Murph finishes up his two-part First Look mini-series on Digits, a totally new Accounting Platform built for the AI era.
In Part 1 of this mini-series, we looked at "What is Digits?", "What Digits is!", "Digits Design (Technically Unique)", "Agentic AI isn't (just) an Add-on", and "Digits Approach to Accounts Receivable" (as one example of functionality). In this second and final part of our First Look at Digits, we will delve into some other functional areas of Digits.
I think the first area we need to look at is where you are likely to spend the start of your day when using Digits, and that is with the Digits Inbox.
Your Digits Inbox
The Inbox is your to-do list in Digits. Accessed from the Inbox item listed in your left-hand menu, it shows you what needs your attention, all in one place. This Inbox:
While Digits AI does most of the routine work associated with your bookkeeping, including automatically categorizing the majority of your transactions, the AI may not have fully learned every unique aspect of your business. In these cases, Digit's AI will flag a transaction for review and place it in your Inbox.
From there, you can either update the suggested category and click Confirm, or you can click Confirm if everything already appears correct.
Out of the Inbox and into the Chart of Accounts is where we want to be, just one thing… Digits looks at your chart of accounts differently. I think you will like 'different.'
The Digits Category Manager
Category Manager is Digits' intelligent, modern approach to the traditional Chart of Accounts. It lets you organize, standardize, and manage categories, whether you are a business running Digits or an Accountant with multiple clients.
The Category Manager is where you set up and organize the different categories your business uses to track income, expenses, assets, and more. It functions as your chart of accounts—think of it like an intelligent filing system for your finances, whether you're a seasoned bookkeeper or just getting started.
To access the Category Manager, you first click on the Accounting left-hand menu item, then click on Category Manager. When you are first getting started with Digits, you can populate your categories with a variety of 'import' sources, including directly from other accounting software or via .csv format.
Of course, you can also create a brand new category list directly within the Category Manager interface by selecting + New Category in the top right corner. Then, just fill in the details like Category Name, Parent Category (if this is a sub-category of a parent), Subtype, Icon (which is optional), Category Number (also optional), and then a Description.
You can create multiple layers in categories using the 'Add Child' icon, as shown in the illustration below.
Moving on from the Category Manager, I want us to contrast a Digits functionality with that of other accounting platforms whose users complain about one specific feature more than anything else. I'm talking about 'Banking and Bank Reconciliation.'
Digits' Banking and Bank Reconciliation
Once you have connected your banks and credit cards, Digits begins to learn your business to provide 24/7 automated bookkeeping; it actually grows smarter with every new transaction and categorization. Along the way, it provides auto-transaction flagging, providing you with the opportunity to review and quality-check the recommended categorizations.
When you connect a U.S.-based bank or credit card account using Plaid, Digits automatically fetches official bank statements into the Documents tab, no manual upload needed. Currently, the following banks are supported:
Wells Fargo, Bank of America, U.S. Bank, Citibank Online, Navy Federal Credit Union, Regions Bank, Fifth Third Bank, Huntington Bank, Truist, Acorns, Mercury, Meow, Slash, Chariot, Parker, Klutch, Spruce, Double Finance, Mass Finance Inc., GuideStone Financial Resources, Dappr, Crew Finance, Percapita Group, Cogent Bank (Personal & Business), Atlas, Safra National Bank, American Bank (TX), and CCBank (Business & Personal). [Note: This list may not be current as of the time of publication of this article; it's based on the last information we had available from Digits at the time the article was initially prepared.]
If your bank isn't one of those supported, Digits can still upload your bank data from a .CSV file download, or even by converting a PDF bank statement download into a .CSV upload. For more information about this process, see the Digits official webpage.
There comes a time when you should reconcile your accounts. Traditionally, bookkeepers and accountants have performed reconciliations as part of their month-end closing procedures, or as soon as bank statements become available. Because Digits AI Agents are booking your data from available bank and credit card account information, and the AI categorization is so accurate, your reconciliation work will be streamlined to a few simple steps.
Start by selecting Reconciliations from the left-hand menu. Digits provides a unique overview of your accounts and their reconciliation histories. There is no doubt which accounts need your attention. You can quickly access any reconciliation that has not been finished and choose to continue working on it. Just as quickly, you can start on a new reconciliation.
Once you've started a reconciliation, you will land on a detailed view of the account you want to reconcile. This view shows you all transactions since your last finalized reconciliation, plus any unsettled transactions from earlier periods.
All automated transactions, including those synchronized from your Connections, are reconciled by default to the appropriate account(s). Manually created or transactions you imported (via CSV file) must be manually reconciled.
Digits allows you to efficiently bulk-reconcile transactions. Select the transactions you wish to bulk reconcile or edit. Update any information, if needed, then select the reconcile or unsettled option. The total sum of all selected transactions you just processed will appear in the account balance.
While this is not intended to be a step-by-step instructional guide, reconciliation really is just about that simple.
In yesterday's Part 1 of my First Look at Digits, we looked at Accounts Receivable, so what about Accounts Payable?
Accounts Payable, Automated, of course.
Digits makes A/P just as simple, automated, and reliable as A/R. First, a modern interface, accessible from Bill Pay in the left-hand menu, puts all your vendor bills and the entire A/P workflow before your eyes. You will see your bills pending approval, those awaiting Payment, and those scheduled and paid.
To post a new bill, upload the Bill or drag a file directly into Digits. Digits AI auto-scans the file and adds the Bill, with pre-filled details, into the In Review section of the Bills interface. Digits utilizes advanced OCR technology to extract the vendor's information and bill details, substantially reducing the need for manual data entry or editing.
Click on the Bill to review and confirm details, edit any fields that Digits hasn't yet learned from your history. If the vendor is new, you will be prompted to complete their profile. As a part of that process, you can select a default payment method, including via ACH, via Check, or via Digits Pay.
If you require vendor bills to be approved, you can select an approver and click Send for Approval. If approval isn't needed, click Approve and Submit Payment. If you choose to use Digits Pay, all payments automatically reconcile with your Digits ledger.
For purposes of full disclosure, "Digits Pay" is included in your Digits subscription costs; however, there is a $0.50 charge per ACH transfer and a $2.00 charge per Check sent via Digits Pay.
The Finance Agent and Real-time Dashboards
Digits' Finance Agent builds and updates real-time dashboards, analyzes trends, prepares statements, and delivers deep financial insights. You will land on your Home dashboard when signing in, but you can also click Home from the left-hand menu.
Your Digits Dashboard is your command center. It puts real-time financial insights and metrics right at your fingertips—no spreadsheets or finance degree required. Instantly see cash flow, revenue, runway, and more, all in one place.
Easily make your Dashboard your own by adding what matters, removing what doesn't, and arranging everything how you like it. Want to change it up? Click Edit in the top-right corner, then add components by dragging in Metrics, Statements, Lists, Headcounts (for Gusto Payroll users), Searches, and Custom tiles. Remove any tile with a click of the X on the right side. Drag the tiles around until they look just right for you.
Speaking of real-time, Dashboards are not the only way to see your financials in real-time. Remember, Digits is working 24/7 to maintain your books accurately, and it grows smarter with each new transaction it encounters. As part of learning your business, it's essential to constantly compute key business metrics, such as cash flow, burn rate, revenue, and expenses. You can certainly see this in the real-time Dashboard as we discussed above, but there's another way… reporting.
Digits' Reporting Agent and Real-time Financials
The Digits' Reporting Agent builds and publishes interactive, presentation-ready management reports and executive summaries. As part of that functionality, clear, interactive key reports are but a click away in the Financials tab.
On-screen or print-ready, the key financial reports you require are ready at the click of your mouse – Balance Sheet, Profit & Loss, Cash Flow, A/R Aging, and A/P Aging. Each report is compiled in real-time, filterable, and packed with insights like top transactions, customer trends, and account breakdowns.
Whether you're running a business and managing the books for your own company or you are an accountant overseeing the financial operations of a hundred companies, Digits gives you a complete picture of all the finances under your purview.
Clean, smart visuals and flexible outlays help you track financial performance, monitor cash flow, and stay on top of your business, or a hundred businesses.
Customize your report the way you like it to look and feel the way you want. Add a Title to your cover page of an Executive Summary, toggle off account numbers (if you prefer), add your logo or branded image to the cover page, then scroll to the Add button and select graphs, statements, lists, or KPIs.
Digits offers Report Scheduling to automatically generate specific reports or report packages on the frequency you set (monthly, quarterly, end-of-year, etc.). If you want to share your financials outside of Digits, no problem. Whether you're prepping for a shareholder meeting, an audit, a staff meeting, or a conference with your banker, exporting your data is fast and flexible in either PDF or CSV format.
And when you want to preserve a set of financials or a supporting ledger, Digits has you covered with document management.
Digits' Document Management
Digits' Documents show all files you have uploaded into Digits, including those Vendor bills you scanned or dropped in for Accounts Payable, Bank statements you may have uploaded when you were reconciling your account, CSV data, PDFs of special reports you prepared for a presentation, etc. Best of all, they are all in one location where you can manage, search, preview, and offload if needed.
Whether your documents are auto-fetched or user-uploaded, everything you upload stays in this one place. You have the option of displaying your documents in grid mode (as shown above) or in list mode.
Other Considerations
It's just not possible for me to cover every detail about Digits, even though I'd like to. The purpose of a First Look (or, for that matter, an 'App Aware') feature is to let you know about a product that's new to us. While an App Aware is a cursory look, a First Look is more of an examination of the software or app. As part of a First Look, I always undertake at least a demonstration, or even a one-on-one demonstration, as I did with Digits. Therefore, I'm comfortable with the level of summary I'm providing regarding those functional areas I have covered. But there are areas of Digits that I've considered and will discuss in this section, even though I didn't personally experience them.
Migrating to Digits
Digits has built tools to provide a seamless data migration from other software products, including QuickBooks Online and Xero. Digits understands that switching accounting platforms is a 'big deal', so they have attempted to make the conversion as simple as possible.
Let's discuss migrating from QuickBooks Online. After creating a Digits account, users connect their QuickBooks account to Digits. You decide the magical date when you want Digits to become your accounting platform.
For example, if you are on a calendar year basis, then you likely want to start with Digits shortly after the first of the year, and your 'cutover date would be 12/31/XX'. On the other hand, if you want to bring over your entire history, then you will set your 'cutover date' as the first date you ever used QuickBooks.
Digits will securely import the historical information, including past transactions, your existing chart of accounts, vendors, customers, and other key financial information. The cutover date you set becomes the date on which Digits takes over as your 'source of truth' of your accounting information.
If you want to test out Digits while still using QuickBooks, you can run a parallel set of books for a month (or so). In this case, you will set your cutoff date during Digits signup. Data before that date is pulled from QuickBooks, but will not be updated and will not be synchronized back to QuickBooks. You can then begin entering new data in Digits, and continue working in QuickBooks to have a direct comparison.
If you want more information about how the Digits migration' cutoff date' works, consider reviewing this official Digits support guide: Understanding Dates in Digits.
The process is very similar if you are using one of the other accounting document sources shown in the 'conversion tool' graphic above.
Payroll
Digits doesn't currently offer a payroll function as part of its platform; instead, it has teamed up with Gusto to ensure that payroll and benefits information is directly synchronized to Digits. This integration streamlines reconciliation, improves reporting accuracy, and eliminates the need to enter recurring payroll data manually.
Digits does provide a step-by-step procedure whereby you can record payroll manually to ensure proper accounting for Gross Wages, Benefit Costs, Employer taxes, Payroll liabilities, and Payroll Processing costs.
What Else is Missing
As for now, Digits does not support 'itemized inventory'. Basic inventory is on the Digits' Roadmap, but how far out I can not say, even if I knew. Certainly there are Light Inventory and Manufacturing solutions that should be looking to integrate with Digits, and ultimately, at least for Heavy Inventory and Manufacturing functionality I suspect that Digits will rely on 3rd-party apps, as do most cloud-based entry-level accounting platforms.
As a natural extension of not having native inventory, there is currently no 'published' native integration between Digits and a third-party Sales Tax compliance solution like Avalara (AvaTax); however, several of the 3rd party applications that Digits does integrate with can integrate with AvaTax or other sales tax software. For example, Digits connects with the Stripe payments platform which can compute sales tax or offer AvaTax integration. Similarly, some third-party E-commerce platforms that already integrate with Digits can process Sales Tax through them. In these cases, the applicable sales tax related impact on the financials can flow through to Digits.
Accounting Firm Support
Remember, Digits spent a couple of years listening to what accountants told them at trade shows about what they needed in the way of a general ledger. As a result, Digits was built for accounting firm success with tools that allow you to manage your practice from a single command center and boost your efficiency. This includes Firm Dashboards, Team Collaboration workflows and workspaces, and accountant support.
Combined with the Digits Accountant Partner Program, you get the power of Digits for your firm's books free, a dedicated success team, full migration support for you and all your clients you add to Digits, and firm-wide training and enablement. Not to mention discounted pricing for your clients, ranging from 10% to 25% depending on their plan.
Data Security
Digits has built multiple layers of advanced security to protect your data and ensure your privacy. It is SOC 2 Type II compliant, meeting the rigorous security, availability, and confidentiality standards set by the AICPA.
Digits Technical Support
Digits offers dedicated expert, hands-on support for all its customers. This includes tailored guidance to help you seamlessly migrate your existing data and workflows to ensure a smooth integration and long-term success with Digits.
What's My Conclusion
I think, for the short time Digits has been in active development, they have come a long way in providing what appears to be the core building block of an accounting platform built for AI from the ground up..AI wasn't just an afterthought; it was the precursor to the questions they ask accountants: "What do you want in your next Accounting Platform?" I appreciate that they ask that question of so many of us before putting 'code to processor' under the assumption that they know better than we what we should have.
It's clear that many smaller businesses who are 'inventory-centric' may not find Digits a viable solution; however, chances are if they look to either the "Green Ball" or the "Blue Ball" for a cloud based solution and their inventory requirements are very intensive, involve manufacturing, or need true E-commerce functionality, they would be looking at an inventory-centric add-on that handles those capabilities.
Should you buy it? I say, look at it in depth. Get a Demo, preferably one-on-one. Then try it in a test run. Maybe even do a side-by-side test and see how it works for you. One of their nice features is the ability to accurately measure how much time their AI is saving you by doing things you would otherwise do manually. When you see those numbers, you may actually decide to let "Digits up your profits."
Getting more information and pricing.
If you want more information, including pricing details, head over to the Digits website. From there, you can sign up for a free trial or learn more about becoming a Digits Partner.
Post Your Comments
Let us, and our readers know what you think of Digits, especially if you do try it out. Just post you comments at the bottom of this article.
Disclosures:
Some feature content, including graphics, was adapted from Digits' supplied materials, including IA's First Look/App Aware survey submission. Content adapted by Insightful Accountant from Intuit sources is furnished for educational purposes only.
As used herein, Digits® and Autonomous General Ledger® are registered trademarks of Digits Financial, Inc., a privately-held, private-equity financed corporation headquartered at 1015 S. Fillmore Street, San Francisco, California, USA, 94115.
As used herein, QuickBooks and QuickBooks Online refer to one or more registered trademarks of Intuit, Inc., a publicly-traded corporation headquartered in Mountain View, California.
Any other trade names or references used herein may refer to registered, trademarked, or copyrighted materials held by their respective owners; they are included in the content for informational and educational purposes only.
This is an editorial feature, not sponsored content. No vendor associated with this article has paid Insightful Accountant or the author any form of remuneration to be included within this feature. The article is provided solely for informational and educational purposes.