Recent episodes featuring David Leary
Sponsors BQE Succeed: Show NotesComing soon! LinksWSJ News Exclusive | Intuit Near Deal to Buy Credit Karma for $7 Billion analyst sees more free filers hampering revenue growth | Accounting Today Democrats Say They’ll Replace Their Caucus App With iPads And A Google Form botches tax return question in Democratic debate: ‘I can’t go to TurboTax’ rule Warren Buffett loathes boosts Berkshire's bottom line to $81B to Be a CFO? Consider Some Numeric Body Art the oversight of US auditing is a very bad idea an Independent Watchdog, Who Will Audit the Auditors? - WSJ's See What Some Folks Are Saying About the Proposal to Fold the PCAOB Into the SEC - Going Concern Accountants Took Washington’s Revolving Door to a Criminal Extreme House Subcommittee Scrutinizes Accounting Rule Maker - WSJ of Accounting Firm Affects Medical Group Hub Now Automates Resolving Unclassified Expenses starts billboard battle with Gusto – TechCrunch Online: Evolution and innovation Updates 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, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person!  May 31 - June 3, 2020: BQE Succeed - Encore at Wynn Las VegasLimited edition shirts, stickers, and other necessitiesTeePublic Store: Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: Classifieds High Rock Accounting:  Elefant: Bookkeeping Side Hustle: Go here to create your classified ad:  TranscriptComing soon!_____________________This episode of The Cloud Accounting Podcast is sponsored by BQE Core. If you are focused on niche clients that are architects, engineers, consultants, or lawyers, BQE is the app for them, and BQE SUCCEED is the conference for you to best connect with companies in those niches. BQE Succeed is happening from May 31 to June 3, 2020 at the Encore at Wynn Las Vegas. Listeners can get $200 off registration by using code "CAP2020." The Cloud Accounting Podcast will be there. Will you? Head over the That is Cloud Accounting Podcast dot promo forward slash B-Q-E-S-U-C-C-E-E-D. _____________________ClassifiedsHigh Rock Accounting is searching for rock stars. We’re a growing accounting firm looking to increase our team. Our ideal candidate will be self-motivated, eager to learn, and grow with the firm. We help businesses succeed by utilizing cutting-edge technology to provide accounting solutions that increase business efficiency and competitiveness. Our goal is simple – enhance accounting operations, improve accuracy, and reduce costs. As a High Rock star, you'll be responsible for full-cycle accounting in a cloud environment. E-mail That's careers@ One of the biggest hurdles accounting firms face is finding training that is current and relevant. There is an answer - Elefant Training. Elefant offers webinars and training on Xero, QuickBooks, and cloud-based apps and modern practice management issues like remote leadership and creative compensation. Their instructors are firm owners who also happen to be international experts in cloud accounting.  This year, Elefant is offering recordings of their most popular webinars, plus valuable resources in their brand-new learning library. You can use code "CAP20" for 20 percent off your subscription. Bulk licenses for firms are also available. Visit for more info. That's ______________________ Are you looking for more great cloud accounting content? Ryan Lazanis started and sold his own cloud-accounting firm in just five years. Now he helps firms stay on the cutting edge through his free weekly email, curating the top five pieces of content that help modernize your firm. Visit to sign up. That is Accountants and bookkeepers, are you itching to make a career pivot and escape the 9-to-5 grind and the [00:53:30] busy season stress and start to build your own career path where you work virtually on your own terms? Then you need to get your copy of the newly released Bookkeeping Side Hustle Guidebook and learn actionable steps to become a virtual bookkeeper without the overwhelm. Cloud Accounting Podcast listeners can get the e-book for 30-percent off with the code "CAP30OFF." Get your copy at _____________________Want to get the word out about your newsletter, webinar party, Facebook group, podcast, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad. Hit the show notes, and the links to get more info. 
Sponsors SmartBooks Genie: Analytix Solutions: BQE Succeed: Show Notes 03:03 – Love by numbers? Here are seven reasons to date a finance professional |  AICPA Insights 04:34 – Is $11K in Amazon gift cards worth a prison term? One Michael Mann associate is about to find out | Times Union  06:27 – Check out last week's episode for more MyPayrollHR discussion  07:20 – The U.S. Inspector General blames the IRS for Free File faux pas | Accounting Today 09:25 – Rhode Island cares how you feel when you file your 1040s | Reddit 10:28 – Faster than a speeding bitcoin, ransomware shows no signs of stopping | NYT 12:31 – Not surprisingly, cyber incidents take first place in the list of business risks | CFO 13:07 – Are slush funds the answer to ransomware attacks, or just a quick fix? | NYT 14:04 – Gone phishing ... Puerto Rico just can't catch a break | AP News scam   14:55 – Has the Trump Administration done something semi-intelligent? | Bloomberg Tax 15:45 – Stats be damning – What exactly has the PCAOB been doing for the past 16 years? | Accounting Today 19:44 – Humans – the missing link in tech solutions? | ScaleFactor 26:57 – Come on in, the remote work is fine! Full Read: The 2020 State of Remote Work | Buffer 35:41 – Has San Fran lost its tech luster? | CNBC  36:37 – A little talk about how Slack is lacking  40:13 – Another case for remote work – the struggle to find workers is real | Wall Street Journal 41:48 – Remote Work – If you're not commuting, you're not polluting | Forbes  43:00 – Another "new" accounting app for small business - Kashoo | PRWeb 44:01 – Square waits for no one – they just do stuff | Square 44:20 – New at Xero: Mileage in Xero Expenses is now in open beta and the February Global Release Update | Xero Blog 45:33 – Freelancers need love (and bookkeeping) too – Joust to the rescue! | Small Business Trends 48:10 – Feeling the love and the free ad spots – we've got REVIEWS!  50:06 – FreshBooks sets sail for the UK | GlobalNewswire 50:34 – Xero's not the only fish in the sea, according to one accounting-software minnow | AFR   52:27 – Receipt Bank axes its credit card in the wake of new plans? | AccountingWEB  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, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! May 31 - June 3, 2020: BQE Succeed - Encore at Wynn Las VegasLimited edition shirts, stickers, and other necessitiesTeePublic Store: Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: Classifieds High Rock Accounting:  Elefant: Bookkeeping Side Hustle: Go here to create your classified ad:  TranscriptAre you struggling to free up time for client advisory work? Is scope creep hurting your fixed-pricing model? Are your quality-control processes lacking? Is your staff stuck in a never-ending monthly close process? Ever wish you had a Genie that could help you out? Stay tuned to hear more from our sponsor, SmartBooks Genie, later in the episode.  Blake Oliver: We collaborate remotely. We use Slack; we use Basecamp-  David Leary: This is where I was heading with Slack – I've questioned it; you've questioned it. I've started talking to other people that are questioning it. [00:00:30] It's almost like Slack's a little outta control. The benefits you had from Slack before are starting to go away because it's starting to just feel like another big old inbox. Then, if you're in multiple Slacks, and you can't find things ...  Blake Oliver: Oh, yeah, it's-  David Leary: Is Slack ripe for disruption from a different app? ____________________ This episode of The Cloud Accounting Podcast is sponsored by Analytix Solutions. If you're looking for better ways to run and scale your cloud-accounting practice, check out Analytix Solutions. The team at Analytix provides accounting, bookkeeping, and tax preparation services. They can help solve your firm's challenges, like back office scalability, and long-term growth. They can even help streamline your daily operations.  How? By using a cloud-accounting solution called Insight360 that combines experienced professionals, app integrations, and a management portal. Insight360 takes care of your back office tasks and delivers timely and precise reporting of both financial and operational parts of your client's business. Analytix offers multiple partnership models, such as referral, semi-private, and private-label, and uses project-based pricing so you won't get trapped into any long-term contracts, or commitment. Head over to That is Cloud Accounting Podcast dot promo forward slash A-N-A-L-Y-T-I-X. ______________________This episode of The Cloud Accounting Podcast is sponsored by BQE Core. If you are focused on niche clients that are architects, engineers, consultants, or lawyers, BQE is the app for them, and BQE SUCCEED is the conference for you to best connect with companies in those niches. BQE Succeed is happening from May 31 to June 3, 2020 at the Encore at Wynn Las Vegas. Listeners can get $200 off registration by using code "CAP2020." The Cloud Accounting Podcast will be there. Will you? Head over the That is Cloud Accounting Podcast dot promo forward slash B-Q-E-S-U-C-C-E-E-D. ______________________Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.  David Leary: And I'm David Leary. Blake, hugs and kisses for you. This is our 160th episode, and it's Valentine's Day! [00:02:30] Blake Oliver: Happy Valentine's Day, David. I couldn't think of anyone else I'd rather spend the morning with than you. I have a relevant-  David Leary: The chocolates you sent were wonderful, by the way!  Blake Oliver: Oh, yeah, the digital chocolates that I didn't send? I spotted an article that is appropriate for Valentine's Day on the AICPA blog. Can I share this with you?  David Leary: Do you absolutely love it?  Blake Oliver: I ...  David Leary: All right, I'll stop. There's no more jokes. It's done. I'll stop now. Sorry.  Blake Oliver: These are "7 reasons to date a finance professional," over at [00:03:00], by Mballa Mendouga. I'll go through the list for you. 1) they pay attention to detail. 2) you'll never have to calculate the tip ... Although, we do, annoyingly, take out our calculators to calculate the tip because we don't like doing mental math. People always get confused by that. 3) consistency; 4) they know work/life balance ... That, I'm not really sure about.  David Leary: That is hilarious! That's genius!  Blake Oliver: Well, here's the ... Here's what that means: [00:03:30] "You won't have to worry about finance BAE getting too clingy, especially during tax season – whether they're offering sound business advice, filing people's taxes, or running audits, finance professionals dedicate their work days to the clients' goals and happiness. For their partner, that means ample amounts of 'me' time and space; but don't worry. Finance professionals know all about balance. They can multitask like no other, so you won't have to worry about feeling neglected, either.  David Leary: This is great.  Blake Oliver: If you really don't like going out to Valentine's dinner, then date a finance professional. [00:04:00] 5) they're great under pressure; 6) guess who's handling the taxes? I think that's my wife's favorite part is that she doesn't have to deal with any of the money stuff. She hates that. Then, 7) you can trust them.  David Leary: Well, I can stick with a Valentine's Day theme, if you'd like.  Blake Oliver: All right.  David Leary: You know what's a nice thing to get your Valentine? Amazon gift cards!  Blake Oliver: Oh, yeah, money always beats anything else because ... I feel like when somebody gives me a gift that I have to go use and I can't ... It's not money, [00:04:30] then, it's like a chore. So, yeah, tell me about the Amazon gift cards.  David Leary: An associate of the MyPayrollHR CEO, Michael Mann, plead guilty on Wednesday to a charge of conspiracy to commit wire fraud.  Blake Oliver: Was this somebody who worked for him?  David Leary: He was- for one of his entities. You know, he has the huge structure; this is one of the entities that was "advising" Optimum, which is a United Healthcare Group company.  Blake Oliver: Mm-hmm.  David Leary: Basically, what they were doing was they were taking a real consulting contract, somehow, [00:05:00] they got with Optimum for $3.6 million, and then, tweaking it, and using it over and over again. Instead of just the real company, with the contract, he'd have seven fake companies, and they would all have the same invoice. Then, he would use that to go get loans.  Blake Oliver: Oh, I see. So, he was factoring fake receivables.  David Leary: Exactly. Apparently, when a bank would contact him, he would forward the email to Michael Mann. Michael Mann would reply back, and then, he would forward, and be like, "Yeah, this seems legit!" [00:05:30] The banks just did not do good due diligence on this stuff either.  Blake Oliver: Right.  David Leary: But here's his payout. Here's the thing – Michael Mann paid him $11,000 worth of Amazon gift cards. That's how ... This guy helped commit $13 million of fraud-  Blake Oliver: And he only got-  David Leary: -and he only got $11,000 in Amazon gift cards.  Blake Oliver: Oh, God ... Not- not worth it.  David Leary: Now he's gonna go to prison. So ... And he has to pay them back. He has to pay back $11,300 worth of gift cards back, apparently.  Blake Oliver: [00:06:00] Did it say how long he's going to prison?  David Leary: He hasn't been sentenced yet.  Blake Oliver: Okay. Wow. If he gets prison time, and all he got was $11,000 of gift cards, that's not a good payout.  David Leary: This story just ... There's gonna be more people exposed. There's just too many entities. There's too many people involved. It wasn't just Michael Mann sitting there in his room by himself, orchestrating all this. There's a lot more people going down. I actually think your hunch- last week, you talked about the president of the bank. [00:06:30] They just happened to be roommates or something in college- what'd you say?  Blake Oliver: They were part of an MBA program together. So, it's this personal relationship thing, right? Maybe the bank manager or the VP that we were talking about, maybe he didn't mean to do anything wrong, but he trusted Mann because of that personal relationship.  David Leary: Yep.  Blake Oliver: I'm not an expert on fraud, but it just ... Reading all these stories over the past few years about it, seems like a lot of the time, the problem is people rely on personal relationships; they don't do their due diligence. You gotta trust but verify.  David Leary: [00:07:00] I think that's the last of my Valentine's Day stories.  Blake Oliver: I've got a story about other folks not doing their job, and that is the IRS. Now, maybe we can give the IRS a break because they are seriously, seriously under-funded, but you would think they would do a little bit better than how they did when it came to managing the Free File program, which is what I wanna talk about.  Obviously, we've been talking about this for months and months now – the IRS exercised very little oversight over the Free File program, [00:07:30] which is the program that allowed low-income taxpayers to file their taxes for free. They outsourced the Free File program to dozens of tax-preparation companies, including TurboTax. Those companies then found ways to redirect people into paid products so that something like only two percent of folks who would've qualified for the Free File program to do their taxes for free ended up paying to do their taxes.  The Inspector General of the United States came out [00:08:00] with their official report earlier this month and formally said that the IRS did not exercise proper oversight; that the complexity, confusion, and lack of taxpayer awareness around the operation requirements of the Free File program are contributing reasons why many eligible taxpayers don't participate in it.  They verified that only 2.5 million, or 2.4 percent of the 104 million eligible taxpayers obtained a free return filing through the program. More than 34.5 million taxpayers who met the Free File [00:08:30] program criteria used the members' commercial software to file their tax returns. So, out of those third of people who qualified, who used commercial software to file their tax returns, somehow, those companies managed to funnel those folks into paid software the vast majority of the time.  The lack of oversight's pretty amazing. There's a lot of detail in this report about the complexity, but also about what the IRS didn't do, when they were supposed to exercise oversight. [00:09:00] Apparently, they failed to develop goals and performance metrics. They weren't really even measuring the program, so the IRS folks didn't even know that it was this bad, and they weren't verifying that people who qualified for the program were being properly put into the right funnel, and all this stuff. The IRS agreed with almost all the recommendations and is going to implement them. In more uplifting news, did you know that the Rhode Island 1040 form has emojis on it this year? [00:09:30] David Leary: Emojis on the 1040 form?  Blake Oliver: Yeah. The 2019 Form RI-1040- it is Line 15c and 16 – Total Amount Due, and Amount Overpaid. Next to Total Amount Due, there is a frowny face, and next to Amount Overpaid, there is a smiley face. I found this on a Reddit thread on the Tax Reddit. The comments are pretty funny. Somebody said, "The first time I saw it, I thought our system accidentally printed it [00:10:00] but it is, in fact, real." Apparently, Arkansas's individual return has had them for years. Utah did it a few years ago on their online filing system; took it off after they got complaints, and then put it back on when they got even more complaints for taking them off.  David Leary: Now we have show artwork, right? We can utilize that for our artwork on the show.  Blake Oliver: Yeah, there you go. Those are all my tax stories.  David Leary: Do you wanna talk about ransomware?  Blake Oliver: Sure.  David Leary: All right. There was an article in The New York Times kind of summarizing the year in [00:10:30] review for ransomware in 2019. The numbers are really scary, when you look at it versus 2018, or even Q4 of 2019 versus the previous quarter. In 2019, 205,000 organizations have claim that they've been hacked by ransomware attack; 41-percent increase.  Blake Oliver: Wow.  David Leary: The average payment is now $84,000, and that was just for the Q4 of 2019. It's double what it was in Q3 [00:11:00] of 2019.  Blake Oliver: Wow, this is quickly approaching the amount that people lose due to in-house fraud.  David Leary: Then they're saying, in just December alone, it's jumped up to 190,000.  Blake Oliver: That is, I think ... I think 200,000 is something like the ... I could be wrong here, but around the amount that the average business loses due to fraud. That basically means ransomware should be equally on our attention.  David Leary: Think about that- if you put that on a graph, it's like a hockey stick!  Blake Oliver: Yeah.  David Leary: What happens when people see numbers [00:11:30] look like hockey sticks? Businesses pop up, correct?  Blake Oliver: Right. Of course.  David Leary: Okay, so what's happening now is hundreds of gangs are starting to specialize, and hackers are starting to specialize in creating 'Ransomware as a Service.'  Blake Oliver: Hacker gangs- David Leary: Yes.  Blake Oliver: -are creating Ransomware as a Service?  David Leary: As a service; so you can-  Blake Oliver: What does that mean?  David Leary: You and I could go buy a ransomware package, and maybe inside the feed of The Cloud Accounting Podcast, distribute it ...  Blake Oliver: Oh ... So, like, create a little side business doing ransomware.   David Leary: Exactly, so we don't have to ... I don't have time to code up ransomware! I could just sign up for a service and get ransomware, and then distribute it. Then, not only that, because when people get ransomed, you put the phone number ... You've gotta call in ... You and I do not have time to take phone calls from people, saying, "I wanna pay the ransom!" They're setting up call centers to handle the call volume. A complete industry, a legit industry, has been built around ransomware attacks!  Blake Oliver: That's amazing. I have a related stat. [00:12:30] According to the Allianz Risk Barometer for 2020, 39 percent of respondents to its ninth annual survey of risk experts identified cyber incidents as their main concern, pushing business interruption events out of the top spot it had occupied for seven years. Cybersecurity, which includes ransomware, is now the top concern – 49 percent of risk experts say it's their top concern over business interruption events.  David Leary: Two add-ons to this, right? [00:13:00] Bryan Sartin- he's the head of Global Security Services at Verizon; they're encouraging clients to create a slush fund of bitcoins.  Blake Oliver: Just to have in case you need it.  David Leary: Just to have in case you need it. Then, the article also talks about somebody who had a medical practice, a doctor. She ran her practice over 20 years, and then, it totally became a mess. She got ransomwared, et cetera ... She was shutting down her whole thing, but her forensic expert apparently told her that even if she paid the $50,000 to get her data back, [00:13:30] there's only a 15-percent chance she'd actually get it back. Stop clicking on links, guys.  Blake Oliver: This is sobering.  David Leary: The numbers just are staggering from the month, by month, by month of last quarter, even.  Blake Oliver: You were talking about the trend, right – that hockey stick kinda growth? David Leary: Mm-hmm.  Blake Oliver: Same thing for this stat that I just mentioned. Seven years ago, cybersecurity ranked 15th, with just six percent of responses that it was the top concern. It went from six percent to 39 percent in just seven years.  David Leary: Wow.  Blake Oliver: Amazing.  David Leary: [00:14:00] It's still affecting governments. Did you know Puerto Rico- they lost $2.6 million in a phishing scam?  Blake Oliver: Oh, no! How did this work?  David Leary: They got contacted by an email that said change the bank account details to this, and they paid the bill to the wrong bank account details. Again-  Blake Oliver: It's classic. Classic.  David Leary: -so all of you probably ... To be honest, everybody listening should have a process with each client- provide value to your clients – call them all up and have some internal processes where you do not change the banking account information without either a sign-off, [00:14:30] or a secondary verification. You can't just do it because you got an email.  Blake Oliver: Yeah, email verification doesn't work. Email is not secure. Well, let's shift gears for a bit, and talk about the Trump administration. It's election season. I got my ballot in the mail here in California – my mail-in ballot; but that's not what I wanna talk about. What I really wanna talk about is the White House budget.  The Trump administration released the budget, and there's something [00:15:00] in there that's really relevant to accounting. The White House wants to get rid of the PCAOB – the Public Company Accounting Oversight Board – which has been around for 16 years. It was created after the fall of Enron to be the watchman – the auditor of the auditors. Yeah, the Trump administration wants to eliminate the PCAOB and transfer its authority back into the SEC, which is the parent of the PCAOB-  David Leary: How do you feel about this? Because I think before, in previous episodes, you ... I think you've railed against [00:15:30] them for failing- being a failure at what they're supposed to be doing.  Blake Oliver: I love this! This is like the best thing that Trump has ever done! It's amazing! Because just two weeks ago, in Accounting Today, there was this great article called, "Is the PCAOB Doing Enough?" The stats are just damning. Since the PCAOB opened its doors, it has levied less than one half of one percent of the fines that it could have imposed on the Big Four U.S. accounting [00:16:00] firms, based on its finding of defective audits. This amounts to a total of $6.5 million in fines; rather than the $1.6 billion that were warranted – a minuscule fraction of what the PCAOB should have recovered from wrongdoers. It is also a minuscule fraction of revenue of the sector, which reported more than $154 billion in global revenue in 2019, alone.  David Leary: I imagine that number doesn't even cover their budget line to justify their existence.  Blake Oliver: I don't think [00:16:30] so because- David Leary: Could you repeat that again? $6 million? $3 million?  Blake Oliver: In 16 years, they have collected $6.5 million in fines.  David Leary: I'm getting my calculator here. 16 ... All right, let's see. What's that a year? That's a couple ... $200,000 a year? [crosstalk]  Blake Oliver: You do the math right now, and I'm gonna look up something else for us, which is interesting. I'm gonna look up the cost of the PCAOB.  David Leary: I'm dividing $5 million by-  Blake Oliver: You're dividing $6.5 million by 16 years.  David Leary: Oh, it's earth-shattering. $400,000 [00:17:00] a year.  Blake Oliver: Okay ...  David Leary: For a government department.  Blake Oliver: So, the budget for 2020 for the PCAOB is $284.7 million.  David Leary: Oh, we have to kill it! That's absolutely [crosstalk] You've got me convinced! This is the best thing Trump's ever done. I'm sold!  Blake Oliver: Isn't this amazing? So, putting these fines in perspective, $6.5 million in fines for an industry that generates $154 billion in global revenue. It's like- David,  [00:17:30] if I got a parking ticket and it was like five bucks, right? It gets worse. I'll share some of the stats from this article. By the way, this article in Accounting Today, it's in the show notes, and it links to a report by The Project on Government Oversight, which is one of those groups that government oversight. Thank God we have these.  According to POGO's report, since the PCAOB began its oversight functions in 2003, it has identified 808 instances- [00:18:00] 808 instances in which the Big Four firms performed audits that were "so defective that the audit firms should not have vouched for a company's financial statements, internal controls, or both." But they only took enforcement action in 21 of those instances. 808 completely defective audits; 21 enforcement actions.  Individual fines? The PCAOB is no joke. They have the power to levy individual fines on accounting firm management who fail to reasonably supervise lower-level staff; [00:18:30] so the partners. They've imposed a total of $410,000 in fines in 16 years, which is less than one- the salary of one Big Four partner. [crosstalk] What a waste of money, right? What a giant freaking waste of money that the PCAOB is, and how could anyone justify keeping them around when this is their track record over 16 years. It's like, just shut it down.  David Leary: This is just one little small piece of our government, right?  Blake Oliver: Yeah.  David Leary: I'm sure this just goes [00:19:00] deeper and deeper [crosstalk]  Blake Oliver: No, David, you should be worried. This is gonna make me vote for Trump, David. You're gonna- I'm passionate about this! This is my issue!  David Leary: Well, your other guy, Yang, dropped out this week.   Blake Oliver: Yeah, Yang dropped out, and that was-  David Leary: You were all part of the Yang Gang.  Blake Oliver:  I know we talked about Andrew Yang on the show, and I ... Not that much; we don't talk about politics a ton, but, yes, I liked- I like Andrew Yang, and not necessarily because I agree 100 percent with his policies, but because I think he's drawing [00:19:30] attention to the threat of automation and how that's gonna fundamentally change our society. He's actually talking about it and wants to do something about it.  David Leary: Let's go off your talking about automation spin.  Blake Oliver: Okay.  David Leary: ScaleFactor ... We've talked about ScaleFactor a lot in the past, right?  Blake Oliver: Yes, and I am not terribly familiar with them, but I understand they are one of those software companies with a service, or, like you like to say, accounting firms with developers.  David Leary: Accounting firms with engineers. They're similar to Botkeeper, ScaleFactor, Ceterus, [00:20:00] Bench; arguably, QuickBooks Live; kinda that model, right?  Blake Oliver: InDinero, right?  David Leary: InDinero, right; that same model. They had a blog post this week come out about how, "The Future of Small Business Finance is More Human than You Think."   Blake Oliver: More human than you think?  David Leary: It really sounds like they're pivoting their business model.  Blake Oliver: Currently, they do ... You buy ScaleFactor and you get software plus a service, and it's provided in-house.  David Leary: Yep. It's similar to the QuickBooks [00:20:30] Live model. They use QuickBooks or Xero under the covers, and you pay for them, and you get a ScaleFactor app, and a ScaleFactor dashboard, and you do all your interactions with ScaleFactor. In-house, they have accountants and bookkeepers do your bookkeeping.  Blake Oliver: Got it.  David Leary: It's a full-blown service.  Blake Oliver: They raised a bunch of money last year; that's how we ended up talking about them, right?  David Leary: Yeah, so of all these players, they've raised the most. They've taken in $100 million.  Blake Oliver: Okay, got it.  David Leary: And, I think when they announced, they took in that last round, [00:21:00] they didn't have 1,000 customers. I think we did some math before, and it was- the ratios were not good as far as for the amount of money they've taken in versus how many actual customers they've acquired so far.  If you really read the article, it starts out – a little – very high about ... I’m not saying arguing against technology, but tip-toeing the waters that maybe it wasn't solving- automating, and creating bots, and using technology, maybe it wasn't solving problems as easily as they maybe thought it could. I'll [00:21:30] just read some quotes, here.  Blake Oliver: I know where this is going.  David Leary: "The time and cost savings that come from smart application of technology can be the lifeblood of a small business, but sometimes, the answer is no." Then, there's another sentence about, "Psychological support in the early years is a critical piece of business owner success that requires a different kind of innovation. Technology can still enable the solution, but it is not the whole solution." It's very interesting because I think a lot of these companies were betting on, [00:22:00] "We'll just get engineers and automate the hell outta everything." Is the pendulum swinging a tad the other direction?  Blake Oliver: Well, I think they're just learning hard lessons; which, once you do bookkeeping for a few years, you start to realize just how hard it is, and how there is so much that you cannot automate. There's a lot you can automate, but there's a lot you can't; 100-percent bots ... Not gonna work. Not even ... Maybe you can do [00:22:30] half. It just depends on the task, right? The client-facing stuff, it's so difficult to automate.  David Leary: It sounds like they're completely pivoting to where they are gonna play more of a middle man, like a true Uber model. So, Uber does not have drivers in-house; looks like they're gonna pivot that way. If you really read the article a little bit deeper, there's a sentence that actually reinforces that. They go on to say, "We are also retaining a portion of our finance professionals to foster this new marketplace from the inside. In addition, we'll be providing assistance [00:23:00] for some team members to spin off and start their own independent businesses as certified pros in our ecosystem." It sounds like internal accountants and bookkeepers that they had in-house are now, for lack of a better term, being laid off to go become independent contractors for ScaleFactor.   Blake Oliver: Makes total sense to me. This is the only way that you can scale a business is by being a platform; not by being a provider. This is the problem, I think, that a lot of these software-plus-a-service companies have is that they end up getting sucked [00:23:30] into doing the service, and that doesn't scale like software does. You don't get the return on investment; you don't get the huge margins; you don't get the crazy exponential growth that you need to justify taking VC money.  David Leary: Think about bookkeepers, in general, or, let's step it back ... You've done this. You order a Lyft, and he or she shows up, and there's an Uber sticker in the window, a Lyft sticker in the window, an Amazon delivery app running because he's also doing Amazon package [00:24:00] deliveries; he or she is; all those food services – DoorDash, and all that kinda stuff, right? It's all ... TaskRabbit ... They've got 50 stickers of all the services he or she does gig work for, right? Is there gonna be more bookkeepers that are going to ... They have their LinkedIn page, and they're gonna be like, "Hey, I'm a QuickBooks Live bookkeeper, and I'm a ScaleFactor bookkeeper, and I do gig bookkeeping for this other ..." Is that kind of the future you think we're headed?  Blake Oliver: Yes, unless states follow California's lead and pass laws like AB5, which pretty much makes it [00:24:30] impossible to do that here in California. ScaleFactor's not gonna be able to hire California bookkeepers as contractors on their platform, I don't think, because the test for independent contractor status is really hard now. Those laws were created specifically to target companies like Uber, and Lyft.  David Leary: But could ScaleFactor take on California clients, but have labor in El Paso?  Blake Oliver: Yeah, but what if Texas does the same thing? What if New York does the same thing? If most of the U.S. [00:25:00] population falls under these new laws that are getting passed, then, no; they'll have trouble. So, we'll see.  David Leary: I did reach out to ScaleFactor. We'll put a link on Twitter, just to confirm whether or not they actually laid off staff, which ties into our story from last week, where over here, on the QuickBooks side, it sounds like they can't hire staff fast enough, so [crosstalk]  Blake Oliver: Right? Which is why they're gonna advertise-  David Leary: -there's some freed-up labor now. The market's gonna eventually balance all this out, right?  Blake Oliver: We'll see. [00:25:30]____________________ This episode of The Cloud Accounting Podcast is sponsored by SmartBooks Genie. SmartBooks Genie was born out of the struggles experienced by Calvin Wilder, as he grew his firm, SmartBooks, from zero to 40 people in eight years. Calvin has been using Genie to run SmartBooks for the last 18 months and now, he's making Genie available to all accounting and bookkeeping firms to power their client-accounting services.  SmartBooks Genie layers on top of QuickBooks Online to allow you to centralize your firm's workflows, manage the monthly close, automatically prepare client reports, and complete time-consuming manual processes that you're currently doing in spreadsheets or other isolated systems. By centralizing client management to get core work done accurately and on time, SmartBooks Genie will stay on top of the deadlines and scope of service that you're delivering to clients, so you keep your client engagements profitable.  To learn more about SmartBooks Genie and take advantage of its Early Adopter program offering 50 percent off monthly subscription fees, head over to That is Cloud Accounting Podcast dot promo forward slash G-E-N-I-E. SmartBooks Genie grants your wish for a streamlined practice. ______________________Blake Oliver: We're talking about distributed workforces, people working virtually. I imagine that ScaleFactor may have had bookkeepers, accountants in their office, and now those folks are gonna work from home in a different relationship with the company. So, let's talk about remote work and working from home.  David Leary: Yes.  Blake Oliver: David, you sent over the latest Buffer State of Remote Work Report.  David Leary: Somebody tweeted that, and I said, [00:27:00] "That's Blake's beat," and I tagged you in the tweet.  Blake Oliver: Well, and you know I love-  David Leary: I didn't open it or read it, so I'm looking forward to you summarizing for us.  Blake Oliver: Buffer does a great job with this report. The link is in the show notes, and I encourage anybody who's interested in seeing some good visuals on remote work to go visit that. I'm a big fan. I have been working remotely since I started in accounting; most recently, since October, because where I work, Jirav, we're a virtual company. [00:27:30] We have a headquarters in a WeWork in San Francisco, but that is a optional work space. People work from home; often, we have folks in Seattle and Texas, L.A., and we're gonna grow that way. So, let me just share some of these interesting stats from the report, shall I?  David Leary: Yeah.  Blake Oliver: This was a survey of folks who work remotely at least some of the time. There is one unequivocal response, and this has happened every single year ... When they asked folks, "Would you like to [00:28:00] work remotely at least some of the time for the rest of your career?" 98 percent say yes. When people get-  David Leary: Who are the two percent? They must have-  Blake Oliver: They're not having-  David Leary: Too much laundry to do or something; like, "I can't be at my house. It's just too much."  Blake Oliver: There's a small percent that don't recommend remote work. 97 percent of people who work remotely recommend it to others; three percent don't. We'll explore that three percent a little bit more, as to why they don't recommend remote work because I think that offers some clues as to how we can make remote work better.  David Leary: Okay.  Blake Oliver: Just to provide some [00:28:30] context to folks, remote work has been growing really fast, but it's still very small in the U.S.. Only three percent of U.S. workers work remotely; although, I believe- I don't have the data in front of me, but if you just look at professionals, or knowledge workers, who work on a computer, it's probably all of that three percent is gonna be in that group, pretty much, so it makes it a bigger percentage of people who are listening to this show, and whatnot. [00:29:00]  Of people who work remote, over half – 57 percent – work remote 100 percent of the time; then, about 16 to 17 percent work remote 75 to 99 percent of the time; 10 percent work remote one to 25 percent; smaller percentages work remote 50 to 75, 25 to 50 ... Basically, more than half work remote full-time, and the rest [00:29:30] are working remote some of the time. 70 percent are happy with the amount of time they work remotely, but 19 percent would like to work remotely more often. Only 11 percent would like to work remotely less often.  Of the benefits- let's talk about the benefits of remote work. You might think that it's the ability to spend time with family or work from home, but those are actually not at the top of the list. The number-one reason people like working remotely is the ability to have a flexible schedule. That's almost a third [00:30:00] of respondents. Then, a quarter say it's the flexibility to work from anywhere; and 21 percent say not having to commute, which I think is my favorite. What's your biggest struggle with working remotely? It's split between-  David Leary: Can I guess some of these?  Blake Oliver: Yeah, go ahead.  David Leary: Just opening cabinets and just looking for a snack. Laundry ...  Blake Oliver: Not on the list.  David Leary: And daytime soap operas [crosstalk]  Blake Oliver: 12 percent say distractions at home are the biggest struggle, [00:30:30] but almost twice that, 20 percent say collaboration/communication; 20 percent say loneliness; and 18 percent say not being able to unplug. Then, comes distractions at home. Not being able to unplug is interesting because that actually ties in with other stats we have heard from remote work surveys that say that remote workers are more productive; as much as 20-percent more productive than office workers because their office is at home so they can work all the time, and they end up working a lot more [00:31:00] than if they went to an office.  David Leary: I think there's a fine line of working remotely, and working at home, as well, because I work from home, and I wanna kill myself a lot of times because it's just- it's hard. There's a lot of distraction. But, if I go to a Starbucks, I'm working remotely, and nobody bothers me, and I get a lot done. It's almost like I sit down, and you can really get into the zone, but it's a lot harder to get in that zone sometimes, at home, when there's distractions.  Blake Oliver: When I have my best days are when I will [00:31:30] sit down early. I wake up, and the first thing I do is grab coffee, and I go sit in front of my computer, where I'm sitting now, in my office, and I'll knock out a solid two to four hours of stuff I really just need to get done without distractions. Then, once you've done a few hours of really what some people call flow work, you're exhausted. So, I'll take a break. I'll go have lunch or brunch; get outta the house; then I'll work at a Starbucks for a few hours. [00:32:00] Then, I'll come home and finish up. Changing that view really helps, I think; it also helps you feel less lonely.  The collaboration/communication part, that is a significant challenge; although I would argue that it can be just as difficult in an office, depending on the size of your company. You definitely, if you have remote workers, you need to have better processes than ... You can't rely on the ability just to walk over to somebody's desk and find out what's going on. You've gotta have more defined ways of communicating. Where do you think, [00:32:30] David, since you're making guesses ... Where do you think people primarily work from when they work remotely? Starbucks?  David Leary: Oh, the physical place ... I was gonna say at their- I think it's gonna be at their house, probably the number-one place.   Blake Oliver: It is.  David Leary: Then, I would say, probably on the couch; if people are being honest ... I'm willing to bet and guess many people do it on the couch.  Blake Oliver: Well-  David Leary: While Netflix is on.  Blake Oliver: -couch is not listed here, but 80 percent of people who work remotely work from home, primarily; nine percent work at the company's office; so, [00:33:00] I guess a different office than your team? Seven percent work at coworking spaces; only three percent work primarily from coffee shops, which I totally get. That's impossible to get ... You can't work full-time from a coffee shop; although, I think there's lots of people in my neighborhood who do because the Starbucks is always jammed.  David Leary: The other interesting thing is, even at companies, when you're in the office ... I remember having this experience at Intuit; you go to a meeting, and the Intuit campus is gigantic, and people just don't have the time to walk to the meeting, [00:33:30] so they end up dialing in remotely. Even though they're at the office, they're still attending meetings very remotely.  Blake Oliver: That's pretty funny, right? Yeah [crosstalk]  David Leary: -so even people at the office are getting the remote experience.  Blake Oliver: Yeah. We would do the same thing when I was at the firm down on Wilshire Boulevard. My team would be- there'd be a wall between me and my team, and we would all just dial in on Zoom because it was easier than trying to get everyone around a desk; we all had our stuff at our desks. It just makes so much sense. Some insights from the report, okay? The [00:34:00] big question is how do people overcome the challenges of remote work, and why do people not recommend remote work? What are the issues, and how can we fix them? The number-one issue is when teams are split between offices and remote workers.  This is something you'll hear from a lot of folks who run remote companies is that if you're gonna do it successfully, and if you want those remote workers to feel included, it's actually really important that you don't have an office, or if you do have an office that it's not required that people go there.  Because you don't want your company [00:34:30] split into two groups, where you have – here's my group of people in the office who all have really great relationships and have that traditional office style of working together. Then, here's the remote team, which are like second-class citizens, and they don't get to know what's going on; they miss out on stuff. Those people feel really lonely. If you're gonna do remote, you need to really go all in on it. It's kinda like dropping timesheets. It's kinda like changing your process to pricing fixed fees, or value-based. You can't really go halfway and make it work. [00:35:00] You gotta do the whole switchover to be really successful.  David Leary: Buffer is like a social media tool/company. Are they 100-percent remote, them as a company?  Blake Oliver: 100-percent remote, yeah-  David Leary: I think TaxJar's 100-percent remote- Blake Oliver: Zapier is [crosstalk] They're big. I wanna say they're like 1,000 people, and they are 100-percent remote. So, guys, if you think that remote work is just for small firms, or small teams, it's not true. There are some big tech companies [00:35:30] that have gone fully remote. You know why they're going remote? Because San Francisco is unlivable now.  There was actually just a story on CNBC about Twitter's CEO, Jack Dorsey. He said that San Francisco is just unsustainable and that they're not planning to expand the Twitter offices in San Francisco anymore. They're gonna go everywhere else, and they're gonna have a distributed team. His other company, which is Square, which everybody is familiar with from their point-of-sale, they are not opening offices in San Francisco. They recently opened a new office [00:36:00] in Oakland. They're not going that far away from the Bay Area, but it's certainly a lot cheaper.  We have this experience, too, at my company, at Jirav; San Francisco headquarters but we're not gonna expand there; no way; too expensive. Even L.A. is cheap compared to San Francisco [crosstalk]  David Leary: Even L.A. is cheaper ...  Blake Oliver: Yeah.  David Leary: Did this get into any tools?  Blake Oliver: Solutions? Well, obviously, they recommend Buffer for using your social media because it's- you know, Buffer's the company that created this report. But, you and I can talk tools, David. We collaborate [00:36:30] remotely. We use Slack; we use Basecamp-  David Leary: This is where I was heading with Slack, right? I've questioned it. You've questioned it. I've started to talk to other people that are questioning it. It's almost like Slack's a little outta control, and the benefits you had from Slack before are starting to go away. It's starting to just feel like another big old inbox. Then, if you're in multiple Slacks, and you can't find things ...  Blake Oliver: Oh, yeah, it's-  David Leary: Is Slack ripe for disruption from a different app? I've started to, in my head, digest what else could I be using?  Blake Oliver: I saw a headline that IBM is signed up [00:37:00] for Slack now, and I feel like that means that it's the beginning of the end.  David Leary: Oh, it's tipped; okay.  Blake Oliver: They're gonna put something- hundreds of thousands of people on Slack, and ... Yeah, I think the problem with- it's certainly better than email, and it's a solution we need, but it hasn't solved email, and that was what Slack aimed to do. They were like, "We're gonna replace email," and then, they never did. It just became yet another communications channel we have to manage. So, I think there's still a solution out there? Hopefully, somebody can figure [00:37:30] that out.  After years of using Slack, I think the big problem is when there's just way too much communication going on in Slack, and people- you've gotta train people in your organization when is the best time to use instant chat, or team chat, and when is the best time to use email because you don't wanna be distracting people constantly. This is one of the problems with remote work; if you have your chat app open, it's just as distracting as being in the office and having conversations happening around you all the time.  We gotta figure out how do we now when communication should be asynchronous, [00:38:00] meaning I am not expected to reply immediately to it; maybe I have a 24-hour period. Then, you have communication that really is priority. I would say that 80 percent of communication is not high priority, or more.  David Leary: I'd argue that there's people I'm on Slack with that I've been communicating via text messages a lot more in the last four to eight weeks; so something obviously has shifted to where- it's almost like, "Hey, I want them to see this message," or I need actually to- I really need to communicate with them, and Slack's just not good [00:38:30] enough for that anymore. I don't know, it's something to keep in mind and watch. I don't know if we have to beat this up today.  Blake Oliver: Yeah, no, we'll keep talking about it, but yeah, that's my- because you brought it up, I gotta say, that's my main complaint with Slack is that if I open a message on my phone, it's marked as red. If there's something I needed to do, it's not easy to keep that in an inbox, or keep that in a queue. I have to star it, and then remember to go to my starred messages, or I have to set a reminder. It's not good for actually tracking work that needs to get done.  David Leary: Versus an inbox; it'll just sit in your inbox [00:39:00] for the rest of your life [crosstalk]  Blake Oliver: That's the thing about an inbox- yes, the inbox may get full and cluttered, and then it's a pain to clear it, but at least you are assured that you're not going to lose a message that you read because it's there in that inbox.  David Leary: Well, I think there's that feature of Slack, I think it's on by default, where all the messages just go to your inbox, and you can reply to them in your inbox; so you could actually just never actually use Slack anymore, but just have all the messages run through your inbox, and you just [crosstalk]  Blake Oliver: Oh, in my email?  David Leary: In your email, yeah.  Blake Oliver: Then, that's worse. That's the worst, because you can't reply from your inbox, so then you gotta go back to [00:39:30] the app. It just- it makes things even worse. Anyway, we're not gonna solve the world's problems in that regard today.  David Leary: No. I have two small app updates that were kinda interesting, but then, I do wanna talk a little bit about the UK. I don't know what else you have on your plate.  Blake Oliver: There's just one thing I wanted to add to that remote work discussion-   David Leary: Oh, yes.  Blake Oliver: -which is something that we don't often bring up; a lot of times, we talk about work/life balance; we've talked about the talent shortage; how accounting firms, bookkeeping firms, in particular, [00:40:00] are gonna have trouble attracting and retaining talent, and that's one reason that remote work is important. It can help you attract folks who don't wanna commute. There was a stat recently in the Wall Street Journal in an article called, "Smallest U.S. Firms Struggle to Find Workers." Businesses with fewer than 20 employees – in 2019, their headcount was essentially unchanged. When you compare that to bigger companies, companies with 500 or more employees, they grew their workforces by 2.3 percent in January, and they grew their workforces [00:40:30] in 2019.  The economy's good; businesses are expanding; but the small businesses have not been able to hire and aren't able to compete with the big companies that can offer big benefits. So, remote work is a real option; a way that they can – the small businesses – compete. Also, investing in software was mentioned in this article. The quote is, "Some small companies are using software to drive efficiencies that keep headcount down and allow companies to remain competitive. North Carolina Trailer Sales, Inc. [00:41:00] invested in new software that cost $15,000 a year to streamline bookkeeping and other administrative tasks." They don't say what that software is-  David Leary: Sounds like an ERP.  Blake Oliver: Yeah, sounds like an ERP system, right? More companies willing to spend on software. Outsourcing is also mentioned. "Other companies are taking advantage of a boom in service providers willing to handle functions such as human resources and marketing. Altraco, a contract manufacturer in Thousand Oaks, California outsourced accounting in 2019, and this year plans to shift [00:41:30] logistics, and the creation of artwork, and presentations to third parties." Software; outsourcing ... Outsourcing, too, is like a remote work kind of think, if you think about it, right? They're not your employees; they're contractors, but they're not in your office.  David Leary: Yep.  Blake Oliver: One more thing I wanted to add – this was an article in Forbes, called, " Remote To The Rescue: How Virtual Jobs Are Saving The World." It reminded me that there are benefits to the earth from remote work. Remote work saves 3.2 metric tons [00:42:00] of carbon emissions and 313 gallons of gasoline per remote worker per year. So, if you are a climate-change advocate, and you wanna save the world, you can make your employees' lives better, and you can reduce your carbon footprint by letting people work from home because they're not commuting; they're not polluting. Lastly, another benefit of remote work that isn't brought up a lot is its promotion of diversity and inclusion; because when you measure people based on results, [00:42:30] the color of their skin, or their gender is less important. Also, when people aren't in an office all the time, that is not as visible-  David Leary: Or hygiene.  Blake Oliver: -so people's work ... Or hygiene. That's right. You have to have systems to measure work product, which is hard, but yeah, it's better for top performers because they don't get judged based on superficial traits.  David Leary: I have two small quick app news- [00:43:00] Kashoo, are you familiar with Kashoo? K-A-S-H-O-O?  Blake Oliver: Uh, gesundheit ...  David Leary: They're a cloud-accounting software app. It's been around- I feel like it's been around at least a decade. It's been around a long time. They released some new tools. They have now added machine learning to categorize and reconcile expenses. They're saying data entry is virtually eliminated. Then, they're also gonna do some OCR – take a picture of a receipt, upload it right into the app. They're consolidating, arguably, things that were done by third-party apps into their [00:43:30] one app.  Reading it, it's hard to tell ... This is just kinda normal cloud-accounting stuff - other than the OCR – that everybody else has been doing, so I don't know ... What was Kashoo doing before? I've never actually used it; I just know they've been around. I've always thought it's bank feeds, and they pulled down transactions.  Blake Oliver: Yeah, I think similar to Xero, QuickBooks Online; more for those micro-businesses, though? I got some app updates, too.  David Leary: Okay.  Blake Oliver: Square has released progressed invoicing. [00:44:00] So, now you can send an invoice and set up milestones; then, you can progress invoice your clients.  David Leary: Wow.  Blake Oliver: Yeah, right? It's something that people have been asking for, forever, in a lot of apps, and Square just does it. They just go and do it. Nothing stops them. Then, Xero has a couple updates. Xero Expenses has mileage. That's now in open beta. You can track your mileage in that Xero Expenses app.  Then, you can now attach a file to a Spend Money transaction on [00:44:30] your mobile device. This is something that was really requested; when you're reconciling on the bank feed, you can now open up that transaction you create, and you can snap a picture of a receipt and attach it. It changes the workflow from having to submit the receipt first and then reconcile.  David Leary: Yep.  Blake Oliver: Makes a lot of sense because I don't save all of my receipts. David, I know you're crazy, and you save every receipt. I just wanna go in, when I'm reconciling, take a picture of any of the bigger items, like my hotel bill.  David Leary: Well, one day, when I hire [00:45:00] a- I outsource my bookkeeping work, I'm gonna be an ideal client. There's gonna be a lot of demand to take me on because my stuff's all nicely organized, and I have good habits as a client-  Blake Oliver: Except, you'll know how it should be done, so you'll complain when it's not done properly.  David Leary: Not done properly or on time ... "This is taking too long!" File this one under banks becoming GLs. Joust - like joust, the event on horses [crosstalk]  Blake Oliver: Or the famous computer game. [00:45:30]  David Leary: Oh, yes, exactly. They've launched a banking app for freelancers. They're actually part of an invoice-guaranteeing company called PayArmour. I don't know if you've ever heard of [crosstalk]  Blake Oliver: No, I've never heard of it.  David Leary: -to help collect ... It's invoice-factoring to collect unpaid invoices. Basically, this app is now ... It has an FDIC-insured bank account combined with a merchant account, but it also does ... You get your debit card; you get bill pay; you get savings, and goals; you get a dashboard; you get client management; you get invoices and invoice factoring. It's your bank account, your bank [00:46:00] app, but it's your full-blown ... It's pretty close to a GL. We just keep seeing this every week.  Blake Oliver: Did they start as a bank?  David Leary: I think they started as a invoice-factoring company, and then worked with a bank to spin up this Joust app.  Blake Oliver: Got it, and who's it for? Who's using this?  David Leary: Small businesses; freelancers.  Blake Oliver: Freelancers [crosstalk] small business is a big category; so, is it [crosstalk] Got it.   David Leary: But it's just that same march we keep seeing every week. Banks wanna [00:46:30] be GLs. GLs wanna be banks.  Blake Oliver: For freelancers, I totally see this app/bank/plus accounting system/plus invoicing system being the winner, among freelancers, for sure; because their needs are really simple, and it's totally doable. They just need to categorize their expenses, send invoices, get paid, manage their money. Somebody's gonna get millions and millions of customers if they can lock this down.  David Leary: Then combine it [00:47:00] with probably some human piece; some human bookkeeping type level of support; some small add-on on top of it.  Blake Oliver: You really may not even need to because this is the one thing that AI is really good at, and ML - like you just said with Kashoo - is categorizing transactions. If you have a big enough database and you have enough people who are manually categorizing – just some of them; a fraction of them – you can automation categorize the rest. This is not complicated to look at a bank statement line and figure out what category it should go to, especially if you've got a standardized [00:47:30] Chart of Accounts. That's the trick.  David Leary: That's the key is standardized accounts across the board because I'll tell you what ... Mint ... I've given up. I don't even correct transactions anymore. I just don't care. I know that it categorizes them based on what the crowd categorizes things on, and it's just ... It's always a hassle. It's never right.  Blake Oliver: That's the trick – standardized Chart of Accounts; then, have some human verification, a little bit of it. Anyway, that's all I got this week. How about you, David? Oh! We didn't read our reviews! [00:48:00] David Leary: We have to read reviews, and then we can talk UK. What do you wanna do [crosstalk] Let's read the reviews and get back to our Valentine's theme. There's a lotta love in there.  Blake Oliver: Yeah, let's read some love notes. So, we got one here on Apple Podcasts. This is from CPA in YYC. "I recently began researching starting my own accounting firm and listening to this podcast has helped affirm I am on the right track and has kept the impostor syndrome to a minimum. I particularly enjoyed the dive into what the heck is goodwill, and how do we keep our designation relevant?" That's from [00:48:30] Ian Folinsbee, CPA, CMA, and founder of MetaQuants Inc., in Calgary, Canada. Awesome! Thanks, Ian, for listening, and I’m glad you liked this discussion. Sometimes, I think, when I talk about FASB, and goodwill, and the PCAOB, that nobody actually cares about this stuff. It's good to know you do.  David Leary: I usually go out and get something outta the fridge and come back when you're going off on that.  Blake Oliver: That's David's snack time.  David Leary: I have an interview ... Interview, sorry! I have a review that was on Podchaser. [00:49:00] This is five stars. It's from Marc R. Bruce: "A big thank you to David and Blake for an amazing podcast. You're absolutely making a difference in the world of cloud accounting and bookkeeping. I'm an Australian, living in Asia, working with accountants and clients across the region to help them with their transformation journey. This podcast has become a very important source of ..." Blake Oliver: Then it cuts off?  David Leary: That might be the whole thing. He might've ran out of characters. I don't know.  Blake Oliver: Well, thank you, Marc. Last one is from Cliff Mitchell; five stars; on Podchaser, as well. "David and Blake are running the best podcast [00:49:30] in cloud accounting. They have a deep understanding of the app and accounting landscape and are both entertaining personalities. They also like ClockShark, which is obviously the best time-tracking app for cloud accounting." Thank you, Cliff, for listening and taking advantage of our offer to read your review on the air, even if it is obviously totally promotional! It's smart! You get a free ad. Write a review.  David Leary: Actually, I think ClockShark's sponsoring next week, so [crosstalk]  Blake Oliver: Oh, thank you, ClockShark! That's awesome. I've heard great things. [00:50:00] Last story, you were gonna talk about the UK, right, David?  David Leary: Yeah. I don't know if you heard, FreshBooks is launching in the UK.  Blake Oliver: I had not heard that. Wow! That's a big deal [crosstalk] Oh, I knew they were going international, yes, but I didn't know where.  David Leary: Yeah, so they work in the UK. They work globally; but they've actually added functionality to support making tax digital, which is the big push in the UK. If you step back and you think about Intuit's claim – they're beating Xero in the UK now ... So, FreshBooks in the UK, that's fine. That's one of the articles.  Then, there's a related article that was [00:50:30] published in the Australian Financial Review about how an accounting software minnow says it can prosper in Xero's shadow. This is-  Blake Oliver: A minnow?  David Leary: A minnow. So, if you've really been following any of the news lately, Receipt Bank, they took that huge round, and they've been on the press tour; Receipt Bank's founder has been on the press tour spouting the virtues. This article's interesting because it touches a little on that concept of what happens when an app- so, Xero bought Hubdoc, [00:51:00] right? When there's other players in that space ...  Everybody has Xero, Intuit- everybody wants to be an open ecosystem, but if you really read this article deeper, it goes a layer beyond this, "Oh, it's all fair, and it's okay." There's a quote from Steve Vamos. He's Xero's Global CEO. He talks about how Hubdoc and the automation of ingesting documents and data is core to the vision they have at code-free accounting. In Australia and New Zealand, they built it. But in the UK, they did not [00:51:30] have time to build it, so they just wanted ... They just wanted to get something in market, and that's where buying Hubdoc came in because they want to win the UK and make progress there.  Then, on the other side, the Receipt Bank ... Their quote: "In Britain, most British accountants and their small business clients in that country still use desktop software; but Mr. Blair said the trend is firming towards greater reliance on real-time data." The line in the sand's starting to – for the UK as a battleground – is getting kinda declared.  Blake Oliver: So, the [00:52:00] line is ...  David Leary: It's not really a line in the sand, then. The stake in the ground. Xero purposely picked up Hubdoc to go after the UK market. Receipt Bank is in the UK market. If you tag this on to another article from Receipt Bank ... Remember, we covered about Receipt Bank; I think they have their own credit card?  Blake Oliver: Right; not here, though, in the U.S..  David Leary: Just in the UK-  Blake Oliver: In the UK.  David Leary: Yeah. So, Receipt Bank in the UK has two products. They have ... Well, they have a credit card product, which they are now killing; but they also have – I don't know if you knew this or not – kind of [00:52:30] like a QuickBooks Self Employed product, like a small version of a GL-type- Blake Oliver: I didn't know that.  David Leary: -full-blown product; it's like a standalone product. This article, they talk about how they're killing their UK product, but if you read it, it actually hints towards them doing two other things. I'll read that part of the quote here; this is Receipt Bank Director of User Adoption, Ben Martin. "Martin stipulated that it does not mean they're pulling back in all terms of payments and hinted that there may soon be news from Receipt Bank on that front."  So, they're killing the credit card [00:53:00] over here on their left hand, but they might be doing something more, payments-wise, on the right hand. Then they also, in this article, have talked about how they're involved in the bank feeds. They're gonna be adding bank feeds to Receipt Bank as part of the open banking initiatives in the UK.  Blake Oliver: Hmm. They're gonna go head to head with Xero. That's what this sounds like-  David Leary: This is what it feels like; like Xero-  Blake Oliver: I think they have to, to survive-  David Leary: -Xero, Intuit, Sage, FreshBooks ... The next battle we're gonna be following for the next six to eight months is [00:53:30] the UK.  Blake Oliver: Well, if they're gonna do that, they gotta rebrand because they can't be about receipts and banks. I always wondered that about Receipt Bank; why is it called that? It makes sense, you bank your receipts with them; put in all your receipts, but they do so much more now. They do expense reports. They do- if they're gonna do GL, then they need a new name.  David Leary: Well, unless you plan on becoming a bank and get a bank charter, right?  Blake Oliver: Oh, yeah.  David Leary: They might be a step ahead! Right?  Blake Oliver: Maybe.  David Leary: You're right [00:54:00] [crosstalk]  Blake Oliver: Maybe this was all planned from the beginning.  David Leary: That's right. You take these three articles together, and you start piecing it together, it's like, oh, yeah, everybody's lining themselves up for this battle in the UK. The lines are being drawn.  Blake Oliver: Well, maybe we can get ourselves out there. We are going to some events this year. Is there anything we can share with our listeners?  David Leary: We are gonna be attending BQE Succeed.  Blake Oliver: That is the second week of June. You can learn more at We're gonna be doing a keynote.  David Leary: We gotta write that; get that done. [00:54:30] Blake Oliver: Yeah, we gotta get that up on the schedule.  David Leary: We'll have more [crosstalk]  Blake Oliver: That's all we've got-  David Leary: We have to get the-  Blake Oliver: Yeah, that's all we've got on the schedule right now. If you wanna reach me or David and complain, or send us an article, or just say hi, you can connect with me on LinkedIn. I'm on Twitter: @BlakeTOliver. When you do connect with me on LinkedIn, please say that you're a podcast listener. That helps me figure out who's real and who's a bot. You can also email me at How about you, David? [00:55:00]  David Leary: Twitter's probably the best and the easiest: @DavidLeary; but also, a lot of people have been using LinkedIn because I think they are just on LinkedIn and not on Twitter; so I'm totally open to that, as well.  Blake Oliver: Well, David, Happy Valentine's Day, again, and until next week, see ya later.  David Leary: And hugs to all our listeners. Happy Valentine's Day to all of you!  ____________________Time for the classifiedsHigh Rock Accounting is searching for rock stars. We’re a growing accounting firm looking to increase our team. Our ideal candidate will be self-motivated, eager to learn, and grow with the firm. We help businesses succeed by utilizing cutting-edge technology to provide accounting solutions that increase business efficiency and competitiveness. Our goal is simple – enhance accounting operations, improve accuracy, and reduce costs. As a High Rock star, you'll be responsible for full-cycle accounting in a cloud environment. E-mail That's careers@ One of the biggest hurdles accounting firms face is finding training that is current and relevant. There is an answer - Elefant Training. Elefant offers webinars and training on Xero, QuickBooks, and cloud-based apps and modern practice management issues like remote leadership and creative compensation. Their instructors are firm owners who also happen to be international experts in cloud accounting.  This year, Elefant is offering recordings of their most popular webinars, plus valuable resources in their brand-new learning library. You can use code "CAP20" for 20 percent off your subscription. Bulk licenses for firms are also available. Visit for more info. That's ______________________ Are you looking for more great cloud accounting content? Ryan Lazanis started and sold his own cloud-accounting firm in just five years. Now he helps firms stay on the cutting edge through his free weekly email, curating the top five pieces of content that help modernize your firm. Visit to sign up. That is Accountants and bookkeepers, are you itching to make a career pivot and escape the 9-to-5 grind and the [00:53:30] busy season stress and start to build your own career path where you work virtually on your own terms? Then you need to get your copy of the newly released Bookkeeping Side Hustle Guidebook and learn actionable steps to become a virtual bookkeeper without the overwhelm. Cloud Accounting Podcast listeners can get the e-book for 30-percent off with the code "CAP30OFF." Get your copy at _____________________ Want to get the word out about your newsletter, webinar party, Facebook group, podcast, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad. Hit the show notes, and the links to get more info.
Sponsors BREX: Edgewood Business Solutions: BQE Succeed: Show Notes 03:03 – Oh, my! What big FAANGs you have!  These five tech players have a combined $4.1 trillion market cap | Investopedia  05:22 –  Setting the accounting world on fire – well, at least part of it | Sawyer County Record 06:09 – Cash is still king in NYC | NYT 08:06 – How the Astros brought their C (for cheat) game | WSJ  13:49 – Sage Marketplace offers over 100 ways to customize Sage Biz Cloud | Sage 14:14 – Gusto Cashout service is now free for employees | Gusto 16:05 – Acumatica beefs up its payroll features and integrations | Accounting Today 18:04 – KPMG buys stake in LumaTax | Accounting Today 19:00 – Visor takes a new approach with Get Grid | Get Grid 22:47 – Etsy – "Mistakes certainly do happen ..." continues plaguing sellers with an array of accounting headaches |  eCommerce Bytes 23:37 – Facebook and the IRS square off over a measly $9 billion | WSJ 28:31 – Pioneer Bank faces the music for its actions, or lack thereof re: MyPayrollHR | The Daily Gazette 30:42 – AICPA see deregulation as a huge threat to CPA licensure | Accounting Today 38:06 – Help Wanted – Intuit is looking for QBLive bookkeepers, and they're not afraid to advertise inside of QBOA | Facebook 41:28 – BOA could hit Intuit where it hurts | 42:30 – WePay – Scaling the Books? | WePay  43:30 – United Airlines takes a train-them-yourself approach to hiring | CNBC buys  43:45 – Try, try, try again - KPMG relaunches Spark | KPMG Spark 47:58 – Overruled - UpCounsel shuts down | LawSites 49:05 – Comings and Goings: Damien Greathead moves to Practice Ignition, and Jody Padar joins Botkeeper | Insightful Accountant/Accounting Today 49:43 – Jumping ship or business as usual? Intuit's Alex Chriss dumps a huge chunk of his Intuit holdings | Yahoo! Finance Chriss's Intuit trading history over the past year might provide some perspective | Wallmine 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, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! May 31 - June 3, 2020: BQE Succeed - Encore at Wynn Las VegasLimited edition shirts, stickers, and other necessitiesTeePublic Store: Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: Classifieds High Rock Accounting:  Elefant: Bookkeeping Side Hustle: Go here to create your classified ad:  TranscriptRight now, BREX is offering approved accounting partners the ability to offer their clients a $1,000 signup bonus and waive card fees for life when they sign up for a BREX Corporate Card. Stay tuned to hear more from our sponsor BREX later in the episode. Blake Oliver: Somebody would watch an in-game live feed and log the catcher's signs into the spreadsheet, as well as the type of pitch that was actually thrown. With that information, Codebreaker determined how the science corresponded with different pitches. [00:00:30] Once decoded, that information would be communicated through intermediaries to a base runner who would then relay them to the hitter. David Leary: I love this! I'm smiling so much right now, and the reason why is, obviously, you paid attention ... The Iowa caucus was Tuesday night ...______________________ This episode of The Cloud Accounting Podcast is sponsored by Edgewood Business Solutions. Are you a CPA looking to light your load this tax season? Are your firm's bookkeeping services in demand but your team doesn't have the capacity to take on more work? Are you looking to grow your practice now and beyond tax day? Edgewood Business Solutions is here to help. For over nine years, Edgewood has been specializing in remote white-label bookkeeping and collaborative services for California-based CPA firms. Edgewood's team of professionals can assist with ongoing, temporary, or project-based services. To learn more how Edgewood Business Solutions can help you increase your profitability and business growth while saving you those pesky overhead costs, head over to That is Cloud Accounting Podcast dot promo forward slash E-D-G-E-W-O-O-D. ______________________ This episode The Cloud Accounting Podcast is sponsored by BQE Core. If you're focused on niche clients that are architects, engineers, consultants, or lawyers, BQE is the app for them, and BQE Succeed is the conference for you to best connect with companies in those niches. BQE Succeed is happening from May 31 to June 3, 2020 at the Encore at Wynn Las Vegas. Listeners can get $200 off registration by using code "CAP2020." The Cloud Accounting Podcast will be there. Will you? Head over to That is Cloud Accounting Podcast dot promo forward slash B-Q-E-S-U-C-C-E-E-D. ______________________ Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: And I'm David Leary. another week, Blake.  Blake Oliver: Another week. The Ralph's across from me closed, David; our local grocery store. David Leary: Because [00:02:30] of Whole Foods? Costco? Blake Oliver: Apparently the rent is too damn high. That's what the employees were saying that there was a rent dispute. Apparently the rent on that grocery store is $200,000 a month. The owner, the landlord, wanted to raise it $50,000. So, Ralph's said no thanks, and the rumor on Nextdoor and all these neighborhood apps is that we're gonna get an Amazon store. David Leary: Wow. So, it is Amazon, then ...  Blake Oliver: Yeah, so ...  David Leary: It'll either be them, or Netflix, or Facebook, or Google, [00:03:00] or Apple, right? One of those five. I think I saw something this week that those five companies account for over 15 percent of the entire value of the tech value of all tech companies, now, or some ridiculous thing - those five companies. Blake Oliver: It's nuts. If an Amazon store does open, it'll be a grocery store, and I'm sure they'll have other things there, too. The thing that's really crazy about Amazon stores is there are no cashiers. They've completely - this is what I hear - automated the checkout process. You go in, you [00:03:30] scan a barcode on your phone that identifies you by your Amazon account - you have to have an Amazon account to shop there - then you go through the store, and you pick up your items, and a combination of cameras and barcodes help Amazon know exactly what's in your cart and what you've got. I mean, you could put it in your pocket, Amazon will know. Then you just walk out of the store when you're done, and it bills it to your Amazon account, just like you shopped online. David Leary: Now, have you been to one of those stores? Blake Oliver: No, no. I've heard about them, and I've seen walkthroughs and videos of them in Seattle. David Leary: We should [00:04:00] take a trip. It's gonna be a business expense. Blake Oliver: I mean, if one opens, then I'll definitely- I'll have to do a live video or something [crosstalk]  David Leary: Maybe in New York City. I don't know if there's one there.   Blake Oliver: I don't know. I was trying to do the math in my head on ... Well, if Ralph's thinks they can't afford the $50,000 more per month in rent, maybe Amazon doesn't care because what is $50,000 times 12? It's $600,000. Maybe they save that much in salaries, if they don't need 10 people working at the store. I have no idea what the [00:04:30] average salary is of a grocery store worker, but let's say it's $60,000, here in L.A.; then they can absorb that extra rent cost through automation. David Leary: Well, plus, I'm sure Amazon's much better at tracking you and what your purchasing habits are than Ralph's probably was-  Blake Oliver: Oh, yeah, and they can use that data to make more money- David Leary: -yeah, they're gonna monetize that.  Blake Oliver: So, anyway, what's new with you, David? David Leary: Nothing new with me, personally; just chugging along. I do have like 45 browser tabs, today, so we should get into the news here.  Blake Oliver: Let's get to your top story. David Leary: Top [00:05:00] story. I'll read the headline: "Fire Damages Wall at Accounting Office." Blake Oliver: Where is this headline? Is it ... Is this the Tucson Weekly News? David Leary: No, this wasn't in Tucson. This is from the Sawyer County Record. Blake Oliver: Sawyer County? Where is that? David Leary: Actually, to be honest, I don't know. I read the article three times. Blake Oliver: All right. David Leary: "A structure fire at Anderson, Hager, and Moe CPA building on Windmill Square on Highway 27 in Hayward, Saturday, [00:05:30] February 1, caused a small amount of damage to the building." So, essentially, a wall caught on fire. But the good news is, in a Facebook post, they thanked the Hayward Fire and Police Department for their excellent response time and professionalism. They said the fire was very contained, and they said that- they added that the company ... It's now February 3, and all files and computers were not damaged. They're ready for the tax season. Blake Oliver: All right. David Leary: So, any of you who thought you had a bad start to your tax season, at least you didn't have a wall start on fire.  Blake Oliver: Well, what caused the fire? Was it an on-premise server? [00:06:00] David Leary: It's undetermined. Blake Oliver: I got a story, a follow-up to the whole discussion around cashless stores that we've been having - last year in particular- David Leary: Like Amazon. Blake Oliver: Yeah, cash- exactly, like Amazon. Maybe this will affect Amazon stores. New York City last month, a couple weeks ago, banned cashless stores throughout the city. City council approved legislation that prohibits stores, restaurants, and other retail outlets from refusing to accept hard currency. They joined New Jersey, Philadelphia, and San Francisco, and [00:06:30] some other cities are considering similar moves. Massachusetts apparently - I did not know this - had a law requiring all retailers to accept cash and credit since 1978.  But, yeah, it's burdensome for cashless stores because the whole point of not accepting cash is you don't have to have multiple employees monitoring the cash. You don't have to worry about your employees getting held up at gunpoint. All that stuff. Now, businesses have to bear that burden. David Leary: Well, the loophole's just gonna be like Amazon. [00:07:00] You have to be a- it's a membership thing, and they just bypass whole thing. Blake Oliver: Well, so the exception in New York is that if you have a machine that will allow people to convert their cash into a card and they can use that, then you're exempt. So, maybe there's a business here. Somebody should start this - really affordable ATM machines that'll just convert cash into like debit cards, or- David Leary: Well, those exist. I'm sure Ralph's had one. You take your coins, and you dump it in, and it gives you that little gift card and code, and you take it [00:07:30] up to the cash register, and you pay for your groceries with it. So, this does exist ... So, don't start that as a business! Somebody already has that market. It's done. Did you know that those guys also are the Redbox guys? Blake Oliver: The Redbox guys? David Leary: That's the same guys.  Blake Oliver: Oh ... Well, it makes sense. They have expertise building those machines, right? David Leary: Yeah.  Blake Oliver: Well, maybe little ones that go on the counter, next to the Square point-of-sale? Maybe Square should build one. David Leary: Little miniature ones. Blake Oliver: Anyway ... What else? Oh, baseball! David, [00:08:00] are you a baseball fan? David Leary: No, but I know it exists, and I heard there were some cheating recently. Blake Oliver: Living in L.A., it's hard to escape this. Apparently, the Houston Astros were cheating during the World Series and for a long time before that; they were stealing signs- David Leary: Maybe they were cheating against the Dodgers, right? Blake Oliver: Against the Dodgers, yeah, yeah.  David Leary: That's why it's in your news. Got it.  Blake Oliver: I'm not much of a baseball guy, but I do know that we have one of the best pitchers in the league, and why [00:08:30] were the Houston Astros hitters so good at hitting the balls he was throwing? Because they frickin' knew what was coming, because the Astros were stealing signs. The reason I bring this up is because an article in The Wall Street Journal detailed, recently, how they used Microsoft Excel as their code-breaking app. They literally called it Codebreaker. It was a spreadsheet. Get this, it was created by an intern. It was in Excel-based application programed with an algorithm that could decode the opposing catcher's signs, and it [00:09:00] was called Codebreaker. The way it worked was simple. Somebody would watch an in-game live feed and log the catcher's signs into the spreadsheet, as well as the type of pitch that was actually thrown. With that information, Codebreaker determined how the signs corresponded with different pitches. Once decoded, that information would be communicated through intermediaries to a base runner, who would then relay them to the hitter. David Leary: I love this! I'm smiling so much right now, and the reason why is, obviously, you paid attention- the Iowa caucus was Tuesday night, [00:09:30] or Monday night? Blake Oliver: The disastrous Iowa caucuses. David Leary: The whole time, I'm thinking, why didn't they just track this in a Google sheet, or an Airtable, or Microsoft Excel? Blake Oliver: I was thinking the same thing! They could have set up a Google Form. Everybody just goes to this URL, enters their email address to identify themselves as - whoever's in charge of that caucus; that particular one - and just fills out a form with the vote totals. David Leary: It's insane. So, the lesson here, for our listeners in your space- Blake Oliver: Wait ... Before we get to the lesson, [00:10:00] let's talk about this, because I don't think people know just how dumb it is. There was an app involved, right, David? David Leary: Yeah. They paid to have a custom-built app. Blake Oliver: They paid $60,000 to have somebody build an app, and the app had one job. All it did was- as far as I can tell, all it did was let you input your vote totals and report them, right. So, it's basically just a form with a spreadsheet. David Leary: Yeah. Blake Oliver: And somehow they [crosstalk] screwed that up.  David Leary: Yeah, under the covers, it probably is just a spreadsheet. They're dumping [00:10:30] this to CSV file somewhere. We can go off and on about the ability install the app and all this other stuff, but the real lesson here is: if you can do something with Excel, don't build something else to solve it already. Then, the other part- or the same part of that thought that ties back to our industry is how come we always see like the Big Four- the Academy Awards are coming up this weekend, right? The Big Four, somebody - EY - somebody is gonna be there with their metal suitcases and their handcuffs on. "We counted the votes." How come they're never around for real vote counting? The [00:11:00] exposure would be just as good. Blake Oliver: Because the only reason they do it for the Academy Awards is because they want to hang out with celebrities. David Leary: Ohhh ...  Blake Oliver: The Democratic party doesn't want to pay some- like three Ernst & Young partners $500 an hour to sit around tabulating votes. David Leary: That's true. I'm sure the- Blake Oliver: In Iowa.  David Leary: If somebody at a Big Four was to quote them and build that app for them, it would work, maybe ... Possibly ... Maybe not. But it would probably cost $600,000, not $60,000. Blake Oliver: So, [00:11:30] I have a story kind of related to this. When I was in college, we had a ski club. Northwestern University- and it's a big ski club. It's like a huge thing, like a huge percentage of the students go skiing every winter break, and the ski club organizes it and decides where to go, and books like an entire resort, pretty much- David Leary: It's a big party. Blake Oliver: A good chunk of it. Yeah, it's a big party.  David Leary: It's not skiing. Blake Oliver: We don't have spring break. We do the winter-break thing. The way they organized this was brilliant. For the room reservations, in the grouping, to sign up for it, it could be really complicated because [00:12:00] you could sign up by yourself, but then you'd be rooming with people you don't know. You wanna go with people you know, because there's like hundreds of kids going on this trip. So, you get your group together and then, the way that you make your reservation was just you go into a Google Sheet that was public. It was a Google Sheet that was public to the university; so, if you had an email at the university, you could use it.  You'd just go in, and make your changes, and put in what your group was, and all this stuff. They simply had a rule- when they sent this out, they said, "We're gonna look at the audit trail, and if anyone [00:12:30] screws around with anybody else's reservation in the sheet, you're out. So, if there's any funny business, we're gonna know because we're gonna look at the audit trail." They never had any issues because everybody knew, "If I mess with the spreadsheet, they're gonna find out, and I'm gonna lose my spot." It doesn't have to be complicated. They could have just done that at the caucus. They could've just given everyone- David Leary: I've thought about that, too [crosstalk] Just make the whole thing public. Everybody ... Then, it'll be 100-percent visible. There'd be no- This is what I like about Firefox and open-source code, right?  Blake Oliver: Yeah. They could [00:13:00] have just actually made this spreadsheet public to the whole world. The only people who could edit it would be the heads of each caucus, the people responsible for reporting for that group. Why would that be a problem? You could look at the audit trail and see if anyone changed any numbers that they weren't responsible for. [crosstalk] I know! Maybe they shoulda used blockchain. That would've been great. David Leary: They coulda hired this- the intern from the Houston Astros. Blake Oliver: Yeah, I know. Isn't it great, though, that an intern wrote that spreadsheet? I feel like this will be a movie someday, and it's gonna be like Moneyball, but the [00:13:30] bad-guy version of Moneyball. David Leary: With Moneyball, I'm sure was all in Excel, as well. Blake Oliver: I'm sure it was, yeah.  David Leary: [inaudible] download an app for that? Should we get ...?  Blake Oliver: Well, yeah ... What's next? David Leary: Should we just run through a lot of app news? There's a ton!  Blake Oliver: Yeah, let's do it. David Leary: So, Sage, they're relaunching their Marketplace. They built a new Marketplace on the AppDirect platform. It's gonna ... "Sage Marketplace gives more than 2 million Sage customers access to hundreds [00:14:00] of trusted apps. They're all tested and verified by Sage." Blake Oliver: Which GL is this, though? All of it?  David Leary: It seems like it's kind of all of them. Blake Oliver: Okay. David Leary: Yeah. Blake Oliver: So, whatever Sage system I'm on, I can go find apps that work with it. David Leary: That's what it looks like. Blake Oliver: Oh, cool. What else is new? Gusto sent me an email telling me that Gusto Cashout is now free. We've talked about this. Cashout is the service they have now for employees, where employees can 'Cashout' their [00:14:30] earnings in advance of their paycheck. So, it's like a payday loan, but it's totally free.  David Leary: Not really like a payday loan. Small businesses used to always do this for employees. They would give an employee an advance and then deduct it out of the paycheck on payday.  Blake Oliver: Right. So, Gusto is ... What I love about it is that an employee, instead of having to go to the business owner ... It's a little bit humiliating, potentially, and it's also annoying for the business owner to have to keep track of this. They can just go into Gusto, and Gusto will let them take, I think it's up to, $1,000 per [00:15:00] paycheck. Then, as soon as their paycheck actually is issued, it is deducted. It used to cost a fee, and now they've made it free. David Leary: What I love about this, from an innovation standpoint, is remember way back in the day, I used to do tech support for QuickBooks Payroll, and customers ... Small business owners had a hard time wrapping their head around this because you have to basically create a pair of payroll items - one to give the loan, and one to deduct the loan. That'd have to go out to a watch account, so you could track what each [00:15:30] employee's doing. Then, you'd have to create a custom report with different targets, so they could actually see how much was left on the loan they gave the employee. It's just a lot of burden to do, and it's very mistake prone. So, if they can take this off the small business owner's back, I think it's really cool that ... It's a really smart, well-thought-out feature. Blake Oliver: Well, and then, God help them if they accidently made one of those items taxable; they didn't do it. David Leary: Yep.  Blake Oliver: Yeah, it's much easier. I got another one. Are you familiar with Acumatica? David Leary: Yeah, they [00:16:00] play in the space, like Sage Intacct; they're in that space. I think, actually, they were acquired by private equity recently.  Blake Oliver: They're a cloud ERP system, and they specialize in manufacturing; a lot of manufacturing on Acumatica. They released a new payroll module. It allows controllers or accountants to run their own in-house payroll. You can do salaried and hourly workers, integrated taxes and tax forms, deductions and benefits, certified wages, union wages, timecard integration with overtime rules, and flexible payroll periods. They [00:16:30] also have updated their Manufacturing edition, which makes sense given the emphasis on manufacturing. Something that really was interesting to me, that they announced also, were new integrations, including Smartsheet. David Leary: What is Smartsheet? Blake Oliver: Smartsheet! It's like ... I thought you would know this one, David. David Leary: Oh!!! I thought ... Okay, yeah ... Yeah, Smartsheet, the app. Blake Oliver: Yeah. David Leary: Yeah, I guess I thought they were creating their own thing and that was their branding. I got it. Sorry. Blake Oliver: Yeah, no, so this is the original ... Smartsheet's been around [00:17:00] forever. They're the super-powered spreadsheet app where you can build your own really crazy database, essentially - custom - that looks like a spreadsheet. It does a lot of other stuff. Now, you can integrate Acumatica and Smartsheet to, I guess, update stuff- like give access to update stuff outside of Acumatica and then sync it in and stuff like that. David Leary: So, that makes sense because I think Smartsheet, their sweet spot is CFOs and finance departments. That's really who loves- who really [00:17:30] utilizes it a lot. They even use it to manage their workflows; they manage data and create reports. So, that would make sense that if an ERP that's at that level, if they were gonna pick an app to integrate with, it would be Smartsheet.  Blake Oliver: Also, integrations with big commerce - for e-commerce - Adobe; you can work with Adobe Docs inside of Acumatica now. They also announced an alliance with BDO. So, BDO is gonna provide advisory and consultation services, in addition to the Acumatica resellers that already do the [00:18:00] integration and selling. David Leary: Want me to jump in? Blake Oliver: Yeah. I mean, have you got anymore app news?  David Leary: KPMG bought a stake in LumaTax. It's in that same group with TaxJar, or Avalara. LumaTax is attacking a little bit differently. They're really trying to attack it almost like from a bank feed's perspective. You connect it to all your stuff, your e-seller shopping carts, et cetera, and it just goes and pulls the data in and then works backward to create your sales tax liabilities, so you can pay them. That's the gist of it. Obviously, it's probably a bit more complicated [00:18:30] than that. KPMG invested in them and bought a stake of it. Blake Oliver: Visor Tax. We haven't talked about them in a while. Really, it might have been over the summer that we talked about them. No, in the fall, right?  David Leary: I think we did talk about them in the summer because I think sometime mid-summer people were finding out they got audited., and they can't get ahold of anybody at Visor Tax; I think we talked about them once mid-summer, but essentially we talked about them a lot last April because it was tax deadline date, and they weren't filing people's taxes. [00:19:00] Blake Oliver: Yeah. So, Visor, for those who aren't in the know, is one of those hot - or at least they were hot - modern tax startup/tax with an app. You pay $100; you take a picture of your forms; and they do your taxes. Well, it didn't quite work out. A lot of people apparently never got their taxes filed, or it was late, or just massive issues. Kinda makes sense given that it's really hard to imagine anyone making money on doing taxes for a hundred bucks. Well, [00:19:30] it looks like the owners of Visor have pivoted to something new. It's called Get Grid, and you can check it out at It is apparently a service where you enter how much you make- you enter your paycheck details, how much you make, and your withholding, and some other information. Then it tells you whether or not you are eligible for a "Payboost," which [00:20:00] is the extra money that you could be getting out of your paycheck that is normally withheld. Then, you can choose how much extra you want to receive every pay period. Payboost will work with the payroll provider to adjust your withholding so you get that extra money. So it's basically like doing a W-4 for you, I think.  David Leary: Like every single paycheck, or every week, adjusting it real-time, based on- Blake Oliver: Well, you have to go in the app and update things, I guess, but [00:20:30] I don't know if it syncs with your payroll. I don't think it does. I think you just do this once and then it ... It's not clear to me. So- David Leary: This has been done before. You know that, right? It's already been done. Intuit purchased a company years ago called GoodApril. Two guys did this startup, and that was the whole play; like, "We're gonna help adjust your taxes during the year through your W-4, essentially, so that way you have a good April, when you do your tax return. Intuit purchased it, and I don't know what ever happened to it. I don't know [00:21:00] if it was gonna be a feature or a tool for TurboTax. But it makes sense. The payroll companies should do this. We just talked about Gusto ... If you have an employee-facing portal for your payroll app and you have an employee-facing portal, you could just have a tool like this. Blake Oliver: Well, right. David Leary: Then, some part of me feels like I've seen ADP talk about something like this for their portal login. Just like they have wizards to help you maximize your 401(k) contributions; the same type of wizard. I've seen it. This is not a new product. Now, they're marketing in a very [00:21:30] interesting way with this Payboost concept, which kind of goes after those people that either want to be paid early, or payday loan ...  Blake Oliver: Right-  David Leary: The target market they're going after [crosstalk]  Blake Oliver: That's the part that I find a little confusing is that they say here that the average family ... A family that makes $30,000 per year gets an average tax refund of $3,000. That's an extra $250 a month that the government holds on to, and you could get that by using Payboost. You pay [00:22:00] a dollar per paycheck to access that $250 a month. You could just do this yourself by using the IRS calculator to change your own withholding. You could just choose to have less withheld ...  David Leary: We've talked about this before, though, even with the survey about people, their confidence, doing their own taxes. Even though, logically, it's completely illogical, right? Like, "I'm gonna give the government [00:22:30] a loan ..." But for a lot of people, in a weird way, that's the only savings- the way they save anything, and then they get that check once a year. But you're right - if somebody wants to do this, they could just do this automatically. David Leary: Speaking of people that have made mistakes over the past year, do you remember about nine months ago we talked about how Etsy screwed up in the way they were posting the fees? The seller fees for each sale was posting incorrectly to the bank accounts and then it was trickling from there into the accounting software packages [00:23:00] incorrectly.  Blake Oliver: Yeah, there was some big mess up. David Leary: So, apparently, nine months later, it's still not fixed. The other is these people that don't reconcile all year. Right. And then they show up to an accountant or a bookkeeper. Right. So if you're an account or bookkeeper and you have an Etsy seller and you have not heard about this problem, you better be very careful when you're reconciling and doing their books and their taxes this year because they probably have this issue, and it's been happening every single week, and if they're not manually correcting it, it's there. They have a big mess. Blake Oliver: So, Facebook [00:23:30] and the IRS are going to war, David.  David Leary: War?  Blake Oliver: Maybe it's not that dramatic, but they're going to court anyway. So, Facebook and the IRS have this disagreement that has been going on for years, apparently. A trial is scheduled to start this week, this coming week, in tax court. It's been going on for nine years, and it's a dispute over how Facebook's transfer of profits to an Irish subsidiary worked.  This is a very common thing that U.S. multinationals do, where they [00:24:00] will license their IP to a foreign subsidiary, where they'll sell their IP to a foreign subsidiary and then license it back. David Leary: I thought Trump fixed this three years ago, and everybody was bringing that money back in. Apple brought the money back; everybody brought the money back. Blake Oliver: Well, this is from before 2017.  David Leary: Okay, okay ...  Blake Oliver: So, anything before 2017 was subject to a 35-percent tax rate at that time. So, this is what the argument is about - did Facebook pay the right amount of tax in those nine years or something that it was operating [00:24:30] before the new tax law. It all hinges around - it's coming back, David, intangible assets, the valuation of intangible assets.  When it filed its tax returns, Facebook put a $7 billion value on the intangible assets in question. So, the value of these intangible assets has a correlation to the royalties paid to the U.S. parent by the Irish subsidiary. So, Facebook had an incentive, when it valued those assets originally, [00:25:00] to go low because then the royalties would be lower, and there'd be less income coming to the United States; less revenue - less profit, and more of it would stay in Ireland where they had ... I don't know what it is. It's like 10-percent tax rate; something really low.  Facebook put a $7 billion value on the intangible assets, and now it's actually saying that it should be even lower, and it should get a refund. Well, the IRS is saying that those assets are $14 billion, but it could be as high as $21 billion. So, apparently, we have [00:25:30] a range of anywhere from $7 billion to $21 billion because nobody can figure out how to value these intangible assets that are critical to calculating Facebook's tax liability.  We've been talking about intangible assets, when it comes to GAAP, and FASB, and goodwill accounting - it's a problem there. It's also a problem in tax because it's really hard to value intangible assets. So, I think one of the arguments is that we should just dump this whole way of allocating revenue and just say that multinational corporations should just tally [00:26:00] up how much revenue they earn in each country in the world and then just allocate the profit that way. Kinda makes sense. If you earn 20 percent of your revenue in Ireland, then, 20 percent of your profit should be there. David Leary: I think I heard a podcast this week that had that argument about it – figuring out how to divvy that up across the board.  Blake Oliver: Rather than trying to do an individual P&L and all this transfer-pricing stuff. The only people who benefit from this situation are, well, the Big Four accountants who figure [00:26:30] out how to do these schemes and valuations and save a bunch of money for corporations- I guess the shareholders, also. I find it really unfair to small businesses that don't have armies of accountants and lawyers to set up these complicated tax schemes. If you're just a small business here in the U.S. and you operate here, you've no choice but to pay the U.S. tax rate. You can't get around it. So, I think it's a question of fairness. That's my opinion, for what it's worth.  David Leary: Make sure you go out and vote. You've gotta vote. [00:27:00] That's the way to solve this- Blake Oliver: But nobody's talking about this stuff. No politician is talking about international-transfer pricing.  David Leary: Bernie Sanders, kind of, I guess, but yeah, it's hard to say [crosstalk]  Blake Oliver: No, no, no. He just wants to give everyone free healthcare and eliminate college tuition, right? That's his platform.  David Leary: And all the dirty stuff which companies do - he wants to stop all that, as well.  Blake Oliver: Oh, yeah, right-  David Leary: Should we move on ... Should we stay on court-related stories? _______________________ Introduce your clients to BREX. BREX is a corporate card unlike any others. It offers instant approval, no personal guarantee from the business owner, advanced fraud protection, the ability to issue additional and physical cards as needed, and a 360-degree view of all spending activity. BREX has all the features that business owners love.  BREX has also built all the features that accountants and bookkeepers love, as well, like instant receipt capture and matching, intelligent categorization, smart category management, and automatic reconciliation; smart admin tools to easily enforce policy controls, issue and shut down cards as needed; granular reporting, and deep integrations with QuickBooks, NetSuite, Expensify, and Xero.  To learn more about BREX, head over to That is Cloud Accounting Podcast dot promo forward slash B-R-E-X. BREX is the corporate card making accountants' lives better.________________________ Blake Oliver: Legal? [00:28:30] Yeah, let's do it.  David Leary: Legal? Okay. Remember MyPayrollHR? Blake Oliver: Oh, how could I forget?  David Leary: Story keeps on giving. So, Pioneer Bank - that was Michael Mann's bank, and his company, MyPayrollHR, and his 27 subsidiaries or whatever ... They were the bank where he did all his money transfers out and he was doing all his kiting at. So, Pioneer Bank is sued over its actions ahead of the MyPayrollHR collapse.  Berkshire and Chemung Banks, they've lost millions, and they're basically saying it's because Pioneer didn't disclose the fraudulent activity [00:29:00] properly. Two months after MyPayrollHR began to collapse, in August 2019, Pioneer disclosed to Berkshire that there'd be 35 overdrafts by the borrower totaling $121.8 million from January to August 2019. Blake Oliver: So, this was happening way before the collapse. How did this not get caught sooner? David Leary: Well, do you remember Pioneer was like- right around the collapse, Pioneer- they were due to have an IPO, right?  Blake Oliver: Mm-hmm.  David Leary: So, I imagine somebody tried [00:29:30] to hide this; maybe not hide it, but, you know, hope it went away, possibly? Blake Oliver: Well, here's a clue: Pioneer Bank Vice President David Blessing had been a friend of Mann since graduate school, and he brought Mann, and ValueWise to Pioneer, when he joined the bank 10 years ago and served as their relationship manager with the bank. He's the guy who reached out to Berkshire about buying into this line of credit, which is why Berkshire is suing Pioneer. David Leary: Yeah. Yeah, he encouraged them to buy in ... You remember [00:30:00] they were in the same building? They were in the same office plaza, or whatever-  Blake Oliver: Yeah, yeah.  David Leary: [Inaudible] we thought that. We're like, "That's interesting that they just happened to be in the same plaza, and maybe there is more connections to each other than we once thought." I don't know what went through Berkshire's side of the- before they invested, but ... Michael Mann had 37 deposit accounts under his name at Pioneer. It's messy. Either it wasn't disclosed or Berkshire. And this other bank, Chemung, did not do their own due diligence. Blake Oliver: Yeah, maybe they relied on personal [00:30:30] relationships and didn't really look into it and nobody told them. So, do you wanna talk about the threats to CPA licensure, David?  David Leary: Yes! I saw that article. Blake Oliver: Yeah. So, this is an Accounting Today. AICPA president and CEO Barry Melancon gave a speech at the meeting of the Accountants Club of America in New York. I've never heard of the Accountants Club of America before; I have to be honest about that. Sounds pretty cool to me. David Leary: We're not invited. I'll tell [00:31:00] you that right now.  Blake Oliver: I guess not. I'm picturing wood-paneled- David Leary: You don't have to picture it; that's in the picture! Blake Oliver: Oh, is it in the picture? Yeah? It's like the ... I'm thinking the Explorers Club - elephant head on the wall, and the giant fireplace - that's what I'm picturing. So, Barry Melancon gave a speech at the meeting of the Accountants Club of America in New York, and Accounting Today covered it.  He covered a lot of issues, a lot of things that are really important in the profession, but one thing that [00:31:30] got a ton of coverage, and it seems to have gotten the greatest emphasis, was threats to the profession from deregulation efforts. So, Melancon, when he talks about deregulation efforts, he's talking about efforts at the state level to reduce licensure requirements for lots and lots of different jobs- David Leary: A lot of professions because- and we've talked about this before. If you wanna put braids in somebody's hair, you have to get a hairstylist license that you probably don't [00:32:00] need to because you're not actually cutting hair. Blake Oliver: Right. In some states, it's pretty burdensome. So, I'll just read this part of his speech: "There's a lot of action in The States. There are major forces at work and lots of big money to unwind in The States. The basic licensing regime that exists in this country is not just targeted to CPAs, but it's targeted to all licensing. Now, that doesn't mean it's manifested itself in every state, but it's manifested itself with attempts in probably about 35 states over the last four years. We actually lead a coalition, today, [00:32:30] and we've brought together the learned professions. There are forces both on the Conservative and the Liberal sides that would like to see state licensing regimes unwound for different reasons, but with the same objective. The Liberal side argues that the licensing regime is just a big conspiracy to deny access to certain types of jobs to underprivileged people. They'll use, as a sort of poster child for that, certain trades — as opposed to professions — like hairdressers and things of that nature.” Then he mentions Arizona as a state that passed a bill; [00:33:00] one of the houses in your legislature passed a bill saying that anyone could do anything; didn't have to have a license, as long as the person who you're providing the service to signed something in writing saying they understood you weren't licensed. Does that make sense, David? So, if-  David Leary: That would make perfect sense. I went to a roller skating rink the other day and a very clear sign on the door said they didn't have insurance.  Blake Oliver: They can do that in Arizona?  David Leary: Even doctors who don't carry- there's doctors that don't carry malpractice insurance, and [00:33:30] basically, they can charge lower rates because nobody's ever gonna sue them; because that's all that's for is being sued. If you know that they don't have insurance, you're not going to try and sue them. They don't have anything. Blake Oliver: So, Arizona is one of those states that he mentioned. I guess there was some movement in Florida on this. But here's what I don't like about this. I think it's a red herring because I asked NASBA for their spreadsheet. NASBA, and the AICPA worked together on this threat to the CPA licensure, and they [00:34:00] keep track of it. So, I said, okay, well ... I emailed the person who's in charge of this over at the NASBA, and I can't remember who it was. I said, "Would you mind sending me the information you have on all of these threats? Because I hear there's threats in 35 states to the CPA license. People wanna deregulate us." I got the spreadsheet, and I looked through it ... I'm sorry, but these are not serious threats. Either it's legislation by a fringe group that never got out of committee - most of it never gets out of committee -  or it's not really targeting the CPA license. It's just targeting [00:34:30] what we were talking about - licensure for stuff that we wouldn't even call necessarily a profession; braiding hair, or a variety of other kinds of work that's not what we would call white-collar work, or professional work. This, to me, is just a way to distract- it's a distraction. I'm not gonna put intent on this, but it's a distraction from the actual threat to the profession, which is irrelevance, which is that we just aren't keeping up, and maybe people won't even need CPAs. It doesn't matter [00:35:00] if we have the license. David Leary: We talked about it the last couple weeks, right? What's the value? People do not think a CPA is valuable from a ... The free market, themselves, don't care. What value is a CPA bringing? [crosstalk] CPA and people that have it, and the organization- they're gonna protect that, but let the free market decide. Let people- a bunch of people say they're accountants, and then let the free market decide if they're gonna give their money to people that have the CPA or somebody who just says they're an accountant.  Blake Oliver: That's the situation [00:35:30] for some designations, such as the CMA - Certified Management Accountant. There's nothing that you can do, as a CMA, that you can't do as a non-CMA. It's a certification, not a license; also, the CFA, the Certified Financial ... Or CFP? I can't remember, but those ones, there's no franchise, right?  CPAs, we can sign audit reports if we have that on our license, but that's pretty much it. That's the thing I understand about this, too. It's like you don't actually [00:36:00] need a CPA license to do much of anything these days. And in most states, you can be an accountant. You'd have to call yourself a CPA. So, why are we talking about this? David Leary: Well, I mean, that's their job, right? The AICPA's job is to protect the profession, correct? Blake Oliver: Yeah. That's one of their jobs for sure - protect and advance it. I think there are other things that we could be doing with our money that we pay to the AICPA than defending against licensure threats that are not realistic or that don't really affect CPA licensure. David Leary: But [00:36:30] just the way that was phrased and written or the way it was said, his quote, it's good politics. He's gonna get his base, who doesn't know better, that have been a CPA for centuries, and they're just like, "No! You can't do this!" And they're gonna donate more money to the AICPA; they're gonna support this. This is to fire up the base; this is just a voting game. This is a political play.  Blake Oliver: Now, I have to give him credit for acknowledging a big problem, which is that hiring of accounting graduates - over [00:37:00] the last four years - at public accounting firms is down 31 percent. You could look at that as not as many accounting graduates are getting hired in accounting firms; or you could look at it as accounting firms are just hiring more non-accountants; non-CPAs. I think that really is a threat, actually, to CPA firms, because, as Melancon says, if you have firms that are not 50-percent owned by CPAs, at least 50-percent owned by CPAs, people are gonna start asking, "Well, you know, why do we need CPA to do our audits, if most of the people on the audit team are not CPAs [00:37:30] these days?" That's a really legit question. There is that CPA evolution- David Leary: Let's just be honest. People aren't gonna start asking that, they're already asking that. It's not something that's gonna happen in the future, once the ratios change at firms. People are already asking, you know, what's the ... They're arguing - what's the point of the audit to begin with? People are arguing that; this is already happening.  Blake Oliver: What else we got?  David Leary: We'll get plenty of emails for that. They can send them to you on that one. I can see it already.  Blake Oliver: Okay. Send them to me. That's my beef.  David Leary: Just in case. What did we ... Let's see, flip [00:38:00] around here ... Wanna talk QuickBooks Live? We could jump over to that, maybe?  Blake Oliver: Yeah. What is- what's new with QuickBooks Live?  David Leary: So, there's a Facebook post that I saw this week and looks like it's a screenshot of an email from the communications team at Intuit regarding QuickBooks Live. It looks like what they're doing is they are going to identify ProAdvisors through QuickBooks Online Advanced. So, if you're using QuickBooks Online Advanced, Blake, and you're a sole practitioner, [00:38:30] if that's the word, you might see an ad that says, "Hey, would you like to do some QuickBooks Live work?" Blake Oliver: Did you mean Advanced, or Accountant?  David Leary: Accountant. Did I say Advanced? Blake Oliver: Yeah.  David Leary: I'm sorry.  Blake Oliver: It's confusing because it's both QBOA [crosstalk] right?  David Leary: Yeah.  Blake Oliver: So, Advanced ... QuickBooks Online Accountant is- David Leary: Accountant.  Blake Oliver: -the Accountant version of QuickBooks Online.  David Leary: Yes, the Accountant version. Blake Oliver: Okay.  David Leary: If you're in there, and you're a sole practitioner, like, basically, you don't have any other bookkeepers working for you, they'll know that - knock on wood, right? They're gonna [00:39:00] know that, and they're going to really target you with, "Hey, do you wanna take on some QuickBooks Live work?"But they're also aware that ProAdvisors that have firms and have multiple bookkeepers all in the QBOA, if that messaging shows up, that looks like Intuit's trying to poach those employees. They're kinda giving a heads up in that they're gonna try not to expose this to the wrong buckets of people, right, but [crosstalk]  Blake Oliver: But we saw this before, right? [00:39:30] Intuit was saying that they weren't going to message QuickBooks Live to clients of ProAdvisors, and they were gonna somehow know that. If somebody, if an end-user was connected to a ProAdvisor in QuickBooks Online, if they had them on the account as an accountant, then they wouldn't get the messaging about, "Hey, sign up for QuickBooks Live, and get your bookkeeping done by a live bookkeeper." But then, it happened anyway. David Leary: Yeah, and [00:40:00] that's because of either mistakes, or bugs, or ... Not bugs, but just not good testing that didn't go on. It's probably gonna happen again. That's what everybody's focus is, if you read these chains about this. But if you step back and really read what this is, what this is telling me - the demand for QuickBooks Live is so large that Intuit cannot hire fast enough; that they're now taking these next steps to try to get more QB Live bookkeepers in there.  Blake Oliver: That's possible. It also just makes a lot of sense that they would be trying to recruit [00:40:30] current ProAdvisors who are working for themselves because those are people who you don't have to train. They already know how to use QuickBooks. It's like simple onboarding. It's exactly the people they want working for them. David Leary: Actually, the messaging could make sense, as well, if they do the targeting right, right? Because you- if somebody has- they're a sole practitioner, and they have 200 clients, they're not gonna have time for QuickBooks Live; but if they have four clients, they probably need work. It might make sense to target them, and they could see that through QuickBooks Online Accountant version. So, people are very, [00:41:00] obviously, upset about this because they think QuickBooks is just coming for their business, right? But it's also, I think, a sign of the times a little bit. Blake Oliver: It is true, though. It's a legit concern that, now, Intuit is competing with me, as an accountant, for bookkeeper's. I'm going to have to offer at least what Intuit's offering in order to get a ProAdvisor to work for me. So, there's that. That's what's going on. David Leary: Yeah, it's happening. At same time, Intuit's getting competition from another side. So, [00:41:30] Bank of America has their Business Advantage 360 that about a million small businesses have used now. That's now tying into other apps. So, it's gonna now tie into QuickBooks. It's gonna tie into Google Apps. It's gonna pull data ... The banks are trying to keep everybody inside of the software. Blake Oliver: Right.  David Leary: They don't want people using other software packages. So, in a way, Intuit's gotta ... They have new competition they've never had before. There's more people doing the GLs, and Intuit's changing their business model. It's very obvious they are going to head towards becoming kind of an accounting firm, right? We talked about this- Blake Oliver: Services; software [00:42:00] and service- David Leary: Software and service, right? It's not just-  Blake Oliver: It's more being a platform. They're connecting those ProAdvisors with those clients who want bookkeeping done, and Intuit's in the middle, and they earn a profit by doing that. They create value.  David Leary: We talked about Square, right? Had that blog post from the engineer talking about how Square has a GL tool they're using in-house, blah-blah-blah. Well, have you ever heard of WePay?  Blake Oliver: Yeah. That's the one that's big in China, right? David Leary: No, I think that's different. That's [00:42:30] [inaudible] or something [crosstalk] WePay is a payments company that was- Chase Bank brought them about a year ago. Well, their engineer wrote this big old blog post about balancing the books at scale. It's just very similar, in a way, to the Square post talking about double-entry accounting, and how they move money, and they're building these micro-services to post these transactions to Chase's bookkeeping. Now, it's not- a lot of it's internal-type stuff, but engineers at banks are bragging about how they're building GLs. We are in a whole [00:43:00] new world. We've talked about this before. There's banks buying GLs; there's banks building GLs. Tech companies are trying to become banks. It's all getting very gray, and Intuit's trying to differentiate. Because if you go to the Bank of America website and there's a GL, and your payments, and everything else is there, but a human's not there to help you do your books ... Intuit has a differentiating factor. The market's getting very messy right now for everybody, and it's not just accounting. I have two other articles that are kind of related. United [00:43:30] Airlines bought a flight training school because they need 10,000 more pilots, and they can't ... The free market's not training them fast enough, o they bought their own training academy to just train their own pilots.  Blake Oliver: Classic vertical integration.  David Leary: It's the same game. KPMG Spark re-launched.  Blake Oliver: Really? Yeah.  David Leary: Remember, they launched; they killed it. [inaudible] launched now in the U.S.; very similar model. You're getting books and a person. It's that's same model everybody's running right now. Blake Oliver: So, yeah, KPMG [00:44:00] Spark - the fixed-rate, on-demand bookkeeping for startups and small businesses - what everybody else is doing? Interesting. What's their pricing? I'm really curious. I didn't know they were back.  David Leary: I had the tab open; let's see- Blake Oliver: Here, I'm opening it right now. Plans and pricing. David Leary: So, they're pricing it based on clients, but it's like 175 bucks a month. Blake Oliver: Oh, here we go; additional- okay, so they have Starter, Essential, and Enterprise. Onboarding fee for starter - $100; $300 for Essential; $400 for Enterprise. Okay, let's say I'm [00:44:30] Essential; I'm in the middle. I've got four to six bank accounts on a cash basis, and I need payroll and tax prep. David Leary: Oh, did you go to just their regular website?  Blake Oliver: Yeah,  David Leary: Oh, that's not the good one! I have-  the link that's in the show notes, they actually have a page now targeting this at accountants and bookkeepers. So, you can put your clients- KPMG'll do the ... You outsource your bookkeeping division to KPMG. Blake Oliver: Wait, wait ... Why- David Leary: Yeah, their in-house team [00:45:00]  Blake Oliver: Okay. Why would I, as a CPA, outsource accounting to KPMG? David Leary: Because you don't want to do it in-house, but you want to charge clients for it, so you either outsource it to them ... Maybe you're to capacity [crosstalk]  Blake Oliver: -this is the Botkeeper argument, or the whatever argument, right? Like all these other services. But those services aren't the Big Four. KPMG could just market to my clients now; they could just steal them. David Leary: But, isn't it- [00:45:30] Isn't it valuable to have it quality assured by a licensed CPA? Blake Oliver: Right, and that's what they've got plenty of at KPMG.  David Leary: It says it right there.  Blake Oliver: Yeah, right. So, why couldn't they just do everything? Why couldn't they just take my clients and do everything? That's crazy. Interesting. So, now it's re-launched, and it's available to CPA firms as a service to do the bookkeeping. Okay, so my first instinct was they're leveraging offshore resources that they already used for KPMG. Maybe they've got an India office that they're using for this; but it says that it's in Salt Lake City, [00:46:00] and it never outsources its bookkeeping to third parties. So, maybe they've got a delivery center that they use for regular KPMG work that they are now basically filling up with more work from KPMG Spark. They can max out the- to keep that office always busy. David Leary: Everybody's getting into this game  because I think the demand's there; the market demand is there. We had an episode in the summer ... Intuit thinks it's a $10 billion opportunity that's not being served. Blake Oliver: I have to say, the pricing on this is kinda scary, if I were in competition. [00:46:30] So, like, I'm on the direct side, and the middle-of-the-road plan is four to six bank accounts. If I click on Cash, and I click on Payroll ... I have four to six bank accounts; cash basis; and they're doing payroll for me - it's only $495 a month. That seems really low. If it's accrual, it's $1,095 a month. I wonder what the quality is like. Even if I choose the biggest plan - seven to 10 bank accounts; accrual-basis accounting with advanced [00:47:00] insights, whatever that means - it's only $1,345 per month. $1,345. At my last firm, we started at $1,000 a month. David Leary: I think some of the pricing we're probably seeing, as well, is a market share price; people are trying to grab shelf space and market share-  Blake Oliver: I just wonder, yeah, if you actually sign up ... If you actually went through a scoping, if it would actually come out to this, or if this is just super-low for the website, like for marketing. David Leary: Maybe they're trying to experiment – Intuit - [00:47:30] the way QuickBooks and everybody else is, right? Everybody's prices are changing a lot on this, across the board.  Blake Oliver: All right.  David Leary: But on a related note, though, other industries ... Have you ever heard of UpCounsel?  Blake Oliver: Is this like Upwork for lawyers? David Leary: Essentially, yes, for freelance lawyers - a similar model. There's people looking for law-  Blake Oliver: Services? David Leary: Services; and there's lawyers looking to fulfill those, just like there's bookkeepers looking to get clients, and there's clients that need bookkeeping service. It's all the same model. Well, UpCounsel shut down this week. [00:48:00]  Blake Oliver: What happened? David Leary: It didn't really say what happened? They-  Blake Oliver: How long have they been around? They've been around for a little while, right? A few years?  David Leary: 2012, they started. So, they've been chipping away at this for a while. They've taken on $26 million total in VC money, and they've been chipping away, chipping away, chipping away, but they finally pulled the plug on it. It didn't really give reasons - reasons why; they were kinda sad that they had to do this. They've really tried to legitimately build a real business here. My impression is they probably ran out of money, and nobody is gonna give them more money because Clio just took $250 [00:48:30] million to basically build the same thing, right?  Blake Oliver: Right. Clio is the law firm practice management solution, and they're adding in this kind of marketplace. Is that what's happening? David Leary: Yes, it's the same verbiage that Intuit had in their stuff about QuickBooks Live. It's very similar verbiage. Blake Oliver: Clio doing that is exactly like Intuit doing QuickBooks Live. It's amazing the parallels. Well, that's all I got. David, what about you? David Leary: Some people are on the move here. Blake Oliver: Yeah? David Leary: Two are for sure confirmed, and one is- a listener [00:49:00] sent in something that is arguably a speculation. So, Practice Ignition, I don't know if you saw Damien Greathead, who was a vice president at Receipt Bank, he - about two weeks ago, said he was leaving Receipt Bank. Now, it's been announced that he is now joining Practice Ignition-  Blake Oliver: As their head of marketing. Congratulations. David Leary: Damien got to move back home; back Down Under. So, obviously, it probably sounds like a professional move, and a personal move, as of both ... We just talked about Botkeeper. [00:49:30] I don't know if you saw Jody Padar- she's now ... I think, before, she was on the board of Botkeeper, and an advisor at Botkeeper. She's now going to take a full-time job as the VP of Strategy, it looks like.  Then, somebody emailed an article from Slater [inaudible] covering, really, inside sales of stock for Intuit. This person who sent this in noted that Alex Chris, who's the leader of the QuickBooks Division at Intuit, he sold ... I'll just read it: "EVP James Alexander Chriss sold 21,543 shares [00:50:00] of the company's stock in a transaction dated Monday, November 25. The shares were sold for an average price of $258.78 for a total transaction of $5.574 million. Following the completion of the transaction, the executive vice president now owns 126 shares in the company valued at $32,606.28." Blake Oliver: So, he sold basically almost all of his stock. David Leary: Yeah. So, last November ... Obviously, this is three months later, he's still there; but people are wondering is he gonna leave if he sold that much?  Blake Oliver: I [00:50:30] want $5 million of Intuit stock! That's pretty great.  David Leary: Because insiders sell all the time, because they have to rebalance their personal portfolios. There's lots of reasons why, but to sell -  what is that? - 98 percent maybe? I mean, that's a lot- a lot to be sold. So, somebody was wondering, you know, hey, is there- is Alex Chriss leaving because that's a huge major move. Blake Oliver: We'll see. Well, that's all the time we've got today. David, if people want to get in touch with you, tell you what [00:51:00] they think/send you stories, where should they do that? David Leary: Easiest way is on Twitter: @DavidLeary, but a lot of people have been doing it on LinkedIn, as well. So, you can track me down on LinkedIn.  Blake Oliver: And I am @BlakeTOliver. I'm on LinkedIn, and you can email me, if you like: And if you would like to join our email list and get notified of new episodes with a link to the show notes, go to, scroll to the bottom of the page and [00:51:30] put in your email address; hit enter, and you'll get subscribed to our list. We'll let you know of new episodes, and we'll keep you updated on where we're going because we're gonna be going to a bunch of shows this year, right, David?   David Leary: Our conference plans are falling into place.  Blake Oliver: Until next week, signing off. Time for the classifieds______________________High Rock Accounting is searching for rock stars. We’re a growing accounting firm looking to increase our team. Our ideal candidate will be self-motivated, eager to learn, and grow with the firm. We help businesses succeed by utilizing cutting-edge technology to provide accounting solutions that increase business efficiency and competitiveness. Our goal is simple – enhance accounting operations, improve accuracy, and reduce costs. As a High Rock star, you'll be responsible for full-cycle accounting in a cloud environment. E-mail That's careers@ One of the biggest hurdles accounting firms face is finding training that is current and relevant. There is an answer - Elefant Training. Elefant offers webinars and training on Xero, QuickBooks, and cloud-based apps and modern practice management issues like remote leadership and creative compensation. Their instructors are firm owners who also happen to be international experts in cloud accounting.  This year, Elefant is offering recordings of their most popular webinars, plus valuable resources in their brand-new learning library. You can use code "CAP20" for 20 percent off your subscription. Bulk licenses for firms are also available. Visit for more info. That's ______________________ Are you looking for more great cloud accounting content? Ryan Lazanis started and sold his own cloud-accounting firm in just five years. Now he helps firms stay on the cutting edge through his free weekly email, curating the top five pieces of content that help modernize your firm. Visit to sign up. That is Accountants and bookkeepers, are you itching to make a career pivot and escape the 9-to-5 grind and the [00:53:30] busy season stress and start to build your own career path where you work virtually on your own terms? Then you need to get your copy of the newly released Bookkeeping Side Hustle Guidebook and learn actionable steps to become a virtual bookkeeper without the overwhelm. Cloud Accounting Podcast listeners can get the e-book for 30-percent off with the code "CAP30OFF." Get your copy at _____________________ Want to get the word out about your newsletter, webinar party, Facebook group, podcast, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad. Hit the show notes, and the links to get more info.
Sponsors G-Accon: OnPay: BQE Core: Show Notes 00:50 – More Super Bowl earworms here | Ad Age 01:34 – Last week's discussion on tax-prep confidence levels 03:54 – Fake news or worthwhile information? You decide! | Business Insider 06:38 – More helpful journalism from Biz Insider's Eric Rosenberg | Business Insider 10:09 – Which tax software is the best for firms? | CPA Trendlines 11:53 – Intuit ProConnect expands their tax professional ecosystem | Silicon Valley Daily 12:35 – No news is no news when it comes to the Summit Hosting outage, but we're covering it! 20:06 – As per usual, Reddit users have something to say about Summit | Reddit 22:48 – The real cost of ransomware attacks? | Coveware 26:14 – OOPS! That's our bad! – Microsoft makes a huge data boo-boo | Threatpost 28:39 – Just what we need – another report. That'll fix what ails our government! | Accounting Today 30:43 – It's only money ... $22 TRILLION worth ... | Politico 34:03 – When you see complex accounting shenanigans, be like Mr. Buffett and run the other way | Yahoo! Finance 35:06 – You might not like green eggs and ham, but Sam.I.Am likes The Cloud Accounting Podcast!  Thanks for a great review, Sam.I.Am!  37:11 – There's more to CFO-ing than numbers | WSJ 41:03 – Blake sees goodwill in a new light, thanks to David 46:07 – The Gene Marks tome - Outfoxing The Small Business Owner: Crafty Techniques For Creating A Profitable Relationship 47:00 – Teller sets its sights on Plaid with a $4M raise | TechCrunch 49:34 – Former CAP guest, Jason Deshayes, shares his delightful bank-feed experience  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, and NOW, you can see our smiling faces on Instagram!  Limited edition shirts, stickers, and other necessitiesTeePublic Store: Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast:   Classifieds Elefant: Go here to create your classified ad: you ever wanted to get data out of Xero or QuickBooks Online into a Google Sheet and then automatically do it again tomorrow, and the next day, and the day after that, and the day after that, and the day after that? Stay tuned to hear more from our sponsor, G-Accon, later in the episode.__________ ...English, Spanglish, Español.We all speak refund, go and get yours. Now get deductions, get deductions.Make sure you’re not missing nothing. You can file it, you can do it.You can file it, you can do it. We can help you getting through it.Get it filed, nothing to it. Do ya taxes, do ya taxes. Everybody, everybody, do ya taxes. Got everything you need to reenact this. Do ya taxes, do ya taxes. All people. All people. All people are tax people.All people. All people. All people are tax people ... From Intuit TurboTax All People are Tax People [00:00:30] Blake Oliver: All people. All people. All people are tax people. All people, all people are tax people ... Well, that's what we have to look forward to this weekend. David Leary: Well, I went to the future and I retrieved the Super Bowl commercial for TurboTax, but I have bad news - there is no QuickBooks Live commercial- Blake Oliver: So, your prediction- [00:01:00] David Leary: -all the commercial slots are sold out and there's only a TurboTax Live commercial, so I completely ... I've been predicting this for 11 months, I think, and it's never happened. Blake Oliver: Well ...  David Leary: They did commercials for QuickBooks Live in the championship games; just not the Super Bowl. Blake Oliver: The timing's just not right for QuickBooks Live because that's not what- people are not thinking about that right now. They're thinking about getting their taxes done. That was very catchy, I have to say. Definitely better than the weird robot child ad from last year. Do you remember that one? David Leary: Oh, far better, yes! This is gonna ... On Monday, [00:01:30] Tuesday, Wednesday, people are gonna have this as an earworm all week. It's ...  Blake Oliver: All people are tax people ...  David Leary: It ties into- what was the survey last- the survey data we had last week? 90 percent, 95 percent of everybody is very confident in their tax filings? Blake Oliver: Yeah! People are getting comfortable with doing their taxes themselves, online. David Leary: You know what we forgot to do is the intro ... Should we jump in and do that now? Blake Oliver: Oh, yeah!  [00:02:00]__________This episode of The Cloud Accounting Podcast is sponsored by OnPay. Many times when choosing a payroll service, you have to choose between a new startup with a great app, or an established company whose tech may feel behind the times. With OnPay, you get the best of both worlds - a great app from the established company that has been providing payroll services for over 30 years in all 50 states. OnPay is an easy-to-use full-service payroll that's the right fit for all your clients, whether they have just one or 500 employees. They handle all the complicated stuff, like agricultural payrolls, Form 943, multi-state, and H-2A visas. OnPay even makes it easy to switch from other payroll services by doing all the data entry for each client that you set up. Right now, Cloud Accounting Podcast listeners can get three free months of OnPay payroll service. To learn more, head over to That is Cloud Accounting Podcast dot promo forward slash O-N-P-A-Y. __________This episode of The Cloud Accounting Podcast is sponsored by BQE Core. 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. Core is an all-in-one app for project management, including time and expense tracking, budgets, forecasting, client billing, and accounting. It includes a full-function mobile app, and a cutting-edge voice-based assistant. Even though Core is an all-in-one app, it still works nicely with accounting apps, like QuickBooks, and Xero. To learn even more about BQE Core, head over to That is Cloud Accounting Podcast dot promo forward slash C-O-R-E.__________Blake Oliver: Welcome [00:03:30] to The Cloud Accounting Podcast! I'm Blake Oliver.  David Leary: And I'm David Leary. Blake, here we go.  Blake Oliver: So, it's tax season. TurboTax is out in force. Have you seen any of these sponsored posts on Business Insider? Have those popped into your feed?  David Leary: Sponsored posts from Intuit?  Blake Oliver: I'm gonna pop it right here into the show notes for you, David, so you can check it out. It says, "The tiny mistake I made with TurboTax [00:04:00] that took hours to fix." This is in Business Insider. I was reading this on my phone, and I said, "Is this ... This cannot possibly be a real Business Insider article," because it just seems like way, way too promotional. Blake Oliver: You just implied that there are any real Business Insider articles. Blake Oliver: Well, no, I mean, it's not ... It's not to the level of The New York Times, or The Wall Street Journal, or anything like that, but it's not bad, usually. It's helpful. Actually, the little bullet points at the top of every article are great for people who like to skim. Well, [00:04:30] first of all, it's by this guy, Eric Rosenberg, who has written some other articles all about TurboTax that are highly promotional. This one, I thought, was particularly interesting because it's cautioning people - watch out! If you use the Free File version of TurboTax, but then, after you enter all your information, you find out that you don't meet the criteria, you're gonna have to enter your information all over again into the paid TurboTax product. That makes filing your taxes [00:05:00] a big hassle, so if you don't want to have that problem where you choose the Free File option, and you can't go back, then maybe just do the regular TurboTax. David Leary: Interesting [crosstalk]  Blake Oliver: Right? Interesting approach.  David Leary: -a guest post or a seeded article of some type? Well, it's-.  Blake Oliver: On mobile, when you view it on mobile, there's a little tiny pop-up at the bottom that says 'ad,' and that's all that there is. I didn't even notice that until I was all the way through it. Then, on desktop, there's a [00:05:30] little blurb at the top, in italics, that says, "Personal Finance Insider writes about product strategies and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective." David Leary: These articles, if I discover they're like this, I don't even bring them to the show. They don't usually make it, but this one's so obviously bad, I guess, it qualifies to be on. I do, though, question the ... Take the article out of this, but just the logic of this ... If you start TurboTax Free File and you discover, oh, [00:06:00] never mind, I forgot I sold ... I have a 1099, or I sold stock, or I forgot I did this thing- Blake Oliver: Yeah. David Leary: -and now I want to use the real TurboTax, the paid TurboTax. I can't upgrade my data or move it? Blake Oliver: No, they won't let you. David Leary: I wonder if that's because of fear of the regulatory stuff? It seems so illogical to me ... Did the pendulum swing too far the other way of like, "We don't wanna be accused of upgrading people that are using Free ..."?  Blake Oliver: It might be part of the IRS rules. I don't know. But [00:06:30] I thought the approach was interesting. They're still clearly trying to obviously get as many people as possible to use TurboTax paid-.  David Leary: Yeah.  Blake Oliver: -and dissuade them from using the Free File product. So, this was kind of a, I thought, very sneaky approach to that. Another article by Eric Rosenberg on Business Insider is, "I've tried four major tax software programs, and TurboTax gets me the biggest refund every time." David Leary: I saw that article, and I also feel like when I saw- I didn't read the whole article. I saw the headline, and I feel like I've seen that article every [00:07:00] year; like last year, and the year before, and the year before ... But, yeah. Blake Oliver: It's just so ridiculous because unless there's actual errors in how these programs are handling your tax situation, the refund should be exactly the same. That's not what differentiates these programs, right? Like when the Wirecutter says that TurboTax Deluxe is the best version, which they do they say it's because the workflows are easier. It's just easier to understand the questions, and answers, and all that, not because the actual calculations are better. David Leary: You [00:07:30] know, I think ... Because we get approached all the time with people who wanna advertise on the podcast, and people want us to just talk about them, and they'll pay us to talk about them. This is why I make it so clear that all our sponsors- it's very clearly called out as, "This episode sponsored by ..." so there's a separation of content from sponsorship, because I argue most of the media out there, especially in our industry, it's very gray. Blake Oliver: Oh, yeah. David Leary: It's super-super-gray, and it's not clear what's paid for or not paid for. I'm really insistent about that, to keep [00:08:00] it as separate as possible. So, just to clarify, TurboTax did not pay for us to play the whole entire commercial. It's just ... It's so infectious, we could not stop listening to it over and over again.  Blake Oliver: I was very amused by it. You're gonna be hearing it. If you watch the Super Bowl, you're gonna be hearing that in your head now, and I apologize to you. David Leary: Well, one of two things is gonna happen here, right? Some people are gonna listen to it on the Super Bowl. It's gonna be stuck in their ear, and it's gonna get out of the air. Then they're gonna tune into the podcast, and it's gonna go right back in their ear again, and they're gonna be cussing us. "Damn it, David and Blake! Why?!" [00:08:30] But it's very infectious. It's pretty, pretty funny. Wanna stay on taxes for a second?  Blake Oliver: Yeah.  David Leary: All right, so my daughter's gonna graduate eighth grade here; go on to high school. In the state of Arizona, you gotta pass that civics test. Blake Oliver: All right. David Leary: So, she's got a review test ... She's taking the practice test at the table yesterday, and she yells out, "What is the deadline for filing federal income tax forms?" I yelled back to her, I said, "If you don't answer that correctly, you have to move out." But, technically, it's not just April [00:09:00] 15, right? Blake Oliver: Right. Well, the correct answer - if you're an accountant - is, "It depends."  David Leary: That's not an option on this test.  Blake Oliver: It's always the answer to basically any question where you don't know the answer. So, are you gonna tell her, or are you gonna make her look it up, because it's [crosstalk] David Leary: Oh, she knew. She was smart enough to figure that out. Blake Oliver: Okay, good.  David Leary: I don't know if that's true for all kids, right? Blake Oliver: Yeah. What she should do is she should answer - to get extra credit - "It depends if your client is filing an extension or not, and if they're an individual or a corporation ..." What is the entity type, right?  David Leary: Yeah. [00:09:30] It didn't have any fill-in spots for those questions. The sad part is I think this test is made to where you really have to screw up to not pass it. One of the questions is like, "Who is the president of the United States?" Blake Oliver: That would be ... Well, you know, actually, when we do real polls of that of the general population, there is a significant part of the population that does not know this question every year. It's like when Jimmy- well, it wasn't Jimmy Fallon; it was ... Who walks the Hollywood-.  David Leary: Oh, the 'man in the street' type interview stuff? Yeah.  Blake Oliver: Yeah. They [00:10:00] always find people who don't know. David Leary: We should do that at an accounting conference once ... We can ask them about filing dates. All right, enough about that. Should we get into some real news? Blake Oliver: I got one more tax-related story. CPA Trendlines, in their Annual Accounting Firm Operations and Technology Survey, asked firms what is their tax software? So, are you curious to know what is the most popular tax software among firms? David Leary: This is software they're using to produce returns internally. Blake Oliver: Yeah, yeah, what software [crosstalk].  David Leary: Excel! It's gotta be [00:10:30] Excel! Blake Oliver: No, thank God. No, no ... Nobody's doing that. Well, maybe some, but 28 percent of all firms in 2019 were using CCH ProSystem; 16- well, let's round up to 17 percent, Ultratax CS from Thomson Reuters; 14 percent, CCH Axcess Tax; 12 percent, Lacerte; then, there's seven percent that says not applicable, none, or unsure. So, I wonder if the [00:11:00] people who are still filling out paper forms are included in that number? David Leary: What was the percentage of unsure? Blake Oliver: Well, it's not applicable, none, or unsure is seven percent. Now, not all the respondents to the survey are in tax, necessarily. David Leary: Okay, okay ...  Blake Oliver: I guess if you're just really ignorant of what your tax people are up to, you might not know what they're using. After that, it's seven percent, Drake Tax; then, ProSeries Professional at four percent; other at four percent; ATX at two percent; Intuit Tax Online, 1.4 [00:11:30] percent. Yeah, so CCH comes out on top, but that's really thanks to the medium/large/extra-large firms, those over 10-11 people. On the small-firm side, it looks like Lacerte, and Ultratax, and Drake are coming out as winners there. David Leary: Tagging on this, Intuit ProConnect had an announcement. They released some new features and functionality. I'll read the article [00:12:00] title - this is an article from Silicon Valley Daily - "Intuit ProConnect Expands Partnership Ecosystem to Accelerate Software Capabilities for Tax Professionals." One of the big features is hosting for ProSeries and Lacerte, which I was actually shocked that this wasn't really being done. Another thing was e-signatures, and then pay-by-refund enrollment functionality. Blake Oliver: What was the first one you said? David Leary: Hosting.  Blake Oliver: Oh ...  David Leary: Right Networks is going to host ProSeries and Lacerte software. Blake Oliver: Got it. David Leary: I can quote here: "Cloud hosting also means [00:12:30] tax professionals can have more flexible and secure storage options of tax data in their current workflow." Blake Oliver: Well, since you brought up hosting, David ... David Leary: Yes. Blake Oliver: That brings us to the Summit Hosting outage [Cue dramatic music] which we found out about last week, on Friday, right after we had finished recording. This is a big deal! Did we cover a Summit previously? We talked about them when they acquired iNSYNQ, right?  David Leary: they purchased iNSYNQ. iNSYNQ, last- was it [00:13:00] June or July, had a major outage-.  Blake Oliver: And it was so big that we extensively covered the iNSYNQ outage. People were out for, what, weeks, right, in many cases? David Leary: Yes. Blake Oliver: So, then iNSYNQ gets bought by Summit Hosting; maybe a distressed purchase kind of situation, right? Clients are leaving. Let's save this this enterprise. Then Summit, itself, goes down from ransomware. I can't help but think, was it an iNSYNQ customer that they [00:13:30] were porting over and then infected the Summit Hosting environment? David Leary: All you can do is think because there's not much for communication on this. I'm surprised that we didn't even hear about it until Friday because it was already down a full week before that.  Blake Oliver: Apparently, this started on Saturday, the 18th, according to a user posting on a Reddit thread. We were recording last week, on the 24th, when we found out about it. So, yeah, almost a full week people were out. Somebody, as recent as 16 hours [00:14:00] ago, posted that, on Monday, they logged in and tried to open their two QuickBooks company files and couldn't get in because the password wouldn't work for either company file. They realized that the server didn't have the latest versions of the company files. The versions that had been restored were from two months ago, and two months of transactions were missing. So, then they contacted Summit, and Summit said they would restore the most recent backup. There was no word, but later in the day, the files had been restored to the latest versions.  [00:14:30]They won't answer this person's question as to why that happened or how that happened. They're closing support requests without a response ... Just going through the customer feedback, and the reviews, and stuff, it seems like they're just ignoring a lot of people completely. David Leary: There's a lack of communication on their Twitter handles or anything else. Blake Oliver: We reached out, right? You reached out to them-  David Leary: I sent them an email because they emailed us, after the acquisition, to give us some details about the acquisition of iNSYNQ. I replied to that email. I said, "Hey, I heard you guys were out [00:15:00] all week, and it was ransomware. Is there any public information? Is there a link, or a blog, or any communications?" Nobody replied to the email. What I find entertaining about this is if you rewind a little bit ... This is a game that all these hosting companies are playing - a marketing game. When iNSYNQ went down, a lot of hosting companies, including Summit Hosting- employees of Summit Hosting, were tweeting at customers who were like, "My iNSYNQ's down ..." like, "Hey, you should switch to Summit Hosting!" Well, now there's new ... Go to myERP. [00:15:30] They were tweeting at customers of Summit Hosting and go, "Hey, you're down! Come switch to us! We never crash. We're reliable!" People are just jinxing themselves. Blake Oliver: Right. David Leary: I find it very entertaining because if I had to bet money, guess who's going down next? Blake Oliver: Yeah.  David Leary: It's gonna be the one who brags about how they never go down. Blake Oliver: Let's talk a little bit more about what exactly happened here. David Leary: Okay. Blake Oliver: So, we know it was a ransomware attack because a user posted an email sent by Summit Hosting to users. [00:16:00] We know that it started on January 18. So, they said, "On Saturday, January 18, the MyAsp environment was hit with a ransomware attack. Our security systems caught it immediately and shut down all client servers, of which there are 400 within this environment, in order to isolate the attack and protect end-users' data. In order to resolve this, our engineering team had to scan or restore every server individually. We had about 90 percent of the servers back online by Monday night." So, they went down- they got attacked Saturday. [00:16:30] They said they had 90 percent of the service back online by Monday night. Continuing: "But in the process of scanning and restoring one of the servers, the encryption file that triggered the attack on the 18th was executed again, and the whole environment had to be shut down a second time." They continue and say, "It is very important to note the backups are secure and data was not compromised." Sounds like what happened is ransomware was triggered in this environment ... By the way, this is a shared hosting environment - and that is really, really important to note here - because [00:17:00] all of the attacks that I am aware of that have spread like this, that have impacted a lot of people are on shared hosting environments, meaning that you are on the same server as many other companies. So, one company gets infected, and it spreads throughout, potentially, many servers.  his is very different than dedicated hosting, where you get your own computer in a data center that is isolated from the other ones. So, if somebody gets infected in that [00:17:30] data center, it's not going to spread to you. It's a lot more expensive to have your own dedicated server, but probably, at this point, worth it. So very, very important to note. But it's also interesting here, right, that it was a backup file. It was a file from a backup that then re-infected everything. So, somehow, they didn't have a way of stopping the ransomware from getting into the backups. David Leary: Well, I think it's not so much that the ransomware gets in the backups. It's- it was in that machine. It was there. You backed up the machine, not knowing you- you just did [00:18:00] a backup, not knowing you backed up ... Because it wasn't discovered yet, right? [crosstalk]  I think this has happened with some of the other cases we've looked at is where you have to make sure the backup you're restoring ... This is why you have to go so far back, and people are missing data because [crosstalk] If that backup has a virus, or the ransomware, you can't restore it. You're just bringing it back. Blake Oliver: So, that's why this one customer that I mentioned earlier logged in and found company files that were two months old because they were just going back as far as what they thought was safe. So, [00:18:30] people might be working on files and not even realize that they lost data if Summit hasn't informed them of that. That's something to really watch for, right?  This is all a really, really good reason to - if you're using a hosting provider - make your own backups, not of the whole environment, but of your critical accounting files, and do it every day, multiple times per day, even, down to your local machine, or a separate host, or a Dropbox file, or a Box file, or Google Drive, or something [00:19:00] that is not connected. That way, if this does happen, you have your own backup that you can restore locally, and you can keep working. That was another problem with this whole thing is that people were- David Leary: The timing.  Blake Oliver: -people were requesting their backup files, but Summit didn't have a way to get them their backup files because they had to restore the whole environment, and that takes a lot of time, and they were just completely slammed. Apparently, if customers were pestering them ... People said they had success just calling over, and over, and over again until somebody answered, and then, that person would get them the backup files. David Leary: I was actually [00:19:30] surprised there wasn't more about this online. I mean, there was posts, but it didn't explode the way ... Considering the deadline that everybody's at, today ... It's full-blown busy season right now. Either, A) there's not that many people using Summit Hosting, so that's why it was a little quiet, or they're just ... Everybody's just so busy, like, "Okay, that's not working. We have to do them by hand, or do things manually," and they just didn't even have time to complain about it online, right now. Blake Oliver: Yeah ... Well, I just think a lot of times, too, the people using these services are business owners, themselves, and they're [00:20:00] very sympathetic, and understanding, and actually probably more than they really ought to be. I don't know if- I would not be this patient. The link to this Reddit thread will be in the show notes. You should take a look because this is actually ... People are furious. You look at the online reviews lately, and Summit Hosting has just plunged. Now, one more thing I wanna add is there's a big question as to did Summit Hosting simply restore backups and not pay for the ransomware, or did they pay the hackers? Because this happens all the time. Somebody [00:20:30] posting here on this Reddit thread said, "Yesterday, I logged in using TeamViewer, while their engineer was working. Later I saw a message saying, 'All files successfully decrypted. Have a nice day.' I'm wondering if they paid the ransomware?"  David Leary: My understanding - that's the game, right? The insurance companies, they sell this ransomware insurance, then they do payouts; but what they're collecting in ransomware insurance fees from companies is nowhere near what they have to pay out ... Everybody's happy about this. The insurance companies want people to pay out, [00:21:00] so more people buy the insurance. So, it is what it is, but ... If you affected by the Summit, and you felt like you're in a silo, there's other people that have been affected, too.  Blake Oliver: Yeah, and if you have more information on this or anything we reported isn't correct, let us know. We wanna hear from the users. Again, I just want to emphasize - this is my key takeaway from all of this - use a dedicated private server. Do not use shared hosting environments. Just because somebody is listed as a preferred provider, that doesn't mean that they're secure; because Sage, [00:21:30] and Intuit, and these other app developers, they don't generally investigate the security protocols of these companies to become a vendor associate, you just answer a questionnaire. David, we talked about the Intuit Authorized Commercial Hosting Providers list. We have to update it now because now, I believe, four out of the 16-  David Leary: I think we're at five.  Blake Oliver: Five? Five out of the 16 authorized commercial hosting providers have been ransomwared. All right. David Leary: What concerns me about this, I think, is the risk [00:22:00] that you're putting your data in. The whole value prop of this was I don't wanna have to do the security in-house on my own computers. so I'm gonna use a service like this, and they're gonna provide me the security. But I'd argue that these companies are a higher target because they have 2,000 customers; 2,000 machines that could be a target of ransomware. So, if one gets ... If all it takes is one person on one of those machines to open up the wrong email, or install the wrong file, and there's a chance everything's infected ... If you have your own network for your own accounting [00:22:30] firm, if the dentist office next door in your shopping mall gets ransomwared, that's not gonna jump into your- over the wall into your servers. I almost feel like the risk may be the pendulum swinging where it's actually less risk for you to have it on your own- on-site. Blake Oliver: Now, I still think that it's more risky to have it on-site. I mean, you're not as big a target, but there's just no way that your router, or your firewall is gonna be as good as what these hosting providers have. I think the [00:23:00] best solution is use a dedicated server. Don't use shared hosting, even though it's cheaper, and otherwise, have your own host. But if you do host it yourself in your office, have a professionally installed firewall to prevent somebody from hacking in, and professional monitoring.  Have a backup plan for what is going to happen if your hosting provider does go down because, according to a report from a cybersecurity company called Coveware, the average number of days a ransomware incident lasts is now 16.2 [00:23:30] days; 16.2 days, which is up from 12.1 days, and that's because of how long it takes to restore all of the files that get encrypted in a ransomware attack. Most these companies don't have a good enough backup plan for how they're gonna do that. They don't have the personnel to do it. You need to have the files so that you can keep operating for up to two weeks. David Leary: You just had that other article, three or four articles ago, and you were talking about what tax software people are using at the firms. Are all of those desktop apps [00:24:00] ... Even in the cloud accounting, and the small business SaaS app side of the world, lots of things are cloud now in SaaS. But on the tax prep world, am I making an assumption here - but a lot of it is not cloud yet- Blake Oliver: Basically- David Leary: -and that the only option is to host. Blake Oliver: Yeah, virtually all of it that people are using has to be hosted. It's either desktop, local desktop in office, server-based, or hosted environment, because the software companies have not innovated. Now there is, I think, Intuit Tax [00:24:30] Online, right? That's completely online, but it's a very, very tiny install base. David Leary: Obviously, Canopy's taking a shot at this, and some others, but- Blake Oliver: They don't-  David Leary: -in the grand scheme of things, firms have to use hosting if they do tax prep. Blake Oliver: Yeah, basically. David Leary: They don't have an option ... If you're not doing tax prep, you have options. You could not use hosting at all. You just be all 100-percent cloud.  Blake Oliver: Yeah. You could get away with it, if you're just doing accounting; but, yeah, if you do any tax, you've got to have a solution. That's why this is really important. David Leary: This is gonna happen again. We'll talk about this again before 2020's over, I'm sure, [00:25:00] with some other provider. It's just a matter of time.__________This episode of The Cloud Accounting Podcast is sponsored by G-Accon. G-Accon is the Google Accounting Connector that seamlessly integrates Google Sheets with Xero or QuickBooks Online and synchronizes data in both directions, eliminating the need for mistake-prone manual exports and imports. G-Accon is a powerful app for accountants, advisors, bookkeepers, and business owners to automate reporting, consolidate data, and build charts, and dashboards. With G-Accon, you can use the power and convenience of Google Sheets to customize and manipulate data in ways you can't do with your cloud accounting software. Imagine automatically sending your clients reports with just the data they need when they need it. G-Accon can even be used for backing up historical data. To learn more about G-Accon's powerful automation features, get a demo, and receive free training, head over to That is Cloud Accounting Podcast dot promo slash G-A-C-C-O-N. G-Accon, the Google Accounting Connector.__________Blake Oliver: I got another security story kind of on this front.  David Leary: That's good. I don't have any story that tags on, so go ahead.  Blake Oliver: Maybe Summit Hosting can feel a little bit better because Microsoft had a recent security shocker. A database containing 250 million Microsoft customer records was found unsecured and online just sitting out there in the open-.  David Leary: 250 million.  [00:26:30] Blake Oliver: Yeah, spanning 14 years; it was just sitting there online without password protection. This was found by a security research team from Comparitech. They uncovered no less than five servers containing the same set of 250 million records. It was customer service and support logs detailing conversations between Microsoft support agents and customers from across the world. It spanned a period from 2005 through December 2011.  [00:27:00]By unsecured, it means anyone with a web browser who just stumbled across the databases could access them. No authentication was required. There's no evidence that this data was actually accessed by anyone maliciously, but just the fact that it was sitting out there - an open database- David Leary: Since possibly 2011, it's just been sitting out there somewhere on some drive- Blake Oliver: Well, and if you're using OneDrive, or Dropbox, or Google Drive, or whatever - one of those services - and you send a link to somebody so that they can access the document, and you change the security settings so that [00:27:30] anyone with a link can access that ... We do that all the time just because it's convenient, because we don't know if the recipient is going to have a login for these services. Well, that's essentially what you're doing, and the Microsoft folks just did this at a grand scale. So, this was the result of misconfigured security rules, but I think it ties back to this whole discussion about the California Consumer Privacy Act, David, because as you pointed out, it's going to cause a ton of companies to have to create new databases that consolidate all the information about their customers in one [00:28:00] place. That's actually a huge risk because if they don't configure the security settings properly, then somebody might be able to access all of your data rather than just a piece of it. Imagine if this was [crosstalk]  David Leary: -more convenient ... You already brought that up, Blake. It's convenient for thieves because they can just get all your data ... All they need is one piece of your data. They contact a company; they send them an email with all your data. Blake Oliver: Right. David Leary: Or, in this case, they just have to break into the one main database now, and they get everybody's data. Blake Oliver: Exactly. So, unintended consequences, here. David Leary: Thanks, California. Blake Oliver: Yep. Hey, at [00:28:30] least the weather's good. It's gonna be 81 degrees today, and it's January 31 ...  David Leary: We can-  thanks, California. Wanna talk about the federal government? Blake Oliver: Yeah. David Leary: The AICPA backs legislation to present a report on the nation's economic health. Blake Oliver: So, how is the economy doing? Is the report out yet? David Leary: Well, no, there's no report yet. There's a bill being presented by Kyrsten Sinema. She's a Democrat senator from Arizona. It's a bipartisan fiscal state of the nation resolution, which would require [00:29:00] a nonpartisan official to present a clear, unbiased assessment of America's economic health- Blake Oliver: Uh ... Unbiased assessment?  David Leary: -and the AICPA is supporting this bill. Blake Oliver: Oh ... That's cool. So, this would sorta be like the Office of Budget and Management- or Management and Budget, where it's a nonpartisan group that reports on things that we need to know. David Leary: Yes. They're gonna, apparently, prepare the report yearly. Then, they have another 45 days later to report out on it. Rewind [00:29:30] here ... There's a trillion dollars of bunk journal entries by the Pentagon. Blake Oliver: Right. David Leary: We talked about the IRS accounting problems, and money going out, and there's no approvals, or controls [inaudible] of refunds they send out. Computer systems are out of date. This bill feels just like it's a political game. Like, I don't know if this is really possible. The accounting systems don't work. Blake Oliver: Well, this is going to be a report about the state of our economy, not the government. David Leary: But it's all tied to the nation's debt and federal budget deficit. That's what it's really about; it's so [00:30:00] lawmakers can understand the federal budget and deficit. Blake Oliver: Well, yeah, this is fun, right? It's always fun to create new reports ... It's sexy, right? Whereas fixing the Pentagon's accounting or actually enabling the IRS is not. David Leary: We need more dashboards. We need a big dashboard app that pulls data from all these government systems, and any citizen can just go view the dashboard every day if you want. Blake Oliver: Well, you know, maybe the folks in California who are building the state accounting system could get to work on that, and can spend a billion dollars on it, and not have anything after 10 years. David Leary: $1.1 [00:30:30] billion, right? I think it's past that. Blake Oliver: Yeah, I think it's like $0.1 billion every month now, at this point. David Leary: I saw another article with a great quote from Warren Buffett. Blake Oliver: Yeah? [crosstalk] Well, wait, wait ... Before we go there, you mentioned the deficit, right?  David Leary: Yes.  Blake Oliver: I just saw a stat, actually, about the deficit. The CBO is reporting that the debt has topped $22 trillion dollars. Federal debt held by the public is projected to rise to $31.4 trillion at the end of 2030, which [00:31:00] amounts to - and this is the big number - 98 percent of GDP. So, in 10 years, the federal debt will nearly equal our entire gross domestic product. That would be like, David, if you or I held personal debt that was equal to our entire salary for the year. David Leary: That's the American way, baby. Blake Oliver: I think a lot of people do, actually ...  David Leary: I think there's a lot of people that are like that. Yeah, this isn't ... Okay, whatever ... That's what it is. Blake Oliver: Maybe that alone, if that's the American way, that's fine. [00:31:30] But then it's projecting that debt held by the public could climb as high as 180 percent of GDP by 2050, if we don't do something. So, that's what really worries me, is if we go underwater, or if we go more than 100 percent of GDP on debt, how do we extract ourselves from that? I'm gonna end up paying for all this stuff, as a millennial.  David Leary: You just earn more money ... It's not a big deal. But here's the real motivation, though. If you really read Kyrsten Semina's quote about this- this is [00:32:00] her quote ... Now, keep in mind, Arizona has a lot of retirees. You know what retirees love to do? Blake Oliver: What? David Leary: They love to vote. They love the vote!  Blake Oliver: Vote for higher taxes? David Leary: Well, they vote. They just vote. They show up to the polls and vote. Unlike any other demographic, the retirees vote. Blake Oliver: Yeah.  David Leary: Here's her quote: "Measuring America's economic standing is a commonsense step to address our nation's debt, grow our economy, and protect retirement benefits Arizonans [00:32:30] have earned." This is a vote-pandering move. This is not a real bill. Blake Oliver: Well, this is why I'm putting as much as I can into my Roth IRA, because I wanna pay the tax now, because I feel like it's inevitable that old people are gonna get together and just raise taxes on working people to pay for their benefits. That's what's gonna happen politically. My taxes are gonna go up. Our taxes are gonna go up, David, to fund the retirement of [00:33:00] boomers who never saved. David Leary: I remember me saying that when we were 18, 19, 20 years old in Accounting 101 classes ... I don't know.  Blake Oliver: It'll happen. It'll tip. Unless the boomers just keep working, which is also possible. That keeps extending. We keep thinking that the retirements are gonna come in record numbers, and they just don't. So, maybe that'll keep us going. David Leary: Speaking of saving for retirement, you obviously wanna be like Warren Buffett one day ... There's [00:33:30] a quote from Warren Buffett about how [crosstalk]  Blake Oliver: I don't wanna be like Warren Buffett, one day. He still lives in the same house that he had 30-40 years ago. If I'm as rich as Warren Buffett, I'm gonna be on my yacht in the Mediterranean with a helicopter, and speedboats. That's the whole ... That's what- I'm investing in podcasting for a reason, David. David Leary: Yes, our podcast boat that we're gonna buy.  Blake Oliver: Maybe it'll be a deduction if it [00:34:00] is a recording studio. David Leary: Oh! All right, we got a plan now. We got a plan. So, his quote is related to complex accounting is a warning sign. Essentially, he talks about how businesses that have complex explanations of their financials, you have an insight to the character of management; you probably shouldn't trust them, and just move on, and invest in something else. I can read his quote, if you'd like, here?  Blake Oliver: Yeah.  David Leary: "Accounting can offer you a lot of insight into the character of management...When you don't have a product where revenues and expenses are being matched up on something close to cash in the short term you have the opportunity for people playing games with numbers - and some people have learned to do that very well and they've sometimes created long-lasting stock manipulation or promotion schemes that have enriched the managers at the expense of the public over time. If you ever get suspicious about accounting just go onto the next company." [00:34:30] Blake Oliver: That's good advice. Yeah, don't put up with complicated accounting. David Leary: Stepping back, would you invest in the Pentagon, knowing what we know about that? Blake Oliver: No, I would not.  David Leary: Step [00:35:00] back and really look at some of these things, yeah ...  Blake Oliver: Hey, so did we get any reviews this week? [You've got mail] David Leary: We did get a review. One review came in on Podchaser. Blake Oliver: This is from Sam.I.Am. "I really enjoy listening to The Cloud Accounting Podcast. Really appreciate the effort that you guys put in to make the podcasts so engaging and insightful. I am just starting out as a cloud accountant in a country where cloud accounting is not so popular yet and am grateful for this priceless resource, which keeps me well informed on the latest trends in the industry." Awesome. [00:35:30] Thanks, Sam! David Leary: Thank you, Sam.I.Am ... Green Eggs and Ham ... That's a great screen name.  Blake Oliver: I received some feedback from a listener, Caroline Dillard. She said, "Hey, Blake, I was listening to y'all's last episode on my drive into work today. Really enjoyed your discussion about goodwill. It was a much better breakdown than any of my textbooks have given. When you were talking about pneumatic tubes, there was a Wells Fargo across the street that had pneumatic tubes. Thought you'd like to know the tubes are alive and well in north Texas." David Leary: She [00:36:00] should go over and put some Cloud Accounting Podcast stickers in there, and send them into the tellers-  Blake Oliver: Send them over to the Wells Fargo folks?  David Leary: - so they can go for a ride.  Blake Oliver: That's great. Thank you, Caroline, for that feedback. Just a reminder to everyone, if you want to read this review, we really appreciate those. They help get the word out. You can write a review on Apple Podcasts, or on Podchaser. While we're at it, if you wanna contact me and tell me anything, give me any feedback, I'm @BlakeTOliver. How about you, David? David Leary: I'm @DavidLeary, so I'm easy to get ahold of. Hey, Blake, [00:36:30] you ever wanna be a CFO? Blake Oliver: You know, part of the reason that I'm doing what I do now over at Jirav is because I wanna learn how to do financial projections; look forward rather than backward. I'm increasing my value ... That's what CFOs do, right?  David Leary: But you're CPA, right? Blake Oliver: Yeah. David Leary: Did you know that of the 1,000 largest public companies in the U.S., CPAs that are CFOs are at the lowest level in six years? Blake Oliver: Yes, I saw this, and it's kind of depressing. It used to be over, what, 40 percent, six years [00:37:00] ago? David Leary: Yeah.  Blake Oliver: It's declined by quite a lot - 10 percent or more, in just that amount of time. Why does this article say that CPAs are not CFOs as much, anymore? David Leary: Well, a lot of it is the CFO just has to oversee so much more than just the books, right? The human resources, IT, risk management. They just have a lot more to do than just paying attention to the books; not to mention the actual financing parts of things, right? Never mind the accounting, but just the finance game. Blake Oliver: Mm-hmm.  David Leary: A lot of people [00:37:30] who just came up only doing the books don't have that skill set to manage all these other things. The interesting part of the article, though, was- this is from Michael Bryant. He is the CFO of the National Association of State Boards of Accountancy. He said that CPAs are held to a professional code of conduct. If they breach it, they could be suspended or lose their license. If you believe that ethics bring value to an organization, the accounting offers something more- the accountant offers something more. So, it's [00:38:00] kinda weird because he's almost implying, like, because they're not a CPA, they're questionable. Blake Oliver: Well, somebody having a professional license that has an ethics requirement definitely increases confidence - by investors, by management. CPAs, I would hope, are gonna be less likely to do something improper and more concerned with ethics. So, that's a good reason to hire a CPA, but apparently, that's not as important anymore; or other things have become important enough [00:38:30] where the CPA is just not as valuable in the head of finance position. Hey, let's just go back to all the discussion we've been having over the last few years about the CPA license, the value of the CPA license. Is it keeping up with what the market wants? It has not been, and the AICPA, and NASBA have taken notice, and that's why they're doing this whole CPA Evolution project to change the initial licensure to include more than just traditional audit, tax, and accounting, and add technology, and add business intelligence, and all these [00:39:00] things. That's a good move. David Leary: It even ties back to the discussions we've had about the FASB and the GAAP rules- Blake Oliver: Yes!  David Leary: -and what people even value, like the value of accounting, and accounting reports, in general; not just the CPA, just in general ... The value people are perceiving it provides companies. Blake Oliver: Yeah. So, I got into kind of a vigorous debate on LinkedIn after posting this with some folks. This is my feeling - it's that accounting standards have gotten many, [00:39:30] many, many times more complicated since the 1970s. We have just so much more that we have to worry about when it comes to GAAP. So, what are accountants focusing on in corporations, in these big 1,000 largest public companies? They're spending more and more of their time dealing with technical accounting. That gives accountants less time to focus on other stuff. So, my concern is that accounting is getting pigeonholed into this compliance function where [00:40:00] we're spending all of our time, as CPAs, getting the financial statements right, according to GAAP, which has gotten so-so-complicated. But have financial statements gotten that much more useful to investors? If accounting standards are four or five times more complicated than they used to be, are the financial statements four or five times more useful? I think we all agree - no! I haven't heard anyone make the argument that they've gotten that much more useful; that having volumes of disclosures in the footnotes is helpful. David Leary: Arguably, [00:40:30] it's made everything worse, right? I've experienced this, myself, where you can't do what is the right thing for your customers and your employees because of some weird revenue-rec thing. I've seen situations like this where the accounting standard is overruling what is the right thing to do for the benefit of the company. Blake Oliver: Yeah, that is bad, if that's happening. David Leary: It's definitely happening. I've experienced that, where decisions have to be done and made because [00:41:00] of accounting standards, not because it's the right thing to do for customers. Blake Oliver: Bringing it back to the goodwill discussion about FASB is investigating what to do with goodwill, you said something last week, David, that was- actually, it has stuck with me, and I've been thinking about it the whole week. You said that, to you, goodwill is brand. I owe you an apology because I was wrong. When you said that, I said something like, "Oh, yeah, it's brand, but it's also all these other things." Then, I went looked into it, and it actually is a lot brand. [00:41:30] You can make the argument that almost all of it, in many cases, is brand value. We don't currently, in U.S. GAAP, we don't put brand on the books. It's an intangible asset. We're too scared, as accountants, to deal with it, so we just say, look, we're not gonna put it on the books." It's too difficult to value, too difficult to capitalize, so we don't. Okay, that works great until you have an acquisition where brand is a big component of the value. Then, as in the case with Amazon and Wells- not Wells [00:42:00] Fargo- Whole Foods, you get $9 billion dollars of goodwill added to Amazon's books and brand is in there, somewhere, along with other stuff, and now it's on the books. So, we can't keep intangible assets off the books even if we want to, because acquisitions forced them onto the books in this weird category called goodwill, where they're all just lumped together, and it makes it less transparent.  David Leary: I'm starting to feel like we're getting into a crisis. It's building up [00:42:30] to, like, what's the point of accounting? What's the point of accountants? What's the point of all of this? Because it's doing nothing but slowing down economic growth, arguably.  Blake Oliver: It's putting a compliance cost on companies that they don't need to have, and that doesn't create a lot of value for investors. So, it arguably makes everything that we produce more expensive because every time you add a compliance cost, that gets passed through to consumers. So, if we figured out how to reduce accounting standards to make them less rules-based and [00:43:00] give accountants more discretion, actually trust them to make the right decisions inside of companies about what to capitalize, and how to do it, and all that stuff, then maybe accounting would be more fun; maybe it'd be more useful; maybe it'd cost less [crosstalk].  David Leary: Maybe the Pentagon is cutting edge. They're already there. They're like, "Just screw it! Just journal entry out to some other stupid thing, and they'll just cancel each other out eventually, and nobody cares." Blake Oliver: You know, yeah ... I don't think we should go quite that far, but ... Yeah ...  David Leary: They're ahead of us in the curve. That's exactly what's happening here. [00:43:30] Or it's just a leading trend. Everybody's gonna start copying that.  Blake Oliver: None of this, of course, means that accounting isn't gonna be successful and great, but it's just this traditional path of audit, tax, financial accounting inside of companies, it's just not where you wanna be. I think if you wanna have a great career, you've gotta branch out. If you're a CPA, you've gotta learn stuff beyond the CPA. Go learn those CFO-type skills. The accounting background is really, really helpful. It's just you don't wanna get stuck doing financial [00:44:00] statements for public companies that ... Do you really wanna be doing that for the rest of your career, if investors aren't really using it?  I think one of the last stats we said, it was 14 percent of investor decisions; 14 percent of the decision by an investor. I'll say it another way - when an investor decides to invest in a company, only 14 percent of that decision is because of what's in the financial statements. I don't have that stat in front of me, but I really- I recall that. If it's not that, it's a small amount. So, do you really wanna be doing that for your career? Do you really wanna be auditing [00:44:30] public companies? If the financial statements are not helpful, what's the point of the audit on these financial statements [crosstalk]  David Leary: There's a whole industry built on this. A whole billions and billions and billions of dollars industry.  Blake Oliver: Busywork. A lot of it is ... A lot. Now, I'm not saying it's not ... Obviously, financial statements, and accounting, hugely important to the economy. We need them. But there's a ton of busywork associated with it that we don't need. If we could just reduce it to what matters, then we'd all be better off. David Leary: Amen.  Blake Oliver: I love getting up on my soapbox here with you, David. It's a lot of fun. David Leary: Well, they're all [00:45:00] related themes, right? Over and over again [crosstalk]  Blake Oliver: Well, how do we bring this back down, though, to ... Most of our listeners are accountants and bookkeepers in public for small businesses. We're not doing accounting for big public companies. We're not doing GAAP, in most cases. We're doing cash-basis books, or modified cash-basis. There's some accrual stuff going on, but it's not GAAP. So, why do we care about this? I guess I'd just say because, hey, we have money in the stock market, right?  David Leary: Well, I [00:45:30] think that, but not just that. I think it's really the way you treat your clients, right? You could get in the minutiae, and over-track things, and lose perspective when you're dealing with your clients' books and not actually help your client because you're overly tracking and breaking out line items on receipts that don't need to be tracked to that detail level, possibly- Blake Oliver: Right.  David Leary: -in splits, and classes, and tags, and all this other stuff, and you missed the point of actually helping your client. So, I think it totally really because that's what's happening right now ... The [00:46:00] overregulation's getting away from running a corporation in a good way, possibly, and that's the same thing with your clients. It totally relates. Blake Oliver: You know, Gene Marks talked about this once in an article- actually, it was in one of his books that I read; it's a book for small business owners. He says, on hiring an accountant- he said your accountant's gonna try and sell you financial statements - income statement, balance sheet, statement of cash flows - and they're gonna spend- you're gonna spend a lot of money generating these reports, and they're not really that useful to you. I'll have [00:46:30] to dig it up for you, David. But it's really funny, and it's true, right? The accrual-basis income statement, balance sheet, and statement of cash flows are not helpful to most small businesses. Those are not gonna move the needle for them. They need completely different information. So, that's the takeaway. What information they need, we won't go into that right now. David Leary: So, speaking of information, one thing everybody needs is bank feeds, right? Blake Oliver: Yep. David Leary: I don't know if you saw ... We talked about Plaid, what, two weeks ago? They got acquired by Visa for half-a-bajillion dollars or something ridiculous-.  [00:47:00] Blake Oliver: Yep, yep.  David Leary: $450 million ... It was a ridiculously high number. Well, there's another competing company that just raised $4 million. It's a company called Teller. So, Teller raises $4 million to take on Plaid in the U.S. by providing API access to bank accounts. Blake Oliver: When I sent this to you, you said that- you joked that that's probably what Plaid spends in a month. David Leary: Well, I think I joked that Plaid probably spent that in the time it took you to paste the article [crosstalk] They were in the UK, before, and in Europe. Then, with open banking, there's not a need for that type of a product. [00:47:30] What was really interesting for me, reading this, is the founder's tone against Plaid. He argues that people are not happy with the market leader. People are not happy with Plaid. I don't know if that's true. I mean, I've talked to a lot of developers. Almost every app I looked at is using Plaid. I'm not hearing grumblings about Plaid.  Now, maybe some end-users complain about it because there was an outage. It wasn't working with this bank, or it wasn't working with this bank because that's the typical fault of screen-scraping. The [00:48:00] founder, he actually gets into this a little bit about his app, a little bit. Plaid uses screen-scraping, which he calls it a "creaky technique." The way screen-scraping basically works is it's a web browser; that data travels to the web browser; and the bank is sending data to a web browser.  Blake Oliver: When you log into online banking, what you see is what is getting sent to Plaid. David Leary: Yes. Now, what he's done- they do it a different way. They're tricking the bank. This is the way I read [00:48:30] this is that they reverse-engineered the banking app. So, they take the Bank of America mobile app, reverse-engineer it ... I think what they're doing is they're sending a signal, so the bank thinks they're communicating with their own mobile app, and then he's pulling the data out that way. If he thinks the banks were blocking Plaid over and over again, they're gonna lose their minds when they find out this is going on.  Blake Oliver: Yeah because they could just shut it down, right? Wait, so tell me how it's working, again?  David Leary: Okay. There's not tons of details, right. I'll just [00:49:00] read this straight out here: "He, along with the cofounder, Dan Palmer, had spent several years building an early version of Teller that reverse-engineered the APIs used by UK banks for their own mobile apps and offered access to developers that wanted to create apps using banking data. It was billed as a more robust, and real-time alternative to screen-scraping. So, screen-scraping is the bank knows you're a browser; it sends the data, and then you're just getting the HTML and pulling stuff out of that HTML. Blake Oliver: Yeah. David Leary: He's connecting into the banks under [00:49:30] the guise of being their own mobile app. This is insane! Blake Oliver: Yeah, yeah. Well, hey, so you said, before all of this about the actual how it works, you questioned is Plaid working for people? Given that bank feeds are breaking a lot, and most bank feeds, a lot of them are using Plaid, we can assume that issues with Plaid might be behind it. I found example! Jason Deshayes said, in response to our discussion about You Need a Budget, that they use USAA. He and his wife use [00:50:00] USAA for banking, and the security is all jacked. "It requires us to re-credential whenever we pull transactions." So, they're connecting YNAB to their USAA bank accounts, and they have to re-authenticate every single time. I looked it up, and YNAB uses Plaid.  David Leary: Yeah, and it's not so much because of Plaid. It's not having an open API at the bank, right?  Blake Oliver: Right.  David Leary: So, every time you sign into that bank, you have to re-authenticate. Until the banks support - which, obviously, we're seeing now with Chase; we're seeing it with Wells Fargo, [00:50:30] Bank of America ... They're all starting to support some auth-token access instead of screen-scraping- Blake Oliver: Mm-hmm.  David Leary: We'll see. I just can't imagine tricking the banks is a good play. I just don't see ... I don't see that going down well. Blake Oliver: Well, that's all the time we've got for today. David, great chatting with you, as usual. If people wanna get in touch, where's the best place for them to do that? David Leary: On Twitter, I'm @DavidLeary, but it feels like a lot of people like to message me on LinkedIn, so use LinkedIn messaging if that's where you're at, instead.  Blake Oliver: Yeah. I'm [00:51:00] Blake Oliver. I'm @BlakeTOliver. I'm also on LinkedIn. You can connect with me. Message me there, if you do connect with me. Please leave a note saying that it's the podcast because, otherwise, I have no idea who you are, and you might be a bot. You can also email me at If you are interested in getting notified whenever we post new episodes, you can join our email list. We'll also keep you apprised of where we're gonna be this year. Go to, [00:51:30] and scroll to the bottom of any page, and you will see a signup form for our email newsletter. If you join that, you'll get notifications of new episodes in your inbox with links to the show notes and any other special communications that we wanna send you. David Leary: We're starting to figure out where we're going this year. So, in about two weeks, we should be able to put up a final list of where we expect to be. Blake Oliver: Well, David, pleasure, as usual. I'll see you here next week. David Leary: Enjoy the Super Bowl. Blake Oliver: Thanks.  David Leary: Bye. __________Time for the classifieds. Looking for some more great cloud accounting content? Ryan Lazanis started and sold his own cloud accounting firm in just five years. Now, he helps firms stay on the cutting edge through his free weekly email, curating the top five pieces of content that helped you modernize your firm. Visit accounting to sign up. That's Future Firm dot co slash cloud accounting.  One of the biggest hurdles accounting firms face is finding training that is current and relevant. There is an answer. Elefant Training. Elefant offers webinars and training on Xero, QuickBooks, cloud-based apps, and modern practice management issues, like remote leadership and creative compensation. Their instructors are firm owners who also happen to be international experts in cloud accounting. This year, Elefant is offering recordings of their most popular webinars, plus additional valuable resources in their brand -new learning library. You can use the code "CAP20" for 20 percent off your subscription. Bulk licenses for firms are also available. Visit for more info. That is E-L-E-F-A-N-T training dot com.  Want to get the word out about your newsletter, webinar party, Facebook group, podcast, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad. Hit the show notes, and the links to get more info.
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Oct 4th, 1974
Tucson, AZ, USA
Episode Count
Podcast Count
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3 days, 15 hours