By Laura Bock and Shruti Batra

The finance back office is entering its first real upgrade cycle in decades. For too long, enterprise resource planning (ERP) and accounting systems have been defined by complexity, high cost and stale data, operating more as check-the-box utilities than strategic enablers.

Today, a new wave of AI-native challengers is reimagining the CFO stack from the ground up. These platforms automate ingestion, reconciliation and reporting while delivering real-time insights and decision support.

Importantly, AI doesn’t replace the accountant, it redefines the role, shifting from bookkeeper to advisor, from execution to judgment. This transition is not without hurdles: culture inertia and adoption risks are real.

But this shift is fueling demand for modern tools, creating one of the most significant transformation opportunities in finance in decades. And as labor shortages collide with legacy fatigue, the cost of inaction will catch up. The time to modernize is now.

At QED, we’ve long believed finance and accounting workflows were ripe for reinvention. Our investments in companies such as Avidxchange, RogerAI, MakersHub, Collective and Proper reflect our conviction that finance and accounting workflows are overdue for reinvention, and we continue to actively explore this category as AI reshapes the CFO stack.

Key trends:

Across the market, several themes stand out. Structural headwinds like the accounting labor shortage are colliding with powerful tailwinds from AI and cloud adoption, creating both urgency and opportunity. Meanwhile, new business models, deeper vertical specialization and an influx of fresh capital are reshaping how finance software is built, bought and used.

• Accounting labor cliff: The profession is facing a historic supply crunch: 75 percent of CPAs are set to retire in the next decade, with more than 300,000 already gone since 2019. Rising tax, audit and compliance demands are colliding with a shrinking talent pipeline, pushing firms to adopt software-driven solutions to bridge the gap.
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• AI reshaping workflows: Generative AI is automating rote finance tasks, such as document ingestion, reconciliations, contract parsing and report generation - freeing up accountants to focus on oversight, analysis and advisory.
  
  AI has had a significant impact on transaction categorization which is the atomic unit of accounting: every expense or deposit must be properly classified (are the pens that we bought to put on the table at the CEO conference “office supplies” or are they “events and marketing”) and getting it right has historically required human judgment. AI systems can now handle context-sensitive classification reliably at scale, freeing accountants to focus on oversight, analysis and advisory.
  

• ERP fragmentation and recomposition: The monolithic ERP suite is breaking apart. Specialized challengers are winning with best-in-class tools for billing, close, AR and AP that outperform legacy modules. Over time, these point solutions are expanding into broader platforms. The old ERP model is splintering before gradually being reassembled in a modern form.
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• Shift from billable hours to fixed fees: The move away from hourly billing has been building for years - firms and clients alike have long been frustrated by misaligned incentives and unpredictable costs. But AI is the catalyst that’s finally breaking the dam.
  
  By automating repetitive tasks and standardizing workflows, firms can now deliver faster, cheaper outcomes with greater predictability. This makes fixed-fee and value-based models not only desirable but operationally viable, opening the door for software-first firms to capture more of the economics.

• From stale to real-time data: Legacy systems leave CFOs working with numbers that are 30-90 days old, limiting their ability to act strategically. AI-native platforms enable continuous close, live reconciliations and predictive insights, transforming finance from backward-looking compliance to forward-looking decision support.
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• Finance as a strategic driver: CFOs are no longer back-office historians - they now sit at the center of business decision-making, partnering with sales, product and operations to shape strategy in real time.
  
  This shift is revealing something important: ERP was never meant to be ‘accounting software,’ - yet that vision was aspirational until now. With AI and real-time data flows, finance is finally becoming an operating system for the company, not just a reporting function. Dashboards, continuous forecasting and cost visibility are now core to how companies run, not nice-to-have extras.
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• Trust, accuracy, and ‘human-in-the-loop’: Precision is nonnegotiable in accounting and audit. Adoption depends on platforms delivering auditability, version control and explainability, with clear workflows for human oversight.
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• Verticalization of the stack: Generic ERPs struggle with industry-specific workflows (healthcare billing codes, construction project accounting, insurance claims). Vertical SaaS players are embedding accounting modules directly into their stacks, creating opportunities for AI-native challengers to win distribution through vertical depth.
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• Capital flowing into the stack: Investor conviction is strong and is accelerating the category’s momentum. Recent financings include Rillet ($70 million Series B from a16z and ICONIQ; $30 million from Sequoia), Campfire ($35 million Series A from Accel), Dual Entry ($90 million from Lightspeed, Khosla Ventures and Google Ventures) and Tabs ($55 million Series B from Lightspeed and GC).

Together, these dynamics converge to make the CFO stack not just an area of incremental improvement, but one of the most active and investable frontiers in enterprise software today.

Where we see opportunity:

1. Data as the foundational wedge

Accounting starts and ends with accurate data - if the inputs are wrong, everything downstream becomes “garbage in, garbage out.” It’s also where the bulk of manual hours are spent, as accountants pull information from bank statements, AR/AP systems, contracts, ledgers, receipts and invoices into reconciliations and the monthly close is still highly manual and bookkeeper-driven. With the accountant pipeline shrinking, automating this ingestion is the most urgent opportunity and we see it as the foundational wedge for AI-native platforms.

For example, MakersHub is tackling this head-on in construction and manufacturing, where accountants often spend hours manually re-keying line items from long invoices. By automating that ingestion, they save finance teams enormous time and unlock cleaner, faster data for downstream reporting and decision-making.

2. The next wave in accounts receivable automation

Accounts receivable is one of the most manual and painful areas of finance - chasing down payments, matching cash and resolving discrepancies can consume endless hours. It’s a perfect category to be overhauled by AI agents, which excel at repetitive workflows that still require compliance and auditability.

Companies like Monk.com, Tabs and Stuut are rethinking the receivables function end to end - automating billing, collections, cash application and reconciliation to shorten cash cycles and cut time-to-collect by as much as 40 percent. With billions of dollars tied up in manual processes, rising interest costs and tighter liquidity, CFOs are under pressure to unlock cash faster, and AI-native AR platforms provide the tools to do so, turning receivables from a reactive cost center into a predictive asset.

3. Reinventing the ERP

ERP is a $220 billion-plus category growing at 17 percent annually - but one that has seen little true innovation in recent years. The space remains dominated by Oracle, SAP and NetSuite: systems that are indispensable yet slow, costly and painful to implement. For too long, finance teams have been stuck with platforms that function as compliance utilities rather than strategic infrastructure.

The timing for disruption is strong: labor shortages, AI advances and legacy fatigue open the door for AI-native ERP challengers. Replacing these incumbents, however, does not happen overnight. Swapping out an ERP is like ripping up the carpet in a busy office: possible, but disruptive and often deferred. That’s why many challengers are first targeting startups and SMBs, where the stakes of change are lower, before climbing upmarket.

This is a long game, where adoption cycles can stretch years and distribution advantages matter. Ultimately, it may be a battle of endurance, the player with the largest war chest, and the patience to play through multi-year sales and replacement cycles, is most likely to win.

4. AI agents: software → teammates

The next frontier is AI agents for accounting. Unlike static tools that automate single workflows, agents can continuously execute and adapt across tasks, handling transaction entry, reconciliations and accuracy checks in the background while accountants focus on judgment and client service.

Early pilots suggest AI agents can reduce manual effort by 30 percent or more. Crucially, these systems don’t require ripping out existing ledgers or ERPs, they integrate alongside them, lowering adoption friction and expanding gradually into new workflows. Basis, which recently raised $34 million from Khosla and others, exemplifies this approach. As models gain reasoning and action capabilities, AI agents could redefine how the back office operates, turning software from a passive system into an active “teammate” in financial operations.

5. Verticalization of finance workflows

We believe there is a strong opportunity in vertical finance platforms that tailor accounting and back-office workflows to the needs of specific industries. Collective, for example, serves freelancers and digital knowledge workers with a full-stack solution for bookkeeping, tax and compliance. Proper is tackling property management accounting, automating the specialized workflows of rent rolls and real estate bookkeeping.

The appeal of this strategy is clear - vertical depth can unlock product-market fit and efficient distribution in markets that generic platforms often fail to serve. ScaleFactor and Bench once struggled with overly broad, horizontal approaches, whereas other players like Pilot and EvenUp show that vertical approaches can yield defensible positions where workflows are complex and domain-specific. The verdict is still out on whether modern AI-native challengers will succeed more by going broad or by going deep.

Conclusion

The CFO stack is being rebuilt in real time, fueled by labor shortages, outdated legacy systems and the rise of AI. From data ingestion to ERP to AI agents, the opportunities are massive, but the winners will be those who pair automation with trust, precision and seamless adoption. The result will be finance teams that operate less as compliance back offices and more as strategic engines for the business.

If you are building in the space, reach out to shruti@qedinvestors.com and laura@qedinvestors.com

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