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Sage Copilot AI aims to pair power and simplicity for small and medium businesses

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Small and mid-size business platform Sage is already well experienced with AI, having woven it throughout their products for years, but its new generative AI Sage Copilot solution has been touted as a dramatic step forward in the company’s long term vision of simplifying accounting to make it more accessible to all. 

Aaron Harris, Sage’s chief technology officer, said that the company has long had classic AI deep learning models that perform functions users have relied on for years. These tasks often require the use of many different models working in concert, with Harris noting that invoice processing alone requires the use of 27 different models: 15 to 20 are required to read the data alone, and more are needed to perform the calculations. 

Sage Copilot coordinates between these models and acts as an interpreter between them and the human users who are requesting they perform a task. Effectively a “mouth” attached to a larger whole, the LLM works by translating the user request, usually inputted through a conversational interface, into machine language. This then goes to the various AI models on Sage’s servers, which then get to work on whatever the user asked them for, eventually sending instructions back to the LLM. The LLM reads back the machine language and implements the command or, in the case of an informational query, translates it back to human language. Harris stressed that it is not the LLM itself that does this work, referencing their well-known difficulties with math, but the other AI models that the LLM interacts with. 

“We don’t trust them to do math. There’s much better ways to do math… We’re not using the AI to do the math on the results, we’re using AI to write the [structured query language] exactly as you described,” said Harris during an interview. 

He added that, rather than being a feature of any one particular solution, Sage Copilot can be used across its products through the use of specialized “agents.” The company creates AI “agents” purpose built to do one thing really well, such as interacting with certain types of data, executing specific queries, or engaging with specific software products. Sage Copilot has access to multiple agents, each built to communicate with a different product, whether Sage Intaact, Sage HR or something else.

“The intention is that Copilot can work across the portfolio of Sage products,” he said. 

Having Copilot act as a coordinator for all the other models also means its automation capacities go far past what it had previously accomplished. Harris raised the example of processing an invoice. This act alone requires multiple steps, but many of them have already been automated in Sage, taking out much of the work. Copilot goes a step further by allowing wholesale workflow automation through coordinating among several models that each enable a different automated process. “We can now really accelerate our ability to automate with large language models, and we can use AI to do more of the orchestration. So, giving it the ability to not just process the invoice but to move it on to the approval stage, to understand after it’s approved [it needs to] move it through the payment process,” he said. 

He added that, in the future, “that invoice will have been created for you, automatically.” His team had recently conducted a hackathon where it was found Copilot can automatically generate invoices based on events happening around the user, like if it knew they were going on a job using geofencing, and act proactively. 

Harris said that certain companies today will attach their solution to a ChatGPT account and call that generative AI functionality. In contrast, developing Copilot was a meticulous process that required a lot of trial and error even before its UK release earlier this year. During this time, the development team encountered many challenges that needed to be overcome, such as teaching the model that there can be more than one kind of cash balance. 

“I got in and I asked Copilot ‘what is my cash balance?’ And Copilot said it’s at zero. And I dug around and what I learned was that Copilot inferred from my question ‘what’s my petty cash?’ It didn’t actually understand that what I was asking for was the balance of cash across my bank account,” he said. “Fast forward a month. We’ve done a lot of work to train the model the way we wanted to when you ask that question. … [Now] it’ll give you a table with your bank accounts and your balances in total. If that is what you’re asking, this is the answer.” 

Getting these kinds of interactions right was vital to ensuring Copilot was easy to use and reliable in its outputs without having to possess a lot of arcane technical knowledge. Interacting with Copilot in plain language allows people to access accounting information and perform business tasks on their own, a major component of the wider goal of making accounting more accessible to a wider base of people. 

“Generative AI and copilots, and their natural conversational interface, enables us to bring accounting outside the finance team to the rest of the business. One of the biggest blocks is getting [accountants] to approve things or to answer questions, finance teams are spending time supporting me instead of getting the books closed. With Copilot having a conversational interface, it now becomes much more natural and easy for me to approve a purchase order or to ask a question like ‘how am I trending on my travel expenses?'” Harris said. 

While Sage wants to make accounting more accessible to the layperson, he added that professionals can be excited too. The big promise, he said, is that it will free them from things they don’t want to do. He compared it to having an army of interns at one’s disposal who can take care of the numerous mundane demands that pop up throughout the day. The result, according to Harris, will be “faster and smarter decisions.” 

“Unpacking that, what we’re really saying is [this can be] how you, across the whole of the business, understand the patterns of activity in that business in real time to discover when there is a change in performance—when there’s something that can indicate an opportunity or risk—that the more strategic specialists can address in real time… We’re enabling more decisions to be made confidently,” he said. 

Harris said the name “Copilot” represents what he felt was a good bet that the term copilot would become generic, versus being permanently associated with Microsoft’s product. He said that the term has, over time, emerged as standard in a similar manner as “band-aid,” “Xerox” and “Google.” 

The large language model was released in the UK in February and is set for release in the US at the end of this year. 

Part of a larger strategy

Copilot is one component of the company’s larger product strategy to promote continuous accounting, real time assurance and continuous insights. But this, itself, is part of Sage’s overall strategy, particularly for the North American market; Mark Hickman, the managing director of North America, said Copilot is “critical to our success.” 

“As we move forward, [we want] to really be that leader, we want to be ahead of the competition when it comes to AI and how we bring that to market, into that ecosystem of 2 million customers globally and hundreds and hundreds of thousands in North America,” said Hickman. 

To this end, Sage has been busy making new alliances and deepening current ones with companies like Microsoft, Amazon and PwC. They have collaborated on technology solutions with the aim of eventually driving integration into products like Office and other platforms, as well as on distribution and implementation of said solutions. With Microsoft and Amazon in particular, Hickman said they have whole partnerships where they go to market together and close new customers. Given these companies’ focus on large enterprises, Sage’s focus on small and medium businesses has acted as a bridge to this larger community. 

“What we’ve discovered here is that [Microsoft and Amazon], they don’t really play in the small to medium businesses with the cloud. So 90% of their new customers are net new customers so they’re actually getting into new customers because they’re working with us and closing new deals to get into these accounts and … using their amazing, world class platforms and their brands to work together,” he said. 

This is especially germane as the UK-based Sage expands further into the North American market, which makes up more than 44% of the company’s global revenues already. The company is making heavy investments in this region, which include technology but also additional staff as well as new facilities. Hickman said they will be building a whole new campus in Atlanta to serve as their new base for North American operations (in addition to the office they already maintain in that city), as well as new offices in Portland and Vancouver. 

Hickman said Sage’s thinking on these new locations came as the company emerged from the pandemic lockdowns, eventually settling on what he called a “hub strategy.” Previously, the company had over 80 offices around the world, but he said many of them were small and remote. The company chose a very deliberate strategy where they would instead have large offices in each of the major markets they really invest in, with fewer small satellite offices. This has allowed them to really focus their efforts around these flagship country “hubs.” He noted that the new offices in Canada is also a reflection of this hub strategy of “really increasing the investment in the offices where we want to concentrate our growth.” 

“So the North American businesses, the US businesses, are the fastest growing [sector] with great growth, and we hope to really accelerate that growth as we move forward,” he added. 

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IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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