InScope Secures $14.5M to Revolutionize Financial Reporting with AI
Even without a background in accounting, anyone who has ever glanced at a 10-K or 10-Q can tell that preparing financial statements is a complex, tedious process. For years, companies have relied on legacy platforms like Workiva and Donnelley Financial Solutions to streamline these operations. However, longtime accountants Mary Antony and Kelsey Gootnick found themselves frustrated by the persistent manual hurdles within these existing tools. Recognizing a significant gap in the market, they set out to build a better solution. This article delves into how InScope is leveraging artificial intelligence to transform financial reporting, its recent $14.5 million Series A funding, and the future of accounting technology.
The Genesis of InScope: From Frustration to Innovation
Antony and Gootnick first met seven years ago at Flexport, where Gootnick served as the company’s controller and Antony as assistant controller. They remained connected even after Antony moved to Miro and Gootnick to Hopin and later Thrive Global. Throughout their careers, a recurring theme emerged: the inefficiencies inherent in financial statement preparation.
“The way financial statements come together, it’s just patched together in a lot of spreadsheets, moved into a bunch of Word documents, emailed back and forth between people,” Antony explained to GearTech. This fragmented process was not only time-consuming but also prone to errors and lacked a centralized source of truth.
In 2023, driven by this shared frustration, Antony and Gootnick launched InScope, an AI-powered financial reporting platform designed to automate many aspects of the financial statement preparation process. The company recently announced a successful $14.5 million Series A funding round, led by Norwest, with participation from Storm Ventures, and existing backers Better Tomorrow Ventures and Lightspeed Venture Partners. This funding will fuel InScope’s continued development and expansion.
How InScope is Automating the Financial Reporting Workflow
While InScope isn’t yet fully automating the generation of complete income statements and balance sheets, it significantly reduces the manual workload. The platform excels at automating tasks that traditionally consume a substantial amount of accountants’ time, such as verifying mathematical accuracy and ensuring consistent formatting. Antony estimates that simply standardizing elements like dollar signs and commas can save accountants up to 20% of their time.
Key Features and Benefits of InScope
- Automated Data Verification: InScope’s AI algorithms automatically check for errors in calculations and data consistency, reducing the risk of inaccuracies.
- Standardized Formatting: The platform enforces consistent formatting across all financial documents, eliminating tedious manual adjustments.
- Centralized Workflow: InScope provides a single source of truth for all financial reporting data, streamlining collaboration and reducing version control issues.
- Reduced Manual Effort: By automating repetitive tasks, InScope frees up accountants to focus on higher-value activities like analysis and strategic decision-making.
- Improved Accuracy: AI-powered verification minimizes errors and ensures the reliability of financial statements.
Rapid Growth and Market Traction
InScope has experienced impressive growth over the past year, increasing its customer base by 5x. The platform has attracted significant accounting firms, including CohnReznick, currently ranked among the top 15 nationally. This demonstrates the growing demand for innovative financial reporting solutions and InScope’s ability to deliver tangible value to its clients.
The company’s success is also attributed to a growing recognition of the need for modernization in the accounting industry. Traditional methods are often outdated and inefficient, leaving firms struggling to keep pace with the demands of a rapidly changing business environment. InScope offers a compelling alternative, empowering accountants to work smarter, not harder.
The Role of AI in the Future of Financial Reporting
While accountants are generally considered a risk-averse profession, Antony believes that the benefits of AI-powered automation will eventually outweigh their concerns. The ultimate goal of InScope is to fully automate the financial statement preparation process, allowing accountants to focus on providing strategic insights and advisory services.
However, the transition will likely be gradual. Accountants will need to build trust in AI algorithms and develop the skills necessary to effectively utilize these tools. InScope is committed to providing comprehensive training and support to help its clients navigate this transition.
Addressing Concerns About AI Adoption
One of the primary concerns surrounding AI adoption in accounting is the potential for job displacement. However, experts argue that AI is more likely to augment accountants’ roles rather than replace them entirely. By automating routine tasks, AI can free up accountants to focus on more complex and strategic work, such as:
- Financial analysis and forecasting
- Risk management
- Strategic planning
- Client advisory services
This shift in focus will require accountants to develop new skills, such as data analysis, critical thinking, and communication. However, it will also create new opportunities for career advancement and professional growth.
Investor Confidence and the Vision for InScope
Norwest partner Sean Jacobsohn explained to GearTech that his investment in InScope was driven by feedback from multiple clients who reported significant time savings using the platform. He believes that InScope’s unique advantage lies in the founders’ deep understanding of the financial reporting process.
“It’s a very complex space, and you need to be able to have been in the shoes of the buyer before,” Jacobsohn stated. Antony agrees, noting that accountants are not typically the type to launch startups. However, she and Gootnick honed their entrepreneurial instincts through years of experience in fast-paced, high-growth startup environments.
The Competitive Landscape and InScope’s Differentiation
The financial reporting software market is competitive, with established players like Workiva and Donnelley Financial Solutions. However, InScope differentiates itself through its focus on AI-powered automation and its deep understanding of the accountants’ workflow. While existing solutions offer some level of automation, they often require significant manual intervention. InScope aims to provide a truly hands-off experience, minimizing the need for manual adjustments and reducing the risk of errors.
Furthermore, InScope’s user-friendly interface and intuitive design make it easy for accountants to adopt and integrate into their existing workflows. The platform is designed to be flexible and scalable, catering to the needs of both small and large organizations.
Looking Ahead: The Future of InScope and Financial Reporting
With its recent funding and growing customer base, InScope is well-positioned to become a leader in the AI-powered financial reporting space. The company plans to use the funds to expand its engineering team, accelerate product development, and scale its sales and marketing efforts. Key areas of focus include:
- Expanding the platform’s AI capabilities to automate more complex tasks.
- Integrating with other accounting and financial systems.
- Developing new features to support emerging accounting standards.
- Expanding its customer base to include more accounting firms and corporations.
InScope’s vision is to transform financial reporting from a tedious, error-prone process into a streamlined, automated, and insightful experience. By empowering accountants with the tools they need to work smarter, InScope is helping to shape the future of the accounting profession. The $14.5M funding is a testament to the potential of AI to revolutionize this critical aspect of business operations, and InScope is leading the charge.