# digits.com llms-full.txt > Digits is the world's first Agentic General Ledger (AGL), AI-powered accounting software that does the work for you by auto-booking 95%+ of transactions in real time, delivering always up-to-date financials, and automating bookkeeping, financial management, and the month-end close for small businesses, startups, and accounting firms. This file contains the full text of digits.com pages, converted to Markdown for AI/LLM consumption. Navigation, images, and interactive UI are omitted. For a concise index of key pages, see https://digits.com/llms.txt. --- # Main Pages ## Accounting software— that works for you. URL: https://digits.com/ ## Accounting software— **that works for you.** Digits is the first AI-native general ledger for business owners and accountants. One system for automated books, month-end close, bill pay, invoicing, and real-time financials. Introducing ### AI Accounting - Digits AI learns your business to provide 24/7 automated bookkeeping - Connect unlimited banks, credit cards, expense accounts, payroll & more. - Keep track of cash flow and other key metrics — burn, revenue, expenses. - Effortless setup ## Gather data and insights - Connect to banks and credit cards - Import transactions and statements automatically - See runway and burn metrics in minutes - Always on ## Real-time categorization - 24/7 AI bookkeeping - Grows smarter with every categorization - Auto-transaction flagging, reviews & quality checks - Human in the loop ## Managed accounting - Sign up for Digits and invite your existing accountant to the platform - Save your inbox & collaborate at the source directly in Digits - [Need an accountant? Find one through Digits' Accounting Firm Directory.](https://accountants.digits.com/) - A complete ecosystem ## Tax-ready - Secure internal storage and doc collection - [Work with one of Digits' tax prep & accounting partners.](https://accountants.digits.com/) - One-click tax package ### Experience the full power of Digits Say goodbye to cluttered spreadsheets and outdated tools. Enjoy seamless connectivity and flow within a single platform from start to finish. #### Agentic General Ledger™ The first AI-native accounting platform—Digits uses the latest in AI/ML to automate bookkeeping, reconciliations, and more. [Explore AGL®](/agl/) #### AI Bill Pay The world's most advanced (and most automated) accounts payable solution. [Explore Bill Pay](/product/bill-pay/) #### AI Financials Get live KPIs (runway, burn, revenue & more) & create interactive reports with zero learning curve. [Explore financials](/product/financials/) #### Bank-grade security Advanced envelope encryption to protect your data and privacy. [Explore security](/security/) Automated accounting for the modern finance stack **Are you an accounting firm?** Get exclusive plans and pricing. [Learn more](/accountants/) ### Compare plans #### Essentials Solopreneurs and early-stage businesses $ 65 /mo Most Popular #### Core Small businesses and growing companies $ 100 /mo #### Pro Scaling businesses with internal finance teams $ 250 /mo [Contact Sales](https://digits.com/pricing/pro/) #### Essentials $ 65 /mo ##### Essentials features: Most Popular #### Core $ 100 /mo ##### Core features: ##### Plus everything in Essentials #### Pro $ 250 /mo ##### Pro features: --- # Agentic General Ledger ## Experience the magic of AI accounting today. URL: https://digits.com/agl/ #### Beyond the AI Hype Digits AGL® is 21% more accurate, 1,634x faster and uses 311x fewer tokens. Digits AGL®: 97.8% Anthropic:Claude-Opus-4-8 (medium): 80.7% Anthropic:Claude-Opus-4-8 (low): 80.5% Anthropic:Claude-Opus-4-8 (high): 80.5% Anthropic:Claude-Opus-4-8: 80.1% OpenAI:GPT-5.4-Mini (medium): 79.9% OpenAI:GPT-5.4-Mini (high): 79.7% Anthropic:Claude-Sonnet-4-6: 79.5% OpenAI:GPT-5.5 (medium): 79.4% Anthropic:Claude-Fable-5 (medium): 79.2% Anthropic:Claude-Fable-5 (xhigh): 79.2% Anthropic:Claude-Sonnet-4-6 (medium): 79.2% Google:Gemini-3.5-Flash (low): 79.1% Outsourced Accountants: 79.1% OpenAI:GPT-5.5 (low): 79.1% Google:Gemini-3.5-Flash (minimal): 79% Google:Gemini-3.5-Flash (medium): 79% Google:Gemini-3.1-Pro-Preview (low): 78.8% Anthropic:Claude-Fable-5 (low): 78.7% OpenAI:GPT-5.5 (high): 78.7% Anthropic:Claude-Fable-5 (high): 78.6% OpenAI:GPT-5.4-Mini (low): 78.5% Google:Gemini-3.5-Flash (high): 78.5% Google:Gemini-3.1-Pro-Preview (medium): 77.8% DeepSeek:DeepSeek-V4-Pro (high): 77.8% Google:Gemma-4-31B (minimal): 77.5% Google:Gemma-4-31B (medium): 77.2% MoonshotAI:Kimi-K2.6: 76.7% OpenAI:GPT-5.5: 76.6% Anthropic:Claude-Opus-4-7 (high): 75.9% Anthropic:Claude-Opus-4-7 (low): 75.7% Anthropic:Claude-Opus-4-7 (medium): 75.7% Anthropic:Claude-Opus-4-7: 75.6% ZAI:GLM-5 (medium): 72.6% ZAI:GLM-5: 72% OpenAI:GPT-OSS-120b (medium): 71.9% OpenAI:GPT-OSS-120b: 71.7% DeepSeek:DeepSeek-V4-Pro: 65.7% MoonshotAI:Kimi-K2.6 (medium): 62% ### How **AGL** works ### 170M Total transactions ### 875B Transaction value Proprietary AI models trained on over 170 Million transactions totaling $875 Billion ### AI Agents Digits was one of the first companies leveraging AI Agents to deliver autonomous decision making for tedious accounting workflows. ### Vector Similarity Models Models trained to find similar transactions or vendors, eliminating the need to manually categorize every expense. This allows for pattern recognition and the ability mimic the unique behaviors of each individual Digits user. ### Natural language processing Digits uses state-of-the-art natural language processing (NLP) to understand banking transactions, invoices or contracts to assist users with their accounting tasks and questions. ### Custom large language models Custom large language models parse through transactions, bank statements, contracts, and invoices to give better context for classifications. ### Dozens of models working in harmony Deployment of in-house, generative AI models capable of generating answers, graphs, and insights to financial prompts. ### First-class ML competency - Dedicated ML team AI models built and deployed by a industry leading experts and best-selling subject matter authors. - Exclusive Industry Relationships Ongoing collaboration and partnership with leading AI companies such as NVIDIA and Google. - Generative AI Deployment of in-house generative AI models capable of generating answers, graphs, and insights to financial prompts. - Similarity models Ability to mimic individual accountant decisions, no generic classification model. - Custom-trained, deep-learning and large-language financial modeling engine We continuous improve of ML models based on customer feedback (not possible on GPT-4). - Automated coding of transactions Automates tedious transaction classifications. ### Proprietary AI orchestration - Vector similarity search Similarity models trained to find similar transactions or vendors, eliminating the need to manually categorize every expense. - Natural language processing Natural language processing (NLP) is used to understand banking transactions, invoices or contracts to assist users with their accounting tasks and questions. - Self-critical agents AI agent computer programs that perceive and interpret its environment in order to autonomously perform actions and make decisions — automating tedious accounting tasks, such as identifying transactions for accruals / depreciation schedules and automatically creating entries and supporting documentation. - Machine learning Ops Machine learning operations that combines machine learning, data engineering, and devops to standardize and streamline ML model deployment and management. - Built to scale Built to scale; the analysis and processing of millions of transactions daily. ### Top features powered by AGL® - Object-oriented data layer High performing data representation to provide deeper understanding of financials and improve model training. - Vendor database An extensive vendor dataset that standardizes our clients ledger while easing year-end tax preparations. - Insight algorithms Constant variance analysis that tracks momentum and magnitude of charges in order to promptly flag what matters. - Recurrence detection Deep learning that detects recurring transactions, even upon their first arrival. - Proprietary layout-aware language models and datasets Machine learning models, ranging from deep learning to state-of-the-art, fine-tuned large language models. - Reconciliation Real-time reconciliation, categorization, and classification of inbound transactions and financial data. --- # Products & Modules ## The Agentic Close URL: https://digits.com/product/agentic-close/ Stop closing your clients' books across disconnected systems. Digits does the work inside the ledger and surfaces what needs your review. ### From transaction to close. One system. Most accounting systems only _record work._ The Agentic Close _does it for you._ 1. Collect ### Financial activity flows into the ledger continuously. - Connects directly to banks, cards, payroll, and payment platforms - Imports transactions and documents as activity happens - Ingests statements, invoices, and receipts automatically - Begins work the moment new data arrives 2. Book ### Transactions categorized continuously inside the ledger. - Categorizes transactions automatically as they arrive - Surfaces lower-confidence items for review - Learns from accountant decisions over time - Reduces recurring manual bookkeeping work 3. Reconcile ### Reconciliation starts before month-end begins. - Matches transactions automatically against source activity - Matches transactions and resolves confirmed items automatically - Surfaces exceptions with context on what was attempted and why - Attaches each match to an audit-proof bounding box on the statement PDF 4. Schedule ### Schedules generated directly from ledger activity. - Detects transactions requiring schedule treatment - Drafts fixed asset and prepaid schedules automatically - Maintains supporting journal entries continuously - Carries approved logic forward into future periods 5. Review ### Quality control with full execution context. - Evaluates categorization, balances, duplicates, and anomalies - Runs continuously throughout the month - Escalates exceptions with full context and a recommended action - Configurable by party, category, and materiality threshold 6. Report ### Financials ready when review is complete. - Produces reports directly from the live ledger - Eliminates manual assembly and reconstruction work - Keeps reporting connected to underlying activity - Reflects the real-time state of the books ### Every close requires less work than the last. ### Every client. One live view. Track open items, blocked work, and team assignments across your entire firm from a single dashboard. ### Manage by exception Quality Control runs continuously inside the ledger, surfacing unusual transactions, reconciliation mismatches, and balance anomalies with full context. Configure what gets flagged around your firm's materiality thresholds and workflows. ### The firm that emerges #### Focus on judgment. Not coordination. Staff accountants move beyond transaction-level cleanup and spend more time understanding financial performance, identifying risk, and developing stronger accounting judgment earlier in their careers. #### Visibility across every client. Managers see where work is blocked, what needs review, and where intervention is required without chasing updates across spreadsheets, Slack threads, or status meetings. #### More capacity. Same team. Partners reclaim time for strategic client conversations while firms increase capacity without scaling operational overhead or adding headcount. Free your team for the work that grows the firm ### Digits For Firms - Agentic Close trained on your firm's standards - Automated Schedules - Your brand on every client login and report - Exclusive firm pricing - Dedicated success manager ## Meet Ask Digits URL: https://digits.com/product/ask-digits/ Ask questions. Complete tasks. Understand your business. ### Ask Digits About Your Finances Ask Digits anything about your financials—cash flow, expenses, revenue trends, vendor history, budgets, or forecasts—and get clear, accurate answers in seconds. ### Ask Digits to Get it Done Initiate tasks in one place—no toggling between tools, no tedium, just tasks being done **for** you. ### Ask Digits to Surface Tasks Digits monitors what needs your attention—like follow-ups, transactions, flagged reviews—and surfaces it instantly within your current workspace. #### Fast, Accurate, **Always Secure** Digits never sends your raw financial data outside of our proprietary models. The Agent Bar is built directly into Digits, powered by our own financial modeling engine. You get: - Accurate calculations - Real financial context - Consistent outputs - Enterprise-grade security ### Upload, Forward, or Drag Anything to Ask Digits Drop in a statement or receipt— or forward financial documents to @digits.cc—and Digits immediately processes, matches, or reconciles them. ### Experience the full power of Digits #### Month-end simplified Digits offers fundamentally better accounting workflows that save you both time and money. [Explore better accounting](/product/agentic-close/) #### Reporting, reimagined Intuitive, visual financials delivered right at month-end, not weeks late. [Explore financials](/product/financials/) ## Digits - Automated Schedules for Accountants URL: https://digits.com/product/automated-schedules/ ### Automate your schedules. Eliminate your workbooks with Digits. Full automation. Full control. No spreadsheet in between. [Get started](/accountants/) ### Every schedule type. One workflow. No spreadsheets. - Available Now ## Fixed Assets - Detects probable fixed assets from transaction patterns - Pre-populates depreciation schedule based on asset type - Generates and posts journal entries monthly - Updates net book value on the balance sheet automatically - Available Now ## Prepaid Expenses - Detects prepaid transactions from bills and vendor patterns - Applies amortization from the source transaction - Posts monthly expense recognition automatically - Keeps the prepaid balance accurate every close cycle - Coming soon ## Revenue Recognition - Detects revenue requiring deferred recognition - Applies schedule configuration and posts entries automatically - Reconciles back to financials inside the ledger - Replaces the revenue waterfall spreadsheet - Coming soon ## Accrued Expenses - Detects expenses incurred before cash changes hands - Generates accrual entries for contractor work, services, and arrears - Reverses automatically when the invoice arrives - No more hoping the business owner remembered to tell you #### You make the decisions, Digits handles the tedium. #### Detect Digits identifies transactions that should trigger a schedule and surfaces them to you. #### Configure The system applies the accounting treatment based on transaction context. #### Review Review the pre-populated schedule: amount, term, categories, posting dates. Accept, dismiss, or adjust before anything is configured. #### Post Journal entries generate automatically, every period, for the life of the schedule. No manual calculation. No copy-paste. No recurring journal entry that you have to set up and hope you got the math right. #### Built into the ledger. Not bolted on. #### Detected automatically. Finalized by you. Most systems wait for you to initiate a schedule: categorize a transaction, enter the details, and set up a recurring entry. Digits finds the transactions that need schedules and brings them to you. You apply judgment where it matters. Digits handles everything else. #### All your schedules in one place. Manage fixed assets, prepaids, and every future schedule type in Digits. No new tabs to manage, spreadsheets to maintain or bolt-on tools to reconcile against. #### Full visibility from schedule to balance sheet. Every schedule traces from the source transaction through each posted journal entry to the balance sheet. See which transactions in a category are scheduled and which aren't. Know exactly where a balance comes from. ## AI Bill Pay, finally URL: https://digits.com/product/bill-pay/ The world's most advanced (and most automated) accounts payable solution. #### Explore the world of AI Bill Pay #### Pay with ACH or Check Digits AI auto-detects vendor remittance details and you can choose how to pay with just a click! #### Designed for Speed Modern, Kanban-style interface puts all your bills and your entire AP workflow at a glance. #### Drag. Drop. Approve. Pay. It's that easy—Digits AI handles the rest, saving you hours every month. #### Automated Bill Review Eliminate manual data entry with automated bill detail extraction, including line items! #### Smart Notifications Never miss an update. Smart notifications make it easy to keep up with your AP workflow. ### The benefits of using Digits Pay for your business - ### Ledger integration Automatically reconcile payments with your Digits ledger — no more 3rd party tools or manual journal entries. - ### No monthly fees Bill Pay starts with no monthly fees! - ### Automated detail extraction Digits Bill Pay leverages advanced OCR technology to extract invoice information, reducing the need for manual data entry. - ### Direct Pay We make it easy on both you and your vendors. With remittance detection you'll be able to pay vendors by their preferred payment method. - ### Streamlined approval workflows Customize your workflow and set approval policies on bills or delegate to others where needed. ### Your all-in-one finance tool - Live bookkeeping powered by Digits AI - Instant transaction data & KPIs - Bill Pay & Invoicing - Unlimited connections - Unlimited users #### AI invoicing Get paid faster. Generate & customize invoices in seconds, track payments, and get smart reminders. [Explore AI Invoicing](/product/invoicing/) ## AI Bookkeeping URL: https://digits.com/product/bookkeeping/ Smart businesses automate their accounting to focus on growth, not expense categorization. - #### Real-time categorization Digits AI learns your business to provide 24/7 bookkeeping with transaction flagging & smart reviews. - #### Automated reconciliations Digits reconciles your accounts automatically—from uploaded statements or connected banks—so you always know your numbers are accurate and up to date. - #### Live data you can trust Connect unlimited banks, credit cards, expense accounts, payroll & more. - #### Dimensional accounting Analyze your business seamlessly across projects, locations, and departments - #### Stay on top of runway Keep track of cash flow and other key metrics — burn, revenue, expenses. - #### Smart insights Track the trends and change-drivers affecting your revenue & expenses. - #### Your team, on the same page With unlimited seats & in-product commenting, sharing with your team & stakeholders is easy. ### Compare plans #### Essentials $ 65 /mo Most Popular #### Core $ 100 /mo #### Pro $ 250 /mo #### Essentials $ 65 /mo #### Core $ 100 /mo ##### Core features: #### Pro $ 250 /mo ##### Pro features: #### AI Insights & Dashboards Put finance at your fingertips. Customize your interactive dashboard to display your KPIs, no learning curve required. [Explore AI Insights & Dashboards](/product/dashboards/) ## AI Insights & Dashboards URL: https://digits.com/product/dashboards/ Bring your business to life with interactive dashboards. ### Experience AI Financials Stay ahead of what's next from the board room to the data room with KPIs and financials right at your fingertips. #### KPI cards Keep track of key metrics for your startup: revenue, burn, cash flow, runway, net income, and more. #### Drag, drop, done Your dashboard offers unparalleled customization. Use modular widgets to create the perfect dashboard for you. #### Dive in deeper Dive into the data with the granularity you need to answer difficult questions and make important financial decisions. #### Live statements Transform three-statement reporting—income, balance sheet, and cash flow—into a live, dynamic view of your business. ### Under the hood - ### Advanced Data Architecture Digits models your data in a vector database as the foundation of leveraging modern AI capabilities. Our AI continuously indexes and searches your entire financial history in real time, delivering instant insights. - ### Connect API Digits never sleeps, so you can. Our Connect API platform integrates seamlessly with 10,000+ financial institutions, bringing you continuous, real-time access to your key financial metrics. [Learn more…](https://digits.com/integrations/) - ### Vendor-level detail Digits AI pulls detailed information from external data sources and attach vendor names to every transaction. - ### 24/7 AI analysis Digits’ AI analyzes your financial data in real time, surfacing key trends, drivers and insights instantly—so you can make smarter decisions, faster. ## AI Financials URL: https://digits.com/product/financials/ Transform your reporting into a dynamic view of your business. #### Why Digits Reports? #### Collaborate and comment Add comments directly at the line level for clear, pinpointed context in every report. #### AI-driven insights Digits highlights trends, anomalies, and key shifts, so you always know what’s happening behind the numbers. #### Interactive, not static No more stale PDFs or spreadsheets. Hover-to-discover, click into lines, explore transactions, and compare trends instantly. #### Personalized for you Tailor reports to focus on what matters—revenue, expenses, cash flow—flexible views built for your business. #### Financial statements that speak your language #### Profit & loss View your company's Profit & Loss for an instant snapshot into your revenue, expenses, and profitability over a specific period. Always on for a live, dynamic view of your business, or run a custom report to analyze any time period. #### Balance sheet Get a comprehensive snapshot of your company’s financial standing with the Balance Sheet. View your assets, liabilities, and equity in real time on Digits, or customize reports to evaluate financial health at any point in time. #### Cash flow Monitor your company’s cash inflows and outflows with the Cash Flow Statement, providing insight into liquidity and financial flexibility. Access real-time updates on Digits or generate custom reports to assess cash management over any chosen period. #### Custom Reports Stay in sync with your team using Digits Reports. Generate custom reports for any time period, capturing any combination of financial statements and key metrics. Access detailed insights and collaborate effortlessly with built-in comments. ### Focus on what matters - ### Tailored to your business Every report is fully customizable, so you see your numbers the way you need to. Create views and reports tailored to how you operate. - ### Save your inbox Engage your team members and advisors directly at the source – turning data into real-time collaboration. - ### Always up-to-date Your financial statements and draft reports update automatically with live data. No manual refreshes, no outdated numbers—just real-time insights. - ### Share with confidence Give visibility to teammates and partners with secure, permission-based access. #### AI bookkeeping 24/7 bookkeeping powered by Digits AI, with instant categorization that learns from your inputs. [Explore AI bookkeeping](/product/bookkeeping/) #### AI Bill Pay Automate your accounts payable with AI Bill Pay. Simply drag, drop, approve, pay — and save hours every month. [Explore Bill Pay](/product/bill-pay/) ## Introducing AI Invoicing URL: https://digits.com/product/invoicing/ Smart, simple and seamless. ### Why AI Invoicing? Goodbye, tedium. Hello, automation. Welcome to invoicing software that works for you, not against you. #### Fully automated invoicing AI Invoicing generates invoices in seconds, pulling in customer details, pricing, and payment terms with minimal input from you. #### Brand customization Personalize your invoices with your logo, branding, and custom fields, ensuring a professional look and feel. #### Real-time payment tracking Keep tabs on your incoming payments and know exactly when invoices are viewed, paid, or overdue with smart tracking and automated follow-ups. #### Automated accounting AI Invoicing integrates directly into your Digits accounting for a fully streamlined experience. #### Smart reminders & follow-ups Stop chasing unpaid invoices. Our AI automatically sends gentle reminders and escalates follow-ups when needed, improving your cash flow. ### Invoicing that works for you - ### Save hours every week Stop wasting time on invoicing and focus more on growing your business. Let the billing process work for you, not against you. Free up your time to scale and succeed. - ### Get paid faster Automated reminders and frictionless payment options mean no more waiting for clients to act. - ### Reduce errors & hassles AI eliminates common mistakes, ensuring every invoice is accurate and professional. As your business grows, AI Invoicing grows with you, handling more clients and transactions effortlessly. --- # Pricing & Plans ## Accounting software— that works for you. URL: https://digits.com/pricing/ ## Accounting software— **that works for you.** ### Compare plans #### Essentials $ 65 /mo Most Popular #### Core $ 100 /mo #### Pro $ 250 /mo #### Essentials $ 65 /mo #### Core $ 100 /mo ##### Core features: #### Pro $ 250 /mo ##### Pro features: ##### Plus everything in Core #### Partner-provided services #### Full-Service Accounting Use Digits to automate your bookkeeping and hire a professional to fully manage all your accounting and finance needs. [Find an accountant](https://accountants.digits.com) #### CFO Services Cash flow forecasting, budgeting, technology implementation, business valuations, tax planning, & more. [Find a CFO](https://accountants.digits.com) #### Tax Support & Filing US Federal & State tax return filing, tax extensions, Delaware franchise tax, R&D tax credits, & more. [Find tax support](https://accountants.digits.com) [Learn more](/product/bookkeeping/) #### AI Bookkeeping 24/7 bookkeeping powered by Digits AI, with instant categorization that learns from your inputs. [Learn more](/product/dashboards/) #### Live metrics & dashboards Put finance at your fingertips. Customize your interactive dashboard to display your KPIs. no learning curve required. [Learn more](/product/financials/) #### Interactive reports Give your team and stakeholders vibrant reports & financial statements; don't worry, they export to Excel. [Learn more](/product/bill-pay/) #### AI Bill Pay Automate your accounts payable with AI Bill Pay. Simply drag, drop, approve, pay — and save hours every month. [Learn more](/product/invoicing/) #### AI Invoicing Get paid faster. Generate & customize invoices in seconds, track payments, and get smart reminders. ### Frequently asked questions **Is there a free trial available?** Yes, Digits offers a 30-day free trial, allowing you to explore our features and understand how our platform can benefit your business or firm before committing to any plan. [Sign up today](/?getstarted=true) to get started with your trial! **Does Digits do my taxes?** Digits will help get your finances in order so that come tax time your books are ready for filing. While Digits itself does not file your taxes for you, you can export the tax package to give it to your tax preparer or [use one of our accounting Partners](https://accountants.digits.com/) who can support your year round tax needs – everything from 1099s, state and federal filings, to R&D tax studies. **Who enters the transaction details?** Digits has trained dozens of AI models to understand transactions, gather available context, and enter them into Digits for you from any of the connected sources (banks, cards, payroll, etc). Digits AI assists in booking these transactions to the appropriate category on your ledger's chart of accounts. **Do I need an accountant if I use Digits?** Using an accountant is entirely up to you. Digits automates your bookkeeping in real time, giving you accurate, decision-ready financials every day. But when it's time to prepare verified financials—the version trusted by investors, lenders, and tax authorities—you may want a professional to review and validate your books. Explore the [Digits Accountant Directory](https://accountants.digits.com/) to connect with certified firms who are already experts in Digits. Each partner combines automation with professional oversight, offering a full range of accounting and advisory services to help your business grow with confidence. Or learn more about when to hire a professional [on our blog.](https://digits.com/blog/do-i-need-accountant-small-business/) **Which countries do you support?** Currently, our services are available only to U.S.-based entities. We're committed to expanding globally and hope to serve businesses outside the U.S. in the future. **I have multiple businesses. Will this cost extra?** Digits supports multi-entity businesses. Each business or location would need its own Digits subscription. **Does Digits support cash or accrual accounting?** Digits supports both cash and accrual accounting. Use the accounting method that best fits your financial reporting needs. **Is Digits secure to use?** Yes. We're [SOC2 Type II certified](https://trust.digits.com/). We also use revocable tokens to access your data via secure APIs and secure our system-to-system communication using TLS. Learn more about our security standards [here](/security/) . **Are there any setup fees?** No, there are no setup fees involved when you sign up for Digits. If you run into any troubles connecting your accounts, our Support Team is here to help! **Will I be charged sales tax on my subscription?** Sales tax may be applied to your Digits subscription depending on your location, and any applicable taxes will appear on your invoices. **Can I change my plan later?** Absolutely! You can upgrade or downgrade your plan at any time to better suit your needs. Simply reach out to our team and we'll be happy to support. **What does it cost to accept payments and pay bills?** The cost of accepting payments and paying bills depends on the plan you choose. Visit our Help Center [here](https://help.digits.com/business-bills-and-invoices/digits-pay-pricing) to learn more. **Does Digits support automated bank reconciliation?** Yes. Digits continuously matches financial activity against your ledger and reconciles your accounts using AI, surfacing exceptions as they occur so there is far less manual cleanup at month-end. Reconciliation runs around the clock across your connected bank, card, and payroll accounts. **Does Digits provide real-time financial reporting and dashboards?** Yes. Digits generates real-time financial statements—profit & loss, balance sheet, and cash flow—plus live dashboards that update automatically as transactions sync, so you always see current financials. Core and Pro plans add custom dashboards and dimensional reporting. **Does Digits include accountant review or quality control?** Yes. Digits includes an AI Quality Review that checks your books for errors and inconsistencies, and accounting firms get an Advanced Quality Review during the close. You can also connect with a certified firm from the Digits Accountant Directory for professional review and verified financials. **Does Digits automate the month-end close?** Yes. Digits automates month-end close tasks—reconciliations, accrual and amortization schedules, and statement collection—so books are finalized faster. Accounting firms can use Agentic Close to run the close across all of their clients. **Can Digits help accounting firms manage multiple clients?** Yes. Digits gives firms a single platform to manage all of their clients' books, with unlimited team seats, roles and permissions, central billing, task management, and flexible client-level plans. AI handles day-to-day bookkeeping, the close, and reporting across every client. **What's included in Digits pricing?** Every Digits plan includes real-time financials and dashboards, 24/7 AI bookkeeping and reconciliation, invoicing and bill pay, and Ask Digits. Higher tiers add revenue and spend integrations, custom dashboards, dimensional accounting, automated schedules, close automation, and custom management reporting. Accounting firms get firm-specific plans with practice management, Agentic Close, and partnership options. **Does Digits offer advisory or custom management reporting?** Yes. Pro plans include custom management and board-ready reporting, and accounting firms can deliver scheduled reporting packages to clients—supporting advisory work on top of fully automated bookkeeping. **Can I ask Digits questions about my financials?** Yes. Ask Digits is a conversational AI assistant included in every plan that answers plain-language questions about your financials and accounting data. ## Advanced Plan Early Access Request URL: https://digits.com/pricing/early-access-form/ ### Trusted by thousands of startups, & small businesses #### Insights in minutes, not days Digits combines a sleek dashboard with deep, nuanced insights — it’s the perfect balance. Kayvon Beykpour Founder, Periscope #### 10x fewer errors. Zero spreadsheets. Digits is incredible. Intuitive, interactive, and finally gives the right insights beyond spreadsheets. Ellie Jaman CEO, Wscripted #### 1 full workday back every month I don’t spend time on accounting — and I love that. Michael Ducker Co-founder & CEO, Blaide ## Request Digits Pro Plan URL: https://digits.com/pricing/pro/ #### Insights in minutes, not days Kayvon Beykpour Founder, Periscope #### 10x fewer errors. Zero spreadsheets. Ellie Jaman CEO, Wscripted #### 1 full workday back every month Michael Ducker Co-founder & CEO, Blaide --- # For Accounting Firms ## Accounting software— that works for your firm. URL: https://digits.com/accountants/ ## Accounting software— **that works for your firm.** Digits is the only general ledger with the Agentic Close, trained on your firm's accounting processes. ### Bolt-on tools don't scale. Schedules, reporting, email, client portals, practice management — every tool your team bolts onto the ledger means another seat, another login, another person stitching it all together. ### One platform. Scalable workforce. Digits helps firms scale their standards. Serve more clients without compromising on quality. ### Up-level your best employees. Move your best employees into month-end reviews, advisory, and work that grows client relationships (and revenue). Firm Model #### Less to review. More to trust. Digits learns from the accounting decisions your firm makes every day. As your team reviews transactions, categorizes activity, and completes closes, Digits captures those patterns and applies them to future work. Over time, work arrives closer to your firm's standards before anyone opens a review queue. That means less time correcting routine issues and more time focused on exceptions that actually require professional expertise. Automated Schedules #### Free up your team's most costly hours. Digits automates schedule maintenance directly within the accounting workflow, making information easier to review, trace, and manage. Every schedule connects directly to the underlying transactions and journal entries. No duplicate work. No separate reconciliation process. No searching across systems for answers. Just a cleaner close process that gives your team more time for client-facing work and higher-value analysis. ### Your firm's brand, front and center. Digits lets you brand your clients' entire financial experience — not just the portal. #### A branded experience for your clients. Choose your logo, header color, and accent. Clients log into a workspace that feels unmistakably yours — from the first interaction onward. #### Strengthen your brand with every report. Monthly financials, board packages, and client-ready summaries sent to your clients with your firm's logo, color, and a custom cover — auto-delivered on schedule. ### The Agentic Close works across your firm. #### Starter Plus Firm Only $50 /client per month For your tax and after-the-fact bookkeeping clients who need clean books and basic collaboration. #### Essentials Plus $115 /client per month For your introductory CAAS clients who hire you for monthly close, bill pay, and payroll oversight. #### Core Plus $185 /client per month For your full-service CAAS clients with complex closes built on accruals and multi-dimensional reporting. Our Solutions team will help you map clients to the right plans and give you exclusive discounts. [Get started](#firms-get-started) ### AI performance, tracked. See where your AI Agents are pulling their weight, where humans still need to step in, and how your firm's capacity is growing month over month. Track your firm's Zero-Tedium Rate as AI takes more work off your team's plate, every month. #### The right people, the right access. Dial in client access by choosing the right plan, and give everyone on your team the right level of visibility and access. ### Firms cutting cost. Adding capacity. ### Frequently asked questions Digits automates the full month and close end-to-end. The bookkeeping prep is done before your team opens a client's books. Transactions are categorized, accounts are reconciled, and anomalies are flagged automatically for every client, every day. Your team reviews what's done instead of building it from scratch. Digits also handles schedules (depreciation, prepaids, and revenue recognition) and runs automated quality control across the close. Work that used to take hours per client happens in the background. Firms on Digits report saving 6+ hours per client per month. That's time your team spends on advisory, not data entry. When the prep work is automated, your team's role changes. Instead of categorizing transactions and chasing documents, they're reviewing AI-generated books, catching edge cases, and advising clients. Digits trains models on your firm's specific patterns, including categorization preferences, account structures, and vendor mappings, and applies that knowledge across your entire book of business. Your team isn't teaching the system the same thing twice. They're building institutional knowledge that scales. Your preparers become reviewers. Your reviewers become advisors. The tedium goes away. The judgment stays. Your clients get a portal where they can view their financials in real time, including an interactive P&L, Balance Sheet, and Cash Flow statements, so they can actually explore. They can also collaborate with your team directly inside Digits: commenting on transactions, forwarding documents via email, uploading receipts through the iOS app. Questions attach to specific line items instead of floating in an email thread. With Firm Branding, the entire ledger and your monthly reports are white-labeled with your logo, colors, and name everywhere. The result: clients engage with their financials more often, respond to questions faster, and see your firm as the technology-forward partner they rely on. You can migrate clients from legacy ledgers in just minutes with our automated importers. Nothing changes unless you want it to. Please contact us if you're interested in getting access to advanced features, such as schedules, revenue recognition, and advanced quality control. All of them. Digits supports after-the-fact bookkeeping and catch-up, ongoing monthly accounting, and advisory engagements. Handle both your simple and complex clients on one platform. Digits is powered by a system of specialized models. Our core intelligence comes from models built and maintained by our in-house ML team, using 3rd-party Large Language Models only where they add clear value, such as structured data extraction and controlled fallback, under strict guardrails. Customer data is protected and encrypted at every layer and is never used to train external models. #### The Agentic Close Most accounting systems only record work. The Agentic Close does it for you. [Explore the Agentic Close](/product/agentic-close/) #### Accruals automated Automate your schedules. Every schedule type. One workflow. No spreadsheets. [Explore schedules](/product/automated-schedules/) ## Digits — Your demo is on the calendar! URL: https://digits.com/accountants/booked/ #### Your demo is on the calendar! ###### Check your inbox for meeting details, and feel free to invite your team. We look forward to showing you Digits and helping you build your AI-native firm. [Go to Digits home](https://digits.com/) ### Trusted by today's fastest-growing firms #### 67% increase in client engagement We have 196 clients on Digits now. They dive into reports many times a month and have much more substantive conversations with us during advisory meetings. Matt Gardner CEO, Hiline #### 100x faster cleanup I started new and let Digits do a bank download, and then I did two years of books in four hours. 2 years of books in 4 hours? Yeah. Pretty cool. Christopher Craig Owner, The Tax Firm ## Digits — Thanks for reaching out! URL: https://digits.com/accountants/cla/ #### CLA Digits CLA's Digits account is already set up, and accounts are managed by your firm (not created individually). To get access, contact Heidi Grinde, your CLA administrator, and ask to be added to the CLA workspace on Digits. She can provision your account with the right clients and permissions. --- [Already have access? Sign in instead.](https://my.digits.com/firm) [Think this is a mistake? Contact Digits Support.](https://digits.portal.usepylon.com/forms/get-in-touch-with-digits-support) #### 67% increase in client engagement Matt Gardner CEO, Hiline #### 100x faster cleanup Christopher Craig Owner, The Tax Firm ## The first ledger built for firms URL: https://digits.com/accountants/compare/ The best accounting platform for modern firms. ### The pace of modern accounting **doesn't wait** for rules, clicks, and month-end marathons. #### Less time closing. More time advising. Digits automates bookkeeping, reconciliation, schedules, and the month end close so your team can focus on review, client relationships, and higher-value work. The ledger, reporting, collaboration, and firm operations all in one platform. QuickBooks Xero Puzzle AI Architecture **AI is the foundation.** Digits is AI-native from day one, powered by the Agentic General Ledger™ and trained on 170M+ real transactions to continuously book, reconcile, and review the ledger. AI layered onto legacy workflows. Intuit Assist supports existing QuickBooks workflows, while posting, reconciliation, and close remain user-driven and plan-dependent. AI assistance added to traditional workflows. Xero combines bank rules with AI-powered suggestions, with accountants reviewing and confirming transactions before finalizing. Rules-based automation enhanced by AI. Puzzle combines configurable and AI-learned rules to automate bookkeeping, reconciliation, and close workflows. Accounting AI Model **Powered by the Agentic General Ledger™.** AGL® is Digits' accounting-specific AI model architecture for accounting, with tiered intelligence that learns from firm standards, historical decisions, and review patterns to improve automation across every client. Intuit Assist adds AI across QuickBooks, but public materials don't describe a domain-specific accounting model or firm-trained accounting AI. Xero includes AI across selected workflows, but public materials don't describe a domain-specific accounting model or firm-trained accounting AI. Puzzle uses AI throughout bookkeeping and close workflows, but public materials don't describe a domain-specific accounting model or firm-trained accounting AI. AI Transaction Automation **AI automatically categorizes 95%+ of routine transactions.** In benchmarking, Digits achieved 97.8% transaction categorization accuracy, outperforming every frontier AI model evaluated. Bank rules, automation, and Intuit Assist help categorize transactions, but Intuit doesn't publish transaction categorization accuracy or benchmark results. Bank rules and JAX help categorize transactions, but Xero doesn't publish transaction categorization accuracy or benchmark results. AI automatically categorizes 90-95% of routine transactions using AI and rules, but Puzzle doesn't publish transaction categorization accuracy or benchmark results. AI Bank Reconciliation **AI reconciles bank activity as transactions arrive.** Digits continuously and automatically matches, reconciles, and finalizes bank reconciliations, with exceptions ready for review before they become a month-end backlog. Reconciliation follows traditional month-end workflows, with AI assisting transaction review as part of the close process. JAX helps match transactions during reconciliation, but reconciliation remains a traditional month-end workflow. AI matches bank activity and pre-drafts reconciliations for accountant review during close. Accruals Schedules **Schedules live directly in the ledger.** Digits auto-detects and drafts schedules for accountant review. One approved by an accountant, Digits auto-generates the recurring journal entries. Supports accrual accounting through traditional accounting workflows and recurring journal entries. Supports accrual accounting through standard workflows, with schedules typically managed in an external tool or workbook. Automatically drafts schedules and recurring journal entries from transactions. Accountants review before finalizing. Realtime Financial Reporting **Financials update as the ledger updates.** Financial statements, dashboards, and KPIs refresh as AI books transactions, reconciles, and reviews the ledger, so firms don't wait for month-end to see accurate financials. Reports reflect posted transactions throughout the month, but accuracy depends on completing reconciliation and month-end workflows. Real-time reporting is available, though financial statements depend on traditional bookkeeping and reconciliation workflows. Financial statements update as transactions are processed, with AI Close helping improve reporting accuracy during month-end. Custom QC Checks **Write Quality Control checks in plain English.** Digits then turns them into deterministic checks that run the same way across current and historical books, and surfaces exceptions in the Checklist. No hallucinations. Review is configured through Books Close templates, tasks, roles, approvals, and built-in transaction checks during month-end close. Review is configured through reports, Workpapers, Practice Manager workflows, templates, and firm-defined review processes. Custom review workflows are configured through AI Close prompts and reusable AI tasks, with findings routed for accountant review. Agentic Close **Agentic Close brings the accounting work together in the ledger.** AI transaction automation, continuous reconciliation, Quality Control, and schedules continuously advance the close, shifting month-end tedium to exception review. Books Close brings together templates, tasks, approvals, transaction checks, and AI summaries to organize the month-end close. Month-end is managed through reports, reconciliation, Workpapers, Practice Manager, and firm workflows, with AI assisting selected accounting tasks. AI Close brings together AI tasks, reusable checklists, prompts, and accuracy reviews to automate parts of month-end close, with accountant review before completion. ### It's essential to look beyond automation alone While Digits leads with a truly AI-native engine, it also outperforms traditional solutions like QuickBooks Online in other critical areas — like collaboration, user access, reporting, and real-time visibility. ### Everything that keeps your firm moving Accounting software should do more than keep the books. Compare reporting, collaboration, client onboarding, firm operations, and the tools that help teams scale. QuickBooks Xero Puzzle Firm Dashboard **One dashboard for every client.** The Firm Dashboard shows clients, open Checklist items, filters, search, and accounts that need attention, with badges updating as work is resolved. Accountant Suite gives firms a central view of QuickBooks clients, files, tasks, dashboards, alerts, workflows, and AI-assisted firm tools. Practice Manager gives visibility into jobs, workflow, time, WIP, billing, invoicing, and practice operations. Firm admin tools support team management, client access, and firm-wide resources, while accounting visibility centers on AI accounting, close, and review workflows. Client Reporting **Reporting is built for recurring client delivery.** Scheduled packages, custom dashboards, financial statements, management reporting, and dimensions live in the ledger. QBO Advanced supports advanced reporting, classes, locations, projects, custom fields, and Accountant Suite dashboards depending on setup. Xero includes reports, dashboards, tracking categories, projects, KPI analysis, cash-flow tools, benchmarking, and multicurrency reporting. Puzzle offers financials, insights, custom reports on higher plans, plus classes, departments, and projects for startup-focused reporting. Unified Platform **One platform for the firm's accounting work.** Digits brings together the ledger, AI bookkeeping, AI reconciliation, Agentic Close, Quality Control, schedules, reporting, dimensions, and client workflows into one platform. QuickBooks client files plus Accountant Suite, Books Close, Payroll, Bill Pay, Time, Payments, reporting, and apps depending on workflow. Xero client files plus Practice Manager, Workpapers, partner tools, reporting, and apps depending on firm needs. AI accounting and close platform with reporting and review workflows. Broader firm operations may depend on plan scope and integrations. Client Setup Migration **Guided setup supports every client path.** Firms can start fresh, import from QuickBooks, or migrate from another platform into a consistent Digits workflow. Migration tools and Accountant Suite help move clients into QuickBooks, though setup spans individual QuickBooks files and firm-level tools. Xero supports client conversion through migration services, partner resources, and setup workflows, with firms managing onboarding. Puzzle supports migration from QuickBooks and other platforms, with timing and implementation depending on client complexity. Firm Client Collaboration **Client requests stay tied to the books.** Client portals, comments, and action items live inside the accounting workflow. Available on the go via the Digits iOS mobile app. Accountant Suite centralizes client requests, tasks, workflows, and client data across QuickBooks files. Partner tools support client records, jobs, tasks, billing, compliance, and communication workflows. Provides a central inbox for firm/client requests, with collaboration tied to AI Close, review workflows, and accounting execution. Client Billing Seats Roles **Unlimited team seats with centralized firm administration.** Core Plus includes team access, role-based permissions, and central client administration, so firms can manage staff and client work from one place. Client subscriptions can be accountant-billed, client-billed, or split-billed. Access inside each QuickBooks file varies by plan, with Accountant Suite roles and controls. Firms can hold the billing relationship for client subscriptions. Xero business plans have no per-user license fees; partner and practice-management access depend on tier and permissions. Firm pricing is custom. Team access, client access, permissions, and user groups are managed through firm admin tools, with seat packaging varying by plan. ### Trusted by thousands of startups, small businesses, and accounting firms ### Which Platform Is Right for You? **Digits — Is best for:** - Accounting firms that want AI-native accounting – close, reporting, client work – in one tool. - Practices that want to spend less time on review because Digits learns from firm decisions across clients. - Teams that want to use their firm’s brand on client-ready reporting, dashboards, portals, and collaboration. - Partners who want visibility into AI performance, open exceptions, and capacity gains across every client. **QuickBooks , Xero & Puzzle — QuickBooks may be better for:** - You prefer a broad partner ecosystem over consolidating AI accounting and firm workflows in one platform. - Your firm is deeply invested in the Intuit ecosystem across tax, payroll, payments, and client files. - Your team prefers familiar QuickBooks workflows and is comfortable managing close through tasks and review. - You’re willing to work across Accountant Suite, Books Close, apps, and plan-based client access. - You’re comfortable with AI assistance layered into traditional workflows without published transaction-categorization benchmarks. - Your firm is standardized on Xero Practice Manager, Workpapers, tracking categories, and partner workflows. - Your team is comfortable with traditional month-end workflows supported by reports and reconciliation tools. - You prefer a broad partner ecosystem over consolidating AI accounting and firm workflows in one platform. - You like your AI Close with training wheels: prompts, rules, checklists, and approvals instead of firm-trained automation that learns from your accounting decisions. - Your firm focuses heavily on startup accounting and wants AI-assisted bookkeeping and close workflows. - Your team is comfortable refining AI prompts and rules as part of transaction categorization and review. - Your firm is comfortable evaluating AI claims without published categorization benchmarks or training transparency. ### Frequently asked questions **Which platform has the strongest AI accounting engine for firms?** Digits uses proprietary accounting AI inside the ledger, with company, global, and firm models included in Core Plus. Xero and QBO use AI features across their accounting and firm tools, while Puzzle markets AI accounting and AI close workflows. The key difference is whether AI is built into the ledger and firm model or layered across connected workflows. **Which platform is best for automated and consistent Quality Control checks?** Digits Core Plus includes Agentic Close with Advanced Quality Review Agent. Firms can describe checks in plain English, and Digits turns them into deterministic checks that run consistently across the books. Xero and QBO support review through accounting workflows, workpapers, reports, anomaly detection, and firm tools. Puzzle supports AI close and review workflows, with packaging depending on the plan or firm setup. **Which platform is best for month-end close workflows?** Digits Agentic Close automates reconciliation, Quality Control checks, schedules, and scheduled reporting in one firm bundle. QBO’s month-end close workflow is built around Accountant Suite and Books Close. Xero firms may rely on Practice Manager, Workpapers, and the firm process. Puzzle offers AI Close and accounting automation, with firm packaging that may vary. ## Digits — Welcome to Digits! URL: https://digits.com/accountants/confirm/ ### Welcome to Digits! ###### We're thrilled you're here. Digits is built for firms that are ready to build AI-native practices and leave the tedium behind for good. Get up to speed with a quick walkthrough from Jason Staats. 👇 ###### Ready to go? Start adding clients to experience the future of accounting. [Get started](https://my.digits.com/join/accountant?_dd_s=aid=e16971e9-1b51-4e32-8fc5-a35254a1f230&logs=1&id=71bfe6f8-6e09-4466-9606-40f5485fce79&created=1776788863325&expire=1776789763351) #### 67% increase in client engagement Matt Gardner CEO, Hiline #### 100x faster cleanup Christopher Craig Owner, The Tax Firm ## Become a Partner Firm URL: https://digits.com/accountants/partner/ #### 67% increase in client engagement Matt Gardner CEO, Hiline #### 100x faster cleanup Christopher Craig Owner, The Tax Firm ## Digits — Thanks for your interest in Digits! URL: https://digits.com/accountants/success/ #### Thanks for your interest in Digits! ###### To make sure everyone gets a 5-star experience, we've moved to guided demos. It's quick, it's free, and after just 15 minutes you'll walk away with answers to your most burning questions and a demo account to explore on your own! [See Digits in action](https://scheduler.default.com/digits/firm-sales/demo) #### 67% increase in client engagement Matt Gardner CEO, Hiline #### 100x faster cleanup Christopher Craig Owner, The Tax Firm ## Digits — Thanks for reaching out! URL: https://digits.com/accountants/waitlist/ #### Thanks for reaching out! #### 67% increase in client engagement Matt Gardner CEO, Hiline #### 100x faster cleanup Christopher Craig Owner, The Tax Firm --- # Integrations & Security ## Connect and forget URL: https://digits.com/integrations/ Direct API integrations with preferred financial tools means with Digits your business always has accurate and up-to-date accounting. ### Your financial data. Always on. Always accurate. Digits Connect API seamlessly integrates with 12,000+ financial institutions, giving you real-time visibility into the metrics that matter—without delays or manual work. ### Native integrations with best-in-class platforms. #### Mercury Banking #### Ramp Expense Management #### Gusto Payroll and Benefits #### BILL Financial Operations #### Stripe Payments #### Arc Banking #### Ignition Revenue & billing #### Karbon Practice management #### Reach Reporting Financial reporting #### Mercury Banking #### Stripe Payments #### Arc Banking #### Mercury Banking #### Stripe Payments #### Arc Banking #### Mercury Banking #### Stripe Payments #### Arc Banking #### Reach Reporting Plus over 12,000 more financial institutions. ### Build on the AGL® Create integrations on Digits AI-native general ledger that interprets, categorizes, and records financial data automatically. [Learn more](/api) --- # Developer & API ## Accounting — you can build on. URL: https://digits.com/api/ Built for teams who expect more from accounting integrations. [Get started](https://my.digits.com/join/developer) [Explore the API docs →](https://developer.digits.com/) Introducing ### Digits Connect API The Digits Connect API gives you programmatic access to the AGL® — our AI-native general ledger. #### Built for Builders Legacy accounting APIs expect you to sync charts of accounts, build mapping UIs, and handle duplicates. Digits replaces all of that with a single, intelligent API. #### Open, flexible, and intelligent by design. Digits doesn’t believe access should come with strings attached. Just clean, open, developer-first accounting infrastructure. - No partner fees. - No paywalls. - No marketplace restrictions. ### Digits MCP server Connect Digits to ChatGPT, Claude, Cursor, or any MCP-compatible tool. Work from real-time, structured financial data. - ### Analysis Your AI works from real-time data. The AGL® auto-books and reconciles continuously, so every answer starts from clean, current financial data. - ### Retrieval Structured data your AI can actually use. AI works with consistent entities for accurate aggregation and reliable answers. - ### Automation Turn your financial data into repeatable workflows. Power recurring reports, variance alerts, and board-ready financial packages using real-time data. #### Your AI is only as good as your ledger. Start with Digits. [Get started](https://help.digits.com/firms-connections/digits-mcp-claude) #### What You Can Build #### Sync bills, invoices, and transactions Ingest bills, invoices, card transactions, and bank activity into a single general ledger with automatic balancing and categorization. #### Build custom accounting dashboards Use structured ledger data to power custom dashboards, reporting, and financial views inside your product or internal tools. #### Automate categorization and vendor cleanup Convert raw transaction feeds into clean accounting records with resolved vendors and consistent categorization. #### Add accounting features to your product Embed accounting workflows, financial insights, and ledger-backed functionality directly into your application using the Digits Connect API. ### Everything you expect from a modern API — built for financial data. - ### AI-native categorization No custom mapping logic — the AGL interprets and classifies automatically. - ### Vendor enrichment Send raw descriptions, and Digits researches, identifies, and hydrates vendor details. - ### Idempotent writes Send safely and repeatedly — no duplicates, ever. - ### Consistent schemas Predictable, typed responses across endpoints. - ### Full OpenAPI spec & sandbox Generate clients, test freely, and deploy with confidence. --- # Compares & Alternatives ## Digits was built for AI. Others just bolt it on. URL: https://digits.com/compare/ See how the Digits Agentic General Ledger™ compares to the platforms still catching up. [Compare now](#compare-grid) ### Join hundreds of small businesses and accounting firms who have switched to Digits [View case studies](/case-studies/) ### See how Digits compares Pick your current software to see a side-by-side breakdown [Digits vs. QuickBooks ](/compare/quickbooks/)[Digits vs. Xero ](/compare/xero/)[Digits vs. Rillet ](/compare/rillet/)[Digits vs. Campfire ](/compare/campfire/)[Digits vs. Kick ](/compare/kick/)[Digits vs. Zoho Books ](/compare/zohobooks/)[Digits vs. DualEntry ](/compare/dualentry/)[Digits vs. Fincent ](/compare/fincent/)[Digits vs. Finta ](/compare/finta/)[Digits vs. SoftLedger ](/compare/softledger/)[Digits vs. Uplinq ](/compare/uplinq/)[Digits vs. Everest Systems ](/compare/everest-systems/)[Digits vs. Double ](/compare/double/)[Digits vs. FreshBooks ](/compare/freshbooks/)[Digits vs. Botkeeper ](/compare/botkeeper/)[Digits vs. Puzzle ](/compare/puzzle/) ### Beyond the AI hype Purpose-built AI for accounting. Proven at scale. Trained on $ 875 B+ in real small-business transactions. Not generic LLMs. Purpose-built accounting agents and models. Automates 95 % of your bookkeeping — so most transactions never require your attention. Outperforms 100 % of frontier LLMs on double-entry accounting tasks. Tested. Measured. Published. ### Simple to start. Powerful at scale. Connect your accounts and Digits begins categorizing, reconciling, and closing automatically — no rules to build, no seat limits, no operational overhead. - **Set up in minutes** Not weeks of building rules and configurations - **AI that does the bookkeeping** Categorizing, reconciling, reviewing, closing, 24/7 - **Unlimited users** Partners, staff, auditors, CFOs, no seat caps - **Accounting software that works for you** Fundamentally better workflows that save you both time and money #### Digits beats the worldʼs best LLMs We benchmark Digits against the world's leading frontier models—and publish the results. No other accounting platform does. Digits AGL®: 97.8% OpenAI:GPT-5.5: 76.6% ZAI:GLM-5: 72% ### Frequently asked questions 5 out of 5 stars • **5 stars** on Product Hunt ## Digits vs. Botkeeper URL: https://digits.com/compare/botkeeper/ Which accounting platform is best for modern businesses & firms? ### The pace of modern finance **doesn't wait** for rules, clicks, and month-end marathons. Digits is an AI-native accounting platform that reconciles to bank statements automatically, turns financials into live dimensional dashboards, and unlocks unlimited collaboration—no rules, no scripts, no seat limits. ### What we compare Where AI actually does the work, how teams collaborate, which reports drive decisions, and what you'll really pay. **Digits Core** $100/mo vs. **Botkeeper** $149/mo Features change—verify on vendor pages. ### Built for AI, not before AI | Feature | Digits Core $100/mo | Botkeeper $149/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | AI-assisted automation layer that works on top of QuickBooks or Xero, rather than replacing the ledger. Public materials focus on workflow and review-queue automation, with limited detail on model training or benchmarking. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Pulls GL data from QBO/Xero and matches to statements/feeds with confidence scoring. Discrepancies go to side-by-side review; reconciliation is finalized after | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No ledger-level Q&A assistant is clearly described in public materials. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Flags “needs review” items using confidence scoring and an exception report (e.g., duplicate, missing/uncategorized, unreconciled), with audit logging. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Shows close status and flags anomalies/exceptions, but close is user-run—more “work the queue” than an automatic close draft triggered by statement arrival. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Automation runs alongside an external system of record (QBO/Xero). Accuracy depends on keeping both systems aligned, and competing AI across layers can introduce inconsistency in categorization, matching, and reconciliation. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Less data entry, but expect ongoing upkeep across two systems (QBO/Xero + the automation layer), plus review queues and exception cleanup. | ### More than automation. Built for scale. If you're comparing platforms to find the best AI accounting software, don't stop at task automation. Digits' Agentic General Ledger™ is built for real-world finance teams—collaboration, scalable user access, and real-time reporting you can actually operate on. ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Botkeeper $149/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | $149/month per license (1 client/entity). | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | In-product collaboration is enabled through an activity hub and comments on tasks, documents, transactions, reconciliations, and review items. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Works with QuickBooks Online/Xero as GL—dimensions depend on connected accounting software capabilities. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Firm-level dashboards (Firm Insights, close tracking) plus embedded Reach Reporting with templates, branding, and dashboards. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Smart Connect fetches bank/card statements from 4,600+ financial institutions; bank data provider isn’t disclosed publicly. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Designed to operate alongside QBO/Xero (and tools like BILL), with optional add-on services for additional coverage. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | AP/AR workflows live in the underlying ledger/connected tools; a native bill pay + invoicing workflow isn’t clearly described as part of the core license. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - One ledger-native system of record—books, statement-tied bank recs, dashboards, and AP/AR in one place - Always-current books—exception-only review instead of month-end cleanup and manual tie-outs - Trusted automation plus firm-ready economics with unlimited users per client, partner discounts, and predictable pricing **Botkeeper Botkeeper $149/mo — May be better for:** - Practices that want to keep the GL in QBO/Xero—even if it means stacked software costs, added oversight, and dueling automation - Firms willing to trade efficiency for familiarity: monthly close tracking + exception reports instead of always-current, statement-tied books - Buyers comfortable with “AI” positioning without published training data or benchmark methodology ## Digits vs. Campfire URL: https://digits.com/compare/campfire/ ### What we compare **Digits Core** $100/mo vs. **Campfire** Contact Sales ### Built for AI, not before AI | Feature | Digits Core $100/mo | Campfire Contact Sales | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | AI-first ERP with a proprietary accounting model (LAM) trained on accounting data, but it doesn’t clearly publish a comparable benchmark methodology and results. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Closer to a traditional close workflow with AI assist: it flags discrepancies during reconciliation, but you still draft and approve the reconciliation. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | Ember answers questions from your accounting data and can draft outputs like journal entries and custom reports. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Surfaces discrepancies and unmatched statement transactions with an audit trail and approval. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Close is workflow-driven (tasks/owners/handoffs), with AI helping surface discrepancies during reconciliation. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | AI helps surface variances and discrepancies. Review is handled through close workflows rather than clearing a small set of flagged exceptions. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Automation reduces transaction-matching busywork, but ongoing effort is still close-workflow driven: teams manage tasks, owners, handoffs, and review steps to finish the period. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Campfire Contact Sales | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Pricing and seat terms aren’t publicly disclosed. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Collaboration is centered on close management—task tracking, ownership, handoffs, and timeline visibility. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Segment reporting by entity, department, or customer, with custom reporting for dimensions. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Pivot-table reporting; broader KPI/board reporting varies by module (Core vs Revenue Automation). | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Bank integrations connect accounts, but supported banks and the data provider aren’t publicly disclosed. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Split across two products (Core Accounting + Revenue Automation), so what you get depends on which modules you buy. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Not one product, and not clearly AI: invoicing requires Revenue Automation, while Core handles AR/AP subledgers. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Growing businesses and firms that want clear, upfront pricing and predictable packaging - Users who care about transparency in how automation is built, trained, and validated - Businesses across any industry—from self-serve operators to accounting firms **Campfire Campfire Contact Sales — May be better for:** - Organizations that don’t need a price list upfront and are comfortable with sales-led pricing - Teams that want to choose modules (Core Accounting vs. Revenue Automation) instead of a single bundled product - Buyers who are fine with limited public benchmarking and training detail for LAM beyond high-level claims ## Digits vs. Double URL: https://digits.com/compare/double/ ### What we compare **Digits Core** $100/mo vs. **Double Scale** $50/mo + the cost of the underlying ledger ### Built for AI, not before AI | Feature | Digits Core $100/mo | Double Scale $50/mo | | --- | --- | --- | | System of Record | Digits is the ledger and accounting system of record. | Double sits on top of QBO, Xero, Sage, NetSuite, or another ledger with two-way sync. | | AI Engine Type | AI isn’t a feature; it’s the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Proprietary models built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Uses third-party AI model providers — Anthropic, OpenAI, and Google — with data synced from the client’s existing accounting system. The AI works from synced ledger data, not from inside the ledger where the books are created, reconciled, and reviewed. Public docs do not disclose an accounting-specific model or benchmark methodology. | | AI Bank Reconciliations | Digits automatically and continuously reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review, so you can trust your numbers without doing the busywork. | Reconciliation still happens in QuickBooks, with help from a Chrome extension. Can auto-clear transactions, analyze differences, and sync completed reports back. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | In-app AI chat for QuickBooks-connected clients only. Can query connected ledger data plus tasks, questions, documents, and workflow context. QuickBooks already includes native Intuit AI for transactions, book review, reconciliation assistance, and report insights. | | Exception Flags/ Quality Control | Flags issues with transactions during reconciliation, like missing, duplicates, overmatches, and mismatched dates. Quality Control adds automated checks for missing fields, miscoding, duplicates, unusual activity, account validity, schedules, and vendor changes. | Flags missing fields, uncategorized transactions, parent-account coding, missing attachments, inconsistencies, and duplicate entities. Review happens around the connected ledger. | | Quality Control Approach | Describe a Quality Control check in plain English. Digits writes deterministic software, and that software runs the same way across your entire financial history, on every transaction, every time. | Custom checks require more manual setup: teams build transaction review reports by setting filter criteria for month-end close. Public docs do not show automated logic running across new, edited, and historical transactions. | | Close Cadence | As soon as statements arrive (uploaded or auto-fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Month-end close is managed through recurring close tasks, file review reports, account rec tasks, and final review. Work progresses through task completion rather than statement-triggered auto-drafted reconciliation. | | Controls & Accuracy | AI does the routine work, you manage the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review, so teams move from preparing the close to reviewing and approving it. | Accuracy depends on the underlying ledger and the firm's checklist discipline. Double standardizes the review process, but categorization and reconciliation accuracy are inherited from QuickBooks Online or Xero. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Reduces close effort by centralizing review, client requests, receipts, bank feeds, accruals, AI journal entries, and practice workflows. Still requires firms to manage the underlying connected ledger; expect manual data refreshes when work occurs in both systems at once. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Double Scale $50/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Unlimited users are included in Double. Billing is by connected client, but the underlying ledger system/tool may still have its own user limits or fees. | | Collaboration | Collaboration lives where the accounting work happens — comments on transactions, reports, and categories, plus shared dashboards, portals, and a Checklist for action items. | Provides workflow tools like client requests, reminders, inbox, email-linked tasks, time tracking, and team management. Collaboration sits around the connected ledger. | | Dimensions/ segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Can review fields from the connected ledger, like classes, locations, customers, vendors, and accounts. Segmentation still depends on what’s available in the underlying ledger. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Provides reports and close views, including P&L, Balance Sheet, Cash Flow, aging reports, Final Review, AI Flux explanations, and firm-level close visibility. Reporting depends on connected ledger data | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Supports bank/card feeds for AI-assisted categorization, review, and posting to the connected ledger. Works from transactions already coded in the connected ledger; items still sitting in the QuickBooks or Xero bank feed must be classified or accepted in that system before they're visible in Double. | | Ecosystem | All-in-one AI accounting with Connect API — core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Connects to QBO, Xero, Sage, NetSuite, and other ledgers to manage close, receipts, reports, client requests, and AI workflows. Strong for existing stacks, but still adds another system around the ledger. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Can generate and post bills, invoices, and related transactions to the connected ledger. AR/AP workflows remain in the underlying system. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Firms that want proprietary accounting AI inside the ledger, not third-party AI reading synced ledger data - Teams that want bookkeeping, reconciliation, reporting, and review in one tool - Firms that want custom, automated Quality Control checks that run the same way across clients and periods **Double Double Scale $50/mo — May be better for:** - Firms want to keep QBO or Xero and add review, close, and client workflow tools around it - Firms that want custom, automated Quality Control checks that run the same way across clients and periods - Practices are comfortable adding another system to manage close workflows around existing client books ### Frequently asked questions **What is the main difference between Digits and Double?** The main difference is that Digits is the ledger, while Double sits on top of another ledger, like QuickBooks, Xero, Sage, or NetSuite. Digits brings AI bookkeeping, reconciliation, reporting, and Quality Control into one accounting system. Double adds review, close, client workflow, and AI tools around an existing accounting system. **Which is better for accounting firms, Digits or Double?** Digits is better for firms that want an AI-native ledger, automated reconciliation, and custom Quality Control checks that run the same way across clients and periods. Double may be better for firms that want to keep clients on QuickBooks or Xero and add review, close, accrual, and client workflow tools around those ledgers. **Is Double cheaper than Digits?** Double Scale is listed at $50/month, while Digits Core is $100/month. However, Double also requires the cost of the underlying ledger, such as QuickBooks or Xero. Digits includes the ledger itself, so the better comparison is Digits Core vs. Double Scale plus the connected accounting system. **How is Digits Quality Control different from Double’s review reports?** Digits Quality Control lets firms describe checks in plain English, then turns those checks into deterministic software that runs the same way across current and historical books. Double provides review reports, variance checks, AI variance explanations, and issue lists, but public docs do not show automated logic running across new, edited, and historical transactions. **Do I still need QuickBooks or Xero to use Double?** Yes. Double isn't a ledger; it connects to QuickBooks Online, Xero, Sage, or NetSuite and works from the data in that system, which stays your system of record. The bank feed, reconciliation, and the books themselves live in the connected ledger, and Double adds review, close, and client-workflow tools around it. Digits is the ledger itself, so AI bookkeeping, reconciliation, reporting, and Quality Control all happen in one system — with nothing underneath it to maintain or pay for separately. ## Digits vs. DualEntry URL: https://digits.com/compare/dualentry/ ### What we compare **Digits Core** $100/mo vs. **DualEntry** Contact Sales ### Built for AI, not before AI | Feature | Digits Core $100/mo | DualEntry Contact Sales | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Markets “AI Accounting Intelligence.” Public pages don’t share training/benchmark methodology, and the base plan doesn’t clearly itemize which AI features are included. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Auto-matching, not auto-reconciliation. Matches transactions, but doesn’t keep accounts continuously reconciled to statements end-to-end. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | AI copilot for insights and quick answers (“TL;DR”), positioned mainly for analytics and decision support—not a ledger-wide Q&A assistant embedded across every workflow. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Flags anomalies/unmatched items with audit trails, but doesn’t clearly publish standardized exception labels or post-match review requirements. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Workflow-driven—close checklists, review notes, sign-offs/tie-outs, and period locking—plus “tracked” reconciliation, rather than a statement-triggered, auto-drafted close. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Controls are built into the close workflow—roles/permissions, approvals, sign-offs/tie-outs, balance-change alerts, period locking, and audit trails—with AI positioned as assistive within those guardrails. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Cuts manual effort, but not the process—teams still confirm suggested matches, clear exceptions, and complete close workflows. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | DualEntry Contact Sales | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | 3 full-access users + 5 view/approve users listed for the base plan. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Collaboration is mostly workflow-based—close checklists, task visibility, review notes, and sign-offs/tie-outs—rather than shared dashboards, firm/client portals, or an action-items inbox. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Segmentation uses custom classifications and custom fields (tags), rather than named dimensions like Departments/Locations. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Includes built-in reporting with custom reports and scheduled report delivery in the base plan. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Includes live bank feeds; the bank data provider isn’t specified publicly. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | ERP packaging model: core modules are included up front, but key capabilities expand through tier upgrades and add-ons. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | AP and AR are included in the base plan; subscription billing and revenue recognition are listed in higher tiers/add-ons. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Exception-only close at scale—AGL auto-books and reconciles so staff time goes to review, not prep - Always-current books reduce rework—stop chasing month-end cleanup and spreadsheet tie-outs - Fast onboarding in minutes so you can migrate clients quickly and standardize workflows firm-wide - Built-in firm/client collaboration (comments, shared views, portals, action items) keeps work moving - Unlimited users per client—no seat caps for partners, staff, clients, CFOs, or auditors **DualEntry DualEntry Contact Sales — May be better for:** - Firms that prefer a checklist-driven close—tasks, sign-offs, and review notes every period - Orgs relying on auto-matching plus exception queues, not continuous statement-tied reconciliation end-to-end - Practices that can operate within seat caps and upgrade when they need more full-access users - Buyers fine with “AI” positioning without published training data or benchmark methodology - Teams willing to navigate tier/add-on packaging where capabilities (including AI) aren’t itemized upfront ## Digits vs. Everest URL: https://digits.com/compare/everest-systems/ ### What we compare **Digits Core** $100/mo vs. **Everest** Contact Sales ### Built for AI, not before AI | Feature | Digits Core $100/mo | Everest Contact Sales | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | AI agents you can run or build using natural-language prompts. No public benchmarks or training details; the AI you get depends on which modules you buy. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Intercompany balancing/validation is marketed as AI-driven reconciliation, but the public details read more like rules and validation than AI doing bank-style statement reconciliation. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | Pre-built and custom AI agents you can run or build with prompts. Positioned as workflow automation inside the ERP, not a single ledger Q&A assistant. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | AI agents surface anomalies and generate flux/variance explanations, but public pages don’t spell out standardized exception flags. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | AI can assist with close tasks (reconciliations + flux analysis), but the close is still driven by finance workflows (journals, validation, posting). | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Control comes from ERP guardrails—traceability, validation checks, and audit-ready reporting (including ASC 606). AI is positioned as an assistive tool; teams still review and approve outputs. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Lower effort after implementation, but not plug-and-play. Expect an ERP rollout with ongoing configuration and governance across modules, workflows, and AI agents. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Everest Contact Sales | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | User/seat limits and pricing aren’t published. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Collaboration features, such as in-line comments, portals, and action-item inbox, aren’t clearly described publicly. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Multi-entity and multi-book segmentation, with consolidation/elimination and drill-down across entities. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Real-time dashboards for revenue/finance reporting with drill-down; custom reports and insights via AI agents using natural-language prompts. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Supported banks, bank-feed coverage, and data providers aren’t clearly published. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Modular ERP suite sold via demo (module-based packaging + implementation), rather than a single all-in-one accounting plan. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Invoicing and revenue recognition are emphasized; AP/bill pay workflows aren’t clearly described on public pages. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Fast setup in minutes—not weeks—plus AI that keeps books current for a lighter, faster close - Firms and CFOs who want real-time dashboards and dimensions—without the cost and complexity of an ERP rollout - Teams that want clear, predictable pricing ($100/month) plus firm discounts—vs. sales-scoped, module-based contracts **Everest Everest Contact Sales — May be better for:** - Teams comfortable with limited public detail on bank-statement reconciliation specifics and AI benchmarking - Teams willing to pay for AI mostly focused on reporting/flux insights—and accept heavy ERP rollout overhead and governance - Orgs okay with sales-led scoping where features vary by module and contract (not posted pricing) ## Digits vs. Fincent URL: https://digits.com/compare/fincent/ ### Built for AI, not before AI | Feature | Digits Core $100/mo | Pro Plan $189/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Service-led bookkeeping with an LLM-upgraded, self-hosted auto-categorization engine. Shares workflow + accuracy claims, but not training data details or benchmark methodology. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Transactions are matched to statements, discrepancies are flagged, and final sign-off happens through manual review. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No AI assistant is clearly described on public pages. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Flags items that need review, but doesn’t clearly spell out standardized exception labels or whether only exceptions are reviewed. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | A dedicated bookkeeper closes the books each month and delivers monthly financial statements. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Rules + AI suggestions, with review on uncertain items to ensure accuracy. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Low day-to-day effort because it’s service-backed, but you should expect ongoing back-and-forth coordination to finalize. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Pro Plan $189/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Seat/user limits aren’t clearly specified on public plan details. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Collaboration is centered on a dedicated bookkeeper (messaging + status tracking), with transaction notes/attachments. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Segmentation isn’t listed for the Basic plan; project tracking and deeper customization appear in higher tiers or add-ons. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Includes a dashboard, financial insight reporting, and monthly financial statements. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Connects bank accounts (and cards), but doesn’t publicly list total bank coverage or the underlying bank data provider. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Service-led model that works alongside your existing tools, with add-on services, rather than an all-in-one workflow handled entirely inside the software. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Bill pay and invoicing aren’t listed as included in Basic; they’re shown under higher tiers/features. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Businesses that want AI-first accounting that keeps the books current automatically with less reconciliation and close busywork - Modern firms and CFOs who need real-time dashboards, dimensions, and collaboration built into the workflow - A flexible ownership model—run Digits self-serve, bring your accountant, or get matched with a Digits partner when you need managed bookkeeping **Fincent Pro Plan $189/mo — May be better for:** - Teams that are okay with a more traditional month-end cadence, where reconciliation and close progress through human review rather than staying current automatically - Founders who don’t need deep in-product collaboration and dimensional reporting - Organizations that are okay relying on add-on services and coordination instead of an all-in-one platform ## Digits vs. Finta URL: https://digits.com/compare/finta/ ### What we compare **Digits Core** $100/mo vs. **Finta Growth** $300/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | Finta Growth $300/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Auto-categorization, smart suggestions, and rules-based workflows. Doesn’t publicly share training data, evaluation metrics, or benchmark details behind these automations. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Transaction matching and transfer reconciliation for bank transfers; broader statement-style reconciliation isn’t clearly detailed. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No AI assistant described publicly. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Gives “smart suggestions” when unsure, but doesn’t clearly describe standardized exception flags or an audit-trail-based exception review flow. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | More like a traditional close: ongoing bookkeeping with transaction matching and transfer reconciliation, rather than an automatically drafted, statement-triggered close. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Accuracy is driven by rules and human review. Automation handles the basics, then people confirm or choose from suggestions when the system isn’t confident. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Designed to stay low-effort day to day (automation handles the basics), but you should expect ongoing human review of exceptions plus rule maintenance to keep categorization accurate. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Finta Growth $300/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Seats/user limits aren’t publicly specified; plans are primarily tiered by usage limits and support level. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | User collaboration features aren’t clearly described publicly. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Includes Departments only. Other dimensions (locations/projects/classes) aren’t clearly listed on the pricing page. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Dashboards with real-time metrics, insights on changes, and downloadable financial statements. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Connects bank accounts (examples shown include Chase), but public pages don’t specify total bank coverage or the underlying data provider. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Integration-first: connects to existing finance tools and consolidates that data. Broader offering is positioned as bookkeeping plus tax services, though tax is outside the accounting feature comparison. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Bill pay and invoicing aren’t clearly described as built-in workflows on the public site. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Companies that want true automation built into the ledger to cut reconciliation and close busywork while keeping books current - Firms and CFOs who need real-time dimensional reporting and collaborative workflows - Businesses that want clearly defined features and AI you can rely on as they scale **Finta Finta Growth $300/mo — May be better for:** - Startups that don’t need a clearly defined, statement-driven monthly close workflow - Very early-stage companies that can stay within lower transaction limits - Teams that are okay with less clarity around feature sets and limited public detail on how AI is trained or used ## Digits vs. FreshBooks URL: https://digits.com/compare/freshbooks/ ### What we compare **Digits Core** $100/mo vs. **FreshBooks Premium** $70/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | FreshBooks Premium $70/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Cloud accounting and invoicing software with automation across recurring invoices, payment reminders, bank imports, and receipt capture, plus AI-assisted invoicing, expense categorization, and time tracking. Automated bookkeeping is available through a core plan plus a partner integration — not a single ledger-native, agentic accounting engine. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Bank transactions update through connected feeds, and FreshBooks suggests likely matches. Users still review and confirm the work, making this an assisted bank rec workflow rather than continuous AI reconciliation that clears activity in the ledger. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No conversational AI assistant or copilot is offered. There’s no feature that answers free-form questions across your data or queries the ledger in natural language. Help comes from human support, the Help Center, and standard reports you run yourself. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | During bank reconciliation, users review suggested matches, unmatched transactions, and items that need attention before confirming the work. | | Close Cadence | As soon as statements arrive (uploaded or auto-fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Close remains user-driven. Bank transactions update through connected feeds, helping users stay organized throughout the month, but users still review, match, and reconcile activity themselves. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Users review imported transactions, confirm likely matches, and reconcile accounts to keep reports accurate. The control model is still review-based, not AI-led bookkeeping, where routine activity is handled automatically and only exceptions surface. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. No add-on bookkeeping plan, and no year-end catch-up. | Mostly human-driven. Automation reduces manual work across invoicing, payments, expenses, and bank imports, but users still review transactions, confirm matches, reconcile accounts, and manage the close. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | FreshBooks Premium $70/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Premium is $70/month with unlimited billable clients, but extra team members cost $11/month per person | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Collaboration supports client accounts, project comments, file sharing, team access, and accountant access across invoice and project workflows. | | Dimensions/ segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Tracks work by clients, projects, and expense categories. Useful for service businesses, but not built around departments, locations, or class-style accounting dimensions. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Includes a business dashboard, standard financial reports, and CSV/PDF exports. Users can hide or reorder dashboard sections, with reporting organized around preset financial and business views. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Bank and card transactions can import automatically through third-party bank connectors like Plaid, Yodlee, and Salt Edge. Users may still need to refresh connections, re-verify accounts, or import CSVs when transactions are missing. | | Ecosystem | All-in-one AI accounting with Connect API — core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Covers core small business accounting, invoicing, expenses, payments, and receipt capture in one platform. Growing teams may rely on paid add-ons and app integrations for broader workflows. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Includes customizable invoices, recurring invoices, automated payment reminders, online payments, deposits, proposals, retainers, Accounts Payable, bill tracking, and bill receipt capture. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Businesses that want agentic AI accounting to keep books current with less reconciliation and close work - Firms and CFOs that need real-time dashboards, dimensions, and collaboration in one accounting workflow - Growing teams that want clear $100/month pricing, unlimited users, and no seat-based access creep **FreshBooks FreshBooks Premium $70/mo — May be better for:** - Teams comfortable with hands-on bookkeeping—reviewing bank imports, categorizing, and reconciling each period themselves - Users okay with preset reports and dashboards instead of custom drag-and-drop dashboards or scheduled report delivery - Small businesses that want straightforward invoicing and expense tracking without advanced AI accounting workflows ### Frequently asked questions **What are the main differences between Digits and FreshBooks?** Digits and FreshBooks take very different approaches to accounting. Digits is an agentic, AI-native accounting platform that automates bookkeeping, reconciliation, and close workflows directly within the ledger. FreshBooks is accounting software designed primarily for invoicing, payments, expenses, and basic bookkeeping for small businesses and service-based companies. Digits continuously reconciles accounts and surfaces only the exceptions that need review, helping teams keep their books current throughout the month. FreshBooks helps users manage accounting tasks and reconcile transactions, but the process remains largely user-driven. FreshBooks is a strong fit for freelancers and service businesses that prioritize invoicing and client billing. Digits is built for businesses, CFOs, and accounting firms that want AI-led accounting automation, real-time financial visibility, and a faster path to close. **Does FreshBooks use AI for bookkeeping?** FreshBooks Premium uses automation to speed up bookkeeping, but it is not agentic AI bookkeeping. Users still review, match, and reconcile transactions yourself. FreshBooks does offer hands-off automated bookkeeping, but through Kick, a separate paid plan that categorizes and reconciles your books with an accountant review at year-end. It runs alongside FreshBooks, not inside it. Digits is built differently. Agentic AI is part of the ledger itself, so bookkeeping, reconciliation, and close run continuously in your system of record, with no separate bookkeeping plan to buy. ## Digits vs. Kick URL: https://digits.com/compare/kick/ ### Built for AI, not before AI | Feature | Digits Core $100/mo | Kick Plus $100/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Uses bank data and user-defined rules to automate categorization, but it doesn’t publicly disclose the AI engine, how it’s trained, or any performance benchmarks. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Relies on user-built categorization rules and guided, statement-based reconciliation, where you run the process and approve matches—automation helps, but it doesn’t continuously reconcile in the background. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No ledger-wide Q&A assistant is documented; Kick focuses on an ‘Actions’ feed of prompts and recommendations rather than conversational, ledger-native Q&A. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Review-queue suggestions, not exception flags. Kick proposes statement-match fixes (missing/duplicate/date) for approval, and categorization cleanup is mostly filter anything "Uncategorized" and edit. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | You upload statements and Kick generates suggestions, but you must review/accept changes and complete reconciliation for each period—books don’t close until you finish that workflow. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Review-driven controls where accuracy depends on user verification of auto-categorization and reconciliation suggestions, with rules used to enforce consistency over time. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Automation helps, but expect regular review and corrections, plus rule setup/maintenance to keep categorization consistent and close workflows moving. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Kick Plus $100/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Invite teammates/advisors with role-based permissions (accountants/bookkeepers supported). | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Shared workspace access that tracks changes rather than built-in commenting. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Segmentation via Classes for grouping transactions and reporting by category. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Real-time financial insights with downloadable reports and exports. Custom dashboard builder and scheduled delivery not currently documented publicly. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Banks & cards via Plaid, plus direct integrations (e.g., Stripe, Gusto, Ramp, Mercury, PayPal, Relay). | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Oriented around a shared workspace and partner program rather than an all-in-one platform. No API layer, no native bill pay, and no workflow-native inline commenting or custom dashboard builder. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Invoicing via Stripe integration; No native bill-pay workflow. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Businesses and firms that care about transparency in how automation is built, trained, and validated - Organizations that want an all-in-one accounting platform (GL + invoicing + bill pay) with collaboration built into the ledger workflow - Finance teams that want AI-first, exception-based bookkeeping—the system does the work and humans review what’s flagged **Kick Kick Plus $100/mo — May be better for:** - Teams that prefer hands-on bookkeeping with regular review and reconciliation work - Organizations that are satisfied with standard reports and downloads (rather than custom dashboards, branded reports, or scheduled delivery) - Users who are okay with limited public transparency into AI training/benchmarks, making performance harder to evaluate upfront ## Digits vs. Puzzle URL: https://digits.com/compare/puzzle/ Update ### Puzzle has joined Accrual. On September 2, 2026, Puzzle announced that it was acquired by Accrual. [Read the announcement](https://accrual.com/insights/puzzle) ### Frequently asked questions **What is the difference between Digits and Puzzle?** The difference is how the work gets done. Puzzle requires a human to review and post every transaction, while Digits completes bookkeeping work automatically and brings the accountant in only when needed. Puzzle is a governed accounting platform. The AI prepares the work, but a person approves each step. Digits is an [AI-native, agentic platform](https://digits.com/blog/ai-enabled-vs-ai-native-vs-agentic-accounting-software-whats-the-difference/). It categorizes transactions, maintains reconciliations, and keeps financials current in real time. When Digits is confident, it completes and verifies the work automatically. When judgment is required, it surfaces exceptions to the accountant. **Is Puzzle shutting down?** Puzzle's platform for startups and small businesses continues to operate independently under the Puzzle brand. On September 2, 2026, [Accrual announced](https://accrual.com/insights/puzzle) an agreement to acquire Puzzle's accounting-firm technology and business. Accrual described the deal as being about technology, product, and talent rather than consolidating customers. **Who acquired Puzzle?** Accrual. On September 2, 2026, Accrual announced it had entered into an agreement to acquire Puzzle's accounting-firm technology and business. The transaction is expected to close in the coming weeks, subject to customary closing conditions. Financial terms were not disclosed. **What did Accrual acquire from Puzzle?** Puzzle's accounting-firm technology and business, including the AI-native ledger and month-end close products Puzzle built for firms. Puzzle's direct platform for startups and small businesses was not part of the deal. Accrual said it expects to begin incorporating Puzzle's ledger and close capabilities after the deal closes, with broader availability planned by the end of 2026. **What are the alternatives to Puzzle for small businesses?** Digits is an alternative to Puzzle for small businesses looking for more automated accounting. Digits reconciles to bank statements automatically and surfaces only the exceptions that need human review, reducing the manual work required to keep books accurate and up to date. **Can I move my historical books from Puzzle to Digits?** Absolutely! Yes. You can bring your historical accounting data with you when moving from Puzzle to Digits. [How to migrate to Digits from Puzzle](https://help.digits.com/business-getting-started/migrate-to-digits) ## Digits vs. Quickbooks URL: https://digits.com/compare/quickbooks/ ### What we compare **Digits Core** $100/mo vs. **QBO Plus** $115/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | QBO Plus $115/mo | | --- | --- | --- | | AI Engine Type | AI isn’t a feature; it’s the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | AI layered in after the fact. Built on legacy architecture where the core workflow remains user-driven. Intuit Assist supports existing workflows, but posting, reconciliation, and close still require manual review and approval. AI capabilities vary by plan. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Connect accounts to sync transactions, then review, categorize, and reconcile manually as part of regular bookkeeping. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | AI is split across multiple agents and tiers—more to learn, more to navigate, more steps. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | QuickBooks supports bank rules to auto-categorize, which means rules setup and ongoing rule management. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Reconciliation is performed against bank/credit card statements via a step-by-step reconciliation workflow. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from “preparing” the close to approving it. | User-controlled bookkeeping means the accuracy depends on correct categorization and completed reconciliations; accountant access/sharing is supported so a bookkeeper or CPA can help manage the file. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Automation reduces the workload, but ongoing review is still required. Expect regular transaction review/categorization, rule maintenance, and reconciliations on a recurring cadence. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | QBO Plus $115/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Includes up to 5 billable users. Additional users require upgrading or paying extra. | | Collaboration | Built‑in comments across transactions, reports, categories; shared dashboards; and an Inbox to manage action items in one place. | Share your books with an accountant, bookkeeper, or tax pro so they can sign in to QuickBooks Online and help manage your books and reports. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Classes & Locations with a 40 combined cap; Projects included. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | AI P&L insights, anomaly detection & resolution, budgeting in Plus; (advanced KPI dashboards and custom reporting move up to the Advanced plan). | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Robust bank feeds with extensive financial institution coverage. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Intuit markets 800+ integrations. Many apps require a separate subscriptions; optional Intuit add-ons like Payroll/Time/Payments are priced separately. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Supports invoicing and bills/payables; online payments are enabled through QuickBooks Payments, with limits that vary by payment type and setup. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Growing teams that want unlimited users without per-seat pricing - Modern finance teams ready to eliminate manual reconciliation and month-end bottlenecks - Businesses and firms that need real-time dimensional reporting and shared visibility - Organizations prioritizing AI-first accounting that reduces busywork and improve accuracy **Quickbooks QBO Plus $115/mo — May be better for:** - Businesses standardized with the Intuit ecosystem (QuickBooks Payroll, TurboTax, etc.) - Teams that prefer traditional bookkeeping workflows with incremental AI helpers - Organizations that require a broader third-party app marketplace ### Frequently asked questions **How is Digits different from QuickBooks?** QuickBooks is built on legacy architecture with AI layered in after the fact. Intuit Assist supports existing workflows, but posting, reconciliation, and close still require manual review and approval. The core workflow remains user-driven, and AI capabilities vary by plan. Digits is an [AI-native, agentic platform](https://digits.com/blog/ai-enabled-vs-ai-native-vs-agentic-accounting-software-whats-the-difference/) that continuously handles the work of bookkeeping — so accountants can focus on judgment, review, and advisory work. Digits categorizes transactions, maintains reconciliations, and keeps financials up to date as activity happens. When something requires human judgment, it routes it to the accountant. When it can handle the work confidently, it moves it forward automatically and verifies the output before finalizing it. The result is a system where the books stay current, and accountants focus on review, judgment, and advisory work instead of transaction processing. **Is Digits better than Quickbooks for accounting firms?** For accounting firms, Digits is the stronger platform. Digits is built for a different model. It continuously runs the routine accounting work across the firm, so accountants can spend less time on transaction processing and more time on review, judgment, and client advisory work. The system is designed for multi-client operations, and it improves over time as it sees more activity across the portfolio. That difference becomes more important at scale. In a traditional system, like QuickBooks, each new client adds more manual work. In Digits, each correction helps improve performance across the platform, so the system gets stronger as the firm grows. Digits also embeds verification directly into the workflow. Categorization, reconciliation, and validation all happen inside the same ledger system, reducing sync issues between tools and helping firms maintain continuously up-to-date financial records with less manual oversight. The result is a platform designed not just to assist accountants with bookkeeping tasks, but to reduce operational overhead across the entire client portfolio while giving firms more capacity for advisory and higher-value client work. [Become a Digits Partner](https://digits.com/accountants/) **What should I consider when migrating clients from QuickBooks Desktop to Digits?** Migrating from QuickBooks Desktop depends on how your historical data is structured. For firms with long transaction histories or detailed records, migration may be handled in stages to ensure financials remain accurate. Elements like invoices and aging reports often require validation during the process, so reports continue to tie out correctly. Digits works with firms upfront to evaluate their data and workflows, then defines the right migration approach based on complexity and scale. [Become a Digits Partner](https://digits.com/accountants/) ## Digits vs. Rillet URL: https://digits.com/compare/rillet/ ### What we compare **Digits Core** $100/mo vs. **Rillet** Contact Sales ### Built for AI, not before AI | Feature | Digits Core $100/mo | Rillet Contact Sales | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Built around invoice/bill and close workflows; claims proprietary machine-learning models, but doesn’t publicly share how the AI is trained or independently benchmarked. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Auto-matching, not auto-reconciliation. Matches transactions, but doesn’t keep accounts continuously reconciled to statements end-to-end. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | Aura AI pulls insights from the general ledger and supports in-workflow actions, rather than one system-wide Q&A assistant. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | When a clear match isn’t found, it surfaces the most probable matches and recommended actions. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Automation runs within a structured, close workflow (checklist + tasks + docs + approvals), rather than statement-triggered reconciliation the moment statements arrive. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Reduces manual matching, but approvals and close workflows still require review, sign-off, and completing close steps. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Automation reduces manual work, but teams still run close tasks and approvals to finish the period. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Rillet Contact Sales | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Seat pricing isn’t publicly listed. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Workflow-based collaboration: assigned tasks (owners/deadlines), document uploads, and approval steps for review/sign-off. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Custom reporting categories (department/location/project-style segmentation); availability varies by tier. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Real-time dashboards and reporting with exportable charts and close outputs. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Custom bank connections (for larger institutions) plus 12,000+ banks & cards via Plaid. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Integration-led platform; pricing isn’t public, and the Custom API is Enterprise-only—so what you get (and what costs extra) isn’t clear. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Invoicing is included, and payables are supported via AP integrations. Advanced automation and controls (task lists, approvals, etc.) vary by tier. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Growing businesses that want clear, upfront pricing - Teams that care about transparency in how automation is built, trained, and validated - Firms and CFOs who want true bank-statement reconciliation, not just invoice/bill matching **Rillet Rillet Contact Sales — May be better for:** - Companies that are comfortable with sales-led pricing based on scope and complexity - Teams building a central system for finance + ops data with lots of connectors - Organizations that prefer a workflow-driven month-end close (tasks, approvals, docs) ## Digits vs. SoftLedger URL: https://digits.com/compare/softledger/ ### What we compare **Digits Core** $100/mo vs. **SoftLedger Standard** Contact Sales ### Built for AI, not before AI | Feature | Digits Core $100/mo | SoftLedger Standard Contact Sales | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Cloud accounting built for multi-entity and consolidation. Rules- and workflow-driven (not AI-native automation). | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Reconciliation is manual and rules-based—users match, review, and reconcile. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No AI assistant for ledger Q&A. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Rules-based flags for unmatched/anomalous items with audit trails; no AI-driven prioritization. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Close is user-run—real-time reporting helps, but reconciliation and close remain human-driven. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Accuracy depends on manual review, rules, and standard controls; no confidence-based escalation. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Manual workflows drive the day-to-day—more review and process management to keep books current. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | SoftLedger Standard Contact Sales | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Standard plan includes 3 users; pricing is custom (not listed publicly). | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | No native client portal or in-line transaction commenting; collaboration is handled outside the platform or via custom integrations. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Multi-dimensional support, including entities, cost centers, products, jobs, and custom dimensions. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Real-time reporting with a configurable report builder and consolidation views—more report-builder oriented than dashboard-first. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Bank feeds via Plaid. Manual CSV imports and Open Banking APIs are available for custom workflows. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | API-first GL designed to integrate with external tools; bill pay, payroll, and payments are typically handled via integrations. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | AP and AR modules included, but workflows are manual. Payments require integration with external providers. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Always-current books with statement-tied reconciliation that cuts month-end catch-up and rework - Fast onboarding in minutes with real-time dashboards, built-in dimensions, and in-product collaboration - Clear, upfront pricing with predictable packaging as you grow, without sales-scoped complexity **SoftLedger SoftLedger Standard Contact Sales — May be better for:** - Teams that prefer hands-on work, even if it means more manual reconciliation and close effort - Organizations that can operate without custom dashboards and in-product collaboration to keep work moving - Firms and CFOs comfortable with custom-quote pricing and add-ons like API credentials or analytics ## Digits vs. Uplinq URL: https://digits.com/compare/uplinq/ ### What we compare **Digits Core** $100/mo vs. **Uplinq Starter** $250/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | Uplinq Starter $250/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Dedicated bookkeeper + AI: Uplinq includes a bookkeeper on every plan, but doesn’t clearly publish benchmarks or training details for its AI. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Uses AI to match transactions, but a dedicated bookkeeper still reviews and fixes what doesn’t match. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | An AI assistant isn’t clearly documented on Uplinq’s public pages. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Discrepancies are routed to a bookkeeper for cleanup; you step in only when they need clarification. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Monthly financial close isn’t included on Starter; it starts on the Scale plan ($700/mo & up). | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Controls lean on AI and human oversight: automation categorizes and flags issues, with a dedicated bookkeeper responsible for keeping the books clean/complete. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | More hands-off because it’s service-backed: you connect accounts and share docs as needed, and Uplinq’s automation + bookkeeper handle the day-to-day. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Uplinq Starter $250/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | User/seat limits aren’t listed. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Service-led collaboration: a dedicated bookkeeper plus “real-time support” when you need help. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Departments, locations, classes, and projects aren’t listed in Uplinq’s public plan details or documentation. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Real-time dashboard with on-demand transaction reports and P&L, but limited public detail on customization, branding, or scheduled reporting. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | 10,000+ bank integrations, but the provider and supported-bank list aren’t publicly disclosed. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Bookkeeping service + AI software layer that relies on connected accounts and a human bookkeeper. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | The Starter plan doesn’t list invoicing or bill pay. AR/AP support is available at the Scale tier ($700/mo & up). | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Growing firms managing many clients in one platform—unlimited users and built-in collaboration per client - Teams that want clear pricing and validated AI you can trust as you scale - Businesses that want the option to work with a firm—Digits also has an Accounting Partner Program **Uplinq Uplinq Starter $250/mo — May be better for:** - Small businesses that are comfortable with higher monthly spend for a service-led model versus a self-serve platform - Teams okay with a lighter feature set or paying to add more later - Businesses that don’t need a formal monthly close on the Starter plan ## Digits vs. Wave URL: https://digits.com/compare/wave/ ### What we compare **Digits Core** $100/mo vs. **Wave Pro** $19/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | Wave Pro $19/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Automatically imports bank transactions, matches duplicates, scans receipts, and suggests categories based on transaction descriptions and past activity. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Automatically imports, matches, and categorizes some transactions, but reconciliation is still a user-led workflow where you match statement activity to Wave transactions. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No comparable AI assistant is publicly marketed. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | Shows auto-updates for categorized, merged, or receipt-created transactions, plus reconciliation statuses when periods need attention. | | Close Cadence | As soon as statements arrive (uploaded or auto-fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Close is user-led. Users start reconciliation, enter statement details, and match transactions manually or with Wave’s auto-match option. The close is not automatically drafted when statements arrive. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Accuracy depends on user review. Users categorize transactions, review auto-imported activity, confirm entries, and reconcile accounts. The system supports bookkeeping accuracy, while the checking and approval work stays user-led. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Ongoing bookkeeping stays mostly human-driven. Pro plan can automate imports, matching, categorization, receipts, invoices, and reminders, while users still manage review, reconciliation, and close. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Wave Pro $19/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Supports added users and accountant access for one business. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Designed for a single business and its invited users. Customers can pay invoices online, but collaboration stays mostly outside the accounting workflow — no publicly marketed in-line comments, shared dashboards, firm/client portal, or central action-item inbox. | | Dimensions/ segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Uses a customizable chart of accounts plus tags for tracking projects, events, properties, or other labels, with tag-based reports for comparing activity. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Offers an at-a-glance dashboard and standard financial reports, including Profit & Loss, Balance Sheet, Cash Flow, and aging reports. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Supports linked bank and card feeds so transactions can be imported for matching and categorization. Public pages do not name the bank-feed provider. | | Ecosystem | All-in-one AI accounting with Connect API — core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Combines accounting, invoicing, payments, receipts, and basic reporting in one small-business system. Payroll, paid bookkeeping support, and added integrations can increase cost and complexity as needs grow. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Includes invoicing, recurring invoices, online payments, automatic payment reminders, and bill tracking inside the platform. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Growing businesses that want AI-native accounting to keep books current with less manual reconciliation - Firms that want to standardize AI bookkeeping, reconciliation, reporting, and client collaboration in one platform - Businesses that want AI bill pay, AI invoicing, bookkeeping, and reconciliation in one connected system **Wave Wave Pro $19/mo — May be better for:** - Freelancers and very small businesses need low-cost invoicing, payments, receipts, and basic bookkeeping - Teams are comfortable managing transaction review, categorization, reconciliation, and close themselves - Businesses mainly need simple financial reports and tax-time records, not AI-native close automation ### Frequently asked questions **What is the main difference between Digits and Wave?** The main difference is that **Digits is an AI-native accounting platform**, while **Wave is a low-cost small-business accounting and invoicing tool**. Digits is built to keep the books current with AI bookkeeping, statement-based reconciliation, dashboards, reporting, and collaboration. Wave is built for simpler needs like invoicing, payments, receipts, basic bookkeeping, and standard reports. **Which is better for accounting firms, Digits or Wave?** Digits is better for accounting firms that want to standardize AI bookkeeping, reconciliation, reporting, and client collaboration in one platform. Wave is better suited for freelancers, solopreneurs, and very small businesses managing their own books, not firms managing many clients with shared workflows, dashboards, portals, and review processes. **Does Wave offer AI bookkeeping?** Wave offers automation for tasks like bank imports, receipt scanning, transaction matching, and category suggestions. However, it is not positioned as an AI-native accounting platform. Digits is built around the Agentic General Ledger™, which uses AI to auto-book, reconcile, review, and surface exceptions so teams spend less time managing the books manually. **Does Wave automatically reconcile bank accounts?** Wave supports reconciliation workflows, including auto-match options, but users still start the reconciliation, enter statement details, and review matched transactions. Digits automatically creates reconciliation drafts when statements arrive and flags what needs review. **Is Wave cheaper than Digits?** On sticker, yes. Wave Pro is about $16-$19/mo vs. Digits Core at $100. However, Wave's low tiers are manual bookkeeping. To get books managed for you, Wave Advisors starts around $149/mo (above Digits Core pricing) and still isn't an AI-native ledger with continuous reconciliation, dimensions, an AI assistant, or firm collaboration. ## Digits vs. Xero URL: https://digits.com/compare/xero/ ### What we compare **Digits Core** $100/mo vs. **Xero Established** $90/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | Xero Established $90/mo | | --- | --- | --- | | AI Engine Type | AI isn’t a feature; it’s the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | AI assistance added on top of traditional workflows. Xero relies on bank rules plus AI-powered suggestions, but users still review and confirm actions to keep books accurate. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | A reconcile queue, not exception flags: bank rules + AI suggestions still need review—so staying caught up means working the queue. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It answers questions directly from your real financials and keeps next steps one click away—not just another reporting chatbot. | Xero’s JAX is an in-product companion that can explore your financial data, provide charts/tables, and help with admin workflows like quotes/invoices. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | A reconcile queue, not exception flags: bank rules + AI suggestions still need review—so staying caught up means working the queue. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | Transactions are imported each business day; you get close-ready by working the reconcile queue, then running close reports. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from “preparing” the close to approving it. | Human-driven accuracy. Bank rules and AI suggestions help, but users still review/confirm and maintain rules to stay accurate. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Automation reduces clicks, but you still do the work. Expect regular review/coding, bank rule upkeep, and ongoing reconciliation to keep accounts in sync. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Xero Established $90/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | Invite unlimited internal teammates and advisors to the same Xero org. | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Collaboration happens through notes, discussions, and Xero HQ messaging, rather than a single shared workspace. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Departments/locations use Tracking Categories (two active; ~100 options recommended). Insights are mostly via reports/dashboards, not a unified dimensional view. | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Real-time reports, visual performance metrics, and cash-flow analysis, with dashboards used to surface key metrics rather than provide fully interactive, multi-view analysis. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Supports automated bank connections for daily transaction imports, though some customers may incur additional charges for certain direct feeds. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Add-on–driven ecosystem via the Xero App Store; payroll, expenses, projects, and analytics are optional and may cost extra. | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Xero supports invoicing, online payments, and bill management, with bills and receipts captured through Hubdoc, a separate, connected product. Automation is rules-based, with users reviewing and completing workflows. | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - Leaders in modern finance prioritizing AI-first accounting that reduces busywork and improves accuracy - Firms and CFOs who want real-time dimensional reporting and collaborative workflows - Teams that want to stop babysitting automation—no rule building, no rule tuning, just exceptions when needed **Xero Xero Established $90/mo — May be better for:** - Teams that prefer hands-on bookkeeping with regular review and reconciliation work - Organizations comfortable with rules-based automation that still requires ongoing rule setup, tuning, and oversight - Businesses willing to stitch workflows together across apps, connected products, and marketplace add-ons ### Frequently asked questions **How is Digits different from Xero?** Xero is a traditional accounting system with workflows driven by human input. Digits is an [AI-native, agentic platform](https://digits.com/blog/ai-enabled-vs-ai-native-vs-agentic-accounting-software-whats-the-difference/) that continuously handles the work of bookkeeping — so accountants can focus on judgment, review, and advisory work. Digits categorizes transactions, maintains reconciliations, and keeps financials up to date as activity happens. When something requires human judgment, it routes it to the accountant. When it can handle the work confidently, it moves it forward automatically and verifies the output before finalizing it. The result is a system where the books stay current, and accountants focus on review, judgment, and advisory work instead of transaction processing. **Is Digits better than Xero for accounting firms?** For accounting firms, Digits is the stronger platform. Xero is a well-built accounting system with broad adoption, and for firms that want a familiar, accountant-controlled close process, it remains a reasonable choice. But Xero was built around workflows that depend on people to move work forward, which means more manual processing as firms grow. Digits is built for a different model. It continuously runs the routine accounting work across the firm, so accountants can spend less time on transaction processing and more time on review, judgment, and client advisory work. The system is designed for multi-client operations, and it improves over time as it sees more activity across the portfolio. That difference becomes more important at scale. In a traditional system, like Xero, each new client adds more manual work. In Digits, each correction helps improve performance across the platform, so the system gets stronger as the firm grows. [Become a Digits partner](https://digits.com/accountants/) **What should I consider when migrating clients from Xero to Digits?** Migration from Xero depends on your current plan and how your data is structured. Some plans provide more limited access to underlying data, which can affect how historical transactions and reports are brought into a new system. In those cases, migration may involve more hands-on steps to ensure accuracy. Digits works with firms to scope migrations upfront, including how historical data, invoices, and reporting will be handled. [Become a Digits partner](https://digits.com/accountants/) ## Digits vs. Zoho Books URL: https://digits.com/compare/zohobooks/ ### What we compare **Digits Core** $100/mo vs. **Zoho Books Premium** $70/mo ### Built for AI, not before AI | Feature | Digits Core $100/mo | Zoho Books Premium $70/mo | | --- | --- | --- | | AI Engine Type | AI isn't a feature; it's the foundation. Digits is AI-native from day one, powered by the Agentic General Ledger™. Built for machine learning and trained on 170M+ real transactions, Digits auto-books, reconciles, and reviews continuously, then surfaces only the exceptions that need a human. | Not an AI/ML-led ledger. Traditional accounting software with rules-based automation. | | AI Bank Reconciliations | Continuous AI Reconciliation: Digits automatically reconciles your accounts to bank statements (uploaded or connected) and flags only what needs review—so you can trust your numbers without doing the busywork. | Rule-based suggested matches (“best/possible”) that you confirm. Reconciliation is period-based and finalized by the user. | | AI Assistant | Ask Digits—purpose-built for accounting. One ledger-native assistant built into everything. It understands your real financial data and answers questions directly—not a chat layer sitting on top of reports. | No AI assistant for ledger Q&A. | | Exception Flags | Clear exception flags (Missing, Date mismatch, Duplicate, Overmatched) plus an audit trail so you can see exactly what changed and why. | No AI-based exception flagging. Manual review of all unmatched transactions is required. Audit trail available for transactions. | | Close Cadence | As soon as statements arrive (uploaded or auto‑fetched), the reconciliation draft is automatically generated; you finalize in a few clicks. | User-run close: reconcile for the period and lock periods manually, rather than auto-drafting close on statement arrival. | | Controls & Accuracy | AI does the routine work, you supervise the exceptions. Most activity is auto-booked; anything uncertain is surfaced for targeted review—so teams move from "preparing" the close to approving it. | Accuracy is driven by rules and manual review: recurring rules handle repeat items, suggested matches still need confirmation, and the audit trail records changes. | | Effort Required | Minimal ongoing effort: 24/7 AI bookkeeping and AI bank recs keep the ledger current. Drop in a statement. Digits takes it from there. | Mostly human-driven. Rules reduce repeat work, but teams still categorize transactions, confirm matches, reconcile accounts, and run close steps manually. | ### Features & Limits beyond AI | Feature | Digits Core $100/mo | Zoho Books Premium $70/mo | | --- | --- | --- | | User Access | Unlimited users included —team, advisors, and auditors at no extra cost. Plans are billed on a per-business (or per-client) basis, not per seat. | 10 users included in Premium; additional users cost extra ($3 per user/month add-on). | | Collaboration | Built‑in comments across transactions, reports, categories, shared dashboards, and an Inbox to manage action items in one place. | Portals for customers and vendors are included. Collaboration is more portal- and permission-based, with user seats capped by plan. | | Dimensions/segmentation | Departments + Locations are included out of the box, with dimensional dashboards and statement slicing. (Projects coming soon.) | Reporting tags (divisional reporting) and projects are included; location tracking is a paid add-on ($30/mo). | | Dashboards & reporting | Real-time KPI dashboards (multi-view, drag-and-drop); drill-through; scheduled, branded reports; export to PDF/CSV. | Built-in dashboard + custom reports; scheduled report emails are supported. | | Bank/data connections | 12,000+ banks & cards via Plaid. Statements auto-fetched to Documents for many institutions; PDF-to-CSV where supported. | Direct bank feeds via Plaid integration. Auto-imports transactions daily. Manual CSV/OFX import is also available. | | Ecosystem | **All-in-one AI accounting with Connect API—**core GL, bill pay, and invoicing built in, so you rely on fewer third-party add-ons, while still integrating with partners like Gusto, Ramp, BILL, Stripe, Mercury, and 12k+ banks. | Standalone accounting app with an open API and optional extensions via the broader Zoho suite. Some workflows add cost (e.g., BillPay, Locations). | | Bill Pay & Invoicing | Built-in AI Bill Pay and AI Invoicing automates document capture, vendor data extraction, smart categorization, and streamlined approvals. | Invoicing is included; bill payment workflows are sold as a BillPay add-on ($69/mo). | ### Which Platform Is Right for You? **Digits Core $100/mo — Is best for:** - AI-first workflow for modern teams that want real efficiency, not traditional rules-and-reports accounting - Exception-only close with statement-tied recs that keep books current all month, not month-end catch-up - Predictable $100 pricing plus partner discounts as you scale clients, without add-on surprises **Zoho Books Zoho Books Premium $70/mo — May be better for:** - Teams that aren’t chasing efficiency gains and are fine with rules-based workflows and manual reconciliation - Firms comfortable with user caps and add-on pricing as needs grow, like location tracking and bill pay - Operators satisfied with standard reports and portals, without in-line comments or firm-style action queues --- # Customer Stories ## Case Studies URL: https://digits.com/case-studies/ ### Real results, powered by Digits. Case Studies [From Questioning Every Report to Trusting the Numbers: How PlusPlus Built a Modern Finance Stack with Digits](/case-studies/plusplus/) By bringing accounting, bookkeeping, collaboration, and reporting into one integrated platform, PlusPlus cut monthly financial review time by roughly 50%, reduced back-and-forth with its bookkeeping team, and gave leadership a faster, more reliable way to understand business performance and report to investors. Case Studies [How Lincoln Accounting Reclaimed 30+ Hours a Month by Switching to Digits](/case-studies/lincoln-accounting/) Lincoln Accounting cut its average monthly close from three hours to about one hour per client, reduced manual bookkeeping from 12-15 hours a month to roughly two, and reclaimed more than 30 hours each month after moving clients from QuickBooks to Digits. Case Studies [From Bookkeeping Factory to Fractional CFO Firm: How Elev8 Built Big-Firm Output Without Adding Staff.](/case-studies/elev8-cfo/) By automating month-end workflows and financial reporting with Digits, Elev8 CFO reduced its monthly close from 18 days to 5, reclaimed nearly 90 hours every month, and created the capacity to scale advisory services across 27 client engagements—all without hiring additional staff. Case Studies [How Eiduk Tax & Wealth is Scaling an Advisory-First Firm with Digits](/case-studies/eiduk-tax-and-Wealth/) By replacing manual bookkeeping workflows with automation-first accounting infrastructure, Eiduk Tax & Wealth reduced onboarding time by roughly 50%, lowered operational overhead, and created a scalable path to grow advisory services without continuously adding staff. Case Studies [How TFMA LLC Improved Workflow Efficiency by 70% with Digits](/case-studies/how-tfma-llc-improved-workflow-efficiency-by-70-with-digits/) TFMA LLC replaced time-intensive bookkeeping with Digits, improving workflow efficiency by 70%. What once took weeks of manual cleanup can now be completed in days—freeing the firm to focus on advisory, growth, and higher-value client work. Case Studies [How Steve Tonkin & Company Is Building a Future-Ready Accounting Firm with Digits](/case-studies/how-steve-tonkin-company-is-building-a-future-ready-accounting-firm-with-digits/) Steve Tonkin & Company replaced slow, manual workflows with Digits, achieving immediate 20% time savings and unlocking 30–50% efficiency gains. The firm now spends less time on reconciliation and admin work—and more time delivering fast, strategic insights to clients. Case Studies [ECA Gate and Lock – Reclaiming Time and Simplifying Accounting with Digits](/case-studies/eca-gate/) ECA Gate and Lock replaced hours of manual bookkeeping in QuickBooks with Digits AI, reducing daily accounting time from four hours to under 20 minutes. The team now has clear, real-time financial visibility without the burden of constant cleanup. Case Studies [How Adept: Accounting Principles & Solutions Reduced Bookkeeping by 75% with Digits](/case-studies/adept-accounting/) Adept: Accounting Principles & Solutions replaced time-intensive bookkeeping with Digits, cutting manual workload by 75%. The firm now focuses on financial analysis, forecasting, and strategic advisory instead of routine admin work. Case Studies [GrowthMap Finds Financial Clarity and Momentum with Digits](/case-studies/growthmap/) GrowthMap adopted Digits to replace patchwork accounting with real-time clarity—cutting bookkeeping time to minutes, saving thousands, and gaining the visibility needed to scale confidently. Case Studies [BookSmarts Tax & Accounting helps small business owners move faster with Digits](/case-studies/booksmarts-tax-and-accounting/) BookSmarts Tax & Accounting built its practice around insight—not manual labor. By switching to Digits, the firm replaced transaction chasing and cleanup with automated financials and real-time visibility, helping clients move faster while creating space for higher-value advisory work. Case Studies [Mana Accounting & Advisory: Saving Hours with AI-Powered Accounting](/case-studies/mana-accounting-advisory-saving-hours-with-ai-powered-accounting/) Mana Accounting replaced manual categorization and rule management with Digits AI. The firm now focuses on advisory services instead of tedious bookkeeping tasks. Case Studies [Olive Knits – Empowering Creative Confidence with Clear Finances through Digits](/case-studies/olive-knits-empowering-creative-confidence-with-clear-finances-through-digits/) Olive Knits founder Marie Greene replaced sleepless nights worrying about books with clarity through Digits. AI bookkeeping learns from corrections and adapts automatically. Case Studies [Unlocking Effortless Financial Management: Spearus](/case-studies/spearus/) Spearus switched from QuickBooks to Digits after finding traditional tools clunky. The intuitive platform transformed accounting from a chore to an enjoyable task. Case Studies [The Third Place – Cultivating Community while driving financial success with Digits](/case-studies/the-third-place/) The Third Place found Digits after Bench and Pilot proved expensive and inaccurate. Now, bookkeeping is hands-off with fast, proactive responses from the Digits team. Case Studies [Effortless Financial Clarity: Blaide’s Success with Digits](/case-studies/blaide/) Blaide achieved financial clarity with Digits after struggling with traditional bookkeeping. AI-powered automation saved time, reduced costs, and improved compliance. Case Studies [How an AI Company Prepares for Fundraising with Digits](/case-studies/thoughtly/) Thoughtly uses Digits for accurate financials and cash flow forecasting ahead of fundraising. AI-powered bookkeeping gave their investors confidence in the numbers. Case Studies [How an AI startup uses Digits to maintain cash flow visibility at scale](/case-studies/wispr/) Wispr, an AI startup, uses Digits to monitor cash flows in real-time without manual oversight. The founder tracks spending and makes informed decisions faster. Case Studies [After 15 emails, a fintech founder had enough—here’s why he switched to Digits](/case-studies/mural/) Mural's CEO switched from QuickBooks to Digits after too many back-and-forth emails with his accountant. Digits simplified collaboration and freed mental space for growth. ## How Adept: Accounting Principles & Solutions Reduced Bookkeeping by 75% with Digits URL: https://digits.com/case-studies/adept-accounting/ March 23, 2026 [Adept: Accounting Principles & Solutions](https://www.adeptaccountingprinciples.com/) was built to help small and mid-sized businesses access enterprise-level accounting and operational systems — without enterprise-level costs. Founder [Taveion McCutcheon](https://www.linkedin.com/in/taveion-mccutcheon/) has spent his entire career in accounting, from junior roles to senior financial positions in government. But when he launched his own firm, he quickly saw a problem: Too much time was going toward bookkeeping — not enough toward strategic advisory. > “I’m skilled in financial analysis and forecasting,” Taveion says. “That’s where I bring value. I don’t want to spend my time on tedious admin tasks.” ### The Problem: Manual Bookkeeping Slowing Growth Before Digits, Adept relied on traditional tools like QuickBooks and Excel. Taveion had worked in nearly every major accounting system — Sage, Intacct, QuickBooks Desktop and Online — and knew them well. The challenge wasn’t understanding the tools — it was the time they required. Before Digits, bookkeeping accounted for roughly 70% of his workload — hours spent reviewing transactions, categorizing expenses, and reconciling records before meaningful analysis could even begin. Taveion even experimented with building custom AI agents to automate parts of the bookkeeping process. But making them reliable required constant testing, retraining, and monitoring — turning automation into another system he had to maintain. Everything changed when he came across a [YouTube interview featuring Digits’ CEO, Jeff Seibert, on Insightful Accountant](https://www.youtube.com/watch?v=ZtZRu6XrM6c). > “About ten minutes in, I thought — this is exactly what I’ve been trying to build.” ### Three Years of Cleanup in Two Days At the time, Taveion had three years of books to clean up. Using Digits, he completed the cleanup in just two days. > “That was the turning point.” Instead of spending weeks (or outsourcing costly catch-up work), the books were reconciled quickly — and accurately. ### A 75% Reduction in Bookkeeping Time Since adopting Digits, Adept has reduced bookkeeping workload by approximately 75%. > “I haven’t really been doing bookkeeping anymore,” Taveion says. “Digits speeds up the entire process.” That shift allows him to: - Focus on financial analysis and forecasting - Spend more time advising clients - Move faster into tax prep and strategic planning Instead of waiting until month-end, he and his clients now see numbers in real time. > “You can spend money and immediately ask how much you have left this month. That’s a game changer.” ### Powering an AI-Driven Firm Taveion built his own operational platform, [ADA OS (Adept Data Automation Operating System)](https://adaos.dev/unveil.html), which integrates business tools into a single interface. Through [Digits API](https://developer.digits.com/docs/overview), Adept’s platform can access real-time financial data and feed it directly into their system. That means: - Profit & Loss statements can be generated instantly - Reports can be emailed automatically - Financial data can be accessed via chat > “Digits is the main backend brain for accounting inside ADA OS.” ### The Future of Accounting Taveion believes bookkeeping will increasingly be automated over the next 5–10 years. > “I don’t think AI will take accountants’ jobs. I think accountants who learn AI will take jobs.” By removing manual bookkeeping, firms can focus on what truly differentiates them: analysis, insight, and growth strategy. ### The Verdict Because of the speed, automation, and real-time visibility, Taveion actively recommends Digits to other firms. > “Because of how quickly you can clean up books and get to real advisory work, I’d recommend it to pretty much everybody.” For Adept: Accounting Principles & Solutions, Digits isn’t just another tool — it’s the foundation that allows the firm to run a faster, more modern accounting practice. ### Ready to Move Beyond Manual Bookkeeping? Digits helps modern accounting firms eliminate tedious categorization, gain real-time financial clarity, and focus on high-value advisory work. If you’re ready to reduce bookkeeping time and deliver more strategic value to your clients, Digits is built for you. ## Effortless Financial Clarity: Blaide’s Success with Digits URL: https://digits.com/case-studies/blaide/ September 25, 2024 Blaide is a software company at the forefront of the residential construction industry. They provide AI tools for contractors to streamline their operations, relieving them from tedious back-office tasks and allowing them to concentrate on delivering exceptional hands-on service. #### What to Avoid As a founder of multiple startups, Blaide’s co-founder and CEO, Michael Ducker, understood the importance of getting his accounting right to avoid the financial missteps he had experienced firsthand. He had been burned by using various systems for different financial tasks—one for bookkeeping, another for forecasting—resulting in a disorganized and fragmented financial stack. Additionally, the lack of tools with seamless integrations led to significant inefficiencies and wasted time. These issues made accounting feel like a chore, characterized by tedious manual entries and constant back-and-forth communication with a hired bookkeeper, adding no real value to the business. For Blaide, Michael wanted a comprehensive, integrated, and user-friendly accounting solution that would eliminate these manual tasks, integrate flawlessly across platforms, and provide a single source of truth for the company's financial records. #### Why Digits? Michael set out to find a solution that not only maintained compliance but also provided a true understanding of the company’s finances so they could make decisions based on up-to-date information. Enter Digits, which revolutionized Blaide's accounting practices by offering a one-stop solution that integrated seamlessly with their existing financial tools: - **Unified and Integrated System**: Digits’ integration with Mercury, Blaide’s primary banking platform, streamlined their financial operations. - **Cost-Effectiveness**: Compared to alternatives, Digits provided equivalent services at half the cost, making it a financially savvy choice. - **Time Efficiency**: By automating and managing accounting tasks, Digits freed up the team's time, allowing them to focus on strategic growth. - **Accuracy and Transparency**: Monthly Digits reports ensured precise tracking of financial health, fostering complete transparency and compliance with regulatory standards. #### Efficiencies Gained Since Adopting Blaide has seen immediate gains since implementing Digits—it’s not just an accounting tool but a partner in growth: - **Streamlined Processes**: Tedious, manual accounting tasks were entirely offloaded, providing Michael and his team with more time to focus on business growth. - **Role in Investor Communication**: The reliability and accuracy of monthly Digits reports significantly enhanced investor updates, ensuring stakeholders received a true and fair view of Blaide's financial status. - **Enhanced Transparency**: Digits provided deep insights into various financial elements, including fees and prepayments, offering a stable and accurate view of Blaide’s monthly financials that go beyond the cashflow analysis most early stage founders rely on. - **Personalization**: Blaide’s dedicated Digits accountant tailored a custom chart of accounts to fit their specific business model, ensuring all unique needs were met. - **Human Touch**: The onboarding was enhanced along with one-on-one setup conversations that addressed every requirement and concern. - **User-Friendly Design**: Digits’ intuitive interface, enriched by its aesthetic design, made financial management not just seamless but also enjoyable. > I don't spend time on this and I love that I don't spend time on it. _Digits has fundamentally transformed how Blaide manages its finances, turning what was once a burdensome task into an efficient, transparent, and value-adding process. Ready to upgrade your accounting to Digits for complete peace of mind?_ _[Book a demo](https://digits.com/demo/)_ _with our team today._ > If you want an easy-to-use piece of software that looks beautiful and allows you to focus on what matters, Digits is the way to go. ### Featured Guest #### Michael Ducker Co-founder & CEO of Blaide ## BookSmarts Tax & Accounting helps small business owners move faster with Digits URL: https://digits.com/case-studies/booksmarts-tax-and-accounting/ February 5, 2026 [BookSmarts Tax & Accounting](https://www.booksmartstax.com/ "null") serves small business owners who want more than reports—they want clarity and momentum. Founded by James Merante, EA, the firm is built around delivering actionable insights that help clients implement meaningful change in their businesses and lives. ### The Challenge 🧮 James’s biggest challenge wasn’t accounting complexity—it was **time**. Before Digits, much of his work was consumed by low-value tasks: - Chasing bank statements, payroll reports, and source documents - Manually keying and coding transactions in QuickBooks - Staffing or outsourcing catch-up and cleanup work > “I spent more time on the lowest-skill work than anything else.” For new or tax-only clients, onboarding could stretch **weeks**—delaying not only actionable insights for the client, but also the firm’s ability to demonstrate value early and create a strong first experience. ### Why Digits? 🚀 James wanted a system that could turn raw financial data into accurate financials—without manual cleanup, or rule-building. Digits delivered exactly that. By connecting bank, payroll, and loan feeds directly into Digits, James can now generate reliable financials with **minimal hands-on work**, freeing him to focus on advisory instead of data entry. > “I want to get paid for insight and experience—not manual labor.” ### Impact & Results 💅 Digits immediately changed how BookSmarts operates. #### Measurable Time Savings - **A full year of accounting completed in hours instead of weeks** by uploading source documents - **5–10+ hours saved per client per month** by eliminating manual booking and document chasing - Clients on Digits are **fully accounted for weeks earlier** than clients on legacy tools > “Clients on Digits are done. Clients on QuickBooks are still giving me documents.” #### Inbox-Driven Accuracy James relies heavily on the Digits Inbox: - When transactions need more context, James requests clarification directly from clients. Once provided, he resolves the transaction, and Digits applies that learning to similar transactions going forward—reducing future questions and rework. - Ongoing reviews take minutes, not hours. > “Once you clarify it, you pretty much never have to look at it again.” ### New Growth Opportunities 🌱 Digits unlocked a more proactive, repeatable approach to working with tax-only clients: - Instead of chasing documents once a year, James completes a one-time setup that gives him ongoing, year-round visibility into client finances - That visibility allows James to stay informed and prepared without taking on full monthly bookkeeping work - As clients experience faster turnaround, clearer insights, and a smoother tax process, many are choosing to expand into ongoing monthly accounting engagements > “I’m deepening relationships and picking up new monthly accounting clients.” ### Looking Ahead 🌟 James believes financial reporting will soon become a commodity. Speed and accuracy won’t differentiate firms—**insight will**. Digits helps BookSmarts stay ahead of that shift today by removing transactional work and creating space for strategy, advisory, and higher-value conversations. > “If you’re not on the front end of these improvements, you go out of business.” ### Final Take 💡 Digits didn’t just save time—it reshaped how BookSmarts delivers value. - Hours saved per client every month - Weeks faster to complete financials - More time for insight, advisory, and growth For firms focused on value-based pricing, Digits isn’t just helpful—it’s essential. **Ready for clearer financials and faster insight?** See how Digits helps firms deliver accurate reporting, real-time visibility, and better conversations with clients. ## ECA Gate and Lock – Reclaiming Time and Simplifying Accounting with Digits URL: https://digits.com/case-studies/eca-gate/ March 24, 2026 [ECA Gate and Lock](https://ecagateandlock.com/) designs, fabricates, installs, and services automated gate systems for residential, commercial, and industrial customers. Their mission is to deliver security at your front door says founder Adam Tammisto. While their mission is centered on delivering security and peace of mind to others, Adam realized their internal accounting processes weren’t delivering that same sense of clarity and confidence. ### The Challenge: Complex Workflows and Constant Cleanup As a material-heavy business running manufacturing, construction, and service operations, ECA processes a high volume of purchase orders, vendor bills, fuel receipts, payroll, and job materials every week. QuickBooks couldn’t keep up. > “It looks like there’s automation, but you still have to review every single thing,” Adam explains. Disconnected systems between their CRM, payroll, and accounting created duplicate entries. Basic workflows required multiple steps. If Adam fell behind for even a couple weeks, reconciliation became overwhelming. To keep the books reliable, he was spending four hours every single day inside QuickBooks. > “If you let it go for two or three weeks, you’re in a pile you almost can’t recover from.” For a small business owner actively running operations, that wasn’t sustainable. ### Discovering a Truly Automated Ledger Before switching, ECA evaluated multiple tools — including Wave, Xero, and an AI overlay platform that still required QuickBooks underneath. > “If something’s wrong in QuickBooks, the AI is wrong too.” Digits stood out because it wasn’t layering automation on top of outdated infrastructure. It rebuilt the general ledger from the ground up. > “It’s the promise other platforms make — but Digits is actually delivering it.” ### The Impact: 4 Hours Down to 15 Minutes Since implementing Digits, Adam’s daily financial workflow has dropped to 15–20 minutes each morning. > “That’s cut four hours out of my day.” Receipts are uploaded into Digits, transactions are automatically categorized, and any items that require attention surface in the Checklist. Even if he falls behind, getting caught up is simple — not overwhelming. ### What Made the Biggest Difference **Checklist + Document Matching** “I can click into a transaction and get right back to the document. That’s fantastic.” No more manual cross-checking or hunting for attachments. **Simplified Categorization** Digits made it easy to clean up and reduce category clutter, creating clearer reporting and better visibility. **Bill Pay Workflow** With so many vendors to manage, ECA relies on a visual workflow that clearly shows what’s awaiting review, what’s scheduled for payment, and what’s already paid — giving them confidence in their outgoing cash management. **Financial Visibility That Makes Sense** “It was easier for my business partner to understand the P&L. It just made more sense.” Digits transformed the P&L from a static report into an interactive story. With auto-generated insights and the ability to drill into any number for instant detail, they could clearly explain what was changing, what was intentional, and how major investments impacted the bigger picture. ### Built for Real-World Small Businesses Like many growing companies, ECA needed clarity without complexity. Without a full-time accounting team, they needed a system that was intuitive, efficient, and didn’t demand hours of manual work. > “If you’re a small business owner and don’t have a dedicated AR/AP person, QuickBooks is just going to be a struggle.” Digits simplified financial management enough that Adam can stay in control — without sacrificing hours of his day. ### Would ECA Recommend Digits? > “Oh, hell yeah!” For contractors and operators overwhelmed by traditional tools, the message is simple: Modern accounting shouldn’t take four hours a day. With Digits, it doesn’t. [Get started today](/case-studies/eca-gate/?getstarted=true) ## How Eiduk Tax & Wealth is Scaling an Advisory-First Firm with Digits URL: https://digits.com/case-studies/eiduk-tax-and-Wealth/ May 25, 2026 ### An accounting firm built around automation [John Eiduk](https://www.linkedin.com/in/johneidukcpacfp/) launched [Eiduk Tax & Wealth](https://eiduktaxandwealth.com/wealth) in 2021 after years of working at the intersection of accounting and technology, helping companies implement systems and improve workflows. Today, Eiduk Tax & Wealth specializes in tax planning, advisory, and bookkeeping services for healthcare professionals and other service-based businesses. “I really started looking at technology tools to grow my firm and scale by myself,” John explained. “I knew there had to be a better way than just throwing more bookkeeping bodies at the problem.” ### **The operational reality** Like many accounting firms in the U.S., John initially relied on QuickBooks Online. But as his client base grew, so did the operational overhead surrounding bookkeeping. “There’s so much coordination involved,” he said. “Receipts, categorizing transactions, reconciling accounts, communicating with clients, and managing bookkeepers. It creates what I call coordination fatigue.” While QuickBooks offered robust functionality, John found the experience increasingly difficult to scale: - Time-consuming reconciliation workflows - Heavy dependence on manual bookkeeping labor - Clunky reporting processes - Constant interface changes and updates - Difficulty scaling without hiring additional staff > “With QuickBooks, onboarding was only the beginning,” John explained. “After the initial setup, there was still significant manual work required to categorize transactions, reconcile accounts, and continuously monitor the books.” For a firm focused primarily on advisory services, the traditional bookkeeping model simply wasn’t sustainable. ### **Why Eiduk Tax & Wealth chose Digits** John first discovered Digits through a [YouTube conversation between accounting creator Jason Staats and Digits CEO Jeff Seibert](https://www.youtube.com/watch?v=vdGpHoxkjqY&t=9s) discussing the future of AI-native bookkeeping software. He immediately saw the platform’s potential to modernize accounting workflows. “I looked at other newer solutions too,” he said. “But Digits looked ready. The UI and UX felt polished, functional, and thoughtfully designed.” As someone with extensive software implementation and product management experience, John evaluated Digits differently than most accountants. “The technology felt sound right away,” he explained. “The reporting, the drill-downs, the categorizations, the workflows it all made sense.” One major differentiator was Digits’ automation-first approach. > “I saw a path to scale without needing to continuously add bookkeeping staff,” he said. Before migrating clients, John decided to fully test Digits using his own firm’s books first. “I threw the kitchen sink at it,” he laughed. “Multiple bank accounts, Stripe integrations, payroll accounts, transfers, everything.” During onboarding, John imported historical QuickBooks transactions into Digits and set clear cutover dates for clients. From there, he could connect bank accounts, validate reconciliations, and quickly reclassify transactions — all within a single platform.Once the workflows were in place, the efficiency gains became immediately clear. > _“Once the model learns the transactions, I’m mostly reviewing instead of manually processing everything.”_ ### **Rebuilding the bookkeeping workflow** One of the biggest operational improvements came during client onboarding. “QuickBooks onboarding used to take me two to four hours per client,” John said. “With Digits, it’s closer to an hour, assuming the client is responsive.” More importantly, Digits removed the need for constant supervision. > “I don’t have to babysit the system anymore,” he explained. “I can let auto-reconciliation run, upload documents, work on something else, and come back later. It lets me multitask in a way QuickBooks never did.” The automation dramatically reduced manual bookkeeping work while still allowing John to maintain oversight. That shift fundamentally changed how John thinks about scaling his firm. ### Faster financial visibility with less manual work Beyond onboarding improvements, Digits simplified the day-to-day bookkeeping experience. “I love how quickly I can pull up a profit and loss statement, drill into transactions, and reclassify items,” John said. Instead of navigating through multiple layers of menus or exporting PDFs, Digits allows him to review financials in real time. > “It should just be point and click,” John explained. “That’s what impressed me with Digits. The workflows feel modern.” ### **Turning bookkeeping into a scalable service line** Digits didn’t just improve efficiency—it also changed the economics of John’s bookkeeping services. Previously, bookkeeping work often required additional labor costs, software overhead, and constant coordination. With Digits automating much of the repetitive work, John was able to create a more scalable bookkeeping model while maintaining strong margins and spending less time on manual processing. “Digits allows us to deliver bookkeeping services far more efficiently,” John explained. “That gives us the flexibility to serve a wider range of clients while maintaining profitability.” That flexibility allows John to price services strategically based on the client relationship and level of support required—without sacrificing profitability. As a result: - Clients can access bookkeeping services that fit their needs and budget - The firm spends significantly less time on manual processing - Automation reduces dependency on additional staff - More time can be spent on higher-value advisory work For John, bookkeeping is no longer the bottleneck. Instead, it has become a scalable operational layer that supports more profitable advisory relationships. ### **Building a Modern Accounting Stack** Today, John’s preferred tech stack centers around Digits alongside automation-focused financial tools like Ramp. “I love software that actually integrates and plays nicely together,” he said. “Digits feels like accounting software built for modern workflows.” As he continues growing Eiduk Tax & Wealth, John plans to migrate more clients from QuickBooks into Digits. > “I’d tell firms to start with a handful of smaller clients and make the jump,” he said. “Once you experience what bookkeeping should feel like, it’s hard to go back.” ### What’s Next As Eiduk Tax & Wealth continues growing, John sees Digits as a key part of building a scalable, advisory-focused firm. “Digits gives me confidence that I can grow without getting buried in manual bookkeeping work,” he said. ### The future of bookkeeping is automation-first Discover how modern accounting firms are using Digits to reduce manual work, improve client visibility, and scale more efficiently. ## From Bookkeeping Factory to Fractional CFO Firm: How Elev8 Built Big-Firm Output Without Adding Staff. URL: https://digits.com/case-studies/elev8-cfo/ July 8, 2026 [Elev8 CFO](https://elev8cfo.com/) is a solo accounting practice in El Paso, Texas, built around a simple belief: the future of accounting isn't bookkeeping, it's insight. Founded by Enrolled Agent [Oskar Escobedo](https://www.linkedin.com/in/oskar-escobedo-ea/), Elev8 operates through two complementary businesses. Elevate Tax and Accounting handles compliance work, while Elevate CFO focuses on advisory services, financial forecasting, and fractional CFO engagements. Today, Oskar supports 37 client engagements across industries including construction, childcare, real estate, lending, and professional services, all without a single staff accountant. But just a year ago, the operational reality looked very different. ### **The Challenge: An 18-Day Monthly Close** For more than a decade, Oskar relied on QuickBooks Desktop to manage his clients' books. The issue wasn't the software itself. It was the amount of manual work required every month. Each reporting cycle required exporting trial balances, cleaning data, building financial statements, formatting reports, creating PDFs, and delivering them client by client. The process consumed approximately 108 hours and stretched across 18 days every month. "Before Digits, I was a bookkeeping factory. Now I don't do bookkeeping anymore." Two-thirds of every month was spent producing financials instead of helping clients understand and act on them. Oskar had already begun repositioning his practice toward fractional CFO services and advisory work. But there was a problem: growth would likely require hiring staff accountants to handle production work. That wasn't the business he wanted to build. "The only path was making production stop requiring me." ### **Why Digits** Oskar first discovered Digits through [Jason Staats' YouTube channel](https://i.ytimg.com/an_webp/vdGpHoxkjqY/mqdefault_6s.webp?du=3000&sqp=CILEwdEG&rs=AOn4CLCruT_EQLqsWEf-My1sQ-NqlR-aew) while evaluating tools that could help modernize his firm. What stood out wasn't the automation itself, but what it made possible: an accounting practice that wasn't dependent on manual month-end work. > "I wasn't buying software. I was buying infrastructure I could build on." Digits provided a modern, real-time accounting platform that allowed Oskar to: - Close books 72% faster - Communicate with clients directly inside the platform - Access up-to-date financial information throughout the month - Automate financial reporting delivery - Build custom workflows using the [Digits Connect API](https://developer.digits.com/docs/overview) "Digits was the only one where I could see a path to pulling the P&L and balance sheet programmatically and building my own delivery layer on top. I wasn't buying software. I was buying infrastructure I could build on." ### **27 Clients Migrated in ~40 Hours** Like many firms considering a platform change, Oskar initially viewed migration as the biggest hurdle. After closing his clients' books at year-end, he began moving them on to Digits. Using a combination of automation and AI-assisted workflows, he streamlined the conversion process and completed the migration of 27 clients, including trial balances, chart of accounts, bank feeds, and payroll connections, in approximately 40 hours. Without automation, he estimates the process would have taken roughly twice as long. More importantly, the migration created the foundation for a completely different operating model. ### **Month-End Close Time Down to 5 Days** The results became clear during the first full close cycle on Digits. The monthly close dropped from 18 days to just 5. Hours spent each month fell from approximately 108 to about 20. That's nearly 90 hours, and more than two full workweeks, returned to the business every month. > "I went from 18 days to 5 days. That speaks for itself." Client communication improved just as dramatically. Before Digits, resolving bookkeeping questions often required multiple follow-up emails over a period of 10 to 12 days. Now, Oskar sends requests directly through Digits, and clients typically respond within a few business days. "I don't have to send a follow-up to a question I already asked." Digits' transaction-first approach also transformed how he monitors client books. Instead of waiting for month-end to generate meaningful financial information, Oskar now has access to current, categorized transaction data throughout the month. > "Before, I had to wait until the month ended to provide a year-to-date financial," he said. "Now I can do it at any point." ### **Building an Automated Financial Delivery System** Once the migration was complete, Oskar implemented the workflow he had envisioned from the beginning. Using the [Digits Connect API](https://developer.digits.com/docs/overview), he built an automated reporting pipeline that generates and delivers branded financial statements to clients every month. Today, 27 clients receive automated financial reporting through that system, and 10 of them have already moved onto the Digits client experience with direct dashboard access. > "I can now completely leave the bookkeeping duties to Digits. If I need to come back and review, I'm confident I can close all 27 clients within 2 days." For clients, the experience improved immediately. Financials arrive faster, on a predictable schedule, and with greater consistency. > "In their eyes, the value they were receiving from me increased, and I was saving more time." ### **What 90 Hours Per Month Made Possible** The biggest impact wasn't operational, it was strategic. With 90 hours reclaimed every month, Oskar finally had time to work on growing the business rather than maintaining it. He launched a new website, expanded his firm's LinkedIn presence, invested in SEO, developed new advisory offerings, and focused on building the marketing infrastructure necessary for long-term growth. > "For the first time, I had time to work on growing the firm instead of just keeping up with client work." He accomplished all of this without hiring additional bookkeepers because the capacity that would have required another employee was created through automation. ### **From Bookkeeper to Advisor** As accounting technology continues to evolve, Oskar sees the role of the accountant changing as well. Rather than spending time producing financial reports, he believes firms should focus on helping clients understand what those numbers mean and how to act on them. > "I'm on a mission to educate clients on what that data means. It's about empowering my client to be a better business owner." For Elev8 CFO, Digits didn't simply improve efficiency. It created the operational leverage needed to build the advisory-focused firm Oskar had envisioned from the beginning. ### **Advice for Firms Considering the Move** When asked what he would tell firms that are still hesitant to modernize their workflow, Oskar's answer is simple: count the hours you personally spend assembling financial statements every month. Those are often the most expensive hours in the firm. "I would say start with 5 clients. Run one parallel close. Make sure the reconciliation is good and the numbers tie. That's your proof." Then he offers one final thought: > "The migration wasn't the risk. Waiting was." #### Spend less time closing the books. Spend more time growing your firm. See how accounting firms use Digits to automate month-end workflows, deliver real-time financials, and focus on the work that drives growth. [Get started today!](https://digits.com/accountants/) ## GrowthMap Finds Financial Clarity and Momentum with Digits URL: https://digits.com/case-studies/growthmap/ February 26, 2026 [GrowthMap](https://buildwithgrowthmap.com/) helps early-stage B2B service companies break through growth ceilings and scale with confidence. Founded by entrepreneur and author of [Hook to Booked](https://hooktobooked.com/), [Gabriel Ryan](https://www.instagram.com/gabrielryan), the company partners with businesses generating roughly $30K–$100K per month, helping them build predictable acquisition systems instead of relying on chaotic, gut-driven growth. As a data-driven founder who also values creativity and intuition, Gabriel wanted to run his business by the numbers. But when it came to accounting, reality didn’t match the vision. ### Flying Blind Financially 📉 Before Digits, accounting at GrowthMap was treated as a necessary evil—just enough to file taxes. Gabriel relied heavily on bank balances and Stripe dashboards to understand the business. While he experimented with assistants, contractors, and manual reporting, nothing delivered trustworthy, real-time insight. Accounting systems felt tedious, fragmented, and ultimately unreliable. “I wanted to run the business by the data,” Gabriel shared. “But in practice, accounting was just something I did to file taxes. I was basically managing the business through my bank account.” Over time, the cost of this patchwork approach added up: - **6+ months** spent trying to clean up books - **3 different people** hired (in-house and external) - **$25K–$30K invested** with no lasting solution - Quotes of **$9,000** just to catch up two years of books in legacy systems Meanwhile, tax extensions loomed—and the stress followed. > “Anytime I saw a TurboTax commercial, I got this pit in my stomach. I knew I still hadn’t solved the accounting problem.” ### Discovering Digits 🔍 While searching for better systems—through YouTube, AI tools, and founder communities—Gabriel came across Digits. What stood out wasn’t just automation, but the promise of **real-time financial insight** built with AI at its core. > “I was honestly considering building something internally,” he said. “Then I found Digits and thought, _someone already built exactly what I need—please let this actually work._” Gabriel’s goals were clear: - Real-time, trustworthy financials - Clean, up-to-date books (including two years of backlog) - Visibility into expenses, burn rate, and growth drivers - A system he could trust—not just for taxes, but for decision-making ### Getting Fully Caught Up—Fast ⚡ Despite concerns about closed bank accounts, Stripe reconciliation, and historical data, the cleanup process moved far faster than expected. What would have taken months was resolved in a fraction of the time, as Gabriel fully reconciled two years of books and delivered clean, tax-ready financials to their accountant. > “I expected to need a lot of hand-holding,” he said. “Instead, I was able to complete everything independently. Starting the new year with two clean years of books in a system I trust was a total game-changer.” ### Immediate Impact & Measurable Wins 🎯 Since adopting Digits, GrowthMap has seen tangible improvements across time, cost, and strategic clarity: #### Major Cost Savings By handling cleanup and ongoing accounting in Digits, Gabriel saved: - **$9,000+** in bookkeeping catch-up fees - Ongoing costs from legacy tools and manual services #### Ongoing Time Savings Monthly reconciliation now takes **~5 minutes**, down from hours of manual work and coordination. > “I’d rather spend money to save time than spend time to save money. Digits completely flipped that equation for me.” #### Expense & Subscription Savings With clear categorization and easy reconciliation, Gabriel quickly identified unused tools and subscriptions—some of which had gone unnoticed for over a year—leading to immediate cost reductions. #### Burn Rate & Growth Clarity Digits surfaced insights that helped explain why revenue growth wasn’t translating into profit at the same pace. With real-time visibility into expenses tied to client growth, Gabriel can now plan hiring, compensation, and investments strategically. > “For the first time, I can clearly see how our burn rate changes as we grow—and plan around it.” ### Why Digits Stands Out ✨ For Gabriel, Digits isn’t just bookkeeping software—it’s a financial operating system. Key standouts include: - **Fast, intuitive reconciliation** that’s almost enjoyable - **No rules to maintain**—AI learns without manual setup - **Clean, shareable reports** ready for accountants, partners, or AI analysis - **Shared access** that accountants adopt easily and trust > “My accountant jumped in and immediately got what she needed. And the data has completely changed how I talk with my business partner about hiring, costs, and growth.” ### Built for the Way Modern Businesses Operate 🚀 Looking ahead, Gabriel plans to use Digits as part of his weekly, monthly, and annual business planning—pairing founder intuition with real financial data. “This is the first time I feel like I can back up my instincts with numbers I actually trust.” As someone who builds software and advises growing companies, Gabriel sees Digits as aligned with the future. > “We’re clearly moving toward a world with more AI, not less. Digits is fast, nimble, intuitive—and built for where things are going.” ### The Verdict > “I recommend Digits to entrepreneurs and accounting professionals alike. If you’re tired of extensions, blind spots, and outdated systems, there’s no reason not to give it a test drive.” ### Ready to Run Your Business with Clarity? Digits helps founders like Gabriel replace guesswork with real-time financial insight—without the stress, manual work, or outdated systems. If you’re ready to stop flying blind and start making confident, data-backed decisions, **Digits is built for you**. [Get started](https://digits.com/?getstarted=true) with Digits today and see what clear, real-time financials can unlock for your business. 👉 ## How Steve Tonkin & Company Is Building a Future-Ready Accounting Firm with Digits URL: https://digits.com/case-studies/how-steve-tonkin-company-is-building-a-future-ready-accounting-firm-with-digits/ April 20, 2026 [Steve Tonkin & Company](https://stevetonkin.com/) is a small, family-run accounting firm based in the Denver area, focused exclusively on bookkeeping, accounting, and controllership services. Led by owner [Steve Tonkin](https://www.linkedin.com/in/steventonkin/), the firm serves small businesses seeking responsive, high-quality financial support without the complexity of tax preparation services. With more than 20 years of accounting experience and over 40 years working with accounting systems, Steve’s mission is simple: deliver efficient, high-value accounting services while remaining accessible and responsive to clients. “I look at accounting as more of a verb than a noun,” Steve explains. “If a client needs help, we’re there to provide it.” By adopting Digits, Steve is increasing operational efficiency, reducing administrative friction, and building a firm designed to scale without sacrificing personalized service. ### **The Challenge: Inefficiencies Slowing Productivity** Before adopting Digits, Steve relied heavily on QuickBooks Online and Excel. While functional, these tools introduced significant inefficiencies—especially as platform performance and support challenges increased. By January of this year alone, Steve had spent 12–15 hours on QuickBooks support calls—time that couldn’t be billed to clients. While five to six seconds per action may seem minor, multiplied across hundreds of transactions and dozens of client accounts, the delay became significant. “When you’re working through a large number of transactions, those seconds add up quickly,” Steve notes. “It became clear that I needed a more efficient solution.” What should have been value-added client time was increasingly being consumed by outdated platform friction. ### **Discovering Digits** Steve first learned about Digits through an episode of [Jason Staats’](https://www.youtube.com/watch?v=vdGpHoxkjqY) _[The Accounting Podcast](https://www.youtube.com/watch?v=vdGpHoxkjqY)_. Intrigued by its AI-driven approach and streamlined workflows, he began evaluating the platform as a potential replacement for traditional accounting tools. “That podcast was all it took,” he says. “I started researching Digits immediately and realized it offered the efficiency I’d been looking for.” ### **Early Impact: Faster Workflows and Greater Efficiency** Although still in the early stages of transitioning clients, Steve has already observed meaningful improvements in his firm’s operations: - 20% immediate time savings simply by moving away from legacy systems - Projected 30–50% overall efficiency gains as client adoption scales - Faster reconciliation workflows and more responsive reporting “The reconciliation process alone is significantly faster,” Steve explains. “Everything is more intuitive and efficient.” With five clients already on Digits and plans to onboard additional clients throughout the year, Steve expects the majority of new business to run entirely on the platform. > “My goal is to grow beyond 30 clients this year, with most new clients using Digits from the start.” ### **Strengthening Client Relationships Through Innovation** Digits has also enhanced Steve’s ability to serve clients more effectively. By reducing administrative workload, he can respond quickly to client inquiries, often within four hours, and focus more on strategic insights. Clients have responded positively to the transition, particularly appreciating the improved visibility into their financial data, including up-to-date balances, spending trends, and reconciled transactions without waiting for end-of-month reports. > “When clients see the system, they like it immediately. It gives them clearer, more timely insight than they had before.” Additionally, introducing Digits has helped position Steve as a forward-thinking advisor, generating new opportunities through referrals and professional networks. ### **A Vision for the Future of Accounting** Steve believes the accounting profession is entering a transformative period driven by automation and real-time financial data, and for him, this shift isn’t theoretical, it’s strategic positioning. “Firms that adopt AI and modern platforms will stay competitive,” he says. “Those that don’t will find themselves buried in manual work and forced to compete on price.” For Steve, Digits represents a foundation for the future—not only for his firm but for the next generation, as he builds a practice his family may one day continue. > “My goal is to build something sustainable and efficient—something that allows us to focus on our clients, not repetitive tasks.” ### **Why Digits Stands Out** After evaluating alternatives such as Xero, Wave, FreshBooks, and enterprise-level ERP systems, Steve found Digits to be the first platform in decades that meaningfully improves the core accounting workflow rather than layering new features onto old architecture. > “In over 40 years working with accounting software, Digits is the first solution that feels like a fresh breath of air.” By delivering real-time financial visibility and streamlined processes, Digits enables Steve and his clients to make faster, more informed decisions, moving beyond static reports and toward proactive financial management. ### **The Verdict** Steve actively recommends Digits to other accounting professionals and small business advisors seeking greater efficiency and insight. > “For most firms and small businesses, there’s no reason not to adopt Digits. It’s efficient, intuitive, and built for the future.” ### **Ready to Build a More Efficient Accounting Firm?** Like Steve, you can streamline workflows, reduce administrative drag, and build a future-ready accounting firm. If you’re ready to modernize your firm and eliminate the friction holding back your growth, Digits is built for you. ## How TFMA LLC Improved Workflow Efficiency by 70% with Digits URL: https://digits.com/case-studies/how-tfma-llc-improved-workflow-efficiency-by-70-with-digits/ April 20, 2026 [Jonathan Brown](https://www.linkedin.com/in/jonathan-brown-88a407273/) built his accounting firm, [TFMA LLC](https://tfmallc.com/), with a clear mission: deliver high-level financial strategy and service, the kind typically reserved for athletes, entertainers, and high-net-worth families, to everyday entrepreneurs. Jonathan provides general accounting, payroll administration, financial modeling, budgeting, and what he calls “financial therapy” — helping clients align their money with the life they want to build. But as his client base grew, one challenge kept surfacing: Bookkeeping was consuming too much time. ### **The Challenge: Time-Heavy Cleanup and Manual Work** Before Digits, Jonathan relied on two primary workflows: - Full manual cleanup in QuickBooks (higher cost, more manual oversight) - Excel-based reporting using bank exports and pivot tables (more cost-effective, but still data-heavy) Both required significant manual effort. Annual cleanups, in particular, were time-intensive — involving heavy data entry and reconciliation work before real analysis could even begin. “It really came down to time,” Jonathan explains. “Servicing clients and getting them caught up took a lot of manual effort.” He knew there had to be a better way. ### **Discovering Digits** While researching AI tools to improve efficiency, Jonathan came across Digits. He tested it using his own financial history, importing over a decade of transaction data, and immediately saw the potential. Within a week of using Digits, he was already marketing a new value proposition: > “I can bring your books fully up to date in two to four days.” ### **A 70% Improvement in Efficiency** Before Digits, annual cleanup meant weeks of manual reconciliation and data entry. Today, those same projects can be marketed and delivered in days. > “There's way less data entry. That alone changes everything.” Key operational improvements Jonathan noticed immediately: - Reduced reliance on manual bookkeeping support, allowing him to operate leaner with one strong bookkeeper instead of maintaining multiple layers of support. - Faster onboarding and cleanup, where projects that previously could stretch across weeks can now be positioned as being completed within days instead of weeks. - Significantly faster reconciliation and vendor categorization, including the ability to search, recode, and bulk-adjust transactions in seconds rather than manually editing line by line. Even early in the transition, the impact has extended beyond internal operations. By repositioning his services around speed and AI-driven efficiency, including marketing the ability to “bring your books up to date in two to four days,” Jonathan has: - Signed multiple new clients shortly after repositioning his services around Digits-enabled efficiency - Secured a new client sent to TFMA directly from [Digits’ Accounting Firm Directory](https://accountants.digits.com/), which connects business owners with trusted, Digits-trained partners. For a firm that previously relied almost entirely on word-of-mouth referrals, this shift represents a meaningful expansion of both visibility and growth potential. ### **More Than Time Savings: Space to Think, Build, and Grow** For Jonathan, the biggest transformation hasn’t just been operational, it’s strategic. Historically, tax season meant long hours focused solely on servicing existing clients. Now, with bookkeeping streamlined, he’s able to: - Develop marketing campaigns - Refine branding strategy - Create new service packages - Take time away without operations breaking down > “It opened up time for me to think about growth, branding, and balance.” With Digits automating much of the foundational bookkeeping work, Jonathan has been able to rebalance how he spends his time. Instead of getting buried in lower-margin bookkeeping tasks, he can focus more heavily on advisory services — where he typically charges $500–$1,000 per month. At the same time, he continues to serve bookkeeping clients at $200–$400 per month, but with significantly less hands-on effort required. Because much of the manual categorization and reconciliation is streamlined, those bookkeeping engagements now take just 1–3 hours per client per month. That efficiency allows them to remain a profitable, scalable revenue stream — rather than a time-consuming drain on capacity. In short, Digits hasn’t just saved time, it has allowed Jonathan to increase margins, protect lower-tier revenue, and grow advisory income simultaneously. ### **Real-Time Financial Visibility as a Differentiator** Jonathan doesn’t just use Digits as a backend bookkeeping tool, he brings it directly into client conversations. During client meetings, he shares his screen and walks them through their financials in real time. Instead of static PDF reports, clients can see: - AI-generated transaction insights, highlighting spending patterns and unusual activity - Vendor-level breakdowns, showing exactly where money is going each month - Live dashboards that compare actual spending against budget targets If a client is overspending in a category, Jonathan can quickly drill into the transactions, identify the primary vendors driving the increase, and discuss adjustments on the spot. “You spent $800 at Whole Foods this month,” he’ll say. “Let’s look at that in context.” That level of visibility changes the conversation. Rather than reviewing outdated reports, clients see up-to-date numbers tied directly to their daily financial behavior. While not every client logs in weekly, the ability to access real-time data and review it collaboratively builds credibility and reinforces Jonathan’s advisory role. Instead of simply preparing reports, he’s helping clients understand and act on their financial data in the moment. ### **The Future of Accounting** Jonathan believes the accounting profession is moving toward: - Advisory over data entry - Relationship-building over manual processing > “Plugging in numbers won’t be as valuable. Strategy and implementation will.” In that future, accountants won’t just prepare reports, they’ll orchestrate systems. That’s the model Jonathan is building today. Digits enables that shift. By automating repetitive tasks, it frees firms to focus on growth, relationships, and higher-level thinking. ### **Why Digits Stands Out** After working in traditional accounting systems, Jonathan describes Digits as the first platform that feels built around automation from the ground up, not layered on afterward. > “I didn’t even really look at competitors. I saw what it could do and that was enough.” For firms and accountants looking to stay ahead of AI-driven change, he sees Digits as a major advantage. ### **The Verdict** Jonathan actively recommends Digits, particularly to firms looking to improve efficiency and modernize operations. > “For anyone trying to reduce workload, improve margins, and stay competitive, it’s a powerful tool.” For his firm, Digits isn’t just bookkeeping software. It’s the foundation for a more scalable, balanced, and forward-thinking accounting practice. ### **Ready to Work Smarter, Not Longer?** Like Jonathan, you can streamline onboarding, reduce manual workload, and unlock more time for advisory and growth. If you’re ready to reduce manual work and build a more scalable firm, Digits is built for you. ## How Lincoln Accounting Reclaimed 30+ Hours a Month by Switching to Digits URL: https://digits.com/case-studies/lincoln-accounting/ September 2, 2026 [Jason Kassab](https://www.linkedin.com/in/jason-kassab-37a34312a/) and his business partner, [Scott Wiegand](https://www.linkedin.com/in/scott-wiegand-51726283/), have spent more than 20 years working together in accounting and tax. After selling the last of the income tax franchises they operated, they launched [Lincoln Accounting](https://www.lincolnfirm.com/), a lean, hands-on firm serving more than 30 accounting clients. As the firm grew, the software underneath it was creating more work than it eliminated. Before Digits, every Lincoln Accounting client was on QuickBooks Online. Today, the team has migrated roughly half its clients off QuickBooks and is working toward moving the rest to Digits. For the clients and workflows already on Digits, the impact is measurable: - 30+ hours reclaimed per month - Average monthly close: ~3 hours → ~1 hour per client - Manual bookkeeping: 12-15 hours → ~2 hours per month - ~90% of transactions auto-categorized ### **The Challenge: Automation in QuickBooks Required More Work** As QuickBooks introduced new AI-powered categorization, Jason found that transactions the team had previously categorized reliably began requiring more review. Transactions that had been categorized correctly month after month were suddenly receiving inaccurate suggestions, leaving the team correcting work that had previously been on autopilot. Bank connections created another recurring bottleneck. When a connection broke, the team often needed the client to log in and reconnect it, leading to emails, texts, phone calls, and waiting. Across the client base, the team was spending 12 to 15 hours each month on manual bookkeeping, while a typical month-end close took around three hours per client. For a two-person firm trying to grow, that time could be spent serving existing clients or bringing on new ones instead. ### **Why Lincoln Accounting Moved to Digits** Jason and Scott were familiar with Digits before the Digits Ledger launched, having previously used Digits' legacy reporting product alongside QuickBooks. The launch of the Digits Ledger changed the equation. Now, the team could move the accounting work itself out of QuickBooks while giving clients a more interactive way to understand their financials. Live reporting quickly became one of the features that convinced Jason. > "We just fell in love with Digits when we were able to use live reporting. Number one, we have to use this. But this is what I feel like is going to help our clients." > > **— Jason Kassab, Partner, Lincoln Accounting** Instead of receiving a static financial statement, clients can explore their reports, drill into the numbers, and use Ask Digits for additional context. For Jason and Scott, moving to Digits wasn't only about replacing QuickBooks. It was an opportunity to improve both how their team managed the books and how clients experienced their financials. ### **The Migration: Days, Not Months** Switching accounting platforms can sound like a major implementation project. That wasn't the team's experience. Lincoln Accounting was up and running on Digits within two days, and Jason estimates that setting up a brand new client with no accounting history took him as little as 10 minutes. For clients moving from QuickBooks, the team was able to migrate the account structures and balances without rebuilding years of work. > "It's almost like you're just upgrading everything. It's not really like you're starting over — it's really just a total upgrade. We haven't had any issues where something didn't come over exactly the way it was from where it's coming from. It's all been an exact mirror image of what it should be." > > **— Jason Kassab, Partner, Lincoln Accounting** Within about a day of onboarding a client, Jason felt comfortable with everyday categorization and chart of accounts changes. Within a month, he felt fully confident running the month-end close in Digits. ### **A Seamless Experience for Clients** Jason and Scott also needed their clients to feel comfortable with the switch, including longtime business owners who weren't necessarily eager to learn another piece of software. So far, that concern hasn't materialized. Clients are notified when the team publishes a report, can interact directly with their financials, and can upload documents and receipts to Digits. Previously, the client experience was spread across QuickBooks, Canopy, and email. With Digits, more of that interaction happens alongside the client's accounting itself giving the team fewer disconnected workflows to manage and clients a simpler way to stay connected to their financials. ### **The Results: 30+ Hours Back Every Month** Lincoln Accounting started their move to Digits nine months ago. Today, approximately 90% of transactions across migrated clients are being auto-categorized. Jason says the difference is noticeable: > "The suggested categorization from QuickBooks being wrong, to where with Digits it is correct right from the get-go, at a much, much higher percentage. I know Digits' goal is mid-to-high 90%, and I feel that's true. That's where it is." > > **— Jason Kassab, Partner, Lincoln Accounting** The efficiency gains extend across the workflow: **Monthly close per client:** ~3 hours → ~1 hour **Manual bookkeeping:** 12–15 hours/month → ~2 hours/month **Total time reclaimed:** 30+ hours/month **Auto-categorization:** ~90% For a two-person firm, 30 hours is nearly an additional workweek of capacity every month. ### **Beyond Efficiency: More Time to Advise** That extra capacity changes what Jason can spend his time doing. With live financials and Ask Digits, he can identify changes in a client's business that might otherwise be buried in a traditional financial statement from an unusual spike in expenses to a record quarter or meaningful increase in revenue. Jason incorporates those insights into the strengths, areas for attention, and narrative summary he provides clients each month. > "They see the value in what we're doing for the work, not just creating a report. We're invested in their business." > > **— Jason Kassab, Partner, Lincoln Accounting** The result isn't just less time spent on bookkeeping. It's more time helping clients understand what their numbers mean. ### **Digits Is Now the Main Ledger** As the team continues moving its remaining clients off QuickBooks, the goal is to eliminate the need to manage accounting across multiple systems. When it comes to which platform Jason wants the firm running on, his answer is simple: > "There's only one. It's only Digits." > > **— Jason Kassab, Partner, Lincoln Accounting** And his advice to another accounting firm considering the switch? > "They won't be missing anything. They'll only save time. Once you use the software and are comfortable with it, you'll realize you're saving a ton of time, and you're going to deliver a better product for your client. I would tell them to go for it. There really shouldn't be a hesitation." > > **— Jason Kassab, Partner, Lincoln Accounting** For Lincoln Accounting, the result is a simple equation: less time maintaining the books, more time helping clients understand them, and more room to grow without growing the workload at the same rate. See what your firm could do with 30+ hours back each month. Discover how Digits helps accounting firms automate the manual work behind the close, deliver a better client experience, and create more capacity to grow. ## Mana Accounting & Advisory: Saving Hours with AI-Powered Accounting URL: https://digits.com/case-studies/mana-accounting-advisory-saving-hours-with-ai-powered-accounting/ October 10, 2025 [Mana Accounting & Advisory](https://mana.cpa/ "null") is dedicated to serving startups and law firms by acting as their in-house finance team. From bookkeeping and payroll to bill pay and tax, the firm takes a holistic approach to client finances—always with the goal of delivering actionable insights, not just numbers. ### **The Challenge 🧮** As Mana grew, the tools couldn’t keep pace. QuickBooks and Zoho handled the basics, but left the team buried in manual work: - Creating and managing transaction rules - Categorizing line items one by one - Cleaning up messy historical data Reporting was another pain point. Clients wanted clear takeaways–what to do with the numbers  –not just templated spreadsheets. Founder and CEO [**Josh Chapel**](https://www.linkedin.com/in/joshuachapel/ "null") summed it up: > “A lot of the work wasn’t difficult—it was just time-consuming. Manual categorizations, cleanups, and boilerplate reporting slowed us down. Our clients wanted to know what to do next with their numbers, and we didn’t have the right tools to deliver that efficiently.” Onboarding new clients often came with another layer of added friction. Each setup meant chasing credentials, hand-holding through every step, and wasting valuable time before any real work could begin. ### **Why Digits? 🚀** As an early believer in AI’s potential, Josh had been following Digits long before it became available to accounting firms. When it did, it felt like a perfect match—Digits aligned seamlessly with Mana’s philosophy of continuous improvement. Josh wasn’t struggling with complex work—he was stuck in time-consuming, repetitive tasks. Cleanups dragged on. Categorization required constant manual input. Onboarding new clients slowed everything down. And clients wanted better answers, faster. Digits delivered. Cleanups that took hours now take minutes. Transactions come in already categorized, no rule-building required. Clients connect their accounts without hand-holding, and reporting finally looks and feels as sharp as the insights inside it. Most importantly, Digits gave Josh and his team the freedom to focus on what really matters: delivering value through insight and advisory—not getting buried in busywork. For a firm built on doing things better every day, Digits wasn’t just a tool. It was a turning point. > “With Digits, categorizations are already built in—it’s just a matter of glancing through. That’s serious time savings for us and for our clients.” – Josh Chapel ### **Impact and Results 💅** Digits quickly became a time-saver and confidence booster for Mana’s small but growing team. **Efficiency Gains:** - Cleanups that used to take entire afternoons now take minutes. - PDF bank statements are uploaded directly into Digits for instant processing. - Accurate AI-driven categorization out of the box. No rule-building required. - Saves up to five hours per client project, freeing Mana’s team for higher-value work. **Easy Adoption:**  With only three team members, simplicity was key. Digits delivered. - Staff described the platform as **intuitive, modern, and far less intimidating** than legacy tools - **Minimal training was needed**—the team quickly gained confidence and consistency across clients **Better Client Experience:** Client onboarding is now fast and friction-free. With just an invitation and a few clicks, new clients connect their accounts without needing extra guidance. - **No more credential-chasing or setup delays** - Clients receive beautiful, interactive dashboards with smart charts and widgets—now **enhanced by Digits’** AI-driven automation for even faster insights Most importantly, Digits has freed Mana’s accountants to focus more on **insights and advisory**—the work that truly drives client value > “Digits gives us more time to focus on conversations and insights instead of just getting accurate numbers. That’s the future of accounting.” – Josh Chapel ### **Looking Ahead 🌟** Josh sees AI as the driving force reshaping the profession. He believes tools like Digits will reduce tedious manual work, pushing accountants toward higher-value analysis and strategy. For Mana, that means expanding advisory services—even for base clients—by providing deeper insights alongside accurate numbers. > “Digits shows you where the future of accounting is going. If you want your firm to grow, get involved sooner rather than later.” – Josh Chapel **Ready to save hours and elevate your client experience?** [**Book a demo with Digits today**](https://digits.com/demo/ "null")**.** ## After 15 emails, a fintech founder had enough—here’s why he switched to Digits URL: https://digits.com/case-studies/mural/ September 12, 2024 Mural is a cross-border payments and invoicing company that uses blockchain technology to move money instantly at a fraction of the cost. Pre-Digits, Mural was using QuickBooks with a traditional accounting firm that worked to close the books by emailing back and forth. This process felt slow and manual to Mural’s CEO and Co-Founder, Sinclair Toffa. We were excited to help Sinclair simplify collaboration and spend less time managing his finances. ##### Digits Impact TL;DR: - Frees up mental space to focus on growth - Simplify collaboration with accounting team - Complete picture of all financial transactions ### The problem: Collaborating on accounting is a struggle As a fintech, Mural has many different bank accounts. Because of this, getting the complete picture of what’s happening with the business requires a lot of manual work. From exporting data via different sources, to sharing data in varying ways, the process was time intensive and tedious. However, Sinclair's biggest pain point was collaboration with his bookkeepers. Every month, he would receive emails from them with little screenshots of transactions that they couldn’t reconcile. Sinclair would reply with feedback, but the process was slow and sometimes he never heard back. After hearing about Digits several times through his founder network, Sinclair decided to finally make the switch after a 15 email long chain chasing down a couple of transactions went unresolved. ### The solution: Digits AI powered accounting Finance teams often don’t get the same attention when it comes to flashy, productivity-boosting tools as sales and marketing teams do. This can make it challenging for finance professionals to streamline their processes and maximize their productivity, even though their work is just as critical to the success of a business. Sinclair looked at some tools here and there and spoke with smaller accounting firms that approached Mural. What drew Sinclair to Digits was the simplicity of its interface and user experience. When the accounting team needs his input on specific transactions, Sinclair would receive a tag notification. He could then jump into the platform, promptly respond, and view the complete history of their collaboration. > I feel like Digits has done a great job of having all of that out of the box for me. So, you know, it runs on an autopilot, and that's been an absolute life saver. Since joining Digits, Sinclair has seen improvements to product every month. There’s a spend analysis feature that tells him where Mural can save money and an Ask Digits GPT advisor that answers questions on demand. > Working on Digits has made a night and day difference us. I’m really glad I made the choice. _Digits has empowered Mural with the tools and insights needed to navigate its finances in minutes. Ready to upgrade your accounting to Digits for complete peace of mind?_ _[Book a demo](https://digits.com/demo/)_ _with our team today._ ### Featured Guest #### Sinclair Toffa Founder & CEO @ Mural ## Olive Knits – Empowering Creative Confidence with Clear Finances through Digits URL: https://digits.com/case-studies/olive-knits-empowering-creative-confidence-with-clear-finances-through-digits/ October 1, 2025 [Olive Knits](https://www.oliveknits.com/ "null") is a thriving creative small business that empowers knitters with patterns, workshops, and a supportive community called [_Knit Camp_](https://oliveknits.thinkific.com/memberships/knit-camp "null"). Founded by [Marie Greene](https://www.oliveknits.com/about/ "null"), a passionate entrepreneur, the company’s mission is to help knitters gain creative confidence while fostering connection. Through a blend of educational resources and community building, Olive Knits has become a trusted resource for makers worldwide. Yet, behind the vibrant community and steady growth, Marie found herself facing a frustrating—yet all too common—challenge: managing the finances of a small business. ### **The Financial Struggle 🧵** Like many entrepreneurs, Marie initially relied on a patchwork of accounting solutions. QuickBooks felt overwhelming. Spreadsheets became unmanageable. Other tools never adapted to her corrections, forcing her to repeat the same work and leaving her unable to trust the results. Even with a private bookkeeper, she found herself needing to dedicate hours each week answering calls, emails, and clarifying transactions. The result? Stress, backlogs, and sleepless nights. > “I used to stay awake worrying about the state of my books,” Marie recalled. “Even with a bookkeeper, I felt like I was still doing too much of the work myself.” ### **Discovering Digits 🔍** One late night, in the middle of insomnia brought on by accounting stress, Marie turned to ChatGPT for help. She searched for AI bookkeeping solutions and discovered Digits on a list of top platforms. Intrigued by its promise of automation and clarity, she decided to give it a try. Her goal was simple: eliminate the time sink and stress of bookkeeping while gaining reliable, and timely visibility into her finances. ### **The Digits Impact 🎯** Since adopting Digits, Olive Knits has experienced dramatic improvements in financial management: - **Clear Financial Visibility Anytime** Digits’ real-time clarity eliminated the backlogs and negative surprises. > “Now I can instantly pull up what I need — whether it’s downloading a statement or checking a category. That visibility is priceless.” - Marie - **Significant Cost & Time Savings** By replacing her previous bookkeeping setup, Marie saved about **70% in monthly costs** and at least **three hours per week**. With transactions connected automatically and automated categorization learning the nuances of her business quickly, manual uploads and back-and-forths are no longer necessary. - **Intuitive AI-Driven Categorization** Digits’ categorization became a standout feature. “It just learns,” Marie emphasized. “Instead of re-explaining the same transaction every month, Digits recognizes it and saves me time. It’s like having a bookkeeper who actually remembers.” - **Setting the Stage for Growth** With financial clarity, Marie now feels prepared for future business milestones — like bringing in a business partner. > “Digits makes my business decisions so much easier because I can see the full financial picture instantly,” - Marie ### **Why Digits Stands Out ✨** Instead of juggling the complexity of QuickBooks or the ongoing demands of a private bookkeeper, Marie found Digits. It pairs automation with intelligence, giving her confidence that everything is handled—and the freedom to focus on what matters most. > “I recommend Digits to any entrepreneur who wants time savings, cost savings, and reliable clarity. Especially if you have multiple income streams, Digits is a game-changer.” ### **Ready to Knit Together Financial Clarity?** Digits is helping small business owners like Marie trade late-night stress for peace of mind and growth opportunities. Is your business ready to experience streamlined accounting with Digits? [Sign up today.](https://digits.com/ "null") ## From Questioning Every Report to Trusting the Numbers: How PlusPlus Built a Modern Finance Stack with Digits URL: https://digits.com/case-studies/plusplus/ September 9, 2026 For founders, accounting isn't the job. Understanding the business is. As CEO of [PlusPlus](https://plusplus.co/), [Marko Gargenta](https://www.linkedin.com/in/markogargenta/) doesn't want to spend his days inside financial statements. He needs fast, reliable answers to straightforward questions: _Are we growing? Is cash healthy? Are we headed in the right direction?_ Before Digits, answering those questions often meant reviewing spreadsheets, chasing bookkeeping questions over email, and wondering whether the numbers could be trusted. Today, PlusPlus works with Digits and one of its accounting firm partners, [Hiline](https://www.hiline.co/), to manage its accounting through one integrated solution.The result: monthly financial reviews take roughly half the time, leadership trusts the books, and investor reporting is faster. ### **The Challenge: Collaborating with Accountants** PlusPlus had always worked with outsourced accounting teams. The bookkeeping got done. The friction was everything around it.  For a startup founder, the contrast was hard to miss. Every other part of the company ran on tools built for working together. Product decisions happened in Figma, where designers and engineers comment directly on the frame they're discussing. Code moved through pull requests, with review attached to the exact line that changed.  Accounting remained fragmented. The numbers sat in one system, the questions sat in an inbox, and the answers sat in a spreadsheet attached to a reply. Stitching those back together was the founder's job, every month. ### **One Platform, One Relationship** Instead of managing accounting software, spreadsheets, email, and a separate service relationship, PlusPlus now handles everything in one place, with one predictable fee from Hiline that covers both the platform and the service. Marko describes the setup as more efficient, more streamlined, and far more self-service than anything he'd used before. Conversations now happen inside Digits, directly alongside the books. When Marko has a question about a transaction, he comments on it in context. Hiline's team responds in the same place, makes the change, and the update is reflected in the financials immediately. No email thread, no spreadsheet, no wondering whether the fix actually landed. For Hiline, that means less time reconstructing context and more time advising. For PlusPlus, it means the collaboration feels like working with a finance team down the hall rather than a vendor across an inbox. When asked whether he would recommend it to other companies, his answer was immediate: "For a tech startup, I think it's a perfect, no-brainer integrated solution." ### **Investor Reporting Without Building Reports** Preparing investor updates used to mean gathering information by hand. Today, Marko starts with the Digits dashboard. Investors rarely want the full P&L. They want to know which way things are trending: revenue, expenses, cash, growth. Those metrics are already there, and Marko can lift them straight from the dashboard into an update. The result is faster investor reporting, and more time spent discussing the business rather than assembling financial packages. ### **The Future of Startup Accounting Is Integrated** Founders don't need more spreadsheets or more email. They need financials they can trust, real-time visibility into their business, and an accounting team that works the way modern software does. That's what happens when an AI-native firm and an AI-native platform operate as one. See how Digits helps accounting firms and the companies they serve work together in real time, so founders spend less time managing their finances and more time building the business. ## Case Studies URL: https://digits.com/case-studies/search/ ### Real results, powered by Digits. ## Unlocking Effortless Financial Management: Spearus URL: https://digits.com/case-studies/spearus/ May 7, 2025 ### The Challenge 🎯 [Spearus](https://www.spearus.com/ "null"), led by CEO [Robert Banchero](https://www.linkedin.com/in/robertbanchero "null"), partners with industry giants like Dell and VMware to deliver cutting-edge IT solutions. However, managing financial operations was a hurdle. Traditional tools like QuickBooks proved cumbersome and required deep accounting knowledge, making simple tasks unnecessarily complex. > "QuickBooks was clunky and required accounting expertise. It was a constant battle just to perform basic functions," Robert shared. After a disappointing experience with Puzzle, which presented modern analytics but fell short on functionality and affordability, Spearus sought a solution that truly matched their needs. ### The Digits Solution 🚀 Introduced to Digits by a college friend, Robert found the platform’s seamless, intuitive design to be a game-changer for Spearus. Digits offered a refreshing ease that other software lacked. #### Immediate Benefits 🌟 - **Revitalized Engagement:** Digits rekindled Robert's interest in managing the business’ finances—transforming accounting from a chore to an enjoyable task. - **Streamlined Usability:** With intuitive categorization and a user-friendly interface, Digits eliminated the complexity of previously daunting tasks. The team at Spearus could easily adjust entries, ensuring accuracy and efficiency. - **Insightful Analytics:** The analytics dashboard provided valuable insights, enabling Spearus to monitor their financial health with ease and make informed decisions. - **Time and Cost Efficiency:** Spearus anticipates significant savings in both time and costs, reducing reliance on otherwise costly accounting service fees. ### The Transformation 🔄 Spearus is a testament to the transformative power of intuitive financial software. With Digits, Robert is ready to present organized financial records to his accountant, promising a seamless tax season. Digits' ease of use and robust features support ongoing growth, making it an integral part of Spearus' strategy. > "I've enjoyed working with Digits. It's not just about saving time; it’s about empowering me to manage finances with confidence. I wholeheartedly recommend Digits to anyone looking to simplify their financial operations," says Robert. Experience the Digits difference. [Start your free trial today](https://my.digits.com/join "null") and discover how seamless financial management can fuel your growth. ## The Third Place – Cultivating Community while driving financial success with Digits URL: https://digits.com/case-studies/the-third-place/ March 4, 2025 [The Third Place](https://thethirdplace.is/ "null") is a software platform designed to help local businesses—like restaurants, bookshops, and art galleries—grow both their revenue and their sense of community. By enabling them to expand their offerings and forge deeper connections, The Third Place transforms these businesses into welcoming neighborhood staples where personal connections thrive. However, despite its commitment to community building, The Third Place struggled with inefficient financial systems and operations. Co-founder and CEO [Vivien Sin](https://www.linkedin.com/in/viviensin/ "null"), had previously tried accounting solutions like Bench and Pilot but found them both costly and inaccurate. “We were too small of a startup to attract the necessary expertise, and yet the services we tried were both expensive and ineffective,” Vivien explained. Inconsistent bookkeeping not only created operational headaches but also took valuable time away from their core mission. #### The Search for a Solution 🔍 The pursuit of a solution led Viven to an unexpected conversation with a Digits team member at a startup dinner event. Vivien was actively seeking a new accounting platform and was immediately intrigued by Digits’ approach. “I wanted to be as hands-off as possible with basic bookkeeping — just ensure the categorization is correct and the bookkeeping takes minimal intervention,” Vivien explained. #### The Digits Impact 🎯 Since onboarding Digits, The Third Place has experienced a notable transformation in its financial management processes: ##### Streamlined Accuracy and Communication: Digits impressed with its swift, insightful responses, vital for a hands-off approach to bookkeeping. “The response rate is phenomenal,” Vivien observed. “When feedback is provided, it’s integrated quickly and efficiently, which was unmatched in our previous experiences.” ##### Smart, Intuitive Insights and Dashboards: Digits’ visual dashboard became a game-changer. “It feels like Digits anticipates the questions I’m going to ask and provides the answers immediately,” Vivien said. This efficiency saves her 45 minutes every time she engages with the platform, allowing her to focus on high-level business decisions rather than bookkeeping. ##### A Human Touch in Accounting: Beyond its AI-powered automation, Digits sets itself apart with an exceptional customer experience. Vivien emphasized the intelligence and proactiveness of the Digits team: > "It's refreshing to engage with professionals who not only grasp our needs but proactively drive solutions with remarkable intelligence." Unlike past providers Bench and Pilot, where financial management felt like a frustrating chore, Digits made accounting for The Third Place seamless, personal, and supportive. Vivien wholeheartedly recommends Digits to tech startups and businesses: > “Digits provides a superior product with a human touch. It’s a game-changer for businesses seeking efficiency and clarity in their financial operations.” Is your business ready to experience streamlined accounting with Digits? Discover how our AI-powered tools can revolutionize your financial management by [booking a demo today.](https://digits.com/demo/ "null") ## How an AI Company Prepares for Fundraising with Digits URL: https://digits.com/case-studies/thoughtly/ September 12, 2024 Thoughtly helps businesses build and deploy human-like AI voice agents in just 17 minutes. Like many founders, Torrey is an engineer who started a company to build products, not to do finances. Thoughtly needed accurate accounting to enhance their cash flow forecasting, crucial for presenting to investors in an upcoming fundraising round. ##### Digits Impact TL;DR: - Improved cashflow forecasting - Shared financial understanding with co-founder - Clarity on where the company was spending ### The problem: it’s hard to tell the difference between all these “AI accounting startups” Before Digits, Torrey experimented with several "ai accounting startups," many from YCombinator's recent cohorts. Their sales pitches sounded similar—they all promised QuickBooks setup, a proprietary platform, and tax assistance. However, these solutions fell short of expectations. The data was frequently inaccurate and failed to address Torrey's specific questions. While they all offered self-serve and AI capabilities, their execution of these claims left much to be desired. After exhausting these options, Torrey sought advice from his investor, Afore, who recommended Digits. ### The solution: Digits ai-powered accounting Onboarding was easy for Thoughtly. They connected their existing bank and credit accounts, and were even able to link their treasury accounts well after onboarding. The entire process, including connecting Stripe, took just five minutes. #### Beautiful financials Thoughtly received its first accountant-verified report in a couple of weeks. > _**This**_ is what I’ve been looking for. _**This**_ is an accounting team. Now I can understand what I want out of a modern accounting solution — I don’t want to look at all the transactions and categorize everything myself. I want to look at a balance sheet that has been reconciled and verified. #### Real-time runway Before Digits, Torrey struggled to track his team's marketing spend accurately. QuickBooks proved unreliable, while Brex and Mercury offered only partial insights. It wasn't until Digits comprehensively categorized Thoughtly's transactions that they gained a true understanding of their financial landscape. It was eye-opening for Torrey and his co-founder to observe the impact of their key decisions — such as closing sales and making hires — on their runway metric in Digits in real time. > This is exactly what we and other founders need. _Digits has empowered Thoughtly with the tools and experts needed to navigate its finances with confidence. Are you ready to upgrade your accounting to Digits for complete peace of mind? Book a demo with our team today._ ### Featured Guest #### Torrey Leonard Founder & CEO ## How an AI startup uses Digits to maintain cash flow visibility at scale URL: https://digits.com/case-studies/wispr/ September 12, 2024 Wispr, an AI-driven company focused on creating natural language user interfaces, is on a mission to make human-computer interactions as seamless and natural as human-to-human interactions. As Wispr grew, Tanay Kothari, the CEO, found it increasingly difficult to maintain a clear and detailed view of the company's finances. He needed a solution that would allow him to stay on top of financial transactions and make informed decisions without the time-consuming process of manual oversight. Digits is the one-stop shop for founders who want to focus on building their businesses, not managing their finances. We were excited to support Tanay in closely monitoring his company's cash flows. ##### Digits Impact TLDR; - No longer “flying blind” with prioritized-for-you metrics dashboard - Saved countless hours of enriching transaction data to be able to answer difficult questions and make important financial decisions - Saved three hours per month working on action items with his interim CFO ### The problem: more people more transactions When it comes to finances, what Tanay really cares about is being able to have a constant pulse on what's happening. There was a point when he knew every single transaction that was going on inside the company, including who made it and where it was going. As the company grew beyond 15 people, it became increasingly difficult to track the flow of cash. If this lack of visibility persisted, it would lead to suboptimal decision-making. Early tech companies faced with this challenged usually do one of two things: (A) hire a tech-savvy outsourced finance team or (B) make an internal finance hire to stay on top of finances full time. Wispr first tried Bench, then Pilot. While both are excellent companies, working with them felt like collaborating with traditional accountants with slightly improved interfaces. For instance, Tanay could log in and see a list of newly added vendors, but he couldn't track where the money was going or how individual line items were evolving over time. Despite using Bench and Pilot, Tanay still had to dedicate several hours each month to meticulously review the company's books. This task became overwhelming as Wispr expanded beyond 15 employees. The second approach of making an internal finance hire may seem straightforward, but it's rare to find a person who excels in all areas of financial operations and advisory for an early stage company. This approach typically costs significantly more than utilizing a fully-staffed firm on a fractional basis. ### Solution: Digits AI powered accounting Tanay turned to Digits for an innovative, AI-driven approach to financial management. Digits stood out with its user-friendly interface and powerful analytical tools, which offered a seamless experience for understanding and managing financial data. Tanay was particularly impressed by Digits' ability to provide real-time insights and detailed financial reports that were easy to navigate and interpret. **Onboarding and Integration** The onboarding process with Digits was smooth and efficient. Tanay's first interaction was with Jeff from the Digits team, whose positive energy made the process enjoyable. Tanay appreciated the white-glove service, which stood out compared to other products he had used. Integrating Digits with Wispr’s existing financial platforms was straightforward, taking only a few minutes. **Adapting to Digits** Tanay and his interim CFO quickly adapted to using Digits. The intuitive interface required little to no additional training. The team at Digits was responsive and supportive, ensuring that any questions or issues were addressed promptly. Tanay appreciated the proactive communication and quick turnaround on feedback, which made him feel valued as a customer. > I remember the first time I looked at my first monthly report. I immediately sent Jeff an e-mail and was like dude, this is insane. I just spent 10 minutes answering all of my questions that I otherwise needed three hours and a call with my CFO to be like “what is going on”? ### The Impact - **Enhanced Financial Visibility** — \*\*\*\*With Digits, Tanay was able to regain a detailed view of Wispr's finances. He no longer had to spend hours each month reviewing financial statements. Instead, Digits provided comprehensive reports that answered his questions in minutes. This increased transparency allowed Tanay to make better-informed decisions and manage the company’s finances more efficiently. - **Improved Forecasting and Budgeting** — Digits also transformed Wispr's budgeting and forecasting processes. The platform allowed for easy tracking of financial metrics and headcount management. Tanay could create and adjust budgets with greater accuracy, ensuring that Wispr remained within 5% of their forecasted burn rate each quarter. This capability was crucial for a company developing deep tech hardware, where long-term planning is essential. - **Positive Team Experience** — Both Tanay and his interim CFO found Digits to be a significant improvement over previous solutions. The CFO, initially skeptical about switching from traditional platforms, quickly became a proponent of Digits due to its superior functionality and user experience. This positive reception extended throughout the Wispr team, reinforcing the decision to adopt Digits as their primary financial management tool. _Digits has empowered Wispr with the tools and insights needed to navigate its finances in minutes. Ready to upgrade your accounting to Digits for complete peace of mind? Book a demo with our team today._ ### Featured Guest #### Tanay Kothari Co-founder and CEO --- # Blog & Insights ## Digits Blog URL: https://digits.com/blog/ ### News and all things business finance #### Browse by Categories [All](/blog/all/) [AI](/blog/ai/) [Accounting](/blog/accounting/) [Developer](/blog/developer/) [News](/blog/news/) [Tax](/blog/tax/) [ AI ### Zero Entry: The Opportunity of a Lifetime for Accountants Accounting is entering a technology shift unlike the ones that came before. AI is changing how the work gets done, from categorization and reconciliation to research, quality control, and close. That shift will reshape how firms are staffed, how engagements are priced, and where accountants create the most value. In Zero Entry, Digits co-founder Rob Hamilton shares why this moment could become the opportunity of a lifetime for accountants, and what firm leaders should be doing now to prepare. ](/blog/zero-entry-the-opportunity-of-a-lifetime-for-accountants/)[ AI ### How non-engineers at Digits ship AI-built tools When everyone can build with AI, the bottleneck shifts. Here's how Digits built the infrastructure that turned ideas into trusted internal software. ](/blog/how-we-ship-ai-built-tools/)[ News ### Introducing the Agentic Close: Manage by Exception Digits Agentic Close continuously books, reconciles, schedules, and reviews financial activity, surfacing exceptions in Checklist for accountant review. ](/blog/agentic-close/) ### Editor's Picks - News [Breaking: Frontier Models Now Beat Human Accountants. Why Does Your Close Still Take All Month?](/blog/frontier-models-now-beat-human-accountants/) Frontier AI now beats human accountants at classification, but the real accounting advantage is purpose-built systems that help close the books. - News [Digits is Now Programmable](/blog/digits-is-now-programmable/) Digits is now programmable: Connect API opens the AGL to developers with AI-led categorization, vendor matching, reconciliation, and dimensional accounting. - News [Introducing Expanded Payroll Connectors](/blog/introducing-expanded-payroll-connectors/) Digits now connects to 18 more payroll providers, automatically posting payroll into the Agentic General Ledger™—no CSV exports, no manual journal entries, no reconciliation headaches. - News [Always Be Closing: Introducing AI Bank Reconciliations](/blog/ai-bank-reconciliations/) Digits AI Bank Reconciliations automatically reconcile bank statements, flag anomalies, and tie out balance sheet accounts. Drop in a PDF statement—Digits handles the rest. ### Latest Articles [View all](/blog/all/) - AI [Zero Entry: The Opportunity of a Lifetime for Accountants](/blog/zero-entry-the-opportunity-of-a-lifetime-for-accountants/) - Accounting [Digits vs. Accrual for Accounting Firms: What's the Difference?](/blog/digits-vs-accrual/) Compare Digits and Accrual for accounting firms. Digits is the AI-native general ledger where the accounting happens. Accrual adds AI to individual tax preparation around your existing tax engine. ## 1099 Vs. W-2: The Pros and Cons for Your Startup URL: https://digits.com/blog/1099-vs-w2/ February 6, 2025 Bootstrapping a startup means trying to stretch your funding as far as possible. Salaries are often a founder's biggest expense — but if you pay under market value, you won't get the talent you need to succeed. Forgoing W-2 employees and using 1099 contractors may seem like a good way to hire top-of-the-line people without running yourself out of business. However, working with freelancers brings its own set of challenges: You must follow IRS and state regulations regarding what you can require of contract workers. The penalty for breaking these laws is steep. Many founders opt to wing it when hiring, choosing the solution that seems most cost-effective at the moment. Like every other part of the hiring process, your employee classification decisions should be made thoughtfully and with an eye on the future. Here's how to choose between hiring 1099 vs. W2 workers. ### **1099 vs. W-2: What's the difference?** The key difference between 1099 and W-2 workers is the amount of control you have over their work. 1099 workers are also known as independent contractors for a reason: While they have a work arrangement with you, they are only obligated to deliver the product or service you contracted them for. Contractors choose how to complete their work and control their own schedules. When you're working with a contractor, you can't order them to work in the office every day from 9 - 5. You can't tell them they have to work in a certain program (though you could specify a certain file type you need the final product to be). And you can't require a contractor to refuse other work, even if it's similar to the service they're providing to your company. W-2 employees, on the other hand, have a tighter work relationship with your company. You can direct both what they do and how they do it. They'll typically work with company tools (laptops, software, etc.) and on a schedule determined by their manager. W-2 employees are with your company for the long haul rather than coming and going as projects dictate. ### **What you need to know about hiring W-2 employees** Many of the people who work at your startup will be full employees. W-2 employees are fully trained by your company and embedded into it in a way contractors are not. For one, their skills and expertise remain on tap as your company grows. While they're hired into an official role, you can shift their duties as needed. Startups may hire employees to fulfill roles like: - Handling ongoing scheduling and other administrative tasks that require knowledge of the company's workings and systems - Planning your product development timeline, coordinating freelancers and employees, and bridging the gap between executives and individual contributors - Managing your operations, including duties like hiring and training, that require strong relationships with managers and executives When you hire a W-2 employee, you're investing in a person, not a product or outcome. Your employee will (hopefully!) grow in their role and perhaps even win a promotion when they gain the skills to help your company at a higher level. Unless you hired them for a temporary position, they're with your company until you or they decide the employment arrangement should end. #### **Pros and cons of hiring employees** On paper, hiring employees costs more — but sometimes, that extra investment is worth it. Benefits of employee workers include: - **Greater control:** You have more say over how they perform their job. If you want them in the office for set hours or need them to use a Windows PC instead of a Mac (or vice-versa), that's your right as an employer. - **Improved team cohesion:** Because employees signed up to be with your company and only your company, they'll spend every day working with the same team. Over time, they'll learn each other's strengths and weaknesses and work together more smoothly. - **Higher loyalty:** Employees' jobs rely on your company's continued success. This incentivizes them to work hard and do their best. - **More stability:** Employees work for the good of your company, not for the success of a specific project. They can be pulled onto assignments to help during a big crunch or cover someone else's duties. They also accrue institutional knowledge that's important to your success but may not be officially documented. Cons of employee workers include: - **Higher costs:** When you hire an employee, you're required to pay for benefits like health insurance, paid time off, and other perks. You'll also pay half of their Social Security and Medicare taxes. - **More administrative work:** Hiring employees requires heavier documentation on your part, plus compliance with [employment laws](https://www.dol.gov/general/aboutdol/majorlaws "null"). - **Less flexibility:** Scaling up (or down) takes more time when working with employees vs. contractors. You'll need to go through a full hiring process, potentially wait for your new hire to transition out of their old job, and then do a full onboarding. Once you reach a certain size, you'll also have to follow [rules for layoffs](https://www.dol.gov/general/topic/termination/plantclosings "null"). While there's no one answer to "Is it better to hire employees or independent contractors?" there's a reason most Fortune 500 companies don't solely run on freelance workforces. #### **Tax implications of W-2 employees** Some of the administrative work mentioned above will go toward paying employee taxes. As an employer, you are responsible for: - **Federal and state income tax withholding:** The employee decides how much they want [withheld from their paycheck](https://www.irs.gov/publications/p15t "null"), but your company will be responsible for remitting those taxes to the relevant agencies. - **Payroll taxes:** Employers pay half their employees' Social Security taxes and Medicare taxes, which comes out to [7.65% of their salary](https://www.irs.gov/taxtopics/tc751 "null"). These are known as the Federal Insurance Contribution Act, or FICA, taxes. - **Unemployment taxes:** Employers must pay federal (FUTA) and state (SUTA) [unemployment insurance taxes](https://www.irs.gov/individuals/international-taxpayers/federal-unemployment-tax "null"). - **Workers' compensation insurance:** Most states require you to provide workers' comp for all employees to cover injuries that happen in the workplace. - **Regular reporting:** Your company will file [quarterly and annual payroll tax returns](https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-due-dates "null") and is responsible for providing tax form W-2 to employees. As you can see, there are a lot of details here to keep track of. Most business owners work with accountants to ensure they stay compliant. #### **How to file form W-2** Filing a [W-2](https://www.irs.gov/forms-pubs/about-form-w-2 "null") requires you to have your business information and your employee's information on hand. Boxes A, E, and F will have your employee's information; boxes B, C, and D are for your company information. Then, you'll need to fill out employees' wages and tips (Boxes 1 and 8, if applicable), tax withholdings (Boxes 2, 4, and 6), and the amount of their wage subject to Social Security and Medicare taxes (Boxes 3, 5, and 7, if applicable). Much of this information will be repeated in the state wages section (Boxes 15-20). Boxes 10-14 don't apply to every employee; check with a tax expert if you're not sure whether you need to fill them out. Copy 1 should be filed with their state or other local tax authority. Copy 2 and Copy B go to the employee for filing with their state and federal tax returns, respectively. Copy C is theirs for their records, and Copy D is for your company's records. W-2 tax forms must be sent by January 31st of the year following an employee's work. ### **What you need to know about hiring 1099 contractors** Small business owners typically hire independent contractors when they need a specialized skill set or certain expertise to complete a specific project or initiative. You can bring a contractor on board to benefit from their knowledge without having to find the budget for another employee. Some examples of contractors startups might hire include: - A branding specialist to develop your company's logo and wordmark - A growth consultant to create a go-to-market plan for your marketing team to execute - An app developer to turn your web app into a mobile app 1099 contractors may work with one or two points of contact at your company, or they may interact with full teams. However, they're ultimately there only for the time it takes to complete the project or scope of work. #### **Pros and cons of hiring independent contractors** Independent contractors are less expensive for a company trying to keep things lean, but short-term workers typically bring short-term benefits. Pros of independent contractors include: - **Cost savings:** Independent contractors pay self-employment tax, so your company won't have to cover payroll taxes or coordinate withholding. They also don't qualify for employee benefits like insurance, PTO, or retirement plans. - **Greater flexibility:** Because contractors work on an as-needed basis, it's easier for you to wind up or wind down staffing as your budget allows. Working with freelancers also enables you to pivot quickly and choose people with the right expertise for your company's current needs. - **More specialization:** Contractors bring expertise you might not have access to in-house. You may not be able to pay a network security engineer salary, but a consultant could design and implement security measures for a lower project rate. - **Fewer compliance risks:** Freelancers have fewer legal protections, so you're less likely to run afoul of laws and regulations. Cons of independent contractors include: - **No employer control:** You don't get to tell an independent contractor how to do their job. They can work at their own pace and choose their own hours. If you want someone who's plugged into your team, a contractor would be a poor fit. - **Risk of misclassification:** Just because you pay someone with a 1099 doesn't mean they're an independent contractor. If you break federal or state laws regarding who can and can't be considered a freelancer, you could be on the hook for [serious fines and penalties](https://www.deel.com/blog/employee-misclassification-penalties/ "null"). - **Less investment:** Contractors come in, do their job, and get paid — whether or not your company succeeds in the long term. A good independent contractor takes pride in their work, but they're less likely to go above and beyond or pick up the slack if they see something else that needs to be done. Because independent contractors have fewer ties to your company, relying too much on them could leave you with a lack of internal talent and big knowledge gaps that you'll need to run your day-to-day. Plus, contractors doing company essential work are likely misclassified (more on that later). #### **Tax implications of 1099 workers** Handling payroll and taxes for 1099 workers is much easier than it is for W-2 employees. We don't even have a bullet-point list for them. All you need to do is send form 1099-NEC to any contractor who has earned more than $600 from your company in the past year. Your company doesn't withhold taxes for 1099 contractors, nor are you responsible for FICA and other employment taxes. They're not eligible for workers' compensation (or other benefits). #### **How to file form 1099-NEC** Filing a [1099-NEC](https://www.irs.gov/forms-pubs/about-form-1099-nec "null") is easy: You'll need to input the contractor's full legal name, your Taxpayer Identification Number (TIN), the contractor's Social Security Number (SSN) or TIN, their address, and the total amount you've paid them in the tax year. Copy A goes to the IRS, Copy B goes to the contractor, and Copy C becomes a part of your company's records. 1099 tax forms must be sent by January 31st of the year following the contractor's work for you. ### **Misclassification of workers: A critical IRS concern** Hiring someone as a contractor while treating them as an employee is against employment law. Enforcement agencies take this transgression seriously. Self-employed workers trade the security and perks of a W-2 job for the freedom to be their own boss. If the law determines they've lost that freedom, your company will be on the hook for unfair employment practices. #### **Employee classification tests** Depending on where you live, there are one or two tests you'll need to apply to determine if a role should be classified as a W-2 employee or a 1099 independent contractor. The [IRS common law rules](https://www.irs.gov/businesses/small-businesses-self-employed/employee-common-law-employee "null") use three categories to determine a worker's rightful classification. Ask yourself these questions regarding the following categories of your employment agreement: 1. **Behavioral Control:** Do you have the right to control what the worker does and how they do it? 2. **Financial Control:** Do you control business aspects like how the worker is paid or whether expenses are reimbursed? 3. **Type of Relationship:** Are there contracts, benefits, or an expectation of an ongoing relationship? Is the work a key aspect of your business? If you answered yes to any of these questions, you may need to classify the worker as an employee. All categories are considered together, so one "yes" doesn't guarantee that person is an employee. Many states have stricter rules than the federal government. A worker who counts as a contractor under federal law may still need to be a W-2 employee if they work in one of those states. The most common test used by states is the ABC test, where all three need to be true: - The individual free is from your control and direction, both under contract and in fact, for the performance of the work. - The individual performs work that is outside your company's normal course of business. - The individual established themself as a worker in the trade, occupation, or business for which you have contracted them. Under the ABC test, the answer to all three of these questions must be "yes" for an employee to be considered an independent contractor. As of 2025, [thirteen states use the ABC test](https://www.jdsupra.com/legalnews/independent-contractors-under-u-s-law-12379/#:~:text=States%20applying%20some%20version%20of%20the%20ABC%20test%20include%20California%2C%20Connecticut%2C%20Delaware%2C%20Illinois%2C%20Indiana%2C%20Massachusetts%2C%20Nebraska%2C%20Nevada%2C%20New%20Hampshire%2C%20New%20Jersey%2C%20Vermont%2C%20Washington%2C%20and%20West%20Virginia. "null"), so be careful if you're hiring in any of them. Both the federal classification test and the ABC test questions are somewhat subjective. We recommend consulting a lawyer so you can be confident in your worker classification choices. #### **Penalties for misclassification** The Silicon Valley ethos of "move fast and break things" should not be applied to your employment practices. Mistakenly identifying a W-2 employee as a 1099 contractor can be extremely expensive. Companies that make this mistake may have to pay the federal government, the state government, and the misclassified individual. The [federal penalties](https://www.wingspan.app/articles/lessons-from-uber-lime-meta-on-misclassifying-your-independent-contractors#:~:text=may%20face%20imprisonment.-,IRS%20tax%20penalties,-One%20of%20the "null") for unintentionally misclassifying an employee are: - A fine of $50 per form W-2 the employer failed to file - Back taxes equal to 100% of the FICA taxes the employer should have paid - A penalty equal to 1.5% of the wages plus 40% of FICA taxes that were not withheld from the employee - A Failure to Pay Taxes penalty equal to 0.5% of the rapid tax liability for each month, up to 25% of the total liability The penalties accrue interest from the date the tax payments should have been made. If the IRS determines you willfully misclassified an employee, you could be subjected to penalties of up to 20% of all the wages paid plus 100% of FICA taxes — both your share and the employee's share. The IRS may also pursue criminal penalties of up to $1,000 per misclassified worker and a year in prison. States may further penalize you for misclassification. For example, [in California](https://www.dir.ca.gov/dlse/MisclassificationOfWorkers.htm#:~:text=All%20employers%20are,the%20JKH%20decision. "null"), you would be prohibited from using employee labor until you were back in compliance, and you'd have to pay back taxes, unemployment insurance fees, and penalties. Finally, a misclassified individual can bring a civil claim against your company for violating the Fair Labor Standards Act (FLSA) and other labor laws. They may be able to receive back wages (including unpaid overtime) and compensation for the benefits they did not receive, like insurance coverage, paid leave, and severance pay. Don't forget that losing a lawsuit also means you'll have to pay that person's legal fees. These penalties add up quickly, especially if you've misclassified multiple employees or kept a worker misclassified for a long time. Our advice: Make sure a knowledgeable HR employee oversees all staffing decisions so you don't make this mistake. #### **Best practices to avoid misclassification** So, how do you make sure you're hiring the right types of workers for each job? Start by evaluating each new position under any applicable tests before you make the hire. You may want to talk to a lawyer as part of this evaluation. Then, keep detailed records of the reasons you classified a worker as a contractor instead of an employee. You'll want these if questions ever arise surrounding the worker's status, even if just to prove it was an unintentional misclassification. HR should maintain these records. Finally, find an accountant or another tax professional to ensure you meet all your tax obligations for W-2 employees and 1099 contractors alike. ### **The accounting know-how your startup needs** Most founders aren't accountants, and they shouldn't have to be. Digits gives you clean, GAAP-compliant books powered by automation, not manual effort. From transaction categorization to real-time reporting, Digits handles the heavy lifting so you can focus on building your business. Already working with an accountant or bookkeeper? You can easily invite them to Digits to collaborate directly, giving your team shared visibility without extra tools or manual handoffs. [Try Digits for free today](#interstitial "null") and see how smarter accounting can streamline your startup's finances. ## Digits Launches Real-time Finance Dashboard for Businesses; Announces $22M Series B URL: https://digits.com/blog/22m-series-b/ April 23, 2020 We are obsessed with the vision that **business finance should be immediately accessible and intuitive**. It should learn, in real-time, as the business evolves, and it should empower business owners and operators everywhere, without requiring any prior financial training. Why? Because today's business climate requires you to take action in the moment and react rapidly to changing market conditions. That means not waiting weeks to receive a standard packet of black & white financials—which honestly can be quite difficult to interpret—**and instead demanding the visibility and insight you need to make decisions, right now**. #### The Power of Digits The world's largest companies have sophisticated finance teams and internal forecasting models that give them these capabilities. What about everyone else? What if synthesized, actionable financial insights were available to every business on earth? **What if they were always in real-time, and always up-to-date?** For two years, we've been building the technical infrastructure to make this a reality: N-dimensional transaction attribution. Auto-reconciliation. Predictive classification. Vendor identification and profile synthesis. Sub-second, full-ledger search. Statistical analysis and anomaly detection. Per-secret envelope encryption. The list goes on. #### Introducing Digits, for Expenses We've been humbled by the glowing feedback from our early customers and we've been inundated with requests for access. And, in these unprecedented times, we feel the obligation to help as many business owners as we can, as quickly as possible. **So today, we're launching a broad early-access program for** **[Digits for Expenses](https://digits.com/expenses)**. We've taken all of the power of our platform and focused it specifically on helping business owners navigate today's challenging market dynamics, so they can see and manage how their company is spending money: > **Digits is a phenomenal and truly game-changing product**. To be able to ask such a wide spectrum of financial questions and get to those answers immediately has been so empowering, and the team's passion for the space is clear in all the small details. > > Thinking back to a finance world before Digits… feels like remembering Netflix as a DVD-by-mail service. – Kenny Mendes, Head of Finance, People, and Operations [Digits for Expenses](https://digits.com/expenses) is the first real-time, intuitively visual, machine-learned expense monitoring dashboard for small businesses, **and in light of current conditions, we are making it Free.** _(__**Seriously.**_ _We have other paid products on our roadmap, but Digits for Expenses is and will continue to be free for all small businesses. In this quarantine, it's the least we can do.)_ #### GV leads $22M Series B As we've built Digits, we've been overwhelmed by the energy and excitement for our mission from founders, accountants, and investors alike, and we've been honored to have the financial backing of Benchmark and [over 70 passionate angel investors](https://digits.com/our-supporters). **We see this as a long-term, sustained effort, and Digits for Expenses is just the first chapter:** we believe that innovations in technology, algorithms, and design have unlocked a new realm of possibility for financial software, and we are committed to making this vision a reality for businesses around the world. In support of this, we're excited to share that we have closed **$22M in Series B funding, led by** **[Jessica Verrilli at GV](https://www.gv.com/team/jessica-verrilli/)**, and we're thrilled to welcome her to our Board. Jessica's deep experience in corporate development at Twitter and in early-stage investing through GV and #Angels have given her unique insight into the challenges small businesses face during their most-defining moments, and we're looking forward to imbuing the product with her knowledge. > **Jeff and Wayne are masterful at creating intuitive, high-utility products from complicated data.** I saw this up close with Crashlytics and Twitter, and I'm thrilled to partner with them on Digits as they reimagine financial software for startups. – Jessica Verrilli, **General Partner** This round gives us the stability we need to become the partner that businesses can trust: at current burn, Digits' runway now extends over 10 years. #### $8+ Billion and counting… When we announced our Series A in November, Digits' production systems saw over **$1.5 Billion** in transaction value across our early customer base. **Today, that number is already over $8 Billion, and growing daily.** [Digits for Expenses](https://digits.com/expenses) is available today, for free, for US-based startups and small businesses. We plan to add support for international markets later this year. Digits takes just a few clicks to set up, and sits on top of your existing ledger and your existing accountant's work—you change nothing. [Sign up here to get started](https://digits.com/demo/). _(If you're an investor, startup incubator, or accounting firm and want priority access for your portfolio companies, contact us at_ _[partnerships@digits.com](mailto:partnerships@digits.com)__.)_ #### With Thanks, As founders, we would like to thank the entire Digits team for their tireless work over the past two years to bring us to this point. We still see this as just the beginning of our Digits journey, and we look forward to building powerful tools to help businesses of every shape and size chart their course. We can't wait for you to [experience Digits](https://digits.com/demo/), and we can't wait to hear what you think. ## 409A Valuations: A Complete Guide for Startups URL: https://digits.com/blog/409a-valuations-startups/ December 21, 2024 Mistakes with 409A valuations are all too common in startups — but they don't have to be. From errors in execution to the misconception that they're unnecessary, these pitfalls can lead to severe tax penalties, unhappy employees, and wary investors. In this article, you'll learn exactly what 409A valuations are, why they're crucial for your company's future, and how they impact everything from employee compensation to investor negotiations. ### What is a 409A valuation? A 409A valuation is an IRS-approved assessment of a private company's common stock's fair market value (FMV). The purpose of this valuation is to ensure compliance with IRS regulations, particularly for deferred compensation arrangements like employee stock options and other equity awards. For startups, this valuation is crucial since early-stage companies often have illiquid stock that can be difficult to accurately price. By obtaining a 409A valuation from an independent valuation provider, startups ensure that their stock value is defensible, avoiding potential penalties from the IRS. This is especially important ahead of major milestones or liquidity events, such as an IPO or acquisition, which can dramatically impact the value of the company. ### How is a 409A valuation different from a strike price or VC valuation? Although they may seem similar on the surface, a 409A valuation, strike price, and VC valuation are three different things that serve unique purposes. A **409A valuation** is a necessary third-party assessment of the fair market value (FMV) of your company's common stock. It's primarily used to keep stock options or equity awards in line with IRS regulations. The **strike price**, on the other hand, is the price at which employees, advisors, or other option holders can buy shares when they exercise their options. The strike price is set at or above the FMV calculated in your 409A valuation, which is why these terms are often confused. A **VC (Venture Capital) valuation** is different from both a 409A valuation and the strike price. It reflects the value of your company as determined during a fundraising round based on negotiations between founders and venture capital investors. This valuation often emphasizes future growth potential, market opportunities, and investment terms, making it inherently forward-looking. Unlike a 409A valuation, which tends to produce a conservative estimate of your company's current value, a VC valuation is typically more optimistic and tied to market dynamics and investor sentiment. ### Why do 409A valuations matter? 409A valuations are important for a variety of reasons, but here are three of the most important ways this valuation can affect your startup. #### 1\. Tax law compliance The primary reason for obtaining a 409A valuation is to comply with IRS regulations governing deferred compensation. Setting the exercise price of your company's stock options in line with or above the fair market value (FMV) determined by a 409A valuation helps shield your business from costly penalties and tax consequences — both now and in the future. In the early stages, some founders may be tempted to assign a nominal value, such as "zero," to their stock. While this may appear convenient at first, it can lead to significant income tax issues for your employees down the line. Companies are also required to report the value of stock options and other equity awards in their financial statements in accordance with [GAAP](https://www.accounting.com/resources/gaap/#:~:text=Generally%20accepted%20accounting%20principles%20\(GAAP\)%20comprise%20a%20set%20of%20accounting,transparency%20of%20their%20financial%20disclosures. "null"). Guessing your company's value is not a viable option, as accurate valuations are needed for both tax compliance and regulatory disclosures. #### 2\. Talent recruitment Stock options are a critical part of many compensation packages, often serving as a major incentive for attracting top talent. In most startup industries, employees often expect to receive stock options as part of their deal. If they are an original employee of your startup, this could be a significant portion of their compensation package. A professional and defensible 409A valuation ensures that these options are priced correctly, meaning there will be no unwanted surprises when employees exercise their options. For example, a few years ago, we had a client come in who had set up their company and issued stock options at a fair market value of $.0001. As this company began to raise money, its lead investor questioned this number. Upon further review, the FMV was revised upwards to nearly $1, which caused tax issues for the original employees. Offering a defensible valuation not only protects your employees but also enhances your credibility with potential hires and investors. When your equity compensation is properly valued, you build trust and demonstrate that your company takes compliance seriously. #### 3\. Fundraising efforts While the primary purpose of a 409A valuation is to set the exercise price for stock options, it can also play a role in fundraising — albeit indirectly. Investors may view your 409A valuation as one of several indicators of your company's current worth, particularly during equity negotiations. It's important to remember, however, that a 409A valuation typically reflects a more conservative estimate of your company's value compared to what you might see during a fundraising round. In most cases, the enterprise value established during fundraising will exceed your 409A value. This distinction matters as it ensures your stock options remain affordable for employees while reflecting realistic market expectations for your business during investor discussions. ### How does a 409A valuation work? A 409A valuation starts with hiring a qualified, independent third-party firm to assess your company's FMV. Once you've picked a firm to partner with, they will go through the following steps: 1. **Data Collection**: The valuation firm gathers essential information about your company, such as financial statements, cap tables, historical growth data, industry trends, and any significant milestones (like fundraising rounds or acquisitions). 2. **Methodology Selection**: Valuation experts choose the right methodologies to evaluate your company. Common approaches include the market approach (based on comparable companies or transactions), the income approach (projected cash flows), and the asset-based approach (net asset value). The valuation method chosen will often come down to your company's stage, market activity, and growth trajectory. 3. **Valuation Analysis**: Using the gathered data and selected methodologies, the valuation firm calculates your company's FMV. This step often involves detailed modeling and adjustments for factors like market volatility, recent investments, or major changes in your industry. 4. **Report Creation**: The firm compiles its findings into a formal report that outlines how it determined the FMV, including key assumptions, data used, and analysis methods. This report provides the documentation your company needs to comply with IRS regulations and withstand potential audits. 5. **Final Review and Implementation**: Once you receive the 409A valuation report, it's important to review it thoroughly with your legal and tax advisors. Upon finalization, this valuation sets the exercise price for stock options, ensuring your equity awards are compliant and defensible. ### How often should you update your 409A valuation? It's generally recommended to update your 409A valuation at least once a year or after any significant events that could impact the company's valuation, such as fundraising, major changes in revenue, or significant shifts in the market. Regular updates ensure that your stock options are priced accurately and remain compliant with [IRS guidelines](https://www.irs.gov/pub/irs-pdf/p5528.pdf "null"). Do you need to do this like clockwork on an annual basis? No, but you should try to keep this as updated as possible. While there is no all-encompassing list of significant events that should trigger a new valuation, here are the items we see most often in practice: - Major secondary transactions where a third party buys stock from an existing shareholder at a notably different value compared to the stated FMV - New equity or debt financing - Market pricing corrections or differences - World events that affect your industry ### What are some common misconceptions about 409A valuations? We hear all kinds of misconceptions about 409A valuations from our clients. Here are the most common ones. #### 409A valuations aren't worth the cost While there is a cost associated with 409A valuations, the potential expense of not having one can be much higher due to penalties and tax liabilities. Ignoring the need for a 409A valuation can also expose the company to legal risks if employees face unexpected tax issues. We see many valuation firms offering discounted or attractive valuation prices for startups. While you should ensure a fair price, do not always go with the cheapest option. #### 409A valuations are only needed when raising Series A or beyond Companies should regularly update their valuations, especially after significant changes in business conditions. New valuations are needed at all significant events, which could include a small round or even a secondary stock sale. #### Using the same firm for multiple 409A valuations is a bad idea Using the same firm for multiple 409A valuations isn't necessarily a bad idea. As long as you are satisfied with their work and they maintain their independence and objectivity, there's no reason not to continue with them. In fact, consistency can actually be beneficial because they'll have a deeper understanding of your business over time. Startups with unique ideas, products, or services may be best served to develop a long-lasting relationship so they do not need to re-explain and teach each new firm about their company. ### Ensure compliance and maximize benefits with strategic 409A valuation planning The 409A valuation process, while sometimes a pain, is a critical part of managing a startup. Regular updates and accurate valuations help prevent tax penalties, attract talent by correctly pricing stock options, and prepare your company for future growth opportunities. When determining if it's time for a 409A valuation, founders should consult with both their corporate counsel and tax advisors to make informed decisions. If you are looking for startup-friendly tax advice, please [reach out to our team](https://digits.com/demo/ "null"). We can help offer the specialized tax advice you need to ensure your startup is safely looked after come tax time. ### 409A valuation FAQs #### What if the IRS challenges our 409A valuation? If the IRS challenges your 409A valuation, they could determine that the exercise price of your stock options was set too low. This finding could result in penalties and immediate income recognition for option holders, as well as interest charges. To mitigate this risk, it's crucial to work with a reputable valuation firm and tax advisor who can provide a well-documented and defensible valuation. #### Are employees penalized for non-compliant 409A valuations? Yes, if the 409A valuation is not compliant, employees who hold stock options may face significant penalties. These can include immediate taxation of the option's value upon vesting, a 20% IRS penalty on the income recognized, and additional interest penalties. This alone should encourage startups to take this process seriously. ## Announcing Financial Reports from the Future (and our $65M Series C) URL: https://digits.com/blog/65m-series-c/ March 24, 2022 Today's finance tools fall far short of what accountants and finance teams deserve—immersive storytelling backed by intelligent analysis, powerful visuals, and instant answers. It's time to bid farewell to stale, black and white reports, tedious Excel models, and unsecured email attachments. **Let relics go the way of relics.** Financial reports are meant to tell a story. Today, that story is confusing—it's told in a format that's complicated, tough to understand, and hasn't changed in decades. When business owners receive their monthly financials, they struggle to grasp the takeaway or what they should do about it. The burden falls upon them, their accountant, or their finance team to make sense of it all. #### SoftBank Vision Fund 2 and Harry Stebbing's 20VC Growth Back our Vision for the Future of Finance As we've built Digits, we've been overwhelmed by the energy and excitement for our mission from founders, accountants, and investors alike, and we've been honored to have the financial backing of [Benchmark, GV, and over 70 passionate angel investors to bring us to this point](https://digits.com/company/). Today, we're excited to announce the next chapter: our $65 Million Series C, led by SoftBank Vision Fund 2 with participation from Harry Stebbings' 20VC Growth, as well as Benchmark and GV. SoftBank's extensive experience in global fintech and their shared commitment to long-term, meaningful impact in the spaces they invest in is an ideal partnership as we shift to our next stage of growth. #### Meet Digits Reports Welcome to the future of financial reporting. Digits Reports is a modern and secure format for live, interactive, collaborative financial statements. Go ahead, play with the numbers. Features like Hover to Discover allow you to quickly see trends, deltas, and actionable insights. Deep-dive on demand. Live connections to your underlying accounting software enable infinite exploration, with endless visualizations. Collaborate seamlessly. With one-click secure sharing, send and receive reports that invite exploration while keeping sensitive information safe. [Experience Digits Reports](https://digits.com/reports/) #### The Builder Behind the Scenes The true power of Digits Reports lies in the editor. Behind the scenes, Digits Reports Builder is the pro-tool we're giving to accountants and finance professionals, letting you create highly-visual, interactive reports in a fraction of the time. Go ahead, tell the story you've always wanted. A picture's worth a thousand words, and now you can paint a story your clients can comprehend, told the way you want it. Drag and drop charts, insights, and top performer graphs directly into a report. See an intelligent insight you like? Click and instantly add it to the executive summary. Don't worry, Digits has already calculated and verified the math for you. For the first time, you can generate dynamic documents your clients can explore, visually and intuitively, from a high level down to individual transaction details—all in one place. Digits Reports Builder works just as you'd expect, allowing you to create stunning reports from the moment you open it. Fine-tune your reports to match client goals and highlight insights that surface what they need to know. Adding charts and refining financials have never been this easy or beautiful. **Just drag. Drop. Done.** [Try Digits Reports Builder Today](https://digits.com/reports-builder/) #### So what's next? Today, we're launching **Digits Reports for FREE**. We want your feedback, feature requests, and complaints. (Seriously!) We plan to announce expanded features and pricing plans later this year. We founded Digits to empower accountants, financial professionals, and operators with the finance tools they deserve, and our team has poured their hearts and souls into the product. It's been a huge honor designing and building Digits Reports in close partnership with dozens of accounting firms and small businesses. Here's a behind the scenes look at how it works: [Try Digits Reports for Free](https://my.digits.com/signup/plan/starter) ## 7 Reasons Accounting Firms Are Switching to Digits URL: https://digits.com/blog/7-reasons-accounting-firms-switch-to-digits/ August 14, 2025 Most accounting platforms weren't built for how modern accounting firms operate or what their clients expect. Reconciliation is limited. Reporting is static. And "AI" usually means a few autofill rules or a loose ChatGPT functionality added to outdated software. Firms are tired of juggling spreadsheets, broken bank feeds, and outdated client portals that require more follow-up than they save. Manual work slows everything down, from categorization to review to month-end close. And adding new clients often means adding headcount just to keep up. Digits offers a better way. It's a truly AI-native platform built from the ground up to automate transaction booking, streamline reviews, and keep every client's financials live, accurate, and accessible. With built-in dashboards, smart collaboration tools, and real-time data flows, Digits gives firms the visibility, efficiency, and scale they need to grow, without burning out their team. Here are seven reasons firms are switching to Digits: ### 1\. The Autonomous General Ledger® Digits eliminates the manual grind of [transaction categorization](https://digits.com/product/bookkeeping/ "null") by automatically booking over [93%](https://digits.com/blog/agl-announcement/ "null") of entries with zero rules or setup. It's powered by the world's first Autonomous General Ledger® (AGL®), which has been trained on more than [$875 billion](https://digits.com/agl/ "null") in real transaction data and tested internally on over 2,000 monthly closes. Plus, the more you work with it, the smarter it gets. Digits adapts based on your team's preferences and each client's chart of accounts. All of this saves your firm time and money. Most firms still burn hours every month on brittle rule logic, tedious click-throughs, or offshore "AI" teams. Digits replaces all of that with an AI-native system that gives your team time back to focus on high-margin work, like advisory and client strategy. ### 2\. Direct integrations with over 12,000 financial institutions Clean, complete data is the foundation of every accounting workflow, and Digits makes it automatic. With direct integrations to over 12,000 banks, credit cards, payroll systems, and expense platforms, Digits pulls in everything your team needs in real time. No more missing feeds, broken connections, or manual uploads. [Digits Connect](https://digits.com/integrations/ "null") ensures every account stays synced and up to date, with proactive alerts if anything needs attention. With fewer data issues slowing things down, your team can deliver financials faster, strengthen client relationships, and take on more work without adding headcount. ### 3\. Full-account reconciliation Digits lets your team [reconcile every balance sheet account](https://help.digits.com/support/solutions/articles/151000213257-bank-reconciliation-in-digits "null") for every client, including credit cards, loans, clearing accounts, and payroll liabilities. Legacy tools typically stop at bank recs, leaving the rest to spreadsheets and workarounds. Digits replaces that manual effort with AI-driven matching across multiple data sources. It automatically pairs entries, flags discrepancies, and tracks progress in real time so your team knows exactly where to focus. Plus, with Digits, you can filter by account, drill into specific transactions, and resolve issues without ever leaving the platform. All of this allows you to complete account reconciliations faster, with fewer hours wasted on cleanup. ### 4\. Built-in transaction review with one-click client Q&A Digits speeds up review cycles by surfacing [questionable transactions](https://digits.com/blog/introducing-digits-transaction-review/ "null"), suggesting fixes, and letting your team follow up with clients in one click. Instead of relying on long email chains and suffering through delayed replies, your team can send targeted questions directly from the Digits Inbox platform. It does this by learning from your historical data and flagging anything that looks unusual or lacks key details. That means your team spends less time manually inspecting transactions and catches issues faster and more reliably than manual review alone. ### 5\. AI-powered reporting and dashboards Every client you manage through Digits gets access to a [live dashboard](https://digits.com/product/dashboards/ "null") with real-time metrics like revenue, [burn rate](https://digits.com/blog/burn-rate/ "null"), cash flow, and [runway](https://digits.com/blog/extending-your-startup-runway/ "null"). Clients can check their numbers anytime and drill into specifics to see what's driving changes behind the top-line metrics. Plus, at month-end, those same insights are transformed into interactive, [professional reports](https://digits.com/product/financials/ "null") that are ready to share with clients. Reports include hover-to-discover visuals, line-by-line commentary, and AI-generated summaries that call out key shifts, trends, and anomalies. You can even tailor each report to highlight what matters most, giving them a customized view of the financial picture. ### 6\. A secure and centralized platform Digits replaces scattered portals, inboxes, and file drives with one secure, modern workspace for your team and your clients. Every client gets a branded portal with login-free access, built-in messaging, and a document vault where they can securely upload files, respond to questions, and check off to-do items. For your firm, Digits provides a centralized dashboard to view every client's books, track progress, assign work, and collaborate in context. You can comment directly on transactions, reports, and vendors using Digits Inbox. This way, nothing gets lost in email threads or Slack channels. It's a better way to manage your workflow, communicate with clients, and scale your firm. ### 7\. Built-in bill pay and invoicing workflows Digits lets your firm manage accounts payable and invoicing without leaving the platform or stitching together external tools. With [AI Bill Pay](https://digits.com/product/bill-pay/ "null"), you can upload vendor invoices, extract line items automatically, route approvals, and pay by ACH or check, all backed by a secure, auditable ledger. On the AR side, Digits also supports [invoicing workflows](https://digits.com/product/invoicing/ "null") that let you create, send, and track client invoices with full visibility into payments and cash flow. Everything is synced to your clients' books in real time, so there's no need for manual reconciliation or outside systems. It's a faster, smarter way to offer full-service bookkeeping, and a simple way to grow revenue by managing more of your clients' financial operations in one place. ### Switch to Digits today Digits gets your firm up and running in days, not weeks, so you can start closing books faster with fewer tools. To make the change as painless as possible, we offer robust resources to guide you through onboarding, from syncing client connections to training your team and tailoring the platform to your workflows. You'll get hands-on setup, in-product collaboration, and real-time financials that streamline everything from reconciliation to reporting — no more stitching together five different tools just to serve one client. Ready to see how Digits can help your firm unlock the full-time and cost-saving power of AI? [Become a Partner today](https://digits.com/accountants/ "null") and give your clients the modern experience they've been waiting for. ##### FAQs ###### What makes Digits different from traditional accounting platforms for firms? Digits is different from traditional accounting platforms because it's fully AI-native and built to automate the most time-consuming parts of accounting. Unlike legacy systems, Digits uses a proprietary Autonomous General Ledger® (AGL®), trained on over $875 billion in real transaction data, to automatically book more than 93% of transactions with no manual setup. It also includes live dashboards, real-time collaboration tools, and a centralized client portal, all in one secure, unified platform. ###### How does Digits help accounting firms save time and scale efficiently? Digits helps accounting firms save time and scale efficiently by automating core accounting workflows. Its Autonomous General Ledger® (AGL®) categorizes and books over 93% of transactions automatically, while built-in tools for reconciliation, transaction review, and reporting reduce the need for manual work. ###### What support does Digits offer for firms switching from other platforms? Digits supports firms switching from other platforms with dedicated onboarding & personalized guidance through 1:1 support, weekly live webinars, Digits Academy, step-by-step documentation, and more. Further, client migration from other ledgers is seamless. ## 7 Sources of Funding for Startups (And How to Improve Your Odds of Getting Funded) URL: https://digits.com/blog/7-sources-of-funding-for-startups-and-how-to-improve-your-odds-of-getting-funded/ December 10, 2024 For Airbnb to disrupt the hotel industry and Canva to do the same with digital design, they both needed one thing: funding. Fundraising is one of the biggest challenges startups face, and finding the right source of capital can shape the success of your business. This guide breaks down the key sources of funding for startups and explains when to consider each one. From bootstrapping to pitching venture capitalists, you'll find actionable advice to navigate your funding journey with confidence. ### 1\. Bootstrapping Bootstrapping is the art of building your business using personal savings or early revenue instead of outside funding. It's one of the most common ways startups get off the ground, especially for first-time founders who want to keep things lean and in their control. This approach works best for ventures with low startup costs or those generating revenue early on. It's also a great fit for founders who value independence, as they retain 100% of the ownership. #### How to succeed with bootstrapping Start small and focus on validating your idea before scaling. A slow, steady approach lets you build strong relationships with early customers while reinvesting revenue back into the business for growth. #### Advantages of bootstrapping - **You're in charge:** With no investors, you maintain full ownership and control over every decision. - **Lean and efficient:** Bootstrapping forces you to prioritize spending, keeping your business financially disciplined from the start. - **No debt or dilution:** Avoiding loans or equity deals means you don't owe anyone or share your company's future upside. #### Challenges of bootstrapping - **Limited resources:** Without external funding, scaling can be slower, and big expenses like hiring or marketing might feel out of reach. - **High personal risk:** Using your own savings or reinvesting all profits can put pressure on your finances. - **Growth constraints:** While great for early stages, bootstrapping can make it tough to compete with better-funded rivals when scaling. #### Bootstrapping success story: Mailchimp Mailchimp started as a side project, funded entirely by its founders. By bootstrapping, they retained full control and grew the company into a global leader in email marketing. This lean approach paid off big time when they sold the company for $12 billion to Intuit in 2021. ### 2\. Angel investors Angel investors are individuals who use their own money to invest in early-stage startups in exchange for equity. These investors don't just offer money, though — they often offer a helping hand with developing your product, growing your team, or securing your first customers. #### How to succeed with angel investors To win over an angel investor, craft a pitch that's clear and compelling. Highlight your market opportunity, show how their investment will drive growth, and be prepared to share key financials and milestones. #### Advantages of angel investors - **They invest when others won't:** Angel investors step in early, taking risks banks and VCs avoid, helping you go from "big idea" to actual business. - **You get more than money:** Many angels bring industry experience, valuable connections, and hard-earned good advice to help you avoid mistakes. - **Terms that fit you:** Angels are flexible with deals, whether it's equity, convertible notes, or other creative setups. #### Challenges of angel investors - **Equity adds up:** Every angel deal means giving up ownership. Do this a few times, and your stake might shrink more than you'd like. - **Not exactly unlimited funds:** Angel checks usually range from $10,000 to $500,000. It won't typically cover massive growth needs. - **Finding "the one" is work:** Not every angel is a fit. You'll need time (and patience) to find one who believes in you and your vision. #### Angel investor success story: Uber [Uber's early growth](https://www.cnn.com/2019/05/08/tech/uber-first-investors/index.html "null") was fueled by angel investors like Garrett Camp and Chris Sacca, who saw the potential of a ridesharing platform. Their financial contributions, coupled with strategic advice and industry connections, helped Uber scale quickly and take its place as a major player in the transportation sector. ### 3\. Venture capital Venture capital (VC) is a type of funding provided by professional investors and firms to startups with high growth potential. In exchange for their investment, VCs take an equity stake in your company. If you're looking to scale quickly and dominate your market, VC funding can provide the resources to get you there. This funding source works for startups with a proven business model, clear growth metrics, and the potential to deliver significant returns. Like angel investors, VCs bring more than just cash; they can help with strategic advice, connections, and credibility that'll help you secure your place in the market. #### How to succeed with venture capital VCs want to see how their investment will multiply, so focus on how your business model is positioned to make a dent in the current market. This means you'll need clear growth metrics, unit economics, and future milestones already in place. #### Advantages of venture capital - **Big checks for big growth:** VCs invest significant sums, often millions, giving you the fuel to scale quickly and take market share. - **Strategic support:** Beyond money, VCs offer guidance, mentorship, and connections to partners or customers that can help your business thrive. - **Increased credibility:** Securing VC funding signals to the market, and other investors, that your startup has serious potential. #### Challenges of venture capital - **Equity dilution:** VC deals often mean giving up a sizable share of your company, reducing your control over time. - **Pressure for rapid growth:** VCs expect quick results, which can be capital-intensive. - **High stakes, high scrutiny:** The due diligence process is exhaustive, and once you take the money, you're on the clock to deliver results. #### Venture capital success story: Airbnb Airbnb's meteoric rise was fueled by [early VC backing](https://www.sequoiacap.com/companies/airbnb/ "null") from firms like Sequoia Capital and Greylock Partners. These investors provided funding, as well as strategic guidance and connections that helped Airbnb expand globally and build a trusted brand in the short-term rental market. ### 4\. Crowdfunding Crowdfunding is a way to raise funds by tapping into a large group of people, often through online platforms like Kickstarter, Indiegogo, or GoFundMe. Instead of relying on a few big investors, crowdfunding allows you to gather smaller contributions from a broader audience, often in exchange for early access to your product, perks, or equity. This funding source is perfect for B2C startups with a compelling product or idea that resonates with a wide audience. It's also a great way to validate market interest before you scale. #### How to succeed with crowdfunding A successful crowdfunding campaign starts with a clear story that excites people about your vision. Create engaging visuals, like videos or prototypes, to show what you're building and why it matters. Transparency is key—keep backers updated throughout the campaign and deliver on your promises to build trust and loyalty. #### Advantages of crowdfunding - **Market validation:** Crowdfunding not only raises funds but also proves there's demand for your product or service before you invest in scaling. - **Community building:** Backers often become your first loyal customers and biggest advocates, helping you build a strong early user base. - **No equity required:** With rewards-based crowdfunding, you don't have to give up ownership or repay loans. #### Challenges of crowdfunding - **Time-intensive campaigns:** Running a successful campaign takes significant time and effort, from creating marketing materials to responding to backers. - **Uncertain outcomes:** Success isn't guaranteed, and failing to meet your funding goal could delay or derail your plans. - **Reputational risk:** If you fail to deliver on promises, it can harm your brand and credibility with early supporters. #### Crowdfunding success story: Oculus VR [Oculus VR](https://www.kickstarter.com/projects/1523379957/oculus-rift-step-into-the-game "null") raised $2.4 million on Kickstarter to develop its virtual reality headset, far exceeding its $250,000 goal. The initial campaign not only provided funding but also proved there was massive interest in VR. The company later attracted major investors and was acquired by [Meta for $2 billion](https://about.fb.com/news/2014/03/facebook-to-acquire-oculus/ "null"). ### 5\. Grants and government programs Grants and government programs offer funding that doesn't require repayment or equity, making them one of the most founder-friendly options. These funds are often provided by federal, state, or local governments, as well as nonprofit organizations, to support innovation, job creation, or economic growth. Grants are an excellent choice for startups working in industries like healthcare, education, clean energy, or technology, where governments have a vested interest in fostering local growth. #### How to succeed with grants and government programs Securing a grant requires thorough research to find programs that align with your startup's mission. Applications can be competitive, so craft a proposal that highlights your innovation, potential impact, and ability to deliver results. Don't underestimate the importance of following every requirement to the letter—attention to detail can make or break your application. #### Advantages of grants and government programs - **No strings attached:** Unlike loans or equity funding, grants don't require repayment or ownership trade-offs, letting you retain full control. - **Credibility boost:** Winning a grant signals your startup's potential to investors, customers, and partners. - **Sector-specific funding:** Many programs target industries like tech, sustainability, or healthcare, providing tailored support for mission-driven startups. #### Challenges of grants and government programs - **Competitive and time-consuming:** Grant applications can be lengthy, and competing against other startups means you're not guaranteed funding. - **Strict requirements:** Grants often come with restrictions on how the money can be used, limiting your flexibility. - **Delayed payouts:** It can take months to receive the funds, which might not align with your immediate cash flow needs. #### Grant success story: BioNTech BioNTech, the biotech company behind one of the leading COVID-19 vaccines, received significant [grant funding from the German government](https://www.reuters.com/business/healthcare-pharmaceuticals/germany-grants-biontech-curevac-745-mln-speed-up-covid-19-vaccine-work-2020-09-15/ "null"). This financial support accelerated their R&D, allowing them to scale quickly and deliver life-saving innovation at a global level. ### 6\. Bank loans and SBA loans Bank loans and Small Business Administration (SBA) loans are traditional funding options that provide startups with capital in exchange for repayment with interest. Unlike equity funding, you retain full ownership of your business, making these loans a popular choice for founders who want to stay in control of their business and want predictable, structured financing. #### How to succeed with bank loans and SBA loans To secure a loan, you'll need to come prepared with a detailed business plan, financial projections, and proof of your ability to repay. SBA loans often have more flexible terms and lower interest rates, but they still require patience, as the application process can be lengthy. Building a good relationship with your bank can also make a big difference. #### Advantages of bank loans and SBA loans - **Ownership retention:** Loans let you fund your business without giving up equity or control. - **Structured repayment terms:** Predictable monthly payments make it easier to budget and manage cash flow. - **Lower interest rates:** SBA loans, in particular, often come with lower interest rates and longer repayment terms than traditional bank loans. #### Challenges of bank loans and SBA loans - **Eligibility hurdles:** Banks and SBA lenders have strict requirements, including good credit scores, collateral, or proven revenue streams. - **Lengthy approval process:** Applications can take weeks or months, which may not suit startups needing immediate funding. - **Debt burden:** Repayment obligations can strain your cash flow, especially during slow growth periods. #### Bank loan success story: Warby Parker Warby Parker, the eyewear startup, [used an SBA loan](https://mixergy.com/interviews/warby-parker-with-neil-blumenthal/ "null") to fund its early operations. The founders retained full ownership while leveraging the loan to build their brand, refine their business model, and scale into one of the top names in the direct-to-consumer space. #### 7\. Revenue-based financing Revenue-based financing (RBF) allows startups to secure funding from specialized lenders and alternative financiers in exchange for a percentage of their future revenue. Instead of fixed monthly payments, your repayment adjusts based on how much your business earns. This makes it a flexible option for startups with unpredictable cash flow, such as ecommerce or seasonal businesses. #### How to succeed with revenue-based financing To secure RBF, your startup needs a proven revenue stream and a plan for scaling. Lenders will focus on your financial history and projected earnings, so be prepared to share detailed reports. Since RBF repayments are tied to revenue, showing predictable or growing cash flow will help you lock in favorable terms. #### Advantages of revenue-based financing - **No equity required:** You keep full ownership of your business while securing growth capital. - **Flexible repayments:** Payments fluctuate with your revenue, making it easier to manage during slow months. - **Quick approval process:** RBF is often faster to secure than traditional loans, with less red tape. #### Challenges of revenue-based financing - **Higher cost of capital:** Interest rates and repayment percentages can be steeper than traditional loans. - **Limited to revenue generators:** RBF is only an option for startups with consistent revenue streams, making it less accessible for early-stage businesses. - **Ongoing revenue commitment:** A portion of your earnings goes toward repayments until the loan is fully paid, which can impact cash flow. #### Revenue-based financing success story: Rentable Rentable, a rental housing marketplace, used [revenue-based financing](https://novelcapital.com/3-successful-startups-powered-by-revenue-based-financing-in-2021/ "null") to fuel its growth without giving up equity. By securing flexible capital that scaled with its revenue, Rentable was able to invest in marketing, expand its platform, and grow its customer base. ### How to improve your odds of getting funded In an ideal world, having a great idea is all you'd need to secure funding. But, sometimes, you need more to convince potential backers of the merits of your particular venture. Here's how to get your startup ready for funding. #### 1\. Build a strong business plan Investors fund startups that have clear potential. A solid business plan shows that you've thought through the risks and opportunities and have a long-term vision for how your startup will become profitable. Make sure your plan includes: - **Financial projections:** Show realistic revenue, cost, and profit expectations over the next few years. - **Market analysis:** Prove that there's strong demand for your product with industry data and competitive positioning. - **A clear growth strategy:** Explain how you'll scale, acquire customers, and generate sustainable revenue. A well-prepared business plan demonstrates that you're not just looking for money—you have a roadmap for making it work. #### 2\. Show financial transparency Investors need to trust your numbers before they invest. Financial transparency is one of the biggest ways to set your startup apart from the many others looking for funding. Here's what investors look for: - **Up-to-date financials:** Stale or inconsistent reports are a red flag that your startup's finances aren't as rosy as you're making them out to be. - **Clear revenue and expense tracking:** Investors want to know where the money is coming from and where it's going so they can trust you are on the way to profitability. - **Scalability:** Demonstrate that your business model allows for efficient growth by keeping customer acquisition costs (CAC) sustainable, maintaining healthy profit margins, and showing a clear path to increased revenue without proportional increases in expenses. One way to make your finances more transparent is to work with an automated accounting platform like [Digits](https://digits.com?utm_source=blog&utm_campaign=sources+of+funding+for+startups "null"). With real-time financial tracking, automated transaction classification, and customizable reports, Digits ensures you always have clear, investor-ready financials at your fingertips. #### 3\. Build relationships early The best time to connect with investors is before you need funding. Building relationships early allows you to establish trust, gain valuable feedback, and make investors more familiar with you when you eventually ask for capital. Here are a few ways to build investor relationships: - **Attend industry events and startup meetups:** Networking in person can make a lasting impression and give you access to industry insiders you'll want to know when your funding rounds come around. - **Engage on social media:** Many investors share insights on platforms like LinkedIn and X (formerly Twitter). Join the conversation and make a name for yourself and your startup before you try to secure funding. - **Provide updates:** If you've met investors before, keep them informed about your progress through newsletters or personal check-ins. Investors back founders they trust, and trust is built over time. When the time comes to raise, you'll be speaking to investors who already believe in you, not trying to convince strangers to take a chance. #### 4\. Focus on your metrics Investors rely on KPIs to assess your startup's potential. The stronger your numbers, the better your chances of getting funded. Key metrics investors look for include: - **Customer acquisition cost (CAC):** How much it costs to acquire a new customer. - **Lifetime value (LTV):** How much revenue a customer generates over their lifetime. - **Annual recurring revenue (ARR):** Predictable, subscription-based revenue (crucial for SaaS startups). - **Burn rate and runway:** How fast you're spending money and how long you can operate before needing more funding. One of the easiest ways to get these metrics is to use Digits, which [automatically syncs with your financial data](https://digits.com/product/dashboards/ "null"), providing real-time insights into CAC, LTV, ARR, and cash flow. Instead of manually crunching numbers, you can present investors with clear, data-driven visuals that highlight your startup's strengths. #### 5\. Practice your pitch Even the best startups can miss funding opportunities if their pitch falls flat. Investors hear countless pitches, so yours needs to stand out by being clear, concise, and backed by data. - **Make your pitch data-driven:** Investors love numbers. Use real revenue, growth, and customer metrics to make your case undeniable. The more evidence you provide, the more compelling your pitch. - **Tell a story:** Connect your numbers to a narrative that explains why your startup exists, the problem it solves, and why now is the perfect time to invest. - **Anticipate tough questions:** Investors will poke holes in your pitch. Be prepared to address concerns about competition, market risks, and scalability with clear, well-reasoned responses that show you've thought through every angle. Once you've done all of the above, practice, practice, practice. You'll want your pitch to go smoothly, so do a couple of mock pitches with people you trust and work out the kinks in your presentation. ### Take control of your startup's funding journey with Digits Regardless of whether you get funded through VCs, Kickstarter, or go the bootstrap route, your startup needs to keep its finances in order. Ensure your finances are always investor-ready with an AI-native accounting platform like Digits that helps you stay on top of your numbers, make smarter decisions, and confidently navigate every stage of growth. With Digits, you can: - Track revenue and expenses in real time to stay ahead of financial trends. - Generate professional reports instantly to impress investors and lenders. - Customize financial dashboards to monitor the metrics that matter most to your startup. Digits is an [automated accounting platform](https://digits.com/product/financials/ "null") built for startups and backed by AI. Whether you're pitching investors, scaling operations, or simply keeping your books in check, with Digits, you have the financial clarity you need to grow your business. [Try Digits for free today](https://digits.com/#persona "null") and see how our platform can help your startup find success through smarter accounting. ## Accounting Firm Automation: 10 Ways to Streamline Your Operations URL: https://digits.com/blog/accounting-firm-automation/ August 14, 2025 The more efficiently your accounting firm or CPA practice operates, the more clients you can serve. And one of the best ways to work more efficiently is by introducing smart automations into your workflow. Tasks like reconciling bank statements, categorizing transactions, and sending reminders can eat up hours every week. But with the right tools in place, these steps can run quietly in the background, freeing your team to focus on higher-value work. In this guide, we'll cover ten high-impact ways accounting firms can use automation to streamline operations, plus tips for identifying the right tools and getting started. Whether you're a solo CPA or scaling a growing practice, these are the workflows that save time, reduce errors, and help you deliver more value to every client. ### Why automation matters for modern accounting firms Manually balancing books, updating transactions, and generating reports limit an accounting firm in terms of how many clients it can serve. It also leaves the door open to potential errors, which can take hours or days to find and correct. In fact, [62% of accounting professionals](https://www.cpapracticeadvisor.com/2025/04/02/new-survey-sentiments-from-fund-accountants-may-indicate-bellwether-industry-shifts/158312/ "null") cite manual data entry as a key source of inefficiency and mistakes, underscoring the need for smarter, automated solutions. The amount of time you waste on these activities is time you could be spending nurturing client relationships or finding new business. That's why automation is key to the growth of your firm: it takes over these rote activities and gives you your time back. ### 10 ways accounting firms can automate their operations Today's technology automates core accounting functions, reducing your workload, improving accuracy, and freeing up your time for higher-value tasks. Let's look at how AI can help you automate many of your day-to-day tasks. #### 1\. Automate transaction categorization and reconciliation Accountants spend a great deal of time manually [categorizing expenses](https://digits.com/blog/general-ledger-built-for-firms-to-scale/ "null") and reconciling accounts. Even a small misclassification or overlooked transaction can cascade into reporting inaccuracies, client rework, and compliance risks. Automating these workflows reduces the cognitive load on your team and helps ensure your financial data stays clean, accurate, and audit-ready. Today's AI accounting platforms automate these processes. For instance, Digits will learn your business over time by scanning every transaction and identifying patterns, which helps it correctly categorize new transactions. It's this kind of logic that helps Digits achieve a [93%+ auto-booking accuracy rate](https://digits.com/blog/agl-announcement/ "null"), based on models trained on over $875 billion in financial activity. And if there's an out-of-the-ordinary expense that it's not sure on, it will flag that for your team to categorize manually. This means you never need to worry about misclassifications slipping through or wasting hours reviewing transactions that the system can confidently handle on its own. #### 2\. Streamline accounts payable and bill processing Sorting paper bills, manually entering data, coding expenses, and scheduling payments all increase the risk of missing due dates. And relying on manual approval workflows like emailing invoices back and forth can delay vendor payments and strain important business relationships. That's why automating accounts payable is such a high-impact win. It helps your firm process invoices, schedule payments, and update your books without pulling time away from other work. With Digits [AI Bill Pay](https://digits.com/product/bill-pay/ "null"), you can drag and drop your invoices for quick approval and payment. The software extracts key details like line items and automatically categorizes them as expenses. Plus, vendors get paid using their preferred method, whether that's ACH or check. #### 3\. Automate month-end close and reporting workflows Creating month-end close processes for dozens of clients requires spending days manually categorizing transactions, reconciling bank accounts, and collecting documents. Your accountants send individual invoices and follow up when payments are late. Your month-end close can take a week or more per client, and your team may work evenings and weekends just to get it all done. And if there's an error? You'll spend even more time trying to find it. By automating transaction categorization and reconciliation, you already have your clients' accounts up to date. If their bills are automated, you don't have to manually pay them. And when it comes to accounts receivable, your clients' invoices can automatically be sent at the same time each month, and you can set up automatic reminders and follow-ups when your clients don't pay on time. For [financial reporting](https://digits.com/blog/reports-updates-q4-23/ "null"), AI automation gives you a real-time look at your clients' financial trends, anomalies, and key shifts to help with decision-making. You can, of course, create financial reports for them like profit and loss statements, balance sheets, or cash flow statements, or you can look at live, interactive insights any time. What once took a week or more can now be completed in just a couple of days. #### 4\. Put payroll on autopilot Payroll involves tracking hours, calculating taxes, staying compliant with ever-changing regulations, and ensuring timely payments, making it both operationally inefficient and high-risk for errors. Automating your payroll with tools like [Gusto](https://digits.com/partners/gusto-accountants/ "null") not only saves hours each month but also helps you stay compliant with tax regulations and avoid penalties by filing 941s, W-2s, and state tax forms on time. Automated processes calculate wages, file taxes, and send direct deposits with minimal manual input. And integrations with your accounting system ensure each expense is appropriately categorized. Whether you're managing payroll in-house or for clients, automation streamlines the entire process and frees up capacity for higher-value work. #### 5\. Automate client communication and follow-ups Building and nurturing client relationships is a key responsibility for accounting professionals, since a happy customer may stay with your firm for years. And yet, with so much other work on your plate, important updates may get delayed, you might miss follow-ups, and your clients may be left waiting for responses. That's where a few simple automations can make a big difference for your team. Here are some ideas for automating your client communications: - Design onboarding email templates in your email marketing platform (such as MailChimp). - Set up triggers to automatically send a welcome email with login information once a new client pays for services. - Create reminders to submit tax documents or complete other tasks. For tax professionals, client management software can help with many of these tasks, making it easy to communicate with clients via chat or set up automatically-triggered messages and reminders for tax season. #### 6\. Digitize and auto-extract data from documents Automating data extraction from documents is one of the most impactful ways you can save time, reduce errors, and speed up workflows for your accounting team, especially during onboarding, month-end close, and tax season. AI tools can extract financial data from documents, which can then be automatically added to your client's ledger or used to calculate taxes. Here's what you can extract: - **Receipts:** Extract vendor, date, amount, and payment method - **Invoices:** Capture client name, due date, line items, and totals - **Bank statements:** Pull transaction details and balances - **Tax documents (W-2s, 1099s, etc.):** Capture employee/employer data, wages, and tax amounts With Digits, document data extraction is built in. Just upload a bill, invoice, or receipt through the Digits portal, and the platform will pull out key details like vendor name, line items, and due dates. From there, it categorizes and books them automatically. That means less back-and-forth, faster approvals, and cleaner books with a fraction of the manual effort. #### 7\. Automate tax calendar tracking and filing reminders Tax season is an accountant's busiest time of year. Eliminating tedious tasks frees you up to process tax returns faster. If you're chasing down clients to get their tax documents, you run the risk of missing deadlines and cutting into the time you could spend getting clients their tax refunds faster. By automating your client tax calendar with a tax workflow platform, you can create recurring tasks tied to key deadlines (e.g., 1099s, 1040s, quarterly estimates). Internal reminders ensure you stay on track, while automated client emails prompt them to submit documents on time. You can even set up multi-step workflows: When a client [uploads a W-2](https://digits.com/blog/1099-vs-w2/ "null"), your system automatically moves the task to "in review" and alerts the right team member. These small efficiencies add up… and can turn a stressful season into a more predictable, manageable workflow. #### 8\. Use AI for forecasting and cash flow analysis Analyzing dozens of Excel spreadsheets with historical data and seasonal trends for forecasts can take hours and still produce error-prone results. With AI-powered tools, your accounting firm can deliver faster, more accurate financial forecasts and real-time cash flow insights without building spreadsheets from scratch. And you don't have to wait until the end of the month, quarter, or year to see how your clients' businesses are faring. AI analyzes financial data, trends, and spending behavior to project future revenue, expenses, and liquidity. This gives you visibility into your clients' finances, helping them make better decisions about hiring, expansion, and spending. For example, a client with seasonal revenue dips, such as a landscaping business with peak revenue in spring and summer, can model multiple cash flow scenarios based on historical billing cycles and current accounts receivable. With Digits' [real-time dashboards](https://digits.com/product/dashboards/ "null") and AI-powered insights, you can quickly spot delayed payments, rising expenses, or early signs of a revenue slowdown. That visibility helps your clients plan ahead, whether that means adjusting payment schedules, deferring nonessential spending, or securing short-term financing. #### 9\. Integrate apps and systems with automation platforms You likely have an entire ecosystem of financial tools you use to manage both your business and your clients' accounts. Manually exporting reports, uploading CSVs, or copy-pasting between systems drains time and increases the risk of data mismatches. That's one of the biggest advantages of using Digits. The platform connects directly with over [12,000 financial institutions](https://digits.com/integrations/ "null") via API and integrates seamlessly with tools like Gusto, Ramp, and Mercury. This means your data stays in sync automatically, no third-party patchwork required. So, when a client runs payroll through one program, Digits can instantly update the general ledger and reflect those changes in your cash flow reporting. This level of integration eliminates duplicate entries, improves reporting accuracy, and keeps your books current in real time. The result? Faster month-end closes, fewer errors, and more time spent advising clients instead of stitching systems together. #### 10\. Create onboarding workflows for new clients Onboarding new clients eats up time you could spend servicing their new accounts. Back-and-forth emails create bottlenecks, delays, and inconsistent onboarding experiences. Instead, build automated email sequences and task reminders that guide clients through the onboarding process without manual intervention. For example: - **Day 1:** Welcome email with client portal login - **Day 2:** Auto-reminder to upload bank statements - **Day 5:** Digital contract signature prompt - **Day 7:** Kickoff meeting scheduler link You don't have to hand-hold in the onboarding process because your accounting system does the heavy lifting for you. ### What are the most impactful tasks to automate first? With so many opportunities to automate repetitive tasks, where do you begin? Identify time-consuming tasks that occur frequently and follow predictable rules. If these tasks don't need to be done by a human, put them on the list to automate, such as: - **Transaction categorization:** Eliminate manual entry and reduce misclassification - **Bank reconciliation:** Speed up close cycles with auto-matching rules - **Client document collection:** Reduce delays by using secure upload portals - **Invoicing and bill pay:** Automate recurring payments and due date tracking - **Client communication:** Use templates and triggers to streamline reminders and follow-ups By starting with these commonly performed, repetitive tasks, you can quickly reclaim hours, reduce errors, and build momentum for broader automation. Once you see the impact, you'll be better equipped to expand automation across the rest of your workflow. ### How to choose the right automation strategies for your firm Not every firm needs to automate everything at once. The smartest automation strategies are tailored to your current workflow, team size, and pain points. Rather than rushing into adding [new technology](https://digits.com/blog/finance-tech-stack/ "null"), follow this structured approach: 1. **Audit your current workflows:** Track the time it takes you and your team of accountants to perform tasks to identify which consume the most time or lead to errors. This includes transaction categorization, data entry, or chasing down client documents. Start with what's repetitive. 2. **Focus on high-impact, easy-to-implement wins:** Select the tasks that will create the biggest time savings and that can be done without your oversight. 3. **Find tools that meet your needs:** Explore accounting automation tools, cloud-based email platforms, and tax client management software, focusing on solutions that integrate seamlessly to maximize efficiency and value. 4. **Consider client experience:** Automation shouldn't just make your job easier. It should improve how clients interact with your firm. Client portals, automated reminders, or self-serve onboarding can reduce friction and build trust. 5. **Start small, then scale:** Implement automation in one area at a time (e.g., document intake, then bank reconciliations). Once those automated tasks are smoothly integrated into your workflow, consider others you can automate. ### Streamline your accounting with Digits Manual processes drain time and limit your firm's capacity to grow. Digits helps you scale by automating the work that doesn't need your direct attention, like categorizing expenses, syncing transactions, and generating real-time financial reports. Unlike legacy software, Digits is built with automation at its core. It gives you up-to-date insights into client finances and frees your team to focus on high-value advisory work instead of repetitive tasks. Automation doesn't replace your accountants; it makes their work more valuable. Let Digits handle the busywork so you can focus on growing your firm. [Try Digits free](https://digits.com/#persona "null") and see what you can do with the time you get back. ##### FAQs ###### What accounting tasks can be automated? Many repetitive accounting tasks can be automated, including transaction categorization, bank reconciliations, invoicing, bill payments, client communication, and financial reporting. ###### How do I start automating my accounting firm? Identify time-consuming, repeatable tasks in your workflow, such as transaction categorization and client communication. Begin with simple automations, then scale as you streamline operations. ###### How can automation help accounting firms scale? Automation lets accounting firms handle more clients without increasing headcount by streamlining tasks like data entry, reporting, and communication. This improves efficiency, reduces overhead, and creates capacity for growth. ## Accounting for Startups: Everything a Venture-Backed Founder Needs to Know URL: https://digits.com/blog/accounting-for-startups-founders-guide/ December 21, 2024 Accounting is one of the least exciting parts of doing business, but as a founder, you can't afford to ignore it. Messy books and cash flow surprises can quickly throw you off course and make it difficult to secure funding. In this guide, we will walk you through everything you need to know about accounting for startups, including how to set up your own system. ### Why is good accounting important for venture-backed startups? Although accounting isn't the glamorous side of running a startup, it's critical if you're venture-backed — or plan to be. Why? Because if your books become a financial black hole, investors will lose confidence in your ability to build a successful company. Detailed and accurate financial insights give VCs a clear picture of how the company is doing, from revenues and expenses to cash flow. If the numbers don't add up, it raises red flags about potential mismanagement, dishonesty, or incompetence. Good accounting also keeps you compliant and prevents the business from going under because you messed up on taxes or forgot to file the right paperwork. Plus, when you want to scale, raise another round, or get a loan, clear and accurate financials make due diligence a breeze. ### What does startup accounting include? Accounting for startups includes numerous processes, from bookkeeping to tracking accounts receivable and payable. While this may seem complex at first, getting the hang of accounting now will help you avoid much worse (and more expensive) headaches later. #### 1\. Bookkeeping Bookkeeping is a process that records data about everyday financial activities (sales, payments, etc.) It helps you ensure all financial data is up to date and correctly categorized, so it's easier to put together reports, manage cash flow, and prepare for tax filings. Typically, one uses dedicated bookkeepers or software. But note that bookkeeping isn't the same as accounting. The [difference between bookkeeping and accounting](https://digits.com/blog/accounting-vs-bookkeeping "null") is that bookkeepers record daily financial transactions while accountants take financial data and generate insights. They are responsible for creating reports such as important financial forecasts for the boardroom. Your accountant will help you with reporting, strategic financial planning, auditing, and tax filing, in addition to other services. #### 2\. Financial record keeping Good startup accounting practices require you to save and organize all financial documents related to your business. Examples of financial records include: - **Invoices:** Records of payments requested from customers for goods or services provided - **Receipts:** Records of company expenses - **Payroll:** Records about your employee salaries, wages, and bonuses - **Bank statements:** Monthly records of all transactions through the startup's bank accounts - **Tax returns and filings:** Documentation of all tax filings, including income taxes, sales taxes, and payroll taxes #### 3\. Cash flow management Cash flow management is essential in accounting for startups because it ensures your company has enough funds to cover day-to-day operational costs. With this method, you track [accounts receivable](https://digits.com/blog/accounts-receivable "null") and payable, so there's always enough cash available. For example, you might avoid immediately paying a vendor until a specific payment comes in because there's a temporary cash shortage. #### 4\. Budgeting A budget sets up guardrails for your spending, preventing you from running out of runway before the next round of funding. Once you've developed a budget, it'll be easier to make smarter decisions on processes such as hiring. Most companies spend a large amount on payroll, and a clearly defined budget will guide your hiring approach. If a full-time employee is too expensive, freelancers and independent contractors are a good alternative. #### 5\. Tax planning and compliance Startups that pay attention to tax planning and compliance from the outset are more likely to avoid costly penalties and maximize savings. Note that even if you're not turning a profit, you must still file your annual tax return (state and federal). Proper tax planning ensures you're taking advantage of deductions, credits, and incentives to save you money. For example, the [R&D tax credit in the US](https://www.adp.com/resources/articles-and-insights/articles/r/r-and-d-tax-credit-what-it-is-and-how-to-claim-it.aspx "null") can significantly lower your tax bill if you're developing new products or technology. Compliance, on the other hand, is about making sure you follow all applicable laws. Consider a company that misclassifies an employee as a contractor. They could face hefty fines and lawsuits, as with [startup Homejoy](https://www.forbes.com/sites/ellenhuet/2015/07/17/cleaning-startup-homejoy-shuts-down-citing-worker-misclassification-lawsuits/ "null"). In 2015, it faced four worker misclassification lawsuits and ultimately shut down as the lawsuits scared off investors. Compliance is essential for venture-backed startups. Investors expect your financials to be squeaky clean. A tax issue hurts your cash flow and damages investor trust. Lastly, tax planning ensures you're prepared for growth. If you expand to new states or countries, you must be ready to manage new tax requirements. And this is much easier to do when you already have your ducks in a row. #### 6\. Financial analysis and reporting The corporate world uses financial analysis and reporting to assess a company's performance and guide decisions. You can think of it as taking the pulse of your business. Financial analysis digs into your revenue, expenses, cash flow, runway, and profitability, helping you understand what's working and what's not. Without it, it's tough to identify inefficiencies, spot growth opportunities, and decide where to allocate resources. For a venture-based startup, financial reporting is more than a tool for internal teams. Investors also use it to measure your progress and see if you're hitting certain milestones. #### 7\. Payroll management Payroll management is the process of paying your employees compliantly and on time. It encompasses everything from calculating their hours to tax withholding and saving payroll documentation. Issues with payroll management could lead to: - Violations of state and federal employment laws - Valuable employees quitting or deliberately lowering their performance - Cash flow issues #### 8\. Accounts payable and receivable [Accounts receivable](https://digits.com/blog/accounts-receivable "null") refers to payments customers owe you for delivered products or services. For example, if your startup sends an invoice for a monthly subscription fee, it falls under accounts receivable until the customer makes the payment. Accounts payable is the opposite of that. It represents money your startup owes to vendors, suppliers, and other service providers. Tracking accounts receivable keeps your finances healthy. For instance, if a startup has $50,000 in unpaid invoices, this limits its ability to cover expenses or invest in growth. Monitoring accounts payable helps you pay bills on time, avoiding late fees or strained relationships with suppliers. ### What accounting options are there for startups? Accounting does include a lot of processes. But the good news is that you don't have to do them armed with just a calculator and a spreadsheet. Here are the different options at your disposal: #### 1\. Software Accounting software helps you automate and manage your startup's financial transactions and reporting. It simplifies tasks like: - Invoicing - Bookkeeping - Payroll - Tax deductions According to [Andrew Royer](https://share.transistor.fm/s/8ed9dda4 "null"), CPA, CGA, good accounting software might even help you delay hiring staff and reduce costs because you can handle many accounting tasks independently. Plus, the added efficiency creates time during the day to focus on more important things, such as cash flow management. #### 2\. In-house or outsourced accountants DIY-ing your accounting works as long as your startup is small. But as your revenue and headcount get bigger and more complex, you'll need to find a more permanent solution. Outsourcing to an accounting firm is generally cheaper than hiring a full-time employee to work in-house. But you still get all the benefits of working with an accountant, including their expertise in tax planning and financial forecasting. That said, hiring an in-house accountant means they'll get to know your business inside and out, making it easier to get personalized financial advice. #### 3\. Digits If you're unsure whether to hire staff or get traditional accounting software, a third option allows for both: Digits. Digits is the first AI-native accounting platform that streamlines your bookkeeping and finances. It provides [real-time financial insights](https://digits.com/product/dashboards/ "null") by connecting to your bank accounts and credit card data. (We integrate with over 10,000 financial institutions.) With an average time to close of five days after the end of the month, Digits generates [ready-to-share reports](https://digits.com/features/financials/ "null") (cash flow, profit & loss, etc.) that you can forward to your investors and update them on your progress. [AI-powered bookkeeping](https://digits.com/features/bookkeeping/ "null") automatically classifies transactions, so your books are always in order. Plus, if you ever do decide to bring on an accountant, you can invite them to work inside your Digits dashboard. This keeps all of your finances streamlined and on one system. Regarding expenses, [Digits' AI bill pay](https://digits.com/features/bill-pay/ "null") is an easy drag-and-drop solution that automatically extracts bill details (including line items) from invoices. Then, all that's left to do is decide how you'll pay. ### How to pick the right startup accounting service If you're pre-seed to Series A, and your financials are relatively simple, an accounting platform is all you need. However, software is only as good as its users. If you're not comfortable with numbers, you could end up with messy books and poor reporting. The good news is that Digits automatically generates reports, so you don't need a degree in finance to understand the data. Plus, every [report is interactive](https://digits.com/product/dashboards/ "null"), so you can dig into the numbers and really understand your financial data. ### How to start an accounting system for your startup Before you build an accounting system for your startup, first separate your finances by opening a business bank account. Then, follow the steps below: #### 1\. Choose an accounting method There are two accounting methods: [cash basis and accrual basis](https://digits.com/blog/cash-vs-accrual-accounting-startups "null"). Under cash basis accounting, your business: - Records income and expenses when "cash changes hands," i.e., when a payment leaves or hits your bank account. - Gets a clear picture of your current financial standing. This method is suitable for very small startups with pay-as-you-go models. However, it doesn't show accounts receivable or payable, which might paint an inaccurate picture of your financial health. Under accrual basis accounting, your business: - Records income and expenses when you earn or incur them, whenever you make the payments. - Gets a more accurate picture of its long-term financial health, since the accrual method factors in accounts receivable and payable. Accrual accounting is a requirement if you plan to scale, take on investors, or apply for loans. However, it's more complex and may provide a misleading picture of your cash flow. #### 2\. Select accounting software As a new startup, spreadsheets might've been enough to cover your basic accounting needs. Now, you need actual accounting software to generate financial reports, track accounts receivable and payable, automate billing, and more. As a startup founder, your goal should be to pick software that automates accounting processes like bookkeeping and gives instant insights into your financial performance. #### 3\. Set up your chart of accounts A chart of accounts (COA) lists all the financial accounts in your startup's general ledger. For example, your COA may include assets, liabilities, and shareholders' equity. Under assets, you can include cash, accounts receivable, savings, etc. Typically, companies list balance sheet accounts first, then income statement accounts. To simplify tracking and reporting, assign each account a unique number. Here's what an example COA looks like: #### 4\. Establish a bookkeeping routine When you're knee-deep in product development and fundraising, it's easy to forget about bookkeeping. That's why you should put it in your calendar — set aside time every week to review and update your records. Your bookkeeping routine should include logging all expenses and income and sending reminders for late payments. You should also reconcile business bank accounts, credit cards, and loans. Use accounting software to [automate bookkeeping](https://digits.com/agl/ "null") as much as possible, including tasks like reconciliation and classifying bank transactions. #### 5\. Set up a payment system By setting up a smooth payment system, you'll avoid cash flow issues and make it a breeze for customers to work with you. Payment platforms like Stripe or Square can streamline payments (even recurring ones) and reduce time spent chasing down checks. Conversely, you'll also need a system for paying your bills — think payroll and vendor invoices. This process gets pretty tedious, so [automating it with AI](https://digits.com/product/bill-pay/ "null") will save you hours per month and make sure you pay invoices on time. Missed payments can lead to fees and damage relationships with key vendors or talent, which is the last thing you need when you're scaling fast. #### 6\. Implement an expense management system An expense management system tracks employee spending and reimbursements. The easiest way to do so is by implementing an expense management platform such as Expensify or Brex. These platforms will ensure that you've documented all expenses in case of an IRS audit. They can also integrate with many accounting systems, simplifying bookkeeping. #### 7\. Establish internal financial controls Financial controls encompass all policies and procedures that protect sensitive financial data and operations. Specifically, they safeguard your startup from fraud, regulatory violations, misappropriation of funds, and errors. Implement three types of controls in your startup: - **Detective controls:** Identify problems as they come up. Bank account reconciliation is a good example. - **Corrective controls: Fix issues and restore compliance after a violation took place. For example, you could define a step-by-step process to help employees flag issues.** - **Preventive controls:** Prevent violations from taking place. For instance, your startup could get a virtual card with controls that limit the amounts someone can spend, and the time of day they can use it. #### 8\. Plan for taxes Planning for taxes ahead of tax season will help you avoid paying too little or too much to the IRS. First, you want to select the right type of business entity, especially as your startup grows. Business entities come with different tax benefits, so don't forget to research them beforehand. Right now, your startup might be a sole proprietorship or general partnership. In the future, you might change it to a C corporation. Also, take advantage of any tax credits and deductions you're eligible for. This will lower your taxable income. Once you start hiring employees, introduce tax-deductible benefits such as health care plans, paid leave, retirement plans, and tuition reimbursements. #### 9\. Develop a financial reporting system As part of your financial reporting system, set up reports such as: - Balance sheet (assets, liabilities, and shareholder equity) - Income statement (revenue and expenses) - Cash flow statement (how cash moves in and out) When using Digits, these [financial reports](https://digits.com/product/financials/ "null") automatically generate at the end of the month, so you don't have to do any manual work. You can also create a custom report with all the key data your investors and advisors want to see, then share it with them for easy collaboration. ### Get your startup the accounting software it deserves Considering all the tech advancements in the last couple of years, there's no reason why founders should struggle with clunky, outdated accounting software. Digits has developed an AI-native accounting platform that features AI bookkeeping and bill pay alongside drag-and-drop live dashboards and reports. This saves you an average of 10 days per month and $8000 per year on accounting-related tasks. Excited to learn more? [Try Digits today](#interstitial "null") for free and see how Digits can help you take control of your finances. ## Business Accounting Software Was Never Built for Accounting Firms URL: https://digits.com/blog/accounting-software-was-never-built-for-accounting-firms/ June 12, 2026 Every firm knows the handoff. A new client comes in. They are on QuickBooks or Xero. The books technically exist, but they were not built the way the firm would have built them. The chart of accounts is a little off. The bank rules are inconsistent. Categories reflect how the business owner thinks about the company, not how the firm reports across a portfolio. Someone has to clean it up, normalize it, and make it usable before the real work can begin. Then the next client comes in, and the same thing happens again. That cleanup work does not show up on the invoice. It shows up in the close. This is not a staffing problem. Not a training problem. Not a tooling problem. Accounting firms have been running on software built for someone else. And the ledger they inherit from a client is the ceiling for everything they can automate on top of it. ### Why does business accounting software create friction for accounting firms? Business accounting software creates friction for accounting firms because it was designed around the wrong operator. QuickBooks and Xero were built for one company, one chart of accounts, one owner or internal bookkeeper, and one set of books. Firms live in a different reality. A single firm manages dozens, hundreds, or thousands of clients across industries, entities, reporting needs, and firm-specific standards. To business software, each client is a fresh setup problem. To a firm, each client should benefit from what the firm has already learned. Multi-entity logins do not fix this. They put a different door on the same product. The orientation is not in the dashboard. It is in the data model. If the system of record treats every client as a separate file and every transaction as an isolated row, every AI feature built on top inherits that ceiling. Firm-built software has to start with the data model, not just a better workflow around it. ### What is the difference between business accounting software and firm accounting software? Business accounting software is built around one business managing its own books. Firm accounting software is built around one accounting firm managing many clients. The difference starts with the default user. Business accounting software assumes the business is the operator: one company, one owner or internal bookkeeper, one chart of accounts, and one set of books. Firm accounting software assumes the firm is the operator: one team managing a portfolio of clients, applying firm standards, reviewing exceptions, and using the firm’s history to improve how future work gets handled. **Category** **Business accounting software** **Firm accounting software** **Optimized for** One business managing its own books One firm managing many clients **Default user** Business owner or internal bookkeeper Firm partner, CAS lead, controller, or accounting team **Chart of accounts** Client-defined and often cleaned up by the firm Firm-informed defaults with client-level flexibility **AI learns from** One client file at a time The firm’s history across the portfolio **Default workflow** Self-service bookkeeping and periodic cleanup Portfolio review, exception handling, and professional sign-off **Knowledge retention** Knowledge can leave when senior reviewers leave Firm standards and past firm decisions stay encoded in the system Adding an accountant dashboard does not turn business accounting software into firm accounting software. If the underlying system was built around a single client file, a single business owner, and a manually configured workflow, the firm still inherits those limits. Different users. Different defaults. Different workflows. Different product categories. ### Is business accounting software becoming a risk for accounting firms? As business accounting platforms add more AI directly for business owners, firms need to be clear about the layer they own. That layer is not manual categorization. It is not cleanup. It is not making a client’s chart of accounts usable after the fact. Those things are becoming automated, and firms that define themselves by doing them are building on a foundation that keeps shrinking. The layer worth owning is judgment, accountability, and the professional relationship. A business owner who can automate more of their own books still needs someone who can interpret what the numbers mean, stand behind the work, and advise on what to do next. No software platform can take professional responsibility for the numbers, carry E&O insurance, or respond to a regulator. That layer is not going anywhere. But it has to be claimed actively, not assumed. Firms that turn their standards, judgment, and client knowledge into how the work gets done will hold that layer. Firms that have not made that shift yet are still relying on the mechanics to justify the relationship. That is why the software category matters. A platform built for the business owner reinforces the old model. A platform built for the firm is how the new one takes hold. ### Should a firm migrate a new client off QuickBooks, or stay where they are? The question is not whether to stay in QuickBooks, move to Xero, or migrate the client somewhere else. The question is whether the next system was built for the firm. A firm can move a client from one business accounting platform to another and still end up with the same problem: a client-defined chart of accounts, client-specific rules, manual cleanup, and a workflow that depends on the firm stitching everything together after the fact. That is the old model of accounting software. The system stores the work. The accountant fixes, interprets, and finishes it. The next model is different. Routine work moves into the ledger itself, and the firm’s standards, history, and judgment become the starting point for every client. Which means there are three options, not two. **Stay where the client is.** The firm inherits a chart of accounts, bank rules, categories, and workflows built around the business owner’s preferences. The firm’s standards are not the default. Each monthly close starts from the business’s setup and ends with the firm cleaning it up. **Migrate the client to another business accounting platform.** The firm absorbs the cost of moving books that were not structured the way the firm structures books: new chart of accounts, new conventions, new rules. But if the destination was still built for one business to run its own books, the firm may end up rebuilding the same operating model in a different system. **Move the client into firm-built software.** The starting point changes. The system is built around the firm’s standards, past firm decisions, review workflows, and portfolio-wide knowledge. The client still gets flexibility where the work requires it. But the firm is no longer adapting its operating model around software designed for someone else. The first two options both ask the firm to keep working around software built for the business owner. The third changes what the firm is building on. ### If not QuickBooks or Xero, what should accounting firms use? Accounting firms should use software built around the firm as the operator, not another platform built for one business to run its own books. That is what Digits built the [Agentic General Ledger™](/glossary/agentic-general-ledger-agl) to do. Most AI accounting tools sit beside the ledger. They read transactions, suggest treatments, organize review queues, and wait for someone else to carry the result into the books. Digits is different because its intelligence is [ledger-native](https://digits.com/glossary/ledger-native/?utm_source=chatgpt.com). It operates directly inside the general ledger rather than in a separate AI tool sitting on top of it. The Agentic General Ledger™ does not just suggest accounting work. It performs the work inside the system of record: categorizing, verifying, posting, reconciling, and routing exceptions according to the firm’s standards and history. The ledger is no longer just where accounting work is recorded. It is where the books stay current, firm standards get applied, and exceptions surface for review. **The Agentic General Ledger™ is not a plugin, not a review queue, and not another business accounting platform with AI added on. It is a ledger where intelligence lives inside the system of record.** ### **Why do traditional ledgers force accountants to stitch work together?** In traditional accounting software, much of the real work happens outside the ledger: spreadsheets, workpapers, reconciliation tools, review queues, categorization tools, and close workflows. Each system holds a piece of the work. The ledger records the result after everything gets stitched back together. The accountant is the one doing the stitching. A platform can make the stitching easier. It can make the queue cleaner. It can make the handoff faster. But if the work still happens outside the ledger, the firm is still operating in the old model. ### **How does Digits treat accounting data differently?** Most ledgers store a transaction as a line item: date, amount, merchant description, account, and memo. The system can record what happened, but it does not deeply understand the relationships around the transaction. Digits treats accounting data differently. Transactions, vendors, customers, categories, entities, and firm decisions exist as connected objects. That means the ledger can understand how a transaction relates to the vendor, how the firm has handled that vendor before, how similar clients handle the same pattern, and whether the classification fits the firm’s standards. That is a different foundation for AI. For core accounting work, Digits also uses purpose-built [deterministic models](/glossary/deterministic-model) designed to produce consistent, verifiable results from the financial data and accounting context available in the ledger. A bolt-on AI tool can look at a transaction description and make a suggestion. Digits can reason from the accounting context already inside the ledger. That is what allows the Agentic General Ledger™ to act within the books instead of sending another suggestion to a review queue. ### **Why does intelligence inside the ledger prevent truth drift?** When intelligence sits outside the ledger, the firm has to make sure the AI’s output and the ledger agree. A categorization may look right in one tool but post differently in the books. A reconciliation may look complete in one system but not carry through to the system of record. An exception may be resolved in a workflow tool but still need to be reflected in the ledger. That gap is truth drift: the difference between what an outside AI tool thinks happened and what the general ledger actually shows. The Agentic General Ledger™ reduces that risk because the intelligence and the financial data operate inside the same ledger. There is no separate AI system that has to be reconciled back to the system of record. The ledger handles the mechanics. The accountant handles the judgment. ### **How does tiered intelligence work in Digits?** Digits uses a [Model Layer Cake](/glossary/model-layer-cake) that combines multiple layers of intelligence, escalating when the prior layer lacks confidence. Its proprietary accounting models were trained on 180 million transactions representing nearly $1 trillion in real financial activity. **Layer** **Trained on** **Handles** **Company model** This client’s transaction history, vendors, and conventions Recurring transactions, known vendors, established patterns **Firm model** The firm’s portfolio: standards, conventions, and past firm decisions Firm-specific rules, codified judgment, and industry conventions **Global models** Broad accounting patterns learned from proprietary models trained on 180 million transactions representing nearly $1 trillion in real financial activity Broad accounting context, common vendor recognition, and GAAP-standard treatments **Fallback agents** Specialized agents for unclear or novel transactions New vendor lookups, ambiguous transactions, and edge cases requiring contextual reasoning Each layer produces a categorization with a confidence score. Low-confidence transactions escalate through the stack. Verification runs in parallel: a separate AI layer checks each proposed entry against how the firm has handled similar transactions before anything posts. Routine transactions post to the ledger. Exceptions route to the accountant. When a partner classifies a vendor or sets a rule for one client, the firm model carries that decision across the portfolio. The firm’s standards stop living only in handbooks, Slack threads, and senior reviewers’ heads. They become part of the system that does the work. That is the answer to **“if not QuickBooks or Xero, then what?”** Not another business accounting platform. Not AI layered on top. **A ledger built for AI and built for the firm: the Agentic General Ledger™.** ### Why isn’t bolt-on AI enough for firm accounting workflows? Bolt-on AI can make old workflows move faster, but it does not change the workflow’s center of gravity. If the intelligence still sits outside the ledger, the firm still has to review the output, approve the treatment, and make sure the books reflect what the AI suggested. The queue may move faster, but the firm is still operating around the ledger instead of inside it. That is the limitation. Bolt-on AI helps with the work. The Agentic General Ledger™ changes where the work happens. **Category** **Bolt-on or approval-first AI** **Agentic General Ledger™** **Where AI lives** Outside the ledger, in a separate tool or workflow Inside the ledger, on the system of record **What AI produces** Suggestions or drafts waiting for approval Verified entries that post to the ledger **Review model** Every AI output needs approval before posting Exceptions route to accountants; routine transactions post when verification passes **Truth drift** Created at handoffs between systems Eliminated by architecture **Firm review burden** Reviewing AI outputs and whether systems agree Reviewing exceptions and exercising professional judgment Business accounting software can speed up reviews. Firm accounting software reduces how much routine work reaches the review queue in the first place. ### How do Digits, QuickBooks, Xero, and Puzzle compare for accounting firms? **Category** **Digits** **QuickBooks** **Xero** **Puzzle** **Primary orientation** Firm-built general ledger Business accounting software Business accounting software AI accounting software for small businesses **Built around** Accounting firms managing many clients One small business managing its own books with AI assistance **AI role** Acts inside the ledger Suggests or assists Suggests or assists Prepares accounting work for review **Review model** Exception-focused review Human review and cleanup Human review and cleanup Approval-first review **Firm-level learning** Learns from the firm’s history across clients Limited to client-specific workflows Limited to client-specific workflows Limited; primarily business-level context **Where work happens** Inside the system of record Around the ledger Around the ledger Around an approval workflow before posting **Best fit** Firms that want routine work moved into the ledger Small businesses and firms managing simple client books Small businesses and firms managing simple client books Small businesses that want AI-assisted bookkeeping The point is not that QuickBooks, Xero, or Puzzle are bad products. They are built around different assumptions. QuickBooks and Xero were built for businesses to manage their own books. Puzzle is built around an approval-first AI workflow. Digits is built around the firm as the operator, with the Agentic General Ledger™ acting inside the system of record. ### What should accounting firms look for in accounting software? Accounting firms should look for software built around the firm as the operator, not software built for one business to manage its own books. The key question is: **Does this system make the firm rebuild its workflow client by client, or does it help the firm carry its standards, knowledge, and judgment across the portfolio?** **Question to ask** **Why it matters** **Does the intelligence live inside the ledger?** The firm should not have to reconcile AI outputs back to the system of record. **Does the system complete work or create a review queue?** Firm-built software should reduce routine work before it reaches the team. **Does the system learn from the firm’s history?** New clients should benefit from how the firm has handled similar work before. **Does the system preserve firm expertise?** Standards and judgment calls should not live only in senior reviewers’ heads. **Does the vendor publish proof?** Firms should look for zero-touch performance, accuracy benchmarks, and clear methodology. Business accounting software can still work for small, stable firms with simple client needs. But as a firm manages more clients, adds advisory services, or tries to preserve senior knowledge across the team, the limits become harder to ignore. The question is not whether business accounting software can be made to work. Firms have made it work for decades. The better question is: **How much of the firm’s operating model is being rebuilt around software that was never designed for it?** Business accounting software makes the firm adapt to the client’s setup. Firm accounting software makes the system adapt to the firm. That is the category shift. ### **Frequently asked questions** #### **What is business accounting software?** Business accounting software is built for a business owner or internal bookkeeper to manage one company’s books. It assumes one chart of accounts, one business workflow, and one client file. QuickBooks and Xero are the most common examples. #### **What is firm accounting software?** Firm accounting software is built for accounting firms managing many clients. It is designed around firm standards, portfolio-wide workflows, exception review, multi-client learning, and knowledge that compounds across engagements. #### **Why does business accounting software create friction for accounting firms?** Business accounting software creates friction because firms inherit systems configured by clients, not by accountants. Charts of accounts drift, bank rules break, and corrections often stay trapped inside one client file instead of improving the whole portfolio. #### **What accounting software is built for accounting firms?** Digits is built for accounting firms. Its Agentic General Ledger™ uses tiered intelligence, embedded verification, and firm-level learning to move routine accounting work into the ledger and route exceptions for human review. #### **What is the Agentic General Ledger™?** The Agentic General Ledger™ is Digits’ accounting system that acts inside the ledger. It categorizes, verifies, posts, reconciles, and routes exceptions using client-level, firm-level, and global intelligence. Digits’ proprietary accounting models were trained on 180 million transactions representing nearly $1 trillion in real financial activity. #### **What is truth drift in accounting software?** Truth drift is the gap between what an outside AI tool thinks happened and what the general ledger actually reflects. It happens when intelligence lives outside the system of record and outputs have to move between disconnected systems. #### **Why isn’t bolt-on AI enough for accounting firms?** Bolt-on AI sits outside the ledger. The firm still has to verify that every output made it into the general ledger correctly. That creates truth drift and keeps accountants reviewing whether systems agree instead of focusing on higher-value work. #### **What are Zero-Touch Transactions™?** [Zero-Touch Transactions™](/glossary/zero-touch-transactions) are transactions that are categorized, verified, and posted to the ledger without human intervention. Digits publishes a 95% Zero-Touch Transactions™ rate on real client books. Most accounting software vendors do not publish an equivalent metric. #### **How does firm-level intelligence help accounting firms?** Firm-level intelligence lets the system learn from the firm’s standards, corrections, and how the firm has handled similar transactions across the client portfolio. New clients benefit from what the firm has already learned, and new hires inherit more of the firm’s expertise from day one. #### **Can Digits replace QuickBooks or Xero for accounting firms?** Yes. For firms that want Digits as their system of record, Digits replaces the general ledger rather than sitting on top of QuickBooks or Xero as a plugin. The Agentic General Ledger™ is the system of record where routine accounting work happens, and exceptions are surfaced for review. #### **How is Digits different from Puzzle?** Puzzle uses a governed, approval-first workflow, which can make reviews faster but keeps humans approving work before it posts. Digits takes a different approach: the Agentic General Ledger™ acts inside the ledger, posts routine transactions when verification passes, and routes exceptions to the accountant. #### **How should firms evaluate AI accounting software?** Firms should ask whether the AI lives inside the ledger, whether the vendor publishes a zero-touch rate, whether accuracy benchmarks are public with a disclosed transaction set and GAAP-reviewed ground truth, and whether firm knowledge compounds across clients. [Learn how the AGL® can work for your firm](https://digits.com/accountants/) ## Accounting vs. Bookkeeping: What's the Difference? URL: https://digits.com/blog/accounting-vs-bookkeeping/ January 31, 2024 ### TLDR: Accounting vs. bookkeeping Bookkeeping is all about the day-to-day operations of your finances and making sure that all of your records are accurate and organized. Accounting focuses on analyzing your financial data, so you know where your startup's finances are headed and what you can do to make improvements. In this article, we'll dive deeper into both of these financial functions, exploring what good bookkeeping and accounting look like for startups at different stages. We'll also provide guidance on how to approach these critical financial tasks so you can ensure you're getting the kind of financial support you need to grow. ### What is bookkeeping? Bookkeeping is the art of keeping your startup's financial ducks in a row. It involves systematically recording, organizing, and tracking **all** financial transactions within your business (yes, even that personal credit card you keep using for business expenses), providing a clear and accurate picture of your company's financial health. However, don't just think bookkeeping is simply tallying up what's coming in and going out. A good bookkeeper can do a whole lot more for you than that. If it involves day-to-day money matters, your bookkeeper is probably the person taking point on it, making sure that every hard-earned dime is accounted for. Plus, they're also responsible for organizing all of your financial records. So, if you've pulled invoices from 2019 and didn't need to spend two hours doing it, then you likely have your bookkeeper to thank for it. To give you a better idea of everything a bookkeeper does, here's a relatively short list of the tasks a bookkeeper can do for you (so you don't have to): - Record daily financial transactions (sales, purchases, payments) - Reconcile bank statements with internal financial records - Manage accounts payable and receivable - Maintain the general ledger - Process payroll - Prepare financial statements - Track invoices and ensure timely payments - Manage petty cash - Assist with tax preparation by organizing financial records #### How does good bookkeeping help you? Organized and accurate finances help your business in innumerable ways. Here are just a few benefits you'll see if you invest in better bookkeeping: - **Time savings**: Bookkeepers handle the financial tasks so you can focus on growing your business, not wrestling with spreadsheets. - **Accurate numbers**: Financial records are only helpful if they're accurate. Getting professional help reduces the risk of mistakes that could come back to haunt you. - **Cash flow clarity**: They keep your cash flow numbers up-to-date, so if you or your investors want an update, you can get one with relative ease. - **Easier taxes**: Taxes are never simple, but coming armed with accurate records and itemized receipts makes everything a whole lot easier. - **Scalability support**: As your startup grows, your bookkeeper adapts your financial systems to keep pace. - **Compliance confidence**: They keep you on the right side of financial regulations, helping you sleep better at night knowing you're playing by the rules. - **Cost control**: By tracking expenses meticulously, they help you identify areas where you might be overspending, potentially saving you a bundle in the long run. #### Signs You need to improve your bookkeeping Beyond reading an article like this, there are some obvious markers that your startup needs some bookkeeping help. Here are some telltale signs to look out for: - **You can't find anything**: If you're drowning in receipts and invoices, it's time to invest in some help. - **You struggle at tax time**: Scrambling to gather financial info every April? Good bookkeeping means you're always prepared and compliant. - **You've outgrown your DIY system**: Excel sheets were fine at first, but now they're more headache than help. - **You're frequently late on payments**: Consistently missing due dates often stems from disorganized finances. Solid bookkeeping isn't just about avoiding problems — it's about setting your startup up for success. If you're nodding along to these points, it might be time to consider bringing in some professional help. ### What is accounting? Accounting is the art of taking the hard numbers of your finances and turning them into the insights, forecasts, and strategies that will help your startup grow. A good accountant isn't just good with numbers — they're good with business. They can look at your financial books and help you tell your story: where you are, where you came from, and where you're on track to go. This talent is immeasurably useful for any startup. Here are just a few things a good accountant can do for you: - Unravel complex financial data to craft comprehensive reports - Create budgets that help you realize your business goals - Peer into the financial future with forecasts and risk assessments - Navigate tax laws to keep you compliant - Serve as your financial compass, guiding strategic business decisions - Conduct internal financial health checks to optimize processes #### How does good accounting help you? So, accountants are good with numbers and business, but how does that help your average startup founder? Well, here are a couple of ways your accountant can make a difference in your business today: - **Smarter decision-making**: Whether you're considering expansion, new product lines, or cost-cutting measures, your accountant can crunch the numbers and advise you on how to proceed. - **Tax optimization**: Accountants stay up-to-date with tax laws and can identify deductions or credits you might have missed so you don't pay a cent more than you have to come tax time. - **Performance analysis**: By setting up and monitoring key performance indicators (KPIs), accountants can help you understand how your business is performing compared to your goals and industry benchmarks. - **Financial planning and forecasting**: Accountants can craft realistic financial projections, allowing you to get ahead of the curve by proactively planning for growth and avoiding roadblocks. - **Cost control**: Through detailed analysis of your expenses, accountants can identify areas where you might be overspending and suggest ways to safely cut costs. - **Improved cash flow management**: Accountants can identify trends in your cash flow and suggest strategies to improve it, ensuring you always have what you need to operate and grow. - **Better investor relations**: Accountants can help you prepare financial statements and projections that will impress even the most difficult investors. #### Signs you need to improve your accounting Just like there are warning signs that you need better bookkeeping, there are also clear indicators that your startup could benefit from improved accounting practices. Here are some red flags to watch out for: - **You can't answer financial questions**: Struggling to put into words exactly how well your company is doing financially could mean you're not getting access to good enough numbers or explanations of them. - **You're unsure of your financial future**: If you don't know what your business's financial health will look like this next quarter or even further afield, then the forecasting abilities of an expert accountant could be exactly what you need. - **You're missing out on tax deductions**: Overpaying on taxes is never cool. Expert accounting could be the solution. - **You have compliance concerns**: Being compliant with all financial reporting requirements and industry regulations is crucial for the growth of any business. ### Bookkeeper or accountant: Which do you need right now? Businesses benefit from both bookkeeping and accounting, but your specific needs will depend on your startup's size, complexity, and growth stage. Let's break it down: #### When you might need a bookkeeper: Your early-stage startup may be able to get by with bookkeeping alone. With modest sales, simple tax returns, and low headcount, a bookkeeper can fill your needs and set up your financial records correctly from the start. You could even try to handle the books yourself, but you will likely grow past this fairly quickly. If you find yourself struggling to maintain organized financial records or need basic financial reports, a bookkeeper or bookkeeping software can handle these tasks efficiently, freeing you up to focus on growing your business. #### When you might need an accountant Accountants become particularly valuable when your business begins to really take off. They can help manage the increasing financial complexity that comes with scaling, provide in-depth insights into your financial data, and help you secure the funding you need to reach your potential. Plus, they can help you navigate regulations when it comes to taxes or major business decisions, like expansion, diversification, or even selling your business. In essence, an accountant helps you see the bigger financial picture and plan strategically for your startup's future. #### When you might need both Many successful startups find that as they scale, they benefit from having both bookkeeping and accounting. In this scenario, the bookkeeper handles the day-to-day transactions and record-keeping, while the accountant provides higher-level financial strategy and analysis. This combination ensures all your financial bases are covered, from the tiniest details to the big-picture planning. Having both can be particularly useful when you're preparing for an audit. The bookkeeper ensures your records are accurate and up-to-date, while the accountant can guide you through the audit process. Similarly, when implementing new financial systems, a bookkeeper can manage the day-to-day use, while an accountant ensures they meet your broader financial needs. Remember, the choice isn't always either/or. Many startups begin with a bookkeeper and add accounting services as they grow. Others might start with periodic consultations with an accountant and bring on a bookkeeper as their daily transactions increase. The key is to assess your current needs, anticipate future growth, and choose the financial support that will help your startup thrive. ### What to look for when picking bookkeeping and accounting services As you navigate the world of bookkeeping and accounting services for your startup, it's crucial to look beyond traditional options. Finance has changed a lot, even just in the last five years, and the services you choose should take advantage of that. Here are some key features to look for when it comes time to pick where you get your bookkeeping and accounting support from: #### 1\. AI-native capabilities Instead of relying on a human to spend hours manually categorizing transactions or reconciling accounts, AI can do this in seconds with greater accuracy. However, not every AI accounting platform is built the same. In many cases, "AI" simply means a few automation features added to decades-old software. The result can be limited functionality, inconsistent accuracy, and a frustrating user experience. Digits takes a completely different approach when it comes to implementing AI. Digits is an AI-native platform, built from the ground up with artificial intelligence at its core. Powered by the [Autonomous General Ledger®](https://digits.com/agl/ "null"), Digits has been trained on over $875 billion in financial activity across 170 million transactions. This level of AI functionality allows you to automate complex accounting workflows with confidence as Digits handles everything from [real-time categorization](https://digits.com/product/bookkeeping/ "null") to always-on [financial reporting](https://digits.com/product/financials/ "null"). The result is real-time visibility into your finances, faster closes, and accurate, investor-ready reports. #### 2\. Real-time data and dashboards No one has time to wait weeks for financial reports, especially not in a fast-paced startup world. Look for services that offer real-time or near-real-time financial data and reporting. By getting your data fast, you'll be able to make more informed decisions and respond to market changes quickly. Plus, there's no reason why financial data needs to be so difficult to understand. Look for a platform like Digits that can automatically create intuitive and customizable dashboards that help you understand your company's financial situation all in one place. #### 3\. Integrated platforms Consider services that offer an integrated platform for both bookkeeping and accounting needs. Having all your financial data in one place, from transaction-level details to high-level reports, can significantly streamline your financial management processes. An integrated platform eliminates the need to switch between multiple software tools or reconcile data from different sources. This not only saves time but also reduces the risk of discrepancies between different financial systems. Look for solutions that can handle everything from daily bookkeeping tasks to complex financial reporting, all within a single, user-friendly interface. #### 4\. Proactive insights and advisory Modern financial services should do more than just crunch numbers. Seek out options that offer proactive insights and advisory services. For instance, AI-powered analysis can help identify trends, spot potential issues, and suggest opportunities for improvement before they become apparent. On the other hand, a good accountant should reach out to make sure you understand how the latest economic news might affect your cash flow. These insights can be invaluable for startups, helping you understand your cash flow patterns, identify areas of unnecessary spending, and spot growth opportunities. #### 5\. Enhanced security measures With financial data being increasingly digital, robust security is non-negotiable. Ensure that any service you consider employs bank-grade security measures, including encryption, secure data storage, and regular security audits. The loss or leak of your financial data would be devastating. Look for services that use multi-factor authentication and encrypted data transmission so you know your data is getting the high level of protection it deserves. ### Say hello to the future of bookkeeping and accounting Imagine a world where your financial data is always up-to-date, where you can get real-time answers to your financial questions, and where proactive insights help you stay ahead of the curve. This is the future we're ushering in at Digits. Our modern approach to bookkeeping and accounting combines powerful AI automation with a purpose-built platform designed for speed, accuracy, and real-time financial visibility. If you've been let down by subpar or outdated bookkeeping and accounting services, it's time to try something new and purpose-built for fast-paced startups and small and medium-sized businesses. Start your free trial today and take the first step toward financial clarity and control with Digits. ## Digits Blog URL: https://digits.com/blog/accounting/ #### Browse by Categories Accounting [Digits vs. Accrual for Accounting Firms: What's the Difference?](/blog/digits-vs-accrual/) Accounting [Business Accounting Software Was Never Built for Accounting Firms](/blog/accounting-software-was-never-built-for-accounting-firms/) Business accounting software was built for business owners, not accounting firms. Here’s why firms need software built around many clients, firm standards, and portfolio-wide expertise. Accounting [What Is Continuous Close? How AI Ends the Month-End Cleanup Sprint](/blog/what-is-continuous-close/) Learn how continuous close helps accounting firms keep books current throughout the month, reducing cleanup work and surfacing exceptions earlier. Accounting [Will AI Replace Accountants? Why the Job Is Shifting, Not Disappearing](/blog/will-ai-replace-accountants/) AI won’t replace accountants—it will replace routine accounting work, giving professionals more time for judgment, advisory, interpretation, and trust. Accounting [Best Xero Alternative for Accounting Firms](/blog/best-xero-alternative-for-accounting-firms/) Why accounting firms outgrow Xero and what AI-native accounting platforms like Digits do differently. Accounting [What Is Real-Time Financial Reporting? (And Why Most Accounting Software Doesn't Actually Deliver It)](/blog/what-is-real-time-financial-reporting/) Traditional accounting software reports the past. Digits keeps financials continuously current with an AI-native ledger. Accounting [Best QuickBooks Alternative for Accounting Firms Managing Multiple Clients](/blog/best-quickbooks-alternative-for-accounting-firms/) Digits is the AI-native alternative to QuickBooks for accounting firms managing multiple clients that want less manual work and software that actually scales. Accounting [Digits vs. Puzzle: Which AI Accounting Platform Is Actually Built for Firms?](/blog/digits-vs-puzzle/) One publishes benchmark data, explains how the AI works, and ties pricing to results. The other doesn't. Digits vs. Puzzle, compared on what actually matters for firms. Accounting [How to Scale an Accounting Firm: 10 Strategies for Growth](/blog/how-to-scale-accounting-firm/) Scale your accounting firm with AI tools, standardized processes, and advisory services. Digits helps firms auto-book 93% of transactions, freeing time for higher-value client work. Accounting [Hiring International Employees for Startups: Pros, Cons, and How to Hire](/blog/hiring-international-employees-for-startups-pros-cons-and-how-to-hire/) Hiring international employees can improve your startup's efficiency and innovation. Here are the pros, cons, and how to get started. Accounting [Accounting Firm Automation: 10 Ways to Streamline Your Operations](/blog/accounting-firm-automation/) Accounting firm automation isn't just about having the right technology. It's about freeing up your time so you can scale your business. Accounting [7 Reasons Accounting Firms Are Switching to Digits](/blog/7-reasons-accounting-firms-switch-to-digits/) Most accounting platforms weren't built for how modern accounting firms operate or what their clients expect. Learn why firms are building AI-native practices on Digits. Accounting [Grow with Digits: The General Ledger Built for Firms Ready to Scale](/blog/general-ledger-built-for-firms-to-scale/) QuickBooks may have been the go-to for years, but it's not designed for firms that are ready to scale. Read why growth-minded firms choose Digits. Accounting [6 Best Pilot Bookkeeping Alternatives in 2025](/blog/pilot-alternatives/) If you've been using Pilot, you may feel left out of some of the more advanced bookkeeping and accounting features available today, including real-time insights and access to seamless automation. Accounting [SaaS COGS Calculation and How to Use It to Grow Your Startup](/blog/saas-cogs-calculation/) What is COGS, and why does it matter? Learn how to do a COGS calculation for your SaaS startup to manage finances and impress investors. Accounting [Startup Funding Stages: The 7 Stages Founders Should Know](/blog/startup-funding-stages/) The 7 startup funding stages are pre-seed, seed, Series A, Series B, Series C, Series D+, and IPO. 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Accounting [Investor Reporting: Best Practices for More Effective Investor Updates](/blog/investor-reporting-tips/) Effective investor updates include KPIs (burn rate, runway, revenue), wins and challenges, asks, and forward-looking plans. Send monthly or quarterly with consistent metrics. Accounting [Accounting for Startups: Everything a Venture-Backed Founder Needs to Know](/blog/accounting-for-startups-founders-guide/) Accounting for startups is key for gaining investor confidence. Learn how to set up an accounting system. Accounting [A Startup's Guide to Burn Rates: Definitions, Formulas, and Management Tips](/blog/burn-rate/) Learn what burn rate is, why it's crucial for your startup's financial health, and how to calculate it accurately. Accounting [7 Sources of Funding for Startups (And How to Improve Your Odds of Getting Funded)](/blog/7-sources-of-funding-for-startups-and-how-to-improve-your-odds-of-getting-funded/) Fundraising is one of the biggest challenges startups face. To help you find the right way to scale your startup successfully, here are the 7 most important funding sources. Accounting [From Paper to Autonomous: The History of the General Ledger (+Benefits of Going Digital)](/blog/evolution-general-ledger-agl/) Over hundreds of years, the general ledgers has come a long way. Here's how they've changed to meet the needs of modern companies. Accounting [Startup Bookkeeping 101 With Tips from a CPA](/blog/startup-bookkeeping-101-with-tips-from-a-cpa/) Startup bookkeeping involves recording transactions, reconciling accounts, and maintaining financial records for investor readiness and tax compliance. Learn CPA-recommended best practices. Accounting [Extending Your Startup's Runway: 7 Strategies for Stable Finances](/blog/extending-your-startup-runway/) Without a clear overview of your finances, it's impossible to calculate your remaining runway or adjust your burn rate. Accounting [The Essential Guide to Accounting for Startups](/blog/startup-business-accountant-guide/) Startup accountants handle bookkeeping, financial forecasting, tax planning, and investor reporting. Learn how to choose between in-house, fractional, or AI-powered accounting solutions. Accounting [Trifecta – Accounting, Tax, and Budgeting & Forecasting](/blog/trifecta-accounting-tax-fpa/) Digits now offers tax and budgeting & forecasting plans. Join us to make more informed decisions, maintain better financial health, and streamline tax filings. Become a customer today! Accounting [GPT-4o vs. Digits AI: The Power of $700 Billion worth of transactions](/blog/gpt-4o-vs-digits-ai/) Digits AI outperforms GPT-4o on accounting tasks by training on $700B+ in transactions. Proprietary models achieve higher accuracy for categorization and reconciliation than general-purpose LLMs. Accounting [What's the Story with Accounts Receivable?](/blog/accounts-receivable/) Accounts receivable (AR) is all about the outstanding money owed to your business for either goods or services received, but not yet paid for, standard practice for a lot B2B transactions and startups, especially in the SaaS space. Accounting [The Startup's Guide to Leveraging a Fractional CFO](/blog/fractional-cfo/) During the lifecycle and evolution of a startup, certain scenarios will make the founder feel the need for a Chief Financial Office (CFO) to lean on and collaborate with. Hiring a full-time CFO immediately, however, is likely not the right choice and a fractional CFO is likely the startup's best bet to bridge the gap until they are ready to commit to a full-time CFO. Accounting [Rule of 40 for SaaS Companies](/blog/rule-of-40/) The Rule of 40 states that a SaaS company's revenue growth rate plus profit margin should equal or exceed 40%. It balances growth and profitability as a measure of company health. Accounting [IRS Form 1120: A Guide for Startup Founders](/blog/form-1120/) Tax season is a dizzying time for anyone, especially startup founders. The last thing you want to be dealing with are forms, withholdings, or deadlines — you've got your business to run! One key piece of the tax season puzzle is a Form 1120, aka the Income Tax Return. Here's a startup founders guide to understanding you Form 1120. Accounting [Understanding Depreciation: A Comprehensive Guide for Startups](/blog/depreciation/) In simple terms, depreciation is an accounting method that allows a company to spread the cost of an expensive purchase over a period of time, rather than all at once. This not only eases the immediate financial burden but also smooths out expenses over time. This process is vital for budget planning, particularly for start-ups, as it enables more predictable financial management. Accounting [Unpacking the Income Statement: A Beginner's Guide for Start-ups](/blog/income-statement/) An income statement, often referred to as a Profit & Loss (P&L) statement, is a financial report that shows your business profitability over a specified period. It presents your revenue and deducts your expenses and losses, shedding light on your company's financial health. Accounting [Understanding the Per Diem Concept](/blog/per-diem/) In the business world, the term "per diem" is quite common, but its meaning and application often confuse individuals. To clear these misconceptions, let's dive into the definition, implications, and operations of a "per diem" system. Accounting [The Relationship Between Accountants and Startups](/blog/guide-accounting-startups/) Understand the pitfalls of running a startup without the help of an accountant, as well as the benefits of partnering with one. Accounting [When to Hire an Accountant for Your Small Business or Startup](/blog/when-to-hire-an-accountant/) Hire an accountant when starting a business (for entity structure advice), during rapid growth, before fundraising, or when tax complexity increases. Signs include spending hours on books each month. Accounting [Do startups need accounting?](/blog/do-startups-need-accounting/) Starting a new business venture is an exciting time, filled with creativity and ambition. However, amidst the enthusiasm, one crucial aspect that many startup founders overlook is accounting. Accounting [Cash vs. Accrual Accounting: Make the Right Choice for Your Startup](/blog/cash-vs-accrual-accounting-startups/) Cash accounting records transactions when money moves; accrual records when earned or incurred. Most startups should use accrual accounting for accurate financial reporting and investor readiness. Accounting [Accounting vs. Bookkeeping: What's the Difference?](/blog/accounting-vs-bookkeeping/) Bookkeeping records daily transactions; accounting analyzes financial data for strategic decisions. Learn the difference and when startups need each service. Accounting [It's Time to Fix Accounting](/blog/its-time-to-fix-accounting/) Deep dive into the problems with small business accounting in the U.S and Digits' mission to fix these fundamental flaws in the system, leveraging AI and modern technology to push for a long-overdue overhaul. Accounting [Digits Reports Upgrade](/blog/reports-upgrade-q2-22/) Welcome to Q2. Now, with the click of a button, you can generate beautiful, immersive quarterly reports packed with all the intelligent executive summaries and actionable insights you get from standard, monthly Digits Reports. Quarterly Reports pack all the same power: infinitely explore your data through elegantly presented numbers and popular features like Hover to Discover. ## What's the Story with Accounts Receivable? URL: https://digits.com/blog/accounts-receivable/ March 19, 2024 Accounts receivable (AR) is all about the outstanding money owed to your business for either goods or services received, but not yet paid for, standard practice for a lot B2B transactions and startups, especially in the SaaS space. Sounds simple, right? Below we'll dive deeper into the ins & outs of AR and how it might play a role in your startup's financial journey. #### Keeping Track of the Owed Amounts Creating an environment where customers pay you on credit undoubtedly leads to an increase in sales. But, it also means you'll have to start keeping track of who owes you, how much, and when that money is expected. To take care of this, you should establish an AR recording system or aging report — more on these below. Through regular updates to this report, you will always be aware of who has paid and who is yet to pay. This will help you manage your cash flow accurately and ensure financial stability for your startup. #### What's an AR aging report? The AR aging report is your secret tool to organize your cash flow effectively. Like a well-formulated spreadsheet, it's divided into different categories based on the length of time an invoice has been outstanding. Usually, these categories are: 'Current', '1-30 days overdue', '31-60 days overdue', '61-90 days overdue', and '90+ days overdue'. This report provides a clear picture of your overall accounts receivable situation and helps you identify late payments at a glance. #### The Depth and Breadth of AR Management Effectively managing your accounts receivable isn't just about record keeping. It involves a combination of proactive strategies like credit management, collection strategies, and regularly evaluating your AR processes. A robust credit management policy precedes a healthy AR system. Before you extend credit to a customer, assess their creditworthiness to see if they can pay back within the agreed time. Employ different collection strategies to encourage timely payments, from sending friendly reminders to imposing late payment fees where necessary. #### Why Should You Care About AR? You might wonder why all this hullabaloo about AR? Here's why: Poorly managed receivables can significantly impact your cash flow, making it hard to meet operational expenses. Efficient AR management assures a steady stream of income, thereby helping your fledgling company grow and stay afloat in the challenging business landscape. #### Technology to the Rescue Keeping track of your startup's accounts receivables can be taxing. As the company scales, so will the AR complexities. Luckily, accounting services and a myriad of tools, can help streamline things remarkably. Such technologies automate the AR processes, reduce time spent on tracking payments, and empower quick responsiveness to late payments. All of these ensure a healthier cash flow and can give you the time needed to focus on growing your startup. #### Keep on Counting Accounts receivable might seem mundane amidst the exciting world of startups. However, early focus and management of AR can set the foundation for smooth financial operations, stability, and cash flow transparency. A startup that has its financial facets well-orchestrated is one step closer to success. ## Introducing the Agentic Close: Manage by Exception URL: https://digits.com/blog/agentic-close/ June 8, 2026 For decades, accounting platforms have been sold as the financial system of record. But they have never taken that job seriously. Yes, they store financial data, but the work required to produce a complete, accurate, trusted set of books has been left to bolt-on tools and manual labor.  Collecting financial activity, booking it correctly, reconciling it to source documents, preparing accrual schedules, identifying what needs review, fixing mistakes, and drafting reports consumes hours. Accountants have taken on that burden themselves, repeating the same process across every client, every month, for decades. Yet, clients have never hired accountants for data entry. They hire them for confidence: accurate financials, with context on what changed, based on the judgment of someone they trust who will stand behind the numbers  Today, AI can prepare work and surface issues, but it will never replace that trust, judgement, or accountability. Meanwhile, accountants have been stuck with the tedium that their software never finished. At Digits, we've believed since Day 1 that the job of an accounting platform is not merely to store the books. The job is to help close them! ### **Introducing the Agentic Close** In March 2025, we launched the Agentic General Ledger, which auto-booked transactions in real time without rules or manual bank feeds. Last November, we shipped AI Bank Reconciliations. In May, we launched Automated Schedules. Each release was a piece of the close. Today, with the launch of Quality Control and Firm Dashboard, we're bringing those pieces together into the end-to-end Agentic Close. Traditional close workflows are built around a monthly scramble. Transactions pile up. Missing information accumulates. Review happens after the fact. Even modern AI close tools still begin with the accountant describing a workflow, reviewing the steps an agent creates, approving it to run, and deciding when to run it again. At Digits, we take a different approach. The Agentic Close runs continuously. As new financial activity enters Digits, the ledger books it, evaluates it against firm standards, and brings the right exceptions into your Checklist for review, without waiting for anyone to prompt the system. This is management by exception, built directly into the ledger. ### **Plain English instructions. Deterministic checks.** Accounting teams already have expectations for how they want the books reviewed: material expenses over a threshold, transactions booked to parent categories, missing customer or vendor assignments, unusual P&L movement, and client-specific policies, just to name a few. Historically, those rules lived in someone’s head, in a workpaper, or in a month-end checklist. With Digits, you simply express those expectations as Agent Instructions in plain English. Digits automatically converts them into deterministic checks that run consistently across the ledger, continuously, without ever hallucinating. This is not a prompt-driven workflow where an accountant asks an agent to do a task, reviews the action plan it creates, approves it to run, and repeats the process next month. Once configured, Digits checks are hard-coded, auditable, always on, and running continuously as every new transaction enters the ledger.  The ledger does the monitoring. The accountant stays in control. ### **The Agentic Close, end to end** The close is not one task. It is the result of connected workflows, and most should not wait until month-end. Digits brings those workflows together inside one accounting platform, working continuously as your clients' financial activity enters the ledger. ##### Collect Digits Connect integrates with more than 12,000 financial institutions and automatically imports financial activity as it happens. Paper documents, including checks, bills, invoices, and statement PDFs, can be submitted by photo, drag-and-drop, or email forward and are processed automatically. ##### Book Digits AGL® books all financial activity as it arrives using custom-built, domain-specific AI bookkeeping models, not general-purpose LLMs. Trained on 180 million transactions representing nearly $1 trillion in real financial activity, they know when they are confident and when they are not. When there are exceptions – uncertain transactions, miscategorizations, missing vendors, missing customer assignments, and countless other items – Quality Control catches and surfaces them automatically in Checklist for review. ##### Reconcile Digits starts reconciliations for you. Statements are fetched automatically from supported banks, or imported via drag-and-drop or email. It matches bank feeds, statement PDFs, and ledger data, catches duplicates and missing activity, and surfaces only anomalies that need review. Matched transactions are tied to audit-proof pixel bounding-boxes on the statement PDF. ##### Schedule Digits brings supporting accrual schedules directly into the ledger. When a transaction looks like it needs accrual treatment, such as a fixed asset, prepaid expense, or deferred revenue, Digits detects it, drafts the schedule, shows assumptions and projected entries, and surfaces it in your Checklist for approval. Once approved, the schedule becomes a first-class ledger object, with monthly journal entries maintained automatically. ##### Review with Quality Control The bookkeeping models do the work and Quality Control reviews it. It runs always-on checks for balance anomalies, material transactions, unusual spend, and parent-category bookings that need a second look. Clear-cut issues can be resolved automatically. Issues that require judgment are escalated to your Checklist with context and a recommended action. For firms, Quality Control can be configured at the firm level and customized at the client level. Firms can describe checks in natural language, and Digits turns those instructions into deterministic checks that run against every new transaction in perpetuity. ##### Report Clients can access live financials 24/7 through interactive portals, dashboards and real-time financial statements on mobile or desktop. Digits also generates and schedules customizable financial reports that are interactive, drillable to the source transaction, and commentable at the line level. ### **From manual review lists to an intelligent Checklist** With the Agentic Close, Digits continuously evaluates the books in the background and brings the items that matter into Checklist. Instead of hunting for problems, accountants review the exceptions Digits has already surfaced. Instead of assembling the same review list every month, teams refine the instructions that govern what appears automatically in your Checklist. This is the disciplined version of agentic accounting: flexible where customization matters, deterministic where accounting requires control, and continuous where close quality depends on catching issues as they happen. This is the Agentic Close. A ledger that doesn't just store the books, but closes them. The Agentic Close is available today for all accounting firms on Digits. ## Introducing the Autonomous General Ledger® URL: https://digits.com/blog/agl-announcement/ March 10, 2025 Hello, world. It's time. After 5 years of building, and a year of intensive testing with hundreds of businesses, we’re unveiling Digits: the first end-to-end accounting platform for the AI era. The world’s first Autonomous General Ledger®, or AGL®. We started Digits with a simple vision: to reimagine accounting software as **real-time, automated, collaborative, and intuitive**—words you would never associate with the status quo tools of the past 30+ years. We had felt the pain first-hand: countless hours wasted categorizing transactions, interpreting financial statements, exporting to Excel and back again, waiting for updates to show up in QuickBooks…all for what? To then spend even more time analyzing the reports and scrounging for insights? Enough. ##### How Digits is Different Digits **does the accounting for you**—not just categorization, but full automation of your financial workflows—so you can run your business without getting buried by your back-office: 💎 **AI Bookkeeping** — Trained on **$875 billion+** in transactions, Digits **understands your books instantly** and categorizes accurately and reliably. 💎 **AI Financials** — Automated insights, analysis, and drag-and-drop dashboards give you **real-time visibility** into revenue, burn, cash flow, and trends—no spreadsheets needed. 💎 **AI Invoicing and Bill Pay** — **Ditch disconnected tools**. Send invoices, pay bills, and **keep everything in sync**—without manual reconciliation or clunky integrations. With real-time connections to 10,000+ banks, cards, payroll providers, and payment processors, Digits supports your business end-to-end and updates live as it happens. And Digits is designed for fluid collaboration: unlimited users, built-in commenting and sharing, an insanely quick UI, and intuitive visualizations make your finances a joy to explore, no accounting or finance degree required. ##### How Digits Works Achieving this level of automation required rethinking the core architecture of the general ledger and moving beyond the industry's reliance on relational databases. Digits combines the security and performance of single-tenant, memory-mapped flatfiles, the semantic knowledge of an object-oriented vector-graph data model, and the intelligence of over a dozen custom-trained ML models and AI agents that work together, as an orchestra, to tackle the end-to-end accounting workflow. The result is a unified AI Accounting platform that **correctly auto-books over 93% of inbound transactions**—to any arbitrary, business-specific chart of accounts—while surfacing the remainder for your review. [In thorough benchmarking trials,](/agl#whitepaper-section "null") Digits AGL® outperforms LLM-based approaches by over 50%. Source: [Beyond the AI Hype Whitepaper](/agl#whitepaper-section "null") The result is magical: > “As a startup founder and a mom, I literally have no time. The automation Digits brings just makes everything easier for us—I invited Digits to my financial tools and that was it. If you want to save time, and really trust the numbers, choose Digits. It's been a huge weight off my shoulders, it's invaluable.” **Sara Beykpour**, Particle's co-founder and CEO ##### Try it Free, Today Digits launches today—with a 30 day free trial!—for startups and small businesses, with pricing starting at just $100/month: [Get started free](https://my.digits.com/join) We've been working with top firms, including Armanino and Hiline, to develop expanded features for the accounting profession. If you're interested in becoming a Digits accounting partner, [apply for access here](https://forms.default.com/665674 "null"). ##### Thank you! I want to thank our incredible investors—Benchmark, GV, Softbank, 20VC, and 70+ amazing angels—for their unwavering support as we brought this vision to life, and the entire Digits team for creating something even better than I ever thought possible. Join us, today, in this future world of automated small business accounting. I can't wait to hear what you think! ## AI Accounting: How AI Can Help Your Business in 2025 URL: https://digits.com/blog/ai-accounting-benefits/ January 15, 2025 Thanks to artificial intelligence, the future of [accounting](https://digits.com/blog/cash-vs-accrual-accounting-startups/ "null") is changing fast. In 2025, you no longer need to spend hours on time-consuming, routine tasks like data entry, reconciliation, or expense tracking. Instead, AI-powered tools are automating the busywork and giving companies like yours time to focus on what really matters: strategic decision-making and long-term growth. In this guide, we'll break down the ways that AI accounting is reshaping how businesses track their finances and how your business can take advantage of it. ### What is AI accounting? AI accounting means that machines are trained to understand financial data. These accounting tools are designed to take over repetitive tasks, spot patterns, and provide useful insights that help companies make better financial decisions. Instead of your bookkeepers manually entering transactions or sorting through spreadsheets, AI can handle tasks like expense categorization, bank reconciliation, and financial reporting with little input from users. If your company buys office supplies every month, the AI tools learn to recognize the supplier and your spending patterns to categorize those expenses without human input. It can also flag things that seem unusual, like a sudden spike in spending, and alert your team to check it out. More advanced platforms (including Digits) offer features like [real-time dashboards](https://digits.com/product/bookkeeping/ "null"), [cash flow projections](https://digits.com/product/financials/ "null"), and [automated bill payments](https://digits.com/product/bill-pay/ "null"). These tools help reduce the need for manual data entry, lower the risk of errors, and allow accounting teams to focus on higher-value work, like planning, analysis, and decision-making. ### How does AI make financial management better for businesses? AI accounting software helps finance teams focus on bigger financial tasks, like growth strategy, by taking over manual workflows that used to consume hours of their time. By handling these time-consuming tasks, AI frees up your business to focus on activities like sales, budgeting, and fundraising. Here's how AI makes financial management better. #### Faster turnarounds Traditional financial management often depends on manual data entry, slow processes, and outdated tools like Excel. AI accounting tools speed everything up. For example, manually reconciling hundreds of transactions in a spreadsheet might take a bookkeeper a full day. On the other hand, an AI system can scan, match, and verify the same data set in minutes. Generating monthly financial reports typically requires pulling numbers from multiple sources, checking for errors, and formatting the final version. AI tools can now do all of this automatically with built-in rules and real-time data feeds. #### Real-time insights AI technology also unlocks powerful financial insights. By analyzing your historical data and pulling from your live accounts, AI tools can instantly produce up-to-date financial statements and key performance metrics. With real-time visibility into your cash flow, burn rate, and [runway](https://digits.com/blog/extending-your-startup-runway/ "null"), you can make smarter business decisions _faster_. #### Lower administrative costs AI reduces the need for large finance teams by handling the repetitive, manual work that typically requires hours of human input. Even accounting firms and professionals benefit, as AI allows them to serve more clients efficiently and spend less time on bookkeeping tasks. The result is lower administrative overhead and more resources freed up for strategic growth. ### How can businesses use AI in their accounting systems? While AI accounting doesn't replace human oversight, it does help reduce human error, streamline a wide range of financial tasks, and detect irregularities in spending to create more efficient workflows. Here are a few ways AI accounting can ramp up your financial management system. #### Invoice automation AI accounting can [simplify invoicing processes](https://digits.com/product/invoicing/ "null") by generating, sending, and even following up on payment requests automatically. For example, a marketing agency that bills multiple clients every month would need to send invoices manually, track whether they've been paid, and send reminder emails if a payment is late. With AI automation, their accounting system can generate invoices based on project timelines or billable hours, send them out immediately, and notify clients if payment isn't received by a set date. Once payment is made, it's automatically matched to the correct invoice in the system. If something doesn't line up, like a partial payment or a mismatch in invoice number, AI flags the issue for review. This improves cash flow consistency and reduces the administrative load on staff. #### Cash flow forecasting AI tools can identify patterns and generate more accurate cash flow forecasts by analyzing historical data and real-time transactions. These forecasts are especially helpful for budgeting and financial planning, giving your business a better understanding of when to expect inflows and outflows. For example, imagine a small e-commerce company that experiences seasonal spikes in sales. With AI-driven forecasting, the business can predict when to increase inventory or hire temporary staff well before the busy season hits. This insight allows the company to avoid cash shortages and better manage expenses during slower months. If you've got investors, they'll want to see how much cash your business has, how long it will last, and whether the company can sustain its operations. A solid forecast helps them understand if you're managing money responsibly and planning for what's ahead. #### Audit and fraud detection AI accounting tools can support audit processes by quickly scanning large volumes of financial data and highlighting discrepancies or missing documentation. For instance, they can automatically verify whether receipts are attached to expense reports or if approval workflows were followed correctly. This speeds up internal audits and helps ensure compliance with accounting standards. In addition to audit support, AI can flag potential fraud by identifying unusual or suspicious activity. If a vendor suddenly charges a much higher rate or an employee submits two very similar expense claims, AI tools can detect these patterns and raise alerts. ### What are some challenges to using AI for accounting? While AI accounting software brings speed and efficiency to accounting, it's not without its hurdles. Businesses should be aware of the limitations and risks involved when adopting AI tools for financial management. #### Data security AI accounting platforms rely on sensitive financial data to do their job. This includes payroll details, bank account information, tax records, and more. Ensure any AI platform you use follows strong security standards. Look for software that is compliant with security standards like SOC 2. You should also ask vendors how they encrypt data, handle backups, and monitor for suspicious activity. ([Digits takes bank-grade security seriously](https://digits.com/security/ "null") and is SOC 2 Type II compliant.) #### Staff training Introducing AI into financial processes often means a learning curve for your team. CPAs, bookkeepers, or operations staff may need training to properly use new tools and interpret AI-generated insights. Without that training, the software's full potential may go untapped, or worse, be misused. It's important to make sure your team understands how the system works and where human oversight is still required. Maintain clear workflows that define when a human needs to step in, especially for tasks involving compliance, financial forecasting, or exceptions that the system isn't trained to handle. The shift to AI also brings a change in how people work. It can be hard for teams to trust that a machine is doing things correctly. A clear onboarding process and a change management strategy are essential. Gradually introduce AI tools and support employees as they learn for long-term success. #### Accuracy AI systems are only as good as the data they're given. If the data going into the system is messy, inconsistent, or incomplete, AI may make mistakes. Businesses still need regular checks and controls to ensure the AI does what it should. Building in human review processes and validating reports before acting on them will help maintain accuracy. Over time, as the system learns from more high-quality data, it will become more reliable. #### Legal and Compliance Risks Accounting is a highly regulated field with compliance and [tax](https://digits.com/blog/startup-taxes-ultimate-guide/ "null") implications. To reduce this risk, choose an AI accounting platform that is built with compliance in mind. Look for tools that offer features like automated audit trails, role-based access controls, and real-time regulatory updates. ### How startups and SMBs can get started with AI accounting Adopting AI for accounting doesn't have to mean replacing everything your startup or small business already uses. Begin by identifying which accounting processes are most time-consuming or error-prone, then explore AI systems that can streamline those specific tasks. Whether you're working out of spreadsheets or using a full ERP system, the goal is to make your existing workflows more efficient, not to rip out and replace them. Many AI accounting tools are designed to integrate with what you already use, from invoice software to e-commerce platforms. #### Look for tools that work with your stack Before committing to any AI-driven accounting solution, make sure it works with your current software stack. If you're using tools for expense management, accounts payable, or tax filing, your new system should integrate with those services. The more connected your systems are, the more value you'll get from automation and the less manual work your team will need to do. Look for AI accounting providers that can handle core accounting tasks like reconciliation, expense categorization, and report generation while syncing seamlessly with the platforms your team already relies on. #### Start with one workflow You don't have to automate everything at once. A good starting point is a single, high-friction workflow, such as [invoice processing](https://digits.com/blog/ai-invoicing/ "null"). These areas are often repetitive tasks that are ideal for automation. By focusing on one workflow first, you can test how the system fits your operations, evaluate its accuracy, and train your team without overwhelming them. Add additional workflows over time until you've fully leveraged AI accounting capabilities. #### Measure efficiency, not just cost savings While cost reduction (in terms of saving on the cost of human labor that previously handled manual accounting tasks) is one of the benefits of AI, it shouldn't be your only metric for success. Pay attention to how much time your team saves on repetitive tasks, how often errors are caught early, and how much faster you can close your books or prepare reports. Efficiency gains, like faster invoice approval or fewer manual corrections, are often more valuable in the long run than cutting headcount or how much you spend on accounting solutions. Look for measurable improvements in speed, accuracy, and decision-making support as signs your AI solution is working. ### Why Digits is the smart way to start with AI accounting Digits is the best way to get started with AI accounting because it's purpose-built, accurate, and includes all of the features a business might be looking for. Unlike other tools that add AI features to legacy systems, Digits is AI-native from the ground up. It's powered by the [Autonomous General Ledger®](https://digits.com/blog/agl-announcement/ "null") (AGL®), a proprietary system trained on over $875 billion in financial activity across 170 million transactions. That foundation makes Digits [54% more accurate than large language models](https://digits.com/agl/#whitepaper-section "null") at classifying financial data, giving you dependable results you can actually trust. Plus, Digits has all kinds of AI features designed to simplify both accounting and bookkeeping. This includes: - Autonomous transaction categorization and reconciliation: Digits keeps your books accurate and up to date automatically. There is no need for spreadsheets or manual tagging. - AI Bill Pay: Approve and send payments with fewer clicks while Digits handles matching, categorization, and reconciliation behind the scenes. - Real-time, customizable dashboards: Track key metrics like burn rate, cash flow, and runway on [live dashboards](https://digits.com/product/dashboards/ "null") without waiting for end-of-month reports. - Seamless integration with your existing financial tools: Get started quickly without needing to migrate platforms or overhaul your processes. [Sign up for Digits today](https://digits.com/#persona "null") and take the first step toward smarter, more autonomous financial management. ## Always Be Closing: Introducing AI Bank Reconciliations URL: https://digits.com/blog/ai-bank-reconciliations/ November 10, 2025 Month-end close wasn’t supposed to cost you your evenings. Yet for most firms and in-house finance teams, bank and card reconciliations are still a grind: exporting statements, babysitting fragile rules, hunting down mismatches, and patching “close enough” balances just to get the books out the door. We've built **AI Bank Reconciliations** to flip that script! Starting today, the AGL automatically reconciles bank statement PDFs for you, ensuring balance sheet accounts tie out while surfacing any anomalies for your review. Simply drag and drop the bank statement onto Digits, and the AGL handles the rest for you. It's literally that easy. ### What Are “AI” Bank Reconciliations? Think of AI reconciliations as giving your close process its own dedicated team of tireless junior staff, in the form of an AI agent: - It ingests bank feeds, bank statements, and ledger data. - It automatically matches transactions and finalizes reconciliations, without rules you have to configure or maintain. - It runs continuously, so by the time you’re ready to close, most of the work is already done for you. Instead of manually identifying transaction matches and ticking boxes, you’re presented with a clean reconciliation status and a short, prioritized list of exceptions to review, cutting the month-end close process across your client base by hours, every single month. Welcome to the ledger that reconciles itself. ### Much Harder Than It Looks How hard can it be for AI to match numbers between a data feed and a bank statement? Just like manual reconciliations – harder than it looks! Bank and credit card statements are messy. Fees hide in summaries and deposits. Withdrawals swap places across institutions. Sometimes multiple transactions for the same amount show up on the same day. Other times, the same transaction might show up twice or not at all. Getting it right meant designing a system that can catch duplicates, detect missing transactions, and distinguish a true mismatch from a sync delay — all without creating more noise for you. Behind every “auto-reconciled” badge is a complex system of AI data extraction, logic checks, and heuristics to ensure accuracy. After months of design, testing, and refinement, AI Reconciliations are delivering results that speak for themselves: - 75% less time spent on reconciliations - Faster, more accurate month-end closes - A shift from manual preparation to confident review > "AI Bank Recs have flipped my role on its head. I used to spend hours every week slogging through feeds and rules; now I log in and review a clean set of exceptions. My team’s time is now going into judgement and advisory work instead of just finding and matching. It’s the first time in years I’ve felt in control of the close, not buried by it." > > **– Heather Taylor, Accounting Services Manager at Hiline** ### Get Your Nights and Weekends Back With Digits handling the heavy lifting, you and your team can shift from _reconciling every transaction_ to _reviewing what truly matters_ — resulting in faster closes, fewer errors, and more time back in your week. AI Bank Reconciliations are available today for all accounting firms on Digits. **Experience AI Bank Reconciliations today.** ## AI-Enabled vs. AI-Native vs. Agentic Accounting Software: What's the Difference? URL: https://digits.com/blog/ai-enabled-vs-ai-native-vs-agentic-accounting-software-whats-the-difference/ April 16, 2026 Every accounting platform now says it uses AI. But AI is not a single thing.  How the system is built and what it actually does are two different questions — and the answers determine whether the software reduces your work, or just shifts it around. These labels—AI-enabled, AI-native, and agentic—describe different types of accounting software, and understanding the difference is key to evaluating modern AI accounting tools. For accounting firms evaluating software in 2026, that distinction matters. Here’s what each one means, how they relate, and what to look for when choosing a platform. --- ### **What is AI-enabled accounting software?** [AI-enabled](/glossary/ai-enabled-accounting) accounting software is traditional accounting software with AI features added on top.  The underlying system still works the way it always has. AI improves parts of the experience. It can suggest categories, flag anomalies, and guide workflows. But it doesn’t change how the work gets done. QuickBooks and Xero are the clearest examples. Both offer AI-powered suggestions, anomaly detection, and workflow assistance. Those features are useful. They save clicks and catch things earlier. But a person still reviews every suggestion, confirms each categorization, reconciles the activity, and pushes the books to close. The AI assists. The work stays human-driven. AI-enabled is an upgrade to the dashboard, not the engine. The interface looks smarter. The operating model stays the same. There’s a broader shift firms should be aware of. The major ledger platforms spent decades building their businesses through firms. Firms recommended the software, migrated clients onto it, and managed the relationship. But AI is starting to collapse the line between infrastructure and service. When a platform can categorize transactions, reconcile accounts, generate reports, and surface insights on its own, it starts to overlap with the work firms do. Every dollar a client pays for automatable compliance work becomes potential revenue for the platform. That creates a real economic incentive for platforms to go around the firms that depend on them. **That dynamic doesn’t exist when the platform is built for firms instead of replacing them.** ### **What is AI-native accounting software?** [AI-native accounting](/glossary/ai-native-accounting) software is built with machine learning at its core. AI isn’t a feature bolted onto an older system or an afterthought. It’s how the product was designed and how it operates. The difference starts with how the system is built. Legacy accounting platforms store transactions as text rows in relational tables. A transaction is just a string of characters. There’s no semantic understanding or pattern recognition. The system can’t learn what a vendor means in the context of a client’s chart of accounts. You can’t build meaningful AI on top of a system that treats every transaction as an opaque line of text. An AI-native ledger works differently. Vendors, customers, categories, and transactions exist as objects that the system can relate to each other. Similar transactions cluster together naturally. The system doesn’t need a human to tell it that two vendors are similar. It learns that from the data itself. This is the shift in accounting software: from a database that stores financial data to one that understands it. Because an AI-native system understands how transactions relate to one another, it starts from a stronger position. Less manual setup. Fewer rigid rules. A better ability to interpret real transactions. **It also means the intelligence is** **[ledger-native](/glossary/ledger-native)****: it lives inside the general ledger, not in a third-party tool layered on top. That distinction matters.** When intelligence lives outside the ledger—in categorization tools, reconciliation apps, or third-party AI layers—every handoff between systems creates a point where data can fall out of sync. An accountant categorizes a transaction in one tool. _Did it sync back correctly?_A reconciliation is marked complete in one system. _Is it reflected in the ledger?_ Truth drift in accounting software is when your tools say one thing, but your ledger shows something else. Firms end up spending time verifying that what happened in one system made it to another. **When the intelligence lives inside the ledger, that problem goes away.** AI-native describes how the software is built, not what it does. A platform can be AI-native and still depend on humans to drive every step of the workflow. The architecture creates the foundation for stronger automation, but it does not guarantee the system will act on its own. Architecture alone does not tell you what the software will do for your firm. That is where agentic behavior comes in. ### **What is agentic accounting software?** [Agentic accounting](/glossary/agentic-ai) software takes action inside the workflow. It does not wait for a person to move each task forward. It categorizes transactions as they arrive, reconciles bank and ledger activity, matches bills and invoices to records, keeps financials up to date, and routes exceptions for review when human judgment is required. Agentic describes how the software behaves, not how it’s built. What matters is what it actually does. In theory, agentic behavior can be built on any system. A legacy platform with rules can attempt to act on transactions automatically. In practice, the foundation determines how far that can go. Rules-based systems hit a limit quickly. They can only act on transactions they’ve been set up to handle. When something falls outside those rules, the workflow stops, and a person takes over. An AI-native foundation is what makes agentic behavior work in practice. It removes that limit. Because the system understands context, learns from corrections, and improves over time, it can act across a much wider range of transactions without needing every decision predefined. The strongest agentic systems also use [layered intelligence](/glossary/model-layer-cake). Not a single model making every decision, but multiple layers working together.  Client-level models trained on a specific business's transaction history handle recurring patterns with near-perfect accuracy.  Firm-level models capture how the firm operates across all of its clients, including conventions, judgment calls, and quality standards.  Global models trained across millions of transactions provide the broad baseline.  And fallback agents step in to research new or unclear transactions when the other layers aren’t confident.  Each layer catches what the previous one missed. The intelligence compounds over time. Beyond layered intelligence, the best accounting software verifies its own work directly in the workflow. A separate AI layer checks the work of the first, reviewing categorizations, flagging inconsistencies, and validating outputs before they reach the accountant.  Because the AI that does the work and the AI that verifies it operate on the same data in the same system, reliability improves significantly. This isn’t spot-checking. It’s continuous verification at machine speed. Agentic accounting software changes the accountant's role. The accountant is no longer processing every transaction. They become the trust layer—the professional who defines quality, verifies outputs, interprets the numbers, and takes accountability for the outcome. The value shifts from manual work to judgment, responsibility, and expertise. ### **How AI-enabled, AI-native, and agentic relate to each other** These aren’t steps on a ladder. They describe different things: how the software is built and what it does. **AI-enabled and AI-native describe how the software is built.** AI-enabled means AI features were added to a traditional system.  AI-native means the system was designed from the ground up around AI, with a data model built to understand transactions, not just store them.  **Agentic describes behavior** — what the software does.  An agentic system takes action, moves work forward, and brings humans in where judgment is needed. AI-native accounting software can still require manual work if it isn’t agentic. Even with a strong foundation, the system may still depend on humans to move each step forward. A platform can also attempt agentic behavior without being AI-native, but the architecture limits how well that works in practice. Rules-based systems can automate known patterns, but they can’t interpret new transactions in context, learn from corrections, or improve over time. When the agentic layer sits on top of a legacy ledger instead of inside it, firms inherit the overhead of verifying that the AI’s outputs match the ledger. **The best accounting software is both AI-native and agentic.** AI-native defines how the system is built. Agentic defines what it does. The architecture provides context and the ability to learn. Agentic behavior turns that into work that actually gets done. When both live in the same system, there’s no gap between intelligence and record. No sync to fail. No second system to check. ### **AI-enabled vs. AI-Native vs. Agentic: Side-by-side comparison** **Category** **AI-Enabled** **AI-Native** **Agentic** **What it describes** Architecture Architecture Behavior **How it works** AI features layered onto a traditional system Built around AI from the ground up AI takes action and moves work forward **Data model** Relational tables — transactions stored as text Semantic — transactions understood as objects in context Semantic + active — transactions understood and acted on in context **Setup required** Significant — rule configuration and ongoing tuning Minimal — designed to learn from data Low — operates with minimal setup and acts on transactions directly **Automation depth** Suggestions, flags, and workflow assistance Deep categorization and a strong baseline Continuous reconciliation and active bookkeeping **Verification** Manual review of every output Varies — may or may not include embedded checks Continuous AI verification across every transaction **Human role** Drives every step Reviews and decides Reviews exceptions, focuses on judgment, and provides advisory **How it improves** Users build and maintain rules Learns from data and corrections Learns at the client, firm, and global level over time **What it enables** Faster manual work Significantly reduced processing Bookkeeping runs continuously; humans review exceptions and focus on advisory services **Examples** QuickBooks, Xero Puzzle, Kick, Digits Digits --- ### **What does this look like in practice?** Take a typical month. Card spend, payroll, software subscriptions, vendor bills, transfers, and refunds are all hitting the ledger continuously. **In an AI-enabled system,** the software suggests how to categorize each transaction. Someone still works through the queue manually, confirming each suggestion, reconciling the activity, and pushing the books to close. **In an AI-native system,** the software has a stronger foundation for understanding those transactions in context. There is less setup, better pattern recognition, and a cleaner starting point. But the workflow may still depend on a human to move it forward. In an agentic system built on an AI-native foundation, the software processes activity, reconciles what it can, keeps the books current, and surfaces only what needs review. A second AI layer verifies the work before it reaches the accountant, who focuses on exceptions, applies judgment where it matters, and spends time on advisory work and client strategy rather than transaction processing. That’s the difference. AI-enabled accounting software helps with the work. AI-native accounting software is built to understand transactions. Agentic accounting software moves the work forward—and verifies it before a human ever sees it. ### **Why this matters for accounting firms** These are not just labels. They describe different product categories with different limits on how a firm can operate and scale. **Setup time.** AI-enabled systems require rules, configuration, and ongoing tuning before automation becomes useful. AI-native systems start from a stronger baseline with less setup. Agentic systems go further, acting on transactions directly and reducing the need for manual configuration. **Review load.** AI-enabled systems push most work through human review, keeping teams buried in transactions. AI-native systems reduce some of that load, but still rely on humans to move work forward. Agentic systems handle routine work, verify it, and surface only exceptions, so review becomes lighter and focused on judgment. **Scalability.** In AI-enabled systems, each new client adds more rules, cleanup, and ongoing effort. Growth requires more headcount to keep up. Agentic systems keep books current with limited intervention, allowing firms to scale without adding the same level of overhead. When the system learns at the firm level, every new client benefits from the expertise the firm has already built. **Capacity for advisory.** This is the real payoff.  In manual or AI-enabled workflows, teams scale roughly one-to-one with client growth due to the effort required to maintain each set of books. When the system handles routine bookkeeping and keeps financials current, teams gain real capacity to focus on advisory, planning, and higher-value client work—interpretation, accountability, and the trust that comes from a professional who stands behind the outcome. **Knowledge retention.** When a firm’s best practices are encoded into the system that does the work, every new hire inherits the firm’s collective expertise from day one. Training time compresses. Consistency across the client portfolio becomes automatic. This is the difference between a firm whose knowledge lives in people’s heads—and walks out the door when they leave—and one where that knowledge compounds with every close. ### **What accounting software has the best AI?** The best AI in accounting is the one that does the most real bookkeeping work with the least manual effort — and proves it. That means more than a chatbot, a suggestion engine, or a few smart rules. It means the software can interpret transactions in context, reconcile activity continuously, keep financials current, verify its own output, and surface only the items that need review. The strongest systems do not just sound smart in a demo. They reduce actual bookkeeping work inside the firm. That reduction in manual work is what creates leverage — giving firms the capacity to take on more clients, offer higher-value advisory services, and spend less time on routine processing. If a platform calls itself AI-native or agentic but doesn’t publish benchmark methodology, accuracy data, or explain how verification works inside the workflow, that’s worth noting. The strongest systems make their performance measurable and transparent rather than relying on marketing claims alone. ### **Where Digits fits** Digits is both AI-native and agentic. They describe different things, and Digits meets both. **AI-native in architecture.** Digits was built around AI from day one. Its [Agentic General Ledger™](/glossary/agentic-general-ledger-agl) is trained on 180 million transactions representing nearly $1 trillion in real financial activity. The system uses a semantic data model in which transactions, vendors, customers, and categories are represented as related objects—not as text rows in a relational table. That means the intelligence lives inside the ledger. No sync lag. No second system to verify. **Agentic in behavior.** The Agentic General Ledger™ categorizes transactions, reconciles activity, keeps financials current, and brings humans in when judgment is required. It does not wait for a person to move each task forward. When the system is confident, it moves the work forward. When it’s not, it routes the exception, learns from the correction, and performs better the next time. **Tiered intelligence.** Digits does not rely on a single model. Client-level models handle each business’s recurring patterns. Firm-level models encode how the firm operates across clients. Global models provide a broad baseline. Fallback agents handle new or unclear transactions when the other layers aren’t confident. Each layer catches what the previous one missed. **Embedded verification.** A separate AI layer reviews categorizations, flags inconsistencies, and validates outputs before they reach the accountant. The AI that does the work and the AI that verifies it operate on the same data in the same system. This is continuous verification at machine speed. **Operational and published accuracy.** In its 2026 benchmark, Digits AGL achieved **97.8% transaction-categorization accuracy** using ground truth reviewed by U.S.-based GAAP accountants, outperforming every frontier AI model tested. The full methodology and results are published in the whitepaper _[Beyond the AI Hype: Evaluating LLMs vs. Digits AGL for Accounting Tasks.](https://digits.com/agl/#whitepaper-section)_ **Embedded verification** is equally important. A separate AI layer continuously reviews categorizations, validates outputs, and flags inconsistencies before work reaches the accountant. Because both execution and verification occur within the same ledger, firms do not incur the overhead of reconciling disconnected systems or verifying that data is synced correctly between tools. **The result is accounting software designed not just to automate bookkeeping tasks, but to maintain reliable, continuously updated financial records at scale.** **Digits pioneered the Agentic General Ledger™ by combining AI-native architecture, agentic execution, embedded verification, and published benchmark performance in a single system.** **That combination sets a standard that no other accounting platform has publicly matched.** ### **What type of accounting software should you choose?** AI-enabled software gives you smarter suggestions, but the work stays the same. AI-native software improves the foundation, but it doesn’t guarantee the system will act on its own. Agentic accounting software changes the model. The system handles the bookkeeping, verifies its own output, and surfaces what actually needs attention. It works best when built on an AI-native foundation, with the context and learning needed to act reliably. The real question is not which label sounds best. It is whether your software does the work, or your team does. --- ### **Frequently Asked Questions** #### **What is the difference between AI-native and agentic accounting software?** AI-native and agentic accounting software describe two different things: how the software is built and how it behaves. AI-native accounting software is built around AI at the architectural level, with a semantic data model that understands transactions in context rather than storing them as text. Agentic accounting software describes behavior. It takes action inside the workflow, completes bookkeeping tasks, and surfaces only the items that need human review. A platform can be AI-native without being agentic. Agentic behavior can be attempted on any system, but it works best on an AI-native foundation, where the software has the context and learning capability to act reliably across a wider range of transactions. #### **What is AI-enabled accounting software?** AI-enabled accounting software is traditional accounting software with AI features added on top. The underlying system still works the same way. A person reviews suggestions, confirms categorizations, reconciles activity, and pushes the books to close. QuickBooks and Xero are the most common examples. The AI assists, but the work is still human-driven. #### **What is an Agentic General Ledger™?** An Agentic General Ledger™ is an accounting system that actively processes bookkeeping work: categorizing transactions, reconciling accounts, matching records, and keeping financials current without waiting for manual input at each step.  It uses tiered intelligence — client-level, firm-level, and global models plus agent-based fallbacks — and embeds AI-driven verification directly into the workflow.  Digits pioneered and trademarked the Agentic General Ledger™, the first system of its kind built for accounting firms and businesses. It was trained on 180 million transactions representing nearly $1 trillion in real financial activity. #### **What is truth drift in accounting software?** Truth drift is when your tools say one thing, but your general ledger shows something else. It happens when intelligence lives outside the ledger—in categorization tools, reconciliation apps, or third-party AI layers—and data has to move between systems. Each handoff creates a chance for things to fall out of sync. Firms end up spending time verifying that what happened in one system actually made it into the ledger. When intelligence lives inside the ledger, that problem goes away. #### **Is QuickBooks AI-native or AI-enabled?** QuickBooks is best described as AI-enabled. It includes AI features such as category suggestions, anomaly detection, and workflow assistance within a traditional accounting system. The underlying system hasn’t changed. A person still reviews suggestions, confirms categorizations, reconciles activity, and pushes the books to close. QuickBooks was not built from the ground up as an AI-native or agentic platform. #### **Can agentic software be built on a legacy system?** In theory, yes. Agentic behavior describes what the software does, not what it is built on. A legacy system with a rules engine could attempt to act on transactions automatically. But in practice, the foundation limits how well that behavior works. Rule-based systems can only act on transactions for which they have been explicitly told how to handle. AI-native architecture enables the system to interpret context, learn from corrections, and act confidently on a much wider range of transactions.  When an agentic layer sits on top of a legacy ledger, firms also take on the overhead of verifying that the AI’s outputs match the underlying records. #### **What accounting software has the best AI?** The best AI in accounting is the one that does the most real bookkeeping work with the least manual effort and proves its performance with published data. Look for agentic systems built on AI-native architecture, with tiered intelligence, embedded verification, published accuracy benchmarks, and transparent performance validation. Digits is the only platform built on an Agentic General Ledger™ trained specifically on accounting data, with published benchmark results and tiered intelligence purpose-built for accounting workflows. #### **What does agentic mean in accounting software?** In accounting software, agentic means the system takes action inside the workflow. It does not just suggest the next step — it completes routine bookkeeping tasks. An agentic system processes transactions, maintains reconciliations, keeps financials up to date, and brings humans in when a decision or exception requires expertise. The strongest agentic systems also embed verification, using a separate AI layer to check the work before it reaches the accountant. #### **How accurate is Digits' AI?** In its 2026 benchmark, Digits AGL achieved 97.8% transaction-categorization accuracy using ground truth reviewed by U.S.-based GAAP accountants, outperforming every frontier AI model tested. The methodology and benchmark results are published in the whitepaper _[Beyond the AI Hype: Evaluating LLMs vs. Digits AGL for Accounting Tasks.](https://digits.com/agl/#whitepaper-section)_ #### **What type of accounting software is best for accounting firms in 2026?** Agentic software built on an AI-native foundation is the strongest choice for firms that want to reduce manual bookkeeping, scale without adding headcount at the same rate, and free up capacity for advisory work.  The system should use tiered intelligence, embed verification, publish accuracy data, and continuously improve through real accounting workflows and corrections. Digits is the only platform that combines an Agentic General Ledger™, published accuracy benchmarks, embedded AI verification, and tiered intelligence purpose-built for accounting firms and modern bookkeeping workflows. #### **How does the accountant's role change with agentic software?** The accountant shifts from processing every transaction to governing the system's output. They become the trust layer — the licensed professional who defines what quality looks like, verifies that AI-generated outputs meet regulatory and business standards, interprets what the numbers mean for the client's business, and takes accountability for the outcome. The value is no longer in the labor. It’s in the judgment, the signature, and the responsibility that comes with it. **See what it looks like when your accounting software does the work** ## Digits Presented Lessons Learned from Deploying Large Language Models URL: https://digits.com/blog/ai-in-production-2024/ July 20, 2024 Tucked away in the scenic splendor of Asheville, North Carolina, the [AI in Production conference](https://www.aiinproduction.com/ "null") was held on July 19, 2024, bringing together some of the brightest minds in machine learning and artificial intelligence. The intimate gathering of 85 participants included ML experts and AI enthusiasts from renowned tech giants like Tesla, Intuit, Ramp, GitHub, and Digits. The focus of this event was clear: to delve deep into the real-world, production-level applications of machine learning, with a keen interest in the burgeoning field of Large Language Models (LLMs). Unlike many conferences plagued by buzzwords and marketing fluff, AI in Production distinguished itself by being refreshingly genuine. The sessions were dedicated to practical machine learning solutions, steering clear of hype-driven narratives. It was a platform where every presenter showcased solutions to their problems, fostering an environment of learning, problem-solving, and genuine curiosity. ### Unearthing Practical Solutions The conference's essence lay in its authenticity. Each presentation was rooted in real-world experiences, offering attendees valuable insights into the successes and challenges of deploying large language models in production environments. Here are three presentations that stood out to Digits' ML team. #### JAX vs. PyTorch: A Comparative Perspective by Tesla [Sujay S Kumar](https://www.aiinproduction.com/#speakers "null"), a Tesla engineer, delivered one of the standout talks and embarked on a detailed comparison between JAX and PyTorch, two leading frameworks in the machine learning landscape. The session was rich with technical insights, shedding light on the nuances of each framework. The engineer discussed the strengths and weaknesses of JAX in terms of flexibility and performance optimization, juxtaposed with PyTorch's robust ecosystem and user-friendly interface. This comparative analysis equipped the audience with the knowledge to make informed decisions depending on their specific project needs and infrastructural considerations. #### Ethical Implementation: Insights from GitHub The senior Engineering Director, [Christina Entcheva](https://www.aiinproduction.com/#speakers "null") from GitHub, led a thought-provoking session emphasizing the ethical dimensions of deploying large language models. As these models become increasingly pervasive, the ethical implications surrounding data privacy, algorithmic bias, and societal impact are paramount. Christina fostered a sense or urgency regarding model bias and ensuring AI systems' fairness, transparency, and accountability. This talk was a timely reminder of the importance of ethical considerations, resonating deeply with the audience and sparking meaningful discussions on integrating ethical practices into everyday AI operations. #### Tackling Data Curation: Best Practices from Dendra Systems' Senior Data Scientist Another illuminating talk was given by [Richard Decal](https://www.aiinproduction.com/#speakers "null"), a Senior Data Scientist from Dendra Systems, who deep dived into the challenges of curating production data sets once a machine learning model is deployed. The talk focused on the data drift phenomenon—where the target variable's statistical properties change over time, rendering the model less accurate. The data scientist shared valuable strategies for monitoring and mitigating data drift, emphasizing the importance of continuous evaluation and adjustment of data pipelines to maintain model performance. This session was particularly beneficial for practitioners seeking to enhance the robustness and reliability of their deployed models. ### Beyond the Sessions: Meaningful Interactions One of the conference's highlights was the vibrant conversations during and after the sessions. The atmosphere was charged with intellectual curiosity as participants explored the latest trends in machine learning. The intimate setting facilitated meaningful networking opportunities, allowing attendees to connect more personally. The conference's practical focus enabled attendees to go beyond theoretical knowledge and engage with tangible solutions. Every participant left the conference with actionable takeaways, ready to implement the insights gained into their projects. ### A Glimpse into the Future: Anticipation for Next Year The resounding success of the AI in Production conference has left participants eagerly anticipating the next edition. Witnessing the cutting-edge advancements in large language models and their practical applications was a rare opportunity. The conference's genuine, no-nonsense approach ensured that every moment spent was valuable, fostering a culture of learning, innovation, and ethical AI deployment. ### A Heartfelt Thank You A significant part of the conference's success can be attributed to the meticulous planning and execution by Julio Baros and the dedicated team of volunteers. Their efforts in organizing and facilitating the event were commendable, ensuring a seamless experience for all attendees. The invitation extended to Digit's ML team was greatly appreciated, and the team was honored to be part of such a prestigious gathering. ### Conclusion The [AI in Production conference](https://www.aiinproduction.com/ "null") in Asheville, NC, on July 19, 2024, was more than just an event; it was a confluence of brilliant minds, innovative solutions, and forward-thinking discussions. Focusing on practical, production-level applications of large language models provided attendees with a treasure trove of knowledge and insights. The captivating presentations, engaging conversations, and the stunning backdrop of Asheville made it an unforgettable experience. We at Digits are already looking forward to returning next year, eager to continue the journey of learning and discovery in the ever-evolving landscape of machine learning and artificial intelligence. In the meantime, let's carry forward the lessons learned, implement the best practices shared, and strive for excellence in deploying large language models. A big thank you once again to Julio Baros and all the conference volunteers for making this event a remarkable success. Here's to pushing the boundaries of AI and machine learning, one practical solution at a time. Interested in learning more about Digits' presentation at the AI in Production conference? Check out our [full presentation slides](https://digits.com/developer/posts/deploying-llms-with-ease/ "null") for an in-depth look at our journey with large language models. ## Agents in Production: Lessons shared at AI in Production 2025 URL: https://digits.com/blog/ai-in-production-2025-slides/ July 22, 2025 We're excited to share insights from Hannes' recent presentation on deploying AI agents in production environments. As a Principal Machine Learning Engineer with a decade of experience across fintech, healthcare, HR, and retail, Hannes brings real-world perspective to one of the hottest topics in AI today. ### The Reality Check: Agents vs. "Process Daemons" One of the key takeaways? The term "agent" might be doing more harm than good. Hannes argues we should call them "Process Daemons" instead - a name that better sets proper expectations. ### Infrastructure That Actually Works Hannes shared hard-won lessons about agent infrastructure: **Framework Reality**: Open source frameworks like LangChain and CrewAI are great for prototyping but bring too many dependencies for production. The recommendation? Implement your own core agent loop. **Tool Integration**: Rather than manually defining every tool, they use Go's reflection to dynamically generate JSON schemas from existing APIs - letting existing access controls handle security. **Memory vs. Storage**: A crucial distinction that many miss. Use memory as a tool rather than relying on provider memory to avoid vendor lock-in. ### The Full Picture The presentation walks through building a complete agent system with observability, guardrails, memory, and retrieval - showing how what starts as "100 lines of code" quickly becomes a sophisticated system requiring careful architecture decisions. ### Key Recommendations 1. **Prioritize observability and guardrails** from day one 2. **Let applications drive infrastructure** decisions, not the other way around 3. **Focus on responsible deployment** with feedback mechanisms and monitoring 4. **Consider task planning** with reasoning models for better performance 5. **Use reinforcement learning** to continuously improve agent-specific models ### The Bottom Line As Hannes puts it, most AI products today are "basically a chat bot on top of old software." The companies winning are those taking a systems-level approach - rearchitecting how data, context, and control flow together rather than just layering AI on top of legacy systems. For teams serious about putting agents into production, this presentation offers a practical roadmap based on real experience building and deploying these systems at scale. --- _Want to dive deeper? The full presentation covers implementation details, demos, and specific technical recommendations for each component of a production agent system._ ## Digits Presented Lessons Learned from Agents in Production URL: https://digits.com/blog/ai-in-production-2025/ July 22, 2025 ### Key Takeaways from AI in Production 2025: Lessons from Asheville Last Friday, I had the opportunity to attend AI in Production 2025 in Asheville, NC - a focused gathering that brought together teams from leading tech companies including Ramp, GitHub, Adobe, and Digits. Despite its smaller size, the conference delivered outsized insights into the practical challenges of deploying AI systems at scale. ### Rethinking ML Design: Beyond the Algorithm Anne T. Griffin's presentation on ML and design challenged conventional thinking about how we build AI features. Her most provocative insight? **Test model outputs directly with customers**. Too often, we evaluate models in isolation, obsessing over metrics while losing sight of actual user experience. Griffin also highlighted an intriguing paradox: "True AI companies don't call it that." She pointed to Instagram as a prime example - a platform powered by sophisticated ML systems that users simply experience as a seamless product. This observation underscores how the best AI implementations are often invisible to end users. Her framework for approaching ML features centers on three fundamental questions: - What problem are we solving? - Who are we solving it for? - How are we solving it today? These questions might seem basic, but they're frequently overlooked in the rush to implement cutting-edge technology. ### Security in the Age of LLMs: A New Frontier David Hawthorne's presentation on OWASP security considerations for LLMs was particularly eye-opening. He walked through the OWASP Top 10 for LLMs, emphasizing a critical point: **"With LLMs, security issues are chained together."** Unlike traditional security vulnerabilities that can often be addressed in isolation, LLM security requires thinking about cascading risks and compound effects. Hawthorne didn't pull punches in his critique of current security standards, particularly SOC2 compliance. He argued that existing frameworks fail to adequately address the unique security challenges posed by LLMs - a sobering reminder that our security practices haven't caught up with our technology. His recommendation? Adopt evaluation-driven development, keeping ML considerations central throughout the development process rather than treating security as an afterthought. ### The Hidden Challenge of RAG Freshness Drishti Jain's presentation on RAG (Retrieval-Augmented Generation) freshness addressed a problem that's easy to overlook but critical for production systems. While much attention goes to building RAG systems, maintaining their freshness over time presents unique challenges. The core issue: **reindexing is prohibitively expensive**, leading many teams to let their RAG systems slowly degrade. Even more concerning is what Jain called "silent embedding drift" - the gradual degradation of embedding quality that can go unnoticed until it significantly impacts performance. This resonated particularly strongly as we face similar challenges with our own embedding systems. ### Beyond the Sessions: Community and Connections The value of AI in Production extended well beyond the formal presentations. Digits sponsored the conference after party, which proved to be more than just a social gathering - it became a natural extension of the day's learning. The conversations that sparked during breaks and continued into the evening added tremendous value to the conference experience. These informal exchanges often surfaced practical insights and war stories that you don't get in formal presentations. _Networking and conversations at the AI in Production 2025 after party_ _Continued discussions about production AI challenges well into the evening_ ### Looking Ahead AI in Production 2025 may have been a smaller conference, but it delivered concentrated insights into the real challenges teams face when moving AI from prototype to production. The presentations reinforced that successful AI deployment isn't just about algorithms—it's about design, security, maintenance, and most importantly, keeping user needs at the center of everything we build. A big thank you to the organizers for putting together such a focused and valuable event, and to Digits for fostering those invaluable post-conference connections. I'm already looking forward to what insights next year's conference will bring. --- _What production AI challenges are you facing? I'd love to hear about your experiences and continue the conversation from the conference._ ## Introducing AI Invoicing: Smart, Simple and Seamless. URL: https://digits.com/blog/ai-invoicing/ February 12, 2025 Founders and business owners know the struggle—you built something great, closed the deal and delivered the service. Now comes the frustrating part: getting paid. Invoicing is a tedious, manual process riddled with errors, delays, and follow-ups that drain your time and energy. Instead of focusing on growth, you're stuck chasing payments and double-checking numbers. What if sending an invoice was as effortless as the work you just completed? What if getting paid was seamless, automatic, and stress-free—for you and your customers? We brought you [Digits Bill Pay](https://digits.com/blog/bill-pay-made-brilliant/ "null") last year, revolutionizing how businesses handle accounts payable. Now, we're thrilled to introduce its perfect counterpart: **Digits AI Invoicing**—giving business owners complete control over both accounts payable and accounts receivable. ##### Why AI Invoicing? ✅ **Fully Automated Invoicing** – AI Invoicing generates invoices in seconds, pulling in customer details, pricing, and payment terms with minimal input from you. ✅ **Automated Accounting** – AI Invoicing integrates directly into your Digits accounting for a fully streamlined experience. ✅ **Real-Time Payment Tracking** – Keep tabs on your incoming payments and know exactly when invoices are viewed, paid, or overdue with smart tracking and automated follow-ups. ✅ **Brand Customization** – Personalize your invoices with your logo, branding, and custom fields, ensuring a professional look and feel. ✅ **Smart Reminders & Follow-Ups** – Stop chasing unpaid invoices. Our AI automatically sends gentle reminders and escalates follow-ups when needed, improving your cash flow. #### Invoicing That Works for You We built AI Invoicing to make managing accounting even more seamless—and guess what? Our customers are loving it. With a single source of truth and AI handling the process end-to-end, our customers: 🚀 **Save Hours Every Week** – Spend less time on invoicing and more time on growth. 💰 **Get Paid Faster** – Automated reminders and frictionless payment options mean no more waiting for clients to act. 🛡️ **Reduce Errors & Hassles** – Our AI eliminates common mistakes, ensuring every invoice is accurate and professional. 📈 **Scale with Confidence** – As your business grows, AI Invoicing grows with you, handling more clients and transactions effortlessly. > "This is hands down the smoothest invoicing tool I've used. Everything just works, and we're spending way less time dealing with billing. Digits took invoicing from a tedious chore to something I barely think about. It's fast, intuitive, and just makes sense." **Mark Reininga**, Co-Founder of Between Names #### What's Next? Soon, we're taking invoice generation to the next level. We're training our layout-aware models to read contracts, extract key details, and automatically generate invoices for your review. Imagine getting a contract signed and having an invoice ready to send instantly, with zero manual input! AI Invoicing is now available to all Digits customers. Sign up today and experience the future of invoicing: fast, frictionless, and fully automated. Because you deserve to get paid for your hard work—without the hassle. [Try AI Invoicing!](https://digits.com/demo) I can't wait to hear what you think, ## Digits Blog URL: https://digits.com/blog/ai/ #### Browse by Categories AI [Zero Entry: The Opportunity of a Lifetime for Accountants](/blog/zero-entry-the-opportunity-of-a-lifetime-for-accountants/) AI [How non-engineers at Digits ship AI-built tools](/blog/how-we-ship-ai-built-tools/) AI [AI-Enabled vs. AI-Native vs. Agentic Accounting Software: What's the Difference?](/blog/ai-enabled-vs-ai-native-vs-agentic-accounting-software-whats-the-difference/) AI-enabled, AI-native, and agentic accounting software aren’t the same—understanding the difference determines whether software reduces work or just reshuffles it. AI [Why Machine Learning Projects are Icebergs](/blog/why-machine-learning-projects-are-icebergs/) In the world of machine learning, the allure often lies in the dazzling advancements: the latest models, cutting-edge techniques, and breakthrough success stories. It's comparable to admiring the tip of an iceberg without recognizing the substantial structure beneath the surface that keeps it afloat. AI [ML Engineering in the Time of GPT-4 & PaLM 2](/blog/ml-engineering-in-the-time-of-gpt-4-palm-2/) Is Machine Learning commoditized? AI [Assisting Accountants with Zero-shot Machine Learning](/blog/zero-shot-machine-learning-accounting/) Using a machine learning model to classify an object (be it text, image, tabular data) with a label that the model has never seen before, Zero-Shot Classification, seems like an impossible task. AI [ChatGPT for Accounting: How Digits is using Generative Machine Learning to transform finance](/blog/generative-machine-learning-transform-accounting/) In our previous blog post, we introduced how we use similarity-based machine learning for accounting use cases. In this blog post, we will focus on how we use generative machine learning at Digits. AI [Assisting Accountants with Similarity-based Machine Learning](/blog/similarity-based-machine-learning-accounting/) Early in 2022, Digits released Boost to help accountants save time by automating their work. Boost instantly spots inconsistencies in their client's ledger. Every second, Digits sifts through every single transaction and performs a deep analysis. Digits' Boost alerts accountants if it finds errors like transactions in unexpected categories and suggests categories for transactions with missing categories. ## Digits Blog URL: https://digits.com/blog/all/ #### Browse by Categories Developer [Where Does the Foundation Come From?](/blog/where-does-the-foundation-come-from-/) How a summer of interns led Digits to rethink AI-assisted engineering—and why foundational judgment still has to come first. Developer [Build What Makes You Different. Buy Everything Else.](/blog/vibe-accounting/) AI made building software easy. Maintaining it is another story. Why accounting firms should build what makes them unique and buy the rest. News [Digits + Karbon: Practice Management Meets the Ledger That Closes the Books](/blog/karbon/) Digits partners with Karbon to bring practice management closer to the ledger, helping firms connect client work with cleaner accounting data. News [Digits + Reach Reporting: Better Data In, Better Insights Out](/blog/reach-reporting/) Digits partners with Reach Reporting to turn cleaner, more current ledger data into client-ready reports, dashboards, and budgeting workflows. News [Ignition + Digits: AI-Powered Revenue Workflows Meet the AI-Native Ledger](/blog/ignition/) Digits partners with Ignition to connect revenue workflows and the ledger, helping firms automate billing data flow and unlock future insights. News [Introducing the Agentic Close: Manage by Exception](/blog/agentic-close/) News [Breaking: Frontier Models Now Beat Human Accountants. Why Does Your Close Still Take All Month?](/blog/frontier-models-now-beat-human-accountants/) News [Introducing Automated Schedules: Detected, Posted, Reconciled — Inside The Ledger](/blog/automated-schedules/) Accrual accounting, without the spreadsheets. Digits Schedules automates schedules and journal entries directly in your ledger. News [Introducing Digits MCP: The Ledger Agents Love Most](/blog/mcp/) Digits launches its MCP Server, connecting Digits to the tools you already use—so AI works from clean, real-time books at the source. News [Introducing Outcome-Based Pricing for Accounting Firms](/blog/outcome-based-pricing/) Digits guarantees accounting outcomes with new outcome-based pricing—firms only pay when the work is done. Sierra’s Head of Sales joins as Strategic Advisor. News [Introducing Digits Desktop](/blog/digits-desktop/) Introducing Digits Desktop: no versions, no updates, and accounting that runs itself at 3am—even if your computer is off. News [Introducing Digits for iPhone & iPad: Your finances, wherever you work.](/blog/digits-everywhere/) Digits goes everywhere you do: Native apps bring real-time finance to every screen, with instant visibility, one-tap approvals, receipt capture, and an AI agent that answers questions from your live books. News [Introducing Expanded Payroll Connectors](/blog/introducing-expanded-payroll-connectors/) News [Streamlining Financial Management: Announcing Our API partnership with BILL](/blog/bill/) Digits + BILL syncs bills, invoices, and payments from BILL directly into Digits in real time—automatically booking activity to your books, matching transactions, and keeping your financials clean without the manual work. News [Digits Now Thinks, Acts, and Answers](/blog/announcing-ask-digits/) Meet Ask Digits, the new AI hub that lets you ask, review, and act across your books—bringing always-on intelligence to every part of your financial workflow. News [Always Be Closing: Introducing AI Bank Reconciliations](/blog/ai-bank-reconciliations/) News [What’s Next for Digits: From Real-Time to Verified Financials](/blog/what-s-next-for-digits-from-real-time-to-verified-financials/) Digits is redefining financials—moving from real-time insights to verified financials, and launching the Digits Accountant Directory to connect businesses with the professionals who power them. News [Digits is Now Programmable](/blog/digits-is-now-programmable/) Developer [Agents in production: Lessons shared at MLOps World 2025](/blog/mlops-world-2025-slides/) This October, Digits was invited to present our latest lessons learned from our Agents in Production journey at MLOps World 2025 conference. News [Firm Models Are Here: Exclusive to the Digits Accountant Partner Program](/blog/firm-models-are-here-exclusive-to-the-digits-accounting-partner-program/) Digits launches the Accountant Partner Program—your only way to unlock Firm Models: AI trained uniquely for your firm. News [Introducing Multiview Dashboards: Custom Dashboards, Endless Views](/blog/multiview-dashboards/) Introducing Multiview Dashboards: Custom Dashboards, Endless Views. Create multiple custom dashboards tailored to your needs—instantly responsive, fully integrated, and finally free from pivot tables. Tax [Startup Stock Options: How to Create a Stock Option Plan for Your Startup](/blog/startup-stock-options/) Considering offering startup stock options to employees? Let's look at how to create a stock option plan that works for your startup without unnecessary complexity. Developer [Digits Presented Lessons Learned from Agents in Production](/blog/ai-in-production-2025/) This July, Digits joined the AI in Production 2025 conference in Asheville, NC. Developer [Agents in Production: Lessons shared at AI in Production 2025](/blog/ai-in-production-2025-slides/) This July, Digits was invited to present our latest lessons learned from our Agents in Production journey at AI in Production 2025 conference. News [Scaling New Heights 2025 Recap: The Future is AI-Native with Digits](/blog/scaling-new-heights-2025-recap-the-future-is-ai-native-with-digits/) Relive Digits' presence at Scaling New Heights 2025, featuring Jeff's exciting keynote, our hands-on booth experiences, and the launch of our AI-Native Accounting podcast. News [Introducing Digits Accounting Agents](/blog/introducing-digits-accounting-agents/) Introducing Digits Accounting Agents: automate bookkeeping, dashboards, and reporting with AI-native workflows. Review, approve, and unlock a new era of accounting today! News [Digits + Arc: The New Stack for Startup Finance](/blog/digits-partners-with-arc/) Announcing our partnership with Arc! Combine Digits' AI-driven accounting with Arc's cash management for real-time financial insights. Unlock benefits like high-yield accounts and free software with qualified deposits. Modernize your financial strategy and make every dollar count. Start optimizing today! Developer [Significant Performance Improvements in Llama-4-Scout with Latest vLLM Updates](/blog/performance-improvements-llama4-scout/) Digits explored Meta's Llama-4-Scout performance issues tied to third-party server deployments. Recent vLLM updates have significantly improved accuracy and latency. Developer [LLM Finetuning—Digits panel discussion at Startup Grind Conference 2025](/blog/digits-at-startup-grind-conference-2025/) This April, Digits led a panel at Startup Grind Conference 2025 in San Francisco, sharing insights on LLM finetuning strategies and best practices. News [Digits Integrates with Gusto to Deliver Financial Clarity](/blog/digits-integrates-with-gusto/) We're excited to announce our partnership with Gusto, the #1 HR platform for payroll and benefits. This integration enhances Digits, unifying payroll and headcount data with our real-time insights. Simplify tax preparation and empower your small business with smarter financial management. Experience the next level of efficiency today! Developer [Digits Showcases Autonomous General Ledger® at NVIDIA GTC 2025](/blog/digits-at-gtc-25/) This March, Digits was invited by NVIDIA to join NVIDIA's GTC'25 and present the Autonomous General Ledger® developed by Digits. News [Introducing the Autonomous General Ledger®](/blog/agl-announcement/) The Digits Autonomous General Ledger® (AGL®) is the first AI-native accounting platform that auto-books 93% of transactions. It delivers real-time, automated, and collaborative accounting. Developer [Google Developer Group Seattle Talk 2025](/blog/google-developer-group-seattle-talk-2025/) In February 2025, Members of the Digits machine learning team were invited to speak at the Google Developer Group Seattle on the topic of LLM deployments on Google Cloud. Tax [Taxes for Startups: What Pre-Revenue and Early-Stage Startups Need to Know](/blog/startup-taxes-ultimate-guide/) Startup taxes don't have to be complex. Our guide breaks down the requirements and rules all founders should know so you can approach your taxes with confidence. Tax [The Founder's Playbook to Small Business Tax Rates](/blog/small-business-tax-rates/) Discover the small business tax rates and brackets for founders and startups. Learn how much tax your business may pay, as rates vary by structure and state. News [Introducing AI Invoicing: Smart, Simple and Seamless.](/blog/ai-invoicing/) Digits AI Invoicing automates invoice creation, payment tracking, and follow-up reminders. Generate branded invoices in seconds with automatic ledger integration. Tax [1099 Vs. W-2: The Pros and Cons for Your Startup](/blog/1099-vs-w2/) Do you know when it's appropriate to hire a 1099 vs. a W-2 worker? Here are the rules business owners must follow, plus pros and cons of each work relationship type. Tax [C-Corp vs S-Corp vs LLC](/blog/c-corp-vs-s-corp-vs-llc/) Check out our guide to learn how to decide between a C corp, an S corp, or an LLC for your startup. Tax [How to Incorporate in Delaware (And Why You Should)](/blog/how-to-incorporate-c-corp-delaware/) 65% of Fortune 500 companies incorporate in Delaware for business-friendly laws, the Court of Chancery, and investor familiarity. You don't need to operate there to incorporate. News [Introducing Digits Tax-Ready: Stress-Free Books for $250/mo](/blog/tax-ready-books/) Digits Tax-Ready simplifies your bookkeeping and delivers everything you need to confidently hand off your financials to a tax preparer. With automated categorization, expert-reviewed accuracy, and compliant, ready-to-file reports, this plan puts tax season on autopilot—so you can focus on growing your business, not drowning in paperwork. Tax [How to File Delaware Franchise Taxes Online: A Founder's Guide](/blog/how-to-file-delaware-franchise-tax/) Ignoring this tax filing isn't an option. Unfortunately, we have seen dozens of new startups miss this deadline as they operated under the assumption that they were not profitable, so no tax filings were needed. Tax [Startup R&D Tax Credits: How Your Startup Can Benefit](/blog/rd-credit/) The R&D tax credit lets startups offset up to $500,000 in payroll taxes annually. Qualifying activities include developing new products, improving processes, or building software. Tax [Startup Taxes Explained: The Most Overlooked Tax Benefits for Early-Stage Companies](/blog/tax-benefits-for-startups/) From leveraging the R&D credit to planning for a tax-free exit with QSBS, these strategies can make a substantial impact on your business's growth and profitability. Tax [Business Tax Deadlines for the 2024 Tax Year: A Complete Guide](/blog/business-tax-deadline-guide-for-2025/) To help you get ahead of your business tax filings, we've mapped out every critical deadline for the 2024 tax year (most of which you'll tackle in 2025), from federal to state requirements. Tax [How to Convert from an LLC to a Delaware C Corp](/blog/llc-delaware-c-corp-conversion/) One of the most common questions we receive from startup founders is, "When should we convert from an LLC to a C corporation?" While the transition may appear straightforward, several legal and tax considerations must be considered. Tax [409A Valuations: A Complete Guide for Startups](/blog/409a-valuations-startups/) Tax [Qualified Small Business Stock (QSBS) for Founders](/blog/qualified-small-business-stock-founders-qsbs/) QSBS isn't exactly straightforward. There's plenty of misleading information out there, and the nuances can trip up even seasoned founders. The good news? You don't have to tackle this alone. Tax [Tax Deductible Business Expenses for Startups](/blog/startup-tax-deductions/) Common startup tax deductions include office expenses, software subscriptions, professional services, marketing costs, and employee benefits. Learn IRS requirements for ordinary and necessary expenses. News [One Small Step: How New US Open Banking Regulations Could Signal a New Era for Startup Finance](/blog/new-us-open-banking-regulations/) Open Banking could save your business hundreds of hours and thousands of dollars each month. Why? Innovation and automation. Developer [Llama 3.2 - A Game Changer for Smaller, Smarter, and More Responsible LLMs](/blog/llama-3-2-a-game-changer-for-smaller-llms/) Meta's recent release of Llama 3.2 has sent shockwaves through the AI community, and for good reason. This latest iteration isn't just an incremental upgrade; it's a significant step forward in making large language models (LLMs) more accessible, efficient, and responsible. Developer [Digits at CUDA Mode IRL](/blog/digits-at-cuda-mode-irl/) At Digits, we are constantly pushing the limits of production machine learning, therefore we were beyond excited in being selected for one of the few and rare tickets of the inaugural IRL event hosted by the CUDA Mode community in San Francisco, a gathering organized by Accel and NVIDIA on September 21st, 2024. This event, brought together some of the brightest minds in the Torch and CUDA ecosystem, was a testament to the vibrant and ever-evolving world of AI. Developer [Deploying Llama 3.2 - A Breeze with vLLM and Kubernetes](/blog/deploying-llama-3-2-a-breeze-with-vllm-and-kubernetes/) Hosting large language models (LLMs) like Llama 3.2 presents unique challenges, requiring specialized infrastructure and deployment strategies. This is where vLLM comes in, a cutting-edge framework designed to optimize LLM deployment on Kubernetes, the industry-leading container orchestration platform. Developer [Deploying Large Language Models with Ease: Lessons shared at AI in Production 2024](/blog/deploying-llms-with-ease/) This July, Digits was invited to present our latest lessons learned from our Open Source Large Language Model journey. Developer [Digits Presented Lessons Learned from Deploying Large Language Models](/blog/ai-in-production-2024/) This July, Digits was invited to present our latest lessons learned from our Open Source Large Language Model journey. News [Digits Achieves SOC 2 Type 2 Certification: A Landmark in Data Security for AI Accounting](/blog/digits-achieves-soc-2-type-2/) Digits is now SOC 2 Type 2 compliant! Learn how this boosts data security for startups, ensuring financial info is safe and secure with Digits trusted accounting solutions. News [Digits Keynotes Scaling New Heights '24](/blog/scaling-new-heights-24/) Explore Digits' latest announcements from Scaling New Heights 2024 – Orlando. From AI innovations in accounting to keynotes and our exciting Basis acquisition, discover how we're reimagining the future of accounting! News [Digits Welcomes Basis](/blog/basis-acquisition-announcement/) Welcome Basis! Digits has acquired Basis Finance – integrating advanced budgeting and forecasting tools into our AI accounting platform. Save time and simplify financial planning today! Developer [Digits at Google I/O'24](/blog/google-io24/) This May, Digits was invited by Google to join Google I/O and participate in the exclusive, invitation-only developer advisory board. News [Introducing Bill Pay – Made Brilliant!](/blog/bill-pay-made-brilliant/) Introducing Digits Bill Pay — accounts payable automation made brilliant! We've made Digits even more powerful by integrating Bill Pay directly into our AI accounting platform. News [Digits Updates: Spring Forward](/blog/spring-update-24/) Your Finances, All In One Place – Bookkeeping, Reports, Vault – Consolidate today and use a smarter, more intuitive set of tools to manage your finances. Developer [University of Washington Lecture on GenAI in Finance](/blog/uw-lecture-24/) This April, Members of the Digits machine learning team were invited to speak at the University of Washington on the topic of GenAI in Finance. Developer [Digits at Google Next'24](/blog/google-next-24/) This April, Digits was invited by NVIDIA to show our latest ML/AI projects at Google Cloud Next'24. Tax [Non-Employee Compensation Reporting Unpacked: The A-Z on Form 1099-NEC](/blog/form-1099-nec/) If you're a startup founder or an entrepreneur frequently engaging with independent contractors or freelancers for services, you should familiarize yourself with the Internal Revenue Service's (IRS) Form 1099-NEC – a tax document introduced by the IRS in 2020 to report non-employee compensation. Tax [What is a W9?](/blog/form-w9/) As a startup founder, you have a lot on your plate, including managing finance and tax details for your business and your employees/contractors. One important document is the IRS W-9 form. Here's what you need to know about W-9s, including their significance to your business and how to handle them effectively. News [Digits Achieves SOC2 Type I Compliance: Elevating Security Standards as the first SOC2 Compliant Accounting AI](/blog/digits-achieves-soc-2-type-1/) Digits, AI accounting for startups, prioritizes data security with cutting-edge encryption and key protection methods. Recently achieving SOC2 Type 1 compliance, Digits sets the industry standard for secure financial data handling. Learn more about our relentless dedication to integrity, transparency, and security. News [Welcome to Financial Reporting, Reimagined](/blog/reports-updates-q4-23/) Introducing Digits Reports 3.0 – interactive, fast, and collaborative business reporting. Discover instant insights, effective one-click annotations, sophisticated AI assistance, and unmatched speed. Transform your business financial reporting with Digits. News [Digits Updates: End of Summer Edition](/blog/update-q3-23/) Rounding out summer, Digits introduced new features for better efficiency and customization including the integration of Digits AI into report building, giving your clients access to Digits AI during report reviews, and much more! Developer [Digits at Google Next 23](/blog/google-next-23/) This September, Digits was invited to present at Google Cloud's Next - their premiere event to explore Generative AI, learn from experts, connect with builders, and see how AI/ML are reshaping our world. News [Digits at Scaling New Heights](/blog/scaling-new-heights-23/) Dive into the impact of AI on the accounting industry, featuring insights from the Scaling New Heights conference. Including Jeff Seibert's keynote presentation on the introduction of Digits AI, the future of small business finance, and an enlightening discussion on AI adoption in accounting. News [Digits AI Summer Update](/blog/summer-update-23/) 1,000+ new businesses on Digits, new AI capabilities, and Reports get a fresh new look! Read more… News [Introducing Digits AI: The Future of Small Business Finance](/blog/introducing-digits-ai-business-finance/) Digits AI is a business-specific finance AI that provides real-time financial planning, insights, and visualizations through a conversational interface. Secure, accurate, and built for business owners. News [Introducing Digits Transaction Review](/blog/introducing-digits-transaction-review/) Digits answer to automating the transaction review process for both accountants and their clients. Providing a faster, more accurate categorization of transactions, a desired client communication experience, a more seamless and elegant workflow for accountants, and speeding up the overall process. News [Announcing Financial Reports from the Future (and our $65M Series C)](/blog/65m-series-c/) Today's finance tools fall far short of what accountants and finance teams deserve—immersive storytelling backed by intelligent analysis, powerful visuals, and instant answers. It's time to bid farewell to stale, black and white reports, tedious Excel models, and unsecured email attachments. News [Digits Lights Up the Nashville Skyline](/blog/digital-cpa-2021/) Definitely one for the books! Digits kicked off the 2021 Digital CPA conference in style for attendees from the top tech-forward firms at an exclusive, invite-only evening full of magic where we took over the Dream Hotel in Nashville! Developer [Architecting Digits Search: Real-time Transaction Indexing With Bleve](/blog/real-time-transaction-indexing-with-bleve/) We recently launched Digits Search, bringing fast, beautiful, full-depth search to business financial data. We've received a ton of customer feedback, and one question just keeps coming up... News [Building Digits: Our New Engineering Blog](/blog/new-engineering-blog/) Our recent launch of Digits Search represented the culmination of over 30 human-years of software engineering work, from a team with hundreds of years of combined experience. All to make a financial search box... work. Developer [Training and Deploying State of the Art Transformer Models at Digits](/blog/training-and-deploying-transformer-models/) Understanding banking transactions as they happen, in real-time, is core to our mission with Digits Search. You can't answer important finance questions with bad data. News [Digits Search: A finance tool so powerful, you'll think we stole it from the future](/blog/digits-search-launch-21/) Today's finance software falls far short of what business leaders need—intelligent, powerful analysis and instant answers. No longer. News [Digits Wins Awards for Real-time Finance](/blog/digits-wins-awards-real-time-finance/) Through the travails, uncertainty, and drama of 2020, we have done our best to stay heads-down building, fully-remotely, and in focused pursuit of our mission to bring business finance into the modern, real-time era. News [The Magic of Remote Work at Digits](/blog/magic-of-remote-work/) Back in early March, before the full extent of this pandemic set in, I kicked off our introduction to remote work at Digits with 'To be sure, working remotely is not for every business, and not for every individual.' Little did I know how soon so many businesses and individuals would be forced to make do, and how quickly fully-remote work would become mainstream. News [Digits joins the Financial Data Exchange (FDX) to strengthen secure data access](/blog/digits-joins-financial-data-exchange/) At Digits, we have been strong and ongoing proponents of modern, secure connections between financial institutions. As part of our mission to give businesses real-time visibility into their finances, we believe in the need for common, open, interoperable standards for businesses to seamlessly transmit financial data. Developer [Building Digits: Efficient Serving of Static Views with Google Cloud Spanner](/blog/efficient-service-of-static-views-google-cloud-spanner/) At Digits, we strive to push the bounds of technology in order to deliver radically more useful, delightful software experiences for our customers. News [Digits May Upgrade](/blog/may-update-20/) After two years of heavy development, we've announced Digits for Expenses! We couldn't be more humbled by the support and excitement we've seen from countless business owners and accountants across the country and around the globe, and we're working tirelessly to get them into our Early Access program. News [Digits Launches Real-time Finance Dashboard for Businesses; Announces $22M Series B](/blog/22m-series-b/) We are obsessed with the vision that business finance should be immediately accessible and intuitive. It should learn, in real-time, as the business evolves, and it should empower business owners and operators everywhere, without requiring any prior financial training. News [A New Definition for Remote Work](/blog/new-definition-remote-work/) Remarkably, we're now at the point where most software/digital/service-based businesses, and most knowledge-based employees, are well-suited to going fully-remote, and many will be better off if they do! In fact, remote work has already jumped 159% in the past 12 years, but that's just the tip of the iceberg. News [Benchmark Leads $10.5M Series A in Digits; Peter Fenton Joins Board](/blog/benchmark-leads-10m-series-a-peter-fenton-joins-board/) Six months ago we shared a preview of our next adventure, and of our obsession with building modern, intuitive, intelligent, delightful financial software. And the response has left us overjoyed and even more focused. News [Our Next Adventure](/blog/our-next-adventure/) As builders, there is nothing more gratifying than crafting a product that is used by millions. That saves them countless hours of effort. That turns something complex and frustrating into something accessible, intuitive, even delightful. ## Digits Now Thinks, Acts, and Answers URL: https://digits.com/blog/announcing-ask-digits/ December 8, 2025 For decades, accounting software has been dumb. _Literally._ Accountants, business owners, and finance teams spend hours booking and reconciling transactions, and then more hours exporting, pivoting, analyzing, and reporting on the data. When they log out, grab coffee, unplug for the night, or take a breather, all work stops, and their financials sit there at rest, doing nothing. You deserve to take breaks, but your financials don't! At Digits, your accounting software doesn’t wait for you. It works **_for_** you, 24/7. Last month, [we launched AI Bank Reconciliations](https://digits.com/blog/ai-bank-reconciliations/ "null") and [announced that Digits now auto-books 95%+](https://digits.com/blog/what-s-next-for-digits-from-real-time-to-verified-financials/ "null") of small business transactions in real time, as they happen. Today, we're bringing agentic intelligence to the review, analysis, and reporting side of the monthly close—and letting you Ask Digits for whatever you want, whenever you want it! ### Meet Ask Digits Ask Digits is your central hub for interacting with the full power of Digits—an always-available assistant that empowers you to command, question, and collaborate with the AI agent working across your books. Ask questions about your finances in plain English, search for any transaction, vendor, or customer in a split second, trigger quick actions like creating transactions or reports, kick-off and monitor the progress of background tasks like bank statement reconciliations—all from one central place. Ask Digits provides contextual prompts to guide you when the agent needs input to complete work, creating a simple yet powerful collaboration loop. #### Fast, Accurate & Secure Unlike other accounting platforms that send your full, raw financials to ChatGPT and hope for the best, Ask Digits is built right in. The agent maintains direct access to your books and leverages Digits’ powerful financial modeling engine to guarantee the math always adds up. “Digits is SOC 2–certified with end-to-end encryption, delivering fast, accurate financial answers — with full context carried forward every time you Ask Digits.” It remembers your financial world, not just the last question. #### Multi-Modal, Multi-Channel Ask Digits also speaks images, documents, and email! Drop a PDF bank statement to start reconciling. Drop a receipt to find and match the right transaction. Or simply forward them via email to **@digits.cc** and the agent will get right to work. ### Your Firm's Signature For our accounting firm partners, Ask Digits becomes even more powerful, learning and expressing the uniqueness of your firm to your clients. Today, we're announcing an add-on available through the Digits Accountant Partner Program: the Firm Signature package. Building upon [our work on Firm Models](https://digits.com/blog/firm-models-are-here-exclusive-to-the-digits-accounting-partner-program/ "null"), Firm Signature grants access to deep customization of the end-to-end Digits product experience, including a branded Digits interface—so every client sees your expertise, your standards, and your name. It allows firms to embed their identity and best practices directly into Digits through: - Private Firm Models trained exclusively on your firm’s clients and team workflows - A branded Ask \[Firm\] experience, including firm logo, agent name, and tone - Firm-standard templates for charts of accounts, reports, and dashboards - Practice-area customization for firms serving multiple specialties or verticals The Firm Signature package is available today. Contact your Partner Manager for details. ### Experience Agent Intelligence Today Ask Digits is the result of years of heads-down engineering work, with the initial product vision and prototypes dating back to early 2023. I want to thank our product design and engineering teams for their tireless work in bringing this capability to reality. Ask Digits is available today, for free, for everyone on Digits. We can't wait to hear what you think! ## Alexa Accuardi URL: https://digits.com/blog/author/alexa-accuardi/ Engineer Alexa Accuardi is a Frontend Engineer at Digits, where she crafts the interfaces that make powerful financial tools feel effortless to use. She has contributed to key product interfaces including the ledger, reconciliations, and vendor directories. When she's not at her computer, you can find her playing board games, taking photographs, or enjoying everything the PNW has to offer. ## Bebe Kim URL: https://digits.com/blog/author/bebe-kim/ Head of GTM Bebe Kim is the Head of GTM at Digits. A 3x founder and YCombinator alum, she sold her first business and went public with her first company, led GTM at Atrium to Series B, and joined Digits with her seed stage startup Basis (FP&A tool). An attorney by trade and Top Women to Watch by the American Bar Association, she is particularly interested AI's impact to professional services like legal and finance both from a product perspective and from a responsible AI systems perspective. ## Braden Kraft URL: https://digits.com/blog/author/braden-kraft/ Customer Experience Manager Braden Kraft is the Customer Experience Manager at Digits, where he partners with founders and accounting firms to help them unlock clarity and confidence in their financial operations. Working at the intersection of product, support, and storytelling, he ensures customers not only adopt AI-native accounting, but thrive with it. Braden leads customer education and advocacy efforts at Digits, capturing real-world stories that showcase how both firms and business owners like GrowthMap, K2 Venture Partners, and BookSmarts Tax & Accounting streamline workflows, eliminate manual bookkeeping, and gain real-time financial insight. Through customer storytelling and cross-functional collaboration, he helps shape how Digits communicates the future of modern accounting. ## Brian Hatfield URL: https://digits.com/blog/author/brian-hatfield/ Product Manager Brian Hatfield is an Engineer-turned-Product Manager at Digits and one of the company's first team members. Since day one, he has helped shape the foundation of the platform and its technical direction. Today, Brian leads Setup and Integrations, including Digits' developer platform, focusing on how businesses and partners connect their financial systems to Digits. Prior to joining, he held engineering roles at Google and Twitter (through the acquisition of Crashlytics), working on large-scale production systems and distributed infrastructure. His background in building and operating high-reliability systems informs how Digits designs products that are both powerful and dependable. ## Carlos Gil URL: https://digits.com/blog/author/carlos-gil/ AI Product Manager Carlos Gil is an AI Product Manager at Digits, where he works on the AI-powered products and internal platforms that make accounting workflows easier to understand and act on. He joined Digits through the acquisition of Basis, where he was co-founder and CTO, leading product and engineering for a planning and budgeting platform used by hundreds of operators, accountants, and firms. Before Basis, Carlos led engineering at Domio, worked on financial systems at Betterment, and was part of the founding Uber Eats team at Uber. His experience spans fintech, accounting, data infrastructure, and workflow automation. A longtime New Yorker, Carlos moved to San Diego in 2024, where he lives with his wife and son. ## Cole Howard URL: https://digits.com/blog/author/cole-howard/ Machine Learning Engineer Cole Howard is Machine Learning Engineer at Digits, where he designs predictive systems across the ledger and payment systems. Prior to Digits, Cole build machine learning systems for the recruiting industry at Talentpair. He also designed recommendation systems for Dark Horse Comics. He is also co-author of Natural Language Processing in Action. ## Craig Walker URL: https://digits.com/blog/author/craig-walker/ Head of Product Strategy Craig is Head of Product Strategy at Digits, where he’s helping to reimagine accounting in the age of AI. A seasoned industry leader, Craig was co-founder and founding CTO for online accounting and small business software, Xero. Started in New Zealand in 2006, Xero has become one of the world’s leading software-as-a-service companies. Craig is bringing that experience to building the next generation of accounting software in Digits. At Xero, Craig played a key role in building the founding product team, shaping the company’s technology vision, and developing its core accounting platform. He later led the development of Xero’s next-generation financial services products, overseeing strategy and execution for solutions focused on accounts receivable and payable workflows. Following his time at Xero, Craig served as Chief Product Officer at Versapay, where he helped mid-market businesses modernize their invoice-to-cash processes through AI-driven automation, B2B payments, and cash application. Originally from New Zealand, Craig has lived in the U.S. since 2011 and currently resides in the greater Washington, D.C. area with his wife and two young sons. ## Dakota Monk URL: https://digits.com/blog/author/dakota-monk/ Head of Brand Marketing Dakota Monk is the Head of Brand Marketing at Digits, where he leads brand strategy and go-to-market for the world's first AI-native accounting platform. He is responsible for shaping how the company is positioned in market and how its products are introduced to business owners and accounting professionals. Prior to Digits, Dakota spent over seven years at Shopify in leadership roles across support, community, and marketing, where he helped scale global teams and programs supporting millions of entrepreneurs worldwide. With more than a decade of experience across product marketing and customer experience, Dakota specializes in building category-defining brands, clarifying complex products, and positioning technology in ways that drive adoption and long-term market relevance. ## Ed Solovey URL: https://digits.com/blog/author/ed-solovey/ Engineer Ed Solovey is an Engineer at Digits and one of the company's first team members. He focuses on building scalable systems that form the foundation of the Digits ledger. Ed is interested in building large scale data systems, and prior to Digits helped architect and scale Answers - a mobile analytics product that handled millions of events every second (acquired by Google via Crashlytics). ## Hannes Hapke URL: https://digits.com/blog/author/hannes-hapke/ Advisor Hannes Hapke is advising Digits on ML subjects. He leads 575 Lab, Dataiku's Open Source Office, specializing in responsible AI, privacy, and ML explainability. Hannes is a Google Developer Expert for ML/AI and a member of the Google Developer Board. Previously a Principal ML Engineer at Digits for 5 years, he focused on applying ML to boost accountants' productivity. Hannes is the co-author of four ML books, including Generative AI Design Patterns and Machine Learning Production Systems. ## Jeff Seibert URL: https://digits.com/blog/author/jeff-seibert/ Founder & CEO Jeff Seibert is the founder and CEO of Digits, the world's first AI-native accounting platform. He previously served as Twitter's Head of Consumer Product and starred in the Emmy Award-winning Netflix documentary The Social Dilemma. Jeff was co-founder and CEO of the mobile performance analytics company Crashlytics, which was acquired by Twitter in 2013. Now owned by Google, Crashlytics runs on over 6 Billion monthly-active smartphones and is the market-leading crash reporter for both iOS and Android. A self-taught programmer, Seibert released his first app at the age of 13 and went on to graduate from Stanford with a B.S. in Computer Science. He's angel-invested in almost 100 startups and was named one of Insider's Top 100 Seed VCs in 2021. ## Jo Pu URL: https://digits.com/blog/author/jo-pu/ Jo is a software engineer at Digits, where she builds AI agents and applied machine learning features. She previously worked on Twitter's third-party mobile SDK and publisher platforms, and built an end-to-end data ETL and analytics engine at Yammer / Microsoft. ## Michelle Henley URL: https://digits.com/blog/author/michelle-henley/ Technical Writer Michelle Henley is the Technical Writer at Digits, where she turns AI-native accounting into documentation that's actually useful (and occasionally even fun to read). She translates complex product behavior and real-world firm workflows into clear guides, Help Center articles, and enablement content—so teams and customers spend less time guessing and more time getting things done. Detail-obsessed and clarity-driven, Michelle loves the moment a tangled process becomes a simple checklist. ## Rob Hamilton URL: https://digits.com/blog/author/rob-hamilton/ Head of Partnerships Rob Hamilton is the Head of Partnerships for Digits, which is building the next-generation accounting platform for business owners and accountants. With a long history in AI, Data and APIs, Rob has been leading the charge of bringing AI to the forefront of business and consumer products for over a decade. Prior to joining Digits, Rob held leadership positions with Amazon Alexa, Twitch, and Twitter where he grew revenue, customer success and product teams integrating the latest technology into products with some of the worlds largest brands. ## Team Digits URL: https://digits.com/blog/author/team-digits/ Content & Media Team Digits represents a collective voice behind Digits' content across blog articles, podcast episodes, research, and product storytelling. Spanning leaders across product, marketing, customer experience, and operations, the team brings together diverse perspectives to explore the future of AI-native accounting and modern finance. From in-depth explainers and industry insights to company updates and conversations with founders, Team Digits shares the ideas, stories, and expertise shaping how businesses and accounting firms manage their finances in the AI era. ## Introducing Automated Schedules: Detected, Posted, Reconciled — Inside The Ledger URL: https://digits.com/blog/automated-schedules/ May 7, 2026 Supporting schedules are the most persistent workflow still living outside the ledger.  For as long as accrual accounting has existed, tracking fixed assets, prepaid expenses, amortization, and manually-calculated journal entries has been relegated to schedules managed in external spreadsheets. Traditionally, the ledger records what happened while the schedule determines why and what happens next. Every close cycle, your team rolls schedules forward, recalculates amortization, creates journal entries by hand, and reconciles everything back to the books. There’s little complex judgment involved. Just time, risk, and repetition every single month. Today, Digits Schedules is where that process ends. ### The ledger finds the schedules. You make the calls Other systems try to solve this by adding a module or a recurring journal entry feature, but the workflow doesn’t change. Accountants still identify transactions, decide what needs a schedule, calculate entries, and manage everything manually. Digits takes a different approach. Instead of waiting for you to initiate a schedule, the ledger identifies transactions that need one. A $2,500 equipment purchase hits the books. Digits flags it as a likely fixed asset, drafts a depreciation schedule using transaction context, and surfaces it in your Checklist. You confirm the useful life, verify accounts, and finalize. From there, journal entries are generated automatically every period, for the life of the asset. The same applies to prepaid expenses: subscriptions, insurance, and rent. Detected, scheduled, and posted, all without a spreadsheet. Nothing posts without your approval. Every proposed schedule includes assumptions and projected entries, so you can review the full picture before anything posts. Adjust it, approve it, or dismiss it. The system handles the math. You retain the judgment. ### **From spreadsheets to systems of record** Revenue recognition is a clear example. It’s high volume, highly visible, and often fragmented across spreadsheets – upfront fees, subscriptions, usage – all manually stitched together and loosely tied to the ledger. Accrued expenses are even more disconnected. Often there’s no transaction, just the knowledge that work was done. Contractors bill later. Payroll is earned before it’s paid. These require manual tracking, manual entries, and later reconciliation. These aren’t edge cases. They’re the core of accrual accounting and yet they still rely on disconnected spreadsheets, manual tracking, and human memory. Digits Schedules brings these workflows into the ledger, turning transactions, contracts, and context into structured, reviewable schedules. The work is done where it belongs. ### **Built into the ledger. Not bolted on** When schedules live outside the ledger – in a spreadsheet, a bolt-on tool, or a module that syncs back to the GL – reconciliation gaps are inevitable. The workbook says one thing. The ledger says another. In Digits, schedules are native to the general ledger. Every schedule traces from the source transaction through each posted journal entry to the balance sheet. Craig Walker, Head of Product Strategy at Digits and former Co-Founder & CTO at Xero put it simply: > "_QuickBooks can't do this. Xero can't do this. Even mid-market ERPs sell it as a separate product that takes months to implement before the first journal posts. Digits just made it the default behavior of the general ledger."_ ### **What’s next** We’re starting with fixed assets and prepaid expenses, the schedules every firm touches every month. Automated revenue recognition is coming shortly, along with built-in support for additional accrual workflows like accrued expenses. Our goal is to bring every schedule into the ledger and eliminate spreadsheets and manual journal entries entirely. Digits Schedules are now available for accounting firms on Digits for Firms plans. Speak with our team to automate your accrual workflows inside the ledger with Digits. [Connect with Digits](/accountants) ## Digits Welcomes Basis URL: https://digits.com/blog/basis-acquisition-announcement/ June 17, 2024 At Digits, we're on a mission to reimagine accounting, and all of its related workflows. We save you hours and bring you peace of mind, so you can get back to what matters most—building and growing your business. Higher cost of capital has resulted in a tightening fundraising environment. The importance of extending runway has become crystal clear to founders in 2024. What isn't so clear is how to plan for the future without pouring fifteen hours into a spreadsheet. Over the past six months, we've received countless requests from founders and accounting firms asking us to extend Digits into budgeting and financial planning to ease their burden. Today, I'm excited to announce that Digits has acquired Basis Finance, and we will be bringing the full power of their budgeting and forecasting platform into Digits!
> Most people think of Digits as an AI-native accounting platform. What they don't know is that Digits is also an FP&A-native accounting platform. Combining what Digits has built with what Basis has built is the FP&A holy grail. — Bebe Kim, co-founder and CEO of Basis Today's leading accounting systems were designed over 20 years ago. Their focus on financial use cases is deeply entrenched at the transactional level. Digits was built with operators in mind. Transactions are stored in an object-oriented database. Unlike flat-file databases, this type of database excels at appending and connecting financial, operational and analytical attributes gathered throughout the company's business journey. Digits is the accounting platform that founders are excited to log into. They explore financial transactions like they would in a modern BI tool and control views using granular permissions. We could not be more excited to welcome the Basis team to Digits to build this future together, and both Basis co-founders are continuing their work at Digits following the acquisition. Basis CEO Bebe Kim will be joining the Digits leadership team as our new Head of Marketing and Basis CTO Carlos Gil will be leading the technology integration with our FP&A team. #### Experience Digits Today We can't wait to show you what we build together. To see how founders and accountants are using Digits today, book a demo with us. [Get started!](https://digits.com) ## Benched: What to Do When Your Bookkeeper Leaves You in the Lurch URL: https://digits.com/blog/bench-fallout/ January 22, 2025 ### 90% Benched: What to Do When Your Bookkeeper Leaves You in the Lurch On December 27, 2024, thousands of small businesses across the US and Canada were suddenly — and without warning — locked out of their financial data. Bench Accounting, a trusted, VC-backed bookkeeping platform, [abruptly shut down](https://www.cbc.ca/news/canada/british-columbia/bench-accounting-shutdown-1.7419592 "null"), leaving its customers scrambling as year-end tax deadlines approached. As of now, a last-minute acquisition by workplace management software company Employer.com may save the day. But things still look grim. Employer.com has no experience in the accounting space (it also threw its hat into the ring to acquire TikTok), Bench's employees were all laid off, and customers are uncertain about whether they will get their information back. So, what happens next? What should those directly affected do? What should other businesses take away from this? As a company working in fintech, we want to share our thoughts on what's happened — why what Bench did was so wrong, how it will likely affect the industry, and what small business owners should do with tax deadlines approaching. ### What happened at Bench? If you were affected by Bench's shutdown, you probably don't need this recap. But, for everyone else, here's a quick TL;DR on what happened and when: - **December 27, 2024:** Bench Accounting abruptly shuts down. Customers lose access to financial data, and 613 employees are laid off without notice or severance. - **December 28, 2024:** Media outlets begin reporting on the shutdown, sparking widespread attention. Customers suddenly need to find alternative bookkeeping solutions. - **December 30, 2024:** Employer.com announces plans to acquire Bench Accounting, aiming to restore services for customers and rehire many employees. - **January 6, 2025:** Employer.com completes the acquisition, confirming it will honor existing customer contracts and resume operations. As of right now, it's unclear how smoothly this transition will go and whether Bench will be able to pick up where it left off. Although affected customers can hope for the best, it would be prudent to prepare for the worst. ### What Bench's closure means for small business owners and fintech as a whole Bench's sudden shutdown has left small businesses and the fintech industry grappling with its fallout. Here's what it means for both groups moving forward. #### Lost access First and foremost, Bench's shutdown has, at least temporarily, shut small business owners out of their own financial data. This sudden loss of access has created significant disruptions for businesses that relied on Bench to manage their bookkeeping. Without these records, it will be difficult for businesses to: - File taxes - Secure loans - Conduct audits To regain access to their data, customers now [need to provide consent](https://techcrunch.com/2025/01/10/bench-customers-are-now-being-forced-to-hand-over-their-data-or-risk-losing-it-they-say/ "null") to Employer.com to transfer their financial records to its platform. Initially, this consent process included clauses waiving refunds for prepaid services, which led to frustration and backlash from customers. While the clause has since been removed, the consent requirement has left many feeling uneasy, particularly as it forces businesses to engage with a company they might not yet fully trust. Employer.com's acquisition of Bench does offer some hope for restoring access, but the abrupt shutdown and the contentious consent process have left many questioning whether their interests are truly being prioritized. #### Challenges during tax season For small business owners, the timing of Bench's shutdown couldn't have been worse. With [tax deadlines](/blog/business-tax-deadline-guide-for-2025/ "null") starting as early as March 16, 2025 for some businesses, many people are worried about being able to prepare filings without access to their bookkeeping data. Without critical financial records, meeting tax obligations becomes a logistical nightmare. Businesses rely on accurate and complete documents to file returns, including: - **Profit and loss statements:** Essential for calculating taxable income and understanding your business's financial performance. - **Balance sheets:** Necessary for reconciling assets, liabilities, and equity to ensure accuracy in your filings. - **Transaction histories:** Key for tracking deductible expenses, revenue sources, and payments made throughout the year. - **Previous records:** Important for referencing prior filings, carryover deductions, or other compliance requirements. Without these records, small business owners may struggle to file accurate returns, respond to IRS inquiries or audits, or claim deductions tied to specific financial activities. For businesses operating on tight margins and limited resources, the added delays and potential penalties only compound the stress of tax season. Acting quickly to retrieve or reconstruct missing data is critical to staying compliant and avoiding unnecessary financial strain. #### Broader implications for the fintech industry Bench's sudden shutdown isn't just a blow to its customers — it's a blow to the trust businesses and people place in the entire fintech industry. When a prominent player collapses without warning, it raises unsettling questions about the industry's reliability and its ability to deliver on its promises. At its core, fintech has the potential to transform outdated financial systems, offering solutions that are more accessible, equitable, and efficient. It's an industry built on innovation, challenging traditional models plagued by high fees, limited transparency, and slow adaptation to modern needs. Events like Bench's collapse cast a shadow over these aspirations, making it harder for people to trust the long-term stability of fintech solutions. This is a critical moment for the industry. Fintech companies must step up to prove that startups can be both innovative and dependable. The path forward requires rebuilding trust — not just with customers but with the broader public — by emphasizing stability, transparency, and a commitment to delivering lasting value. Only then can the industry fulfill its promise to truly improve lives and reshape financial services for the better. ### What you should do right now if you've been affected If you've been affected by Bench's sudden shutdown, your most pressing issue is figuring out how to get your financial ship in order. Here are our recommendations. #### Secure your financial records If Employer.com has reopened your Bench account, log in immediately and download anything and everything you can get your hands on. Pay particular attention to critical documents like: - Transaction histories - Tax filings - Year-end financial statements Once you've downloaded these files, store them securely, both locally and in the cloud. This way, you have your data and a strong place to start from, regardless of what happens moving forward. #### Decide on whether you'll stay Employer.com has committed to honoring existing contracts and restoring services, but it's hard to predict how quickly Bench will regain its footing — or what form its services will take. While some small business owners may prefer to wait and see, others may decide to move on. If you are looking to switch, several accounting platforms and professionals are offering discounted or expedited services to support those affected by Bench's closure. Our one piece of advice: Do not just blindly leap to the next provider. Take a moment, compare offerings, and pick a trusted platform that can be more than just a stopgap for the next few months. If you aren't sure what to do or what your best move is, you can always [reach out to our team at Digits](https://digits.com/demo/ "null"). Our support team and trained accountants are happy to talk over your details to see what makes the most sense for your situation. #### Begin preparing for tax season The final hurdle you need to overcome is tax season. With [deadlines for the 2024 tax year](/blog/business-tax-deadline-guide-for-2025/ "null") fast approaching, it's critical to take control of the situation now. Start by reviewing the financial records you were able to retrieve — transaction histories, tax filings, and other key documents — and make sure they're as complete as possible. If the disruption has delayed your preparations, you may want to [file for a tax extension](https://www.irs.gov/forms-pubs/about-form-7004 "null"). This will give you more time to get everything in order while avoiding late penalties. However, an extension doesn't delay payment deadlines, so you'll still need a clear sense of your estimated tax obligations. To bridge any gaps in your records or navigate filing complexities, consider reaching out to a tax professional. They can help you make sense of what you have, identify missing pieces, and ensure you remain compliant. Acting now can save you significant stress — and potentially money — down the line. ### How to safeguard your business moving forward The sudden shutdown of Bench should serve as a wake-up call for all business owners: Even seemingly stable service providers aren't immune to disruption. While you can't predict the future, these proactive steps can help protect your business from similar events in the future: - **Own your data:** Always maintain local backups of your financial records. Use a combination of cloud storage and physical backups to ensure your data is accessible, even if your financial software provider fails. - **Vet your providers:** Look beyond features when choosing your [finance tech stack](/blog/finance-tech-stack/ "null"). Evaluate their funding, transparency, and record with customers through online reviews to ensure they're a reliable long-term choice. - **Create a contingency plan:** Develop a playbook for emergencies, including steps for migrating to a new provider, accessing backups, and finding temporary support. A clear plan can save you time and reduce stress. - **Understand your contracts:** Review the terms and conditions of your agreements with financial providers. Look for clauses about data ownership, service continuity, and support in case of disruptions. - **Leverage trusted advisors:** Build relationships with accountants, bookkeepers, or financial consultants who can provide guidance if something goes wrong. A reliable advisor can help you pivot quickly and keep your business running smoothly. By taking these steps, you can build a more resilient business — one that's prepared for the unexpected and ready to adapt to whatever challenges arise. ### Need a more reliable way to manage your books? If Bench's shutdown caught you off guard, you're not alone. It's a tough reminder of how important it is to have full, uninterrupted access to your financial data and a platform you can count on when it matters most. As the first AI-native accounting platform, Digits gives you the features and stability you're looking for. Digits offers live, always-accurate books, real-time dashboards, and automated transaction tracking, so you're never left in the dark. Start a free trial today and see how smarter, more reliable accounting can keep your business on track through tax season and beyond. ## Benchmark Leads $10.5M Series A in Digits; Peter Fenton Joins Board URL: https://digits.com/blog/benchmark-leads-10m-series-a-peter-fenton-joins-board/ November 6, 2019 Six months ago we shared a preview of our next adventure, and of our obsession with building modern, intuitive, intelligent, _delightful_ financial software. And the response has left us overjoyed and even more focused. We've heard from countless business owners, CFOs, and accountants who've all lost patience with the status quo and who share our hunger—and our vision—for a better solution. We've also been humbled by so many offers of support. #### $10.5M Series A Today, we're thrilled to announce that we closed **$10.5M in Series A funding from Benchmark, alongside** [**72 incredible angel investors**](https://digits.com/our-supporters "null"). We're also excited to share that **Peter Fenton has brought his wealth of board experience** from AirTable, Twitter, NewRelic, Yelp, and many others to Digits. #### $1.5B+ And Counting We'd like to thank our early customers and partners that have all generously shared their time, knowledge, ideas, and feedback with us over the past year as we've built out our core platform technologies. Digits' production systems now see over **$1.5 Billion in transactions** across our customer base, and that figure grows daily. Digits is invite-only. ## Essential Bookkeeping Services for Startups: Choosing the Right Solution URL: https://digits.com/blog/best-bookkeeping-services-startups/ February 6, 2025 ### 6 Best Bookkeeping Services for Startups As a small business owner, you're focused on building your products, securing your next round of funding, and growing your business. But to do that successfully, you must have clear financial visibility, remain tax compliant, manage cash flow well, and build credibility with potential investors. That's where bookkeeping comes in to keep your startup operating and primed for growth. According to a U.S. Bank study, cash flow problems contributed to [82% of startup failures](https://spend.usbank.com/blog/closing-strong-year-end-cash-flow-strategies-monitoring-and-the-role-of-spend-management-platforms/ "null"). The most common culprit is startup founders not having real-time visibility into their [cash flows](https://digits.com/case-studies/wispr/ "null") and [burn rates](https://digits.com/blog/burn-rate/ "null"). Whether you're pre-seed or going for Series A, your financial data tells the story investors want to hear — and basic spreadsheets just won't cut it anymore. Bookkeeping solutions do much more than track debits and credits. Depending on the solution, they can automate day-to-day bookkeeping tasks, provide real-time insights, and scale with your business. But with so many options available, choosing the right service can feel like navigating a maze. In this guide, we'll walk you through everything you need to know about startup bookkeeping services in 2025. By the end, you should have a clear picture of which solution best fits your startup's unique needs. ### Why bookkeeping is critical for startups Clean books aren't just about impressing investors (though that matters). Keeping your financial records accurate, organized, and up-to-date helps you make data-driven decisions that'll set your startup on a winning path. When you know exactly where every dollar comes from and goes to, you can optimize your burn rate — in other words, see exactly how quickly you're spending money and where cuts could be made. With detailed financial data, you can also see which products or services are actually making you money and earmark those as your profit centers. You might also be able to spot potential cash flow issues before they become crises. Bookkeeping services do the heavy lifting in all of this by automatically tracking and categorizing transactions, reconciling accounts daily, and generating real-time financial reports. This means you'll always know [how long your startup's runway is](https://digits.com/blog/extending-your-startup-runway/ "null") and the true profit or loss on each sale or service (called unit economics). For instance, if you run a project management software and just signed two big enterprise clients, those contracts might extend your runway significantly. Growth metrics such as the cost to acquire a customer (CAC) and the lifetime value of a customer (LTV) will also help you know if your business is healthy and growing. You might notice that customers who use your product's collaboration features in the first week are much more likely to stick around long-term. Or you may see that customers who come through partner referrals have a much lower acquisition cost and higher lifetime value than those from paid ads. These insights help you decide where to focus your efforts. When tax season rolls around, you won't be scrambling to piece together a year's worth of transactions because they're already recorded properly: - You have accurate profit and loss statements ready. - All [deductible expenses](https://digits.com/blog/startup-tax-deductions/ "null") are properly categorized. - Payroll taxes are correctly calculated and paid. - Bank statements, receipts, and other business activity docs are organized and accessible. ### What to look for in bookkeeping services for startups Your startup has a unique growth trajectory, and your [accounting and bookkeeping](https://digits.com/blog/accounting-vs-bookkeeping/ "null") needs must match where you are and where you want to go. Early-stage companies often deal with equity management, complex cap tables, research and development tax credits, and rapid scaling. On the other hand, a later-stage company could be focused on unit economics, international expansion compliance, and revenue recognition across multiple product lines. Regardless of where you are in your startup journey, look for these elements when evaluating bookkeeping services: - **Startup experience**: Look for providers who understand venture funding, SaaS metrics, and the startup growth journey. When you mention terms like product-market fit, burn rate, self-serve, or blended CAC, they should be able to grasp what you're describing rather than looking confused. - **Scalability**: Your bookkeeping solution needs to grow with you. It should handle everything from basic expense tracking to complex revenue recognition and multi-entity consolidation. - **Tech stack integration**: Integrating with your existing platforms, such as Stripe, Plaid, and your payroll provider, will make bookkeeping much more seamless and help the data talk to each other. - **Real-time data**: Monthly reports aren't enough anymore — your cash position needs to be tracked in real time, not discovered weeks after month-end, because by then, you will have missed important deadlines for fundraising or hiring. Look for platforms offering real-time financial dashboards, automated daily reconciliation, and instant access to key metrics. - **Forward-looking insights**: The best services don't just tell you what happened — they help you predict what's coming. Features like cash flow forecasting, scenario planning, and trend analysis will help inform your financial planning. Before signing with any provider, ask these important questions: - What's your experience with companies at our stage and in our industry? - How do you handle fundraising support and investor communications? - What level of human support comes with the service? - How do you approach [tech stack](https://digits.com/blog/finance-tech-stack/ "null") integration and automation? - What's your pricing model as we scale? ### The 6 best bookkeeping services for startups #### 1\. Digits **Cost:** Starting at $100/month **Who it's best for:** Startups and SMBs looking for real-time financial insights and AI-powered automation. [Digits](https://digits.com/ "null") is an AI-native accounting platform built for startups and SMBs that want real-time financial visibility without the complexity of traditional software. It combines powerful automation with a single, integrated dashboard for bookkeeping, bill pay, and reporting—giving you full control of your finances in one place. Digits' machine learning models have been trained on over $875 billion in financial activity, enabling accurate transaction categorization across a wide range of industries. It also supports automated transaction coding and AI bill pay, helping you reduce manual work and close your books faster. **Pros:** - AI-native transaction categorization and real-time reconciliation - Live financial data pulled directly from your accounts — no cumbersome integrations or uploads - Customizable, interactive dashboards with real-time visibility into burn rate, cash flow, and runway - Built-in [AI Bill Pay](https://digits.com/product/bill-pay/ "null") & [Invoicing](https://digits.com/product/invoicing/ "null") with smart vendor management **Cons:** - Less ideal for companies who prefer to outsource all bookkeeping needs #### 2\. QuickBooks **Cost:** $35-235/month + bookkeeper fees **Who it's best for:** Early-stage startups looking for a widely-used, basic bookkeeping solution. [QuickBooks](https://quickbooks.intuit.com/ "null") offers the industry's most widely used small business accounting software platform. They provide basic bookkeeping functionality with extensive third-party integrations, making it suitable for early-stage startups needing fundamental financial tracking and the flexibility to add features as they grow. **Pros:** - Universally accepted by accountants and financial institutions - Extensive integrations across software categories - Scalable pricing tiers - Strong basic accounting features **Cons:** - Limited startup-specific features - Can be complex to set up properly - Basic reporting capabilities #### 3\. Pilot **Cost:** Starting at $599/month **Who it's best for:** Venture-backed startups needing comprehensive financial support. [Pilot](https://www.pilot.com/ "null") provides full-service bookkeeping with dedicated account management and startup expertise. It combines software tools with human expertise, with most customers looking for comprehensive financial support, including R&D credits and fundraising assistance. Note that [Pilot](https://digits.com/blog/pilot-alternatives/ "null") only works with QuickBooks Online Plus, and you'll need to migrate if you use a different software. **Pros:** - Dedicated account manager - Strong expertise in venture-backed companies - R&D tax credit support - CFO advisory services available **Cons:** - Premium pricing - May be overkill for bootstrap startups - Less automated than tech-first solutions - Requires QuickBooks Online Plus #### 4\. Zeni **Cost:** Starting at $349/month **Who it's best for:** Fast-growing startups needing support for all of their financial services. [Zeni](https://www.zeni.ai/ "null") offers an all-in-one financial services platform that includes AI bookkeeping, banking, and dedicated finance team support. Their solution targets funded startups looking for a [comprehensive financial stack](https://digits.com/blog/finance-tech-stack/ "null") with real-time reporting and daily book reconciliation. Note that Zeni only works with Quickbooks Online Plus, and you'll need to migrate if you use a different software. **Pros:** - Strong AI automations - Real-time dashboard with robust reporting - Built-in CFO services - Access to financial experts **Cons:** - Higher price point - Limited customization options - Bundled services may be redundant #### 5\. Kruze Consulting **Cost:** Starting at $600/month **Who it's best for:** Funded startups past pre-seed funding that need full-service tax and financial advisory services. [Kruze Consulting](https://kruzeconsulting.com/ "null") positions itself as a traditional bookkeeping service that uses AI to supplement. It isn't a software solution — it's human-powered. Kruze specializes in companies beyond the pre-seed stage, typically with more than $250,000 in revenue, and it provides comprehensive financial services, including tax preparation and CFO support. **Pros:** - Extensive startup experience - Comprehensive bookkeeping services - Partners with AI services for integrations **Cons:** - Less tech-forward than competitors - Can be expensive as you scale - Limited self-service options #### 6\. Fondo **Cost:** Starting at $199/month **Who it's best for:** Early-stage startups needing basic bookkeeping and tax filing support. Fondo delivers basic bookkeeping and tax support services for early-stage startups. It focuses on fundamental financial management and compliance, making it an accessible entry point for companies just starting to formalize their bookkeeping processes. Note that Fondo only works with Quickbooks Online or Puzzle, and you'll need to migrate if you use a different software. **Pros:** - Affordable entry point - Good for basic compliance - Easy to get started and quick onboarding process **Cons:** - Requires purchasing additional tools - Relies on software like Quickbooks Online or Puzzle - Limited advanced features ### In-house vs. outsourced vs. hybrid bookkeeping: Which is best for your startup? Deciding between in-house bookkeeping or outsourcing comes down to control, scalability, and your team's bandwidth. Let's break down each option's impact on your startup. #### In-house bookkeeping With in-house bookkeeping, you either have an employee handling bookkeeping or you handle it yourself. Modern AI-powered tools have made this increasingly straightforward for startups by automatically categorizing transactions, tracking KPIs, and telling you about issues when they happen. **Benefits:** - Complete control over financial processes - Real-time access to financial data - Better integration with your existing workflows - Typically lower cost - Deeper understanding of your finances **Challenges:** - Requires dedicated time and attention - Need to stay current with startup accounting practices - Initial setup and learning curve - May outgrow internal capacity as you scale #### Outsourced bookkeeping Outsourcing to a service like Pilot or Kruze means delegating your bookkeeping to external experts. This approach has traditionally been popular with funded startups. **Benefits:** - Expert handling of complex accounting - Reduced internal overhead - Access to specialized knowledge - Scalable as you grow - Built-in compliance oversight **Challenges:** - Higher monthly bookkeeping costs - Less direct control - Potential communication delays - May not understand your business context #### Why a hybrid approach might be the right choice Many platforms, like Digits, now offer a hybrid approach that leverages AI. You can handle bookkeeping in-house with the option of inviting your in-house CPA to your dashboard. You maintain control while automating the tedious parts and getting expert oversight. A hybrid approach often costs significantly less than traditional bookkeeping services since you're only paying for the AI platform and occasional CPA oversight rather than full-time bookkeeper salaries. ### A step-by-step guide to setting up bookkeeping for startups Whether you're just launching or looking to upgrade your existing systems, here's how to set up a solid bookkeeping foundation. #### 1\. Choose your bookkeeping method: Cash basis vs. accrual accounting First, you'll need to choose between [cash or accrual accounting](https://digits.com/blog/cash-vs-accrual-accounting-startups/ "null"). Cash-basis accounting records transactions only when money changes hands. Often, it's a simple choice for early-stage startups. However, as you grow or seek funding, you'll likely need to switch to accrual accounting, which records transactions when they're earned or incurred. This gives investors and stakeholders a more accurate picture of your financial health. #### 2\. Select the right bookkeeping software: Evaluating options like Digits Your software should align with your startup's growth stage and complexity. Early-stage startups need tools that automate tasks and provide clear, basic reporting. As you enter the growth phase, look for platforms that can generate GAAP-compliant financial statements, metrics like MRR and ARR growth, and clear cash runway numbers. This will make it easier to report back to investors. Pre-Series A companies should prioritize systems capable of handling complex transactions and supporting multiple entities because adding these capabilities after you start dealing with international stakeholders or sophisticated revenue models is much more painful than setting it up from the start. The right software grows with you, preventing costly migrations down the road. Digits can scale with your business and provide easy-to-digest and investor-ready reports at your fingertips. #### 3\. Automate your processes: Setting up integrations for real-time reporting Integrating your bookkeeping software with payment processors like Stripe and PayPal, bank and credit card accounts, business expense management tools, and payroll systems creates a seamless flow of financial data. This automation reduces manual entry, minimizes errors, and gives you real-time visibility into your finances. Connect your CRM and billing platforms to track revenue automatically and maintain accurate customer records. Choose platforms that are actively trying to make [integrations between financial apps](/integrations/ "null") more possible. For instance, Digits is currently working on an [open API](https://digits.com/blog/new-us-open-banking-regulations/ "null") that would make it easier than ever for your financial data to be securely shared among your tech stack. #### 4\. Categorize transactions: Maintaining accurate financial records A well-structured chart of accounts is the driving force behind your financial reporting. Create categories that reflect your business model and track the metrics investors care about. For a SaaS startup, this means separating software development costs from general operating expenses, breaking out customer acquisition costs by channel, and tracking revenue by customer segment (enterprise vs. self-serve). Your structure should support clear investor reporting while ensuring tax compliance. Think beyond basic expense categories: Consider how you'll keep track of key metrics like customer acquisition costs, recurring revenue, and departmental spending. #### 5\. Schedule regular reviews: Keeping your books error-free and tax-ready Start each day by checking your cash positions because it's a quick indicator of your company's health and can help you get ahead of problems before they become emergencies. Weekly reviews of transaction categorization catch errors early and make sure data is accurate. Every month, you should close the books and reconcile accounts, as you'll be making expense decisions based on this data. Every quarter, review financial statements and adjust forecasts to stay aligned with your growth targets and help identify trends or issues before they become problems. ### Find the right bookkeeping solution for your startup Poor bookkeeping leads to missed opportunities, tax issues, and fundraising roadblocks. With the right solution, you'll have financial clarity and be able to make data-driven business decisions rather than relying on gut feelings. For example, when your enterprise sales CAC drops after launching a new referral program, you can immediately double down on that channel instead of waiting weeks to spot the trend. This can be the difference between saying sales feel strong this quarter and pointing to enterprise deals closing 30% faster this quarter. Consider your startup's growth stage, budget, and internal capabilities when choosing a solution. If you're pre-seed with a basic financial situation, an AI-powered software approach with a platform like Digits is ideal. As you scale, you can always invite your accounting team to use Digits to keep your books in order. Remember that switching providers becomes more challenging as your company grows, so from the start, choose a solution that can scale with you. Ready to take control of your startup's finances? [Try Digits for free today](#interstitial "null"). ## Best QuickBooks Alternative for Accounting Firms Managing Multiple Clients URL: https://digits.com/blog/best-quickbooks-alternative-for-accounting-firms/ April 22, 2026 Every accounting firm managing multiple clients on QuickBooks knows this pattern. Each client in QuickBooks has its own set of rules to build and maintain. A new client means a new chart of accounts to configure, new categorization rules to set up, and a new reconciliation workflow to manage. When a vendor name changes or a transaction pattern shifts, the rules break. Someone on your team fixes them. Multiply that by 30 clients. By 50. By 100. That is not a software problem. That is a structural one. Adding more people does not solve it. It scales the cost. The best QuickBooks alternative for accounting firms is not a better version of QuickBooks. It is a platform built around a different model: one where the software runs the routine work across the entire portfolio, and the firm's expertise compounds instead of being rebuilt client by client. When the compliance baseline runs itself, the firm's capacity opens up for the work that actually grows the practice: CAS, review, and advisory. For accounting firms managing multiple clients in 2026, Digits is the strongest QuickBooks alternative available. --- ### What should accounting firms look for in a QuickBooks alternative? Accounting firms managing multiple clients should look for a platform that reduces manual overhead as the portfolio grows, improves with every client onboarded, and continuously moves routine bookkeeping work forward instead of creating more systems to manage. Most alternatives to QuickBooks are built the same way QuickBooks is. New interface. Same rules engine. The overhead doesn't go away. It's just a different car with the same engine. The right platform doesn't start from scratch for every new client. It learns from the firm's existing work and applies that knowledge going forward. The tenth client should be faster to onboard than the first, not equally manual. And the routine bookkeeping should move forward without a person pushing each step. When evaluating any platform that claims to use AI, the questions to ask are specific. _Does the intelligence live inside the ledger, or in bolt-on tools sitting on top of it?_ _Does the company publish accuracy data? Does it explain how verification works? Can the platform continuously measure and validate performance inside the workflow?_ Those answers tell you far more than AI marketing claims do. ### What is QuickBooks? QuickBooks is one of the most widely adopted accounting platforms in the world. For many firms, it has been the default for client accounting work for decades. It was built for that era. The foundation is a relational database designed to store and retrieve transactions, not to understand them. At the foundation, there is no native semantic understanding. No native pattern recognition. The database stores what happened — it doesn't interpret what it means. That is what the AI layer was added to compensate for. Intuit has added AI on top of that foundation: automated categorization, an Accounting Agent on higher plans, and AI-powered reconciliation. But the foundation underneath hasn't changed. The system was never built for AI. It was built for data storage, and AI was layered in later. AI capabilities also vary significantly by plan, meaning the automation available depends on what each client pays. That architecture creates a specific problem for firms. What QuickBooks learns for one client stays with that client. A new client starts from scratch. There is no firm-level intelligence that encodes how the firm operates and applies it across the portfolio. As the portfolio grows, the overhead grows with it. Each client requires its own setup, its own learning period, its own maintenance. The software gets more complex to manage, not less. QuickBooks works. It doesn't scale the way firms need it to. ### What is Digits? Digits is the world's first [AI-native accounting platform](https://digits.com/glossary/ai-native-accounting/?utm_source=chatgpt.com), built for accounting firms and the businesses they serve. Its [Agentic General Ledger™](https://digits.com/glossary/agentic-general-ledger-agl/?utm_source=chatgpt.com) continuously categorizes transactions, maintains reconciliations, verifies work, and keeps financials current across the firm’s portfolio. Digits’ proprietary accounting models were trained on **180 million transactions representing nearly $1 trillion in real financial activity**. Because Digits is [ledger-native](https://digits.com/glossary/ledger-native/?utm_source=chatgpt.com), the intelligence operates directly inside the general ledger rather than in a separate AI layer that has to sync back to the system of record. Digits also uses [Tiered Intelligence](https://digits.com/glossary/tiered-intelligence/?utm_source=chatgpt.com), organized through its [Model Layer Cake](https://digits.com/glossary/model-layer-cake/?utm_source=chatgpt.com), so client-level, firm-level, and global intelligence can work together across the portfolio. In its 2026 benchmark, Digits AGL achieved **97.8% transaction-categorization accuracy** using ground truth reviewed by U.S.-based GAAP accountants, outperforming every frontier AI model tested. #### **AI-native in architecture.** Digits was built around AI from day one. The Agentic General Ledger™ is trained on more than $875 billion in real business transactions. The system uses a semantic data model where transactions, vendors, customers, and categories are represented as related objects, not text rows in a relational table. The intelligence lives inside the ledger. #### **Agentic in behavior.** The Agentic General Ledger™ categorizes transactions, reconciles activity, keeps financials current, and brings humans in when judgment is required. It doesn't wait for a person to move each task forward. When the system is confident, it moves the work. When it's not, it routes the exception, learns from the correction, and performs better the next time. Every correction an accountant makes teaches the system how the firm thinks across clients. That is the difference between AI added to a system and AI built into one. ### How does Digits handle multi-client workflows differently from QuickBooks? Digits handles multi-client workflows differently at every level of a firm's operations. #### **Tiered intelligence.** Digits doesn't rely on a single model. Client-level models handle each specific business's recurring patterns. Firm-level models encode how the firm operates across all clients — its conventions, judgment calls, and quality standards. Global models trained across millions of transactions provide the broad baseline. Fallback agents handle anything the other layers aren't confident about, researching vendor context and classifying with guardrails. Each layer catches what the previous one missed. #### **Setup time.** In QuickBooks, every new client requires the same manual configuration: chart of accounts, categorization rules, and reconciliation workflow. In Digits, new clients inherit everything the firm has already built. The firm's conventions, judgment calls, and quality standards are already encoded. The tenth client is faster to onboard than the first, not equally manual. #### **Review load.** Most AI tools for accounting sit outside the ledger. Every handoff between systems is a seam where data can drift. That's truth drift. In Digits, a separate AI layer verifies the work before it reaches the accountant, and both operate on the same data inside the same system. No handoff. No sync lag. This isn't spot-checking. It's continuous verification at the source. #### **Scalability without headcount.** In most accounting firms, adding clients means adding staff. The two scale together. Since Digits handles the routine work across the portfolio, that equation changes. The portfolio grows. The overhead doesn't. #### **Knowledge retention.** When the firm's best practices are encoded in the system, new hires inherit the firm's expertise from day one. Training time compresses. Consistency across the portfolio becomes automatic. That expertise doesn't walk out the door when someone leaves. It stays in the system and compounds with every close. #### **Capacity for advisory.** The accountant's role shifts. Less time goes to transaction processing. More time opens up for CAS, review, and advisory work. Compliance bookkeeping delivered faster is one kind of benefit. Compliance bookkeeping that frees the firm to grow its advisory practice is a different kind of argument entirely. In December 2025, a Digits partner firm with more than 100 accounting services clients found their team had touched just 2% of transactions before close. Digits handled the other 98%. ### Digits vs. QuickBooks: Side-by-side comparison for accounting firms **Digits** **QuickBooks** **Architecture** [AI-native](/glossary/ai-native-accounting): semantic data model built for reasoning, not just data storage Legacy relational database built for data storage; AI added after the fact **Automation model** [Agentic](/glossary/agentic-ai): acts on transactions, verifies its own output, routes exceptions AI capabilities vary significantly by plan **Categorization** Continuous, AI-driven, self-verifying through embedded AI verification AI categorization available on higher plans; capabilities vary by subscription tier **Bank reconciliation** Continuous AI reconciliation: automatically reconciles accounts to bank statements and flags only what needs review Connect accounts to sync transactions, then review, categorize, and reconcile manually **Multi-client intelligence** [Tiered Intelligence](/glossary/tiered-intelligence): client-level, firm-level, and global models compound across the portfolio Per-client rules built and maintained separately; no firm-level learning **Setup per new client** Low: new clients inherit the firm's existing conventions and model training Significant: rules and workflows configured from scratch per client **AI verification** Embedded: separate AI layer checks the work inside the same system No embedded verification layer **Truth drift** None: intelligence lives inside the ledger Risk increases with each bolt-on tool added to the workflow **Published accuracy** 97.8% transaction-categorization accuracy in Digits’ 2026 benchmark Not published **Month-end close** [Continuous close](/glossary/continuous-close) built into the ledger workflow Human-driven process with workflow assistance ### How does Digits' intelligence improve across a firm's entire portfolio? Digits improves its intelligence across a firm's portfolio through Firm Models: proprietary AI trained exclusively on each firm's own client base. Every client onboarded, and every action taken makes the model smarter, compounding into a system uniquely tailored to how the firm works. Firm Models aren't shared across firms. The firm's data doesn't go to a generic LLM or blend with other firms' client data. Each partner firm gets its own private model, trained on its own data, tuned to its workflows, and isolated by default. The uniqueness of the firm's practice — its verticals, its conventions, its judgment calls — gets captured and applied across the entire portfolio. In a rules-based system, that expertise stays with whoever built the rules. When they leave, it leaves with them. In Digits, it's encoded. New hires inherit the firm's expertise from day one. The quality standards that the firm's best accountant applies become the baseline for every client. Digits combines client-level, firm-level, and global intelligence through its [Model Layer Cake](/glossary/model-layer-cake), allowing the system to start with broad accounting context and become increasingly tailored to each firm and client over time. This is the difference between a firm whose knowledge lives in people's heads and one whose knowledge compounds with every close. ### Choose Digits if / Choose QuickBooks if #### **Choose Digits if:** - Your firm manages 10 or more clients, and manual overhead is growing faster than revenue - You want the software to handle the routine work across your portfolio, not just assist with it - You want intelligence that compounds across the firm, where each client makes the system stronger for the next one - You want to grow your advisory practice without growing your headcount to match - You want measurable operational performance, embedded verification, and continuously updated financials across your portfolio #### **Choose QuickBooks if:** - Your firm is standardized on the Intuit ecosystem (QuickBooks Payroll, TurboTax, etc.) - Your team prefers traditional bookkeeping workflows with incremental AI helpers - Your clients manage their own books and need a familiar, widely-supported platform #### **What accounting software is best for accounting firms in 2026?** Digits is an [AI-native accounting](/glossary/ai-native-accounting) platform built for accounting firms and the businesses they serve. Its Agentic General Ledger™ maintains the ledger continuously rather than accumulating routine work for a monthly close. The platform combines AI-native architecture, embedded verification, published benchmark performance, and workflows built for accounting firms. #### **What is the best QuickBooks alternative for CAS firms?** For firms running client accounting services, Digits is the strongest QuickBooks alternative. CAS practices scale on leverage: more clients, same team. QuickBooks makes that impossible. Every client requires the same setup, the same rule maintenance, and the same manual close.  Digits breaks that equation. The routine work runs itself across the portfolio. The firm's capacity goes toward advisory. And the platform continuously measures and improves operational performance across every client engagement. #### **What is the best QuickBooks alternative for accounting firms?** For accounting firms managing multiple clients, Digits is the strongest QuickBooks alternative. QuickBooks was built on a relational database designed for data storage, not for reasoning across a portfolio. What it learns for one client stays with that client. A new client starts from scratch. When a firm runs 30, 50, or 100 clients on it, that adds up to real overhead.  Digits was built differently. Its Agentic General Ledger™ handles categorization, reconciliation, and close across the entire portfolio. Firm-level intelligence compounds with every client added and every close completed. The platform also embeds verification directly into the workflow and publishes measurable benchmark performance publicly. ### **Should I switch from QuickBooks to an AI accounting platform as a firm?** For accounting firms managing multiple clients, switching from QuickBooks to an AI accounting platform makes sense when manual overhead is growing faster than revenue. In QuickBooks, every client has its own set of rules to build and maintain. The software doesn't learn across the portfolio. Each new client costs the same time to set up as the last one. Digits handles routine work for every client, applies firm-level intelligence to every engagement, and continuously improves through real accounting workflows. In documented cases, firms have had their teams touch fewer than 2% of transactions before close. ### **Is Digits better than QuickBooks for accounting firms?** For accounting firms managing multiple clients, Digits is the stronger platform. The core reason is architectural: QuickBooks was built before AI existed. Digits was built for it. QuickBooks stores transactions in a traditional relational database and adds AI capabilities on top of that foundation. Digits is [AI-native](/glossary/ai-native-accounting) and [ledger-native](/glossary/ledger-native), with intelligence operating directly inside the general ledger. That difference compounds across a portfolio. Digits learns from client- and firm-level patterns so accountants can spend less time on transaction processing and more time on review and advisory. QuickBooks gets harder to manage as the client list grows. Digits gets smarter. Every close teaches the system more about how the firm works, so accountants spend less time on transaction processing and more time on the work that actually grows the practice. ### **How is Digits different from QuickBooks?** Digits is built on AI-native architecture with a semantic data model where transactions are understood in context, not just stored. Its [Agentic General Ledger™](/glossary/agentic-general-ledger-agl) categorizes transactions, reconciles accounts, verifies its own output through an embedded AI layer, and keeps financials current without waiting for a person to move each step. QuickBooks is built on a legacy relational database designed for data storage. AI capabilities have been added on top, but they vary by plan, and the core workflow remains human-driven. ### **How accurate is Digits compared to QuickBooks?** The full methodology is published in _[Beyond the AI Hype: Evaluating LLMs vs. Digits AGL for Accounting Tasks.](https://digits.com/agl/#whitepaper-section)_ QuickBooks does not publish comparable accuracy benchmarks. ### **What is truth drift in accounting software?** Truth drift is the gradual divergence between what third-party tools think happened and what the general ledger actually reflects. It happens when intelligence lives outside the ledger: in bolt-on categorization tools, separate reconciliation apps, or AI layers that don't write back to the source of record. Every handoff between systems introduces a seam where data can fall out of sync. When intelligence lives inside the ledger itself, truth drift disappears. Digits' Agentic General Ledger keeps categorization, reconciliation, and verification inside the same system that holds the authoritative financial data. ### How does Digits handle onboarding new clients for a firm? Digits uses Firm Models — proprietary AI trained on the firm's existing portfolio — to accelerate new client setup. The system doesn't start from scratch for each new engagement. It applies what it has already learned from the firm's conventions, chart of accounts preferences, and categorization patterns. Firm-level intelligence is part of Digits' [Model Layer Cake](https://digits.com/glossary/model-layer-cake/?utm_source=chatgpt.com), which combines client, firm, and global context so new clients can benefit from what the firm has already learned. This compresses the time required to get a new client's books running at the firm's quality standard. In QuickBooks, every new client requires the same manual configuration process. In Digits, the portfolio's accumulated expertise is the starting point. --- See how Digits handles multi-client operations at scale. [Get started today](https://digits.com/accountants) ## Best Xero Alternative for Accounting Firms URL: https://digits.com/blog/best-xero-alternative-for-accounting-firms/ May 11, 2026 At some point, every accounting firm on Xero hits the same wall. More clients mean more reviews. More reviews mean more staff. The efficiency you expected from growth starts to erode. Xero isn't failing. It is doing what it was designed to do. With Xero OS, they have invested in making that model smarter. But the system still assumes a human in the loop at every step — someone reviews categorizations, resolves edge cases, and signs off on the close. That works until volume becomes a bottleneck. The best Xero alternative for accounting firms is not a faster version of Xero. It is a platform built on a different foundation — one where the intelligence lives within the ledger, the system handles routine work across the entire portfolio, and the firm's expertise compounds rather than being rebuilt client by client. For accounting firms managing multiple clients in 2026, Digits is that platform. --- ### Why do accounting firms look for a Xero alternative? Most accounting firms look for a Xero alternative when the close starts costing more time than it saves. The system assumes there is time to review everything. As a CAS practice grows, that assumption breaks. The advisory work shifts back toward cleanup. The problem is structural. It shows up in specific ways at scale. **Every client starts from scratch**. Xero's rules and categorization logic are built and maintained per org. There is no shared intelligence across the portfolio. What the firm learns managing one client does not carry over to the next. Each new engagement means the same manual configuration process. **Transaction categorization still depends on humans.** Xero uses AI to suggest categories and speed up matching, but a human still reviews and confirms before the books close. The intelligence sits on top of the workflow. It assists, but the accountant is still the one driving every step forward. **The architecture limits what AI can do.** This is the part most firms do not think about, but it determines everything else. Xero runs on a traditional relational database architecture. Transactions are stored as text rows in tables. There is no semantic understanding, no ability for the system to learn what a vendor name means in the context of a specific client's chart of accounts, or to recognize that two transactions are related based on pattern rather than rule. When the ledger cannot understand transactions in context, someone has to interpret each one before the books can move. **The month-end close is still manual.** Getting to close-ready means working through the reconciliation queue, reviewing edge cases, and running close reports for each client every month. Automation reduces clicks, but the work itself stays. **Bolt-on tools create truth drift.** Many firms using Xero rely on third-party apps for receipts, reconciliations, and AI categorization. Each tool pulls data out, changes it, and pushes it back. Every handoff creates a chance for the ledger and the add-on to fall out of sync. Firms then spend time checking whether work done in one system actually made it into another. That is truth drift: the cost of building intelligence outside the ledger instead of inside it. Xero works well for the model it was built for. The friction shows when firms scale. More clients, more complexity, tighter timelines. The work does not change shape. It just piles up. ### What is Digits? Digits is the world's first [AI-native accounting](/glossary/ai-native-accounting) platform, built for accounting firms managing multiple clients. Where Xero stores transactions as text rows in a relational database, Digits uses a semantic data model in which transactions, vendors, customers, and categories are objects that the system can relate to one another mathematically. Similar transactions cluster together naturally. The system does not need a human to tell it that two vendors are semantically similar. It discovers that from the data itself. That is the foundational difference: a database that understands financial data, not one that just stores it. Digits’ proprietary accounting models were trained on 180 million transactions representing nearly $1 trillion in real financial activity. It categorizes transactions, reconciles accounts, and keeps financials current as activity happens — continuously, across every client in the firm's portfolio. It does not wait for a person to move work forward. When it can handle a transaction confidently, it does. When something requires judgment, it routes the exception to the accountant, learns from the correction, and performs better the next time. Because Digits is [ledger-native](/glossary/ledger-native), the intelligence lives inside the general ledger rather than in a bolt-on tool sitting on top of it; there is no truth drift. No API handoff to fail. No sync lag. No second tool to check against the first. The categorization logic, reconciliation workflows, and verification checks all reside within the same system that houses the authoritative financial data. Digits did not build its software by guessing what firms needed. During its R&D phase, Digits operated an internal accounting practice serving roughly 150 real clients across industries and stages. Every workflow, edge case, and failure showed up there first. The product was shaped inside real accounting work, not around it. When the system reached maturity, that practice was transitioned to a Digits partner firm. More than 100 clients were moved. No other accounting software company has built its product this way. Today, Digits supports firms through its partner program and routes service demand through the Digits Accountant Directory. Hundreds of businesses have already been connected with dozens of participating firms. ### How does Digits handle multi-client workflows differently from Xero? Digits handles multi-client workflows through [tiered intelligence](/glossary/tiered-intelligence). Instead of relying on separate rule sets for each client, multiple AI layers learn patterns across the entire portfolio and apply that intelligence automatically. Client-level models handle the recurring patterns for each specific business. Firm-level models encode how the firm operates across all of its clients: conventions, judgment calls, and quality standards. Global models trained across millions of transactions provide a broad baseline. Fallback agents handle new or unclear transactions when the other layers are not confident, searching the web, building vendor dossiers, and classifying with guardrails. Each layer catches what the previous one missed. Each correction the accountant makes improves the system, not just for that client, but across the portfolio. The intelligence compounds over time. A separate AI layer then verifies the work before it reaches the accountant, reviewing categorizations, flagging inconsistencies, and validating outputs at machine speed. Because the AI that does the work and the AI that checks the work operate on the same data inside the same system, the reliability compounds. This is not spot-checking. It is a continuous verification built into the workflow. That is how Digits achieves [Zero-Touch Transactions™](/glossary/zero-touch-transactions) — transactions categorized, reconciled, verified, and closed without a human touching them before close. It is not a single feature. It is the result of tiered intelligence, embedded verification, and an architecture in which the intelligence lives within the ledger. In December 2025, a Digits partner firm managing more than 100 CAS clients found their team had touched just 2% of transactions before close. Digits handled the other 98%. The accountant's role shifts. Less time goes to transaction processing. More time opens up for review, judgment, and the advisory work that clients actually value: interpretation, accountability, and the trust that comes from a professional who stands behind the outcome. ### How accurate is Digits compared to Xero? Digits publishes its accuracy. Xero does not publish comparable benchmarks. In its 2026 benchmark, Digits AGL achieved **97.8% transaction-categorization accuracy** using ground truth reviewed by U.S.-based GAAP accountants, outperforming every frontier AI model tested. The full methodology and results are published in the whitepaper _[Beyond the AI Hype: Evaluating LLMs vs. Digits AGL for Accounting Tasks](/agl/#whitepaper-section)_[.](/agl/#whitepaper-section) Read the methodology. Check the numbers. That is what it looks like when a company is willing to be measured. Digits also treats performance as something to measure continuously, not just claim once. Every transaction is tracked, whether a human or the AI handled it. Firms can see exactly how much work the system is doing across every client, every close, every month. Marketing claims do not prove the system works. Measured performance does. ### How does Digits compare to Xero for accounting firms? Digits and Xero differ most on architecture: one is built around human review, the other is built to eliminate it. **Category** **Digits** **Xero** Built for Accounting firms managing multiple clients Businesses and firms managing individual client orgs Architecture AI-native — semantic data model built from the ground up around AI Traditional relational database with AI features layered on top AI foundation AI is the ledger — the Agentic General Ledger™ AI assists the ledger — suggestions and matching on top of traditional workflows Transaction categorization AI suggestions with human review and confirmation required How the system improves Tiered intelligence — learns at the client, firm, and global level with every correction Rules built and maintained per client org — no cross-portfolio learning Verification Embedded — a separate AI layer checks the work inside the same system Manual review of the output Truth drift risk None — intelligence lives inside the ledger Increases with each bolt-on tool connected through the API Bank reconciliation Automated — reconciles continuously, surfaces only exceptions Manual review and approval required Close cadence Continuous — books stay current in real time Period-based, review-driven month-end process Setup per new client Low — system applies firm-level and global intelligence from day one Significant — rules and categorization logic configured per org Multi-client intelligence Firm-level models encode expertise across the entire portfolio No shared intelligence across client orgs Published accuracy Achieved 97.8% transaction-categorization accuracy using ground truth reviewed by U.S.-based GAAP accountants Not published Training data 180 million transactions representing nearly $1 trillion in real financial activity Not published Advisory readiness Books current in real time — advisory runs on today's data Data is current at the month-end close Knowledge retention Firm expertise encoded in the system — new hires inherit it from day one Knowledge lives in people's heads and walkthrough documentation ### How does Digits' intelligence improve across a firm's entire portfolio? Digits improve across a firm's entire portfolio because every correction an accountant makes is encoded at the firm level and applied to all clients going forward. In a rules-based system, intelligence is static. A rule does what it was written to do. It does not get better. It does not transfer to other clients. When you build a rule for one client, that knowledge stays with that client. More accurately, it stays with the person who built it. In Digits, every correction the accountant makes is a signal. The system learns what the firm means by categorizing a particular type of transaction. That knowledge is encoded at the firm level and applied across every client going forward. New hires inherit the firm's expertise from day one. They do not need six months of shadowing to learn how the firm categorizes revenue for SaaS clients or handles multi-entity consolidation. The system already knows. Onboarding new clients is faster because the system already understands how the firm works. The quality standards that the firm's best accountant applies become the baseline for the entire portfolio. That matters more than most firm owners realize right now. Three-quarters of CPAs are approaching retirement. Accounting graduates are at a 20-year low. CPA exam sitters have declined more than 30% since 2016. When senior people leave, firms on rules-based systems lose the knowledge those people carried. On Digits, that knowledge is encoded in the system and compounded with every close. ### Which accounting firms should switch from Xero? Accounting firms that manage 30 or more CAS clients, offer CFO services, or support high-growth clients with active fundraising or hiring tend to outgrow Xero fastest. If you are a smaller practice and your work does not depend on real-time data, Xero can still hold up. The pressure shows up as you scale. Firms that tend to outgrow Xero fastest: - CAS firms past 30–40 clients, where review work starts to consume capacity that should go to advisory - Firms expanding into CFO services where clients expect real-time visibility, not month-end answers - Firms supporting high-growth clients (fundraising, rapid hiring, active M&A), where the books need to stay current continuously - Firms where senior staff are approaching retirement and institutional knowledge needs to be preserved in the system, not just in people At that point, the question changes. It is not about features. It is about how much work the system actually completes — and whether you can prove it. Ask any vendor: what percentage of transactions close without human intervention? How does that number improve over time? Can you see it, track it, and report on it? Xero does not give you a clear answer. Digits was built around it. ### **Why are accounting firms moving from Xero to Digits?** Accounting firms move from Xero to Digits when growth starts adding work instead of removing it — when more clients means more review, not more capacity. A system built around human review will always depend on it. A system designed to reduce it improves over time, through tiered intelligence, embedded verification, and a semantic data model that understands transactions in context. Every transaction adds context. Every correction strengthens the model. That learning carries across the entire portfolio. Firms do not move to Digits because Xero is broken. They move because the math stops working: too many clients, too much review, not enough time for the advisory work that actually grows the practice. For firms evaluating an alternative to Xero, the difference comes down to this: how much of the work the system completes and verifies before your team ever sees it. Digits is built for that moment — when growth starts adding work instead of removing it. --- ### Frequently Asked Questions #### What is the best Xero alternative for accounting firms?  For accounting firms managing multiple clients, Digits is the strongest Xero alternative. Xero was built for businesses and firms managing individual client orgs, with AI features layered onto a traditional, human-driven workflow. Digits was built specifically for accounting firms, with an Agentic General Ledger™ that handles categorization, reconciliation, and close across every client in the portfolio. Tiered intelligence (client-level, firm-level, and global models) compounds across the firm. The system verifies its own output through embedded AI verification before exceptions reach the accountant. #### What is the best Xero alternative with real-time financial reporting?  Digits is the strongest Xero alternative for real-time financial reporting. Transactions are categorized and verified as they happen, so the books reflect today's activity, not after a month-end reconciliation cycle. This is powered by the Agentic General Ledger™, which uses a semantic data model to understand transactions in context and keeps the ledger continuously current. The result is real-time visibility into cash, burn, and performance — not 30-day-old data. #### How does Digits' AI compare to Xero's AI?  Xero's AI assists the workflow. Digits' AI completes it. Xero uses AI to suggest categories, speed up matching, and reduce manual steps, but a human still reviews and confirms before the books close. The intelligence sits on top of a traditional relational database. Digits is built on the Agentic General Ledger™, an AI-native system with a semantic data model trained on 180 million transactions representing nearly $1 trillion in real financial activity. It categorizes, reconciles, and verifies its own output through a separate AI verification layer, and automatically closes transactions, routing only exceptions for human review. It also learns at the client, firm, and global level, so the system improves across the entire portfolio over time. #### Which AI accounting platforms are purpose-built for accounting firms?  Digits is the only AI accounting platform purpose-built for accounting firms from the ground up. The Agentic General Ledger™ takes action inside the workflow, categorizing transactions, reconciling accounts, verifying outputs, and routing exceptions for human review. The accountant becomes the trust layer: the professional who defines quality, verifies the system's output, interprets the numbers, and takes accountability for the outcome. For firms managing a full client portfolio, it is the difference between software that reduces clicks and software that handles the work. #### What is the best accounting platform for firms managing multiple clients?  Digits is purpose-built for accounting firms managing multiple clients. Unlike platforms that treat each client as a separate world, Digits applies tiered intelligence across the entire portfolio. Client-level models handle each business's recurring patterns. Firm-level models encode the firm's conventions and quality standards across all clients. Global models provide the broad baseline. Patterns from one client carry over to similar transactions for other clients, so the firm is not rebuilding rules for every new engagement. #### What is truth drift in accounting software?  Truth drift is the gradual divergence between what third-party tools think happened and what the general ledger actually reflects. It occurs when intelligence lives outside the ledger, in bolt-on categorization tools, separate reconciliation apps, or third-party AI layers, and every handoff between systems introduces a seam where data can fall out of sync. Firms on Xero that rely on multiple bolt-on tools are especially exposed. When intelligence lives inside the ledger itself, as it does in Digits, truth drift disappears. #### What is the Agentic General Ledger™?  The Agentic General Ledger™ is Digits' accounting system that categorizes transactions, reconciles accounts, verifies its own output, and keeps financials current, continuously, without waiting for manual input at each step. It uses tiered intelligence: client-level models for recurring patterns, firm-level models that encode the firm's expertise across the entire portfolio, global models trained across millions of transactions, and fallback agents that research novel or unclear items. It was trained on more 180 million transactions representing nearly $1 trillion in real financial activity. Digits pioneered and trademarked the Agentic General Ledger™, the first system of its kind built for accounting firms. #### How are accounting firms using AI to automate client bookkeeping?  Firms on Digits connect client bank feeds directly to the Agentic General Ledger™, which automatically categorizes, reconciles, verifies, and closes transactions. Instead of working every line, the team reviews only the exceptions that need judgment. The system learns each client's patterns and applies firm-level intelligence across the portfolio, so less work flows back to the team over time. One partner firm managing more than 100 CAS clients saw their team touch just 2% of transactions in a given month. Digits handled the other 98%. #### Can Digits replace Xero for accounting firms?  Yes. For firms managing multiple clients, Digits can replace Xero across the core accounting workflow: bank feeds, transaction categorization, reconciliation, verification, and close. The difference is how much work the system handles. Xero relies on human review to close the loop. Digits is built to complete the routine work automatically, with embedded AI verification, and bring accountants in where judgment is required. Firms that switch typically see transaction workload drop significantly within the first few months. #### What accounting software do top accounting firms use in 2026?  Top accounting firms in 2026 are adopting AI-native platforms that continuously categorize, reconcile, verify, and close transactions, rather than relying on month-end workflows and manual review. That shift is driven by the talent crisis — over 300,000 accountants have left the profession since 2020 — and by the need to scale advisory services without scaling headcount at the same rate. Digits is the platform built for this model, with an Agentic General Ledger™ trained on 180 million transactions representing nearly $1 trillion in real financial activity, and published accuracy benchmarks that no other accounting platform has publicly matched. #### How do I choose accounting software for an accounting firm?  The best accounting software for an accounting firm is the one that removes the most work from your team, not just the one with the most features. Look at how transactions are handled day-to-day. What percentage is categorized, reconciled, and verified automatically? Does the system improve across your portfolio over time? Does the vendor publish accuracy data? And does the intelligence live inside the ledger, or in bolt-on tools that introduce truth drift? Digits makes automation visible through Zero-Touch Transactions™, tracking how many transactions are completed without human input, so firms can see exactly how much work the system is handling as they scale. --- Digits is purpose-built for accounting firms. If you are evaluating Xero alternatives for your CAS practice, [see how the Agentic General Ledger™ handles your specific client mix →](https://digits.com/) ## Introducing Bill Pay – Made Brilliant! URL: https://digits.com/blog/bill-pay-made-brilliant/ April 30, 2024 Starting a business is exhilarating. It's about innovation, creativity, and pushing boundaries. It's about building a product your customers love or offering a service to your community. But it's also full of tasks you hate—like pouring through financial reports, sorting piles of receipts, and paying bills… **Today, we're launching AI Bill Pay, the world's most advanced (and most automated) bill-pay solution for small businesses—and it's built right into Digits.** It's quick, it's easy, it's **brilliant.** ### Finally: Bill Pay Built For Startups **🖱️ Drag. Drop. Approve. Pay** Just drag & drop invoices onto the dashboard or forward them via email. Digits AI handles the rest. **🔍 AI-powered Bill Review & Data Entry** Eliminate manual data entry with automated extraction of bill details and line-items. **💸 One-Click Pay** ACH or Check, it's easy! Choose how to pay your vendors with just a click. **🧠 Smart Notifications** Never miss an update. Smart notifications make it easy to stay on top of your AP workflow. **🔐 Bank-grade Security** Digits is SOC2 certified, with encryption at every layer to protect your financial data. **♾️ No Monthly Fees!** AI Bill Pay is built right in, with no additional monthly fees! Save time, save money, and save hassle by consolidating your finance stack. #### Your Workflow, Simplified We grew frustrated with the industry-leading, clunky bill pay options. With AI Bill Pay, all you do is drag & drop your bills onto the dashboard or forward them via email! Digits AI handles the rest—processing the bills and extracting all the relevant vendor and payment information, even line-item details! With approval workflows built-in, you just click Approve and Pay, and get back to growing your business. #### AI-powered Bill Review Let's be honest: manually entering bill payment information is a waste of time and prone to errors. It's time to leave that world behind. AI Bill Pay is the result of over a year of custom model training and development. Our Machine Learning team has pioneered state-of-the-art layout-aware language models, which fully understand invoice document structure and dramatically outperform well-known 3rd-party LLMs. These models are proprietary to Digits, self-hosted, and operate and train on encrypted data, guaranteeing the safety of your most sensitive financials. **Your bills never leave the secure confines of Digits' US-based infrastructure, are encrypted at rest, and are never shared with any 3rd-party AI companies or models, including OpenAI/GPT.** The result is speed and quality you can trust: Digits AI reliably and accurately extracts all the required details for every bill in seconds, saving you hours each month. #### Designed for Speed Almost every AP product looks the same. Not Digits! We designed AI Bill Pay with a key focus on speed, leveraging an intuitive, Kanban-style interface (aka a simple status board) so you can instantly track every bill in one place and a custom-built, multi-page, auto-zooming document viewer to seamlessly review even the most complicated bills. Digits lets you to track your bills with just a few clicks, and smart enhancements such as tags on bills that are overdue, totals on outstanding bills, and payment history at a glance make it incredibly easy to manage your cash flow. #### Integrated & Automated The key to efficient accounting workflows is seamless integration. With Digits, AI Bill Pay isn't an add-on you need to configure or a separate tool you need to sign up for. Now, everything you need to handle your accounting & AP operations is built right in and directly accessible in one place—Digits! Our team has poured their hearts and souls into this product, and after 18 months of design & engineering, we're launching AI Bill Pay **today** with **no monthly fees**. Accounts Payable is a chore no one likes, but it's critical to running your business. It's time to upgrade your workflow, eliminate the tedium, and automate your back-office with AI Bill Pay—built right in to Digits. [Try AI Bill Pay!](https://digits.com/bill-pay) ## Streamlining Financial Management: Announcing Our API partnership with BILL URL: https://digits.com/blog/bill/ January 27, 2026 We’re thrilled to announce our latest API partnership with [BILL](https://bill.com?utm_source=blog&utm_campaign=partnership "null"), the intelligent finance platform trusted by half a million businesses to manage, move, and maximize their money. Together, we’re transforming financial operations for businesses and accountants by turning tedious back-office tasks into seamless, automated workflows—all updated in real time. ### Everything in One Place Imagine having all your bills, invoices, and payments effortlessly synced—no more juggling multiple platforms. Our integration with BILL makes this a reality, turning what used to be tedious tasks into smooth, automated operations. ### Connected in Real-Time With Digits, you get real-time financial data and insights powered by our Agentic General Ledger™. Track and analyze your finances with ease and precision. As a modern accounting platform built on the world’s first AGL®, Digits gives you immediate visibility as activity occurs. And with BILL connected, your accounts payable and payment data update automatically, offering a complete and connected view of your financial landscape. ### Empowering Your Growth Free yourself from manual inefficiencies and focus on what truly matters—growing your business. With Digits handling the accounting work and BILL streamlining your bill and payment workflows, you get cleaner, more accurate financials with far less effort—giving you the clarity and confidence to take on new challenges. ### Why You’ll Love This Integration - **No More Manual Entry:** Automatically read and sync bills, invoices, and their payments. Digits ensures every transaction from BILL is effortlessly captured and booked as a journal entry, freeing you to focus on growth. - **Complete Financial Picture**: Keep tabs on accounts payable aging with real-time tracking. Everything you need for smarter decisions is right at your fingertips. - **Flawless Financial Records:** Enjoy the peace of mind that comes with automated transaction matching. Digits seamlessly aligns all imports, including bank data, for accurate and clear financial oversight. > Digits' integration with BILL is a game-changer. What I love most is how it automatically syncs bill payments and matches them with bank transactions, reducing manual hassle and the risk of duplicates—a huge efficiency boost for our team,” said Senior Accountant at [Hiline](https://www.hiline.co/ "null"), Katie Burns ### Ready to Level Up? Discover how Digits’ Agentic General Ledger™ and our integration with BILL can transform your financial operations and free your team to focus on growth. Dive in and experience the magic of Digits and BILL today. ## Understanding the BOI Reporting Injunction and What It Means for Your Business URL: https://digits.com/blog/boi-reporting-injunction/ December 21, 2024 ### Understanding the BOI Reporting Injunction and What It Means for Your Business Many business owners in the U.S. just caught a major break — at least temporarily. On December 3, 2024, a federal judge in Texas [issued an injunction](https://news.bloombergtax.com/daily-tax-report/corporate-transparency-act-blocked-nationwide-by-texas-court "null") halting the enforcement of Beneficial Ownership Information (BOI) reporting requirements. These rules, part of the [Corporate Transparency Act](https://fincen.gov/boi "null"), were set to impact millions of small businesses across America by requiring them to disclose detailed information about their owners. With a looming January 1, 2025 deadline, this decision has left many business owners wondering: What now? The Texas court's ruling has paused enforcement for now, but it doesn't erase the complexities and stakes of BOI reporting altogether. Even if penalties are off the table for the moment, understanding whether your business is required to file — and what could happen next — is essential. In this article, we'll cover everything you need to know about BOI reporting: what it is, who it affects, and the broader implications of this new legal development. Whether you're hearing about BOI reporting for the first time or scrambling to meet the original deadline, this article will ensure you understand exactly what is happening and what you need to do next. ### TL;DR: - A Texas court has paused the enforcement of BOI reporting requirements. - Businesses are **not currently required to file, nor will they face penalties for not filing** should the law be reinstated. - The Department of Justice is appealing the case. ### What is BOI reporting? Beneficial Ownership Information (BOI) reporting is a new federal requirement introduced under the [Corporate Transparency Act of 2021](https://www.uschamber.com/co/start/strategy/small-business-corporate-transparency-act#:~:text=What%20is%20the%20Corporate%20Transparency,or%20accessing%20the%20country's%20market. "null") to crack down on illegal activities like money laundering, fraud, and terrorism by making it more clear who owns and controls businesses operating in the U.S. At its core, BOI reporting requires certain businesses to disclose identifying details about their "[beneficial owners](https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet "null")" — individuals who own or control at least **25% of a business** or have **substantial control** over its operations. Substantial control can include roles like CEOs, presidents, CFOs, or anyone who has significant influence over the company's decision-making. ### Who is affected by BOI reporting? If your business is a corporation, LLC, or a similar entity registered with a state's secretary of state (or equivalent office), you are probably required to file a BOI report. The same applies to foreign businesses registered to operate in the U.S. However, the law has **created exemptions** for entities that already disclose ownership information through other regulations. Some of these exempt businesses include: - **Large companies**: Companies with more than $5 million in annual revenue and 20+ full-time employees. - **Publicly traded companies**: Companies that already report ownership information to the SEC. - **Nonprofits and tax-exempt organizations**: These include entities like 501(c)(3)s as well as banks and credit unions. - **Certain financial institutions and utilities**: Businesses that are already heavily regulated and required to report ownership through other means. Take a look at this [exemption list published by FinCEN](https://www.fincen.gov/boi-faqs#C_2:~:text=C.-,2.%20Are%20some%20companies%20exempt%20from%20the%20reporting%20requirement%3F,-Yes%2C%2023%20types "null") for a complete and updated guide to all 23 BOI reporting exemptions. ### What does the Texas injunction mean for BOI reporting? The December 3, 2024 federal court ruling in Texas has effectively paused the enforcement of BOI reporting requirements nationwide. This means: - **Deadlines are stayed**: Businesses are not currently required to file BOI reports while the injunction is in effect. - **No penalties for non-compliance**: Companies will not face fines or other penalties for failing to file during this time. - **Voluntary filing is allowed**: Businesses can still choose to file their BOI reports voluntarily, though it's not required. It's important to note that this ruling doesn't eliminate the Corporate Transparency Act or its BOI reporting requirements. The Department of Justice has [already filed an appeal](https://www.mofo.com/resources/insights/241206-government-appeals-nationwide-injunction-of-cta "null"), which could reinstate the requirements if the ruling is overturned. ### What should you do in light of this ruling? While the Texas injunction has paused the enforcement of BOI reporting, businesses should use this time to prepare for potential changes. Here's what you can do to stay ahead: - **Determine if you're subject to BOI reporting**: Take this time to confirm whether your business falls under the BOI filing requirements or qualifies for an exemption. - **Keep an eye on legal updates**: Litigation on this matter is far from over. Staying informed will help ensure you're ready to act if the injunction is overturned. - **Organize ownership information**: If filing becomes mandatory again, have your beneficial ownership details — such as names, addresses, and identification documents — organized to make compliance quicker and less stressful. - **Weigh the option of voluntary filing**: Filing your BOI report voluntarily remains an option. While not required, doing so could simplify things if enforcement resumes and provide peace of mind if your business complies proactively. - **Consult a professional**: If you're unsure about your obligations or how to proceed, consider seeking advice from a certified accountant or other financial professional. We don't know what will happen with BOI reporting moving forward. The best thing you can do is make sure you are prepared for when the courts release their final decision. ### Make sure you're ready for whatever comes next Whether or not the injunction holds, understanding your obligations and getting your financial data organized now will save you time, stress, and potential penalties down the road. Digits makes that easier. With real-time bookkeeping, always-accurate records, and interactive dashboards, you'll have the tools you need to stay on top of your financial data, so you're never caught off guard by shifting regulations. Start your free trial with Digits and get the visibility and control you need to move forward with confidence. ### FAQs on BOI reporting and the Texas injunction #### 1\. Are penalties retroactive if the injunction is lifted? No. Businesses will not face penalties for failing to file during the injunction period. If the injunction is lifted, enforcement will likely resume with a clear grace period for compliance. #### 2\. What happens to BOI reports that have already been submitted? Businesses that have voluntarily filed BOI reports are not required to take any further action at this time. These reports will remain in FinCEN's system for now. #### 3\. What information will I need to provide if I voluntarily file? You will need to first provide some information about your company, including: - Company's legal name and any trade name or DBA - Address - Jurisdiction it was formed in or first registered in (for foreign companies) - Taxpayer Identification Number (TIN). During reporting, you'll also be asked for information regarding all beneficial owners. For each individual, you'll have to provide: - Their legal name and birthdate - Their home address - An ID number, like a passport number or driver's license - An image of the ID used #### 4\. What is the Corporate Transparency Act (CTA), and why was it introduced? The Corporate Transparency Act (CTA) is a federal law passed in 2021 aimed at combating illicit financial activities like money laundering, fraud, and terrorist financing. #### 5\. Does the Texas injunction mean the CTA is unconstitutional? Not necessarily. The final outcome will depend on how higher courts, potentially even the Supreme Court, rule on the matter. ## A Startup's Guide to Burn Rates: Definitions, Formulas, and Management Tips URL: https://digits.com/blog/burn-rate/ December 10, 2024 Running a business can be tough, and the data reveals that nearly [70% of startups](https://whatsthebigdata.com/startup-failure-statistics/#google_vignette "null") run out of money before their third year in business. Would they have done things differently if they had known in advance? We can't know for sure, but one thing is certain: Understanding your company's burn rate, or the pace at which it spends its available cash, is crucial for financial stability. It's even more important for startups navigating the early stages of growth. Knowing how to calculate and manage this metric can help you boost your chance of survival and even help you thrive during uncertain times. Here's what you should know about burn rate, its importance in planning for your future, and how you can more easily access the data it represents. ### What is a burn rate? Burn rate is a finance term that describes how quickly a business uses up its available cash. It is typically expressed as a per-month rate, such as "ABC Paper Company has a $25,000 per month burn rate." The burn rate is just one financial trait that helps company leaders assess a business's health. While it is not the only concern, it signals the amount of time a company can continue operating without seeking additional funds or generating more income. Take our ABC Paper Company example. If it had just $200,000 in cash reserves, it could only keep operating for eight more months before running out of cash (if all other things remained the same). Looking at the burn rate helps companies set realistic expectations for the future and prioritize cash flow. Burn rate also tells investors about the risk of buying or investing in a company. ### Why tracking your burn rate is so important Financial experts consider burn rate an essential marker for assessing financial health. Depending on the situation, companies that use up cash reserves more quickly may be seen as less healthy than those that burn through cash less quickly. A high burn rate can be seen as a sign that the company doesn't have its finances under control. The [Bureau of Labor Statistics](https://www.bls.gov/bdm/us_age_naics_00_table7.txt "null") reports that nearly 20-25% of companies fail by their 2nd year. While there may be many reasons for this, [cash flow issues](https://advocacy.sba.gov/2018/05/01/why-do-businesses-close/ "null") top all startups' concerns. Other reasons to track the burn rate include the following. #### It helps companies plan Imagine not knowing how long your money will last before making major business decisions. That's the predicament a business leader would be placed in without knowing their burn rate. By simply guessing how long funds will last (instead of tracking and estimating), it's impossible to responsibly plan for the next few months or even a year. A company set to run out of cash in two months may take very different actions than one that won't run out of cash for two years. #### It communicates to investors New companies are especially concerned with burn rate because investors focus on it when deciding whether to invest. Burn rate is often referred to as part of the "startup runway," or the time a new venture has after it begins and before it runs out of cash. Investors know they are taking a risk when joining any new startup, but the burn rate may hint at how much of a risk they are taking. It's a key indicator telling them how long they have to make things profitable and turn a fledgling brand into a long-haul business. ### How to calculate your burn rates Two widely accepted burn rate calculations, net and gross, help companies understand more about their business and what's possible for the future. Each works uniquely and has its own formula. #### Net burn rate The net burn rate works using the concept of "net," which means expenses minus revenue. Like any other net calculation, such as a net paycheck (take-home pay), the net burn rate only considers what's left after the bills are paid. Here's the formula: **Net Burn Rate = (Total Monthly Expenses) - (Total Monthly Revenue)** To calculate it, simply: 1. Add up your total monthly expenses, including all cash outflows. Include payroll, rent, supplies, inventory, taxes, insurance, debt payments, etc. 2. Add up your total monthly revenue. This typically includes sales income, rentals, royalties, interest, and all other types of income. 3. Take your total monthly expenses and subtract your total monthly revenue from it. The result is your monthly net burn rate. In the case of ABC Paper Company, with $80,000 in monthly expenses and $60,000 in monthly revenue, the net burn rate would be $20,000 a month. A positive burn rate means the company loses $20,000 a month and has to access savings, credit, or liquid assets to make up the difference. _A positive net burn rate puts a company in the negative._ If the company in our example has a negative burn rate, it would mean it makes more money than it spends and doesn't lose money each month. #### Gross burn rate A gross burn rate looks only at expenses and doesn't factor revenue into the equation at all. The calculator is simple and looks like this: **Gross Burn Rate = (Total Monthly Operating Expenses)** You only need to add up all of the business's monthly expenses, including payroll, inventory, supplies, insurance, rent, and other costs of doing business. ABC Paper Company had $80,000 in monthly expenses, so its gross burn rate would be $80,000. Unlike a net burn rate, the number will always be positive, as businesses will always have monthly expenses. Income or revenue isn't considered in the formula. ### What is a good burn rate? Determining whether a company's burn rate is "good" or "bad" depends on many factors. The same rate for one business could be devastating for another. To get an accurate view, you would need to put the rate into context and also be sure you don't look at a gross burn rate compared to a net burn rate, as they mean very different things. A good burn rate allows the company to expand and meet important goals while avoiding the risk of going bankrupt. No company wants to run out of cash completely. The ideal burn rate balances growth opportunities with long-term stability. While there's no hard and fast rule about good burn rates, you can look at these factors to help you decide and apply them to your unique business goals: #### The stage of the business New startups, especially those in the very early stages, will naturally spend more money initially to set up the business, purchase real estate, and hire talent. After a point, however, a lower burn rate should be achieved to help the company outlast a 12-18-month runway and move into the next stage of financing and revenue. Growth-stage companies have gotten to a point where they need to scale quickly. This could happen if they sell out of product and need to ramp up production or expand into a new global market. Expect to see a higher burn rate for a time as the company manages this new growth spurt. Older companies that have found their footing can be considered mature companies. They should be profitable and make more money than they spend. The burn rate would be very low or (ideally) negative. A shift toward a positive burn rate may signal it's time to evaluate financial behaviors or reexamine new incoming investments. #### Industry norms It's difficult to compare the burn rates of companies from different industries, and that's why it's not generally done. A tech startup, for example, may have higher burn rates due to its large initial investments and the time it takes to become profitable. Compare that to a smaller, service-based company with very little research and development or overhead costs. Since they spend cash differently, they won't have similar standards for burn rate. #### Economy and funding environment A company's profitability may dip during economic uncertainty and bounce back when markets have steadied. In the same way, the burn rate can swing back and forth depending on external factors such as interest rates, a bull vs. bear market, and how investors feel about spending their money. For example, if investors have better access to capital, they may be more likely to invest, boosting liquidity in their chosen companies and bringing burn rates down. But if they're nervous about what's ahead, they can pull back their cash and leave companies to handle the higher expenses on their own (raising burn rates). ### Tips for managing your burn rate Reducing the burn rate is essential for extending your company's runway and ensuring long-term sustainability. Here are some effective strategies. #### Invest in sales and customer retention Spending money for more marketing or sales campaigns may seem counterintuitive when trying to cut costs. However, investing in the right strategies can help you get ahead, even in difficult times. Look for ways to use what you have, whether it's sales software or a new data tool. To invest in people, consider upskilling your current team to help them succeed without hiring additional help. This will reduce interviewing and onboarding costs while keeping your best team members to grow with the company. Also, talk to your customers about how to do better. You can often find trends in service or satisfaction that will clue you into your next move. By delighting your existing customer base, you can boost sales with the audience you already have. To understand why strategic spending can be beneficial even during cost-cutting, check out our guide to the Rule of 40 for a more nuanced take on investing in growth. #### Keep your data up-to-date Since a burn rate can only be calculated with the best data, you should always know your expenses and revenue numbers. Previously, this required an open line with your bookkeeper or accountant. Now, with solutions like [Digits](https://digits.com/ "null"), it's as simple as opening a dashboard and seeing all of your most important financial metrics laid out before you. Because Digits syncs with your credit cards and bank accounts, you won't have to manually update transactions. View your real numbers right away — no waiting six weeks for your bookkeeper to get you the latest data — so you're always prepared with an accurate burn rate. #### Reexamine your monthly spends In addition to having the most recent data about your spending and income, set aside time to review all the line item details. With the transactions imported into Digits, you can see expenses for a particular category or vendor or even search for specific payments to examine further. Going over everything helps you plan for cost reductions and alerts you to fraud or billing errors. If you see something that doesn't appear correct, you can follow up and prevent additional spending for things you didn't authorize or plan for. This is also the best time to set strict budget limits on things that can be capped. While some expenses, like property taxes, are out of your hands, you might still shop around for insurance or vendor services. (And some vendors would rather cut you a discount than lose your business to a competitor. Don't be afraid to negotiate the price.) #### Temporarily freeze hiring Downsizing is a serious decision with consequences for your employees. If possible, consider how a hiring freeze might accomplish a similar goal. Instead of releasing workers, just hold off on expanding teams and focus on placing internal candidates for valuable roles. You can also be creative with how you staff for highly-skilled positions, using consultants or freelancers when you don't need a full-time employee. If your employees are willing, move to more performance bonuses and incentives based on results to get the best ROI for your wage structure. ### Financial data only helps if it's accurate and current Data is more valuable than ever in today's business climate. By collecting it often and ensuring it's of the highest quality, you can gain more meaningful insights about your business (and its burn rate). Digits automates your bookkeeping by gathering and categorizing your spending and earnings information all in one AI-native platform. Digits can then create robust [dashboards](https://digits.com/product/dashboards/ "null") and reports that offer incredible insights into your spending, revenue, and key financial KPIs. While just one aspect of a healthy business, a lower burn rate may be the key to surviving and thriving, no matter your industry. [Get started for free today](http://my.digits.com/join "null")and see how Digits' automated accounting can help you not just keep on top of your finances but also learn from them. ## Business Tax Deadlines for the 2024 Tax Year: A Complete Guide URL: https://digits.com/blog/business-tax-deadline-guide-for-2025/ December 21, 2024 Have you missed a tax deadline you didn't even know about? You're not alone. Even experienced founders get tripped up by the maze of tax filing requirements — especially since different business structures follow completely different schedules. And unfortunately, failure to follow these deadlines can lead to stiff penalties even if you haven't earned your first $1 of revenue yet. To help you get ahead of your business tax filings, we've mapped out every critical deadline for the 2024 tax year (most of which you'll tackle in 2025), from federal to state requirements. Whether you're running a bustling startup or still getting off the ground, this guide will help you stay compliant, avoid penalties from the IRS, and keep your focus where it belongs: on growing your business. ### 2024 federal tax deadlines by entity type #### Sole proprietorship and single-member LLC tax deadlines Sole proprietors or single-member LLC owners don't file a separate business tax return. All your business activity goes directly on your personal tax return — that's why they're called "disregarded entities." There are no separate deadlines to track and no extra forms to file. Just maintain clear business records and report everything on your regular 1040. Here are the dates you'll need to know about: - **April 15, 2025**: File your 2024 individual income tax return (Form 1040) and report business income on Schedule C. You must pay any remaining balance due at this time (even if you are opting for an extension). - **April 15, 2025:** First-quarter estimated tax payment due. - **June 16, 2025**: Second-quarter estimated tax payment due. - **September 15, 2025**: Third-quarter estimated tax payment due. - **October 15, 2025**: Final deadline to file your 2024 return if you filed for an extension by April 15. If there is a remaining balance, it must be paid at this time, with interest. #### Partnership and multi-member LLC tax deadlines Partnerships or multi-member LLCs need to file separate business tax returns. These returns are necessary because they generate key documents — including Schedule K1, K2, and K3 forms — that you'll need to complete your personal tax return. Here are the important dates you'll need to track: - **March 17, 2025**: File your 2024 partnership tax return (Form 1065) and provide Schedule K-1s to partners. If necessary, you can request a filing extension at this time. - **September 15, 2025**: Extended deadline for 2024 partnership returns. - **April 15, 2025, or October 15, 2025**: Partners report their share of income on their individual returns. #### S corporation tax deadlines - **March 17, 2025**: File your 2024 partnership tax return (Form 1065) and provide Schedule K-1s to partners. If you need it, you can request a filing extension at this time. - **September 15, 2025**: Extended deadline for 2024 S corporation returns. - **April 15, 2025, or October 15, 2025**: Shareholders report their share of income on their individual returns. #### C corporation tax deadlines - **April 15, 2025**: File your 2024 corporate income tax return (Form 1120) and pay any taxes owed. If necessary, an extension to file can be made at this time. - **October 15, 2025**: Extended deadline for 2024 corporate returns. Any remaining balance must be paid, with interest, at this time. The IRS requires all registered corporations to file annual returns — even if you had zero activity or profit in 2024. For C corps, that's Form 1120. For S corps, it's Form 1120S. While some states offer exemptions or simplified filing for inactive companies, federal returns aren't generally optional. This is especially critical if you have any foreign connections (like overseas owners or subsidiaries) — penalties for missing these filings can be quite hefty, even for inactive companies. ### Understanding tax extensions A tax extension gives you some additional time to file your business return but not extra time to pay any taxes owed. Quite often, business owners are under the impression that they can "kick the can" 6 months to make any payments. However, this comes at a cost. Extensions are only additional time to file the tax return, and any payment not made will be subject to penalties and interest. For example, filing Form 7004 gives your business an additional six months to file, pushing deadlines from March 17 or April 15 to September 15 or October 15, 2025. However, any owed taxes are still due on April 15, 2025. If you owe taxes and don't pay by this date, you'll face interest and penalties. It's crucial to estimate and pay any taxes due when you request an extension. **_Example_**: If your C corporation cannot file its 2024 return by April 15, 2025, you can request an extension, but you must still pay any estimated taxes owed by April 15 to avoid penalties. If you cannot calculate how much you owe, you'll need to estimate and pay to the best of your ability. Even if you're wrong, paying something will reduce any interest and penalties on the remaining balance. ### Quarterly estimated tax payments You'll need to make quarterly estimated tax payments if you are going to owe more than $1,000 in taxes. This is especially important for sole proprietors, partnerships, and S corp owners — your business profits flow to your personal tax return without any automatic tax withholding. Missing these quarterly payments means you'll face penalties, so plan ahead and set aside funds regularly. For 2025, the deadlines are: - **April 15, 2025**: First-quarter payment. - **June 16, 2025**: Second-quarter payment. - **September 15, 2025**: Third-quarter payment. - **January 15, 2026**: Fourth-quarter payment. Timely payments are essential to avoid underpayment penalties, which are essentially interest that the IRS will add on. ### Payroll tax deadlines If you have employees, you're responsible for payroll taxes in addition to income taxes. For the most part, your payroll company will handle these filings, but as a business owner, you and you alone are liable for any penalties or failures to pay the proper payroll taxes. Key deadlines include: - **Monthly deposits**: Due by the 15th of the following month if your total payroll taxes are less than $50,000 annually. - **Semi-weekly deposits**: Due on Wednesdays and Fridays for businesses with more than $50,000 in payroll taxes. - **January 31, 2025**: File Form 941 for the fourth quarter of 2024 and issue W-2 forms to employees. It is a good idea to spot-check the payroll company's filings, as errors aren't uncommon. ### State tax deadlines State tax deadlines don't always match federal ones — you'll need to check your specific location. While most states follow federal guidelines, there are key differences. For example, some states let partnerships and S-corps file by April 15th instead of the federal March 15th deadline. - **State Income Tax**: Generally due by April 15, 2025, but check your state's requirements. - **State Franchise Tax**: Deadlines vary, with some states requiring quarterly payments and others an annual payment. As an example, Texas is a franchise tax state, so tax returns are due in May of each year. ### Other important filing deadlines you should know #### Form 1099-NEC and 1099-MISC If you paid contractors $600 or more in 2024, file forms 1099-NEC and 1099-MISC with the IRS and send copies to your contractors by **January 31, 2025**. As a best practice, get your contractor's full tax information before sending their first payment. Don't wait until January — some contractors become hard to reach when you need their details for 1099 forms. A simple up-front process saves you from a last-minute scramble and potential reporting headaches. #### Form 5500 If you offer employees a 401(k) or some other retirement plan, you'll need Form 5500 filed by **July 31, 2025** — though you can extend this to **October 15, 2025**. While your plan administrator typically handles this filing, don't assume it's covered. Touch base with your administrator early in the year to confirm they're handling Form 5500. We've seen this deadline slip through the cracks even with experienced providers. #### Delaware Franchise Tax According to the [Delaware Division of Revenue](https://revenue.delaware.gov/business-tax-forms/franchise-taxes/ "null"), any corporation incorporated in Delaware must file an Annual Franchise Tax Report and pay the Franchise Tax. **Your annual Franchise tax report is due March 1st, 2024.** Missing this deadline results in a $200 late penalty plus interest, calculated at 1.5% monthly. Delaware's franchise tax applies to all corporations regardless of their physical location or revenue levels, making it crucial for both local and out-of-state companies to stay on top of this requirement. You must still file even if you didn't earn much (or anything at all), and even if you are a brand-new business that was just incorporated. Depending on how you calculate your taxes, you'll likely [pay a minimum of $175 - $400.](https://revenue.delaware.gov/business-tax-forms/franchise-taxes/ "null") [Delaware requires](https://revenue.delaware.gov/business-tax-forms/franchise-taxes/ "null") those owing $5,000 or more to pay estimated quarterly taxes according to a schedule of 40% due June 1, 20% due by September 1, 20% due by December 1, and the remainder due March 1. [_More on Delaware Franchise taxes here_](/blog/how-to-file-delaware-franchise-tax/ "null") ### Make sure your taxes are being filed correctly The tax code is 80,000 pages and growing — with penalties lurking around every missed deadline. Even experienced business owners struggle to track all their filing requirements, and it's easy to see why. Don't leave your tax compliance to chance. Schedule a [call with Digits](https://digits.com/demo/ "null") today to map out your 2024-2025 tax strategy and keep your business penalty-free. Our team of tax experts will help you navigate deadlines, maximize deductions, and stay ahead of filing requirements. ## C-Corp vs S-Corp vs LLC URL: https://digits.com/blog/c-corp-vs-s-corp-vs-llc/ February 6, 2025 ### C Corp vs. S Corp vs. LLC: Which is the Best For Your Startup Not sure about the best business structure for your new business? In this guide, we break down the key differences between C corps, S corps, and LLCs in plain English to help you figure out which suits your startup the best. ### TL;DR: C corp vs. S corp vs. LLC Don't have time to read the whole thing? No problem — here's a quick cheat sheet: **C corp** **S corp** **LLC** **Tax implications** Taxed twice: at the corporate level and on shareholders’ personal tax returns. Offers pass-through taxation, with corporate income, losses, credits, and deductions passed through to shareholders. Can be taxed as a sole proprietorship or as a partnership. All profits are subject to self-employment taxes. **Liability protection** Offers strong asset protection. Shareholders are not liable for lawsuits or business debts. Offers strong asset protection. Shareholders are not liable for lawsuits or business debts. Offers strong asset protection. Members are not liable for lawsuits or business debts. **Ownership structure** Can have an unlimited number of shareholders. Limited to 100 shareholders. Can have an unlimited number of members. **Compliance and administration** Requires a board of directors, regular meetings, and corporate bylaws. Requires a board of directors, regular meetings, and corporate bylaws. Easier to manage, with fewer reporting requirements. **Growth goals** Ideal for raising capital and issuing stock. Moderate growth potential due to ownership restrictions. Limited growth potential due to the inability to issue stock. **Profit distribution** Allows you to reinvest profits or distribute them as dividends. Profits are distributed based on ownership shares. Members decide how profits will be distributed. **Best for:** Businesses looking for venture capital or planning to go public Medium-sized businesses Small businesses ### What is a C corp? A C corp (or a C corporation) is a business structure where the owners or shareholders are taxed separately from the business entity. It's the most common type of corporation due to its built-in liability protection and its attractiveness to investors. A C corp is basically a fundraising magnet, which makes it the go-to choice for startups looking to raise venture capital. #### C corp pros and cons **Pros:** - Limited personal liability for owners and shareholders - The ability to issue and sell shares of stock to acquire capital - Ease of transferring ownership by selling stock **Cons:** - Higher legal fees compared to other business structures - Subject to greater legal regulation - Profits are taxed twice (first when filing income taxes and then again when distributing dividends) #### How to form a C corp Looking to form a C corp? Follow these steps: #### 1\. Decide on a business name The first step to forming a C corp involves deciding on a name for your business. The name will need to be unique in your state of incorporation — in other words, you can't choose a name that's already used by another business entity in that state. Here, you'll want to come up with a few different names. This will ensure you have a few options in case any of your name ideas have already been taken. #### 2\. Designate a registered agent A registered agent is an individual or a company that's responsible for receiving legal notices for your business. They need to be located in the same state your business is incorporated in. You can find a registered agent online or by visiting your Secretary of State's website. There's also the option to designate yourself as your company's registered agent. If you're the type of person who enjoys receiving mail from the government, that is. #### 3\. Draft and file Articles of Incorporation The Articles of Incorporation include all the essential information about your corporation, including the business name, registered agent, a description of the business' purpose, and the names and addresses of the directors. Think of it as your company's birth certificate. You can usually find a sample Articles of Incorporation document on your Secretary of State's website. Once you draft the document, you'll need to file it with your Secretary of State's office. #### 4\. Appoint directors Every C corporation needs to have a board of directors who are responsible for daily operations. The board sets corporate policies, approves major decisions, appoints officers (e.g., CFO, CMO, etc.), and issues stock. Some states also require a minimum number of board meetings. However, a board can decide to have additional meetings if needed. The board of directors is usually elected by shareholders. This is done by vote at the annual shareholder meeting, with directors being elected by a majority vote. If your corporation doesn't have shareholders, you can appoint the board of directors yourself as the CEO or President of the corporation. The minimum number of directors for a corporation is set by state laws — usually, the requirement is to have at least one director. #### 5\. Issue stock Issuing stock is necessary when founding a C corp. It needs to have at least one shareholder in order to be a valid corporation. A C corp can also issue shares of stock to raise capital. These shares are distributed to shareholders and act as evidence of their ownership in the company. C corps can issue two types of stock: common stock and preferred stock. Common stakeholders have the ability to vote on the future of the corporation, but they receive dividends after preferred stakeholders (who don't have voting rights). #### 6\. Apply for licenses and permits Depending on the nature of your business and the state in which it's incorporated, you'll likely need to apply for one or more licenses or permits. For example, if you plan on selling physical products in the state of New York, you'll need to apply for a sales tax permit from the New York State Department of Taxation and Finance. Once you've obtained the required permits, you'll be able to start doing business. ### What is an S corp? An S corp (or an S corporation) is a type of business structure that passes business income, losses, credits, and deductions to its shareholders. The shareholders then report these items on their personal tax returns. Think of it as a C corp on a tax diet — there's no double taxation (like with a C corp), so you end up with more money in your pocket. #### S corp pros and cons **Pros:** - Protection for shareholders' personal assets - Pass-through taxation - Tax benefits (shareholders can draw wages or receive dividend distributions) **Cons:** - Only allowed to issue one class of stock - Limited to 100 shareholders - Taxable fringe benefits #### How to form an S corp Follow these steps to form an S corp: #### 1\. Choose a business name Start by choosing a name for your business. It will need to be a unique name that's not used by any other business entity in your state of incorporation. You can use the business registry on your Secretary of State's website to check if a specific name is taken or not. #### 2\. Decide on a registered agent When forming an S corp, you'll need to designate a registered agent who will be responsible for receiving legal notices for your business. This can be any legal entity — including an individual or a company. You can usually find a list of reputable registered agents on your Secretary of State's website. You can also designate yourself as the registered agent for your company. #### 3\. File Articles of Incorporation Articles of Incorporation is an essential document that outlines your company's name, registered agent, type and purpose, and management structure. You can usually find a sample Articles of Incorporation document on your Secretary of State's website. Use it as a guide to draft your own Articles of Incorporation. #### 4\. Issue stock You need to issue stock when founding an S corp in order to define ownership. An S corp can issue stock to up to 100 shareholders. Unlike C corps, an S corp can only issue one type of stock: common stock (a type of stock that grants shareholders voting rights). Issuing preferred stock (a type of stock that gives shareholders priority when receiving dividends but doesn't grant voting rights) isn't allowed for S corps. Additionally, S corp shareholders must be US citizens or permanent residents. #### 5\. Elect a board of directors An S corp needs to have at least one director. This can be the founder or another person. An S corporation can also have multiple directors who become their board. The board of directors will be responsible for the company's daily operations, such as setting corporate policies, approving major decisions, and appointing officers. #### 6\. S corp election To gain S corp status, you'll need to file Form 2553 ("Election by a Small Business Corporation") with the IRS. This is a form through which you elect your business to be an S corp. The form will need to be signed by all of your company's shareholders. #### 7\. Apply for business licenses Before you can start doing business, you'll need to apply for the appropriate licenses and permits required by your state of incorporation. Once you receive the necessary licenses, you'll be able to start generating new customers and revenue for your business. For example, a CPA firm in the state of California would need a Certified Public Accountant (CPA) license from the California Board of Accountancy before being ready to do business. ### What is an LLC? An LLC (Limited Liability Company) is a business structure that provides its owners with limited liability and offers pass-through taxation. Owners of an LLC are called "members" — these can be individuals, corporations, or other LLCs. #### LLC pros and cons **Pros:** - **Personal liability protection** - No double taxation - Ease of formation **Cons:** - Inability to issue stock - Self-employment taxes - Potentially complicated ownership transfer #### How to form an LLC #### 1\. Decide on your business's name The first step to forming an LLC involves deciding on a name for your business. To be approved, the name will need to be unique in your state of incorporation. In other words, there can't be an existing business entity with the same name in your state. #### 2\. Select a registered agent Your LLC needs to have a registered agent who will receive legal notices related to your business. This can be an individual or a company. You can also act as your own registered agent. #### 3\. Prepare an operating agreement Your LLC needs to have an operating agreement that outlines how the company will be operated, including how ownership, labor, and profits are going to be distributed. It should also include information about which members are responsible for which duties within the company. It's not legally required to have an attorney draft your operating agreement, but it's recommended for more complex agreements. You can also find plenty of operating agreement templates online. All LLC members need to sign the operating agreement. Keep in mind that the operating agreement is an internal document — it doesn't need to be filed with the state. #### 4\. File Articles of Organization The Articles of Organization outline the name, principal location, and purpose of a business. They also include the registered agent's name and address and denote whether the LLC will be managed by members or a manager. Once you draft your Articles of Organization document, file it with your Secretary of State's office. #### 5\. Obtain licenses and permits Finally, you'll need to file for and obtain any licenses or permits necessary for running your company. For example, a real estate agency in the state of Florida is required to obtain a Florida Real Estate Broker license before it can start doing business. Once these are obtained, you'll be ready to start doing business. ### C corp vs. S corp vs. LLC: How to pick the right one for you Here are the main factors to consider when deciding between a C corp, an S corp, and an LLC: #### Tax implications All three business structures come with their own separate [tax implications](/blog/tax-benefits-for-startups/). C corps are taxed twice: first at the corporate level and then on the shareholders' personal tax returns. S corps offer pass-through taxation, with corporate income, losses, credits, and deductions passed through to shareholders and reported on their personal tax returns. They offer tax savings due to income being taxed only once. LLCs can be taxed as a sole proprietorship (in the case of single-member LLCs) or as a partnership (in the case of multi-member LLCs). Additionally, all profits from an LLC are subject to self-employment taxes. **LLCs offer the simplest option for handling taxes. But opting for a C corp or an S corp can help you lower self-employment taxes and make it easier to reinvest profits.** #### Liability protection C corps and S corps offer protection for shareholders' personal assets. But they require strict legal compliance (such as holding annual meetings and keeping corporate minutes) for liability protection to apply. LLCs also protect members' personal assets. The key difference is that they don't require the same formal requirements for liability protection. **C corps, S corps, and LLCs all help protect personal assets, but maintaining liability protection is much easier with an LLC.** #### Ownership structure C corps can have an unlimited number of shareholders, while S corps are limited to a total of 100 shareholders. LLCs can have an unlimited number of members. **C corps are ideal for businesses that plan on seeking external funding or going public at some point. However, LLCs offer more ownership flexibility, making them perfect for businesses that don't plan on relying on venture capital.** #### Compliance and administration C corps and S corps require a board of directors, regular meetings, and corporate bylaws. **In comparison, LLCs are much easier to manage and have fewer reporting requirements.** #### Growth goals **C corps offer the most benefits if you're looking to scale quickly or raise venture capital because they don't have a limit on the number of shareholders and are able to issue both common and preferred stock.** **They also allow you to offer stock options, which can help attract top talent.** S corps are less ideal for businesses looking to raise capital since they're limited to 100 shareholders. Since LLCs aren't able to issue stock, they're not suitable for businesses looking to raise capital. #### Profit distribution C corps allow you to reinvest profits or distribute them as dividends. In an S corp, profits get distributed based on ownership shares. **When it comes to LLCs, members decide how profits are distributed. Because of this, LLCs offer the most flexibility when it comes to profit distribution.** ### Build your business on a smarter financial foundation Choosing the right business structure is a big decision, but it's just the beginning. Once you've incorporated, you'll need a reliable way to manage your finances, keep your books accurate, and stay on top of your numbers as you grow. [Digits](https://digits.com/) is an AI-native accounting platform designed to help you automate your bookkeeping, track key metrics like burn rate and runway, and get real-time financial insights, without spreadsheets or manual work. [Start your free trial today](#interstitial) and see how smarter accounting can support every stage of your startup journey. ## Cash vs. Accrual Accounting: Make the Right Choice for Your Startup URL: https://digits.com/blog/cash-vs-accrual-accounting-startups/ January 31, 2024 Let's keep it real. You founded a startup to build exciting products — not to rack your brain over the differences between the two main accounting methods: cash and accrual. But it's a pretty important part of doing business, so here we are. The main difference between cash and accrual accounting is _when_ you document expenses and revenue. Cash-basis accounting records revenue and expenses when cash is deposited or dispensed from your bank account. On the other hand, accrual-based accounting records revenue and expenses as soon as your business earns or incurs them. In this guide, we'll explain these two accounting methods and help you decide which one is better for your startup. ### What is cash-basis accounting? Under cash-basis accounting, your business records transactions when you receive or pay out cash. This means you'll recognize income only when the payment lands in your bank account. The same goes for expenses, which you'll record when you pay a bill, invoice, etc. As such, cash accounting is a straightforward method that appeals to freelancers and small business owners because it doesn't require complicated calculations. But cash accounting isn't without issues because it might not accurately reflect your financial health. For example, if you sold products or provided services that haven't been paid yet, your books won't reflect these earnings. So, your business might seem in worse shape than it is. Similarly, receiving a large sum could make it look like your business is doing great. But at the same time, unpaid bills might eat into a good chunk of this revenue. #### What does cash-basis accounting look like in real life? Let's say you are a startup that provides video editing services. In September, you wrap up a big client project and invoice them $10,000, with a 30-day payment term. The client makes the payment on October 15th. Using cash accounting, you would record that $10,000 as income in October, even though you earned the money in September. Expense-wise, imagine you rent special video editing equipment for a one-off project. The rental company invoices you $2,000 in September. You pay the bill on October 10th. With the cash method, you wouldn't record the $2,000 expense in September, even though you received the invoice that month. Instead, you'd record the expense in October, when you made the payment. #### When is cash accounting best for startups? The cash accounting method is a good option for startups that operate on pay-as-you-go models. It provides a straightforward view of cash on hand, so it works well if you have limited transactions. However, not all business can use cash-basis accounting — learn why in the next section. ### What is accrual-basis accounting? Accrual-basis accounting records income and expenses as you earn or incur them, regardless of when money changes hands. It uses accounts payable (funds you owe to other businesses) and [accounts receivable](https://digits.com/blog/accounts-receivable/ "null") (funds other businesses owe to you) to create a more accurate picture of your financial health. However, this method is more complex because it requires careful record-keeping. A key aspect of accrual-basis accounting is the matching principle. This means recording expenses in the same period as the revenue they generated. For example, if you open a pop-up shop in September, you should record both the shop-related expenses and revenues in this month. #### What does accrual-basis accounting look like in real life? Consider a tech startup that hired a freelance developer in October to work on a new feature. The developer sends an invoice totaling $3,000. Even if the startup doesn't pay that invoice until November, they'd still document the $3,000 expense in October — because that's when the freelancer did the work and the business incurred the expense. Now, let's say that the same startup offers a subscription to a podcast recording platform. Customers can choose between monthly and yearly billing. If a customer signs up for a yearly subscription in December and agrees to pay $1,200 for the year, the company won't record the entire amount in December when the customer pays for their plan. Instead, they'd spread that income over 12 months. So, every month, the startup would recognize $100 in revenue, reflecting the service period to the customer. #### What businesses are required to use accrual accounting? In the US, some businesses are required to use accrual-basis accounting. If you check any of these boxes, you'll need to use the accrual method: - Keep inventory (e.g., an e-commerce business) - Offer credit to your customers (e.g., a hardware store that provides credit to construction companies) - Exceed the $30 million limit in annual gross receipts averaged over the past three years #### When is accrual accounting best for startups? If you aren't required to use accrual-basis accounting based on the criteria above, it's still the best choice for many startups. (And, it's the best choice if you anticipating your businesses requiring it in the future.) Accrual method accounting makes strategic planning easier. It provides a long-term perspective by including receivables and payables. However, be careful with cash flow. Accrual accounting might depict a rosy financial picture with high income that you are yet to receive. And this can be misleading if cash flow is low. Opt for accrual accounting if your business growth goals are ambitious — even if your company is just getting off the ground. Sooner or later, you'll need to implement the accrual method. And it's easier to do so when your business is less complex. ### How to pick the right accounting method for your startup Getting your startup off the ground is challenging enough. By selecting the right accounting method, you'll have one less thing to worry about. Here's what to consider when choosing between cash vs. accrual accounting. #### 1\. Growth plans What are your goals for business growth? If you're a small business that plans to stay small, the simplicity of cash accounting is a good choice. But if you're aiming for quick growth over a short period of time, the accrual method will better support these goals. Lenders and investors prefer it (more on that below), and it's a legal requirement if you go over the $30 million annual gross receipt threshold. Any startup that aims to become a publicly traded company should also consider implementing the accrual method. All public companies in the US must follow the generally accepted accounting principles (GAAP). It's the standard for financial reporting and requires accrual-basis accounting. #### 2\. Existing resources Do you have the accounting resources to support accrual accounting? If not, opt for the cash method. It helps keep simple businesses lean and manageable because it's easy to track. Once you have more resources, [hire an accountant](https://digits.com/blog/when-to-hire-an-accountant/ "null") and implement an accounting platform that will make using the accrual method easier. #### 3\. Business model How does your business operate? The answer to this question impacts whether to go with cash or accrual accounting. If your business operates on a pay-as-you-go model — meaning that customers immediately pay for services — the cash method makes sense. It's simple and saves time because you don't need to track receivables and payables. But if your company has a more complex revenue stream, the accrual method is the way to go. For example, using the accrual method to match revenue with related expenses gives SaaS startup founders a better sense of the business's profitability. #### 4\. Lender and investor expectations Unless your startup is bootstrapped, you'll bring lenders or investors on board. Typically, they require accrual-basis accounting because it reflects actual financial activities, recording income when it's earned and expenses when they're incurred. Depending on when payments come in, cash accounting can make your financials seem better or worse than they are in reality. So, it's not hard to imagine why banks or investors aren't fans of this method. #### 5\. Taxes Cash-basis accounting has tax considerations. Since you only record income and expenses when cash changes hands, tax liabilities can end up being deferred. In other words, you'll avoid paying taxes on income you haven't collected yet. However, the accrual method makes tax planning easier since it allows you to more precisely predict how much you'll owe in taxes come April. ### Why not choose both cash and accrual accounting? While cash vs. accrual accounting might seem like an either-or scenario, it's possible to use both. With an AI-native accounting platform like [Digits](https://digits.com/product/bookkeeping/ "null"), it's possible to keep books on an accrual basis while still getting a cash-focused overview of your finances. For example, you can access cash-related metrics such as gross income and net burn reports. Even better, Digits reports use visual elements and real-time data to help you understand your finances — without getting a headache from staring at Excel models or PDFs. (Don't worry, you can still export data to Excel.) ### How to make the switch from cash to accrual accounting Is your business ready to go from cash to accrual? Then, follow the steps below to get started. #### Understand the implications Switching from cash to accrual-basis accounting will make it easier to secure loans and investors. But there are also important implications for how you do taxes. Specifically, you'll recognize income and expenses when you earn it. As you make the switch, one major area of concern is the matching principle. According to [Adam Olsen](https://youtu.be/7VQh9Sku9NQ?t=546 "null"), the Accounting Advisory Services Practice Leader at consulting firm Embark, your main objective is to resolve differences in accounting records between the timing of actual cash payments and receipts versus when the actual exchange of goods and services occurred. Olsen explains, "So, you need to get in line with the matching principle, where you match income and expenses within the same period in which they occurred. Completeness and cutoff principles become major players." The completeness principle requires that all financial transactions that should be recorded are included in the accounting records. For example, all sales and expenses up to the reporting date must be accounted for. The cutoff principle states that businesses must record transactions in the correct accounting period. For example, any revenue earned in December but received in January should still be recorded in December. #### File the appropriate paperwork Once you decide to switch, file [Form 3115](https://www.irs.gov/forms-pubs/about-form-3115 "null") (known as the Application for Change in Accounting Method) with the IRS. There are two ways to do so: - **Automatic:** The most common one. Prepare two copies of the form and attach the original copy to the federal income tax return for the year you made the change. The other copy should be filed with the IRS National Office anytime between the start of the year of the change and the date you file your federal income tax return for that year. - **Non-automatic:** It's similar to automatic but only available to businesses that meet the [eligibility requirements](https://www.irs.gov/pub/irs-pdf/i3115.pdf "null"). There's also a fee involved. #### Get the right accounting solution for the job The accrual method is easier with the right accounting platform. Unfortunately, businesses often get stuck with accounting software that defaults to manual data entry and outdated tabular interfaces. So it's no surprise that the industry standard is a close of two to three weeks — an eternity when you're getting your business off the ground. That's why more startups are turning to Digits, the first AI-native accounting platform. With Digits, you can close your books in days, not weeks, and get timely, actionable insights when you actually need them. This speed is made possible by Digits' [Autonomous General Ledger®,](https://digits.com/blog/agl-announcement/ "null") built on double-entry accounting and trained on over $875 billion in financial activity across 170 million transactions. It automatically categorizes and reconciles the vast majority of your transactions in real-time, delivering clean books without manual effort. Plus, if you work with a CPA, they can collaborate directly on the platform, so your books are always accurate, auditable, and up to date. ### Take control of your startup's finances Digits is the first AI-native accounting platform designed to take the busy work out of bookkeeping and give you a clearer view of your financial health. Whether you're looking to close your books faster, track KPIs in real-time, or streamline bill payments and invoicing, Digits has you covered. With Digits, you get access to a full suite of AI tools, including: - [AI Bookkeeping](https://digits.com/product/bookkeeping/ "null") for real-time categorization and reconciliation - [AI Financials](https://digits.com/product/financials/ "null") for dynamic, always-up-to-date reporting - [AI Insights & Dashboards](https://digits.com/product/dashboards/ "null") for tracking key metrics like burn rate and cash flow - [AI Invoicing](https://digits.com/product/invoicing/ "null") to help you get paid faster - [AI Bill Pay](https://digits.com/product/bill-pay/ "null") to automate your monthly bill [Get started for free today](https://my.digits.com/join "null") and experience what modern AI accounting should look like. ### Cash vs. accrual accounting FAQs #### Which is better, cash or accrual? Accrual-basis accounting is a better option for startups and larger businesses because it provides a more complete and accurate picture of their finances. Lenders and investors also typically prefer (and often require) this accounting method. Cash-basis accounting is a good fit for very small businesses with limited transactions. #### What is an example of cash and accrual? If your business gets a $2,000 invoice from a vendor in September, accrual-basis accounting will record the expense in this month. Under cash-basis accounting, you will record it only when you pay it, which could be in October or November, depending on the payment terms. #### Do most companies use cash or accrual? The majority of companies use accrual-basis accounting instead of cash. It makes it easier to scale your operations and is preferred by banks and investors. ## Deploying Llama 3.2 - A Breeze with vLLM and Kubernetes URL: https://digits.com/blog/deploying-llama-3-2-a-breeze-with-vllm-and-kubernetes/ October 3, 2024 Hosting large language models (LLMs) like Llama 3.2 presents unique challenges, requiring specialized infrastructure and deployment strategies. This is where **vLLM** comes in, a cutting-edge framework designed to optimize LLM deployment on Kubernetes, the industry-leading container orchestration platform. This blog post demonstrates a practical guide to deploying Llama 3.2 on Google Cloud's GKE platform using vLLM, taking advantage of its powerful features like speculative decoding for enhanced performance. While we focus on Google Cloud, the underlying principles and concepts can be easily adapted for deployment on Amazon Web Services (AWS) and other cloud platforms. Sharing this knowledge is crucial, as the complexity of hosting LLMs often presents a hurdle for developers and researchers. By showcasing a step-by-step process, we aim to empower you to unleash the potential of LLMs in your own projects. Want to deploy your Llama 3.2 model with ease? Look no further than vLLM, a launch partner for Llama versions, and Kubernetes, a powerful container orchestration platform. vLLM offers state-of-the-art deployment optimization for LLMs, including speculative decoding for improved performance. **New to LLMs and Llama?** Check out our blog post on [Llama 3.2 - A Game Changer for Smaller, Smarter, and More Responsible LLMs](/blog/llama-3-2-a-game-changer-for-smaller-llms/). Here's how you can deploy Llama 3.2 on Google Cloud's GKE platform using vLLM: #### Install Prerequisites If you haven't already, install the Google Cloud SDK and kubectl using the following commands: ``` sudo apt-get install google-cloud-cli-gke-gcloud-auth-plugin sudo apt-get install kubectl ``` We follow Google Cloud's Recommendations\*\*: Google Cloud recommends using their Gemma model for Llama 3.2 deployment. #### Set up Environment Variables Before creating your cluster, you need to set the following environment variables: ``` export PROJECT_ID= export CLUSTER_NAME= export REGION= export INSTANCE_TYPE=g2-standard-8 export NUM_NODES=1 export ZONE=${REGION}-a export HF_TOKEN= ``` Click here to obtain a Hugging Face token: [Hugging Face](https://huggingface.co/settings/tokens) #### Create Your Kubernetes Cluster Now you can create your cluster by running the Google Cloud commands below. ``` gcloud container clusters create ${CLUSTER_NAME} \ --project=${PROJECT_ID} \ --region=${REGION} \ --workload-pool=${PROJECT_ID}.svc.id.goog \ --release-channel=rapid \ --num-nodes=${NUM_NODES} ``` #### Create Your GPU Nodes Here we are using NVIDIA's L4 instances on Google Cloud. The instances are perfect for LLM deployments. ``` gcloud container node-pools create gpupool \ --accelerator type=nvidia-l4,count=1,gpu-driver-version=latest \ --project=${PROJECT_ID} \ --location=${REGION} \ --node-locations=${ZONE} \ --cluster=${CLUSTER_NAME} \ --machine-type=${INSTANCE_TYPE} \ --num-nodes=${NUM_NODES} ``` #### Set up Your Kubernetes Credentials You can now set up your Kubernetes credentials using the following command: ``` gcloud container clusters get-credentials \ ${CLUSTER_NAME} \ --location=${REGION} \ --project=${PROJECT_ID} ``` #### Create Your Llama3.2 specific Kubernetes Deployment and Service Copy and paste the following code block in a file called _vllm-llama3.2-3b-it.yml._ We'll dive into the relevant details in the following step. ``` apiVersion: apps/v1 kind: Deployment metadata: name: vllm-llama3-2-deployment spec: replicas: 1 selector: matchLabels: app: llama3-2-server template: metadata: labels: app: llama3-2-server ai.gke.io/model: llama3.2-3b-it ai.gke.io/inference-server: vllm examples.ai.gke.io/source: user-guide spec: containers: - name: inference-server image: vllm/vllm-openai:latest resources: requests: cpu: "2" memory: "10Gi" ephemeral-storage: "10Gi" nvidia.com/gpu: "1" limits: cpu: "2" memory: "10Gi" ephemeral-storage: "10Gi" nvidia.com/gpu: "1" command: ["python3", "-m", "vllm.entrypoints.openai.api_server"] args: - --model=$(MODEL_ID) - --tensor-parallel-size=1 - --max_model_len=8126 - --api-key=token-abc123 env: - name: MODEL_ID value: meta-llama/Llama-3.2-3B-Instruct - name: HUGGING_FACE_HUB_TOKEN valueFrom: secretKeyRef: name: hf-secret key: hf_api_token volumeMounts: - mountPath: /dev/shm name: dshm volumes: - name: dshm emptyDir: medium: Memory nodeSelector: cloud.google.com/gke-accelerator: nvidia-l4 cloud.google.com/gke-gpu-driver-version: latest --- apiVersion: v1 kind: Service metadata: name: llm-service spec: selector: app: llama3-2-server type: ClusterIP ports: - protocol: TCP port: 8000 targetPort: 8000 ``` Once you have the configuration file saved, you can now apply the deployment and service configuration. Kubernetes will now set up vLLM, download your Llama3.2 model, and start the server. ``` kubectl apply -f vllm-llama3.2-3b-it.yaml ``` #### Configuration Details In the Kubernetes configuration, we define that each Kubernetes pod should kick off the vLLM LLM server with `python3 -m vllm.entrypoints.openai.api_server`. Here, we adopted vllm's OpenAI server interface. Additionally, we set the `model`, how many parallel tensors can be computed, the maximum token length, and a fake API key for OpenAI-compatible LLM API. The model is defined through the environment variable `MODEL_ID`. The `model_id` should match the HuggingFace model id (the server will download the model on start-up). ``` command: ["python3", "-m", "vllm.entrypoints.openai.api_server"] args: - --model=$(MODEL_ID) - --tensor-parallel-size=1 - --max_model_len=8126 - --api-key=token-abc123 env: - name: MODEL_ID value: meta-llama/Llama-3.2-3B-Instruct ``` #### Follow along with the server setup After a few seconds, you can follow the model download and vLLM setup by streaming the Kubernetes logs to your local machine. ``` kubectl logs -f -l app=llama3-2-server ``` You should see logs similar to the snippet below: ``` INFO 10-01 08:50:57 api_server.py:164] Multiprocessing frontend to use ipc INFO 10-01 08:50:57 api_server.py:177] Started engine process with PID 21 INFO 10-01 08:51:02 llm_engine.py:226] Initializing an LLM engine INFO 10-01 08:51:04 model_runner.py:1014] Starting to load model INFO 10-01 08:51:04 weight_utils.py:242] Using model weights format Loading safetensors checkpoint shards: 0% Completed | 0/2 Loading safetensors checkpoint shards: 50% Completed | 1/2 Loading safetensors checkpoint shards: 100% Completed | 2/2 ... INFO 10-01 08:51:59 launcher.py:19] Available routes are: INFO 10-01 08:51:59 launcher.py:27] Route: /openapi.json, Methods: GET, HEAD ... INFO 10-01 08:51:59 launcher.py:27] Route: /v1/chat/completions, Methods: POST INFO: Started server process [1] INFO: Waiting for application startup. INFO: Application startup complete. INFO: Uvicorn running on http://0.0.0.0:8000 (Press CTRL+C to quit) ``` Once you see the server being ready with `Uvicorn running on http://0.0.0.0:8000`, you can hop to the next step to connect to your new LLM endpoint. #### Connect to your vLLM endpoint Kubernetes allows you to forward ports. This is a good way to test your LLM setup, but nowhere near a production-ready setup. Therefore, please don't use it in production hosting/inference scenarios. ``` kubectl port-forward service/llm-service 8000:8000 ``` #### Test your Endpoint Once you forwarded the LLM server ports to your local machine, open a new terminal and test the endpoint using the example prompt below. You'll notice that the cURL request exactly mimics the request for OpenAI's API. However, we swapped out the URL (pointing to our [local host](http://localhost) that passes the request to our Kubernetes cluster), used our fake token, and updated the model ID. Voila! ``` PROMPT=$(cat << EOF <|begin_of_text|><|start_header_id|>system<|end_header_id|> You are a helpful AI assistant excellent in writing poems.<|eot_id|> <|start_header_id|>user<|end_header_id|> Please write a poem about machine learning<|eot_id|> <|start_header_id|>assistant<|end_header_id|> EOF ) curl -X POST http://localhost:8000/v1/completions \ -H "Content-Type: application/json" \ -H "Authorization: Bearer token-abc123" \ -d @- <