Community-builder, people-connector, helping tech companies understand accountants, and helping accountants transform their firms with innovative tech.
Recent episodes featuring Rachel Fisch
Sponsors BQE CORE - - Show Notes 02:23 – Blake and David recap the ongoing iNSYNQ ransomware debacle 03:07 – Official iNSYNQ ransomware update ( 04:00 – iNSYNQ feedback from unhappy Tweeters  05:12 – Homeland Security's October 2018 warning about possible ransomware attacks (  06:18 – Tweeting with iNSYNQ CEO Elliot Luchansky on 7/23 before he backed out of the interview ( 08:21 – Get a clue - You can't control the conversation 08:59 – Should Intuit do more to protect customer data? (  11:01 – From the Intuit Hosting Program FAQs - "The Commercial and Standard Hosts who participate in the program are solely responsible for the security, privacy, availability and backup of QuickBooks data files and the software that they host, in accordance with their end user hosting service agreements" ( 12:40 – Meanwhile, on, out of 650 apps, only one has been breached 13:36 – Wake-up call to hosting providers (  14:14 – Blake's take on the iNSYNQ Situation 15:28 – Jack Newton on the "unholy combination" of cloud and on-prem technologies - ( 16:51 – Slightly ironic? Five Ways to Avoid a Ransomware Attack ( 17:27 – Rachel sheds light on some of Sage's cloud and desktop hosting elements 22:30 – How "Six Ways How Cloud Computing Improves Accounting Practices" confuses the issue of  cloud v. desktop  ( 24:56 – Rachel talks about MindBridge, and the benefits of using AI for audits 28:15 – Part of MindBridge's successful marketing campaign ( 32:44 – According to Michael Izza, ICAEW Chief Executive, the auditing profession needs to "be prepared to think and act differently" ( 34:04 – Words of wisdom for auditors ( 35:35 – Where IS the best place to find top-level accounting talent? ( 37:36 – The IRS issues some 10,000 gentle reminders about cryptocurrency filing obligations ( 38:30 – How to pay your $3 million IRS bill in cash ( 40:19 – Expensify takes home some bling for its 2019 Super Bowl 2 Chainz video ( 43:08 – Using Microsoft Excel’s Power Query might leave you vulnerable to malware attacks ( 44:16 – SMB lender OnDeck wants to become a bank ( 45:26 – Lendio, another SMB player, acquires Billy, a cloud-accounting app, rebranding it as Sunrise, perhaps offering a ‘light’ alternative to QBO and Xero ( 47:37 – California wants to increase truth-in-lending protections for small business borrowers ( 49:30 – 59 percent of larger firms still haven’t tackled payment automation ( 51:24 – Gusto’s Series-D round raises $200 million for East Coast expansion and continued development on its Flexible Pay feature ( Connect with Rachel Rachel Fisch on Twitter: @FischBooks  LinkedIn: Rachel Fisch, CPB Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptRachel Fisch: "AI will not replace auditors, but auditors that use AI will replace auditors that don't." This episode of The Cloud Accounting Podcast is sponsored by BQE Core. As many of you know, I'm all about the niches and niche apps. Putting your business clients in the proper niche app is providing them with a 100-percent solution versus, at best, the 85-percent solution of a standalone accounting app. If you have clients that are architects, engineers, consultants, or lawyers, Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. You don't need to juggle between multiple apps. Core has it all in an easy-to-use all-in-one app for project management, including time and expense tracking, budgets, forecasting, client billing, and accounting. Even though Core is an all-in-one platform, it still works nicely with the apps like Google Drive, Dropbox, OneDrive, QuickBooks, Xero, and AccountRight, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app and recently launched a cutting-edge voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. Did I mention that BQE Core works great for bookkeepers, CPAs, and accounting firms, too?  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: And I'm David Leary. Rachel Fisch: And I'm Rachel Fisch. Blake Oliver: Hey, Rachel, thanks for joining us so much, on short notice. It's gonna be great to have you here for our regular news episode. Rachel Fisch: Hey, no, it's totally my pleasure. How it came about was kinda funny. Blake and I were just talking about actually a previous episode [00:01:30] about MindBridge, and I had some thoughts about AI, and= accounting, and audit- Blake Oliver: Yeah. Rachel Fisch: -and he's like, "Hey, you should come back, and let's talk about this." So, here I am. David Leary: They're a Canadian company, so you have extra cred to speak on this.  Rachel Fisch: They are, yeah. David Leary: Okay.  Rachel Fisch: Extra special place in my heart for MindBridge.  Blake Oliver: Awesome. We'll talk about MindBridge. I'm eager to learn more about it, and AI in accounting, and everything that's going on in that world. First, some breaking news, or at least a story that has just refused to stop breaking over the last two weeks - the iNSYNQ [00:02:00] outage. We're talking about the cloud-hosting company. It's a hosting provider of QuickBooks Online- I'm sorry, not QuickBooks Online, QuickBooks Desktop hosting, as well as Sage hosting. They have been out for how long is it, David? David Leary: We covered it last week. I think it was June 16th this started, and-  Blake Oliver: June 16th-  David Leary: -they reported it publicly to their customers on the 19th, I think it was? Blake Oliver: Yeah, so, almost two weeks now, they've been ... At least some customers we're seeing on Twitter are [00:02:30] still unable to access their iNSYNQ-cloud desktops. What, that's 13 days? On July 16th, iNSYNQ was the victim of a MegaCortex ransomware attack. That is the sort of malware that gets into your systems and encrypts files. Then the hackers typically demand payment in bitcoin to unencrypt them. Paying the hackers, though, doesn't always get your files unencrypted. You're taking a bet. [00:03:00] Apparently, many people, even though they're able to get into their iNSYNQ desktops now, there are still some encrypted files. There's an update on the iNSYNQ website, as of July 29th, and I should say, we're recording July 29th, and this update was at 5:50 Pacific Time; just a few hours ago. It says that, "Nearly all iNSYNQ customers now have access to their iNSYNQ desktop. Our work isn't done, though, and we'll continue to work around the clock until [00:03:30] every desktop is restored. Your applications may not be immediately accessible and/or populates your account ..." They're saying most people have access; they're not able to access all their applications. They also go on to say, "While we caught the attack early, the malware was able to encrypt some files. We're currently working to determine if they are recoverable. You may see some encrypted files on your desktop with ‘.MegaCortex' as an extension. They are not available to access." David Leary: I thought I saw somebody tweet that. I think I saw somebody tweet specifically that - that they had a file on their desktop that was [00:04:00] labeled that. Yeah.  Blake Oliver: Yeah, so, that's the current status. It is not the best situation. There are definitely still people who aren't able to access. There's folks on Twitter saying that ... For instance, just recently, today, @rh224 said, "Still can't access," and that support lines are ringing busy. Cecilia - username is @ItsMe_CeciliaB - said yesterday that [00:04:30] she was on hold for over an hour and 10 minutes and their server is still down; can't get through to customer support. It's very, very unfortunate. David, why are we talking about cloud hosting on The Cloud Accounting Podcast? Right? David Leary: We talked about the MegaCortex a couple weeks ago. You did extra research after ... Remember, CCH suffered the same problem. Blake Oliver: Yep.  David Leary: I feel like it was only four or five weeks ago. Blake Oliver: Yeah.  David Leary: Then you did the research in the background. That MegaCortex, apparently, is all tied to some backdoor in Windows that [00:05:00] the NSA discovered, a vulnerability, and now it's being exploited everywhere. Blake Oliver: Oh, yeah ... Well, you found this. You found that the NSA issued an advisory months ago, specifically to- David Leary: Homeland Security issued-  Blake Oliver: Oh, Homeland Security ...  David Leary: Yes, on October 3rd of 2018, Homeland Security issued a warning to hosting providers that they had reason to believe there's going to be attacks coming, in ransomware. Blake Oliver: Do you think these hosting providers were aware of this? Do we know [00:05:30] if iNSYNQ knew about this Homeland Security warning at all? It seems like they were not ready for this, but ... David Leary: That I don't know. I found this on ... There's a whole site. We call it QuickBooks Desktop hosting in our world, right? Blake Oliver: Right. David Leary: Apparently, there's a whole other world, and they call it a managed service providers. Blake Oliver: Oh, so these are people who do hosting for all sorts of things, not just QuickBooks, or Sage, or whatever-  David Leary: All kinds of stuff ... They do a lot of stuff for government agencies, as well. So, lots [00:06:00] of people use hosting environments. It's not just a QuickBooks hosting thing. Really, I think if you would take the niche of QuickBooks hosting, they're part of a bigger - they're call it managed service providers - space that's out there. Because what I did is, I started poking around this weekend, and that's how I found this. Blake Oliver: We reached out- I reached out on Twitter to Elliot Luchansky, who is the CEO of iNSYNQ, and asked him if he would come on the podcast. He replied very quickly and said, yes, that he would be [00:06:30] happy to join the podcast. He said, "Thank you for reaching out. I'd absolutely be open to this. In fact, I appreciate the platform to speak to these points with a neutral party such as yourself. We were really excited. We were gonna have him on today. It's Monday-  David Leary: Well, they even tweeted at us, because they listened to the podcast that we recorded last week. They listened to it, and said, "Hey, we got extra clarifications ... Can't wait to join."   Blake Oliver: Then, on Friday, we got an email saying that he backed out. Unfortunately, we don't have Elliot on the show [00:07:00] to ask him these questions. I still have lots of questions, like how did this happen in the first place? When are these people going to actually get access to their files? iNSYNQ with saying that it would be done this weekend, but apparently, it's still not. What about the files that are encrypted? Are those ever going to get unencrypted? We just don't know-  David Leary: Maybe Elliot doesn't know either, at this point. The ideal situation for him would be to show up on Monday and be like, "Everything's fixed! Woo Hoo!" Right?  Blake Oliver: Yeah. David Leary: Obviously, based on what you said was on their site earlier today, they're not out of the weeds yet. He's probably had a very [00:07:30] difficult 14 days [cross talk] Blake Oliver: Yeah, and I don't wanna speculate, but that's unfortunately all we can do, because we also invited him to - if he didn't wanna come on the show - send us a statement, and then radio silence. Nothing.  David Leary: At least they put a statement on their website of where they're at now, because I think some of the problems they've had is people are accusing them of turning their Twitter account off, doing fake tweets-  Blake Oliver: Well, they did.  David Leary: -deleting Facebook posts, or hiding messages. Blake Oliver: This goes back to when the whole CCH outage happened - the way the tech companies handle a crisis like this. [00:08:00] This was a classic example of what you shouldn't do, at least in my opinion. I don't know what you think, David, but what they were doing at first was basically trying to hide it. They deactivated their Twitter account, apparently. Then, on Facebook, they were ... I didn't verify this myself, but people are saying that they were deleting or hiding posts from users about the outage. David Leary: It's Cluetrain 101. Again, everybody that has customers should go read The Cluetrain Manifesto. You cannot [00:08:30] control the message. The conversation's gonna happen with or without you, and you have to jump in and join the conversation. You cannot control the conversation. You just can't. It's impossible in this day and age.  Blake Oliver: That's what we know about iNSYNQ. The last thing I wanna talk about on this subject is Intuit, o it because, you know, I have to pull Intuit into everything, right, David? That's like my job, apparently. One of the sites that I discovered ... I think it was somebody on Twitter pointed it out to me, or maybe you found it, David; it's [00:09:00] the Intuit hosting program website - This is a site that lists the authorized hosting companies. Apparently, in order to host QuickBooks, you're actually supposed to be authorized by Intuit. There's a wall of logos on this site; it looks like one, two, three, four, five ... 16 companies listed as authorized commercial hosting providers. David Leary: Yeah, they almost have two tiers, like a premium authorized hosts, and then the second tier of some type. [00:09:30] Blake Oliver: If I were a QuickBooks Desktop customer, this is where I would probably go first to find a host, because I'm looking for somebody who Intuit is recommending to me, right? Right up at the top, the headline is, "Are you using and Intuit-authorized hosting company?" "Intuit partners with more than 20 companies who are thoroughly screened to ensure your data is safe and that your business is not at risk. Intuit-authorized hosting companies are listed below. If you have any questions, please contact" That, [00:10:00] to me, means Intuit is vouching for the security of these providers. My business is not at risk. Then, Byron Patrick directed us to the Frequently Asked Questions, because Byron-  David Leary: He's @byron_CPA on Twitter. Blake Oliver: Yeah. He previously worked in the hosting world. On the Frequently Asked Questions, which is available via the menu, there is a list of questions. The second to the [00:10:30] last one, and you have to actually unfurl it to get this answer .... The second to the last question says, "What does the authorized commercial host and authorized standard host statement and logo mean?" It says, "This statement and logo mean only that Intuit has entered into a written agreement with the commercial or standard host, which legally authorizes them to remotely host certain versions of QuickBooks software for access and usage by properly licensed end-users. It does not mean that Intuit sponsors, certifies, prefers or is officially, or exclusively partnered with commercial or standard hosts."  [00:11:00] Now another question on the Frequently Asked Questions, right above that, "Is my data secure when using the Intuit hosting program?" The answer, "While Intuit provides legal authorization to participating hosts, Intuit does not certify, guarantee, or warrant individual commercial and standard host services, or hosting environments. The commercial and standard hosts who participate in the program are solely responsible for the security, privacy, availability, and backup of QuickBooks data files and the software that they host in accordance with their end-user hosting-service [00:11:30] agreements." That seems to completely disavow any responsibility and does not match up with what I'm seeing on that commercial hosting program page. David Leary: Looking at that page, I can tell you that, based on my experience, the page is a little old; it's in the branding, and the format of the page. It does feel like it's a little bit old. The other reason I'd suspect that that page is a little old and out of date, as well, is the fact that some of these companies have merged with some of the other companies, but [cross talk] Blake Oliver: Oh, and they still have the separate logos. David Leary: Yeah. What [00:12:00] concerns me about that page is, doing a little bit of Google searches ... Just type that company name and ransomware; type that company name and hacked; or, of these companies on that page have now been ransomwared. Blake Oliver: This is four of 20. David Leary: Well, I think one of them's in that second tier, whatever the ... I don't understand those two levels that they have there.  Blake Oliver: Three of the top 16, or the commercial hosting providers, have been ransomwared. Then, there's the standard hosting program, which has another dozen, or 20, [00:12:30] or something like that, yeah ... But that four of them- four of these companies have been ransomed? That does not ... We could start playing bingo on this thing, right?  David Leary: If you just go ... Make the circle a little bit bigger to tax software. Then, now, CCH. That's five. Is this becoming ...? In the meantime, I can think of one., there's like what, 650 apps there, right?  Blake Oliver: Yeah. David Leary: They all go through security review once a year to get to stay on [00:13:00] You think QuickBooks Online, Xero - all the SaaS products that are out there [cross talk] small business ... There was one, ComplyRight, which, I think people know them as eFile4Biz. They did have a data breach, but nobody suffered. The true SaaS players don't seem to be suffering this. It's these hosting players that are having these problems. Blake Oliver: Yeah, well, it's because, as we've said, hosting relies on old technology that is fundamentally unsecure, because it relies on Windows as [00:13:30] the server. Time and time again, we've seen that the whole foundation of it is not secure. There's many holes, and people are discovering new ones all the time. David Leary: There is an op-ed-type opinion piece that's in one of these managed server provide websites. It's a wakeup call to this industry, like, "If we keep being hacked like this, our whole industry is gonna collapse." We'll have that in the show notes to read. Then, I'm gonna get a tweet to read. That is from Jack Newton. He is the founder of Clio law firm software, which is law firm software in the cloud. I [00:14:00] think they've seen ... With a lot of the old legacy law firm software, a lot of that's hosted, and a lot of law firms use these hosted environments. He actually had a really good quote that I want to get. While I pull that up, Blake, why don't you tell us your next little piece of this you have? Blake Oliver: My take on this is just that iNSYNQ owes more to its customers. As a CPA who has been in practice, I'm just so offended by the response on behalf of the customers. If I were a customer, this would not be acceptable to be down for two [00:14:30] weeks and not have access to my files. There really should have been backups available instantly. As a software guy, I sympathize, because I work for a tech company now, and I have a behind-the-scenes view into the difficulty in securing environments, but that doesn't excuse the really, really poor response, both to the customers and, frankly, to us, when we're trying to find information out for the community. To say you're gonna come on the show and then not come on the show, I [00:15:00] think, is cowardly and just reflects a really poor understanding of modern public relations and how you are supposed to interact with your customers and the press - if we can even be called that. I would hope that somebody would think of us at least as representing the community or trying to find out stuff on behalf of the community. That's my take. David Leary: Okay, so I found Jack's quote here. This is a tweet from Jack [cross talk] Blake Oliver: This is the CEO of Clio, the online law firm management software. David Leary: Yep. "Hosted cloud [00:15:30] solutions are the unholy combination of on-premise and cloud technologies, combining the worst aspects of on-prem with a 'false' cloud. Hopefully, this devastating ransomware attack highlights how dangerous this model is and helps kill it."  Blake Oliver: That says it all. David Leary: My opinion on this if I feel like you're paying a premium, right? I think I mentioned this in last week's episode. You're outsourcing your IT. All the marketing materials from all these companies is, "We're gonna keep you from being hacked. We have IT; we [00:16:00] have all the security." You're paying a premium to outsource your IT department. Blake Oliver: Yeah. David Leary: In a way, you're becoming a bigger target, because now, instead of it just being you, lonely- Blake Oliver: You're a small firm, yeah.  David Leary: -small firm; nobody cares that you even exist. They're not actively targeting you. Now, you just pulled yourself in with thousands of other accountants, and now you're a target. You're paying a premium to get ransomwared. It's a little bit insane, and I kinda feel like is the pendulum completely swung the other way now, where you're [00:16:30] putting your clients at risk because you have them on hosted, when maybe you really need to swing the other way to a true QuickBooks Online model, to a true SaaS model?  Blake Oliver: Either that or it needs to be a provider that you have personally vetted; you understand their security policies; in the same way that you would vet your own at your office. We just can't trust that these folks are doing it. The irony, of course, is that iNSYNQ has a blog post called "Five Ways to Avoid a Ransomware Attack." David Leary: That's marketing. That's always gonna happen ... Obviously, Rachel's here.  Rachel Fisch: Hey, guys [cross talk]. [00:17:00] David Leary: -we had to inform Rachel, which was this is not just a QuickBooks story. Rachel's with Sage, and- Blake Oliver: Yeah.  Rachel Fisch: Right.  David Leary: -they do Sage hosting, as well, so this is [cross talk] bigger, bigger influence. Blake Oliver: Yeah, so, Rachel, I know this is not your story. You didn't know we were necessarily gonna talk about this or anything-. Rachel Fisch: That's okay.  Blake Oliver: I'm just curious to know, when people ask you about Sage hosting or whatnot, how does Sage handle this? What do you guys say?  Rachel Fisch: So, I can't speak to the security thing, but [00:17:30] I think one of the things that I get a lot of is that a lot of people, I think, equate Sage with desktop. I think that, historically, we've had really strong desktop programs, which is great to fill that need. But I think I kinda need to announce to the world, hey, guys, we've got a ton of cloud-native products, as well. We are actively migrating Sage Desktop files to Sage Cloud. We [00:18:00] do have- we're working with firms who are going full-on cloud. If feels like it's Sage Desktop versus QuickBooks and Xero Cloud world, and it just isn't. We're actually facing the exact same things, where cloud-hosted does not equal native cloud. We're having all of the same conversations. I'd be interested to see what kind of authorizations ... In this case, where it's got the Intuit-hosted, [00:18:30] authorized-hosting team, and whatever that looks like, I would definitely be interested to see what that looks like on the Sage side, to see if there are any extra steps that we take to protect the clients, for sure. Blake Oliver: Well, I don't know a ton about the Sage Desktop products, but I do know that some of the products have what I've heard described as a hybrid cloud, where the file is ... It's like you take the file and Sage [00:19:00] puts it into the cloud and then you can read-write to that file, but you're still using the desktop interface and software? Rachel Fisch: Yeah. There's different models, and the idea is that you're able to work fully in the desktop in a cloud-connected environment, or be able to collaborate with the desktop file, with your client. So, for example, there's something like Sage Drive, where I can use it with my local drive, and then I can save it in Sage Drive, and then my client's gonna take it down, and do the work, and then put it back in Sage Drive so that I can collaborate. Essentially, [00:19:30] that's just our own self hosting, but then at least you've got our brand behind that, and we're not trying to verify other users or other companies, right? Blake Oliver: Yes, and that's where I think Intuit may have made a mistake in this program, which is in creating these commercial authorized-hosting providers, consumers don't know what that means. Rachel Fisch: Right. Blake Oliver: They see the Intuit brand or the logo on the website, and they think that this is safe. It's clearly not, because it's not like Intuit [00:20:00] is going in and auditing these providers. I guess they have the right to do so, but from what I'm hearing online, this doesn't happen. So, really, they're just trusting these providers. Really, it's a financial relationship. Rachel Fisch: So, people don't read all of the terms, and conditions, and FAQs when they sign up for this stuff? I'm shocked.  Blake Oliver: Amazingly right? Rachel Fisch: I'm shocked.  Blake Oliver: If Intuit isn't going to force people to go from desktop to online, and they're gonna allow people to keep doing hosting, then I think they should provide it themselves to ensure security. That's just my take. David Leary: Maybe this is that domino that pushes it that way ... If you [00:20:30] go back, we talked about it after Scaling New Heights, Right Networks ... They're basically locking down their system a little bit, they're going to make everybody use a web-based interface - all the apps - so you don't install apps to those machines. They're really locking down their environment even tighter, because, ultimately, it is like having hundreds and hundreds of Windows computers just sitting there with anybody doing anything they want to them. Of course, something's gonna accidentally- even on accident; even not purposely [00:21:00] attacked, somebody's gonna accidentally get something infected, so there's lots of risk to this. Should we talk about other news?  Rachel Fisch: I was just gonna say, David, I'm looking forward to the article that will be in the show notes later, that talks about the demise of hosting, because I feel like if they are just now saying, "Hey, guys, if this continues, we might be in trouble ..." They're how many years too late? You're already in trouble! We already need to be moving on, to be going full cloud. I [00:21:30] think if anyone was smart right now, they would really take this hosting spin on a marketing trip, and say, "Hey, we'll like do all your migrations for free, and we'll get you over to the cloud, where it really is secure." Then again, today, I was just talking to a Facebook group owner who said that a bunch of his loyal followers were saying that they think the cloud is just a fad. I'm like, "What?!" Anyway, I guess there are still people who will continue to use these services, as long as they seem secure. So, [00:22:00] we'll see. Blake Oliver: I'm okay with being a fad, as long as we're the snap bracelet of fads, because those things are awesome. My son has one, right? They don't go away. We'll be around for a while. Rachel Fisch: Great, great.  David Leary: The big problem is the marketing, which bugs me. It grays the cloud computing world- Rachel Fisch: I agree. Blake Oliver: Right, it confuses people. Rachel Fisch: Yeah. David Leary: You know, I'm doing my normal - not research about this. I was just getting regular articles, doing my normal weekly reading of articles, and news feeds, and stories for the show. I see this one with this headline. It says, "Six [00:22:30] Ways How Cloud Computing Improves Accounting Practices." I was like, hey, that could be a possible story for the show. I click on it; I start reading it; guess what it's about?  Rachel Fisch: Hosting-  David Leary: Hosted desktop QuickBooks-  Blake Oliver: Oh, no ... David Leary: That does not help anybody, because I think there's ... I've talked to ProAdvisors. I've talked to small business owners. There's people that think they use QuickBooks in the cloud, and there's even QuickBooks hosted, and they don't know, because the messaging is so wrong. Rachel Fisch: Yeah.  Blake Oliver: So wrong.  David Leary: Maybe, if anything happens out of this, it's there's some marketing requirements and clarification of [00:23:00] like you can't say you are QuickBooks in the cloud. You have to say you are QuickBooks Desktop hosted, maybe, just to create clarity on this [cross talk] because it's not ... It's not that it's deceiving. I mean, it's marketing, right? That's a gray word. It drives me crazy, because they've been doing that for six years. Rachel Fisch: Yeah, that's been ... Talking when the cloud was first coming out, and you'd see those bookkeepers going, "I've been in the cloud for 10 years." I'm like, "No, you're desktop-hosted. That's not cloud native. There's a huge difference." This episode of The Cloud Accounting Podcast is sponsored by Rewind. For years, Rewind has been successfully backing up thousands of small businesses' data that is stored in cloud apps like Shopify, BigCommerce, and Mailchimp, saving these small businesses from CSV importers, employee mistakes, and app integrations that didn't go as planned. Rewind has also been backing up QuickBooks Online company data, too. That's right, Cloud Accounting world. I did say back up QuickBooks Online company data.  It only takes seconds to install what's essentially an insurance policy against major disaster, or just those small business owners that like to get "creative" in the accounting system. Rewind works automatically in the background, capturing all the changes to your QuickBooks Online in real time. If something does go wrong, Rewind is the only service that gives you 100-percent control of what you need to restore it, be it one transaction, multiple transactions, or all the data. To learn even more about Rewind and access a special offer just for listeners of The Cloud Accounting Podcast, head over to That is Cloud Accounting Podcast dot promo forward slash R-E-W-I-N-D.  Blake Oliver: I don't wanna run out of time. As much as I love talking about that-  Rachel Fisch: Right. Oh, right. We've got other things to talk about, yeah.  Blake Oliver: Yeah. Rachel let's talk about AI and audits, because I am obsessed with AI. I love it. I did a webinar recently about AI for accountants, but I never talked about audit, really ... Well, only the high level. What is going on in that in that world? Rachel Fisch: Sure. Well, I think that I think that AI is one of those [00:25:00] things, you know, along with chatbots, and blockchain, and cryptocurrency. Anyway, there's a lot of buzzwords that happen when you're talking about technology in accounting and in accounting firms. It just seems like AI is getting a little bit more traction in certain applications than things like blockchain and stuff like that. I know you've mentioned the Deloitte Controllership surveys, where it's like nobody is doing anything with [00:25:30] blockchain; but who is doing something with what, right? What I've seen about AI is that ... This came up in a previous podcast, when you guys were talking about MindBridge. is the website, based out of Ottawa, here in Canada. Blake Oliver: We were talking about they raised a bunch of money, right? Was that the story? Rachel Fisch: Yes. That's what got it to hit your headlines there- Blake Oliver: You know them because they're in- sorry, you said Ottawa? I apologize. Rachel Fisch: Ottawa, yeah. No, they're in Ottawa, in Canada. Of course, every [00:26:00] Canadian knows every other Canadian, so I know those guys. They happen to be Sage partners of ours. We run in the same circles. We've got a lot of the same partnerships. They're a really great team over there. They're really real pleasure to work with. You and I just kind of got chatting about what does this look like? I think one of the interesting things about AI and audit is that everybody can understand what an audit is. When you talk about how to integrate AI with accounting services, of course, [00:26:30] we've seen how successful or not successful that is in some areas. Blake Oliver: Yes.  Rachel Fisch: But when it comes to audit, it is literally eyes on paper, reading GL reports and aligning things for hours, and weeks, and months at a time. This is the work of auditors. To me, this is such a natural case study to introduce technology, like with AI. MindBridge has created an AI auditor tool and that's all it does. It reads data, and it highlights [00:27:00] risk. Easy peasy, that's all it does. Blake Oliver: When you say data, is this my GL? I share this into MindBridge?  Rachel Fisch: Yeah. It has direct integrations, as well as flat file uploads. So, for example, I think it was Robin Grosset, who narrated a five minute AI Auditor overview on the website. It's actually done from an Excel file ripped from Sage 50, but it also has direct integration. So, for example, Intacct, you could connect MindBridge with [00:27:30] Intacct, a direct integration, and it could automatically pull and feed the information that you want. Essentially, what it is, is 100-percent data sample, where it simply categorizes by risk. It's got your high risk, your medium risk, your low risk. Of course, there are things like settings and configurations that come into play here. To me, this tool, used in this way, is the most clear example of the benefit of [00:28:00] AI in an accounting application, when it comes to audit.  Blake Oliver: We're getting rid of sampling. Instead of sampling, we are auditing, literally, 100 percent of the GL.  Rachel Fisch: Exactly, yeah-  Blake Oliver: So, why isn't everybody using this right now? Rachel Fisch: Right! Here's the thing. I've been kind of on a mission to find this out. First of all, MindBridge is having some incredible successes. They have some amazing partnerships. They're going into universities. They're doing all of the right things to get the word out. They've got amazing [00:28:30] content, and marketing teams. They've been doing a phenomenal job. Then, if that's the case, why do so many accounting firms either not know what it is, or are not implementing it in their firms? I came down to three challenges. First, one of the reasons that I've been told is that audit regulation and standards currently do not allow for non-human auditors. Now, here's the challenge with that piece is that I have yet to actually find audit standards and regulations that indicate that it needs a certain number [00:29:00] of human signatures, or a certain number ... I'm not a CPA myself. I don't [cross talk]  Blake Oliver: This is what the resistance is. Rachel Fisch: Yes. This is what the resistance is saying? What I don't know is if those are valid. So, if there happen to be any CPAs listening to this ... I'm guessing that this is something that is going to vary by state society, or by country that you're certified in, but to see what exactly is it about the audit regulation that may [00:29:30] limit technology in this. Now, the challenge with that also is that, in many cases, where standards and regulations aren't keeping up to snuff, sometimes a groundswell of momentum is enough to start changing some of those standards and regulations, as well. That's the first one. The second one is that too many firms think that larger sample size actually equals more problems, so they want to keep the audits limited to smaller sample sizes. This I've seen, as well, is that why do we want to sample 100 percent of the data, if [00:30:00] we're just gonna find more problems, and then we're just gonna have to fix the problems, or then it's just creating more problems for everybody?  Blake Oliver: This just this just blows my mind [cross talk]  Rachel Fisch: Just keep in mind, these are- multiple people have told me this. Blake Oliver: Yeah, no, I completely believe it. It's exactly the opposite of what an auditor is supposed to think and do [cross talk] the ideal situation ... Yeah, please, go ahead. I can't ...  Rachel Fisch: Right, yes. My thing is, if I'm only sampling, what [00:30:30] am I missing? Right? Blake Oliver: Right, yeah.  Rachel Fisch: If I don't do 100-percent data, I'm gonna not select from my sample those exact things that-  Blake Oliver: Yeah, and this is exactly the problem with- the big problem with audit, everywhere, seems to be- Rachel Fisch: Generally, yeah.  Blake Oliver: -in general is that auditors are selected and paid by their clients. Rachel Fisch: Yes. Blake Oliver: The clients don't want the auditors to find problems, and so the auditors don't want to find problems either, right?  Rachel Fisch: Sure.  Blake Oliver: It just creates more work for the auditors, and it makes the clients unhappy. The goal of a [00:31:00] really crappy auditor, or at least an auditor who doesn't care about the quality of the audit, is to do the least amount of work to pass muster and minimize the amount of stuff you find [cross talk] attitude ... I understand why that attitude exists, but it just points out the massive problem with the incentives. I hate it. Rachel Fisch: I totally agree. That actually leads to the third challenge, Blake. It's almost like we've talked about this before ... Firms, they don't [00:31:30] know how to charge for automation, right?  Blake Oliver: Right, right, yeah.  Rachel Fisch: How do I now deal with the internal billing structure that goes with doing a job in six hours, instead of three weeks? They were talking about a 20 to 900 times more likely to be in ... Sorry, let me get that quote right. "MindBridge Ai customers have shown that errors are 20 to 900 times more likely to be uncovered with our AI testing components contributing to the analysis ..." The time savings is [00:32:00] like I can do in one hour what would take me five hours, or the one example that I had, also, was six hours instead of three weeks of doing a manual audit. Why do you not want to get this work done faster or better? Blake Oliver: I'm sorry, say that time savings again?  Rachel Fisch: Get done in six ... One person in six hours, what had previously taken two people three weeks, three full weeks, to do-. Blake Oliver: Yeah. I believe it.  Rachel Fisch: -but the challenge is that an accounting firm knows how [00:32:30] to charge for two people for three weeks, right? Blake Oliver: Right. Yeah, they don't know how to ...  Rachel Fisch: Right. Why would ... They have zero motivation to charge for one person for six hours ... I'm gonna include in the show notes, there's a Michael Izza interview from ICAAW talking about the ... I don't know how to pronounce it, whether it's Carrion or Carillion, you know, the big [cross talk]  Blake Oliver: I say Carillion, but I have no idea. Rachel Fisch: I believe it was PWC that was auditing that one, but they've [00:33:00] had major lawsuits between PWC and KPMG, specifically in the audit department, for doing a really crappy job. With this kind of technology out there, there absolutely is zero use or cause for it anymore. Blake Oliver: This is amazing, Rachel. Thank you so much for coming on and explaining that. I just wanna say out there, to anyone, I changed my mind, Rachel, as a result of this. I used to think that client accounting services was the biggest opportunity [00:33:30] for accounting firms, right now, like big ones. Rachel Fisch: I actually [cross talk] audit.  Blake Oliver: Yeah. I think, after listening to you, its audit. I just wanna put it out there. If you're in the Top 100 firm and you're looking for somebody to fix your- to restructure your audit department, to use AI technology, and get you on fixed-fee billing, you can come and pay me a million dollars, and I'll do it for you, because it's so easy. It's so easy [cross talk] open invitation, right?  Rachel Fisch: Yeah.  Blake Oliver: The realization ... It would be amazing. You'd basically [00:34:00] double your profits, or triple, or quadruple. Rachel Fisch: Yeah. I'm just gonna end with my favorite quote from John Colthart. I'm just gonna call him GM of MindBridge, because he wears a couple of hats, but he says, "AI will not replace auditors, but auditors that use AI will replace auditors that don't," which I think is so true.  Blake Oliver: Amazing. Well, we've got two amazing quotes in this episode [cross talk]  David Leary: Just to break it to both of you, this is not a mindset of just auditors and accounting [00:34:30] firms. Rachel Fisch: No.  David Leary: This is a lot of managers, maybe, is the way to think about this. Back in my QA days, there's ... It's kinda like audit. You're running a bunch of tests- Blake Oliver: Quality assurance.  David Leary: Quality assurance. You're running a bunch of tests. The QA person managers love the most is the QA person that gets done first. "Hey, I ran all my tests, and I found no bugs." Because, if you find a bug, it's gotta be tracked. You have to have somebody make a decision. You have to have an engineer look at it. You have to have an engineer fix [00:35:00] it. You have to maybe change documentation. It's very expensive, when you find a bug. But, to be honest, probably it's much cheaper to find the bug in the development cycle than to have a customer find the bug, and then fix it after the fact. It's the same mindset. People would much rather have five QA people come back and say, "We're done with our testing. We found no bugs," because it looks better reports. It's just easier. Blake Oliver: It's all about setting up the right incentives. So, let's try to get a few more stories in before we gotta go. We don't have a lot of time. I've got [00:35:30] a story here about where should we be looking for top accounting talent. Rachel Fisch: Sure.  Blake Oliver: You guys know that I like the Hinge Research Institute. Lee Frederiksen, over there, has a post on Accounting Today, exactly on that topic. They did some research. Tell me you think about this. A recent study conducted by the Hinge Research Institute revealed that most accounting firms still defer to traditional approaches for attracting prospects, meaning they're using job ads, fairs, topping the list, right? Unfortunately, the data says [00:36:00] that's not where top prospects are looking for their next career move. The number-one way that that top talent wants to get recruited is on LinkedIn. That's where they're going to find and research possible new employers. That's 86 percent of job seekers; but only 66 percent of firms are actively using LinkedIn for job candidates - a 20-percentage-point gap. That's the takeaway - if you want to recruit and retain top talent, you've gotta get away from this old job [00:36:30] fairs, and ads, and you've got to be on online. Gotta be on LinkedIn-  Rachel Fisch: Well, it's the definition of insanity, right? When I go and I talk to all the firms that I do - and I talked to hundreds and thousands in a year - they are very clear about ... Recruiting is one of their top challenges, retention, and retraining. Those three things are not technological issues or technology issues, those are people issues. The [00:37:00] challenge is that they're not changing anything about how the firm is structured to actually change that. In this case, it's, "We're gonna keep doing the same things. We know things are changing. We know we want different things out of our employees now, but we're gonna keep doing the same thing and hope for different candidates." It's all the same pipeline at this point. You've gotta start changing the pipeline. Blake Oliver: That's great. Well, what else is new in the world, David? David Leary: I got two quick IRS-related stories- Blake Oliver: Let's hear it. [00:37:30] David Leary: -for two kind of related things - Crypto and cash. Blake Oliver: Okay.  David Leary: This week, the IRS is now sending out letters. They've sent out what it calls are "educational letters" to taxpayers that it has identified for folks that have not reported their virtual currency transactions or are reporting them incorrectly. Blake Oliver: Yeah, educational letters is just code for threats, right? I saw some of these letters. They're basically saying, like, "Report your crypto profits or you are screwed," right?  David Leary: Well, they're [00:38:00] intended to help taxpayers understand their tax filing obligations for cryptocurrency. Blake Oliver: Okay, yeah.  David Leary: The big one is that 10,000 letters are gonna go out by the end of August. Chances are, if you're in tax, you're probably gonna come across something- Blake Oliver: Well, I'm glad it's 10,000, because that means I probably am not getting caught up in this, since, way more than that ... Way more people than that are transacting in cryptocurrency. David Leary: Then, on the other story, the CEO of a pot company in Colorado, John Lord, [00:38:30] went to the bank with $3 million in physical cash to make a deposit- I'm sorry, to a local IRS office to pay his federal taxes. Blake Oliver: I wish I had been working at that office that day. How cool would that be? David Leary: He recently testified ... There's a committee looking into- figuring out how to deal with banking regulations, because a lot of people don't want to touch this money, because they're afraid the DEA's gonna come in; banks don't wanna touch this. He [00:39:00] testified there that he once rented a bank, a former bank, just so he could use the vault to store all his cash. Blake Oliver: That's amazing. David Leary: These are legit guys running around with that much cash. Blake Oliver: Hey, Rachel, cannabis is legal in Canada- Rachel Fisch: Yes.  Blake Oliver: Do you guys ... You don't have a problem with banking, with it? It's not like here, right?  Rachel Fisch: No, we will take your money. Blake Oliver: Yeah. Wow.  Rachel Fisch: Actually, we ... Yeah, no, I think the cannabis industry has been interesting for lots of different, and other subsequent [00:39:30] industries, or related industries. Blake Oliver: Well, you know, here in the US, we still like to use paper checks, and for certain things, we like to use physical paper money. Rachel Fisch: Yes. Blake Oliver: That's how we roll. No pun intended [cross talk] David Leary: -how much money is in that industry. Kind of a preview, last week, at the Accounting and Finance Show in L.A., we did interview with somebody- an accountant; him and his son are-  Blake Oliver: Bruce Anderson, and son, Thomas Anderson. David Leary: -who a team up, and they [00:40:00] take on cannabis clients. It was a very good interview, and it ties into this. Blake Oliver: Yeah, we'll be releasing that in the next few weeks. I got a story here that I've been hoarding that I haven't had a chance to talk about, but I feel like we should, because I keep thinking back onto it. Remember the Expensify 2 Chainz Super Bowl ad? Rachel Fisch: Yeah, I remember that [cross talk]  Blake Oliver: Expensify, man ... They like to blow their entire marketing budget in one thing every year. If it's an invite-only conference in [00:40:30] Bora Bora, or if it is a music video with 2 Chainz, and Adam Scott from Parks and Recreation ... Well, I'm really curious to know how that paid off for them, like if it paid off, or if [cross talk] Rachel Fisch: The actual ROI- Blake Oliver: Like if it paid off. Yeah. Because like, you know, is it worth spending? I don't know how much they spent, but I'm gonna guess, like, say $5 million bucks to do that whole thing. Well, they did win seven awards at the Cannes International Festival of Creativity for their music video. Among the awards were [00:41:00] the top prize, the Gold Lion in the categories of Production of Exclusive Artist Content and Partnership with a Brand or Cause and Use of Original Music, so congratulations. David Leary: They probably thought it was a special effect. You can take a photo of a receipt, and put it into an accounting system? This must be special effects. Rachel Fisch: What? This is magic.  Blake Oliver: Yeah, amazing. Rachel Fisch: I'm sure it's just a fad, right? All those cloud … It's just a fad. Blake Oliver: Yeah, exactly. David Leary: How trendy is that? Blake Oliver: What else? I got lots more stories, but I don't want to monopolize [crosstalk] Rachel Fisch: You might have to cut this in, [00:41:30] Blake. It took me a little while to find, David. It's about the IRS thing. So, there's this post going around social media right now about the IRS announcement. It says, "Confusing: Doing your taxes. Confusinger: Understanding cryptocurrencies. Confusingest: Doing your taxes when you own cryptocurrencies. The IRS is sympathetic, but Uncle Sam waits for no one," and then it goes on with the announcement of the rest of the post, so I thought that was pretty entertaining. Blake Oliver: That's clever. Any time you can attach a meme to an IRS announcement, by all means, right? It should be done. Rachel Fisch: Right? Yeah. [00:42:00] Blake Oliver: Yeah. Of course, for those who are not familiar with the problems of taxation and cryptocurrency, the big issue is that the IRS treats it as an asset, so every single transaction, you have to compute gains and losses, and it just makes- Rachel Fisch: And not a currency, yeah. Blake Oliver: Yeah. Of course, valuing cryptocurrency is difficult because there is no NASDAQ for crypto. There is no market maker, single market maker, so how do you choose what numbers to use? There's an [00:42:30] entire software world now, actually, just around importing your crypto transactions and calculating all those gains and losses. David Leary: I met an app last week, and I cannot remember the name of it, but essentially you connect all 5,000 different possible crypto wallets that are out there, and they'll track all your ... It's almost like online bank feeds for your crypto transactions. So, they pull it all together, and they let you know your gains and losses, and then do export files out for tax software. Blake Oliver: Thank God for that, right? Otherwise, it would be really, it would be Excel nightmare. Oh, speaking of Excel, and we [00:43:00] talked about malware earlier, Microsoft Excel has a feature that can be abused for malware distribution. David Leary: Oh, no. Blake Oliver: If you have Power Query enabled in Microsoft Excel, which comes turned on by default, apparently hackers can abuse Power Query, which has this feature where it goes out to other servers and pulls in data from the internet – kind of an open backdoor. If you open up the wrong Excel file, and you have Power Query turned on, it can [00:43:30] be used to run malicious code on your system with minimal interaction. So, just a warning ... Microsoft has decided not to patch it, because that is actually an intended feature of Power Query, so just do not open up an Excel file from somebody you don't know. Rachel Fisch: Wow. David Leary: Got it. Blake Oliver: That's all you can do. Rachel Fisch: So, the future of accounting is not Excel? I just wanted to be clear. Blake Oliver: Well, you know, I mean, maybe ... I don't know. We'll let our listeners decide [cross talk] David Leary: Especially if it's an attachment. Don't use attachments with Excel. I have some stories on [00:44:00] small business lending. Remember, we've been talking about this, and we've been wondering how viable some these companies are [inaudible] direction? Blake Oliver: Yeah. David Leary: There's definitely a lot of changes happening in that space as we speak. The first story is “SMB lender OnDeck is actively pursuing a bank charter,” because they want to offer a wider range of products and find cost efficiencies. But, really, if you read deeper in the article, effective August 3rd, JP [00:44:30] Morgan Chase no longer intends to originate new small business loans through them, through OnDeck's platform. Blake Oliver: Really? I wonder why that is [cross talk]  David Leary: They are looking to partner with others. One thing that I initially thought was … Because QuickBooks, QuickBooks Capital, and Intuit is very deeply involved with Chase. Is that gonna be an announcement we see soon as a deeper partnership with QuickBooks Capital? The one thing that was in the article that I thought was really interesting was the stats. Online lenders approved 57 [00:45:00] percent of all small business loan applications in June. 50 percent were approved at small banks, and 27 percent at big banks. It's very obvious that this model of these app-first models that have access to accounting data are giving out the most loans. Blake Oliver: Yeah, and probably not the highest quality loans, and that's ... I'm just gonna say why else would Chase be getting out of it? Maybe it had some bad results. David Leary: So, just another loan player, Lendio, who's also in this space, they've taken it [00:45:30] one more step further. They actually completely acquired an accounting app. They acquired an accounting app, Billy, rebranded it as a new product called Sunrise, and they're giving away for free. So, you use this app to do all your cloud accounting, and they can target loans to you. What’s interesting, though, buried in their article is … I'm gonna read the quote here, okay, and you tell me what this sounds like, "When you sign up for a paid version, Sunrise will assign a bookkeeper within 48 hours, and moving forward, they'll reconcile [00:46:00] your books each month." Blake Oliver: Wait, what? David Leary: All right, I'll read this again. Tell me what this sounds like. "When you sign up for a paid version, Sunrise," which is the accounting app, "will assign a bookkeeper within 48 hours, and moving forward, they will reconcile your books each month." Blake Oliver: Yeah, that sounds very familiar. David Leary: It's another QuickBooks Live play. Blake Oliver: Another one.  David Leary: Everybody is doing it now. Now, this is a small business lender that's doing your QuickBooks Live play. Blake Oliver: Wow, that's a new one. I had not … Yeah …  Rachel Fisch: I mean, we're continuing [00:46:30] to see this convergence of bank and/or payments plus GL, and then plus a service piece, right? H&R Block and Wave, right, books to tax, plus they've got service providers. What else was it? Oh, RBC in Canada- the Royal Bank of Canada acquired WayPay, which is a payments provider, and then they're also working with small business, and they've got some other things going on as well. I think we're just going to continue [00:47:00] to see these multiple convergences of bank and payments, GL, and then some level of service, absolutely. Blake Oliver: Yeah. David Leary: I think in the past, Blake, you, and I have talked about this; this is kind of the Wild West, right? Blake Oliver: Yeah. David Leary: A lot of these companies are based out of Utah because there's no limits on usury that you can charge. Well, there is news now. California has proposed lending rules, and they're getting more support for this. The Department of Business Oversight, they've worked with ... I'm taking this as a coalition, [00:47:30] the Responsible Business Lending Coalition. They are proposing legislation and regulation to control truth-in-lending protections for small business owners.  I'll just read the quote from them, "The proposed regulations recognize that small business financing has changed as many small businesses now commonly pay effective APRs of higher than 50 percent and, sometimes, as high as 350 percent without these rates ever being disclosed again to them." That's [00:48:00] one thing I've always felt about all these alternative lending situations. It's very easy, "Click here! Get $10,000!" Then you're kind of paying it back. They're gray. It's half invoice refactoring, it's half not; it's very confusing, and people don't know the rates they're paying. Blake Oliver: I'm in favor of regulations to require these lenders to disclose the APR on any of these transactions, but I am not supportive of restricting businesses from taking these loans if they want to, because some may have no other option, and if they think it's a good idea, then fine, right? They're [00:48:30] business owners. I think, fundamentally, it's different than usury laws around payday loans because some of ... That's an education problem, right? I don't know ... I'm not a fan. I think there should be disclosure, but not necessarily restricting the amount that can be charged. David Leary: I think we're gonna see more about this, as well, because I think, again … We've talked about her before, Elizabeth Warren; this is another thing that could show up and become a political issue for the election - small business loans. Blake Oliver: Oh, yeah. Elizabeth [00:49:00] Warren loves to- David Leary: She wants to be on the podcast [crosstalk] I think ... She wants to be on our podcast. Blake Oliver: I would love to have Elizabeth Warren on the podcast to ask her about cloud accounting and what the government should be doing to regulate cloud accounting. David Leary: I have another, some ... Kind of related to payments that's gonna blow your mind. Blake Oliver: Okay. David Leary: All right. The headline is “MasterCard: Tackling AP Automation's Last Mile.” This article had two amazing stats. They're talking a little bit more enterprise, bigger companies, Fortune 500, right? [00:49:30] 59 percent of firms have yet to tackle payments automation. Blake Oliver: Oh, doesn't surprise me [cross talk] Sad stat, but what's the other one? David Leary: This is the better one. Paper checks make up 51 percent of corporate payments. Rachel Fisch: Wow. Blake Oliver: Oh, boy. Yeah, and imagine being that Canadian company that's getting all those checks from U.S. customers, you're like, "God! Ahhh!" Rachel Fisch: "No more, please, no more!"  Blake Oliver: Right, no more. Rachel Fisch: To me, this is one of the glaringly ways in which the U.S. is behind, pretty much, [00:50:00] everywhere else, right? If you talk to an Australian, or if you talk to somebody from the U.K, or from Europe, they're like, "We did away with checks, like, how many years ago?" Canadians, we still use them, but they are certainly an exception. They are not … It's how do I pay one out of my hundred people who I'm doing a payroll run for that one person who still wants a check? It's so prevalent in the U.S. that I don't know what's gonna start bending or tipping that. Blake Oliver: Well, [00:50:30] I think it's going to be the next recession because ... I love these Metric of the Month stats that they have on that I share from the APQC Benchmarking surveys. One that keeps coming that I keep using in presentations I give is that the least efficient corporate finance departments have four times more employees than the most efficient ones. If you're efficient, you can have 25 percent of the staff of an inefficient department, and that is mostly because of people with paper checks. It’s literally- that's probably a lot of it. [00:51:00] Rachel Fisch: Well, I mean, all the stats - the amount that it costs, the amount of time that it costs to process a check, the amount of money it costs to process a check - all of the data is pointing that ... I don't know if it maybe has to do with the fact that there are 7,000 banks in [Canada] as opposed to the five main ones in Canada and the four main ones in Australia, but I certainly think that probably has something to do with it, just the ability to move money, right? Blake Oliver: Yeah. Any other stories before we go? David Leary: I think Gusto raised another $200 million. They are going to expand the East coast, and I think the interesting one is they plan on building out something [00:51:30] called still Gusto Flexible Pay that's for employees. I know you mentioned payday loans before. It's not a payday loan, but there's another company that also does this, Earnin. Blake Oliver: Oh, yeah, yeah. David Leary: As soon as you clock out at the end of the day, they use your time data; they know you're gonna get paid for eight hours. You could actually just get that money early and deposit it in your bank account. Blake Oliver: Yeah, they're floating the cash to the employees, but the employer can still keep their every two week pay schedule. David Leary: Yeah. This’ll be the death to payday loan places, for sure. Blake Oliver: I hope so. David Leary: You won't [00:52:00] need one. You'll just, "Hey, I had to put braces on my kid." Blake Oliver: Yeah. Studies show that if your employees get paid every day, using this, they're more productive, because they see the fruit of their labor right away. David Leary: That's it for me. Blake Oliver: All right. Well, hey, Rachel, if people want to connect with you online, where's the best place for them to do that? Rachel Fisch: Best place is Twitter @FischBooks. F-I-S-C-H-B-O-O-K-S. Blake Oliver: And how about you, David? David Leary: @DavidLeary. Blake Oliver: And I am @BlakeTOliver. And, if you wanna do [00:52:30] us a favor, leave us a review on iTunes or on your podcast player of choice. We will read it on the air. And David, I forgot, did we miss any this week? I think we didn't get any this week, right? David Leary: No reviews this week, but you know what would be just as good as a review?  Blake Oliver: What's that? David Leary: Is when you're at dinner with one of your accountant friends or bookkeeping friends, pull out their phone and subscribe them to The Cloud Accounting podcast. Blake Oliver: You tried to do this at some conferences recently, David, and people did [00:53:00] not want to give you their phones. David Leary: No, nobody wanted to let me touch their phone and do that. But hey, you know, if it’s a friend, you can do that [cross talk] Rachel Fisch: I will say I got an email from a partner at a firm that I've been working with for a while now, and he said, "So, I'm listening to this Cloud Accounting podcast," and I'm like, "Oh, my gosh! I told you to listen to that." And he goes, "I'm listening to this podcast, and they've said your name a couple of times," and he goes, "It sounds so cool," so people are listening even if they're not reviewing. David Leary: Yes. Somebody at the conference in L.A. came up to me like … It's [00:53:30] always good when somebody you absolutely never met before, you don't know, and they're like, "I listen to the podcast. It's great."  Blake Oliver: That's so great. David Leary: It's always really good that people really listen to us. That's great. Blake Oliver: Yes, thank you to all our listeners for helping us get to this point. We are almost at 100 episodes. This is, I think, 99. I'm not sure because the publishing order may change, but we're very close, if we haven't already hit it. Thank you everyone who has helped us get this far. It's crazy to think where we've come in really just about [00:54:00] a year and, hopefully, we'll get more cloud accountants into the podcast world and beyond in the years to come. Rachel Fisch: For sure. Awesome [inaudible]. Blake Oliver: Thanks, Rachel. Good to talk to you. Bye, David. David Leary: Bye, everybody. Thanks for joining. Rachel Fisch: Yeah, you too. Bye. 
SponsorFloQast: Notes 00:53 - Welcome to the Cloud Accounting Podcast 01:16 - We're at AICPA ENGAGE 2019 02:09 - What are the top threats facing the accounting profession? 04:53 - If I'm not doing audit, why would I go to the trouble of being a CPA firm these days? 06:07 - What's going on with the CPA in Canada 09:22 - Over the last 8 years, CPA hires have increased 4% but non-CPA hires have increased 10% 12:03 - What's with this Canadian firm getting sued by the SEC? 15:04 - Tom Maxwell on Twitter: "Do you text with your clients?" 20:15 - What do you see as the best opportunities for CPAs as robots take over lower level tasks? 30:13 - Follow @fischbooks, @byron_cpa, and @LizzyNorMa on Twitter Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptClosing the books is a manual, error-prone, and time-consuming process. In fact, 82 percent of accountants find the month-end close to be a negative experience, 78 percent report having to reopen the books, and three out of four say they're not confident in their close. Meanwhile, management wants numbers faster than ever, and investor scrutiny on financial reports has only increased. There has to be a better way than email, Excel checklists, and endless status update meetings. FloQast was built by accountants for accountants to help them close faster and more accurately. It provides a single place to manage the month-end close, aligning people, processes, and documents in one collaborative platform. The bottom line: teams relying on FloQast, on average, close three days faster. Learn more at That's F-L-O-Q-A-S-T. Blake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver. Rachel Fisch: I'm Rachel Fisch. Byron Patrick: I'm Byron Patrick. Liz Mason: I'm Liz Mason. Blake Oliver: Liz, you sound pretty good. We thought you were going to lose your voice. [00:01:00] Liz Mason: Yeah, I got it back a little bit. Blake Oliver: That's good. Well, I think that's just a sign that AICPA Engage is going very well, right? Liz Mason: And I'm allergic to Las Vegas, so ... Blake Oliver: Okay. Byron Patrick: The list grows. Blake Oliver: Here we are in Las Vegas at AICPA Engage 2019. How's it going for all of you? Liz Mason: Pretty fantastic. Rachel Fisch: This is my first year. You went to a great session yesterday, Liz. Liz Mason: I did. I actually am [00:01:30] lucky enough to be one of the Leadership Academy alum. Every year they do a big reunion session and have a guest speaker come in, and this year was pLink, so Gretchen Pisano and Alexis Robin came in and spoke to us about vulnerability and how to use that to actually help lead an organization. Byron Patrick: I've seen that session before, Gretchen's awesome. Liz Mason: Yeah. I mean, she's just phenomenal in the way that she approaches things and the thought processes that go in and the stories she's able to relate back and [00:02:00] pull people out of their comfort zones. Rachel Fisch: That's awesome. You're not good at that at all, Liz.  Liz Mason: I'm pretty good at pushing people's boundaries, but ...  Blake Oliver: Well speaking of pushing boundaries ... That's a terrible transition actually because- Byron Patrick: Anticipation, I'm terrified. Rachel Fisch: Yeah, like what is [cross talk] Blake Oliver: I'm going to push your boundaries. I'm going to ask you guys a tough question here. We're here at AICPA Engage. This is a conference for CPAs, members of the ...  Rachel Fisch: American Institute of Certified Public Accountants, I got you. Blake Oliver: I get confused because there's also the- Byron Patrick: Association of International- no, Certified Professional Accountants. [00:02:30] Blake Oliver: Yeah, so that just screws me up. Byron Patrick: They have the same logo by the way. Blake Oliver: Right, it's very confusing. Jeff Drew, from the Journal of Accountancy posed a question to me that I thought was great that I'd love to pose to you, which is what do you think the top threats facing the accounting profession are? Liz Mason: The [00:03:00] accounting profession in total or the CPA designation? Blake Oliver: Well, that's an interesting question because I would say for something to be a profession, the license is a big part of that, and we consider accounting to be a profession such as the way we have a legal profession, medical profession because of those licenses. To me, they're kind of wrapped up together. I mean, could we even have an accounting profession if we didn't have certifications and licenses? Liz Mason: We absolutely could. Blake Oliver: Yeah? That's what's starting to happen, right? Liz Mason: It is. [00:03:30] Blake Oliver: Yeah. I mean, I was a bookkeeper and ran a practice doing a lot of what accounting firms here are doing in the CAS world, in the Client Accounting Services world, and I only went back and got my CPA later. I'm curious to know, is the CPA staying relevant, is it fading, is it losing relevance, is there competition from outsiders? Byron, I want to know how you feel because you have a tattoo of your CPA on your arm. [00:04:00] Byron Patrick: A minor vested interest in preserving the value of the CPA. Yeah, it's interesting, right? I think it's very much still relevant. Will the future that relevance exist? I don't know. I think the general public still looks to and trusts CPAs very much so, and it's a recognized credential. I do think there is outside market, CMA, and such, [00:04:30] that I believe could be presenting a relevant challenge to the designation and the license which we've talked about the challenges. The license, I think, is actually almost making it difficult to actually maintain the CPA for, especially, organizations that aren't a traditional audit and tax shop. Blake Oliver: Right. If I'm not doing audit, why would I go to the trouble of being a CPA [00:05:00] firm? Liz Mason: Right. Blake Oliver: Liz, are you a CPA firm? Liz Mason: Yeah, so High Rock is a registered CPA firm. When we started in Arizona, there was a law that said if you are doing any kind of accounting services, even if it was only bookkeeping, if you have your CPA designation and own it, you had to register with the Board of Accountancy. That was an interesting law, so we registered with the Board of Accountancy. Now, they've since changed the law in Arizona. They changed the law to say you don't have to register as a CPA firm, but if you don't, you cannot use the CPA designation. Blake Oliver: So [00:05:30] you cannot say on your business card that you are a CPA? Liz Mason: Not in conjunction with the name of my firm. Blake Oliver: Okay. They have to be on separate cards? Liz Mason: Yes. Blake Oliver: Got it. Liz Mason: At least that's the interpretation the Board of Accountancy is giving me. Blake Oliver: Interesting. Okay. Liz Mason: You can't say, like, Mason CPA and not be a registered CPA firm, which makes sense, that's a good rule. But, as a partner in that firm, I can't purport to be a CPA or provide CPA services. If I write a proposal and say, "As a Certified [00:06:00] Public Accountant, I will provide these services," I can't say that in conjunction with a proposal from High Rock if it wasn't registered. Rachel Fisch: So I'm not a CPA. Blake Oliver: You are certified though. Rachel Fisch: Well I'm a Certified Professional Bookkeeper through Canada's IPPC program, but CPA Canada is also really different as well. Here, where there's the CPA and CGMA and CMA and all of those things, in Canada there is now only one at CPA and it's managed by CPA Canada, so then you have industry accountants [00:06:30] combined with practicing accountants of all scales and everything like that. It does seem to be maybe a little less restrictive than like what you're mentioning, Liz, but I feel like I need to tread really carefully now. The challenge, though, actually, was that I had actually gone through, got my degree waiver, was accepted into the accelerated program right as this merger was happening between all the designations, and I was adopted into an 18-month program. So, basically, four years of education in 18 months. In November, before the [00:07:00] program started in January, they said, "Oh, by the way, we don't have that 18-month program anymore, you have to do it in nine months." It was already going to be a huge stretch, and so it was actually the merging of the designations that is why I am not a CPA right now. It just didn't make any sense anymore. I'm sitting there going, "Okay, I don't want to be a tax firm, I don't want to be an audit firm, I just want to be doing these controllership services, so can I actually be doing those things and not be a CPA? Absolutely, so [00:07:30] that was my route. Byron Patrick: I think one of the big differences there, right, is it's a federal designation, right? Rachel Fisch: Yes, so it basically has the state society, so provincially. It's a federal designation that is rolled out provincially. Byron Patrick: Are the rules different? Rachel Fisch: Only slightly. Byron Patrick: Only slightly, as opposed to 51 flavors of the United States? Liz Mason: Yes, so it's a little different. Blake Oliver: Just to put things [00:08:00] in perspective, for us to change the CPA exam is impossible because so many states have written it into the law that there are these sections in the exam and that's how you become a CPA. That's one of the big challenges people have proposed. I think it would be a great idea to have some different sections and be able to choose. Maybe I don't need to take audit, and I could take a technology-oriented section instead, but we can't do that because we have to have these four sections. It's almost like we didn't think ahead when we wrote all these laws. [00:08:30] Byron Patrick: How dare you suggest. Liz Mason: It is interesting. It's definitely interesting to see the evolution of the different states and the laws that are happening because we do need something to bring it all together and to actually make this a profession a designate-able one instead of having people try to undercut the rules, right? States like Arizona pass rules like that because they had a lot of firms that didn't register, and they didn't want to prosecute all of them when there's no need. You're not signing any audit reports, why do you need to register? [00:09:00] There are many states following or did it before, but there are some like Texas, which is still super strict. Blake Oliver: Yeah, you can't even call yourself an accountant in Texas if you're not a CPA. Liz Mason: Yeah. Blake Oliver: Yeah. Liz Mason: Yeah, and you have to have the last names of your partners in the name of the firm. I mean, there are very strict rules about who can invest and the advertising that they can do as well. Rachel Fisch: I was at an event just a couple weeks ago actually with Mark Koziel who's the EVP of Firm Services for AICPA. It wasn't at this event; it was a couple weeks ago. What [00:09:30] he was saying was that over the last eight years, CPA firm hires have increased four percent, but non-CPA firm hires have increased over 10 percent. So, within firms, they're hiring more non-CPAs than CPAs or at least at a faster rate. Then, when you look at who they're hiring, well it's these data analysts and technicians that's really enabling these firms to go to the Cloud and to be more tech savvy.  Byron, you were mentioning the cybersecurity elements and things like that, so we're seeing firms get more techy, and [00:10:00] then we've also seen maybe a little bit of disruption where we've got tech trying to be accounting and the complete disregard for the CPA rules and then trying to sell it to accountants or trying to leverage accountants to do that. I feel like we've got this really big imbalance right now happening, but I don't know what that means for CPAs or firms. Byron Patrick: The interesting thing is, and I've seen Mark's presentation a million times on this, and to AICPAs [00:10:30] credit, it is in support for their pathways commission and trying to move that needle of what does a future CPA look like? I mean, I shouldn't even call it a needle. It's a massive boulder that they're trying to move and now you are trying to move a society of a lot of the large basis is traditional CPAs who have been in the profession for 50 [00:11:00] years. I can't even conceive the notion of a data scientist becoming a CPA. The AICPA is trying to do something. What it will look like, who knows, but they are acknowledging, and that's exactly what Mark's point is. The makeup of a firm is changing, and the professionals in a firm is changing, so should we explore? Rachel Fisch: Right, but then does that mean that data analysts and scientists they need to become CPAs in order to work for the firm, or is it just that saturation [00:11:30] that you were talking about earlier where there's a certain percentage allowable, that in order to continue to call yourself a CPA firm, you are allowed to have a certain percentage of non-CPAs? Byron Patrick: It's funny because there is the theory that maybe we should have them become CPAs but, on the other side, I don't think anybody's asked a data scientist if they have any desire of being a CPA, so-  Rachel Fisch: What do you think the answer would be if they did? I don't think so. Blake Oliver: I think their job prospects are too good at this point for them [00:12:00] to want to do that, yeah. Rachel, you mentioned the disregard of technology people for- Rachel Fisch: That might be a great segue, there, Blake. Blake Oliver: Some of the regulations or stuff that CPAs might not do. There was a Canadian app that was in the news recently getting sued by the SEC? Rachel Fisch: That's right. Blake Oliver: How do we even do that? Rachel Fisch: How do we get sued? Blake Oliver: Well, so- Rachel Fisch: Here's how to get sued by Kik, um, yeah, so. Blake Oliver: The SEC is claiming what, Kik did an illegal public offering? Rachel Fisch: Well, essentially, [00:12:30] so the SEC is suing messaging app Kik, which is a Canadian born app for raising a hundred million dollars through an allegedly illegal token sale in 2017 on the grounds that Kin, the digital token, should have been registered as a security. Kik is saying no, it's a currency, and there's a lot of kind of gray area over what is what. Byron Patrick: It was only a matter [00:13:00] of time. They were waiting for the right case to do it. Liz Mason: Absolutely. I mean, ICOs have been happening for what, the last four years? Byron Patrick: They've been waiting for this. Blake Oliver: Why are they going after this Canadian company? Are they just picking on them? Why did they choose them instead of all these other ones? Byron Patrick: I think it's the magnitude of it, the size of it. Blake Oliver: It was what? It was like- Rachel Fisch: A hundred million. Blake Oliver: That's a lot, yeah Byron Patrick: Yeah, and within the ICO world, I think that's one of the larger ones. Plus, for an established brand ... There's a million of these ICOs for people who want to build [00:13:30] a frog aquarium or something and nobody really cares about that. Rachel Fisch: It would not be newsworthy if they sued the frogquarium. Blake Oliver: I was a big fan of CryptoKitties. I don't know if any of you heard about that. Liz Mason: Nice. Blake Oliver: The trade-able, digital kitty cats. Liz Mason: Yes. Rachel Fisch: Yeah. Blake Oliver: I don't know what happened to that. Liz Mason: I don't know. Rachel Fisch: Do you own any? Blake Oliver: No, I do not. Liz Mason: Is that like the evolution of the Tamagotchi? Blake Oliver: Yeah, or the Beanie Baby. It's the virtual Beanie Baby because they [00:14:00] were limited, you know? Liz Mason: Oh, okay. Blake Oliver: You could breed them. I don't own any, I just know about it. Rachel Fisch: Uh-huh, okay. You seem to be getting a little defensive.  Blake Oliver: Any of you purchase, own, have bought or sold cryptocurrency? Rachel Fisch: No. Byron Patrick: Yeah, I have some. Blake Oliver: You dabble in it? Byron Patrick: Yeah. Blake Oliver: Yeah? Byron Patrick: Mostly just to play, just like I wanted to get familiar with the exchanges. I wasn't going to make a bazillion dollars. That was not my goal, but to [00:14:30] get involved in it, you know, throw a little cash in there, and play around. It's interesting, you know, my 90 bucks may be nine million one day.  Rachel Fisch: Here's hoping. Byron Patrick: Right? Liz Mason: Maybe. Byron Patrick: Yeah, maybe. Liz Mason: Yeah, I mean there's been a lot of big ups and downs, and it's always fun to play in a market, right, so it's effectively like investing in something that's completely unregulated for- Blake Oliver: Well, for now, until the SEC decides to regulate it. Liz Mason: But how are they going to regulate it, right?  Blake Oliver: That's the question. [00:15:00] Byron Patrick: It's the wild west. Liz Mason: There's no possible way to do that with the current technology, so. Blake Oliver: Hey, random thing I saw on Twitter that I'm curious to know. Tom Maxwell, from Practice Ignition, he asked on Twitter, "Do you text with your clients?" Rachel Fisch: I saw that, yeah. Blake Oliver: The responses were really interesting. Some people are like, no, never, I would never do that, some are like all the time. I'm curious to know, Liz, if you text with clients and how and if you do that? Liz Mason: Yeah, so when I started High [00:15:30] Rock, I gave everyone my cell phone number because I didn't have a business line yet, right, you know, like baby startup, fine ... People would text me all the freaking time. I started getting really bad anxiety any time my phone buzzed, because I thought it was a client asking for something that I was like ... I couldn't handle it, so I ended up changing my phone number and refusing to give clients my cell phone number, so I have four clients that currently have my cell phone number and they are allowed to text me, nobody else is given it. Blake Oliver: Okay, got it. Liz Mason: Yeah, so but my team members [00:16:00] text with their clients all the time. Byron Patrick: That was my next question. Liz Mason: Yeah. Byron Patrick: So you don't have a policy or anything like that? Liz Mason: No, there's no policy.  Byron Patrick: Okay.  Liz Mason: It's just a personal preference. I like separation and to be able to turn things off without turning off my whole personal life. If I turn my phone off, then I'm ignoring all my friends and family as well. Blake Oliver: That's interesting because they're texting with your clients, and what about that communication going back and forth? Wouldn't you like to be able to track it, see it, archive it? If you're a big firm, then you probably have to. Liz Mason: Right, so we [00:16:30] actually turned on the texting ability with our Cloud voiceover IP software. Blake Oliver: Oh, so that's what they use. Liz Mason: Yeah, so they use that to text with their clients on their phone. It's all tracked through that. It's like a messaging app, but the client looks like just a normal text message. Blake Oliver: What are you using for that? Liz Mason: RingCentral.  Blake Oliver: RingCentral? Liz Mason: Not my favorite, but it's the cheapest. Blake Oliver: All right. Rachel Fisch: I did see Tom's tweet, and then the next half of it, because I think that context is important as well, so the next half of it was, "My dentist just texted me to book my next appointment, and I responded and booked immediately. Found [00:17:00] it effective. Would need to be cautious about overstepping." My immediate assumption was that it was bots, was that that wasn't somebody actually sitting and texting, and if you can do kind of those auto-responders, that's totally different. If I'm giving my cell phone number to a bunch of people, I totally get your anxiety. Byron Patrick: I've had CPA firms asked me how ... I get dental reminders. Why can't I send a tax appointment reminder via text? There's solutions like Acuity Scheduling where it'll integrate, [00:17:30] capture, and send those reminders. It's super easy to do. Liz Mason: Right, but you can't have the conversation. Byron Patrick: It's not a dialogue. Liz Mason: Right, so it's a one way and then you can confirm, like you can say yes or no, and that's it. Byron Patrick: Yeah. Blake Oliver: I had an experience like this. I was looking at apartments, and I was trying to book an appointment, so I called [00:18:00] the leasing office. They didn't answer, but the voice message said, "If you'd like us to text you, press one and we'll coordinate it that way," and I did. I have no idea if this was an AI or a person or a call center, probably a mix, texted me back and then I was able to book that whole appointment via a text message exchange, which was way better than trying to get somebody to call me back. I was thinking everybody should have this. It would be fantastic. [00:18:30] Rachel Fisch: When I heard that story the first time, I also just thought it's bots, like who would be sitting there doing a one-on-one thing? I don't know. Blake Oliver: Well there's services you can pay for now. Rachel Fisch: That do that? Blake Oliver: Yeah, it's like the modern version of the answering service, right? Liz Mason: Yeah, definitely. I know everyone at this table travels a lot to conferences. What I've noticed this year, in particular, is many of the little boutique hotels will send you a text message when you get there and say, "What can I do to help you?"  [00:19:00] Byron Patrick: Yes. Liz Mason: I asked at one of them, I said, "What technology are you guys using?" They use a system that links into their hotel technology, so they sit at their computer and respond to the messages, so it actually is live people at the front desk. It saves them the hazard of 25 phone calls coming in at the same time when people can just text in a request. Byron Patrick: I saw somebody on Twitter the other day actually responded and requested a picture of Steph Curry to be on the reception desk when they checked in and they made it happen. Liz Mason: That's weird. Byron Patrick: A little random, [00:19:30] but- Liz Mason: Was that you? Byron Patrick: No, not at all, not at all, shh!  Liz Mason: No, because you'd be requesting a picture of Barry Melancon.  Byron Patrick: How'd you know?  Liz Mason: A signed head shot. Byron Patrick: Signed, only signed. Actually, my State Farm agent, she ... I don't know what they use. I haven't asked her. Frankly, I don't think she'd know, but the number I [00:20:00] have for her which, to my knowledge, is her cell phone, her entire office uses to text me like, "Hey, I need your kid's report cards for grades," and I respond and then they'll respond right in there. It's so convenient. Blake Oliver: Well bots came up, so let's talk about bots. Here's another question that Jeff from the Journal of Accountancy asked me that I'd love to ask you. What do you see as the two to four best opportunities for CPAs as robots take [00:20:30] over lower level tasks? Byron, I'm going to toss that one to you first.  Byron Patrick: Why? Why? Blake Oliver: You're with this company now called, what is it? Byron Patrick: Botkeeper. Blake Oliver: Botkeeper. Byron Patrick: Botkeeper, yeah. Blake Oliver: Oh, what is that? Byron Patrick: Any listener of the show I am sure is well aware. Right, so our solution is automating those lower level tasks through various platforms of technology and software. I heard a really great term recently. I don't know if anybody's familiar with Calum Chase, but he's a futurist, talks about the singularity and some really interesting, thought-provoking stuff. He shared an article recently where he said, "The future workforce needs to be up-skilled," and I hadn't heard that term 'up-skilled', and [00:21:00] I think it's so great. If we can take these low [00:21:30] level, highly labor intensive but low-skilled tasks, automate them so we can upskill our staff, I think it's great. Yes, absolutely. It means a smaller workforce to accomplish more work. Blake Oliver: That's the question. What are we going to do though? Is it advisory? Sorry, I'm really sorry. Rachel Fisch: I was just going to say, what's the right answer to every question in this conference? Advisory. Byron Patrick: Disruption. Liz Mason: God, that makes me so angry though because people throw this word out advisory as if it's [00:22:00] something new. This is not a new concept. This is something that accountants have been doing since forever. Byron Patrick: The beginning of time. Liz Mason: Yeah, if you're an intelligent human looking at numbers, you identify trends, you talk about things that are happening, you help your clients figure out where their expense sucks are and how to get their receivables faster. All of these advisory basic services are ... That's not a new concept, so the way that it's being repackaged and distributed as a, "Hey, guys, level [00:22:30] up to advisory," is BS. Byron Patrick: The irony is for many years it was about CPA firms getting away from the accounting and bookkeeping, like, get rid of it, get rid of it, get rid of it. Liz Mason: Right. Byron Patrick: And now, "Save your firm. Do client accounting services." Liz Mason: Right, and the fun part about that is that is because of technology because, at the time, those services were not profitable to be doing at that high level. It was way too much manual labor, but now we actually have tools and some [00:23:00] companies do robot stuff that help make that happen and make the timeline so much more feasible. It's efficient to do it. Rachel Fisch: You can't adopt a CAS practice without a level of automation, and so people who are like, "I'm going to start to do bookkeeping. Let's have all paper and all desktop," it's like, "Okay, I can't even help you," like that's not what this is about. It has to 100 percent be about technology and automation so [00:23:30] that we can get to the good stuff. That's just the getting stuff done. I'm trying to be careful, so you don't have to bleep me. That's just the getting stuff done. Blake Oliver: I've got it ready. Byron Patrick: He's already downloaded the sound block. Rachel Fisch: I was in a session yesterday, and they were talking about basically, so it's a lot of hard work to get even your bookkeeping piece transformed into the client accounting service model, but that foundation [00:24:00] absolutely has to be laid before you can even start approaching the virtual CFO services, and CPAs I feel like just want to jump directly to the virtual CFO without effectively creating the strong foundation to actually build that piece of the business off of. They were saying that, basically, it's so hard to do the first part that most CPAs actually quit before they ever get to delivering these virtual CFO services, and then they're like, "Oh, CAS doesn't work, it's broken, it's not profitable, blah, blah, blah, and then it's kind of this [cross talk] thing. What's that? [00:24:30] Liz Mason: Actually, High Rock last year developed a model called our nucleus model where we do all the back office for them and they can just do virtual CFO. Rachel Fisch: So you do the back office for other firms?  Liz Mason: We do the back office for other CFOs. Rachel Fisch: Oh. Blake Oliver: All up to controller type stuff. Liz Mason: Yeah, so we'll do everything up to controller for them, and then they take it from there [cross talk] Byron Patrick: That's right, flip the switch.  Liz Mason: Yeah, exactly. Byron Patrick: Right. Blake Oliver: And that's why companies [00:25:00] like Botkeeper exist, too, right? Byron Patrick: Well that's right, and it's kind of interesting because we've had a lot of interest here at Engage, and the number of conversations I've had where people say, "But you can't work with QuickBooks Desktop?" If this is a path you're going to go on, it's about time we consider some Cloud solutions. Liz Mason: Oh my God, you guys, did you know you can still buy 12-column paper? [00:25:30] Blake Oliver: Oh, yeah. Rachel Fisch: Yes, at Staples. Byron Patrick: How is this possible? Liz Mason: What? It blew my mind the other month when I found this.  Blake Oliver: One of my coworkers from Armanino, I was catching up with her and she's now in tax. She received the closing journal entries for a client from the previous account and they were taking over the book of business, right, or they were taking over the return, and I think they were in New York or something and [00:26:00] they said, "Oh, yeah, it's not digital. We'll have to send it to you," she's like, "Okay," and it comes in a giant envelope. It is that big ledger paper, and all the year-end entries are on paper, and this was for a return like two years ago. Rachel Fisch: Wow. Liz Mason: What the …? Byron Patrick: I known a CPA who acquired a firm, didn't do much due diligence apparently because after the acquisition, she requested that they provide an [00:26:30] employee list. So it came on a scan piece of 10-column ledger paper, and she said, "Can you put that in Excel for me?" And they said, "We don't have Excel." This is a CPA firm. Liz Mason: I get frustrated when the Journal of Accountancy is publishing Here's the Five Tips to Mastering Excel. Byron Patrick: I'm going to write an article of how to move away from 12-column ledger paper to Excel. Blake Oliver: I like that.  Liz Mason: Please, do that. Byron Patrick: Twelve steps to give up your 12-column. [00:27:00] Blake Oliver: Let's do a webinar on CPA [crosstalk]  Rachel Fisch: You need to actually do it in print form and then mail it to them, a self-study.  Blake Oliver: We'll do a DVD, VHS? Byron Patrick: Maybe fax. Can we fax the presentation? Liz Mason: Yeah, we can totally fax the presentation. Blake Oliver: I like that. Rachel Fisch: This is where I think we still have a lot of work to do. We may be in a bit of a bubble as kind of the early adopters and whatever, but there are so many laggards. [00:27:30] Liz Mason: There are. Rachel Fisch: This, honestly, is why I think that QuickBooks Live, why Botkeeper, why all of these ... there's some other ones as well ... why they're going to be successful is because there are still so many businesses that run on that. There are still so many businesses that only use Excel. There's still so many of those that there's still a lot of opportunity for everybody. Liz Mason: I saw a statistic the other day, in the United States there's 30 million small businesses. Ten percent [00:28:00] of them are using Cloud accounting technology, only 10 percent. Byron Patrick: I believe it. Yeah, that makes sense. Liz Mason: That's crazy. Blake Oliver: It's a crazy number.  Liz Mason: That's 27 million companies that are not ... Using desktop products, server-based products, Excel, 12-column paper, nothing. It blows my mind. It's a huge opportunity though. Byron Patrick: It absolutely is, and I won't make up this statistic, but the maps are [cross talk] Blake Oliver: You're welcome to, if you like [cross talk]  Byron Patrick: The MAP survey, which is done by PCPS every year and CPA FMA surveys small firms [00:28:30] and larger firms on what are they doing, what are they adopting, what are their services, where are their challenges? And one of the questions is still are you paperless and how many monitors do you have on your desk? Seventy percent of firms may be paperless, which 30 percent of firms is kind of a ton of firms.  Rachel Fisch: That seems high. I [00:29:00] mean, I know these are like stats Byron style, but that 70 percent seems- Byron Patrick: Well 70 percent are paperless, so 30 percent are no? Liz Mason: Yeah, but paperless includes server-based programs as well. It's not a Cloud statistic. Byron Patrick: Oh, right. Liz Mason: It includes other programs. Byron Patrick: Right, it's not even Cloud. Liz Mason: It's really interesting. I was actually reading that MAP survey last week, two weeks ago. I was writing a white paper for Maryland Society of CPAs about how to scale a practice through efficiency and innovation and talking about the statistics in those, like what are the current problems, and so I pulled a lot of statistics from the MAP survey, which is really interesting to look at how bad it is and the areas of opportunity, so what people are currently doing and how we can fix it. [00:29:30] Blake Oliver: When are we going to see that blog post? Liz Mason: It's a white paper, and I think it's publishing next month. Blake Oliver: Awesome. Liz Mason: I'll let you know. Blake Oliver: Looking forward to it.  Blake Oliver: I think Rachel's got to go to a meeting, and I'm sure you two have plenty to do, so- Liz Mason: We have absolutely no lives.  Rachel Fisch: Or I can just leave you guys still talking [cross talk] Blake Oliver: We can try to set a record. Byron Patrick: Nobody wants to meet with us. [00:30:00] Rachel Fisch: The longest Cloud Accounting episode. Blake Oliver: Before we go, let's go around the circle here, Rachel, where can people connect with you online? Rachel Fisch: Sure, so I'm on Twitter @FischBooks. Blake Oliver: How about you, Byron? Byron Patrick: Twitter, @Byron_CPA, I think. Liz Mason: You should know this. Byron Patrick: I totally should. I think it's @Byron_CPA. Blake Oliver: Are you not on Twitter all that much? You can [00:30:30] choose a different social- Byron Patrick: I don't tweet at myself, that's the problem. Rachel Fisch: It's like not knowing your own phone number, right? Blake Oliver: That's true. How about you, Liz? Liz Mason: You can find me on Twitter @LizzyNorMa.  Blake Oliver: I am, as always, @BlakeTOliver. Thank you so much for joining me and see you again soon Byron Patrick: Thank you. Rachel Fisch: Thanks. Liz Mason: Yes, you too. 
This week, John and Rachel close out the "Green Apple Slices" segments and wrap up over 130 episodes together. The Green Apple Podcast did weekly "Green Apple Slices", where John Garrett and Rachel Fisch discussed a recent business article related to the Green Apple Message. These shorter segments were released each Monday, so don't miss an episode by subscribing on iTunes or an Android app.
The Green Apple Podcast does weekly "Green Apple Slices", where John Garrett and Rachel Fisch discuss a recent business article related to the Green Apple Message. These shorter segments are released each Monday, so don't miss an episode by subscribing on iTunes or an Android app. This week, John and Rachel discuss an Inc article "7 Ways to Keep Employees Motivated Besides Money" by Bubba Page.
The Green Apple Podcast does weekly "Green Apple Slices", where John Garrett and Rachel Fisch discuss a recent business article related to the Green Apple Message. These shorter segments are released each Monday, so don't miss an episode by subscribing on iTunes or an Android app. This week, John and Rachel discuss a HBR article "Six Components of a Great Corporate Culture" by John Coleman.
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Mar 29th, 1976
Toronto, ON, Canada
Episode Count
Podcast Count
Total Airtime
17 hours, 3 minutes