Sage Intacct Advantage 2019 - Interview Pack

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Creation Date December 13th, 2019
Updated Date Updated May 13th, 2020
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All the interview episodes of the Cloud Accounting Podcast recorded LIVE at Sage Intacct Advantage 2019 #ADV19
  1. Sponsors Bill.com https://cloudaccountingpodcast.promo/bill Teampay https://cloudaccountingpodcast.promo/teampay Show Notes 01:08 – Meet Mariana! 01:46 – What's a lawyer doing at an accounting conference?  04:22 – Mariana takes us to school on HIPAA 06:38 – Why should accountants and bookkeepers care about HIPAA?  06:58 – There are three types of entities that fall under HIPAA protection - healthcare providers, plans, or clearinghouses 08:19 – Any accounting system that contains names and addresses of patients must comply with HIPAA Privacy and Security rules 10:09 – Which apps in a healthcare accounting ecosystem DO have to follow HIPAA rules?  12:20 – When dealing with collections for medical accounts, HIPAA rules get so complicated that it's best to consult with legal advisors to know exactly how to proceed 13:40 – Sage took a detailed approach to implementing HIPAA compliance in its 2018 product offerings | Sage Intacct  16:06 – There's no official HIPAA compliance certification, but there are vendors who will provide independent assessments of a firm's compliance level 17:47 – HIPAA is no joke. Violations carry significant civil and criminal penalties!  19:27 – Mariana shares a few facts about the California Consumer Privacy Act | Californians for Consumer Privacy  Connect with MarianaMariana Antcheva, Sage IntacctLinkedIn: https://www.linkedin.com/in/marianaantcheva/ Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 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  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 Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend.  Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y.Mariana Antcheva: Your accounting system, whichever one you use, if it finds itself containing patient names or addresses of patients, will have to comply [00:01:00] with the privacy and security rules of HIPAA.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Mariana Antcheva: And I'm Mariana Antcheva, VP Legal of Sage Intacct. David Leary: Mariana, thanks for joining us. We are here at Sage Intacct Advantage- Blake Oliver: Live in Las Vegas. David Leary: Live, recording right in the middle of this major walkway [crosstalk]  Blake Oliver: -the rotunda. People are going from sessions to other sessions, and there's elevators going upstairs. This is a big conference. There's like thousands of people here. David Leary: I like [00:01:30] to always look at all the sessions and I plow through, and I saw yours, and I'm like, "Why's a lawyer speaking to a bunch of accountants and bookkeepers?" You usually don't see that at the conferences we tend to attend. So, how did you become a speaker at an accounting conference - yeah, Intacct Advantage?  Mariana Antcheva: Well, this is my second Advantage for Sage Intacct. Last year, I volunteered to speak because the GDPR - the General Data Protection Regulation and Privacy Regulation ... quite comprehensive - that came into [00:02:00] effect last year in Europe was something at the forefront of the news, as well as, we were getting questions at Sage Intacct about our own compliance. So, I volunteered to do a session for Advantage, and I ended up, quite surprisingly to myself, even, being the highest-rated speaker at last year's Advantage. This year, the Sage Intacct Advantage team invited me to do two sessions. David Leary: To defend your title. Mariana Antcheva: Yes. Blake Oliver: And, of course, you know, in the world of professional [00:02:30] services, if you do well, you just get more work, right?  Mariana Antcheva: Very true. David Leary: That's the real world. Blake Oliver: So, this year, you're speaking on ... What are the two topics you doing this year? Mariana Antcheva: I am doing, today, which is Wednesday, October 23, I'm doing the California Consumer Privacy Act; a new California law that's gonna come in effect on January 1, 2020, in California. It's quite comprehensive; privacy oriented. Tomorrow, I'm going to be talking about HIPAA- Blake Oliver: That [00:03:00] is the Health Information ... Help me with that acronym. Mariana Antcheva: Let me help you here. HIPAA stands for the Health Insurance Portability and Accountability Act, which is a federal law dealing with the providers' provision of medical care, as well as the handling of individual medical information called 'protected health information.' Blake Oliver: So, I have a personal story around HIPAA compliance, [00:03:30] which is that I started my career as a bookkeeper, and some of my earliest clients were in the medical field - occupational therapists, doctors' offices ... Now, I'm a bookkeeper; I'm not a lawyer; I'm not a CPA, at that point. To me, it was like no big deal that we had patient names in the accounting system, and we were tracking their sessions in different ways and whatnot. But I understand that that is [00:04:00] not okay to do, in certain respects, right? We have to keep ... The big picture around HIPAA - we have to keep the patients anonymized somehow? What do we have to avoid doing, I guess? Mariana Antcheva: As a lawyer, in a typical lawyerly fashion, let me ask you a question before I answer your question. When was that? Blake Oliver: So, I guess that was like five years ago. Mariana Antcheva: Okay, so you're asking actually somewhat of a history question, yes, because HIPAA has [00:04:30] evolved over time, especially around the issues that you're alluding to, meaning how protected health information is handled, how secure it has to be, how private it has to be. HIPAA was originally passed in 1996, and at that time, it was passed as kind of a framework that- it was supposed to be filled in over time. The original focus was more on the portability part - portability of health insurance, when [00:05:00] employees change jobs; portability of medical records, when patients change medical providers. But, over time, this framework got filled with also the privacy and security aspects. In 2004, the Privacy rule came into effect, and it deals, at a very high level, with how private the medical information has to be; with whom it can be shared, et cetera, et cetera. Then, two years later - 2006 - the [00:05:30] Security rule came into effect. It deals with how secure the protected health information has to be protected from unauthorized disclosure or alteration. Then, 2009, another couple big developments. The Breach Notification rule came into effect, and that deals with who do you have to tell, if you realize that protected health information in [00:06:00] your custody has been disclosed without authorization? That is the breach. The other development in 2009 was the HITECH Act. Here, I have to refer to my notes because HITECH stands for Health Information Technology for Economic and Clinical Health Act- David Leary: Simple, simple ...  Mariana Antcheva: Yeah, very simple. The HITECH Act deals with electronic health records; also [00:06:30] expands the HIPAA Privacy and Security rules to business associates. I assume you were actually a business associate? Blake Oliver: Right. So, that gets us to the question - why should we, as accountants, care about HIPAA, right? If it's medical information ... David Leary: We're just touching the money. Blake Oliver: Yeah, we're just accounting for the business, right? Why do we care? Mariana Antcheva: Okay, another legal trick, here. Blake Oliver: Yes. David Leary: A legal trick ...  Mariana Antcheva: Before I answer this question, I would like to include a preface here- Blake Oliver: Okay.  Mariana Antcheva: -because HIPAA [00:07:00] does not apply to every single company here in the United States. It applies to what HIPAA calls 'covered entities,' and covered entities, at a very high level, are three kinds. There are providers of health services; there are also health- could be health plans, or healthcare clearinghouses. If you're an accountant providing accounting services for one of these covered entities, definitely, HIPAA has to be at the forefront [00:07:30] of what you do- Blake Oliver: Because you're a business associate of these covered entities- Mariana Antcheva: Exactly. Sometimes, it gets missed. A lot of people don't realize that a patient name, in and of itself, or a patient name and an address, in themselves, without further medical information, actually constitute protected health information under HIPAA. Blake Oliver: This is what I had no idea about, as a bookkeeper, is that ... I don't know what the reasoning was, but I [00:08:00] think whoever set it up thought, "Okay, well, we're not including any medical information in this file; it's just names and addresses for invoices." Mariana Antcheva: This is a very common misconception. Blake Oliver: Right ... I can't even have that in the accounting system unless the system is compliant with those data protections. Is that what I'm ...?  Mariana Antcheva: Exactly right. Your accounting system, whichever one you use, if it finds itself containing patient names, or addresses [00:08:30] of patients, will have to comply with the Privacy and Security rules of HIPAA.This episode of The Cloud Accounting Podcast is sponsored by Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com.   Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.Blake Oliver: That excludes [00:09:30] the vast majority of accounting software available on the small business market. I've looked into this ... Nothing that's selling direct to ... The products that you would get at Office Depot are not HIPAA-compliant, generally ...  David Leary: So, then, I see this ripple effect, because obviously, we're at Sage Intacct Advantage today, and there's all those apps on the Expo floor, and they tie on to Sage Intacct, but they also tie onto all the other accounting systems that are out there. [00:10:00] Now, there's like a ripple effect because maybe the accounting system's HIPAA-compliant, but maybe that time-sheet app isn't. Where does this stop? Mariana Antcheva: That's an excellent question because you assume that HIPAA follows wherever the protected health information goes, and that's exactly right, that's the concept of a business associate - someone who is not the covered entity, but performs services, or holds information for the covered entity. If Sage Intacct, for [00:10:30] example, our application, were to hold protected health information for our customers, applications that link to it - that's your question - do they have to be compliant with HIPAA, as well, or not? The answer ... Here comes another lawyerly answer - it depends. It depends, first, on whether protected health information makes it into the other application because, in many cases, it actually doesn't. If it is an application that does, for example, employee [00:11:00] expense reimbursement, there's no protected health information; there's no patient data in that application; so, it won't have to comply with HIPAA. But assuming that protected health information makes it into the other application, then, it also depends because some purposes for handling protected health information are actually outside of the scope of HIPAA, and HIPAA lists what these are. Examples of that are some [00:11:30] forms of scientific research, for example, would not fall under HIPAA, or what is perhaps more pertinent to our listeners today is processing for financial purposes, such as processes of consumer-conducted transactions by debit, credit, or other payment card, or the clearing of checks, or electronic fund transfers - things like that are outside of the scope [00:12:00] of HIPAA. Blake Oliver: Okay. Mariana Antcheva: It is a very complicated set of rules, almost like playing chess- David Leary: Like collections, I imagine, too, because the collections works, a lot of times, is you ... That patient didn't pay you; now, you turn that over to a collections agency and sometimes, they sell it to 50 other collection agencies. I mean, technically, that's the patient, but sounds like that - based on what you just said - all the sudden is not as covered. Mariana Antcheva: Well, we'll have to delve into the depths of the HIPAA regulations to verify where collections stand, on one side or the [00:12:30] other. If you have listeners who are interested in that, I urge them to consult with their legal advisors because, again, the rules are so complicated. Blake Oliver: So, how does Sage Intacct help with HIPAA compliance? Mariana Antcheva: Well, Sage Intacct announced its HIPAA compliance last year, and it was a kind of an involved process for us- David Leary: Almost a decade after- Mariana Antcheva: Right. David Leary: -after the HITECH standards were put in, it took a decade for Intacct to even announce ...  [00:13:00] Mariana Antcheva: We have had interest by prospective customers asking whether we're HIPAA compliant. So, first, we conducted a customer survey to understand what the actual need is. We realized that the typical use-case scenario for Sage Intacct is when the accounting team needs to process and issue a refund check to the patient. That's when the patient's name and address make it into Sage Intacct. They said, "Okay, there's [00:13:30] need by our customers and prospective customers for us to be HIPAA compliant so that we can address this use case without resorting to some work-arounds." We engaged with a vendor, Sword & Shield, and conducted gap analysis. We realized that we were already in kind of pretty good shape because we are PCI-compliant; we're SSAE 18-compliant. So, the gap analysis resulted [00:14:00] in a high-19s percentage compliance already. The most probably involved gap that we had was our ability to track not only who has edited accounting information in the system, but also who has accessed it. One of the rights of the patient under HIPAA is to receive information from the covered entity who has accessed that patient's health information. In [00:14:30] an application such as ours, this turned out to be a pretty significant technical issue. Imagine, for example, you run the report, and the patient information makes it into the report, or you have a drop-down menu which is pre-populated for convenience purposes. That's also considered access. So, we took a very detailed approach. We did significant product developments in our May release in 2018. [00:15:00] We launched the Advanced Audit Trail, which does this advanced tracking of access. An interesting fact for our listeners, I, myself, last year, had to have surgery at a renowned Silicon Valley hospital. I was given the option to create a account on the website of the hospital, for myself, to communicate with my doctors, to track my prescriptions, things like that. So, per using the website, and my account, I [00:15:30] saw a button - Who has seen my information? I'm like, "HIPAA Access rule! Let me see who has seen my information!" I clicked, and I was so underwhelmed to realize that the system returned only my own log-ins. I'm like, "Uh, amateurs!"  Blake Oliver: Right. Of course.  David Leary: When it comes to HIPAA compliance, obviously, if somebody wants to be a CPA ... You have to go through the bar exam to become a lawyer. Do you just test it yourself, and be like, "Hey, we're [00:16:00] HIPAA compliant," or is there some certification board that's out there issuing stamps/medallions for being HIPAA compliant? Mariana Antcheva: There is no official certification for HIPAA compliance, but there are vendors who would provide a independent assessment of your systems and processes and would issue a verification whether, in their opinion, you are compliant. Sage Intacct uses Sword & Shield as such a vendor and does [crosstalk] David Leary: That way, you can push that liability, like, "We hired these guys. They [00:16:30] said we were ..." You can push that liability off of you a little. Mariana Antcheva: I don't really view it as a re-assignment of liability, but it is something to reassure our customers that we're taking it seriously; that we're continually monitoring and staying on top of it every year. Blake Oliver: Let's do a hypothetical. I am a CPA who owns a small accounting firm, and I have lots of medical offices that I do outsourced accounting for. We have exactly that situation [00:17:00] that you mentioned, that use case, where we're very careful not to include any patient information in the general ledger. The doctors have their own practice-management software.  We're just recording the income and expenses, except, every now and then, the doctor has to show a refund check. We will cut that check and now, there is a patient name in the general ledger. We're not using a HIPAA-compliant accounting system. We're using something [00:17:30] else. What is my risk? What is the risk I'm running if I just keep doing that? What are the potential penalties that I might face? Because it's very expensive for me to change accounting systems, and maybe I'll just keep doing it if it's not that big a deal?  Mariana Antcheva: Well, from the mouth of a lawyer, it's never a good idea to ignore the law, but that is especially true about HIPAA. HIPAA carries significant civil and criminal penalties. HIPAA takes, [00:18:00] actually, into account the culpability of the company and how reckless, or willful they were in violating the HIPAA rules. So, in really bad cases, the civil penalties can go quite high, up to $1.5 million dollars per year per type of violation. On top of that, there could be criminal penalties for willful violations, going up to 10 years imprisonment. HIPAA [00:18:30] is no joke. David Leary: I'm trying to think about a poor accountant, or bookkeeper, now. You have to know IRS regulations and guidelines, right? You now, because of Wayfair v. South Dakota, you need to basically understand sales tax nexus at a completely ridiculous 50-state/county/city level, across the board. Now, you have to also know HIPAA laws because your clients might ... The poor accountant or bookkeeper has to know everything now these days- Mariana Antcheva: And may I add, the California Consumer Privacy Act, maybe-  [00:19:00] David Leary: Oh, yeah, the Privacy Act. That's next! That's next! Privacy Act. Yep. Absolutely. Mariana Antcheva: Or the privacy laws of about a dozen states that are still in the works but may come into effect in the next year or so. Blake Oliver: Fortunately, the California act only applies to businesses of a certain size, and the threshold is ... Do you have those offhand? I don't remember. Mariana Antcheva: That is my presentation in about 38 minutes. David Leary: All right, we'll have to start a whole new podcast for that!  Mariana Antcheva: It's like, let me give you the number. It [00:19:30] is over $25 million in revenue, or a business that derives more than 50 percent of their revenue from selling personal data, or a business that sells that personal data of more than 25,000 people per year. Blake Oliver: To me, not to get into this ... This is really a topic for another episode, but to me, the big logistical hurdle would seem to be figuring out how to get all of that customer data into one place because [00:20:00] you have to be able to return it to the customer if they ask for it, right?  Mariana Antcheva: Yes.  Blake Oliver: So, if you have everything in spreadsheets all over the place, it's impossible. Mariana Antcheva: Very true. Very true. Blake Oliver: Very difficult, right? Mariana Antcheva: Yes. Blake Oliver: All right. Well, I hear that buzz, and I think that means people are changing sessions, and you probably have to get over to your session that you're gonna be leading- David Leary: Especially with the reputation of being the best session [crosstalk] last year.  Mariana Antcheva: Well, let me first try to defend it this year, and then we will talk again. Blake Oliver: So, Mariana, we [00:20:30] always ask our guests - where can people contact you/get in touch with you online, if they'd like to continue the conversation? Mariana Antcheva: Of course. You can find me on LinkedIn - Mariana Antcheva, VP Legal of Sage. I check LinkedIn pretty regularly. Shoot me a message if you would like to connect. Blake Oliver: Wonderful. Thanks for your time. David Leary: Thank you. Mariana Antcheva: Thank you. 
  2. Sponsors Bill.com https://cloudaccountingpodcast.promo/bill Teampay https://cloudaccountingpodcast.promo/teampay Show Notes 02:09 – Meet Kelly!  03:05 – Kelly talks true crime | WGN Radio  07:21 – It takes a balance - you need the 'yes' people and the naysayers to keep you from making crappy decisions 08:36 – The first step to changing your firm's culture - you've gotta know you have a problem!  10:21 – Speaking of problems, we talk about the melee surrounding audit watchdog, PCAOB, and KPMG | WSJ  10:52 – We humans tend to take a one-dimensional viewpoint when it comes to fraud 12:53 – You can't rely on people's personal perceptions. You have to show them concrete examples of ethical lapses to paint a really clear picture 13:51 – How do we remove the incentives for unethical behavior? 16:02 – Ethics training needs to focus on real-life, practical scenarios that actually relate to the people involved 18:27 – When you’re talking about a company with hundreds of thousands of employees, ethical issues are critical! 20:54 – Financial relationships, in any profession, can create a perverse incentive to ‘look the other way’  23:36 – What your expense reports really say about you | WSJ 23:59 – Kelly’s required ethics and fraud reading/listening list includes the docuseries, “Dirty Money”, a podcast called The Dropout, and John Carreyrou’s book, “Bad Blood”  25:56 – Kelly gives us a brief synopsis of her film, “All The Queen’s Horses” | YouTube 29:04 – While she uses film as a teaching platform, Kelly has no plans to make more films.  Connect with KellyKelly Richmond Pope LinkedIn: https://www.linkedin.com/in/kelly-richmond-pope-cpa-83689a5/ Twitter: https://twitter.com/kellyrpope Kelly's TEDx Talk https://www.ted.com/talks/kelly_richmond_pope_how_whistle_blowers_shape_history/up-next%3E All the Queen's Horses - Website: https://www.allthequeenshorsesfilm.com/ All the Queen's Horses - YouTube: https://youtu.be/dpr2A3S3CNk Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 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  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 Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend.  Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y.Kelly Richmond Pope: So, I think behind every good fraud is two things - a whistle-blower and a cultural problem ... Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Kelly Richmond Pope: And I'm Kelly Richmond Pope. David Leary: Kelly, thank you for joining us here at Sage Intacct Advantage. This is day two or three of the conference. Kelly Richmond Pope: It's day one for me. Blake Oliver: Yeah, this day two. The Accountant Day was yesterday, I think. David Leary: All these feel like five-day conferences, these days. Every conference feels like day five. You're always looking for coffee and hot water. But Kelly, thank you for joining us. I just go through all the sessions, and I find one that looks interesting. I know you had a session - "Why Ethics and Culture Matter."  [00:01:30] Kelly Richmond Pope: Yes, it's coming up. David Leary: Oh, you haven't done it yet.  Kelly Richmond Pope: I haven't done it yet.  Blake Oliver: Oh ...  David Leary: So, if you're listening, go attend the session- Kelly Richmond Pope: Right!  David Leary: -but we're not broadcasting live, so this is not gonna help you [crosstalk]  Blake Oliver: Yeah, this is gonna be like two weeks later, so we will just assume it was amazing. Kelly Richmond Pope: Of course!  Blake Oliver: Actually, I've had the privilege of hearing you speak in the past at a different conference, so I'm really looking forward to talking to you today. Kelly Richmond Pope: Well, thank you. Blake Oliver: On a similar topic, kind of. I think the last one was on fraud. Kelly Richmond Pope: Yes.  Blake Oliver: But we [00:02:00] know that fraud, and ethics, and culture are all interrelated subjects, right?  Kelly Richmond Pope: Right because ethics ... Well, fraud is the absence of ethics, so they're all related. David Leary: And just for our listeners who aren't aware of who you are, you have a documentary on Netflix; you have TED Talks out there. I think your TED Talk has 1.5 million views, I saw? That's impressive. What else do you do? Because you're obviously multi-talented. You're a professor ...  Kelly Richmond Pope: I'm a professor. My training is- that's my home. I'm a teacher. I feel like I'm a teacher. But I [00:02:30] am an associate professor in the School of Accountancy and Management Information Systems at DePaul University in Chicago. I teach managerial accounting, and forensic accounting. I'm a filmmaker; I host a radio show on WGN Radio on Monday nights - a true crime radio show from 10:00 p.m. to 1:00 a.m. in the morning. Blake Oliver: And you do that live? Kelly Richmond Pope: I do it live.  Blake Oliver: Wow ...  Kelly Richmond Pope: Yeah.  Blake Oliver: Then, you gotta get up and go to class? Kelly Richmond Pope: I teach three classes on Monday. My last class ends at 9:15, and I'm in the studio at 10:00. [00:03:00] Blake Oliver: That's a long day. Kelly Richmond Pope: It's a long day. Blake Oliver: So, it's true crime ... Do you cover like financial crimes, and ...?  Kelly Richmond Pope: We cover all kinds of crimes. I have a co-host. His name is whose name is Bill Kresse. He also teaches at Governor State in the Chicagoland area. We cover all kinds of crimes. So, this past week, we had Al Capone's granddaughter on. She had just written a book, so she was just talking about the life of being Al Capone's granddaughter. Blake Oliver: Wow ...  Kelly Richmond Pope: We then talked about real estate scams and how celebrities are being used to [00:03:30] get people to come to these real estate seminars that end up being just sort of fraudulent. So, we talk about all different kinds of things. David Leary: Why is ethics and culture so important to you? Because I think you've talked about ... I think your TED Talk is on whistle-blowers, and that's a lot of culture-related ... People don't have the courage to be a whistle-blower because of culture, sometimes, at the company. Kelly Richmond Pope: Well, I think what we're seeing right now is when we see all of these fraud stories, and we think about them being ethical lapses, it really comes back to culture. [00:04:00] Take Boeing, for example. Boeing is a culture story or an ethical-cultural-deficiency story because you have a pilot who knew something was wrong, reported it, and no one listened, so now, we have deaths. That's a cultural issue as to why we wanna bury that type of information. You think about what's happening with the opiate crisis, where doctors are getting paid to find people to give these prescriptions to. That's a cultural [00:04:30] issue. So, I think behind every good fraud is two things - a whistle-blower, and a cultural problem. That's why it's important to me. David Leary: In many cases, these frauds, people saw them happening, but the culture just prevented them from- Kelly Richmond Pope: Absolutely yeah. It's almost like if we can get away with it, we do. That's not good, so I think it's something that we need to talk about. I think people need to evaluate [00:05:00] the culture that they work in and what they contribute to that culture. How it relates to whistle-blowers is how do we embrace a person that is coming forward and saying something? Sometimes, it's hard to wrap your hands around somebody that's doing something different than you are or saying something different than you are. Blake Oliver: In the case of Boeing, my understanding is that pilots testing the new software, or the new planes in the simulators, detected issues. They reported [00:05:30] them, or they felt- it was like they felt pressure from management not to bring up these issues? Kelly Richmond Pope: Yeah, culture. Blake Oliver: What should Boeing be doing, or what should they have done to make that not happen? Kelly Richmond Pope: Sure. I think that the one thing Boeing could do, or any company, is you have to listen to your first line of defense, and that's your employees; in Boeing's case, it's your pilots. If I look at my organization, which is DePaul, it's gonna be either students or professors. You wanna listen to your first line of defense [00:06:00] because they know. So, when you silence them, what do you have? You're gonna have a problem because either people aren't gonna say anything, or they're going to just turn a blind eye to things that they see all the time, which is not good. I think that what they should have done is had a better reporting process, where that person or people can be embraced, should be embraced, and not scared to come forward. Blake Oliver: So, actually celebrate your internal whistle-blowers, [00:06:30] or- Kelly Richmond Pope: Celebrate might be a strong word. Encourage ...  Blake Oliver: Encourage it.  Kelly Richmond Pope: Well, I guess celebrate's a good word because you wanna know if your airbag isn't working. If your person on the assembly line knows that there's a deficiency, or if they know that you put some type of product that's gonna explode on impact, then you want that person to tell. You don't wanna find out the hard way. David Leary: You'd think it would be rewarded more because if you're a CEO of a company, you don't want a bunch of Emperor's [00:07:00] New Clothes people telling you how great everything's going, and you're just blind to this real risk that's there. Kelly Richmond Pope: You say that but actually, sometimes we do. Think about the kind of people that a lot of us surround ourselves by - our friends. Typically, our friends aren't gonna go against you. When you have something that- Blake Oliver: Well, that's why David and I hang out because he tells me what he's thinking. Kelly Richmond Pope: But you think about, when you have a controversial issue that you're deciding about, you have two people you can call - the one that you know is gonna always disagree, or the one that you know, that's [00:07:30] going to agree with you. Sometimes, we might choose the one that agrees with us so that we can get the outcome that we wanna have. I think that it's human nature to want what you want, and sometimes, you don't wanna hear that other side, but you need to have both people, both parties in your life to stop you from those bad decisions. David Leary: So, if you have a management problem, if you wanna call it that- a culture problem, can you change your culture - the behavior? Kelly Richmond Pope: I think you definitely can change your culture. Now, this is a very broad [00:08:00] question, broad answer, but think about how things change with the new C-suite, how things change with a new employee, new employees, how things change with a new building, how things change with a new logo. So, I definitely think you can change your culture, you just have to want to. Blake Oliver: Any tips ...? I mean, I know there's no just easy solution to these things, to changing a culture. Is there something ...? What's the best tip you have for doing that - for [00:08:30] a traditional firm, right?  Kelly Richmond Pope: Let's use an example; let's use Theranos, and Elizabeth Holmes. Blake Oliver: We love that story.  Kelly Richmond Pope: A place that had a very wicked culture. There was only one choice, and that's to follow what everybody was doing. You couldn't be a naysayer. How do you change that culture is just by listening to people. Maybe ask them to report something anonymously, put it in a box, and you read all the comments together, and you address [00:09:00] them either in a newsletter, or a video. You have to be diligent to wanna change your culture - if you notice you have a problem. The first thing is, do you know you have a problem? Sorta like Alcoholics Anonymous - you gotta know you have a problem!  This episode of The Cloud Accounting Podcast is sponsored by Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com.   Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.Blake Oliver: Well, speaking of organizations that may not know they have a problem, the PCAOB ... I have been following some of these stories recently, in The Wall Street Journal. Kelly Richmond Pope: Sure. Blake Oliver: It's just a major ... I don't wanna swear on the podcast, but there's a big problem there in that ... Well, first, there was the KPMG [00:10:30] scandal involving inside information going from PCAOB inspectors to KPMG partners telling them which audits are gonna get inspected. The worst ethics violation I've heard of in a long time- Kelly Richmond Pope: What's interesting about that is, if we talk to anybody walking around here right now and ask them are they ethical, they're all gonna say yes. Blake Oliver: Right.  Kelly Richmond Pope: But then, when you start giving them various scenarios and ask them to reason through different things, you're gonna see different answers. I think even [00:11:00] with the KPMG-PCAOB situation, they didn't think they did anything wrong. When they were doing it, they're like, "I'm a good person ..." Because we think of fraud, really, in a one-dimensional way. "I don't steal people's money. I'm not murdering anyone. So, I'm a good person." But there's lots of ways you can commit crimes ... Violent crimes are not the only way, but I think that we have convinced ourselves that crime looks a certain way, and, "If I don't do that, then I'm a good person." You can still break rules, and you can still [00:11:30] go to jail. Blake Oliver: So, what can they do ...? Do you think that it's savable, that the PCAOB can actually become a force for good in the accounting world, or is it just a giant waste of money? Because, up to this point ...  Kelly Richmond Pope: Well, I think with the PCAOB ... That's one bad apple. I don't think the whole thing is over, but I do think that they're gonna have to be more strategic about how they train. You need to give people [00:12:00] some exact scenarios of what an ethical lapse looks like. For example, "If you go and get hired, you can't pull information ..." People need exact definitions, because I think even the way we teach ethics in college, we often teach it from a very theoretical perspective. You really need practical application; practical application. I had a student who wanted to order something from online. Let's just say it was a book bag, and [00:12:30] their roommate had ordered the book bag, and they were already- they were in the same household. You could get 20 percent off if you were a new customer of this company. The student had already used the discount before, and the roommate had used the discount before. The student said, "Well, I really want this book bag. If I use my dog's name, how would they know?"  Point being, we need exact examples of that's wrong. Just because you won't get caught. doesn't mean that it's not [00:13:00] wrong. But I think that we need to show people examples of what an ethical lapse looks like because we're just so bent on, "I haven't stolen money. I haven't murdered anybody. I'm a good person." When you go to those outliers, it leaves a lot of room for people to say, "Yeah, I'ma hire David, and I'm gonna ... David bring your information over here, and we're gonna use it."  David Leary: I imagine, in the accounting industry, it's kind of ironic, right, because CPAs and accountants who would pride themselves on they were ethical ... Then, every [00:13:30] single person's probably fudged their time sheet. Kelly Richmond Pope: Oh, sure- Blake Oliver: Probably. Kelly Richmond Pope: I mean, yeah, absolutely. Everyone's probably photocopied their kids' birthday invitations on the work computer, at some point ... Let's not say everybody, but at some point, there's something we've done. Some people can stop themselves. Other people can't. Blake Oliver: Ethics training is all great. We should all do it. But sometimes, the underlying structure, the underlying way things are set up [00:14:00] causes people to behave unethically simply because of the incentives. So, I'm thinking in particular of audit; the audit profession, where there's all this talk about how we need to do better education for auditors so that they actually do their jobs and whatnot. But, when an auditor is selected and hired by their client - that's the way we've got it set up in this country - they're naturally going to act in the best interests of their client more of the time than the general public, like the stakeholders, investors [00:14:30] and whatnot, because there's money on the line, right?  Kelly Richmond Pope: Mm-hmm.  Blake Oliver: Ron Baker likes to say you can't be independent when there's a financial- when you're getting paid. You can't be independent. Kelly Richmond Pope: Sure.  Blake Oliver: What do you think about changing up the way audit firms are selected? Kelly Richmond Pope: Well, first, let me go back to your first comment, because I don't think all ethics training is good. I think it's done poorly, for the most part. I think that's our first problem is we're not pushing people to think about [00:15:00] the scenario hard enough. We're treating it like, "Here are the rules; check the box," and that's not how you have to do it. You really have to put a person in a scenario to force them to think about, "Hmm, well, have I done that before?"  That's some of the things that we'll do at the beginning of my session. I have some scenarios. We have to poll, and we get some poll information. Every time I've done this, you see a lot of variability. Now, there is a right answer, but the way we rationalize this answer in a large group sort of changes. That's the first thing. I think [00:15:30] that all ethics training is not good. I think it's- there's a little bit of good and a whole lotta bad. David Leary: I can say, based on me, after a 20-year career at Intuit, you have to do these trainings every year ... The ethical training, the scenarios were just so far-fetched that they weren't probably representative of 99 percent of the employers.  Kelly Richmond Pope: Sure.  David Leary: It was like some king in some country wants you to build a building in his place ...  Kelly Richmond Pope: It was the outlier. David Leary: Yeah, it was the outlier, and it wasn't the day-to-day real ethical [00:16:00] questions that probably happen to every single employee. Kelly Richmond Pope: Right, and that's what you need. You need those type of scenarios to push them to think. For example, the one that we're gonna do today is you took a cab, and the cab driver gives you a receipt, and they ... They give you a blank receipt, and they also give you the actual receipt from the meter- David Leary: Before you continue, is this gonna be a quiz, like Blake, and I can answer, like yes/no?  Kelly Richmond Pope: You can, sure. Okay, so this is the scenario. I'm putting you guys in a scenario. You ready? Blake Oliver: Yes. Kelly Richmond Pope: Okay. [00:16:30] So, you take cab. Forget Uber. Forget Lyft. You take cabs. I still take cabs. Blake Oliver: There's the first problem ... Kelly Richmond Pope: Okay, so you take a cab, and at the end, they hand you your receipt, and they give you a blank receipt, because cab drivers do that. Blake Oliver: Yes. Kelly Richmond Pope: Sometimes, they'll even say, "How many receipts do you need?" Has that ever happened to you? Blake Oliver: I've had the blank receipt for sure, yeah. Kelly Richmond Pope: All right. So, when you go to submit this receipt, you add $2. Is that okay?  Blake Oliver: No, I would not do that. David Leary: No.  Kelly Richmond Pope: What if you tipped?  [00:17:00] Blake Oliver: I would consider the tip to be part of the fare, yeah. Kelly Richmond Pope: So, you might add $2. Blake Oliver:  Yeah [crosstalk] if I actually gave him the $2.  David Leary: If I gave the $2, then I'd write that down, yes.  Kelly Richmond Pope: But is it anything wrong which is adding $2. It's just $2. What if you use the blank receipt, and you forgot what the amount was, so you're just rounding. Is that wrong? Blake Oliver: That's like time sheets, right? Then there's nothing ... Well, I mean, you've gotta choose a number, so you try to be as accurate as you can, right? Kelly Richmond Pope: So, you added $2. Is that wrong? So, you'd think it was $5.25, but by [00:17:30] the time you added the tip, you don't know ... Maybe-  David Leary: Or even my handwriting. Sometimes, it's like, is that a seven or a nine? Kelly Richmond Pope: Right. Blake Oliver: Right.  Kelly Richmond Pope: So, just to make it even, you add $2. Is it wrong? Blake Oliver: I don't know. Is it wrong? This is the "Is it wrong in the big balance sheet in the sky" sort of way ... Yeah, I guess, but, does it ... Is it material is maybe my question as an accountant. If it's immaterial, then ...  David Leary: That's where I'm thinking ... It's a lame argument - it's victimless; nobody got hurt. I'm [00:18:00] not justifying that, I'm just ...  Kelly Richmond Pope: But just think, we're in this scenario ... I'm pushing a little bit because your first response is wrong. I say, wait a minute ... What if you forgot what the fare was, and you're just trying to guess, and you just you have to submit it ... Are you gonna pay it? You gonna cover the extra $2. I mean, you just added $2. I didn't say you were stealing. I just said you couldn't remember. Blake Oliver: Did I do it knowingly, or ...? Kelly Richmond Pope: What was your intent? Blake Oliver: That's what's hard to know is intent, right? Kelly Richmond Pope: These are the things that we need to talk about. This [00:18:30] is the way we need to talk about our decision-making because it might not be a big deal for us, the three of us, talking about it, but if you have 300,000 employees doing it, it could definitely be material then. So, I think that we need to be more practical about how we approach the way we reason through decisions. Blake Oliver: I like that. Yeah, less theoretical, more practical. Kelly Richmond Pope: Less theoretical, more practical. The problem, I think, with our profession is because we have a code of ethical conduct, we just sort of look at those things and say, "Check, check, check, check, check," but [00:19:00] what are the scenarios that match with those, we don't do. So, we really have to push ourselves to think about what would you do? Blake Oliver: You know, the only problem, Kelly, with this is that if we push the accounting profession to do this, then they'll want to create a rule for every potential situation, so we'll end up with an accounting ethics handbook that is 400 pages- Kelly Richmond Pope: That's true.  Blake Oliver: -and has 5,000 rules in it. Kelly Richmond Pope: That's true. That's true. That was the first thing. The second part of your question was what can we do/what should we do? I don't know. If I knew that, I wouldn't be sitting here on this podcast with you. [00:19:30] Blake Oliver: I'd love to get your take on this ... One argument is let's change up how auditors get selected. So, instead of having companies select their own auditors, let's have the financial stock exchanges, select the auditors instead. That way, there's less of an incentive for an auditor to overlook something, in order to maintain that client relationship and not lose the engagement. I guess some [00:20:00] of the evidence cited for this is that, in PCAOB inspections, something like 20 to 50 percent of audits fail inspection. That means that the people who are supposed to be checking these numbers - the auditors - are doing a bad job in one out of five audits, at a minimum. That's just of the ones we've inspected, right?  Kelly Richmond Pope: But think about this ... Think about other professions. We go to the doctor. We pay the doctor to give us bad news. We pay the dentist to give [00:20:30] us bad news. Why do we have to be any different? We incentivize other professions to give us good or bad, so why is this any different? Blake Oliver: Well, and actually, you brought up the opioid crisis. It's people paying doctors for prescription medicine is what ... The doc doesn't want to lose a patient- Kelly Richmond Pope: Sure. Blake Oliver: -so they prescribe the medication.  Kelly Richmond Pope: Yes. Blake Oliver: And they wanna get paid, so there's a financial relationship that causes that perverse incentive, where the doctor is now prescribing [00:21:00] you more medication than you need. You get addicted. The pill- what do they call them? The pill factories- Kelly Richmond Pope: Then, the pharmaceutical is giving you a kickback. Blake Oliver: Right, and ultimately, that's who everyone's going after is the pharmaceutical companies, because they got all the money in the end. Kelly Richmond Pope: Sure. Sure. I think when you ... The pharmaceutical giving the kickback is the big issue because they're the ones that created the incentive, but I think when you think about patient to doctor, you [00:21:30] do pay your doctor to give you all information. We don't pay our doctor just to give us good information. So, why can't this work the same way? Blake Oliver: So, here's the difference is that I, as the audit committee ... Well, I guess it depends. So, I'm paying for the audit. You're my CPA. I'm paying you to audit me, but that audit isn't really for me; it's for my investors. Kelly Richmond Pope: Okay.  Blake Oliver:  maybe; but, if I'm a smaller company, maybe I don't have that. I want the audit to come out clean because I'm managing this company. My investors wanna see the truth. So, we have [00:22:00] different interests. Kelly Richmond Pope: Sure, but then, the question becomes will the regulatory agencies really care that much about the investors' interests? I don't know if we can alleviate the problem. Just be good. Just stop lying. That's just about it. Just stop it, you know? Just stop it. Blake Oliver: Maybe we should really be punishing these crimes. Kelly Richmond Pope: Sure. Blake Oliver: Because I feel like a lot of these auditors get just a slap on the wrist. Kelly Richmond Pope: Right, and going back to Theranos, if Elizabeth Holmes [00:22:30] gets a slap on the wrist, oh, my goodness! What kind of message is that? Or even Varsity Blues situation with the celebrities lying about their kids playing sports, and they don't even play the sports. If they just get a slap on the wrist, what are we really saying? Blake Oliver: Yeah, so maybe that's ... I'm one of those people, I'm for drastic changes in the way we do things. But, yeah, maybe if we just actually enforce the rules we've got. Kelly Richmond Pope: Sure. [00:23:00] Blake Oliver: That would help, too. Kelly Richmond Pope: Enforce the rules we have. Follow the rules we have and enforce the rules when they're not followed. David Leary: Just bringing this back down to a smaller firm, maybe I have a small accounting or bookkeeping firm; I have 10 employees. What's the best way for me to ensure I have this ethical culture there? Is it just me leading by example? Is it ... Are there bigger training programs or groups I could be part of? The one thing I think about it is a big corporation's going to have an ethics hotline, there [00:23:30] an ethics hotline service I could subscribe to? What's options are out there as a firm owner [crosstalk]  Kelly Richmond Pope: I think there are a lot of cost-effective options. For example, you could share an article, like an ethics-related article. There was a really good article in The Wall Street Journal a few weeks ago, and it's in my presentation today. It was about what expense reports tell you about your soul. Did you guys see that? David Leary: I think we covered it on the podcast.  Kelly Richmond Pope: Did you talk ... It was the Grifter, [00:24:00] the Rookie, the Sidestepper ... They had these different classifications. Share it. Talk about it. Have a brown bag. Doesn't cost you a lot of money to do that. There are TEDTalks. You could share mine. There's things that you can do as a leader that you can share with your employee base that gets the message that you care about how people see ethics and fraud in decision-making. You don't have to be a large company to show that you care [00:24:30] and that you value this. Of course, you wanna lead by example, but it doesn't take a lot to show that this is something that's important to you. There's a good movie, a good docuseries on Netflix. It was called Dirty Money. Alex Gibney's docuseries. David Leary: Watched some episodes of that, yeah.  Kelly Richmond Pope: Again, send out an email. "Hey, team, I watched this episode. I watched this show. Would love to have a brown bag and talk about what you think about it." I mean, there's ... People just want human connection. There's lots of material [00:25:00] that you can share. David Leary: You could have your staff listen to this podcast- Kelly Richmond Pope: You could have your staff listen to this podcast. Something that we do in my class is we listen to the Dropout Podcast. Some of the students read John Carreyrou's book, "Bad Blood," but we also listen to the Dropout Podcast. A couple weeks ago Tyler Shultz's attorney in class talking. There's small ways that you can create a culture that I think we just think we don't have time, but we really do. Blake Oliver: So, Kelly, you [00:25:30] are a filmmaker. Kelly Richmond Pope: I'm a filmmaker. Blake Oliver: Which is so cool, and I feel like I'm on late night because I've got this postcard with your movie poster on it. I'm gonna put it on the table right now, and the camera's gonna zoom in. It's called "All the Queen's Horses." Kelly Richmond Pope: Yes. Blake Oliver: The subtitle is, "How could one woman steal $53 million without anyone noticing?" Kelly Richmond Pope:  Yes. Blake Oliver: What is this film, and where can we watch it? What's it about? Kelly Richmond Pope: The documentary chronicles [00:26:00] the fraud committed by this woman. She was a city comptroller of Dixon, Illinois. The documentary talks about how she did it. How does one person do that? That's a lot of money. Blake Oliver: They're a small town, too- Kelly Richmond Pope: 16,000 people. Blake Oliver: So, how did nobody notice? Kelly Richmond Pope: Well, this is the thing. There were red flags that were missed, but it's not that people didn't notice them; they just didn't know what to do about it. There's lots of red flags. I'm sure if we walked to our room in this hotel, we would notice red flags. [00:26:30] What're we gonna do with it? Who're we gonna talk to? We might not know, so we might just keep walking and keep moving. The same thing in Dixon, people noticed things; they just didn't know what to do with it. The documentary is really about how something like this not only can happen in Dixon, but can happen anywhere, whether it's a small company, large company, medium-sized company. The one thing that I caution people about "All the Queen's Horses," is don't think because it's the government, it can't happen to you. The fraud schemes are the same. The environment's [00:27:00] changed, but the schemes are the same. So, if you read a fraud book from 20 years from now, you're still talking about money laundering. We're still talking about embezzlement. We're still talking about financial statement fraud. We're still talking about the same schemes, just with different players. You can find it on iTunes, but I guess iTunes has gone away now, right? Is Apple doing away with iTunes? David Leary: We'll find it and put it in the show notes, for sure [crosstalk]  Kelly Richmond Pope: It's YouTube. You can rent it on YouTube, Google Play, Amazon, and then, [00:27:30] probably your local cable, but your local cable's gonna be the most expensive way to watch it. Blake Oliver: As always. David Leary: Well, one of the frauds that we've been really covering the last five, six, seven weeks here, on the podcast, about on a weekly basis, is the MyPayrollHR fraud.  Blake Oliver: Have you heard about this one? Kelly Richmond Pope: Share, please.  Blake Oliver: So, gosh, how do we summarize it? Owner of a payroll company in Clifton Park, New York, basically had a bunch of business entities, was borrowing money on fictitious businesses, and diverted how many [00:28:00] millions of dollars from a payroll- David Leary: What he did is he changed the ACH file at the last minute and took all ... He withdrew the money from all the employers, and then that goes to an ACH company to distribute the ACH funds to all the employees' bank accounts. He diverted that back to his- Blake Oliver: Own bank account [crosstalk] He's a payroll processor. David Leary: So, what happened ... Then, there was a bunch of domino effects of this; a whole bunch of- Kelly Richmond Pope: How did he have control to do that? David Leary: Apparently, the ACH system is ... Anybody can just- Kelly Richmond Pope: Hackable? David Leary: It's not even hackable. It's like a file- Blake Oliver: It's like a spreadsheet. David Leary: -text file ... Somebody just changes it. Then, on [00:28:30] top of that, which is even crazier, is apparently the law firm has to keep their client's escrow funds in an escrow account. Apparently, if you run a payroll company, you can just keep the funds co-mingled with your other funds, which is, from an industry perspective, a little on the crazy side. For a decade, apparently, after they've dug into this now, he's running this fraud for a decade of this kiting between the one company to the other company ... Then, one day, it just became this $36 million fraud, just like that.  Blake Oliver: So, what was your question, David? David Leary: I don't even know what I was ... I [00:29:00] was gonna give you the next movie idea, but you haven't heard of it, so we'll have to fill you in.  Blake Oliver: I'm one and done. I'll use film as a platform to train and teach. I just finished creating this investigative, immersive experience with my co-creator, Ronnie Jackson, called "Red Flag Mania." It involves- or it includes a short film. It puts you in this scenario, and you have to solve this case. You watch a film; you're given a case box of evidence; you [00:29:30] have to solve the crime; then, there's a big reveal at the end. I'll use film that way, but I'm not doing a film again. I'm one and done. I'm a one-hit wonder, sorta. David Leary: Kelly, what's the best way for people to get a hold of you? Kelly Richmond Pope: I'm on all social platforms. I'm on LinkedIn, which, by my name, Kelly Richmond Pope; I'm on Instagram, but that doesn't feel very professional. My Instagram is like pretty pictures, but I don't really have any pretty accounting pictures up there. Blake Oliver: That's why we haven't done an Instagram yet, for our podcast. It's like what do we take a picture of? Kelly Richmond Pope: Yeah, it's weird, right? If [00:30:00] you think about, like all  the platforms have their place. So, you think about Instagram being very personal and pictures. Facebook feels very personal. When work people want your Facebook, I'm like, "Un-uh ... No. I don't want that relationship with you. I want you on LinkedIn" Then, Twitter- Twitter, and LinkedIn seem similar to me, except the Twitterverse is just very crowded. But social channels are just @KellyRPope. Then, LinkedIn is just my name - Kelly Richmond Pope. Blake Oliver: Thank you for [00:30:30] your time today, Kelly.  Kelly Richmond Pope: Thanks for having me. It was fun.  
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Sponsors Bill.com https://cloudaccountingpodcast.promo/bill Teampay https://cloudaccountingpodcast.promo/teampay Show Notes 01:10 – What does David Appel do, precisely?  02:15 – If accounting happens in Vegas, does it have to stay in Vegas?  03:28 – Repetition is key to creating job satisfaction, personal validation, and economic value for your clients 05:30 – It's not about billable hours and recurring revenue, it's about creating the most economic value for not only your clients, but as many people as possible 09:19 – David A. gives some examples of successful subscription-based models  11:15 – How do you know when you've outgrown your first accounting system?  13:37 – An ounce of prevention really is worth a pound of cure when it comes to moving to a new accounting system 15:31 – When you provide value, using whatever it is you're selling, that thing tends to sell itself 16:28 – Find the value you can add by talking and LISTENING to your clients 19:01 – Focus on solving client problems, and billing models will fall into place  Connect with David!David Appel, Head of Software and SaaS Vertical, Sage Intacct LinkedIn: https://www.linkedin.com/in/davidappelsf/ Twitter: https://twitter.com/davidappel Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 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 necessities.TeePublic Store: http://cloudacctpod.link/merch 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 Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com.   Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.David Appel: It's not about billable hours, or about recurring revenue, it's about how you think about how you're gonna create the most economic value for your [00:01:00] clients. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. David Appel: And I'm David Appel from Sage Intacct. Blake Oliver: David Appel from Sage Intacct, what do you do at Sage Intacct? David Appel: Well, it's a fantastic job that's got a title, but what I really do is spend time talking to our customers, and industry thought leaders, and investors about how do you build a great business, and what do people need in order to become successful there? Then we take that into the product because there's this [00:01:30] old adage - the best salespeople don't sell; instead, they help people buy. So, I get to spend all day long finding out what people are really hoping for and accomplishing, and then we put that into a great product and help them be successful with it. David Leary: You're like that guy that was in Office Space that talks to the customers, and takes that note, and then delivers it over to the engineers. David Appel: I'm probably like a lot of characters in Office Space. That was a funny movie.  Blake Oliver: That's one of my favorites. I should mention that we are here, live, at Sage Intacct [00:02:00] Advantage at the MGM Grand Conference Center in front of the big, beautiful digital Intacct Advantage sign in the rotunda, here, and-  David Appel: It's Vegas, baby! Blake Oliver: Vegas. David Appel: We're sorry all of you listening are missing out because we're having a great time. Blake Oliver: Well, you know, the thing about the MGM Grand that I don't understand - from just a design perspective - is that they made it so people for coming from the hotel have to walk past the pool to get to the conference center. You're watching everybody out there-  David Appel: Yeah, that's a problem- Blake Oliver: -having fun ... [00:02:30] David Appel: And for those of you haven't been to Vegas, 'walk' is the operative word, because ... I talked to somebody yesterday, who had 21,000 steps. I was just like, "My goodness ..." Blake Oliver: But it's good because then, when you go out, and you indulge - dinner, and drinks, and whatnot - you've already burned the calories. David Leary: The calories are there. Blake Oliver: So, it's good. David Leary: You know, I like to look and see what interesting things people are talking about. I think I noticed that you're talking about SaaS and subscription businesses, and I'm like, "Great! That's ... Everybody's like, "Go, move, kill the billable hour! Go to subscription businesses!" So, I'd love to get your points of view [00:03:00] on it; what's your thoughts on it, and we'll kinda wiggle around a conversation- Blake Oliver: Yeah, so just a little context, right? Folks listening are generally accountants and bookkeepers. David Appel: Hi, everybody. Blake Oliver: Hey. Yeah. There's all these thought leaders in the profession talking about we've gotta move to subscription-based pricing. I imagine there's a lot of parallels between what you do, talking to people in the SaaS world and the software world, and the subscription economy. What should accountants learn from that world? David Appel: Oh, man. Well, having [00:03:30] spent a lot of time with a lot of you, you're already well on top of a lot of the things. So, maybe some of this might be sharpening the saw for you, but, it's just- if you can do something one time versus doing something once and it continue to repeat, there's just a lot of lift that comes from that. There's economic lift. There's a lot of personal validation that comes from it. All of you who've got great skills, where you're helping your clients, if you could do it once, but then have it be repeatable value for them and everybody else, why wouldn't you do it? That's how you create not only job [00:04:00] satisfaction, and sense of personal validation, but a lot of economic value. David Leary: I like to take it further because I don't think people have ever put in that perspective before, because it's always been like, "Oh, the more efficient you get, you can't really bill for less time. You'll make less money." I like this concept - reading between lines of what you just said -  this concept of think about it as not only are you billing your revenue on a monthly basis, you're providing value on a monthly basis. I don't think ... Blake, have you ever heard anybody phrase it that way before? Blake Oliver: Well, it's about charging for your knowledge, not for the work that you're doing; not [00:04:30] for the plugging in the numbers, and-  David Appel: Mind if I tell it in a story? Blake Oliver: Yeah, please.  David Appel: I'm blessed with five mentors 20 years older than I am, and one of them told me this story once. Those of you listening may have heard it before, about the French cathedral builder. In the 14th century in medieval France, there was a cathedral builder hustling down the dirt road. He passed three people stacking bricks. He said to the first one, "What are you doing?" He said, "I'm stacking bricks." "Oh, okay ..." Passed the second one; "What are you doing?" "Oh, I'm stacking bricks to build a wall." "Oh, okay ..." Passes the third one; "What are you doing?" "Oh, I'm stacking bricks to build a wall in order to learn [00:05:00] how to build a cathedral one day!" You fast forward into the future. First person's dead. Second person's barely scraping by. Guess what the third person's doing? David Leary: Building the cathedral. David Appel: Building cathedrals. So, for all of you out there, delivering some sort of asset and billing in return for that time, it's great. It's critical. It's stacking bricks. You can't build anything without it. Doing that in a way in which you can provide some long-lasting economic value because you're helping the client understand the problem is critical. That's building the wall.  [00:05:30] Doing it in a way in which it's long-lasting and it gets shared across multiple people, so the company don't just solve a functional problem, but really build a better business by understanding their economic model and how they're bringing it to their customers to maximize value creation and then share it across to everybody - that's very charismatic. It's very fulfilling, and that's building the cathedral. I'd challenge the notion - and I know that you guys asked the question the way that you did - to me, it's not about billable hours, about recurring revenue; it's [00:06:00] about how you think about how you're gonna create the most economic value for your clients and for as many people at once, as possible. Blake Oliver: I like that. Do it once and affect many clients with that one action. David Appel: Yeah. Let's just use a classic- the mid-sized accounting firm, for those of you that work at that. You've got an audit team; you've got a tax team; you've also got an advisory team; perhaps, you have a M&A transaction services team. How do you do an M&A transaction services advisory job, but then take that asset to understand how maybe you're great in life science [00:06:30] firms, so you can bill better for that, but then you also build an asset that they can use in order ... Like whatever their cap tables are gonna look like or something; that gets repeated and used over and over because that's how the partnership builds maximum profit. Blake Oliver: That's an issue in a lot of firms is the silos that exist. Tax doesn't talk to audit, doesn't talk to M&A, doesn't talk to the outsourced accounting folks, really ... David Appel: Yeah, it comes down to compensation models. I would challenge, and I don't know if the people on the phone agree with me, but I've spent a lot of time with accounting [00:07:00] firms. The model that was built in the '60s and '70s that still serves as the limited liability partnership model for a lot of firms, they're not finding it as compelling in the wealth creation for a lot of newer employees; isn't as compelling for that. You see these profit models, they're getting shared across the partnership, across divisional lines, in order to encourage selling multiple service lines to any one given client. You're seeing the comp models change that way. But then, again, to maximize it, do it with recurring revenues. This episode of The Cloud Accounting Podcast is sponsored by Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend.  Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y.David Leary: What are some of your favorite subscription businesses that you've seen out there? David Appel: Us! Sage Intacct! If you don't already have a relationship with [00:08:30] us, BOOM! GO! Call us! Call me right now! Operators are standing by. Blake Oliver: What's that hotline number? David Appel: Yeah but do it from The Cloud Accounting Podcast web page, so they get their traffic up. Blake Oliver: Lots of our listeners are familiar with the- David Appel: I didn't answer his question [crosstalk]  Blake Oliver: Oh, no, I thought you were pivoting away. Please go ahead. David Appel: Oh, my gosh. You name an industry ... I am, of course, very excited about a lot [00:09:00] of our customers. I could go on down the list about the ways that they're building their businesses. Of course, many of our partners that are out there, they're great firms. I'll pull one out that I'm ... We've got many of them. So, the ones that I don't mention right now, please don't send me hate mail that I didn't mention you. I'm just gonna pick one of CliftonLarsonAllen - fantastic firm. Several of the ways they've built recurring revenue is, first off, they have an outsourced accounting platform, which the Shared Service Center gives some labor [00:09:30] arbitrage. But then also, they've built a very great practice in nonprofit with their Sage Intacct practice, so they've got a lot of intellectual property that they bring from not only deploying us, but then, advising different sectors in the nonprofit industry with a lot of the competency that they had before. That's an example of one partnership. Let me just give an example. We're doing this at Sage Intacct Advantage. In my industry keynote that we did yesterday, I had a firm come up called Acquia, and Acquia is a leader [00:10:00] in Drupal deployments and marketing assets for how you really build big web pages. They were challenged with how they were gonna adapt their billing model in order to change - without getting too complicated - how the marketing department spend was going.  They put us in place and created some really innovative billing models with a revenue model that worked for them. Doing both of those allowed them to - let me think about how to say this the right way - understand their [00:10:30] cash flow and be able to forecast their cash flow because it was a recurring subscription model. With that competence, they had a competitor coming in to one of their niche markets and trying to box them out, and they were able accelerate funding and headcount in marketing to have a competing product to that, which fended off the firms, which got churn up, and then, customer lifetime value up. That, and many other things that they've done as a great culture, they just had a billion-dollar unicorn exit with an acquisition by Vista Equity. [00:11:00] There's CliftonLarsonAllen as an accounting example. There's Acquia as a recurring revenue model example  because we're able to think ahead further on forecast and cash flow, in order to make big business decisions. There's a million examples like that. Blake Oliver: For those not as familiar with what Sage Intacct is, I often hear it described as the second accounting system that a company will use. They'll graduate from something else, right? For small business ... I'm an [00:11:30] accountant advising my clients on what software to use. At what point have they gotten too big for that first solution? I'm thinking specifically for software and SaaS and whatnot- David Appel: Yeah, yeah, and again, to those of you listening, I'm trying to keep this very straightforward ... We found a number of triggers that happen. People start off on QuickBooks or something like. It's very simple. It's cash-based accounting. They're trying to get product market fit to design a product that customers are gonna want. But then, knock on wood, that happens, and they get [00:12:00] excited. Now they make a couple more finance hires ...  One of three triggers, generally, happens; four triggers, pardon me. First off, they hire somebody with a great accounting and finance background that says, "Boy, we gotta put the infrastructure in place to scale." That's straightforward. So, you, as the accountant, when you see those hires start coming in, let's go. Blake Oliver: They got the controller, the VP - Finance- David Appel: Second is when they have multiple entities that needed to consolidate. The third thing is some volume item happens, either a number of invoices [00:12:30] or number of revenue schedules, and you just want to get out of doing it with elbow grease and Excel. The models start breaking down. The spreadsheets start getting complicated. Fourth is you wanna start being able to plan further ... You wanna think ahead and not look backwards. So, again, those of you listening right now, and you're advising your clients, look for one of those four triggers, and that's generally the transition point. Blake Oliver: That is super-helpful. I, myself, even though I live in the world of accounting technology, it's hard to know when [00:13:00] something that's really fun, and shiny, and does a lot of things is appropriate. When do you make that move? David Leary: It's interesting to put it into a spreadsheet perspective. I remember a few years back, talking to our QuickBooks customer at one time. It was like, "Oh, I had a spreadsheet with 50 tabs in it. That's how we knew it's time to get off of that and move to a small accounting package." Then, one of the customers today, I think, at Sage Intacct, in the keynote had ... It was ridiculous. They had 700 spreadsheets- Blake Oliver: 400 workbooks, I don't know ... David Leary: Thousands of tabs in their spreadsheet. It's just like the perspective is [00:13:30] completely different. That's where you probably ... If you're into hundreds and hundreds of workbooks, you probably need to jump up to something bigger. David Appel: My father would say, "People change with pain, and that's only when the pain becomes unbearable do they make the change." But there's that class of buyers, and there's other classes who've been through it before and don't wanna put themselves through that pain and do it proactively on the earlier side, because an ounce of prevention is worth a pound of cure. Blake Oliver: When we started recording, I think you said something along the lines of the best salespeople don't [00:14:00] sell, they help people buy. David Appel: Yeah.  Blake Oliver: What do you mean by that? David Appel: Well, everybody's in sales, right? So, everybody listening to this ... You're always trying to help make something happen. But I think sales has gotten a really bad rap with a bunch of schwarmy, "Hey!!! ..."  Blake Oliver: Used-car salesman? David Appel: Yeah ... "Boy, I got a deal for you!" That's not what happens. People create their own interests because they wanna solve something in their lives; make something better; then [00:14:30] they go looking for answers, in order to find it. Then, you help them problem-solve to see how they're really gonna get there better. The trick really is to understand that Wayne Gretzky quote, "Skate to where the puck's going;" where I spend a lot of my time, and then, in order to help people fulfill it ... I hope- is that example ... Did that answer your question?  Blake Oliver: I think so. I've seen this happening more and more because I'm on the marketing side of things a lot, these days, where-  David Appel: If you guys haven't seen some of Blake's marketing, [00:15:00] you've gotta check it out. It is top notch!  Blake Oliver: Well, so ... I did a lot of CPE webinars the last two years, and I found that people really liked when we offered as much educational content as we could possibly stuff into our webinars. Instead of trying to stick the product in unnecessarily and really sell that product ... Because, a lotta times, I think, in webinars, it's a bait and switch. You sign up for the webinar, and you end up just getting a product demo [crosstalk] It's advertisement-  David Appel: Are these [00:15:30] your webinars? Blake Oliver: No, no ... The way I approached it was, "Well, I'm a CPA, and I want actual CPE." I feel like if we're gonna have this requirement to get 40 hours of CPE every year, or whatever, then we should ... We shouldn't just be checking the box. We should be actually getting meaningful content. I view that as my mission when I create CPE. It's not just checking the box for people, it's giving them good, informative content. When you do that on the marketing side, when you actually just educate people, [00:16:00] and you ... The product is just there as the platform, and you're teaching them something; you're not giving them a demo, you're just teaching them something, and you happen to be using whatever it is you sell, that sells itself, right?  David Leary: That's the providing value. Blake Oliver: Yeah. I don't know, it's like that-  David Appel: If we take it back to our point in this discussion - do it in a repeatable way so it's recurring value.  Blake Oliver: Yeah. We never got down to the on-demand webinars, which I would love to be able to do - do them once. David Appel: See, to oversimplify the world, [00:16:30] most people go through three stages of ... All the sudden, they have, "Oh, my gosh, I have a problem" stage. Then, they're like, "What are my options?" stage. Then, it's, "How do I pick from my options?" stage. For all of you listening to this, right, and you're trying about adding more value to your client, interview some of your clients to say, "What problems did you realize that you had?" Then look for those ... That's back to the triggers of, "Oh, my gosh, I got a problem." Then, have the ideas through that next step of, "What are my options, and how [00:17:00] am I gonna choose?" Because all of you ... All is a big word ... Most of you are independent, and you're just trying to help your client find the best solution. So, have some preparation on how to help them make the decision. That's where you bring a lot of value. Blake Oliver: Talk to your clients- David Appel: Listen to your clients.  Blake Oliver: Listen to your clients. That's much better. David Leary: Everything's changing to a subscription economy. Do you think there's gonna be any point where it starts to tip to where there's subscription fatigue? What I mean by that is like ... I think I screwed [00:17:30] up, and I had my Amazon Subscribe and Save ... I got a bunch of stuff shipped to me that I really didn't need right then because I didn't have time to manage the subscription. It's almost like are subscriptions actually causing me more headaches now? I don't know?  Blake Oliver: Well, I hear this from folks who have a dozen accounting and finance applications in their team now. They're like, "Whoa! My spend on software has suddenly jumped annually. I've got 10 things I'm paying for. I used to be able just to pay for one." David Leary: Well, there's apps that have popped up now that will [00:18:00] let you track all your SaaS subscriptions. Then, they'll help you cancel them if you have too many. And that's just software SaaS. I mean, I'm getting razor blades ... At what point- Blake Oliver: You're talking about on the consumer side- David Leary: On all sides. Just ... I'm subscribed to 500 things, it feels like. It's hard to track. It really is. David Appel: I'd slice that from one time, from subscription, into, instead, of thinking about it of opt out versus opt in. I'm a very big fan, personally, and on the business side ... It's opt in. So, for those who don't know, opt [00:18:30] out means you're automatically committed, and you have to say that you don't want it. It's like a privacy statement from your financial institution. Opt in is it's not coming unless you choose. Then, at that time of choice, be thoughtful. Blake Oliver: Well, speaking of subscriptions, actually, a company that's doing it right ... I love Expensify's model because - we've talked about this before on the show, I think, David - you can sign all of your employees up for their app, and you only pay for the ones that use it that month. David Appel: Nifty.  Blake Oliver: So, you don't have to think about how many users do I [00:19:00] have? Am I gonna have to upgrade ...?  David Appel: That's where a lot of my time goes is advising clients on what the potential billing models are. People sometimes spend too much time looking at their belly button on trying to pick which billing model to choose. Instead, you think about what business problem your client's trying to solve and then, how they're likely to best solve that. Then you match your billing model to that decision-making process. Just to say one thing is back to the recurring revenue model - once you solve that problem for them, then you can just keep [00:19:30] driving recurring revenue time after time, because, in that example with Expensify, as word builds that this is, oh, my gosh, a great way of doing expenses, then more and more people just sign up. David Leary: I think a firm owner could actually utilize that with trying to reassure their own clients. Like, "Hey, here's our base subscription fee, and we charge subscriptions for these other services, but if that month, or that quarter, you don't need that service, don't worry. You're not gonna have to pay for it" Kind of have a scalable subscription model would make sense- Blake Oliver: Yeah, I like that. That makes sense, because I [00:20:00] think that's one of the big hesitation points for clients that you're trying to switch from an hourly to a subscription is they think, "Well, maybe, I'll be better ... Why are you trying to switch me? Maybe I'll be better off if I don't; if I just use you hourly." David Appel: I'd challenge the firm owners and the leading partners at the firms to only try to solve problems in a lasting long-term need so that it's not going to happen because any given accounting firm has many, many service lines, but a few are the big profit drivers, and [00:20:30] they're the big profit drivers because they're the biggest problems people want to have solved. So, create your business model and culture to solve those problems. Blake Oliver: That's what I've seen some firms doing is giving away the bookkeeping that they used to charge hourly for and putting clients on a subscription for VCFO consulting, right?  David Appel: Yeah, that's a great idea.  Blake Oliver: It ends up- maybe it ends up being the same, but psychologically, it's very different when you're getting that bookkeeping for free now. You're not afraid to call your bookkeeper every [00:21:00] day if you need to, I guess. Proactively solve problems. David Leary: So, if people wanna continue this conversation with you and track you down on the interwebs, how would they get a hold of you, Dave?  David Appel: Shoot me an invitation on LinkedIn. David Appel@Intacct. I'd love to get engaged.  David Leary: It's spelled how?  David Appel: Sorry, David, and Appel is A-P-P-E-L ... Looks like [crosstalk] je m'appelle Appel ...  Blake Oliver: You and Tim Appel are not- no relation there? David Appel: No, it's actually a pretty popular Danish last name. Blake Oliver: Interesting. Cool. David Appel: Well, guys, I had a great time. Blake Oliver: Thank [00:21:30] you very much. David Appel: Thank you, guys.  David Leary: Thank you.  Blake Oliver: Bye. 
  4. Sponsors Bill.com https://cloudaccountingpodcast.promo/bill Teampay https://cloudaccountingpodcast.promo/teampay Show Notes 01:39 – Laura outlines her career path from school to VP of Finance 02:30 – Laura liked using the Sage Intacct product so much at a former company that she wanted to become part of Sage Intacct  04:25 – What's the difference between accounting and finance departments?  05:22 – Laura's excited to work on the tools that will help 'eliminate' the month-end close 06:15 – Laura talks about what CFO 3.0 means for her and her team 06:52 – You really have to open up your mind to new possibilities and see things from different angles in order to embrace the new technologies 07:57 – Those who get into accounting in order to get the bird's-eye view of a company are the ones likely to move into higher positions as they progress 08:41 – Wanna be a CFO? Don't be a tree. Move around, meet people, and learn new things, constantly 10:40 – Laura's passion and big focus centers around mentoring, and making sure employees feel like they're learning,  growing, and contributing 12:26 – Are employees an asset or an expense? Laura and Blake disagree | Harvard Business Review 13:21 – Laura talks about the gender gap in accounting, and what Sage is doing to turn that around 14:50 – We talk about why women-led businesses excel | CNBC  15:11 – Diversity is great, but you need to have the open, transparent culture to back it up, otherwise, you're going nowhere 15:45 – As former guest, Jina Etienne, stated, there's no diversity if you're not free to just be yourself, no matter what your ethnicity, or gender 16:23 – Laura's advice for women entering the accounting industry - be confident, know your strength, own your voice, and don't be afraid!  Connect with LauraLaura Wiler, VP of Finance & Business Operations, Sage IntacctLinkedIn: https://www.linkedin.com/in/laurawiler/ Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 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 necessities.TeePublic Store: http://cloudacctpod.link/merch 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 Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend.  Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y.Laura Wiler: Being willing to change and kinda look at things differently is gonna be really important to be able to embrace that kinda technology. Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Laura Wiler: I'm Laura Wiler, VP of Finance and Business Operations from Sage Intacct. Blake Oliver: Awesome! Thanks so much for joining us here live at Intacct Advantage in Las Vegas. Laura Wiler: Glad to be here.  Blake Oliver: So, I understand that, as VP of Finance, you are in charge of the whole finance operation for Sage Intacct. Is that right, like that ...? David Leary: Well, you're an accountant, first. Laura Wiler: I'm an accountant, first, yeah, but I quickly moved [00:01:30] into the world of finance, where we could have a little more impact on the overall business as a whole. Blake Oliver: So, you started the CPA route ...?  Laura Wiler: I didn't actually. Blake Oliver: Oh ... Laura Wiler: I came straight out of school into a very small startup software company in the Portland area. Got to wear a lotta different hats, not just accounting; but decided, after about seven years, that I was gonna get my CPA. So, I did so. Most of my work was [00:02:00] around technical accounting, and those types of things- Blake Oliver: Got it. Straight into industry.  Laura Wiler: Yeah, straight into industry. Blake Oliver: Specifically the software industry- Laura Wiler: Indeed. Blake Oliver: How long have you been with Intacct? Laura Wiler: Six years- Blake Oliver: Six years, awesome. Laura Wiler: -in January. Blake Oliver: So, I guess, as the VP of Finance for Intacct, you are on Intacct, I imagine? Laura Wiler: We are. Actually, prior to Intacct, I was at a company, a similar SaaS-based company, and we implemented Intacct. So, I actually chose the product there. Blake Oliver: Is that what led [00:02:30] you here?  Laura Wiler: It is. It is. I just- I got a good sense for the culture. It was a real customer focus, and I felt that and saw it as we went through our implementation. We were pretty complex, as implementations go, and saw a huge difference and just really wanted to be part of the company. So, when I was ready to look for another opportunity, I reached out. Just so happens, they were kind of at the point where they needed somebody to come in and help them transform because they were pretty small, when I [00:03:00] started. So, yeah, I got to actually re-implement Intacct's use of their own product. Blake Oliver: Oh, interesting. Laura Wiler: Yeah. Blake Oliver: Now, something I've noticed over the last five years, in particular, is the growth of this app ecosystem around the Intacct GL, and product, and all that. Do you get to experiment with anything you want? How do you approach that? Laura Wiler: Sure. At my prior company, I think we had six different applications. It was one of the reasons I chose Intacct because there were [00:03:30] certain tools that were just better than others and having the ability to pick what worked for us was really important to me. At Intacct, we do have the same ability to do that, and we do. I think we've got more than seven different applications that we use across the business. We're encouraged to do what's gonna help us grow. David Leary: It's cool that you get to eat your own dog food and use the products you actually use because there's no way other companies are using their software. Blake Oliver: Somebody a few years back asked [00:04:00] Xero's CEO, then, Rod Drury, "So, are you using Xero for your accounting?" Which is kind of a ... A non-accountant would ask that question, right? Obviously, you can't. It doesn't scale to a global business, but you guys can, which is cool. Laura Wiler: Right, right.  David Leary: So, you're saying Intuit's not running on QuickBooks Online ...  Blake Oliver: Yeah, they're actually ... Intuit is running on a single instance of QuickBooks Desktop on the CFO's laptop. Laura Wiler: Oh, my goodness.  Blake Oliver: No, it's not. It can't be. David Leary: I have a question. So, just me being somebody who's not truly worked in accounting ... I've been in the accounting industry, [00:04:30] but not having worked it, what's the difference between the accounting department and finance department? Laura Wiler: Typically, and this is what we'd like to change, but typically, the accounting department looks at the past. So, tell you what happened. The finance department tells you what's going to happen. That's the simplistic way I look at it. We wanna kinda change that, and that's partly why we do what we do and make sure that our accountants ... We have really talented people in our accounting team that they can use their time and their talents towards [00:05:00] helping the business instead of just reporting on the past. Blake Oliver: Yeah, one of the things that was said at the keynote, today, that really stuck in my head was this concept of eliminating the month-end close-  Laura Wiler: The close, mm-hmm! Blake Oliver: Yeah, that's a bold statement! I know how bold that is, as a CPA, who has done the financial close. Kind of a lot there.  Laura Wiler: Yeah, no, and honestly, some of the things that they were showing and told you, we actually haven't had our hands in yet, so I'm really anxious to see that. [00:05:30] But anything we can do to take the repetitive things out of the close, we try to do. Blake Oliver: One of the other concepts in the keynote, this morning, was CFO 3.0. That's not something new. I think that's something that Intacct has been talking about for a while - this idea that ... And it ties into what we were just talking about, that accountants need to go from talking about what happened to why it happened. That's sort of where we're at now. What Intacct [00:06:00] is building now is helping accountants talk about what will happen and how we can make it happen, right?  Laura Wiler: Yeah.  Blake Oliver: So, I guess in the context of your role, how do you approach those questions? Laura Wiler: That's a big question there.  Blake Oliver: Yeah.  Laura Wiler: So, I think ... Well, I mean, a lot of what I've said, right? Trying to use technology to its fullest, of course; trying to equip and build the team that we need that can actually do some of these things. I spent a lot of time, actually, [00:06:30] building the team that we have and making sure we had the right people in the right place. Being willing to think about what could happen or what's possible ... I think, as accountants and finance professionals, we tend to be pretty skeptical about things, like we saw this morning. How is this gonna really work? Blake Oliver: Right.  Laura Wiler: Which, I gotta be honest, that's what goes through my head, too. Blake Oliver: Yeah, it's our nature, right?  Laura Wiler: It is. I think just having- being willing to change and look at things differently is gonna be really important to be able to embrace that [00:07:00] kind of technology. David Leary: I think the thing that stood out for me is that CEOs have traditionally came from either somebody in the sales department or in the marketing department, but now, because of where the CFO role is changing, the CFO might be the only person with a 360 view of the company, and now, that lends itself to more CFOs now becoming CEOs. I thought that was a really interesting thought process. Blake Oliver: Yeah.  Laura Wiler: I agree. Seeing that happen in reality, at Sage, is pretty phenomenal. Blake Oliver: Yeah [crosstalk]  David Leary: -but Sage implemented that themselves, or that's the path- [00:07:30] Laura Wiler: Yeah, they did.  Blake Oliver: Yeah, that's cool because then, there's that path now of I can go, and major in accounting, and become a CPA; then, maybe someday become a CFO, and then, maybe even someday be running that organization as the CEO ... That path exists for us- Laura Wiler: For sure. Blake Oliver: -whereas maybe, in the past, it was more of 'You go into accounting; this is what you're doing for the rest your life' kind of situation Laura Wiler: That sounds kind of depressing ...  Blake Oliver: A lot of things have ...Yeah, sorry. I didn't mean to take it to that dark place.  Laura Wiler: No, don't be ... No, it's okay, but you're right. People [00:08:00] go into accounting ... I ask people this, in fact, in interviews - "Why did you choose this?" Some of the best answers are really that, "I actually wanna understand how the business really runs, and this is where you get that full view." So, it's just natural that you're gonna look to people like that, as they raise their visibility in the company. Blake Oliver: So, I'm a CPA, and maybe I'm in public accounting, and maybe I'm working [00:08:30] in industry, but I have aspirations. I have dreams of getting that CFO spot, or that VP Finance, whatever you call it, right? Running the team. Laura Wiler: Yep. Blake Oliver: What tips do you have for getting there? Laura Wiler: For me, personally, I spent a lot of time just building relationships with people in a business. That gave me a huge opportunity to do a lot of different things. Each company that I've worked at, I may have started in a particular role, but I [00:09:00] had a lot of opportunity to move around and learn different parts of the business. I think that that, for me, is what set me up to be able to lead teams, more operational teams in businesses. David Leary: Just getting multiple disciplines at the organization underneath your belt.  Laura Wiler: For sure. I think you show your value, when you do that because you're thinking kind of holistically about the business. I think that's the biggest thing for me is just being able to do multiple things in the companies you're at and taking opportunities when they present themselves. This episode of The Cloud Accounting Podcast is sponsored by Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com.   Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L. David Leary: When you do get to that level where you're the CFO-type level, what is your role, as far as mentoring [00:10:30] younger accountants that are coming up? Is that really your responsibility, or is it just kinda as the leader of the  organization, or do you just leave people's development up to themselves? Laura Wiler: Not at all. That's actually one of my passions is really helping people figure out how they can get better, learn more, and just be more impactful to the organization. This year, I actually formally started mentoring people within Sage. They've got a program around doing that, which has been really rewarding. In [00:11:00] fact, I've probably learned more than I've taught. I think it's important to show that you care about your employees and you care about their success. For us, our employees are our biggest asset. If we don't help them grow, and feel like they're learning, and contributing, they're not gonna stay. So, that's a big focus for me. Blake Oliver: Employees are our biggest asset, and yet we don't show them on the balance sheet, right? Laura Wiler: Yeah, I guess not ... Blake Oliver: I just read an article in the Harvard ... We [00:11:30] were gonna talk about this on the show, but we didn't have time, on the Harvard Business Review, about just that. Not to get too nerdy here, with GAAP and everything, but the idea that, in many companies, now, it's not the machinery that's the most valuable asset, it's the staff and the employees. We have no way of showing investment in our staff. It all gets expensed in the current period, and not capitalized. I don't know ... Not to put you on the spot or anything, but do you have any opinions about that - big picture ...? Laura Wiler: Should we be capitalizing our people? [00:12:00] Blake Oliver: Yeah, well, or like, maybe our [crosstalk]  David Leary: It's an asset. If you're in the- we're in a knowledge economy, right? Your people are your biggest asset.  Laura Wiler: That's true.  Blake Oliver: Yeah, or research and development expense, for instance. That all gets expensed; most of it- Laura Wiler: Generally. Blake Oliver: -generally, in the current period, and yet, you've got these biotech companies that are doing all this research, and it's not showing up on the balance sheet. It's just expensed, and it distorts everything. I don't know. Laura Wiler: I can see the point you're making very clearly, [00:12:30] but I tend to feel like those types of things are more ... I don't know, they're a little bit just part of business and part of building a good company. Putting it on the balance sheet, trying to ... I can't even imagine. I'm just trying to think about all the ... Our retention rate's going into our [crosstalk] Yeah, how are we gonna ... No. I don't even want to get that complicated. It's hard enough to just do lease accounting. No, no, no ...  Blake Oliver: Oh, yeah, right? David mentioned mentoring. One of the other topics that we cover occasionally on our show is the gender gap [00:13:00] in accounting. It's terrible. It's like, what? In a lot of- at least in public accounting, it's like less than 20 percent of partners are women. I don't know what it's like in industry, in terms of women in leadership positions, but I imagine it's also still a problem. What are your thoughts on that? I understand that you're doing some stuff to work on that and to empower women ...  Laura Wiler: I actually looked into ... We looked at this at our company and spent some time just in preparation for the show and the focus that we're having on [00:13:30] that tomorrow. Surprisingly, at Sage Intacct - maybe it's not so surprisingly, based on the culture that we have - over 40 percent of our leadership roles are fulfilled by women. I feel it when we make decisions when we're working together. It's just one of those things where there's a lot of different viewpoints, and backgrounds. All of that is obviously gonna help you make the right decision and hopefully, turn into opportunity for your company. There are studies out there that have shown that. As [00:14:00] far as the broader industry, I think it's really more about the education. Women are more educated than they've ever been. Yet, when you look broadly, leadership roles, they're just not ... It's not keeping pace, and I think that's a problem. Part of it is just being deliberate about it; really making sure you understand that you're hiring women, or just people of different backgrounds, right?  Blake Oliver: Right. Laura Wiler: I think, for us, in our company, I tell you about 44 percent, but [00:14:30] when you look at the technical roles, it's not the same, especially in engineering. We've got very few women in leadership. We do have a leader who's a woman, but broadly, it's not. That's something we have to change in the way we focus on. Blake Oliver: I think just being aware of it is that first step, right?  Laura Wiler: Agreed.  Blake Oliver: Acknowledging it is something that the company needs to do? Laura Wiler: Agreed.  Blake Oliver: There was actually just a story all over the news. This is an article on CNBC about, "Firms with a female CEO have a better stock price performance, new research says."  Laura Wiler: I saw that. [00:15:00] Blake Oliver: I think CFO, also ... If you just started a hedge fund that only bet on women-led businesses, you'd actually be beating the market.  Laura Wiler: Yeah,  yeah, no ... Blake Oliver: Why is that?  Laura Wiler: I'm not surprised? Well, honestly, I think that just, like you said, diversity of thought, and having women, and other people with different backgrounds in a conversation is just going to- it's going to improve the conversation and improve the answer you got. I really believe that. I don't know that it's more complicated than that. There [00:15:30] are plenty of smart people out there. I also think that having a diverse organization is one thing, but if you don't have a culture that's really open, and transparent, and allows people to speak their mind, then you can be as diverse as you want; no one's gonna speak up, and you're not gonna get there, either.  David Leary: We had somebody on an interview- Blake Oliver: Jinah Etienne? David Leary: Jinah Etienne, a few episodes back. She talked about ... She really brought diversity to a different perspective. Until people are just comfortable being themselves in a room with their co-workers, it doesn't matter. If people can't be ... If everybody just likes to assimilate, and they can't be [00:16:00] their true selves, you can't have diversity. Laura Wiler: It's a good point. It's partly why we even focus on thinking about - at least not me, personally - looking into how do we look? Because it feels very open, and everyone is speaking their mind, and we all kind of make collective decisions that way. So, it's good to see.  David Leary: Is there any one piece of advice you'd give to a young female accounting student? Laura Wiler: So, as women, I think we tend to ... I think Michelle Obama said this, but you suffer from impostor [00:16:30] syndrome. You really feel like, unless you know everything very thoroughly, you're afraid to step out and make yourself vulnerable. I think it's really important to just be confident and know that you have strength, and your voice matters. Just get out there and don't be afraid, honestly.  Blake Oliver: Great advice. I like that.  David Leary: So, how do we get a hold of you, Laura, outside [00:17:00] of the podcast? How would people track you down on social media, et cetera? Laura Wiler: I'm on LinkedIn.  David Leary: On LinkedIn? Okay.  Laura Wiler: Yeah, so you can always reach me there. Blake Oliver: All right. Wonderful. Thanks so much for your time today- Laura Wiler: Thank you.  Blake Oliver: -and really appreciate having you on the show. Laura Wiler: All right. Thanks, guys. 
  5. Sponsors Bill.com https://cloudaccountingpodcast.promo/bill Teampay https://cloudaccountingpodcast.promo/teampay Show Notes 03:38 – Angelo defines 'family office'  04:19 – Definitely not small potatoes!  'Single' family offices are usually owned by those with wealth ranging from tens to hundreds of millions of dollars 06:21 – The ultra-high-net-worth crowd use a family office as a way to manage wealth, and mitigate financial risks 07:16 – An effective virtual family office utilizes outsourcing and the newest and most efficient technologies to seamlessly manage the family or individual's funds 08:51 – How do you measure success of a family office?  Clarify, communicate,  compare, and get two or three sets of eyeballs to check the work 12:26 – How exactly does one enter into the family-office arena as a career choice? Is it even possible?  13:52 – Breaking into the family office segment means getting to know the target (ultra-wealthy) audience, gaining some experience, and proving your worth 14:38 – At some point, the old dogs are going to have to learn some new tricks 15:36 – You really can't outsource creativity and leadership in the family office 16:50 – Apart from technology and automation, you need the soft skills - collaboration, globalization, and listening  17:22 – Angelo discusses some of the challenges of working for a family office 18:31 – Angelo talks about what inspired him to enter into the family office arena 20:29 – Check out Angelo’s book, “Effective Family Office: Best Practices and Beyond,” on Amazon!  He’s also got a podcast! You can find Effective Family Office Podcast on iTunes, for Apple users, or Stitcher, for the Android crowd!  Connect with AngeloAngelo Robles, CEO, Family Office Association Website: https://familyofficeassociation.com/ LinkedIn: https://www.linkedin.com/in/angelorobles/ Twitter: https://twitter.com/familyoffice  Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 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 necessities.TeePublic Store: http://cloudacctpod.link/merch Subscribe Apple Podcasts: http://cloudacctpod.link/ApplePodcasts Spotify: http://cloudacctpod.link/Spotify Google Play: http://cloudacctpod.link/GooglePlay Stitcher: http://cloudacctpod.link/Stitcher Overcast: http://cloudacctpod.link/Overcast   Transcript This episode of The Cloud Accounting Podcast is sponsored by Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend.  Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y.Angelo Robles: I hire one or two people dedicated to me 24/7, and now I know my interest is in their heart. Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Angelo Robles: And I'm Angelo Robles of Family Office Association. Blake Oliver: Awesome! Thanks for joining us here live at Intacct Advantage 2019 in Las Vegas. We are here in front of a giant digital billboard - Welcome to Sage Intacct Advantage - Never-Ending Imagination. It's fun to be here. Thank you so much for joining us. We're really eager to be talking to you about- David Leary: About family offices. I [00:01:30] found you- I went through the 250 sessions, I think, that were happening at this event, and I looked at .. I was like, "That sounds interesting. We should have him on the podcast!" The connection happened, so now you're here, and we wanna learn about family offices. Blake Oliver: So you know, my background in public accounting was in outsourced accounting, Angelo. I was on the same floor as the business-management team. I understand there are some parallels between family office and, say, business management. Could [00:02:00] you give us and our listeners an overview of what exactly family office means in the accounting world? Angelo Robles: Sure. It's great to be here, guys. Great to be at the MGM in Vegas. I think the first time, among my 50 times to Vegas, I'm ever wearing a suit. David Leary: It looks very nice for those of you who can't see it.  Blake Oliver: Yeah, and the suit must be a part of the family office thing, right? You've gotta dress to impress? Angelo Robles: The audience is missing my double-breasted suit. I always wear my best suits when I can't be seen visually. They could imagine in their mind.  Blake Oliver: Well, we'll get a picture, and we'll [00:02:30] stick that up on social media along with the podcast. Angelo Robles: It'll be proof I'm not kidding about my suit.  Blake Oliver: It'll be proof that we're here, too, right? Angelo Robles: Behind the giant digital billboard. Blake Oliver: Exactly. Exactly. So, what brought you away from your family to Las Vegas to talk about family office? Angelo Robles: Coming to Las Vegas is not the hardest thing for me to do, so Sage Intacct had a pretty easy job over there;  but there certainly is a tie-in to the great work that Sage Intacct does around the world with accounting and their amazing software and how family [00:03:00] offices would benefit from the utilization of greater technologies. A lot of them are still a little dated. They're doing things a little bit ... We would look at it as that's like 10-20 years ago. You've gotta leverage technology. I've been talking about that and what I do for a long time. Blake Oliver: I realize we totally skipped past that first question, which is- David Leary: Yeah. What is a family office? Blake Oliver: Yeah, what is it? Angelo Robles: Well, at least we started talking about my suit and about how it could be impactful, too. That's probably a better first question. But I suppose [00:03:30] you're right, to add some context, in terms of what I'm saying ... I'm the founder and chairman of an organization in Greenwich, Connecticut, called Family Office Association. In simple terms, that means what is a family office? I define it- We're very narrow. We're an inch wide and a mile deep. To me, it's a single family office. A single family office is an entity created by one family of great, great wealth to internally and exclusively manage their money and, often, their other affairs. If [00:04:00] you're a billionaire, even lesser, but if you're a billionaire, almost every billionaire will have their own single family office. David Leary: A lot of podcasters have family offices, I imagine? Angelo Robles: You guys are on the way. You just gotta get the right advertisers!  Blake Oliver: What's the minimum? How much do David and I need to make from The Cloud Accounting Podcast to hire somebody to run our family office? Angelo Robles: Well, since you bring that up, in my conversation at the Sage Intacct conference today, I spoke about the rise of the [inaudible], the ultra-ultra-affluent theoretically [00:04:30] being able to create their own what we call virtual single family office. I'm gonna make the argument ... Historically, it would be probably a couple of hundred million to have a "traditional" single family office. But with the utilization of technology and greater outsourcing, I am gonna state that it's possible to have a single family office at only, and I'm doing air quotes, everyone, only a couple of tens of millions of dollars. Blake Oliver: Oh, David, it's within reach! Angelo Robles: You're there.  David Leary: When you say virtual family office, I'm thinking like you being the accountant or bookkeeper, [00:05:00] you'd have your own virtual family office, but you would take Blake and I as a client, and me in as a client. You'd have multiple clients? Angelo Robles: No. So, again, I'm gonna ... I probably need to define the single family office. It's one family; keyword there is 'family.' One family or individual of great wealth. Let's define that as someone hits it big in the jackpot today at the MGM. Okay, it's not $100 or $200 million, it's $30 or $40 million, God forbid. They now have enough resources where, like, "Wow, I'm rich, but I care about my legacy. [00:05:30] I care about taxation. I care about investing. Everyone ignored me before; now everyone's coming after me, and they're gonna be in it for themselves." So, how about this? I create my own company. I hire one or two people dedicated to me 24/7. They're all mine. That's all they could do. Now, I know, in theory, my interest is in their heart because they're totally dedicated to me. It's my company. I created it, and I could trust [00:06:00] that they're gonna be dedicated to me because I'm paying them to be, and they don't need other clients. If they have other clients, that's gonna, in theory, water down their focus to me. I want them 24/7, and I'm willing to pay for that. Blake Oliver: Got it. Single family office - ultra-high-net-worth individuals, or families who have a dedicated accounting/finance team for them? Angelo Robles: Yes, but in theory, what a smaller virtual single family office, where ... The keyword 'virtual' means it's gonna be a lot of outsourcing [00:06:30] and the utilization of technology for communication, for project management, for accounting. It gets better all the time. It's never been easier. Sage Intacct is an amazing company for families that have multiple LLCs, multiple entities, multiple trusts. Doing it one by one's a lot of work, so having a company like Sage Intacct, it streamlines the capability to get the information how you want to get it. If you get it in a more timely manner and with less errors than the [00:07:00] traditional method of doing it, you can make more timely investment and tax decisions, as well. So, it's a risk mitigation tool, as well. The key things in a virtual family office are outsourcing and technology, so certainly, technologies are gonna be a big part of it. Blake Oliver: What sort of outsourcing are you talking about? Like, maybe a virtual family office, I only hire one CFO for my family, and then he asked delegates everything [crosstalk]  Angelo Robles: Yes, correct ... Let's talk a little bit about that. A more traditional family office - half-a-billion [00:07:30] dollars and up - and let's just say you have 15 people that work there. You have a CEO, you have a CFO, you have an analyst, you have a CIO on investments, et cetera, et cetera, et cetera. That also means you've gotta manage people. People maybe get bored, they leave; you have to replace them. When you have employees, I hate to say this, but sometimes things go wrong. You get workplace issues, you get sexual harassment, you get ... Well, they need to go on vacations. They need disability insurance. They're [00:08:00] human. They have ups and downs. David Leary: Well, it's like a real business at that point.  Angelo Robles: It's a real ... Maybe, if you're the family, or the CEO, you don't want or necessarily need that. So, how about you form your entity, you streamline operations, you hire one or two people that are very good at communication and maybe broader knowledge. Then, it's like, "Okay, we have this legal issue. Then, let's source the best legal person for the job. We don't need to have them 24/7 and pay them half-a-million dollars [00:08:30] a year. We're gonna use them for this trust and estates work. We're gonna use this attorney for companies we're looking to buy that need to handle the transaction." That applies not just to legal; that could apply to investing, accounting, and many other things, where the job of that virtual family office is to outsource by best in breed. Now, that does beg the question - how do you measure the results and success? Well, one, you've gotta clarify the goals of that individual or family, because sometimes, [00:09:00] with wealthy individuals, a shock to all of you, they change their mind a lot. So, you need to understand what are your goals that you want us, and me, as a single family office, to focus on? By the way, I'm probably gonna ask you that every two weeks, and we're gonna clarify where we are in these goals, right now, so you understand it. To help understand whether the outsourcing is doing a good job, you want to clarify the goals among all the parties involved and what's expected. You want to have great communication; not good, but great. [00:09:30] You want to measure. How do you benchmark? How do you do best practices of what the other best-of-the-best virtual single family offices are doing? Then, how do you stress test?  I spoke a little bit about that in my session, where you have other experts that look at the work that someone else has done. They're not gonna replace them, but you want a second set of eyes, or a third set of eyes because this money is so important, and it's important for the person running the single family office. You could do [00:10:00] things without having a whole bunch of employees. Some single family offices have 100 to 200 employees. For them, that may be applicable, but if you're looking at a- not hundreds of millions, or you don't wanna manage in big, dispersed group of people ... I can make the argument, if you're a smaller family unit, and you're traveling around the world, have one anchor entity and a couple of employees, but then have different outsourced partners even beyond the U.S., around the world, that help in certain specific [00:10:30] legal, tax, and investment issues. You don't have to hire them. You're outsourcing them. How do you manage that? Use technology like Trello, for project management. Use a Slack, and Asana for communication. Use even social media; use a private network on Facebook, or LinkedIn. Then you have, again, the accounting software that we briefly discussed. Technology and AI is making all of this easier. Now, a problem is ... I mean, I'm 53. I'll give that as an example. Now, I happen to have a Gen-Z-er at home. He's [00:11:00] 16. So, the average Gen-Z-er goes on their phone, by the way, 116 times a day. Technologies, to me, are not quite as native. I have to think about it. I gotta work a little harder, but I know it's important. So, what you may want to do is incorporate people, where technology is just more natural and native to them. They're a little bit more used to the quasi-outsourced world, and how they collaborate, and how they communicate is different than people in my age bracket. Now, I'm not quite saying go out there and hire a 21-year-old ... This episode of The Cloud Accounting Podcast is sponsored by Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com.   Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.Blake Oliver: Well, speaking of that ...  Angelo Robles: But ...  Blake Oliver: Speaking of hiring a 21-year-old, [00:12:30] many of our listeners are students, or new in their careers as CPAs, or accountants, and bookkeepers. If they are excited by family office as a career, how do you even get into that, because it's very niche, right? Very small. Angelo Robles: It's very niche-y. Until the rise of the virtual single family office, which will change things ... I mean, how many people are worth half-a-billion dollars or more? It maybe 8,000 or 10,000 around the world, so it's hard for someone younger to get into a position to even be an intern at a "single [00:13:00] family office," and they're dispersed. They could be anywhere. Obviously, there's gonna be more of them in New York, and San Francisco, and London, Moscow, Hong Kong, et cetera. It's gonna be where the wealth is a little bit concentrated. There's not a great career path at the moment, because single family offices are a relatively limited number. They're fragmented. You know one, you know one - they're like snowflakes, they're all different. There's tremendous interest of getting involved in a single family office, even though it has both positives, but [00:13:30] it has negatives. For a younger person, I would say ... Finding out single family offices is almost impossible. It's so hard, but if you-  Blake Oliver: Right, because a lot of wealthy families don't want that family office to be public. Angelo Robles: You got it. They wanna be private. Blake Oliver: Yeah, so it's got some obscure name on the LLC, and there's no sign on the door, right?  Angelo Robles: Here's a couple of things that I may recommend to someone younger. One of them may be interning, getting the experience, and proving your worth. The other that we hinted [00:14:00] at in a pre-conversation is a lot of the families that created wealth are getting older. They're in their 60s, or 70s. They're transitioning to the millennials that are upwards of, what, 37, at the year that we're talking now? They might have went to school with some of the family members of wealthy families ... If they're a Gen-Z-er, they're in high school or college. What's gonna be their peer network? They have to look a little creatively around it and see where that could align. The other thing that we spoke about is the older generation, that they don't relate to the millennials, and [00:14:30] they don't understand how they communicate, and how they make decisions; they're not gonna have a job. So, there will be a transition of jobs to a younger generation of people. Maybe the last thing I'll bring up is, if we're talking virtual family office, and technology, technology, technology, the younger generation's gonna be more fluid in various technological advancements and how to ... I would even consider, and I mentioned this to some SFOs that are a little more dated, bring in a tech whiz that's young and dynamic, and have him work [00:15:00] with, one, adding an intern, or two, but changing a little bit of the culture and changing the technological tools that your family office is using. Now, the only challenge with that is some older people, it maybe a little bit hard to learn a new trick, but they could. They're gonna have to see and have the desire to do so, but that could be a value to everyone. David Leary: It sounds like, if I'm an accountant, and my history has always been accounting, and tax, and bookkeeping ... I get all that. I really have to develop a whole set of new skill sets of management, and communication to [00:15:30] really run a family office, especially one of these virtual family offices, because I'm kind of an orchestrator, at that point. I'm not really just running numbers. Angelo Robles: You are correct. The skill set basically involves how do I become a leader? But becoming a leader is going to be something you should be learning in your own family initiatives with their own friendships and relationships, and how do you become a good listener? How do you come up with ... There's a couple of things a family office can't outsource. What is that gonna be? It's gonna be the creative part - own the idea; leadership - how [00:16:00] do you inspire and motivate others, and how do you communicate and execute upon the service to the family? So, you are correct. You're almost implying that maybe accountants are gonna be intellectual and smart, and they're gonna understand numbers, but maybe they're not always gonna be great on the softer skills - the emotional intelligence part. I don't think that's necessarily true, by the way, but let's even assume that stereotype. In that case, then you are correct. Learning about how do I become a better listener? How do I be a leader? How do I communicate? [00:16:30] I'm going to say that's gonna benefit them in life, not just in this specific job situation. They should be starting to do that anyway. Could I make the argument that accounting, legal, and many professions with the greater advancements in AI and technology is gonna make the more mundane aspects of those jobs gonna be replaced by technology and AI? Then we come down to what Davos spoke about the year prior at the meeting. What are the 10 most needed skills to move forward over the next 10 years in a job? It's being collaborative. [00:17:00] It's globalization. It's being a good listener. It's working in different teams from people that you may not be as used to. How do you collaborate and lead each other to come to the best conclusion or the best answer to the questions that you're bringing up? Those are the skills that are going to be needed and I think that could be learned. David Leary: Are there any downsides to family offices? Do families fight? Blake Oliver: What are the biggest challenges?  Angelo Robles: If I was someone looking to work inside a family office, potentially, the biggest challenge is, okay, great, I'm hired for this position. The family [00:17:30] principal, let's use that word, is 73 years old. They're probably not gonna live forever. So, I'm giving up a career where I have a diversity of clientele, working in a traditional accounting firm. I'm getting all the advantages now of never needing to rain-make. I'm just working for one family ... A couple of the downsides are do I get bored after two or three years, if they're too small and not doing enough interesting things? By getting bored, do I also not sharpen my skills as much because I don't have enough different things [00:18:00] coming at me? That's one big issue. The other that I hinted at is suppose that more elder principal ... If they don't have a younger family that is involved and interested, what happens if they die or get disabled, and I'm two years in? My skills might have slightly diminished if I'm not seeing as many diverse clientele anymore. I'm not rain-making as much; I'm not networking; I'm not meeting as many people. Now, I feel like, "Oops, I gotta start over all again." Those are two big challenges. Blake Oliver: How did you get into the family [00:18:30] office business? Angelo Robles: No one wanted to hire me. That's 90-percent true. I was at UBS and also ... The real driver, I've been in financial services, and I've been an investor; mainly, a startup investor for a fair number of years. But the main way is I approached the Hedge Fund Association and supposedly, I live in the headquarters of the world for hedge funds, in Greenwich, Connecticut. I'm like, "Hey, Hedge Fund Association, you have no chapter here. Let me start a chapter for you." They were kind enough [00:19:00] to take a risk. I enjoyed organizing, writing, thought leadership, programming, introducing speakers, picking out speakers/topics. I liked the process of running, effectively, a membership organization and events. I'm like, "Who needs to only make their money in financial services, given that I have some relationships with families and single family offices? Hey, let me create my own kind of a family office organization dedicated to single family offices that is a deep thinker, a writer, a thought leader ..."  I like [00:19:30] the intellectual part, but also host a variety of programs. Here I am now, about 11 or 12 years later, so I guess it's working. Blake Oliver: How many members do you have, and where do they hail from? Are they all over the world? Country?  Angelo Robles: Yes, they are all over the world. I would say ... Well, to be exact, what our number is about 93 percent, I think are U.S.-centric; mainly gonna be where some of the wealth is a little bit focused on. Greenwich, New York, Boston, Miami, Palm Beach, Orange County, L.A., San [00:20:00] Francisco, Silicon Valley. So, it tends to be a little coastal, but I have members in Iowa, and Wyoming. I have members in the Caribbean. I have members on, I think, practically all continents. We're looking to become even more global, from our perspective, in what we do. We have over 200 direct families and single family offices who are committed members. David Leary: So, if anybody wants to learn more about the family office, or learn about the Family Office Association, how do they get a hold of you or stay in touch? Angelo Robles: Sure. Our [00:20:30] website is simply our company name - FamilyOfficeAssociation.com. My email is Angelo@FamilyOfficeAssociation.com. I wrote a book. I have others coming out next year. They could look me up on Amazon, by my name, and I do have a podcast, myself. It's on iTunes, for Apple users, and Stitcher, for, I guess, Android users. I think iHeart, as well, if I remember correctly. You could likely look it up from my name. It's Angelo. Last name is Robles (R-O-B-L-E-S), but it does [00:21:00] have a name. For now, we call it Effective Family Office. David Leary: Okay. We'll put that in the show notes, so everybody can link to it, and find it very easily, and subscribe. Blake Oliver: And I've got a new show to listen to. I'm looking forward to that. Angelo Robles: You may have too many podcasts on your rotation now. Blake Oliver: Well, I'll knock one of the other ones out. I won't say which one-  David Leary: You just stop listening to The Cloud Accounting Podcast, then you can make room-   Blake Oliver: Exactly. Then our numbers will go down. David Leary: Yeah, that's true ...  Blake Oliver: Well, Angelo, thank you so much for joining us and giving us your time today, and safe travels back to Connecticut. Angelo Robles: The pleasure was all mine. Thank you, guys. Loved it- David Leary: Thank you.  Angelo Robles: Thanks. Bye-bye. [00:21:30]
  6. Sponsors Bill.com https://cloudaccountingpodcast.promo/bill Teampay https://cloudaccountingpodcast.promo/teampay Show Notes 01:07 – Meet our guests!  01:48 – Aaron talks about what's on the horizon for Sage, including the launch of Intelligent GL | Sage  02:32 – Intelligent GL uses AI to provide continuous trust, and continuous insights that help customers make better business decisions 03:13 – Blasphemy!  How dare you try to take away our close ... Ha!  05:02 – Brendan shares how AutoEntry will work with Sage to make sure the data is in the right place at the right time 08:33 – Aaron talks about the importance of partnering with other software providers to create a centralized hub for their clients' financial activities 09:57 – Dan talks about the Sage People rollout in 2020 11:37 – You can lead a horse to water, but you can't make it stop loving Excel  13:28 – After a certain point of growth, Excel's capabilities no longer scale 14:02 – Dan gives some detail on Sage's Visual Explorer  Connect with Our Guests Aaron Harris, CTO, Sage Website: https://www.sageintacct.com/leadership/aaron-harris LinkedIn: https://www.linkedin.com/in/aaron-harris-7407b2/ Brendan Woods, Founder and CEO, AutoEntry Website: https://www.autoentry.com/about-us LinkedIn: https://www.linkedin.com/in/woodsbrendan/ Dan Miller, VP of Product, Sage Intacct Website: https://www.sageintacct.com/leadership/dan-miller LinkedIn: https://www.linkedin.com/in/danielgmiller/ Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 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. Oh, and don't forget to come see our smiling faces on Instagram! Meet Blake in person! December 9-11: Digital CPA Conference in Seattle         Limited edition shirts, stickers, and other necessities.TeePublic Store: http://cloudacctpod.link/merch 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 Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com.   Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.Brendan Woods: Well, you can't close, period, without having information, and there's lots of other benefits, I suppose, to automating data entry. Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Aaron Harris: I'm Aaron Harris, Sage Group CTO, and one of the original founders of Sage Intacct. Brendan Woods: I'm Brandon Woods. I'm the founder and CEO of AutoEntry; I'm now joined to the team in Sage.  Dan Miller: And I'm Dan Miller. I'm the Vice President of Product for Sage Intacct.  Blake Oliver: We're here live at Intacct Advantage in Las Vegas; MGM Grand, in the rotunda, watching everyone go to all of these sessions. Thank you so much for having us here. It's awesome. [00:01:30] It's amazing what a large conference this has become. This is my third year. So, congratulations to you folks [crosstalk] Aaron Harris: Yeah. Thank you very much. Brendan Woods: Let's just jump in, right? I think a lot of our listeners care about the tech - AI, automation. You have talked about all this stuff. So, what's next for the next 12 months for Intacct?  Aaron Harris: So, yeah, I think the tagline for the conference here is "AI Changes Everything." We see it as a journey where we need to help our customers along the journey with us, as we develop AI capabilities, [00:02:00] and we sort of jointly understand how we're gonna change the industry together. We launched something that we call the 'Intelligent GL,' which essentially uses AI to transform an organization's accounting processes from periodic point in time - mostly focused on the past - processes, to continuous - focused on the future - strategic processes, and we're gonna use AI to make that happen. Blake Oliver: Dan Miller, what does that actually look like when it comes to the product? What are you using AI [00:02:30] to do, or what are your plans in that regard? Dan Miller: Well, we announced several things that we're gonna be doing. As Aaron was talking about, the Intelligent GL is going to allow people to capture information for continuous accounting. They're going to be able to have continuous trust in their accounting system because we're gonna be able to, through AI, be able to provide an audible system all the time and continuous insight, which will help them have predictive capabilities to [00:03:00] look into the future about where their business is going, so they can make better business decisions. Blake Oliver: The thing that really stuck out to me ... There was, I think, one phrase that was uttered a few different times, was that, "We aim to eliminate the financial close." David Leary: It almost got a standing ovation yesterday. Aaron Harris: We've been talking about that for a couple of years. The first time we indicated that we have this very provocative, aspirational objective to eliminate the financial close, it made people uneasy. It's a bit of sacrilege [crosstalk]  Blake Oliver: Yeah, that's our job, right?  Aaron Harris: The close has been [00:03:30] the thing you do your job around for literally centuries. We're not talking decades, or years; for centuries. When you can really help people to understand how the financial close holds organizations back ... The idea that I only have the ability to see how I performed once that close is complete, and I have another opportunity to do it a month later, when I go through that process again, it really is quite antiquated. We absolutely have the technology now to give organizations continuous [00:04:00] visibility into how they're performing. Now, we're being deliberately provocative here. I don't think we're gonna eliminate the close in the next couple of years. But what if we got the close down to something like 10 or 20 minutes, right? Where I'm only within half an hour of having perfect vision into the performance of my organization, as the last ... There are some straggling transactions coming in, and there are some allocations that have to be continuously computed that haven't come along ... It's a directional thing [00:04:30] that we think drives excitement, drives creative thinking within the organization, and gets our customers to see a vision of where we want to take this. Blake Oliver: On that theme, Brendan Woods, you've joined us here from AutoEntry. Our listeners are well aware, I believe, that AutoEntry was recently acquired by Sage. We saw that announcement up on the main stage. What are you up to now, and what can we look forward to when it comes to AutoEntry, and Sage, and Sage [00:05:00] Intacct? Whatever you can share with us ...  Brendan Woods: Yeah, sure. As many of the listeners probably already know, AutoEntry is all about automating data entry into accounting systems. I think it's a perfect fit for working with Sage, as we go forward, because, I suppose, as to what Aaron was saying, working towards continuous close, and continuous audit, even, if we go a step further, in order to do that, you need the data in the system. You can't close, period, [00:05:30] without having the information. There's lots of other benefits, I suppose, to automating data entry, beyond that; things like cash-flow forecasting, and budgeting ... If you don't know how many creditors you've yet to input into the system because bills are sitting in an in-tray on someone's desk, yet to be manually inputted, and so forth. So, there's lots of value. What we've obviously done over the years has built up an independent business, integrating lots of accounting systems and serving CPAs, and accounting, and bookkeeping firms around the world, to streamline their practices and help [00:06:00] them grow; and direct businesses, also. But I always envied the opportunity to work more closely to the GL products. themselves. I think both ourselves and Sage saw a great opportunity to do that across that suite of products that they have. Blake Oliver: Yeah, there's only so much you can do as a third party. Now that you're a part of Sage, I imagine deeper integrations are- and much more is possible in that regard. Brendan Woods: Absolutely. I mean, there are lots of exciting conversations starting about what's possible; the [00:06:30] art of what's possible. That said, it's important also to recognize that we have built up, in the short term, a very significant customer base, over 3,500 accounting, and bookkeeping firms around the world. To serve them and to continue to serve them, we will also obviously support the integrations we have with other products because it is seen as a practice solution for the accounting space; so that they need to think that they can use AutoEntry as a standard operating procedure at the front end of their processes to [00:07:00] standardize how they get data into all of their systems, be it- no matter what their client may be using. But yes, to your point, as regards Sage, it does give us the opportunity to, at least in this particular space, really optimize the integration experience and the user experience, generally, of using automation of data entry with the product, itself.This episode of The Cloud Accounting Podcast is sponsored by Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend.  Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y. David Leary: So, obviously, AutoEntry's now part of the ecosystem. I think, in general, a lot of ERP systems are somewhat closed. Aaron, this is really for you - with Intacct, through the years, it's always been kind of an open ecosystem, and open API. Can you speak to the importance of having [00:08:30] software partners on your journey with you on this?  Aaron Harris: It's absolutely critical. I'd like to point out just this this proliferation, in the modern cloud era, solutions for every conceivable business need. A medium-sized business, today, may use 100 or more cloud applications across their business processes to drive efficiencies and to make as many processes as possible digital. The same company, 15-20 years ago, might have [00:09:00] 10. We not only can't expect to solve all customer problems, it's impractical; it's impossible. But what's unique about being the provider of the financials system of record is that we can then become the hub for all of that activity that's flowing through a company's ecosystem. So, it's to our benefit to be very open, to make sure that we can plug into any source [00:09:30] of economic activity within the business, so that we can capture that down into the financial system of record. Blake Oliver: Lots of product announcements, feature announcements this year. Dan Miller, you were up on stage talking about Sage People and that ... Has that happened yet, that integration, or is that forthcoming? Dan Miller: Is forthcoming? Blake Oliver: Forthcoming.  Dan Miller: The first part of the integration will be happening shortly. Blake Oliver: Got it.  Dan Miller: But we are rolling out, over this 2020 [00:10:00] year, the capabilities from employee-master, synchronization, compensation, time entry will all become part of what we're rolling out. The real focus there is on how we leverage and unify the system information to be able to provide better information for customers, where they have insight into how the combination of what's going on for [00:10:30] their staff, from a financial perspective, can be blended together with what they know about them, from an HR/management perspective, to make better decisions. Blake Oliver: That makes so much sense because so many businesses these days, it's human-capital-driven, and many accounting systems don't even account for that. Dan Miller: No, they don't ... Many accounting systems don't have the ability to bring in additional information. We've been built open from the very beginning - with the idea of our statistical accounts and multi-book accounting - to be able to bring information in that's not [00:11:00] just your pure accounting, but be able to look at that additional information in ways that help you be able to have metrics that give you insight into how your delay in hiring in a particular location is affecting your future ability to achieve revenue objectives. David Leary: One thing that stuck with me yesterday, in your keynotes, was this distance from the source of truth, and almost this attack on Microsoft Excel. [00:11:30] Do we see a future where maybe people won't need Microsoft Excel anymore? Dan Miller: I don't believe that will happen in our lifetime [crosstalk]  Aaron Harris: I've sort of come to peace with the reality that that no matter what we do, people will always love Excel ... You know, spreadsheets are really ... It's elegant and CFOs feel comfortable there. What we have to do with Sage, and Sage Intacct is really make sure that we're encouraging our customers [00:12:00] to put things into accounting and finance that need a little bit more control, where flexibility that you get in a spreadsheet isn't necessarily rewarded. We're also helping them, when they wanna use spreadsheets, to be even more productive than they have been in the past. Yeah, I've come to peace. It took me a long time. I used to get on stage and rant and rave about, "Why are you still using spreadsheets? It's horrible. There's all kinds of things that can [00:12:30] go wrong!" I think Dan got the biggest laugh of the conference- Blake Oliver: I was gonna bring that up - the big screen of #REF and #DIV/0! errors. Everyone loved that. Aaron Harris: Yeah. So, we're gonna continue to remind people of what can go wrong, and horribly wrong, in some cases, but, yeah, I've turned into a realist, as I've gained experience-. Dan Miller: Well, I think that Aaron got it ... What Aaron just said is really right on. I think that Excel has- is great for [00:13:00] low-volume activities, or activities where it is something that is managed by an individual. When you start getting into complex processes you're trying to do at volume, the risk of that breaking is too high to have it be built in a solution that anything you might touch, and it could potentially break the outcome, and give you incorrect information in that process ...  It's totally reasonable for a company to start their budgeting [00:13:30] in Excel, when they're really small, but when they get big enough where they're starting to collaborate across the departments with the finance team, and they want direct input because the input needs to come from the experts, that is no longer a scalable thing to do in Excel.  Blake Oliver: Well, to be fair, that demo or preview of the visual- was it the Visual Explorer? Dan Miller: Yes.  Blake Oliver: Was pretty darned ... Hopefully, people will stop doing their basic pivot [00:14:00] tables and charts in Excel ...  Dan Miller: We were building the Visual Explorer to solve really looking for new ideas, new insights about how they run their business. The fact that you can take a data set, be able to quickly choose a visualization, and then refine, and refine, and refine, helps people think about what's the real question I'm trying to answer? Because a lot of times, there's something we want to know; if we explore a little bit, and you [00:14:30] dig underneath the covers, you learn something that's there that you couldn't have otherwise known if you had to do that by running report, after report, after report. That's missing. That kind of insight really only comes through the exploration, and making the exploration easy is what that's about; building it into the system of record, so it's on your transactional system, makes it available and easily accessible to all of the individuals that have access to the Intacct data, not just the [00:15:00] one person in FP&A. Aaron Harris: If we want people to move from Excel and spreadsheets into this controlled system of record, we've gotta make it easy. Spreadsheets are the original citizen-developer platform. People love it because it gives them flexibility. You don't have to be a developer. You can really do some very creative work, and you become comfortable there. So, if we hope for them to do some of these activities that we really would prefer them to do within our environment, we've gotta create that same experience, [00:15:30] where they feel like a citizen developer, who's very comfortable with the tools. It's very easy to use, and they see the value of doing it there, as opposed to going outside the system, where they don't have the same data trust, and if they don't have the same security that you would otherwise have, you run the risk of corrupting things and causing problems. David Leary: Aaron, how would people get a hold of you if they want to track you down, ask you a question on the socials? Aaron Harris: Well, so, I'm here at the conference, wandering the floors. By all means, if [00:16:00] you see me, grab me. That's a pretty common occurrence here. Blake Oliver: I think that look in Aaron's eyes is ... The idea of getting a thousand feature requests, right?  David Leary: The million podcast listeners we have suddenly reaching out ...  Aaron Harris: Yeah, I've got handlers now that try to protect me. But you can find me on LinkedIn. Blake Oliver: All right, and Brendan, how about you? Brendan Woods?  Brendan Woods: Well, you can find me on LinkedIn, as well. You can find me at Brendan.Woods@autoentry.com, and most likely, very soon, Brendan.Woods@sage.com. [00:16:30] Blake Oliver: And Dan Miller ... Dan Miller: Yeah, you can find me on LinkedIn. It's pretty obvious. Blake Oliver: All right. Sounds great. Thank you all.  Dan Miller: Yep. Thank you.  Brendan Woods: Thank you.  
  7. SponsorsBill.com: https://cloudaccountingpodcast.promo/billTeampay: https://cloudaccountingpodcast.promo/teampayShow Notes 01:09 – Meet Alliah Mohamed, director of accounting and financial operations for DonorsChoose!  01:29 – Bright lights, big city, and one CAP listener in the live audience!   02:07 – How does DonorsChoose work?  03:22 – Because they work with such a mind-boggling number of funds, DonorsChoose uses Sage Intacct to help them track the money 04:51 – Before Intacct, DonorsChoose did things the old-fashioned way - manual entry 07:01 – Alliah attends Intacct Advantage to get inspiration, education, and connection with other users 07:56 – What's in the DonorsChoose tech stack?  09:08 – Why wait for a solution? Build your own!  10:10 – Lean, mean, not-for-profit machine - DonorsChoose is an innovative, tech-forward group of ... SIX people! Connect with AlliahAlliah Mohamed Director, Accounting & Financial Operations, DonorsChoose LinkedIn: https://www.linkedin.com/in/alliahmohamed/ Twitter:  https://twitter.com/alliah_mohamed  DonorsChoose website: https://www.donorschoose.org Email: Alliah@DonorsChoose.org 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. Meet Blake in person! December 9-11: Digital CPA Conference in SeattleLimited edition shirts, stickers, and other necessitiesTeePublic Store: http://cloudacctpod.link/merchSubscribe 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   Episode Art Photo Credit: April Blankenshiphttps://twitter.com/aprilblnknshphttps://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com. Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.Alliah Mohamed: So, on a given day, we're able to pull up a project ... If we receive $2,000, we're seeing exactly how we spend the $2,000.  Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Alliah Mohamed: And I'm Alliah. I'm the director of accounting and financial operations at DonorsChoose.org. DonorsChoose.org is a leading platform for supporting public-school teachers and students throughout the United States. Teachers come to our site and post projects requesting materials that their students need, and donors donate to projects that inspire them. Blake Oliver: Great.  David Leary: Awesome. We're here at day two of Sage [00:01:30] Intacct Advantage; day two of us recording, I guess, would be the better way to say this.  Blake Oliver: Yep. We are recording live in the rotunda of the MGM Grand with the big Sage Intacct Advantage electronic billboard over to the side here. David Leary: We even have a listener standing by watching us record. Blake Oliver: We've got one fan watching us record this episode live. I am really excited to be talking to you, Alliah. I didn't catch your full name. Alliah Mohamed: Alliah Mohamed.  Blake Oliver: Alliah Mohamed, and you're with DonorsChoose.org. I am so excited to be talking to you because not only are you a customer, but, [00:02:00] potentially, my brother could be in need of DonorsChoose. He's a public-school teacher in Manhattan. Alliah Mohamed: Yes. Blake Oliver: You were telling me, at one of the events, when we connected, about ... Well, how does it work? How would it work for him if I wanted to help him? Alliah Mohamed: Yeah. Just point him to DonorsChoose.org. He comes to our site and then, he verifies that- we verify that he's a teacher and then, he goes shopping, creates a project ... Blake Oliver: Then people donate money [00:02:30] to support him, like for supplies and stuff like that? Alliah Mohamed: Yeah. Let's say he wanted to take his students to a field trip. He'll come to our site, write a little essay explaining what he wants to do with his students. He goes shopping for the experience and then, donors see exactly where their donation is going- being applied to.  Blake Oliver: Got it. David Leary: Obviously, you're a nonprofit, and you being the accountant at the nonprofit, there's gotta be challenges. I think I've just heard a couple. A lot [00:03:00] of nonprofits have multiple funds, but if you're doing this for every teacher across the nation-  or is this global? Alliah Mohamed: No, United States.  David Leary: So, across the United States. Then, if every teacher creates a trip, or a project, something for their school, that's an individual fund; then, you have those donors. You've gotta be tracking thousands of thousands and thousands of funds. Alliah Mohamed: Yes. David Leary: How do you do that? Alliah Mohamed: We use Sage Intacct to help us with the financials. When someone is coming to our site, and they're donating [00:03:30] to a project, we're tagging exactly, at a project-ID level. Then, we're tracking expenses at that P-ID level. So, on a given day, we're able to pull up a project ... If we receive $2,000, we're seeing exactly how we spend the $2,000. Blake Oliver: Wow. You must have thousands and thousands of project IDs.  Alliah Mohamed: Yes. Blake Oliver: These are all using the 'dimensions' in Intacct - is that how is tracked? Alliah Mohamed: Yes. Blake Oliver: Got it. The website must [00:04:00] be integrated, then, with those dimensions to create those project IDs in the software?  Alliah Mohamed: Yes. Blake Oliver: Oh, wow. That's really cool. How did you ...? I know you're not necessarily like an IT/technical person, but how did you guys go about doing that work to automate that? Alliah Mohamed: We have a product and engineering team because we're a web-based platform. So, we've worked closely with our CTO and his engineers to build that for us. Blake Oliver: Got it. So, you built the integration [00:04:30] in-house from your web site to Intacct.  Alliah Mohamed: Yes. Blake Oliver: How long have you been customers of Intacct? Alliah Mohamed: Six years now. Blake Oliver: Six years. Wow, so pretty ... I know Intacct has grown a lot, but you must have been one of the ... I guess Intacct's been around for 20 years. Alliah Mohamed: Yes. Blake Oliver: But there's a lot of growth, like starting six years ago. Alliah Mohamed: Exactly.  Blake Oliver: You guys jumped on that. Alliah Mohamed: Yeah. Blake Oliver: Awesome. David Leary: Was there a time when you would be ... You were taking website donations and you weren't using Intacct? How'd you track it then? Or has it been since day one? Alliah Mohamed: We were tracking stuff offline. [00:05:00] We store all that data, also, in our platform on our "admin site." So, we were extracting that data and then, manually uploading it to our financial system. David Leary: Efficient. Blake Oliver: That must've been a lot of work. Alliah Mohamed: Yes. Blake Oliver: How long have you been at DonorsChoose? Alliah Mohamed: Six-and-a-half years. Blake Oliver: Okay, so you were there ... You came on board and then, you guys switched over to ... What were you using before if I may ask?  Alliah Mohamed: We using a Financial Edge, [00:05:30] which is a non-for-profit cloud-based ... Not cloud-based, actually [crosstalk] Blake Oliver: Not-cloud-based accounting system. Okay, gotcha. So, you came on board and then, were you part of this changeover, or ...?  Alliah Mohamed: No. I actually helped with some of the import templates to get our data into the system, but I was actually on the team part-time, so I was not the one who decided to implement Intacct.This episode of The Cloud Accounting Podcast is sponsored by Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend. Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y. Blake Oliver: Is this your first time at Intacct Advantage, or have you come before? Alliah Mohamed: No, this is actually my sixth time at Intacct Advantage. Blake Oliver: What brings you here, every year-  Alliah Mohamed: Over, and over?  [00:07:00] Blake Oliver: Yeah. Alliah Mohamed: I think it's something unique, where you're able to learn things that you wouldn't otherwise know, when you're just sitting at the office. It's good to talk to people and hear how they're using the product. Then, you can take that back home, and you can be like, "Wow! I'm really inspired the way this company is doing X. I think we can do something similar or learn from that and take some ideas." Blake Oliver: So you follow that not-for-profit track that they have here at Intacct? Alliah Mohamed: I do. Then, I [00:07:30] also do the one specifically for finance leaders. Those are really good, too, to hear how other people are running their company ... Blake Oliver: One of the key features of Intacct that I find fascinating is the ability for a controller, or a CFO, or a VP of finance to integrate potentially dozens of applications with Intacct; that open API. Do you mind if I ask what you are using as part of your accounting and finance tech stack?  Alliah Mohamed: Yeah. We have a custom integration, that I'm really proud of, that we [00:08:00] launched maybe six months ago. It's a custom integration between our Citibank environment and Sage Intacct. On a daily basis, we're able to see all our daily transactions populate automatically via journal entry. Blake Oliver: So, you've built an automatic bank feed? David Leary: I was just gonna say, bank feed; it sounds like bank feeds.  Alliah Mohamed: Yes.  Blake Oliver: Wow, and you did that yourselves. Alliah Mohamed: Yeah. We paid a consultant to help us- Blake Oliver: Right, but you own that integration? Alliah Mohamed: Yes, exactly. Blake Oliver: Wow. You could probably sell that. I'm sure that some other Citibank customers will be interested. [00:08:30] Alliah Mohamed: We joke that basically, they took our idea, and created bank feeds.  Blake Oliver: Oh! So, when did you build this? Alliah Mohamed: We started the process two years ago. Blake Oliver: Okay, but what you're doing is you're posting those entries from the bank already- is it already coded to correct account? Alliah Mohamed: Yes. We have a table that we are maintaining. Let's say this specific vendor is coded to a specific GL account. We have a table where it's pulling that from, and we're updating that table set, but-  [00:09:00] David Leary: So, you created rules ...  Alliah Mohamed: Yes.  Blake Oliver: Oh, wow!  David Leary: We had a discussion about this earlier- Blake Oliver: We were talking with Matt Paff, who's an analyst from Australia- Alliah Mohamed: Yeah. Blake Oliver: -where everybody has that feature, or functionality built into their accounting software,  in the cloud. They're used to it, right? Because Intacct doesn't, that's a big sticking point for him. So you guys must have ... You felt this pain point, and you just decided to go out and solve it yourselves?  Alliah Mohamed: Yes. Blake Oliver: That's interesting because, obviously, you're a web-based not-for-profit. You've got a ton of technical [00:09:30] expertise to just go out and be able to conquer these problems for yourselves. That's really neat because ... I don't know; maybe this is the stereotype of not-for-profits is you don't think about them being necessarily the most innovative companies-  Alliah Mohamed: Exactly. Yeah, we're very tech-forward. Blake Oliver: That's great. How many people are on your accounting and finance team? Alliah Mohamed: We're a six-person team, including the CFO. Blake Oliver: How large is DonorsChoose, in whatever metrics you guys like to track? Alliah Mohamed: On a yearly basis, I'll say we're about $175 [00:10:00] million in revenue. Blake Oliver: Okay. Six people. $175 million in revenue. That's pretty good, in terms of ... You guys on the very low end, I would say [crosstalk]  Alliah Mohamed: We're mean and lean. When I started at the company six-and-a-half years ago, our team was just five people. We've just grown by one headcount in six-and-a-half years. David Leary: But DonorsChoose is growing, obviously, during that time.  Alliah Mohamed: Yes, exactly.  David Leary: It's probably a testament to your use of technology, and automation, and building out tools [00:10:30] to move data around. Alliah Mohamed: Yeah. Blake Oliver: Anything else you wanna talk about before we get going? David Leary: Actually, I was gonna ask you one question with the bank feeds, or we're calling ... You created bank feeds, let's say. Alliah Mohamed: Yes.  David Leary: Have you documented that or blogged about that ...? Is that a session you're doing? Have you taught any of your community here at Intacct [crosstalk] to put you on the spot ... We'll put it in the show notes!  Alliah Mohamed: Yeah. So, I actually run our user group in New York City. On a quarterly basis, customers come together and just about how they're using the system [00:11:00] and share best practices. I actually demo-ed how we're using it. Everyone was like, "Wow! How did you get the resources to do that?" Which, for a nonprofit, I'm really grateful that we get the resources to do those things. Blake Oliver: Yeah, that's really exciting. I would encourage you to do a session next year on just that feature, like how you built that. Alliah Mohamed: Yeah. Blake Oliver: There'll be no excuses, because you guys are a nonprofit, and you were able to pull this off, versus all these companies have tons of money, and they have big budgets to work from, and they can't pull it off. Alliah Mohamed: Yeah.  [00:11:30] Blake Oliver: So, congratulations, and thank you for joining us, Alliah.  Alliah Mohamed: Yeah, thank you. Thanks for having me. David Leary: Thank you. What's the easiest way for people to get a hold of you if they want to come to your meetup group or something? Alliah Mohamed: Yeah, my email address is Alliah@DonorsChoose.org. Blake Oliver: Thanks a lot. David Leary: Bye.  Alliah Mohamed: Yes, thank you!
  8. SponsorsBill.com: https://cloudaccountingpodcast.promo/billTeampay: https://cloudaccountingpodcast.promo/teampayShow Notes 01:18 – Meet Rob Reid, chairman of Sage Mid-Market Solutions Group 01:23 – Meet Kevin Cumley, director of the Sage Intacct Accountants Program 01:40 – What really is 'mid-market'?  04:34 – Doing cloud before cloud was a thing - Sage Intacct began as a cloud firm some 20 years back!  05:02 – Sage Intacct helps firms deliver outsourced accounting and financial services to their clients 06:44 – What separates Intacct from other players in the field?  08:17 – For small organizations, understanding cash takes priority over GAAP, until they need investors. Intacct offers insight from both perspectives 11:48 – Sage's Accountants Program offers extensive training and certifications to get them prepared to use the Intacct platform effectively 14:21 – It can't be that hard to satisfy accountants, can it ...?  16:57 – Innovative firms understand the importance of combining the technology with their accounting expertise 17:39 – Practice lines, such as tax and audit are on the decline, making outsourcing more attractive Connect with our guests Rob Reid, Chairman Mid-Market Solutions, Sage  LinkedIn: https://www.linkedin.com/in/rob-reid-2b72896/ Twitter: https://twitter.com/SageIntacctRob Kevin Cumley, Director, Accountants Program, Sage Intacct LinkedIn: https://www.linkedin.com/in/kevincumley/ Twitter: https://twitter.com/KevinCumley 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. Meet Blake in person! December 9-11: Digital CPA Conference in SeattleLimited edition shirts, stickers, and other necessitiesTeePublic Store: http://cloudacctpod.link/merchSubscribe 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   Episode Art Photo Credit: April Blankenship https://twitter.com/aprilblnknshp https://twitter.com/aprilblnknshp/status/1187023281687130112/photo/2 TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Bill.com. As a listener, you've probably heard Blake and I speak about Bill.com on numerous occasions. It feels like they are discussed monthly in either new news or new announcements, but I'm betting there are some things you don't know about Bill.com. Did you know customers use the Bill.com platform to process over $70 billion in payments for the 2019 fiscal year? That they partner with several of the largest U.S. financial institutions, like Bank of America, PNC, and Chase? More than 70 of the top 100 U.S. accounting firms use Bill.com. Bill.com not only connects to all the popular accounting-software providers, they also connect to many of your favorite apps, as well. To learn more about how Bill.com's, AI-enabled financial-software platform creates connections between businesses and helps manage cash inflows and outflows, head over to CloudAccountingPodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L.Rob Reid: They want the visibility to understand where are there opportunities, so I can take advantage of them faster than larger corporations?  [00:01:00] Blake Oliver: Welcome to The Cloud Accounting podcast. I'm Blake Oliver. David Leary: I'm David Leary. Rob Reid: I'm Rob Reid. Kevin Cumley: I'm Kevin Cumley.  Blake Oliver: Thank you, Rob, and Kevin, so much for coming. I guess we should say a little context for listeners. What is it that you do, Rob? Rob Reid: So, I'm the chairman of the Sage Mid-Market Solutions Group. Blake Oliver: All right, and Kevin?  Kevin Cumley: I'm the director of the Sage Intacct Accountants Program. Blake Oliver: Awesome! We are here live recording at Intacct Advantage in Las Vegas. [00:01:30] So, thank you so much for having us here, inviting us to come. Kevin Cumley: Yeah, thanks for being here. Blake Oliver: Yeah. It's a privilege. This is my third Intacct Advantage, but this is David's first. David Leary: It's my first. So, I'm probably like a lot of listeners that maybe have come from a small-business background. I'm really wondering what is mid-market? Because, sometimes people are like, "Oh, it's once you have 50 employees; you have $50 million in revenue; or you have 20,000 inventory items ..." How does Intacct define mid-market? What is it, and then, what are problems that mid-market have that maybe be normal small [00:02:00] businesses don't? What's the mindset? Rob Reid: Yeah, David, a bunch of great questions there. All the different analysts do have different definitions; that sort of confuses people. We really believe that the mid-market really spans from about 100 employees up through a few thousand. Enterprise is typically over 5,000; large is typically a couple thousand to 5,000. That mid-market, then, is right there above small - small usually being between [00:02:30] one and in 99. What portrays a lot of the differences in the mid-market is they're typically very oriented to growth. They've been able to get out and thrust out of being a very small business, but now, they're typically going up against larger competitors. What's really interesting about the mid-market is that 90 percent of all the growth in our economy since the Great Recession is coming out of the mid-market. Enterprise actually has declined by 10 percent, and [00:03:00] the mid-market is pacing this economy. We think that's a prime opportunity for organizations to be more efficient in mid-market, so they can best go and have differentiation to go up against those larger organizations; and they want the visibility to understand where are there opportunities, so they can take advantage of them faster than larger corporations; or where are the risks where they need to shore things on up? Those are some of the things at Sage Intacct that we [00:03:30] focus on. David Leary: So, it sounds like if you are a small business that's becoming a bigger business, and you're ready to take that next step and grow, you should go for it because it sounds like the market conditions are ripe for that. Rob Reid: Right. Absolutely. We have a lot of graduates that come on in utilizing our system in the mid-market. They've been a small business. They've now thrust it into having a lot of success, and they know that they need to have a system that they understand the metrics as to what's going on and where should [00:04:00] they be investing the next dollar. We help them with that. Blake Oliver: So, I spent some time at a firm called Armanino, who you know well as a big Intacct customer/user for their clients. Maybe you could tell us, for accountants not so familiar with the product, what are some of the reasons that they use Sage Intacct in their practices? Rob Reid: You know what, Kevin? Why don't you talk about why all the top accounting firms are out there using us for their practice, and [00:04:30] the kinds of benefits they receive, and how that goes on then to their customers and clients? Kevin Cumley: Sure, Rob, I would be glad to, and maybe start with a little bit of background first. So, from the very beginning, almost 20 years ago, Sage Intacct was designed to be a platform for accountants to be able to deliver outsourced services to customers- David Leary: And started as a cloud firm, day one [crosstalk] Kevin Cumley: Very first, yep. From day one- Blake Oliver: And we should say, 20 years ago. So, you guys have been doing this for a long time, right? Is it the 20-year anniversary is coming up? I heard that in the keynote- Rob Reid: Yep, next month. Blake Oliver: There weren't a lot of cloud applications [00:05:00] around back then, right?  Rob Reid: We were one of the very first. Kevin Cumley: Yeah. Accountants didn't really understand that back then. It was hard for them to wrap their head around, "Okay, we're gonna use something that exists someplace else to deliver outsourced services to our clients ..." But it's the only platform that was actually designed, from the ground up, for that specific purpose. To Rob's point, firms like Armanino, and including, I think, now almost 40 of the top 100 CPA firms in the country, they use Sage Intacct as a platform to deliver outsourced [00:05:30] accounting and financial services to their clients. It enables them to be not much more than just an accountant, but to deliver high-value strategic advisory services that are oriented in an up-market, as well. So, it scales very well. Our Accountants Program, we've got firms that are on the smaller end of the scale, both CPA firms and BPOs; and we've got large firms, like Armanino, that can use it to provide outsource services to smaller organizations or much larger organizations [00:06:00] that are right in the middle of the mid-market. Rob Reid: Typically, a client would go to an Armanino, and say, "Here I am, an entrepreneur, trying to start my business. I really don't know that much about accounting, and I don't wanna go in and hire lots of accountants or a CFO. I wanna invest in the service or the products that I'm in." Armanino utilizes our platform and their expertise, from an accounting perspective, to do this outsourced accounting so that the entrepreneur and his [00:06:30] team can be- or her team can be focused on their business. Then, they allow the accounting firm, with all the expertise they have, to draw upon. Armanino has just done a great job for thousands of customers, from that perspective. Blake Oliver: What makes it ... Any features, for somebody new to the product, that make it different than a QuickBooks or a Xero? Why couldn't I just use that? What is special about Intacct? Rob Reid: Yeah. One of the great things that QuickBooks does is it allows a [00:07:00] entrepreneur to understand and be able to invoice, which, to get the cash in; and then, to know where they're expanding. It's very easy-to-use consumer-like type of application. However, when you start to move up to going into mid-market, or if you want to be very sophisticated in your planning, the ability to get insight out of QuickBooks, the way Intacct can provide it to you, it's just not there. It's just a great tool to [00:07:30] manage a very small business. But you have aspirations to grow, you need that insight that Intacct can provide. Then, if you wanna bring in investors, we are a GAAP solution; meaning that investors trust the data coming out of it. Unfortunately, QuickBooks is, again, a great product, but it's not GAAP.  Blake Oliver: Yeah, that's a very good point. We were preparing GAAP financials for our clients, and I think, in particular, multi-book was very popular in that we could have our [00:08:00] reports for various different purposes. You have your GAAP book and then, you have some other management book or [crosstalk] Rob Reid: Well, one of the number-one things people like about our multi-book approach is that they can look at a cash position versus GAAP.  Blake Oliver: Yep. Rob Reid: For most small organizations, understanding your cash position is actually more important than GAAP. But then, if you wanna go out and get investors, then GAAP's more important. That was [00:08:30] a very unique capability that we provide to our clientele that the vast majority of other solutions do not provide. Blake Oliver: Yeah. The other one that I recall is multi-ledger. Is that the name for it? The ability to have multiple entities all sharing the same- Kevin Cumley: Multi-entity functionality. Yep, that's right. You can have small organizations that have very complex needs, or they need multi-entity - consolidations, inter-company transactions - so they don't have multiple copies of, say, QuickBooks, and lots of spreadsheets trying to do all that stuff. You probably experienced that. Blake Oliver: Yeah, 20 [00:09:00] QuickBooks files, and then I have to consolidate in an Excel spreadsheet. Kevin Cumley: Yeah, but what's the risk of ever having errors there? No ... Blake Oliver: There's none. None at all. I mean, I'm an expert. David Leary: Spreadsheets are perfect. Kevin Cumley: So, that's one good example. Another good example is if they need advanced functionality. So, if they need things like contract management, revenue recognition, integrations with large platforms, like Salesforce, for example, those would be differentiators, where it might be a smaller organization that's more complex; or to Rob's point, now they're moving up; they're getting larger; they're really moving into mid-market, where they [00:09:30] need higher transaction volumes and all those more advanced features and functionalities in order to really, truly manage the business.This episode of The Cloud Accounting Podcast is sponsored by Teampay. Wouldn't it be great if you had a way to automatically enforce spend policies and gain full transparency into requests for funds all the way to reconciliation? Or what if you could do that while empowering your employees to buy what they need, when they need it? Teampay gives total control and real-time visibility into spending. Teampay's distributed spend management platform automates the purchasing workflow and gives you proactive controls and real-time visibility over a company spend. Teampay also empowers your employees with a user-friendly purchasing experience. When employees make a request, Teampay automatically enforces policies, issues intelligent payments, and automatically sends the transaction data to your accounting system pre-coded. To learn more about how Teampay modernizes how you manage spending, head over to CloudAccountingPodcast.promo/teampay. That is Cloud Accounting Podcast dot promo forward slash T-E-A-M-P-A-Y. David Leary: I have a question regarding the Accountants Program. You obviously talk about accountants that are at firms, whose service clients that are on Intacct. I was just even standing in line at the registration desk, here at the hotel; I met somebody in line, and they're just an internal controller. What's the mix, I guess, for your Accountants Program, or even the attendees of this conference? How many are just internal controllers at their own companies coming to this conference? Or is it accountants that serve clients? Then, is the training in the programs you provide for internal people versus people with [00:11:00] clients? Is it different? Is it the same? Rob Reid: The overall mixes about 90 percent of our customers actually go on a subscription, and they do have a controller or another financial professional in their organization. Then, they'll have somebody like Armanino help them implement it initially and make sure that all their processes are being satisfied the way they want. They get to reimagine how they want to be for the future, and the system gets set up like that for them. Then, [00:11:30] about 10 percent of our clientele then just has this outsourced model, where it's 'rent-a-CFO,' 'rent-an- accounting-department,' and then, the underlying platform that's supporting that accounting firm is Sage Intacct. It's about 90/10. Kevin Cumley: To answer your question about training, if somebody is in our Accountants Program, we have a very broad and extensive training and enablement program to not only teach them how to be in this business, and how to be successful as an outsourcing [00:12:00] firm, but then, provide them with extensive, in-depth training on the product and certifications, so they're well-prepared in order to be able to use Sage Intacct as a platform to deliver those services, and, ultimately, what matters the most, which is successful engagement and a happy client. Rob Reid: What has been interesting is even though we were visionaries coming in and providing the solution 20 years ago for accounting firms, we had to overcome the issue with regard to the cloud. We [00:12:30] also had to overcome the issue - business mindset - of, "Oh, I need everybody reporting in and being part of my organization." So, we've seen tremendous increase - even though I just gave that ratio of 90/10 - in the interest of outsourcing. People are now getting comfortable with a subscription, if you will, type of economy, or other people doing things and having tools for them.  How many people now don't have cars? They're just using Uber? How many other things [00:13:00] is it ... Well, it used to be you had to own. The new millennials, et cetera, they don't wanna own homes. They just wanna rent. They wanna be able to move around. They don't wanna have to be buying books. "I just wanna be able to subscribe to them." We're seeing a real movement to the accounting firms as to, "Why do I need this expertise? Let me focus on my business and let the accounting firms in this outsourced model take off." So, Kevin, and the team, we've had tremendous increase, [00:13:30] especially over this last year. Blake Oliver: Going back 20 years ago, Rob Reid, what was the genesis of Intacct? Because that was very early in the world of cloud. What gave you guys the idea to build a cloud product - very focused ...? Was it always focused on the CFO as like the primary customer? Rob Reid: Yeah. Our original founder, David Thomas, had this vision that we could deliver cloud services for accounting firms [00:14:00] in this outsourced model. We were able to go out and sign up thousands of accounting firms initially-. Blake Oliver: Ah, so it was accounting firms, first [crosstalk] Rob Reid: It was accounting firms, first. That's what Kevin was reflecting on ... That's sort of the soul of Intacct is we took on, actually, the hardest thing we could do - satisfy accountants in accounting. Blake Oliver: It is difficult, yes.  Rob Reid: It is, yeah. It's the hardest thing you could possibly do. We decided that's a good one to go after, right?  Kevin Cumley: Yeah.  Rob Reid: But he had wild success in signing up these accounting firms. [00:14:30] Then, the accountants who are accountants, they're not salespeople, said, "Hey, we've got this new technology. It's gonna allow you, and I, simultaneously, to look exactly as to what's going on, what's going on with your invoice, see what's going on in your expense; we can have a strategic discussion."  The client went, "That sounds really cool." They would get all excited about it.  Then, the accounting firm would say, "Now, this is gonna be out in the cloud ..."  The client would go, "The cloud? What the heck is the cloud?"  [00:15:00] "Oh, well, we have these servers in this [hardened] data center, so that all the ... You can share the resources ..."  The client would say, "You're not gonna have my most important information behind your closed doors, in your vaults? My information is gonna be somewhere out there? I don't think so."  Then, the accounting firms said, "Okay, we'll just keep doing it the old way."  So, the company struggled for a little bit and then, we decided, okay, we've gotta go after small- and medium-sized organizations [00:15:30] directly. As soon as we did that, the company just started flourishing, and we've been growing at great- a really fast pace ever since. David Leary: Interesting that going straight to the business owners, or the businesses that are looking for getting their pain solved ... I think, sometimes, accountants don't go out of their way to solve their clients' pain points. So, you have to speak to the business owner to do that. I have a question - the big thing this last year has been services, where it's software and the services. You're getting kind of an accounting system, and you're getting access to bookkeepers. Everybody's [00:16:00] heading down that path, and there's a lot of accounting firms that are doing this now. There's accounting firms that have- I call them [crosstalk] Blake Oliver: Accounting firms with engineers. David Leary: Engineers under the roof, and they have a front end ... So, it's truly Software as a Service, right? Is Sage heading that way, as far as Intacct goes? With some of the firms are you ... [inaudible] "Hey, I'm gonna buy Sage Intacct, and I also get accountants and bookkeepers that are experts at the same time in my rolled up subscription"? Is that kind of coming?  Rob Reid: I'm not aware of any accounting firms are providing subscription on their [00:16:30] services, just ... You have a set fee that you're paying for the accounting services to the firm, and we're bundled into that. Having a subscription for engineers, I'm just not aware of that. Typically, what they will do is 'by project,' and take it from them. But maybe, if they start to see a trend that they could figure out how to do the subscription services from that perspective ...  A lot of accounting firms have seen that [00:17:00] the melding of all the regulatory requirements and then, the technology together and offering that as a service is actually becoming the most important business. It used to be tax and audit, and now, most of the innovative accounting firms are saying, "Our understanding of accounting, overall, and technology ..." and they're turning as much into technologists, and accountants, as opposed to just accounting. David Leary: Compliance is just a given; like, "We're just gonna do [00:17:30] that because, duh, we have to do compliance ..." Rob Reid: Exactly. Kevin Cumley: It is, but there's literally no growth in those practice lines anymore. I mean, they're pretty much flat, or very, very low [crosstalk]  Rob Reid: You're talking about tax and audit?  Kevin Cumley: Tax and audit, yep; those compliance services. In fact, I led a panel discussion yesterday, where I had four of our top partners - two of them were larger CPA firms. One of them talked specifically about audits and how they're giving up audits; take the outsourcing services, just because it's delivers a lot higher value to their clients. And, in the end, it's [00:18:00] much stickier. Also, you look at ... Rob had mentioned these organizations that are now looking to outsource on an increasing basis. Part of it's just about unemployment. It's really hard to find that talent. They're competing against all the top firms in the country, so these firms, they have a large set of staff that can deliver those services a lot better; oftentimes, more economically viable. So, just it's better all the way around. Blake Oliver: It's not an either/or, anymore. It used to be I either had everything in-house, or I outsourced my entire [00:18:30] finance function. But now, you might have a CFO in-house, who purchases- basically leasing staff, almost, from an accounting firm, or having them do the close. That sort of thing is becoming more common. Kevin Cumley: That blended model is becoming increasingly more common. David Leary: I think it's time to wrap up. We thank you for being with us on the podcast. If people wanted to get a hold of you, what's the best way, Rob? Rob Reid: I'm Robert.Reid [R-E-I-D] @Sage.com. Kevin Cumley: And I'm Kevin.Cumley [C-U-M-L-E-Y] @Sage.com.  [00:19:00] Blake Oliver: And for accountants who want to learn more about that Accounting partner program you have, where should they go? Kevin Cumley: They can go to the Sage Intacct website, go to the Partners section, and go to the Accountants Program. Blake Oliver: All right. Thanks so much, guys. Rob Reid: All right. Thank you.  David Leary: Bye, everybody. Kevin Cumley: Thank you. 

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