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Puzzle, a San Francisco-based fintech startup, has introduced an innovative AI-powered accounting platform aimed at automating up to 90% of routine tasks, allowing accountants to focus on strategic work. In an exclusive interview with VentureBeat, Puzzle CEO Sasha Orloff explained how the new general ledger software integrates complex accounting policies directly into the platform, eliminating the need for manual spreadsheet processes.
The platform supports both cash and accrual accounting, catering to businesses of all sizes. Orloff highlighted that the system offers real-time, precise accounting tailored to meet the demands of today’s fast-paced business environment, especially with the accounting industry facing talent shortages and increasing workloads.
Automating complex accounting tasks with Puzzle’s AI general ledger
Puzzle’s platform addresses manual accounting challenges by automating processes like revenue recognition, asset depreciation, and prepaid expenses. Traditionally, these tasks require spreadsheets that need to be reconciled with accounting software such as QuickBooks.
Orloff explained, “In QuickBooks, you typically have to calculate things like revenue recognition, fixed assets, and prepaid expenses manually in spreadsheets. With Puzzle, all of that logic and calculation is handled inside the software.”
Puzzle enables users to set up accounting rules, known as “software-driven accounting policies,” for various transactions like SaaS subscriptions or prepaid contracts. Orloff stated, “You save it, and then it just gets applied when an invoice or a bill comes in.” This automation reduces errors and eliminates much of the manual work accountants usually encounter.
Ensuring accuracy with human-in-the-loop AI
One of the main concerns with AI-driven automation is maintaining accuracy, especially in fields like accounting where precision is crucial. Puzzle addresses this by allowing accountants to control the level of automation they utilize. Orloff emphasized the flexibility, stating, “The accountant is always in control. You can create a rule in our system that says, ‘Let the system take its best guess, and I’ll review it later,’ or ‘I want to do it manually.’”
Each transaction in Puzzle is tagged with information about how it was processed, providing transparency. Orloff mentioned, “Everything is tagged, so you know whether something was drafted by AI or if it’s a high-confidence transaction the system has handled before.” This feature enables accountants to trace transactions and verify their accuracy.
By incorporating human oversight, Puzzle reduces the risk of AI errors or “hallucinations,” as Orloff referred to them. “AI can hallucinate, but humans make mistakes too,” he mentioned. “That’s why we designed a system where AI suggests things, but the accountant can verify and control everything.”
Addressing the talent shortage in accounting with AI
Puzzle’s launch comes at a crucial time for the accounting profession, which is experiencing a severe talent shortage. With 75% of accountants nearing retirement, 300,000 leaving the workforce, and a nearly 30% decline in CPA applications, the industry is facing challenges. High burnout rates are also prevalent, with 99% of accountants feeling overworked due to the repetitive nature of their roles.
Orloff views Puzzle as a solution to alleviate some of these pressures. “We’re witnessing a significant transformation in accounting with the introduction of AI,” he noted. Unlike competitors like QuickBooks, which suggested replacing accountants, Puzzle aims to support and empower accountants. “We’re here to elevate accountants and accounting firms and make them the heroes of their companies,” Orloff expressed.
He envisions AI tools like Puzzle enabling accountants to take on more strategic roles in businesses. “If we can move accountants from the back office to a seat at the table for crucial financial decisions, that’s a win for everyone,” Orloff stated. “The role of an accountant will become more impactful and higher paid, focusing on significant decisions rather than routine tasks.”
Rapid Growth for Puzzle as AI Transforms Accounting
Since its public launch less than a year ago, Puzzle has processed over $30 billion in transactions for more than 3,000 businesses, ranging from startups to small businesses utilizing tools like Stripe, Gusto, and Brex. Orloff reported that Puzzle’s growth has been primarily driven by word of mouth, with the company experiencing 15-20% month-over-month growth, 70% of which is organic.
While Puzzle initially attracted startups, demand from small businesses and accounting firms has surged. Orloff explained, “We started engaging with startup communities because they adopt modern tools and were eager to embrace new accounting solutions. However, we began receiving interest from small businesses such as doctors’ offices, law firms, and retail stores.”
Accounting firms, in particular, are turning to Puzzle to manage more clients without expanding their staff. “There’s been a shortage of accountants, and accounting firms are turning away clients,” Orloff pointed out. “With our automation, they can handle more business at higher margins, enhancing customer satisfaction.”
AI as a strategic advantage for the Future of Accounting
Orloff believes that Puzzle’s platform signifies the next phase in the accounting evolution. “When Excel was introduced, 1 million bookkeeping jobs were eliminated, but 1.2 million higher-paying advisory roles were created,” he noted. “We’re going to witness a similar transformation today. The mundane, repetitive work will be automated, and accountants will devote more time to assisting businesses in devising tax strategies and enhancing their financial well-being.”
Orloff sees Puzzle as a tool that benefits not only accountants but also the businesses they serve. “We’re constructing a system that simplifies and enriches accounting, strengthening the relationship between the accountant and the business owner,” he stated. “It’s a win-win situation.”
As more businesses adopt Puzzle, the platform’s automation capabilities will continue to enhance, creating a self-reinforcing cycle of efficiency and accuracy. “The more people use us, the more automation and accuracy we can embed in the system,” Orloff mentioned. “It’s a self-fulfilling flywheel where everyone wins: the business owner wins, the accountant wins, and ultimately, the entire economy benefits.”
