Accountants; Heads Up. Pacioli.ai Could Be a Gamechanger

Technology can change rather quickly.  But people tend to change their minds significantly more slowly.  Pacioli.ai and Luca Suite, which is part of Pacioli.ai, are potentially and in my opinion, a significant milestone in accountancy.  In fact, it could be a gamechanger.

Yesterday, it was announced that Pacioli.ai and Luca Suite were made available as production, commercially available software.  (As I understand it, this is a public soft launch.)  This software release might be interesting to you because both WHAT is being made available is unique, but also HOW it is being made available is unique.

In terms of WHAT; Pacioli.ai is a PROLOG based validator of XBRL-based business and financial reports and Luca Suite is a model-based financial report and business report creation tool which can serialize a report as XBRL, Inline XBRL, HTML currently and other formats to follow.

In terms of HOW; Pacioli.ai is a TRUE Web3 software application.  Pacioli.ai is a multi-tenant cloud-based software application.

Multi-tenancy is a software architecture that allows multiple customers or user groups to share a single software instance, database, and hardware.  Each customer or user group, called a tenant, is guaranteed privacy and can make some customizations to the application. Tenants can't customize the application's code, but they can often customize the user interface or business rules.  Multi-tenancy has its roots in classical mainframe architectures, where many software applications and users shared one common computing hardware platform such as an IBM 360 mainframe computer.

Why is this important? Because accountants have a potential opportunity to test the ideas of Web3 and build a business franchise. NOTE that I am not promoting this opportunity, I am simply pointing out what is going on and you should decide for yourself whether this is worth checking out.

As I understand it, what is called a “node operator” can run a node of the Pacioli.ai software, at this point mainly a powerful PROLOG (but it only uses the DATALOG portion of PROLOG for processing safety) XBRL-based report validation/verification tool and semantic reasoning engine.  

Effectively, each node operator is a “franchise” with a franchising business in XBRL-based report verification/validation using the Seattle Method which I created.  Ultimately, my Seattle Method will very likely be replaced by the Standard Business Report Model (SBRM) being created by OMG.  Each franchise is a separate business effectively. Resources such as rules necessary to perform high value verification tasks can be shared by these franchise or a franchise can use whatever rules they might want.  Or, they can create rules and make those rules available to other franchise owners.  It is up to them.

When I say "rules" I mean financial reporting related rules that can only be created by a skilled and experienced accountant.  Here are examples of the types of rules I am talking about.  I mean, think about it; what good is software that needs rules to work if there are no rules available?  Or, what new opportunities can be opened up by creating machine-readable rules for new areas?  Every accountant, anywhere in the world has an opportunity here.

Software users can pay using crypto assets, primarily and maybe even exclusively the AUDT token.  I am getting out of my realm here so I think I will stop while I am still in the boundaries of my understanding.  I don’t know if Luca Suite is true, pure Web3 software yet.  The best summary of how I think this might work is documented in Auditchain Explained in Simple Terms.

Full disclosure, I was part of the very small team that created Pacioli.ai and Luca Suite.  As such, it would appear that I am a bit biased.  Fair enough.  But, if this software was junk, trust me when I say I would tell you it was junk.  I am probably one of the world’s biggest critics of bad software.  

This software is not perfect, but it could potentially be truly revolutionary.  Clearly Auditchain Labs AG has to prove to the market that Pacioli.ai and Luca Suite have value.  We shall see if there are any takers over the coming months.

What I am pointing out is that accountants have an opportunity to be the freemasons of the information age. The first step in that process is to expand your digital proficiency.  Novices beware!!! Be very careful if you have not been paying attention to Web3, XBRL, blockchain, artificial intelligence, and such.

There are immediate opportunities related to MiCA and VARA crypto asset regulatory reporting, sustainability reporting, financial reporting in Switzerland, and obviously US GAAP and IFRS financial reporting to the Securities and Exchange Commission in the US and IFRS financial reporting to the European Single Market Authority (ESMA) in Europe.  More opportunities, such as the Financial Data Transparency Act (FDTA) will likely come online at some point potentially.  Even more will follow.

In my personal opinion, this is a huge step towards modern accountancy.  This has been quite a journey, not what I expected when I called Wayne Harding in May 1998 and explained that CPAs needed to pay attention to XML and that we needed to create a global standard.

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