QuickBooks LIVE - Episode Pack

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Creation Date December 28th, 2019
Updated Date Updated November 27th, 2020
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Cloud Accounting Podcast episodes covering the evolution of the QuickBooks LIVE bookkeeping service.
  1. Transcript available! Read the transcript while you listen.Show NotesAccording to a new pricing page on the QuickBooks website, Intuit is now offering QuickBooks software plus access to “real bookkeepers to help you manage your business” for between $210 and $350 per month.  Now QuickBooks customers can “Get valuable insights from unlimited one-on-one conversations with an experienced bookkeeper that knows your business.” How does it work? "A QuickBooks Bookkeeper sets up your books via live video chat and is available for you all year long.”  Blake and David discuss this breaking news and the implications for accountants, bookkeepers, and QuickBooks ProAdvisors, who are understandably concerned. In a response, Intuit has shared a feedback form for those in the community to share their thoughts. Get in TouchThanks for listening! Let us know what you think on Twitter. Follow and tweet @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page! SubscribeApple Podcasts Google Play Stitcher Spotify PocketCasts Overcast Player.fm TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast for a special breaking news edition. I'm Blake Oliver-. David Leary: And I'm David Leary. Blake Oliver: David, you pointed me to this link to a Facebook group that we are both members of; it's a private group called Business Workflow and Management. I believe it's run by Seth David, is that right? David Leary: No. That is- Blake Oliver: No ...  [00:00:30] David Leary: This is actually, I think ... At one time, I think Stacy Kildal, and Seth David both ran this group together, and then, since then, it has split. Blake Oliver: Oh ...  David Leary: I think they both have the same initials. It's very confusing. I thought it was the same group for two years- Blake Oliver: Okay, well-  David Leary: This is Business Workflow and Management. It's #BWAM. Blake Oliver: This is a group for primarily bookkeepers, is that right? David Leary: I think so, yes. Bookkeepers, accountants ... Blake Oliver: A lot of folks in the Intuit world, right? QuickBooks world?  David Leary: I think it probably started out very QuickBooks-focused, but [00:01:00] it's definitely not anything specific about QuickBooks; it's really just, in general, small business stuff. Blake Oliver: All right, well, let's get to the breaking news, here, which, Deborah, who posted in this group, stumbled across a new pricing page on the Intuit website, and the QuickBooks website. What did she find? David Leary: Do you wanna read her post first?  Blake Oliver: Yes. Okay, so this is February 4. Deborah says, "So, now Intuit is doing away with us altogether. Has everyone seen this new pricing, with bookkeeping?" and a link to the QuickBooks online pricing, and free trial landing [00:01:30] page. She also posted a screenshot of it. I'm actually able to go there right now: QuickBooks.Intuit.com/pricing. There are now two options on the page. One is the regular, what they're calling 'Do it yourself' pricing for QuickBooks - the various versions of the online product: Simple Start, Essentials Plus, Advanced, et cetera. There's also a tab here that says, 'With expert help.' A QuickBooks bookkeeper sets up your books via live video chat, [00:02:00] and is available for you all year long. Now this, this is big. Intuit has been doing CPA-, and EA-assisted tax prep with their TurboTax product for a few years now. I think they just added CPAs this year. You can pay extra to have their help. This is the first time I've ever seen this in QuickBooks, right, David?  David Leary: I have a slightly different experience. I know Deborah posted a screenshot, and I think I saw that yesterday, but today, I'm seeing a different screenshot. They [00:02:30] moved the positioning; it's in a different spot. We can talk about that later. There was a comment from Intuit that this is ... They are testing this. They're obviously testing it, not just getting feedback from small businesses, but they're actually testing where they should place this on the website, because there's different versions of this. You see it moved around, and it's ... The way it's offered as an add-on, versus a slider- Blake Oliver: Yeah, but who cares about that? The big news here is that Intuit is going to be offering bookkeeping services bundled with QuickBooks, and the prices are kinda scary, if you're a [00:03:00] independent accountant, or bookkeeper who does this for a living. Just to give you an example, there, what they're calling the most popular tier, which is Plus with Live Bookkeeping is $260 per month, discounted for, I guess, temporarily down to $230 a month.  What that gives you is not just the QuickBooks product, access to that; it gives you the ability to talk to a live bookkeeper. There's this lovely picture of Claudell, who's [00:03:30] been a bookkeeper for 19 years, waving hi. She's the only one on the page, so far, so maybe they only have one bookkeeper working for them at the moment. Who knows?  It says that you can connect with a professional bookkeeper when you need an extra hand; stay confident knowing a certified QuickBooks expert is looking over your books as you work; and on-demand assistance setting up your books, categorizing your transactions, and reconciling your accounts. Somebody will help you set up your QuickBooks, which, actually, Intuit [00:04:00] used to do that in the past, with the Desktop product, right?  David Leary: Yeah. Going back to the Facebook post about this, there's 90 to 100 comments in there, and it's all over the place.  Blake Oliver: It's blowing up on Facebook, because, of course, people are saying ... Well, there's actually some great comments, here. Do you wanna read some of them, David?  David Leary: The comments are all over the board, from ... Some of the comments are, "Oh, they're choosing to compete with us.". Blake Oliver: Some of the comments are defending Intuit, saying, "Oh, this is no big deal. They're just taking on the low-end bookkeeping work. I'm not concerned [00:04:30] about that." Kristin says, "There's a big difference between something like this already existing in the marketplace, due to the competition between firms, and a big company, whose product we have been touting as a great solution, to suddenly become the competition."  David Leary: Yeah, and there's another similar comment like that. "It's one thing to have to compete with Bench, but it's a whole 'nother thing to compete with Intuit." Zack put that one.  Blake Oliver: What this made me think of immediately, when I saw this - this is a big move - is Bench, right? Which, Bench is [00:05:00] a service that makes their own bookkeeping software, receipt-capture software, and they provide a live bookkeeper that you get assigned to you that helps you reconcile your accounts and categorize your transactions every month. This looks very similar. Something else you get with this package is, not only do you get the set-up, but you get monthly insights. The bullet points under that feature are: your bookkeeper can fix [00:05:30] incorrectly posted transactions to ensure your books are accurate, and walk through monthly reports with your pro, and see how well your business is doing. That sounds like what I was doing, when I started out as a QuickBooks ProAdvisor, years ago. David Leary: Some part of me feels like this is inevitable, at some level. As more, and more bookkeeping becomes a commodity, and it's also happening in other industries, as well, eventually, this is going to ... I know some people even used the word Uber in some of the [00:06:00] comments. If it's becoming a commodity, and we think AI's eventually gonna do this, it's almost where is the interaction with the bookkeeper a temporary thing, for just a little while? There's a lot of 'sky is falling' comments, but I think some perspective on this, right? I remember, back in the day, when I used to work at the mall, selling software, when QuickBooks and TurboTax started hitting the market. This is to date myself a little bit. Everybody was, "The sky is falling. They just wanna steal accountants' jobs. It's ruining the accounting industry. People aren't gonna hire accountants, [00:06:30] and bookkeepers anymore, because they can get this software." It kinda didn't happen. I think some of this is like 'sky falling' you know? [cross talk] but I also think there's a lot of other impacts. There's a lot to talk about. I think this changes a lot of-. Blake Oliver: It's gonna cut the bottom end of the market out from under anybody who is serving that group. If you're doing QuickBooks bookkeeping for less than $300 dollars per month, I don't think you're gonna be able to compete anymore. [00:07:00] You're not going to be able to compete with Bench, or with Intuit, now. My big concern, or my big question, is how does this affect Intuit's relationship with the ProAdvisor community?  Because, if I were a ProAdvisor, I'd be seriously concerned that they've been saying, "Oh, we're gonna help you build your business. We support accountants." That has been the message coming out from Intuit for many years now. "We are [00:07:30] on your side," and yet, here's a competitor that we are creating, and who's to say that, in the future, they won't move upmarket? I'm really surprised that this page just appeared out of nowhere, and the community wasn't prepped for this, because they're probably gonna piss off a lotta people. David Leary: Yeah, I think somebody put a comment in there that, in a way, Intuit's been prepping people for this, for years, and I think we [cross talk]  Blake Oliver: Really? This is the first time I've heard of this. David Leary: Yeah, but indirectly, right? Everybody's [00:08:00] been really telling all the ProAdvisors, and Accountants, "Hey, you gotta provide more advisory service, more value. You gotta provide more value. You've got to learn to value-bill. You need to do ..." Really? What I kinda see happening, if you take the bell curve, and there's what? 100,000-200,000 ProAdvisors, whatever it is ... The ones that have moved to cloud first, the ones that have automated the processes, the ones that are truly kind of that aggressive, forward-thinking ProAdvisor, who's value-billing, they've really transformed their practice for the last five, or six [00:08:30] years. I see a lot of those ProAdvisors - that end of the bell curve - they're stealing all the A, B, and C clients, leaving the other 80 percent to fight over the D, and F clients that, to be honest, none of these people want. In the same forums, they bitch about these clients. They bitch about these clients that only wanna pay them $180 a month. In a way, somebody's gotta still take care of these clients [cross talk] The market demand'll still be here for this low-end client, but none of the ProAdvisors really want them anyways, but it's an interesting balance. [00:09:00] Blake Oliver: Well, it's one thing to complain about them. Everybody [cross talk] likes to complain about their clients, but when the revenue is being sucked away from you by a company that you pay a lot to for their software, I just ... I see this as a huge question, and I am gonna be really curious to see what the conversation is like at QuickBooks Connect, this year, in the fall. David Leary: How do you think this affects fixed prices? If I've had fixed prices on my page - I've moved [00:09:30] to that model - and my fixed prices were $325, now, are people gonna call me, and be like, "Intuit'll do it for $260 ..."? Did they just set fixed prices for the whole industry?  Blake Oliver: This is why I would be annoyed if I were still in practice is that these are acting like ... Do you know the concept of anchor pricing, David?  David Leary: Yes, yes, yes, yes ... [cross talk]  Blake Oliver: The idea is that once you put a price out there, that's the anchor, and then, all of the negotiation, or discussion revolves around that anchor. If you're [00:10:00] talking prices with a potential customer, you always want to start as high as you possibly can, without scaring them away. Let's say you know that there's just no way that they're gonna pay you $1,000 a month.  You start there, and you say, "Well, typically, I charge $1,000 a month for this sort of service," and then, you can discount to $500, which might be what they're willing to pay. If you start at 500, you might end up having to discount to 250. It's psychology. By putting out here prices that are essentially around [00:10:30] $200, between $200 and $300 a month, Intuit has anchored a very low price point for the industry. Now, how am I gonna convince prospects to pay me $500 a month, or $1,000 a month, when they look at this on the QuickBooks website?  David Leary: Yeah, and this starts to affect the value conversation, as well. Blake Oliver: Yeah. David Leary: It's tough, because I think it's everything that ... Even this happened at QuickBooks Connect, teaching people how to charge for their value. Teaching people [00:11:00] how to do fixed-fee. It almost goes against some of these things, or, at least, sets, like you said, that par, that bar for the level price. Blake Oliver: Yeah, and this is not value pricing. This is fixed-fee pricing [cross talk] difference, which is, with value pricing, you can charge different prices for the same service to different customers, based on their perceived value [cross talk]  David Leary: Do you think this is gonna make value conversations easier, if you're [cross talk]  Blake Oliver: I don't know. I think it makes it harder, honestly. David Leary: Harder?  Blake Oliver: Yeah, I [00:11:30] think, basically, Intuit has just anchored the price for bookkeeping services, and this is the floor. David Leary: I think one of the comments was talking about how this is really gonna help- be powered by accounting professionals. I mean, now we start doing math on margins, right? How much could you pay somebody an hour to do this, and that type of stuff. Then if kind of also makes me think ... Every single day, I get a private message on LinkedIn from somebody in India that wants me to give them bookkeeping clients. I don't have any bookkeeping clients to give them. Is this gonna open the door to this Uber-ization, and this flood of bookkeepers [00:12:00] are willing to do this for $10 an hour for Intuit?  Blake Oliver: I'm not quite clear on who is Intuit using to provide this service. Who have they hired? Who are their bookkeepers that are gonna be doing this, and how much are those people are getting paid? Are they outsourcing? The picture on the website, certainly ... It doesn't seem like Claudell is outside the United States. She could be. Who knows?  David Leary: That might be a test picture, because I signed up for TurboTax Live, and I think [00:12:30] her picture's there, too, so that might be just-  Blake Oliver: Stock imagery. David Leary: It might be, maybe she's really a TurboTax Live person, and they just wanted to test this for QuickBooks Live, and they just used the same image, or something. Then I was seeing, because I did start my taxes with TurboTax Live, and I have yet ... I'm paying like a hundred bucks more for TurboTax Live, and I have yet to actually engage the accountant. Now, I'm thinking, "Man, maybe this is just a big margin sell." I'm gonna pay more, and then actually not [00:13:00] ever take advantage of the service. Blake Oliver: There's a chat feature on the website, and I'm asking right now where the bookkeepers are located. I wonder if they'll tell me. David Leary: Oh, wow, real-time ... Wow. real-time testing, here, going on.  Blake Oliver: I said, "hello. I'm curious to know where your bookkeepers are located for the Plus with Live Bookkeeping service plan." Let's see if they get back to me. Ooh, it says, "Agent is typing." "Thank you for your continued business with QuickBooks. I'd be glad to assist you today. May I please have your name so I can address you better?" "Hi, I'm Blake."  David Leary: While you're [00:13:30] starting to do that interaction, Blake, and you start getting some answer, I have to also kinda frame this a little bit. Again, it's not new. Way back in 1998, I actually helped create a team, and created an offering for QuickBooks, called QuickStart.  Essentially, you could buy QuickBooks Desktop software; you'd get an expert; i.e. David Leary - literally, it was me, and a team of three other people. We would set up your whole data file, train you to use it, and then, send it back to you, and [00:14:00] kind of push you out of the nest a little bit. In a way, it's not like this is something that hasn't been done before by Intuit.  Blake Oliver: Tell me about that. How long did you do that, and why did it stop?  David Leary: I think I had this as a question down below. It's like kind of thinking in my brain, as a jotted some notes on this. I think it's scale. There is a difference to do this - to have a bookkeeper from with 100 clients, 1,000 clients, 5,000 clients. Now you're thinking about [00:14:30] the Intuit scale. You now have a bookkeeping firm with millions of clients. It's very, very hard to scale. Blake Oliver: Right. David Leary: Let's just use Uber as an example: 99.99999 percent of every Uber ride is the same. Somebody sits their butt in a car, and it drives them somewhere, then they get out of the car. That's the Uber experience, but every single small business is different. Even though you think you've set up these processes, and it thinks it's scale, it's very, very hard to scale this, especially [00:15:00] at a millions level. How big was your accounting firm, when you eventually got it up to your bookkeeping ...?  Blake Oliver: I had two partners. Two of us were operating it; one investor. Then, we had 10 employees, 10 staff, and we were serving about 200 customers per year, or clients. David Leary: Okay, so you need about a staff of 10 to serve 200. Let's do the math-  Blake Oliver: 20 per [cross talk] [00:15:30] David Leary: QuickBooks users. What kind of staff would you have in bookkeepers, then? It's divided by 20, right?  Blake Oliver: That was relatively high-touch, compared to what this would be, I imagine. Maybe you could have a single bookkeeper assigned to 40 or more, or maybe you just have a pool. I don't know how they're doing it. I'm curious. I'm asking this agent in the online chat. We'll see if we get any information. So far, they've asked me what QuickBooks software I'm using currently, and I said QuickBooks Pro, and they have not [00:16:00] yet responded. David Leary: The scale thing's very interesting, because-. Blake Oliver: I feel like it would have to be a pooled resource, because the way it works with, say, TurboTax ... I actually tried it last year, because I was curious. I bought the TurboTax with the assisted help, where I could contact an EA. At that point, they only had the EAs.  I could basically get on a video chat with an EA, immediately, or very soon; I could schedule one. I did it. I asked a question about something I couldn't figure out how to do. [00:16:30] Wonderful EA from the United States - I don't remember exactly where - jumped on, sorted it out with me, helped me press the right buttons. It actually worked really well, but it wasn't like she was dedicated to me. She was a pooled resource. If I called back again, I'd get somebody else. I'm curious if this is that model, with this QuickBooks bookkeeping thing, or if it's you get an assigned person. David Leary: What you're saying is maybe one quarter, I get insights from somebody; then, next quarter, I get insights from somebody else.  Blake Oliver: Right, and it's a [00:17:00] lot cheaper, if you're if you're building out a scalable business. All you know is that, "Okay, well I just need to have enough bookkeepers working at any time of day to be able to take the calls from people so they can help," but, then, you're not really getting a dedicated bookkeeper, which is a very different experience.  Maybe that's how ProAdvisors will have differentiate themselves from this service. I still don't like the idea of having to compete against my software provider for clients. I [00:17:30] wonder if this is ... If Xero is gonna capitalize on this, and if they will figure out a way to pull away ProAdvisors from Intuit, but you were saying that maybe Xero will do the same thing. David Leary: Yeah. I think, in the short term ... Because there're some comments. People are like, "I'm gonna go get certified in Xero, tomorrow." I think there's a comment like that, the huffin'-puffin', but that's very ... It's naive to think Xero is not gonna do this tomorrow, or Sage. This, I think, is inevitable, ultimately, in the long run. If [00:18:00] anybody should be scared, right ... I think if you think about some of the people that are already doing this, you have the Bench, the Pilots, the ScaleFactors, BotKeeper, Ceterus. I think if anybody should be scared, it should be Bench, because they built their own proprietary accounting system. They're not built on top of a QuickBooks, or a Xero.  If you're Ceterus, or ScaleFactor ... If Intuit introduces a model like this, you kind of already have a lot of systems, in place to work with a model like this. somebody like Bench has no [00:18:30] ... I think it's all proprietary. They're not already working with QuickBooks under the covers. How did they ...? I think there's upside for some people on this, but I think it's also scary for others. Blake Oliver: Yeah. David Leary: What else did I see that was an interesting comment on this that I was thinking about? Oh, quality control is interesting to think about, but then again, I think about the current ProAdvisor side, and I think again, again, you may ... Even with people who are certified with CPA, what is the real quality control? Everybody is kind of on their own, hoping ... Their fingers [00:19:00] are crossed, because, essentially, it's practice. People have a practicing firm.  Blake Oliver: So ... David Leary: You get an answer?  Blake Oliver: The agent I'm talking with, his or her name is Jhen, J-H-E-N, and gave me a link to the current ProAdvisor directory. I clarified; I said, "I'm sorry, I'm confused. I'm interested in the live bookkeeping service; the one that is $230 per month, where I can talk to a live bookkeeper inside QuickBooks." Jhen is now transferring me to somebody else who can help me. David Leary: The other big impact ... Yes, it's gonna impact ProAdvisors. It's [00:19:30] gonna impact accounting firms, and bookkeeping firms. I think [cross talk] impact the whole app-distribution structure, because, are bookkeepers that are a part of this, are they going to be somewhat constrained by some sort of Intuit rules, or guidelines, to where they're only allowed to recommend app A, B, and C?  Blake Oliver: Well, are they even gonna recommend apps? I think they'll be kept on pretty strict rails: helping to categorize transactions, and review financial [00:20:00] statements, and fix transactions, and whatnot. I can't imagine that Intuit could actually make any money, if they've got these bookkeepers out there doing software consulting, right?  David Leary: It feels like there're so many more questions to this - thousands and thousands of open questions. The problem is I think there're so many open questions, that's where people start with "The sky is falling" stuff. They're laying in bed at night, and their head's spinning around this, and then, they just come up with these doomsday scenarios. Some thought I've had is it's kind of good for Intuit. Intuit needs to disrupt [00:20:30] themselves, because if they don't figure out how to do this, and disrupt this model a little bit, somebody else is gonna do it to Intuit. Is it the perfect solution? Is it where things are going for sure? I don't know, but, if Intuit doesn't try to do things like this, somebody else is probably gonna do this, because I kinda feel like it's inevitable with the way things are headed. We should read Kim [Amsbaugh's] kind of official response that she put out there in the forum, while you're typing away there. Blake Oliver: Yeah, go ahead. [00:21:00] David Leary: She also provided a survey URL for feedback-  Blake Oliver: Wait, who is this person?  David Leary: Kim Amsbaugh. I think her current ... She's in PR at Intuit, but I don't know ... I think she might be PR communications for either the accountants team, or the whole QuickBooks side of the fence. I don't think Kim speaks to any PR-type stuff, or community relations with TurboTax side, but I don't know Kim's exact current title. Kim's been at Intuit a very, very long time, but I don't know exactly what her exact perfect title [00:21:30] is. I'll just read her post.  Kim Amsbaugh: "Hi, everyone. Kim Amsbaugh here, with Intuit. We're testing small business interest in a bookkeeping service as part of their QuickBooks subscription powered by accounting pros like you. We're learning from this test and look forward to partnering with accounting pros to deliver great services to small businesses, while also potentially providing new revenue streams for the accounting community. We highly value your feedback and have shared it with the team. If you want to share more, please share your thoughts here."  David Leary: They've created a Google forum [inaudible] really, all these people [00:22:00] that are probably in that forum, and others to give feedback, because that's the best way to shape something like this is for Intuit to throw it out there, get feedback, and iterate on it. Blake Oliver: Okay, so, I've been transferred to Heath, who said, "So we have that live now with our TurboTax, and it has been very successful, and we have started to advertise this with QuickBooks to see how popular it would be, but it isn't quite live, just yet." David Leary: Oh, yeah, I see, because, if I try to buy it, it [00:22:30] says, "Thanks for your interest in QuickBooks Live ..."  Blake Oliver: Oh, so this is just testing. They're just testing interest. This is what startups do when they wanna see if there's a market for the product. You don't wanna build something if there isn't a market, so you put up a landing page, where you advertise it, and you make it seem like it's real, and it exists, and you see how many people click the Buy button. They actually can't buy it. You just take their email, and then, if you get enough interest, then you actually go and build it-. David Leary: Which is, a lotta times, smarter to do, because what if Intuit tried to build this? They got [00:23:00] tons of ProAdvisors on board; everybody changed their processes; they spent months building this in secret, and then, they launched it, and not one small business owner clicked to buy it. It would've been millions, tens of millions, hundreds of millions of dollars just lost.  This is something companies do, because it's just cheaper. It's cheaper. Actually, I would recommend ProAdvisors, and listeners of our podcast, accounting firms, do this. If you're thinking of adding a new service, instead of building it, and adding a new service to your clients, put a button on your website, and see if people click on it. If nobody's clicking on [00:23:30] it, they don't want that service from you. Blake Oliver: Right. David Leary: I would do ... It's a good way to test something for nickels-. Blake Oliver: But it's also somewhat dishonest, wouldn't you say, or confusing? It certainly caused a lotta confusion today.  David Leary: It's confusing. No, there's no doubt it's confusing. Dishonest is hard to say, because I've done it myself, and I'm a believer in it. Then, like- Blake Oliver: It does work.  David Leary: -"Oh, people actually want that," and then I go hurry up, and build it. I've done that myself, but, yeah, I don't know it's dishonest. It [00:24:00] would be dishonest, if it just stopped, like it didn't actually do anything,  but it's like, "Hey, thanks for your interest. Please fill out this form if you want us to tell you when this is gonna be available.". That's the other part of this; this could completely ... Two weeks from now, Intuit could come back, and be like, "Hey, we did this test, and 100,000 small business owners want this. Hey, ProAdvisors, who's gonna sign up?" Like, "We got a lead funnel of 1,000 people that want ProAdvisors." Blake Oliver: The summary is, we've figured it out, right now, this [00:24:30] is just testing on the pricing page. Intuit is trying to gauge if there's enough interest, and we suspect that, if there is enough interest, they will build it, given the success that Bench is having. By the way, Bench has grown quite a lot since the last time I took a look at them, and I've got some stats. David Leary: Current stats on Bench? Blake Oliver: Yeah.  David Leary: The last stats I knew of, I think. was they had 5,000. Are they past that, now? Blake Oliver: Well, let me tell you. I [00:25:00] wrote a post about Bench, back in 2015, on my blog. The post is called, "Is Bench Bookkeeping Right for my Business?" A lot of that information was out of date, so, recently, the Bench folks reached out to me, and said, "Hey, would you mind updating your post?" They gave me some new information. I was happy to do that. The new info is that, in January 2018, Bench raised $18 million for a total of $53 million invested to date. They now have 350 employees, and their pricing [00:25:30] ranges from $95 to $495 per month. I don't know how many customers they have, but I do believe it's over 6,000. Is that what you said? David Leary: When I've talked to them in the past, they told me 5,000, so it could be as high as 6,000 now. Divide 350 ... That's about 17 clients per employee. From a bookkeeping firm, is that efficient [cross talk] 6,000 [00:26:00] customers divided by, you said, 350 employees. That's 17 bookkeeping clients per employee.  Blake Oliver: We've gotta consider that a number of those employees are probably not, are definitely not providing services to the clients-  David Leary: They're engineers, yeah.  Blake Oliver: Let's just say it's 300 that are actually bookkeepers, right? David Leary: Okay.  Blake Oliver: So, then, it's 20 to 1.  David Leary: I've talked to many ProAdvisors, and people that have bookkeeping firms, and between QuickBooks Online, and the apps, and what they're billing efficiently, they're [00:26:30] pushing ratios of 50, 60, 75 a month. Blake Oliver: Well, it depends what kind of work you're doing with your clients. Depends how big they are. I found, on average, that my bookkeepers could handle 20. Now, if they were really talented, they could handle 40. I had just one all-star, who ... She could do 60, but that's unusual.  David Leary: I [00:27:00] assume your firm was taking advantage of every possible automation, and cloud thing you could [cross talk] right?  Blake Oliver: Not every automation, but we were definitely ... Compared to most firms that are still using desktop software, we were doing really well. We were using receipt capture. We were using online bill pay; Bill.com; we were using Xero. Our clients had at least three apps that were all integrated. I think 20 is reasonable, on [00:27:30] average. Again, I'm sure there are some rock stars out there, who are like, "Oh, 20? No way. I can handle way more than that." Well, you're probably not average. That's ... You work for yourself, first of all. That takes entrepreneurial skill, and ability, and that means you're probably just a lot more productive than most people who would just be an employee. If you just take the average bookkeeper, who doesn't wanna be entrepreneurial; just wants to come in, and do a job from 9:00 to 5:00, they can probably handle 20 is [00:28:00] my guess. I'd love to know if anyone thinks that that's off [cross talk] -interesting, so Heath is now taking a survey. He's taken my info, and has asked ... When the feature is released, they'll contact me, so I gave him my name, and e-mail address - my real name, and email address, and phone number. He's saying, "From one to five, what level of interest do you have in this?" I guess I'll say five. "Does the price seem reasonable to you, from one to five?" Yeah, it seems very reasonable. Hopefully, I don't get black-balled [00:28:30] from this list, and they never tell me anything ever again. Okay, let's step back for a second. I feel like, when I had my own practice, I ended up putting a floor on basic bookkeeping services of $250 a month. If a client wasn't willing to pay at least that, then I wasn't interested in talking to them. It just wasn't ... The margins were not gonna be good. It wasn't gonna be a good experience.  I would not be worried, if I still had my practice, about this [00:29:00] assisted-bookkeeping QuickBooks-Intuit product, because all the prices are basically less than $260, and I'd be really looking for clients that are willing to pay $500, and more. Of course, when we joined a CPA firm - we merged with a CPA firm toward the end - we were looking at customers willing to pay $1,500 a month, and up. That's not a problem. : What is a problem, I think, is the anchoring. I don't like Intuit setting [00:29:30] a floor on prices, or not even a floor. I don't like them setting a low anchor point. That would be frustrating to me, and then having to constantly explain the difference to clients. Although, maybe, it would end up helping, because it educates them on online bookkeeping, and I could say, "Look, here's what's included with the QuickBooks Live Bookkeeping product. You get just these three things, and here's what you get from us. You get these 30 things." Maybe, in the end, it will help educate the [00:30:00] market. I don't know, what do you think, David? David Leary: It's actually good getting a perspective on this from somebody who's owned a firm, has operated a firm. Like, "Hey, at this dollar figure, I could do it; at this dollar figure, I can't," but, if I'm hearing you correctly, there could be a huge upside here, because, now, even now that there's an anchor price that has kind of the - 'bottom-barrel' is not the best terminology, but, right now, live, I can't think of something else to say - the bottom-barrel set of features, whatever it might be ... Maybe there's no app consulting; [00:30:30] maybe there's none of this, right?  Blake Oliver: Right.  David Leary: Now, on my site, I can put a fixed fee of $500, and be like, "Yeah, but look at the 10 other things I'm gonna give you; the hundred other things I'm gonna you on top of ... versus what QuickBooks could give you." In a way, maybe this is like a reverse-psychology thing, and it actually sets the price bar ... It allows people to set their fixed fees higher. Blake Oliver: What I would do is, if Intuit starts doing this, is I would immediately start optimizing my website [00:31:00] with blog posts, and doing paid advertising online, saying, "Unhappy with QuickBooks Live Bookkeeping? Here's something better for you ..." because it-  David Leary: Good luck with that, because Bench has run so many Facebook ads, and Google Search ads that you just can't afford to buy those terms.  Blake Oliver: Well, not, but I can do organic SEO, on my website, writing articles like that ... The reason Bench reached out to me about correcting the information on my blog post is obviously because it's having an SEO impact. People [00:31:30] are finding that article, and they found it, so it must be ranking , and they wanna correct the information so that it doesn't hurt their business. I could do the same thing with QuickBooks, and just write a bunch of articles about their service, and the problems with it, and case studies of people who switched over to mem and I could rank very highly on Google for those terms. Actually, in that way, I'd be sort of piggy-backing off of Intuit and stealing the people who're really just [00:32:00] too big for them, who would be good for my service, and Intuit's the one that would be spending millions of dollars bringing in these customers. It's sort of like ... What do you call it when one animal feeds off of another? It's not parasitic-. David Leary: Symbiotic? Blake Oliver: It's more symbiotic, yeah.  David Leary: One thing I think I'd see this as being a positive out of this is you said, "Hey, if somebody doesn't wanna pay me $280, I don't want them as a client." Blake Oliver: Right. David Leary: What'd you do? You just said, "Sorry," and just [00:32:30] punt them? At least now, you can send them somewhere, like, "Hey [cross talk] for you, the right size might be over here." People aren't just gonna be punt-kicked from one firm, to another firm, to another firm. Blake Oliver: What's great is that I can use that now, and I can still keep the client for the other stuff. They're not willing to pay me to do their basic bookkeeping work, fine, but at least they have help, and I can just say ... I can say to them, when they get stuck on categorizing transactions, "Well, you should use your QuickBooks Live Assistant [00:33:00] to help you with that," and then, I don't have to get on the phone with them. Then, they call me when they need some help with like an integration, or they call me when they need help with tax. David Leary: Interesting, so you, as a firm owner, could outsource ... Use this as an outsourcing service for your own clients. Blake Oliver: Which is what Bench is starting to do with accountants. They have, now, a partner program that is not ... It's active. They haven't like started promoting it a lot. It's not a secret, but you can actually [00:33:30] partner with them, as, say, a tax professional, and then, have them do the bookkeeping for your clients, and then they'll send you the reports for taxes, and they'll do the adjusting entries, and all that stuff. This could be very similar, and there are way more tax professionals, independent tax professionals, out there still than there are, I think, independent bookkeepers. Maybe that's the play for them: get all that bookkeeping work referred to them by the tax people. David Leary: Yeah. I don't have much ... Literally, I had a scratch [00:34:00] pad of thoughts on this. I think we've exhausted all them. I really knew we had to do its own show. We couldn't have talked about this, and talked about 15 other articles, so I think this had to be its own show. It had to be a standalone episode. I'm sure a lot of people are gonna wanna send us thoughts, and feedback- Blake Oliver: Yes. David Leary: -and comments, so what's the best way for them to do that? Blake Oliver: We really wanna hear your thoughts on this. Contact me, and David. Tweet at us. I'm @BlakeTOliver, and [00:34:30] where are you, David? David Leary: I'm @DavidLeary. Blake Oliver: Follow us, or like our page on Facebook - Cloud Accounting Podcast. Just search for that. You'll find it on Facebook, and feel free to connect with me on LinkedIn, if you're on LinkedIn. I'm always looking to hear what people think about the show. Oh, don't forget to subscribe to our show notes. If you go to BlakeOliver.com ... Or, you're not gonna remember that-. David Leary: Cloud Accounting Podcast, yeah.  Blake Oliver: CloudAccountingPodcast.com; that will direct you to the podcast page [00:35:00] on my website. There is a blue banner at the top that says Subscribe to Updates. Click that banner, subscribe; you will get notified via email of any new episodes, and in that email will be all the links, and descriptions of any articles that we talk about on the show, so you can then go, and read those later, if it was interesting to you in the discussion. David Leary: That'll be important with this episode, because you're gonna wanna get the link to the survey, and you're gonna wanna get the link to the Facebook post, as well.  Blake Oliver: Exactly, and the screenshots [00:35:30] of this new pricing page. All right, David, well, that was a fun special episode. I look forward to chatting with you on Friday. David Leary: Yeah. Same Bat Time, Same Bat Channel. Did I say that? That's so corny! Why'd I even say that? Anyways, I'm out; we're out. 
  2. Show NotesThis episode is sponsored by Veem, the easiest way to send money internationally. Sign up today and earn 10,000 VeemBack points on your first* transaction.*Restrictions apply. Visit the Veem website for details. Offer limited to one reward per account. Offer only applies to international payments, and only on standard exchange rates. USD to USD cross border payments are excluded. Qualifying payments must be $1000 USD or more. VeemBack Points will be added to qualifying accounts by April 19th, 2019. Terms and conditions subject to change at Veem’s discretion. Offer only good for US customers who have never sent a payment. This offer can not be combined with other offers. Offer Valid thru April 1st, 2019 23:59 PST.Bookkeeping is Dead: How Intuit Will Kill It for Good — Blake Oliver — Hot on the heels of TurboTax Live, Intuit is building an on-demand bookkeeping service called “QuickBooks Live" that will connect business owners directly with bookkeepers via video chat and screen sharing technology integrated directly into the QuickBooks application. Intuit is testing potential bookkeeping — AltAccountant Podcast — With Intuit/QuickBooks (and other software companies) testing the demand for bookkeeping services built-in the subscription.... some interesting questions to think about. What if the need for manual bookkeeping was replaced by software company? What would your business look like if you had to provide valuable services and “bookkeeping” as we know it ceased to exist? Is Intuit® Building the 'H&R Block®' of Bookkeeping? — Insightful Accountant — Joe Woodard provides his personal perspective and recommendations for bookkeepers on the QBO-Attached Bookkeeping Service Intuit is considering offering its users. inDinero Acquires mAccounting in Move to Transform the Outsourced Accounting Industry — PRWeb — inDinero, leading accounting and tax software for growth businesses, acquired outsourced accounting and tax firm mAccounting to fuel their next phase of growth. FreshBooks matures accounting offering — Enterprise Times — FreshBooks has started the year with several update, including the introduction of double entry accounting and bank reconciliation. KPMG shutters small business accounting unit — AccountingWEB — KPMG has confirmed that it will close its small business accounting venture after just five years in the market. American Express and Bill.com Introduce Vendor Pay — Bill.com — American Express and Bill.com announced a strategic partnership with a new offering: American Express “Vendor Pay” by Bill.com. Get in TouchThanks for listening! Let us know what you think on Twitter. Follow and tweet @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page! SubscribeApple Podcasts Google Play Stitcher Spotify PocketCasts Overcast Player.fm TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Veem. Are you tired of slow, stressful, and expensive bank wires? There is a better way. You could Veem it. Veem is a simple, affordable, and fast way to send, and receive payments around the world, or to the business next door. Veem bypasses current wire-transfer processes, saving users time, and money. Veem also integrates with your favorite accounting software, like QuickBooks, Xero, and NetSuite, making manual data entry a thing of the past. Cloud Accounting Podcast listeners who sign up for Veem will get 10,000 VeemBack Rewards points. That's a free $100 for each of your clients that sign up. Head over to CloudAccountingPodcast.promo/veem. That is Cloud Accounting Podcast dot promo forward slash V-E-E-M to redeem this exclusive offer. Remember, Veem it, and it's paid.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver-. David Leary: And I'm David Leary. Take a breath, Blake. Take a breath. Blake Oliver: A lot of developments [00:01:00] in a very short amount of time from our friends over at Intuit. David Leary: I think the notification button on my- the little red notification on my phone for Twitter has not turned off in eight straight days, or whatever this is, now, four ... Whenever we did the last podcast, the special breaking news episode. That was episode ... What's the number on that, for those of you [cross talk] Blake Oliver: 57.  David Leary: Episode 57. Since that episode released, Episode 57, yeah, my [00:01:30] notifications for LinkedIn, Twitter, and Facebook, and private messages has been a little on the crazy side. Blake Oliver: For those of you who are just joining us today, welcome to The Cloud Accounting Podcast. Episode 57 was all about QuickBooks Live. We're proud to say David and I broke the news, here on The Cloud Accounting Podcast. We were first to the story. It's all about Intuit offering business bookkeeping services, live bookkeeping services, inside the [00:02:00] QuickBooks app. For $200 a month, they are going to now be offering basic bookkeeping services. There was a whole bunch of response from Intuit, and people in the community - critics, supporters; Intuit saying this is only a test, but is it really a test? I mean, there's so much to talk about here, David. Where do we start?  David Leary: When we did the Episode 57, it was like real-time digestion of what's happening. We saw that thing, the Facebook post. We went to QuickBooks' pricing page. It was live [00:02:30] on the pricing page. You and I were like, "Let's get on, and record." We kind of recorded, real-time, our discussion, and, in a way, it was like watching a televised police chase. You actually were using the chat; you were trying to do it. I think somebody even tweeted that at us. It went from that to tons of forums, tons of tweets, lots of opinions everywhere, but I feel like in the last two days, deeper articles are being written. I know you wrote a deep article. Joe Woodard wrote a deep article. We could talk about Hector Garcia has a very good hour-long video that really [00:03:00] poses some deep thoughts, and questions about this. I think we're at that ... Deeper thoughts are happening about this, and so, I think that's where we start is those articles. Blake Oliver: I'll just go through my article, here. It sort of lays out what we know so far. How about that? I'm not a journalist, but I'm trying to be journalistic in my coverage of this. If you're interested in it, it's over on my blog, BlakeOliver.com/blog. The article, which I published, is called "Bookkeeping is Dead: How Intuit Will Kill it for Good." [00:03:30] Maybe that's a little harsh, but I really wanted to get people's attention, because I think this is a huge story in the accounting profession, especially client-accounting services, and bookkeeping. I started as a bookkeeper, so I am very, very much personally invested in the outcome of this. As many of you know, last week, David and I got a tip from a private Facebook group that there was new pricing on the QuickBooks pricing page. Intuit was advertising real bookkeepers to help you manage your business,  with a lovely, smiling woman, Claudell, a bookkeeper [00:04:00] for 19 years, who you could now buy bookkeeping services from, in addition to your QuickBooks company file, for an extra $200 per month. This came as a shock. I had not seen anything from Intuit about this. David, had you seen anything from Intuit about this, publicly? Nothing, right? Just completely outta the blue. David Leary: Not until the website was up. Blake Oliver: You and I got on the podcast, and we just started talking about it; we started digging into it, looking at the pricing page, trying to figure out what is [00:04:30] going on; tweeting at people; doing basically a live breaking-news edition. In the days that have followed, I did a little bit more digging, and I found out this is really very similar to another service that Intuit already offers, called TurboTax Live.  For those of you who aren't familiar with it, this started in 2017. It's a service that connects customers who are using TurboTax, Intuit's tax-preparation product - self-tax-preparation product - to enrolled agents, or, [00:05:00] this year, certified public accountants, on demand, via a one-way video. These people can help you with your questions. They can help you fill out your forms. They can even sign, and submit your tax return for you, if needed. Interestingly, they are using the same picture of Claudell, if that is really her name, on TurboTax Live, as the sort of mascot for TurboTax Live, basically with that offering; you pay extra, significantly more than you'd normally pay for [00:05:30] TurboTax, but you have the assurance of having an EA, or CPA there to answer your questions [cross talk] David Leary: -I signed up for TurboTax Live. I'm gonna talk to Claudell, because I ... I haven't yet, but I'm getting to the point where I'm probably gonna have questions. You do all the easy parts first, and you put off the hard parts. Blake Oliver: Yeah. David Leary: I'm gonna be talking to Claudell soon.  Blake Oliver: I've used TurboTax Live. I used it last year, because I was very curious how it worked. It seems to be the future of tax prep. Intuit calls this category "Assisted [00:06:00] Tax Prep," meaning it's not full-service, but it's also not self-service; it's assisted. It's sort of a new category. H&R Block is also trying to do this, as well, and it seems to fill a lot of people's needs. They wanna do it themselves. They wanna save money. They don't wanna spend three times more to have somebody do it for them, but they also wanna be able to ask questions. I went over to the TurboTax Live pricing page, and there's a great screenshot on my blog. You [00:06:30] can see, it looks almost exactly like this new QuickBooks Live offering, where you pay a little bit extra, and you get access to this expert to help you out. I was curious ... Well, we should talk first about Intuit's response to all of this coming out, because the pricing page was a shock. A lot of people were shocked. I was shocked; you were shocked; tons of people in the community were shocked. What does Intuit ... What did Intuit say in response to all of this coming out?  David Leary: Well, I mean, I agree about people being in shock. I worked for Intuit for [00:07:00] 20 years. Intuit's response: "This is a test." [cross talk] Yes, they could be testing-  Blake Oliver: -their official Intuit accountant's Twitter account responded to my post about the new pricing page, saying, "To clarify, this is a test we're running to gauge SMB interest in a bookkeeping service as part of their QB subscription that would be powered by accounting pros. The pricing is not set, nor are the services. The info on the site is only being used as an example, as part of the test."  Indeed, if you try to click "Buy Now," on that pricing [00:07:30] page for QuickBooks Live, it doesn't work. It says it's not available yet, and you put in your email address, and I guess they'll notify people who are interested, if they do eventually launch the service. That's the official response, but it doesn't seem to be exactly what's happening, right, David? David Leary: It's obvious it's live, right? That's not a live service, but it's live on the website. This is why I feel like this is such big news, because it's not like, "Here's a fake screenshot ..." like, "Here's a fake screenshot. Give me some feedback." It's [00:08:00] in-the-field live test, but not just that it's in the field, there's job postings that seem to go along with the test. Blake Oliver: Yes, and that is what really blew my mind is an accountant, who shall remain nameless, contacted me, and sent me the URL of a job posting on the Intuit Careers website for a job that has got the most boring title I could ever think of, but is a really interesting job. It's Manager III: Service and Support. If you [00:08:30] read the overview, and the responsibilities ... Well, I'll just read it. They're looking for a group manager to lead the service-delivery function within our small-business professional-services team. The group manager will be responsible for "Delivering an outstanding experience for small-business customers through our expanding network of certified bookkeeping professionals." Full stop. Is it just a test, if they're hiring somebody to run the program?  David Leary: It feels like this is ... It could be a well-funded [00:09:00] three-year test. I think the word 'test' is getting very- being used very liberally. Blake Oliver: Yes. David Leary: There's just a lot of variance in how big of a test this is. I think that's why I truly feel like this is a story. You could say it's a test, but regardless, Intuit making a test like this is gigantic news. The fact that this test is even happening is the news, regardless of the results of the test. Just the test itself is news.  Blake Oliver: What's [00:09:30] interesting is that we have sort of confirmation that this is more than just a test from Joe Woodard, himself, who - for those who are not familiar with Joe Woodard ... David, what's the deal with Joe? He's famous why?  David Leary: Joe Woodard has a lotta history in our space. I think Joe ... Hopefully, I'm right, here, if he's listening. He has a conference , Scaling New Heights, and he has The Woodard Group. The Woodard Group is a really mostly made up of QuickBooks ProAdvisors. He's put on a conference - Scaling New Heights. I [00:10:00] wanna say it's 10, maybe 11 years old now. He's got his conference that's out there, and he has a tribe of people who listen to him. He has a very deep relationship with Intuit. Intuit is the exclusive sponsor of his conference. He obviously saw this story break, and then, he went, and contacted Intuit, and came back with some facts. One of its facts kinda, the way I read it, indicates that this is not a test of market viability. The decision's already been made to move forward. [00:10:30] That tells me this is kind of just a test of what's the website design gonna look like? What's the price gonna be? How are we going to off-  How are we gonna work on this service behind the curtain, as far as who's gonna do it, how's the work gonna get done? It feels like, based on his fact number two, this train is pulling out of the station full bore. Blake Oliver: Maybe at Intuit, they've sort of got their wires crossed a little bit in terms of the messaging - how much of a test is this - or has the decision already [00:11:00] been made and saying that it's a test is a way to mitigate some of the potential downside response from the ProAdvisor community, which is understandably concerned. There's been quite a lot going on in the ProAdvisor community; folks saying ... Well, one big concern is even if you don't view Intuit as a competitor at this price point, $200 a month, are they anchoring pricing low? We discussed that on our first episode on this topic. [00:11:30] Another question is just simply having your software provider compete, in any way, with you is questionable. What's to stop them from then offering more higher-level services in the future? There's arguments on this, the practicality, the principle of it. I think a lot of those questions are just sort of self-evident. I don't think I'd ever want to be potentially competing in the services realm with my software provider, necessarily.  Accountants have been a very, very dedicated, loyal channel for Intuit [00:12:00] for years, and years, and years, recommending their products, promoting their products. It's a big reason why Intuit has such massive market dominance is because bookkeepers, and accountants only will use QuickBooks, in the United States, at least. David Leary: You've covered that really well, these open questions, in your summary, but I think one that's really interesting that you ... You really put in some work this weekend. You and I had opposite weekends. I'm breaking up tile, and concrete in a bathroom to expose a pipe underground that I could put my finger in, and you did some research. You really [00:12:30] dug in, because you found quotes from a conference call about TurboTax Live, and if you really ... Like you said, you read these quotes ... I'll let you read them; you really made the conclusion that this is exactly what's happening right now with QuickBooks Live.  Blake Oliver: If you go to the transcript of Intuit's third-quarter earnings call from last year, after tax season, CEO Brad Smith, who is now the former CEO, had some really interesting things to [00:13:00] say about TurboTax Live in its first season. I'll read some of these quotes, and, in your mind, as I read these quotes, just replace TurboTax Live with QuickBooks Live, because we've basically figured out, they're essentially the same service, just with different products. One is with TurboTax; one is with QuickBooks, but they even both have Claudell as the face of the product. Let me read this for you: "We're pleased with the results of our TurboTax Live offering in its first season. [00:13:30] TurboTax Live has the potential to be transformative to our consumer business in the years to come. It opens up the 20 billion assisted-tax-prep category, and it provides us with an opportunity to grow our dollar share, while increasing our average revenue per return. We're just getting started with TurboTax Live, and we are looking forward to what we can deliver next season.". Okay, great, TurboTax Live clearly did well. Brad Smith was very excited about it. Enough to bring it out- mention it specifically on the earnings call. The [00:14:00] analysts wanted to know a little bit more, so they asked some more questions, and the responses from Brad Smith are very revealing. He says, "The other thing we wanted to see is if we could change the source of new customers; get people out of tax store, and CPAs. So far, the mix of new customers, as we finish this season, also looks like we've been successful in proving that hypothesis. So, as we lean into next year the primary objective is going to be to transform the 20 billion assisted-tax-prep [00:14:30] category and begin to bring more of them into the do-it-yourself category. We think that will be the big opportunity for us over the long run."  Finally, he said, "We're now converting people who have already adopted a method, and with TurboTax Live, we're converting them from higher-priced alternatives. When they come into our category, we're getting three times the average revenue per customer for those customers that come in with TurboTax Live.". That means the only way that's [00:15:00] happening is if TurboTax Live is stealing customers, is taking business from higher-priced alternatives. He said it himself. What are the higher-priced alternatives? Independent CPAs, tax stores, but especially, I think, independent tax-preparers. Now. let's replace TurboTax Live with QuickBooks Live. Same principle. It's the same type of service - assisted bookkeeping, assisted tax prep. They are gonna make a bundle on this, and they're gonna do it. Intuit [00:15:30] is a public company. Their primary obligation is not to accountants, and bookkeepers, it's to their shareholders, and then, their customers. They create value for their customers. They create capital for their shareholders. To me, this is inevitable. If they passed it up, they'd actually be negligent. David Leary: It's not just the inevitable. Your argument is the road map, and plans are right here in front of all of us. Blake Oliver: Yeah, they've done it already. They started in 2017, and they did it successfully. Intuit's a smart company. David Leary: Not only that, I [00:16:00] think you go on to talk about competitors are doing this. You have Bench doing this ... We'll talk about some of these other competitors, because , coincidentally, in the same week, some competitors have made some very interesting announcements, as well. It's just this snowballed all of them, but we're gonna talk about those articles a little more deeper in the podcast, here, I think. What else is a good highlight of yours? I thought it was entertaining how you had a graph of how the use of the word 'bookkeeper' is going away. Blake Oliver: Yeah, well, and I'm kind of picking on Intuit, because they are the mover in the space right [00:16:30] now, and they are the giant. I mean, how can you not? They are the elephant in the room, the only billion-dollar small-business SaaS company, so, they have the ability, and the power to kill bookkeeping. Bookkeeping, though, has already been on the decline for 30 years, ever since Intuit came out with Quicken, the job has been getting more, and more automated. We went from paper ledgers, to digital ledgers, and then, with online accounting now, we're not even entering transactions anymore. I put in this post that if you think about the definition of the word 'bookkeeper,' the [00:17:00] definition is a person who records the accounts, or transactions of a business. Well, anyone who has used cloud accounting knows that you really don't need to actually physically manually record them anymore. You can automate 90 percent of that, or more, potentially. This, to me, is just the finishing move in the long decline of bookkeeping. People who call themselves bookkeepers, really, a lot of them aren't bookkeepers anymore, especially in the ProAdvisor community. When I say that bookkeeping is dead, that's not necessarily a bad thing. David Leary: Yeah, I [00:17:30] think, as the week went on, the thoughts went on, I've actually started to think a lot about the name 'Xero.' Why is it called 'Xero?' Part of me is starting to think like Xero bookkeepers, Xero bookkeeping. It may not be; it may not be. I have no idea-  Blake Oliver: I don't know.  David Leary: -but, at least this week, it seems like a perfect name for that. To me, it kind of makes a lot of sense why it's called that, especially if you start thinking about it in the light of this week, and even the stats you have about the number of bookkeepers that used to exist, [00:18:00] and the number that exist today. Blake Oliver: Yeah. We will, of course, keep our listeners informed of any developments that occur in this space. I am on Twitter. If you have inside information into this, and anything going on, let me know. You can hit me up on Twitter; I'm @BlakeTOliver, and David, how about you?  David Leary: @DavidLeary. Blake Oliver: We usually finish our shows like that, but we're not quite done yet, right, David? We've got some more excellent cloud-accounting news to cover. David Leary: Yeah, I think there's two [00:18:30] still tied to this Intuit thing and you have them linked in, actually, your blog post. It's Hector Garcia, and I always forget the other person's name ... Kirk Bowman. They make a video together, and Hector Garcia really posed an interesting question: what if bookkeeping did not exist at all. It's very, very good. There's a lot of deep thoughts on it. I think it's a definitely an article- video worth watching. Then, Joe Woodard actually wrote a nice three-page article on his site, Intuitive Accountant. A lot of it covers a lot of the same stuff Blake, and I just [00:19:00] talked about. I don't think we have to cover that more. One thing I did find very interesting in here, and I could be nitpicking one line, but I just- it really caught my attention. Joe is giving some suggestions on how people should respond to this.  One is to offer a level bookkeeping far above Intuit's possible service, and then, offer services beyond bookkeeping. That's your two strategies if  you're a QuickBooks ProAdvisor, and you wanna compete, et cetera, et cetera, but, he actually [00:19:30] kinda talks about focusing on businesses that don't use QuickBooks Online. I'll actually read the sentence: "If these businesses don't use QuickBooks Online, you can avoid competition with Intuit's prospective bookkeeping service."  Now, I read into this line A) is he talking about QuickBooks Desktop, or B) is he talking about Xero, and Sage, and other competing products? This line just really caught my eyes. There's not a ton in there, and I'm sure Joe will probably do a follow-up post [00:20:00] later this week, just because there's a lot happening. That just really caught my eyes. I don't know if you saw that, when you read this article or not, but ... Blake Oliver: To be honest, I missed that point, because I was reading really fast, and I'm glad you brought it up. I think that there is a humongous opportunity right now for Xero to go after all those ProAdvisors who no longer feel that Intuit is in their corner. If Xero says, "We're not gonna try to automate you guys; we're not gonna try to build our own bookkeeping service, our own accounting services; we're [00:20:30] just gonna focus on the software, and we're gonna support you," then, I think that's a message that would resonate, right now, with accountants, and bookkeepers who are feeling threatened. David Leary: Yes, they totally ... Xero could do something like that.  Blake Oliver: Part of the reason that Xero has had such a hard time penetrating the US market has been accountants' and bookkeepers' loyalty to QuickBooks, and to Intuit, because Intuit has been good to them, but that could all be disrupted by this. We'll have to see how it pans out. David Leary: Yeah, unless you subscribe to the theory that I do that [00:21:00] there's no way Xero, and Sage don't do this, as well. Proof of this is kind of in our next articles. Blake Oliver: Yeah, let's hear it.  David Leary: Let's jump into inDinero. inDinero really does outsourced accounting, and they are a software platform. In a way it's inDinero with live bookkeeping, if you wanna think about it that way. Blake Oliver: They have built their own accounting general ledger. They don't use QuickBooks; they don't use Xero. They are their own thing, right? David Leary: Yeah, they're full stack; have their own ... But they now purchased an accounting [00:21:30] firm. Blake Oliver: Oh, wow, mAccounting. They were on the podcast. David Leary: Oh, really? Okay, small world. Blake Oliver: Yeah, I hadn't seen this before we got on. So, that's ... Wow. David Leary: Yes, Intuit's doing this, or testing this, if we wanna use that verbiage, but everybody ... There's other people doing this, as well, and they're tagging it from a different direction. Instead of maybe partnering, or working with bookkeepers, they're just buying firms, and doing. inDinero is. [00:22:00] I think the other example of this is you can look at ... There's an article about FreshBooks. FreshBooks, now ... This came out, and a lot of this news, I think, would've been big on its own, but the Intuit news was just gigantic. Blake Oliver: Yeah.  David Leary: FreshBooks is now announcing they're supporting double-entry accounting, and bank reconciliations. Blake Oliver: Yeah, that's big, because they claim to have millions of users, and mostly small freelancers. They started out as invoicing software, and they gradually [00:22:30] added expensing, and all that stuff, but it was still always ... Most accountants wouldn't recommend it. If you went and hired an accountant, or a bookkeeper, they'd switch you off of FreshBooks, or they'd use Xero, or QuickBooks to do the accounting, while you still used FreshBooks for invoicing, but, now, that could change, right?  David Leary: Yeah. They flat out state, "The update should enable it to attract more accounting partners to its platform." This is kind of a big game-changer for them now. A little deeper in the article, it does mention [00:23:00] that even though they announced bank reconciliation, they don't have any bank feeds. Here comes that fine line of is it efficient to use something without bank feeds?  Blake Oliver: I'm actually not sure if that is correct, because I do recall that you can import transactions from banks. David Leary: It's not bank feeds. You have to go download the QBO files-. Blake Oliver: Are you sure?  David Leary: -and import those in. Yeah ... It does include an automated bank import, but this includes some manual [00:23:30] intervention to download the bank data. Blake Oliver: No, no, so there is ... It's limited. I think that, because this article appeared on Enterprise Times, which is a UK site, but if you go to the FreshBooks website, you can see that they have automatic expense reporting available to North American users. David Leary: Okay, yeah. Thanks for clarifying.  Blake Oliver: They're doing like the Yodlee thing, where you go on the Expenses tab, you click Connect Your Bank, you put it in your bank, and your credentials, and then it will import the transactions. Then, you can categorize this. David Leary: This [00:24:00] is a big deal, that they're now trying to come in, and compete with QuickBooks, as well?  Blake Oliver: Maybe this type of competition is what is incentivizing Intuit to move up into services, because FreshBooks is admittedly far easier to use than QuickBooks. It was designed, from the beginning, not for accountants at all. It was designed for freelancers, so it is dead simple to use. I know because I, myself, [00:24:30] used it when I first started out bookkeeping. I wanted  a simple time-tracking/invoicing solution, and I set up a FreshBooks account because it was faster for me to do that on my mobile phone, at the time, than to use QuickBooks.  David Leary: That was one of the points somebody brought up in this article was is this a risky strategy? Because, if they add some complexity to FreshBooks, does that mean their core users are going to leave, and go to something simpler, like a Wave or a ZipBooks, or it even mentions going to Pluto, which is kind of just the payments, and receivables platform. [00:25:00] It's really interesting to see where this goes, but the key here is the industry is changing. Other people are doing this work. Another example of this is maybe somebody, though, that has done it and failed. Do you wanna talk about that? KPMG?  Blake Oliver: Oh, yeah. We've been speaking about success, and Intuit's great success, and obviously FreshBooks is doing really well. Well, the Big Four just can't seem to figure out how to provide [00:25:30] small-business accounting services. I think this would have been the story we led with on any other week. This appeared in AccountingWEB. It's an article called, "KPMG Shutters Small Business Accounting Unit." In the UK, KPMG has been trying for, what, a couple of years now? David Leary: The service launched in October of 2014, after an 18-month trial. It already had an 18-month trial, before that. They had almost a staff of 200 to handle the client work. Blake Oliver: I didn't realize it was that big. The service is called [00:26:00] KPMG Small Business Accounting. That's what they did. They did small-business bookkeeping/accounting with a pledge to "disrupt, and dominate the SME market," and promised small businesses that you "can pay us the same as your current accountant, but we'll give you more." Yeah, they failed. I feel like there have actually been a few other services like this that have just not worked out or have sort of just dwindled into irrelevance. David Leary: I think the interesting tie to this, back to testing [00:26:30] with QuickBooks. Some people's reactions to Intuit doing this is like, "Good luck. You're just gonna mess it up. Look what KPMG did ..." [cross talk]  Blake Oliver: -it's so wrong. David Leary: It is a little wrong, but, at the same time, if you read this, KPMG promised people their own dedicated accountant, with experience. They offered small businesses ... Then, if you start reading the reasons people are leaving, or [the reason it] failed, many weren't happy with the service they got, and they were unhappy about [00:27:00] the people's knowledge of their business. Mistakes were being made; churn of client account managers. These are scale problems. Blake Oliver: Yeah. David Leary: That is going to be the interesting part of this test is not whether it's a viable service. The test is can Intuit build this, and scale it. That is the true test. Blake Oliver: Well, as somebody who has built, and scaled, to a small degree, a online bookkeeping company, I can tell you that is the biggest challenge is getting bigger, and not having crazy amounts of turnover, and dissatisfied clients, [00:27:30] and disparate processes, and whatnot. I feel like Intuit is the one company, the one big company, that can do it. The Big Four definitely can't, because they haven't figured out how to standardize, or productize hardly anything, especially when it comes to small businesses. That's why they're so expensive. Hell, they're still billing hourly for pretty much everything. There's just no incentive under that model to do anything to streamline and standardize. They're the complete wrong ones to do it, [00:28:00] but Intuit, complete right company to build an effective online bookkeeping service, for a very low price point, like $200 dollars a month. The way they'll do it is by very carefully limiting the scope of services; by putting the bookkeepers, and the clients on rails, using software, which they can do, because they built the software.  Your bookkeeper isn't ... You're not gonna be able to ask your bookkeeper to go file your sales tax, because they can't do it in QuickBooks. They'll only be able to help you with stuff they can do in QuickBooks, which will help them minimize [00:28:30] the scope; prevent scope creep.  The fact that they have a delivery system of on-demand video inside of the app also means that they could potentially just have a pool of bookkeepers, where you don't even get assigned one. That would be so much more efficient than the traditional accounting-firm model of assigning bookkeepers, because, of course, what's the problem when you assign staff? As soon as they leave, you gotta get somebody else in there; gotta transfer that knowledge; doesn't always happen. Intuit's perfect for this. David Leary: I [00:29:00] know we have a couple more articles, and I'm not sure if we should quickly do those, because in this KPMG article, there's a great quote; two quotes. Maybe I'll read them now, and then, if you want to cut them, and then play them at the end, in summary? Because I think it really summarizes kind of the week. Blake Oliver: All right, let's do it. David Leary: All right, so here we go. Commenting on the news, Daren Moore, Group Commercial Director at TaxAssist Accountants added, so this is gonna be his quote ... "Servicing the small-business market has always been about building a good relationship with the client [00:29:30] to provide sound advice alongside the compliance piece. Attempting to deliver that service remotely presents a number of challenges, which technology won't always solve alone. Clients want and rely on that relationship and the high street accountant has adapted to deliver the best of both worlds approach with local relationships on the ground alongside smart digital solutions to help people run their business.” Blake Oliver: What's he saying there?  David Leary: What he's saying is you can't just throw technology at this, at small businesses; you [00:30:00] just can't solve it that way. It's a relationship. Blake Oliver: Right. David Leary: I know we were talking about this a little bit, about the Uber ... Doing Uber ... For Uber ... These cases are very similar but doing bookkeeping the same for every single small business could be very, very difficult. One thing Intuit's always been good at is relationships. If Intuit can figure out how to do the relationship part of this, they're gonna build the technology, but the relationships are really the key here, and whoever solves that ... The Big Four A) kinda suck at technology, and they suck at [00:30:30] relationships [cross talk] that's the reason this failed.  Blake Oliver: -well, they're great at relationships, but only very high-touch personal relationships, like, you have this great relationship with that partner at KPMG, but they're not gonna give that to you, as a small business owner. They can't do it at scale. It's all scale. There's one more thing I wanna touch on before we go, which is this Bill.com plus Amex thing. This is a video that appeared on LinkedIn that you pointed me to, and I just think it's fascinating. [00:31:00] There's not a lot of info, but we should talk about it. What is going on with Bill.com? David Leary: I think Bill.com announced ... We may have talked about it 20 episodes ago, or whatever. Bill.com's starting to do a lot more partnerships with banks. Instead of you going to your bank ... A lot of small businesses do this still; they just go to their bank, or their credit union website, and go to the Pay Bills section of that website, and pay their bills from there, because it's free. Blake Oliver: Right. David Leary: Bill.com, I think, knows that, so, Bill.com is, I think, getting closer relationships with banks. If [00:31:30] you have a bank account at Chase, and you're a small business, when you go to the Bill Pay section, instead of seeing the same Bill Pay every other Chase customer has, you're probably gonna see some version of a Bill.com. Blake Oliver: Yeah.  David Leary: Apparently, now, this is kind of launching with American Express. You're gonna be able to pay your vendors inside of American Express, using Bill.com. It's not very clear; there's just a video. I didn't see ... There's been so much Intuit news, I haven't .... I didn't see the actual article; I just see this little post from Bill.com. Blake Oliver: One of the things [00:32:00] that they mentioned in this video is paying vendors using American Express via single-use virtual cards, which is really cool for business owners, because one of the problems you have is that you have a business card from Amex, for instance, that you give to your marketing department. Then, you might have like 12 people using that card on various different sites, and then, the number gets stolen. Now, all of a sudden, you have dozens of software subscriptions [00:32:30] that get shut down, because the credit card is failing, because you had to get a new number. Where, if you give out single-use virtual cards for purchases, then that number is just used for that one purchase. If it gets stolen, it doesn't work. That's a really cool feature, and I think it could be really, really helpful. David Leary: What I don't understand about that is the tie-in with Bill.com, then, because MasterCard and Visa have virtual cards, through their APIs, and third-party apps. I'm using Divvy. I [00:33:00] have a bunch of virtual card set up on that. I think we've talked about [cross talk] before. They have a virtual card. I like to spin up, like your example, right spin up virtual cards for all the different SaaS apps I sign up for, just so I don't have to ... It's just easier. I don't know where this ties in with Bill.com. Does that mean Bill.com's gonna allow you to instantly, inside the product-  Blake Oliver: Yeah, so-  David Leary: -you'll pay with the virtual card, boom-boom-boom, and it just spins it up. You don't have to leave to go create your virtual card on some American Express website. [00:33:30] Blake Oliver: You won't have to. I guarantee you that. I'm speculating here, because I'm only familiar with this from the Sage Intacct side. I know that in Sage Intacct, you can connect to Amex, and you can pay with your Amex inside of Sage Intacct, using their Bill Pay feature. I think this is similar. The idea will be you go into Bill.com, and normally, you would see two options - pay by check, or pay by ACH. In the future, you will see a pay with Amex option, and then, when you pay, your vendor gets [00:34:00] paid, and then it goes on to your Amex bill. I'm not sure what the fees are gonna be-  David Leary: Got it.  Blake Oliver: -how that's gonna work. Are you gonna absorb a fee? Is the vendor gonna absorb a fee to get paid that way? That an open question. Bill.com, if you're listening, send us the info, because we wanna talk about it on the podcast. David Leary: Yeah, and I see they made a comment. "Hey, we'd love to hear the podcast. Please share the details ...". Blake Oliver: I've gotta respond with a link.  David Leary: I got a response, but it was a little too late. We're recording live at this point, Bill.com. We'll [00:34:30] reach out ... Maybe we'll have more on this story next week. Blake Oliver: With that, I've gotta go, David. It was great talking to you. If people wanna get in touch, what's the best place for them to do that? David Leary: To get a hold of me, it's gonna be @DavidLeary. Blake Oliver: I am @BlakeTOliver on Twitter, or you can connect with me on LinkedIn. Don't forget, we've got a page on Facebook for The Cloud Accounting Podcast, so just go to Cloud Accounting Podcast on Facebook. You can also subscribe to my email list to get show notes for each podcast episode emailed [00:35:00] to you automatically, every time we publish an episode. Why would you wanna do that? Because then, all these articles we talk about, all this news we talk about, you're gonna get that in your email inbox with links to every article, and a brief description, so you can go in there after you listen to the episode, click the links, and get the full story, or, hey, you can share out those links on your network, and be on the cutting edge of accounting technology, and look like you know everything that's going on. Subscribe at CloudAccountingPodcast.com, and don't [00:35:30] forget to rate us on iTunes. We'd love to get more five-star reviews and tell your friends. David Leary: And that's a wrap. Blake Oliver: Bye. David Leary: Bye, everybody. 
  3. Show NotesIn this episode, Blake and David discuss:Intuit catches 'credential stuffing' attack on TurboTax account — Accounting Today — The software provider recently alerted Vermont that a cybercriminal had gained access to a state resident's account. How did they do it? Because the customer had used the same password on another site that got hacked. The lesson: Use a different password on every site! How do you do that? With a password manager.Intuit Inc. (INTU) CEO Sasan Goodarzi on Q2 2019 Results - Earnings Call Transcript — Seeking Alpha — Can you believe it? A question about QuickBooks Live made it into the latest Intuit earnings call! The analyst from RBC must have seen the conversation online about what QuickBooks Live means for ProAdvisors. We’re proud to have broken the story on the Cloud Accounting Podcast, and good job everyone in making sure that this “test” didn’t fly under the radar. In short, Sasan Goodarzi, CEO of Intuit, likes what he sees from the test. That doesn’t surprise us considering he and his predecessor were both bullish on TurboTax Live, a very similar service.David also highlights the following quote from Goodarzi earlier in the call:This strategy is a continuation of Intuit's 10-year transformation led by Brad from a North American desktop company to a global cloud company. As we advance our strategy, we're taking steps towards becoming an AI-driven expert platform. Let me unpack what I mean by an AI-driven expert platform. It's a platform where we and others solve the most pressing customer problems and deliver awesome experiences. It's about significantly accelerating our application of Artificial Intelligence, which progressively learns from the large datasets across the platform, and delivers the benefits customers seek with speed, and it's about solving the largest problem customer's face, confidence, by connecting them with experts on our platform.What ProAdvisors are Saying about QuickBooks Live — Insightful Accountant — Here’s the feedback from the wider ProAdvisors community based on three online “town halls” hosted by Joe Woodard with official Intuit participation. One stat in particular that caught our attention — 51% of attendees saw QuickBooks Live has having a negative future impact on Intuit’s relationship with the accounting profession, while only 30% saw a positive impact.Interestingly, the Intuit representative said he regretted not communicating Intuit’s test to accounting professionals. However, that contradicts what we’ve told by a ProAdvisor that Intuit held a secret webinar for 75+ top ProAdvisors informing them about QuickBooks Live in late January. These ProAdvisors were unable to speak publicly because they were under NDA, which may explain the unusual silence from some in the community who would typically be all over such a story.Whatever you think about the whole incident, David highly recommends everyone read The Cluetrain Manifesto, available online for free. What Intuit ProAdvisors can learn about QuickBooks LIVE from the GoDaddy Pro launch — Medium — Ned Dwyer sees significant parallels between the test of QuickBooks Live and the “Do It With Me” program he helped to create at GoDaddy for customers who needed assistance creating their own websites.JPMorgan's Dimon: Square innovated where we should have — American Banker — The CEO of the nation's biggest bank gave the fintech props for revolutionizing payments and then building off its success to provide a whole range of services to small-business clients.Air On The Side Of Real Time With Abacus Corporate Travel Booking — Abacus Blog — Abacus Travel combines seamless travel booking with the power of real time expense reporting.Are Job Switchers Earning More? — Korn Ferry — Even in this record-low unemployment market, companies have been keeping salaries in check. But new government figures suggest that those who jump ship are starting to get around that.Get in TouchThanks for listening! Let us know what you think on Twitter. Follow and tweet @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page!Transcript Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary.  Blake Oliver: We're definitely not talking about Botkeeper this week, right, David? David Leary: Correct, but I hope you have some other articles, because I parsed through all mine, sat down to get ready for the show; realized most things are not worth talking about, and I wound up, coincidentally, only having articles about Intuit this week. Blake Oliver: Well, there's a ton of great Intuit stuff this week, given that we have the transcript from the earnings call, and we'll get to that. I've [00:00:30] also got a story about J.P. Morgan, and Square, which is very interesting. Actually, David, you kinda called this months ago, so that's gonna be interesting. Also, a story about Abacus, the Expensify, and Concur competitor, and, if we can get to it, a story from the consulting firm, Korn Ferry, about how job switchers are earning more money than those who stay in their job. David Leary: Good, should we jump in?  Blake Oliver: Yeah, let's talk about Intuit. David Leary: First, I got caught by the click bait headline around InPayments, which said "Intuit [00:01:00] denies data breach at TurboTax." I kinda was busy, and I think I even sent you a text. I was like, "Hey, we might have a story here. There might be a breach at TurboTax." Then, Accounting Today had a little bit more sane headline that said, "Intuit catches credential stuffing attack on TurboTax account." You were able to research into this a little bit.  Blake Oliver: Yes. Basically what happened is classic situation with hacking these days, where some hackers broke into an unrelated website, [00:01:30] where people who also happen to use TurboTax, had used the exact same password, and user name that they used for TurboTax. WebsiteXYZ.com got hacked, and they took these user names, and they started trying them on TurboTax, to see if they could hack in, because people don't use different passwords, and it worked, but Intuit was able to catch it, which is a good thing. David Leary: Intuit had some sorta account-logging fraud detection, and they detected it, and then they pretty much shut it down. That's actually really good on Intuit's side, then. [00:02:00] Blake Oliver: Yeah, it's good for Intuit, and it's a reminder to all of us of the importance of password managers, and using ... Well, using unique passwords on every website, so that if one of them does get hacked, they can't get into your other, more important banking, and financial, and tax sites. If you don't have one, download a password manager. I'm a big fan of LastPass. Do you use one, David? David Leary: I do have LastPass, but [00:02:30] I actually just use the built-in Firefox stuff [cross talk], but I do two-factor on everything, if there's two-factor there. For example, I have two-factor my Intuit. Yes, it's a hassle, every time I log into Mint, every time I log into QuickBooks. Then, obviously, I'm using TurboTax Live, and I log into that, I have to pull out my phone, and type in my six-digit code. The cost of the time is probably worth the security. Blake Oliver: Definitely for your financial accounts. Actually, I am interested to know if [00:03:00] Intuit is ... I think, obviously, they're not enforcing multi-factor authentication on TurboTax. They really probably should, at least via text messages, even though that's not the most secure way. It would basically stop this kinda thing in its tracks. David Leary: If they required it? Blake Oliver: Yeah. The idea being that when you sign up for an account for TurboTax, you also put in your mobile number, and then they would text you a code every time you log in. That way, even if somebody gets your password, they can't get in. I [00:03:30] think that that's where Intuit could improve, in this respect. David Leary: I think the trouble on this is some people might have created that Intuit account a decade ago.  Blake Oliver: Yeah.  David Leary: That's some of the problem on this. I think there's a challenge, if you ... A brand-new start-up, yeah, it's easy. You're only taking on new customers, but people have had their Intuit accounts for decades. Blake Oliver: Yeah, getting them to ... Forcing them to sign up for it is a pain. David Leary: Well, that's good, though. The headline was scary, but the reality, it wasn't anything to worry about. Blake Oliver: Not like Marriott, right?  David Leary: That's exactly how this happens. A hack at Marriott, or a hack at one of these other [00:04:00] companies exposes a bunch of people's usernames and passwords on that site. Then, people just start trying them on other sites. Some hacker somewhere decided, "Hey, I'm gonna try out TurboTax ..." and that's where they started trying to use them at.  Blake Oliver: Moving on to other Intuit news, this, I am very, very excited to talk about, David. This is the transcript from the Intuit earnings call, in which Sasan Goodarzi, CEO of Intuit, discussed their second-quarter 2019 results. David Leary: I think what turned us on to that, there was a tweet. Blake Oliver: Yes. David Leary: Last episode, right? [00:04:30] Blake Oliver: Mm-hmm.  David Leary: That was about ... He made that vague comment in a tweet about ... He discussed an AI expert platform. Blake Oliver: Mm hmm. David Leary: We were like, "What?!"  Blake Oliver: Yeah. This made me go and dig up the earnings call. Regular listeners of this show will recall that there were some amazing tidbits in last year's earnings call, hinting at the future of QuickBooks Live, based on the results from TurboTax Live.  Now, I'm becoming an analyst, and I'm digging through these [00:05:00] earnings calls. I finally sat down, went through the transcript, and I couldn't believe it. David, the story that we broke about QuickBooks Live, and all the commentary from all the thought leaders in the profession ... All you folks who are listening that wrote about QuickBooks Live on your blogs ... Joe Woodard, on InsightfulAcountant ... An analyst from RBC must have read this stuff, and asked Sasan Goodarzi on the earnings call about it. Shall I [00:05:30] read the question, and response? David Leary: Yeah, why not? Blake Oliver: This was Ross MacMillan, and he said, "There was some commentary around, I guess, the test product - bookkeeping - that was out there. I know it's not a product that's in the market yet, but I was just curious of kind of your thoughts around that, and maybe if there's anything just to talk about on a potential product in the future?"  Sasan replies, "Yes, I think you're asking about QuickBooks Live. Let me just take a step back and set up some context. When you think about what I shared [00:06:00] earlier around an AI-driven expert platform, there are common needs across all of our customers that we serve - consumer, self-employed, and small business. One of the biggest problems that customers face is confidence, and so one of the most important areas that we are focused on is connecting people with experts on our platform.". "We've been doing some testing to learn what's important to small businesses, what's important to bookkeepers, enrolled agents, and accountants, and running a test to make that connection. So far, we like what we see in [00:06:30] the test, because ultimately, it's a two-sided platform. It's about serving small businesses, but it's also helping enrolled agents', CPAs', and bookkeepers' growth, and we're seeing ... We like what we see so far in our early reads." David Leary: It ties back to something he said earlier in the call. He actually even, I think, references in this, where he talks about Brad Smith really led that transition for the last 10 years, for Intuit to go from a desktop company to a global cloud software company, and the start of the platform, really ... QuickBooks Online became a platform. Sasan's really now ... You [00:07:00] can see where his 10 years is. It's gonna take Intuit to become an AI-driven export platform, and really, all of Intuit as a platform, not just QuickBooks Online as a platform. Blake Oliver: Yep. I was just psyched that this became a story that the analysts are paying attention to. David Leary: Obviously, people are listening, which is good. Blake Oliver: Yeah.  David Leary: I don't go to the closet every week just to talk to you, only; I feel like we are actually talking with the others out there. Blake Oliver: It's great. Speaking of the conversation [00:07:30] around this, I know that Joe Woodard put together a number of town halls, and brought together ProAdvisors, and some people from Intuit to talk about QuickBooks Live. I unfortunately was not able to attend, but, David, I understand that you got a recap of what happened, and there's an article that Joe posted on his website. David Leary: I know that there were a couple of ProAdvisors, and some others reached out, or made ... I saw some comments, especially from the people that attended the ... Try that again, Woodard webinars. [00:08:00] He had through three webinars. I think they might've been three days in a row, but it might've been every other day. He  surveyed people that attended. and Rich Preece, from Intuit, showed up, and he talked to all the ProAdvisors. He's leading accountants globally at Intuit. The big distinction here is people who attended that, and attended the conference call, they're the ones that noticed, "Oh, there're some differences in the answers being given." Sasan's answers that you [00:08:30] just read in the conference call feel very like, "Yes, we're testing, but this is amazing. The results were amazing, and this is moving forward.". Blake Oliver: Right. David Leary: You can almost ... You can taste it, just in the responses. Unfortunately, that was ... I think that took place on the day after the third Woodard webinar, sow within like a five-day period, the message is a little bit different, at least for people that are observing, that attended, from the answers that they said they received in the webinar. Joe Woodard put out some stats about people who attended. 94 percent [00:09:00] of the people that attended were ProAdvisors, and 84 of them are Certified ProAdvisors. The audience are definitely people that are super-super in the QuickBooks family, and, obviously, super-concerned - good and bad. They're just wanting to learn more about QuickBooks Live.  Couple interesting numbers ... For these attendees, only 5 percent did not perform bookkeeping services, but 44 percent, it's their primary practice. Another [00:09:30] 14 percent, it's their sole practice model - bookkeeping. You're pushing 54 percent of the people that attended this meeting, the only thing they do is bookkeeping. Blake Oliver: Yeah. David Leary: It's super-super-super-important, and which makes sense why they showed up to this- Blake Oliver: The thing that really struck me - going to page ... This is a long article; going to page three - is the polls about the impact. 51 percent of the people in these town halls, all ProAdvisors, almost all ProAdvisors, saw a [00:10:00] negative impact, 51 percent. 20 percent saw no impact, and 30 percent saw a positive impact. Obviously, Intuit's gonna have a hard time, or is currently having a difficult time getting ProAdvisors on board, which kind of makes sense, given the lack of communication about this before the tests started, right? David Leary: Yeah. For the vast majority of the people, this was a surprise. Blake Oliver: Yeah. What really is interesting to me is question five - why [00:10:30] didn't Intuit directly communicate QuickBooks Live to its ProAdvisor community before going public with the test? That was one of the questions that was asked on these webinars. Intuit's answer is, "Typically, Intuit doesn't communicate the testing of new concepts, or product ideas, even if the test has some level of public exposure. The normal sequence is to run the test, evaluate the results, and then decide the appropriate level of communication." Rich stated that he regrets not [00:11:00] communicating Intuit's test to accounting professionals, especially ProAdvisor program members, in advance of running the test. However, we have some information that suggests that they actually did communicate the test in advance to some ProAdvisors, at least, right, David? David Leary: Yeah, I think there was rumblings that this was shown before it went live, because I actually heard about it a little bit ... Little rumblings of it before it went live, but I had ... Even from my own imagination ... I was told there was [00:11:30] a test, and in my imagination, I was like, "Oh, it's a typical Intuit test. Somebody made a fake-looking website, showed it to ProAdvisors; got feedback.". Blake Oliver: Yeah. David Leary: Then, that following Monday, it was on the website, like really out there, and I was like, "Whoa, this is ..." That's when, obviously, we did that other episode, and it [inaudible] from there. Some ProAdvisor members did get a heads-up on this, but in the vast majority of the ProAdvisors, nobody was told that this test was happening, or this was coming, or even ...  [00:12:00] It's interesting, because I think there's two arguments on this. Some ProAdvisors are saying Intuit's been telling you for three years, four years. Intuit's been saying, "Hey, you need to become a firm of the future; you need to start doing advisory work; you need to start doing this; you need to start doing this." Some people are arguing that Intuit's been telling ... It's clear as mud that Intuit's been telling us this. Then, there's this whole other- Blake Oliver: Well-  David Leary: I'm sorry, clear as day ... Clear as water. I don't know ... What would be the proper analogy there, Blake?  Blake Oliver: Clear as day, maybe?  David Leary: Clear as day, but the other part ... There's [00:12:30] a whole 'nother set of people that are arguing, "Wait a minute, Intuit's never given us a smell, or a hint of this at all, and they just dropped it." Blake Oliver: This was really interesting to me to find out, which is I got some intel from a top ProAdvisor, saying that, on January 24, Intuit invited over 75 of the top ProAdvisors to a webinar, a Q&A webinar, on the 30th of January, [00:13:00] specifically about QuickBooks Live to inform them, and get their feedback; but that they then, on the webinar, said it was under a non-disclosure agreement, and couldn't be shared publicly. Apparently, Intuit did share this with its top influencers, but they couldn't say anything about it, because they were under NDA. That, to me, explains a lot of the reaction, when this did go public, and [00:13:30] why certain people that I figured would be all over this weren't saying a word-. David Leary: Because they weren't allowed, yeah. Blake Oliver: They couldn't. We're talking about a number of people have commented publicly on the roll-out of this being mismanaged, from a PR perspective. Why would you think that you can invite over 75 people to a webinar, and put them under NDA, and then think it's not gonna get out there, somehow, when this is something that's highly relevant to everybody in [00:14:00] the profession, who has a relationship with Intuit, or QuickBooks, and you're putting it on the public pricing page? How did they think that this would stay a secret?  David Leary: At some point, if you have 75 people in a meeting, is it really an NDA at that point? There's some number where an NDA becomes ineffective, possibly, right, from a math standpoint? Essentially, this is really a bigger Cluetrain Manifesto. Those of you who've never been to that site, go to cluetrain.com. You don't even have to read the book; just [00:14:30] read the 95 theses. Thesis number one is markets are conversations. Companies miss this point all the time-  Blake Oliver: Whoa, they need to update their website, David.  David Leary: What? I'm sorry?  Blake Oliver: They need to update their website-. David Leary: Because it looks how old?  Blake Oliver: It looks like it's from 1999,  David Leary: It is. These guys made this ... They were a decade ahead of their time. Blake Oliver: What is this about? David Leary: Okay, so two engineer-  I think they were engineers. They were tech engineers. This is on the cusp of the internet; just starting to come out. The concept of wikis, and internets, and disorganization [00:15:00] of the hierarchy just started coming out. These guys wrote this book, The Cluetrain Manifesto, and these are the 95 theses. A lot of it is like markets are conversations. Big companies, your marketing doesn't work. You have to have conversations with people. It really changed my ... The way I've thought about customers. Even when I was at Intuit, I've always worked in ... There's a thesis about you have to embrace the fact that your customers may know more about your product than you, and if you- Blake Oliver: Oh, that's definitely the case with Intuit. [00:15:30] David Leary: If you can embrace that, it changes how you-  the decisions you make, and how you interact with your customers, and how you design your products [cross talk] if everybody has not read this, it's super-super ... Actually, if you are in PR communication in any way, shape, or form, you need to print these out, and hang them on your wall. It's that important of a doc, and these guys were 15 years ahead of their time. Blake Oliver: Well, that's great- David Leary: It's a snapshot ... They missed a couple things, but [00:16:00] how they were supposed to predict exactly how the internet would turn out is a little hard, but 93 of those are perfectly on the money. Blake Oliver: Well, I'm gonna go check that out. Thank you, David, for that. We'll put that in the show notes; that link in the show notes, as well. Moving on from the town halls, let's talk about something that we could learn about QuickBooks Live from GoDaddy. David Leary: Yes, that was an interesting article. Blake Oliver: Ned Dwyer, he's the founder of an app called Spritz. They are ... How would you describe Spritz, David?  David Leary: Spritz is [00:16:30] a prepaid small business credit card/debit card. I actually have one. It's Spritz.works.  Blake Oliver: I, too, have received one of these cards. I've tried it out myself. It works great. Ned is the founder of that company, Spritz, and he is a listener of the podcast. Thank you so much, Ned, for listening. He said, "Hey, QuickBooks Live sounds very familiar to me. It sounds like when I worked at GoDaddy." In 2015, Ned joined GoDaddy, as [00:17:00] a director of product, working to help their web-developer, and designer community be successful. At that time, he was part of a project to create a community, a platform, for web developers. GoDaddy had three different ways of helping people who were using their domain service. They had three products, basically.  They had DIY - do-it-yourself. That was their website-builder product that anyone could sign up for and build their website with. It's like Squarespace,  or [00:17:30] Wix. In Intuit's case, he compares that to QuickBooks Online. Then there's Do It With Me - DIWM. That was the internal services department that they built at GoDaddy, called Professional Web Services. They would work with you to help you use the website builder, or WordPress to build a site for you in a semi-collaborative approach. That would be comparable to Intuit's new QuickBooks Live; the new assisted bookkeeping service would be the Do It With Me at GoDaddy. [00:18:00] Then, they also had a Do It For Me product, and that was a full-service type of situation at GoDaddy. That was their marketplace, and it's comparable to Intuit's Directory of Accounting Professionals- The ProAdvisor Directory. Now, to basically summarize this article, what happened at GoDaddy is that the Do It With Me, the assisted product, and the Do It For Me, the community, were basically [00:18:30] competing with each other for the same business, in a lot of cases. What Ned says happened at GoDaddy is that Do It With Me, because it was so profitable - something like 80-percent profit margins, which is actually very similar, by the way, to TurboTax Live - those profit margins were so high that Do It With Me ended up getting higher billing then the Do It For Me, and the marketplace kinda just withered at the expense of the Do It With Me product. If [00:19:00] the same thing happens with Intuit, they have a assisted, and they have a full-service option, or a referral option. Ned suspects it's likely that because Intuit is a company that is trying to make a profit, and they can make more money from the assisted product, that that's what they'll promote. That has consequences to accounting professionals. Basically, you have to figure out how to get clients from outside the ProAdvisor Directory, because you're probably not gonna get as many clients in [00:19:30] the future from them. There's a lot in ... This is an article that Ned wrote on Medium, by the way, and the link will be in the show notes. Definitely check it out, if you're interested. That was my takeaway. David, is there anything I missed? David Leary: There's a takeaway and lessons for ProAdvisors in this, but he also has takeaways for Intuit in this. If there's any Intuit employees listening, you probably should check out this article, as well, because it's very easy on paper, but it's a lot harder to do, especially when it's already a mature market, and [00:20:00] there’s obviously a market leader. It's gonna be complicated waters. If anybody can do it, it could be Intuit. My money would be on somebody like Intuit doing it, but there's lessons in here for all sides of this. I would argue this might be one of the best thought-provoking articles around about QuickBooks Live, because everybody ... I mean, yours kind of was, "Hey, this is coming." Your articles that you wrote, early on, right? "Hey, this is really coming. Look, there's hints of it; Intuit [00:20:30] earnings from a year ago ..." Everybody else's articles are like, "Oh, it's no big deal; just go into advising, blah, blah, blah ..." but this is really a super-super-thought-provoking article that really tells people, "Here's kind of what happened when we tried to build something just like QuickBooks Live." The funny thing is, is Ned sent this to us as an email. As soon as I got it, I was like, "You need to put this out as a blog post. Blake and I shouldn't be the only people that get to read this," so he ran off, and wrote us a blog post. Blake Oliver: It's a great post. Check [00:21:00] it out. The thing that makes a lot of sense to me about why this would happen the same way with Intuit, as with GoDaddy, is the margins. Let's say Intuit charges $200 a month on top of the QuickBooks fee for their assisted-bookkeeping product, for QuickBooks Live. They probably would only be spending an hour or two every month helping a customer, on average, just to categorize transactions, close the books, whatnot. Well, for Intuit, their cost is probably something like $20 [00:21:30] an hour for that labor. Maybe they're paying $40 to service a $200-per-month account. That's an 80-percent profit margin. Am I right? Yeah, it is-  David Leary: It may be even more. I paid for TurboTax Live. I have yet to engage my CPA that I've access to [cross talk]  Blake Oliver: -have the comfort of knowing you could-  David Leary: I have the comfort of knowing I could, that's correct, but, essentially, I paid an extra hundred dollars, and it's all margin for Intuit. Blake Oliver: Fascinating. What [00:22:00] else do we got today? David Leary: We have some non-Intuit stories, which you brought to the table, thank god, because every story I went through ... Every time I got close to bringing it to the podcast this week, I was like, "Ah, it's not worth talking about," and I just threw it in the trash pile. At least you found a couple worth talking about. I'll let you continue on. Blake Oliver: Here's one on American Banker. It's called "J.P. Morgan's Dimon: Square Innovated where We Should Have." It features the CEO of J.P. Morgan, Jamie Dimon, confessing to having a little bit of envy for [00:22:30] the payment processor, Square. This was at J.P. Morgan Chase's annual Investor Day in New York recently. He talked about Square, and he talked about how they innovated, where Chase did not; that they innovated with the little dongle that you attach to your phone that you can use to take payments. He also lamented that Square beat J.P. Morgan to the punch in making online loans to small businesses.  He now sees the opportunity in the $40-trillion investments [00:23:00] market, particularly around providing advice to households of modest means, basically allowing Chase to tap into the loan market that it hasn't been willing to get into - small loans, financial advice to middle-class families, that sort of thing. I thought this was interesting, David, in the context of this podcast, because you've talked a lot about Square, and FinTech, and payments, and how the banks are going to have to change what they're doing to target ... Become more efficient [00:23:30] to reach these small businesses that need loans that aren't getting them. David Leary: I don't think it's just about becoming more efficient. I don't think it's just becoming more efficient. They just have to provide them products that they need and want. Blake Oliver: Yeah.  David Leary: Square just keeps chugging away. If Square ever made a GL, it could be very dangerous. Blake Oliver: Given everything they've built ... They've built so much in the last few years. Payroll; they have built time-tracking. You can do almost everything from Square, when it comes to your employees. David Leary: Yeah, and then [00:24:00] you can do all your marketing stuff to market your business- Blake Oliver: Oh, yeah, email marketing. David Leary: You have your point of sale. You have everything but a GL. It's very, very interesting to see where Square's headed next. Obviously, people are noticing. I think we need to read American Baker more. I feel like we've been getting some very good articles out of them, lately. Blake Oliver: Well, speaking of feature updates, new features from apps, there's an expense-management app that I've been following for a long time now, called Abacus. I actually [00:24:30] used it, at one point, in my own business. If you use Expensify, they're a competitor to Expensify. Started a bit after and have been quickly growing as a competitor.  Concur is another example of a competitor in the space. It's more established than both Expensify, and Abacus, or disrupting. I saw this on the Abacus blog last week. Abacus has just released Abacus Travel, which is a full-featured travel-booking platform, [00:25:00] accessible right inside of Abacus. That caught my attention, because one of the reasons that we used Concur in my last public-accounting job was because of the travel booking that was directly in Concur. The reason that you want this, as a medium-sized, or a large business, is that you can create travel-booking policies that allow you to control the types of travel that employees are doing, what they're permitted to do. Can [00:25:30] they book business class, or can they not? You're not in the situation of having to then deal with it, after they've already paid for it, and are expensing it. You can also manage all the re-bookings, and whatnot; all sorts of great features for businesses inside of the tool. Thus far, I've only seen that in apps like Concur. I don't think Expensify has it, so it was really interesting to me to see Abacus beat Expensify to the punch in building something like this. David Leary: Did it say if they're built on somebody else's platform? For [00:26:00] example, I know Priceline has a platform. I've seen developers plug into to build some sort of travel-booking site for employees. All but travel sites have some sort of APIs. Does it say anything about that, that they're actually using somebody else's, or is this ...? Blake Oliver: It doesn't mention it on the blog post, I don't think, but I have not dug into the support documentation, yet. The big benefit, of course, is the ability to implement all your travel-booking policies inside [00:26:30] of your expense-management app before people expense it. Check that out, if you're in the market for expense-management. or expense-reporting tools. David Leary: Yeah, it's definitely a needed feature, and saves time, because if you're booking your travel with the same app, you're doing your expense tracking with, you just eliminated a whole middleman game of getting receipts from one other app over into the expense app. It's just all seamless. No, that makes sense. Then,  I think you had one more article about switching jobs? Blake Oliver: Yes. This [00:27:00] is called, "Are Job Switchers Earning More?" on the Korn Ferry website. Korn Ferry is a consulting firm that puts out some really excellent analysis, and research. This article caught my eye because it features a survey, or statistics saying that job switchers, "in January, saw their wages grow 4.6 percent, on average, from a year earlier, according to new data from [00:27:30] the Federal Reserve Bank of Atlanta. It's the fastest growth for job switchers since October 2007, and handily beats the 3.4-percent growth in wages for those who stayed in their current jobs." Basically, it's getting more and more appealing to switch jobs, if you want to make more money, which I don't think is really that much of a surprise to anybody. It's kind of always been ... Well, over the last 10 years, especially, it's always been the best way to get a raise is to change jobs. Although, David, you were at Intuit for, [00:28:00] what, 19 years? Clearly, you made a different choice. David Leary: Yeah. They're saying in this article, over the last 20 years, only one time did the non-switchers make more, and that was in 2009, when basically there was no jobs to be taken. Nobody was hiring, so that was the only time that happened. The interesting thing about this article is where it's gonna ... As so much stuff's going to gig, and more and more people are going to head towards that, "I'm just an independent contractor, or an [00:28:30] independent person" route, is that going ... Is this article including those types of numbers? Because you could [cross talk] Chances are, a lot of people that go out on their own that first year, a lot of times, maybe are not exceeding their previous income on year one.  Blake Oliver: Yeah. This is something that is very interesting. The projections that more, and more Americans would join the gig economy, and quit full-time employment, and go out on their own as freelancers, that [00:29:00] has not really happened nearly as fast as people were predicting-. David Leary: So, you're calling bull on all those headlines, and those articles- Blake Oliver: Yeah, and that's not me. There's a lot of really smart people out there that are saying the research was wrong, but what is changing, and what I think this article gets right, is that the average job tenure in the U.S. has dropped. Now, it's at 4.2 years, which is down from 4.6 years, just five years ago, and continues a long-term decline. It's not that people are going out, and getting into the [00:29:30] gig economy, and becoming freelancers. That really hasn't changed that much. People are just more open to switching jobs more frequently. Think about that, 4.2 years, that's the average; that's across all age groups. For millennials, for people in their 20s, and 30s, it's even less than that. A lot of people are switching jobs every year, every two years, three years. I think technology actually makes a lot easier to do that these days. David Leary: Do you think it's people are jumping, because [00:30:00] they wanna get raises, or they just ... Jobs are just dead ends. Where they're at ... There's no reason to stay where they're at. Blake Oliver: I think it's two things. One, it's really hard to get a meaningful salary increase if you stay. I guess that kinda makes sense, right? They've gotta be afraid that you're gonna leave to give you a real raise, and if you're gonna leave ...  Well, this brings me to my second point, which is that with technology changing so rapidly, with business models changing so rapidly, the most important thing, career wise, if you're young, is to be able [00:30:30] to be in a position where you're learning. I don't know, after two, or three years in the same job, if you're smart, you've probably learned what you need to learn about how to do that job. Then, the only way to keep learning is to get a new job, and if that new job isn't available at your employer, you've gotta go somewhere else. I feel that way, too. I haven't stuck around in many jobs for very long, at this point in my life. I'm hoping it changes, and I do stick around where I am now, because I like it, but if I'm not learning, I'm gonna move, and I [00:31:00] would actually ... There's even studies - I don't have this in front of me - but studies that show that younger workers are actually willing to take pay cuts to get into jobs, where they are gonna learn new skills. That's the most important thing. David Leary: If you're running a firm, and you don't want your employees to quit, you basically have to offer more opportunities, and give 'em the chance to learn. Blake Oliver: Yeah. That was my big frustration, when I was in public accounting, is that ... I left after one year at my last firm, and it was a big firm. Part of the reason [00:31:30] that I left - it was a number of factors - it was the feeling that I've done one year, and next year's gonna be exactly the same. Not much is gonna change, so what's the point in staying any longer? Yeah, I agree with you that giving people the opportunity to try new things, and move around during- in the firm, and get new skills is super-important. David Leary: No, it's a good find. Something to think about this week.  Blake Oliver: That's everything I've got this week. That was a fun episode. What is the future bringing to us, David? What [00:32:00] are you doing the rest of March? David Leary: The rest of March? We're starting to get nice weather. I had a soccer tournament this weekend. I was out ... I'm wearing shorts. We've gotten to short weather. Yes. I wore shorts all day, today.  Blake Oliver: Oh, man. Really?  David Leary: We're tipping into ... I gotta maintain the pool; those kinda spring-cleaning things ... I know the rest of the country is freezing, but we have ...  Blake Oliver: Yeah, there's people who are giving you the finger right now, as they listen to this podcast, David. You might wanna be careful.  David Leary: Well, I'm sorry. I'm sorry. I think we have ... I think [00:32:30] things will start happening, end of April, and May. I think Accountex in the UK starts up; the summer accounting season starts, all the shows conferences ... Things'll start getting busy here very, very soon. It's a quiet news week. It was a quiet, quiet weekend. We'll get back on this next Friday. In the meantime, if people have something exciting, they wanna send us, how would they get a hold of you? Blake Oliver: Find me on Twitter. You can direct message me, or you can just tweet at me out in the open. I'm @BlakeTOliver. [00:33:00] How about you, David? David Leary: I'm @DavidLeary. Don't forget about our Facebook page. You can go to Facebook.com/cloudaccountingpodcast, and you can like that page. Hopefully, we'll be doing some more ... We did the interview with Botkeeper, and we're gonna try to do a couple more Facebook Lives in the future. It was kind of an interesting model. Blake Oliver: Yeah.  David Leary: It's an easy way to have the community participate. I think that was the coolest part of that. I think we had about 45 people all putting comments in, during the whole Facebook Live. That was kinda fun to do, so [00:33:30] we wanna try to do those more often. Blake Oliver: I'm looking forward to more Facebook Lives. David, have a great week, and I'll talk to you again on Friday. David Leary: Bye, everybody. 
  4. Show Notes00:08 -- We got more reviews. Thank you! Give us a review on iTunes and we’ll read it on one of our weekly shows. 01:43 -- A survey revealed that you’ll get the best results from a blog post if you spend six hours working on it. 03:57 -- QuickBooks Live is now official — details on Intuit’s official Firm of the Future blog include the fact that Intuit has already hired 10 Boise-based ProAdvisors as part of the QuickBooks Live Bookkeeping team.  09:07 -- A survey by the IMA suggests that the gender pay gap is closing for management accountants. 10:57 -- A 2018 survey shows that mandatory busy season Saturdays are on the decline at CPA firms, but a shocking number still require their staff to work weekends.  12:11 -- Meanwhile, 8 percent of CPA firms will hire “anyone who is breathing,” according to a survey of AICPA Engage 2018 attendees. Could there be a correlation? 13:21 -- If you want to have a better busy season experience, stop pointing the finger at clients and start asking your team how you can facilitate a better process that makes it easy for clients to get you what you need. 16:59 -- The cashless debate continues! LA Eater asks, “Restaurants Are Going Cashless. Is It Always Best for Business?” Meanwhile, Philadelphia has already banned cashless stores, citing discrimination, and San Francisco is mulling its own ban. Gene Marks says you’re crazy if you reject any form of payment. 22:09 -- Facebook admitted that it stored hundreds of millions of user passwords in plain text for years, potentially enabling thousands of its employees to access them. 26:34 -- Here’s a rundown of upcoming accounting and bookkeeping training shows and conferences in 2019, plus all the ones David and Blake will be attending. 28:51 -- When you’re booking your accommodations this upcoming conference season, consider the Rodeway Inn. They’ve got the best hotel WiFi, according to research. Get in TouchThanks for listening! Let us know what you think on Twitter. Follow @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page!TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: We got some more reviews, David. David Leary: That's exciting. More reviews, iTunes reviews?  Blake Oliver: iTunes reviews. Yeah, it seems to be working. David Leary: This is gonna be my favorite part of the show, because I don't have an iPhone, so I don't get to read these, so it's wonderful to hear you read these. Blake Oliver: Why don't we take turns? I'll go first. David Leary: Oh, okay. Blake Oliver: Stick bro said, "Blake and David do a great job keeping up on changes in the industry. The podcast saves me time doing my own research and keeps [00:00:30] me up to date. Let's admit it, accounting is boring; yet, they make this otherwise boring topic interesting." Wow, I think that might be the best compliment we've gotten yet, David. We made a boring topic interesting.  David Leary: Cloud accounting is not boring. We have a review from Stan? Blake Oliver: He's not sure if that's his username. David Leary: It may not actually be Stan, okay? "Look forward to this podcast each week. Five stars. Apps, bots, innovation should be at the front of every accountant's mind, and these guys really bring home the importance of doing your research. Keep [00:01:00] up the good work!"  Blake Oliver: Thanks, Stan. Lastly, "Great way to stay up to date on #CloudAccounting. Five stars," from Dave Wiese. Thank you, David. Can I get CPE credits for listening to the #CloudAccountingPodcast? Asking for a friend. I learn more from David Leary and Blake Oliver, than from any of these courses." We reached out to NASBA on Twitter. They didn't reply to my message. I'm not sure why. Oh, well ...  David Leary: I think there's requirements for CPE. We have to actually put out an agenda- Blake Oliver: Yes, learning [00:01:30] objectives-. David Leary: -ahead of time, of what we're gonna talk about, but we don't know what we're gonna talk about until the news happens, so, it's very, very difficult, there. Blake Oliver: I think it has to have some interactive element, as well, so we might have to shift this to a live show. David Leary: People put their headphones in their ears. That's interactive. Blake Oliver: Well, David ... What's new this week?  David Leary: Let me ask you this ... I think your best blog post ever was the QuickBooks Live one you did - all-time hits. How many hours did you spend working on that?  Blake Oliver: It took me like a day. David Leary: A day. Okay. Blake Oliver: Actually, I have to correct the record. My number-one blog post, by far, of all time, [00:02:00] is a post on my blog about remote work - places that you can remote work. It was called something like "X Places You Can Work Other than a Coffee Shop." I get thousands, and thousands of hits every month that just dwarf the hits I get on anything accounting-related. David Leary: How long did you spend on that post?  Blake Oliver: It's hard to say, because it was a list that I compiled, but, yeah, it took five, or six hours. David Leary: This is from American Express's small-business-trends blog, "Survey Reveals 56% of Bloggers Get Better Results by Spending 6 Hours on a Post." Really, the [00:02:30] gist of the article is if you're writing a blog post for your accounting firm, or your app, or wherever you're writing your blog post for, the ones you spend time on, and actually have deep, enriching, good content, in the long run, will get you more eyeballs than lots of just blabble posts about nothing. Blake Oliver: That makes sense, right? It's quality over quantity. David Leary: You are correct, it's about quality over quantity. I'll just read you a quote from here. "In the report, Jay Baer of Convince [00:03:00] & Convert highlights the importance of definitive content. Baer says, "To succeed with blogging (or just about any written word online) you must provide definitive content. Not just some half-baked flotsam and jetsam that's 85 percent of the same as 5,237 other posts on the internet, but real meaty stuff." I think that's the service we provide, because we're the ones going through the 5,237 other posts, and bringing you guys the top stories every week. Blake Oliver: It's a lot of crap to wade through. Yeah, just know that it takes [00:03:30] a lot of effort to put this together. Well-  David Leary: This ties right into to the next story. As of about two hours ago, there was a new blog post on the Firm of the Future blog, which is an Intuit property. This is about QuickBooks Live bookkeeping. It's super-super-deep, and it has everything you wanna know, straight from the horse's mouth, which means, now, Blake, you'll have less work to do on your next blog post. Blake Oliver: Well, that's good. I don't have to dig so much. It's really nice to see all of this coming out, upfront. David, what's the news about QuickBooks Live?  David Leary: The [00:04:00] article covers a little bit about what we already knew, that this is a test, and it has some of the stats that Intuit's been communicating. I think we talked about, before, about 89 percent of the small businesses say they're more successful when working with an accountant. With that said, there's still 40 percent ... They don't work with an accountant, or ProAdvisor, at all. Part of QuickBooks Live was to match those people up. They actually give a little bit of a history, on this post, about what happened in February of 2019; what happened in March of 2019. In February, they do talk about the test that we've covered [00:04:30] deeply on the podcast; about the pricing test they were doing. Then, they also talked about, in February, that they actually made a hiring of 10 accounting professionals in their Boise office. Blake Oliver: Wow, 10 already ...  David Leary: Remember, you found that job posting in Boise?  Blake Oliver: Yep.  David Leary: Yes, they have hired 10. Now, this is to 'test' this. Blake Oliver: These are 10 ProAdvisors? David Leary: They are 10 ... They're accounting professionals, who are ProAdvisors. Blake Oliver: Got it.  David Leary: They mentioned that this is not their long-term vision. This is just a way for them to start testing the service, because [00:05:00] their long-term vision is to play middleman, and get people paired up with the other ProAdvisors that are out there on the market. Blake Oliver:  ProAdvisors working from home, everywhere in the country, theoretically?  David Leary: Correct. Blake Oliver: Got it.  David Leary: Then, they actually even go into what's next. It's really communicated really well. On March 25th, which is what? Monday morning? Sunday morning? Blake Oliver: Mm-hmm.  David Leary: They're gonna start another version of this test that's a little bit deeper, and they're gonna do even more of a pricing structure, and test on the website, and see how the messaging- to better understand what the small-business owners want. [00:05:30] They will possibly use that to gauge the interest in the service, and possibly match some of the customers up with the Boise ProAdvisors. Then, they also mentioned that they probably are gonna add some  ProAdvisors, and bookkeepers to QuickBooks Live, in Reno, Nevada, because that's where QuickBooks Payroll is.  Blake Oliver: What was interesting to me about this post is they talk about what is going to actually be included in the QuickBooks Live service, because that was not clear. Originally, it was not really made clear in those town halls, in which [00:06:00] ... Who was at the town hall?  David Leary: Joe Woodard did the town halls. Rich Preece attended those, from Intuit. Blake Oliver: Got it. It wasn't really clear what the services are, and now, that's being talked about. The article says that, "Pending additional testing, the service will include setup, monthly categorization, reconciliation, reports, year-end closing of books, and help using QuickBooks." Why I find that very interesting is that that is a lot more hands-on than Intuit has portrayed this. It [00:06:30] was portrayed as just, "We're gonna help you use QuickBooks. It's not a replacement for a ProAdvisor," but that scope of services, including setup, monthly categorization, reconciliation, reports, year-end closing of books, and help using QuickBooks? That's the meat and potatoes of a lot of QuickBooks bookkeepers. David Leary: Yep.  Blake Oliver: They also said that you're not going to get the same person assigned to you, as a business owner, every month; that you might have to deal with different people each time ... I don't see how that's gonna be possible, if [00:07:00] that's the scope of services. There's gonna have to be a one-to-one relationship. David Leary: With this testing, they're really trying to ... Intuit's trying to get their own questions answered, themselves, and they actually put these out there, like, "Hey, we have our own questions we're trying to answer." How much will the service really cost? How much are ProAdvisors, and bookkeepers gonna be paid as part of this service? Then, what is the scope of services being offered through it? Then, what happens to somebody if they maybe outgrow that level of service? Intuit has their own questions, and it's actually great that they're putting it out here, and just ... They're [00:07:30] being honest, and open, and having the conversation, and showing their own vulnerabilities, like, "We don't know these answers yet." Kudos to Intuit putting this out. I wish it had the date, and time; I wish it said who wrote it, but it doesn't have any of those types of things. Blake Oliver: There is the question answered in this post that a lot of people have had, which is will this service be offered to someone already connected to an accountant? The official answer is, "Our goal is to connect small businesses not currently connected to a ProAdvisor bookkeeper, or accountant." Now, [00:08:00] I have a hard time seeing how they can keep those two groups separated - the business owners who are already connected to an accountant, or a bookkeeper, and the ones who don't have one. How's Intuit gonna know that? There are inevitably gonna be people who have a current relationship with a ProAdvisor that see this new option, and that disrupts that relationship, and I'm curious to know how Intuit will handle that. David Leary: The only way they're gonna know is if somebody [has] actually, in their QuickBooks, have added their ProAdvisor, their accountant. Then, there's real data; there's a real connection [00:08:30] there, where Customer A - small-business owner A - is connected to Accountant B.  Blake Oliver: How are they going to only market to the people who don't have an accountant? It's impossible. David Leary: The trouble, I think, is really gonna be for ... Let's say you are a small business, and you are, "Hey, I'm kind of not too keen on my current bookkeeper, or my current ProAdvisor, and I wanna shop around a little bit. Maybe I wanna test out this QuickBooks Live." Blake Oliver: Yeah, exactly. David Leary: Are you gonna be kind of blocked from trying out a new service?  Blake Oliver: No, of course not.  David Leary: Yeah, you're right. That's, again, another open question that's gonna have to be answered over time. [00:09:00] Blake Oliver: All right, cool.  David Leary: More time on high-quality blog posts ... That's the theme here, because this is a really good one that obviously somebody spent some time on. Blake Oliver: Following up on our discussion about the new list, the "Top 50 Women in Accounting" list that Practice Ignition sponsored, I've been paying a little more attention to this, recently. I spotted an article in CFO Magazine, called, "For Management Accountants, Gender Pay Gap is Closing." The really interesting stat in this article is that, in [00:09:30] the United States, the median total pay for women in 2018, for management accountants, was 88 percent of what men earned. Now, that's not that great, right? That's according to a survey by the Institute of Management Accountants. We can certainly do much better. The good news is that's up from 85 percent in 2017 - from 85 percent on the dollar to 88 percent on the dollar in 2018. The really good news in this survey: for women in their 20s, in the 20 to 29 age group, women [00:10:00] earned a median 97 percent of what their male counterparts did. At the other end of the age spectrum, for women 50 and older, the figure was just 80 percent. Clearly, there is a change happening, and globally, there actually is no compensation gap anymore. If anything, women are earning more than men, in certain areas of the world. It's good news, right? Hopefully, though, as those women in their 20s move into their 30s, and 40s, that the gap doesn't widen again. David Leary: Well, I think, though, the [00:10:30] big problem that's always faced females is that they already start out down 12 percent, or 18 percent, from the get-go. Then, even if they get raises that are equivalent to men, by the time it's all said and done, it's like compound interest, right?  Blake Oliver: Right.  David Leary: They're just gonna be way behind. The fact that they're starting out almost on equal footing, from the beginning, at 97 percent ... I know somebody's gonna be like, "That's still not equal!" But, it's just- it's gonna stack up to where that gap should not get as wide, as they go further on in their careers. Blake Oliver: Now, moving on to busy-season news, I've [00:11:00] got a busy-season stat for you, David. David Leary: What's this one? Blake Oliver: This stat is from a report by Convergence Coaching. The report is called the "Anytime Anywhere Work Survey," and it was done in 2018. The one I wanna call to your attention, David, is this question about Saturdays being mandatory, or optional in busy season. David Leary: I think there's another accountant who took a photo of their parking lot that showed all the cars in it on a Saturday morning, and he was really proud that his firm had those employees showing up to work on a Saturday morning, like it was a teamwork effort. Blake Oliver: The stat [00:11:30] from this report that stuck out to me about optional, or mandatory Saturdays is that, in 2016, 39 percent of firms offered optional Saturdays; only 39 percent of firms made Saturdays optional, but that jumped to 58 percent in 2018, so, now, over half of firms have optional Saturdays. David Leary: What if you even are making your employees work all Saturdays, and you still can't get all the work done? What do you do then?  Blake Oliver: That's the thing is that it's not about how much time the people are working. You [00:12:00] don't need them coming into the office; you don't need to mandate that they work on Saturdays, because people will figure out how to get their workload done, if you trust them. That's the difference between the old-school mentality, and the new. David Leary: Got it.  Blake Oliver: That's really important, right? It's really important to trust people, because it is getting harder and harder to hire. I came across another stat that was actually really funny, from the AICPA ENGAGE Conference in 2018. There was an audience survey done there that Accounting Today published about hiring standards. The question [00:12:30] is: how strict is your firm, in terms of who you will hire? Eight percent of firms, or eight percent of attendees said that they'll hire "anyone who is breathing," and 41 percent said they have an ideal, but will settle. Only 51 percent of attendees said that they, and their firms adhere to high standards, when they're hiring. That’s probably because it's getting harder, and harder to find talent. There's a labor shortage in the CPA, and the accounting world. Going back to this question of optional, or mandatory Saturdays, if [00:13:00] your firm still has mandatory Saturdays, especially the kind where you have to come into the office, who's gonna wanna work at your firm? David Leary: That's crazy. Anyone who is breathing ... Eight percent.  Blake Oliver: I mean, who knows? This was an audience survey, so, maybe there were some cheeky answers there, right?  David Leary: They were being funny. Yeah, that could be [cross talk]  Blake Oliver: -clearly, half of firms are having to settle; not getting necessarily who they want. I got one more busy-season story for you, David. David Leary: Okay. Blake Oliver: Last one. This is called, "Point with Your Thumb, Not with Your Finger," published in Accounting Today, [00:13:30] by Kyle Walters, who is a partner at L&H CPAs and Advisors, in Dallas. He talks in this article, or at least he starts off this article by talking about a policy that his firm has, which is that you can only point at people with your thumb, not with your index finger. That sounds a little strange ... Why would you have that policy? Well, it is more a metaphor than anything. The idea is that when you point at people with your thumb, you're really pointing at yourself. He says in this article, in [00:14:00] busy season, it's really important to point at yourself, not the client, and not blame the client for the problems of not getting documentation, or not getting what you need on time to get your work done. He says, "You're not an accountant, you're a luxury service provider." If your clients were organized, and got everything to you in time, and you didn't have to ask them multiple times to get things done, they probably wouldn't need you to do their taxes. They could probably do it themselves if they were that organized, right?  David Leary: He's got a point. He's got [00:14:30] a point. Blake Oliver: He talks about some ways that you can improve the flow of communication, the client experience, and reduce this friction that occurs between the staff, and the clients. For instance, sending a tax organizer in January is not enough. He says you really "need to walk clients through the process without being condescending.". Maybe do some things that are not typical, such as send a courier to your client's house to pick up documents, [00:15:00] or create a short instructional video that walks new, or tech-challenged clients through your portal. How about adding an administrative assistant whose job is to help people use the portal better? If you take those steps to really hold your clients hands, then it'll make everything better for both your staff, and for the clients, who ... Really, how can we blame them for not wanting to do their taxes? It's basically the worst thing for a lot of people; they hate it, right? I just liked his approach of [00:15:30] thinking of your firm as a luxury service provider, rather than a compliance shop. David Leary: Yeah, and I think that the firms that probably need this the most right now are heads down, and will not know this article was written, and did not have time to read it ... If people read this four weeks from now, they can really implement this stuff for next season. Blake Oliver: I like this, too, because there's all these people out there talking about how tax preparers/compliance shops need to go into advisory services. I don't really think that that's necessarily how you have to differentiate yourself. [00:16:00] Yes, it's true that compliance work is becoming more, and more automated; it's requiring less, and less effort, but you can continue to provide incredible value by taking the extra time you have, now that you're not typing in transactions, or manually moving around tax data ... You can take that extra time you have and offer of better client experience. There's many, many, many ways to improve the client experience, right now, that we can think of. It could simply be that by offering [00:16:30] better customer service, you can continue to do the services you've already done, or always done, and continue to see your profits grow. The last thing I liked in this article a lot is about making mistakes. When your firm makes a mistake, you shouldn't just say, "I'm sorry, my firm made a mistake." You should also say, "I made a mistake, and here's what we're gonna do to fix it. Are you okay with that, Mr. and Mrs. Smith?" By doing that, you'll have a much better relationship with the client, and a smoother-running firm the next time around. David Leary: Blake, I [00:17:00] actually ... If you know, I'm a foodie ... I don't know if I'm a foodie, or not. I just made that up. I was reading Eater Magazine, the Los Angeles Edition, and I saw an article ... I actually sent it to you, when I saw it, because I was like, "Hey, Blake's in LA. This could be an on-location investigation for him." The title of the article is, "More LA Restaurants are Going Cashless. Is it Always Best for Business?" This is a restaurant magazine talking about this. They talk about how Blue Bottle recently announced plans ... Blue Bottle's kind of a- [00:17:30] Blake Oliver: High-end- David Leary: -fancy version of Starbucks. High-end coffee- Blake Oliver: A high-end coffee company.  David Leary: They're experimenting with a new cashless-payment model, meaning customers are no longer gonna pay for food and drinks with anything other than a credit card, or a phone app, or your iWatch type of a situation. They really go into some of the bigger news ... There's a salad chain called Sweetgreen, and they had a robbery in New York City, at one of their stores - cash robbery - and it led to a police chase, and somebody wound up being shot.  They have famously [00:18:00] just said, "No more cash," because of the safety of their employees, and their restaurants. I know we've talked about this before, as far as, from a cloud-accounting standpoint, it's super-efficient to just only do credit cards, because then you could just move those in the accounting system, and you don't have to count cash; you don't have to go to bank to do a deposit. It's just easier from a bookkeeping perspective to do that. Blake Oliver: Oh, yeah.  David Leary: But, now, there's a lot of arguing happening on both sides of this. before I jump into the other articles that are related to this, did you actually go [00:18:30] to one of these restaurants, or go to one of these ... I'm sorry, no-cash restaurants in LA? Blake Oliver: I've definitely been to cash-only- or to card-only restaurants in Los Angeles. I can't remember exactly where, but I wouldn't have even noticed, because I can't remember the last time I paid for lunch, or anything with cash. I think it's great, but there are people that are upset about this, and complaining. I know that Philadelphia recently banned cashless stores. Is that right?  David Leary: There was [00:19:00] recent news, this week. They banned cashless stores. The argument is that if anybody is maybe, I'm not saying off the grid, but they don't have credit cards for personal-finance reasons, they are the  unbanked, they just personally choose not to have them, it's a division-. Blake Oliver: Right. David Leary: Some of them are arguing it's haves and have-nots, but a lot of these restaurant owners, if you start reading these articles, make arguments  that like, "Is it really our fault?" What if a restaurant takes cash, but they only sell $50 hamburgers; they take cash, with only $50 hamburgers. Are [00:19:30] they gonna be creating a cultural divide? There's a lot of arguments around this. Gene Marks is saying you're crazy to do cash-only, because he looks at this as you don't- and I'll read-  Blake Oliver: Not cash ... He's not saying ... You're crazy to do cashless. David Leary: Cashless, yes. Yeah, sorry, or even go cash-only. His article is "Cash-less? Cash Only? You've Gotta be Crazy to Reject Any Forms of Payment." I kind of- I get the whole efficiency; I get safety; I get having [00:20:00] to physically count cash. Restaurants are expensive to run, and if you're paying somebody to count cash every night, that's money you could be paying your kitchen staff. I get those arguments. but I think I'm on Gene's page here, where you have to really accept all possible payments. My dream would be is, with Xero, or QuickBooks, when I send an invoice to somebody, I wanna have 25 payment options available to my customer, so they can pay me any way that works for them. That's Gene Marks' argument on this. Blake Oliver: Look, the [00:20:30] problem here in LA is that, in a lot of places, people are just not paying with cash, so, it becomes silly for the businesses to accept it, because very few people are paying with it. I understand the argument that it could be discriminatory, especially towards poor people who don't have banking, but there's gotta be a better solution than forcing all businesses to take cash, which they don't wanna do. Maybe the city could put out free card- ATMs that issue prepaid cards, or something like that. It's expensive, and dangerous to have cash [00:21:00] on hand in a store, so, I disagree with Gene, here. I think that businesses should do whatever they think is best for their businesses ... Clearly, a lot of them have decided that they don't need to accept cash in order to succeed. David Leary: I can see this being a battle, because my small-business advocate - me - is like, "This is super-efficient; small businesses kinda have to do this." They just have to, to survive. It's tough, right?  Blake Oliver: What about airlines? Airlines stopped taking cash on planes a long time ago. Are we gonna start forcing them to do [00:21:30] that again?  David Leary: Yeah. Blake Oliver: You can only pay for your drinks, and your food with a credit card on all the flights that I've been on - Delta, Southwest, American. I haven't paid cash anything. If we're okay with that, why can't stores do it, too?  David Leary: I wouldn't be surprised if this gets bubbling up to the higher political levels. Right now, it's a lot of individual cities, and states that are banning this, but I could see this becoming a national political topic. Maybe it's even in the election, because, you're right, so many transactions are on credit card. Are we gonna have discussions [00:22:00] about getting rid of all cash, at a national level? Who knows? Anybody who has a client, who has a cash register, and listens to this podcast - this is gonna affect you. Blake Oliver: You wanna talk about the Facebook thing next? I couldn't believe when I read it. Apparently, hundreds of millions of people's passwords were being stored in plain text on Facebook's servers?  David Leary: Yeah, not only were they stored in plain text; possibly up to 20,000 Facebook employees had access to this. Blake Oliver: It gets worse, and worse for Facebook, every day. Where did you see this? David Leary: It's on KrebsonSecurity, [00:22:30] which is ... I think we've talked about this once before. This is THE place people go to find out about security hacks, security breaches, and problems like this. They do really deep articles, investigative-type reporting, and journalism. It's KrebsonSecurity. Essentially, the headline is pretty straightforward: "Facebook Stored Hundreds of Millions of User Passwords in Plain Text for Years." This goes back to 2012. Blake Oliver: They're not making people reset their passwords, though, and they're not saying that the passwords were necessarily used in a bad way. It was just [00:23:00] exposed on their internal networks. David Leary: That's correct. Based on their investigation, they're pretty confident it's not being used improperly. Nobody stole these. My bigger concern with this is Facebook, in a way, is hiring the A+++++ of talent. Facebook is; Apple is; Google is, right? They have the highest-flying stocks; they have the most money; the most cash. They're hiring these smartest people in the world, from an engineering standpoint ...  Glaring ... You [00:23:30] could argue this is Security 101. Mistakes like this are happening ... Some of it could be a cultural thing. What about the companies that are hiring just an A+, or an A, or an A-, or maybe a B+ engineer? This is what's kinda scary about this, because even the article talks about GitHub and Twitter both had some similar issue like this, a couple months back. This is kinda scary, because this is like 101. Blake Oliver: If you think about this in the context of all the data that Facebook [00:24:00] has, passwords are the most important thing that they could be protecting, and they are not securing our passwords, which give access to potentially anyone into our accounts. What do you think they are doing to protect all of our personal information that we are out there sharing on Facebook? Well, they're obviously not. That's what the whole Cambridge Analytica scandal was about, that third-party app developers had unfettered access into what appeared to be most of the Facebook database. David Leary: That was a API level; [00:24:30] it was kosher, et cetera, et cetera. Blake Oliver: But internally, imagine you work at Facebook as a developer. Theoretically, those people aren't supposed to be able to go in, and view our Facebook messages, right, David? Well, do you think they probably can? I imagine that a lot of them probably could, if this is how well they were securing our passwords. I wouldn't bet that my messages are safe. David Leary: Up to 20,000 people had access to this. I'm not saying 20,000 people saw them, but-. Blake Oliver: They could have. David Leary: -nobody raised this issue up since 2012? The [00:25:00] whole thing is dumbfounding, and crazy. Blake Oliver: I gotta take the opportunity to tie this back to all of our discussions about third-party providers overseas, serving the CPA profession, especially small ones. If a company like Facebook is not securing data, what do you think the odds are that that "bot" company in The Philippines is securing your client data? I'm gonna say not very good. David Leary: Yeah, it's- Blake Oliver: CPA firms, it's buyer beware in this world, if you are outsourcing your client data; if you're putting your [00:25:30] own data on consumer-quality networks. We really oughta be using B2B software, B2B services, that are audited; that have standards that they publish that will tell you what they're doing with your data, or we're putting ourselves, and our clients at risk. David Leary: The one good thing about things like this coming to light is that this is how they get resolved. Blake Oliver: Facebook seems to just do whatever they want, and nothing gets fixed.  David Leary: I know when ... After, I think, the Cambridge [00:26:00] Analytica stuff broke, I remember, at Intuit, at the time, the board took that very serious; lots of companies took that stuff very serious, and, then, looked at their own APIs, and their own data sets. I'm sure every Fortune 500 company, right now, is performing an investigation on how they're storing people's passwords. There's a ripple effect of how this affects the rest of the industry. I guarantee you, other companies, their CEOs are like, "I don't wanna be on the front page of the Krebs Security thing. What's our security policy around our passwords?" This is gonna- it'll cause [00:26:30] a ripple effect in a good way. Blake Oliver: It's less than one month, really only three weeks until the end of busy season, and you know what that means, David ... It's the beginning of conference season!  David Leary: Conference season. Yes! Yes, yes ... Blake Oliver: Well, one of the big events that are coming up in the next few months, in April, May, June ... What are you gonna be at? David Leary: Mollie Macklin, at Insightful Accountant, she put together a "Training Shows, and Conferences for 2019" blog post. They're not all [00:27:00] here, but it's pretty exhaustive. There's a good 30 shows, and conferences. We'll have that in the show notes, in the links. First off, I think we're both gonna be at The Accounting Salon, which is May 6th, 7th, 8th, correct? Blake Oliver: That is in New Orleans, yes; May 6th through 8th. That's gonna be great. David Leary: Scaling New Heights, and XeroCon are the same week, so, I'm gonna do both- Blake Oliver: Road warrior. David Leary: -I'll be two days at Scaling New Heights, and two days at XeroCon, which will be a little crazy, but I'll make it. Where are you headed? Blake Oliver: Well, actually, FloQast is doing our very first conference, our own user gathering. [00:27:30] David Leary: Congratulations!  Blake Oliver: It's a ton of work already. It's May 16th. It is just for current FloQast users, this first year. We wanted to get our feet wet with that. It's called Take Control, and that is May 16th, in San Francisco. If you are listening, and you happen to be a FloQast user, head over to FloQast.com/takecontrol, and register. I'm also gonna be at the Houston CPA Society 2019 Spring Accounting Expo on May 22nd. I'll be presenting on remote [00:28:00] work, and the chaos of the close. I might go to AICPA ENGAGE, in June. I'm not sure about that yet. I know that FloQast is gonna be there, and then, I will also be at XeroCon San Diego. David Leary: Okay, so we'll both be at XeroCon; overlapping there. Blake Oliver: That's in June 18th, and 19th, and you said that is immediately following Scaling New Heights?  David Leary: They overlap, yes. Blake Oliver: They overlap. Okay, cool.  David Leary: Yeah, they completely overlap, but I will be ditching one early to go to the- to attend the other one slightly late ... That way, I get to do both [00:28:30] in the same week, which should be a lot of fun. We'll do a podcast related to that. This list goes all the way through' ends out in November, with QB Connect - the full, exhaustive list of all the shows you should consider when you have some time here.  I have to vote; my favorite name of any conference listed here ... I'm not going to it, but, the favorite name is Abacus Maximus, which just might be the best conference name of all the conferences listed here. Then, I have one more small article for all of you, when you go traveling to these conferences. This was American Express's small-business trends. You wanna stay [00:29:00] at the Rodeway Inn. Now, do you know why you wanna stay there, Blake?  Blake Oliver: I don't know. I'm kinda getting a little picky with my hotels these days. Why would I want to stay at a place called the Rodeway Inn?  David Leary: Because they have the best hotel Wi-Fi of any hotels, followed by Americas Best Value Inn, Quality Inn & Suites, Days Inn. Blake Oliver: What is it with these inns that have good Wi-Fi? David Leary: They're balancing it out. They're lower-priced. They're providing better service; because the ones with the worst Wi-Fi are the ones that I feel like most business travelers stay at - the [00:29:30] slowest Wi-Fi places. It's the Hilton Hotels, Fairfield, Marriott, Courtyard by Marriott. They have the worst Wi-Fi- Blake Oliver: Aww, man ...  David Leary: -and they cost more. I'm spending twice as much, just to get some Wi-Fi. Blake Oliver: That's why I just gave up, and I bought unlimited on my phone, and I just use my phone as a hotspot, whenever I can, because I just can't- I can't put up with the Wi-Fi that's slower than my cell connection. David Leary:  Blake, is that it? Did we ... We got through everything this week? Blake Oliver: I think we did. Yeah, that's everything for this week. [00:30:00] If people want to get in touch with you, David, online, where can they do that? David Leary: Right. Easiest is Twitter. I'm just @DavidLeary.  Blake Oliver: I am @BlakeTOliver, and don't forget, you can follow The Cloud Accounting Podcast on Facebook. Just go to your Facebook search bar, and type in Cloud Accounting Podcast, and you will find us. Follow our page. Give us a rating on Facebook. We really appreciate that. Also, give us a rating on iTunes, and we'll read it on the air. David Leary: We are now on Twitter, and LinkedIn. [00:30:30] I haven't posted much there, yet, but that's gonna be happening soon. You can find us on LinkedIn, and Twitter. Anywhere it's convenient for you, we're there. Blake Oliver: David, it was a lotta fun. Talk to you next week. David Leary: Bye. Talk to you soon. 
  5. SponsorXero: http://cloudaccountingpodcast.promo/joinxero Show Notes00:52 -- We got some more iTunes reviews! Leave us a review and we might read it on the air. 02:09 -- New usage rules for Intuit's popular accounting software could mean some customers will need to move to a pricier plan. And some entrepreneurs say it's one tweak too many. 06:26 -- The next "QuickBooks With Live Bookkeeping" test is up and running. Say bye bye to Claudell... and meet David! He's a "bookkeeper 17 years." The price has now doubled from $200 to $400/month. What's included in the new test of QuickBooks Live? Listen to find out. 15:50 -- Cathy Iconis lays out the basics of what you need to do to start your own virtual bookkeeping business. It’s a lot! 18:59 -- Companies that use Box.com as a cloud-based file hosting and sharing system might be accidentally exposing internal files, sensitive documents, or proprietary technology. 21:30 -- Here’s a how a scammer used phishing emails to steal over $100 million from Google and Facebook. 25:32 -- Zapier tested options for screen recording software ranging from minimalistic three-button windows to complex apps overflowing with tools, priced from free all the way up to several hundreds of dollars. 30:34 -- No matter what anyone tells you, we’re not ready for the massive societal upheavals on the way thank to artificial intelligence. Get in TouchThanks for listening! Let us know what you think on Twitter. Follow @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page!Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Xero. As a listener of this podcast, you are probably keen on getting industry insights, staying ahead of leading-edge technology, and boosting your network. Well, I have some good news for you. This June at Xerocon 2019, Xero will bring together hundreds of tech-savvy, future-minded professionals just like yourself from across the Americas, and the entire globe. Come join Blake, myself, and this collaborative community in action, June 18th, and 19th, in San Diego. To receive a special discounted ticket to Xerocon 2019, in San Diego, head over to CloudAccountingPodcast.promo/xerocon. That is Cloud Accounting Podcast dot promo forward slash X E R O C O N. Book your Xerocon ticket today, and we'll see you in San Diego. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: We got some more reviews, David; three more. David Leary: Three more. That's good. That's good, yeah.  Blake Oliver: NAS77Y said, "Forget [00:01:00] the rest. This is THE podcast on cloud accounting you should be tuned into weekly. Blake and David are a perfect duo. Apart from being entertaining, they're also experts in the accounting, and accounting-software vertical. The updates they share are well-researched and articulated. Every accountant, bookkeeper, and business owner should be listening to this regular shows so they can stay informed, and make smarter business decisions around accounting, and cloud software."  David Leary: And we got a review from the world-famous Brent Forbush, CPA: "Great content. On point. Five stars. Blake and David do a great [00:01:30] job of keeping abreast of all the changes in the profession, and even more importantly, making sure to call out the parts of the profession need to change to stay ahead. With the ever-changing technology landscape, they help make sure we are evaluating our process, and technology stack to ensure we use the best of breed. Thanks for being a voice."  Blake Oliver: Finally, we've got Jimmy [Joette], who said, "Outstanding, five stars. I can't say enough about the job Blake and David do in discussing new trends, software updates, news articles, and everything relevant to the industry. I get excited every time I see a new podcast, because it means I'm about to [00:02:00] learn more news relevant to our industry. Thanks, guys." Well, thank you, Jimmy, and thanks, Brent, and thanks, NAS77Y. I really appreciate those reviews. David Leary: Yeah, this is great. Blake Oliver: You know who isn't getting very good reviews this week? It's Intuit. David Leary: Yeah, yeah.  Blake Oliver: Did you see the article in Inc. magazine? David Leary: I did see that, and the headline in the article is, "Changes are Coming to QuickBooks Subscriptions, Again, and Small Business Owners Aren't Happy." When you tweeted this out, the day before, I actually went, and did a follow me home. [00:02:30] I went to ... I drove to Phoenix, and I went to a small business, a T-shirts/sign-printing business. They're fairly, fairly big. Chatted about their business; how they're doing things. They talked about QuickBooks. Un-baited from me, they brought up the QBO list limits, and how they're gonna exceed the chart of accounts ones ... There's almost like eye rolling about it. They were ...  My takeaway's yes, it feels like we're in a closet, in a vacuum, you and I, [00:03:00] talking about these list limits. Then, the accountants, and bookkeepers are talking about it on social media, and all that, but it's obviously based on me doing that follow-home to a small business this week, and then, this article that this is really being chatted about, not just in our little Cloud Accounting Podcast circles. This is really being discussed, because this is Inc. Magazine. Blake Oliver: Yep, Inc. Magazine ... The price increase is pretty substantial, if you do go over the limits on the chart of accounts. For [00:03:30] those who haven't been following the story, starting April 10th, Intuit is imposing new usage limits on existing tiered plans. If you're a current customer, you might outgrow your plan sooner than expected. For example, customers currently on the $60-per-month plan, which is $720 per year, might have to move to a $1,200-per-year plan - that's QuickBooks Online Advanced - which would be a 66-percent price increase, and that's only because you have more than 250 [00:04:00] accounts in your chart of accounts, or more than 40 classes, and locations. This article features business owners, both small, and slightly larger - a $100,000 business in New York; a $1 million annual revenue business in Boulder - talking about how they switched from Desktop to Online, and now they're upset, and they're not ... They're upset about being forced into price increases, while also, they don't perceive that there has been a lot of development in the product [00:04:30] for new features, and benefits; talked about how QuickBooks Online has gone down two or three times in the last year. Yeah, I think this just validates the commentary that you and I had a couple of weeks ago, talking about how it's not really wise to increase prices, when you haven't actually delivered new features. David Leary: Well, yeah, and then, it's the ... I think the limits, themselves, they just feel low. Blake Oliver: They're kinda arbitrary, aren't they? Why would you want to pay more for a product, just because you have [00:05:00] more charts of accounts? That's like  ... It's not a feature. It's not like I'm getting advanced inventory management, or something, which people would be happy to pay more for, right?  David Leary: Yeah. If somebody's extra-anal, or wants to over-organize things, it's almost like a punishment- Blake Oliver: Like me.  David Leary: Yeah. I know we've talked about this in the past couple episodes ... Even myself, I use a lot of classes, and I'm like, "Oh ..." I'm kinda rethinking that now, because this could catch up. The interesting thing about this, like that business I talked to, they [00:05:30] were paying a lot more for ... I think they were using a Sage Desktop product that they migrated from about 14 to 18 months ago, to QuickBooks Online, and then, add-on apps, right? They kinda moved to that ecosystem. Blake Oliver: Right.  David Leary: It's not that they're really upset about the price, but they just almost had that eye rolling about it, because, when it's all said and done, it's still gonna be cheaper per year than they were paying before, for their Sage product, but, it's [00:06:00] just ... I think it's the sting of it, and then, kind of just eye rolling about it, like, "Are you kidding me? Because our chart of accounts hits 251 ..." They're not mad, it's just they're eye rolling, like, "This is unbelievable. That's the limit?" I suspect that eventually this will change. There's a lot of chat about this, outside of ... Obviously, outside of our circles, because this is now ... The small-business owners are talking about this with each other. Blake Oliver: Speaking of Intuit, and QuickBooks, there's a new [00:06:30] QuickBooks Live test going on. Number two is up, and running, and you and I were able to see the pricing page. It's pretty easy to get around the cookies that prevent you from seeing it, because you can just use an incognito window, right? I took a look at the new pricing, and it's pretty similar to the last pricing; although, Claudell is gone, David.  David Leary: That was the first thing I noticed, as well. I was a little heartbroken. Blake Oliver: Say goodbye to Claudell. She has been replaced, [00:07:00] in test number two, by David, who is also a very experienced bookkeeper. He's been doing it for 17 years. The big difference is that the price has now doubled from $200, to $400 per month. David Leary: But one of the major things somebody pointed out is the other test, here, is the services offered, and the scope is different. Before, it was a little ... "Hey, some set-up help, and we'll do some categorization for you." Now. it's almost like a full-blown bookkeeping service. Blake Oliver: It is, yeah.  David Leary: At the other end of it ... The other [00:07:30] end of the pendulum has swung the other way, and obviously, Intuit's gonna test, because you have to do a test. You gotta go a little extreme, or you're not gonna learn anything. Blake Oliver: Well, should I go through the scope of services? David Leary: You know them by heart? Blake Oliver: Well, I took screenshots, so I've got them listed out here- David Leary: That'll work. Perfect. Blake Oliver: First, your QuickBooks Live bookkeeper will customize your setup, which means setting up your books, and tailoring the product to fit your business; importing historical data, like customer, and vendor lists is included in this. Then, they will categorize, and reconcile transactions, [00:08:00] which means categorizing expenses, income, customers, and checks. They will also reconcile accounts, and transactions to make sure they match. Third is provide monthly insights on your business. That includes creating customized reports catered to your particular business; reviewing business reports to see how you're doing from month to month. They will also help ensure your books are accurate at month end, fix incorrectly posted transactions, so your books are correct, find any missing figures to keep your books balanced. Then, finally, [00:08:30] they will close your books on time, generate accurate year-end reports for your business, when it's time to file, walk through a year-end checklist with you, and even ensure you have a seamless hand-off to your tax accountant. Yes, David, I think that this is a rather full-service type bookkeeping offering, and at $400 a month, it might be a little- still a little bit underpriced, if you ask me. David Leary: Well, I think it depends on ... Yes, from a bookkeeper's perspective, if you have [00:09:00] a bookkeeping firm, it may be that $400 feels underpriced, but I think if you are a small-business owner, and you just need cash-basis bookkeeping, it may be overpriced, because I think ... I swear I saw a Google ad on one of my searches this week that said, "Bookkeeping - $89 a month." Blake Oliver: Yeah [cross talk] there's all sorts of low-end bookkeeping services out there. Then, when you actually click through, and you get to the site, or you talk to somebody, you find out it's gonna be much more expensive than that. David Leary: Yeah, as soon [00:09:30] as you add in anything else [cross talk] Blake Oliver: Unless they're using- Unless they're using offshore labor. David Leary: Yeah, yeah ... As soon as you add in, "Oh, I need a payroll service, and I need this app, and I need an approval process," it does start to add up. Blake Oliver: As we discussed last week, the big news is that they've hired 10 bookkeepers in Boise and are moving forward within a closed beta of QuickBooks Live with various business owners, so it's not a test anymore. It's actually a [00:10:00] beta. The public pricing is still in test mode, I guess. I wonder ... What I'm really curious to know is, and this is what disappointed me, when I listened to some of the public interviews that the QuickBooks Live folks gave, this past week or two, and the blog post, is what are these QuickBooks Live bookkeepers getting paid? Because that's going to have a huge impact on ...  If this service actually goes live, and becomes big, and [00:10:30] this is how ProAdvisors are now making money, and that they're working for QuickBooks Live, as bookkeepers, on their platform, we need to know what they're getting paid, to know if it's going to be good for them or not. Nobody asked that question, so I really would like to know that- the answer to that. My guess is it's not gonna be much more than the TurboTax Live people, which is something like 20 bucks an hour. David Leary: Is that public information out there? Has that been ...?  Blake Oliver: No, no, no, we don't know.  David Leary: What about the TurboTax Live people? Is that something that [cross talk] [00:11:00] Blake Oliver: That is something ... There was a blog post that Craig Smalley wrote. He talked about how he applied for TurboTax Live just to see what it was, from an employee standpoint. He said that he was told the pay rate was somewhere around that. Obviously, it depends on your individual situation, but that's what they're telling people. The other thing that bothers me about all of this, or the big question I have in my mind is that ... Rich Preece was on another podcast, this week, [00:11:30] talking about- answering questions from ProAdvisors; talking about what this really is. Is it competing with ProAdvisors? Of course, he says, "No, it's not designed to compete with ProAdvisors. We're actually going to use, or invite ProAdvisors to participate in this program ... We're not competing with you; you're gonna be able to use our platform and join our platform to provide bookkeeping services to clients. This way, you'll get more clients." To me, that's sort of like Uber [00:12:00] saying to taxi drivers, "Yeah, we don't compete with taxis, because you have the opportunity to sign up with us, and drive for Uber." Everybody knows that the way Uber works is that it hasn't been exactly the best thing for taxi drivers, because when you have anybody able to join Uber, drive for Uber, and it's a contract relationship, and all that ... You're not getting the benefits; prices are getting- or hourly wages are being lowered. Platforms benefit the companies building the platforms, [00:12:30] primarily; not the service providers that are currently being disrupted by those platforms. David Leary: Yeah. I think that's kinda the history of platforms is that. Then, it's a double-edged sword, because I think even people ...  It's been the politics, now, like, "Oh, Amazon runs the platform. They need to be broken up," or "Apple runs the platform. They're taking 30 percent of every developer's take, but developers are making money off of the App Store," and things like that. At the same time, I think there's [00:13:00] a big bell curve of bookkeepers out there. I see this in the Facebook posts. There's bookkeepers that are providing exceptional services. They have their own bookkeeping firm. They've done the marketing; they've done the research. They have clients. Then, you'll see, in the other end, you see people ... They'll just post on to Facebook, "How do I get clients for my bookkeeping business?" or, "I just opened a bookkeeping business ..." They almost aren't doing any work, if that makes any sense.  They're not putting in the effort to create their firm, and [00:13:30] to go out, and do work. Maybe that's a good fit for those people who are like, "Hey, I just wanna do bookkeeping, but I don't wanna have to find the clients. I don't wanna have to spin up my own website. I don't wanna have to do any of these things. I just wanna become a bookkeeper, and I'll just do it for QuickBooks Live." Maybe there's a set of the population this is a good fit for. Blake Oliver: I would say that this is going to be great for business owners, if it's done right, because they'll have access to bookkeeping help for ... Directly, in QuickBooks Online, for much less than they would pay otherwise. It's [00:14:00] gonna be great for bookkeepers who aren't really that good at running a business, because now they have access to as much work as they want, and it's all in a platform that's easy for them to work in. Who it's not good for are the entrepreneurial bookkeepers, accountants who have created their own firms, or businesses, and brands because ... Does anyone really think that QuickBooks is gonna be driving people wanting bookkeeping services to the ProAdvisor directory, once this thing's up and running? No. It's like we talked [00:14:30] about what happened with GoDaddy, with the Do It With Me, and the Do It For Me services.  Ned from Spritz wrote that awesome post talking about what happened there. There was a total incentive for GoDaddy to drive people to its own platform, rather than to the third-party providers, because they made way more money on the Do It With Me ... The platform play. Once this goes live, I wouldn't expect for ProAdvisors to be getting a lot of leads through the ProAdvisor directory [00:15:00] anymore. They'll have to figure out how to get them from elsewhere. David Leary: Everybody talks about advising, and I've always talked about going niche ... I've always thought if you do niche correctly, you're gonna have conversations with small-business owners way before they even think about buying QuickBooks, or way before they go to the Find a ProAdvisor site. It's just gonna be, if you're an entrepreneurial bookkeeper, or accountant, you're just gonna have to do things differently, because a lead just falling in your lap because somebody went to the Find a ProAdvisor site may [00:15:30] not be there, and you're just gonna ... People who wanna be lazy are gonna have a place in this world, and people who wanna work really hard in their firm, and grow it, there's a place for them, too. You're just gonna have to be a little bit more hustle, and innovative, I think. Blake Oliver: Yeah. David Leary: I have an article that kinda ties into that conversation a little bit. Blake Oliver: Let's hear it. David Leary: Cathy Iconis wrote a article on her blog site, QBO Chat, and it's, "How to Start a Virtual Bookkeeping Business." I think this is a good post for ... I know I just referenced [00:16:00] those people that are just on Facebook: "How do I start a bookkeeping practice? I just quit my job," right? They're on that end of the spectrum. Cathy really goes into everything from ... Step one: I started with $1,000, my initial funding. How I got my business name; how I structured my company; the tools you need; the hardware; the storage; how to pick a package to build your practice on, and how to do training. I think this is just a good article for all those people that are [00:16:30] at square one. They don't know what to do next. It's just a really good 'how do I?' article. Blake Oliver: Reading through this, it really solidifies in my mind how difficult it is to actually go into business for yourself. A lot of people don't think about that when they say, "I'm gonna go start my own accounting firm," or "I'm gonna start my own bookkeeping practice.". There's a lot that goes into it, from forming your LLC, to getting set up on your technology stack, to building our pricing packages. Then, your tech [00:17:00] stack for actually delivering the services. It's hard. That's what a QuickBooks Live is going to solve for people who just don't have it in them, or don't have the time, and resources to go do that. That way, they can go work for themselves, and everything's taken care of. David Leary: Yeah, that's a good point, because if I wanted to start a car service, tomorrow, I don't know, legally, if I'm allowed. Never mind, I have to buy a car, and all the sudden ... There's all this stuff that would have to happen; insurance, et cetera. I've gotta brand it. I've gotta find [00:17:30] customers, or I install the Uber app, and I become a driver ... I have no clue how long that takes. I'm gonna say in 48 hours, I'm driving for Uber. Blake Oliver: Probably.  David Leary: But, you're right, it's a complete difference from, "Hey, here's a bunch of work you have to do, if you ..." This is not even like ... She doesn't even get into, like, you gotta get customers; you wanna maintain- Blake Oliver: Right. David Leary: This is just spinning it up. Okay, great; now you have it. Now, you gotta actually start making some money, and getting customers. Blake Oliver: It's tough to set up your tech stack, and figure out how you're gonna use ... Are you gonna use QBO, or are you gonna use Bill.com, Hubdoc, and Sitely, all that stuff. To actually [00:18:00] go out, and get those customers, that's where a lot of people get stuck, because they're not salespeople. That's not why you go into accounting is to do sales. most of the time. So-  David Leary: Yeah, I think you're one of the exceptions, because you've always ... Early on, even when you had your bookkeeping practice, you always described yourself as like, "I'm a marketing bookkeeper," or something like that, right?  Blake Oliver: Yeah. Well, it's funny, because I never thought I would be good at marketing, and then, it was when I started my own practice [00:18:30] that I found I really enjoyed it; that I liked blocking, and I liked getting out there online. I wouldn't call myself a sales guy, because I don't like doing calls all day with prospective clients - I get a little tired from that - but I love the online-marketing stuff. That is really fun. Most bookkeepers, probably that's not the thing they're interested in. If they were, they'd be doing marketing. What's next? What should we talk about next?  David Leary: I think that "leaking sensitive files via Box accounts," is an interesting one.  Blake Oliver: Oh, yeah. Let's talk about that. All right, David, so [00:19:00] speaking of your tech stack, and how you're gonna store documents, this is an important thing. One thing that you might do, when you're starting a bookkeeping practice, or an accounting firm, is set up your online storage, your cloud storage - Dropbox, or Box, or Google Drive, or OneDrive, right?  Well, an article popped up on ZDNet this past week, talking about how there are lots of companies that use Box.com, which is a very, very secure file-storage system, but they are ... Because they're not configuring it correctly, they may be accidentally [00:19:30] exposing internal files, sensitive documents, and proprietary tech. Here's how they're doing this. Box has this ability, where you can create what's called a vanity URL for a file. Instead of it just being a random string of digits, and numbers that links to the file, you could say something like my-social-security-number, and-  David Leary: Well, hopefully you wouldn't do that. It would just be like David's Cool Download or something. Blake Oliver: Yeah, or like Passport, or something like that. You [00:20:00] could customize the URL. What people have been doing at some big companies, like Apple, is they've been creating vanity URLs for internal documents, and then they've been making those documents public, because they don't want people to have to log in to view them. What that means, though, is that, if you're a hacker, you can just basically search the web for vanity URLs; use dictionary attacks, searching on the Box domain for [00:20:30] these files, and then you can find them that way. It's like having an unlisted phone number ... People can still find you, because they can just dial all the numbers, and find you. David Leary: So, somebody who's a little enterprising, and smart, they could be like, "Box. com/newestAppleiPhone11." Blake Oliver: Yeah.  David Leary: "11, version of the iPhone ..." and they just keep searching, and eventually, you just find some docs is basically what's happening. Blake Oliver: Yeah, yeah, and it's a cautionary tale [00:21:00] that whenever you set up ... Whenever you're using cloud-based storage, where files are permissioned, and accessible via URLs, you really wanna make sure that you've set up your policies so that that sort of thing can't happen; that your staff, out of convenience, don't accidentally expose documents by using a vanity URL on a document that is public, that shouldn't be public' that sort of thing. That's the security lesson for the week. David Leary: Wow. It's kinda funny, that carelessness [00:21:30] of companies; not knowing they're doing these things. Here's one, and I know we've talked about this before; not so much with companies, but I think we talked about how the IRS was just cutting people refund checks for over a million ... They don't check, unless it's over- how much was that again? $10 million or $5 million?  Blake Oliver: If the refund check is under $2 million, it doesn't go through human review. Although, I imagine that's probably changed now, given what happened. David Leary: There's [00:22:00] an article that came out. It was on CNBC. A scammer just sent fake invoices to Google, and Facebook, which is a scam people have been doing for years, and years, and years. He $100 million from them. Blake Oliver: How ... Wait ...  Over what time period? I mean ...  David Leary: In 2016-  Blake Oliver: It looks like  2013, between 2013 and 2015. Wow ... He [00:22:30] was just sending fake invoices to these companies, and they were paying them?  David Leary: Yeah, he created a fake company that posed as another company. It's a total scam-  Blake Oliver: Yeah.  David Leary: On the Facebook, and Google side of things, do they not have any accounts-payable controls? Nobody's sanity-checking this stuff? I even know ... I'm pretty sure there's apps that are off the shelf that will validate companies before you pay them.  Blake Oliver: Yeah. This [00:23:00] seems like a perfect application for artificial intelligence; having some sort of AI review all the documents, and look for inconsistencies, and create a risk profile for every single invoice. I guess that's not a priority for Facebook. That's the problem; when you have so much money floating around, your internal controls go a little lax, because you're not too worried about it. Isn't $100 million like a rounding error for Facebook?  David Leary: Yeah, the sheer number is just amazing, and in a two-year [00:23:30] period [cross talk] that's basically a million bucks a week he's pulling out of those companies; half-a-million dollar each, a week-  Blake Oliver: Wow ...  David Leary: If you start averaging this out for a two-year period. That is-  Blake Oliver: This not just a scam that big businesses fall for; medium-sized, small businesses, even, fall for this stuff, too. We gotta be vigilant. David Leary: Yeah, and this is where I think you have to have some approval processes around things. It could be a Bill.com type [00:24:00] situation, where it's ... Really, there's an app involved. You do the approval through there, but it could be as simple as a Google checklist, or a process, or anything like that, where two people have to both say, "Okay, it's time to hit send on that bill payment," before they just get paid.  Blake Oliver: Right. This is another area where human ... The humans are the weakest part of this chain, in the internal controls, because a lot of times, even when you have that, people will just go in, and they'll see a bunch of bills for themselves to [00:24:30] approve; they won't really take the time to look at them. They'll just hit approve, approve, approve, approve. I had this happen with clients all the time. They just were too lazy to approve, or to actually look at the documents. Then everything would get paid; then, we'd find out later that, "Oh, I didn't actually wanna pay that. What am I supposed to do. I had an approval process in place?" You're the one who didn't actually look at the document. I don't know what to do in that case. David Leary: In some level, I think these guys were geniuses; another level, they're [00:25:00] morons because Facebook recovered the bulk of the funds, after it was reported. If you're gonna steal $50 million from a company, don't you do a better job of hiding it? How did Facebook recover this money? That's beyond me. I don't know. I'm a little shocked by it ... It's people being quick, being careless. It’s the same thing with that Box article … Paying invoices that you didn't take time to make sure it was real. It comes back to bite you. Everybody has to be careful out there.  Blake Oliver: On [00:25:30] a totally different subject, I found ... Do you ever read the Zapier blog, David? I love their blog. It's so good-  David Leary: I have never read it, actually. Blake Oliver: I don't know when they started doing this, but they hired ... They must've hired some really good writers, because they're putting out great content, like every week; really helpful stuff that's not about Zapier, but ties into it. It's a perfect example of content marketing. This one that I saw is from February 11th. It's called, "The Best Screen-Recording [00:26:00] Software in 2019." It's a roundup of all the screen capture software that's out there for small businesses [cross talk]  David Leary: So, Loom, and stuff like that, is that one you [cross talk] Blake Oliver: Yeah, Camtasia, ScreenFlow. If you wanna create a demo video of your product, or if you want to create a training video for your clients, these are the apps use. They picked the top 10, and then they say which is the best to use for each use case. Do I wanna quickly share videos, or do I wanna live-stream [00:26:30] webinars, or do I wanna create high-production recordings? You can just go through the list and find the one that's perfect for you. I highly recommend anyone looking to create that kinda content, take a look at this. I am a big fan of Camtasia. I've been using that recently to create some on-demand demo videos for FloQast that we're gonna be putting up on our website, so people can actually see the product, without having to book a live demo. I can do [00:27:00] really cool things, like I can highlight stuff on the screen; I can add text; I can create arrows. I can even show a thumbnail of the person running the demo that's captured from their webcam. It's really cool. That's the number-one app on their list, but there's a lot of other ones that are really good. I don't know if you've used any of these, David?  David Leary: I have not, but I've heard a lot about things like Loom. I think it's really popular with people ... Maybe you're documenting your processes, [00:27:30] and instead of you typing, "Here's how you run payroll in QuickBooks," instead of you documenting the click-by-click steps to do that, you could actually ... A lot of people, the popular way to do it is Loom. Then people just record the video, and then somebody ... You have a new employee; you just tell them to watch that video, and that's how they go do the process. I think even Mike Michalowicz talked about this in his book, "Clockwork." Then you just put that person, whose ever using the video, as the person responsible for shooting a new video as [00:28:00] soon as the process changes. It's a quick way to keep your processes up to date. I think a lot of people have used Loom to do that ... Actually, of this list, I've heard of Camtasia, and Loom; that's it. The other eight, I'll have to go in and take a peek at. Blake Oliver: I also use a tool called Snagit; Snagit's another tool made by the people who make Camtasia, and it's for quick screen grabs. They don't have the same editing [00:28:30] features, but it lets you grab your screen, and send it to somebody. This was one of the ways that I really differentiated myself, as a bookkeeper, with my clients is when they had a complex question, they wanted to know how to do something. Instead of sending them an email, and telling them how to do it, or having to call them on the phone, and walk them through it, I would just record a quick video, showing them exactly how to do it, and I would send that to them.  They freaked out. They loved it, because then they could go back, and watch the video anytime. If [00:29:00] you have a firm, teaching your staff how to do this, it's great for, like you said, David, documenting internal processes, but it's also a really cool way to record personal videos for clients, whenever they have questions about how to do things. Loom is a great example of that. It's super-easy-  David Leary: How formal do you get with these? Blake Oliver: Well, not formal at all. I'd be like, "Oh, hey, David, I'm just responding to your email asking how do you deal with a loan [00:29:30] repayment on payroll. You gave an employee an advance, and now you wanna withhold that from their paycheck. I'm gonna go into Gusto, here, and you can see that I click on the employee, and then I go down to deductions, and I create it this way ... I'm like loan repayment; it's gonna be after tax ..." Then, that way they know how to do it every time. David Leary: Okay, got it, got it. It's okay to use video, professionally done, or really informal that you can scale it, and utilize in your firm. Blake Oliver: Yeah.  David Leary: That's the lesson here. Blake Oliver: Really, [00:30:00] really powerful. I think it goes to that whole idea of this is how we, as service providers, can differentiate ourselves in a world in which QuickBooks Live is coming. We need to figure out ways to be luxury service providers, not just people helping do compliance activities, because that whole compliance stuff, it's gonna ... The price is gonna go down on that; we aren't gonna wanna be doing that. If we can be the person who does these [00:30:30] really cool videos for our clients, that will set us apart, and people will wanna pay for that. That's all I got this week. David Leary: Cool. I just have one more article titled ... It has a very good click-bait title: "Tech companies should stop pretending AI won’t destroy jobs." This is the MIT Technology Review. Blake Oliver: Mm-hmm. Great magazine. David Leary: It's a little bit of a long read. The takeaway I got from it is, yes, [00:31:00] there's this disagreement between AI companies. At some level, they refuse to acknowledge that maybe people are going to lose jobs; or they have this other argument, which is like this, "Eh, we'll just supplement those people with a universal basic income." There's this almost convenient argument that's out there. I think the secret thing in this guy's article that is really the scary thing, and he doesn't actually ... He just provides the data, but he doesn't provide the conclusion, so this is me applying my own conclusion [00:31:30] to his article. He really compares about AI in China, and how China has a chance to win the whole AI game.  For one thing, they have more data. Then, the other thing, they have 2X the amount of people working on a AI stuff. Ultimately, you need data. Who has the most data is going to win AI. The ironic thing of this whole thing is what if AI eliminates all the tech jobs in the US, too? It's [00:32:00] not just the mundane jobs - customer-service-level jobs. What if a bunch of engineers that are working on AI are completely displaced because China wins? I think that's the really interesting thing, here, from a numbers standpoint. Right now it's 50/50 chance, going forward in the future, that we stay on top of the technology revolution with AI - we, as in the United States.  Blake Oliver: Wait, what's the ... The 50/50 number, that's whether or not we [00:32:30] win the AI race, or China wins it?  David Leary: Yes. Right now, it's ... He basically has three points. First, China has a huge army of young people coming into AI. It's basically doubled over the last decade. Second, they just have more data; that's just- there's more data. There's more people; there's more data being thrown around in the cloud; they have access to more data. Blake Oliver: I guess I just don't understand that link. Why is it that having more data makes you more likely to develop an AI faster? That's [00:33:00] like saying that I have more bricks, so I'm more likely to build a house, right?  David Leary: It's not that you can build it ... It's not that the more data builds it faster, it just makes your AI more robust, and the more robust it is, it can learn faster on its own. If you don't have data, how does your AI work, or learn?  Blake Oliver: I don't know. I don't know anything about actually how AI gets built. David Leary: If nobody went to Amazon, and bought deodorant, Amazon [00:33:30] would not have any data to be able to say people who bought this deodorant also bought this toothbrush.  Blake Oliver: Right. David Leary: They can do that because they have data. Regardless of how genius their AI scientists could've been to put together the deodorant, and the toothbrush, if they don't have the data, they can't say that. That's what his argument is: you really have to have this tremendous amounts of data. Then, his third argument really is the whole Chinese companies, specifically AI companies, have kinda passed what he calls the 'copycat phase.' [00:34:00] 15 years ago the startup scene in China was just copying every product that was made in the US, and now, they've matured to a point where they're just building their own cool stuff; they're not really copying, knocking off whatever product is successful in America next. Blake Oliver: I really like what he says at the end. He talks about those who deny that AI has any downside, which is most of the tech community. Most people who are developing AI don't want to admit that there is a likelihood that it will automate a significant percentage of the work that [00:34:30] we're doing now, and that it's ... Even if new jobs are created, it's gonna be hugely disruptive to the people who lose their jobs to AIs. He says at the end, "These changes are coming, and we need to tell the truth, and the whole truth. We need to find the jobs that AI can't do, and train people to do them. We need to reinvent education. These will be the best of times, and the worst of times. If we act rationally, and quickly, we can bask in what's best, rather than wallow in what's worst." I think that's great. I just don't have any confidence [00:35:00] that at least the United States will figure out how to reinvent education quickly enough to catch up with the change that is coming. I think we're in for a huge social disruption, once AI gets good. Right now, we're in the world of sort of crappy AI. Siri, on your IOS device, can't really do all that much. You have to be very explicit. As soon as we pass across that barrier [00:35:30] where the AI gets good enough to answer most of our requests, to be able to do a lot of basic work without a ton of guidance, which we're almost there ... How many millions of truck drivers do we have in this country? We've been talking about self-driving trucks for a long time. It will eventually happen. It'll get there. David Leary: I don't think we know what the world's gonna look like 50 years from now, or even going back 30 years from now ... You and I have jobs that didn't exist;  when we were in high school, they didn't exist. There was no such thing as a web programmer. [00:36:00] These things did not exist. If you really look back at the history of ... There was a time in United States, when 90 percent of every single person in the country was farming, and now, hardly anybody farms. There wasn't this chaos, and breakdown, and collapse of society. I think-  Blake Oliver: Well, it was pretty disruptive. There was a lot of ... I'd have to go back, and remember my US history classes, but the Industrial Revolution [00:36:30] was not exactly a peaceful time to be alive. David Leary: Yeah, it was ugly. It was hard. Yeah, I agree ... Blake Oliver: The cities were disgusting. That's where we got all these cholera epidemics. That's what we need to realize is that we are on the brink of ... You've talked about this before, David - the fourth Industrial Revolution, right? David Leary: Mm-hmm.  Blake Oliver: Where, like you said, we're gonna go from ... We went from a primarily agrarian economy to an industrial economy, and now, we're going from an industrial [00:37:00] economy to whatever is next, and- David Leary: I think that's the proper take on this is I don't think any of us really know what's next. Blake Oliver: No, but we're definitely not prepared for it. That's for sure. I mean, you look at the state of education, and, I don't know, maybe it's changed a little bit. My son is only four, so I haven't seen what public education looks like in the elementary-school setting just quite yet. I will, but I'm betting it's not that much different than the education that I received. I went to public schools in [00:37:30] California, and it was not designed in any way to prepare me for this economy that we're in now. I had to ... I've spent more time teaching myself how to do stuff than I ever learned in school.  David Leary: Well, I think in the new economy, there's gonna ... My kids wanna be YouTube stars. Everybody and their brother wants to be a podcaster, now. This is the new jobs: Instagram star, podcaster, YouTube star. That'll be the new jobs, and you and I-. Blake Oliver: Not everybody can be an Instagram [00:38:00] model. That's the problem. There just aren't enough. David Leary: That's why we have to go into podcasting. Blake Oliver: Yeah, exactly. David Leary: Perfect. I think, on that note, if people really wanna find out about podcasting, or wanna connect with us about our podcast, what's probably the best way? Blake Oliver: Well, they can reach me on Twitter. I'm @BlakeTOliver. How about you, David? David Leary: I'm @DavidLeary, and you can also ... Cloud Accounting Podcast is now on all the socials. We're not on Instagram, but we are on LinkedIn, Twitter, and [00:38:30] Facebook, so, if you find us, like us. We'd love that. Blake Oliver: Stay in touch, and write us a review on iTunes, and we will read it on our upcoming episodes. We really appreciate that. It's a great way to help other people discover the podcast, because that's how Apple decides whether or not to show The Cloud Accounting Podcast to somebody who might be interested in it. Really appreciate that. Thank you everybody who wrote reviews, and we hope that they keep coming.  David Leary: Awesome. See everybody later. [00:39:00] Blake Oliver: Thanks, David. Bye.  
  6. SponsorXero: http://cloudaccountingpodcast.promo/joinxero Show Notes01:21 -- We got some more reviews! Leave us a review on iTunes and we’ll read it on the air. 02:33 -- Scroll to the comments of this review on The College Investor for some pretty scathing reviews of Visor, the $99 tax prep service we covered in the last episode of the Cloud Accounting Podcast (they did not have a good busy season). 03:15 -- Ryan Lazanis says that the only way traditional accounting firms can compete with accounting startups like Visor, Pilot, Bench, and Botkeeper is personalized service.  05:30 -- According to a stat published in the Journal of Accountancy, only 60-70% of small firms (under $1 million in revenue) accept credit cards as a form of payment. 06:31 -- Here’s a story about a CPA who has partnered with other professionals to act as the single point of contact for all his client’s financial needs. It's a great example of how accountants can create plenty of value beyond compliance, which will become increasingly automated over the next decade. 09:31 -- Henry Bloch, the ‘H’ in H&R Block, died at 96. 11:44 -- Intuit appears to be marketing QuickBooks Live to clients of ProAdvisors. 19:24 -- Here’s why there won't be an Uber for Bookkeeping — at least that’s what Blake thought three years ago. Has QuickBooks Live changed that? 21:49 -- Jordyn Dahl, News Editor at LinkedIn, posted about the QuickBooks Advanced Rate Limits. The quantity of comments suggests this is a big deal. 22:32 -- Businesses that invoice via QuickBooks Payments can receive next-day funding for both credit card and ACH transactions. It’s only available to QuickBooks Online and GoPayment customers for now. It costs 1% (max $10) per transaction. Next day is also available for credit cards, with no additional fee. 25:19 -- Intuit sees uptick in TurboTax sales this year. Intuit reported a 5 percent increase in TurboTax units sold this tax season compared to last year, thanks to a 7 percent increase in TurboTax Online sales. Intuit CFO Michelle Clatterback said the company’s consumer group now expects full-year fiscal 2019 revenue growth to be about 10 percent, at the high end of its previous guidance range of 9 to 10 percent. It will be reporting its quarterly earnings on May 23. 26:33 -- Here are the top 10 cities for accountants. A study by AdvisorSmith analyzed 399 small, midsized and large cities across the country based on accounting salary and job availability statistics from the Bureau of Labor, and on the local cost of living from Sperling’s BestPlaces. 28:04 -- The Desktop Accounting Podcast is headed your way soon! 28:55 -- Here are three ways to charge $25K to your customers, courtesy of Greg Kyte. 32:15 -- Listen to “I’m not a Robot” on Planet Money to learn how scammers are paying humans to defeat CAPTCHA. 33:28 -- Slack is bridging email to chat, improving calendar integration and search. 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.TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Xero. As a listener of this podcast, you are probably keen on getting industry insights, staying ahead of leading technology, and boosting your network. Well, I have some good news for you. This June, at Xerocon 2019, Xero will bring together hundreds of tech-savvy, future-minded professionals just like yourself from across the Americas, and the entire globe. Come join Blake, myself, and this collaborative community in action, June 18th and 19th, in San Diego. To receive a special discounted ticket to Xerocon 2019 in San Diego, head over to CloudAccountingPodcast.promo/Xerocon. That is Cloud Accounting Podcast dot promo forward slash X E R O C O N. Book your Xerocon ticket today, and we'll see you in San Diego. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: I don't know about you, David, but it has been a crazy week for me. We did three webinars Tuesday. Actually, [00:01:00] no, it was two webinars, and one in-person event. Tuesday, I was downtown LA, and then we did two webinars, and I've got two more next week, so, I'm ready for the weekend. David Leary: Yeah, I feel like we just, two hours ago, recorded last Friday's podcast. I don't know what happened to the week, but we're back at it, and we're recording another episode. Blake Oliver: Yeah, I'm excited to hear ... I'm excited to do some follow-up on those stories from last week. What is- David Leary: We do have some follow-up, but we also got two reviews; we got two amazing reviews.  Blake Oliver: Oh, got it. Okay, let's [00:01:30] hear the reviews. David Leary: All right. One was from Canada. "Don't miss this podcast!" Five stars ... "Any accounting firm wanting to keep up with the ins and outs of the cloud-accounting industry must [capital S] subscribe to this awesome podcast. David, and Blake do a great job of educating, and entertaining." I don't have a name on that one, unfortunately, but it is from Canada. Did you wanna read the other one?  Blake Oliver: This is Double Jazz Hands. Five stars ... "Blake, and David approach today's modern accounting news, and trends like two kids in a candy store. As they [00:02:00] gleefully bounce from one side of the podcast room to the other, you can tell how excited they are to share the next bit of news, however good or bad, to the rest of us, waiting with bated breath. These modern-day green-visored Holmes-and-Watson investigative duo are awesome at what they do, helping to advance the conversation of cloud accounting, with all its complex layers. Three cheers to The Cloud Accounting Podcast!" Will Lopez@AdvisorFi.  David Leary: Wow, thanks, Will. That's-  Blake Oliver: That's almost poetic. David Leary: I'm not sure Blake read it with the enthusiasm that it comes through, when you read [00:02:30] it. Pretty amazing. Thank you so much, Will. We appreciate that. Let's jump in. Blake Oliver: Yeah. David Leary: Quick update from last week. Everybody knows about the Visor story, last week. After the fact, I did stumble upon a website called TheCollegeInvestor.com. That website had a review of Visor's tax software, but then, in the comments are all the real reviews from all the users. Even as of April 25th, so this is yesterday, somebody left to review; says, "Agreed, Visor's horrible. They prepared my taxes incorrectly, and they took [00:03:00] forever to respond to my request to fix the problem. I now need to return money back to the state. I wouldn't  use this service again, even if they paid me." It's a similar story ... I actually think the reviews on here are worse than it was on Twitter, because people have more space to write. Blake Oliver: I've got a follow-on to that story, as well. I don't know if you spotted this, but Ryan Lazanis wrote a great article on his blog, FutureFirm.co? David Leary: I have it open in my tab. I have the same article. Perfect. Blake Oliver: He [00:03:30] does a really good job of summarizing the model and threat of accounting-tech startups, and the existential threat they pose to the traditional accounting firms. I'm gonna skip through all of that, because we've kind of talked about that; how the app-based interface with your accountant potentially could be disruptive to the industry. Obviously, people want it. That's why they were signing up in droves for Visor. Now, as to whether or not they can deliver it, that's a different question. Let's assume that, eventually, somebody figures out how to do it, whether [00:04:00] it's Intuit with QuickBooks Live, or it's Visor with tax, or any these other modern accounting-tech startups, right? They're gonna figure it out.  Then, Ryan says, "Well, how can we compete with that, as traditional firms? We can't compete on price. We can't necessarily even compete on tech. What we can compete on is personalized service, and that means getting to know your clients so well that it feels almost like advisory service, even if that's not necessarily what you would think of yourself as doing. Get [00:04:30] to know them well enough, where you're creating value." I like that. That seemed a very simple, excellent way to differentiate yourself, and it's something that an app-based company just is not gonna be able to do, because they're going after a volume play. David Leary: Somebody wants to be the McDonald's of this, and you can't be the McDonald's, so you're gonna have to be a nice restaurant, your neighborhood diner that people are loyal to, because you provide that personalized service. What I liked about his article is he really compares the ... He [00:05:00] makes the argument that these startups are doing the 100-percent opposite of what the traditional firms have done for the last 60 years. Who knows if it's gonna work or not? Blake Oliver: Right.  David Leary: But they are doing the exact opposite. It's almost like that George Costanza ... You know, when George Costanza's on Seinfeld, then he- Blake Oliver: His philosophy? David Leary: Yeah, he's just like, "I'm gonna be the Anti-George, and whatever my gut tells me, I'm gonna do the opposite." That's what these guys are betting on. They're betting ...  Blake Oliver: Right. David Leary: Which tells you what they think about the existing industry. Blake Oliver: Yeah, there's a lot of problems with the way it's done [00:05:30] now. I saw a stat in the Journal of Accountancy that something like 60 to 70 percent - well, in some cases, 80 percent - accept credit cards as a form of payment. The firms under $1 million, it's somewhere between 60 and 70 percent of firms accept credit cards today. That, to me, is anti-consumer. It's anti-customer. People want to pay with credit cards, and you don't let them? Am I crazy, David?  David Leary: I [00:06:00] think that's this stereotype of firms, and accountants being cheap, and they don't want that extra two percent being taken away from them by the credit card fees. Blake Oliver: It comes back to in terms of customer satisfaction, and then, they buy more from you. To imagine the accounting profession catching up  ... The ones who are not taking credit cards right now, there's just no way they're gonna catch up. They haven't seen the light, and they won't. Hopefully, those who do, will. I have another story related [00:06:30] to this. Along the lines of Ryan's argument, there was a article on the AICPA blog, "Your tax practice could be on the edge of greatness. Push." It's a story about a CPA who partnered with other professionals to act as the single point of contact for all of his clients' financial needs. It's a really great example of how accountants can create more value beyond compliance. It fits in with Ryan's argument that accountants and bookkeepers have to swim upstream, if they wanna survive, because [00:07:00] all that easy work is going to be automated; is going to be handled by apps, and the VC money is gonna pour in there, because that's the volume play, but, there's no way they're ever gonna be almost like a business manager, which is what this article talks about. The example is really good. The author's father-in-law passed away, and mother-in-law moved in with his wife, and daughter, and himself. Then she was diagnosed with cancer, and then a few years after that, she [00:07:30] passed away. Then, his wife was the executor, which is a huge job, but the CPA, their family CPA, took on that role of coordinating with the lawyer, the investment advisor. Set everything in motion and held the author's wife's hand through the whole thing. That, to them, was amazing. David Leary: It's almost like a even further step, because I know a lot of accountants, and bookkeepers are kind of, to some extent, the technology advisors of a small business, right? "Hey, use these apps. Get [00:08:00] Microsoft Office ... Blah, blah, blah ... We're gonna get you all set up." How about I just advise you in all parts of your business.? I've got a lawyer that I can recommend. I have a website builder that I can recommend ... You're bringing a full suite, just not a tech suite, anymore. Blake Oliver: Yeah, and personal financial planning is part of that. Retirement planning. This actually really reminds me a lot of business management in Los Angeles, which is kind of its own unique space in the accounting world that not a lot of people know about, because it's limited to celebrities, [00:08:30] and athletes, and whatnot. The only time you hear about is when these business managers steal money is when you hear about it; but most of them are really great, and they don't do that. I worked in a firm that had a very large business-management division, because we were right there in Santa Monica, right?  David Leary: Yep.  Blake Oliver: What a business manager does is they're basically an accountant who handles your taxes, and everything else financial in your entire life. They're almost like a fixer - financial fixer. They'll help you buy a house. If you want a new car, just call them up; they'll go figure it out. They'll do everything. [00:09:00] David Leary: It's full service. Blake Oliver: Full service, and they take as much as five percent to do that, right? There is a opportunity now, with tech, to bring that level of service - maybe not quite that level, but some aspects of it - to accounting, and be a family office, or business manager lite, something like that. David Leary: Well, I know it'd be a great experience. Think of your client. If you made your clients feel like movie stars, that would be huge. Blake Oliver: Yeah. David Leary: I have an article that ties back to the same vein of [00:09:30] this whole thing. Essentially half of all VC money goes to Google, Amazon, like hosting Google ads, and then Facebook, all these ads. If you really think about all those companies we talked about - the Botkeepers, and the Pilots, and ScaleFactors, and all those people taking that VC money - a lot of that's going into ads ...  Even, we talked about Visor last week - ads, Instagram models. It's all marketing. Some news that happened last week is Henry Block - he's one of the [00:10:00] founders of H&R Block - he died Tuesday at age 96. Wall Street Journal has a good long-read article about his life. He actually started collecting Impressionist art. The second part of the article is like full circle to what we're essentially talking about now. Him and his younger brother had a struggling bookkeeping firm. They weren't making strides. This is in the mid-1950s-. Blake Oliver: They were in Kansas City, Missouri? David Leary: Kansas City, Missouri. They actually saw their tax-prep part of their business as [00:10:30] a headache, and they were gonna eliminate it entirely, but, one client of theirs, who was an ad salesman, suggested they should run some ads offering to do people's personal taxes for just five bucks. It created such volume of turn- of business, they changed, and pivoted to only focus on tax returns. It's the same game that's happening now, with these new tech companies. They're advertising the hell out of something, and they're basically trying to be the next H&R Block, just different, right? [00:11:00] Blake Oliver: Right. David Leary: Instead of having 12,000 franchises in hard stores, they're gonna be all virtual, and they'll have-. Blake Oliver: An app. David Leary: -12,000 people downloading their apps. Exactly, but I read it in this article ... It's the exact same thing happening, it's just from the 1950s. Blake Oliver: History repeats itself. David Leary: Yes. Yes. Yes. Blake Oliver: Wow.  David Leary: It's worth checking out ... All of us should just pause. Even though H&R Block might be struggling in the grand scheme of things, but it's worth reading about the article, and knowing it's a huge [00:11:30] part of the history of where we're at in this space. Blake Oliver: What's gonna be exciting is watching whoever becomes the next H, in the next version of H&R Block, whatever that is. That's obviously where all this money is going, to be the next H&R Block.  David Leary: There's no doubt that's what this is. Blake Oliver: I think we've beat around the bush enough, David. It's time to talk about QuickBooks. It's time to talk about QuickBooks Live.  David Leary: QuickBooks Live, the story that just keeps giving. Blake Oliver: The drama that doesn't seem to end on Facebook, in these groups. David Leary: The gist of the story [00:12:00] is, if you go back to ... We've talked about this in the podcast, in previous podcasts, and Intuit even had that blog post out about ... It was last month. They really went out, and proactively communicated about QuickBooks Live. The message has been, "We're not going to market QuickBooks Live to any small-business owners that have accountants or connected ProAdvisors. Blake Oliver: Right, and as a reminder/refresher, QuickBooks Live is the new assisted-bookkeeping service that Intuit is testing. Customers will be able to [00:12:30] access inside of QuickBooks, very similar to TurboTax Live, where you can have an EA,  or a CPA help you with your taxes. That's the idea for QuickBooks Live. This was naturally concerning to accounting professionals, and that's been what everybody's been talking about, but Intuit promised they wouldn't be marketing to businesses that were connected to an accountant, right?  David Leary: Correct. So what happened was somebody on multiple... I think it was the same person on multiple Facebook groups put up a screenshot, and this screenshot essentially [00:13:00] showed Live Bookkeeping, which, basically, it was an ad for QuickBooks Live, inside of QuickBooks Online, of their clients file. Obviously, people's heads exploded. The huge chain went on, and on, and on. I was a little skeptical because, for me, I didn't totally believe it, because my take was that screenshot, the way it was taken, you couldn't tell for sure; you couldn't verify for sure [00:13:30] that that QBO file was connected to an accountant. Blake Oliver: Right. David Leary: I actually asked to see the other screenshot, and then, actually, somebody else sent us a private message, so I actually have seen the screenshots. The reason I was skeptical before is because in QuickBooks Online, there's a tab called My Accountant. It uses an 'if' statement: if you're not a connected to an accountant, it shows you a screen with an email field that says, "Put in your accountant's email address, so you can be connected with your accountant." The rest of that 'if' statement is if [00:14:00] you are connected with an accountant, it'll show who your accountant is at the top, and then give you a place to communicate with your accountant, and share documents, et cetera. Blake Oliver: Right. David Leary: I was like, "There's no way ... " Intuit already, or QuickBooks, and Intuit already has the logic to know who is connected, or not connected to an accountant. It's built into QBO. My initial gut reaction was there's no way possible Intuit launched this little ad for Live Bookkeeping, for QuickBooks Live, without doing that same [00:14:30] check. I was very, very skeptical of this thread. It had 85-90 messages in it, and this screenshot. Finally, somebody sent me the screenshot, and my jaw kinda hit the floor. Absolutely, QuickBooks Live Bookkeeping is appearing in a file connected to an accountant. Confirmed.  Blake Oliver: How is that happening? Why is that happening? Intuit said they wouldn't do that. David Leary: Some people think they did it on purpose. I saw some comments like that. I don't necessarily know it's [00:15:00] on purpose. I think it's going too fast; not sanity-checking. Nobody's stepping back, and being like, "Hey, let's be very careful, because there's been a lot of talk about QuickBooks Live, and it's been very sensitive for the last three months.". Blake Oliver: Right.  David Leary: Where's the check of, like, let's pause ... Before we put that ad in QuickBooks Online, let's make sure it's working properly. I'm just very, very shocked that it appears like this. I am shocked, and I actually feel bad for Kim from Intuit's PR, Kim Asbaugh, and the [00:15:30] communications team, because every time this story dies down for a week, something else happens that they have to go out, and do damage control, because this is not good. Blake Oliver: Well, there was another post that I spotted. An accountant received an email from a prospective client, so, not a not a customer yet, or not a client yet,  saying, "I have decided to go with bookkeeping services offered by QuickBooks Online directly through their website. Therefore, please cancel our scheduled appointment. [00:16:00] I'm sorry about this. I appreciate your time." In this instance, it was a prospect of a ProAdvisor who saw the QuickBooks Live advertising and decided to go with that instead. That's not anything that Intuit has promised not to do. There's no way to hide, to know the intent, or whether or not somebody is looking at a ProAdvisor as a potential service provider. My argument has always been that, no matter what [00:16:30] Intuit promises, or tries to do to segment its marketing, it's not possible, and that prospects, and existing customers of ProAdvisors are going to find out about QuickBooks Live, and they are going to decide whether or not to use a ProAdvisor's services and compare them to QuickBooks Live. Which opens up all those questions about is the pricing going to set an expectation, and hurt the ability of ProAdvisors to charge higher fees? Is it gonna still take business away from them? I think, yes, [00:17:00] ultimately ... The whole point of QuickBooks Live is to grow their subscriptions with services. There's no way they're only going to be able to get people who aren't working with a ProAdvisor, or never intended to. It's just not possible. David Leary: This is the nightmare everybody foresaw weeks ago. "I can see it now. I'm gonna get an email from my client, saying they're gonna ... They want the price of QuickBooks Live, or they wanna just switch to QuickBooks Live. Blake Oliver: Yeah.  David Leary: Right, and now, somebody had an email like that. They posted it on Facebook. Everybody loses their mind. The ad showing [00:17:30] up in QuickBooks Online, people are gonna be upset. It all makes sense now. Intuit's also trying to figure out, from the pricing ... I believe they're really trying to figure out how do they do this, so they can employ ... "Employ's" kind of a loose term. Connect; play that middleman, Uber-style, right?  They'd play the middleman between the current ProAdvisors, and small-business owners. It just feels rough how this is being tested at Intuit. Maybe this is one of those ... It has to be rough. The Band-Aid's just gotta get ripped off, and everybody's [00:18:00] gonna get over it. Six months from now, it'll be like, "Yeah, that was no big deal." I don't know, but it's shocking. I was shocked, myself, that this showed up like this, after they kinda have been promising they wouldn't do it. Blake Oliver: My feeling is that this is not going to be a Band-Aid that gets ripped off. This is not gonna smooth over. This is permanently changing the relationship of ProAdvisors, and Intuit, forever. It's-  David Leary: You blogged about that 12 weeks ago. Blake Oliver: Yeah, and you can see it in the commentary. People are very upset about this, who [00:18:30] have been very loyal for a long time, and are talking about switching to Sage, switching to Xero, switching to Accounting Suite; looking for other options, because they don't wanna be partners with a company that's offering a competing service. David Leary: I still subscribe ... I don't even know switching is the answer, because I really, truly believe that - based on your article, and the success of TurboTax Live, and the demands of being a public company, and The Street, and Wall Street's demands, and [00:19:00] shareholders demands - that the other players - Xero, Sage, et cetera - are gonna have to do the same thing, because they're gonna have pressure from The Street. There's no way, if they're charging $39 for a subscription, and then, all the sudden, Intuit's getting $199 a month for a subscription, those other shareholders, or investors are gonna be like, "That's okay, just leave 150 bucks a month on the table; don't go chase it." They're going to have to do the same thing. There's no doubt. Blake Oliver: Well, I'm not convinced that Intuit will actually be able to succeed with this service. I [00:19:30] previously wrote an article called, "Why There Won't be an Uber for Bookkeeping," that I posted on LinkedIn; that was a few years ago. I'm gonna go back and read that again. It's really, really hard to scale a services business for small-business owners. It's hard enough to make software for them, right? To actually-. David Leary: Visor was an example, last week. Blake Oliver: Yeah, Visor completely, and miserably failed to scale their service operation for tax season, which is what they're ... That's their one job, right? You had one job to [00:20:00] do. We'll see. Here's the risk of QuickBooks Live for Intuit: it's that they're pissing off their ProAdvisor community, which has been so good to them, for so long, in helping them obtain market share, and gain mindshare among business owners. Yet, there's no guarantee they'll even be able to scale QuickBooks Live enough to make up for that. The damage that they do, if they fail, is potentially humongous. David Leary: It's a huge gamble. Blake Oliver: It's also giving Xero an inroad into [00:20:30] the United States that is, thus far ... The beachhead for Xero is very tiny, still, and this is giving them that opportunity to win hearts and minds of former- David Leary: That's correct ... I don't think, if I look back at the last ... Xero's probably been in the States now, what, seven to 10 years? Maybe a full decade now?  Blake Oliver: Yeah, I think maybe-. David Leary: But there hasn't been a crack in the dam. They can't penetrate anything. There's not a leak. Now, there's kind of a leak. Blake Oliver: Yeah, because people have been so happy with where they are, so, why [00:21:00] switch? Now, this is the opportunity. This is the crack, and I think if different software companies take advantage of it, they can get in, and they can start chipping away at that wall, and the dam will break. David Leary: I don't know. That's tough.  Blake Oliver: I actually think that would be good for everyone, if there was more diversity, and if there were more firms using different products, because that would increase development, and would ... It's always good to have multiple players in the market. 80-, 90-percent market share is not a good thing for the customer. [00:21:30] David Leary: You also  have to look at Intuit's point of view on this, right? There's six other startups that all took VC money that are coming after the same customers. At some other level, you can't blame Intuit at all, because they gotta do things like this to survive in the future. They've got people clawing at them, right?  Blake Oliver: Yeah, but, I understand there is this impetus, because you need to make profit; you've gotta do something new, but sometimes, doing something new isn't always the right thing. David Leary: That's true.. Blake Oliver: You can see this with the new QuickBooks Online Advanced limits. [00:22:00] I saw a post last week, from Jordyn Dahl, on LinkedIn. She's a news editor on LinkedIn, and she did a long post summarizing the QuickBooks Online Advanced limits, the new limits. She's not an accountant; she's not in the accounting world. She's talking to business owners, right?  David Leary: I know. A bunch of people outside of our little closet are talking about this, yep. Blake Oliver: She got a hundred comments on this post, a hundred comments, which, to me, indicates that there's [00:22:30] a lot of people worked up about it. David Leary: Yeah, and it's sad, because it offset some good news from Intuit this week [cross talk]  Blake Oliver: Oh, yeah, we have some good news about Intuit. I'm actually glad that we do. Let's talk about that. David Leary: Two things that were big. One is they enabled one-day ACH. If I need to pay ... I'm a small-business owner, and I need to be paid, I will get that money in my bank account the next day- Blake Oliver: That's exciting. David Leary: -which is huge, because they added some stats in here that 44 percent of small-business owners are reporting they're not paid on time ... That [00:23:00] barrier of not getting cash in their accounts causes them to have insufficient funds to pay somebody else. This just- it really ripples across. The interesting thing, though, in this survey that Intuit put out is 66 percent ... I'm sorry, 160 ... 60 percent of small-business owners surveyed said they're still paid by check, particularly when the payment value is high. That's a lot of checks still being passed through the [cross talk] still.  Blake Oliver: Well, it's because ACH has been so slow; two days, right? Now, I [00:23:30] was looking into this, because I had the same article on my list this week, and I was curious to know whether or not this change was due to the new same-day ACH rules that NACHA, the organization that governs ACH, has been moving forward on. I actually found out, after doing a bunch of research, that it doesn't, because the way that QuickBooks payments works with ACH is these are [00:24:00] debit payments - I'm requesting to take money out of your account.  That has not been sped up by the new same-day ACH trials, because there still needs to be a two-day window, in which a account holder can contest a debit, since they didn't initiate it. It turns out that it's not using the new technology, or the new processing windows. Intuit is financing this, so that's why they ... It was hard for me to find this, but that's why there's a [00:24:30] charge of one percent for this new service. It's one percent of the transaction, with a max of $10 per transaction. David Leary: Yeah, and I think I remember, if we go back to QuickBooks Connect, when they announced next-day payments, and same-day payroll ... They announced three different instant-payment things. I think that's correct. They even mentioned that they're floating that difference. You can choose not to do next-day, and then, it's the standard ... It's either free, or it's 50 cents, or whatever that nominal fee is, or you can choose to [00:25:00] do next-day for a fee. I think I remember them saying that Intuit is footing this; floating the money for these transactions. Blake Oliver: Right. They're clearly hoping to make a lot of money, if they're taking one percent of everything, up to $1,000, and then, 10 percent per- $10 per transaction, after that.  David Leary: Intuit's TurboTax numbers have came out. Blake Oliver: Let's hear that. How'd they do?  David Leary: Their TurboTax numbers are up again. I think you even mentioned that last week, with the [00:25:30] amount of people not just doing online, right- or not using brick-and-mortar stores, right?  Blake Oliver: Yeah.  David Leary: TurboTax, obviously, is a huge benefactor in that. They had a five-percent increase in TurboTax units across the board, with a seven-percent increase in TurboTax Online. They saw a three-percent decrease in TurboTax Desktop. TurboTax just continues to roll forward, roll forward, roll forward. They've adjusted their guidance, so they'll be at the high end of their previous [00:26:00] guidance range of nine to 10 percent for revenue growth. The thing this article didn't have, and they did not release yet, which would be, I think, the most interesting is how did TurboTax Live do?  Blake Oliver: Right, but are they gonna break that out?  David Leary: That's gonna be the ... Well, they broke it out in the conference call, previously, right, last year?  Blake Oliver: The actual performance? I think they just said that they had really good growth. I don't know if they actually gave the numbers.  David Leary: Good, okay ... That'll be interesting, so tune back, May 23rd, because I think that those numbers we see for TurboTax Live [00:26:30] is going to tell a lot of the story of QuickBooks Live. Blake Oliver: Well, hey, I've got a story here from Accounting Today. This is kind of a fun one. "The Top 10 Cities for Accountants."  David Leary: I'm trying to think ... This is like, hey, if you wanna go and hang out with accountants, there's a bunch of them living there, or is this like top 10 cities where, if you're an accountant, you're gonna have a good quality of life?  Blake Oliver: It's not that there's a lot of accountants hanging out there. It's two factors. This is a study by AdvisorSmith. They analyzed 399 small, mid-sized,  and large cities across [00:27:00] the country, across the United States, based on accounting-salary, and job-availability statistics from the Bureau of Labor. How many accounting jobs are there, and what is the cost of living - balancing those two things.  You wanna be in a place that has lots of jobs, and good salaries, and local cost of living. Even if the salaries are lower, you might have lower cost of living, which makes up for it. I'll go through the list. 10 - Jefferson City, Missouri; 9 - Trenton, New Jersey; 8 - [00:27:30] Birmingham, Alabama; 7 - Denver; 6 - Dallas; 5 - Midland, Texas; 4 - Wilmington, Delaware; 3 - Houston; 2 - Parkersburg, West Virginia, and 1 - Springfield, Illinois. David Leary: Wow, no Boston on that list. For some reason, my brain always thought Boston had a huge accounting firm/Big Four presence, or something. Blake Oliver: I just think it's just too expensive. I liked seeing Denver on that list, because I love Denver. I could live in Denver. I don't know about [00:28:00] Dallas, or Houston. The humidity thing is a problem for me. What else do we got this week? Anything else, David? David Leary: I have one thing - a tweet - but I don't know if you have any news articles, before I talk about that tweet?  Blake Oliver: Well, how good is your tweet?  David Leary: It's super-super-breaking news. Blake Oliver: Oh, well, let's hear it. David Leary: There was somebody tweeted that there is, coming soon, the Desktop Accounting Podcast, believe it or not. Blake Oliver: Oh, wow. I've always wanted to listen to a Desktop Accounting Podcast. [00:28:30] I'm excited about that. Is this for real?  David Leary: Yes ... As far as I know, it's for real. This is not me. I didn't set this up; you didn't set this up. We didn't set this up as a gimmick, or anything like that. Some of the comments were a little bit funny. Somebody said that they were going to distribute it on CD-  Blake Oliver: I like that. David Leary: -which I thought was a little bit funny. Those of you who are open-minded, and you listen to The Cloud Accounting Podcast, but maybe you still have some clients on desktop, there might be a podcast for you to listen to, as well. Blake Oliver: Speaking of entertaining ways to spend your time, there's a great article from [00:29:00] Greg Kyte, on the Thriveal blog. It's called, "Three Ways to Charge $25,000 to Your Customers." I always love Greg's articles, because he makes it both entertaining, and educational. I'll give you the three ways. He uses some stories from his own experience. As a little bit of background, Greg is a corporate controller, so he outsources work; utilizes the work of an accounting firm. He interacts with that firm, and [00:29:30] he uses that experience to understand better, as a customer ... He talks about his experience as a customer of that firm and gives advice to accountants looking to sell to guys like him. David Leary: But he's an accountant, who's also a stand-up comedian. Blake Oliver: Yes, he's also stand-up comedian-  David Leary: Okay. You can't leave that out of his bio [cross talk]  Blake Oliver: I just figure everybody knows who Greg is, at this point. Here's the three ways. Way number one is, "I would gladly pay you $25,000, if you find [00:30:00] me $25,001 of tax savings." This has always amazed me ... If you're a tax firm, and you have tax experts, and you figure out how to save somebody a bundle of money, why are you charging them hourly for that? The ROI is easy to understand. If you save somebody $25,000, charge them some sort of percentage of that, or charge them a fee that expresses the value of that savings. Don't just charge them your hourly rate. That's a good one. In the article, the story was all about the qualified [00:30:30] business income deduction that was new this year, and the fee was way under what they coulda charged, he said, on an hourly basis. Number two, "I'll gladly pay you $25,000, if you create a retirement plan that will earn me butt tons of money." This had to do with a special type of retirement plan that Greg's employer could setup for him, so that he could invest in real-estate properties that the employer is invested in, and that helps out Greg personally. Your [00:31:00] customers will, even if they are not the actual customer, if the firm is the customer, the people working there will wanna pay you more, if you help them out, right? That's another example. Three is, "I'd gladly pay $25,000, if you help me automate to the point where I can fire an employee." That one's pretty easy these days. I think most of the listeners of the podcast would understand that one. A lot of us probably did that, or do that, where we say, "Outsource your AP automation, or outsource your AP work [00:31:30] to me. I'll use automation to do it, and you can get rid of that AP clerk you don't like very much."  It's funny the way he says it. Usually we try to sugar coat it by saying, "Oh, well, we'll help you re-purpose that person into a better role, where they can add more value to your organization," but, honestly, what're you gonna do? Most the time, you're just gonna let 'em go, right? That's an easy way to justify value-billing for technology initiatives with your customers. If you are gonna put in an AP system that allows them to reduce their staff, price it in terms [00:32:00] of how much of a staff reduction- how much they're gonna save on salaries. Don't do it hourly- David Leary: Yeah, frame it that way. Blake Oliver: Yeah, frame it that way. I like this article because it's actually an article about pricing and selling that is entertaining. Thank you, Greg, and go check it out. David Leary: I did listen to a good podcast that could be interesting for everybody. It's from Planet Money. It's called "I'm Not a Robot." It's the history of reCAPTCHA. Everybody's done that. You have to check-mark the box that says, "I'm not a robot," or you have to type in- Blake Oliver: I hate that thing.  David Leary: -the thing from the [00:32:30] book. This kinda gives you the history of it, so you understand why it exists, how it's evolved, and where, arguably, v3 is gonna be in the future. Blake Oliver: Wait, so, what is the podcast about?  David Leary: It's about reCAPTCHA, the history of it-  Blake Oliver: Oh, the history of it.  David Leary: The podcast title [cross talk]  Blake Oliver: -that sounds awful. Why would I wanna spend my time on that? Sell me on that.  David Leary: Here's what you'll like about it. There's farms of people that can be hired by spammers to click the box that says, "I'm not a robot.". Blake Oliver: Oh, [00:33:00] God ... David Leary: There's human-powered automation in clicking through that message. Blake Oliver: Right. David Leary: Maybe that would be a reason for you to listen to it. Blake Oliver: Maybe that's the job I can get, once my job has been automated, is I can click ... I can help the robot; my new employer, which will be a robot, I can help it get through the reCAPTCHA, because it won't be able to do so, itself, you know? That's what we'll be doing?  David Leary: Apparently, yes. It's worth a listen. It's kinda cool. Blake Oliver: I've got one last story here- David Leary: Yeah. [00:33:30] Blake Oliver: -and this is gonna be music to the ears of any Slack users out there. If you're using the team-chat wunder-app Slack, you'll be so excited to learn that Slack has built a new bridge between its service, and email. In the coming months you'll be able to @ mention people in channels, or send them a direct message, and it will route those messages to their email inbox. These are people that aren't in your Slack, as users, but you still wanna be able to communicate with them. You can message [00:34:00] them like any other user. That message will go to them via email. They can respond to that email without having to go into Slack - they're not even in Slack - and those replies will come into your Slack, and the back-and-forth exchange will also transform into a full Slack history, if the person ever does join Slack.  David Leary: Congratulations, Slack you became email. Thank you. Blake Oliver: Well ...  David Leary: We can stop using it. It's done. It's over. I'll just switch back to email. What's the point? Blake Oliver: The reason I think this is awesome is because there are lots of accounting firms that are starting to use [00:34:30] Slack to communicate with clients. I did this, too. I had ... Some of my clients, I was able to get communicating with me in Slack, but, half, I couldn't. They just wanted to stick with email. I ended up ultimately abandoning Slack, because I didn't wanna have two different places for them to contact me. Why this is great is because now, if I am running a firm, I can work with all of those users, in Slack, or not, all from Slack. Slack is almost becoming good enough to use as a practice-management-communication tool. I [00:35:00] think this is gonna give all the apps, like Carbon, and Client Hub, and - what's the other ones, the communication apps for accountants - a run for their money, because, why wouldn't I just do it in Slack?  David Leary: Now, isn't there some risk to this? What I mean by that is, in theory, Slack is secure, right?  Blake Oliver: Uh-huh.  David Leary: As soon as you send that Slack message, and it goes out as an email, it's a postcard. I think you just have to be very aware of what you type in that message, because the [00:35:30] rest of the messages ... If you're used to everything being secure in Slack, and you've just been, I'm not saying careless, but because you're confident you're in a secured location, sharing secure information, if you type that into an external one, it becomes a postcard, as an email. You just have to be very, very ... It's the warning out there, for anybody who tries to do this. Blake Oliver: One of the security measures is that these email-only Slack users have to be added by an administrator, manually. You can't just had add somebody's email, and start communicating with them, because that would create a bunch [00:36:00] of security problems for a company. Hopefully, the administrators, whoever owns these Slack instances, will understand that risk. David Leary: Until people can Slack with us, what's the best way for them to get a hold of you? Blake Oliver: I'm on Twitter. I'm @BlakeTOliver, and how about you, David? David Leary: I'm @David Leary. Blake Oliver: Follow The Cloud Accounting Podcast on Facebook. You can also subscribe to our emails. Just go to CloudAccountingPodcast.com, click on the blue Subscribe banner at the top, put in your email address, and [00:36:30] you will get the show notes emailed to you the morning after an episode drops. That way, you've got all the links to all the articles right there in your email inbox, with all the time codes, so you can skip right to that story in the podcast, if you're really excited about it. Great way to follow up on anything that you found interesting in our show. David Leary: Then you get 'em instantly. The second Blake is done editing the podcast, the email goes out even faster than I can make the artwork. If you want the episodes faster than I get them from Blake, get on the email list. [00:37:00] Blake Oliver: Give us a review on iTunes, and we will read it on the air. We really appreciate those reviews. They're the number-one way that you can help us grow our audience. Really appreciate that. We're a Top 50 Business News podcast, David. It's really exciting- David Leary: Congratulations. Blake Oliver: Yeah, congratulations to you.  David Leary: We are beating Marijuana Daily, as of right now.  Blake Oliver: Help us get higher than Marijuana ... Daily Podcast, and climb the charts, and reach the accounting world that remains stuck [00:37:30] in the ways of desktop. Do not let the Desktop Accounting Podcast win. We have to grow our numbers. David Leary: All right. On that note, Blake, I'm out. Blake Oliver: Great talking, David. See you next week. David Leary: Bye, everybody. 
  7. SponsorXero: http://cloudaccountingpodcast.promo/joinxero Show Notes02:34 -- Blake crunches the numbers and figures that if Intuit meets its publicly stated goals, QuickBooks Live will likely be a $60 million per year accounting firm by 2020, putting it at 73 on Accounting Today’s Top 100 Accounting Firms list.  06:56 -- Sholto Macpherson asks, is QuickBooks Live a "Watershed moment or BAU?" — Twitter 10:02 -- Google’s Duplex Uses A.I. to Mimic Humans (Sometimes) — The New York Times — Google admitted that it’s AI still needs human help, but you’ve got to listen to a recording of a call from Google Duplex (a bot) to a restaurant to book a dinner reservation. 17:13 -- Roger, the accounting automation tool, raises $7.35M Series A — TechCrunch (Guess who is one of the investors? Dan Wernikoff, the former GM of QuickBooks and TurboTax.) 20:02 -- Firms lose cloud access after Cetrom systems breach — Journal of Accountancy — Centrom, a provider of cloud hosting to CPA firms, fell victim to an attack using similar malware to the one that caused the CCH outage. 21:23 -- In Baltimore and Beyond, a Stolen N.S.A. Tool Wreaks Havoc — The New York Times — The New York Times details how a leaked N.S.A. hacking tool might be responsible for the recent malware attacks on CCH, Centrom (a provider of cloud hosting to CPA firms) and the City of Baltimore. 25:53 -- Social engineering: Password in exchange for chocolate — ScienceDaily — A disturbing percentage of people will give out their password to strangers in exchange for little value. 29:38 -- Hands On: The Twin-Screen Asus ZenBook Pro Duo Is a Laptop From the 2020s — PC Magazine — With two built-in screens, David predicts this laptop could be the ideal computer for accountants and bookkeepers on the go. 32:04 -- When You Raise Prices More Than a Smidge ... They At Least Look At Another Vendor — SaaStr — The author cautions software companies that rase prices to dramatically. Meanwhile, David was hit by a 100%+ price increase on his QuickBooks subscription! 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? We have some open sponsorship dates available for the summer season. We also have some “conference special” sponsorship opportunities available, for example, the week of June 16 we’ll be doing 4 daily “conference crossover” episodes covering Scaling New Heights and Xerocon. For details and pricing, read the prospectus.SubscribeApple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Xero. Did you miss the Xero Roadshow when it came to your city? What if I told you you could still attend a Xero Roadshow event? On June 4, 5, or 6, you can attend the Xero Roadshow Online. That's right. You can attend a Roadshow event via your web browser. At the Xero Roadshow Online, you'll learn how your practice can benefit from the full power of the Xero platform, and even earn CPE credit. To register for free, head over to CloudAccountingPodcast.promo/xeroroadshow. That is Cloud Accounting Podcast dot promo forward slash X-E-R-O-R-O-A-D-S-H-O-W. Don't forget to register for Xerocon! Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: What's new, David?  David Leary: What's new? Short week, right?  Blake Oliver: Yeah. David Leary: I feel like there was not a lot of major-major-major-major [00:01:00] news. There was a event, though. QuickBooks Connect happened in Australia. Blake Oliver: Yes!  David Leary: It was in Melbourne, this time; not Sydney. Blake Oliver: We've got some news about QuickBooks Live, the gift that keeps on giving. It's coming to Australia. David Leary: Wow, so another new week, another major QuickBooks Live announcement. Yes, that's big. Blake Oliver: I really wanna touch on those numbers that we talked about last week, because it's been sitting with me, since Friday, how big this is, right?  David Leary: Could we pause you there, before [00:01:30] you get into how big it is? Could we get into ... We have two reviews that came in. Blake Oliver: Okay, yeah. What are the reviews?  David Leary: We got two reviews. I'll read this one. It's from Jazfun2. It's five stars. "'And now you know the rest of the story.' David and Blake, in true Paul Harvey style, show us the behind the scenes details of the topical headline stories from most media outlets. The insight and depth of knowledge is refreshing, and to hear a podcast where they can laugh at themselves, as well as the industry, makes the listening lively. In an industry fueled by technology - AI -Blockchain frenzy - [00:02:00] Blake and David give us honest perspective. Always waiting for the next one to drop so I can catch up. The Cloud Accounting Podcast is a must-listen if you really want a reality check on what's happening in the cloud." Blake Oliver: Awesome! David Leary: Thank you, Jazfun! Blake Oliver: That's Jan, right?  David Leary: I think so. Blake Oliver: Thanks, Jan. We got another review, as well. "Two great guys keeping you updated on relevant accounting stuff. What a great podcast; fine for staying up to date on all things accounting. I especially have appreciated the accounting-app news updates. Keep them coming. Your fan, MM." Thank you, MM!  David Leary: Absolutely. [00:02:30] All right, now you can give me your big numbers. Blake Oliver: All right. Sorry, yeah, I jumped the gun there. We were talking about QuickBooks Live last week, and the news that Rich Preece  announced on The QB Live Show that QB Live is expanding from the current 50 ProAdvisors to 500 ProAdvisors within about a year. Is that right, David? Did I get that right? David Leary: I think he mentioned like within the next nine months. Blake Oliver: Okay, within the next nine months- David Leary: Which is crazy-fast.  Blake Oliver: Yeah, that's the goal. These ProAdvisors, of course, are not gonna all be working in the Boise [00:03:00] office; they're gonna be distributed around the country, like TurboTax Live. Similar. David Leary: Well, specifically, they're gonna use ... The first 500 are gonna use existing TurboTax Live ProAdvisors, because they're set up, and ready to go. Blake Oliver: Got it. 500 ProAdvisors ... Rich Preece gave us some numbers about the number of customers they have. It looks like the ratio of ProAdvisor to customer is something around 22-23. Let's just call it 25. Let's say ProAdvisor on QB Live could [00:03:30] serve 25 customers. Each of these customers pays $400 per month. 500 times 25 is 12,500 QuickBooks Live customers paying $400 per month; that equals $5 million per month, which is $60 million per year in QuickBooks Live revenue. That would put QuickBooks Live at number 73 on the 2019 List of Top 100 Accounting Firms, according to Accounting Today, right behind SingerLewak, which has 10 [00:04:00] offices, 43 partners, and 305 total employees. David Leary: Okay, so just to be clear, last week ... Last week, two weeks ago, three weeks ago, a month ago, whatever, Intuit was not a bookkeeper, or an accounting firm. Blake Oliver: No. Software developer. David Leary: Now, they're becoming ... Now, they basically are becoming a bookkeeping firm, in a strange way. Blake Oliver: Yeah.  David Leary: Accounting firm ... They're going to be one of the biggest, instantly. Well, within nine months. Blake Oliver: Yeah, a Top 100 firm within nine months. David Leary: Wow ...  [00:04:30] Blake Oliver: They're not calling themselves an accounting firm, though, because it's a ...  I don't know exactly what they're describing it as; I don't really recall. It's kind of indefinite, but a platform to connect businesses, and ProAdvisors. Hey, isn't that what an accounting firm is, anyway? It's a brand that connects ... In most cases, it connects a business owner who needs services - tax, accounting, consulting - to a service provider, typically a partner in the firm, who, in a traditional firm, owns their own book of business. This is basically [00:05:00] the same concept [cross talk] David Leary: Right, same model, because if I have a firm, I have my own in-house ProAdvisors that I might be paying 40 bucks an hour to do the books for my clients. Blake Oliver: Yeah.  David Leary: Then I'm taking a piece of whatever I'm charging the client. Blake Oliver: Whatever they call it, I'm calling it an accounting firm. I think that's what it is. David Leary: I could agree with your point of view on that. Blake Oliver: Yeah, so-  David Leary: Even if it's a slightly number, cuz I think your estimate is going off of each ProAdvisor is handling 25 customers ... I think, right now, the current numbers they released - we talked about it last episode - it's [00:05:30] at about 19 to 20. Even with those numbers, it's probably gonna still be about a $50-million-a-year business. Where does that put them on the Top 100? Is it still Top 100? Blake Oliver: Oh, yeah, definitely in the Top 100. David Leary: Wow. So, just for fun, project this out, year two, and year three. Just quickly, off the top of your head, are they a Top-10 accounting firm in year two? Blake Oliver: Well, I just know to get up to the 50, you gotta to be over 100 million. Yeah, I could easily see Intuit becoming a Top-25 firm. [00:06:00] David Leary: Who does this disrupt, then? Is this disrupting the average ProAdvisor, or is this disrupting bigger firms that are trying to do 3,000, 5,000, 6,000 clients?  Blake Oliver: I don't think it's disrupting the big firms, because I don't think most of them are dealing with small clients like this. Their fees are coming from mid-sized businesses, large businesses [cross talk] It will undercut them in that they're not gonna be able to get a foothold in this space. What [00:06:30] it really is doing is taking all of these small ProAdvisors and aggregating them into what is essentially a large firm. That's what it seems like to me. David Leary: Got it.  Blake Oliver: It's disrupting the independent bookkeepers, for sure. I think it's gonna be very hard for independent bookkeepers to compete with QuickBooks Live, and small firms, small CPA firms, small EAs, just bookkeeping firms, competing. How do you compete with $400 a month for bookkeeping? This is why the discussion going on in Australia right now is [00:07:00] interesting.  You sent me a tweet from Sholto Macpherson, our friend over in Australia, asking ... He asked you, David, he said, "What is your take on QuickBooks Live? Is it a watershed moment, or business as usual? Will it replicate the impact of TurboTax Live?" Knowing what I know about the cost of labor in Australia, I feel like it's gonna be even harder for Australian bookkeepers to compete with QuickBooks Live, if it goes out there at the price of $400 [00:07:30] per month, US. Maybe I'm wrong. David Leary: Just to put some context on that, it looks like Sholto tweeted this during QuickBooks Connect, during one of the keynote talks. A futurist was on stage talking about disruption, and he just found it ironic that it was minutes after Intuit just talked about QuickBooks Live being launched in Australia. He feels like that's kinda gonna be disruptive to the people sitting in the audience. There's a little back and forth between Sholto, and Paul Messner about maybe this is not gonna [00:08:00] impact that audience, et cetera. When he asked me what my take is, I think one thing I would say Australians don't understand about QuickBooks Live is how successful TurboTax Live was. We talked about that last week on the podcast, right?  Blake Oliver: Right. David Leary: TurboTax Live might be the most successful TurboTax offering in 25 years. Call it a bundle; call it whatever you want, it's a way to sell TurboTax, and it's selling better than ever. The other thing I think they don't understand is the marketing machine of Intuit. Everywhere [00:08:30] you turned, you saw TurboTax Live. It was on all the Super Bowl commercials; it was on all the college football championship bowl games. For about a six-week period, you saw TurboTax Live everywhere. I don't think they understand the Intuit machine, and how those wheels get going, and it's gonna happen. Acting like this won't have an impact, I think, is very naïve. Blake Oliver: We'll find out. David Leary: Going to your comment as far as the cost of labor in Australia, and the pricing model [for that] ... In [00:09:00] a way, this could actually possibly disrupt Australia more. The logic on that is I think a lot of these firms in Australia, they're outsourcing a lot of labor already. Blake Oliver: Yeah.  David Leary: A lot of them are doing- they're using some sort of outsourced labor to run their firm. Now, in a way, this is competing directly with those. Blake Oliver: Right. David Leary: If you have a bookkeeping firm, and you're using outsourced labor to control, and keep your costs down, you probably actually have a bigger competitor against you now, than if you were just an independent ProAdvisor that actually [00:09:30] could say, "Hey, I'll take some of the work from QB Live."  This could actually disrupt Australia even more, and then-  Blake Oliver: Yeah, I think you have something there.  David Leary: Then, we were talking about, last week, how TurboTax Live is bringing in new customers. This could help Intuit get a stake in the ground in Australia, because this could get new people to use QuickBooks Online in Australia. We'll see, but there's a lotta discussion about whether ... Now the discussion on this is like ... Now that everybody understands, and believes it's coming, and know it's [00:10:00] coming, now, people are wondering, who's it gonna disrupt?  Blake Oliver: David, we haven't talked about bots in a while. I've got a bot story for you. Fake bots. David Leary: Fake bots? Okay.  Blake Oliver: Yes, and this is not some startup. This is a big company. This is a story in The New York Times about Google Duplex. Have we talked about Google Duplex on the podcast? I love using it as an example of AI.  David Leary: We may not have talked about it, but I'm familiar with it. I could maybe try to give an example. Blake Oliver: The big Google Duplex story was last [00:10:30] year, when Sundar Pichai, the CEO of Google, gave a demonstration of Google Duplex, which is the name they have for their AI voice assistant, calling a hair salon, and booking an appointment on behalf of a Google customer, all by itself. The audience was just blown away that this AI could call the hair salon, talk to a human being, deal with some unusual stuff that happened, in terms of the booking, and make the appointment. Some people were so [00:11:00] blown away; thought it was not real at all. It couldn't be real; it had to have been fake. David Leary: My understanding is that Google is also using the same technology to just call small businesses randomly, and say, "What are your hours this week?" or "What are your hours today?" That's how the update the Google searches. You know, when you search for a small business, and it shows the hours they're open?  Blake Oliver: Yep.  David Leary: Google's- apparently they're using this same robot to go and gather information about small businesses - their hours of operation, et cetera. Blake Oliver: Makes so much sense, right? This is the customer-facing [00:11:30] aspect of it they're experimenting with. You can actually use Google Duplex right now. If you download the Google Assistant on your IOS, or your Android device, you can ask it to make a dinner reservation for you, and it will call a local restaurant, and do it. The New York Times decided, "Hey, let's test this out. Let's see if it works." They did an experiment, and they made four bookings. Here's the rub. Out of four successful bookings with Duplex, only one [00:12:00] was done by a robot. Three were done by people. Google is using a call center to augment Google Duplex, and to help it when it fails. Does this is sound familiar, David? It's fake bots, or it's human-assisted bots. David Leary: It's the same story that was ran ... Was it Bloomberg who ran that three or four weeks ago, about Siri, and Amazon Echo, or about Alexa? Everybody's using [00:12:30] humans to help process some of this. Blake Oliver: Right, because the AI's impressive, but it still can't do everything. The New York Times reached out to Google, and asked  them, after they discovered that humans were assisting the AI, how many of the calls are actually being done by a human? Google said that about 25 percent of calls placed through Duplex start with a human, and that about 15 percent of those that began with an automated system had a human intervene at some point. Now, The New York Times in their testing, they only had- it [00:13:00] flipped. They had 75 percent of their four calls were actually done by a human, and only one of them was completed successfully by an AI, all by itself. This is a fake-bot story, but it's also amazing because they posted the recording of the AI, in its conversation with a restaurant owner - the one that worked; the 25-percent example, where the AI worked successfully - and it is super-impressive. I wanna play it for you. Do you wanna listen?  David Leary: Yeah, absolutely. Blake Oliver: You gotta hear this! Recording-Restaurant: Hello, [inaudible], may I help you? [00:13:30] Recording-Google AI: Hello? Recording-Restaurant: Hello. Recording-Google AI: Hi, I'm calling to make a reservation. I'm Google's automated booking service, so I'll record the call. Could I book a table for Tuesday, the 21st? Recording-Restaurant: Okay. Hello?  Recording-Google AI: I'd like to make a reservation for a client for Tuesday, the 21st. Recording-Restaurant: Okay, actually, how many people? [00:14:00] Recording-Google AI: It's for 10 people. Recording-Restaurant: 10 people. Okay, what time?  Recording-Google AI: At 7:00 p.m.. Recording-Restaurant: 7:00 p.m., okay.  Recording-Google AI: I need a table for 7:00 p.m.. Recording-Restaurant: Okay, 7:00 p.m., okay, and then-  Recording-Google AI: Yeah.  Recording-Restaurant: -are there any kids?  Recording-Google AI: I'm actually booking on behalf of a client, so, I'm not too sure. Recording-Restaurant: Not too sure? Okay, got it. Okay, so, please be on time. That's 7:00 p.m., on Tuesday, right? [00:14:30] Recording-Google AI: Yes.  Recording-Restaurant: Okay. I can put you in the reservation book, so, see you on Tuesday.  Recording-Google AI: Oh, would you like the client's name now?  Recording-Restaurant: Yes. Recording-Google AI: The first name is Kate. Recording-Restaurant: Okay, Kate. What is the last name?  Recording-Google AI: Last name Metz.  Recording-Restaurant: Metz? Okay. What [00:15:00] is the telephone number?  Blake Oliver: That was an AI. That was not a human being. David Leary: What's interesting about that ... I think short interactions like that are very predictable - how that conversation's gonna go. It's like scanning OCR in a business card. Very, very easy because once you figure out where the zip code is, you can work backwards, and there's the rest of the address. You look for a certain pattern. A reservation phone call's always gonna have some pattern to it, in general, that [00:15:30] they can do that. Blake Oliver: Yep.  David Leary: What I find really interesting is, at the same time, if you're gonna automate that from this side, if I'm a restaurant owner, and I'm using an app like OpenTable, when's OpenTable gonna have a bot answering those phone calls, and handle it? Why is that restaurant owner answering the phone, and talking to another bot? The bots could just talk to each other, and then you just show up for your reservation.  Blake Oliver: The bots talking to each other. That's funny. David Leary: It almost makes more sense for the restaurant owner to have a bot answering calls for taking in reservations. Blake Oliver: Well, I was out [00:16:00] looking at apartments, yesterday, and when I called one of the large corporate complexes, they told me that if I pressed one, they would text me, so that I didn't have to stay on the phone, and I could book my whole appointment that way. I pressed one, and I got a text message, and I was able to book the whole appointment via text-message exchange. It's possible that was all a completely automated system that was reading my responses and finding time in [00:16:30] the calendar; because, when I got to the leasing office, the guy who was sitting there at the desk had no idea that I, in particular, was coming in, and the appointment had been booked for him.  That could be a call center somewhere, so maybe human-assisted, maybe artificial intelligence, or a mix; it could be both. That's the thing that I think - the take-away from this story, and all the other coverage of bots that we have done - is that, right now, AI is getting really good, but it's still a mix of human, and machine, and it's really hard to know when. I [00:17:00] think it's important, as businesses, that we ask, and that we find out. Maybe as consumers, we don't care, but as businesses, accountants protecting people's data, we need to know when humans are looking at this stuff, and when it's not humans. David Leary: There's another product, it's called Roger AI. They are an accounting-automation tool that- they just raised $7.35 million. A couple of interesting things I think from this is who is part of the raise. Everybody, [00:17:30] remember Dan Wernikoff, the former GM of QuickBooks?  Blake Oliver: Ah, he's investing. David Leary: And TurboTax. He's investing. He's backed this Series A. This is a company out of Denmark. Now, they obviously did their round in San Francisco, so we know they have a San Francisco office. Looking at their website, looking at the product, it kind of feels like ... Obviously, I have not tried it. I haven't played with it, but it feels a little bit like a Zapier, or an If This Then That (IFTTT) type product, and a little bit like an AutoEntry, and a Bill.com, and some [00:18:00] Expensify- some OCR products. Then, you can build custom workflows on top of your accounting system, and integrations. Blake Oliver: Well, what does it do? Give me an example.  David Leary: Let's say I take a picture of a receipt. The receipt needs to be categorized and get into my QuickBooks. Maybe that receipt also needs to have three people approve it before it gets billed to a customer for some job, I don't know. Blake Oliver: Mm-hmm.  David Leary: You can automate all these processes, and then maybe it kicks it over to Slack, and then, somebody in Slack can say, "Yes, approve that." I think it's [00:18:30] still pretty rudimentary. They don't integrate with many things as of yet. It's like Dropbox, QuickBooks ... Like six apps it integrates with, so the depth of the integrations is not a lot. They're playing it up to: "Hey, you can use this to automate processes inside your small business, but then you, as the accountant, could use this to automate processes you're doing for your clients."  If I really step back and think about this, if you look back to when we had the Botkeeper demo, and internally, Enrico and his team at Botkeeper [00:19:00] are building all these automation tools, in-house, to massage data, touch data, move data, kick off processes. That's how Botkeeper's able to augment the humans that are helping out. They have these automation tools helping out along the way. Imagine if Botkeeper took all those automation tools, whatever their tech stack is, and said, "Hey, we're gonna just sell that as a separate product," and you could buy tools that smell-taste similar to what Botkeeper showed us. That kind of feels like what Roger AI is here. [00:19:30] Other than that ... I'm only judging from what I've seen on the website. There's no video. I explored around the integrations, kicked around, but I have not signed up. It's so new, like the QuickBooks-Xero integrations say, "Coming soon." The Bill.com integration says "Coming soon" [cross talk] Blake Oliver: They don't have any- David Leary: Every integration- all the integrations say it's "Coming soon," so I don't know what it actually connects to at this point. I just thought it was interesting that Dan Wernikoff jumped in on this. Blake Oliver: If you're interested in checking it out for yourself, head over to their website at Roger.AI; R-O-G-E-R DOT A-I. I've [00:20:00] got some follow-up on the security issues we talked about last week. We talked about the City of Baltimore getting hacked. David Leary: Okay.  Blake Oliver: We've been talking about Wolters Kluwer getting hacked. Well, another cloud-hosting provider, called Centrum, has reported a systems breach. This was an article in The Journal of Accountancy, published on Thursday. the 30th of May. Apparently, a [00:20:30] whole week ago, on Friday the 24th, Centrum was hit by a malware attack. Now, Centrum - this is the first time I'm hearing about it - seems to be a virtual desktop/other cloud-hosting provider for CPA firms- David Leary: Okay, so they do specialize in our space. Blake Oliver: Yes, specialize in accounting. On Thursday, they posted an official statement on their website, describing this malware attack that happened a whole week before. Very similar to Wolters Kluwer, and they actually said in their statement that it appears to be similar to the one that hit CCH, Citrix, Baltimore, [00:21:00] and Philadelphia. I was curious to know, well, what is this virus that has hit CCH? Because we still don't know. Wolters Kluwer hasn't told us what it is, and what- David Leary: We projected ... I think we talked about that; I found that second article that was out there of that other malware, two or three weeks ago, I think we had a link to it. I'll see if I can find it.  Blake Oliver: Yeah. Apparently, there's a connection between all of these malware attacks - Baltimore, CCH, and [00:21:30] this one now, with Centrum. The New York Times, again doing some really great investigative journalism, has a story up on their site called, "In Baltimore and Beyond, a Stolen N.S.A. Tool Wreaks Havoc." Apparently, all of these attacks are linked to tool, a hacking tool that the NSA developed called EternalBlue. That's a key component in all of these malware attacks. Before it leaked ... They lost control of it in 2017. I [00:22:00] had kind of heard about this before, but now this is really refreshing my memory. I can't believe what a disaster this has been. Apparently, "before it leaked, EternalBlue was one of the most useful exploits in the NSA's cyberarsenal. According to three former NSA operators, who spoke on the condition of anonymity, analysts spent almost a year finding a flaw in Microsoft software, and writing the code to target it." "EternalBlue was so valuable, former NSA employees said, that the agency never seriously considered alerting Microsoft about the vulnerabilities, [00:22:30] and held onto it for more than five years, before the breach forced its hand." This EternalBlue hack has been used by state hackers in North Korea, Russia, and China. It was behind the WannaCry attack in 2017, which destroyed systems in the British healthcare system, German railroads, 200,000 organizations around the world. Russia used it as part of the NotPetya attack, which cost FedEx more than $400 million, and cost Merck, the pharmaceutical company, $670 million dollars. One [00:23:00] of the cybersecurity experts interviewed in the story called this whole episode, "The most destructive, and costly NSA breach in history. More damaging than the better known leak in 2013 from Edward Snowden." The NSA, and the FBI have declined to comment for the story in The New York Times, and have basically denied responsibility, or that they should be held accountable. Admiral Michael S. Rogers, who was Director of the NSA during this whole leak, suggested in remarks [00:23:30] that the agency shouldn't be blamed. He compared it to Toyota. He said, "If Toyota makes pickup trucks, and someone takes a pickup truck, welds an explosive device on to the front, crashes it through a perimeter, and into a crowd of people, is that Toyota's responsibility?" Then he continues, "The NSA wrote an exploit that was never designed to do what was done." This is amazing to me. This is known, and we're just kinda okay with it?  David Leary: Nobody's talking about [00:24:00] it. This will never make mainstream media. This is kind of a big deal, because this is like ... If it's that powerful the tool that we created - we being our country-  Blake Oliver: Yeah. David Leary: Things our taxpayers pay for, that means everybody's at risk, right?  Blake Oliver: Oh, yeah. For our international listeners, who are not familiar with the NSA, they are the most secretive spy agency we've got in the United States; probably using their artificial intelligence, and bots to listen in on this podcast right now. The [00:24:30] National Security Administration. David Leary: Good find! What a story! Very, very amazing story there. The other interesting thing, I think I'd tie this back to is maybe this is an argument of not upgrading the IRS's computer system. Blake Oliver: Oh, because they are using mainframes that are not susceptible to modern hacking? Yeah. David Leary: Yes. Right? It's so much legacy technology that nobody has the technical skills to hack them. Blake Oliver: Well, here's the thing is that the flaw in Windows [00:25:00] that allowed these attacks to happen, that this exploit utilizes has been patched; Microsoft patched it. The problem is that there are so many systems out there that have not been patched, that have not been upgraded by the people responsible for security, that it still exists. You can still use this tool to hack into computers all over the world. David Leary: Okay. I'm not gonna cuss, but I wanna slap my hand on the desk. That is a bunch of crap. I'm an accounting firm. I know that running my own IT is a risk. I [00:25:30] have to keep all my machines updated; I have to keep all my patches. I'm gonna go outsource this to a hosting company, because they promised me to be my IT department, and they're not #$%&ing patching machines? You're gonna have to bleep that.  Blake Oliver: Yeah, and this is the thing. We don't know for sure, but if Wolters Kluwer, CCH, was the victim of this hack, that means that they weren't properly patching their PCs. I've got another story [cross talk]  David Leary: I have no comments on it. Sorry. Don't get me fired up more now. Come on, now. Blake Oliver: I've got another story that'll [00:26:00] make your blood boil, or maybe it'll just make you give up on humanity. This is another security one. Are you familiar with the concept of social engineering?  David Leary: Yeah, so I'm like, "Hey, Mare ..." I called up this front desk of an office. I'm like, "Hey, Mary. I was wondering, can you give me your password, because of blah-blah-blah?" They just give it to me. Blake Oliver: Yeah. David Leary: It's what happened to Podesta, basically, with the Clinton emails. Blake Oliver: Right, cuz people are the weakest link in the chain of security. Psychologists at the University of Luxembourg have been studying social engineering as [00:26:30] a way of hacking - how effective is it? They did a large-scale study involving over 1,200 people to investigate how people are manipulated into sharing their passwords with complete strangers in return for small gifts. What they did is they stood out on the University of Luxembourg campus wearing University of Luxembourg branded bags. They looked like they were affiliated with the university, and they randomly selected passersby, and asked them about their attitude toward computer [00:27:00] security, and then also asked them for their password. They were carrying- the study, the people conducting the study were carrying University of Luxembourg bags, but were otherwise unknown to the respondents. Now, David, guess how many people gave out their passwords?  David Leary: I'd say it's about 50 percent. I'm just guessing ...  Blake Oliver: Yeah, well, because I already hinted that it's so bad, right? They varied the experiment. To some people, they just asked them for their passwords. Some people, they gave them chocolate, and they would do it before, [00:27:30] or after, or during the interview. Here's the crazy part - 30 percent of participants revealed their passwords in exchange for chocolate. David Leary: "Hey, here's a piece of candy. Give me your password." "Okay ..." That's the test- the scenario. Blake Oliver: That was if they received the chocolate after the question was asked. Like I'm gonna ... "Hey, will you give me your password? We've got chocolate here." If the chocolate was given beforehand, 43.5 percent of the respondents [00:28:00] shared their password with the interviewer. The willingness to divulge passwords increased further if the chocolate was offered immediately before the participants were asked to disclose their password. Anywhere between- depending on how you do it ... If you give people chocolate, you can get their passwords, 30 to 48 percent of the time, which is just insane to me that it's that easy to get people to give up their passwords. David Leary: It seems like a very cost-efficient way to hack into things.  Blake Oliver: Right. If you wanna hack into a city, like [00:28:30] the City of Baltimore, just go to a government building, set up a table, put on a City of Baltimore T-shirt, and hand out chocolate in exchange for people's passwords. This is absolutely mind-numbingly insane. David Leary: It makes that NSA tool that we probably spent billions of dollars of taxpayers' money on to hack into people's computers ... They could have just done this. Blake Oliver: It shows the importance ... You harp on this every single time we talk about security - of multi-factor authentication. It's not [00:29:00] just because somebody might steal your password, it's because your people working in your firm, or at your tech company might be dumb enough, and are ... I don't know, maybe dumb is harsh, but just people are not thinking. They're just willing to give away these passwords, and we have to protect our companies from our own staff more than anyone else. David Leary: People need to put their passwords at the level of their loved ones. Like, "Hey, would you trade me your child for some chocolate?"  Blake Oliver: Yeah, education ... We [00:29:30] need some education here. This is just ridiculous. That is my crazy, ridiculous security news for the week. David Leary: Wow. Okay, I have something cool I saw this week-  Blake Oliver: All right [cross talk]  David Leary: I think it's pretty cool. You're an accountant, or bookkeeper. You like to use two screens, right?  Blake Oliver: Yep. David Leary: What happens when you go to Starbucks?  I have to bring my giant screen with me, and find a plug ... I've seen people doing that. David Leary: You're one of those guys? You're one of those guys that bring the huge 22-inch screen to ... I've seen that, as well, playing a video game [cross talk] Anyways, ASUS has a new [00:30:00] ZenBook Pro Duo. We'll have it in the show links. You can see the photos, everything. It looks like it might be the coolest- Blake Oliver: Oh, this is so cool. David Leary: This is the accountant's/bookkeeper's laptop. Imagine if you took the keyboard, slid it down towards your belly, and in that upper half of where the keyboard is, you now have a half-size screen. Then, to the right, you have a touchpad that's also like a screen. Now, you have a 10-key, still, as well. Blake Oliver: Wow. [00:30:30] David Leary: You could have the bottom half- maybe that's the e-mail that came in, and you're reviewing it, while at the top half, you have QuickBooks open, and you're doing some data entry, or whatever ... I'm assuming you're still doing data entry, right?  Blake Oliver: Yeah.  David Leary: You really get that benefit of a huge ... Basically, it's like a monitor and a half, but you still have the same form factor of a laptop. Blake Oliver: What I like about this is that it solves a problem, which is you need two screens, but you don't necessarily need a full-sized second screen. You just need [00:31:00] a place where you can put something that you're referencing - part of a document, or part of a web page that you're looking at, while you work on a full-size screen. This is really cool. The picture looks amazing. It's called the ASUS ZenBook Pro Duo. Click on the link in the show notes and check out the pictures of this thing. It looks fantastic. This is the sort of thing that might actually get me to switch off my Mac. David Leary: Yeah. This is a bookkeeper's laptop, or accountant's laptop, by far. This is a totally slick. ASUS, if [00:31:30] you would like to send a review copy, please contact us on Twitter. Blake Oliver: Yeah, send one to David, and send one to Blake. David Leary: Even for the podcast, because I could have the stories I'm talking about up there, but our recording software could be running on the bottom half. Blake Oliver: Yes. Yes. That's beautiful, and you can be monitoring it. I love it.  David Leary: This becomes a business expense now. We have to buy these for us. Yes, get one of these, for sure. Blake Oliver: All right. What else? David Leary: What else do I have? I have a- oh, I [00:32:00] have a story about raising prices. Blake Oliver: Let's hear about that. David Leary: Okay, two things happened this week. One, I saw this article in SaaStr. SaaStr is a website community for people that build SaaS software. All the app developers would probably go to SaaStr and read the blog posts there. Blake Oliver: Right. David Leary: Makes sense, right? This article is titled, "When You Raise Prices More Than a Smidge ... They At Least Look At Another Vendor." I think the take-away in this article is that ... I'm just gonna quote it. "What [00:32:30] I think is most important is how material price increases make your customers ... look. Look at other solutions ... You've just planted a seed. You've sent them on a fact-finding mission to talk to your competitors." The premise is if you're just charging for your SaaS app every month - X price - and people are just happily using it, they're never gonna pause, and think, "What's the value I'm getting out of that product?" They're just gonna keep chugging away, right? Blake Oliver: Right. David Leary: They could maybe incrementally raise it a little bit here, a little bit here, a [00:33:00] little bit here, but if you do a material raise, people are going to question it, and then-  Blake Oliver: Yeah.  David Leary: Coincidentally, me personally, I had that experience this week. Blake Oliver: Oh, what happened?  David Leary: I got an email from Intuit about my QuickBooks subscription. Blake Oliver: Oh, no; you got hit with an increase- David Leary: I got hit with a price increase. My price is going- I think I'm paying- right now, it's $29 a month for my QuickBooks Online Plus. On July 1, I've been told it's going up to $70 a month. Blake Oliver: That's a steep increase. David Leary: It's [00:33:30] over 100-percent increase. For me, I feel like I probably get $360 of value a year from QBO, but when I start stepping back, and I look at $840 for a year, that all of a sudden becomes my biggest business expense. It's more expensive than the podcasting software we're using. It's more expensive than the social-media tools I used to create the artwork for the podcast. It's more expensive than Canva. It's [00:34:00] the most expensive ... Microsoft Office I got all year for 99 bucks, or 106, or whatever that is. All of a sudden, QuickBooks is my most expensive business expense. With that said, I'm not gonna change. I'm too old to learn a new product. I'm not gonna shift, right? Blake Oliver: Oh, David, don't cut yourself short. David Leary: I don't have the energy for it, but I'm gonna try and downgrade my plan, because I'm not using the features at that level. The only feature I am using is the 1099 Subcontractor feature. [00:34:30] Are you familiar with that in QBO?  Blake Oliver: Yeah, you sent me one, because- David Leary: Oh, yeah. That's right. Blake Oliver: -you had to pay me some money, and it was over the $600- David Leary: Threshold. Blake Oliver: -threshold, so ... Yeah, actually, that's one of the coolest things, I have to say, about QuickBooks Online is I got an email saying, "I need your W9," and I just clicked the button, and I put that in, and it went right into your QBO file, right?  David Leary: It's a really cool feature, but ultimately, what that's really doing ... It's driving subcontractors [00:35:00] to sign up for QuickBooks Online Self-Employed. Blake Oliver: Right. Brilliant; brilliant.  David Leary: I would argue that feature should just be free on all QBO plans, because I used it with somebody else, and she signed up for QB Self-Employed. Blake Oliver: Right. David Leary: That's the one feature I'm using of Plus that I'd argue should be a free feature. Then, not to mention, and this is, I think, the kicker for me, when I think about the value: I send everything through AutoEntry. AutoEntry's essentially doing all the work for twelve bucks a month and shoving the transactions into QBO. It's such [00:35:30] a huge price increase, it's just- the reaction to it, I'm just like ... Then I saw somebody reply to my tweet about this, and they said, "Oh, you can't downgrade."  Blake Oliver: You can't.  David Leary: I guess I'm paying it. Blake Oliver: Or, bringing it back to this article on SaaStr, maybe you shop around. Hey, I'm sure that there's somebody at our episode sponsor, Xero, who would really love to talk to you, David. This [00:36:00] is a really good question: when is it good to raise prices, and when does it do more harm than good? In the software world, I think it is debatable that ... Sometimes, you just want to take your legacy customers, and leave them at the price they were at, rather than disrupt things the way that ... Your relationship with QuickBooks is ... You're questioning it at this point, given the massive doubling of the cost-  David Leary: I mean, $840 of value. I don't see that. That value is hard to measure. [00:36:30] Blake Oliver: I think it is important for tech companies to really think carefully, before they raise prices, because the incremental cost to serve a customer for Intuit, for most SaaS companies is not that much. Your cost of sales is not very high, once you've got a customer. In the accounting world, if we're talking about raising prices in your accounting firm, or bookkeeping firm, in my experience - and I was guilty of this myself - most firms are really bad about raising prices and are seriously underpricing their legacy [00:37:00] customers. By legacy, I just mean customers you've had for a long time. We are not good at raising prices every year, especially the way that Intuit has been, and we need to do more of it. In that case, you actually want your customers to go out, and shop for other options. It's really an easy equation. You just look at your customer base, and you say, "All right, if I raise prices across the board by 20 percent, would I lose 20 percent of my customers?" If the answer is no, that you would lose less than 20 percent, you should [00:37:30] raise your prices. David Leary: Yeah, and I think that's probably the equation Intuit's doing-  we talked about that with the QuickBooks Advanced [cross talk] Blake Oliver: Right. Exactly. It's important to be raising prices, always, because you need to create capacity in your firm for taking on new clients. It's way easier to create capacity by raising prices and shifting some of your customers to other firms that are willing to service them for less, for instance, than to go out, and hire new people. It's just a very easy [00:38:00] way to increase your revenue, and your margins without having to grow your firm. It's so much more efficient. David Leary: Yeah.  Blake Oliver: The problem is most firms don't do ... They don't take the time, and they have these personal relationships with their clients. They feel bad doing it, especially ... I find so many bookkeepers feel bad about charging what they're really worth, and they don't. That's why they're just not making a lot of money. David Leary: Yeah, and I think ... I'm getting a 60-day [00:38:30] warning about this, or whatever it is, from the email ... Somebody said this at the AICPA Executive Roundtable, and I don't know ... It was from the mid-sized firms - small- to mid-sized firms. I don't know who said it, and I apologize if you're listening. If you said it, tweet at me, and let me know. Essentially, this accountant said that they're okay with companies raising prices. It's okay to do, but give people a 12-month heads up, because right now, if you're an accountant, or bookkeeper, if you've gone to a fixed-pricing model, and [00:39:00] you've calculated your costs, and you're rolling those out your client, you need a year window to re-up those contracts you have with your own clients. You can't just give them a 60-day warning; be like, "Hey, by the way, QuickBooks went up in price, so I need charge you more, right?  Blake Oliver: Yeah.  David Leary: Price increases are gonna happen. I think everybody knows that, except them. It's just 100-percent price increases do feel a little on the crazy side. Blake Oliver: It'd be a lot.  David Leary: Yeah, it's a teeny bit upsetting to have to bite [00:39:30] the bullet on that, but I probably will still pay it, because I just ... The headache of switching- Blake Oliver: Right. Yeah.  David Leary: -would be too much. Blake Oliver: Yeah. It's a huge pain to change your accounting system. Well, David, that's all I've got this week. How about you? David Leary: I think that kind of wraps things up here. I think that's it. Blake Oliver: If folks want to get in touch with you online, David, where's the best place for them to go? David Leary: To use the Twitter. I'm @DavidLeary- Blake Oliver: And I am @BlakeTOliver. You can connect with us on [00:40:00] LinkedIn; on Facebook. You can follow The Cloud Accounting Podcast on Facebook, just search for us there. If you are going to be at Xerocon, we'll be there in June. David Leary: I'll also be at Scaling New Heights, so, if you want a Cloud Accounting sticker, Podcast sticker, come find me. Blake Oliver: I will be at AICPA Engage, starting on the 10th of June. If you're gonna be at any of those conferences, reach out to us on Twitter, or message us elsewhere, and let us know. We'd love to ... I'd love to meet up with our listeners, and chat [00:40:30] with you all in person. it's fun. David Leary: We can buy beers for every listener. No, I'm kidding! I didn't say that. We won't do that. I think that's a wrap this week. Blake Oliver: That's it for me. I'll see you next week, David. David Leary: All right, bye, everybody. Blake Oliver: Bye.  
  8. SponsorsHalon Tax: http://cloudaccountingpodcast.promo/halontax TOA Global: http://cloudaccountingpodcast.promo/toaglobal LivePlan: http://cloudaccountingpodcast.promo/liveplan Show NotesComing Soon! 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.SubscribeApple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax, and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing. Now Halon Tax is working with bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. They're even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to CloudAccountingPodcast.promo/halontax. That is Cloud Accounting Podcast dot promo forward slash H-A-L-O-N-T-A-X. Oh, yeah, Halon Tax works great with Xero, and Wave, too.  David Leary: Welcome to The [00:01:00] Cloud Accounting Podcast. I'm your host, David Leary. Rich Preece: Hi, I'm Rich Preece, from Intuit.  David Leary: Rich, you're finally hear on a podcast. Thank you, thank you, thank you! You might be the first Intuit person, besides me, when I used to work at Intuit, that's been on the podcast.  Rich Preece: Well, I am thrilled to be here. Hope to get invited back, so you'll be the judge of that, David. David Leary: Got it. For those of you who don't know who you are already, any of our listeners - maybe we just gained new ones this week, or maybe gain some next week - who are you?  Rich Preece: Yeah, so a 17-year veteran at Intuit. There's a number of things I've done, but currently [00:01:30] I lead the US business for QuickBooks. Prior to that, I've led our international business. I've led our accountant segment. I've definitely had a number of roles here at Intuit.  David Leary: I think the big reason you're here is QuickBooks Live, and I think it's arguably one of the biggest things to hit our industry in 10 years, possibly. It's really recent. You just started testing this publicly in February. Can you roll back what the last four months have been like, because it's been fast?  Rich Preece: Yeah, it has been fast. We agree with you. We think this is going to be significant, and we think this both helps [00:02:00] small businesses and the accounting profession, as well. Just to answer your question specifically, about six months ago, we started to do some testing on our website, and there was a couple of things we were trying to test. First of all, just the general appetite for essentially a sort of bookkeeping service, where we're connecting QuickBooks customers to accounting professionals/bookkeepers, who will help them with simple set-up of QuickBooks and then simple ongoing bookkeeping. The way that we tested that was [00:02:30] we tested a number of different price points on the website. We tested $200, $400, $600. What we were looking to do is to see what the appetite and interest was for the concept, generally speaking, and then the price points. That was the first thing. Now, once we had learned those lessons, we very quickly actually brought in nine ProAdvisors. We put them in our office in Boise, in Idaho, where we have our TSheets business, and then, we actually let 200 [00:03:00] folks sign up - these were QuickBooks customers - sign up for QuickBooks Live, commit to paying that price point. Then, what we needed to learn was obviously what kind of questions do they have? Obviously, basic bookkeeping means one thing to one person and another to a different person. Through those nine ProAdvisors, we learned the questions. We learned how much time does it take to answer the questions. We were really just trying to fine-tune the service before we put it out there for all of our QuickBooks customers, which we did just a couple of weeks ago. David Leary: It's [00:03:30] funny when you say, "We did a quick test ..." or, "Quickly did this ..." I was at Intuit for a long time- Rich Preece: You were!  David Leary: -and 'quick' would be like three years. Rich Preece: Yeah, yeah. David Leary: It's amazing, within weeks of doing the test, you're like, "We ramped up with nine people." It's just- it's amazing the pace and the quickness that is being rolled out.  Rich Preece: Yeah, well, obviously, this is something where we think it's transformational, as well. We think it actually can hugely help small businesses. The premise that we had was ... Inside of our ecosystem, a stat that we share a lot is 58 percent [00:04:00] of all of our QuickBooks customers are connected to an accounting professional. That, of course, means that 42 percent are not. The premise of this is how can we get those 42 percent the help that they need? Because many small businesses need help. We went on that journey, and we realized we have to move quickly for a couple of reasons. One is the technology is already there. Two is that, as we know, half of all small businesses go out of business every five years. This is important for us to do more to connect [00:04:30] accounting professionals with small businesses, because we know, actually, that both are more successful when we can do that. We just realized we don't have years. We have to do this thing in months. For full disclosure, David, we're still learning as we go here. We've gone live, as I mentioned, just about two weeks ago, and we're very confident in what we have. We started with a single price point, which is $400. We obviously are still learning. We will likely break out additional products, as well, and we're doing that with the accounting community. We're sort of learning as we go, so we'll continue to test [00:05:00] and deploy. David Leary: It's interesting, you talk about that 40 percent that still don't have a bookkeeper [cross talk] connected. Enrico from Botkeeper, today ... We're at Scaling New Heights Conference. I forgot to mention that for those of you that are listening. Enrico had everybody do an informal survey of how many people had to turn away a client in the last six months. I would say 65 percent of the room raised their hand, if not 80 percent of the room - turned clients away, and those people have no place to go. They're being sent away.  Rich Preece: It's funny, I was in the room; I saw the same thing, and I saw, to your point, it [00:05:30] was well over half of the room. Then he asked, "How many of you have turned away clients in the last week?" And it seemed as if 20-25 percent of the room held their hand up then, as well. I think this is the point. This is why we actually think a service like this is so important.  The fundamental point is that small business growth continues to be explosive. That speaker that you referenced showed some stats about just the escalation of small business growth. As we know, the number of accounting firms is relatively flat, so [00:06:00] there isn't really a competition problem here. Accountants can't service all those small businesses who are looking for help. Again, that's why we actually think having a platform, which is an on-demand platform ...  Just to be clear, for those folks that don't know what QuickBooks Live is, the very simple concept is that we have, obviously, a very substantial number of small businesses that come to us on a daily/weekly/monthly basis to sign up for QuickBooks Online. In each of those cases, many of those folks need a question answered, need [00:06:30] a little bit of help, but they're reluctant to go to our Find a ProAdvisor platform, because they actually say they are not ready for a help from a fully-fledged accounting professional/bookkeeper. Now, interestingly, the help that they need is help getting started with QuickBooks. It's bank reconciliation. They start to describe basic bookkeeping, while at the same time saying they're not ready for an accountant. It's through that lens in our research that they actually said to us, "We want you, QuickBooks, to help us."  Then, very simply, that was where the concept was born of well, [00:07:00] why don't we build a platform where for those certified ProAdvisors and other accounting professionals, who actually are looking to connect with these small businesses who need help, they can, in on-demand fashion, participate on a platform. They can help with that simple set-up; they can help with that simple ongoing bookkeeping.  Then, we're doing more, obviously, to connect those small businesses with those accounting professionals. Then, just the last thing I'll say, because this is a question we get a lot, is it's important, through that lens, that you can understand why the [00:07:30] folks who participate will be presented as, "Hey, I'm Rich. I'm from QuickBooks. How can I help you today?" versus, "I'm Rich. I have my own CPA practice." because that small business, when they first signed up, actually said they're not ready for an accounting professional, which is why they're looking for QuickBooks to help, but we're going to connect them with the ProAdvisors who can help them. David Leary: Yeah, unless they don't know what they want yet. Rich Preece: That's correct. Exactly. We believe it will obviously expand, the number of small businesses out there who really are looking for that help from [00:08:00] those accounting professionals, because they will very quickly learn the value of that expert assistance. David Leary: If get to more details about QuickBooks Live, Blake, and I totally both believe that the amazing success TurboTax Live has had the last- it's three years old now?  Rich Preece: It's two years. Yeah, this was our second year. David Leary: Two years old. Arguably, I think, from the conference calls, TurboTax Live is the most popular version of TurboTax in 30 years almost ... TurboTax is almost 25-30 years old, right? Can you speak to the success of that, and how it's driving some of the decision-making with QuickBooks Live? [00:08:30] Rich Preece: Yeah, absolutely. Just again, for those folks who may not be quite as familiar, just very briefly ... A couple of years, two years ago, we introduced, again, what we call TurboTax Live. Very specifically, we have almost 40 million people that use TurboTax every year. Obviously, a lot of folks in the US use TurboTax to do their taxes, but a number of them get to a part of the experience in TurboTax where they have sort of a moment of self-doubt. They have a question that they can't [00:09:00] answer, and then, their only alternative is to go to an accounting professional, or perhaps a tax store, which isn't something they wanted to do. This is folks who traditionally have simple returns. They wanted to do it themselves in TurboTax. Through that same learning, we said, "Well, boy, what if we had a platform where, at that moment in time, we could have built out a number of CPAs, and EAs on that platform, where they actually could be the help who are answering the questions?" Then [00:09:30] we would pay those CPAs, and EAs, and obviously, the folks who are using the service on TurboTax would pay us an incremental fee. In the first year, it was it was extremely successful. We haven't announced the numbers, but we have said it was extremely successful. In the second year, what we have said on our recent earnings call was that, actually, we had three times the number of customers in the second year use it. We've also shared that, just from a scale standpoint, it's one of the fastest growing businesses we've seen inside of Intuit.  That obviously gives an indication of, really, [00:10:00] the need that this has addressed. We are very bullish on this notion of, again, connecting our customers to expert help at the time that they need it, whether it's in TurboTax, or QuickBooks. We think that there is a future, where, in the past, our solutions have been do it- basically, you're doing it on your own. The alternative has been 'do it for me,' and this is a sort of hybrid 'do it with me' solution, which, again, has borne out over two years now in TurboTax, and we're just two weeks in, in QuickBooks [00:10:30] Live, but we think we'll see the same type of dynamics. David Leary: I guess the paradigm is before, I could do my tax with TurboTax, or I wouldn't do them, and I would go to H&R Block, or I'd go to a tax shop to get those done. Rich Preece: Yep.  David Leary: Now I can have a little confidence to do it myself, and then, I'm going to sit on my couch, and bring up TurboTax Live. I talk to Claudell, I get my help, and I'm done. I just get that peace of mind. I just don't have to get in my car. It's not really much different, I just don't have to drive. I get it instantaneously. Rich Preece: Well, that's correct, and also, you're going to pay quite a lot less, as well. If you're going to a tax store and, on average, [00:11:00] perhaps paying $300, with TurboTax, you may be paying $60 for one of the paid offerings in TurboTax. It's about another $80 to add TurboTax Live ... Obviously, if you put that together, you're out the door for $140, but most importantly, you're filing your return with absolute confidence. You got the help that you needed from a qualified expert during that experience. David Leary: [Many] times you just have one little thing you're not sure about; you just need a little question. Rich Preece: Exactly, [00:11:30] exactly, and in TurboTax Live, that expert also reviews your return before it's filed, as well. That's the other benefit. The other thing I'd say, David, and I've sort of mentioned this - but only because it's the number-one question I get all the time - is again, I cannot over-iterate, these are existing either tax professionals, if it's TurboTax Live, or QuickBooks ProAdvisors, if it's QuickBooks Live, who are actually the folks on the other end helping the customers. This is not somebody new; this is simply us trying to connect the accounting industry's [00:12:00] professionals that we've always partnered with, with more small businesses, and in TurboTax's case, with more tax customers. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners prefer virtual advisory services? Did you know that the number-one thing they want from an expert adviser is strategic planning and review? This [00:12:30] is even more than general ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to CloudAccountingPodcast.promo/liveplan. That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N. Be sure to check out the LivePlan method to learn how to grow and scale your advisory business. David Leary: A few weeks back, I think I heard you on an interview, [00:13:00] and you're talking about how Intuit's going to own the relationship with the customer. Rich Preece: Yes. David Leary: Is that driven because that's what the customers want? Is that just a decision ...? Because that's a little different than the Find a ProAdvisor site, where you're playing matchmaker and then getting out of the relationship.  Rich Preece: Yeah, that's correct, and again, I'm glad you brought this up, because this is another sort of hot topic in a lot of questions we get. You actually mentioned it- you're absolutely right. It is specifically because, again, as we learned what these customers are looking for, they [00:13:30] were very, very clear with us, time and again, that they are not ready for an accounting professional. They went as far, many times, to say, "I wouldn't even know what questions to ask an accounting professional." These are often small businesses that are in their infancy, and they believe that one day they might need an accounting professional, but not today. When we said to them, "Well, then, who do you want help from?" They said, "I want help from you guys. I want help from QuickBooks. I came to you as a brand, so that's the help I'm looking for."  That is why we've been so clear with accountants, and we've tried to be [00:14:00] really concise when saying, for those folks who wish to participate as a bookkeeping or accounting professional on QuickBooks Live, it's important that, coming in, they realize this is an opportunity to gain revenue, because they will be positioning themselves as a QuickBooks bookkeeper. If they're looking to gain clients, as you mentioned, we have the Find a ProAdvisor platform, which is ... Last year alone, over a million small businesses went to that platform looking for an accounting professional, so that is a wonderful way to gain clients. QuickBooks [00:14:30] Live is a wonderful way to generate incremental revenue. But we don't want to confuse the two. David Leary: Do you envision one day where there's a transition, where somebody maybe outgrows QuickBooks Live and needs to transition over? Rich Preece: Yeah, I think that's entirely possible. Actually, just as a quick proof point of that, in the two weeks we have been live with QuickBooks Live, when somebody comes to us and what they're really looking for is something more than basic bookkeeping, we actually very deliberately say, "This service isn't built [00:15:00] for you," [cross talk] and we send them to the Find a ProAdvisor platform, so we're already doing that on a daily basis. To your point, in the future, I suspect people will start with basic bookkeeping and outgrow the service, and that's absolutely fine, too. In the interim, we are specifically putting more people into the Find a ProAdvisor platform because of this. David Leary: I think in the May blog post ... Ramping up with staff, because right now, you said first, it was nine people in Boise. Rich Preece: Correct. David Leary: Now you plan on using existing TurboTax Live people to staff QuickBooks Live. I [00:15:30] think the blog post that ... You're going to scale up to 500 bookkeepers in the next nine months or so?  Rich Preece: Well, that's obviously very much of an estimate at this point. What I can tell you ... Because, clearly, when you first launch something, you don't quite know what the demand is on one side and the supply on the other. The interesting thing about a two-sided network is you have to get both right at the same time. What we have said is - it's slightly different than your positioning on this - but what we said is that we started out with about 2,000 ... Well, I [00:16:00] say we started out ... In the second year, about 2,000 TurboTax folks working on TurboTax Live. These are CPAs. These are EAs. We actually asked those folks, "Which of you are multi-service? Which provide bookkeeping, as well, and who would be interested in participating in QuickBooks Live?" Now, of the group who A) qualified and B) were interested, there was about 500-  David Leary: Okay, so you have a pool of 500- Rich Preece: That's correct.  David Leary: -that are waiting and ready to [00:16:30] match the demand as it comes in [cross talk]. Rich Preece: That is correct. Obviously, as we go through that pool ... Of course, some of them, I'm sure, will drop out, because the vast majority also have their own practice, so they're doing this kind of incremental to their own practice. As we work our way through those folks ... Just to be clear, of course, they've gone through the background training; they've gone through the certification ... By the way, these have to be certified ProAdvisors- David Leary: And they get the kit [cross talk] Rich Preece: We send them a laptop. Yeah, absolutely ... We send them a laptop. We send them a headset. We send them a screen that sits behind them, because this is video [00:17:00] conferencing. Obviously, it makes sense to start with that group. The point we were making in the blog is there's up to 500 in that group, and we were just trying to sort of answer the question we were getting from many ProAdvisors, which is, "Why haven't you contacted me yet?" We were just trying to say, "Hey, sit steady. We promise we will," and we will do so just after we've gone through this first group, which are the TurboTax Live pros.  David Leary: Got it, so they're just queued up and waiting for those clients. I think the way we read it in the blog post, and maybe it just didn't come out right in text, was like you guys have planned at 500, which [00:17:30] means you're planning on having 10,000 QBO Live customers, which all the sudden puts you at the [16th] biggest accounting firm/bookkeeping firm.  Rich Preece: Yeah, yeah.  David Leary: It's like the numbers add up really, really fast. Do you think, in general ... There was recent news, H&R Block just acquired Wave. Rich Preece: Yep.  David Leary: That just happened last week. There's lots of accounting firms with engineers that were getting VC startup money. Is Intuit driving this train, or boat - whatever you want to call it - or is Intuit just riding a wave that's going to happen naturally? Rich Preece: Yeah- David Leary: This is coming no matter what. Rich Preece: Yep, yep, you [00:18:00] know, what I would say ... It's actually customer demand and optionality that's driving the train. I genuinely believe that. The success of TurboTax Live obviously speaks to this is something that people want. I think, increasingly, people are willing to interface with an expert in a sort of virtual way. By virtual, I include video conferencing in that. I just mean they're not getting in their car; they're not necessarily driving. I also think, on the other side of the platform, accounting professionals are doing the same thing that the medical professionals have done for the last three or four years, which [00:18:30] is they are willing to offer their services in a different way, which is convenient to their customers or their clients.  Personally, I actually think this is sort of demand-led and then, obviously, technology and AI sits underneath and makes it far easier than it has before. I think Intuit is obviously participating in this opportunity. To your point, I think many other competitors are. I, like you, found the Block, and the Wave acquisition interesting. They didn't say anything on the call. I listened [00:19:00] to the call directly connecting the two, but obviously, it will be interesting, over time, to see if those two things are connected to a sort of virtual-expert platform- David Leary: It sounds like customers want one-stop shop ... They want both books, and tax, books, and tax. People kind of want that. The customers want that. I know accountants and bookkeepers will say, "I'm only gonna do bookkeeping," or, "I'm only gonna do tax." I think customers kind of want that, and TurboTax Live is the proof of that. QuickBooks Live ... Even the market reaction from H&R Block, and Wave [cross talk] that could be the same thing. Customers want that combined service. Rich Preece: I think they want the combined service, and I think they want [00:19:30] convenience, and I think those two things together are really driving the industry. Then, the technology, as we mentioned, it sits underneath this. I really think now is the time when there will be a significant shift, to your earlier point. This is arguably transformational in the industry. David Leary: I know you said some people initially reacted negatively. They weren't sure what QuickBooks Live is. There's been a lot of ... I guess the QBO certification tests are harder now. There's been price increases. People's [00:20:00] reactions, for the time I've seen in a long time, have been a little bit on the negative side to QuickBooks and things like that. How do you feel that's affecting things? Is it something you guys are listening to, the team's reacting to some of that negative ... There's negativity out there a little bit.  Rich Preece: First of all, I think that's fair, David. What you've been hearing, and I've been hearing some of the same things ... It basically falls into the bucket of people understand the concept of Live, and they're excited to participate. We actually have a significant list of people who [00:20:30] have already sent us their information, and said, "Hey, I'm not gonna wait for you; here's my information. Please add me to the list." To your point, though, it's very different, and it comes on the back of some other changes - again, a recent price increase of the product, et cetera. So, I think there's real anxiety out there, as well, where there are bookkeepers who say, "Boy, is this gonna disrupt me? Is this gonna take my clients away?" We genuinely think it will not, and we genuinely think it will actually expand the opportunity for them to service more clients. I think the approach we're taking is we're trying to be patient, and we're [00:21:00] trying to communicate and then communicate again and then communicate again, because we recognize people have an emotional reaction to this. It's their business. When you're a bookkeeper, you fear something changing your business. You fear losing clients. So, we're just trying to patiently explain, "We actually don't think that will happen. It's not why we're doing this. Again, these are the small businesses who weren't looking for an accounting professional or bookkeeper, and we're trying to connect them to you." Once people understand that concept, we [00:21:30] actually find that that sort of anxiety and negativity typically changes to a far more positive response. David Leary: That makes sense. It's usually ... I look at a lot of the Facebook groups that are out there. You see these posts ... There's a whole group of bookkeepers and accountants that- they're just posting things like, "How do I get clients?" But they don't want to do any of the work. They don't want to market their firm ... I looked at QuickBooks Live. It was like, here's a place these people that just want to pop in and do some bookkeeping work and not actually run a bookkeeping firm, QuickBooks Live is the perfect fit for these people. There's a lot of people out there like that, I think; bookkeepers- Rich Preece: Yeah, that's exactly [00:22:00] what it is. Essentially, you've got no marketing cost; you've got no travel time going back and forth to a client's; obviously, you've got no of the sort of difficulties of chasing down billing. This is literally [cross talk]  David Leary: -handle the billing. Rich Preece: Absolutely. Yeah, absolutely. We charge the customer to that current point of $400, and then we pay the accounting professional by the hour on the platform. Just to be specific, we're deliberately not paying them for the number of clients that they help. We're not looking for them to sort of rush through helping clients, which would then, of [00:22:30] course, be a poor experience for the QuickBooks Online customer, which is why we pay for the- we're paying the bookkeeper or the accounting professional by the hour.  To your point, it is literally an on-demand service. The vast majority of those accounting professionals and bookkeepers who are participating today, particularly on the TurboTax side, as we mentioned, have their own firm, and they're doing this incrementally to that firm, where they have extra capacity ... I should also add that 95 percent of the accountants participating on [00:23:00] TurboTax Live in the first year signed up for the second year. Obviously, that's an indication that it's working for them. It truly is that truly flexible on-demand opportunity to make more money without any of the marketing, or billing, or other components of the traditional client relationship. David Leary: Essentially, other than your time, you have no expense.  Rich Preece: Correct. Yeah, there's really ... I mean there's none that I can think [cross talk] at all. David Leary: -an internet connection maybe, and that's it. Rich Preece: That is literally ... As we mentioned earlier, we literally ship you a laptop. We ship you a headset. We ship you the [00:23:30] screen that sits behind you, because, again, you are on video. The client can see you. You can't see the client, because one of the interesting things we learned when we were testing this is oftentimes [cross talk] Yeah, oftentimes that client is sat at home- now, whether they feel as if their home is messy, whether they've sat there in their pajamas, they want to see the person they're working with, because it actually makes them feel as if it's a real human being; it's somebody that they visualize, but they don't want that person seeing them for the [00:24:00] reasons I mentioned. David Leary: Is that just off by default, or can a small business owner opt in to have their own video on?  Rich Preece: It's actually a great question. It's off by default, but something we can obviously consider in the future. That's an interesting idea. Should we learn that there are some people that do want that [two-way] video-  David Leary: Yeah, there are human dynamics in this; face-to-face.  Rich Preece: Yeah, exactly, but so far in our learning journey, the vast majority have said, "I want to see them, but I don't want them to see me," so that's why we built it that way. This episode of The Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff and finding staff is getting tougher every day. This is where TOA Global can help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building a global team, you'll be able to take away the time-consuming process-oriented work from your local team, while building a cost-effective team offshore. As people experts, TOA Global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional-development tools. To learn how to build your world-class team today, head over to CloudAccountingPodcast.promo/toaglobal. That is Cloud Accounting Podcast dot promo slash T-O-A-G-L-O-B-A-L. David Leary: I must say, the communications on QuickBooks Live has gotten so much better since February. Blake and I joke about this. We don't have to do any research; you guys just put out a nice blog post every month now [cross talk] Rich Preece: Well, thank you- David Leary: -just get to read it that way. How do you find the blog post? Where's it at? How [00:25:30] do people get to that - other than the show notes for the podcast - is it just QuickBooks ...? Rich Preece: It's FirmoftheFuture.com. For anybody looking at either A) to ... First of all, thank you for the compliment. We appreciate it. It's our communications team, it isn't me, so I give all credit there. Yep, FirmoftheFuture.com. We have a blog there, where we're regularly updating the latest information on QuickBooks Live. Also, there's a link there, where you can sign up.  Again, for anyone listening to this that says, "Hey, I'd be interested in participating and being one of those [00:26:00] bookkeepers or accountants," you do have to be a certified ProAdvisor. Again, we are trying here to work with the folks that have always worked so closely with us and help us. You can go to FirmoftheFuture.com. You click on the link to sign up. It's super-simple. Then once we have your information, we will reach out to you in the coming months, as we're looking to bring on that next wave of accountants and bookkeepers onto the platform. David Leary: Then, before I let you go, is there any nugget or something about QuickBooks Live that we don't know that you could just drop as a bonus just for The Cloud Accounting Podcast listeners?  Rich Preece: You know, it's funny, I [00:26:30] would love to ... It's actually ironic, to your previous point, when we first put this out there, we probably under-communicated, and that was partly what drove some of the anxiety. What we've been doing in the last two or three months is trying to over-communicate. So, I'm actually proud to say there is no nugget- David Leary: There's nothing left.  Rich Preece: There's no nugget, because we're trying to get in front of all comms- David Leary: That'll work.  Rich Preece: -but if there ever is, I'll be happy to come back on the show and then talk to you about it, David.  David Leary: Perfect. So, if people want to get ahold of you, RI=ich, what's the best way?  Rich Preece: Well, if they want to get hold of me, they can actually email me anytime at: rich_preece@Intuit.com. Again, the [00:27:00] team and I would love to hear feedback. We would love to hear comments. We're building this ... We're learning as we go, so, yeah, I would love any feedback. David Leary: Great. Perfect. Thanks for coming on The Cloud Accounting Podcast, Rich. I'm David Leary. You can follow me on Twitter: @DavidLeary, and that's a wrap. Rich Preece: Awesome. Thank you, David. David Leary: Thanks, Rich. Bye-bye everybody. 
  9. SponsorsOnPay: http://cloudaccountingpodcast.promo/onpayOnPay is offering an exclusive promo code only for the listeners of The Cloud Accounting Podcast to get three free months of OnPay payroll service for any of your clients that you set up by February of 2020! Visit the sponsor link, and use code "CAP3FREE" to take advantage of this offer! Show Notes01:27 – Things to do in Tucson at 4:30 in the morning when your puppy has to go potty – listen to podcasts from former guests, like Scott Orn, of course!     02:41 – If you missed our discussion on the streaming wars, go here   03:24 – It’s not you, it’s me … Or is it? Gusto and Zenefits just don’t see eye to eye | Accounting Today 04:13 – What happens when the customer-first company puts the customer last?  06:07 – Ready, set, SOAPBOX ... The gentleman debate Gusto v. Zenefits 07:49 – Blake sides with Gusto - data security wins over convenience 10:04 – David finds this to be more of an ‘immature’ publicly-held negotiation about the private agreements betwixt the two companies, and the biggest loser is, of course, the customer 13:33 – Another review! Thank you!   15:43 – Anything you can do, Amazon can do better? | NYT  18:43 – Amazon is okay with losing a bit of money on one-day Prime shipping ... Small price to pay for crushing competition, right?  21:21 – What can accounting firms learn from Amazon's modus operandi?  Maybe more than you think!  24:21 – Is your fixed-fee model flopping? | AccountingWEB 29:04 – Making sweet macro music … | Digg.com 29:40 – Play that funky music, accounting boy ...  30:26 – Move over, Uber, bookkeeping is the hottest side hustle now! | Forbes 30:48 – Get these guys some L.A.-level tacos, or a whole steak ... Check out their fabulous merch!  33:18 – Hey, you! Get off of my cloud! A VC’s perspective of the future of cloud | LinkedIn 36:11 – Fight, focus, or flight - how to win in the "Intelligent Connected World."  40:08 – Piece of cake? Sage thinks so with its latest acquisition | Enterprise Times 42:32 – Some further insight on ‘coopetition’ from Matt Paff | LinkedIn  45:30 – Robinhood’s a little less merry – They’re no longer banking on a charter | PYMNTS.com   46:49 – Reading assignment for next week's show – “Can Silicon Valley remake the payday lending industry?” | NewStatesmanAmerica Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!  Meet Blake in person! December 9-11: Digital CPA Conference in Seattle         Limited edition shirts, stickers, and other necessitiesTeePublic Store: http://cloudacctpod.link/merch  SubscribeApple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast   TranscriptBlake Oliver: In a big firm, since every engagement has to be profitable, they're trying to maximize profitability on every engagement. The firm spends a lot of energy and time on getting those really big, profitable engagements and doesn't want the small ones, which might be bookkeeping a lot of the time. What they fail to see is that even though bookkeeping may have a very low margin, having the client talking to you every month gives you many, many opportunities to upsell additional services. Welcome [00:00:30] to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Happy Thanksgiving weekend! Blake Oliver: Happy Thanksgiving to you, David. Did you go out shopping for Black Friday? David Leary: No, I did not do that ... I'm at a stage in my life where we have everything we need. Blake Oliver: So, are you a Cyber-Monday shopper, or are you just not shopping that much?  David Leary: Even that, we've cut back on that, too.  Blake Oliver: Okay.  David Leary: I used to be very into that Cyber Monday thing.  Blake Oliver: Well, when we get into the news, I have a story about Amazon, which is [00:01:00] super-relevant to Cyber-Monday shoppers, of course, and, I think, something interesting about their business strategy that I found a way to apply to accounting firms and how they think. David Leary: None of my articles relate back to Thanksgiving weekend, unfortunately. Blake Oliver: Well, you tweeted at like 5:00 in the morning ...  David Leary: I did tweet on Thanksgiving morning ... I did tweet on Thanksgiving morning ... Blake Oliver:  You were tweeting about Gusto and Zenefits no longer being friends. David Leary: Yeah because I got the puppy ... My puppy likes to wake up at 4:30 [00:01:30] in the morning, so I have to go outside ... It's a nightmare right now. It's just puppies, man. That's how it is. So, I'm out there, and I'm just kinda scrolling through the news, you know, preparing for the podcast, and I see this article about Gusto and Zenefits. I almost forgot about that this happened. Scott Orn, who was on the podcast probably almost over a year ago ... He's with Kruze Consulting. He actually has his own podcast called Startups with Friends? Blake Oliver: No, Founders & Friends.  David Leary: Founders & Friends ... He released a special [00:02:00] episode last week some time, and he was talking about the impact that Gusto and Zenefits are gonna have because they're not- their APIs aren't tying back together; they're not talking to each other. This goes back to what we talked about two weeks ago, or whenever; I think I posed that question - what happens when these companies stop working together? What happens? Blake Oliver: Yeah, what happens when, for business reasons, somebody decides to shut off their API and no longer connect with a certain payroll provider, or general [00:02:30] ledger, or whatever? David Leary: Yeah, and I posed it like what if it's at a bigger platform- accounting-platform level and its exclusivity with apps- Blake Oliver: What was the reason that you originally said that? I can't even remember. David Leary: We were talking about the streaming wars.  Blake Oliver: Oh, right, right, right ... David Leary: Because Netflix lost all the Disney movies ... All the other streaming companies now lost all the Disney movies; all the Marvel movies, because it's exclusive, and now-  Blake Oliver: Nobody's sharing their content anymore. They're all building their own services.  David Leary: Now, I think if you wanna watch the Martin Scorsese movies, they're [00:03:00] all only on Netflix, right? Blake Oliver: Right.  David Leary: It's that game of being exclusive. So, we were talking about this, like what happens? Well, then, of course, served up on a platter, here's two apps that have turned off ... The APIs are no longer talking to each other. Blake Oliver: It's almost like you somehow had advance notice of this or- David Leary: No, I did not.  Blake Oliver: -you must've just been like feeling the energy in the space. David Leary: Well, things go ... Pendulums swing, right?  Blake Oliver: Yeah. David Leary: I think we had a big swing towards open APIs, and now, are [00:03:30] we seeing it swing the other way? I don't know. I think this could be an example, an argument, of, yes, it's swinging the other way. Yeah, so I tweeted out, essentially, at 5:00 a.m., after I read the article. The article was in Accounting Today, and the title of the article is- Blake Oliver: "Gusto and Zenefits Abruptly End Key Integrations. Customers Scramble." David Leary: So, I read this article, and it's customer focused. I'll skip right to Scott Orn. He actually is quoted in the article. Scott Orn, he's the chief operating officer of Kruze Consulting. They basically do accounting and [00:04:00] HR services for over 200 startups. Blake Oliver: VCFO, as well, they're like, yeah, the full stack. Great example of a modern accounting firm serving mostly startups in the Bay Area. They're in San Francisco. David Leary: He calls them out in this article. He says, "We really like the people at both companies, but this is one example of not putting the customer first, and both companies have built their brand on a customer-first approach." Essentially-  Blake Oliver: Yeah, let's talk about why this happened. What's [00:04:30] the what's the reason behind it?  David Leary: I'll get into that. Essentially, the reason you might use both is, yes, about 80 percent of the features between both products probably overlap, but about 20 percent don't. You might be using 20 percent of Zenefits, and you might be using 100 percent of Gusto; or you might be using 20 percent Gusto and 100 percent of Zenefits, depending on what your needs are- Blake Oliver: If they had did not have an integration and were gonna build one today, it wouldn't happen because they overlap so much. They are [00:05:00] total heads-up competitors because they both offer payroll, and they both offer HR, but they didn't start that way. Originally, Gusto was payroll only and recently started adding HR, and benefits, and whatnot. A long time ago, Zenefits was only HR, compliance, benefits, and whatnot. They didn't offer any payroll. Am I right?  David Leary: Maybe this is what got me so upset, right? I come from that open-ecosystem world. I launched both these apps on Intuit and QuickBooks. Intuit had a billion-dollar payroll [00:05:30] division and still let Zen Payroll, at the time - which is now Gusto - come on the platform. They let Zenefits come on the platform, even though they threatened that billion-dollar payroll division. It's about a more mature view, right?  You can think about ADP/Paychex now sync and work with Intuit and vice versa; QuickBooks syncs with those. 15 years ago, a very immature view of the world was, "No, we don't care if they're a paying customer. They will pay that penalty and download that CSV file; import [00:06:00] it in every time, or manually do work." It's a very immature view of the ecosystem, and now, companies have a more mature view. Blake Oliver: Okay, let's save that debate for just a few moments from now [crosstalk] Let's read the statements from each of the developers. Which one do you wanna read? Do you wanna read Zenefits' or Gusto's? David Leary: Well, let me frame this up, first. Both of these statements, from Zenefits and Gusto, are from, "a spokesperson." As soon as I see things like that- it's not [00:06:30] a quote from some direct person maybe we're familiar with at those companies, it always feels like this is a legal game, or a negotiation game. Blake Oliver: It's PR.  David Leary: It's a PR game, for sure. So, do you wanna read the Zenefits one? Blake Oliver: I'll read the Zenefits one. David Leary: Okay.  Blake Oliver: "Zenefits still has an integration with Gusto for payroll. Gusto required that we modify our payroll integration using the latest version of their API, which does not support the same features as the current integration. Effective next month, joint customers who continue [00:07:00] to use Gusto for payroll will need to manually enter information the API does not support, such as banking and tax details." Now, you read the Gusto one. David Leary: "We asked Zenefits to update their practices for how they were using the integration because the approach they were using created risk of sensitive customer information falling into the wrong hands. Our request was for Zenefits to comply with our existing policies, which all of our partners do. None of this is the result of any new changes that Gusto has implemented. All of our external API documentation is public [00:07:30] at docs.Gusto.com. These security protocols exist in order to keep customer information secure and private. We believe that keeping customer information secure and private is, in fact, being customer-first." Blake Oliver: Okay, so ... May I tell you where I come down on this and why? David Leary: Yeah because I have a whole soapbox. I'm ready to get on it ... So, I'll let you go first. Blake Oliver: Here's how I see it. I see this as Gusto upgraded their API, which happens all the time, and they are requiring all of their partners to move to their 2.0, [00:08:00] or 3.0, or next version of their API, whatever that is, to be more secure. It sounds to me, from this article, like Zenefits declined to do that. They declined to put in the engineering effort to upgrade to the newer version of the API, and Gusto shut off the old one; Zenefits says, "All right, well, you know, now ... That's fine. Our customers will just have to manually import certain data into Gusto." To me, whose fault is that? It's not like Gusto [00:08:30] can go over to Zenefits and build their app for them, right? It's also not appropriate, if the old integration was less secure, to continue to maintain that. So, I come down on Gusto's side, here. David Leary: Yeah, and I ... Yes, that's probably what happened, but I went back to the Way-Way-Back Machine to look at Gusto's APIs, and as far as I could tell, they're very, very similar. They got rebranded and went from Zen Payroll to Gusto. There was a period of time when they were not taking any [00:09:00] more integrations publicly. You had to apply ... They turned their API from being open API to a private API. Blake Oliver: That's the way it is now, right?  David Leary: That's the way it is now. Gusto doesn't have a developer site, as far as a developer's blog, or ... I didn't see any announcements of like, "Hey, we're deprecating on January 1, 2020; we are deprecating the use of old API 1.0 to ... Everybody has to switch to API v.1.2." Blake Oliver: Okay.  David Leary: There's no communications [00:09:30] like that. Now, it doesn't mean it wasn't communicated through email ... There's just so much we don't have access to regarding this. But the things that Zenefits is saying they can't do, I don't see any documentation for the API either. So, I suspect that Zenefits maybe have had some sort of private-level access at one time- Blake Oliver: Oh, interesting ... David Leary: -and a different level of access that isn't public APIs. Somewhere along the line, they don't agree about the private access, and this is why they provided, "Hey, [00:10:00] it's all on our public APIs. Everybody else uses them." Blake Oliver: Oh, interesting ...  David Leary: So, there's a disagreement [crosstalk] This is a public negotiation is what's happening here.  Blake Oliver: Right, right ...  David Leary: Ultimately, the person that suffers is the customer. If they wanted to fix this, both sides could come to the table and figure this out. There's no doubt; they are smart companies; they have plenty of bankroll/VC money to put engineering resources on this. So, this is a dance that's happening. Of course, it's gonna happen. They're competing with each other for [00:10:30] market share, which is fine. That's obvious. It's a dance that's happening. The timing of this, though, is kind of stupid. Scott Orn calls this out. Blake Oliver: End of the year, yeah.  David Leary: It's the end of the year. It's so easy for people to switch payroll companies on January 1. Blake Oliver: So, if the integration doesn't work anymore, than that's a even better reason for people to switch from Zenefits to Gusto- David Leary: Or vice versa- Blake Oliver: -or vice versa- David Leary: Or switch to a third-party payroll product, right?  Blake Oliver: Right.  David Leary: Scott Orn calls that out in the article. I think he was talking about Rippling, or the [00:11:00] other- Justworks ... He was talking about other full-blown HR/payroll-type solutions. So, basically, what I just tweeted out was that this is an immature thing, and I'm embarrassed for both companies. They should figure it out because it just hurts their paying customers. It is circa 2006/2004 Intuit-ADP. The funny thing about this is Zenefits has already done this dance once [00:11:30] with ADP in 2015. ADP shut off all Zenefits' access, and they fought, and spouted, and got in a big argument, and blah, blah, blah, blah, blah ... The same way, publicly, like this. If you go to Zenefits' website, today, there's documentation on how to integrate ADP's products into Zenefits. They'll figure this out-  Blake Oliver: Okay. Got it. David Leary: But Zenefits has done this dance before. Now, me being ... If you're coming from my side, I've had to deprecate APIs before, and when I've done that before, you've [00:12:00] had to communicate it. It's communicated in blog sites. It's communicated in email. You're emailing every single person you know at that company;  you're cold-calling the company, sometimes, because they didn't open their emails. You do whatever you can do to communicate that that API is changing and that it's gonna be shut off, or deprecated. I imagine Zenefits is a big enough company, and Gusto's a big enough company that they had communications. It wasn't like, "Oh, this got into a spam folder somewhere, and nobody knew this was gonna happen ..." Then, really, the giveaway is two spokesmen, spokespersons, spoke on this ... That's [00:12:30] the dead giveaway - this is a public/PR/legal battle that's happening in public. Blake Oliver: Well, let's hope they sort it out. David Leary: That's the thing ... They'll figure it out and then, everybody'll win. Blake Oliver: Perhaps the spirit of the season will bring them together. David Leary: I mean, this could be even a bigger thing. Maybe they're gonna merge. Maybe there's discussions like that on the table. Maybe one's gonna buy the other one. Who knows? But this is totally a public-PR-facing battle out there [crosstalk] for them.  Blake Oliver: Well, before [00:13:00] I get to my top story of the week, shall I read our latest review? David Leary: Oh, yeah, we almost skipped over that. Darn it. Blake Oliver: Yeah.  David Leary: Thank you, sir!  Blake Oliver: Yeah, we were talking about the breaking news; that was breaking news, so- David Leary: We got fired up. Blake Oliver: Yeah.  David Leary: See, you get me on these soapbox tangents, and then I-  Blake Oliver: No, it's good.  David Leary: -go outta order of the show. Blake Oliver: There's no order to this show! It's not like there's structure here!  David Leary: We have an outline. It says reviews, and then ... Blake Oliver: Yeah, but we can jump around. We can do whatever we want. This [00:13:30] is our show, right?  David Leary: That's true, that's true- Blake Oliver: There we go-  David Leary: -it is a podcast. Blake Oliver: All right, so reviews ... We got one review from cellymann: "David Leary and Blake Oliver are unboring. I had a recent conversation with a prospect about how the cloud-accounting space is, "cool," and fun. He laughed, but not in a good way. David and Blake bring the fun to cloud accounting. The "cool kids" of our industry listen to Cloud Accounting Podcast because not only do they bring us what's new and exciting to [00:14:00] the industry, but they actually make it interesting for people who don't find accounting interesting. A must-listen to any accounting professional hoping to build their practice around cutting edge accounting technology." That is from, we think, Brad Celmainis. Thank you, Brad, for that review! Now, let's talk about Amazon and what Amazon has to do with accounting. Black Friday was this past Friday. As we record this, Cyber Monday is tomorrow. So, there are lots of articles [00:14:30] these days about Amazon crushing traditional retail, as there are every year around the holiday season, because everyone wonders is brick-and-mortar retail going to survive another growing season of online shopping and declining season of in-store shopping? David Leary: Did you go shopping Friday morning? Blake Oliver: No way! My son really wanted to go to the mall because there's this amazing climbing structure for kids. We said, "Nope, sorry. Not gonna do it ..."  David Leary: I was up in Phoenix, and I had to take [00:15:00] the puppy to a vet because the eye was ... A little eye problem or something. At 6:00 a.m., I was driving around to a vet; 6:30-7:00 a.m.. Phoenix had a bad rainstorm. I guess everybody in the West Coast has had this really bad rainstorm go through. There was not a lot of traffic on the roads for Phoenix. Blake Oliver: Wow, that's good.  David Leary: I didn't swing by a bunch of malls and things, but ...  Blake Oliver: Yeah.  David Leary: It didn't have that frantic pace out there, that's for sure. Blake Oliver: So, instead of going to the mall, we went indoor miniature golfing, which you might wonder ... Why [00:15:30] would Los Angeles have anything indoor? It's because it actually gets really hot here. David Leary: We have that in Arizona, too. Yes [crosstalk]  Blake Oliver: Yeah. It's dark miniature golfing, like neon, lit-up kinda stuff. Pretty cool. Anyway ...  David Leary: Back to Amazon.  Blake Oliver: Meanwhile, most people are shopping on Black Friday and Cyber Monday. So, there's this article I spotted in The New York Times called, "Chasing Amazon - Retailers are in a Neverending Arms Race." There was one bit here about Amazon that really [00:16:00] stuck out to me, in the context of accounting firms and how accounting firms think versus how Amazon thinks.  I think we can all agree that Amazon is a very innovative company. It has disrupted a lot of traditional industries, all the way from cloud computing with their Amazon Web Services - which kinda dominates the cloud-computing space and pretty much every app in the cloud-accounting space runs on Amazon Web Services, I imagine; at least most of them - and, of course, their traditional Amazon Prime retail- well, not [00:16:30] traditional; un-traditional one-day shipping. Well, Amazon has made this big investment this year in one-day shipping, spending billions of dollars on increasing their logistics so that they don't have to rely on FedEx, and UPS, and the USPS. They can actually deliver packages themselves to the last mile. They can take the package from the warehouse in L.A., out in San Bernardino, to my house, same day. I will then buy more stuff because I can get stuff quicker. Studies [00:17:00] show that if you can get stuff quicker online, you're gonna buy more rather than going to a physical store. What's crazy about this is that if Amazon thought like a traditional accounting firm, Amazon Prime one-day shipping wouldn't exist. If accountants ran Amazon, it wouldn't exist. Why do I say that? Because, according to a Morgan Stanley analysis that's cited in this article in The New York Times, a typical order for one-day shipping is $8.32; [00:17:30] typical order -  $8.32. Amazon spends $10.59 to fulfill and ship that order. So, the typical order is $8.32, and Amazon spends $10.59 to fill and ship it, meaning the company loses money on most of their sales for Amazon Prime one-day shipping. David Leary: Because if it was an accounting firm, I would calculate every single individual [00:18:00] item - if it's profitable or not to ship that one item.  Blake Oliver: Right, and then you'd say, "Oh, it's not profitable ..." David Leary: So, I don't want any sales at all, and I would just never sell anything. Blake Oliver: Right. I would get rid of that line of business, and I would say, "Oh, I'm not gonna do one-day. I'll do two, or three, our four [crosstalk]  David Leary: 10 days, because I'd be cheap. I'd be an accountant going from my ... I would do the cheapest way possible. It'll take 15- days shipping, zero customer service; nobody'll be happy about how long it took to ship ...   Blake Oliver: Yeah. This is a classic example of how traditional cost accounting, which is what most traditional accounting firms use [00:18:30] for tracking profitability on engagements, and clients, and whatnot doesn't work. It doesn't make sense. Let me ask you this - why is Amazon doing this, David? Why would they lose money on all of these one-day shipping orders? What could possibly be the reason? David Leary: To keep me staying at home, right? Blake Oliver: Right. Not only are they crushing their competition this way, they're stealing orders from their competition and weakening them. They are also buying your loyalty. They may lose money on these one-day orders, but because [00:19:00] you're so happy with Prime One-Day, which now, in many cases, we get for free ... I'm a prime member. I get a lot of stuff one-day without having to pay any extra. It's just like included in my Prime membership, and more and more stuff every day gets added to that one-day free shipping. I can buy all the essentials I need and get it in one day. So, by default, I just go to Amazon, or better yet, I order on my smart speaker, my Alexa, and I just set it off ... Don't say anything, Alexa. David Leary: BUY! [00:19:30] Blake Oliver: Yeah. Good thing  I'm wearing headphones. David can't order through the computer. David Leary: Oh ... I tried. I tried.  Blake Oliver: He tried. Better yet, I order through my speaker and I'm not even price shopping at all. I'm just going to Amazon because they give me the best customer experience. They are not worried about losing money on these small orders because, with my loyalty, they make money on all the other orders that are not one-day Prime. David Leary: So, Amazon's using Prime [00:20:00] one-day delivery in the same way grocery stores use that rotisserie chicken.  Blake Oliver: Yes. They don't make any money on the rotisserie chicken, but it gets you in the store, and then you buy other stuff where they make money. David Leary: Same thing.  Blake Oliver: But it's also, I think, even bigger than that in that Amazon is spending all this money to build their own delivery fulfillment infrastructure for that last mile from the warehouse to your house. So, eventually, it will be profitable for them to bring you something [00:20:30] probably. David Leary: Well, they're building a distribution center in every major city. I mean, Tucson has a distribution center now. Every major city is getting one. Blake Oliver: Right, so they can do this. I think accounting firm should be thinking this way, too, which is don't look at individual orders. Don't look at individual tax returns, or individual engagements, and maybe don't even look at the whole client. Actually look at your firm, as a whole. Look at the firm because clients don't have costs. Engagements don't even have costs [00:21:00] because your cost is people and your people are paid salaries, and that is a firm-wide cost. That's not a cost that can be attributed to a specific client, even if you use elaborate cost methodology to track their hours and then allocate their hours. It's all just meaningless. Amazon doesn't do it because it doesn't make sense. So, be like Amazon, and it'll enable you to offer low-margin services ... This was always the struggle I had in a big firm, which is, [00:21:30] in a big firm, since every engagement has to be profitable, they're trying to maximize profitability on every engagement, the firm spends a lot of energy and time on getting those really big, profitable engagements and doesn't want the small ones, which might be bookkeeping a lot of the time. What they fail to see is that even though bookkeeping may have a very low margin, or none at all, or even lose money, having the client talking to you every month gives you many, many opportunities to upsell additional services- David Leary: True. That makes sense.  [00:22:00] Blake Oliver: -which is the same thing Amazon's doing, right?  David Leary: In a way, you'd wanna maybe ... I know a lot of people don't do payroll anymore, but it gives you an excuse, every week, to talk to somebody at that company, at that client, every single week-  Blake Oliver: Right, and find out what's going on, and spot the growth. You see the payroll; you see who they're hiring; you know when they're growing, when they're successful ... If their payroll is expanding a lot, maybe it's time to go pay them a visit and see if you can get some consulting, which will give you great margins. That's a great example - don't [00:22:30] look at the trees. Look at the forest.This episode of The Cloud Accounting Podcast is sponsored by OnPay. Many times, when choosing a payroll service, you have to choose between a new startup with a great app, or an established company whose tech may feel a little behind the times. With OnPay, you get the best of both worlds - a great app from an established company that's been providing payroll for over 30 years in all 50 states. OnPay is an easy-to-use, full-service payroll with simple, straightforward pricing, and it includes all their features - employee self-onboarding, HR tools, health insurance, worker's comp tracking, and 401(k). With an accountant's dashboard and partner program combined with best-in-class integrations with Xero, and QuickBooks, OnPay is the right fit for all your clients, whether they have just one or 500 employees. They also handle all the complicated stuff that other payroll providers don't, like agricultural payrolls, including Form 943, multi-state payrolls, and employees with H-2A visas. I'm really excited to tell you that OnPay is offering an exclusive promo code only for the listeners of The Cloud Accounting Podcast to get three free months of OnPay payroll service for any of your clients that you set up by February of 2020. Head over to CloudAccountingPodcast.promo/onpay. That is Cloud Accounting Podcast dot promo forward slash O-N-P-A-Y, and use code "CAP3FREE," when you sign up your clients. That is C-A-P, the number 3, F-R-E-E. And to be clear, you cannot get this promo anywhere else. It's only available to the listeners of the Cloud Accounting Podcast.David Leary: I kinda have a related article that's maybe counter-intuitive to what you're saying, because you're basically telling people, "Hey, you can't hourly bill and track it all that way. It just doesn't work." Blake Oliver: Yeah. Don't try to maximize the profitability on every engagement. David Leary: Every engagement ... Calvin Wilder of SmartBooks ... I think we've talked about SmartBooks before. We've mentioned  Calvin before, anyways. He [00:24:30] wrote a guest blog post on AccountingWEB this week, and the title of the article is, "How to Know When Fixed Fee Pricing Isn't Working." Blake Oliver: Hmm ... Yeah, tell Me More. David Leary: Yeah, it's a longer article, but it's worth reading. He lays out, basically, for the last 10 years of running SmartBooks, which is basically an accounting firm ... He's got a little bit more of engineering tech on it, so he's kind of a forerunner to these new business models we're seeing pop up everywhere. It's outsourced [00:25:00] bookkeeping, essentially, what he's doing for small businesses [crosstalk] Blake Oliver: -and they've been doing it for a long time, so they're in the cloud, and remotely, so they're a good case study. David Leary: Yeah. Then, they were using fixed-fee billing because they believed it was really predictable and something desired by clients. They really thought it could simplify their engagements and avoid friction. He kinda goes through reasons that it just never worked out as well as they thought it would in their head. He's talking about scope creep- [00:25:30] Blake Oliver: Here's a quote that really sticks out to me ... I'm just sort of browsing through the article right now with you, David. He says, "One would think that after working with hundreds of clients over a 10-year tenure, that we'd have sufficient ability to successfully price new clients. Unfortunately, that has not been the case. This failure has largely been driven by a few main factors." Then he gets into them. David Leary: Yeah, scope creep, employee burnout. Your employees can do so much work, but then eventually that higher volume, they burn out, and now you're having to possibly hire [00:26:00] a new employee and train new people. It just takes time to do that and then, you're not as efficient. That negative employee retention just adds up. Larger clients just erode the profitability on those fixed fees. Clients want flexibility. There's friction and misalignment. He goes on with all these problems that he ran into over his decade of doing this. The conclusion really, in the end, is now, his firm is actually offering fixed-fee pricing still, but they're actually offering the ability, if a client would like [00:26:30] to choose an open an honest ... I'm sorry, not open and honest ... Transparent hourly billing model. Blake Oliver: So they're not going away from fixed fee entirely, but they're gonna offer hourly billing again. David Leary: Yeah, they're gonna reintroduce hourly billing.  Blake Oliver: I can't believe that going back to hourly billing is the right solution. One of the things he mentioned - employee burnout, and large clients eroding profitability - a lot of that happens when the employee incentives aren't aligned with the firm, with the fixed fees. If [00:27:00] you're paying employees hourly, but you're billing fixed fees, that can create a problem. Some firms are moving to incentive-based compensation for their employees so that it's based on the book of business that they're working on or a combination of those two. I don't know. Interesting ... Well, if you're skeptical- if you're listening, and you're skeptical of fixed fees, or worried that it might not work, then I guess this is an article to check out.  David Leary: I could see where ... Let's just use QuickBooks Live as an example ... It's $200 a month. Maybe I'm a small [00:27:30] business owner. I'm just tip-toeing in the waters here. I've been paying 70 bucks for QuickBooks. Maybe I kind of think, "Oh, I probably have an hour a month of bookkeeping. Can't I just pay you for one hour, and pay you 45 bucks?" I could see where maybe clients maybe would try to ask for hourly billing, because the fixed fee ... They're not used to seeing fixed fee with professional services. Where else do I get to pay a fixed fee [crosstalk]  Blake Oliver: Well, I think it's fine, actually, to offer both, but you [00:28:00] wanna make the hourly billing price less ... If the client does select hourly billing, they'd actually be better off with the fixed fee. They have to pay a penalty, essentially. They have to pay more if they want hourly billing is the idea. David Leary: Anyways, it's a long article. It's worth checking out. I find it just interesting that somebody, after 10 years of using the fixed fee, is like, "Maybe this is not working for us ..." This could be the problem of scaling services like this versus having [00:28:30] a lower number of ... A high volume ... This is all about scale, right?  Blake Oliver: Right.  David Leary: Versus small number of clients and value pricing. Then, he just also talks even about artificial intelligence. The scale never happened. This massive "Everybody's gonna lose their jobs. We don't need bookkeepers because artificial intelligence will do all the work and 80-90 percent of the work's just gonna go away." It hasn't ... If you had your fixed prices set on this bet that you were gonna get more, and more, and more efficient [00:29:00] because of AI, he's like, "It's just not there." It hasn't happened after a decade. Blake Oliver: Let's see ... What else do I have? I have something fun. A guy made a digital drum machine in an Excel spreadsheet. Do you wanna hear it? David Leary: Okay ... A guy, or somebody at a Big Four? Who has time for this? Who does this?  Blake Oliver: Let's see. This was on Digg.com. So, I can't ...  David Leary: Oh, you found this in 1997, I see. Digg.com ...  Blake Oliver: It's just funny. I'll just play this for you. David Leary: So, when you say you're playing something, are you opening up a spreadsheet, or an Excel [00:29:30] sheet right now? [Feel the beat ...]  Blake Oliver: So, this is a YouTube video of the Excel spreadsheet playing the beat ... Pretty good, right? Not bad.  David Leary: So, you could download this spreadsheet if you'd like. Blake Oliver: I think so. It looks like it's using [00:30:00] macros or something. David Leary: All right, wrap that up. Blake Oliver: It goes on for like 13 minutes. David Leary: That's crazy. Crazy, crazy, crazy. Blake Oliver: So, the link will be in the show notes, if you wanna see the full video. David Leary: It sounds amazing. Blake gets very excited about this. Blake Oliver: You can do anything with Excel. David Leary: So, I got an easy, easy kinda fun one. Blake Oliver: Okay. David Leary: A new survey by Flex Jobs about the hottest side [00:30:30] hustles. What do you think the number-one side hustle is, right now, in America? Blake Oliver: Well, I know, because I tweeted this out. David Leary: Oh, I stole your article? Sorry ...  Blake Oliver: Yeah, yeah. It was bookkeeping. David Leary: How is it not podcaster? Blake Oliver: I mean because bookkeepers make money and podcasters don't. David Leary: Okay, now I see ...  Blake Oliver: On the whole. Although, David, how is our dinner fund from the merchandise sales going? We have enough to go out to tacos maybe?  David Leary: We might be past that. I [00:31:00] think we're at $22 or something. Blake Oliver: Okay, so half a steak? David Leary: We could go to tacos in Tucson. We can't go to tacos in L.A.. That's where we're at.  Blake Oliver: We could buy like two tacos in L.A., maybe; three tacos [crosstalk] Yeah, bookkeeper. I saw this. Bookkeeper is the number-one side gig, right? Or, what did they say?  David Leary: Side hustle. Blake Oliver: Side hustle. Yeah. There was actually another accounting job on there, too, right?  David Leary: I did find it funny that career coach was [00:31:30] number two because my theory is that there's more accounting career coaches than there are bookkeepers-  Blake Oliver: Well, they'll coach you how to become a bookkeeper- David Leary: Exactly. There's a lot of those that are out there. Blake Oliver: So, that's why this is number one, and number two. That makes sense. Copy editor, consultant, curriculum writer ... Just going down the list [crosstalk] David Leary: NetSuite administrator ... Blake Oliver: NetSuite administrator, and they make an hourly rate of ... What was it there?  David Leary: $70 an hour. Blake Oliver: That's pretty darned good, right? Senior accountant is on there, actually. I guess more, and more ... Enough firms [00:32:00] are offering part-time roles that you can be a part-time senior-  David Leary: That's a side hustle? Blake Oliver: It can be a side hustle. Let's say you just do it in tax season. 45 bucks an hour, right there. So, where did this data come from? This came from Flex Jobs, okay ... Survey by Flex Jobs. So, if you wanna get out of bookkeeping, or accounting, you could look at executive assistant, graphic designer, lead-gen specialist, online instructor, photographer, project manager, recruiter, sign-language [00:32:30] interpreter ... Social media marketing specialist. David, there's a job for you! You're good at social media. David Leary: So, bookkeeper, that is the number-one side hustle. Blake Oliver: Number-one side hustle. That's why Intuit is building QuickBooks Live, if you ask me. There are not enough bookkeepers to fill the demand for that side hustle. I'm surprised Uber driver isn't on there. I guess they don't make enough money, right? David Leary: It's not hot. This is like the hot-  Blake Oliver: The hot one. David Leary: This is the hot list ... Three years ago, I guess, everybody was becoming an Uber [00:33:00] driver, right? It was the hot thing. Two years from now, everybody's gonna be a bookkeeper. You'll go to parties ... "What do you do?" "I'm a bookkeeper." You go to the next person at the party. "What do you do?" "I'm a bookkeeper." It's gonna be amazing. Blake Oliver: Everybody's a bookkeeper ...  David Leary: We need to figure out how to get them all to listen to the podcast? We need to ride this wave. Blake Oliver: We need to start an online bookkeeping company that will do bookkeeping for bookkeepers, because you don't have the time, as a busy bookkeeper, to do your own bookkeeping. I think this is a genius idea and we should raise money for it. So, actually, speaking [00:33:30] of raising money, I have a story about VCs, or a story from a VC. This is called, "Investing in the Cloud: From Gold Rush to Hunger Games and Beyond." It was a LinkedIn article posted by Rory O'Driscoll. He's a partner at Scale Venture Partners. It's a big overview of where he sees cloud going, from the standpoint of an investor investing in cloud startups. David Leary: He has great graphs, or great PowerPoint slides in there. Blake Oliver: He starts [00:34:00] out with the current situation, which is that cloud-company valuations are at all-time highs and that cannot possibly be justified by improved company operating performance. But it does make sense, given 20 years of consistent 30-percent growth in the cloud-software market, which we have seen from Intuit, from Xero; even from Sage, when it comes to their cloud-computing division. They're all growing 30 percent; smaller companies often growing even faster. That's given investors the comfort to pay a lot of money because [00:34:30] when something's been happening for a long time, you think it's a sure thing. But, like any good investor, he says just because it has been happening doesn't mean it always will. He thinks that within the next two or three years, there's gonna be a growth crunch. So, cloud markets are saturating. You can't have 30-percent growth every year without, eventually, cloud eating up traditional software. That makes sense. Basically, cloud has been mostly about cloud-based apps eating up the business of on-premises apps. David Leary: Talking about the growth, this [00:35:00] goes ... One of the things we noticed with the Intuit numbers - it was the first time we haven't seen them say how many new units they moved [crosstalk] Blake Oliver: Of QuickBooks Online, yes, which makes you think maybe that the growth is slowing. So, what this investor, Rory O'Driscoll, is saying is that the gold rush will become the Hunger Games, at some point, because the cloud markets will saturate, and it will become cloud app versus cloud app rather than cloud app versus on-premises app. There's a few different [00:35:30] winning strategies, if you are a software company in the space, that you could use in the next few years, when this starts to happen. He thinks this could happen [crosstalk]  David Leary: Turn of APIs for another app. Blake Oliver: Yeah, that could be one, right?  David Leary: That could be one.  Blake Oliver: That's going heads up, right? Going to battle. Fighting, going head on in the existing cloud market - that's Zenefits and Gusto going at each other. Or it's Xero and QBO really going hard at each other, which is kind of starting to happen. He thinks this can happen as soon as 2021. That's when the [00:36:00] majority of software revenues are gonna come from the cloud. In 2021, it will no longer be on-prem. Cloud will have won. The battle is already over, at that point, for cloud versus on-prem. Then, there's this question of cloud versus cloud. You can either fight ... You can focus; you can find the parts of the cloud market where there's still low competition and good growth - find the untapped resources - or, lastly, you can fly, which is build a company based on more than just the move to the cloud. That's like beyond the cloud. [00:36:30] What is that? Well, he calls this the 'Intelligent Connected World,' or ICW. What does it really mean? Well, he uses an example, which is very near and dear to our hearts, which is next-generation bookkeeping. This is the example at the end of the article for what companies could do, if they don't wanna fight or focus. If they wanna do something completely different, they could go after the market for next-generation AI-driven bookkeeping services for SMPs.  These [00:37:00] kind of companies are not replacing the cloud provider. They are sitting on top of the cloud providers, such as QBO, and using AI and connectivity to replace a human bookkeeper with a service powered by a combination of AI and humans for a more cost-effective solution. The idea is that you skip fighting in the software battle, and you just go straight to some function that is being done by humans in the real world, and you automate that. That is where the true visionary [00:37:30] stuff is gonna happen, and that's where the big dollars are now. This is validation, I think, David, of the stuff we've been talking about - from the investor community. David Leary: Yeah. I was looking at that article, as well, and I thought his ... The one that really set it off for me was his grim realities of exponential math. It takes 19 years for SaaS, or a product, to get to 30-percent market share. But, two [00:38:00] years later, it hits 50 percent, and two years after that, 100 percent.  Blake Oliver: Right.  David Leary: That's where we're at in the curve, and if that's the case, where we're at, you probably don't wanna start a brand-new SaaS-based payroll company today, or a SaaS-based time-sheet company, or a SaaS-based anything.  Blake Oliver: It's too late. It's all gonna be divided up by Gusto, and Zenefits, and OnPay, all these ... They're all gonna ... They are already positioned to dominate. David Leary: You've gotta build a new model, which is like what they're doing now. It's like people and SaaS together, [00:38:30] which, who knows what the new model will be two years from now, right?  Blake Oliver: Right.  David Leary: But you probably need to be ... You need to figure out what the next 10 or 15 years is, not what's the next four, because the next four is already done. Blake Oliver: The economics of going into real-world GDP and trying to automate what humans are doing makes a lot of sense because  instead of ... Here's the example - instead of fighting over $500 per year versus QBO, you're going after $5,000 a year as a replacement for a $10,000-per-year old-school bookkeeping service. [00:39:00] David Leary: Interesting. Well, I'm surprised ... This guy's completely ... He's an investor, but he's outside our space [crosstalk]  Blake Oliver: I don't know. Maybe he's invested in one of these apps, and that would make a lot of sense. David Leary: Yeah. We could work backwards and figure that out pretty easily because what these companies like to do is they like to brag about who invested in them, so we could easily work backwards and figure out who of the players [crosstalk]  Blake Oliver: -I'm gonna do a Google search right now. "Scale Venture Partners and bookkeeping ..."  David Leary: It would make sense if he invested in ScaleFactor because [00:39:30] ...  Blake Oliver: They invested in Bill.com, Scale Venture Partners did. David Leary: Okay. This goes back to ... You know how we've talked about it before with QuickBooks Live, and the stance that Xero's taking of, "We're never gonna do anything like this ..."? This is another article that- you have to do it! You're going to have to do this. There's just no way ... Eventually, you're gonna have to do this. Anybody who thinks they're not is [crosstalk] Blake Oliver: Well, that's where the growth is. David Leary: Yeah. Blake Oliver: The growth opportunity is in automating human activity.  [00:40:00] David Leary: If they were a private company, I would believe it, but they have shareholders. They have a fiduciary responsibility to keep growing- Blake Oliver: To maximize their growth, yeah.  David Leary: That's a good find. It's cool that the examples he's giving is our industry. So, another acquisition from Sage. They acquired CakeHR - HR software. It ties into payroll - hiring new employees; the onboarding; all that type of stuff; handling raises ... Similar [00:40:30] to what Zenefits is offering; similar to what Gusto's offering now - a lot of the providers are doing it. They're only in, right now, the UK and Australia. That's it, right now, but, apparently, the way it's structured ... Reading the article, apparently, it's set up to scale very well to other regions and other countries. They just have not launched in other countries before. This is where it's a good pick-up for Sage, because Sage has Sage products in lots of different regions of the world. Blake Oliver: My [00:41:00] first question was gonna be - didn't they just make an acquisition and turn that into Sage People? But this is not for the same market. Sage People is more for the mid-market, and CakeHR is going to be for their small-business offering. David Leary: Exactly, and one of the articles actually calls that out. They're like, "Sage Accounting plus Sage Payroll plus Sage CakeHR is their small-business suite. Then, they have Sage Intacct, Sage Payroll, and Sage People, and that's their enterprise-level mid-market suite. They're building the exact same suite at two levels. The other thing that was news, I [00:41:30] think last week, and we didn't really pick it up on it, is they sold off theirs payments division. They had something called Sage Pay, and they sold that off to another company to focus in on this full stack. Blake Oliver: So, they're really focusing on the accounting plus HR plus ... What was the other thing? Oh, payroll.  David Leary: Payroll.  Blake Oliver: Gotcha. David Leary: Then that stacks nicely between the- with their business offering ... They have the same offering now for small business and the same offering for enterprise. Different products, but now they can start building up expertise. There's [00:42:00] probably things Sage CakeHR does that Sage People does and vice versa. They'll start to be able to pull features down and push features up. The other thing to call out here, and this ties back to the first thing we talked about, is CakeHR is an open API; so they connect to Sage Payroll, and they connect to other payroll products [crosstalk]  Blake Oliver: Yes, but for how long? David Leary: Yes, exactly! Unfortunately, my gut tells me the pendulum's gonna swing to people moving a little bit away from open APIs in the short term [crosstalk] [00:42:30] Blake Oliver: Well, you know, it's funny- David Leary: -tells me that. Matt Paff kinda wrote about that, as well, and this article you just brought up about the- Blake Oliver: Yep. It's funny, at first, when you started talking about this weeks ago, maybe even months ago, I was very skeptical and thinking, "Oh, David is- David Leary: I'm nuts.  Blake Oliver: -David is sounding the alarm. The sky is falling! It's all gonna ... No, it's not gonna happen ..." But this article, we just ... which is very persuasive, talking about how it's gonna become cloud versus cloud in [00:43:00] the next ... Gosh, it's what? It's turning 2020 in a month. So, we're talking in a year or two, we're gonna hit almost total saturation of the market because everybody's gonna move from on-prem to cloud. Well, then, if these cloud companies are going to battle with each other and then they're doing acquisitions, and they're creating their own suites, then, yeah, there is a possible incentive for foul play ... Not foul play, but just hardball. David Leary: Well, everybody's getting in each other's lanes. Bill.com and products that were just bill [00:43:30] payment, right? There's a stack of those apps, and they just did bill payment. But now, a lot of the credit card apps, the prepaid credit card guys, they're starting to do bill payment. I'm sure it's only a matter of time until Bill.com has an expense or a credit card app, right? Blake Oliver: Yeah.  David Leary: So, they're getting in each other's lanes, and if they keep getting in each other's lanes, even though they used to work together, and they cooperated, they're gonna be competing now, more directly. It's only gonna be natural that not [00:44:00] everybody is gonna be cool, and kosher, and like, "Hey, man, we should have open APIs ..." Blake Oliver: Yeah.  David Leary: This is a risk that's gonna happen. I think it's risky for accountants and bookkeepers, because how do you pick the right tech stack, now, if there's risk of you pick a solution that all the sudden gets closed down? Blake Oliver: Well, I think, if you are having to decide now, you try to pick a solution that isn't gonna get disrupted in the future or pick a stack that isn't going to be a problem. So, as much as [00:44:30] Xero says Hubdoc's always gonna be open and gonna work with QuickBooks, I would take that with a grain of salt. If you're on a QuickBooks ... If you've standardized on QuickBooks as your GL, maybe you don't wanna pick a competitor's product to do your OCR. I mean, that's the way to be safe about it. David Leary: Yeah, or you have to just run with multiple stacks [crosstalk] Blake Oliver: Yeah, which is ...  It's impossible. I don't think you can scale a business that way, so you have to choose-  David Leary: Shame on the industry. Please, please, industry - I know you're listening - do not head down this path. [00:45:00] It's bad for everybody. It's bad for you, I think, ultimately. Blake Oliver: Well, and I think that what you're saying is very noble and good, but, I mean, in the end, economics will dictate whether this happens or not. It's, you know, inevitable. David Leary: Yeah. We'll see. We'll see, for sure. Blake Oliver: We'll see. We'll keep following this. That's all I've got for this week. How about you, David?  David Leary: Oh, a little update on banks! Remember, we talked about banks all this time, and all the tech companies trying to become banks? Well- Blake Oliver: We've been talking about that for a [00:45:30] while. David Leary: -and we even talked about how, last week or the week before, how Walmart gave up ... This story's been done before ... Well, Robinhood, which we've spoken about before, they have an online investing app, and they've been trying to pursue a bank charter. They gave up this week. They're just like, "We're not gonna try to become a bank anymore." They just gave up. Blake Oliver: Yeah, that doesn't surprise me. Everybody else has been failing. Why would they succeed? Also, we've covered them before, and I'm just searching our archives ... David Leary: Well, they jumped the gun on some banks trying to be a bank [00:46:00] before, and they kind of broke some rules?  Blake Oliver: Yeah, okay ... Yeah, this does not surprise me at all. They launched their bank accounts before they even got approved to do it. This was bad ... They launched checking and savings accounts before they were even insured. David Leary: Yeah, so they were already on the radar [crosstalk] Blake Oliver: Yeah, there's no way. There's no way the regulators were gonna let them off of that and give them- David Leary: Yeah, because I think if you start on the naughty list, you [00:46:30] can't move over. Blake Oliver: Yeah. David Leary: You're in trouble, so [crosstalk] Blake Oliver: That was back in July. David Leary: Yeah, they gave up on that. I think we can save this one for next week, and we can deep-dive in it. There's a remote work report from Zapier. A little teaser for next week. Blake Oliver: Oh, yeah ... I've got a bunch of stories about remote work, so maybe we'll have a themed episode. We can just start with that. That'll be great.  David Leary: Then, I had some notes ... There was an article about payday loan companies. We've talked about some of these before, and this ties into everybody's trying to attack banks, or become banks, et cetera ... The title of the article is "Can [00:47:00] Silicon Valley Remake the Payday Lending Industry?" They really focus in on that company Earnin, which'll let you sync to your time-sheets and get paid every day. We've talked about these companies before. Employees can get instant paydays or get their paycheck two days early. We've talked about this before. The article talks about existing payday loan stores ... You're paying 600-percent interest a year ... These [00:47:30] new apps aren't really subject to Truth in Lending Act because they're not giving, technically, a loan out. You kind of do it as like tips. So, if you're a generous tipper, you could actually wind up paying 265-percent interest a year, if you're a generous tipper, and not even know you're doing it.  Then, you give up a lot of hidden costs, as far as you're connecting them to your bank accounts. They can see your transactions. Even though they don't do "collections," they [00:48:00] can just withdraw the money whenever they think you have the money. The payday lender, you might get a loan, but they can't get access to your bank account and take money out. The article goes into there's just hidden costs in this. The radar's starting to be turned on, on these other companies. They might not be as perfect as they come out to seem. It's just something to keep an eye on, especially if you're doing payroll ... Your small business owner has employees like this that are using these services. Just be aware that they're- Blake Oliver: So, [00:48:30] is this something that a business owner would sign up for, or can employees just do it on their own? David Leary: I think the employees just do it on their own. Blake Oliver: Oh ... Well, then, there's really nothing that we can do about it, right?  David Leary: Oh, as far as a bookkeeper goes, or an accountant?  Blake Oliver: Yeah. I'm just trying to figure out what is the tie-in to bookkeepers or accountants. What does it have to- what can we do about it?  David Leary: In the olden days, people used to ... They would sometimes give a payday loan to their employees, just the company would; they'd give an employee an advance, right?  Blake Oliver: Yeah. David Leary: You can do something about it. You could pay your employees [00:49:00] more frequently. There's lots of things that could be done ... It's just something to be aware of because it seems like it's this magic tech solution and maybe it's not. It kind of ties back to that other article from two weeks ago. Like it or not, you're just still broke. You can have all the apps you want, but you're still broke. I think that's about it for this week. Blake Oliver: That's all I got. Until next week, where can people find you online, David? David Leary: You can track me down on all the socials. I'm @DavidLeary. Blake Oliver: And [00:49:30] I am @BlakeTOliver.  David Leary: And The Cloud Accounting Podcast is on all the social, including Instagram now, as well. Blake Oliver: We actually had some comments from people saying that we look different than they imagined. I don't know ...  David Leary: At QuickBooks Connect, somebody thought ... Yeah, they imagined your voice was gonna come outta my body, when they met me. I'm sorry to disappoint you. Yes, I look like this AND I have a crappy voice! That's the way it is ... Oh, merch store! The limited-edition cassette-tape [00:50:00] shirts are only on sale til December 12. So, you have to order it by December 12, or it'll just go away. That's it. Then we'll come up with some other cool shirts, maybe ... Blake Oliver: Sounds good. Well, until next week, David, great talking, and I'll see you then.  David Leary: Bye, everybody. 
  10. SponsorsIntuit QuickBooks https://cloudaccountingpodcast.promo/quickbooks Show Notes01:20 – Meet Ted!   02:59 – Ted talks about Intuit's impetus behind moving into the service game 03:28 – Confidence is key!  Most of the small businesses without an accountant or bookkeeper lack the confidence to reach out for help 04:42 – While QuickBooks Live and TurboTax Live share similar tech, their services are very different 06:04 – QuickBooks Live is only available, currently, in the U.S., and all Live bookkeepers reside in the U.S.  07:03 – Ted shares some of the requirements for becoming a QuickBooks Live bookkeeper 08:01 – The gentleman talk QBO Accountants Edition, and some of the new feature roll-outs, such as the Optimization Center 09:42 – Intuit sees a huge opportunity to capture those small businesses that are, so far, sans accountant 11:11 – What's the real scope of the QuickBooks Live offering?  13:42 – What differentiates the different price points in QuickBooks Live?  14:38 – Intuit is solving for both sides of the market - small biz and accounting professional 15:38 – A bit of discussion on the different ProAdvisor buckets and how QuickBooks Live will affect them 16:39 – What do you tell a ProAdvisor who loses a client to QuickBooks Live?  17:46 – Take a load off, Annie - QuickBooks Live plays a key role in the advisory vision - by transferring lesser-value work  to QB Live, so accountants and bookkeepers can focus on advising and other value-add services 18:28 – Intuit needs to establish clear guidelines around relationships to solve for the needs of the customers and accounting partners 19:43 – Is there a grand convergence of all the Intuit offerings on the horizon?  20:29 – Who's in charge of ensuring the delivery QuickBooks Live services meet's Intuit's WOW factor?   21:49 – What's next on the agenda, for Ted, and QuickBooks Live?  Connect with Ted Ted Callahan, Director, QuickBooks Live Offering, IntuitTwitter: https://twitter.com/asciv LinkedIn: https://www.linkedin.com/in/tedcallahan/ Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! December 9-11: Digital CPA Conference in Seattle         Limited edition shirts, stickers, and other necessitiesTeePublic Store: http://cloudacctpod.link/merch  SubscribeApple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast   Episode Art Photo Credit: Will Farnellhttps://twitter.com/willfarnell https://twitter.com/willfarnell/status/1191506218424176640/photo/1 Transcript This episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to CloudAccountingPodcast.promo/quickbooks. That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you.Ted Callahan: You want to have a person who really knows your business helping you do that, so you need to build a durable connection. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Ted Callahan: I'm Ted Callahan, the Director of the QuickBooks [00:01:00] Live Offering. David Leary: Ted, thanks for joining us. We're here at the last day of QuickBooks- not the last day, the end of the first day of QuickBooks Connect. It's getting a little late. Blake Oliver: We're gonna get this right at some point, right? David Leary: Yes, yes, yes, we will. By day three I will ... It's day one, and we're meeting you for the first time, and I think most of our listeners are meeting you for the first time. What's your background? How'd you get here? Ted Callahan: Sure. Yeah. I've been at Intuit a little over two-and-a-half years, joined their Self-Employed team. I know you guys have talked with the QuickBooks Self-Employed crew in [00:01:30] the past. I had a unique role where I was actually building a bridge across two different business units so that we could really have the TurboTax Self-Employed offering and the QuickBooks Self-Employed offering work together and build a flywheel from that accounting product into the tax product. David Leary: Interesting. Ted Callahan: Mm-hmm. David Leary: Good. Then you came over to the small business side, and it's all QuickBooks Live now? Ted Callahan: Yep, joined the QuickBooks Live team in May. David Leary: Got it-  Blake Oliver: I think the last time we talked about QuickBooks Live on the show, it was still in a development phase- Ted Callahan: That's right.  Blake Oliver: -it was not [00:02:00] live yet. Since then, it has expanded beyond the Boise office. I think, what, it was 10 bookkeepers to start - very trial phase? Ted Callahan: Right. We had a Boise bookkeeping lab, and we still do. We had a crew of bookkeepers there so that we could test and iterate really quickly, figuring out how exactly does this all work? Because, obviously, Intuit's traditionally been a software company, not a services company, and you've gotta really learn your way, end to end, how to operate that as a true business. [00:02:30] David Leary: Could we pause on that? Ted Callahan: Mm-hmm. David Leary: We were walking last night after dinner, and we were thinking about software companies getting into the service game, and it's hard, right? Then, also, just we started talking about margins. Traditionally, software companies are running 80-, 90-percent margins, and the WeWorks now, and you look at Ubers and Lyfts, these software companies, tech companies are trying to do the human element; their margins, they're running at 40-percent margins. Why would Intuit even do this, at some level, right? Ted Callahan: Yeah, it's [00:03:00] a great question. I had the same question when they came to me with the opportunity, to be candid. I think, fundamentally, it comes back to the process that we used to really understand what are the needs of our customers? When we talked to our small business customers, 60 percent are already connected to an accountant. I know Rich covered that when he was with you guys back in June. There's a whole other set, then, 40 percent - tough math - that aren't connected. When we talked to them, and we found out, "What are your biggest problems?"  It came down to they didn't have confidence [00:03:30] that they were keeping their books correctly, and they also weren't spending the time to maintain those books. It was a compounding problem - because they didn't have the confidence, they wouldn't dedicate the time, and you can see that just getting worse and worse.  Literally, when we're looking at some of these small business's books, they'll have over 800 unreconciled transactions. They'll have hundreds of duplicate transactions because they've implemented a third-party app incorrectly. They were really eager for us to help them solve those problems, but they didn't feel like they were ready to go [00:04:00] to the ProAdvisor Network and get the kind of help that we already offer through that platform today. David Leary: I could see how that's intimidating. If you haven't reconciled ever, and you're like, 'Oh, my God. This guy's just ..."  Blake Oliver: Maybe you've never had an accountant or a bookkeeper before, in your life, right? Ted Callahan: Right. Blake Oliver: That's where QuickBooks Online is different in that- or QuickBooks Online- QBO Live is different in that you can engage with a bookkeeper directly through the app, right? Ted Callahan: Exactly. Blake Oliver: It's video conferencing inside of QuickBooks. I've [00:04:30] used the TurboTax Live product. Did you use it too, David? David Leary: I paid for it and never used it [crosstalk] I sent a message and Claudell was not available, and I was very upset. Blake Oliver: We haven't gotten to try QuickBooks Live yet, but I assume it's like the same- is it the same tech? Ted Callahan: It's very similar tech. Yeah, I think the critical difference is TurboTax Live, they are transactionally helping a customer with a problem as you're going through a very linear flow of getting your taxes done. You've got a very clear goal - get that thing done. Bookkeeping is a different matter because it is every month, you've [00:05:00] gotta do it again, and again.  You wanna have a person who really knows your business helping you do that, so you need to build a durable connection. So, similar tech; fundamentally, same platform is the ultimate vision, but if you think about building that durable relationship between a team of bookkeepers and that small business entity, that requires some very real back-end lift. Blake Oliver: How does that work, then, given that it's not transactional? Am I assigned a single bookkeeper, or ...?  Ted Callahan: Yeah, it's a great question. [00:05:30] The way that it works is you're assigned a team of bookkeepers where you have one primary bookkeeper who's the lead. Their job is really understand your needs, then put together a personalized plan for your business, and then manage the team to make sure they deliver great product on time for that business. Then the team is there to support; provide greater depth expertise as needed; extra muscle in those clumpy seasons when more transactions come in, things like that. Blake Oliver: These Live bookkeepers are anywhere, [00:06:00] right? They can work remotely? Ted Callahan: That's correct. Yeah, that's a great question. Blake Oliver: Okay. United States? Globally? Ted Callahan: Right now, we're only in the United States, and all of the bookkeepers are in United States. It's a very common question we get from the small businesses. They say, "Wait a second. Is this gonna be a call-center experience?" We say, "Absolutely not. This is truly about providing expertise for your business, so in-market is important." David Leary: Where are you at in the size journey? Because, I think, early on, some of the projections- we were working backwards from that and like, "Oh, my gosh. Intuit's gonna be the 60th biggest accounting firm overnight." Are [00:06:30] you still ramping up? I forgot the numbers from before, it was thousands, right? You were gonna ramp up really quickly. Ted Callahan: There's all kinds of great projections, right? The great thing about a forecast is the only thing you know is that it's wrong. It's very early days, right? We're just announcing the service, so we're not providing any public figures. What I can say is that the demand continues to outpace supply, so we're constantly looking for more high-quality bookkeepers, and we can talk about their qualifications, as well. Blake Oliver: Yeah, so who can be a Live bookkeeper? [00:07:00] Ted Callahan: Yeah, great question. Blake Oliver: You did kinda tee that up for me, thank you.  Ted Callahan: I know. I was about to say that was a really nice segue [crosstalk] We just met each other, and we've already got that kind of vibe. We ask that they would ... A requirement is you've gotta be a certified ProAdvisor who's active. That means you're current on the latest QuickBooks Online set of features and capabilities. We also require at least a year of active service in that QuickBooks world, so that you have some real depth and content expertise. We also wanna make sure, from a background [00:07:30] perspective, that you either have a degree in accounting or finance or that you've been working as a bookkeeper for at least three or more years. That's because we know a lot of the great bookkeepers - my sister-in-law is actually one of these - haven't actually completed school, but they've developed a real practice and craft expertise that we want [inaudible]. Blake Oliver: I'm a CPA now, but I was a music major- Ted Callahan: Oh yeah? Blake Oliver: -and a bookkeeper for many years before I ever got my accounting, so I appreciate that because otherwise, you'd be kind of blocking people that are otherwise qualified, so [00:08:00] that's great. David Leary: There are some great announcements for the QuickBooks Online Accountants Edition today; great features were added in there, I'd argue. I'm wondering were those features already on the road map, are they being built, or is this because now that Intuit's truly a bookkeeper, is Intuit experiencing these pains, and finally, Intuit is adding real functionality? Those features that were added today were super-super-functional features that people need. Ted Callahan: Yeah. David Leary: Now that you're actually eating the dog food and going through the pains of running a bookkeeping practice, are we gonna see better and better features added to QuickBooks for everybody? [00:08:30] Ted Callahan: Yeah, it's a really insightful question. I certainly think when you really ... When you don't only eat the dog food, but you pay for the cost of the dog food, you look at that set of features that get prioritized probably in a different light. We've been working very closely with the accounting team to prioritize those common features and get them across the line when we didn't have enough resources on them. Blake Oliver: For context here, for our listeners who didn't get to go to the keynote, we were looking at- Ariege introduced the Optimization Center, which you [00:09:00] can actually see an efficiency score for each client based on how automated they are. I thought that was pretty cool; very useful for your Live team, as well, I imagine. David Leary: What I love about that is I see that score, this efficiency score, and you wanna get your clients 85 percent or higher to be efficient in scale. I could see internally that's another way Intuit could make QuickBooks Live work. You're gonna have to scale this massively at the Intuit scale level, right? Ted Callahan: Yeah. David Leary: What's great is I could see you guys using that internally, [00:09:30] but you put it in the product for everybody else, for all accountants and bookkeepers. Blake Oliver: That was a question we had, is would these Live tools for the Live team be available to all ProAdvisors? It seems like that's happening. Ted Callahan: Yeah, I think a key message that I've really been testing with all of the different conversations I've been having is that we fundamentally believe that this is a win-win because we're growing the market for services, right? We talk about out there in the wild, seven out of 10 small businesses aren't connected to an accountant.  That's an opportunity [00:10:00] for everybody that's here at this conference, from an accounting perspective. I think, again, that gap that we see where they say, "Hey, we're not quite ready," here's where we can step into that and help provide some transparency in the category of what is bookkeeping, how do I pay, and to have all of that transparency right up front is really clarifying, and I think will help grow that market. Blake Oliver: The two other major features that were announced were a Bookkeeping Review area where- almost like a checklist; "Here's everything that I need [00:10:30] to do," linked to certain areas of QuickBooks. "Here's what I need to close the books," basically.  Ted Callahan: Yep.  Blake Oliver: With a customizable aspect, too. I think that's neat in that firms will be able to, or individuals will be able to create a customized close checklist for each client. Then, the last one was the Business Performance Overview, like KPI charts ... Not a huge number, but all the really essential ones, right? That brings me to my [00:11:00] next question, which is what exactly is the Live offering going to encompass as a service offering? David Leary: Oh, like will Live eventually get into the advising game? Blake Oliver: Yeah, well ... Are they gonna take me through my KPIs? Are they gonna help me set them up? That's been a big question for us is what exactly is the scope of that $400 per month service? Because I, as a independent ProAdvisor, also offering similar services, I [00:11:30] need to price my services, so I kinda wanna know what is the QuickBooks Live ... What encompasses that? Ted Callahan: Yeah, that's a great question. I would say I'd break it out into three discrete pieces. The first is all around setup; getting that small business customer appropriately set up with their bank, their bank feeds, and their third-party apps which, again, is a place where we see folks can get really messed up.  Then, there's that core, I call, meat-and-potatoes bookkeeping work, which is the categorization of the expenses; the reconciliation of the transactions. Then, [00:12:00] also teaching the customer key workflows in the product. Because, again, my analogy for this is QuickBooks is a very powerful tool. Like a chainsaw, you can cut down a huge tree with it, or you could chop off your own arm if you don't know how to handle that thing. Teaching our small business customers how to use the product in the right way is a fundamental task that QuickBooks Live is providing, where the small business owners are getting a lot of value and, again, that's improving their confidence and their desire to actually engage in the product. Your last point on the personalized [00:12:30] reports, that's also a key part of the value delivery because this is all about giving a customer the insights so they can be managing their business better and then making those right decisions to grow their business. Blake Oliver: My QuickBooks Live bookkeeper would walk me through those reports every month? Ted Callahan: That's right. Yep. That's definitely part of the personalized plan. That's what they come up with of, "Hey, what do you need to be managing your business? Where are you?" One of our early customers was a surf shop in Hawaii. They had just gotten a bank loan, and the bank was requiring them to [00:13:00] be providing much more sophisticated reporting. So, they actually hired us to help them as they started scaling up their operations from one to three different places, including a coffee shop. We were very much a part of, "Help us deliver that monthly income statement, balance sheet, statement of cash flows to the bank, so the loan gets paid down appropriately." Blake Oliver: The price is $400 per month. Is that right? Ted Callahan: Oh, yeah. We've actually [crosstalk] we've rolled out three different price points now. Blake Oliver: Okay, because that's what I was wondering - how you could possibly [00:13:30] serve the wide variety of QuickBooks customers at one price point? Ted Callahan: Yeah. We now have a $200 offering a month, a $400 per month, and then a $600 per month offering. Blake Oliver: What differentiates those? Ted Callahan: It's all around the amount of expenses a small business has per month. If you have $0 to $25,000 a month in expenses, you'll be in the $200 skew. If you have greater than $150,000 a month, you'll be in the $600 skew. If you're in between $25,000 to $150,000 of expenses [00:14:00] a month, you'll be in that $400 price point. Blake Oliver: Gotcha.  David Leary: That's a good way to do it versus transaction volume. Ted Callahan: Mm-hmm. Blake Oliver: Yeah. Ted Callahan: Yeah. As you would imagine, we explored a lot of different ... The goal was how can we clearly communicate to a customer what to expect in a way that made sense and scaled with what we would need to be doing for them on the back end. David Leary: Now that QuickBooks Live is kinda ... You're advertising it. You're not running a Super Bowl ad yet, or anything crazy like that, but it's being advertised. It's out there. The covers are off. Is it bringing in new small businesses [00:14:30] to the QuickBooks family that just never approached it before or even new accountants and bookkeepers are joining QuickBooks Live that, maybe, the typical ProAdvisor fit wasn't for them ...? They don't have a firm, but they kinda wanna do bookkeeping. Ted Callahan: Yeah, great questions. It brings it back to that vision of solving for both sides of the market, right, both the small business and the accounting professional. On the small business side, the answer is it's both ... We see that 40 percent of our current customers who aren't attached to an accountant who said they need help, they're super-excited [00:15:00] about the service, and they're signing up for it in droves. Then also, like you said, there's a whole slew of customers out there who never considered QuickBooks because they viewed it as do-it-yourself accounting software. They said, "Hey, I don't wanna do my books. I want someone to do that with me," so we're testing into how do you communicate to that set of customers because that's a very different value proposition and, candidly, how- and marketing machine to go do that. That's on the small business side. On the ProAdvisor side, because we have that requirement of you've been active, and [00:15:30] you've been a ProAdvisor for over a year, I think it's exactly what you would expect on the ProAdvisor side, but maybe you had more behind the question. Happy to- David Leary: No, I'm just wondering if ... I feel like there's- you can kinda group some of the ProAdvisors in different buckets, right? I think you have some people that - they're value pricing, they have a niche practice; for them, they just look at QuickBooks Live as nothing. It's not gonna compete with them, et cetera. Then, I think, on the other end of the bell curve, you have ... You'll see it in these Facebook groups; there's people that are like, "How do I grow my bookkeeping practice? How do I get clients?" [00:16:00] Blake Oliver: "How do I get clients?"  David Leary: "How do I get clients? How do I market for ...?" Almost, their questions are like they don't really wanna run a bookkeeping firm, and I can see where they're big fans of QuickBooks Live because they're gonna be able to just do what they wanna do, which is just do bookkeeping for small businesses. They can work [from home]; they have lots of flexibility, et cetera.  I think that the people that I feel like are the most threatened I feel like are the people that are - they have a practice, and it's very similar to the offering QuickBooks Live has. I think those people feel the most threatened because they do have clients; they have a real business; they're past that "How do I get any clients" phase; but [00:16:30] they're also not in the new world of offering advising, and value-added services. I think those are the ones that have the biggest fears, the biggest threats, and the biggest concerns about QuickBooks Live. Where are those people gonna fit in? Blake Oliver: Yeah. What do you say to the ProAdvisor who loses a client to QuickBooks Live? Because it will inevitably happen. Ted Callahan: Yeah, I think ... All great questions. I think, fundamentally, what you guys are doing is you're segmenting the accounting market into these different groups. I would say, for the ProAdvisors that have their practice, they actually ... This has [00:17:00] been the surprise of the conference for me, personally; they're actually coming up saying, "I would love to partner with you and hand over my bookkeeping practice to you or at least a portion of it. Let's test into that." That's something that we were not prepared to have happen. Literally, I've got over a dozen business cards of different firms asking to do this. David Leary: It's good that you answered that because I actually have a question from a listener who is asking, "Do you plan on partnering with people ...? If I'm trying to grow my firm, how do I utilize QuickBooks Live to help me grow my firm?" Ted Callahan: Exactly. We [00:17:30] actually had two sessions today. We actually had to move to a larger room because there were so many people that were wanting to come learn more about it, which was great. Blake Oliver: I could hand off my lower-end work to QuickBooks Live, right, so that I can focus on the higher-level tax advisory. Ted Callahan: Exactly, all part of that advisory vision that we talk about. That's an important opportunity that we need to now say, "Okay, have we really earned the right to do that?" We'll figure that one out.  Blake Oliver: The demand is there, apparently. David Leary: How does that work? Because Rich Preece talked about it before about how Intuit's gonna own [00:18:00] the relationship with the small business owner, right? Ted Callahan: Mm-hmm. That was in that model of exactly how I've been articulating - small business customer saying they're not ready for an accountant. This is different. This is a small business customer who's made that choice, so that's a different world. David Leary: That's what I'm trying ... So, I work for an accounting firm, and I have some clients that I'm like, "Yeah, I need to ... I can't be doing the work for these clients until they get a little bigger, and I can provide some more value." So, they're gonna kick them to QuickBooks Live for a while, and then, how do they get  them back? Ted Callahan: Yeah, these are all things we need to go figure [00:18:30] out [crosstalk] As you would imagine, Intuit is a very principled company, and so we would establish a very clear set of principles of is this our customer relationship, or is this the accounting firm's customer relationship? Then, we would have to think through what are the different use cases and make sure we're solving each one appropriately, both for the needs of that small business customer and that accounting partner. David Leary: Because I could see a graduation here. Ted Callahan: Mm-hmm. You could even see it going back and forth, to your point, right? An accounting firm says, "Hey, not right for us. Send them into the QuickBooks Live offering." Then, because we know that when you [00:19:00] work with an accountant, you're more likely to be successful, they graduate; then we can hand them back would be the vision. But you can imagine the complexity of tracking and managing that through time. Blake Oliver: If anyone can do it, I think Intuit can figure it out. David Leary: If you can make it super-complicated, Intuit's gonna figure that out. Yes. Do you ever see a collision between ... You're starting to see a lot of companies now are doing this Software as a Service, or accounting firms are adding engineers. They're having a front-end software product. We've seen acquisitions of tax companies buying accounting software products.  Is there a collision course where there's gonna be an [00:19:30] offering like, "I'm a small business owner. I'm getting TurboTax. I'm getting QuickBooks. I'm getting a QuickBooks Live Bookkeeper. I'm getting a TurboTax Live Accountant all in one price point. I just get it all at once." Is this on a collision course, here? Ted Callahan: I mean, you could definitely make the case there's gonna be this grand convergence in the future. Where my head goes to is, have we earned the right to do that today? There's a lot of capabilities in QuickBooks that don't exist yet to have that seamless flow. On [00:20:00] the TurboTax side, they don't even have a business product, to my knowledge, that's online, so that's not where things are.  Then, I think, also, the concept of how do you communicate that credibly to a customer? You'd really have to think through - how do you position that? I think anytime we get those big, grand visions that we can all see, "Oh, this makes a lot of sense. Everyone will do this!" Then, you go, "How would you go tell somebody and convince them to buy that if they don't know you?" That bar gets really challenging, it turns out. David Leary: Makes sense. No, I think one of the questions [00:20:30] I have, talking to people, is oversight. Who's making sure the QuickBooks Live bookkeepers are doing their jobs correctly, and where's that oversight? Because, I mean, if you talk to ProAdvisors, in general, they'll get a client and they're like, "Oh, their last bookkeeper messed all their stuff up," right? How are you guys managing that? Ted Callahan: Absolutely. Yeah, no, it's a great question. A couple answers for that. First of all, we're absolutely managing that. We actually have four different roles on the back end of the experience of different bookkeepers, [00:21:00] based on their level of experience. We have everything from an associate bookkeeper all the way up to a senior bookkeeping expert and then, two in between that. That's at the front lines, and only that senior expert is the person who's doing the client-facing work. Then, above that, we actually have two layers of management watching over, where there's lots of support; where we answer questions, but we're also making sure, hey, there's a standard of bookkeeping we want to be practicing because, ultimately, the brand equity of Intuit, it [00:21:30] represents a lot of trust to these small business owners. We have to be delivering what we talk about as a consistent "wow" bookkeeping experience. David Leary: Yeah, I imagine it's ... QuickBooks Live is dead if it starts screwing up people's books [crosstalk]  Blake Oliver: QuickBooks Live is dead? Ted Callahan: Yeah, QuickBooks Live is dead. Blake Oliver: Long live QuickBooks Live? David Leary: That'll be the episode title. Ted Callahan: We can see that now. Blake Oliver: Ted, I got one last question for you, which is what is next for you and for QuickBooks Live? Ted Callahan: Yeah.  Good question. I would say it's all about earning the right for our customers [00:22:00] to do the job that we've set out to do and consistently finding new ways to delight them. Blake Oliver: Where can people find you online if they wanna connect with you or learn more about QuickBooks Live? Ted Callahan: Yep, so I'm on Twitter. I'm @asciv. Long story, won't explain ...  Blake Oliver: Well, we'll have to ...  Ted Callahan: Or you can find me on LinkedIn. Ted Callahan on LinkedIn. Blake Oliver: All right. We'll have to hit you up at the party and find out the story behind that [crosstalk]  David Leary: How do they get a hold of you, Blake? Blake Oliver: I am @BlakeTOliver, and you, David? David Leary: @DavidLeary. Blake Oliver: Hey, thanks for your time, Ted. This was great. Ted Callahan: Great to meet you guys. Thanks for your time.
  11. SponsorsIntuit QuickBooks https://cloudaccountingpodcast.promo/quickbooks Show Notes00:57 – Claudell is so far beyond MIA, we couldn't even say her name right!   01:05 – Who needs Claudell, when you have a real LIVE QuickBooks Live bookkeeper to talk with? Meet Pam Bingham!  01:30 – David's got a gazillion questions!   02:54 – Pam shares what it's like to be a QuickBooks Live bookkeeper 03:30 – Job-in-a-box - QuickBooks Live provides its bookkeepers with everything they need to start - from equipment to training 04:48 – The main focus of QuickBooks Live bookkeeping is helping clients clean up and prep their books for month-end closes, and tax time 06:35 – While some providers aren't crazy about QuickBooks Live, Pam took this opportunity and ran with it 07:58 – QuickBooks Live can give bookkeepers some stability when their own practices face constant changes 08:38 – Your practice is what you choose to make of it - plain and simple 11:08 – For clients, QuickBooks Live allows them the freedom to focus and work on the top priority, their business 12:28 – Most of the work done for QuickBooks Live is offline. The face-to-face client meeting is typically a small fraction of the entire process 13:25 – Unlike driving for Uber, being a QuickBooks Live bookkeeper is about building and maintaining long-lasting relationships  Connect with Pam Pam Bingham, EA, Founder, PB Tax and Accounting Services Twitter: https://twitter.com/PBTaxAccounting LinkedIn: https://www.linkedin.com/in/pambingham/ Website: http://www.pbtaxinc.com/ Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! Sadly, we do not have any 2020 travel plans as of yet.           Limited edition shirts, stickers, and other necessitiesTeePublic Store: http://cloudacctpod.link/merch  SubscribeApple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast   Episode Art Photo Credit: Will Farnellhttps://twitter.com/willfarnell https://twitter.com/willfarnell/status/1191506218424176640/photo/1 TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to CloudAccountingPodcast.promo/quickbooks. That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you.Pam Bingham: This gives them an opportunity to work on their business, focus on their business, and let QuickBooks Live handle their books.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Pam Bingham: And I am Claudette. Blake Oliver: What? [00:01:00] David Leary: Claudette's here?  Blake Oliver: Claudette is here from QuickBooks Live? No ... David Leary: QuickBooks Live Claudette. Blake Oliver: I don't believe it. David Leary: No ... Pam Bingham: That's right, don't believe it. I'm Pam Bingham. Blake Oliver: You are a QuickBooks Live advisor!  Pam Bingham: I am a QuickBooks Live bookkeeper, that's correct. Blake Oliver: A QuickBooks Live bookkeeper ... Wow!  David Leary: This was meant to be ... So, Tuesday, I go to lunch; I sit down ... Rewind a second. We are at QuickBooks Connect 2019 ... This is our last interview we're doing- Blake Oliver: Yep.  David Leary: It's wrapping up on Friday. Blake Oliver: People are literally taking things down as we speak. The place is being dismantled. David Leary: Hopefully, we [00:01:30] still have power. So, we sit down on Tuesday, and a lot of people are talking about QuickBooks Live. Everybody's at the table, chatting about QuickBooks Live, QuickBooks Live ... Then, Pam chimes up and says, "Oh, I was a TurboTax Live bookkeeper, or advisor, and now I'm a QuickBooks Live bookkeeper." I was like ... I started shaking. I was like, "You're going on the podcast! Wait until I tell Blake! I'm bringing you on the podcast!" So, now we're here. We have a real QuickBooks Live bookkeeper on the podcast, and we wanna understand ... Who are you, first? Because I know you're a  ProAdvisor, and you have a firm and that experience, and then, where QuickBooks Live fits [00:02:00] in that experience. Then [crosstalk] Blake Oliver: Or we could start with that.  David Leary: All right, we'll start with that, yeah ...  Blake Oliver: We won't overload you with too many questions-  David Leary: I'm actually excited. I got a little shaky here. Could be the fresh-pressed juice or something ...  Pam Bingham: It might be. David Leary: It might be. Pam Bingham: It might be the juice ...  Blake Oliver: So, who is Pam? Pam Bingham: Pam? Pam is ... I am a ProAdvisor, and I am an enrolled agent. I have a practice that I- I have bookkeeping and tax clients, and I am a QuickBooks Live [00:02:30] bookkeeper, as well. Blake Oliver: So, where are you based? Pam Bingham: I'm in the Los Angeles area, the San Fernando Valley. Blake Oliver: Oh, me, too! We're neighbors! Pam Bingham: Yeah. David Leary: Yeah, so listeners ... It's amazing. Blake has had a QuickBooks Live bookkeeper living next door to him, and he's never broke the story. Blake Oliver: Wow. Yeah, I feel bad now ... So, you have your own practice? Pam Bingham: I do. Blake Oliver: You're an enrolled agent. Yeah, so, I don't know ... What's a day in the life of being on QuickBooks Live? Pam Bingham: It's great because you work with the small business owners, and you help [00:03:00] them with their books. You help them clean up their books and teach them good workflows. So, it's a pretty good offering, and it's a pretty good opportunity to help small business owners. David Leary: I think when we had Rich Preece on, in the past, he talked about [crosstalk] Blake Oliver: Former leader of QuickBooks Live [crosstalk] David Leary: -he said they send you out a box. You get a laptop; you get a pop-up banner behind you ... What's your experience? When you go from, "Hey, I'm working; doing my firm work now, and I put on my QuickBooks Live hat," what do you do, actually, [00:03:30] to do that?  Pam Bingham: I take off my firm hat and I put my QuickBooks Live hat on ... No, they do. They send you out a box that has all the equipment that you'll, like a laptop, and your camera, headphones, and, yes, a wrap-around so that you can block the noise-  Blake Oliver: A backdrop for your chair?  Pam Bingham: Yeah, a backdrop for your chair. It comes all ready to go, and then, you're [00:04:00] ready to go; you're ready to start training, and going through learning all their processes and that type of thing. Blake Oliver: How much of your time are you dividing between QuickBooks Live and your own work as a ProAdvisor? Pam Bingham: You're required to work about 20 hours, at least; 20 hours a week. Blake Oliver: How many clients do you work with? Pam Bingham: It could be between 15 and 20. Blake Oliver: 15 and 20 clients on an ongoing basis and about- at least 20 hours [00:04:30] a week? Pam Bingham: Yeah. Blake Oliver: Got it.  David Leary: When you say it's about 20 hours a week, is it when you have time to pop in and out, like an Uber driver's like, "I feel like going to do rides right now," or do you have a little bit of a schedule [crosstalk]  Pam Bingham: No, you have a schedule. David Leary: Okay. Pam Bingham: Yeah. Blake Oliver: Got it. So, you log in and then, you go to work ... How do you- do you schedule appointments with clients? Pam Bingham: Well, they are able to schedule the appointments with us, so you meet with your clients, and you figure out what they need, and you provide [00:05:00] that service. It's basically helping the clients have tax-ready books for the end of the year. You make sure that you prepare the necessary ... Help them with their transactions and help them just kind of reconcile and wrap up the month to close the books ... You build this relationship with the clients. Blake Oliver: So, coding those- getting those transactions into the GL, categorizing them. Are you reconciling the books, as well? Pam Bingham: Mm-hmm.  [00:05:30] Blake Oliver: I understand part of the service is helping the clients understand their reports, right? Do you do that - walk through the reports with them? Pam Bingham: Well, you know-  Blake Oliver: Is that something they have to ask for? Pam Bingham: Yeah, but we're not ... I don't give tax advice or anything like that. Blake Oliver: Right, but if I wanna understand my P&L, and walk through that with you-  Pam Bingham: Yeah, I can walk you through your P&L, definitely. I definitely do that, yeah.  David Leary: Do you actually do other things like help them set up their bank rules? Pam Bingham: Yes. David Leary: You do things like that. Okay.  Pam Bingham: Set up bank rules, and recurring transactions, [00:06:00] and stuff like that. Blake Oliver: How did you get into the program? Pam Bingham: You know, I did hear about it like everyone else. They reached out to some of the tax folks and asked us if we'd like to come on board. Blake Oliver: Oh, correct, because you were at TurboTax Live. Pam Bingham: Yeah.  Blake Oliver: So, have you switched over completely, or are you still doing-  Pam Bingham: I have.  Blake Oliver: Got it.  Pam Bingham: I have left that world of TurboTax-   David Leary: One thing that struck me, yesterday or Tuesday, at lunch, was you have an existing, real bookkeeping practice. You're a traditional [00:06:30] ProAdvisor to some extent, right?  Pam Bingham: I am. David Leary: You are very comfortable with the idea of QuickBooks Live-  Pam Bingham: I am.  David Leary: There are some providers that are not comfortable with it. Can you explain where your comfort level is and where it fits in, in your view of all the clients you have, or don't have, or might take? Pam Bingham: Well, for me, my practice is ... It's kind of probably difficult to understand. I have a full practice - a full practice, for me. Let me explain that. David Leary: Okay.  [00:07:00] Pam Bingham: I vacillated - do I want to ... How far do I wanna grow my practice? I've had it for about eight years; almost eight years, and it has grown since I started it. It's gone up; it's gone down; it's changed. I've changed the way that I work with clients. But, for me, this opportunity that came along with QuickBooks Live was kind of like a fill-in-the-blank type [00:07:30] of situation- Blake Oliver: Because you're doing mostly tax work with your own practice. Pam Bingham: Yeah, I have more tax clients than I do bookkeeping clients. That is correct. Blake Oliver: Got it.  Pam Bingham: So, it was kinda fill in the blanks and then, it gave me an opportunity to be a part of this this service that ... It's new! It's new, so why wouldn't I wanna do it now, if I'm going to participate? Blake Oliver: Right. You're an early adopter. You're a trailblazer.  Pam Bingham: Right.  Blake Oliver: That's really cool. David Leary: One thing that I think I've [00:08:00] never even considered before was it was always presented as, "Oh, if I have some downtime, I could do QuickBooks Live on the side to supplement my practice." I think, if I just heard you correctly, is QuickBooks Live's letting you stabilize your practice, because your practice is a little variable. Pam Bingham: Sure. David Leary: Now, with QuickBooks Live, you're like, "Hey, I know 20 hours a week are gonna be stable. I'm gonna have income; I'm gonna have X number of clients ... It's pretty stable; the demand's gonna be stable, and my practice can be the variable," versus the other way.  Pam Bingham: Right.  David Leary: I [00:08:30] think some people always thought QuickBooks Live would be the variable thing; like, "Oh, yeah, I'll pop in eight hours a week; I'll do some QuickBooks Live, and do [crosstalk] practice ..." It's interesting, you just changed my perspective on this. Pam Bingham: Yeah ... I can only answer why I do it. I don't know why other [crosstalk] I'm sure there's bookkeepers that work there that probably don't have clients or don't have the means to get other clients. I'm capable of building my practice as far as I want to build it, whichever way I want. It's probably [00:09:00] not fair to say, but I think if you wanna do it, you can do it. But I determined, for myself, that this is the route that I wanted to go. I saw it as a good opportunity. Again, early adopter ... They just have really great opportunities for you to grow, and grow with the company, if that's what you choose to do.  Blake Oliver: Wonderful.  David Leary: What would be an example of a QuickBooks Live engagement? The customer sets the appointment; they get on the phone [00:09:30] with you ... What are they asking? Pam Bingham: Well, it's just like any other customer who needs help with books. It really is no different. The only difference is we have parameters in that we can't take every client. Well, who would? I mean, I don't take every client, but I probably take- David Leary: I think there's a lot of firms that try to take every client, and that gets them in bad situations. Blake Oliver: Yep. Pam Bingham: I probably take on more- would take on different situations that QuickBooks Live would not, but ... It's a startup [00:10:00] that doesn't know what to do and handle it so you can get them set up and teach them how to manage this thing so that they can know where they are, financially, all the time. That's the goal with bookkeeping. David Leary: I like how ... Intuit's offering QuickBooks Live bookkeeping kind of at the purchase point of QuickBooks Online. In theory, the hope and the theory is, from day one, they in QuickBooks Online. They set up employment, [00:10:30] and from day one, they're starting to set things up correctly, which just helps everybody down the funnel, eventually. If they grow to a big, huge company and they move on out of QuickBooks Live to another bookkeeper, or ProAdvisor, their books are actually set up, and they're actually usable- Pam Bingham: Right, instead of the way that I sometimes get clients, and I'm like, "Okay, well, did you have help doing this?" "Well, I just started figuring it out ..."  Blake Oliver: That's the classic Desktop QuickBooks situation, where the bookkeeper doesn't get involved until 14 months later, and they have to untangle [00:11:00] a year- Pam Bingham: Or two. Blake Oliver: -or two ... This is hopefully eliminating that situation. Pam Bingham: Yeah. It's giving business owners a head start to really move out of the space that they really don't need to be in. They need to be in a space where they're growing their business and delegate ... It's hard to do it. I mean, you know it; even everyone who has a business ... It's hard to delegate. It's hard for me to delegate ... This gives them an opportunity to work on their business, [00:11:30] focus on their business, and let QuickBooks Live handle their books. David Leary: Do you do any QuickBooks Live work offline? If you have real clients, you talk to your client; you have a meeting; you might, for an hour, do work in their QuickBooks file or something. Does that model exist with QuickBooks Live? Pam Bingham: No.  David Leary: You just do whatever you do, real-time, when you're in a face-to-face video [crosstalk]  Pam Bingham: -during whatever time frame that you're working for QuickBooks Live ... It doesn't have to be just face to face. You can do it offline, with not talking to the client, yes.  [00:12:00] David Leary: Okay, so you are doing some sort of bookkeeping work behind the scenes. Pam Bingham: Yes.  David Leary: It's not all live client interaction- Pam Bingham: Okay, yeah.  David Leary: -interesting to know. I did not [crosstalk]  Blake Oliver: That's one the questions we had, actually. I'm glad you asked that. Yeah, is it only with the client, holding their hand, or is there an offline component, which David's talking about? Pam Bingham: Yes. Blake Oliver: Yeah. I'd assume you wouldn't need to be on the phone live with the client, while you're getting reconciled, right? Pam Bingham: No.  Blake Oliver: Yeah, that may not be productive. Pam Bingham: No, it would not. David Leary: What's the ratio, do you [00:12:30] think, as far as time you spend chatting, video, face to face with your client versus doing offline work? Pam Bingham: Usually if you have an appointment, it's about an hour, depending on the client. But typically, it's an hour to go over, review whatever it is that you're reviewing with the customer. Blake Oliver: What's the longest client call you've had? Pam Bingham: An hour-ish ...  Blake Oliver: Okay. That's not bad. I was thinking, like somebody could keep you on for like half a day ...  Pam Bingham: An hour-ISH ...  [00:13:00] Blake Oliver: An hour-ish ...  Pam Bingham: Yeah, no, no ... How does that help the client anyway? If you're on with them for half a day, what could you possibly do? Blake Oliver: Good point.  David Leary: That's true ... Are you starting to recognize repeat clients or seeing the same faces to where you're getting to know these clients a little bit [crosstalk]  Pam Bingham: Well, this is a relationship that you're building. The goal is to have this client, to help them keep their books in order. Blake Oliver: These are not just one-off calls, and requests for work-  Pam Bingham: No-  David Leary: It's not like an Uber driver [crosstalk]  Blake Oliver: This is an ongoing relationship- [00:13:30] Pam Bingham: Yes.  Blake Oliver: -with, you said, like 20-something clients, is that right? Pam Bingham: Yeah. David Leary: Okay.  Blake Oliver: This has been super-helpful- Pam Bingham: Really? Okay. Blake Oliver: Yeah! Thank you so much for helping us understand how it works. It's one thing to hear about the program from the leaders; it another thing to talk to somebody who's actually doing it. So, thank you so much, Pam, for joining us. Pam Bingham: You're very welcome! Blake Oliver: Normally, we ask our guests - are you on social media? If people wanna follow you, should they follow you? Do you wanna share that out?  David Leary: Well, this is the easy answer - if you wanna get a hold of Pam, you join- you buy QuickBooks Live for bookkeeping, and then, you can talk to Pam! That's probably the easiest way. [00:14:00] Pam Bingham: I think that I may follow you both. I think I do.  Blake Oliver: All right. As always, you can find me on Twitter. I'm @BlakeTOliver, and how about you, David? David Leary: I'm @DavidLeary. Blake Oliver: And Pam, thank you so much for joining us today. Pam Bingham: Take care. David Leary: Thank you, Pam.  Pam Bingham: You're welcome. Bye!  

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