversation and to be confident in it if you have data. And just this past data. Again, I’m not suggesting that you get married to this data, and that you treat this as if it’s chiseled into stone or something. But it is another data point for you about how you’ve spent your time and what you’ve worked on. And what parts of this job took, took what tasks took so much time in here, so that you can have a better discussion about how to how to run the job better next time.

Randy Johnston  07:20

Yeah, so notice that Laurel is not only tracking your online work, but also tracking your offline work. And frankly, it helps you organize so you can work faster along the way. And the more you use Laurel, the smarter it gets. So how does floral basically go about this? Well, it has a thing they call the Laurel assistant that collects and captures your all your digital footprint, all the applications that you’re using, and then it uses AI to translate that into the way that we speak. And what we’re doing with it, it does a visualization that allows you to see how you’ve been using your time, we we laurels claim is that they can say one to two hours per week per person in timekeeping. And then they do the analysis, and they integrate into your existing tech stacks. So you can actually see, you know, what you’re working on and how to Bill and it really improves your billing time speed, because it eliminates the time lag. Again, I for two years, I’ve probably been a proponent of hotel billing, delivering the billing when the work is completed. But, uh, you know, many firms are still being billing, you know, a few days afterwards or at the end of the month, and so forth. So when you’re using these techniques, laurels claim is that you might see anywhere from a four to 11% profit, uplift. So Brian, in terms of how Laurel keeps track of the work, what type of things go on here.

Brian F. Tankersley, CPA.CITP, CGMA  09:01

Again, there is an Assistant, there’s a lot of assistance that is basically running in the background all the time. And it’s just watching what you’re looking at and what you have going on. So if you’re at a meeting, that you’re switching over to look at memes or email or other things like that, it will actually capture the thing that is the active window that you’re that you’re working on. As opposed to there so so that time where you were working email or doing other things like that, in the middle of the meeting, about the new about the new childcare, childcare plan that you will never have a child in can be, you know, can be quite valuable. They have a in their user interface. They actually have a calendar and they will actually go through and again there’s a slight lag in between when it when the time is incurred and when it’s recorded, but it actually gives you a calendar and some other insights. Here. It shows you your timesheet and In your your online captured work is shown in a right pane. And so the idea behind it is that you can compare the stuff you worked on in the rightmost pane, the right third of the screen as it were against your timesheet, which is the middle pane in this in this 1/3 1/3 1/3 user interface. It also integrates with most of the apps you use. So Outlook, email, Outlook, calendar, teams, calls, Zoom calls, research, websites, applications, other things like that. And so it will actually go through and recognize clicks keystrokes, and scribbling again, and it tracks the active window. So it tracks what you’re actually doing, not what you want people to think you’re doing. Okay. And again, this isn’t a spying application, necessarily. But it does show you how much time you’re spending on things. And so as an example, when I was a CPA, firm tech manager, one of the, you know, this was, I guess, you know, this is in the dawn of instant messaging way back in the early part of the 21st century. I had a couple of folks that spent all day long on AOL Instant Messenger chatting back and forth with each other during the workday, and I would love to have known how much time they were actually burning, making that the active window thinking about how they were going to chat with each other as opposed to doing the work. And so it’s a again, the idea here is that this is, this is the mirror that is telling you the truth of where you are right now with how you spent your time, which I think a lot of us need.

Randy Johnston  11:34

Yeah, and if you think about having so many applications, open this product tracking where you’re active, and then it turns it into a work history, right. So you can see all the online activities that Laurel captured for you, and they’re in chronological order. And that includes the emails and the calls and the documents and other items that are automatically listed for potential time entries there. So the work history is kind of interesting. And then beyond that, it also does work groups. So it actually will let you identify a collection of project and engagement, if you will, to collect a lot of those activities together. So emails that are in the same thread or a document that you started in the morning and return to later, or where you’ve got the same client name involved, it’ll collect that stuff for you automatically together, which is kind of a big deal. And then once it’s collected all that together, you can review what you have been collected, modify it as need be and release the entries to really confirm and submit your time. So this whole mechanism is actually very nifty in terms of the way that it works. But then the question might be okay, that sounds like a lot of time trackers that I’ve used. How’s that using AI? Well, first, it’s doing narrative and description, text predictions, it’s doing work code predictions for activity phases, and tasks. And it’s doing engagement and client predictions along the way. Now, again, when you’re first using the system, it’s not super accurate. But the more you use it, the better the predictions are inside the platform. So those narrative predictions will let you begin typing in a will actually make a guess, of the project engagement client and so forth that you’re working on. And then it will fill in from recent entries that you’ve made, as well as entries you’ve made in the past. So those types of work code, billing code of engagement, client predictions are all, I think, pretty big helps to, you know, doing the timesheets more readily and easier. Now, it turns out that they also have dashboards that were watched the back end of this. So Brian, just like you were talking about when you’re a tech manager, being able to see that this is a little big brother ish sounding to me, because it is a firm wide dashboard. But you know, the Laurel positions that as billing leaders, they’ve had so much experience in legal legal really has more of a culture of this, but it does show the activities including, you know, baseline billing, and how you’re doing compared to peers, and then the business impact. So, you know, Brian, and I wanted to make sure that you had a bit of a flavor on, frankly, the first new major breakthrough that we’ve seen in a billing platform in a while. AI based was interesting, but just ease of use was interesting. And what I’ve think some of the users are saying I believe is pretty true there, Brian, you know, I’ll never go back. If I leave the firm. I’m gonna go acquire Laurel and use it myself. Other parting thoughts there, Brian, for our

Brian F. Tankersley, CPA.CITP, CGMA  15:17

listening, the thing I would suggest to you about passive time tracking is that and I agree with this person on the sentiment, by the way, I will never go back. The thing that the thing that passive contracting has done for me over the 1010 plus years I’ve been using it is it really, it really goes in, and it removes all the anxiety I have about capturing my hours. It’s we, you know, again, if you’ve ever been a manager or a partner, and you’ve touched 15 files in a single day, or do and worked on 15 different engagements. And then at the end of the day, you realize you didn’t make any notes about how much time you spend in there. And you’ve just allocated the time out. That’s the you know, that’s not the way you want to do your time. And so it really makes it where I can just work and focus on getting the work done, as opposed and enjoy that as opposed to being anxious about well, do I have all my time billing done? Oh, I didn’t get my billing done on Friday afternoon before I took off for the weekend. I’ve got to get it done. But I’ve got to get this done now. So I can’t enjoy Saturday. Because I’m because I’m so anxious about getting that particular task done. And so now we’re cutting into the, into my enjoyment of the weekend. Okay, it’s not really as much about how much time it cuts into the weekend. It’s about how much mindshare you have to spend on time tracking and, and thinking about those kinds of things. It really makes it easier to just let go.

Randy Johnston  16:54

Yeah, and according to laurels analysis, they claim on a larger firm that they actually captured an extra 23 billable minutes per day with about a $13,000 uplift per timekeeper in a given year. Now, your mileage may vary. But bottom line is, if you make it easier, the ease with Laurel is a pretty big deal. So Brian, thanks for helping me talk through Laurel for our listeners today. And we’ll look forward to seeing all of you again soon in another accounting Technology Lab podcast.

Brian F. Tankersley, CPA.CITP, CGMA  17:37

Thank you for sharing your time with us. We’ll be back next Saturday with a new episode of the technology lab, from CPA practice advisor. Have a great week.

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