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David Leary

Host & Producer of Cloud Accounting Podcast
Recent episodes featuring David Leary
Dear AICPA! I Wrote Your Concession Letter
Cloud Accounting Podcast
Sponsors BQE CORE - http://cloudaccountingpodcast.promo/core  REWIND.io - http://cloudaccountingpodcast.promo/rewind  Show Notes 01:38 – Welcome Ben Wann, CMA, CPA, and MBA to the show! 02:39 – Notable industry departures: Matt Rissell exits TSheets amidst some corporate remodeling | BoiseDev Jennifer Warawa parts ways with Sage and the accounting industry | Accounting Today Blake Oliver departs FloQast | LinkedIn 07:46 – Seriously, you are not a tree. Move around! How career expectations have shifted from taking root in one job for decades to seeking new opportunities on the regular 11:08 – VC fundraising activity: FreshBooks raises "most significant investment so far" from JPMorgan Chase | BetaKit ScaleFactor continues to rake in some serious VC coin | Crunchbase 21:05 – Ben reads us a story: “Dear AICPA! I Wrote Your Concession Letter” and explains why he is bullish on the CMA versus the CPA after obtaining both 28:44 – Speaking of designations, where have all the CPA candidates gone? | CPA.com  33:53 – According to a June ADP survey, 25 percent of accounting professionals surveyed said they would not recommend young accountants get a CPA license, or seek some other credential or advanced degree 35:50 – Ben talks about cheese, business process improvement, finance business partnering, and how new technology drives him to educate and help people navigate the constantly shifting accounting landscape 39:00 – Yet another way to Crunch some numbers with the help of freelancers | SmallBusiness.co.uk  42:23 – Something’s phishy … More updates on the iNSYNQ ransomware snafu | Krebs on Security 47:41 – Armanino goes full crypto – first with a range of blockchain services, and now accepting payment via all forms of cryptocurrency | Armanino, LLP  Connect with Ben Website: The Numbers Guys Twitter: @BenWann_CMA LinkedIn: Ben Wann, CMA, MBA, CPA Udemy: Ben Wann | Process Improvement Specialist-Accounting/Finance YouTube: Ben Wann Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast Transcript Ben Wann: “To the esteemed finance and accounting community, after much consideration and deliberation, it is with a heavy heart and misty eyes that we are announcing that we are pulling the CGMA certification from the US market, effective immediately.” This episode of The Cloud Accounting Podcast is sponsored by BQE Core. As many of you know, I'm all about the niches and niche apps. Putting your business clients in the proper niche app is providing them with a 100-percent solution versus, at best, the 85-percent solution of a standalone accounting app. If you have clients that are architects, engineers, consultants, or lawyers, Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. You don't need to juggle between multiple apps. Core has it all in an easy-to-use, all-in-one app for project management, including time and expense tracking, budgets, forecasting, client billing, and accounting. Even though Core is an all-in-one platform, it still works nicely with the apps like Google Drive, Dropbox, OneDrive, QuickBooks, Xero, and AccountRight, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app, and recently it launched a cutting-edge, voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to CloudAccountingPodcast.promo/core. That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. Did I mention that BQE Core works great for bookkeepers, CPAs, and accounting firms, too? Blake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary- Ben Wann: And I am Ben Wann.  Blake Oliver: Ben, thanks for joining us. David Leary: And Ben, where are you joining us from? Ben Wann: I am over [00:01:30] here in sunny Pennsylvania. David Leary: Sunny Pennsylvania. Other side of the country here for us. Blake Oliver: It's Friday afternoon for us, Friday evening for you. I'm excited to have you on the show, because you are a CMA, you are a CPA, and you are an MBA. Did I get all three of those right? Ben Wann: Correct. Blake Oliver: And in what order did you do those? Ben Wann: I did the CPA first, because that's the one everyone knows. What the cool kids are doing. Did the CMA to try and elevate my level of accounting knowledge. Then, the MBA [00:02:00] to round it out. Blake Oliver: But you list them in a particular order on LinkedIn, right? Ben Wann: I do. Blake Oliver: You are a big advocate for the CMA. Ben Wann: Yes. Blake Oliver: I'm eager to talk to you about that and also some of your thoughts about the AICPA and the CPA, since you've got both. That's gonna be really interesting to talk with you about that. Ben Wann: Absolutely. Blake Oliver: What else do we have on the docket today, David? David Leary: So, money. Lots of big raises and money going to companies. That's on the docket today. More ransomware updates, as always. Departures. [00:02:30] We have a lot of departures that have happened this- well, not a lot, but notable departures this week. Blake Oliver: Notable departures of - David Leary: We could start there. Blake Oliver: Yeah. Let's talk about that. David Leary: Matt Rissell is leaving Intuit at the end of the year. Matt Rissell of TSheets. Blake Oliver: Right. So, TSheets was acquired by Intuit, and then Matt Rissell became what, a VP there? David Leary: That's correct. It's been three years already, apparently?  Blake Oliver: Apparently, yeah. I couldn't believe it. David Leary: That's super-fast. Then Sage had news, right? That's it. Blake Oliver: Before [00:03:00] we go into that; I’m reading this article now. Since their acquisition by Intuit ... They were acquired for $340 million. Based in Boise, right? That Boise TSheets office became an Intuit office. It says that it's grown by 160 employees to 400 employees, the majority of whom work in the company's Eagle office. David Leary: Yeah. That changed Boise. Blake Oliver: Yeah. David Leary: Intuit going to Boise was a significant economic impact on Boise. He changed it. Blake Oliver: And [00:03:30] the growth of the customer base ... It seems like this acquisition really worked out, right, because their customer base went from 36,000 to 82,000 customers. Yeah, they're the largest employer in Eagle. David Leary: Wow, congratulations, Matt. It was a good ride. Blake Oliver: I wonder what he's gonna do next. Maybe he'll come on the podcast. David Leary: He had the bout with cancer a few years back, so he's really ... He spends a lot of time with his family. He has his kids and his wife. Maybe ... I imagine he’ll probably take a lot of downtime. He definitely likes doing all that outdoorsy stuff in [00:04:00] Idaho, as well. Blake Oliver: So, who else is moving on? David Leary: I'm gonna let you say it, because I always mess up Jennifer's last name. It's bad, because I've been saying her last name for a decade, and I mess it up. Blake Oliver:  Jennifer Warawa. I think I got it right. She's leaving Sage. David Leary: She's leaving Sage. Blake Oliver: Yeah. That's a big deal, because she's been there for, what, 12 years? David Leary: 11 or 12 years, I think, the article said, yep. She took a job with ... She's getting out of the accounting industry. So, she took a job- she's relocating from Atlanta to Dallas to take a job in construction. Blake Oliver: [00:04:30] For those who don't know Jennifer, she ... What is her role there, or what has been her role at Sage? David Leary: She is an executive vice president, I want to say, of accountants at Sage? Is that the official title? Blake Oliver: I don't know the official title, but I know that she ran that channel program - the accountants channel program, meaning selling, through accountants, the Sage products. David Leary: If I was to say that Matt Rissell is the face of TSheets, could I say Jennifer was the face of Sage? Me being an Intuit person, [00:05:00] if I had to say, "Who do I know at Sage?" I'm gonna say Jennifer. Blake Oliver: Yeah. I would agree with you. She was the face of Sage. At all the conferences, she gave the keynote speaking sessions. She was the representative that everyone knew. David Leary: Was this true for Sage's small business level, all through their enterprise products, as well? Was she at the Intacct conference giving keynotes, as well, or is she just really just the true Sage-branded stuff? Blake Oliver: She was at the Intacct conference last year, and she's been at ... She [00:05:30] used to go to Sleeter Conference, right? [cross talk]  David Leary: -she was there forever, yep. Blake Oliver: Yeah, so she kind of did the whole thing. She's leaving accounting for something completely different- David Leary: Construction, yes. Blake Oliver: Gonna be an exec in a construction company. David Leary: So, the last departure … Blake, you are leaving FloQast. There was a LinkedIn post that went out today. Blake Oliver: Oh, yeah. I am leaving FloQast. That's right. I'm departing at the end of this month, and I'm gonna be doing my own thing for a while. So, I'm [00:06:00] open to helping people with marketing or CAS operations - I ran a client accounting services firm - and just seeing what's next. David Leary: So, VP of Sage? That’s available.  Blake Oliver: The timing is really remarkable. So, who knows? If you want to know why I left, I wrote a short post on LinkedIn that'll be in the show notes, so you can check that out. It’s all about ... Things change fast in a startup, right? We've gotta be agile, and our marketing focus has shifted. [00:06:30] I am not a guy who's gonna go put on a suit. I've spent, unfortunately, too much time in Southern California wearing sandals. David Leary: So, you're not headed to the Big Four? There’s nothing … [cross talk] Blake Oliver: No. David, I think we should make The Cloud Accounting Podcast … Look how far this show has come with just part-time effort. We could really make this thing great or, at least, not terrible. David Leary: You might have time- we could get our Instagram account set up finally. Blake Oliver: Yes! David Leary: We could have some time for that. Blake Oliver: It will be an Instagram account of me in my pajamas every day, working [00:07:00] on the podcast. I think that'd be really successful. David Leary: Who would not subscribe? Blake Oliver: I think actually, Ben, you had a great picture of you and ... You have a partner in your content creation efforts, and he was wearing shorts in front of the camera or something. Ben Wann: Yeah. Everyone thought he was wearing his underwear, but they were actually just normal shorts. So, from the top up, we were all formal, with our hair done, and our jackets, but, from the bottom down, it's all party. Blake Oliver: Yeah, exactly. That's the way to do it, right? We've all been guilty of it on Zoom meetings, and when [00:07:30] we work from home. You dress up, up top- Ben Wann: That's right. Blake Oliver: -where people can see you, and you're nice and cool down below. It's good. Ben Wann: We were talking a little bit before the show about how expected transitions should be. We’ve shifted in the world, from where you go into a job, and that's what you do for five or 10 years at a piece. Now, it should be expected that you go to a job, and you should already be planning to leave that job as soon as you start it. You’ve gotta plan out what you're gonna improve, how [00:08:00] you're gonna automate, optimize. You should have an end path planned out. You shouldn't plan to park yourself. Just seeing people like yourself being able to move to different opportunities strategically, it's just really smart, and it's the trend that's really going on right now. Blake Oliver: You actually wrote about this a while ago, and I remember reading your post about how that's ... That’s how you've thought of your career is that "I'm gonna go into a company, know what I want to achieve, and do my best to achieve that in one, two-" Ben Wann: Exactly. [00:08:30] Blake Oliver: Ideally in a couple of years, right? And then you move on. That's way better than staying someplace for 20 years and not really doing anything or changing anything, I guess. Ben Wann: Yeah. Yeah. I did the podcast with Phil Yaeger, and I talked about how I see myself as an internal consultant. I'm constantly trying to learn, and get better, and be at the top of my game. There's this divide still between what we expect from normal employees and consultants. To me, that's outrageous. Why should your employees [00:09:00] not be held to the same standards? Blake Oliver: Yeah. Ben Wann: If you can get there yourself, you can write your own ticket. I've been fortunate enough to do that, and you're doing it. I hope more people hear this, and they also wanna do that. The world's your oyster. Blake Oliver: It’s nice, too, because I think that's reducing the stigma of shorter-term employment, right? It used to be that if you jumped around every few years, people would look at you funny, but, now, if you do it smartly, and you have a reason for it- Ben Wann: That's right. [00:09:30] Blake Oliver: -and you can justify these changes, then it's ... I feel like at FloQast ... I came out of an accounting firm, doing client accounting services, to go to FloQast to do product marketing, which I'd never done before, never studied product marketing. I view it as I got an MBA in marketing, and I got paid to do it. Now, I can take that skill and go do that either at a firm, or at another software company, or as a consultant. David Leary: I don't think it has to be a jump from a company to a company. When I was at Intuit, I [00:10:00] pretty much, like every two or three years, was at a new job, right? It's about not being stuck in any role- Blake Oliver: Yeah. David Leary: -and constantly evolving and taking on new challenges. One thing you said, Ben, that was interesting is that thought process of thinking about what your exit is on day one. Blake and I did an interview, which we'll be dropping here soon, about selling your firm. That was one of the takeaways from that interview, I remember, was to have your plan for the exit … Don't think about selling your firm 25 years [00:10:30] in- Blake Oliver: Yes. David Leary: -when you're six months away from retiring. On day one of starting your firm, think about how you're gonna sell your firm. Blake Oliver: We talked about significant departures. Let's talk about the fund raising. The money, right? Ben Wann: The money. Blake Oliver: There were two big announcements that I saw this week. It was FreshBooks raised a bunch of money from Chase, and ScaleFactor raised another bunch of money. I don't remember who that was from. David Leary: Let's talk about FreshBooks first, because, I think there's less insanity- Blake Oliver: Yeah. [00:11:00] David Leary: -and discussion on that one. We might have a half hour of chatting about the ScaleFactor race, so, let's jump into the FreshBooks one. Blake Oliver: The story about FreshBooks is that they announced an undisclosed amount of fundraising from JP Morgan Chase. But given this is JP Morgan Chase, I imagine, it's pretty substantial. They had previously raised CA$40 million in Series A 'round in 2014, and $57 million in series B in 2017. [00:11:30] Here's the thing that stuck out for me is that- David Leary: This might be a $100 million race. Blake Oliver: It could be. I know that Chase put a ton of ... I think they put that amount to Bill.com recently, so, I wouldn't be surprised if they were making similar-sized investments, right? David Leary: And it was stated "most significant investment" so far, in quotes-  Blake Oliver: So, it has to be at least $57 million, right? David Leary: $57 million and one penny. Blake Oliver: As part of the new deal, a Chase representative will be joining FreshBooks' board of directors. FreshBooks said it will use the new funds [00:12:00] to continue to expand operations and its business reach. So, having a banker on the board is gonna be interesting at a software company like that. For those who aren't familiar with FreshBooks, they kind of go under the radar sometimes with accountants, because they don't market to accountants, really. It's to small business owners, like owners of micro-businesses, in particular, meaning sole proprietors and all that. They're not like Xero, or Intuit going [00:12:30] after those accounting firms. They are the largest accounting software company in North America, maybe even the world, just by volume of customers. David Leary: I think they count their customers a little differently. What I mean by that is QuickBooks, and Xero will count small business owners that are paying for the subscriptions. FreshBooks kind of ... I'm using QuickBooks. I invoice you through QuickBooks payments. You pay. Blake Oliver: Yeah. David Leary: You're a customer. Then you invoice the other guy, and [00:13:00] Ben pays me through QuickBooks - that's a customer. So, if Xero and QuickBooks counted similarly, in a way, the numbers would not ... It's just they count their numbers in kind of a different way. Blake Oliver: Got it, but it's still millions and millions. David Leary: Oh, yeah. This is how they get to that "We've served 20 million customers." Going by that, Intuit has served hundreds and -300, 400, 500 million, possibly, right? Blake Oliver: Mm-hmm. It's an interesting question - how do you count those? But they're big. Whatever [00:13:30] metric you use, they're big. Let's talk about the ScaleFactor money. David Leary: Yes. ScaleFactor took another $60 million. This, in just 2019 now, in one year, they've taken on $100 million of VC money. Blake Oliver: Wow. That's a lotta money. Just for perspective, I think, at FloQast - I don't know the exact number - we, in six years, raised half that. So, this is a lot of money for any company, [00:14:00] software or otherwise. David Leary: Absolutely. Blake Oliver: What's crazy about this is that ScaleFactor is not just doing software. They are heavy professional services. They are- David Leary: They are an accounting firm, or bookkeeping firm with engineers under roof. So, this is gonna be in that same vein of, arguably, you could say QuickBooks Live is dancing in that space. You got the Botkeepers, and Ceterus, and Pilot, and ScaleFactor, and Bench - these companies we've talked about before in the past. Blake Oliver: The thing that blows my mind about this is that they're raising money as if they are a [00:14:30] software company, which is something where you can scale that really quickly. It makes sense that companies can be valued at many times- many times … 10, 20 times, 30 times earnings. But it's not just a software company. They are providing a service with that software and, arguably, one that's far more important than the software. Accounting firms are typically valued at anywhere from 1 to 1.25 annual revenues. This company ... [00:15:00] ScaleFactor is being valued at ... Well, we don't know ... What do we know, actually, about how big they are? David Leary: Some of the numbers in the article … They don't have 1,000 customers yet. Blake Oliver: Right. David Leary: It's very clear in the article. They say they don't have 1,000 customers, and they recently crossed 200 headcount. So, if you back out that math- Blake Oliver: Yeah. David Leary: Let's say they have 1,000. What's the number of clients per body in the office there? Blake Oliver: They only have 30 CPAs, though, out of those 200 headcount. [00:15:30] So, they’ve got 30- David Leary: But they're not ... Yeah, 30 CPAs, but what about bookkeepers, and people doing the work? Blake Oliver: We don't know. How many of those 200 people are engineers building software is another-  David Leary: Even if they are. Let's just assume they're all ... It's just headcount, right. So [cross talk] 1,000 divided by- Blake Oliver: Just 200? David Leary: 200. So, we're- Blake Oliver: Five. David Leary: It's five. Five clients per employee [cross talk]  Blake Oliver: -right. David Leary: Yeah, five clients per employee. I've talked to accountants, and bookkeepers that have ... They're pushing ... One bookkeeper's [00:16:00] handling 50 clients. Blake Oliver: Right. David Leary: I think you said you had a bookkeeper, in the previous episode, that pushed almost 40 clients a month.  Blake Oliver: Yeah. That's an all-star bookkeeper. It also depends on the size of the clients. Let's give them the benefit of the doubt and say that it's five clients per employee. That would make these clients enormous. David Leary: But they're going after that $400 a month QuickBooks Live customer. Blake Oliver: Right. David Leary: It’s right on the website, their pricing. Blake Oliver: Do we know their average price? What do you think their most popular package is? David Leary: Let's give them the benefit- it’s $1,000. Let's say they're selling [00:16:30] payroll and some add-on things, and it's a higher-end package, and they're getting $1,000 a customer. Blake Oliver: Okay, and let's just assume they have 1,000 customers, right? So then, that's $1 million in recurring revenue. $1 million in recurring revenue makes you worth $100 million in investment. Here's the other thing that's crazy is they said that- this is in the Crunchbase article that you shared, David. It doesn't say what their revenues are, but it said that they have 700-percent ARR growth in 2018, which is just insane, even for a software company ... [00:17:00] For an accounting services business, it’s insane. There's actually a mention in here that the CEO admitted that it was from a very small base, because, of course, if you start small, you can have 700-percent growth. When I had my firm, I pulled this trick, too, right? It's the oldest marketing trick in the book. You start with 10 customers, and you grow to a hundred, and you’re like, "I had 10 time …1,000-percent growth." It’s [cross talk]  David Leary: Based on my knowledge of this space, of these accounting [00:17:30] firms with engineers under roof, they have the smallest number of customers and have raised the most money. Blake Oliver: Here's the thing that's interesting, too. It says they haven't hit ... They expect to hit the 1,000-customer mark this year by adding hundreds of new customers per month. It's August right now, and if they're gonna add hundreds of customers per month to get to 1,000, then let's say it's 200 customers per month. We've got August, September, October, November ... That's 1,000 customers right there. Five [00:18:00] months. David Leary: Which means they're also gonna have to add 20 employees a month to do that [crosstalk] based on their current ratios, which ... That's what's confusing, because the whole bet of doing this engineering-based work with the accounting firms is that you have these insanely awesome ratios. Blake Oliver: Yeah. David Leary: That is not an insanely awesome ratio. I actually really … Think about the money, right? If ScaleFactor is built on top of QuickBooks, and Xero ... It's right on the website, it's very clear. They fully disclosed, right? Blake Oliver: They don't have their own GL. They are using ... They are leveraging in QuickBooks [cross talk] [00:18:30] David Leary: Off the shelf. Pilot, I think, uses QuickBooks. I think there's another service that uses Xero. A lot of these guys are using off-the-shelf. Bench is the only one that, I think, is not using off-the-shelf. They're using their own GL that they've built in-house. If you have $50 million, you should just put $25 million on Intuit, $25 million on Xero, and just ride that out. That's a guaranteed victory. If you believe they're gonna win, you gotta …  Blake Oliver: None of this makes sense to me. Hey, Ben, are you still there? Ben Wann: Yep, I'm here. Blake Oliver: Here, David and I are amateur-analyzing this. David Leary: He's the credentialed guy, right? He's the credentialed guy. [00:19:00] Blake Oliver: You're the credentialed guy. You're a certified management accountant. I know that you had no idea we were gonna talk about this, but I'm just wondering does this any of this make sense to you, just looking at it right now? I don't get it. Ben Wann: It sounds a little unusual. Knowing nothing, just hearing you guys talk, sounds like something's missing, or we're not aware of some type of information. Blake Oliver: My guess is that you've got a bunch of VCs who are looking at ScaleFactor like it's a tech company and that they're applying those kind of metrics, and valuations to [00:19:30] it. Maybe they just don't realize ... Is it possible they just don't realize how heavy the human component is? And that it's not ... Nobody has ever scaled an accounting firm this quickly, or as quickly as you would need to, to justify that valuation. David Leary: And it may not be them scaling internal processes yet. What they've been doing really well is Facebook ads. Half of all VC money goes to Facebook, and Google, and Amazon. If you really watch ... I [00:20:00] see it in my feeds. ScaleFactor is at the top of everything that’s small business, or QuickBooks-related that I search for on Google, I see a ScaleFactor ad. Even other accounting firms … I searched for a different accounting firm that's not even a software-based one, I get a ScaleFactor ad. Everywhere on Facebook, I get ScaleFactor … Lots of this money is going to Facebook ads, which helps you get 700-percent growth, because ... So, they're playing the startup game. There's no doubt. Blake Oliver: You're getting that growth at very high cost, because you’re-. David Leary: The cost per customer has gotta be the highest in all-time [00:20:30] industry. Their probably spending $20,000 a customer right now. Blake Oliver: Well, hey, if any of our listeners have any more insight into ScaleFactor, or how this whole thing works, I would love to know. You can please tweet at me, tweet at David. Let's figure this out, because it's a mystery. David Leary: Even ScaleFactor, yourself. I've reached to ScaleFactor via email before. I've reached out to ScaleFactor on LinkedIn in the past. I've tweeted at ScaleFactor and included this article. I would love to hear from ScaleFactor on how ... Why they're different from these other players in this space. Blake Oliver: Let's get somebody on to talk about it, because maybe we're [00:21:00] wrong. Maybe we're just not understanding it. So, Ben …  Ben Wann: Yes. Blake Oliver: Let's talk about why we brought you on today. Ben Wann: All right. Blake Oliver: I saw a LinkedIn post that you made, a LinkedIn article that you wrote this week, that I just ... I loved it. It's called "Dear AICPA! I Wrote Your Concession Letter." Ben Wann: Correct. Blake Oliver: You published this on the 7th. Actually, so it was two days ago, and then I was like, “We gotta get you on to talk about this,” because this is near and dear to my heart. So, I [00:21:30] was wondering if you wouldn't mind just taking a moment and just reading this for our listeners, because I think it's great. Ben Wann: I'll give it my best shot here. I put myself in the head of the- into the mind of the AICPA.  To the esteemed finance and accounting community, after much consideration and deliberation, it is with a heavy heart, and misty eyes that we are announcing that we are pulling the CGMA certification from the US market, effective [00:22:00] immediately.  With profit on our minds and lust in our heart, we, unfortunately, had entered into a foray that was far beyond our core set of competencies. Our initial estimation of the willingness of people to first purchase a certification to artificially inflate our member count was our first downfall. We had assumed that, after reaching a critical mass of paper certificates, that thousands upon thousands of professionals in [00:22:30] the accounting and finance community would then eagerly clamor to then pay for the privilege of actually studying for and then passing our exam. In addition, we have failed to recognize that the name given to our brand-new certification was not an original idea. It was - how do you say - heavily-borrowed from.  We can now admit, looking back, that we were so hungry to emulate the success of the CMA and how they were, in [00:23:00] fact, the leading global certification that we just couldn't help ourselves. We wanted to build on their success and add our own special sauce by cramming an additional letter into the mix; a 25-percent increase in the value to our members. We want to recognize that we have also disrespected dual CPA and CMA holders by creating this confusion in the marketplace. You have to admit, though, it was amusing to see our [00:23:30] certification pop up on real job postings for a while. We jokingly suggested adding it to the list of key job skills and education, and no one thought that we were kidding. So, well, we just kept running with it. Finally, our biggest failure was to not recognize the innovativeness, the creativity, and the flexibility of our main competitor, the IMA, or the Institute of Management Accountants. Buttressed by a passionate network of [00:24:00] Net Promoter members and a high-performancing board of senior professionals, the organization has only become stronger, and faster over time. In recent years, we've been trounced by the IMA in every market; even the US, our home. It is now time to recognize the foolhardiness of our decision. Each month, we have had to agonize by reading through our competitor's publication, 'Strategic Finance,' to painfully bear [00:24:30] witness to an ever-growing, and truly international list of new members and certification holders that we simply cannot compete with. We recognize that we have a rare window of opportunity now to bow out with dignity, and honor before we are completely ushered into non-existence.  Going forward, I promise you that we here at the AICPA will focus on the things that make us special - creating new rules for auditing, advocating for state-specific CPE courses, [00:25:00] and creating special interest groups to protect entrenched interests. Regretfully yours, the AICPA. Blake Oliver: You include the disclaimer that this is a satire article that was not written by the AICPA. Ben Wann: Correct. Blake Oliver: And should not be ... What’s the legal disclaimer they have at the end of all their podcasts? It should not be relied upon for legal guidance or any of that. I love that. Thank you for reading that, Ben. This episode of The Cloud Accounting Podcast is sponsored by Rewind. For years, Rewind has been successfully backing up thousands of small businesses' data that is stored in cloud apps like Shopify, Big Commerce, and MailChimp, saving these small businesses from CSV importers, employee mistakes, and app integrations that didn't go as planned. Rewind has also been backing up QuickBooks Online company data, too. That's right, cloud accounting world. I did say "backup QuickBooks Online company data." It only takes seconds to install what is essentially an insurance policy against major disaster or just those small business owners that like to get "creative" in the accounting system. Rewind works automatically in the background, capturing all the changes to your QuickBooks Online in real time. If something does go wrong, Rewind is the only service that gives you 100-percent control over what you need to restore, be it one transaction, multiple transactions, or all the data. To learn even more about Rewind and access a special offer just for listeners of The Cloud Accounting Podcast, head over to CloudAccountingPodcast.promo/rewind. That is Cloud Accounting Podcast dot promo forward slash R-E-W-I-N-D. Blake Oliver: David, I think you may be a little confused by this. David Leary: Yeah. I am all for stirring the pot. I love this. I'm all ... And I love some good satire. Absolutely, 100 percent, but in actually reading this, I was smiling. I was like, "This is great. This is really, really great.” You hit a level. But, to be honest, I am a little confused. I'm not in the loop of the inside baseball of what happened, where are you coming from, why you [00:27:00] wrote this? Any of those types of questions, I'd like to understand. They copied a different certification test, and they wanted to try to rebrand it and confuse the market? Can you give me some background on this, Ben? Ben Wann: Yes. Yes. So, a couple of years ago, can’t be more than three or four, they ... The AICPA partnered with CIMA, the UK accountant association, [inaudible], to create this new certification, the CGMA. What they did is ... Initially, all you had to do was [00:27:30] send in a check, and say you had some type of certification in an industry, and you got a brand-new certification. This cheapens and discredits kind of the whole process of the CPA and the CMA. These things take months of effort, sometimes years of studying. Being able to buy a certification to try and win the market is a terrible tactic, and everyone saw right through it. Blake Oliver: Was this motivated by the success of the CMA, like the [00:28:00] CMA was growing, and started, and then the AICPA decided to come in and offer their own credential to compete with it? Was that how it happened? Ben Wann: Yeah, because I guess everyone's seen these numbers with the number of CPA candidates in the pipeline. It's going down. So, the AICPA is looking abroad, trying to strengthen their product and their pockets. They noticed that CMA has really expanded to every other country, except the US, initially, and it's double-digit [00:28:30] growth, 27 percent. Now, they're back in the US, with 20 percent growth here, as well. That’s what they were chasing. Blake Oliver: Speaking of the number of new CPA candidates, the numbers have dropped. I posted a chart that I spotted in a CPA.com white paper on LinkedIn this week that shows, from 2005 to 2010, the number of new CPA versus accounting grads was-that line was trending upward at the same rate. [00:29:00] Ben Wann: Yep.       Blake Oliver: Then, somehow, something happened; between 2009 and 2010, all of a sudden, that dropped, and now, there's a much larger gap. The number of new accounting grads has grown. Ben Wann: Yep.  Blake Oliver: But it looks like the new CPA candidates just continue to drop. Ben Wann: Yeah. There are several things going on here. Blake Oliver: Let's talk about that. What's going on? Ben Wann: The big thing that has a lot of people annoyed is this 150-credit requirement. Before, I guess, 2010-2012, you needed 120 [00:29:30] credits. That's what everyone usually graduates college with, and you had to have two years’ experience working with a CPA firm, and that was your education. Now, they are saying everyone needs 150 credits. For many people, this is a master's degree. It might cost $20,000- $30,000 to complete. There's other paths to get around this. It's just a lot more work, and for what result? It's very unclear to people. Blake Oliver: Yeah. I was joking online that when [00:30:00] I sent my application in for my license, I found out that I was nine credits short of the 150 requirement. So, I went online to the cheapest community college that I could find that had an online program. I think was Oxnard Community College here in LA, and I registered for Intro to Philosophy and Intro to Management. I really enjoyed my Intro to Management class, given that I've already owned and sold a business. That was really, really helpful to me. That's [00:30:30] the thing that's funny about this 150-hour requirement, right, is you can take any- Ben Wann: Correct. Blake Oliver: I don't even understand the original logic behind it. What was the ... David, it sounds like you have something to say?  David Leary: Yeah. It feels like ... One thing, the bell went off for me a couple weeks ago. You said that ... The Cal CPAs- if you're a CPA in California, you have to join that membership. Blake Oliver: Yeah, I think you … Well, I think you have to, right, in order to …? David Leary: But the AICPA is 100-percent optional. Blake Oliver: Yeah, you don't have to be a member the AICPA [00:31:00] to maintain your license, because it's state-certified. David Leary: Okay, and then I've seen people online say, "Hey. I'm probably not gonna renew my AICPA membership." People aren't finding value in this. Some of these things, like, "Hey, we're not getting the revenue we want, let's have another certification. Let's spin up a commercial site like CPA.com," is it something … Does the CPE credit stuff kind of all fall in under that, like they're getting some kickback from the colleges by requiring more credit hours? Is it a revenue game? Ben Wann: Yep.       Blake Oliver: Yeah. It has to be, right?  Ben Wann: With state-specific CPE, this is another issue where people are furious, right? Each state has their own rules. The state of Delaware, where I’m certified, they have their own ethics course. To get certified every two years, you have to do their course that costs money. They're gonna get a cut of that, the state society. What's different from one state to another? Nothing. So, to have these hoops you have to jump through in order to give money to a [00:32:00] state society is ... Everyone’s seeing through it, and we’re tired of it. Blake Oliver: Just to put some numbers behind this conversation, if you look at the chart that I'm ... Obviously, our listeners can't see this chart. In 2008-2009, it looks like about two-thirds of accounting grads were going for the CPA, right? If you just divide the number of new CPA candidates by the number of accounting grads, it was about two-thirds. If you look at the latest data, which is [00:32:30] from 2017, that number has dropped to half. So, that's a huge, huge change, right? Ben Wann: Oh, yeah. Blake Oliver: And if it continues to go down, if fewer than half of accounting grads are going for the CPA, I'm concerned about the CPA's future. As somebody who invested the time and money to get it, I'm disappointed in that trajectory. Ben Wann: Yeah.  David Leary: Shouldn't that be the role of the AICPA to encourage people that are graduating with accounting degrees to become CPAs? Shouldn't that be their number-one most [00:33:00] important function? Blake Oliver: Probably, to get more members, right? Somebody on LinkedIn said that the good thing about all this is that with fewer CPAs, it creates more demand for CPAs, right? Ben Wann: Yup. Blake Oliver: But I don't think that actually is true, because it could backfire in that fewer CPAs mean that people aren't as familiar with it, which means that demand drops, right? In economics, if you decrease supply, you may increase [00:33:30] prices, but you also decrease demand. I've got another chart here, kind of related to this whole discussion. This appeared in the June 2019 issue of "Accounting Today," and it's a survey that ADP did. The question they asked 1,500 accounting professionals. They asked 1,500 accounting professionals the question: "Would you recommend that young accountant get their CPA license?" A full quarter of those accounting professionals either said no, or that they would recommend [00:34:00] something else. Ben Wann: Yeah, I'm one of them. I'm dual-certified. I'm one of ... There's not that many people who can talk on both sides, kind of unbiased. People ask me- Blake Oliver: Yeah. Ben Wann: Unless you wanna do tax or audit your whole life, I'll say, "Go bananas. Do the CPA,” but, otherwise, the CMA is so much deeper. It just prepares you for the job. A lot of people have said this, "The CPA has helped me get my job, but the CMA helps me do my job." Blake Oliver: That, I think, ties in with what I have heard from the community, which is that fewer [00:34:30] and fewer accountants are going to school, and graduating, and thinking, "I'm gonna make partner at an accounting firm someday." That dream of making partner, people just aren't that interested in it anymore. If you aren't buying into that dream, then why would you necessarily need that CPA, if you think, "Well, I'm just gonna go into public for a few years and then leave." Ben Wann: Yeah, it used to be it was a one-stop shop. If you were smart and you went to accounting, you had to do public accounting. You worked a [00:35:00] ton of hours. You got a lot of experience. You were better than the industry peers after two to four years. Then you see all these smart, driven people with a CPA. It’s like, "Okay. They're doing so well, because they're CPAs,” kind of, you know?  Blake Oliver: Yeah.  Ben Wann: But now, there's all these alternative paths where you can be very successful without ever working in public accounting. I had never want to work in public accounting, and I haven't. I'm at the top my game, so I'm doing very well. There's so many opportunities out there. You don't have to do public [00:35:30] accounting to have a really strong career in accounting. Blake Oliver: Let's talk a little bit about your background and what you're up to, Ben. I'd love to hear ... I know that you are working on CPE courses. You may already have some available. You're a big advocate for the CMA. Tell us a little bit about what your projects are, and what you're up to, and where people can find out about that. Ben Wann: Talking about trends, technology is everywhere, and I don't think there's a discipline being more impacted right now than accounting by technology. What we do, how [00:36:00] we do it, where we do it is all changing. So, within 10 years, it's a complete shift. There’s a huge need for people to understand what skills they have to learn and to help people bridge that gap from where we've been to where we're going to go. In my career, I've seen so many people who are just stuck, and they're not gonna get it. What's driving me is I want to help fill those knowledge gaps between theory and practice. Right now, there's not that many sites [00:36:30] for information to understand, "Okay. If I wanna do this, how do I actually do it?" Not "I don't want to manufacturer widgets." That's what's kind of driven me. I'm really into the education side. In that regard, I have actually started producing courses on a site called Udemy.com last year, and now, I'm up to five courses. I have a YouTube channel. I have a website that I run with a team of people called The Numbers Guys. [00:37:00] The basis of that site is to provide the blogs, the really strong blogs that help people understand what a day in the life of an accounting professional- all these different avenues looks like, and how we get our jobs done, and what we're interested in.  I've also really focused on business process improvement, because if we're gonna go into the future, we've gotta get our houses in order. I see that to be a huge opportunity. Then there's also this shift in accountants transforming [00:37:30] from kind of like the stereotype of this boring, dull, introverted person to, now, someone who's not just reconciling accounts but working with the business to turn data into insights. There's a lot of communication. There's a lot of influencing going on. That's known as finance business partnering. My two big things right now are finance business partnering, and business process improvement. Blake Oliver: What's your day job? Because you do this ... You're a very busy guy. You're [00:38:00] doing this on the side at night- Ben Wann: Nights and weekends. Blake Oliver: Weekends. What do you do during the day? Ben Wann: Yeah, that's ... I do that, too. At my day job, I'm an operational controller for a company called Savencia. They make all sorts of cheeses. They're French-owned. We have four factories here in the US, and I run ... I'm in charge of the controlling department. I make sure that our cost accounting is strong, it's accurate, and we're getting good data out to help the [00:38:30] business know what they're doing to make good decisions. I report right into the CFO. Each day, what I love about this job is I'll go from working with the executive team to data entry clerks. I'm in the plant most of the time. It's a really boots-on-the-ground job. Blake Oliver: Sounds delicious, too. Ben Wann: Yeah. Blake Oliver: Hey, David, before we go, we got a little follow up on our ransomware stories over the last few weeks. You wanna touch on that? David Leary: Yeah. Before we jump into the ransomware one, there was the one that's kind of related to the ScaleFactor one. There's a British company called Crunch. It's [00:39:00] Crunch.co.uk. Crunch essentially, has - they're really going after the self-employed market, the freelancers - bookkeeping software. They have their own in-house bookkeepers, as well. So, it's a similar play, right? It's accountants with engineers under roof. But what they announced, they are now going to offer a freelance bookkeeping network – an Uber model – just like QuickBooks Live. This is the third week in a row now some other company is now gonna offer bookkeeping as part of their software package. Blake Oliver: It's gonna [00:39:30] be interesting reading all the reviews of these various services as they roll out. I don't know if anyone's really figured it out yet, right? David Leary: Do you think ... This is hypothetical, and Ben, please chime in on this, sometimes you get an Uber, and that guy's got an Uber light, and a Lyft light, and he's got both phones on his dashboard, or her - whoever's the driver … They're picking some ... One ride, they pick up a Lyft person. Next ride could be an Uber person. Do you think there's gonna be bookkeepers, and accountants out there that’ll, "Hey! I'm doing this …" Because chances are H&R Block’s gonna do this with Wave. [00:40:00] I'm gonna take a Wave customer this time, a QuickBooks Live customer, a Crunch customer. Is it just gonna be really like the gig accountants, or gig bookkeepers are just gonna work with all these services at the same time? Blake Oliver: Maybe, David, now that I'm gonna have some time on my hands, I should just sign up for all of these services and report back. David Leary: As a small business owner, or as a bookkeeper? Blake Oliver: As a bookkeeper. I could go be a QuickBooks Live bookkeeper. I could go be a Pilot bookkeeper. I could go be a ScaleFactor bookkeeper. Crunch bookkeeper. David Leary: It'd be an interesting [00:40:30] experiment. I'm sure there's people that have done driving for Uber, and Lyft and wrote a blog posts about that. Blake Oliver: Yeah, they have, and then they get banned for life, probably. Ben Wann: Blake, that's interesting [cross talk] in there. There's actually people who I talk with, who are making a business out of kind of doing what you just talked about. Trying to get a grasp for all of the apps and resources that are out there and then translate that into, "Okay. If I have this problem, what's really the best solution?" There's a need for that. Blake Oliver: Oh, [00:41:00] yeah, and not nearly enough people who are taking the time to build up that knowledge base. Even in specific industries, like manufacturing, knowing all the different tools available and going to different companies and modernizing their IT infrastructure from a financial accounting perspective. Really, really fascinating. David Leary: Or just cheese manufacturers. Blake Oliver: Just cheese. You could just specialize in cheese. I'm sure there's some very unique aspects to the manufacturing process that you have to track in your ERP, right, Ben?  Ben Wann: Correct. There is. The dairy industry. [00:41:30] Blake Oliver: Yep, dairy. Cool. David Leary: Let's talk ransomware again. Blake Oliver: Ransomware, yeah! Risks …  David Leary: The rewind ... It was yesterday or the day before, iNSYNQ ... Blake Oliver: Yesterday. David Leary: So, the CEO of iNSYNQ ... Remember we talked about it a lot on last week's episode that he was planning on joining us for an interview and then he canceled? We talked about that last week-  Blake Oliver: Yeah, he bailed on us, and now we know who he bailed on us for. David Leary: Then, I saw, two days later, an advertisement for him to go on the [00:42:00] Woodard, Joe Woodard's webinar. So, he was on the webinar and it was- Blake Oliver: Remember, it wasn't a webinar, it was a town hall. David Leary: Town hall. Okay. Yeah, it was a webinar platform, but it was a town hall for people to ask questions about the attack. He answered all the questions that came in. Some of the answers did feel a little prepared. It looks like Brian Krebs actually attended, and he has information. He really did a nice write up about it, and it looks like they [00:42:30] were in for almost 10 days, before they actually encrypted anything. Blake Oliver: Yeah, that's kinda scary that the attackers were in there for 10 days, and iNSYNQ didn't know until they unleashed their attack. By the way, for those who aren't familiar, Brian Krebs is a security researcher who has a blog called KrebsOnSecurity.com. Your entire goal as a software company should be to never show up on KrebsOnSecurity.com [cross talk]  David Leary: -on his blog- Ben Wann: -that’s the wall of shame …  Blake Oliver: Yeah, exactly. So, iNSYNQ, for [00:43:00] those who are not familiar with this whole saga, they were attacked in July 16th or something like that by a malware ransomware attack that shut down their QuickBooks and Sage hosting platform for two weeks. David Leary: My understanding, as of the thing yesterday, there are still some customers who are not 100-percent up. Blake Oliver: Yeah, it's only in the 90th percentile. It's 90 percent, in terms of customers who have access, which is kinda crazy. I know, David, you're gonna go through a [00:43:30] lot of this, but the thing that really stuck out to me is that the reason they couldn't give people backups quickly ... Think about this - if your network gets shut down and infected, that's fine. It can happen, but you should have backups of these QuickBooks files that you can just provide to the customers; but they couldn't do that, apparently, because the backups were not separated from that live environment. So, they could also have been infected with ransomware. I'm not clear on whether they were, but [00:44:00] it's possible that they were, which should never happen. David Leary: Some of this is the confusion caused by these hosting companies, right? With QuickBooks Online, or Xero, or true SaaS software, you don't have to make backups, right? Blake Oliver: Right. David Leary: You can backup … There's tools like Rewind, who's- actually, I think they're sponsoring this episode, right? There's tools like Rewind that will- for data entry errors, right? If you do data entry, and you need to rewind your data, and fix something, that happens. Fundamentally, you don't have to back up your data, [00:44:30] not in the same sense you used to have to … You go to a menu, "File Backup," and you make a true backup of your data on a removable drive. You take it somewhere else - network drive, or tape drive, whatever. These hosting providers, because it's in cloud, people kind of assume they don’t have to make that backup anymore. If people were making a backup and saving it to their own local hard drive, they could’ve just installed QuickBooks to a local computer, restored the backup, and moved on, and just wash their hands off this. Blake Oliver: Yeah. David Leary: There's [00:45:00] confusion on the marketing of this, which is really, really, really ... The worst part I hate about it all is just the confusion, and then the reluctance for them to not admit that the risk is higher on Windows-hosted machines of being ransomwared than a true SaaS play. Blake Oliver: Oh, yeah. Joe said something about how you're just as much at risk on a SaaS provider as a hosting provider, and that's just simply not true. David Leary: Not for ransomware. Now, there's been breaches. There are data breaches. There's no doubt. Breaches are at all-time highs, [00:45:30] but you could argue that those are ... They're getting either its names, socials, credit card numbers. It's marketing data that these huge companies have; it’s essentially, marketing data, but they’re not … If ADP got hacked, I can still run payroll tomorrow. I'm not locked out of my business files. That's the problem with iNSYNQ. Two other interesting [cross talk] Go ahead.  Blake Oliver: I was gonna say, the lesson here, for me, is go ahead and use hosting, but make [00:46:00] sure that you are managing your own backups in addition to whatever they are saying they're doing, so that if their backups fail, you've got your own local backups. David Leary: We went off on that last week, right? "You gotta backup. You gotta backup. You gotta backup." Two things that I thought Brian Krebs surfaced was, one, a Google ad from iNSYNQ. Blake Oliver: Oh, yeah. David Leary: It was pretty interesting. The Google ad says, "iNSYNQ, we're still standing." I'll read the text of the ad: "Competitors are offering empty promises about security to capitalize on the iNSYNQ attack. That [00:46:30] is not okay, but don't worry, we still are. Stick with the company who plays nice. Impacted by the attack? Call our hotline." Blake Oliver: I know why they're doing that, because I searched iNSYNQ on Google, and I saw ads from their competitors, saying, "Hey, affected by the iNSYNQ attack? Come to us, and we'll take care of you." Actually, I just searched, and I found one from TrapTechnology.com/iNSYNQ. "Impacted by the iNSYNQ attack? No contracts. Get a free trial." Ben Wann: Doesn’t hurt to try.  David Leary: And the other piece- Blake Oliver: Oh, NetSuite is doing it. "Affected [00:47:00] by the iNSYNQ attack? Switched to NetSuite today." David Leary: Switch off of hosting! Another thing he pointed out is that Alex Holden, the founder of Milwaukee-based cyber intelligence firm Hold Security, basically came out and pretty much said that if these companies can detect the infection before, they have some elbow room, because a lot of the times, these people will infect- they'll get on the network, and it'll be days before they do any encrypting of files. So, the key is to find the infection and stop it within seconds. Blake Oliver: Yeah. [00:47:30] David Leary: But you're right, if they've already started encrypting stuff by the time you discover it, obviously, we're seeing the repercussions of that. Blake Oliver: Well, speaking of encryption, I got one more story before we go. David Leary: Okay. Blake Oliver: From my old firm, Armanino: they are now accepting cryptocurrency payments. Press release came out yesterday, David, so you'll be happy to hear; that's another accounting firm that is modernizing their payments platform. Ben Wann: What is the angle there? Is that just marketing? I don't get it. Blake Oliver: Yeah. It's really great marketing, and I'm really confused why not every [00:48:00] big firm is doing this. They have ... Armanino started a blockchain cryptocurrency practice. Ben Wann: Okay. Blake Oliver: They've been promoting it, so, why not make an announcement? "We now accept every form of cryptocurrency. You can pay us with anything you want." Because, of course, the tech press are going to pick it up, right? [cross talk] David Leary: It's super-easy, right? It's just like getting QuickBooks merchant services. It's just you're adding a merchant service for 5,000 different wallets. [cross talk] Blake Oliver: -all you have to do is set up Coinbase or something, and [00:48:30] it just automatically converts whatever people pay you into US dollars, right? Just a great example of some easy accounting firm-type marketing stuff you could be doing. David Leary: I'm glad you brought that up, because it reminded me of a thought I had in the car, when I was driving earlier today, about ScaleFactor. I was like, "ScaleFactor's never once played the AI or blockchain card, and they're raising all this crazy money … They're not even playing the AI and blockchain card." Blake Oliver: That's true. Maybe that means they have some actual automation at work [cross talk] David Leary: -and on that note … [00:49:00] Blake Oliver: This was really fun. Thanks, Ben, for joining us. If people wanna follow you online, I know you mentioned that stuff before, but what's the best place for them to follow you personally, and then, your website for your project? Ben Wann: LinkedIn is the place to find me, and then The Numbers Guys is our website. David Leary: No Twitter for you, Ben? No Twitter? Ben Wann: I'm on Twitter. I don't know what I'm doing on Twitter. David Leary: Oh, we’ll have to get you on. We'll get you in the loop. Blake Oliver: That's good, because a [00:49:30] good rule of social media marketing is pick your platform and kinda own it, so you’re doing the right thing, Ben.  Ben Wann: Yep. Blake Oliver: David, where should people find you online? David Leary: I am on the Twitters- would be easy … It's @DavidLeary. Blake Oliver: I'm @BlakeTOliver. You can find me on both those places. David Leary: And, as always, please leave reviews on iTunes, but we have great news for all you not … All you iTunes, and Apple haters, like me, out there. You can finally write reviews somewhere else. There's a website called PodChaser.com. On there, [00:50:00] you can search for Cloud Accounting Podcast, or click the link in the show notes, and you can leave a review on Pod Chaser. What's nice about that is those reviews are starting to appear in other podcast players. It's one place to write a review, and in regards to the podcast player you use, it's going to populate across. Blake Oliver: They got some sort of API connection going on. That's cool. Ben Wann: I listen to a lot of podcasts, and I got turned on to you guys … In the last few days, I've just been listening to what you're up to. This podcast is really good. I've enjoyed it. You guys are doing really great work. David Leary: Oh, [00:50:30] thank you. Blake Oliver: Thanks so much, Ben. That's awesome. Really appreciate that. Now go write a review [cross talk] All right, that's it for me. Talk to you next week, David, and Ben, thanks for being on the show. Ben Wann: All right. See you later. David Leary: Bye, everybody. Blake Oliver: Bye.
#Xerocon San Diego: LivePlan's Sabrina Parsons, CEO, and Kathy Gregory, Director of Strategic Development
Cloud Accounting Podcast
SponsorLivePlan: http://cloudaccountingpodcast.promo/lpbootcamp Show Notes  00:31 – A personal word of thanks to our sponsors  01:00 – Sabrina and Kathy define advisory from their perspective   03:05 – Finding the why - Asking the right questions to help build a strong advisory service  07:01 – Another model of combining bookkeeping and advisory - former guest, Kenji Kuramoto  10:22 – Worth repeating: Bookkeeping is not what creates value in the mind of the business owner   11:37 – Adapt or die ... Stop fighting AI and get creative   13:29 – Sometimes Kool-Aid is good. Sabrina breaks down the myth that strategic planning is not a small-business imperative 15:14 – Want to take your client-advisory skills to the next level? The LivePlan Client Advisory Services Boot Camp is just what you need!   16:41 – For small businesses that don't have the budget for CFO-level help, there are endless opportunities for accountants skilled in strategic planning and advisory  19:10 – When you've got the 'who, what, where, and why,' LivePlan gives you the 'how'   19:53 – Kathy shares the inspiration behind LivePlan and describes some key features  22:08 – LivePlan is launching a new QuickBooks Desktop Beta. If you're interested in taking part, visit LivePlan.com/strategicadvisors to learn more 25:16 – LivePlan offers tools that remove the complications and make it easy for small business owners to work alongside their accountants  27:15 – Why Palo Alto transformed from desktop to cloud, and how they found the method to their madness within their own method - LivePlan   31:53 – How does Palo Alto Software stay profitable, and continue to reinvest in its own growth? Strategic planning   34:07 – Sabrina give a brief glimpse into her side gig - advocating for working moms and working families and how it took her to the White House more than once Connect with Sabrina and Kathy  Email: accountants@liveplan.com Website: LivePlan.com Twitter - LivePlan: @LivePlanSA Twitter - Sabrina: @mommyceo LinkedIn - Sabrina: https://www.linkedin.com/in/sabrinaparsons Twitter - Kathy: @KathyGregory1 LinkedIn - Kathy: https://www.linkedin.com/in/kathy-gregory-821525112/ Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.  Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast, I'm Blake Oliver. David Leary: I'm David Leary. Kathy Gregory: I'm Kathy Gregory. Sabrina Parsons: I'm Sabrina Parsons. David Leary: Sabrina and Kathy, where are you guys from? Sabrina Parsons: We are from Palo Alto Software, makers of LivePlan and also Outpost. But I think, for today, it's really makers of LivePlan, because we're here to talk to you guys about all kinds of things related to LivePlan and advisory. David Leary: There's the word - advisory. We're in the Summer [00:00:30] of Advisory. We were talking about this last night- Blake Oliver: Yes, yes ... Oh, and before we get into that, though, thank you so much for sponsoring and making this whole event possible for us. Sabrina Parsons: Oh, absolutely. Blake Oliver: We appreciate it!  Sabrina Parsons: We love Cloud Accounting Podcast. David Leary: Thank you. Blake Oliver: So, yeah, let's dive right into it. Let's do it. Advisory. David Leary: It's everywhere. We actually had an interview earlier today, where they're starting to ... People are getting scared by the word advisory, because it's like- Kathy Gregory: Being overused.  David Leary: Do advisory or die! What does it mean to you two? [00:01:00] Kathy Gregory: To me, you can't advise a small business or client. You can't advise your client unless you're doing strategic planning. For me, right away, you better be doing some planning, and broad-level strategic planning should be included and then the follow-up to the planning, but it can't be just ... I've heard people talk about advising on IT solutions, and advising, obviously, on tax. I completely understand that, and I think all of that can be included, but you're not gonna help a small business get [00:01:30] to where they wanna be - either grow or retain where they are, or even scale back ... Sometimes a business is trying to slow down, and a person's trying to retire out, or they're trying to just take it down and end it. Whatever it is, whatever the plan is, you're not gonna be able to do that unless there is strategic planning involved. David Leary: There's no plan, there's no map. What are you advising? Kathy Gregory: Right. Sabrina Parsons: Exactly, and I think that's ... I know, people get scared about it, and I think 'The Summer of Advisory' ... They're hearing all these things. There's a lot [00:02:00] going on right now, but I think the reason they get scared is because it is so undefined, and people define it in so many different ways, and it feels overwhelming. But, at the end of the day, really what you're doing ... What we all say by advisory, we all mean helping small businesses. That's what I like to kind of reframe and help people understand that it doesn't have to be this big, scary word that means 500 things. Really, what you're doing is helping a small business client. [00:02:30] How do you help a small business client without understanding their strategic roadmap, and where are they going, and really interpreting their financials for them? Because if they need IT help, maybe they'll come to you, but they're already there with you because you know numbers. If you're an accountant, that's why a small business client is with you. I think sometimes I see that disconnect, where, sure, you can learn IT, you can advise on IT, but your [00:03:00] strength as an accountant is your- the way you know numbers and embrace them. Blake Oliver: One thing I see, and I'm guilty of this, is people will ... When I was in practice, they'd come to me and they'd want a service. They'd say, "I need bookkeeping." Then I would just jump in and start doing that for them. Or maybe they would need some controller-type services. It was always best if I stopped for a moment, and I asked why. Not just "Why do you need my services?" Which I got better at asking that ... From a sales perspective, that's really important. But also, it's like, "Why are you in [00:03:30] business?" Sabrina Parsons: Yes.  Blake Oliver: We fail to stop and think about that. It could be, like you said, for strategic planning, Kathy. Maybe they wanna sell the business; they wanna retire, or I don't know, maybe it's just like they wanna quit their day job ... Everybody has a different reason, right? Financial independence- Kathy Gregory: I think, in the accounting industry, and in the public accounting industry, for so long, because of compliance-based services, a public accountant can literally sit back and wait for the client to come to them, because [00:04:00] they need whatever compliance-based service they need. But if you're going to work at a higher level with a client and help them grow their business, or help them achieve their goals, you have to lean forward, and you have to ask those questions that are different, and new, and more broad. Then, know how to apply that information. If the client tells you, "I'm trying to really just make enough money to send my kid to college," or, "I'm trying to purchase a new piece of capital [inaudible] company," or whatever it is, all of those are [00:04:30] business goals, and you have to be able to translate those into whatever financial plan that will help them achieve that. It's just it's a different type of work. Blake Oliver: Yeah. How do we get comfortable with that as accountants? Sabrina Parsons: You know, I think the first place is to also realize - and Blake, I don't know how much- whether you'll agree with me or not - but I feel like if you ask those questions to a small business, "Why do you need the bookkeeping?" I feel like we hear a lot from small businesses. We work directly with them. We started, and still [00:05:00] to this day, more than 80 percent of our revenue is direct from small businesses. We interact with millions of small businesses ... When they have the money to hire a bookkeeper, they don't understand what bookkeeping means. What they think to themselves is, "Whew ... I finally made it. I have enough money for somebody else to do the financials.". Blake Oliver: Right.  Sabrina Parsons: They don't understand that bookkeeping is literally compliance, and you're not helping [00:05:30] them analyze what's going on. You're just recording what happened. I think that's part of the disconnect. When accountants are afraid of advisory, because they don't know how to sell it, the biggest message I want them to hear is you don't have to sell it. You just have to do it, because that's why a small business owner is coming to you. I think it's a huge disconnect-. Kathy Gregory: And be able to know what the right price is for your firm and your ecosystem for that, too. Make sure you charge for it. But [00:06:00] yeah, just do it, because they expect that. Blake Oliver: Yeah, a lotta times, we give it away, right? Kathy Gregory: Yes!  Blake Oliver: We charge for a tax return, but we're doing a ton of advisory that's way more valuable to the owner. David Leary: And the owners will pay for it, because they'll understand the value- Kathy Gregory: If they understand it. Yeah, and I think that seems to be the next step for the accounting industry as a whole is to decide what it is, and then be comfortable with systematizing it, because I think it's ... I hear two things said a lot at conferences and at places, that advisory is knowledge [00:06:30] work. I hear that a lot. It's knowledge work ... It is, 100 percent, but you can still systematize knowledge work. You can still do that. You can set up for yourself a process and a system. Then, once you have that, then it's defined, and then you know what you're doing, and you can train your staff on it, and everybody knows what their piece of it is. Then, you can price it easier, and you can market it easier, and you know what that is. They need to embrace both - the fact that it's knowledge work, but that you can also make it a system. David Leary: Yeah. I think, this summer, a couple things I've [00:07:00] observed is Kenji ... Say Kenji's last name for me.  Blake Oliver: Kuramoto.  David Leary: Kuramoto ... Who was actually at The Accounting Salon. He was ... If you go back a couple episodes, listeners, you can listen to his interview. It was interesting, because he started 100-percent virtual CFO advising only. He's worked his way backwards into bookkeeping, because he realized he can't do any advising if their books aren't accurate-  Kathy Gregory: Oh, yeah. You've gotta have that.  David Leary: What's interesting, you guys have an app, LivePlan, and that connects to the accounting systems, but then also helps do the advising, right? There was a slide last week on Twitter. It was at the AICPA, and somebody was ... It was like, "Stop [00:07:30] doing bookkeeping and do advising!"  Kathy Gregory: Oh, boy.  Blake Oliver: Oh, yeah.  David Leary: How is that possible? Kathy Gregory: No, it's not possible.  David Leary: How do you do advising if you don't have good numbers? Kathy Gregory: No, no, you gotta have good numbers and a very clean month-end, or at least having it happen quickly. Sabrina Parsons: And if you can control that ... Kenji working his way to bookkeeping and understanding that, then your advising is gonna be better, because garbage in is garbage out. If you've got terrible charts of accounts and someone isn't doing the bookkeeping correctly, it's gonna be really, really difficult. But there's [00:08:00] an opportunity there, whether you wanna do all the bookkeeping or not. This is also where I think people have to not be afraid of what technology is bringing to the table.  I know a lotta people are afraid of all kinds of online services now, including Intuit, that are offering bookkeeping, right? I really want an accountant to look at that and say, "Okay, is that work that I wanna do - that work that's commoditized that I [00:08:30] can no longer charge as much for, because it's so easy for people to go online, and find services, and package services at ridiculous rates?" If it's well done, and you can then do the advisory, the value is not in the bookkeeping.  At some point, it's even gonna be ... I mean, technology, automation, IA, is gonna continue to work on the bookkeeping side and continue to make that an automated artificial-intelligence [00:09:00] process. That's fine. Let that happen, and use that, and then build your advisory services. Wouldn't you rather do super-interesting work, help a business grow, or sell, or add a partner, or add a location? Really be that entrepreneurial catalyst for your small business. That's so much more invigorating. You can bring passion to that. Don't be afraid of all the online services, because there's only gonna be more, and more, [00:09:30] and more of them, and that's okay. Kathy Gregory: You get to keep playing with numbers, too. It's not like you don't get to keep playing with numbers. You just do them in a different way; you analyze them in different way. Knowing that each metric that comes off of your standard P&L balance sheet and cash flow ties back to something going on in the operation that's working, either well or not well? That's a super-fun job. I nerd out over that all day. I think it's so fun to dig into those metrics and try to figure out [00:10:00] what's happening in a small business operation that's working, or not working, then asking the right questions of the business owner. There's nothing more fun than that, and there's nothing more fun than seeing their eyes light up, when you hit on something, you've uncovered something. They go, "Yeah ... Yes, that's not working right, and I don't understand it, but I didn't get the numbers to be able to know it." You know what I mean? It's like these two brains coming together. It's so fun. David Leary: Something you said, Sabrina, and I think this is the problem ... People hear some of the sentences, but maybe not the whole conversation. You said bookkeeping is not the value, but I [00:10:30] think people hear that, like, "Bookkeeping is not valuable," but you can't do the valuable stuff without solid bookkeeping. Nobody's saying bookkeeping is not valuable. Blake Oliver: Well, it's not what creates the value in the mind of the business owner. David Leary: Correct. Yes. Blake Oliver: It's essential to do the work, right? Sabrina Parsons: Exactly. Exactly. I think that's exactly right. Blake, you should repeat that again.  Blake Oliver: It is not what creates value in the mind of the business owner. Sabrina Parsons: Exactly. You also can't fight ... I believe you shouldn't [00:11:00] fight that technology battle. You should embrace it. I don't mean that bookkeepers aren't smart, that they aren't doing valuable work, that what they do today is somehow lesser. I just mean this is the reality. This is what's happening, and they can't stop that. Right? It's the same way where, if you're a taxi driver, at this point, you've probably stopped fighting rideshare, right?  Blake Oliver: Yeah, probably. Sabrina Parsons: Ten years ago, it didn't exist; five years ago, taxi [00:11:30] drivers fought it; at this point, they've given up fighting it and they've either joined or moved on to do something else-  David Leary: We've talked about that on the podcast, in the past. There were some articles, because we brought this up ... There's taxi drivers, and taxi associations, in taxi people that are doing very creative additional services. It's forced them to step up their game. Blake Oliver: Yellow Cab, I think, created their own app now. They are being forced to improve, I think, and the same thing's happening in our industry with these software plus a service type of offerings - the Botkeepers, the ScaleFactors, the- [00:12:00] David Leary: QuickBooks Live-  Blake Oliver: QuickBooks Lives. That's forcing us all to up our game, but it's also creating a bigger market for these services. Now, people are aware, "Hey, this is not just a niche thing. I can get this." Sabrina Parsons: The other part that I think, to Kathy's point of this can be exciting work, is that we've lived in an environment in the U.S., where small businesses understand they need bookkeeping. As soon as they can afford it, they want somebody else to do it. They've understood [00:12:30] that they can't run a business without bookkeeping software. That's why you've got all these big players and lots of players in this market. They embrace that. They know that. But they're still failing. If you start a business in five years, 70-percent chance that you're outta business. 60 percent of the ones that fail were actually profitable. They ran out of cash. They're not managing their business, and this has been for years, and years, and years. What I think is the super-exciting [00:13:00] opportunity is that if all of these services online and all of this technology really pushes bookkeepers and accountants to innovate and to be really thoughtful about what they bring to the table and bring real value with their experience, their knowledge, their human mind that technology can't do, we actually have a chance in the U.S. of changing the economy. Small businesses drive the economy, and a rising tide lifts all boats. I [00:13:30] know I sound like I'm dispensing Kool-Aid, but I find it to be super-intriguing to look at those numbers and think about could we really affect the economy by getting accountants to do this sort of advisory work? It is good for small businesses. Intuit does strategic planning. Xero does strategic planning. All public companies do. When we know and we see all those reports from Wall Street ... Did [00:14:00] Google make their numbers? How's Microsoft doing? How's Intuit doing? What they're talking about is their forecast, and what they're doing is saying, "Here's the forecast, here's the actual. Did they make their numbers?" Startups do strategic plans.  Small businesses are kinda told this myth that business planning is for startups only, and for raising capital, which is a total myth, because even large [00:14:30] private companies, they do planning, and they have a board, and the board has to approve the plans, and they look at it every month. It's almost this myth that small businesses have been told, and then accept, because strategic planning is hard, that they don't need it yet. Yet, everybody else that's successful and bigger does it. Kathy Gregory: Even without the board, even ... I spent years in a fairly large engineering firm, and we did it just for middle operational management, pulling data [00:15:00] out of the accounting system, because the accounting department wasn't doing that; massaging it in a way that made sense, building forecasts, so that operations managers could make decisions; could make strategic decisions. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. This has been The Summer of Advisory. Everyone at every conference, and every session is telling you to become an advisor, but the fact is, a 50-minute CPE session at a conference does not make you an advisor. [00:15:30] Some of you even took to Twitter to vent about this fact. Well, I have some good news for you. Believe it or not, Twitter led to the creation of a three-day course, or should I say a boot camp on advisory? Yes, that is right. You can now really become an advisor by attending the LivePlan Client Advisory Services Boot Camp on October 2, 3, and 4, 2019. The three-day event in Eugene, Oregon, will include deep learning, and hands-on workshops to learn the LivePlan method for strategic advising, and how to market, sell and deliver this vital client [00:16:00] advisory service to your small business clients. To learn more about attending the LivePlan Advisory Bootcamp, head over to CloudAccountingPodcast.promo/lpbootcamp. That is Cloud Accounting Podcast dot promo forward slash L-P-B-O-O-T-C-A-M-P.  David Leary: I suspect small businesses do wanna make plans, but they get caught up running their business, and that's where partnering with somebody who could actually come in and just ... In a way, it's advising- just [00:16:30] holding them accountable a little bit is just gonna help them. Sabrina Parsons: Also, if the accountant does the advisory, because the small business owner is doing a million things ... Really, it's like Kenji being a CFO for hire. That's what they need. They just, they can't take on that role. They don't have that knowledge. They don't have the expertise. They need that value from somebody else, and they will welcome it. Once you do it correctly, they'll be addicted. They are not gonna drop you. Your [00:17:00] retention with that client is gonna be as long as they have their business. If you're charging them $2,000 a month, you're not getting a CFO for $24,000 a year. That is not happening. You can't get that sort of strategic level of experience for that sort of money. So, if an accountant can do that, there is room for thousands of dollars a month that are still completely doable [00:17:30] for a small business, and the value is there. Blake Oliver: So, I'm an accountant. I'm ready to make this leap. I want to get started in advisory, but I don't know where to get started - that's the classic problem. I wanna do it ...  David Leary: You just go to conference. There's lots of sessions. Blake Oliver: How does LivePlan create that starting point for me. How does it work?  Kathy Gregory: From soup to nuts, if you do it [00:18:00] all, you would start with a broad conversation with your client to understand their big goals and begin doing real strategic planning with them that would include everything from looking at their market, and looking at how they're selling, and who they're selling to, and why they're selling it, and having a fairly deep discussion with them about that. Then translating those things into a forecast. There are simpler ways to start, if that is work that is new to you. In our software, you can dive into those- yes, I'm sorry?  Blake Oliver: Sorry, I'm just trying [00:18:30] to picture it in my mind. I'm creating a strategic plan. It's like a business plan. Am I thinking the same terminology?  Kathy Gregory: Yeah, we call it a Lean Plan. Blake Oliver: Lean Plan, okay-  Sabrina Parsons: I will just interject, before Kathy describes it, because you asked how LivePlan helps. I think the number-one thing, to David's joke of just go to conferences, because they have all these sessions, is that I think part of the problem for accountants is they all get talked at about why, and they [00:19:00] don't need that. They already bought it. They know why-. Blake Oliver: This is the classic problem of conferences, all high level. Sabrina Parsons: Exactly.  Blake Oliver: "You need to do this." Then you go home, and you wonder like, "Well, how do I do it?" Sabrina Parsons: Exactly. Exactly. This is what we've learned over the years. Our tool is a tool for small business owners. It is a platform and a system for accountants, and it's two different things. What we've really understood that what accountants needed is not to be convinced. They're convinced. They buy it. They [00:19:30] nod their heads. Then they go home, and they don't know what to do. What Kathy's really built, and then I'll let her describe it, is the 'how,' and in a way that makes sense to someone who's been doing tax and compliance work. It is a system and a process with tasks that you can learn how to do. We've really gotten into the weeds to show accountants, and train them- Blake Oliver: Yeah, we like checklists, so this is-  Sabrina Parsons: Yes, yes-  Kathy Gregory: It is a checklist. Yeah, my background is in a lot of things, but business process design [00:20:00] is one big piece of it. So, it was realizing- it was coming to these conferences, when I first came to Palo Alto Software, and realizing, oh, this industry doesn't have a business process for this, and that really is what's needed. Then, once there is a master kind of business process, then firms can adopt that in whatever way makes sense depending on the things they focus on, or the skills they have. If they focus on only bookkeeping, there's pieces of it you can do. If you're sort of CFOs for hire, then it's different; but you have to have the master plan first and then be able to [00:20:30] pick apart pieces of it you like- Blake Oliver: Got it.  Kathy Gregory: -and deal with capacity planning, and resource allocation, and all of the things that you have to think about when you roll out a new service. Blake Oliver: So super-high level, just overview for those who are not familiar at all with LivePlan ... I think I used LivePlan actually, myself, as a business owner. Kathy Gregory: Great. Blake Oliver: I don't know if you know that. When I started my firm, I created my business plan, that one-page pitch to get an investor with LivePlan-. Sabrina Parsons: That's awesome. Blake Oliver: Now, of course, I was bad, and I didn't follow through with the forecasting, and the [00:21:00] budget-to-actuals, and any of that-. David Leary: That's because he was a bookkeeper, and he was too busy. Blake Oliver: I was too busy. So, that I'm familiar with. I could create that business plan and try to get investment or just really distill in my mind what it is I'm doing, which is actually just a great exercise. Can you explain your business in like-. Kathy Gregory: Isn't it great? Blake Oliver: -in one sentence? Kathy Gregory: And how it limits you to those characters? Blake Oliver: Yes!  Kathy Gregory: Because it seems like a nothing thing, but it's important, because you strip out all the words that don't matter, and you get down to the words that ... It really is powerful. Blake Oliver: So that part I did. Then, if I had actually continued, I would then [00:21:30] create a financial forecast? Kathy Gregory: Yeah. Blake Oliver: I wanna hire employees; I wanna expand ... It's building out a forecast. Kathy Gregory: Yeah, and then really thinking through the things to forecast. That's a critical piece of it. The software helps you think through that. If you already have maybe a chart of accounts with a ledger, you've got codes already, but the things you wanna forecast should be strategic to your business, and they should roll out of that Lean Plan. Blake Oliver: Got it. Then, once I've created that, I can pull in the actuals from my accounting software. What GLs do [00:22:00] you support? Xero, obviously, because you're here at Xerocon. You're also doing ...?  Kathy Gregory: And QuickBooks Online-  Blake Oliver: QuickBooks Online. I pull in those numbers ...  Sabrina Parsons: We are also going back to ... We used to support QuickBooks Desktop. The Sync Manager went away. We were hesitant to build our own sync manager, waiting to see what Intuit was gonna do; but it's clear that QuickBooks Desktop, at this point, still has a lotta usage, and it isn't [00:22:30] going away. So, we are launching our beta for accountants next week. If anyone is curious and they want to be part of the QuickBooks Desktop beta, they can contact us. If they just come to a LivePlan.com/strategicadvisors, they can find the information, but we are back to supporting QuickBooks Desktop.  Blake Oliver: All right. Well, the folks who are signing up for Right Networks, for their Always On feature, which claims to make QuickBooks Desktop just as good as QuickBooks Online, now [00:23:00] they've got LivePlan integrating with it, too. Sabrina Parsons: We are actually using Right Networks, their ...  Kathy Gregory: Autofy.  Sabrina Parsons: They just purchased Autofy, and-  David Leary: Yep, yep, that's what we were talking about [cross talk] Sabrina Parsons: Autofy is who's actually doing our Desktop integration-. Blake Oliver: You don't have to be logged into as a user, too, for the sync to work, all that stuff?  Sabrina Parsons: Exactly. Exactly.  Blake Oliver: We oughta talk about this more, David. I'm actually more bullish on hosting than you might think. Yeah, yeah. Well, that's great. Okay, now it's kind of making sense in my mind. Kathy Gregory: Yeah, so you [00:23:30] connect the accounting solution, and then LivePlan's dashboard is going to present you with the metrics - each individual metric. It was built, remember, for small businesses. That's the cool thing about it, for accountants, that they don't have to now reconstruct and build reports that makes sense to small businesses, because they're already built; they're already done. Blake Oliver: Got it. Kathy Gregory: Then it shows me very clearly the difference between plan and actual; really simply, like with green arrows up mean good, and red arrows down mean bad. [00:24:00] Again, it's cool for the accountant, because it's a talking point. Have you ever been in an advisory meeting or any a meeting with your client, maybe at month end, and you've got the talking points. You know what you're gonna tell them, but your brain just breaks down in the middle of the meeting, and you kind of forget the points? This is nice, because it helps guide you through- Blake Oliver: It's that agenda for that meeting.  Kathy Gregory: Yeah, it is. Then our business process that's outside of LivePlan comes with meeting agendas, and scripting, and all the other things that help you- that support you. Sabrina Parsons: Initially, if you're [00:24:30] afraid, or you don't know, the scripting is great, right? We kind of prompt you with, "Here's some questions you should be asking." When people actually start doing this, then they build their own questions. They get more comfortable. They understand their style and the style of the client. It goes back to that whole idea of everybody gets the why; How? How?  We've realized that getting down to even providing you with scripts really helps people get over that hurdle and that fear, because the other part that I think is really vital, and [00:25:00] I would say is a competitive differentiator for LivePlan versus other reporting analytics apps, is that we didn't build this first and only for accountants, who then put stuff together and presented to clients. That's fine, and other people have chosen to do that, but we built it so that the small business owner works with the accountant; so that the small business owner's also using the dashboard, and so that the reports make sense to the small business owner, because what we heard from accountants [00:25:30] is they stop using a lot of these other tools because they send stuff to their client, and the client never responds, doesn't look at it month, after month, after month. They don't, because it's too complicated, because it wasn't built for them.  David Leary: And essentially, because you guys have a 25-30 years’ experience servicing small businesses, and you attacked it from that direction. It reminds me of Intuit; years ago, in my career at Intuit, with TurboTax. They, at one time, hired an editor from People Magazine to basically go in and change all the text in TurboTax, because it [00:26:00] was easier to use then, because it was written with all this accounting language, and nobody could understand it. It's kinda the same thing. If people are coming from the accounting dashboard side, trying to push down the other direction, you're probably not gonna communicate to the small business owners. You guys already had that DNA in you, and then came the other direction. Sabrina Parsons: Exactly. We actually started working with the accountants because they came to us. We got to a point of critical mass of having LivePlan out there in the marketplace, that the small business owners were taking LivePlan to the accountants. We started hearing [00:26:30] from accountants saying, "What is this? Do you have trainings? How do I use it? My small business clients have it, and now I have to learn how to use it." We really were pulled by the accountants to come into this market because of our DNA with small business owners and the fact that the small businesses were already using it, which I think was appealing to accountants. They don't have to position, or sell, or market this other tool or these other reports. David Leary: Could you speak to ... It's [00:27:00] not really advisory related, but I think it's a cool story, because everybody's in this transition still, constantly - desktop to cloud. We just talked about desktop a couple seconds ago. But, tell the history of LivePlan, and Palo Alto software, because it was a desktop company, and now you've changed it into a SaaS cloud company. You've made the transition yourself. Sabrina Parsons: Yes, we have. I took over the business in 2007, and we were basically a Windows desktop company. Our flagship product was Business Plan Pro. A lot of people have used it; millions of entrepreneurs. [00:27:30] But the writing was on the wall, and we understood, as a software development firm, what the cloud had to offer in terms of usability, in terms of development, getting away from that Golden Master, and installations, and the support side; also, the ability to iterate more quickly and really bring customers what they want consistently and not once a year with this big release. We started, [00:28:00] at that point, planning. I think what is interesting to me is for people to understand that the way LivePlan was born was really saying, yes, we've gotta go in the cloud, but also recognizing that Business Plan Pro wasn't doing the ongoing management the small businesses needed. We were using Business Plan Pro. Every year, we'd create our strategic plan, and every month, we would compare plan, versus actual, versus previous period, versus previous [00:28:30] year, because those data points tell you a lot. If you're a retail store, and you're looking in January, you look at previous period December, and the numbers are not gonna look ... You're gonna look, like, "Oh, my God, I'm doing so much less ..." but that's obvious, right? Seasonality. You want previous period, but you also want same period last year, because that tells you even more. That was the way we managed Palo Alto Software every month, but it entailed exporting from Business Plan [00:29:00] Pro, exporting from Accounting Solution, massaging data, and so- David Leary: Because you were using your own product, you realized all the things it sucked at.  Sabrina Parsons: Exactly. Exactly, and the ongoing small business management ... We built LivePlan, and the methodology that's behind that process and system that Kathy has built for accountants is what we used to build LivePlan. There is a management methodology to LivePlan. When you take a company and you switch it from Windows development [00:29:30] software to cloud, you have to have whole different developers. There's a lot of resources there, and there's a real big push on cash. All of a sudden, you need to hire all these other people for a product that's not bringing you revenue yet. We changed technologies. That's hard. It can be very difficult for a company. We also changed business models. We had a piece of software that we were selling, and it was more transactional. You bought it ... Yes, we got some upgrades, but you bought it, and you didn't [00:30:00] keep paying us, right? You bought it, and, on average, we were making 160 dollars from every user, because we had a couple of versions - $99, $199 - different things that you could buy, but we were getting all the money at once.  So, not only did we have to switch from a resource perspective and hire all these new developers, but we also, all of a sudden, were in a situation, where we were gonna be getting $20 a month ... We didn't know, were we only gonna get $20? Were we gonna get $300? Were we [00:30:30] gonna get $160? Were we gonna get more people but less money? That's kind of a scary thing and a huge cash flow implication, because all of a sudden, we're getting 20 bucks, and it's taking us over a year to get to that average transaction that we already had.  The only way we were able to do that is using the LivePlan method. That's exactly how we used it, right? We forecasted. We understood our cash. What [00:31:00] we did is that we saw our runway, and we slowly introduced LivePlan, while still selling Business Plan Pro, so that we were able to really strategically ... But there's no way we coulda done it without managing-. Blake Oliver: You did a cross fade. Sabrina Parsons: We did ... Obviously, I'm proud of it, because I love LivePlan, but I also want people to know it's how we manage the business. We are privately owned. No debt. Cash-flow [00:31:30] positive. We've never taken on an investment, and we continue to grow. We've done that, and we're able to do that because we eat our own dog food, because we do strategic planning, because we don't spend money we don't have. Blake Oliver: That's interesting. That's kind of a rarity. You are profitable, cash-flow positive, and not interested in taking on investment money?  Sabrina Parsons: No.  Blake Oliver: Are you planning to stay private, and just ...?  Sabrina Parsons: You never know what happens in the future, but it works for us, and we don't need it. We've built up cash that we can [00:32:00] reinvest. We've built up enough cash that we've launched a whole 'nother product. We've been able to invest in that product. We have a team of 20 people and that product is just barely launched. We've done that all with using our own revenue and profits from our existing product line, but it takes a lot of super-careful planning. Blake Oliver: That's very refreshing. David Leary: It's very hard for companies to get off the desktop model to a cloud model. We actually did an interview last week with Shafat from BQE- Blake Oliver: Similar [00:32:30] story. David Leary: Similar story. Instead of how you cross-faded it, to take Blake's term-  Blake Oliver: He did a hard cut off. David Leary: He just stopped. The second it was done, it was launched. You couldn't buy his desktop product anymore. He went for it. Maybe he didn't use LivePlan. He just jumped right in.  Sabrina Parsons: Maybe he had a credit line, or he had some investors. You have to have some cash to do that, right?  Blake Oliver: You've got to have a lotta cash to take that kinda risk. David Leary: I think it was private, but, see, they were an existing desktop app that had an established base for a long time. Blake Oliver: If people wanna find out more about LivePlan [00:33:00] and connect with you, and your company online, where can they do that? Kathy Gregory: If you're an accountant, the best way is you can email us at accountants@LivePlan.com. That's the first way. Our website is LivePlan.com. Then, in the upper right-hand corner, it'll say Solutions, and there's a dropdown, and you can pick Accountants. That'll get you to the site that has all the resources. There are tons of resources on our site. Blake Oliver: Are you two on the social medias? Do you like the Twitter- Kathy Gregory: Oh, yeah, I'm on the social medias. My Twitter handle, I'm supposed to know that, right? I think it's @KMGregory1. I [00:33:30] believe that's what it is. Yeah, that's what it is. I have fun on Twitter all the time with accountants, but I can't recall ... [cross talk]  Blake Oliver: It's like knowing my own phone number. Kathy Gregory: Yeah, right, but I do have-  Sabrina Parsons: Kathy also helps manage our LivePlan Strategic Advisor Twitter, and that's @LivePlanSA.  Kathy Gregory: Yeah, @LivePlanSA, and there's a blog that I think is fun and good on the site.  Blake Oliver: All right, great.  Sabrina Parsons: And my Twitter handle is @mommyceo Blake Oliver: I love that. And as always, I am @BlakeTOliver. [00:34:00] How about you, David? David Leary: I'm @David Leary. I think this is interesting, because I don't think we've had anybody on our podcast that has spoken to a president before. Sabrina Parsons: In my spare time, I do a lot of advocating for working moms and working families. I have been lucky enough to be invited to two summits during the Obama presidencies, and, yes, was able to have some really cool experiences because of that and speak at a White House summit-. Blake Oliver: Wow. [00:34:30] Sabrina Parsons: -and bring two of my three boys to come ... One of them was has been too young to also be able to experience that ... Being a CEO, woman, working mom in a technology software company, there's not a whole lot of us. I am hoping that 20 years from now, that's different, but I am definitely a big advocate of working parents, and working moms, and try to do a lot [00:35:00] of political advocacy to actually make change. David Leary: Nice.  Blake Oliver: Wonderful. Thanks so much for joining us [cross talk] Yeah, great to talk to you.  Sabrina Parsons: Thank you.  Kathy Gregory: Thanks so much. It was really fun.  David Leary: All right, bye.  
Ransomware attacks continue!
Cloud Accounting Podcast
Sponsors BQE CORE: http://cloudaccountingpodcast.promo/core Show Notes 00:08 – Blake and David talk politics for a brief moment in time ...  00:47 – While Andrew Yang has a touch of bot-phobia, he's the only 2020 presidential candidate talking AI in any meaningful way. 01:24 – Yang's take on "reality TV" style elections |The Hill 02:04 – What it takes to hit the debate stage | NYTimes 04:34 – The ransomware wars go mainstream, when the latest attack on QuickBooks hits "action" news channels, like News 6 in Orlando | ClickOrlando.com 06:49 – Hackers are buying kits designed to specifically target QuickBooks Desktop data files | Healthcare Info Security 07:30 – Ransomware rebuilds - new business opportunity for accountants?  09:10 – How many accounting firms suffer ransomware attacks and stay silent about it to save face?  11:37 – Backing up the backups of your backups, and then backing those up on a regular basis is one way to mitigate ransomware damage 12:47 – LinkedIn adds some new marketing tools to help small accounting businesses boost their visibility on the platform business | Accounting Today 14:47 – Ain't nobody got time for updating multiple social sites when you're trying to run and grow your accounting business. David challenges app developers to create an app that's up to the social-media management task 16:49 – Intuit has added a new role in the TurboTax Live arena - tax associate - to assist credentialed agents with a variety of tax-related tasks |Intuit ProConnect 18:18 – QuickBooks Live finally has a landing page all its own, and they're celebrating by offering a free 30-minute consultation! | Intuit QuickBooks 19:13 – What exactly is QuickBooks Live? Short answer: Uber for bookkeeping 20:48 – Intuit provides an actual demo of the QuickBooks Live service in their new add, narrated by Danny DeVito 22:30 – Blake Oliver - Voiceover talent for hire! 23:56 – Does your firm utilize collab tools that include instant messaging? | CPA Trendlines 26:15 – Google Sheets ups its game with some new tools - Slicers, Scorecard Charts, and themes - to create more effective data visualization | Android Police 28:10 – The Federal Reserve wants to create its own instant-payments system, much to the chagrin of the Big Banks | Politico 29:31 – Open call to Elizabeth Warren - Make an appearance on The Cloud Accounting Podcast!  30:38 – Square doubles down on its ecosystem plays | Bank Innovation  32:30 – More talk on Andrew Yang’s automation/disruption platform and why the concept of universal basic income could be beneficial  33:40 – You say you want a revolution? In June 2019, thousands of LA dockworkers marched against the rise of the robots | CNN Business 34:58 – According to a Pew Research Survey, 85 percent of Americans support policies for robot restriction 35:38 – It’s gonna get far worse, before it gets better. Blake talks about history repeating itself, and how the future may not be so bright for millions of workers in industries embracing automation 37:59 – With a reported 40 to 50 percent of accounting work that can be automated, accountants and bookkeepers sit at the top of the list of those who could be replaced by machine counterparts 41:11 – As automation and constant change becomes the norm, how do we tell our kids what to be when they grow up, when the jobs of today may not even exist by the time they enter the workforce? Perhaps investing in education and lifelong learning is the key 43:05 – What do you really think? Give us your issues, your ideas, your suggestions, and even your complaints!  Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.  Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: So, David, did you catch the debates? David Leary: I did watch the debates. Blake Oliver: Yeah? David Leary: It's must-see TV. That's like five hours of ... Remember when WWF would put 20 people in a cage match? Blake Oliver: Yeah.  David Leary: It's like that. Blake Oliver: That's actually a very good analogy. My brother is in town from New York, visiting for a week, and he loves debates and [00:00:30] politics. He's a public school teacher, and he's also a Democrat and very liberal. I like to think of myself as more in the moderate spectrum. I'm a registered Republican in California, so whatever that means ...  David Leary: A Democrat everywhere else? Blake Oliver: Yeah, exactly. I'm like a Bush I Republican, which is kind of weird thing to be, because I'm not a Trump guy. So, it's been interesting watching the debates. I'm a big Andrew Yang fan. We've talked about him on the [00:01:00] podcast before-  David Leary: -because he's all about the bots are gonna take our jobs; we need universal basic income. Yeah, he's talked about a lot of things we talk about. Blake Oliver: Yes, exactly. He's the only one talking about automation in any meaningful way, like the humongous societal threat that automation poses. I've actually got a story along those lines that I will not forget to bring up, because it does tie back to the debate with Andrew Yang. David Leary: I think he was the only one that brought up the point that this is like a reality TV show and look what happened last time - we got a reality [00:01:30] TV star as your president. I think that was one of his lines in the debate, which I thought was an interesting observation. It's [cross talk]  Blake Oliver: He doesn't get a lot of time. You can tell the moderators are like, "All right, enough from you, Yang. We know you're a one-issue candidate, so we're gonna get back to the real debate."  Anyway, I hope he keeps going as long as he can. David Leary: Hey, I did my part. I went in and I donated $5 to six or seven of the candidates, because they have to hit that threshold to stay in the debate- Blake Oliver: Oh, yeah. David Leary: -so I did my part and donated to about six or seven candidates [00:02:00] to keep them in the debate. It's entertaining. They should be on every week. I'd tune in. Blake Oliver: Yeah, no ... Very good. Please, let's keep this going; everybody, please, donate all those one-percent candidates so they can get ... What is it they have to get to now, like two percent or ...? They have to get two percent polling, in order to continue? David Leary: And 130,000 individual donations or something, yeah.  Blake Oliver: It's one of the- either one? Got it [cross talk] We'll talk a little bit about automation. We also, of course, have to talk about the ongoing malware security, QuickBooks hacking thing that's going on. David Leary: There's more malware. [00:02:30] I got some QuickBooks Live news- Blake Oliver: Yeah, QuickBooks Live.  David Leary: A little bit of news about the payments, and that's about it. I don't have a ton of articles this week, but they're ... I'm nicely prepared, though. What about you? Blake Oliver: I got a few more small stories like Google Sheets has new features. Here's a survey about how many firms are using instant messaging with their clients; how much businesses are spending, as a percentage of revenue, to manage taxes. I think there's a real interesting value-pricing [00:03:00] lesson there, potentially. What else? Oh, how workers feel about robots, and their jobs, and automation, in general. Shall we get to it with the security updates? David Leary: We got a review, though, so, do you wanna read that?  Blake Oliver: Oh, yeah, let's do that first. David Leary: Five stars. Blake Oliver: This is from Mel Comer, CPA, and outsourced CFO. Mel said, "David and Blake do a fantastic job keeping the cloud accounting world up to date on important topics. Always interesting, sometimes [00:03:30] controversial, and definitely enjoyable. Suggestions - would love to hear more about blockchain, and cryptocurrency stories and how accountants are dealing with the challenges of having clients in that space. For example - show 100, they mentioned emerging companies who track cryptocurrency transactions for clients. Bitwave is one of those, and we'd love to hear you interview Pat White, the founder. This is a huge need for our clients. Thanks, guys." Awesome. David Leary: Thanks for the review and suggestions. Blake Oliver: You know ever app, right? So, I'm gonna leave it to you to track down Pat [00:04:00] from Bitwave. David Leary: All right, I'll track down ... Actually, I think that might have been the company I mentioned that I met at The Accounting Show in LA. Blake Oliver: Oh, cool.  David Leary: We can track that down, if there's more news that makes sense. The one challenge, I think, with bitcoin and cryptocurrency - they're in every news, and every app talks about AI or blockchain, and crypto. What's bubbling into the news is what bubbles into the news, but I could definitely ... Yeah, we'll check it out [cross talk] Bitwave could [00:04:30] be interesting, and I'll research a little bit on Pat White, the founder. Blake Oliver: All right, let's talk about QuickBooks hacking. David Leary: Yeah. It was nice, we were talking about how great TV is, in the news ... Well, so we know a story is getting a little bit mainstream when Action News 6 Orlando is covering a QuickBooks ransomware attack story. Blake Oliver: When you sent me this link, I thought it was just originally an article on their website, and it was written by one of their interns. I'm like, "Oh, okay, whatever ..." but then, I realized [00:05:00] they had embedded the video from the story up top. This actually was evening news in Orlando. David Leary: The reporter went there. He did the ... With the camera, with the microphone, in front of the business; then he's inside the business, interviewing the business owner. We always talk about this. There's this fine line of we're ... I'm in the closet talking to Blake about issues related to our industry, but I feel like when we're talking about stuff, it's because everybody's talking about it, and [00:05:30] this is proof. Blake Oliver: Yeah.  David Leary: What was interesting about this attack - this has nothing to do with the iNSYNQ attack, other than the fact that it's ransomware. Blake Oliver: Right, ransomware and there's QuickBooks involved. David Leary: There's QuickBooks involved. What was kind of interesting about this attack ...There's the TV news broadcast, but then there's also an article from healthcareinfosecurity.com. (We'll put both links in the show notes) A couple things were interesting about this. It's a dental office, a dental practice. From [00:06:00] what they can tell, the attackers did not do anything with patient records, medical records, anything. They only targeted the QuickBooks Desktop data file, encrypted it with ransomware, and asked for a $10,000 ransom, and if they didn't pay it within 48 hours, it was gonna go up to $20,000. Blake Oliver: The dentist, apparently, he didn't have backups for about five months. David Leary: That's correct.  Blake Oliver: He had to make this choice. He said, "Okay, do I pay the $10,000 ransom [or $20,000 if he waits too long] or [00:06:30] do I simply scrap it and have my accountant redo five months of accounting?" Immediately after reading this, I said, oh, it's gonna be cheaper to- almost guaranteed to be cheaper to just recreate the five months of accounting. That's what he's doing. What was really interesting about this, to me, is that there's a mention in the article - not a whole lot of detail - but a mention that hackers are purchasing kits to specifically target QuickBooks Desktop files on computers and, like you said, only encrypt those and hold [00:07:00] those ransom. David Leary: Yeah, they're going after that data file, because they know it's a business- Blake Oliver: And they know it's valuable. David Leary: It's valuable, exactly. Because if somebody comes in and encrypts some pictures or something, you're like, "Okay, I lost those pictures forever ..."  Blake Oliver: What if he didn't have backups at all? What if he had years of data in that QuickBooks file and hadn't made any backups or didn't know how to restore them? Then he'd really probably be forced to pay the ransom, because it's so hard to go back many, many years to recreate your [00:07:30] accounting information. David Leary: It very specifically states he's gonna pay his accountant. Somebody on Twitter tagged on to this and made a comment that, "Hey, this is a new service their accounting firm can offer." If you think about it- Blake Oliver: Yeah.  David Leary: As long as you quote the price under $10,000, you're gonna get the business.  Blake Oliver: We'll recreate your- David Leary: "Oh, you need me to re-build your data file?" $8,000.  Blake Oliver: Rebuild your data file, yeah.  David Leary: This actually is going to help drive revenue for accounting firms, possibly, these malware attacks. Blake Oliver: How this relates to what we were talking about last week is that, last [00:08:00] week, we were talking about the iNSYNQ ransomware attack and three other ransomware attacks that hit hosting ProAdvisors - these managed service ProAdvisors. This dentist- his name is, by the way, Carl Bilancione? David Leary: Apparently, believe it or not, he was on Survivor once. He is a Survivor star - the TV show "Survivor." Blake Oliver: I thought that was a weird coincidence, but then I thought there's like 20 years of "Survivor" and how many contestants do they have? So there's a probably good chance that you personally know somebody who was on "Survivor" at some point. Yeah, he was [00:08:30] on Survivor. Maybe he actually saw this as a PR opportunity, right? He calls up the news station and talks about getting hacked, and now, here he is getting free advertisement for his practice. David Leary: Oh, I'm sure. I'm sure he gets that piece of it. One other thing that was interesting is the Seminole County Sheriff Dennis Lemma encouraged businesses to never pay the ransom. But then he went on to say that he's had nine reported incidents of this happening in his Florida county this year. Blake Oliver: Nine incidents? Wow. That didn't get news coverage. [00:09:00] David Leary: This is probably happening, and people probably think they're in a silo ... Also, I think, which is interesting about this, do you think, if you're a small business and this happens to you, it's a little embarrassing, possibly? Blake Oliver: Oh, yeah, right. Well, we know for a fact firms have been hacked, and these are accounting firms, and the partners paid the ransom and never told anyone, because they didn't want their clients to know. Like you said, this probably- if this happened nine times in that county alone, this is probably happening [00:09:30] every day, all over the country, multiple times. People are just not admitting it, or they're not advertising it. This guy saw an opportunity, so it became a news story, but it's probably a massive- it's a massive problem, and when it bubbles up like this to TV news, then you know that there's something going on. David Leary: So, it'll be interesting to see ... I didn't see any other attacks out there, but if any of our listeners- if you've had- your small business owner or your client has been ransomwared, [00:10:00] we'd love to find out about it. I think it's ... The only way this is gonna get prevented is if people are aware that they're a target. Blake Oliver: I posted this story- after you found it, David, I posted this on LinkedIn. Joy Lizotte said, on LinkedIn, that our local government, or their insurance provider just had to pay $400,000 because of a similar situation. David Leary: I think I saw the City of Lodi, right there in your backyard in California, there ... Not your backyard, I guess. It's way north. But [00:10:30] apparently, they admitted that they were ransomwared a few months back - an entire city. This is not stopping. It's just, I think, for our industry, it's very obvious there is a target at QuickBooks data files. Blake Oliver: Yeah. David Leary: Make sure making your backups, or switched full-blown to cloud, because this is happening. Blake Oliver: And because this happened to a guy- this dentist, he wasn't using a hosting provider. He was just- he had a file on his local network. Now he did say that he had an IT firm that had secured it, but the hackers were able to get [00:11:00] through that, so the question is-  David Leary: Well, he thinks- if you read one of the articles, he actually thinks it was another dentist in the office who was shopping for wine on a website in France that got him infected. Blake Oliver: Oh, clicked a download or something? David Leary: Yeah. Blake Oliver: Well, so, users are the weakest link, right? The question is should he have been using a hosting provider, even though hosting ProAdvisors, themselves, are at risk? I don't know how you feel, David, but I still think he's better off using hosting. Well, he's better off going to online, QuickBooks Online, and not having to deal with this issue, but if he's gotta keep the [00:11:30] Desktop for whatever reason, then go to a hosting provider;  just make sure it's one that's at the top of the pack. I don't know what else to do. David Leary: If you have reliable backup procedure ... You're making a backup on a daily basis, right? You're backing up your QuickBooks data, but then you're doing periodic backup, like every week, I make a backup, and I take that home, and I put in my safe at home or something. Then, every quarter, I take a backup, and I take that backup, and I store it at my accountant's office in their safe or something, to where-  Blake Oliver: Every year, I make a backup and I bury it in my backyard. David Leary: Something, right? As long as you have- you're [00:12:00] keeping all these backups- Blake Oliver: Right.  David Leary: If you get ransomwared, you're like, "Okay, screw you. I'll delete the file. I'll restore my new one.  Blake Oliver: It is true. It doesn't matter, if you've got daily backups. I used to make hourly backups when I had a desktop file that I was managing, in my office manager days, and it saved me a few times from losing half a day of work. Backups ... Cool.  David Leary: Anyway, that's gonna be the lesson here is to make more backups, and don't click stuff. The other thing that's talked about in both these articles is about thumb drives. Blake Oliver: Oh, [00:12:30] yeah. Don't plug in thumb drives. David Leary: And actually, I have to lock this down at my house, because my kids take thumb drives to school, then they bring 'em home. "Dad, can you print this?" I have to crack down on the thumb drives, I think, this year.  Blake Oliver: They disabled our USB thumb-drive capability at work completely because of this. You cannot use a thumb drive. I got a story here about LinkedIn and how accountants can use LinkedIn better thanks to some new tools that are rolling out. This was in Accounting Today on July 23rd. [00:13:00] Michael Cohn covered this new, "Open for Business" marketplace that LinkedIn is creating. Basically, if you're any kind of professional, you can now list your availability, industry expertise, skills, and geographic location, and indicate that you are, "open for business," and ready to connect - turning LinkedIn into sort of a marketplace for professional services. I don't have this available on my profile yet. I went in this morning to check and look. Apparently, it's rolling [00:13:30] out gradually, so you might wanna go on to your profile and look. It should be there pretty close at the top in this dotted ... There's a highlighted box, or it's got a dotted line around it. It will allow you, if you've been selected for this beta, to highlight your expertise. Then, I guess, theoretically, business owners can look for you, and find you, and hire you. David Leary: Okay, so I gotta- Blake Oliver: I don't know if they can hire you-  David Leary: I have a firm. I've gotta make sure I maintain my Facebook [00:14:00] profile of my business hours there, and then my Google business profile, and my Yelp profile, and now I've got a LinkedIn profile for my business I've gotta maintain. All right.  Blake Oliver: Mm-hmm, but I think the LinkedIn one is actually more helpful, because it's tied to your actual resume, and your social. If you're active on LinkedIn, you should definitely be using this. Could be a good lead-gen tool.  David Leary: For all you app developers out there, there's ... Nobody wants to do this, so, if you can build one app, where I could just update my stuff in one spot, and you'll go populate this on all the services for me, people would pay for that, because nobody has time for this. [00:14:30] Because then you change your business hours, and "Oh, I gotta remember to go change that on my LinkedIn profile, too." Nobody has time for that. This is just another hassle, but we'll see how that goes. The thing is, any improvements to LinkedIn, I'm always welcome for, because I really have a lotta disdain for LinkedIn. Blake Oliver: Got it.  David Leary: You have to use it, though. You can't not be on it. Blake Oliver: Oh, you can't not be on LinkedIn. Well, I think- I like LinkedIn. You're a little more critical than I am, but just for me, as a resume replacement, I [00:15:00] haven't had to print out an actual resume and give it to anyone for years now, because LinkedIn is my resume. Any company that I wanna work for will accept that, and I don't have to give them some Word document. David Leary: Yeah, but it's the messaging, and writing a message, and doing posts. It's all flaky. It's all ... Aww ... Then the LinkedIn spam is the worst of all time [cross talk] so we can start on that.  Blake Oliver: Right, well, that is unfortunate, yeah.  David Leary: It's worse than any other- it's worse than the blind phone calls you get, the robo-calls. LinkedIn spam is worse than robo-calls. This episode of The Cloud Accounting Podcast is sponsored by BQE Core. As many of you know, I'm all about the niches and niche apps. Putting your business clients in the proper niche app is providing them with a 100-percent solution versus, at best, the 85-percent solution of a standalone accounting app. If you have clients that are architects, engineers, consultants, or lawyers, Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. You don't need to juggle between multiple apps. Core has it all in an easy-to-use, all-in-one app for project management, including time and expense tracking, budgets, forecasting, client billing, and accounting. Even though Core is an all-in-one platform, it still works nicely with the apps like Google Drive, Dropbox, OneDrive, QuickBooks, Xero, and AccountRight, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app, and recently it launched a cutting-edge voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to CloudAccountingPodcast.promo/core. That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. Did I mention that BQE Core works great for bookkeepers, CPAs, and accounting firms, too? David Leary: I got some updates on QuickBooks Live.  Blake Oliver: Yeah, let's hear about it. Those videos are crazy. David Leary: Well, before we jump in and go that far in QuickBooks Live, I actually saw an update to a post about TurboTax Live. Blake Oliver: Okay ...  David Leary: This article was originally published on October 12th, 2017 and was re-published on October 4th, 2018 and again on August 1st, 2019 with [00:17:00] updates. Basically, it's the hiring page to do TurboTax Live, which we've talked about before. It's very similar to QuickBooks Live. The difference on this one is they talk about ... I'll read this straightforward: "New this year is a tax associate role to assist credentialed agents in assisting the preparation of 1040s. In addition to earning extra money on an hourly basis, tax professionals can take advantage of the benefits of being [ready?] a W-2 Intuit employee, and get bonuses, 401(k) training, [00:17:30] and be part of the community." So, it's a part time job- or seasonal job, but you are truly a W-2 employee, and I think from what we've seen thus far on the QuickBooks Live side, it was more of a subcontractor situation, not W-2. Blake Oliver: Right. Interesting. Most of the TurboTax Live people are contractors then, or are they W-2 employees? I thought they were part-time employees, but now I'm not clear on that [cross talk] from the fact that they're-  [00:18:00] David Leary: That's why this sentence- it does say "New this year." So it's just joined by our theory of QuickBooks Live is following in the footsteps of TurboTax Live. It'll be interesting to ... Is there gonna be an evolution of QuickBooks Live, where some of these ProAdvisors that are doing QuickBooks Live could become W-2 employees?  To continue on that QuickBooks Live now has its own landing page. Previously, if you are shopping for QuickBooks Online, you got to the pricing page. You could set some sliders, and you [00:18:30] could add on. You could add on QuickBooks Live Bookkeeping. Now they have a true landing page, so small businesses will ... Their entry point to the QuickBooks world is through a QuickBooks Live bookkeeper, and then into the rest- buying QuickBooks Online. They are offering a free 30-minute bookkeeping consult. On that page you can just click, sign up, and you can start your QuickBooks Live process for free. Blake Oliver: We [00:19:00] should say that the videos that they have added on these landing pages are very well-produced and narrated by Danny DeVito. David Leary: Yeah, I would argue this is like a Super-Bowl-level commercial for QuickBooks Live- Blake Oliver: Should we summarize for the new listeners- because we even talked about this in a while, and we've got a bunch of new listeners ... Maybe we should summarize what QuickBooks Live is?  David Leary: The shortest answer would be it's like Uber for bookkeeping. Blake Oliver: Okay, so I am business owner. I need bookkeeping done, so I just open up [00:19:30] my phone- David Leary: Your phone or your QuickBooks Online. You can do a video chat with a bookkeeper, and they'll help you through whatever problems you're having. It could be a reconciliation, et cetera; re-categorizing transactions. The way it's more like Uber is you're paying Intuit, you're going through Intuit, and just like Uber, every time I get an Uber, I get a different driver; I'll probably get a different bookkeeper. It's very similar to an Uber-style model for bookkeepers- Blake Oliver: And I'm just looking scrolling down this page and looking at the pricing, because the pricing continuously changes here. Remember [00:20:00] when we started talking about this, it was $200 month? David Leary: Yep.  Blake Oliver: All these prices here, from Simple Start with Live Bookkeeping up to Advanced with Live Bookkeeping - they've got four tiers - it goes from $410, to $420, to $435, to $475, all in the $400 to $500 range. Interesting, it's such a small range. They really seem to have fixed the bookkeeping price of $400 dollars a month. It's really not changing. The only thing that changes is the embedded [00:20:30] price of the QuickBooks software. David Leary: Exactly. It basically looks like, right now, it's for bookkeeping, no matter if you're a sole proprietor, or the size of your business ... It's $400 which is a pretty much across the board. Blake Oliver: Yep, and the scope of services- what is the scope of services these days? David Leary: If you watch the ad, this ad really, truly demos the service. My understanding is that this is a real small business owner and a real ProAdvisor that are both involved in this conversation. This [00:21:00] is the real-deal demo of the offering. What I like about this new commercial is, in comparison to ... You may have saw this, about three years ago, Intuit had a very pie-in-the-sky vision of the future of QuickBooks Online. It was like this Uber driver. He's driving his Tesla, and the Tesla has the big TV screen. His accountant pops up on the TV screen in the Tesla. He's talking about ordering flour for his bakery business that he also owns. It was a little too forward-thinking. [00:21:30] Blake Oliver: Yeah.  David Leary: This ad is very realistic, and there's screenshots, and it shows interactions. I think it's truly showing the service. It doesn't look like it- it doesn't have screen images simulated; little pieces of text that sometimes they put on ads. If you wanna see how it works, hit the show notes. The link to the YouTube video is in there. Blake Oliver: It looks good. David Leary: If you think about this, chances are this is gonna be a commercial, so bookkeeping ... Bookkeeping [00:22:00] is gonna be a commercial. Do you know any other bookkeeping firms that are gonna run a TV commercial during the Super Bowl, possibly?  Blake Oliver: No. David Leary: This is huge. Blake Oliver: It's gonna be big. David Leary: ... I think a lotta people- I think a lotta small businesses have this mindset of bookkeeping - "I'll just have secretary do it," right?  Blake Oliver: Yeah.  David Leary: In their brain, they've never comprehended like, "Oh, there's actual real people out there that just do bookkeeping?" This is gonna educate the market that there's these people called bookkeepers, and they can help you with your [00:22:30] QuickBooks. Blake Oliver: Yeah. Every firm that has enough resources to film ... If you have $10,000 for your marketing budget, you should film one of these videos. It's not gonna be as good; you're not gonna get Danny DeVito to narrate it, but you can do it. David Leary: You could get Blake! You could get Blake!  Blake Oliver: You could get me! We did this when I was at Armanino. Xero came out- they sent a film crew out, because I was a big Xero partner. They filmed an [00:23:00] interview with me and one of our clients and stitched it all together, very much like that, showing how we worked together using Xero and some other apps. It was really cool. Something like that, that shows just how the service actually works in a couple of minutes is really valuable, not only for the prospects, but also for the partners in the firm that are gonna be referring you work, because they need to understand how client-accounting services works. Everybody should be doing this. David Leary: No argument- [00:23:30] Blake Oliver: Shall we move on?  David Leary: Yeah. Blake Oliver: So, I got another stat from CPA Trendlines from their surveys. You wanna guess how many firms are utilizing a collaboration tool that includes instant messaging, David? David Leary: How many internally, or with their clients? Blake Oliver: That's a good question. David Leary: I'm gonna say with their clients, 15 percent, and then maybe internally, 35 percent. Blake Oliver: I think this is internally. The question is, "Does your [00:24:00] firm utilize a collaboration tool that includes instant messaging (IM)?"  Yes is 39 percent; no is 61 percent. Fewer than half of firms are utilizing IM, and I'm guessing the rest are doing email or something. If they answered yes, you might wanna know what tools they're using. 26 percent are using Microsoft Skype for Business, and three percent are using Cisco Jabber, and there's no other answers for any of the others, so it must be really, really tiny. I'm surprised Slack's not on there. It's kind of disappointing. [00:24:30] We're big Slack fans.  David Leary: I think it'll be interesting, like we talked about a few weeks ago, how Microsoft's Teams is really chugging along nicely here.  Blake Oliver: Yeah.  David Leary: That survey, it'll be interesting a year from now to see where Microsoft Teams is, on that survey. I predict it'll be the number-one tool accounting firms are using to communicate within their teams, because they already are already paying for it. They own it. They just have to flip it on. Blake Oliver: I wonder if maybe these results are distorted, because a lot of firms are very small, like one or two people. You wouldn't [00:25:00] need instant messaging internally for that; you could be using it for your clients. But, like you said, we're way ... That's way out, before most firms are doing that. David Leary: Yeah. Blake Oliver: Here's another app update - Google Sheets, the ugly stepchild of Microsoft Excel, but, you know, we really love it, being in the cloud. I learned how to use Google Sheets before I learned how to use Excel, believe it or not. They have added a few new-  David Leary: What?! Blake Oliver: Yeah, I know. Sorry. I'm [00:25:30] in that generation, David, where I had Google Apps through my university for free, so that's what we ... We used Google Docs; we used Google Sheets to do everything, and it wasn't until I got into the business world that I learned how to use Excel. David Leary: Did you ever use Lotus 1-2-3 at all? Blake Oliver: Oh, no, no, that didn't ... That was not a thing. David Leary: I'm gonna guess that you never used WordPerfect DOS either. Blake Oliver: I think we used it in like elementary school for newsletters or something like that but yeah ... I'm a big Google Sheets fan, because when it's something [00:26:00] that you're used to from the beginning, it's very easy to use. I love the collaboration features. One of the things that's been missing is some of the more advanced Excel features that you just can't get, especially when it comes to building dashboards for clients or for any project you're working on. Good news, they have recently released two things that will really help with that- actually, three features that will really help with that. One is Slicers. This allows you to set up a filter on a sheet that any [00:26:30] user can easily access without having to dig into the settings for the chart or a table. If you're filtering a pivot table, basically, all of the charts will update automatically.  Then the other feature is Scorecard Charts. It allows you to key in on a few metrics and see, in a box, a really important number. Maybe, if it's an airline, like in this example here in the article, it's base fare price, and then passengers flown. You got those right up top, like a dashboard you see in one of these apps. Finally, they've got themes now. [00:27:00] Now you can give all your charts a consistent theme and color. Basically, if you don't wanna use a reporting tool to create dashboards for your clients, you could probably do a pretty good dashboard in Google Sheets these days.  David Leary: Well, especially because there's a couple apps out there that you can connect ... I don't know on the Xero side, but you can connect to QuickBooks, and all your QuickBooks transactions go to a Google Sheet. So, you could do lots of creative stuff from that platform.  Blake Oliver: There's a ton of ... Zapier integrates to Google Sheets. All [00:27:30] these automation tools integrate with Google Sheets, so if you can get it in there, in some sort of tab where it's updating automatically, you could update a dashboard live. In the end, it's gonna be more work maintaining than a reporting tool, but just for a one-off kind of client thing, it could be a great way to get started. David Leary: I have another story. Blake Oliver: Okay.  David Leary: Remember we talked about it before, in the past ... I think it was my prediction of this year, if we go way back to the January episode - first one we did - this is the year of [00:28:00] instant payments. Blake Oliver: Yep.  David Leary: Instant payments, instant payments ... I think, even last week, we talked about Gusto and their round; how Gusto's gonna have employees that can be paid at the end of their shift. Everybody's going to instant payments. The Federal Reserve was in the news last week, because they lowered interest rates, but they also made some comments about ... I don't know if you know this, they run ACH. Blake Oliver: Oh, I didn't know that. David Leary: Yeah, essentially it all falls under the same ... It's the Fed, right? They pretty much designed, they run, they do the movement of ACH, and ACH, historically, [00:28:30] because it's a government thing, doesn't really make profits. It just has to charge enough to cover the expenses. That's why ACH is so cheap, and that's why people love ACH. Well, a few-  Blake Oliver: A government program that actually works? David Leary: Yes.  Blake Oliver: And is efficient?  David Leary: It works so well nobody wants to touch it I think is the bigger thing.  Blake Oliver: Right.  David Leary: A few years back, in 2015, they pretty much told private industry to build their own, "something faster." The banks did. The banks basically spent a billion dollars - all the Big Banks - and they built a [00:29:00] payments network that was faster. Zelle is a good example of this, this peer-to-peer instant payments, right? Blake Oliver: Yep.  David Leary: But they kind of just built it for themselves, so you have 10,000 other banks, the smaller banks in the U.S., that don't have access to this fancy network the Big Banks worked together to build. Well, what the Fed said this week is they're now gonna create their own instant-payments system. On one hand, the Big Banks are pissed. They're pissed about this, because it's gonna cut into their profits ... Because they can make a lot of fees on this, long [00:29:30] term. Blake Oliver: Yeah. David Leary: This is becoming very political, because, on the other side of the coin, you think like, here we go, Big Business is gonna influence government decisions. But on the other side of the coin, there's other Big Businesses, like Walmart that do not want to pay the banks these fees, and they want a free government program to move their money around. So you're seeing this big debate, and it's starting to become a partisan, even ... Here we go, Elizabeth Warren worked her way into the podcast again, and I'm gonna read her quote. She's like, "Big Banks want to force [00:30:00] families to use their private systems,” Warren said. Again, Elizabeth Warren, if you're listening, and you wanna come on the podcast ... Every week, you somehow ... In the bottom of the article ... Every week, she somehow gets into an article, and here's another one this week. Blake Oliver: Whoever is doing PR comms for the Elizabeth Warren campaign is really on it. They're in everything, so, good for them. David Leary: I have another related payments story. Previously, we've talked about Square. Everybody knows Square, those little white dongles you charge your credit cards at food trucks [cross talk]  Blake Oliver: The original mobile credit-card [00:30:30] swiper. David Leary: They're huge, right? Square's grown. I've even said that they might be Intuit's biggest threat in the United States. They announced their quarterly earnings, and they talked ... There's a little bit of numbers, and they made some moves. One thing they did is they sold their food-delivery business to DoorDash, but what they're really doing is they're doubling down on their ecosystem plays. Their ecosystem is really their small businesses, their front-end consumers. They're now in payroll. They have a huge ecosystem of stuff. Couple of interesting notes. Their loans grew by 36 percent. They gave about 70,000 loans for $528 [00:31:00] million in Q2. Blake Oliver: Wow. David Leary: Thus far, since 2014, they've given out $5 billion in loans to small businesses. Blake Oliver: Wow. Yeah, that's a lot.  David Leary: I think we talked a little bit about their cash card. They have a Visa debit card for small businesses. So, if you're a Square merchant ... If you're a Square food truck, and you go to buy your supplies for the food truck from a merchant that also uses Square, you can actually buy those with this Visa card and avoid all the fees on both ends, so there's- Blake Oliver: You're just transferring direct from one Square account to another. David Leary: Yes. [00:31:30] What they've done now is they've leveled this up, so now you can pay your employees directly to their Square card. If you think about it- Blake Oliver: Oh, yeah, okay this is-  David Leary: I'm a small business owner. Square has the money. Square's paying my employees. Square still has the money. My employees are going to buy their lunch at different food truck for somebody else who has a Square reader and paying that food truck. They've completely cut the banks out of the entire equation, like the full ecosystem. Blake Oliver: So, at what point does Square have to [00:32:00] become a bank? Because that's what it sounds like they are becoming, at that point. David Leary: We've talked about that in previous episodes, they are trying to do that ... If you think about it, I'm sure the banks know this is happening, but I think they probably never guessed it would happen. They're just being cut out of the complete equation. That's all the stories I've brought this week, Blake.  Blake Oliver: I promised at the beginning of this episode I was gonna talk about automation, and I specifically mentioned Andrew Yang and his platform- are you familiar with Andrew Yang's platform, David?  David Leary: Yeah. I mean, we talked about it in the podcast earlier. [00:32:30] Blake Oliver: Yeah, we've done it in previous episodes. Basically, his idea is that automation is going to disrupt society to such an extent, it's going to eliminate so many jobs that are core to our economy, like truck driving, like fast food - all these jobs with millions, and millions of people; which, by the way, it's not so visible, but includes a good chunk of accounting. His platform is to create a universal basic income, where [00:33:00] everybody in the country gets some set amount of money per month that allows them to fulfill the basic necessities, like food and housing. Sounds like a crazy plan, but part of me really loves it, because you could do away with a lot of social safety net programs that are super-inefficient just by giving everyone a check. The way Andrew Yang it is, "Capitalism that doesn't start at zero." I like this. It's really interesting. One of my friends from college calls it 'robo-socialism.' [00:33:30] I just like the idea. I like that it's out there, because I'm very attuned to the amount of automation that's going to disrupt society. Some other folks are talking about this, too. There was an article on CNN.com called "The Robot Revolution Is Here: Prepare for Workers to Revolt," by Carl Benedikt Frey. This is in CNN Business Perspectives, and it was published at the end of July. He starts out by talking about how, in June, [00:34:00] thousands of dockworkers marched at the Port of Los Angeles against the coming introduction of robotic machines threatening their jobs. Dockworkers, by the way, are some of the most highly paid middle-class jobs that you can get. The dockworkers in LA are so essential that they do really well. But it's a job that's also highly susceptible to automation. It used to be you had people who physically- all they did was load and unload cargo by hand. Now we have these giant machines that can do it. The [00:34:30] machines are still piloted, but now there's versions of those machines that are unpiloted. They're fully autonomous. So, these dockworkers who are left are protesting that. I think it's a good example of the social unrest that will potentially occur when more and more stuff gets automated, and these good middle-waged jobs start to disappear. One of the stats in this article is a Pew Research survey stat that says, "A staggering 85 [00:35:00] percent of Americans support policies to restrict the rise of robots." Then, of course, he mentions Andrew Yang, who is running to ... He's actually, I think, misunderstands Andrew Yang's platform. He says he's running to protect jobs from automation, where actually he's running to create a safety net to protect people from automation, but, you know, same idea-  David Leary: I think Andrew Yang's take is that it's inevitable [cross talk] Blake Oliver: It's inevitable, yeah. You can't stop it. David Leary: In the short term, for sure, people will lose their jobs. [00:35:30] Blake Oliver: Oh, yeah. David Leary: But, at the same time, there's gonna be new jobs created that we can't even imagine yet, but definitely, in the short term ...  Blake Oliver: That's what this article is all about. It's a great read. It uses the Industrial Revolution as something to look back on and see what can we expect from the automation that's going to happen, because automation with AI is likely going to be as amazing, but also as disruptive as the Industrial Revolution was. If you're a student of history, you may recall the Luddites [00:36:00] who were famous for smashing machinery, and rioting, and destroying all this automation during the Industrial Revolution between 1811 and 1816, but they were just one small part of all these machinery riots that swept across Britain, France, Germany , and China, among other places. There was a lot of growth. Output per worker grew by 46 percent during the Industrial Revolution; between 1770 and 1840, output per [00:36:30] worker grew by 46 percent, but the workers themselves weren't the ones who primarily benefited from that productivity growth. It was the owners of ... As Marx liked to put it, "the owners of capital." It was the factory owners. It was the new industrialists who primarily benefited. Now, eventually, the rest of- everybody else benefited because we ... It's kinda hard to argue with. We all benefited from automation [00:37:00] in factories. Now we have everything we could never have imagined 100-200 years ago. David Leary: On the whole, society, yes-  Blake Oliver: Yes. David Leary: -more efficient, more GDP. Everybody benefits. Blake Oliver: Right, but during that whole process, those decades, it was really disruptive and caused a lot of problems for workers who either had to figure out how to retrain or they lost their jobs. There wasn't any sort of safety net at that time, so it was even worse. That's [00:37:30] kind of the gist of this article. There are some specific jobs that are called out in here. 3.5 million Americans work as cashiers, but Amazon now has stores that they're testing that have no cashiers. There's obviously truck drivers; automated trucks could reduce the number of truck drivers that are necessary. You could have one driver who pilots a caravan of 10 trucks that are all following each other. Now you just need a tenth the number of drivers, that sort of thing. I [00:38:00] guess it's just a cautionary tale of, yes, this is going to create enormous efficiencies and productivity gains, and we will all be better off when it happens, but while it's happening, there's going to be a lot of potential unrest. If you ask me, the political unrest we're seeing now is actually just a preview of what is to come, because a lot of the disaffected folks in our society are people who lost their jobs to manufacturing automation over [00:38:30] the last 40 years. So, imagine what will happen when service industries, or professional work, or office work is automated to that extent. Something big to think about, long term. The tie in, of course, to accounting is that I think McKinsey says that something like 40 to 50 percent of accounting work can be automated. David Leary: Every time you see an article about automation, or what jobs are at the most risk, accounting and bookkeeping is always number one on these lists. Blake Oliver: Well, yeah ...  David Leary: What's [00:39:00] interesting with this is we're past the labor piece of this, the physical labor. If I have a swimming pool business, people would think I'd be insane if I hired people to dig the swimming pool with shovels. It's so common now; of course, you're gonna use a backhoe, even though, hey, that's 10 people that don't have jobs, because I have a backhoe digging the swimming pool, right? We're entering this new world where it's all the mental jobs. People that have [00:39:30] never been affected by this before are the ones getting affected now.  Blake Oliver: To extend your analogy, traditional bookkeeping with data entry, where you're keying in transactions, that's the equivalent of digging a swimming pool with a shovel, but we're still doing it in a lot of businesses, and it's gonna go away. David Leary: I think it's the natural course. It's just, you're right, people are not gonna like it. It's gonna be very disruptive. Blake Oliver: That's why I like that somebody in the Democratic debates is bringing this issue up, because [00:40:00] it may not be here now, but it is going to be one of the defining challenges of our generation - figuring out what to do with the people who are displaced. Do we retrain them? Do we simply give them cash? What do we do? What is going to work the best? Not many people are talking about it. David Leary: Essentially, Trump won because he spoke to people who'd lost their jobs due to manufacturing. Yang's trying to speak [00:40:30] to people that might lose their jobs in the future ... It's gonna be harder for him to make that argument [cross talk] Blake Oliver: Yeah, well, I think he's just trying to talk to the people who are making policy right now to avert further problems, because we didn't ... When we shifted all of our manufacturing offshore, we didn't think long term about the impact of that. Nobody was out there saying, "Well, what is going to happen to these communities long term?" It was all just [00:41:00] short-term gain. Now there's all this effort to bring manufacturing back, but now it's all automated. Even if you do bring it back, there's not a lot of jobs to be had, so it's a ... And on that note ...  David Leary: I think it's a bigger challenge, yes, with raising kids. What do you tell your kids to be? [cross talk] Blake Oliver: Right, and the jobs they think they might have might not even exist. Everyone wants to be a firefighter when they're a kid, right? That's the stereotype. Well, what if we have firefighting robots?  David Leary: No, no, no, everybody wants to be a YouTube [00:41:30] star. Blake Oliver: A YouTube star ...  David Leary: Now, apparently bots are making the YouTube videos, so those people ... That career is dead.  Blake Oliver: I think this just shows that an investment in education is the best thing we could do, because lifelong learning is what allows you to survive in a constantly changing economic environment. You aren't going to learn how to do one thing in school and then do that for your career. That's been true for a lot of people in the professional world for a long time. But maybe that hasn't been true for [00:42:00] a long time. For a long time, it used to be you could just go major in accounting, get a job, have that job for 40 years; doesn't change much. Done. Right? I don't think that exists anymore. David Leary: Not in the same way it used to. You have to be dynamic. There's constantly new jobs being created. But you're right, if you don't have the ability to learn or have the energy to learn something, it's gonna be ... It's difficult. I also think this is gonna have a lot of impact on age demographics. It's really hard to tell somebody that's 58 [00:42:30] years old - they're seven to 10 years away from retirement - "Go retrain yourself and get a new job." Somebody's gonna have to take care of those people. I don't have the answers. Blake Oliver: That's it for me. We will continue to search for those answers in upcoming episodes of The Cloud Accounting Podcast. David, where should people go to connect with you online and to continue this discussion? If you have solutions, I'd love to hear them. David Leary: Solutions, because this has turned into the political podcast. Elizabeth Warren made it. Andrew Yang made it. We've talked about the debates. It turned into The [00:43:00] Politics Podcast here this week. Best way to get a hold of me is gonna be on Twitter. I'm @DavidLeary. Blake Oliver: And I am @BlakeTOliver. I would love to hear what you think about any of these issues. If you think I'm an idiot; if you think these are good ideas; if you've got something to suggest that we haven't even thought of, we don't know what we don't know. Please do consider subscribing to our show notes. You can go to BlakeOliver.com, and if you click on the blue Subscribe banner, you'll [00:43:30] get subscribed to the show notes. They go out every week after the episode drops, and it has a link to the episode webpage, where you can click on all the links that we talk about. David Leary: I think that's a wrap. Blake Oliver: Thanks, David. Great to talk and talk to you next week. David Leary: Bye, everybody. Blake Oliver: Bye. 
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#Xerocon San Diego: Shawn Kanungo, Disruption Strategist, Founder, and Keynote Speaker
Cloud Accounting Podcast
Sponsors  Halon Tax: http://cloudaccountingpodcast.promo/halontax TOA Global: http://cloudaccountingpodcast.promo/toaglobal LivePlan: http://cloudaccountingpodcast.promo/liveplan Shownotes 02:25 – Shawn explains the difference between a linear accountant and an exponential accountant 04:24 – Get stuff done! Embracing the gig economy with a Fiverr experiment 05:36 – Shawn shares some career background - from CPA to disruption strategist 07:37 – Accountants currently have a 94-percent chance of being automated  10:15 – Winter is coming! If your firm doesn’t get with the cloud, you may get left out in the cold 11:18 – According to Hinge Marketing, in accounting, 25 percent of firms are eating all the growth (https://hingemarketing.com/library/article/2018-high-growth-study-accounting-financial-services-edition-executive-summary) 13:45 – According to Shawn, the accounting firms that chase relevance and stay on the leading edge will win the race 14:26 – Blake and Shawn talk about how Xero is breathing some rock-star-level life into the accounting industry 16:31 – If accounting is on the cutting edge of disruption, why are so many firms still using Excel as their primary record-keeping system?   19:12 – How Intuit leveraged disruption to increase marketshare 21:16 – The Xero-Stripe Partnership (https://www.pymnts.com/news/partnerships-acquisitions/2019/xero-stripe-team-small-biz-payments/) 24:10 – The more you build out your ecosystem, through integrations and partnerships, the more value you bring to your clients 27:12 – Ball's in your court ... Are you brave enough to face an accounting world without billable hours?  30:03 – If you want to change the trajectory of your firm and move it towards the cloud, try taking a risk 32:40 – How can accounting bring its sexy back?   34:11 – Shawn shares some secrets to becoming a great storyteller and public speaker Connect with Shawn Website: https://www.shawnkanungo.com/ LinkedIn: https://www.linkedin.com/in/shawnkanungo Facebook: https://www.facebook.com/shawnkanungo Twitter: https://twitter.com/shawnkanungo Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptShawn Kanungo: Well, first of all, if you're a senior accountant, you're listening to this in your cubicle, or you're running on the treadmill, or you're doing the dishes at home, I would say tomorrow morning, or this morning when you're listening to this, walk into your office and try to get yourself fired. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners prefer virtual advisory services? Did you know that the number-one thing they want from an expert advisor is strategic planning and review? This is even more than general-ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. Shawn Kanungo: I'm Shawn Kanungo. I'm really excited to be on this podcast. We've fundamentally removed David from the podcast. He's not on the podcast anymore. Now, I am the Ka-new co-host- Blake Oliver: Oh ...  Shawn Kanungo: -and I think it's gonna be the Blake and Shawn Show. David, we miss you, we love you, but, I'm sorry ... I just wanna say I'm a big fan of this podcast. A big fan of the podcast. Before we start, I just wanna say to the audience, all the listeners there, if [00:01:30] you haven't put a rating and review into iTunes, or Spotify, Stitcher, wherever you can get this, do it now. It helps a lot for the show, because we've gotta get this thing up to like 10 million subscribers. We need to, because what these guys are doing is so fundamental to this cloud-accounting space. They're the only ones that are actually highlighting it. You guys are doing so much for the economy, and for the space. Appreciate it!  Blake Oliver: Well, thank you so much, Shawn. We're here at Xerocon in San Diego, and you just gave a fantastic keynote. Shawn Kanungo: Oh, wow. [00:02:00] Thank you. Blake Oliver: I mean, what, 800, maybe 1,000 people in that audience there. It was called "Strategy in a World of Disruption. Be Bold, Be Brave, Be Experimental: Why Build a Culture of Experimentation?" I loved ... You had this one slide in your presentation. I mean, there was a lot to talk about, but this one slide just is sticking in my mind - Linear Accountant- Shawn Kanungo: Yeah. Blake Oliver: -versus Exponential Accountant. What does that mean? Shawn Kanungo: Linear really means how do we think five [00:02:30] to 10 percent better within our organization? This idea of linear thinking has been literally ingrained - in our organization, in our leadership, in our systems, in our family, in society - that we need to think about things in a linear way. Exponential is actually about thinking differently about business, about processes. It's actually taking a different lens. What we've seen a hundred times out of a hundred ... If you can take an exponential lens, meaning take [00:03:00] a different approach to things, you can actually get a 5X to 10X improvement. I think, especially for accounting, you know this better than anybody, this idea of linear thinking, of risk [cross talk]  Blake Oliver: -risk aversion? Yeah.  Shawn Kanungo: -is literally ingrained in our DNA. The reason why I wanted to showcase the difference between a linear accounted versus an exponential account is ... There are some tenets to it, and I can get into what those tenets are, but I think this is what we need to move, especially now. We live in a world with [00:03:30] all these exponential technologies. We need an exponential mindset! Blake Oliver: That is such a different mindset than, like you said, what we are taught to think in the accounting world, where it's all about incremental improvement. Let's become three percent more efficient, five percent more efficient, and maybe this is ... The challenge I ran into in public accounting was trying to get people on board with disruptive change is really, really hard. You had a great tip for doing that. You ask people do [00:04:00] a small project, right? Shawn Kanungo: Exactly.  Blake Oliver: The example was like a Fiverr?  Shawn Kanungo: Yeah. So, a little bit of background - I spent 12 years at Deloitte, leading their Digital Innovation Group in western Canada. One of the things that we did was I really wanted people to embrace this whole idea of the open-talent economy, the gig economy, because it just makes sense for us not to do everything. There's an entire ecosystem of people that will do things for us. Talent is ubiquitous. So, what I wanted to do was say, "Listen, guys, I'm gonna give everybody five bucks, five bucks out of my own pocket. I'm gonna give [00:04:30] everybody five bucks across western Canada. What I want you to do with this five bucks is go on Fiverr, and just get something done. Whether it's a product, a service, a voice over ... Whatever it might be, just get it done. Then, send me back the product and then we'll talk about it." The difference between talking about all this change and talking about innovation is that when you actually go off and do something and actually get somebody else to maybe even do something - this is a small example, using a gig economy - you're actually doing something. You're like, "Wait a minute! Somebody [00:05:00] else is getting something done for us at a radically cheaper cost. I didn't have to do this."  Blake Oliver: Right.  Shawn Kanungo: It literally flips your brain to say there's an ecosystem of people will do stuff for us [cross talk]  Blake Oliver: What else can we do? Shawn Kanungo: Exactly. That is the whole idea of experimentation, which I try to hammer in. It's like starting with small teams, small problems, small sprints and seeing how we can move the needle ... I think this idea of experimentation is so foreign to accountants. We don't experiment. Blake Oliver: You're a CPA. Shawn Kanungo: Yep. Blake Oliver: Tell me [00:05:30] about your background. How did you get into talking- speaking about disruption? Shawn Kanungo: I started my career at a company called Singapore Press Holdings. I then actually moved into accounting. I worked for Deloitte for the first couple years, got my CEA. Moved into management consulting on the side. My friends and I, we were building apps, consumer-based apps. Some were complete flops; some were more like mediocre successes.  At the same time, I was getting into the Strategy and Innovation Group at Deloitte. We [00:06:00] were early in the game of working the organization when it comes to innovation. We were the first to try things around artificial intelligence, using the gig economy, using drones. We were the first to do all that stuff. Clients wanted to hear about the work that we were doing in digital transformation and innovation. After that, after 12 years at Deloitte, one of things that I really wanted to do was really take equity in organizations. Working for a public firm, you can't take equity in anything. For me, equity was a big deal - taking it in companies and scaling them up. We started a group called Queen & Rook. It's like a consulting [00:06:30] model, but instead of getting paid for fees, we actually get paid in equity. So, I started that. One of our companies as a voice-technology company. We're using artificial intelligence to solve [pre-need] problems. The speaking thing came naturally, because people want to hear about digital transformation and innovation, and here I was, talking about it. You get onto one conference, another conference, and just like the momentum builds. Now, I'm here talking to you and being on The Cloud Accounting Podcast. My life, it's done. This is it. This is the peak, right now!  Blake Oliver: Right now? This podcast is ...  [00:07:00] Shawn Kanungo: This podcast. This podcast is the peak. That's my journey. I've been obsessed about this idea of digital, and innovation, and disruption. For me to bring this message, especially here at Xerocon, to this audience, to the accounting profession, means a lot, because if you look everywhere, a lot of people are saying that automation is gonna take accountants' jobs, right?  Blake Oliver: I like that you talked about that, because at a lot of accounting technology conferences - maybe [00:07:30] they talk about it more at general tech conferences - but you showed a slide ... What was it? Accountants are- Shawn Kanungo: 94 percent-  Blake Oliver: 94-percent chance of being automated. You're not afraid to put that out there that this is a risk. Shawn Kanungo: Totally. Blake Oliver: This is- we need to be aware of this risk. Shawn Kanungo: Your audience knows this, as well. You're highlighting all the movers and shakers that are getting into the space; you highlight all the companies that are AI accounting practices, or they're incorporating [00:08:00] AI. I was listening to a really great episode with Rachel- Blake Oliver: Mm-hmm. Rachel Fisch, yeah.  Shawn Kanungo: -and you guys were talking about this idea of service and how service is still so important. Yeah, there's a lotta of this AI automation piece, but at the end of the day, there is a big piece to everybody's firms, where it's around customer service. There are certain pieces that will never be automated, so, although everybody's saying that automation is gonna take an accountant's job, let's be real. It's not. What I want is to tell people, listen, this is the greatest [00:08:30] time to be an accountant ever. Actually, it's gonna be the sexiest job ever, because- Blake Oliver: Yes, make accounting sexy! Shawn Kanungo: Yeah, because think about it ... If you have all these ecosystems and technologies doing some of the work that we used to do ... To be honest with you, listen, I'm a CPA. There's a lotta work that shouldn't be done by humans. If we can double down on things like storytelling and actual customer experience- Blake Oliver: Talking to our clients? Shawn Kanungo: Totally! That is what an accountant should be. [00:09:00] Blake Oliver: Well, but that's not what it ... I wonder if this is unique in some ways to the United States market. Cloud accounting has penetrated maybe 10 percent, here in the United States. That's just my rough feeling, having been doing it for 5-10 years. Whereas, in Australia and New Zealand, it's like 50 percent. We're way behind, and it's going slow. Shawn Kanungo: Why do you think that is? Blake Oliver: I know US regulations. I studied to be a CPA here in the US, and compliance is a big headache here, compared to Australia, compared [00:09:30] to Canada, compared to the UK, so we can make a lotta money on compliance. I think you mentioned something like this in your keynote - we get comfortable. We're nostalgic. Shawn Kanungo: Yeah. Blake Oliver: You mentioned nostalgia, and firms here ... How do you disrupt a firm where the partners are pulling in 20-percent profit margins off of tax compliance? There are firms in LA that are still doing bookkeeping for $85 an hour, [00:10:00] keying in transactions, and people are paying for it. Shawn Kanungo: Totally.  Blake Oliver: Maybe that will come to an end. Shawn Kanungo: Yeah. I think the organizations that are saying, "Listen, we're not gonna move to this new way of doing things. We're getting fat, rich and lazy doing it this way ...". Blake Oliver: Right.  Shawn Kanungo: The reckoning will come. You know, I started my thing talking about 'Winter is coming.' It is going to happen. People are going to start realizing that these organizations that have not moved to the cloud ... "Wait a minute! My apps are not integrated. [00:10:30] I can't use the ecosystems that these other guys are using." We're moving to a world where, if you're not on cloud, that means you're not actually on the foundation of using some of these innovative apps and services. Listen, all the startups and tech companies that are actually in this space, they're all designing for cloud. So, if you're not part of that, then you're gonna be left in the dust. Right now, it's working fine because of regulation and [00:11:00] all that kind of stuff, but we've seen this throughout history that the organizations to stay nostalgic, they're gonna end up losing-  Blake Oliver: It could be a very quick shift that happens- Shawn Kanungo: Absolutely. Blake Oliver: I see everything's going ... Everything's fine. Everything's fine. Then, like you said, winter is here, right?  Shawn Kanungo: Exactly. Totally! Blake Oliver: It's gonna be interesting to see when that happens. I don't know if you're aware of these stats. Hinge Marketing does some great surveys of professional services firms, and they released a study - I [00:11:30] think it may have been last year - showing that in accounting, it's about 25 percent of all the firms are eating all the growth. Shawn Kanungo: Yeah. Blake Oliver: Does that feel right to you? When you go out and speak, you must meet people from cloud firms- Shawn Kanungo: Sure.  Blake Oliver: -you meet people from traditional firms. What do you think's gonna happen to those traditional firms? Are they just gonna disappear? Shawn Kanungo: By traditional firms, you're talking about the big guys? Blake Oliver: Yeah, well, there are top 100 firms that are still doing things the same way they [00:12:00] used to do things. There's ones that are innovative, of course. Then there's also the small CPA shops. I feel like, at some point, these people are gonna want to retire, right? Shawn Kanungo: Totally. Blake Oliver: What are they gonna do? It's just close the doors, and that's it?  Shawn Kanungo: Listen, I'm not a futurist- Blake Oliver: But you talk a lot about the future. Shawn Kanungo: I do talk about the future. Don't take anything I say as a prediction about the future. I really do see myself as a practitioner and a tactician. This has been my work. [00:12:30] I really think that there's gonna be some firms that certainly win market share, because they always position themselves as leading edge; that they're getting into new spaces, whether it's artificial intelligence or block chain.  It's going to constantly shift. I don't know who's gonna win the game, but what I do know is that some of the savvy firms, some of the top accounting firms ... We could even mention the top four accounting firms - the Deloittes, KPMGs, PWCs, et [00:13:00] cetera. Because I worked at Deloitte for 12 years, I have a lot of love for Deloitte. One of things that I really love about Deloitte is they have this thing called Innovation Cloud; this is what I call it. They have been around for like 150-180 years. The reason why they've been around - they always try to position themselves as relevant. That's why, in Canada, we started in new AI shop called Omnia. To [00:13:30] be honest with you, not that many organizations across the country are adopting AI at scale. It's just not happening. But they always position themselves in this new forward-thinking, next-generation organization, because they're always chasing relevance, and I think that's important. The organizations that will continue to chase relevance, be on the leading edge, the market will see. The customers will see, because customers always, always, always wanna be with guys that were leading edge. They wanna be with the cool, modern [00:14:00] companies. I don't know where it's gonna go, who's gonna win the game, but I do know that the organizations that will win will be the ones that will always be relevant. They will be doing an amazing job at Xero. Here, listen, we're at Xero ... I know this podcast is technology agnostic, and I know David is an Intuit ... He was Intuit guy. He was like their main guy, right? What Xero has done really, really well is, you know, what they've done? They've turned accounting into like a concert. They've turned accounting [00:14:30] into like rock star status, and they've done an amazing job at chasing relevance. It's been a remarkable. Blake Oliver: "Beautiful business software," I think is the motto for Xero these days. Shawn Kanungo: Exactly.  Blake Oliver: "Beautiful business software." You can feel it when you walk into the convention center, and you walk into the Expo Hall. It doesn't feel like any other accounting conference, right?  Shawn Kanungo: Well, you've been to how many? You've went to six Xerocons now?  Blake Oliver: Six Xerocons since the original in San Francisco [cross talk] Shawn Kanungo: Yeah, a great sponsor of this podcast, by the way. Blake Oliver: Thank you, Xero. You can [00:15:00] tell when a company is design-led. That's the way it feels to me; just very thoughtful. Everything is very thoughtful with Xero - with the product, with the events, and the mission.  Shawn Kanungo: By the way, do we have to throw in a Xero ... Like the drop, the midroll? Because this is pretty much the midroll, right now, right? Blake Oliver: Yeah, no, we probably don't have to do a promo message for this episode.  Shawn Kanungo: I wanna get your perspective on this, because [00:15:30] you know this space way more than I do, in terms of the cloud-accounting space. Do you think that it will be a winner-take-all market? You look at other spaces, whether it's in CRM, or whether it's in HR. There's companies that always come up that basically win the game. Do you think that there will be a winner take all ...? You were talking about QBO; we're talking about Xero, Sage, whatever. What is your hot take on this?  Blake Oliver: David likes to [00:16:00] talk about this on the podcast, where, if you look at Intuit in the heyday of desktop accounting software, when it owned 80-90 percent of the US market and it was all desktop, the total addressable market for cloud accounting is 10 times greater than that. There were only something like a few million businesses in the United States using QuickBooks Desktop. There's like 30 or 40 million that could be using accounting software. It's amazing, actually, so [00:16:30] many businesses ... Here we are on the cutting edge of disruption, talking about cloud. There are so many businesses that are still using Excel to do their accounting.  Shawn Kanungo: Actually, every single business is still using Excel in some sort of way. Blake Oliver: Right, but as their primary system of recordkeeping. That is really what I see Xero and any other software developer competing against is that status quo. My hope, and this is why we try to keep the podcast [00:17:00] agnostic-  Shawn Kanungo: Exactly. Blake Oliver: -and independent is that the more voices there are, the more options there are, the better it is for the end customer, for the accountants, for the people working for these companies, when they're competing. We want a competitive marketplace. Shawn Kanungo: Totally. Blake Oliver: There's so much greenfield available. I think it was- Steve Amos was on stage earlier saying that Xero has penetrated three [00:17:30] percent of the total addressable market in the United States. Shawn Kanungo: That's crazy.  Blake Oliver: Right? It's not like Xero and QBO are competing for the same customers. They're actually competing for people switching off of desktop software. Shawn Kanungo: Do you think there'll be a winner? Blake Oliver: I hope that there are many winners. It's gonna be interesting. Now we're gonna get nerdy here. Intuit and Xero are very different companies with very different strategies. I'd love to hear your perspective on this. Xero has been in the United States market for 10 years now, probably, but they've struggled [00:18:00] to gain a toehold. Now, the growth is amazing. There are over 100,000 businesses in the U.S. using Xero; but compare that to 2-3 million on a QuickBooks Online type product. This episode of The Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff, and finding staff is getting tougher every day. This is where TOA Global could help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building a global accounting team, you'll be able to take away the time-consuming, process-oriented work from your local team, while building a cost-effective team offshore. As people experts, TOA Global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional development tools. To learn how to build out your world-class team today, head over to CloudAccountingPodcast.promo/toaglobal. That its Cloud Accounting Podcast dot promo forward slash T-O-A-G-L-O-B-A-L.  Blake Oliver: How does Xero gain market share? How do they ... Because everyone knows what QuickBooks is, right? Shawn Kanungo: Totally. Blake Oliver: That's the barrier. Shawn Kanungo: Intuit, yeah ... They're not a laggard. They are innovative. Obviously, they have a bigger machine than Xero. Brad Smith, the ex-CEO of Intuit, made a critical decision, I think, when he first came on. QuickBooks, a lot of the products were just like shrink-wrapped [00:19:30] products that you could just get off the shelf. He had a pivotal point that changed the direction of Intuit. The reason why they're now continuously doing well in the States is that they changed their product into a platform, just like how Xero is, working with other developers. They actually opened up their platform, so other competitors- third parties, competitors could come onto their product. I mean, that's a very- that's [00:20:00] a fundamental shift around how you think about your organization bringing competitors into the mix. They're not an organization that has gotten nostalgic. In fact, they have disrupted themselves. If you look at some of the best organizations in the world ... Today, I brought up the story of Netflix and how they disrupted themselves. Intuit's not afraid of doing that. Obviously, you're seeing Xero come up. They're the upstart. They're the global upstarts coming in, trying to take a space out [00:20:30] of this company, but I don't see Intuit as ... They're the incumbent, but I don't see them as a laggard. I also see them as innovative. So, I think that the race is not necessarily gonna be about product. I think it's gonna be about ecosystem. I think it's gonna be about who can you add to your ecosystem faster than others? Whether it's Shopify ... Of course, all these guys you're gonna work with ... Probably both companies. But it's like who can integrate and make the ecosystem more seamless, so that if I'm a small business, and I say, "Well, I'm on Squarespace, and [00:21:00] I have Shopify, and I have Workday as HR ..." Who can actually integrate those pieces better? I think that's the game, because a software is a software; it should be seamless, it should be user-friendly. They're both getting to that point. But that's where I think the game is gonna be won. Blake Oliver: Well, we saw that with the Stripe announcement this morning. Shawn Kanungo: Totally. Blake Oliver: Deep Stripe integration into Xero. It's interesting, because it's something that I think business owners will be even more excited about than accountants. For accountants, [00:21:30] we're kind of used to already working around these issues, but for a business owner signing up today on Xero, the ability to just pair it with a mobile card reader and then do recurring payments with invoices and not have to do some other separate processing method, I think that's gonna make a big difference. Shawn Kanungo: It's funny, Tony, the new President for the Americas, came on stage, and he talked about the business owner not caring about the software. They don't. Ask any business owner who's starting a business. They [00:22:00] don't care about accounting. They don't want-  Blake Oliver: They just want a solution, which- Shawn Kanungo: They don't care about the software- Blake Oliver: -I think is a good lesson for all the accountants in the room, because a lot of the folks here, myself included, we make the mistake of talking, I think, too much about the software- Shawn Kanungo: Yes. Blake Oliver: -when we're talking to our clients. We get really nerdy about it. We're like, "Oh, there's this great solution, Xero. I'm gonna put you on it, and these integrations. We're gonna get Gusto for payroll. We're gonna do this with Bill ..." You can see the eyes glaze over. The business owner is ... We're looking at it from our perspective, because we love connecting these [00:22:30] apps. We have fun with it. The business owner, they just want a solution. Shawn Kanungo: Exactly. Blake Oliver: They just want you to take care of it. I learned, when I was in practice, to gradually not bring that out. If they wanna know how I'm doing it, that's great. I'll educate them. But I look at it more from their perspective. Your bills are gonna get paid. Your cash flow's gonna be monitored. Payroll's gonna be taken care of. Then, after that, talk about how we do it. Shawn Kanungo: Totally! Business owners don't go into business wanting to be in accounting or into software. They [00:23:00] go into business selling donuts. That's what they're in business for. This is why I think the game will be won with the people who can take all those ecosystems. You meet a business owner; they're like, "Yeah, our website's on this, and we're using this." I'm like, "Oh, yeah, we can integrate all that. It's all good." That's where the game will be won. I look at a great company like Slack. I don't know if you use Slack.  Blake Oliver: Oh, yeah.  Shawn Kanungo: I'm a big proponent. I love Slack. I mean, Slack is not crazy. It's like WhatsApp [00:23:30] or BBM for business [cross talk] Blake Oliver: We had IRC 20 years ago, right? Shawn Kanungo: Totally.  Blake Oliver: It's just chat. Shawn Kanungo: It's chat- Blake Oliver: But it's ... Something is different ... What do you think is different about Slack that makes it amazing?  Shawn Kanungo: What they've done is they have integrated- they've made it so easy for third-party developers to be on Slack. They've integrated things like ... I use Trello all the time. So, Trello's in there. Mailchimp. All these different things are integrated within Slack, so you don't have to leave the ecosystem. They've built it for it. I look at Shopify, as a [00:24:00] Canadian company, in Ottawa, they've done the same thing. They've done a great job at creating apps and ecosystems. This is ...  Blake Oliver: Well, you said this earlier. This is a theme here. The winners are the apps ... We could even probably put accountants in this group, too - the integrators. The more you connect with, the more valuable you are, as a company, as an app, probably as an individual, too. Shawn Kanungo: Exactly. No, 100 [00:24:30] percent. When I talked about ... Going back to this idea of a linear accountant versus an exponential accountant, things that I highlighted was, number one, focusing on capabilities; things like improvisation, and imagination, and creativity - all those things that build a culture of innovation are most important, as opposed to just jobs, and skills. I think reskilling is great, but we can reskill anybody, but actually having those capabilities will be competitive advantage. Number one's capabilities. Number two is actually automation; looking [00:25:00] at your entire business to say how can we make this easier? How can we automate it? By the way, there's technologies out there that could do that. Number three is ecosystems, which is very important. Number four is really around experimentation. We've been so engineered to think about efficiency - how do we make things better - as opposed to thinking how do we try something new and try something different? The last thing is really around unlearning. That, to me, is the most difficult part for accountants, because we've been ingrained in this idea of what accounting is and what should be - the debits and credits. When [00:25:30] all these technologies in an ecosystem come to play, the tools that you had, being an accountant and the things that you brought up with, with being an accountant, might actually disappear. We have to almost like let go of it. Blake Oliver: I wanna talk to you more about those last two points. You said experimentation and learning. Shawn Kanungo: Unlearning.  Blake Oliver: Unlearning. Unlearning! I love that. Let's talk about experimentation. This was my frustration, when I was at a large firm - there wasn't time for experimentation- [00:26:00] Shawn Kanungo: Okay, yeah.  Blake Oliver: -because I had to be billable. I wanna know what you think. You filled out a lotta time sheets, right? Shawn Kanungo: 100 percent. Blake Oliver: For 12 years at Deloitte. Shawn Kanungo: 100 percent. Blake Oliver: Do you think that is a barrier to innovation in accounting firms? Shawn Kanungo: Oh, my God. Well, don't get me started on billable hours. That's such an archaic way of managing your business. This is why the big firms and medium-sized firms ... I don't know who came up with this idea. The game has changed. Now it's about providing [00:26:30] value as opposed to like, "Oh, I spent eight hours on cash." How do you experiment when your performance management is not linked to experimentation? It's not linked. When do I have time? I'm working on this core stuff already. Blake Oliver: Yeah.  Shawn Kanungo: It's very difficult. I'm not saying it's easy to do, but experimentation ... The whole point of experimentation is that you take something very small - very small problem, very small sprint, very small team - and try to work on something that might [00:27:00] make the business better; it might make your life a little bit easier. It's hard to do. You need to get leadership on side to say, "Hey, listen, we're gonna try some new things. By the way, we're not gonna be billable when we do that." That takes a lot of balls to do and tell your leadership that "We need to go off and do that." The other piece is around performance management. You look at every single- every single firm, the metrics are designed to be around billable hours - maybe like engagement [00:27:30] surveys or whatever - but it's not getting engineered for experimentation. I think your performance management should also incorporate experimentation; meaning how many shots are you taking? How many failures have you tried? That is not engineered into performance management. There are some pieces to make that experimentation happen. Leadership is one and being accepting that people are gonna experiment. Number two is baking that into your performance management, which is really important. At [00:28:00] every single firm, we work in different silos. I was fortunate enough ... I'm from a small city, and we were able to experiment and try new things, because we got paid by clients. At the end of the day, they just care- they just want a solution. They just want value back. We'd get to take a little bit of our funding from our client and start innovating on their dime with things that they may need. Clients never know. I talked about this at the beginning of the conversation - clients [00:28:30] don't know what they need or want. They don't know how to innovate. They say, "We want we want X," but maybe they actually need X, and Y, and Z. I think accounting firms or consulting firms, they have such a great opportunity to innovate, because they're already getting paid, and the client doesn't give a ... They don't care how their value's gonna get delivered. So, I think even taking a small portion of your budget and saying how can we try a new way of doing this, making it faster? I've [00:29:00] noticed that every time we take this approach, we always become under budget. We always help open up their eyes about what possibilities could be, because we took some risk. It's hard. I'm not sitting here saying it's easy, but the organizations that value experimentation will be the ones that win. Blake Oliver: I'm sure some of our listeners are in firms that they are trying to internally disrupt, or they want to. They would love to see change happen, but they don't feel like they have the power to do so. What would you say to a [00:29:30] senior accountant or a manager who doesn't- that is not a partner; can't make that change happen? How do you get that maybe older generation, the generation of the partnership where people are really nostalgic ...? They're holding onto their tools. They don't wanna let go of what works. What advice would you have for me to start- get them on board? Shawn Kanungo: First of all, if you're a senior accountant, you're listening to this in your cubicle, or you're [00:30:00] running on the treadmill, or you're doing the dishes at home, I would say tomorrow morning, or this morning, when you're listening to this, walk into your office and try to get yourself fired ... Basically means try to take a risk that might change the trajectory of your organization or might change the trajectory of your career, because this is what's really on the line is your career. You'll find, 99.999 percent of the time, you're not gonna get fired. Blake Oliver: Right. Shawn Kanungo: You're actually gonna take a risk that [00:30:30] might change the trajectory. So, try to think about how to get fired. The second thing is, I think within ... I talked a little bit about this idea of innovation cloud. If you can show your leaders ... Not tell them something; not ask them to take an idea and do something differently. Don't do that. Actually show them something. Actually do something very small. Say, "Hey, by the way, we tried this ..." I did this on the weekend. I did this on weeknights. I did this with my own money. Listen, sometimes you gotta [00:31:00] put skin in the game. "We tried something very small, and it worked.". Instead of hypothesizing if an idea is gonna work or not, now the leaders are like, "Oh, my God, okay ..." [cross talk] You showed me something. I'm now experiencing a change." Now, you're like, "Okay, let me try more stuff." Now you're building your brand equity around innovation and cloud, and then you can take more shots. That's what happened to me. You start off small; try a little small experiment, and then ... This is what happened to me. I [00:31:30] was known as the innovation guy. I didn't term myself as the innovation guy. It's not something that happened, like somebody stamped it. It's because I took small experiments all the time, and I started to build my own innovation cloud. I think this is the way of doing it is also ... It's a faster way of getting your leaders to trust you. You've gotta take small shots. You do. Blake Oliver: Take risks with your own time. If I think back on it, all the successful stuff that I've managed to accomplish, it's doing it on the [00:32:00] side [cross talk]. Shawn Kanungo: Dude, you're doing this podcast ... Blake Oliver: Nights and weekends. Shawn Kanungo: Nights and weekends for your own passion. You're doing something different. You're doing something creative. You're bringing your community together. Nobody asked you to do this. You don't have to do this. But it's inspiring. I think more people should take this route to say, "Well, I'm an accountant, but I'm starting a podcast. I'm gonna get into the media game." More people should do this. Blake Oliver: You said [00:32:30] something about accounting, making accounting sexy, or accounting being sexy. Shawn Kanungo: Yeah. Blake Oliver: That is not exactly ... Those two words, they don't go together very often. What do you mean by that? Shawn Kanungo: Well, it makes sense, because when you remove all the things that we don't wanna do as accountants, whether it's like copying/pasting between systems, whether it's data entry, whether it's coming up with financial reports ... A lot of the systems are doing that, and there's lot of people that can help us out with that. I think, in the future, accounting is gonna be a lot more about [00:33:00] schmoozing your client; influencing, presenting, engaging, persuading your client to take a particular action. That means that we have to double down on being better storytellers. I believe that a base skill for accountants will be video; a base skill for accountants will be presentation styles and motion graphics. Blake Oliver: What you mean by video? Like being on video chat, or making videos, or-  Shawn Kanungo: Making videos; making videos for [00:33:30] presentations ... Listen, I do a lotta video. I post video every week. Video is the fastest way to gain trust with clients. Blake Oliver: A lot of accountants, you know, aren't comfortable necessarily with that. Did we get into accounting to-  Shawn Kanungo: I'm not saying you necessarily have to be on [cross talk] I agree [cross talk] Blake Oliver: Well, let me ask you this. We hear this a lot that we need to improve our presentation skills. We need to become better storytellers. What if I'm not a very good storyteller right now, but I know I need to do this? How do I learn to [00:34:00] do that? How do I get better at it? Shawn Kanungo: That's a great question. Blake Oliver: How did you get good at it? Because you're obviously a great storyteller. Shawn Kanungo: I appreciate that. I'm just gonna clip that out and put it somewhere ... I think it's just about starting with small projects. Again, it comes back to this idea of pairing something that you really love with the project that you have in mind. You're really great at audio. That is your jam. You can say that you're [00:34:30] one of the best accountants in the world, when it comes to this craft of using audio to tell stories. It's like what is your medium. I don't care if it's video ... I think video is important. I'm not necessarily saying that you have to be on camera, but using video to influence/persuade clients to take a particular path with stats, or facts, or whatever ... Maybe it's not video; maybe it's not audio; maybe it's writing; maybe it's graphics; maybe it's design. Whatever your skill set is, in terms of displaying pieces, just [00:35:00] connect that with your clients. I think everybody has some sort of skill in storytelling. Storytelling is not just speaking. It's not just video. It's not just ... Just find what you're good at and you're passionate about and connect it. I'm really good at connecting different things together. I'm really good at ... Speaking is definitely something I'm good at, but video is also something I'm really good at - not only from being on camera, but also creating graphics. If you watch my presentation, it's all motion graphics. It's all very visual-. [00:35:30] Blake Oliver: Did you create that yourself?  Shawn Kanungo: Myself and my team, yeah ... I try to use my skills, and these are the only skills that I have and apply it to storytelling. Blake Oliver: How did you get into public speaking? Have you always been comfortable with it? Because you seemed very comfortable on stage, and, as a CPA, that's a little bit unusual. Shawn Kanungo: Yep. The magic is that I was in management consulting for a very, very long time. Blake Oliver: That's getting up in front of very powerful, important people- Shawn Kanungo: It's just reps. You're [00:36:00] getting in front of executives - CEOs, leaders - talking about things that you probably just researched the night before. We used to play this game called PowerPoint Karaoke, where you would- and sometimes, we'd do this in front of my client, where you don't know what the next slide is, but you're trying to explain to a client what's happening, what's coming up next. You're building your improvisational skills just by doing that. I think it's a really great way of like ... Just playing PowerPoint Karaoke- Blake Oliver: I love that term.  Shawn Kanungo: -trying to explain things [00:36:30] and doing it in a convincing and a powerful way. I think it's just putting in the reps. For me, the reason why I got into public speaking is that a lot of people wanted to hear about the work that we were doing in innovation, and digital transformation, so we'd go get up and talk to clients. Then I'd get on to conferences; then I'd do keynotes ... The momentum has built. Blake Oliver: It sounds like the lesson is you really just gotta get up there and do it. Shawn Kanungo: 100 percent, 100 percent. A lotta people say, [00:37:00] "Well, how do I start? Where do I start?" You just ... Listen, I did a hundred talks for free, before anybody paid me to speak. You just build up the reps, and just get in front of anybody and speak. I think that's a really important skill set. I think it's ... Now, when everybody is on their phones, being able to articulate yourself and story-tell is gonna be such an important skill set, especially for accountants.  Blake Oliver: Shawn, thanks so much for speaking with me today. Shawn Kanungo: Man, this was crazy. What an amazing podcast. Blake Oliver: Thank you.  Shawn Kanungo: It's an honor. I messaged you ... This is how it happened. I [00:37:30] saw you. Blake Oliver: This is Twitter [cross talk]  Shawn Kanungo: I saw you in the conference. I recognized you from the pod. I said, "Hey, man, I just love your podcast. I'd love to catch up." I didn't have no idea that I would be on the pod. Then, just through Twitter, and then we got to meet up. You're doing so much for this community. It means a lot. I think the biggest favor that you could do is just like go rate, and review, and subscribe. Yeah, man, that's it.  Blake Oliver: So, Shawn, if people wanna connect with you online, find out what you're up to, where should they go? Shawn Kanungo: I [00:38:00] think the best thing is probably LinkedIn. That's my platform. You can connect with me there, Shawn Kanungo. I'm Shawn Kanungo everywhere - Insta, Twitter, Facebook. I have a public profile on Facebook. LinkedIn is probably the best way. Shoot me a note, and we can chat about innovation, disruption, technology, accounting. It's all good. Blake Oliver: Thanks so much for joining me and have a great flight home. Shawn Kanungo: Awesome. Thank you. This episode of The Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing. Now, Halon Tax is working with bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. They're even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to CloudAccountingPodcast.promo/halontax. That is Cloud Accounting Podcast dot promo forward slash H-A-L-O-N-T-A-X. 
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Stats
Birthdate
Oct 4th, 1974
Location
Tucson, AZ, USA
Episode Count
98
Podcast Count
5
Total Airtime
2 days, 50 minutes