Latest / Leaders In Payments / Embedded Finance Special Series: Embedded Accounting, the Next Big Fintech Product with Justin Meretab, Layer | Episode 527

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Embedded Finance Special Series: Embedded Accounting, the Next Big Fintech Product with Justin Meretab, Layer | Episode 527 · Leaders In Payments

• 0:00
  SPEAKER_00: Hello, everyone, and welcome to Leaders and Payments Podcast.
• 0:03
  SPEAKER_00: I'm your host, Greg Myers.
• 0:04
  SPEAKER_00: And as many of you know, embedded finance has quickly become one of the most important conversations in payments and fintech.
• 0:11
  SPEAKER_00: More vertical software companies are looking beyond their core platforms and exploring how payments and other financial products can create new revenue, strengthen customer relationships, and deliver a more seamless experience.
• 0:23
  SPEAKER_00: It is also the focus of Embedify, the Embedded Finance Summit I'm hosting on October 13th in Lehigh, Utah, where vertical SaaS leaders, technology providers, and industry experts will come together to discuss how embedded finance is being built and deployed in the real world.
• 0:40
  SPEAKER_00: We'll be talking not only about payments, but also lending, banking, insurance, accounting, and payroll.
• 0:45
  SPEAKER_00: You can learn more at Embedify2026.com.
• 0:48
  SPEAKER_00: As we lead up to the event, I'm talking with industry leaders who are helping software companies navigate the embedded finance opportunity.
• 0:57
  SPEAKER_00: Hello, everyone, and welcome to the Leaders in Payments Podcast.
• 1:00
  SPEAKER_00: I'm your host, Greg Myers.
• 1:01
  SPEAKER_00: And as many of you know, embedded finance has quickly become one of the most important conversations in payments in FinTech.
• 1:07
  SPEAKER_00: More vertical software companies are looking beyond their core platforms and exploring how payments and other financial products can create new revenue, strengthen customer relationships, and deliver a more seamless experience.
• 1:20
  SPEAKER_00: It's also the focus of Embedify, the Embedded Finance Summit I'm hosting on October 13th in Lehigh, Utah, where vertical SaaS leaders, financial technology providers, and industry experts will come together to discuss how embedded finance is being built and deployed in the real world.
• 1:36
  SPEAKER_00: We'll also be talking about not only payments, but also lending, banking, insurance, accounting, and payroll.
• 1:42
  SPEAKER_00: You can learn more at Embedify2026.com.
• 1:46
  SPEAKER_00: As we lead up to the event, I'm talking with industry leaders who are helping software companies navigate the embedded finance opportunity.
• 1:53
  SPEAKER_00: Joining me today as our special guest is Justin Meritab, the co-founder and CEO of Layer.
• 1:58
  SPEAKER_00: So, Justin, thank you so much for being here and welcome to the show.
• 2:01
  SPEAKER_00: Thanks for having me, Greg.
• 2:02
  SPEAKER_00: Tell us a little bit about yourself and maybe how and why you started the company.
• 2:07
  SPEAKER_01: Yeah, absolutely.
• 2:08
  SPEAKER_01: So I have pretty much spent my whole career building SB software.
• 2:13
  SPEAKER_01: I think small businesses are a really fun customer to build for.
• 2:17
  SPEAKER_01: They traditionally haven't had access to the same types of tools that larger mid-market and enterprise companies had to run their operations.
• 2:24
  SPEAKER_01: And when you can streamline a workflow for a small business, that frees the business owner time back to go actually run the business, make sales, and have a really dramatic impact on how these businesses run.
• 2:36
  SPEAKER_01: For the six years before starting Layer, I was at Square.
• 2:40
  SPEAKER_01: And I spent my whole time at Square working on Square's banking products and really helping customers better manage the money that they were collecting with Square, with things like a debit card or instant access to their funds.
• 2:51
  SPEAKER_01: And I learned a lot about how small businesses manage their money and where things worked well and where there were still gaps.
• 2:58
  SPEAKER_01: And one of the biggest gaps throughout my time at Square was related to accounting.
• 3:03
  SPEAKER_01: We would have customers coming to us saying, Hey, can you help me with my accounting?
• 3:07
  SPEAKER_01: Can you help me with my bookkeeping?
• 3:09
  SPEAKER_01: This is so hard to manage.
• 3:10
  SPEAKER_01: They were struggling with tools like QuickBooks or had a bookkeeper, but didn't really feel like the service was being delivered well.
• 3:17
  SPEAKER_01: And the end result was that they didn't really know whether or not they were making money, and tax time was always incredibly stressful.
• 3:23
  SPEAKER_01: And as I started pulling that thread and we started exploring the broader ecosystem of vertical SaaS, you know, platforms that operate like Square for each of their different industry verticals.
• 3:34
  SPEAKER_01: And as we all know, there's this is a rich ecosystem of hundreds to thousands of platforms.
• 3:39
  SPEAKER_01: I realized these platforms are in the exact same boat that we were at Square.
• 3:43
  SPEAKER_01: They have their customers, they become the financial home for their customers.
• 3:46
  SPEAKER_01: And their customers go to them for help with everything from payments to now accounting.
• 3:52
  SPEAKER_01: And these platforms, they wanted to launch better accounting tools for their customers, something that would be easier to use than the QuickBooks of the world.
• 3:59
  SPEAKER_01: But the challenge is that it's so hard to build themselves.
• 4:02
  SPEAKER_01: And they didn't feel like they had the domain expertise or the resources to go replicate everything that QuickBooks and the bookkeeping ecosystem does.
• 4:10
  SPEAKER_01: And I realized there was the opportunity to build a platform company, basically build someone that would handle those hard parts of the infrastructure of launching and delivering an accounting product and let these vertical SaaS platforms focus on the customer experience while solving those accounting pain points for their customers.
• 4:28
  SPEAKER_01: And so that is why we started Layer to be that platform.
• 4:32
  SPEAKER_01: And that's what we've built, basically the first embedded headless accounting and bookkeeping platform that allows Vertical SaaS to go and own and support the bookkeeping and accounting workflows of their customers.
• 4:44
  SPEAKER_00: Just a point of clarification more for me than anything.
• 4:47
  SPEAKER_00: So when you say accounting and bookkeeping, are those two separate things in your mind?
• 4:52
  SPEAKER_01: They go hand in hand.
• 4:53
  SPEAKER_01: So when I mention accounting, really I should say accounting software.
• 4:57
  SPEAKER_01: So that's the tool that these businesses use to track their finances and it's where they do their bookkeeping.
• 5:04
  SPEAKER_01: So traditional accounting software, it's tools like QuickBooks, Xero, Sage.
• 5:09
  SPEAKER_01: And what we provide at Layer is that accounting platform, that software platform, that brings together all of the data for the business, the revenue activity, the expense activity, and lets you organize it into the picture of finances, your profit and loss, a view of your top expenses, the things that actually let you run the business and ultimately pay your taxes correctly.
• 5:32
  SPEAKER_01: Bookkeeping is the act of using accounting software to do that.
• 5:36
  SPEAKER_01: And so accounting software off the bat, it's just a tool.
• 5:39
  SPEAKER_01: Someone needs to go in and properly categorize their revenue, reconcile expenses, all of that.
• 5:44
  SPEAKER_01: That work is bookkeeping.
• 5:46
  SPEAKER_01: And so traditionally, you actually really need both.
• 5:48
  SPEAKER_01: You need the software and you need someone to do the bookkeeping, whether that's the business owner or a bookkeeper that you might hire.
• 5:54
  SPEAKER_00: Perfect.
• 5:55
  SPEAKER_00: Thank you for clarifying that.
• 5:56
  SPEAKER_00: And we talk a lot about payments and lending and banking.
• 6:00
  SPEAKER_00: Those are kind of the big ones that we talk about.
• 6:02
  SPEAKER_00: And it seems like accounting is relatively new to this embedded finance conversation.
• 6:07
  SPEAKER_00: Why should accounting be considered part of embedded finance?
• 6:11
  SPEAKER_01: Because accounting is crucial to small businesses.
• 6:15
  SPEAKER_01: And when you think about it, accounting doing that work of bringing together the picture of all the revenue, the expenses, the different financial activities of the business, it's the only way to truly get an accurate picture of where a business stands financially.
• 6:29
  SPEAKER_01: It's the only way to actually see if you're making money as a business.
• 6:33
  SPEAKER_01: And it's the only way to accurately pay your taxes.
• 6:35
  SPEAKER_01: And when you think about it, those are the only two things you absolutely must do if you want to stay in business is you have to be profitable and you have to pay your taxes.
• 6:42
  SPEAKER_01: And so it's really a universal need.
• 6:44
  SPEAKER_01: Every business does accounting.
• 6:47
  SPEAKER_01: They might not be using formal accounting software.
• 6:49
  SPEAKER_01: Maybe it's a spreadsheet, maybe it's pen and paper, but the process of getting that clarity is essential to running a business.
• 6:56
  SPEAKER_00: Okay.
• 6:56
  SPEAKER_00: So for a vertical SaaS company that already owns the operational workflow, so it's that place they go to run their business.
• 7:03
  SPEAKER_00: And maybe they also own the payment flow.
• 7:06
  SPEAKER_00: What makes accounting the next logical product to embed?
• 7:10
  SPEAKER_01: Whenever platforms are thinking about really any product change, but also the embedded fintech roadmap, they think a lot about ROI.
• 7:20
  SPEAKER_01: What's the return on the investment from pursuing this initiative for any product or feature?
• 7:24
  SPEAKER_01: And I think that applies to when you're thinking about what embedded tool to select.
• 7:27
  SPEAKER_01: And so that's what's the upside?
• 7:29
  SPEAKER_01: What is the return from offering this?
• 7:30
  SPEAKER_01: What is the growth or the impact for their businesses?
• 7:34
  SPEAKER_01: And also how much does it help their customers?
• 7:36
  SPEAKER_01: And then what's the level of investment?
• 7:37
  SPEAKER_01: How hard is it to do?
• 7:39
  SPEAKER_01: And how long will it take to actually get that product in market?
• 7:42
  SPEAKER_01: I think the great thing about embedded accounting is in the landscape and the ecosystem of embedded tools, embedded accounting has a really, really strong ROI.
• 7:52
  SPEAKER_01: You can deliver a ton of value for your customers very quickly and without some of the heavy infrastructure builds or complexity of running businesses that move money, like banking, payroll, or lending.
• 8:04
  SPEAKER_01: And so, starting with the upside of the return, accounting, as we talked about, everyone needs accounting.
• 8:09
  SPEAKER_01: So when a platform is looking at their customer base of small and medium-sized businesses, all of those businesses are potential accounting customers.
• 8:16
  SPEAKER_01: You don't need to have employees, you don't need to have credit needs.
• 8:20
  SPEAKER_01: Everyone needs accounting.
• 8:21
  SPEAKER_01: So the TAM within a given platform or the attach rates they can get with their customers are incredibly high.
• 8:28
  SPEAKER_01: From a monetization perspective, bookkeeping is something that customers are typically paying, you know, anywhere from$40 to$200 a month for accounting software, and they're paying a few hundred dollars a month to a bookkeeper if they're hiring one to actually go do their books.
• 8:43
  SPEAKER_01: So there's hundreds of dollars in monthly spend that when you bring accounting into your platform, you can own, you're delivering a much better experience, and you're capturing that spend.
• 8:54
  SPEAKER_01: So the ROI for you, the growth and your revenue per customer is really significant in the thousands of dollars per customer per year.
• 9:01
  SPEAKER_01: So very strong upside.
• 9:03
  SPEAKER_01: On the flip side, the investment, because accounting software and bookkeeping, these are just software workflows, and there's less compliance implementation or foundational regulatory work to do.
• 9:15
  SPEAKER_01: So you can get a product in market in just a few weeks.
• 9:18
  SPEAKER_01: And we have many customers that have done this from first kickoff call to live customers in the span of days, even.
• 9:24
  SPEAKER_01: And so that not only is there a high ceiling on the value you can deliver to your customers, but also you can get the product in market and start growing it very quickly.
• 9:33
  SPEAKER_00: Well, if I'm a vertical SaaS platform, what do I need to know about my customers and their financial activity before embedding accounting becomes a credible product?
• 9:44
  SPEAKER_01: I think one for your customers and just as a platform in general, we are embedding after the platform is already offering payments.
• 9:51
  SPEAKER_01: We do think that the payments is a key foundational piece to build for a few reasons.
• 9:57
  SPEAKER_01: One, and I'm sure you've talked about this on the podcast a lot, because of the relationship, how it deepens the relationship with your customers, but also through the accounting lens specifically, one of the biggest pain points with accounting in general is reconciling payments data with traditional tools like QuickBooks or Zero, actually getting the numbers of what you're processing to line up with what you're seeing in your bank accounts and that whole workflow can be painful.
• 10:19
  SPEAKER_01: When you do payments and then embed accounting, you can automate all of that reconciliation.
• 10:24
  SPEAKER_01: So it actually makes embedded accounting that much more compelling.
• 10:27
  SPEAKER_01: To your question on like the profile of businesses to serve, the biggest thing is you want businesses where our sweet spot and where we see the strongest attached with embedded accounting is businesses that are doing anywhere from 50,000 to 5 million, 7 million a year in revenue.
• 10:45
  SPEAKER_01: That's a lot of businesses.
• 10:46
  SPEAKER_01: That's the vast majority of businesses in the US.
• 10:49
  SPEAKER_01: And it's basically once you're above 50,000, this is no longer really a side hustle.
• 10:53
  SPEAKER_01: It's a meaningful, they are running it as a business to grow and make a living.
• 10:57
  SPEAKER_01: That stays the same all the way up.
• 10:58
  SPEAKER_01: Once you get into the mid to high single-digit millions, people start bringing the finance role in-house and will have more bespoke accounting needs and workflows.
• 11:08
  SPEAKER_01: So that's where maybe a drop-in solution like layer might be less relevant, but that whole middle, we're a great fit for their customers.
• 11:16
  SPEAKER_00: Yeah.
• 11:16
  SPEAKER_00: And that middle, as you call it, is huge.
• 11:19
  SPEAKER_00: Yeah, very big.
• 11:20
  SPEAKER_00: What advantage does a vertical SaaS platform have over the horizontal accounting product because it understands the industry and the workflow and the transactions of that business?
• 11:31
  SPEAKER_01: You nailed it.
• 11:32
  SPEAKER_01: That is a big part of it.
• 11:34
  SPEAKER_01: There's several things.
• 11:35
  SPEAKER_01: So one, that industry vertical understanding and specialization.
• 11:39
  SPEAKER_01: The way that different industries do their accounting is often different.
• 11:43
  SPEAKER_01: And the way that they think about their finances and what you want to measure when you're tracking your finances is totally different.
• 11:49
  SPEAKER_01: One example is a traditional accounting software or horizontal tools.
• 11:54
  SPEAKER_01: You'll get the same experience if you're a truck driver as if you're a full service restaurant.
• 11:58
  SPEAKER_01: But when you think about how those businesses manage their finances, totally different.
• 12:02
  SPEAKER_01: A quick service restaurant probably doesn't have that many vehicle expenses.
• 12:05
  SPEAKER_01: Whereas if you're a truck driver, almost every expense is related to your vehicle.
• 12:09
  SPEAKER_01: And QuickBooks, by default, has maybe two categories, one for fuel and one for everything else.
• 12:15
  SPEAKER_01: That's not going to cut it if you're a truck driver.
• 12:17
  SPEAKER_01: And so when you launch embedded accounting, you can break down, you can tailor the experience to the industry needs of the vertical.
• 12:25
  SPEAKER_01: So you can have 10 different expense categories, 20 different ones to track the nuances of trucking expenses or how a plumber pays for supplies when they're doing jobs.
• 12:36
  SPEAKER_01: That's incredibly valuable.
• 12:37
  SPEAKER_01: And you can also understand different industries collect revenue differently.
• 12:41
  SPEAKER_01: If you're a barbershop, it's appointment bookings.
• 12:43
  SPEAKER_01: If you're a plumber, it's invoicing, point of sale for restaurants and retail.
• 12:47
  SPEAKER_01: And you can automatically reconcile and reflect those nuances in your accounting software when you are embedding it as a vertical SaaS platform.
• 12:57
  SPEAKER_01: So that's a big one.
• 12:58
  SPEAKER_01: It also lets you cut away the 80% of traditional accounting tools that aren't relevant to your industry because you only need that subset that is relevant to your workflows.
• 13:07
  SPEAKER_01: And a big complaint that SMEs have with traditional accounting software is the complexity and just the laundry list of features you see not knowing what's relevant.
• 13:16
  SPEAKER_01: The last one is the data reconciliation piece.
• 13:19
  SPEAKER_01: Vertical SaaS platforms with payments have such rich data on the revenue workflows of their customers.
• 13:26
  SPEAKER_01: And they know the payment the moment it happens, they know what the fees are, all of the discounts, refunds, that whole life cycle.
• 13:34
  SPEAKER_01: And that can automatically sink into the accounting when it's embedded.
• 13:39
  SPEAKER_01: And so you do not get that out of the box with other traditional tools.
• 13:43
  SPEAKER_01: There's a lot of configuration to set that up.
• 13:45
  SPEAKER_01: And small businesses want something that they just turn on and it just works.
• 13:48
  SPEAKER_01: And you can create that experience when you embed accounting.
• 13:51
  SPEAKER_00: Okay.
• 13:52
  SPEAKER_00: As we've talked about in the industry, knows payments has historically been attractive to these software companies, obviously, because there's clear monetization and some other value as well.
• 14:01
  SPEAKER_00: But what does the business case look like for embedded accounting?
• 14:05
  SPEAKER_00: Is it the revenue?
• 14:06
  SPEAKER_00: Is it retention?
• 14:07
  SPEAKER_00: Is it product stickiness, or is it a combination of all those?
• 14:11
  SPEAKER_01: It's a combination of all of those.
• 14:13
  SPEAKER_01: And there's a few different dimensions.
• 14:15
  SPEAKER_01: So one, from a retention and engagement perspective, when you embed accounting and offer both the software and the full bookkeeping services, you become that financial home for the business.
• 14:27
  SPEAKER_01: These platforms, a lot of them are already the operational home, and accounting makes you that financial hub.
• 14:32
  SPEAKER_01: And that is a huge retention and engagement driver because you become the place that businesses go to get the snapshot of their finances and the first connection point or the place that they'll look for any other tool to run their businesses or any other tool for tracking their finances.
• 14:48
  SPEAKER_01: So we have a lot of customers that have seen huge increases in engagement and retention from their embedded accounting offerings, customers that they're the platforms and small businesses that adopt embedded accounting, retain for much longer, they're more engaged, they're using more other products because they now are using the vertical SaaS platform as their financial hub.
• 15:10
  SPEAKER_01: So, of course, there's a bunch of long-term lifetime value and business benefits from that.
• 15:16
  SPEAKER_01: But the other piece is, like you mentioned earlier, the direct monetization.
• 15:20
  SPEAKER_01: So there is very well-established willingness to pay for accounting software and bookkeeping services.
• 15:26
  SPEAKER_01: Traditional accounting software is$50 to$200 a month.
• 15:30
  SPEAKER_01: Bookkeepers and the folks that they hire are$200 to$300 or even more per month.
• 15:36
  SPEAKER_01: And so platforms can come in with offerings that are actually priced below that total spend in the low hundreds of dollars.
• 15:43
  SPEAKER_01: And it's a great deal for their customers.
• 15:45
  SPEAKER_01: It's much more affordable than other options out there on the market, but is still a huge monetization driver for the platform, making a few thousand dollars incrementally per customer per year.
• 15:56
  SPEAKER_01: In some cases, that's more than the actual core SaaS piece of their offering and equivalent to a business that's processing hundreds of thousands of dollars a year on payments.
• 16:05
  SPEAKER_01: And so we see a very strong business case for platforms and really impactful for their businesses.
• 16:11
  SPEAKER_00: Well, we've talked about this a little bit, but I'll dive a little deeper into it.
• 16:14
  SPEAKER_00: So accounting is a product that most businesses, if you're a small business, you're doing it one way or the other.
• 16:19
  SPEAKER_00: I mean, you may be using spreadsheets or you may be using some horizontal solution, but you have some ingrained relationship there.
• 16:26
  SPEAKER_00: So how do you, I guess, working with and through the vertical SaaS companies, how do you convince a small business owner to move accounting into the software platform that they're using anyway?
• 16:38
  SPEAKER_00: There's really two pieces.
• 16:39
  SPEAKER_01: The first is all of those workflow benefits that we discussed earlier.
• 16:44
  SPEAKER_01: So the industry focus and the specific functionality that's relevant to the industry, purpose built to serve plumbers or auto repair shops or whatever the industry may be.
• 16:54
  SPEAKER_01: The seamless data reconciliation.
• 16:56
  SPEAKER_01: Again, small businesses just want tools that just work.
• 16:59
  SPEAKER_01: They want tools that are built for them.
• 17:00
  SPEAKER_01: That's why they choose vertical SaaS, and they want tools that just work out of the box.
• 17:04
  SPEAKER_01: So it is a better product experience, and small businesses see that.
• 17:08
  SPEAKER_01: They are like, finally, there's a tool that's easy to use that meets me where I'm at and is meant for me.
• 17:14
  SPEAKER_01: They'll choose that over a horizontal tool or a manual process nine times out of 10.
• 17:20
  SPEAKER_01: That is a key piece.
• 17:21
  SPEAKER_01: But the second one is vertical SaaS platforms have really become the trusted partners to the industries and the businesses in those industries that they serve.
• 17:29
  SPEAKER_01: And so when you are a restaurant looking for a tool to run your business, you're going to take very seriously what Toast has to say because you know the high bar for their product.
• 17:40
  SPEAKER_01: You know how they deeply understand restaurants in your industry.
• 17:44
  SPEAKER_01: And so, not just any platforms could offer this and any tools in the ecosystem.
• 17:49
  SPEAKER_01: It's very hard to start a new accounting platform from scratch, but vertical SaaS, they know their industry so well and they built those deep relationships with customers.
• 17:58
  SPEAKER_01: Businesses themselves recognize that it is a natural extension for these vertical SaaS platforms to start offering accounting and bookkeeping as well.
• 18:05
  SPEAKER_00: Well, let's go back and talk about it from the software platform lens again.
• 18:09
  SPEAKER_00: They've got a lot of decisions to make when it comes to embedding products.
• 18:13
  SPEAKER_00: That's what Embedify is partially about.
• 18:15
  SPEAKER_00: Not only accounting like you have, lending, banking, payroll, insurance, they have a lot of pressure on them, I think, to figure out what to embed next.
• 18:22
  SPEAKER_00: And most I've read, 75-80% probably already have payments embedded in some way, shape, or form.
• 18:28
  SPEAKER_00: So what factors or what things should they be thinking about that help them to determine what's next?
• 18:35
  SPEAKER_00: What is that next thing?
• 18:36
  SPEAKER_00: And where does accounting tend to make sense in that evolution as they're thinking about what to embed next?
• 18:41
  SPEAKER_01: Yeah.
• 18:42
  SPEAKER_01: The right path is going to be different for every different platform.
• 18:46
  SPEAKER_01: What I would say is going back to the type of customers they serve and through a few dimensions.
• 18:53
  SPEAKER_01: So, one, if they are serving customers that are in that sweet spot of these are businesses that are doing hundreds of thousands of dollars a year in revenue, those are the types of businesses that we see very strong adoption with with embedded accounting.
• 19:05
  SPEAKER_01: Those are the types of folks that need the most help here and that are looking for better solutions.
• 19:09
  SPEAKER_01: They are the ones that are using the QuickBooks and the zeros of the world today, and in many cases, not feeling like those serve their needs.
• 19:16
  SPEAKER_01: The other thing is to think about the profile of the customers and the industries they serve.
• 19:21
  SPEAKER_01: One thing that we see really strong demand with, or one area where we see really strong demand, is industries where the business owner is still in the day-to-day of the business and they are out seeing customers or they are out on the floor in the field making sales.
• 19:37
  SPEAKER_01: Those are the folks that they're wearing so many different hats.
• 19:40
  SPEAKER_01: They are not only running the business, providing the service, but then also have to come back and deal with the finances.
• 19:46
  SPEAKER_01: Those are folks that are really excited to get embedded accounting tools or to have bookkeeping taken off their plate with embedded bookkeeping, because that frees up their time to go make another sale or to go provide the service or practice whatever craft they love.
• 19:59
  SPEAKER_01: And so as businesses get larger, or in some businesses, the owners sometimes naturally move back to more of a back of house or finance role.
• 20:08
  SPEAKER_01: And in those cases, maybe embedded accounting isn't as much of a fit because that's already most of the owner's job and they can create a setup that works for them.
• 20:17
  SPEAKER_01: But there's a lot of industries and businesses where it's the owner providing the service and out in the field.
• 20:24
  SPEAKER_00: Well, there's this interesting tension between the platform having more control versus it adding complexity to their business when it comes to embedding these financial products.
• 20:36
  SPEAKER_00: So when we think about accounting, how much of the accounting experience should the SaaS platform own?
• 20:42
  SPEAKER_00: And then what do they rely on you and Layer to do and to take off their plate?
• 20:48
  SPEAKER_01: That is something that warrants a lot of focus and thought from the platform and something that we work really closely with our platforms to set up good systems and processes for.
• 20:58
  SPEAKER_01: And what we believe at Layer is when it comes to providing the core product, in our case, that's the accounting software and the bookkeeping service on top of it, we will own that end-to-end.
• 21:09
  SPEAKER_01: So it's our job to make sure the software works well, that it has the features that you need, that the bookkeeping service is working well, that books are accurate, closed on time, you know, done three times faster than traditional bookkeepers.
• 21:22
  SPEAKER_01: The reason why they're working with Layer is so that they don't need to deal with all of that hard infrastructural complexity.
• 21:28
  SPEAKER_01: And so Layer provides that.
• 21:30
  SPEAKER_01: And we want to not only provide it up front, but keep evolving it and improving it so that it keeps pace and continues to create a better and better experience for the platform's customers.
• 21:40
  SPEAKER_01: The platform, however, we want them to lean in on two fronts.
• 21:44
  SPEAKER_01: One, go to market.
• 21:46
  SPEAKER_01: And platforms, we believe, should drive the go to market for their embedded products and particularly embedded accounting.
• 21:53
  SPEAKER_01: So we work very closely with our platform customers to enable them to run really strong.
• 22:00
  SPEAKER_01: Go to market motions for embedded accounting and bookkeeping.
• 22:03
  SPEAKER_01: And that's everything from training their sales teams to doing mock calls to giving them collateral that they can reference, battle cards, everything.
• 22:12
  SPEAKER_01: And this takes time, just like with any new product that you start selling.
• 22:16
  SPEAKER_01: But then the platform, once they build that muscle, they're off to the races.
• 22:20
  SPEAKER_01: We've had many customers that have built incredible go-to-market engines offering their accounting and bookkeeping products, spinning that flywheel.
• 22:28
  SPEAKER_01: We'll work with them to start spinning that flywheel and then it's up and running.
• 22:31
  SPEAKER_01: And then the same is true on the support side.
• 22:33
  SPEAKER_01: And specifically how support for the core platform gets routed to layer for the bookkeeping specific things.
• 22:40
  SPEAKER_01: So we'll work with them on support processes, escalation paths, resources for their team for what are the tier one questions that the platform can answer versus tier two ones that our team will lean in and provide guidance to them to help.
• 22:52
  SPEAKER_01: Those are usually the two main areas.
• 22:54
  SPEAKER_01: And then when you put all three of those pieces, the go-to market, the product, the support, it becomes a great offering for folks.
• 23:00
  SPEAKER_00: Well, we can't have a conversation, especially embedded finance conversation without talking about AI.
• 23:06
  SPEAKER_00: So how is AI changing embedded accounting?
• 23:09
  SPEAKER_00: Do you think we get to this point where bookkeeping, reconciliation, maybe even financial insights largely happen kind of behind the scenes in the background?
• 23:19
  SPEAKER_00: Absolutely.
• 23:20
  SPEAKER_01: AI is changing everything about accounting and bookkeeping.
• 23:23
  SPEAKER_01: And it's a really exciting time.
• 23:25
  SPEAKER_01: As we talked about earlier, traditional accounting software was just a tool.
• 23:29
  SPEAKER_01: It was a means to an end.
• 23:31
  SPEAKER_01: If you had an accounting software subscription, you didn't automatically get your PL.
• 23:36
  SPEAKER_01: There was work you needed to do to connect your bank accounts, reconcile the balances, categorize things.
• 23:42
  SPEAKER_01: And that took hours in many cases for either the business owner or the bookkeeper that they hired, and a lot of time and money going into actually using the accounting software to get to the end state that you want, which is a clean PL that you can go make business decisions off of, or you can go use to file your taxes.
• 24:00
  SPEAKER_01: The exciting thing about AI is it allows accounting software to move from just the place where work gets done to actually doing the work and doing the books for businesses.
• 24:11
  SPEAKER_01: The future of accounting software is software that does your books for you.
• 24:14
  SPEAKER_01: So that's things like categorizing your transactions for you so the business owner doesn't even need to think about it.
• 24:20
  SPEAKER_01: Or taking in all the data, reconciling everything automatically from, hey, send me your loan statement.
• 24:25
  SPEAKER_01: We'll match it up with everything, get it in your books with no further effort for the business owner.
• 24:30
  SPEAKER_01: A lot of these workflows that traditionally required a lot of either data entry or hand matching things together can now be automated.
• 24:38
  SPEAKER_01: And that allows you to deliver a lot more value to the customer.
• 24:41
  SPEAKER_01: And for customers that traditionally maybe they couldn't afford a bookkeeper or they had trouble finding a good one, you can now offer software that matches the quality of work done by a bookkeeper and does it faster and at a more affordable price point.
• 24:56
  SPEAKER_01: Because ultimately, we want to make this as accessible as possible.
• 24:59
  SPEAKER_01: No business should not know their finances because they can't afford to see them.
• 25:03
  SPEAKER_01: And so democratizing that access to clean books and a clear financial picture that you can use to make the best business decisions possible.
• 25:12
  SPEAKER_01: AI is enabling that.
• 25:14
  SPEAKER_00: Well, final question before we wrap up.
• 25:17
  SPEAKER_00: And it's kind of a two-part question.
• 25:18
  SPEAKER_00: If you fast forward a couple of years, maybe three to five years, where do you see kind of this landscape?
• 25:24
  SPEAKER_00: Do you think we're going to be where most small businesses are using a financial product like a vertical SaaS company to do their financing?
• 25:32
  SPEAKER_00: Or do you think it's going to still be kind of on the horizontal solution side?
• 25:37
  SPEAKER_00: And then what has to happen in the industry for that shift to occur where small businesses are mostly using the vertical SaaS solutions?
• 25:44
  SPEAKER_01: I think we will see a meaningful shift out of horizontal accounting tools into verticalized accounting tools provided by vertical SaaS platforms.
• 25:54
  SPEAKER_01: For all the reasons we've chatted about, it's a better experience.
• 25:58
  SPEAKER_01: It's one less tool for small businesses to deal with.
• 26:01
  SPEAKER_01: And it's right where they're running their business day to day.
• 26:04
  SPEAKER_01: Customers want to see where they're making money in the tool that they're using to generate money.
• 26:08
  SPEAKER_01: And they can then take those financial insights and use it to run their business even more efficiently and better.
• 26:14
  SPEAKER_01: So seeing that visibility right in the place where you're making those operational decisions, that is where things are converging.
• 26:20
  SPEAKER_01: And we are seeing this with the other embedded offerings happen across a bunch of other financial tools: lending, banking, payroll, consolidating into vertical SaaS as that hub.
• 26:31
  SPEAKER_01: And we're already seeing that happen.
• 26:33
  SPEAKER_01: Over half of businesses that come onto Layer are coming from a traditional accounting software platform.
• 26:38
  SPEAKER_01: We expect that to continue to accelerate.
• 26:42
  SPEAKER_01: And it's for the reasons that we've chatted about.
• 26:44
  SPEAKER_01: And I think we're still early innings and early days of this shift as the vertical SaaS ecosystem continues to grow so quickly.
• 26:52
  SPEAKER_01: And the platforms that are already live are continue to grow quickly.
• 26:55
  SPEAKER_01: And so I think we're still early in this process, and I expect things to continue accelerating over the coming years.
• 27:01
  SPEAKER_00: Well, Justin, I think that's a great way to wrap up the show.
• 27:04
  SPEAKER_00: So I really appreciate you being here.
• 27:06
  SPEAKER_00: I look forward to seeing you at Embedify.
• 27:09
  SPEAKER_00: And I know your time is valuable.
• 27:10
  SPEAKER_00: So I really appreciate you taking the time out to do this episode.
• 27:13
  SPEAKER_00: Again, thank you for being on the show today.
• 27:15
  SPEAKER_01: Absolutely.
• 27:15
  SPEAKER_01: Thanks, Greg.
• 27:16
  SPEAKER_00: And to learn more about Embedify and to register to attend, visit Embedify2026.com and look forward to seeing you there.