Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

Rafael Casas: [00:00:05] Welcome to Crypto with Accountants powered by Bitwave, where we talk with technologists and crypto enthusiasts as we discuss current events in economy, politics, technology and digital assets with thought leaders from around the world hosted by yours truly, Pat White and Raphael Casas. Today we will be discussing and going deeper into a piece that Bitwave wrote regarding Best Crypto accounting software. Ten must have features. I think that this editorial actually has a lot of fundamental value and more than just crypto accounting software too. Pat. Always a pleasure. You know, as we're doing this podcast, some of our executive team is at NFT Paris making waves. So super exciting things going over there. I'm actually really jealous. How how's everything going with you?

Pat White: [00:00:50] I am. I was supposed to be out there. And ran into some. Some passport issues like this. Like feel like a lot of people have been having this same thing is that the their passport expired over the pandemic and then they realized very, very late that their passport expired over the pandemic. That was what happened to me. So I was pretty sad. I didn't make it out to Paris. Paris in the springtime. Come on.

Rafael Casas: [00:01:11] Yeah, no, I had the same thing, too. I think there was when I had to get my passport renewed during the pandemic. It was just an extraordinary amount of time to get that thing renewed. So everyone's just, like, realizing now. Spoke there.

Pat White: [00:01:22] Yesterday, I was supposed to speak at the conference. Amy got a chance to speak, did a phenomenal job. From everything we've heard. We can talk a little bit about what she was talking about. It'd be it actually be a fun thing as as part of this because she did an overview of NFT accounting and tax because this is a Paris NFT week and so she did a a longer review of of all the different considerations for NFT accounting for if you think about like the NFT ecosystem, you have creators, you have marketplaces, you have holders and you have gaming companies. So she actually did this whole overview for all those different stakeholders, what they have to think about. So we get some time at the end of this. Maybe we talk about that a little bit.

Rafael Casas: [00:01:59] Yeah, absolutely. I think that's something also I think we did a while back with KPMG that we went really deep and I think that was like a really big hit to a lot of people wanted to get. It's really deep there, but some of the things that we kind of wanted to talk about in this editorial that we actually have on our website. But I think, you know, coming from my background of working in implementing with ERPs and large enterprise systems, they just really, really great essential features. We had about ten out there that were, you know, in many different ranges of what you should be looking for when you're going to when you're looking at a at a vendor and the enterprise segment. And I think there's some really great pieces and essential features that we can talk about here. Were there any that you kind of that stuck out to you? There were some that stuck out to me but wanted to give you the floor first. If there's any path that you thought.

Pat White: [00:02:49] No, let's let's just get into it. I mean, these are really there's there's some overlap here also with what we were just talking about, about the NFT treatments here as well. So, no, let's just let's just dive in. What do you what jumped out to you?

Rafael Casas: [00:03:02] You know, some of the things that I notice because I came from the implementation side was, you know, implementation and customer success. I always feel like that is, you know, a real big component of making sure that when you're looking at a vendor that they have those pieces buttoned up because that really that onboarding process making you become enabled and successful is so, so important because at the end of the day, you know, we're helping. Our goal is to help our business businesses become successful and grow, you know, and that's that's kind of being a good business partner is really what I look for in a vendor. You know, outside of there's a few other things as well, but I think that one hits home to me.

Pat White: [00:03:46] Yeah. And I think I think it's important to talk about for this, which is, you know, and this will be appropriate for everybody. So everybody who's listening has probably gone through some sort of ERP implementation, even if that just meant standing up QuickBooks and creating a chart of accounts, or if it means doing a full two year SAP integration like everyone's been through something like that. Crypto is, if you think about this as a spectrum of implementation from QuickBooks to SAP, I would say crypto is somewhere around the net suite level, which is it's more than one day, less than less than three months or six months, somewhere in that kind of range. It really depends on like your complexity as a organization. So, you know, one of the things that we talk about a lot for for accountants in particular getting ready to onboard a new client who uses crypto, one of the things you should be very cognizant of is you don't know you you you have a really bad, unknown, unknown problem. Like I'm telling you right now, you have this problem. Whether you know it or not. I can't tell you how many clients we go to with accountant, with our accounting partners who they're doing onboarding, they're going through implementation. They say, Hey, give us all your wallets. The client gives them all their wallets. And then three weeks later, so we think you're all done. You get everything working, everything's all happy. Three weeks later, they realize they have like a thousand more wallets.

Pat White: [00:05:05] They that they hadn't realized it. And it happens all the time because honestly, crypto is the first place where the CFO and the finance office is dramatically removed from the day to day spend or use of a financial instrument. And I know that sounds kind of crazy, but like it's, it's sort of the deep truth here around crypto is that it is you as the finance team are used to having control over the bank accounts, writing checks. You have expensify or divvy or whatever it is in the crypto world. That's not how it works. Like basically your engineers, your CTO, all these other people are spending crypto. And so if you come into the mentality like and I'm talking here in this case of not the accountants but the client, so a company using crypto, if you come into it with a mentality of like, Hey, I'm on the finance team, I know everything my company is doing in crypto, you're there's a good chance you don't like, there's a very good chance you actually don't know everything your company is doing in crypto. You really need to come in to these projects in a real modality of discovery, like finding everything that's happening in the business, pulling it together. It is not uncommon at Bitwave that the first time all of a company's wallets are in one place are when they onboard with Bitwave like. It is not uncommon at all for that to happen.

Pat White: [00:06:32] So we so we generally recommend that you it's not just that you know with Bitwave you plug in a wallet and we start sinking in your transactions and you're done. Like that's that's not hard. The hard part is, you know, we had one person that came with five wallets and then kind of like a month later realized they actually had 3500. And like if you just think about as an accountant scoping onboarding for five bank accounts versus 3500 bank accounts, very, very similar. Like there's just so much you don't know, so many unknowns, so many, so many new transactions you have to get through. So it's one of those things that, like you need to think about a product like Bitwave with a, you know, and any sort of foray into crypto accounting as a project. It is a data cleanup project. It's a data aggregation and cleanup project, getting all your wallets together. It's A Controls and Advice project, deciding if Eatwith is a taxable event, trade or not. It is a, you know, just stack through these different things that you have to go through. That is your overall journey to getting to getting going with, with Bitwave, getting into crypto accounting, whatever it is. And it's really important to have a good implementation partner there for you on that side. But do think about these things as projects. It's a it's a very good call out. Raphael Yeah, I think, you know.

Rafael Casas: [00:07:54] You make a really good point. And from just from what I've seen and how I've from a from a consulting perspective is, you know, there's so much upstream downstream effects, you don't know what you don't know. So it's really important for these teams to really work together, You know, our partners and our customers that we've seen really work as like a their own little mini center of excellence because there's a lot of things they just don't know, you know, what other departments in the company that's doing and that's like really helpful and being successful. And another thing is. You know where you're when you're looking at a vendor. You don't want them to just give you the software and you know, you're done. They they're never going to talk to you again. We that's part of being a really good business partner where we really kind of pride ourselves in helping with leading practices and making sure that you understand what, you know, maybe the benchmarking of a lot of other companies that we work with in the same industry to help you kind of stand this up much faster than, you know, something that could take you years to finally figure out. And you can't this.

Pat White: [00:08:51] Is not a like set it up and forget it kind of thing. I mean, if you think about how often even Plaid gets or like QuickBooks gets disconnected from your bank account, you know, that same stuff happens with crypto, but it happens even worse because bank accounts move real slow. Bank bank technology moves real slow, right? Like I use First Republic. Like boy, their website hasn't changed. Their like their customer facing website hasn't changed in a long time. I think they did just finally update it. But like before that it had been like 15 years or something. And so if you think about that, like compare what you're used to in terms of connecting to a bank account from QuickBooks, and then compare it to like, okay, what if that bank website changed literally every single day, like Coinbase does, like ftxs to like, you know, Ethereum does. You really have to totally approach this differently. You have to just think about this as in a different way. Like you have to anticipate changes in the future and you have to be always checking for it. So it's diligence around checking for changes is a really important, really important part of this whole this whole workflow. Yeah, agree one you know one of the ones that. That I saw that I thought, you know, Raphael you might be interested in is the multi entity side of this because this is this fits a little bit into your background at Sage and NetSuite and all of that, which is obviously Sage and NetSuite have really robust subsidiary treatments. The crypto world is everybody has multiple organizations, right? Like talk talk a little bit about like what what this means in practice in ERPs and I can talk about what it means in practice in Bitwave.

Rafael Casas: [00:10:28] Yeah think they have a lot of you know fundamental synonyms to this you know really you look for instance, on the net suite side as a good example here and you know, the tech side, the multi subsidiary is really important. You've got a lot of companies these days in the US not just working in the US. You know, multi legislation I think goes hand in hand from the most, most the time that I see from a multi entity standpoint where you know, they have they, they need to be able to have a multi, you know, multi legislation distribution points, you know, some are purchasing from others, you know, having these elimination entries be automated. There's just a lot of functionality that they need. And as well as rolling up from these consolidated reporting, you know, a lot of times they'll want to have they have a lot of different subsidiaries and many different currencies, their base currencies, and they want to roll it all up into, you know, Canadian dollars, for example. So those are the things that are not super easy to do. It all has to be done configured correctly because those are also just, you know, the things that you have to think about when you're how you want to report on these things. Plaid a subsidiary level, you know, the dimensional level and then the roll ups. So, you know, those are those are the areas where companies are not thinking about the implementation in that first year. They're thinking about what their business is going to do, where it's going to go in the next 3 to 5 years and need to be able to accommodate that with multi entity functionality. So it's really important for the growth company.

Pat White: [00:12:06] And some stuff even ends up more complicated in crypto is. So first of all, crypto is 24 hours a day, seven days a week. So you, you know, when you set up companies like like in Bitwave or you're doing this yourself or whatever it is, you end up having to pick a cut off time. That's going to be midnight, right? So there's not like crypto doesn't have bank hours. It's not like it ends at 5 p.m. So you're not using like this worldwide concept of a bank hour kind of thing. Like no crypto is running all the time. So in addition to all the other problems you have, you also have this issue of like, well, how are you going to handle pricing? Like do we need to do you need to have, you know, when you do these roll ups, how do you handle pricing? If you're looking at like your fair market value of your overall holdings, are you doing it at the corporate headquarters? Are you trying to use something clever? Like it's actually a relatively complicated problem to think about, about, you know, hour by hour pricing across a set of various subsidiaries. You also have a lot of really tricky stuff around. So Raphael mentions elimination. You know, elimination normally is for kind of simple elimination, eliminating revenue. When you move things between companies, subsidiaries in crypto, you start getting elimination on impairment, you start getting elimination on gain loss, you get elimination on on revenue between companies.

Pat White: [00:13:26] You might have elimination that is different for tax and accounting purposes. So everything in crypto, you will almost always have some form of difference between tax and accounting that is incredibly common. So this is no different, which is you might be, you know, depending on who picks up the gain loss. Like if you move crypto between two subsidiaries, you might pick up the gain loss in subsidiary A, you might move, you might move at cost from A to B and then gain loss gets picked up in B, you might have that that might be different for GAAP that you're following. So essentially you end up in this situation where you have to actually do elimination differently for tax and accounting. And it can be it can start to get to be really, really a bear. And then you overlay that of course with most of the people in crypto are setting up subsidiaries for jurisdictional shopping purposes. They're not doing it because they have a you know, Walmart has an office in Canada and the US and so they have the two different things. You're doing it because you want to set up a structure in the Cayman Islands where you can issue an ICO without worry of arbitrary regulation through enforcement from the SEC here. And so you're doing this jurisdictional shopping and now you're in this situation where you also not only have these weird elimination rules of GAAP versus tax, you also have jurisdictional rules.

Pat White: [00:14:57] There will be difference between different between the the two different entities that you have to kind of deal with. So you have to make sure you're getting your taxes for Cayman. Well, Cayman doesn't care about taxes, but you're doing your accounting correctly in the Cayman entity separate from the taxes you're doing in the US entity. And then if you have a UK entity to be able to to work that. So it is a remarkably complicated set of things with the caveat of this of course being is, you know, intercompany movements are one of the things that we all envision being an incredibly important part of crypto, like the ability to move $1 billion from the US to the UK in seven seconds and then put it to work in the UK. That is why we're all in crypto Like that is literally the world that we all imagine is instead of waiting for the for Sep two or whatever SEPA to ship a hard drive across the ocean or whatever it is they do to get me my money from me to to the UK. And it takes seven days like this is instantaneous moving around the world. So it's worth like it's worth thinking about that stuff. It's worth us getting into it deeply. Like we have a lot of capabilities in behave around this, but but it's still you still have to think about it, you know, deeply.

Rafael Casas: [00:16:02] Yeah, exactly. I mean, that's when I was bringing up earlier that to me multi-company multi entity goes hand in hand with like multi legislations because most of those companies, they like you said, they need to be able to have a platform that can help them account, you know, for different types of books from legislation. So IFRS or US GAAP, I think that that's something that we we that the platform gateway platform really excels in. But that's something you need to think about having the ability to have those customized legislation reporting outputs that you need to adhere to those. That's another one of the points that we have on here to to from the editorial to kind of look at, because those are really important if you're going to be stuck in the mud, if you can't have that or can't get that out anyway.

Pat White: [00:16:50] So, you know, one of the other things I was going to ask you about here, which is interesting, is that so one of the other things that we put on this list when we when we published this this blog post, all about the crypto features you need is we put the data warehouse axis on there. And this is, you know, one of the things that we're seeing is that. Is becoming incredibly important for crypto. And we'll we'll talk about that in a second. But Raphael, I actually don't know a lot about the Net Suite and Sage and some of the bigger ERPs, what their capabilities around A are because they do a lot with like they all have, you know, modules they sell and things like that. Like how do they tell me a little bit about like what those capabilities and those systems are and then we can kind of compare and contrast to the problems you run into in crypto?

Rafael Casas: [00:17:37] Yeah, I think they do. They do a pretty good job out of the box. You know, you have some of them are quite can be quite limited simply because of the SaaS offering where they don't want to give everyone full access to their database. That's where you have a lot of these really, really great, you know, cloud reporting tools that come out, you know, that have their own data warehousing, reporting schemas that you can really pull data from many different areas data lakes, data data, data rooms. And that's where they, you know, like the Jiras or the Domos or prefixes, that's where those kind of really help complement where, you know, these these reporting tools are quite limited within the systems, you know, and I think that's that that really helps a lot from a financial reporting forecasting. You know, JIRA does really good on the forecasting side and that that's kind of where the their sweet spot is. But I'd say a lot of the A is getting a lot better organically from these systems, but they're still, you know, a lot of a lot of a lot to be desired from the financial professionals there. So that's where they they they implement these third parties. I know that's something that that bitwage's working heavily on and it's a huge advantage to be able to have that data set readily available within a product as opposed to having to add on something.

Pat White: [00:19:00] Well, what mean? One of the things that we think about this is that we we are in this really unique position to see accountants as data people. I mean, it's really interesting because I think people don't always think about accountants as data folks, but more and more and more we see accountants working with spreadsheets that have millions of rows very comfortably. Like that's that, that you're a data person at that point. And so, you know, for us, crypto is, is so data intensive. There's so much data in so many different places like these are data heavy problems and so they require data, heavy solutions. Now that's that's on the aggregation and pulling the data together and being able to do some reporting on it. The other side of this is for crypto is is it is very tricky. It is most akin to around like forex companies, but even then I'm not sure that totally does it justice because you know Forex, you obviously want to hedge there are you want to you want to understand your exposure to Forex, you want to understand any hedging options you have. But at the end of the day, like Forex doesn't move like crypto, you know what I mean? Like recently it kind of has like the, the yen took a huge hit against the dollar. The ruble obviously took a, you know, 75% hit against the dollar. So there's stuff like that that you run into. But for the most part, the euro and the dollar like they move one 1% a day here, they're back. Like it's this pretty gradual movement.

Pat White: [00:20:32] And and that's not how crypto is. So if you're a company that really relies heavily on crypto revenue, so you are getting every single day like you're a marketplace or every day you get a little bit of of crypto deposit into your bank account. Every day you get X, Y, z, whatever it is, you are suddenly very or, or you have deals that you're paying people with that. So you're paying a contractor one bitcoin a month. You suddenly have this exposure to a macro, a macro level exposure that can swing hundreds, hundreds of percentages in a single day very easily and does often move like that. So you're suddenly in this situation where you really have to be thinking forward about how do you shore up your treasure, your balance sheet? Like how what do you what are you keeping cash? What are you keeping cash equivalents like? Usdc What do you keep in eath? We're always really and I'll say this as a as a founder of a crypto company, we're always super. What's the right word like? I like holding crypto. I believe in crypto. I like Ethereum. I want to have Ethereum on the balance sheet. And I tell our CFO that like, Hey, keep Ethereum on the balance sheet and he has to be like, No, no, no, no, no, no. Like, what if it goes to zero? Like, wouldn't you rather have a little bit of cash in there? So you're always in this tension of like, I believe in the ecosystem. I want to do this right.

Pat White: [00:21:50] I want to hold it, but you also have to run a business and be aware of it that way. So Fpna becomes this, this, you know, there's there's terminology in the computer science and forecasting world called Monte Carlo, where you basically are you're forecasting out how much your revenue is based on kind of a percentage of overall sales. But then you have to overlay that with a with pricing, with pricing movements. So instead of like a forecast like you would get in traditional finance where you have kind of this like, you know, you know, forecast, that is like one single line up or down depending you end up with this this kind of curve like this where you have these like that, you end up with this curve, this almost a horn shaped curve where you have like an upper range in case the in case the crypto goes way up. A lower range in case it goes way down. Maybe an average in the middle that you're trying to track to. But you always, as a CFO or as a financial advisor or as the accountant, you need to advise your clients like, hey, assume that this goes to zero. So keep some, you know, keep a little bit of interest here. But like you need to run your business, whether whatever the price of bitcoin, you need to run your business. So assume this is going to zero and plan accordingly. And I've even heard that in a lot of cases we have a we have a great partner propeller, a guy named Sam Lichtman there who talks a lot about he thinks pretty deeply about what a digital asset balance sheet is, which is like if you're coming up with digital assets like your balance sheets just kind of different than other companies.

Pat White: [00:23:15] And that's I mean, there are other companies out there that you have like, you know, oil companies have derivative exposure, all these. But there's just there's this aspect of digital assets where it's a little bit different. One of those is, you know, you as the as a CEO, he talks a lot about this. You should just never assume that your digital asset holdings are cash. Like it's really easy to look at your wallet and be like, Hey, that's cash. But that's not it's not cash. It is it is a, you know, debatably a security whatever you want to call it. But it is a it is a asset that is that moves in value. So when you are doing analysis of like, hey, we want we want to make sure we have 18 months of runway, that is that would be for a startup. You know same for bigger companies 18 months of money in the bank. We you want to do that as though you want to align that as though you don't have any crypto and the crypto is the icing on the cake here. But that again, that can be really hard for the the CEO because the CEO is here all really love having having a lot of crypto. So exactly but it's an interesting it's interesting balancing act.

Rafael Casas: [00:24:16] Having that reporting at your fingertips is something I think was brought up, you know, for one of our advisory council members of, you know, people want to have the ability to have that information at their fingertips to make quick pivots and make quick decisions. That's really, really important. Another thing you bring brought up that I think is really that speaks out to me. It's always spoken out to me from the side is controls and enterprise readiness because there's a lot of, you know, platforms out there that say they have that, but they don't win any any of the any of the European enterprise applications. And that's really, really important. You know, as companies eventually go public, they need to have those SOX controls and audit reports and all that available to them and role based, you know, and admin controls. So those are things I think that are really important because we're heavily focused on the enterprise side and so want to get your thoughts on that too.

Pat White: [00:25:12] Yeah. And it's it's, you know, it's all still developing. It's all we're still figuring out like what kind of controls you want around here, what it what matters. And I mean there's like the normal stuff around role based access control and all that sort of stuff. But then it just it gets a lot more complicated when you start thinking about real, you know, at what level do people care about having access, what is sensitive? You know, let's say one of the questions we get that I love sort of pontificating or thinking about is what is sensitivity in a blockchain world? You know, like obviously your bank transactions are sensitive. Like, you know who I'm sending money to that's sensitive. No one's arguing about that. But like, if I'm sending money on the blockchain, how sensitive is that from a controls perspective? You know, obviously that transaction is public. Everyone knows that transaction happened. Anyone could see it. But what ends up being really sensitive is in fact your it is you, you as a company, your relationship to that transaction, which essentially what it means is it's your relationship to the address. So it's something that I actually talk about a lot with the accountants that we work with, and it's worth everybody listening to think about, which is oftentimes with blockchain stuff, it is not the transaction itself that is that is sensitive. The thing that you have to be most careful about, that you have to be. Most sensitive about is in fact, company. A owns Walmart 012345. It is that relationship that is incredibly sensitive now. A transaction ID tied to that address can leak that relationship.

Pat White: [00:26:43] So if I say, hey, this transaction ID belongs to Betway wallet, well, suddenly they can kind of look at the wallet that were part of that transaction, trace it back. But it's one of those things to think about, which is that like the pieces of paper that you keep, because I was talking about like one of the major projects when you're when you're getting into crypto accounting and you're getting serious about it is you're going to pull all your wallets together in one place. Um, that's actually a super sensitive piece of documentation like you as a business should essentially think about that as, as like a list of all your bank accounts with full account numbers, because that is the most sensitive thing that you are really holding on to is the relationship between you and all of your wallets and exchanges and exchange keys and all that kind of stuff. Because that is how that is, is how a competitor would spy on how many, you know, how much revenue you're making if this all gets on the blockchain or whatever it is. So the things you have to think about, there's all the obvious stuff that we that you think about for every ERP product out there, but there's also some like non-obvious stuff that gets into like, you know, just be careful about sharing your clients addresses. Don't, don't share it willy nilly. Keep it as sensitive as you would keep their tins or any anything else that you would keep that would be sensitive. Consider your clients addresses as that sensitive.

Rafael Casas: [00:28:00] Now a career that's had an interesting call with a kind of a decentralized finance storage company. And they were talking about that. They had there were some people that are using using their platform. They had no idea. So, I mean, there's a lot of things that can happen. There's so much unknown, right? So you have to be cognizant of little nuances and things like that. I think to your point, you know, if chains and integrations, I think that's having a, you know, finding a vendor or working with someone that has a really strong ecosystem is really important as you grow, you know, as these businesses grow, they need to have support for a lot of different things out there. And so I think that's another really good point that was brought up in the in the editorial of. Thinking about what that ecosystem of a vendor looks like. You know, if they work with, you know, chains or protocols or any other type of third party integrations that you already work with and you're maybe moving over into that vendor, it eases up the implementation time. It's a quick transition migration there, and then you don't have to really eat up a lot of time to move into something that you don't really work with or you're forced to work with because it's not in the ecosystem. So I think those are all a lot of really beneficial things you have to think.

Pat White: [00:29:19] Now, I will say not all, not all integrations are created equal. It's one of those other things where you're talking about controls and stuff. You know, a lot of times when you're looking at integrations, what you are going to see out there are people using third party APIs that are not necessarily particularly well controlled for. And it's one of the things also to consider for you is if you are a company that wants to go public and is eventually going to go through a Sox audit. Sox audit, you are have you have an expectation on the accuracy of the data that you're getting. You would want someone like Bitwage who has a SOC report and our SOC report partly covers some of our data sources. There's a lot of like nuance when it comes to this stuff, but this is where it gets really gets really interesting is that like you want to actually make sure it's not just having a connection that's enough. Like you actually need a connection to be getting all the different various data types. So DEFI transactions, token transactions, NFT transactions and be getting it from a source where there is some amount of controls that you as a business can essentially rely on. This is incredibly an incredibly important part about of this entire system here. So you're either are going directly to the source, like going to an Ethereum node or going to Etherscan, which I think a lot of people consider kind of a canonical source for eath, even though it is a third party and getting the data there.

Pat White: [00:30:35] And that's you have to you have to be thinking about that in a control structure, in a reconciliation structure, all of all of that kind of stuff. So it is it's it's there's a lot of things in the world like this. It isn't always obvious what the, the the best connection is or how everything works like that. But it is something important to talk about and think about in terms of your own control structure. It is. Raphael One other thing I wanted to talk about a little bit is we at Bitwave. We think that 2023 is going to be a really big year for payments, so payment rails and things like that. Um, you know, we talked about it briefly. It's this idea of sending $1 million overseas in seven seconds with Polygon for you know, for $0.05. It's, it's amazing to kind of think about, um, think, how do you think of the difference between like traditional ERPs and how they were doing payments or who they were integrating with on the payments side and then like, what the crypto, the crypto world kind of looks like.

Rafael Casas: [00:31:36] Gosh, that does actually what I was going to bring up because we're getting a lot of you know, we've seen a lot of discussion around payments and recurring billing, recurring type of payment platforms out there. And it is it is interesting. A lot of, you know, a lot of their really goals are to help, you know, eliminate a lot of those gas fees or transaction fees that you see global from global payments that are happening now that cost so much money. They're trying to really help eliminate that and make it easier. You know, I see that they just have different goals in mind that when you're looking at the payment companies, they just want to make it at ease. For a customer that's behind the scenes, you don't know really what's the keep fees low as well. But to really have a really good quick integration and simple integration into these ERP companies. But I think there's just a lot more opportunity from these crypto payments where you're, again, leveraging Apnaa. It's a lot more seamless. It helps a lot from a global perspective because a lot of these traditional ones aren't really going to we're really going to solve for those those global payments that are coming out happening. So, you know, I do see there's a lot more potential there as well as they're not only helping from a fiat payment perspective, from a crypto payment perspective. Um, so I think it's just a lot more versatility from those payment companies.

Pat White: [00:33:03] Well, I think, you know, one of the, one of the things that I tend to think is going to happen here is I think payments are going to get tighter and tighter with your your accounting workflow in some ways like or with with the sort of like the workflows have to collapse here a little bit because at the end of the day right now, you really do need very specialized software. Like not everyone can spin up software that sends money through ACH. Like it's not actually that easy. It's kind of a pain to build that kind of software. It's a lot easier to send to send assets or send money. I always say, Guys call it money through through crypto. So I mean, there's this world where you actually are getting this pressure, like there will be more and more of a collapse to have a single pane of glass to do both sending money, accounting for it, handling taxes for it, all that kind of stuff, which is really good. I mean, like we have one of our products is the is the ops product. And the way I describe it to someone who doesn't know this stuff or who just peripherally knows it is, imagine Expensify. But instead of, you know, expensify, you swipe your credit card and then you tell your you tell your accountant what it was. Oh, this was a travel meal. Oh, this was a rental car. Crypto That's the current workflow for a lot of people. But we can actually kind of flip this in the world because now you can actually tell your person what it is.

Pat White: [00:34:25] You know, say, this is, Hey, I'm about to pay for a contractor and then click a button to pay it. That's how a bit of ops works, is that you actually are you are literally doing your booking and then sending it, you're tagging and then sending payments instead the other way around. And that's a really nice workflow. I mean, that is it's, it's actually better for everybody to be quite honest. Like as someone who has who has filed a lot of expense reports in my life. Oh, my God. Uh, I can't even tell you. I'm like, It's God. I still remember. Like, this is total tangential, but I still remember, like, you know, getting my first job out of college. I was working for a company called 4 to 5. I worked for Microsoft for a while, but fortified and I remember they had conquer or one of those and like getting your head wrapped around expense reporting as a as a 22 year old, you know, entering the world of of work is difficult. Like, yeah, especially for me because I did a lot of travel. I was a back then, did a lot of travel, did a lot of stuff like that. It was really genuinely miserable experience and it's never gotten better. Um, you know, with some of the tools is getting better. It's a little bit more real time like divvy, you swipe your card and you immediately get a thing that you can kind of tag there.

Pat White: [00:35:37] But the idea of being able to do that beforehand is actually really, really nice or even for me is, you know, we part of what the way the ops product works is you can actually your, your let's say your bookkeeper can upload a set of payments, a payment set of payments for you to make all pre categorized already all in there. Me as a CEO, I just sort of look over and say, this makes sense. I click it and it just sends it out right there. There's this really cool world of of kind of like streamlining a lot of these these payment capabilities there. So, you know, there's hopefully we will make expenses more and more pleasant over time, figure out ways to have really good automation around this, even better than we have today. I mean, it's always been the dream to have really clean billing automation, invoice sharing, all that kind of stuff. And I've been learning more and more recently about a lot of the automation projects for invoicing. So and a lot of the interchange, the interchange formats for invoices and all of that. And it's really. Interesting. It is actually like totally kind of going tangential on this. I'd be curious, when you were at CPE or Sage, did you ever work on on any of the the invoice exchange, you know, automated invoice exchange, you know, implementations or anything like that?

Rafael Casas: [00:36:51] Yeah, that was part of what I was going to bring that up. That was part of what I did. And to your point of Natasha Fyles and Bittu, it's a pain. You have to build those out. You know, all banks have different specs.

Pat White: [00:37:00] Why is it so hard, though? Because it seems like you would just have this really simple excel or like XML or JSON format that everyone could exchange. Like what ends up being so hard about it?

Rafael Casas: [00:37:10] It's it's just tedious from how these systems while allow you to configure them. So you know some it's going to be a little bit different from a net suite where you have there's a little bit of like a kind of a code that you have to to modify and, you know, with padding and all, you know, all of that. So they make it a little bit easier there because there's a lot of pre configured templates that you can just kind of modify a little bit here and there. There's others, though, where you kind of have to build it from scratch line by line, and it just takes a while to do that. But yeah, that, that, that in itself, you know, crypto payments, having that ability and eliminating that kind of back end implementation work is really, really helpful. But it's just a matter of the tedious configuration in the background to do that kind of stuff. And then from the invoicing side, right, you're some of these smaller vendors, you'll have kind of rigid templates that you can build out for invoices or others are using, you know, maybe some antiquated solutions like Chris reports and others. You're kind of you're doing pure HTML back end changes. So, you know, it's just a matter of the, the tedious side of configuration configuration and customization of these things.

Pat White: [00:38:29] Yeah, Yeah. Well, I mean I, I certainly hope that crypto is where we really finally crack this nut, to be honest, because it seems like it's just so perfect, you know, the idea of standardizing on really clean, really clean, interchangeable formats that then actually have the payment button that both people can use. Right there seems like a real game changer because you're now you're not you don't have this issue of like two different companies that are separately negotiating with two different, you know, payment providers and then trying to figure out how to bridge these two systems. I mean, it's really just a perfect world. It's one thing both people look at it. Both people kind of click a button, one person approves it, one person then pays it. It seems like we're getting closer to being in a in a really happy world around that. And that's that's that's why payments to me are just such an important part of 2023 is that, you know, we're not like speculation about price will always be there but we're it's a little bit less of a focus during the crypto winters whereas like the use case is like right now like getting into this use case, what a great time to get to this use case.

Rafael Casas: [00:39:27] So yeah, and think, think we're with our Enterprise Digital Asset Summit happening end of April. I think that's something that we're kind of gunning for. If you have maybe a A payments panel to kind of this is a really hot topic and there's a lot of new players coming out and a lot of big older players that are coming into this space too, into the crypto side. So it's really interesting. I think at that point.

Pat White: [00:39:51] That probably maybe wraps it up a little bit here. We went through most of the most of the bullet points here.

Rafael Casas: [00:39:55] Yeah, I think there were some really, really good ones. I think the only other thing or two pieces that was really interesting that I saw here was with regards to, you know, the tokens as well as institutional providers. And the institutional side is something that was really, you know, a big focus in FY 2023 that we're working on. I don't know if there's anything that you wanted to touch on there. It's like proof of reserves and liabilities was something that's been a big topic as of late, and we've had some some considerable feedback on that too.

Pat White: [00:40:27] Oh yeah, Well, it's just, you know, everyone honestly, it's just a it's a, it's a continuation of the controls discussion is that up until this point the crypto crypto has been a wild, wild West and controls were always a, you know, so what's funny about crypto people actually is I will say crypto people are better than anyone else in the world. If your businesses that use crypto are are generally better than anyone else in the world around operational security, which is to say the security of a private key that holds tokens on it, tokens on it. Crypto companies usually are very, very good at. And that's honestly, that's really different than like a lot of businesses like, I don't know, like Microsoft is not has had not traditionally been great at OPSEC. They're better now. But like you think about remember all like the terrible vulnerabilities that like Internet Explorer had and all those kinds of things. Like they just weren't great at that kind of like daily, that day over day grind of OPSEC. But crypto people tend to be good about that. What people are terrible at is, is the more philosophical controls, like how are we segmenting our user money from our treasury money? How are we? How do you do a segregation of duties between the person proposing a set of invoices to be paid and the person actually signing the transaction Like those are the stuff we tend to be really bad at.

Pat White: [00:41:45] And so our traditional product, there's a lot of features that we can kind of go into, but the high level of all of it is it's a it's a product and it's a, it's, it's telling people to start thinking seriously about their control structures and getting getting serious about it, because that is the really hard part of this is you if you are if you are doing anything that smells remotely like institutional, which is when we say that we're referring to custody. So if you are custody and assets for clients and it is not always obvious that you are doing this, I will say this right now, like people think that it's super obvious, like if your TD Ameritrade, it is super obvious if you're casting assets for your clients, like either you have a DTCC account for your clients or you don't. That's how you know someone's costing it. In the crypto world, if you have a video game and like let's say you have a web3 game and as part of it, when you sign up, you, you basically give them 25 tokens for free, but you don't transfer those.

Pat White: [00:42:47] Like you just it just sort of is a little, a little thing that ticks up in the top right corner, but you don't actually transfer that into a wallet immediately. Like it's just more of a of a tracking thing. You are custody and assets for a client. Like it's it's a weird way to say it but you have just become not just a game development company but also a custodian with all of the regulations and responsibilities that go along with it. So so businesses need to be thinking very holistically about all of these things that they are doing, all the services they're providing to these clients, and then actually making sure they are accounting and doing taxes for all of those things correctly as well. It's a really funny way to think about it because like no one really thinks about being a no one really thinks about being a custodian if they just set out to build a video game, but you end up being that. So it's it's, you know, the institutional product is all about it's all about controls and like holistically looking at your businesses, your responsibilities, your liabilities, everything that your that you're up against and and building systems, technology systems, people, systems, operational systems to address those holistically.

Rafael Casas: [00:43:48] Yeah, there's a there's a lot of moving parts a lot that goes into that. And if we wanted to as we wrap this up, I know you wanted to bring up quickly, Amy, our COO was having just her presentation at NFT Paris today with regards to, I think it was tax and accounting considerations right around the NFT space. Was there anything that you wanted to quickly touch on before we wrap up here?

Pat White: [00:44:10] Now, you know what? Let's. Let's do it on the next pod. Next. Next pod. Right here On, on. And we'll have her. Yeah, we'll bring her on and have her give the, give the talk. We we've, we've covered a lot today already so that would be we'll do. That'll be a fun pod topic.

Rafael Casas: [00:44:23] Absolutely. And thank you so much everyone for for tuning in to this our CWA crypto with accounting podcast. We have some amazing guests lined up. So please stay tuned and look out for that. And thanks, everyone. Thanks, Pat. We appreciate everyone's time and looking forward to the next one.

Pat White: [00:44:38] Awesome. My my absolute pleasure. This was great. Thank you so much. Everybody. Have a really wonderful day. Bye, everyone.