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Dear AICPA! I Wrote Your Concession Letter
Sponsors BQE CORE - -  Show Notes 01:38 – Welcome Ben Wann, CMA, CPA, and MBA to the show! 02:39 – Notable industry departures: Matt Rissell exits TSheets amidst some corporate remodeling | BoiseDev Jennifer Warawa parts ways with Sage and the accounting industry | Accounting Today Blake Oliver departs FloQast | LinkedIn 07:46 – Seriously, you are not a tree. Move around! How career expectations have shifted from taking root in one job for decades to seeking new opportunities on the regular 11:08 – VC fundraising activity: FreshBooks raises "most significant investment so far" from JPMorgan Chase | BetaKit ScaleFactor continues to rake in some serious VC coin | Crunchbase 21:05 – Ben reads us a story: “Dear AICPA! I Wrote Your Concession Letter” and explains why he is bullish on the CMA versus the CPA after obtaining both 28:44 – Speaking of designations, where have all the CPA candidates gone? |  33:53 – According to a June ADP survey, 25 percent of accounting professionals surveyed said they would not recommend young accountants get a CPA license, or seek some other credential or advanced degree 35:50 – Ben talks about cheese, business process improvement, finance business partnering, and how new technology drives him to educate and help people navigate the constantly shifting accounting landscape 39:00 – Yet another way to Crunch some numbers with the help of freelancers |  42:23 – Something’s phishy … More updates on the iNSYNQ ransomware snafu | Krebs on Security 47:41 – Armanino goes full crypto – first with a range of blockchain services, and now accepting payment via all forms of cryptocurrency | Armanino, LLP  Connect with Ben Website: The Numbers Guys Twitter: @BenWann_CMA LinkedIn: Ben Wann, CMA, MBA, CPA Udemy: Ben Wann | Process Improvement Specialist-Accounting/Finance YouTube: Ben Wann Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: Transcript Ben Wann: “To the esteemed finance and accounting community, after much consideration and deliberation, it is with a heavy heart and misty eyes that we are announcing that we are pulling the CGMA certification from the US market, effective immediately.” This episode of The Cloud Accounting Podcast is sponsored by BQE Core. As many of you know, I'm all about the niches and niche apps. Putting your business clients in the proper niche app is providing them with a 100-percent solution versus, at best, the 85-percent solution of a standalone accounting app. If you have clients that are architects, engineers, consultants, or lawyers, Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. You don't need to juggle between multiple apps. Core has it all in an easy-to-use, all-in-one app for project management, including time and expense tracking, budgets, forecasting, client billing, and accounting. Even though Core is an all-in-one platform, it still works nicely with the apps like Google Drive, Dropbox, OneDrive, QuickBooks, Xero, and AccountRight, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app, and recently it launched a cutting-edge, voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. Did I mention that BQE Core works great for bookkeepers, CPAs, and accounting firms, too? Blake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary- Ben Wann: And I am Ben Wann.  Blake Oliver: Ben, thanks for joining us. David Leary: And Ben, where are you joining us from? Ben Wann: I am over [00:01:30] here in sunny Pennsylvania. David Leary: Sunny Pennsylvania. Other side of the country here for us. Blake Oliver: It's Friday afternoon for us, Friday evening for you. I'm excited to have you on the show, because you are a CMA, you are a CPA, and you are an MBA. Did I get all three of those right? Ben Wann: Correct. Blake Oliver: And in what order did you do those? Ben Wann: I did the CPA first, because that's the one everyone knows. What the cool kids are doing. Did the CMA to try and elevate my level of accounting knowledge. Then, the MBA [00:02:00] to round it out. Blake Oliver: But you list them in a particular order on LinkedIn, right? Ben Wann: I do. Blake Oliver: You are a big advocate for the CMA. Ben Wann: Yes. Blake Oliver: I'm eager to talk to you about that and also some of your thoughts about the AICPA and the CPA, since you've got both. That's gonna be really interesting to talk with you about that. Ben Wann: Absolutely. Blake Oliver: What else do we have on the docket today, David? David Leary: So, money. Lots of big raises and money going to companies. That's on the docket today. More ransomware updates, as always. Departures. [00:02:30] We have a lot of departures that have happened this- well, not a lot, but notable departures this week. Blake Oliver: Notable departures of - David Leary: We could start there. Blake Oliver: Yeah. Let's talk about that. David Leary: Matt Rissell is leaving Intuit at the end of the year. Matt Rissell of TSheets. Blake Oliver: Right. So, TSheets was acquired by Intuit, and then Matt Rissell became what, a VP there? David Leary: That's correct. It's been three years already, apparently?  Blake Oliver: Apparently, yeah. I couldn't believe it. David Leary: That's super-fast. Then Sage had news, right? That's it. Blake Oliver: Before [00:03:00] we go into that; I’m reading this article now. Since their acquisition by Intuit ... They were acquired for $340 million. Based in Boise, right? That Boise TSheets office became an Intuit office. It says that it's grown by 160 employees to 400 employees, the majority of whom work in the company's Eagle office. David Leary: Yeah. That changed Boise. Blake Oliver: Yeah. David Leary: Intuit going to Boise was a significant economic impact on Boise. He changed it. Blake Oliver: And [00:03:30] the growth of the customer base ... It seems like this acquisition really worked out, right, because their customer base went from 36,000 to 82,000 customers. Yeah, they're the largest employer in Eagle. David Leary: Wow, congratulations, Matt. It was a good ride. Blake Oliver: I wonder what he's gonna do next. Maybe he'll come on the podcast. David Leary: He had the bout with cancer a few years back, so he's really ... He spends a lot of time with his family. He has his kids and his wife. Maybe ... I imagine he’ll probably take a lot of downtime. He definitely likes doing all that outdoorsy stuff in [00:04:00] Idaho, as well. Blake Oliver: So, who else is moving on? David Leary: I'm gonna let you say it, because I always mess up Jennifer's last name. It's bad, because I've been saying her last name for a decade, and I mess it up. Blake Oliver:  Jennifer Warawa. I think I got it right. She's leaving Sage. David Leary: She's leaving Sage. Blake Oliver: Yeah. That's a big deal, because she's been there for, what, 12 years? David Leary: 11 or 12 years, I think, the article said, yep. She took a job with ... She's getting out of the accounting industry. So, she took a job- she's relocating from Atlanta to Dallas to take a job in construction. Blake Oliver: [00:04:30] For those who don't know Jennifer, she ... What is her role there, or what has been her role at Sage? David Leary: She is an executive vice president, I want to say, of accountants at Sage? Is that the official title? Blake Oliver: I don't know the official title, but I know that she ran that channel program - the accountants channel program, meaning selling, through accountants, the Sage products. David Leary: If I was to say that Matt Rissell is the face of TSheets, could I say Jennifer was the face of Sage? Me being an Intuit person, [00:05:00] if I had to say, "Who do I know at Sage?" I'm gonna say Jennifer. Blake Oliver: Yeah. I would agree with you. She was the face of Sage. At all the conferences, she gave the keynote speaking sessions. She was the representative that everyone knew. David Leary: Was this true for Sage's small business level, all through their enterprise products, as well? Was she at the Intacct conference giving keynotes, as well, or is she just really just the true Sage-branded stuff? Blake Oliver: She was at the Intacct conference last year, and she's been at ... She [00:05:30] used to go to Sleeter Conference, right? [cross talk]  David Leary: -she was there forever, yep. Blake Oliver: Yeah, so she kind of did the whole thing. She's leaving accounting for something completely different- David Leary: Construction, yes. Blake Oliver: Gonna be an exec in a construction company. David Leary: So, the last departure … Blake, you are leaving FloQast. There was a LinkedIn post that went out today. Blake Oliver: Oh, yeah. I am leaving FloQast. That's right. I'm departing at the end of this month, and I'm gonna be doing my own thing for a while. So, I'm [00:06:00] open to helping people with marketing or CAS operations - I ran a client accounting services firm - and just seeing what's next. David Leary: So, VP of Sage? That’s available.  Blake Oliver: The timing is really remarkable. So, who knows? If you want to know why I left, I wrote a short post on LinkedIn that'll be in the show notes, so you can check that out. It’s all about ... Things change fast in a startup, right? We've gotta be agile, and our marketing focus has shifted. [00:06:30] I am not a guy who's gonna go put on a suit. I've spent, unfortunately, too much time in Southern California wearing sandals. David Leary: So, you're not headed to the Big Four? There’s nothing … [cross talk] Blake Oliver: No. David, I think we should make The Cloud Accounting Podcast … Look how far this show has come with just part-time effort. We could really make this thing great or, at least, not terrible. David Leary: You might have time- we could get our Instagram account set up finally. Blake Oliver: Yes! David Leary: We could have some time for that. Blake Oliver: It will be an Instagram account of me in my pajamas every day, working [00:07:00] on the podcast. I think that'd be really successful. David Leary: Who would not subscribe? Blake Oliver: I think actually, Ben, you had a great picture of you and ... You have a partner in your content creation efforts, and he was wearing shorts in front of the camera or something. Ben Wann: Yeah. Everyone thought he was wearing his underwear, but they were actually just normal shorts. So, from the top up, we were all formal, with our hair done, and our jackets, but, from the bottom down, it's all party. Blake Oliver: Yeah, exactly. That's the way to do it, right? We've all been guilty of it on Zoom meetings, and when [00:07:30] we work from home. You dress up, up top- Ben Wann: That's right. Blake Oliver: -where people can see you, and you're nice and cool down below. It's good. Ben Wann: We were talking a little bit before the show about how expected transitions should be. We’ve shifted in the world, from where you go into a job, and that's what you do for five or 10 years at a piece. Now, it should be expected that you go to a job, and you should already be planning to leave that job as soon as you start it. You’ve gotta plan out what you're gonna improve, how [00:08:00] you're gonna automate, optimize. You should have an end path planned out. You shouldn't plan to park yourself. Just seeing people like yourself being able to move to different opportunities strategically, it's just really smart, and it's the trend that's really going on right now. Blake Oliver: You actually wrote about this a while ago, and I remember reading your post about how that's ... That’s how you've thought of your career is that "I'm gonna go into a company, know what I want to achieve, and do my best to achieve that in one, two-" Ben Wann: Exactly. [00:08:30] Blake Oliver: Ideally in a couple of years, right? And then you move on. That's way better than staying someplace for 20 years and not really doing anything or changing anything, I guess. Ben Wann: Yeah. Yeah. I did the podcast with Phil Yaeger, and I talked about how I see myself as an internal consultant. I'm constantly trying to learn, and get better, and be at the top of my game. There's this divide still between what we expect from normal employees and consultants. To me, that's outrageous. Why should your employees [00:09:00] not be held to the same standards? Blake Oliver: Yeah. Ben Wann: If you can get there yourself, you can write your own ticket. I've been fortunate enough to do that, and you're doing it. I hope more people hear this, and they also wanna do that. The world's your oyster. Blake Oliver: It’s nice, too, because I think that's reducing the stigma of shorter-term employment, right? It used to be that if you jumped around every few years, people would look at you funny, but, now, if you do it smartly, and you have a reason for it- Ben Wann: That's right. [00:09:30] Blake Oliver: -and you can justify these changes, then it's ... I feel like at FloQast ... I came out of an accounting firm, doing client accounting services, to go to FloQast to do product marketing, which I'd never done before, never studied product marketing. I view it as I got an MBA in marketing, and I got paid to do it. Now, I can take that skill and go do that either at a firm, or at another software company, or as a consultant. David Leary: I don't think it has to be a jump from a company to a company. When I was at Intuit, I [00:10:00] pretty much, like every two or three years, was at a new job, right? It's about not being stuck in any role- Blake Oliver: Yeah. David Leary: -and constantly evolving and taking on new challenges. One thing you said, Ben, that was interesting is that thought process of thinking about what your exit is on day one. Blake and I did an interview, which we'll be dropping here soon, about selling your firm. That was one of the takeaways from that interview, I remember, was to have your plan for the exit … Don't think about selling your firm 25 years [00:10:30] in- Blake Oliver: Yes. David Leary: -when you're six months away from retiring. On day one of starting your firm, think about how you're gonna sell your firm. Blake Oliver: We talked about significant departures. Let's talk about the fund raising. The money, right? Ben Wann: The money. Blake Oliver: There were two big announcements that I saw this week. It was FreshBooks raised a bunch of money from Chase, and ScaleFactor raised another bunch of money. I don't remember who that was from. David Leary: Let's talk about FreshBooks first, because, I think there's less insanity- Blake Oliver: Yeah. [00:11:00] David Leary: -and discussion on that one. We might have a half hour of chatting about the ScaleFactor race, so, let's jump into the FreshBooks one. Blake Oliver: The story about FreshBooks is that they announced an undisclosed amount of fundraising from JP Morgan Chase. But given this is JP Morgan Chase, I imagine, it's pretty substantial. They had previously raised CA$40 million in Series A 'round in 2014, and $57 million in series B in 2017. [00:11:30] Here's the thing that stuck out for me is that- David Leary: This might be a $100 million race. Blake Oliver: It could be. I know that Chase put a ton of ... I think they put that amount to recently, so, I wouldn't be surprised if they were making similar-sized investments, right? David Leary: And it was stated "most significant investment" so far, in quotes-  Blake Oliver: So, it has to be at least $57 million, right? David Leary: $57 million and one penny. Blake Oliver: As part of the new deal, a Chase representative will be joining FreshBooks' board of directors. FreshBooks said it will use the new funds [00:12:00] to continue to expand operations and its business reach. So, having a banker on the board is gonna be interesting at a software company like that. For those who aren't familiar with FreshBooks, they kind of go under the radar sometimes with accountants, because they don't market to accountants, really. It's to small business owners, like owners of micro-businesses, in particular, meaning sole proprietors and all that. They're not like Xero, or Intuit going [00:12:30] after those accounting firms. They are the largest accounting software company in North America, maybe even the world, just by volume of customers. David Leary: I think they count their customers a little differently. What I mean by that is QuickBooks, and Xero will count small business owners that are paying for the subscriptions. FreshBooks kind of ... I'm using QuickBooks. I invoice you through QuickBooks payments. You pay. Blake Oliver: Yeah. David Leary: You're a customer. Then you invoice the other guy, and [00:13:00] Ben pays me through QuickBooks - that's a customer. So, if Xero and QuickBooks counted similarly, in a way, the numbers would not ... It's just they count their numbers in kind of a different way. Blake Oliver: Got it, but it's still millions and millions. David Leary: Oh, yeah. This is how they get to that "We've served 20 million customers." Going by that, Intuit has served hundreds and -300, 400, 500 million, possibly, right? Blake Oliver: Mm-hmm. It's an interesting question - how do you count those? But they're big. Whatever [00:13:30] metric you use, they're big. Let's talk about the ScaleFactor money. David Leary: Yes. ScaleFactor took another $60 million. This, in just 2019 now, in one year, they've taken on $100 million of VC money. Blake Oliver: Wow. That's a lotta money. Just for perspective, I think, at FloQast - I don't know the exact number - we, in six years, raised half that. So, this is a lot of money for any company, [00:14:00] software or otherwise. David Leary: Absolutely. Blake Oliver: What's crazy about this is that ScaleFactor is not just doing software. They are heavy professional services. They are- David Leary: They are an accounting firm, or bookkeeping firm with engineers under roof. So, this is gonna be in that same vein of, arguably, you could say QuickBooks Live is dancing in that space. You got the Botkeepers, and Ceterus, and Pilot, and ScaleFactor, and Bench - these companies we've talked about before in the past. Blake Oliver: The thing that blows my mind about this is that they're raising money as if they are a [00:14:30] software company, which is something where you can scale that really quickly. It makes sense that companies can be valued at many times- many times … 10, 20 times, 30 times earnings. But it's not just a software company. They are providing a service with that software and, arguably, one that's far more important than the software. Accounting firms are typically valued at anywhere from 1 to 1.25 annual revenues. This company ... [00:15:00] ScaleFactor is being valued at ... Well, we don't know ... What do we know, actually, about how big they are? David Leary: Some of the numbers in the article … They don't have 1,000 customers yet. Blake Oliver: Right. David Leary: It's very clear in the article. They say they don't have 1,000 customers, and they recently crossed 200 headcount. So, if you back out that math- Blake Oliver: Yeah. David Leary: Let's say they have 1,000. What's the number of clients per body in the office there? Blake Oliver: They only have 30 CPAs, though, out of those 200 headcount. [00:15:30] So, they’ve got 30- David Leary: But they're not ... Yeah, 30 CPAs, but what about bookkeepers, and people doing the work? Blake Oliver: We don't know. How many of those 200 people are engineers building software is another-  David Leary: Even if they are. Let's just assume they're all ... It's just headcount, right. So [cross talk] 1,000 divided by- Blake Oliver: Just 200? David Leary: 200. So, we're- Blake Oliver: Five. David Leary: It's five. Five clients per employee [cross talk]  Blake Oliver: -right. David Leary: Yeah, five clients per employee. I've talked to accountants, and bookkeepers that have ... They're pushing ... One bookkeeper's [00:16:00] handling 50 clients. Blake Oliver: Right. David Leary: I think you said you had a bookkeeper, in the previous episode, that pushed almost 40 clients a month.  Blake Oliver: Yeah. That's an all-star bookkeeper. It also depends on the size of the clients. Let's give them the benefit of the doubt and say that it's five clients per employee. That would make these clients enormous. David Leary: But they're going after that $400 a month QuickBooks Live customer. Blake Oliver: Right. David Leary: It’s right on the website, their pricing. Blake Oliver: Do we know their average price? What do you think their most popular package is? David Leary: Let's give them the benefit- it’s $1,000. Let's say they're selling [00:16:30] payroll and some add-on things, and it's a higher-end package, and they're getting $1,000 a customer. Blake Oliver: Okay, and let's just assume they have 1,000 customers, right? So then, that's $1 million in recurring revenue. $1 million in recurring revenue makes you worth $100 million in investment. Here's the other thing that's crazy is they said that- this is in the Crunchbase article that you shared, David. It doesn't say what their revenues are, but it said that they have 700-percent ARR growth in 2018, which is just insane, even for a software company ... [00:17:00] For an accounting services business, it’s insane. There's actually a mention in here that the CEO admitted that it was from a very small base, because, of course, if you start small, you can have 700-percent growth. When I had my firm, I pulled this trick, too, right? It's the oldest marketing trick in the book. You start with 10 customers, and you grow to a hundred, and you’re like, "I had 10 time …1,000-percent growth." It’s [cross talk]  David Leary: Based on my knowledge of this space, of these accounting [00:17:30] firms with engineers under roof, they have the smallest number of customers and have raised the most money. Blake Oliver: Here's the thing that's interesting, too. It says they haven't hit ... They expect to hit the 1,000-customer mark this year by adding hundreds of new customers per month. It's August right now, and if they're gonna add hundreds of customers per month to get to 1,000, then let's say it's 200 customers per month. We've got August, September, October, November ... That's 1,000 customers right there. Five [00:18:00] months. David Leary: Which means they're also gonna have to add 20 employees a month to do that [crosstalk] based on their current ratios, which ... That's what's confusing, because the whole bet of doing this engineering-based work with the accounting firms is that you have these insanely awesome ratios. Blake Oliver: Yeah. David Leary: That is not an insanely awesome ratio. I actually really … Think about the money, right? If ScaleFactor is built on top of QuickBooks, and Xero ... It's right on the website, it's very clear. They fully disclosed, right? Blake Oliver: They don't have their own GL. They are using ... They are leveraging in QuickBooks [cross talk] [00:18:30] David Leary: Off the shelf. Pilot, I think, uses QuickBooks. I think there's another service that uses Xero. A lot of these guys are using off-the-shelf. Bench is the only one that, I think, is not using off-the-shelf. They're using their own GL that they've built in-house. If you have $50 million, you should just put $25 million on Intuit, $25 million on Xero, and just ride that out. That's a guaranteed victory. If you believe they're gonna win, you gotta …  Blake Oliver: None of this makes sense to me. Hey, Ben, are you still there? Ben Wann: Yep, I'm here. Blake Oliver: Here, David and I are amateur-analyzing this. David Leary: He's the credentialed guy, right? He's the credentialed guy. [00:19:00] Blake Oliver: You're the credentialed guy. You're a certified management accountant. I know that you had no idea we were gonna talk about this, but I'm just wondering does this any of this make sense to you, just looking at it right now? I don't get it. Ben Wann: It sounds a little unusual. Knowing nothing, just hearing you guys talk, sounds like something's missing, or we're not aware of some type of information. Blake Oliver: My guess is that you've got a bunch of VCs who are looking at ScaleFactor like it's a tech company and that they're applying those kind of metrics, and valuations to [00:19:30] it. Maybe they just don't realize ... Is it possible they just don't realize how heavy the human component is? And that it's not ... Nobody has ever scaled an accounting firm this quickly, or as quickly as you would need to, to justify that valuation. David Leary: And it may not be them scaling internal processes yet. What they've been doing really well is Facebook ads. Half of all VC money goes to Facebook, and Google, and Amazon. If you really watch ... I [00:20:00] see it in my feeds. ScaleFactor is at the top of everything that’s small business, or QuickBooks-related that I search for on Google, I see a ScaleFactor ad. Even other accounting firms … I searched for a different accounting firm that's not even a software-based one, I get a ScaleFactor ad. Everywhere on Facebook, I get ScaleFactor … Lots of this money is going to Facebook ads, which helps you get 700-percent growth, because ... So, they're playing the startup game. There's no doubt. Blake Oliver: You're getting that growth at very high cost, because you’re-. David Leary: The cost per customer has gotta be the highest in all-time [00:20:30] industry. Their probably spending $20,000 a customer right now. Blake Oliver: Well, hey, if any of our listeners have any more insight into ScaleFactor, or how this whole thing works, I would love to know. You can please tweet at me, tweet at David. Let's figure this out, because it's a mystery. David Leary: Even ScaleFactor, yourself. I've reached to ScaleFactor via email before. I've reached out to ScaleFactor on LinkedIn in the past. I've tweeted at ScaleFactor and included this article. I would love to hear from ScaleFactor on how ... Why they're different from these other players in this space. Blake Oliver: Let's get somebody on to talk about it, because maybe we're [00:21:00] wrong. Maybe we're just not understanding it. So, Ben …  Ben Wann: Yes. Blake Oliver: Let's talk about why we brought you on today. Ben Wann: All right. Blake Oliver: I saw a LinkedIn post that you made, a LinkedIn article that you wrote this week, that I just ... I loved it. It's called "Dear AICPA! I Wrote Your Concession Letter." Ben Wann: Correct. Blake Oliver: You published this on the 7th. Actually, so it was two days ago, and then I was like, “We gotta get you on to talk about this,” because this is near and dear to my heart. So, I [00:21:30] was wondering if you wouldn't mind just taking a moment and just reading this for our listeners, because I think it's great. Ben Wann: I'll give it my best shot here. I put myself in the head of the- into the mind of the AICPA.  To the esteemed finance and accounting community, after much consideration and deliberation, it is with a heavy heart, and misty eyes that we are announcing that we are pulling the CGMA certification from the US market, effective [00:22:00] immediately.  With profit on our minds and lust in our heart, we, unfortunately, had entered into a foray that was far beyond our core set of competencies. Our initial estimation of the willingness of people to first purchase a certification to artificially inflate our member count was our first downfall. We had assumed that, after reaching a critical mass of paper certificates, that thousands upon thousands of professionals in [00:22:30] the accounting and finance community would then eagerly clamor to then pay for the privilege of actually studying for and then passing our exam. In addition, we have failed to recognize that the name given to our brand-new certification was not an original idea. It was - how do you say - heavily-borrowed from.  We can now admit, looking back, that we were so hungry to emulate the success of the CMA and how they were, in [00:23:00] fact, the leading global certification that we just couldn't help ourselves. We wanted to build on their success and add our own special sauce by cramming an additional letter into the mix; a 25-percent increase in the value to our members. We want to recognize that we have also disrespected dual CPA and CMA holders by creating this confusion in the marketplace. You have to admit, though, it was amusing to see our [00:23:30] certification pop up on real job postings for a while. We jokingly suggested adding it to the list of key job skills and education, and no one thought that we were kidding. So, well, we just kept running with it. Finally, our biggest failure was to not recognize the innovativeness, the creativity, and the flexibility of our main competitor, the IMA, or the Institute of Management Accountants. Buttressed by a passionate network of [00:24:00] Net Promoter members and a high-performancing board of senior professionals, the organization has only become stronger, and faster over time. In recent years, we've been trounced by the IMA in every market; even the US, our home. It is now time to recognize the foolhardiness of our decision. Each month, we have had to agonize by reading through our competitor's publication, 'Strategic Finance,' to painfully bear [00:24:30] witness to an ever-growing, and truly international list of new members and certification holders that we simply cannot compete with. We recognize that we have a rare window of opportunity now to bow out with dignity, and honor before we are completely ushered into non-existence.  Going forward, I promise you that we here at the AICPA will focus on the things that make us special - creating new rules for auditing, advocating for state-specific CPE courses, [00:25:00] and creating special interest groups to protect entrenched interests. Regretfully yours, the AICPA. Blake Oliver: You include the disclaimer that this is a satire article that was not written by the AICPA. Ben Wann: Correct. Blake Oliver: And should not be ... What’s the legal disclaimer they have at the end of all their podcasts? It should not be relied upon for legal guidance or any of that. I love that. Thank you for reading that, Ben. This episode of The Cloud Accounting Podcast is sponsored by Rewind. For years, Rewind has been successfully backing up thousands of small businesses' data that is stored in cloud apps like Shopify, Big Commerce, and MailChimp, saving these small businesses from CSV importers, employee mistakes, and app integrations that didn't go as planned. Rewind has also been backing up QuickBooks Online company data, too. That's right, cloud accounting world. I did say "backup QuickBooks Online company data." It only takes seconds to install what is essentially an insurance policy against major disaster or just those small business owners that like to get "creative" in the accounting system. Rewind works automatically in the background, capturing all the changes to your QuickBooks Online in real time. If something does go wrong, Rewind is the only service that gives you 100-percent control over what you need to restore, be it one transaction, multiple transactions, or all the data. To learn even more about Rewind and access a special offer just for listeners of The Cloud Accounting Podcast, head over to That is Cloud Accounting Podcast dot promo forward slash R-E-W-I-N-D. Blake Oliver: David, I think you may be a little confused by this. David Leary: Yeah. I am all for stirring the pot. I love this. I'm all ... And I love some good satire. Absolutely, 100 percent, but in actually reading this, I was smiling. I was like, "This is great. This is really, really great.” You hit a level. But, to be honest, I am a little confused. I'm not in the loop of the inside baseball of what happened, where are you coming from, why you [00:27:00] wrote this? Any of those types of questions, I'd like to understand. They copied a different certification test, and they wanted to try to rebrand it and confuse the market? Can you give me some background on this, Ben? Ben Wann: Yes. Yes. So, a couple of years ago, can’t be more than three or four, they ... The AICPA partnered with CIMA, the UK accountant association, [inaudible], to create this new certification, the CGMA. What they did is ... Initially, all you had to do was [00:27:30] send in a check, and say you had some type of certification in an industry, and you got a brand-new certification. This cheapens and discredits kind of the whole process of the CPA and the CMA. These things take months of effort, sometimes years of studying. Being able to buy a certification to try and win the market is a terrible tactic, and everyone saw right through it. Blake Oliver: Was this motivated by the success of the CMA, like the [00:28:00] CMA was growing, and started, and then the AICPA decided to come in and offer their own credential to compete with it? Was that how it happened? Ben Wann: Yeah, because I guess everyone's seen these numbers with the number of CPA candidates in the pipeline. It's going down. So, the AICPA is looking abroad, trying to strengthen their product and their pockets. They noticed that CMA has really expanded to every other country, except the US, initially, and it's double-digit [00:28:30] growth, 27 percent. Now, they're back in the US, with 20 percent growth here, as well. That’s what they were chasing. Blake Oliver: Speaking of the number of new CPA candidates, the numbers have dropped. I posted a chart that I spotted in a white paper on LinkedIn this week that shows, from 2005 to 2010, the number of new CPA versus accounting grads was-that line was trending upward at the same rate. [00:29:00] Ben Wann: Yep.       Blake Oliver: Then, somehow, something happened; between 2009 and 2010, all of a sudden, that dropped, and now, there's a much larger gap. The number of new accounting grads has grown. Ben Wann: Yep.  Blake Oliver: But it looks like the new CPA candidates just continue to drop. Ben Wann: Yeah. There are several things going on here. Blake Oliver: Let's talk about that. What's going on? Ben Wann: The big thing that has a lot of people annoyed is this 150-credit requirement. Before, I guess, 2010-2012, you needed 120 [00:29:30] credits. That's what everyone usually graduates college with, and you had to have two years’ experience working with a CPA firm, and that was your education. Now, they are saying everyone needs 150 credits. For many people, this is a master's degree. It might cost $20,000- $30,000 to complete. There's other paths to get around this. It's just a lot more work, and for what result? It's very unclear to people. Blake Oliver: Yeah. I was joking online that when [00:30:00] I sent my application in for my license, I found out that I was nine credits short of the 150 requirement. So, I went online to the cheapest community college that I could find that had an online program. I think was Oxnard Community College here in LA, and I registered for Intro to Philosophy and Intro to Management. I really enjoyed my Intro to Management class, given that I've already owned and sold a business. That was really, really helpful to me. That's [00:30:30] the thing that's funny about this 150-hour requirement, right, is you can take any- Ben Wann: Correct. Blake Oliver: I don't even understand the original logic behind it. What was the ... David, it sounds like you have something to say?  David Leary: Yeah. It feels like ... One thing, the bell went off for me a couple weeks ago. You said that ... The Cal CPAs- if you're a CPA in California, you have to join that membership. Blake Oliver: Yeah, I think you … Well, I think you have to, right, in order to …? David Leary: But the AICPA is 100-percent optional. Blake Oliver: Yeah, you don't have to be a member the AICPA [00:31:00] to maintain your license, because it's state-certified. David Leary: Okay, and then I've seen people online say, "Hey. I'm probably not gonna renew my AICPA membership." People aren't finding value in this. Some of these things, like, "Hey, we're not getting the revenue we want, let's have another certification. Let's spin up a commercial site like," is it something … Does the CPE credit stuff kind of all fall in under that, like they're getting some kickback from the colleges by requiring more credit hours? Is it a revenue game? Ben Wann: Yep.       Blake Oliver: Yeah. It has to be, right?  Ben Wann: With state-specific CPE, this is another issue where people are furious, right? Each state has their own rules. The state of Delaware, where I’m certified, they have their own ethics course. To get certified every two years, you have to do their course that costs money. They're gonna get a cut of that, the state society. What's different from one state to another? Nothing. So, to have these hoops you have to jump through in order to give money to a [00:32:00] state society is ... Everyone’s seeing through it, and we’re tired of it. Blake Oliver: Just to put some numbers behind this conversation, if you look at the chart that I'm ... Obviously, our listeners can't see this chart. In 2008-2009, it looks like about two-thirds of accounting grads were going for the CPA, right? If you just divide the number of new CPA candidates by the number of accounting grads, it was about two-thirds. If you look at the latest data, which is [00:32:30] from 2017, that number has dropped to half. So, that's a huge, huge change, right? Ben Wann: Oh, yeah. Blake Oliver: And if it continues to go down, if fewer than half of accounting grads are going for the CPA, I'm concerned about the CPA's future. As somebody who invested the time and money to get it, I'm disappointed in that trajectory. Ben Wann: Yeah.  David Leary: Shouldn't that be the role of the AICPA to encourage people that are graduating with accounting degrees to become CPAs? Shouldn't that be their number-one most [00:33:00] important function? Blake Oliver: Probably, to get more members, right? Somebody on LinkedIn said that the good thing about all this is that with fewer CPAs, it creates more demand for CPAs, right? Ben Wann: Yup. Blake Oliver: But I don't think that actually is true, because it could backfire in that fewer CPAs mean that people aren't as familiar with it, which means that demand drops, right? In economics, if you decrease supply, you may increase [00:33:30] prices, but you also decrease demand. I've got another chart here, kind of related to this whole discussion. This appeared in the June 2019 issue of "Accounting Today," and it's a survey that ADP did. The question they asked 1,500 accounting professionals. They asked 1,500 accounting professionals the question: "Would you recommend that young accountant get their CPA license?" A full quarter of those accounting professionals either said no, or that they would recommend [00:34:00] something else. Ben Wann: Yeah, I'm one of them. I'm dual-certified. I'm one of ... There's not that many people who can talk on both sides, kind of unbiased. People ask me- Blake Oliver: Yeah. Ben Wann: Unless you wanna do tax or audit your whole life, I'll say, "Go bananas. Do the CPA,” but, otherwise, the CMA is so much deeper. It just prepares you for the job. A lot of people have said this, "The CPA has helped me get my job, but the CMA helps me do my job." Blake Oliver: That, I think, ties in with what I have heard from the community, which is that fewer [00:34:30] and fewer accountants are going to school, and graduating, and thinking, "I'm gonna make partner at an accounting firm someday." That dream of making partner, people just aren't that interested in it anymore. If you aren't buying into that dream, then why would you necessarily need that CPA, if you think, "Well, I'm just gonna go into public for a few years and then leave." Ben Wann: Yeah, it used to be it was a one-stop shop. If you were smart and you went to accounting, you had to do public accounting. You worked a [00:35:00] ton of hours. You got a lot of experience. You were better than the industry peers after two to four years. Then you see all these smart, driven people with a CPA. It’s like, "Okay. They're doing so well, because they're CPAs,” kind of, you know?  Blake Oliver: Yeah.  Ben Wann: But now, there's all these alternative paths where you can be very successful without ever working in public accounting. I had never want to work in public accounting, and I haven't. I'm at the top my game, so I'm doing very well. There's so many opportunities out there. You don't have to do public [00:35:30] accounting to have a really strong career in accounting. Blake Oliver: Let's talk a little bit about your background and what you're up to, Ben. I'd love to hear ... I know that you are working on CPE courses. You may already have some available. You're a big advocate for the CMA. Tell us a little bit about what your projects are, and what you're up to, and where people can find out about that. Ben Wann: Talking about trends, technology is everywhere, and I don't think there's a discipline being more impacted right now than accounting by technology. What we do, how [00:36:00] we do it, where we do it is all changing. So, within 10 years, it's a complete shift. There’s a huge need for people to understand what skills they have to learn and to help people bridge that gap from where we've been to where we're going to go. In my career, I've seen so many people who are just stuck, and they're not gonna get it. What's driving me is I want to help fill those knowledge gaps between theory and practice. Right now, there's not that many sites [00:36:30] for information to understand, "Okay. If I wanna do this, how do I actually do it?" Not "I don't want to manufacturer widgets." That's what's kind of driven me. I'm really into the education side. In that regard, I have actually started producing courses on a site called last year, and now, I'm up to five courses. I have a YouTube channel. I have a website that I run with a team of people called The Numbers Guys. [00:37:00] The basis of that site is to provide the blogs, the really strong blogs that help people understand what a day in the life of an accounting professional- all these different avenues looks like, and how we get our jobs done, and what we're interested in.  I've also really focused on business process improvement, because if we're gonna go into the future, we've gotta get our houses in order. I see that to be a huge opportunity. Then there's also this shift in accountants transforming [00:37:30] from kind of like the stereotype of this boring, dull, introverted person to, now, someone who's not just reconciling accounts but working with the business to turn data into insights. There's a lot of communication. There's a lot of influencing going on. That's known as finance business partnering. My two big things right now are finance business partnering, and business process improvement. Blake Oliver: What's your day job? Because you do this ... You're a very busy guy. You're [00:38:00] doing this on the side at night- Ben Wann: Nights and weekends. Blake Oliver: Weekends. What do you do during the day? Ben Wann: Yeah, that's ... I do that, too. At my day job, I'm an operational controller for a company called Savencia. They make all sorts of cheeses. They're French-owned. We have four factories here in the US, and I run ... I'm in charge of the controlling department. I make sure that our cost accounting is strong, it's accurate, and we're getting good data out to help the [00:38:30] business know what they're doing to make good decisions. I report right into the CFO. Each day, what I love about this job is I'll go from working with the executive team to data entry clerks. I'm in the plant most of the time. It's a really boots-on-the-ground job. Blake Oliver: Sounds delicious, too. Ben Wann: Yeah. Blake Oliver: Hey, David, before we go, we got a little follow up on our ransomware stories over the last few weeks. You wanna touch on that? David Leary: Yeah. Before we jump into the ransomware one, there was the one that's kind of related to the ScaleFactor one. There's a British company called Crunch. It's [00:39:00] Crunch essentially, has - they're really going after the self-employed market, the freelancers - bookkeeping software. They have their own in-house bookkeepers, as well. So, it's a similar play, right? It's accountants with engineers under roof. But what they announced, they are now going to offer a freelance bookkeeping network – an Uber model – just like QuickBooks Live. This is the third week in a row now some other company is now gonna offer bookkeeping as part of their software package. Blake Oliver: It's gonna [00:39:30] be interesting reading all the reviews of these various services as they roll out. I don't know if anyone's really figured it out yet, right? David Leary: Do you think ... This is hypothetical, and Ben, please chime in on this, sometimes you get an Uber, and that guy's got an Uber light, and a Lyft light, and he's got both phones on his dashboard, or her - whoever's the driver … They're picking some ... One ride, they pick up a Lyft person. Next ride could be an Uber person. Do you think there's gonna be bookkeepers, and accountants out there that’ll, "Hey! I'm doing this …" Because chances are H&R Block’s gonna do this with Wave. [00:40:00] I'm gonna take a Wave customer this time, a QuickBooks Live customer, a Crunch customer. Is it just gonna be really like the gig accountants, or gig bookkeepers are just gonna work with all these services at the same time? Blake Oliver: Maybe, David, now that I'm gonna have some time on my hands, I should just sign up for all of these services and report back. David Leary: As a small business owner, or as a bookkeeper? Blake Oliver: As a bookkeeper. I could go be a QuickBooks Live bookkeeper. I could go be a Pilot bookkeeper. I could go be a ScaleFactor bookkeeper. Crunch bookkeeper. David Leary: It'd be an interesting [00:40:30] experiment. I'm sure there's people that have done driving for Uber, and Lyft and wrote a blog posts about that. Blake Oliver: Yeah, they have, and then they get banned for life, probably. Ben Wann: Blake, that's interesting [cross talk] in there. There's actually people who I talk with, who are making a business out of kind of doing what you just talked about. Trying to get a grasp for all of the apps and resources that are out there and then translate that into, "Okay. If I have this problem, what's really the best solution?" There's a need for that. Blake Oliver: Oh, [00:41:00] yeah, and not nearly enough people who are taking the time to build up that knowledge base. Even in specific industries, like manufacturing, knowing all the different tools available and going to different companies and modernizing their IT infrastructure from a financial accounting perspective. Really, really fascinating. David Leary: Or just cheese manufacturers. Blake Oliver: Just cheese. You could just specialize in cheese. I'm sure there's some very unique aspects to the manufacturing process that you have to track in your ERP, right, Ben?  Ben Wann: Correct. There is. The dairy industry. [00:41:30] Blake Oliver: Yep, dairy. Cool. David Leary: Let's talk ransomware again. Blake Oliver: Ransomware, yeah! Risks …  David Leary: The rewind ... It was yesterday or the day before, iNSYNQ ... Blake Oliver: Yesterday. David Leary: So, the CEO of iNSYNQ ... Remember we talked about it a lot on last week's episode that he was planning on joining us for an interview and then he canceled? We talked about that last week-  Blake Oliver: Yeah, he bailed on us, and now we know who he bailed on us for. David Leary: Then, I saw, two days later, an advertisement for him to go on the [00:42:00] Woodard, Joe Woodard's webinar. So, he was on the webinar and it was- Blake Oliver: Remember, it wasn't a webinar, it was a town hall. David Leary: Town hall. Okay. Yeah, it was a webinar platform, but it was a town hall for people to ask questions about the attack. He answered all the questions that came in. Some of the answers did feel a little prepared. It looks like Brian Krebs actually attended, and he has information. He really did a nice write up about it, and it looks like they [00:42:30] were in for almost 10 days, before they actually encrypted anything. Blake Oliver: Yeah, that's kinda scary that the attackers were in there for 10 days, and iNSYNQ didn't know until they unleashed their attack. By the way, for those who aren't familiar, Brian Krebs is a security researcher who has a blog called Your entire goal as a software company should be to never show up on [cross talk]  David Leary: -on his blog- Ben Wann: -that’s the wall of shame …  Blake Oliver: Yeah, exactly. So, iNSYNQ, for [00:43:00] those who are not familiar with this whole saga, they were attacked in July 16th or something like that by a malware ransomware attack that shut down their QuickBooks and Sage hosting platform for two weeks. David Leary: My understanding, as of the thing yesterday, there are still some customers who are not 100-percent up. Blake Oliver: Yeah, it's only in the 90th percentile. It's 90 percent, in terms of customers who have access, which is kinda crazy. I know, David, you're gonna go through a [00:43:30] lot of this, but the thing that really stuck out to me is that the reason they couldn't give people backups quickly ... Think about this - if your network gets shut down and infected, that's fine. It can happen, but you should have backups of these QuickBooks files that you can just provide to the customers; but they couldn't do that, apparently, because the backups were not separated from that live environment. So, they could also have been infected with ransomware. I'm not clear on whether they were, but [00:44:00] it's possible that they were, which should never happen. David Leary: Some of this is the confusion caused by these hosting companies, right? With QuickBooks Online, or Xero, or true SaaS software, you don't have to make backups, right? Blake Oliver: Right. David Leary: You can backup … There's tools like Rewind, who's- actually, I think they're sponsoring this episode, right? There's tools like Rewind that will- for data entry errors, right? If you do data entry, and you need to rewind your data, and fix something, that happens. Fundamentally, you don't have to back up your data, [00:44:30] not in the same sense you used to have to … You go to a menu, "File Backup," and you make a true backup of your data on a removable drive. You take it somewhere else - network drive, or tape drive, whatever. These hosting providers, because it's in cloud, people kind of assume they don’t have to make that backup anymore. If people were making a backup and saving it to their own local hard drive, they could’ve just installed QuickBooks to a local computer, restored the backup, and moved on, and just wash their hands off this. Blake Oliver: Yeah. David Leary: There's [00:45:00] confusion on the marketing of this, which is really, really, really ... The worst part I hate about it all is just the confusion, and then the reluctance for them to not admit that the risk is higher on Windows-hosted machines of being ransomwared than a true SaaS play. Blake Oliver: Oh, yeah. Joe said something about how you're just as much at risk on a SaaS provider as a hosting provider, and that's just simply not true. David Leary: Not for ransomware. Now, there's been breaches. There are data breaches. There's no doubt. Breaches are at all-time highs, [00:45:30] but you could argue that those are ... They're getting either its names, socials, credit card numbers. It's marketing data that these huge companies have; it’s essentially, marketing data, but they’re not … If ADP got hacked, I can still run payroll tomorrow. I'm not locked out of my business files. That's the problem with iNSYNQ. Two other interesting [cross talk] Go ahead.  Blake Oliver: I was gonna say, the lesson here, for me, is go ahead and use hosting, but make [00:46:00] sure that you are managing your own backups in addition to whatever they are saying they're doing, so that if their backups fail, you've got your own local backups. David Leary: We went off on that last week, right? "You gotta backup. You gotta backup. You gotta backup." Two things that I thought Brian Krebs surfaced was, one, a Google ad from iNSYNQ. Blake Oliver: Oh, yeah. David Leary: It was pretty interesting. The Google ad says, "iNSYNQ, we're still standing." I'll read the text of the ad: "Competitors are offering empty promises about security to capitalize on the iNSYNQ attack. That [00:46:30] is not okay, but don't worry, we still are. Stick with the company who plays nice. Impacted by the attack? Call our hotline." Blake Oliver: I know why they're doing that, because I searched iNSYNQ on Google, and I saw ads from their competitors, saying, "Hey, affected by the iNSYNQ attack? Come to us, and we'll take care of you." Actually, I just searched, and I found one from "Impacted by the iNSYNQ attack? No contracts. Get a free trial." Ben Wann: Doesn’t hurt to try.  David Leary: And the other piece- Blake Oliver: Oh, NetSuite is doing it. "Affected [00:47:00] by the iNSYNQ attack? Switched to NetSuite today." David Leary: Switch off of hosting! Another thing he pointed out is that Alex Holden, the founder of Milwaukee-based cyber intelligence firm Hold Security, basically came out and pretty much said that if these companies can detect the infection before, they have some elbow room, because a lot of the times, these people will infect- they'll get on the network, and it'll be days before they do any encrypting of files. So, the key is to find the infection and stop it within seconds. Blake Oliver: Yeah. [00:47:30] David Leary: But you're right, if they've already started encrypting stuff by the time you discover it, obviously, we're seeing the repercussions of that. Blake Oliver: Well, speaking of encryption, I got one more story before we go. David Leary: Okay. Blake Oliver: From my old firm, Armanino: they are now accepting cryptocurrency payments. Press release came out yesterday, David, so you'll be happy to hear; that's another accounting firm that is modernizing their payments platform. Ben Wann: What is the angle there? Is that just marketing? I don't get it. Blake Oliver: Yeah. It's really great marketing, and I'm really confused why not every [00:48:00] big firm is doing this. They have ... Armanino started a blockchain cryptocurrency practice. Ben Wann: Okay. Blake Oliver: They've been promoting it, so, why not make an announcement? "We now accept every form of cryptocurrency. You can pay us with anything you want." Because, of course, the tech press are going to pick it up, right? [cross talk] David Leary: It's super-easy, right? It's just like getting QuickBooks merchant services. It's just you're adding a merchant service for 5,000 different wallets. [cross talk] Blake Oliver: -all you have to do is set up Coinbase or something, and [00:48:30] it just automatically converts whatever people pay you into US dollars, right? Just a great example of some easy accounting firm-type marketing stuff you could be doing. David Leary: I'm glad you brought that up, because it reminded me of a thought I had in the car, when I was driving earlier today, about ScaleFactor. I was like, "ScaleFactor's never once played the AI or blockchain card, and they're raising all this crazy money … They're not even playing the AI and blockchain card." Blake Oliver: That's true. Maybe that means they have some actual automation at work [cross talk] David Leary: -and on that note … [00:49:00] Blake Oliver: This was really fun. Thanks, Ben, for joining us. If people wanna follow you online, I know you mentioned that stuff before, but what's the best place for them to follow you personally, and then, your website for your project? Ben Wann: LinkedIn is the place to find me, and then The Numbers Guys is our website. David Leary: No Twitter for you, Ben? No Twitter? Ben Wann: I'm on Twitter. I don't know what I'm doing on Twitter. David Leary: Oh, we’ll have to get you on. We'll get you in the loop. Blake Oliver: That's good, because a [00:49:30] good rule of social media marketing is pick your platform and kinda own it, so you’re doing the right thing, Ben.  Ben Wann: Yep. Blake Oliver: David, where should people find you online? David Leary: I am on the Twitters- would be easy … It's @DavidLeary. Blake Oliver: I'm @BlakeTOliver. You can find me on both those places. David Leary: And, as always, please leave reviews on iTunes, but we have great news for all you not … All you iTunes, and Apple haters, like me, out there. You can finally write reviews somewhere else. There's a website called On there, [00:50:00] you can search for Cloud Accounting Podcast, or click the link in the show notes, and you can leave a review on Pod Chaser. What's nice about that is those reviews are starting to appear in other podcast players. It's one place to write a review, and in regards to the podcast player you use, it's going to populate across. Blake Oliver: They got some sort of API connection going on. That's cool. Ben Wann: I listen to a lot of podcasts, and I got turned on to you guys … In the last few days, I've just been listening to what you're up to. This podcast is really good. I've enjoyed it. You guys are doing really great work. David Leary: Oh, [00:50:30] thank you. Blake Oliver: Thanks so much, Ben. That's awesome. Really appreciate that. Now go write a review [cross talk] All right, that's it for me. Talk to you next week, David, and Ben, thanks for being on the show. Ben Wann: All right. See you later. David Leary: Bye, everybody. Blake Oliver: Bye.
#Xerocon San Diego: Shawn Kanungo, Disruption Strategist, Founder, and Keynote Speaker
Sponsors  Halon Tax: TOA Global: LivePlan: Shownotes 02:25 – Shawn explains the difference between a linear accountant and an exponential accountant 04:24 – Get stuff done! Embracing the gig economy with a Fiverr experiment 05:36 – Shawn shares some career background - from CPA to disruption strategist 07:37 – Accountants currently have a 94-percent chance of being automated  10:15 – Winter is coming! If your firm doesn’t get with the cloud, you may get left out in the cold 11:18 – According to Hinge Marketing, in accounting, 25 percent of firms are eating all the growth ( 13:45 – According to Shawn, the accounting firms that chase relevance and stay on the leading edge will win the race 14:26 – Blake and Shawn talk about how Xero is breathing some rock-star-level life into the accounting industry 16:31 – If accounting is on the cutting edge of disruption, why are so many firms still using Excel as their primary record-keeping system?   19:12 – How Intuit leveraged disruption to increase marketshare 21:16 – The Xero-Stripe Partnership ( 24:10 – The more you build out your ecosystem, through integrations and partnerships, the more value you bring to your clients 27:12 – Ball's in your court ... Are you brave enough to face an accounting world without billable hours?  30:03 – If you want to change the trajectory of your firm and move it towards the cloud, try taking a risk 32:40 – How can accounting bring its sexy back?   34:11 – Shawn shares some secrets to becoming a great storyteller and public speaker Connect with Shawn Website: LinkedIn: Facebook: Twitter: Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptShawn Kanungo: Well, first of all, if you're a senior accountant, you're listening to this in your cubicle, or you're running on the treadmill, or you're doing the dishes at home, I would say tomorrow morning, or this morning when you're listening to this, walk into your office and try to get yourself fired. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. Did you know that millions of small businesses use LivePlan products to start their business? Did you know that these small businesses prefer a cloud-based accounting solution two times more versus a desktop solution? Did you know that 89 percent of these small business owners prefer virtual advisory services? Did you know that the number-one thing they want from an expert advisor is strategic planning and review? This is even more than general-ledger accounting and bookkeeping services. Did you know that LivePlan has an expert advisory directory that you can join to gain access to these millions of small businesses? To learn more about becoming a LivePlan expert advisor, head over to That is Cloud Accounting Podcast dot promo forward slash L-I-V-E-P-L-A-N.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. Shawn Kanungo: I'm Shawn Kanungo. I'm really excited to be on this podcast. We've fundamentally removed David from the podcast. He's not on the podcast anymore. Now, I am the Ka-new co-host- Blake Oliver: Oh ...  Shawn Kanungo: -and I think it's gonna be the Blake and Shawn Show. David, we miss you, we love you, but, I'm sorry ... I just wanna say I'm a big fan of this podcast. A big fan of the podcast. Before we start, I just wanna say to the audience, all the listeners there, if [00:01:30] you haven't put a rating and review into iTunes, or Spotify, Stitcher, wherever you can get this, do it now. It helps a lot for the show, because we've gotta get this thing up to like 10 million subscribers. We need to, because what these guys are doing is so fundamental to this cloud-accounting space. They're the only ones that are actually highlighting it. You guys are doing so much for the economy, and for the space. Appreciate it!  Blake Oliver: Well, thank you so much, Shawn. We're here at Xerocon in San Diego, and you just gave a fantastic keynote. Shawn Kanungo: Oh, wow. [00:02:00] Thank you. Blake Oliver: I mean, what, 800, maybe 1,000 people in that audience there. It was called "Strategy in a World of Disruption. Be Bold, Be Brave, Be Experimental: Why Build a Culture of Experimentation?" I loved ... You had this one slide in your presentation. I mean, there was a lot to talk about, but this one slide just is sticking in my mind - Linear Accountant- Shawn Kanungo: Yeah. Blake Oliver: -versus Exponential Accountant. What does that mean? Shawn Kanungo: Linear really means how do we think five [00:02:30] to 10 percent better within our organization? This idea of linear thinking has been literally ingrained - in our organization, in our leadership, in our systems, in our family, in society - that we need to think about things in a linear way. Exponential is actually about thinking differently about business, about processes. It's actually taking a different lens. What we've seen a hundred times out of a hundred ... If you can take an exponential lens, meaning take [00:03:00] a different approach to things, you can actually get a 5X to 10X improvement. I think, especially for accounting, you know this better than anybody, this idea of linear thinking, of risk [cross talk]  Blake Oliver: -risk aversion? Yeah.  Shawn Kanungo: -is literally ingrained in our DNA. The reason why I wanted to showcase the difference between a linear accounted versus an exponential account is ... There are some tenets to it, and I can get into what those tenets are, but I think this is what we need to move, especially now. We live in a world with [00:03:30] all these exponential technologies. We need an exponential mindset! Blake Oliver: That is such a different mindset than, like you said, what we are taught to think in the accounting world, where it's all about incremental improvement. Let's become three percent more efficient, five percent more efficient, and maybe this is ... The challenge I ran into in public accounting was trying to get people on board with disruptive change is really, really hard. You had a great tip for doing that. You ask people do [00:04:00] a small project, right? Shawn Kanungo: Exactly.  Blake Oliver: The example was like a Fiverr?  Shawn Kanungo: Yeah. So, a little bit of background - I spent 12 years at Deloitte, leading their Digital Innovation Group in western Canada. One of the things that we did was I really wanted people to embrace this whole idea of the open-talent economy, the gig economy, because it just makes sense for us not to do everything. There's an entire ecosystem of people that will do things for us. Talent is ubiquitous. So, what I wanted to do was say, "Listen, guys, I'm gonna give everybody five bucks, five bucks out of my own pocket. I'm gonna give [00:04:30] everybody five bucks across western Canada. What I want you to do with this five bucks is go on Fiverr, and just get something done. Whether it's a product, a service, a voice over ... Whatever it might be, just get it done. Then, send me back the product and then we'll talk about it." The difference between talking about all this change and talking about innovation is that when you actually go off and do something and actually get somebody else to maybe even do something - this is a small example, using a gig economy - you're actually doing something. You're like, "Wait a minute! Somebody [00:05:00] else is getting something done for us at a radically cheaper cost. I didn't have to do this."  Blake Oliver: Right.  Shawn Kanungo: It literally flips your brain to say there's an ecosystem of people will do stuff for us [cross talk]  Blake Oliver: What else can we do? Shawn Kanungo: Exactly. That is the whole idea of experimentation, which I try to hammer in. It's like starting with small teams, small problems, small sprints and seeing how we can move the needle ... I think this idea of experimentation is so foreign to accountants. We don't experiment. Blake Oliver: You're a CPA. Shawn Kanungo: Yep. Blake Oliver: Tell me [00:05:30] about your background. How did you get into talking- speaking about disruption? Shawn Kanungo: I started my career at a company called Singapore Press Holdings. I then actually moved into accounting. I worked for Deloitte for the first couple years, got my CEA. Moved into management consulting on the side. My friends and I, we were building apps, consumer-based apps. Some were complete flops; some were more like mediocre successes.  At the same time, I was getting into the Strategy and Innovation Group at Deloitte. We [00:06:00] were early in the game of working the organization when it comes to innovation. We were the first to try things around artificial intelligence, using the gig economy, using drones. We were the first to do all that stuff. Clients wanted to hear about the work that we were doing in digital transformation and innovation. After that, after 12 years at Deloitte, one of things that I really wanted to do was really take equity in organizations. Working for a public firm, you can't take equity in anything. For me, equity was a big deal - taking it in companies and scaling them up. We started a group called Queen & Rook. It's like a consulting [00:06:30] model, but instead of getting paid for fees, we actually get paid in equity. So, I started that. One of our companies as a voice-technology company. We're using artificial intelligence to solve [pre-need] problems. The speaking thing came naturally, because people want to hear about digital transformation and innovation, and here I was, talking about it. You get onto one conference, another conference, and just like the momentum builds. Now, I'm here talking to you and being on The Cloud Accounting Podcast. My life, it's done. This is it. This is the peak, right now!  Blake Oliver: Right now? This podcast is ...  [00:07:00] Shawn Kanungo: This podcast. This podcast is the peak. That's my journey. I've been obsessed about this idea of digital, and innovation, and disruption. For me to bring this message, especially here at Xerocon, to this audience, to the accounting profession, means a lot, because if you look everywhere, a lot of people are saying that automation is gonna take accountants' jobs, right?  Blake Oliver: I like that you talked about that, because at a lot of accounting technology conferences - maybe [00:07:30] they talk about it more at general tech conferences - but you showed a slide ... What was it? Accountants are- Shawn Kanungo: 94 percent-  Blake Oliver: 94-percent chance of being automated. You're not afraid to put that out there that this is a risk. Shawn Kanungo: Totally. Blake Oliver: This is- we need to be aware of this risk. Shawn Kanungo: Your audience knows this, as well. You're highlighting all the movers and shakers that are getting into the space; you highlight all the companies that are AI accounting practices, or they're incorporating [00:08:00] AI. I was listening to a really great episode with Rachel- Blake Oliver: Mm-hmm. Rachel Fisch, yeah.  Shawn Kanungo: -and you guys were talking about this idea of service and how service is still so important. Yeah, there's a lotta of this AI automation piece, but at the end of the day, there is a big piece to everybody's firms, where it's around customer service. There are certain pieces that will never be automated, so, although everybody's saying that automation is gonna take an accountant's job, let's be real. It's not. What I want is to tell people, listen, this is the greatest [00:08:30] time to be an accountant ever. Actually, it's gonna be the sexiest job ever, because- Blake Oliver: Yes, make accounting sexy! Shawn Kanungo: Yeah, because think about it ... If you have all these ecosystems and technologies doing some of the work that we used to do ... To be honest with you, listen, I'm a CPA. There's a lotta work that shouldn't be done by humans. If we can double down on things like storytelling and actual customer experience- Blake Oliver: Talking to our clients? Shawn Kanungo: Totally! That is what an accountant should be. [00:09:00] Blake Oliver: Well, but that's not what it ... I wonder if this is unique in some ways to the United States market. Cloud accounting has penetrated maybe 10 percent, here in the United States. That's just my rough feeling, having been doing it for 5-10 years. Whereas, in Australia and New Zealand, it's like 50 percent. We're way behind, and it's going slow. Shawn Kanungo: Why do you think that is? Blake Oliver: I know US regulations. I studied to be a CPA here in the US, and compliance is a big headache here, compared to Australia, compared [00:09:30] to Canada, compared to the UK, so we can make a lotta money on compliance. I think you mentioned something like this in your keynote - we get comfortable. We're nostalgic. Shawn Kanungo: Yeah. Blake Oliver: You mentioned nostalgia, and firms here ... How do you disrupt a firm where the partners are pulling in 20-percent profit margins off of tax compliance? There are firms in LA that are still doing bookkeeping for $85 an hour, [00:10:00] keying in transactions, and people are paying for it. Shawn Kanungo: Totally.  Blake Oliver: Maybe that will come to an end. Shawn Kanungo: Yeah. I think the organizations that are saying, "Listen, we're not gonna move to this new way of doing things. We're getting fat, rich and lazy doing it this way ...". Blake Oliver: Right.  Shawn Kanungo: The reckoning will come. You know, I started my thing talking about 'Winter is coming.' It is going to happen. People are going to start realizing that these organizations that have not moved to the cloud ... "Wait a minute! My apps are not integrated. [00:10:30] I can't use the ecosystems that these other guys are using." We're moving to a world where, if you're not on cloud, that means you're not actually on the foundation of using some of these innovative apps and services. Listen, all the startups and tech companies that are actually in this space, they're all designing for cloud. So, if you're not part of that, then you're gonna be left in the dust. Right now, it's working fine because of regulation and [00:11:00] all that kind of stuff, but we've seen this throughout history that the organizations to stay nostalgic, they're gonna end up losing-  Blake Oliver: It could be a very quick shift that happens- Shawn Kanungo: Absolutely. Blake Oliver: I see everything's going ... Everything's fine. Everything's fine. Then, like you said, winter is here, right?  Shawn Kanungo: Exactly. Totally! Blake Oliver: It's gonna be interesting to see when that happens. I don't know if you're aware of these stats. Hinge Marketing does some great surveys of professional services firms, and they released a study - I [00:11:30] think it may have been last year - showing that in accounting, it's about 25 percent of all the firms are eating all the growth. Shawn Kanungo: Yeah. Blake Oliver: Does that feel right to you? When you go out and speak, you must meet people from cloud firms- Shawn Kanungo: Sure.  Blake Oliver: -you meet people from traditional firms. What do you think's gonna happen to those traditional firms? Are they just gonna disappear? Shawn Kanungo: By traditional firms, you're talking about the big guys? Blake Oliver: Yeah, well, there are top 100 firms that are still doing things the same way they [00:12:00] used to do things. There's ones that are innovative, of course. Then there's also the small CPA shops. I feel like, at some point, these people are gonna want to retire, right? Shawn Kanungo: Totally. Blake Oliver: What are they gonna do? It's just close the doors, and that's it?  Shawn Kanungo: Listen, I'm not a futurist- Blake Oliver: But you talk a lot about the future. Shawn Kanungo: I do talk about the future. Don't take anything I say as a prediction about the future. I really do see myself as a practitioner and a tactician. This has been my work. [00:12:30] I really think that there's gonna be some firms that certainly win market share, because they always position themselves as leading edge; that they're getting into new spaces, whether it's artificial intelligence or block chain.  It's going to constantly shift. I don't know who's gonna win the game, but what I do know is that some of the savvy firms, some of the top accounting firms ... We could even mention the top four accounting firms - the Deloittes, KPMGs, PWCs, et [00:13:00] cetera. Because I worked at Deloitte for 12 years, I have a lot of love for Deloitte. One of things that I really love about Deloitte is they have this thing called Innovation Cloud; this is what I call it. They have been around for like 150-180 years. The reason why they've been around - they always try to position themselves as relevant. That's why, in Canada, we started in new AI shop called Omnia. To [00:13:30] be honest with you, not that many organizations across the country are adopting AI at scale. It's just not happening. But they always position themselves in this new forward-thinking, next-generation organization, because they're always chasing relevance, and I think that's important. The organizations that will continue to chase relevance, be on the leading edge, the market will see. The customers will see, because customers always, always, always wanna be with guys that were leading edge. They wanna be with the cool, modern [00:14:00] companies. I don't know where it's gonna go, who's gonna win the game, but I do know that the organizations that will win will be the ones that will always be relevant. They will be doing an amazing job at Xero. Here, listen, we're at Xero ... I know this podcast is technology agnostic, and I know David is an Intuit ... He was Intuit guy. He was like their main guy, right? What Xero has done really, really well is, you know, what they've done? They've turned accounting into like a concert. They've turned accounting [00:14:30] into like rock star status, and they've done an amazing job at chasing relevance. It's been a remarkable. Blake Oliver: "Beautiful business software," I think is the motto for Xero these days. Shawn Kanungo: Exactly.  Blake Oliver: "Beautiful business software." You can feel it when you walk into the convention center, and you walk into the Expo Hall. It doesn't feel like any other accounting conference, right?  Shawn Kanungo: Well, you've been to how many? You've went to six Xerocons now?  Blake Oliver: Six Xerocons since the original in San Francisco [cross talk] Shawn Kanungo: Yeah, a great sponsor of this podcast, by the way. Blake Oliver: Thank you, Xero. You can [00:15:00] tell when a company is design-led. That's the way it feels to me; just very thoughtful. Everything is very thoughtful with Xero - with the product, with the events, and the mission.  Shawn Kanungo: By the way, do we have to throw in a Xero ... Like the drop, the midroll? Because this is pretty much the midroll, right now, right? Blake Oliver: Yeah, no, we probably don't have to do a promo message for this episode.  Shawn Kanungo: I wanna get your perspective on this, because [00:15:30] you know this space way more than I do, in terms of the cloud-accounting space. Do you think that it will be a winner-take-all market? You look at other spaces, whether it's in CRM, or whether it's in HR. There's companies that always come up that basically win the game. Do you think that there will be a winner take all ...? You were talking about QBO; we're talking about Xero, Sage, whatever. What is your hot take on this?  Blake Oliver: David likes to [00:16:00] talk about this on the podcast, where, if you look at Intuit in the heyday of desktop accounting software, when it owned 80-90 percent of the US market and it was all desktop, the total addressable market for cloud accounting is 10 times greater than that. There were only something like a few million businesses in the United States using QuickBooks Desktop. There's like 30 or 40 million that could be using accounting software. It's amazing, actually, so [00:16:30] many businesses ... Here we are on the cutting edge of disruption, talking about cloud. There are so many businesses that are still using Excel to do their accounting.  Shawn Kanungo: Actually, every single business is still using Excel in some sort of way. Blake Oliver: Right, but as their primary system of recordkeeping. That is really what I see Xero and any other software developer competing against is that status quo. My hope, and this is why we try to keep the podcast [00:17:00] agnostic-  Shawn Kanungo: Exactly. Blake Oliver: -and independent is that the more voices there are, the more options there are, the better it is for the end customer, for the accountants, for the people working for these companies, when they're competing. We want a competitive marketplace. Shawn Kanungo: Totally. Blake Oliver: There's so much greenfield available. I think it was- Steve Amos was on stage earlier saying that Xero has penetrated three [00:17:30] percent of the total addressable market in the United States. Shawn Kanungo: That's crazy.  Blake Oliver: Right? It's not like Xero and QBO are competing for the same customers. They're actually competing for people switching off of desktop software. Shawn Kanungo: Do you think there'll be a winner? Blake Oliver: I hope that there are many winners. It's gonna be interesting. Now we're gonna get nerdy here. Intuit and Xero are very different companies with very different strategies. I'd love to hear your perspective on this. Xero has been in the United States market for 10 years now, probably, but they've struggled [00:18:00] to gain a toehold. Now, the growth is amazing. There are over 100,000 businesses in the U.S. using Xero; but compare that to 2-3 million on a QuickBooks Online type product. This episode of The Cloud Accounting Podcast is sponsored by TOA Global. As you know, most firms struggle with attracting, managing, and retaining staff, and finding staff is getting tougher every day. This is where TOA Global could help. TOA Global is the most professional outsourcing partner to help you build and manage a global accounting team. By building a global accounting team, you'll be able to take away the time-consuming, process-oriented work from your local team, while building a cost-effective team offshore. As people experts, TOA Global can help you select and develop your best team members easily, using their expert ecosystem of people, security, technology, and professional development tools. To learn how to build out your world-class team today, head over to That its Cloud Accounting Podcast dot promo forward slash T-O-A-G-L-O-B-A-L.  Blake Oliver: How does Xero gain market share? How do they ... Because everyone knows what QuickBooks is, right? Shawn Kanungo: Totally. Blake Oliver: That's the barrier. Shawn Kanungo: Intuit, yeah ... They're not a laggard. They are innovative. Obviously, they have a bigger machine than Xero. Brad Smith, the ex-CEO of Intuit, made a critical decision, I think, when he first came on. QuickBooks, a lot of the products were just like shrink-wrapped [00:19:30] products that you could just get off the shelf. He had a pivotal point that changed the direction of Intuit. The reason why they're now continuously doing well in the States is that they changed their product into a platform, just like how Xero is, working with other developers. They actually opened up their platform, so other competitors- third parties, competitors could come onto their product. I mean, that's a very- that's [00:20:00] a fundamental shift around how you think about your organization bringing competitors into the mix. They're not an organization that has gotten nostalgic. In fact, they have disrupted themselves. If you look at some of the best organizations in the world ... Today, I brought up the story of Netflix and how they disrupted themselves. Intuit's not afraid of doing that. Obviously, you're seeing Xero come up. They're the upstart. They're the global upstarts coming in, trying to take a space out [00:20:30] of this company, but I don't see Intuit as ... They're the incumbent, but I don't see them as a laggard. I also see them as innovative. So, I think that the race is not necessarily gonna be about product. I think it's gonna be about ecosystem. I think it's gonna be about who can you add to your ecosystem faster than others? Whether it's Shopify ... Of course, all these guys you're gonna work with ... Probably both companies. But it's like who can integrate and make the ecosystem more seamless, so that if I'm a small business, and I say, "Well, I'm on Squarespace, and [00:21:00] I have Shopify, and I have Workday as HR ..." Who can actually integrate those pieces better? I think that's the game, because a software is a software; it should be seamless, it should be user-friendly. They're both getting to that point. But that's where I think the game is gonna be won. Blake Oliver: Well, we saw that with the Stripe announcement this morning. Shawn Kanungo: Totally. Blake Oliver: Deep Stripe integration into Xero. It's interesting, because it's something that I think business owners will be even more excited about than accountants. For accountants, [00:21:30] we're kind of used to already working around these issues, but for a business owner signing up today on Xero, the ability to just pair it with a mobile card reader and then do recurring payments with invoices and not have to do some other separate processing method, I think that's gonna make a big difference. Shawn Kanungo: It's funny, Tony, the new President for the Americas, came on stage, and he talked about the business owner not caring about the software. They don't. Ask any business owner who's starting a business. They [00:22:00] don't care about accounting. They don't want-  Blake Oliver: They just want a solution, which- Shawn Kanungo: They don't care about the software- Blake Oliver: -I think is a good lesson for all the accountants in the room, because a lot of the folks here, myself included, we make the mistake of talking, I think, too much about the software- Shawn Kanungo: Yes. Blake Oliver: -when we're talking to our clients. We get really nerdy about it. We're like, "Oh, there's this great solution, Xero. I'm gonna put you on it, and these integrations. We're gonna get Gusto for payroll. We're gonna do this with Bill ..." You can see the eyes glaze over. The business owner is ... We're looking at it from our perspective, because we love connecting these [00:22:30] apps. We have fun with it. The business owner, they just want a solution. Shawn Kanungo: Exactly. Blake Oliver: They just want you to take care of it. I learned, when I was in practice, to gradually not bring that out. If they wanna know how I'm doing it, that's great. I'll educate them. But I look at it more from their perspective. Your bills are gonna get paid. Your cash flow's gonna be monitored. Payroll's gonna be taken care of. Then, after that, talk about how we do it. Shawn Kanungo: Totally! Business owners don't go into business wanting to be in accounting or into software. They [00:23:00] go into business selling donuts. That's what they're in business for. This is why I think the game will be won with the people who can take all those ecosystems. You meet a business owner; they're like, "Yeah, our website's on this, and we're using this." I'm like, "Oh, yeah, we can integrate all that. It's all good." That's where the game will be won. I look at a great company like Slack. I don't know if you use Slack.  Blake Oliver: Oh, yeah.  Shawn Kanungo: I'm a big proponent. I love Slack. I mean, Slack is not crazy. It's like WhatsApp [00:23:30] or BBM for business [cross talk] Blake Oliver: We had IRC 20 years ago, right? Shawn Kanungo: Totally.  Blake Oliver: It's just chat. Shawn Kanungo: It's chat- Blake Oliver: But it's ... Something is different ... What do you think is different about Slack that makes it amazing?  Shawn Kanungo: What they've done is they have integrated- they've made it so easy for third-party developers to be on Slack. They've integrated things like ... I use Trello all the time. So, Trello's in there. Mailchimp. All these different things are integrated within Slack, so you don't have to leave the ecosystem. They've built it for it. I look at Shopify, as a [00:24:00] Canadian company, in Ottawa, they've done the same thing. They've done a great job at creating apps and ecosystems. This is ...  Blake Oliver: Well, you said this earlier. This is a theme here. The winners are the apps ... We could even probably put accountants in this group, too - the integrators. The more you connect with, the more valuable you are, as a company, as an app, probably as an individual, too. Shawn Kanungo: Exactly. No, 100 [00:24:30] percent. When I talked about ... Going back to this idea of a linear accountant versus an exponential accountant, things that I highlighted was, number one, focusing on capabilities; things like improvisation, and imagination, and creativity - all those things that build a culture of innovation are most important, as opposed to just jobs, and skills. I think reskilling is great, but we can reskill anybody, but actually having those capabilities will be competitive advantage. Number one's capabilities. Number two is actually automation; looking [00:25:00] at your entire business to say how can we make this easier? How can we automate it? By the way, there's technologies out there that could do that. Number three is ecosystems, which is very important. Number four is really around experimentation. We've been so engineered to think about efficiency - how do we make things better - as opposed to thinking how do we try something new and try something different? The last thing is really around unlearning. That, to me, is the most difficult part for accountants, because we've been ingrained in this idea of what accounting is and what should be - the debits and credits. When [00:25:30] all these technologies in an ecosystem come to play, the tools that you had, being an accountant and the things that you brought up with, with being an accountant, might actually disappear. We have to almost like let go of it. Blake Oliver: I wanna talk to you more about those last two points. You said experimentation and learning. Shawn Kanungo: Unlearning.  Blake Oliver: Unlearning. Unlearning! I love that. Let's talk about experimentation. This was my frustration, when I was at a large firm - there wasn't time for experimentation- [00:26:00] Shawn Kanungo: Okay, yeah.  Blake Oliver: -because I had to be billable. I wanna know what you think. You filled out a lotta time sheets, right? Shawn Kanungo: 100 percent. Blake Oliver: For 12 years at Deloitte. Shawn Kanungo: 100 percent. Blake Oliver: Do you think that is a barrier to innovation in accounting firms? Shawn Kanungo: Oh, my God. Well, don't get me started on billable hours. That's such an archaic way of managing your business. This is why the big firms and medium-sized firms ... I don't know who came up with this idea. The game has changed. Now it's about providing [00:26:30] value as opposed to like, "Oh, I spent eight hours on cash." How do you experiment when your performance management is not linked to experimentation? It's not linked. When do I have time? I'm working on this core stuff already. Blake Oliver: Yeah.  Shawn Kanungo: It's very difficult. I'm not saying it's easy to do, but experimentation ... The whole point of experimentation is that you take something very small - very small problem, very small sprint, very small team - and try to work on something that might [00:27:00] make the business better; it might make your life a little bit easier. It's hard to do. You need to get leadership on side to say, "Hey, listen, we're gonna try some new things. By the way, we're not gonna be billable when we do that." That takes a lot of balls to do and tell your leadership that "We need to go off and do that." The other piece is around performance management. You look at every single- every single firm, the metrics are designed to be around billable hours - maybe like engagement [00:27:30] surveys or whatever - but it's not getting engineered for experimentation. I think your performance management should also incorporate experimentation; meaning how many shots are you taking? How many failures have you tried? That is not engineered into performance management. There are some pieces to make that experimentation happen. Leadership is one and being accepting that people are gonna experiment. Number two is baking that into your performance management, which is really important. At [00:28:00] every single firm, we work in different silos. I was fortunate enough ... I'm from a small city, and we were able to experiment and try new things, because we got paid by clients. At the end of the day, they just care- they just want a solution. They just want value back. We'd get to take a little bit of our funding from our client and start innovating on their dime with things that they may need. Clients never know. I talked about this at the beginning of the conversation - clients [00:28:30] don't know what they need or want. They don't know how to innovate. They say, "We want we want X," but maybe they actually need X, and Y, and Z. I think accounting firms or consulting firms, they have such a great opportunity to innovate, because they're already getting paid, and the client doesn't give a ... They don't care how their value's gonna get delivered. So, I think even taking a small portion of your budget and saying how can we try a new way of doing this, making it faster? I've [00:29:00] noticed that every time we take this approach, we always become under budget. We always help open up their eyes about what possibilities could be, because we took some risk. It's hard. I'm not sitting here saying it's easy, but the organizations that value experimentation will be the ones that win. Blake Oliver: I'm sure some of our listeners are in firms that they are trying to internally disrupt, or they want to. They would love to see change happen, but they don't feel like they have the power to do so. What would you say to a [00:29:30] senior accountant or a manager who doesn't- that is not a partner; can't make that change happen? How do you get that maybe older generation, the generation of the partnership where people are really nostalgic ...? They're holding onto their tools. They don't wanna let go of what works. What advice would you have for me to start- get them on board? Shawn Kanungo: First of all, if you're a senior accountant, you're listening to this in your cubicle, or you're [00:30:00] running on the treadmill, or you're doing the dishes at home, I would say tomorrow morning, or this morning, when you're listening to this, walk into your office and try to get yourself fired ... Basically means try to take a risk that might change the trajectory of your organization or might change the trajectory of your career, because this is what's really on the line is your career. You'll find, 99.999 percent of the time, you're not gonna get fired. Blake Oliver: Right. Shawn Kanungo: You're actually gonna take a risk that [00:30:30] might change the trajectory. So, try to think about how to get fired. The second thing is, I think within ... I talked a little bit about this idea of innovation cloud. If you can show your leaders ... Not tell them something; not ask them to take an idea and do something differently. Don't do that. Actually show them something. Actually do something very small. Say, "Hey, by the way, we tried this ..." I did this on the weekend. I did this on weeknights. I did this with my own money. Listen, sometimes you gotta [00:31:00] put skin in the game. "We tried something very small, and it worked.". Instead of hypothesizing if an idea is gonna work or not, now the leaders are like, "Oh, my God, okay ..." [cross talk] You showed me something. I'm now experiencing a change." Now, you're like, "Okay, let me try more stuff." Now you're building your brand equity around innovation and cloud, and then you can take more shots. That's what happened to me. You start off small; try a little small experiment, and then ... This is what happened to me. I [00:31:30] was known as the innovation guy. I didn't term myself as the innovation guy. It's not something that happened, like somebody stamped it. It's because I took small experiments all the time, and I started to build my own innovation cloud. I think this is the way of doing it is also ... It's a faster way of getting your leaders to trust you. You've gotta take small shots. You do. Blake Oliver: Take risks with your own time. If I think back on it, all the successful stuff that I've managed to accomplish, it's doing it on the [00:32:00] side [cross talk]. Shawn Kanungo: Dude, you're doing this podcast ... Blake Oliver: Nights and weekends. Shawn Kanungo: Nights and weekends for your own passion. You're doing something different. You're doing something creative. You're bringing your community together. Nobody asked you to do this. You don't have to do this. But it's inspiring. I think more people should take this route to say, "Well, I'm an accountant, but I'm starting a podcast. I'm gonna get into the media game." More people should do this. Blake Oliver: You said [00:32:30] something about accounting, making accounting sexy, or accounting being sexy. Shawn Kanungo: Yeah. Blake Oliver: That is not exactly ... Those two words, they don't go together very often. What do you mean by that? Shawn Kanungo: Well, it makes sense, because when you remove all the things that we don't wanna do as accountants, whether it's like copying/pasting between systems, whether it's data entry, whether it's coming up with financial reports ... A lot of the systems are doing that, and there's lot of people that can help us out with that. I think, in the future, accounting is gonna be a lot more about [00:33:00] schmoozing your client; influencing, presenting, engaging, persuading your client to take a particular action. That means that we have to double down on being better storytellers. I believe that a base skill for accountants will be video; a base skill for accountants will be presentation styles and motion graphics. Blake Oliver: What you mean by video? Like being on video chat, or making videos, or-  Shawn Kanungo: Making videos; making videos for [00:33:30] presentations ... Listen, I do a lotta video. I post video every week. Video is the fastest way to gain trust with clients. Blake Oliver: A lot of accountants, you know, aren't comfortable necessarily with that. Did we get into accounting to-  Shawn Kanungo: I'm not saying you necessarily have to be on [cross talk] I agree [cross talk] Blake Oliver: Well, let me ask you this. We hear this a lot that we need to improve our presentation skills. We need to become better storytellers. What if I'm not a very good storyteller right now, but I know I need to do this? How do I learn to [00:34:00] do that? How do I get better at it? Shawn Kanungo: That's a great question. Blake Oliver: How did you get good at it? Because you're obviously a great storyteller. Shawn Kanungo: I appreciate that. I'm just gonna clip that out and put it somewhere ... I think it's just about starting with small projects. Again, it comes back to this idea of pairing something that you really love with the project that you have in mind. You're really great at audio. That is your jam. You can say that you're [00:34:30] one of the best accountants in the world, when it comes to this craft of using audio to tell stories. It's like what is your medium. I don't care if it's video ... I think video is important. I'm not necessarily saying that you have to be on camera, but using video to influence/persuade clients to take a particular path with stats, or facts, or whatever ... Maybe it's not video; maybe it's not audio; maybe it's writing; maybe it's graphics; maybe it's design. Whatever your skill set is, in terms of displaying pieces, just [00:35:00] connect that with your clients. I think everybody has some sort of skill in storytelling. Storytelling is not just speaking. It's not just video. It's not just ... Just find what you're good at and you're passionate about and connect it. I'm really good at connecting different things together. I'm really good at ... Speaking is definitely something I'm good at, but video is also something I'm really good at - not only from being on camera, but also creating graphics. If you watch my presentation, it's all motion graphics. It's all very visual-. [00:35:30] Blake Oliver: Did you create that yourself?  Shawn Kanungo: Myself and my team, yeah ... I try to use my skills, and these are the only skills that I have and apply it to storytelling. Blake Oliver: How did you get into public speaking? Have you always been comfortable with it? Because you seemed very comfortable on stage, and, as a CPA, that's a little bit unusual. Shawn Kanungo: Yep. The magic is that I was in management consulting for a very, very long time. Blake Oliver: That's getting up in front of very powerful, important people- Shawn Kanungo: It's just reps. You're [00:36:00] getting in front of executives - CEOs, leaders - talking about things that you probably just researched the night before. We used to play this game called PowerPoint Karaoke, where you would- and sometimes, we'd do this in front of my client, where you don't know what the next slide is, but you're trying to explain to a client what's happening, what's coming up next. You're building your improvisational skills just by doing that. I think it's a really great way of like ... Just playing PowerPoint Karaoke- Blake Oliver: I love that term.  Shawn Kanungo: -trying to explain things [00:36:30] and doing it in a convincing and a powerful way. I think it's just putting in the reps. For me, the reason why I got into public speaking is that a lot of people wanted to hear about the work that we were doing in innovation, and digital transformation, so we'd go get up and talk to clients. Then I'd get on to conferences; then I'd do keynotes ... The momentum has built. Blake Oliver: It sounds like the lesson is you really just gotta get up there and do it. Shawn Kanungo: 100 percent, 100 percent. A lotta people say, [00:37:00] "Well, how do I start? Where do I start?" You just ... Listen, I did a hundred talks for free, before anybody paid me to speak. You just build up the reps, and just get in front of anybody and speak. I think that's a really important skill set. I think it's ... Now, when everybody is on their phones, being able to articulate yourself and story-tell is gonna be such an important skill set, especially for accountants.  Blake Oliver: Shawn, thanks so much for speaking with me today. Shawn Kanungo: Man, this was crazy. What an amazing podcast. Blake Oliver: Thank you.  Shawn Kanungo: It's an honor. I messaged you ... This is how it happened. I [00:37:30] saw you. Blake Oliver: This is Twitter [cross talk]  Shawn Kanungo: I saw you in the conference. I recognized you from the pod. I said, "Hey, man, I just love your podcast. I'd love to catch up." I didn't have no idea that I would be on the pod. Then, just through Twitter, and then we got to meet up. You're doing so much for this community. It means a lot. I think the biggest favor that you could do is just like go rate, and review, and subscribe. Yeah, man, that's it.  Blake Oliver: So, Shawn, if people wanna connect with you online, find out what you're up to, where should they go? Shawn Kanungo: I [00:38:00] think the best thing is probably LinkedIn. That's my platform. You can connect with me there, Shawn Kanungo. I'm Shawn Kanungo everywhere - Insta, Twitter, Facebook. I have a public profile on Facebook. LinkedIn is probably the best way. Shoot me a note, and we can chat about innovation, disruption, technology, accounting. It's all good. Blake Oliver: Thanks so much for joining me and have a great flight home. Shawn Kanungo: Awesome. Thank you. This episode of The Cloud Accounting Podcast is sponsored by Halon Tax. As a new business owner and first-time tax filer, I needed the peace of mind knowing that my S-Corp return was done correctly. I signed up for Halon Tax, connected to my QuickBooks Online, filled out about four fields in a wizard, clarified two small items with the Halon Tax team. A few days later, I got a text telling me my return was finished. I launched Halon Tax and e-signed my return. The whole end-to-end process was painless and, frankly, kind of amazing. Now, Halon Tax is working with bookkeepers and accountants like yourself to offer the same amazing experience to your small business clients. They're even offering a one-year free trial to all your clients. This even includes your own dedicated tax CPA. To learn more about this exciting offer from Halon Tax, head over to That is Cloud Accounting Podcast dot promo forward slash H-A-L-O-N-T-A-X. 
#Xerocon San Diego: LivePlan's Sabrina Parsons, CEO, and Kathy Gregory, Director of Strategic Development
SponsorLivePlan: Show Notes  00:31 – A personal word of thanks to our sponsors  01:00 – Sabrina and Kathy define advisory from their perspective   03:05 – Finding the why - Asking the right questions to help build a strong advisory service  07:01 – Another model of combining bookkeeping and advisory - former guest, Kenji Kuramoto  10:22 – Worth repeating: Bookkeeping is not what creates value in the mind of the business owner   11:37 – Adapt or die ... Stop fighting AI and get creative   13:29 – Sometimes Kool-Aid is good. Sabrina breaks down the myth that strategic planning is not a small-business imperative 15:14 – Want to take your client-advisory skills to the next level? The LivePlan Client Advisory Services Boot Camp is just what you need!   16:41 – For small businesses that don't have the budget for CFO-level help, there are endless opportunities for accountants skilled in strategic planning and advisory  19:10 – When you've got the 'who, what, where, and why,' LivePlan gives you the 'how'   19:53 – Kathy shares the inspiration behind LivePlan and describes some key features  22:08 – LivePlan is launching a new QuickBooks Desktop Beta. If you're interested in taking part, visit to learn more 25:16 – LivePlan offers tools that remove the complications and make it easy for small business owners to work alongside their accountants  27:15 – Why Palo Alto transformed from desktop to cloud, and how they found the method to their madness within their own method - LivePlan   31:53 – How does Palo Alto Software stay profitable, and continue to reinvest in its own growth? Strategic planning   34:07 – Sabrina give a brief glimpse into her side gig - advocating for working moms and working families and how it took her to the White House more than once Connect with Sabrina and Kathy  Email: Website: Twitter - LivePlan: @LivePlanSA Twitter - Sabrina: @mommyceo LinkedIn - Sabrina: Twitter - Kathy: @KathyGregory1 LinkedIn - Kathy: Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.  Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast, I'm Blake Oliver. David Leary: I'm David Leary. Kathy Gregory: I'm Kathy Gregory. Sabrina Parsons: I'm Sabrina Parsons. David Leary: Sabrina and Kathy, where are you guys from? Sabrina Parsons: We are from Palo Alto Software, makers of LivePlan and also Outpost. But I think, for today, it's really makers of LivePlan, because we're here to talk to you guys about all kinds of things related to LivePlan and advisory. David Leary: There's the word - advisory. We're in the Summer [00:00:30] of Advisory. We were talking about this last night- Blake Oliver: Yes, yes ... Oh, and before we get into that, though, thank you so much for sponsoring and making this whole event possible for us. Sabrina Parsons: Oh, absolutely. Blake Oliver: We appreciate it!  Sabrina Parsons: We love Cloud Accounting Podcast. David Leary: Thank you. Blake Oliver: So, yeah, let's dive right into it. Let's do it. Advisory. David Leary: It's everywhere. We actually had an interview earlier today, where they're starting to ... People are getting scared by the word advisory, because it's like- Kathy Gregory: Being overused.  David Leary: Do advisory or die! What does it mean to you two? [00:01:00] Kathy Gregory: To me, you can't advise a small business or client. You can't advise your client unless you're doing strategic planning. For me, right away, you better be doing some planning, and broad-level strategic planning should be included and then the follow-up to the planning, but it can't be just ... I've heard people talk about advising on IT solutions, and advising, obviously, on tax. I completely understand that, and I think all of that can be included, but you're not gonna help a small business get [00:01:30] to where they wanna be - either grow or retain where they are, or even scale back ... Sometimes a business is trying to slow down, and a person's trying to retire out, or they're trying to just take it down and end it. Whatever it is, whatever the plan is, you're not gonna be able to do that unless there is strategic planning involved. David Leary: There's no plan, there's no map. What are you advising? Kathy Gregory: Right. Sabrina Parsons: Exactly, and I think that's ... I know, people get scared about it, and I think 'The Summer of Advisory' ... They're hearing all these things. There's a lot [00:02:00] going on right now, but I think the reason they get scared is because it is so undefined, and people define it in so many different ways, and it feels overwhelming. But, at the end of the day, really what you're doing ... What we all say by advisory, we all mean helping small businesses. That's what I like to kind of reframe and help people understand that it doesn't have to be this big, scary word that means 500 things. Really, what you're doing is helping a small business client. [00:02:30] How do you help a small business client without understanding their strategic roadmap, and where are they going, and really interpreting their financials for them? Because if they need IT help, maybe they'll come to you, but they're already there with you because you know numbers. If you're an accountant, that's why a small business client is with you. I think sometimes I see that disconnect, where, sure, you can learn IT, you can advise on IT, but your [00:03:00] strength as an accountant is your- the way you know numbers and embrace them. Blake Oliver: One thing I see, and I'm guilty of this, is people will ... When I was in practice, they'd come to me and they'd want a service. They'd say, "I need bookkeeping." Then I would just jump in and start doing that for them. Or maybe they would need some controller-type services. It was always best if I stopped for a moment, and I asked why. Not just "Why do you need my services?" Which I got better at asking that ... From a sales perspective, that's really important. But also, it's like, "Why are you in [00:03:30] business?" Sabrina Parsons: Yes.  Blake Oliver: We fail to stop and think about that. It could be, like you said, for strategic planning, Kathy. Maybe they wanna sell the business; they wanna retire, or I don't know, maybe it's just like they wanna quit their day job ... Everybody has a different reason, right? Financial independence- Kathy Gregory: I think, in the accounting industry, and in the public accounting industry, for so long, because of compliance-based services, a public accountant can literally sit back and wait for the client to come to them, because [00:04:00] they need whatever compliance-based service they need. But if you're going to work at a higher level with a client and help them grow their business, or help them achieve their goals, you have to lean forward, and you have to ask those questions that are different, and new, and more broad. Then, know how to apply that information. If the client tells you, "I'm trying to really just make enough money to send my kid to college," or, "I'm trying to purchase a new piece of capital [inaudible] company," or whatever it is, all of those are [00:04:30] business goals, and you have to be able to translate those into whatever financial plan that will help them achieve that. It's just it's a different type of work. Blake Oliver: Yeah. How do we get comfortable with that as accountants? Sabrina Parsons: You know, I think the first place is to also realize - and Blake, I don't know how much- whether you'll agree with me or not - but I feel like if you ask those questions to a small business, "Why do you need the bookkeeping?" I feel like we hear a lot from small businesses. We work directly with them. We started, and still [00:05:00] to this day, more than 80 percent of our revenue is direct from small businesses. We interact with millions of small businesses ... When they have the money to hire a bookkeeper, they don't understand what bookkeeping means. What they think to themselves is, "Whew ... I finally made it. I have enough money for somebody else to do the financials.". Blake Oliver: Right.  Sabrina Parsons: They don't understand that bookkeeping is literally compliance, and you're not helping [00:05:30] them analyze what's going on. You're just recording what happened. I think that's part of the disconnect. When accountants are afraid of advisory, because they don't know how to sell it, the biggest message I want them to hear is you don't have to sell it. You just have to do it, because that's why a small business owner is coming to you. I think it's a huge disconnect-. Kathy Gregory: And be able to know what the right price is for your firm and your ecosystem for that, too. Make sure you charge for it. But [00:06:00] yeah, just do it, because they expect that. Blake Oliver: Yeah, a lotta times, we give it away, right? Kathy Gregory: Yes!  Blake Oliver: We charge for a tax return, but we're doing a ton of advisory that's way more valuable to the owner. David Leary: And the owners will pay for it, because they'll understand the value- Kathy Gregory: If they understand it. Yeah, and I think that seems to be the next step for the accounting industry as a whole is to decide what it is, and then be comfortable with systematizing it, because I think it's ... I hear two things said a lot at conferences and at places, that advisory is knowledge [00:06:30] work. I hear that a lot. It's knowledge work ... It is, 100 percent, but you can still systematize knowledge work. You can still do that. You can set up for yourself a process and a system. Then, once you have that, then it's defined, and then you know what you're doing, and you can train your staff on it, and everybody knows what their piece of it is. Then, you can price it easier, and you can market it easier, and you know what that is. They need to embrace both - the fact that it's knowledge work, but that you can also make it a system. David Leary: Yeah. I think, this summer, a couple things I've [00:07:00] observed is Kenji ... Say Kenji's last name for me.  Blake Oliver: Kuramoto.  David Leary: Kuramoto ... Who was actually at The Accounting Salon. He was ... If you go back a couple episodes, listeners, you can listen to his interview. It was interesting, because he started 100-percent virtual CFO advising only. He's worked his way backwards into bookkeeping, because he realized he can't do any advising if their books aren't accurate-  Kathy Gregory: Oh, yeah. You've gotta have that.  David Leary: What's interesting, you guys have an app, LivePlan, and that connects to the accounting systems, but then also helps do the advising, right? There was a slide last week on Twitter. It was at the AICPA, and somebody was ... It was like, "Stop [00:07:30] doing bookkeeping and do advising!"  Kathy Gregory: Oh, boy.  Blake Oliver: Oh, yeah.  David Leary: How is that possible? Kathy Gregory: No, it's not possible.  David Leary: How do you do advising if you don't have good numbers? Kathy Gregory: No, no, you gotta have good numbers and a very clean month-end, or at least having it happen quickly. Sabrina Parsons: And if you can control that ... Kenji working his way to bookkeeping and understanding that, then your advising is gonna be better, because garbage in is garbage out. If you've got terrible charts of accounts and someone isn't doing the bookkeeping correctly, it's gonna be really, really difficult. But there's [00:08:00] an opportunity there, whether you wanna do all the bookkeeping or not. This is also where I think people have to not be afraid of what technology is bringing to the table.  I know a lotta people are afraid of all kinds of online services now, including Intuit, that are offering bookkeeping, right? I really want an accountant to look at that and say, "Okay, is that work that I wanna do - that work that's commoditized that I [00:08:30] can no longer charge as much for, because it's so easy for people to go online, and find services, and package services at ridiculous rates?" If it's well done, and you can then do the advisory, the value is not in the bookkeeping.  At some point, it's even gonna be ... I mean, technology, automation, IA, is gonna continue to work on the bookkeeping side and continue to make that an automated artificial-intelligence [00:09:00] process. That's fine. Let that happen, and use that, and then build your advisory services. Wouldn't you rather do super-interesting work, help a business grow, or sell, or add a partner, or add a location? Really be that entrepreneurial catalyst for your small business. That's so much more invigorating. You can bring passion to that. Don't be afraid of all the online services, because there's only gonna be more, and more, [00:09:30] and more of them, and that's okay. Kathy Gregory: You get to keep playing with numbers, too. It's not like you don't get to keep playing with numbers. You just do them in a different way; you analyze them in different way. Knowing that each metric that comes off of your standard P&L balance sheet and cash flow ties back to something going on in the operation that's working, either well or not well? That's a super-fun job. I nerd out over that all day. I think it's so fun to dig into those metrics and try to figure out [00:10:00] what's happening in a small business operation that's working, or not working, then asking the right questions of the business owner. There's nothing more fun than that, and there's nothing more fun than seeing their eyes light up, when you hit on something, you've uncovered something. They go, "Yeah ... Yes, that's not working right, and I don't understand it, but I didn't get the numbers to be able to know it." You know what I mean? It's like these two brains coming together. It's so fun. David Leary: Something you said, Sabrina, and I think this is the problem ... People hear some of the sentences, but maybe not the whole conversation. You said bookkeeping is not the value, but I [00:10:30] think people hear that, like, "Bookkeeping is not valuable," but you can't do the valuable stuff without solid bookkeeping. Nobody's saying bookkeeping is not valuable. Blake Oliver: Well, it's not what creates the value in the mind of the business owner. David Leary: Correct. Yes. Blake Oliver: It's essential to do the work, right? Sabrina Parsons: Exactly. Exactly. I think that's exactly right. Blake, you should repeat that again.  Blake Oliver: It is not what creates value in the mind of the business owner. Sabrina Parsons: Exactly. You also can't fight ... I believe you shouldn't [00:11:00] fight that technology battle. You should embrace it. I don't mean that bookkeepers aren't smart, that they aren't doing valuable work, that what they do today is somehow lesser. I just mean this is the reality. This is what's happening, and they can't stop that. Right? It's the same way where, if you're a taxi driver, at this point, you've probably stopped fighting rideshare, right?  Blake Oliver: Yeah, probably. Sabrina Parsons: Ten years ago, it didn't exist; five years ago, taxi [00:11:30] drivers fought it; at this point, they've given up fighting it and they've either joined or moved on to do something else-  David Leary: We've talked about that on the podcast, in the past. There were some articles, because we brought this up ... There's taxi drivers, and taxi associations, in taxi people that are doing very creative additional services. It's forced them to step up their game. Blake Oliver: Yellow Cab, I think, created their own app now. They are being forced to improve, I think, and the same thing's happening in our industry with these software plus a service type of offerings - the Botkeepers, the ScaleFactors, the- [00:12:00] David Leary: QuickBooks Live-  Blake Oliver: QuickBooks Lives. That's forcing us all to up our game, but it's also creating a bigger market for these services. Now, people are aware, "Hey, this is not just a niche thing. I can get this." Sabrina Parsons: The other part that I think, to Kathy's point of this can be exciting work, is that we've lived in an environment in the U.S., where small businesses understand they need bookkeeping. As soon as they can afford it, they want somebody else to do it. They've understood [00:12:30] that they can't run a business without bookkeeping software. That's why you've got all these big players and lots of players in this market. They embrace that. They know that. But they're still failing. If you start a business in five years, 70-percent chance that you're outta business. 60 percent of the ones that fail were actually profitable. They ran out of cash. They're not managing their business, and this has been for years, and years, and years. What I think is the super-exciting [00:13:00] opportunity is that if all of these services online and all of this technology really pushes bookkeepers and accountants to innovate and to be really thoughtful about what they bring to the table and bring real value with their experience, their knowledge, their human mind that technology can't do, we actually have a chance in the U.S. of changing the economy. Small businesses drive the economy, and a rising tide lifts all boats. I [00:13:30] know I sound like I'm dispensing Kool-Aid, but I find it to be super-intriguing to look at those numbers and think about could we really affect the economy by getting accountants to do this sort of advisory work? It is good for small businesses. Intuit does strategic planning. Xero does strategic planning. All public companies do. When we know and we see all those reports from Wall Street ... Did [00:14:00] Google make their numbers? How's Microsoft doing? How's Intuit doing? What they're talking about is their forecast, and what they're doing is saying, "Here's the forecast, here's the actual. Did they make their numbers?" Startups do strategic plans.  Small businesses are kinda told this myth that business planning is for startups only, and for raising capital, which is a total myth, because even large [00:14:30] private companies, they do planning, and they have a board, and the board has to approve the plans, and they look at it every month. It's almost this myth that small businesses have been told, and then accept, because strategic planning is hard, that they don't need it yet. Yet, everybody else that's successful and bigger does it. Kathy Gregory: Even without the board, even ... I spent years in a fairly large engineering firm, and we did it just for middle operational management, pulling data [00:15:00] out of the accounting system, because the accounting department wasn't doing that; massaging it in a way that made sense, building forecasts, so that operations managers could make decisions; could make strategic decisions. This episode of The Cloud Accounting Podcast is sponsored by LivePlan. This has been The Summer of Advisory. Everyone at every conference, and every session is telling you to become an advisor, but the fact is, a 50-minute CPE session at a conference does not make you an advisor. [00:15:30] Some of you even took to Twitter to vent about this fact. Well, I have some good news for you. Believe it or not, Twitter led to the creation of a three-day course, or should I say a boot camp on advisory? Yes, that is right. You can now really become an advisor by attending the LivePlan Client Advisory Services Boot Camp on October 2, 3, and 4, 2019. The three-day event in Eugene, Oregon, will include deep learning, and hands-on workshops to learn the LivePlan method for strategic advising, and how to market, sell and deliver this vital client [00:16:00] advisory service to your small business clients. To learn more about attending the LivePlan Advisory Bootcamp, head over to That is Cloud Accounting Podcast dot promo forward slash L-P-B-O-O-T-C-A-M-P.  David Leary: I suspect small businesses do wanna make plans, but they get caught up running their business, and that's where partnering with somebody who could actually come in and just ... In a way, it's advising- just [00:16:30] holding them accountable a little bit is just gonna help them. Sabrina Parsons: Also, if the accountant does the advisory, because the small business owner is doing a million things ... Really, it's like Kenji being a CFO for hire. That's what they need. They just, they can't take on that role. They don't have that knowledge. They don't have the expertise. They need that value from somebody else, and they will welcome it. Once you do it correctly, they'll be addicted. They are not gonna drop you. Your [00:17:00] retention with that client is gonna be as long as they have their business. If you're charging them $2,000 a month, you're not getting a CFO for $24,000 a year. That is not happening. You can't get that sort of strategic level of experience for that sort of money. So, if an accountant can do that, there is room for thousands of dollars a month that are still completely doable [00:17:30] for a small business, and the value is there. Blake Oliver: So, I'm an accountant. I'm ready to make this leap. I want to get started in advisory, but I don't know where to get started - that's the classic problem. I wanna do it ...  David Leary: You just go to conference. There's lots of sessions. Blake Oliver: How does LivePlan create that starting point for me. How does it work?  Kathy Gregory: From soup to nuts, if you do it [00:18:00] all, you would start with a broad conversation with your client to understand their big goals and begin doing real strategic planning with them that would include everything from looking at their market, and looking at how they're selling, and who they're selling to, and why they're selling it, and having a fairly deep discussion with them about that. Then translating those things into a forecast. There are simpler ways to start, if that is work that is new to you. In our software, you can dive into those- yes, I'm sorry?  Blake Oliver: Sorry, I'm just trying [00:18:30] to picture it in my mind. I'm creating a strategic plan. It's like a business plan. Am I thinking the same terminology?  Kathy Gregory: Yeah, we call it a Lean Plan. Blake Oliver: Lean Plan, okay-  Sabrina Parsons: I will just interject, before Kathy describes it, because you asked how LivePlan helps. I think the number-one thing, to David's joke of just go to conferences, because they have all these sessions, is that I think part of the problem for accountants is they all get talked at about why, and they [00:19:00] don't need that. They already bought it. They know why-. Blake Oliver: This is the classic problem of conferences, all high level. Sabrina Parsons: Exactly.  Blake Oliver: "You need to do this." Then you go home, and you wonder like, "Well, how do I do it?" Sabrina Parsons: Exactly. Exactly. This is what we've learned over the years. Our tool is a tool for small business owners. It is a platform and a system for accountants, and it's two different things. What we've really understood that what accountants needed is not to be convinced. They're convinced. They buy it. They [00:19:30] nod their heads. Then they go home, and they don't know what to do. What Kathy's really built, and then I'll let her describe it, is the 'how,' and in a way that makes sense to someone who's been doing tax and compliance work. It is a system and a process with tasks that you can learn how to do. We've really gotten into the weeds to show accountants, and train them- Blake Oliver: Yeah, we like checklists, so this is-  Sabrina Parsons: Yes, yes-  Kathy Gregory: It is a checklist. Yeah, my background is in a lot of things, but business process design [00:20:00] is one big piece of it. So, it was realizing- it was coming to these conferences, when I first came to Palo Alto Software, and realizing, oh, this industry doesn't have a business process for this, and that really is what's needed. Then, once there is a master kind of business process, then firms can adopt that in whatever way makes sense depending on the things they focus on, or the skills they have. If they focus on only bookkeeping, there's pieces of it you can do. If you're sort of CFOs for hire, then it's different; but you have to have the master plan first and then be able to [00:20:30] pick apart pieces of it you like- Blake Oliver: Got it.  Kathy Gregory: -and deal with capacity planning, and resource allocation, and all of the things that you have to think about when you roll out a new service. Blake Oliver: So super-high level, just overview for those who are not familiar at all with LivePlan ... I think I used LivePlan actually, myself, as a business owner. Kathy Gregory: Great. Blake Oliver: I don't know if you know that. When I started my firm, I created my business plan, that one-page pitch to get an investor with LivePlan-. Sabrina Parsons: That's awesome. Blake Oliver: Now, of course, I was bad, and I didn't follow through with the forecasting, and the [00:21:00] budget-to-actuals, and any of that-. David Leary: That's because he was a bookkeeper, and he was too busy. Blake Oliver: I was too busy. So, that I'm familiar with. I could create that business plan and try to get investment or just really distill in my mind what it is I'm doing, which is actually just a great exercise. Can you explain your business in like-. Kathy Gregory: Isn't it great? Blake Oliver: -in one sentence? Kathy Gregory: And how it limits you to those characters? Blake Oliver: Yes!  Kathy Gregory: Because it seems like a nothing thing, but it's important, because you strip out all the words that don't matter, and you get down to the words that ... It really is powerful. Blake Oliver: So that part I did. Then, if I had actually continued, I would then [00:21:30] create a financial forecast? Kathy Gregory: Yeah. Blake Oliver: I wanna hire employees; I wanna expand ... It's building out a forecast. Kathy Gregory: Yeah, and then really thinking through the things to forecast. That's a critical piece of it. The software helps you think through that. If you already have maybe a chart of accounts with a ledger, you've got codes already, but the things you wanna forecast should be strategic to your business, and they should roll out of that Lean Plan. Blake Oliver: Got it. Then, once I've created that, I can pull in the actuals from my accounting software. What GLs do [00:22:00] you support? Xero, obviously, because you're here at Xerocon. You're also doing ...?  Kathy Gregory: And QuickBooks Online-  Blake Oliver: QuickBooks Online. I pull in those numbers ...  Sabrina Parsons: We are also going back to ... We used to support QuickBooks Desktop. The Sync Manager went away. We were hesitant to build our own sync manager, waiting to see what Intuit was gonna do; but it's clear that QuickBooks Desktop, at this point, still has a lotta usage, and it isn't [00:22:30] going away. So, we are launching our beta for accountants next week. If anyone is curious and they want to be part of the QuickBooks Desktop beta, they can contact us. If they just come to a, they can find the information, but we are back to supporting QuickBooks Desktop.  Blake Oliver: All right. Well, the folks who are signing up for Right Networks, for their Always On feature, which claims to make QuickBooks Desktop just as good as QuickBooks Online, now [00:23:00] they've got LivePlan integrating with it, too. Sabrina Parsons: We are actually using Right Networks, their ...  Kathy Gregory: Autofy.  Sabrina Parsons: They just purchased Autofy, and-  David Leary: Yep, yep, that's what we were talking about [cross talk] Sabrina Parsons: Autofy is who's actually doing our Desktop integration-. Blake Oliver: You don't have to be logged into as a user, too, for the sync to work, all that stuff?  Sabrina Parsons: Exactly. Exactly.  Blake Oliver: We oughta talk about this more, David. I'm actually more bullish on hosting than you might think. Yeah, yeah. Well, that's great. Okay, now it's kind of making sense in my mind. Kathy Gregory: Yeah, so you [00:23:30] connect the accounting solution, and then LivePlan's dashboard is going to present you with the metrics - each individual metric. It was built, remember, for small businesses. That's the cool thing about it, for accountants, that they don't have to now reconstruct and build reports that makes sense to small businesses, because they're already built; they're already done. Blake Oliver: Got it. Kathy Gregory: Then it shows me very clearly the difference between plan and actual; really simply, like with green arrows up mean good, and red arrows down mean bad. [00:24:00] Again, it's cool for the accountant, because it's a talking point. Have you ever been in an advisory meeting or any a meeting with your client, maybe at month end, and you've got the talking points. You know what you're gonna tell them, but your brain just breaks down in the middle of the meeting, and you kind of forget the points? This is nice, because it helps guide you through- Blake Oliver: It's that agenda for that meeting.  Kathy Gregory: Yeah, it is. Then our business process that's outside of LivePlan comes with meeting agendas, and scripting, and all the other things that help you- that support you. Sabrina Parsons: Initially, if you're [00:24:30] afraid, or you don't know, the scripting is great, right? We kind of prompt you with, "Here's some questions you should be asking." When people actually start doing this, then they build their own questions. They get more comfortable. They understand their style and the style of the client. It goes back to that whole idea of everybody gets the why; How? How?  We've realized that getting down to even providing you with scripts really helps people get over that hurdle and that fear, because the other part that I think is really vital, and [00:25:00] I would say is a competitive differentiator for LivePlan versus other reporting analytics apps, is that we didn't build this first and only for accountants, who then put stuff together and presented to clients. That's fine, and other people have chosen to do that, but we built it so that the small business owner works with the accountant; so that the small business owner's also using the dashboard, and so that the reports make sense to the small business owner, because what we heard from accountants [00:25:30] is they stop using a lot of these other tools because they send stuff to their client, and the client never responds, doesn't look at it month, after month, after month. They don't, because it's too complicated, because it wasn't built for them.  David Leary: And essentially, because you guys have a 25-30 years’ experience servicing small businesses, and you attacked it from that direction. It reminds me of Intuit; years ago, in my career at Intuit, with TurboTax. They, at one time, hired an editor from People Magazine to basically go in and change all the text in TurboTax, because it [00:26:00] was easier to use then, because it was written with all this accounting language, and nobody could understand it. It's kinda the same thing. If people are coming from the accounting dashboard side, trying to push down the other direction, you're probably not gonna communicate to the small business owners. You guys already had that DNA in you, and then came the other direction. Sabrina Parsons: Exactly. We actually started working with the accountants because they came to us. We got to a point of critical mass of having LivePlan out there in the marketplace, that the small business owners were taking LivePlan to the accountants. We started hearing [00:26:30] from accountants saying, "What is this? Do you have trainings? How do I use it? My small business clients have it, and now I have to learn how to use it." We really were pulled by the accountants to come into this market because of our DNA with small business owners and the fact that the small businesses were already using it, which I think was appealing to accountants. They don't have to position, or sell, or market this other tool or these other reports. David Leary: Could you speak to ... It's [00:27:00] not really advisory related, but I think it's a cool story, because everybody's in this transition still, constantly - desktop to cloud. We just talked about desktop a couple seconds ago. But, tell the history of LivePlan, and Palo Alto software, because it was a desktop company, and now you've changed it into a SaaS cloud company. You've made the transition yourself. Sabrina Parsons: Yes, we have. I took over the business in 2007, and we were basically a Windows desktop company. Our flagship product was Business Plan Pro. A lot of people have used it; millions of entrepreneurs. [00:27:30] But the writing was on the wall, and we understood, as a software development firm, what the cloud had to offer in terms of usability, in terms of development, getting away from that Golden Master, and installations, and the support side; also, the ability to iterate more quickly and really bring customers what they want consistently and not once a year with this big release. We started, [00:28:00] at that point, planning. I think what is interesting to me is for people to understand that the way LivePlan was born was really saying, yes, we've gotta go in the cloud, but also recognizing that Business Plan Pro wasn't doing the ongoing management the small businesses needed. We were using Business Plan Pro. Every year, we'd create our strategic plan, and every month, we would compare plan, versus actual, versus previous period, versus previous [00:28:30] year, because those data points tell you a lot. If you're a retail store, and you're looking in January, you look at previous period December, and the numbers are not gonna look ... You're gonna look, like, "Oh, my God, I'm doing so much less ..." but that's obvious, right? Seasonality. You want previous period, but you also want same period last year, because that tells you even more. That was the way we managed Palo Alto Software every month, but it entailed exporting from Business Plan [00:29:00] Pro, exporting from Accounting Solution, massaging data, and so- David Leary: Because you were using your own product, you realized all the things it sucked at.  Sabrina Parsons: Exactly. Exactly, and the ongoing small business management ... We built LivePlan, and the methodology that's behind that process and system that Kathy has built for accountants is what we used to build LivePlan. There is a management methodology to LivePlan. When you take a company and you switch it from Windows development [00:29:30] software to cloud, you have to have whole different developers. There's a lot of resources there, and there's a real big push on cash. All of a sudden, you need to hire all these other people for a product that's not bringing you revenue yet. We changed technologies. That's hard. It can be very difficult for a company. We also changed business models. We had a piece of software that we were selling, and it was more transactional. You bought it ... Yes, we got some upgrades, but you bought it, and you didn't [00:30:00] keep paying us, right? You bought it, and, on average, we were making 160 dollars from every user, because we had a couple of versions - $99, $199 - different things that you could buy, but we were getting all the money at once.  So, not only did we have to switch from a resource perspective and hire all these new developers, but we also, all of a sudden, were in a situation, where we were gonna be getting $20 a month ... We didn't know, were we only gonna get $20? Were we gonna get $300? Were we [00:30:30] gonna get $160? Were we gonna get more people but less money? That's kind of a scary thing and a huge cash flow implication, because all of a sudden, we're getting 20 bucks, and it's taking us over a year to get to that average transaction that we already had.  The only way we were able to do that is using the LivePlan method. That's exactly how we used it, right? We forecasted. We understood our cash. What [00:31:00] we did is that we saw our runway, and we slowly introduced LivePlan, while still selling Business Plan Pro, so that we were able to really strategically ... But there's no way we coulda done it without managing-. Blake Oliver: You did a cross fade. Sabrina Parsons: We did ... Obviously, I'm proud of it, because I love LivePlan, but I also want people to know it's how we manage the business. We are privately owned. No debt. Cash-flow [00:31:30] positive. We've never taken on an investment, and we continue to grow. We've done that, and we're able to do that because we eat our own dog food, because we do strategic planning, because we don't spend money we don't have. Blake Oliver: That's interesting. That's kind of a rarity. You are profitable, cash-flow positive, and not interested in taking on investment money?  Sabrina Parsons: No.  Blake Oliver: Are you planning to stay private, and just ...?  Sabrina Parsons: You never know what happens in the future, but it works for us, and we don't need it. We've built up cash that we can [00:32:00] reinvest. We've built up enough cash that we've launched a whole 'nother product. We've been able to invest in that product. We have a team of 20 people and that product is just barely launched. We've done that all with using our own revenue and profits from our existing product line, but it takes a lot of super-careful planning. Blake Oliver: That's very refreshing. David Leary: It's very hard for companies to get off the desktop model to a cloud model. We actually did an interview last week with Shafat from BQE- Blake Oliver: Similar [00:32:30] story. David Leary: Similar story. Instead of how you cross-faded it, to take Blake's term-  Blake Oliver: He did a hard cut off. David Leary: He just stopped. The second it was done, it was launched. You couldn't buy his desktop product anymore. He went for it. Maybe he didn't use LivePlan. He just jumped right in.  Sabrina Parsons: Maybe he had a credit line, or he had some investors. You have to have some cash to do that, right?  Blake Oliver: You've got to have a lotta cash to take that kinda risk. David Leary: I think it was private, but, see, they were an existing desktop app that had an established base for a long time. Blake Oliver: If people wanna find out more about LivePlan [00:33:00] and connect with you, and your company online, where can they do that? Kathy Gregory: If you're an accountant, the best way is you can email us at That's the first way. Our website is Then, in the upper right-hand corner, it'll say Solutions, and there's a dropdown, and you can pick Accountants. That'll get you to the site that has all the resources. There are tons of resources on our site. Blake Oliver: Are you two on the social medias? Do you like the Twitter- Kathy Gregory: Oh, yeah, I'm on the social medias. My Twitter handle, I'm supposed to know that, right? I think it's @KMGregory1. I [00:33:30] believe that's what it is. Yeah, that's what it is. I have fun on Twitter all the time with accountants, but I can't recall ... [cross talk]  Blake Oliver: It's like knowing my own phone number. Kathy Gregory: Yeah, right, but I do have-  Sabrina Parsons: Kathy also helps manage our LivePlan Strategic Advisor Twitter, and that's @LivePlanSA.  Kathy Gregory: Yeah, @LivePlanSA, and there's a blog that I think is fun and good on the site.  Blake Oliver: All right, great.  Sabrina Parsons: And my Twitter handle is @mommyceo Blake Oliver: I love that. And as always, I am @BlakeTOliver. [00:34:00] How about you, David? David Leary: I'm @David Leary. I think this is interesting, because I don't think we've had anybody on our podcast that has spoken to a president before. Sabrina Parsons: In my spare time, I do a lot of advocating for working moms and working families. I have been lucky enough to be invited to two summits during the Obama presidencies, and, yes, was able to have some really cool experiences because of that and speak at a White House summit-. Blake Oliver: Wow. [00:34:30] Sabrina Parsons: -and bring two of my three boys to come ... One of them was has been too young to also be able to experience that ... Being a CEO, woman, working mom in a technology software company, there's not a whole lot of us. I am hoping that 20 years from now, that's different, but I am definitely a big advocate of working parents, and working moms, and try to do a lot [00:35:00] of political advocacy to actually make change. David Leary: Nice.  Blake Oliver: Wonderful. Thanks so much for joining us [cross talk] Yeah, great to talk to you.  Sabrina Parsons: Thank you.  Kathy Gregory: Thanks so much. It was really fun.  David Leary: All right, bye.  
QuickBooks Live, busy season Saturdays, the gender pay gap, bans on cashless stores, upcoming accounting conferences, and more
Show Notes 00:08 -- We got more reviews. Thank you! Give us a review on iTunes and we’ll read it on one of our weekly shows. 01:43 -- A survey revealed that you’ll get the best results from a blog post if you spend six hours working on it. 03:57 -- QuickBooks Live is now official — details on Intuit’s official Firm of the Future blog include the fact that Intuit has already hired 10 Boise-based ProAdvisors as part of the QuickBooks Live Bookkeeping team.  09:07 -- A survey by the IMA suggests that the gender pay gap is closing for management accountants. 10:57 -- A 2018 survey shows that mandatory busy season Saturdays are on the decline at CPA firms, but a shocking number still require their staff to work weekends.  12:11 -- Meanwhile, 8 percent of CPA firms will hire “anyone who is breathing,” according to a survey of AICPA Engage 2018 attendees. Could there be a correlation? 13:21 -- If you want to have a better busy season experience, stop pointing the finger at clients and start asking your team how you can facilitate a better process that makes it easy for clients to get you what you need. 16:59 -- The cashless debate continues! LA Eater asks, “Restaurants Are Going Cashless. Is It Always Best for Business?” Meanwhile, Philadelphia has already banned cashless stores, citing discrimination, and San Francisco is mulling its own ban. Gene Marks says you’re crazy if you reject any form of payment. 22:09 -- Facebook admitted that it stored hundreds of millions of user passwords in plain text for years, potentially enabling thousands of its employees to access them. 26:34 -- Here’s a rundown of upcoming accounting and bookkeeping training shows and conferences in 2019, plus all the ones David and Blake will be attending. 28:51 -- When you’re booking your accommodations this upcoming conference season, consider the Rodeway Inn. They’ve got the best hotel WiFi, according to research. Get in TouchThanks for listening! Let us know what you think on Twitter. Follow @BlakeTOliver and @DavidLeary. Also, to make sure you don’t miss any Cloud Accounting Podcast news, please like our Facebook page!TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: We got some more reviews, David. David Leary: That's exciting. More reviews, iTunes reviews?  Blake Oliver: iTunes reviews. Yeah, it seems to be working. David Leary: This is gonna be my favorite part of the show, because I don't have an iPhone, so I don't get to read these, so it's wonderful to hear you read these. Blake Oliver: Why don't we take turns? I'll go first. David Leary: Oh, okay. Blake Oliver: Stick bro said, "Blake and David do a great job keeping up on changes in the industry. The podcast saves me time doing my own research and keeps [00:00:30] me up to date. Let's admit it, accounting is boring; yet, they make this otherwise boring topic interesting." Wow, I think that might be the best compliment we've gotten yet, David. We made a boring topic interesting.  David Leary: Cloud accounting is not boring. We have a review from Stan? Blake Oliver: He's not sure if that's his username. David Leary: It may not actually be Stan, okay? "Look forward to this podcast each week. Five stars. Apps, bots, innovation should be at the front of every accountant's mind, and these guys really bring home the importance of doing your research. Keep [00:01:00] up the good work!"  Blake Oliver: Thanks, Stan. Lastly, "Great way to stay up to date on #CloudAccounting. Five stars," from Dave Wiese. Thank you, David. Can I get CPE credits for listening to the #CloudAccountingPodcast? Asking for a friend. I learn more from David Leary and Blake Oliver, than from any of these courses." We reached out to NASBA on Twitter. They didn't reply to my message. I'm not sure why. Oh, well ...  David Leary: I think there's requirements for CPE. We have to actually put out an agenda- Blake Oliver: Yes, learning [00:01:30] objectives-. David Leary: -ahead of time, of what we're gonna talk about, but we don't know what we're gonna talk about until the news happens, so, it's very, very difficult, there. Blake Oliver: I think it has to have some interactive element, as well, so we might have to shift this to a live show. David Leary: People put their headphones in their ears. That's interactive. Blake Oliver: Well, David ... What's new this week?  David Leary: Let me ask you this ... I think your best blog post ever was the QuickBooks Live one you did - all-time hits. How many hours did you spend working on that?  Blake Oliver: It took me like a day. David Leary: A day. Okay. Blake Oliver: Actually, I have to correct the record. My number-one blog post, by far, of all time, [00:02:00] is a post on my blog about remote work - places that you can remote work. It was called something like "X Places You Can Work Other than a Coffee Shop." I get thousands, and thousands of hits every month that just dwarf the hits I get on anything accounting-related. David Leary: How long did you spend on that post?  Blake Oliver: It's hard to say, because it was a list that I compiled, but, yeah, it took five, or six hours. David Leary: This is from American Express's small-business-trends blog, "Survey Reveals 56% of Bloggers Get Better Results by Spending 6 Hours on a Post." Really, the [00:02:30] gist of the article is if you're writing a blog post for your accounting firm, or your app, or wherever you're writing your blog post for, the ones you spend time on, and actually have deep, enriching, good content, in the long run, will get you more eyeballs than lots of just blabble posts about nothing. Blake Oliver: That makes sense, right? It's quality over quantity. David Leary: You are correct, it's about quality over quantity. I'll just read you a quote from here. "In the report, Jay Baer of Convince [00:03:00] & Convert highlights the importance of definitive content. Baer says, "To succeed with blogging (or just about any written word online) you must provide definitive content. Not just some half-baked flotsam and jetsam that's 85 percent of the same as 5,237 other posts on the internet, but real meaty stuff." I think that's the service we provide, because we're the ones going through the 5,237 other posts, and bringing you guys the top stories every week. Blake Oliver: It's a lot of crap to wade through. Yeah, just know that it takes [00:03:30] a lot of effort to put this together. Well-  David Leary: This ties right into to the next story. As of about two hours ago, there was a new blog post on the Firm of the Future blog, which is an Intuit property. This is about QuickBooks Live bookkeeping. It's super-super-deep, and it has everything you wanna know, straight from the horse's mouth, which means, now, Blake, you'll have less work to do on your next blog post. Blake Oliver: Well, that's good. I don't have to dig so much. It's really nice to see all of this coming out, upfront. David, what's the news about QuickBooks Live?  David Leary: The [00:04:00] article covers a little bit about what we already knew, that this is a test, and it has some of the stats that Intuit's been communicating. I think we talked about, before, about 89 percent of the small businesses say they're more successful when working with an accountant. With that said, there's still 40 percent ... They don't work with an accountant, or ProAdvisor, at all. Part of QuickBooks Live was to match those people up. They actually give a little bit of a history, on this post, about what happened in February of 2019; what happened in March of 2019. In February, they do talk about the test that we've covered [00:04:30] deeply on the podcast; about the pricing test they were doing. Then, they also talked about, in February, that they actually made a hiring of 10 accounting professionals in their Boise office. Blake Oliver: Wow, 10 already ...  David Leary: Remember, you found that job posting in Boise?  Blake Oliver: Yep.  David Leary: Yes, they have hired 10. Now, this is to 'test' this. Blake Oliver: These are 10 ProAdvisors? David Leary: They are 10 ... They're accounting professionals, who are ProAdvisors. Blake Oliver: Got it.  David Leary: They mentioned that this is not their long-term vision. This is just a way for them to start testing the service, because [00:05:00] their long-term vision is to play middleman, and get people paired up with the other ProAdvisors that are out there on the market. Blake Oliver:  ProAdvisors working from home, everywhere in the country, theoretically?  David Leary: Correct. Blake Oliver: Got it.  David Leary: Then, they actually even go into what's next. It's really communicated really well. On March 25th, which is what? Monday morning? Sunday morning? Blake Oliver: Mm-hmm.  David Leary: They're gonna start another version of this test that's a little bit deeper, and they're gonna do even more of a pricing structure, and test on the website, and see how the messaging- to better understand what the small-business owners want. [00:05:30] They will possibly use that to gauge the interest in the service, and possibly match some of the customers up with the Boise ProAdvisors. Then, they also mentioned that they probably are gonna add some  ProAdvisors, and bookkeepers to QuickBooks Live, in Reno, Nevada, because that's where QuickBooks Payroll is.  Blake Oliver: What was interesting to me about this post is they talk about what is going to actually be included in the QuickBooks Live service, because that was not clear. Originally, it was not really made clear in those town halls, in which [00:06:00] ... Who was at the town hall?  David Leary: Joe Woodard did the town halls. Rich Preece attended those, from Intuit. Blake Oliver: Got it. It wasn't really clear what the services are, and now, that's being talked about. The article says that, "Pending additional testing, the service will include setup, monthly categorization, reconciliation, reports, year-end closing of books, and help using QuickBooks." Why I find that very interesting is that that is a lot more hands-on than Intuit has portrayed this. It [00:06:30] was portrayed as just, "We're gonna help you use QuickBooks. It's not a replacement for a ProAdvisor," but that scope of services, including setup, monthly categorization, reconciliation, reports, year-end closing of books, and help using QuickBooks? That's the meat and potatoes of a lot of QuickBooks bookkeepers. David Leary: Yep.  Blake Oliver: They also said that you're not going to get the same person assigned to you, as a business owner, every month; that you might have to deal with different people each time ... I don't see how that's gonna be possible, if [00:07:00] that's the scope of services. There's gonna have to be a one-to-one relationship. David Leary: With this testing, they're really trying to ... Intuit's trying to get their own questions answered, themselves, and they actually put these out there, like, "Hey, we have our own questions we're trying to answer." How much will the service really cost? How much are ProAdvisors, and bookkeepers gonna be paid as part of this service? Then, what is the scope of services being offered through it? Then, what happens to somebody if they maybe outgrow that level of service? Intuit has their own questions, and it's actually great that they're putting it out here, and just ... They're [00:07:30] being honest, and open, and having the conversation, and showing their own vulnerabilities, like, "We don't know these answers yet." Kudos to Intuit putting this out. I wish it had the date, and time; I wish it said who wrote it, but it doesn't have any of those types of things. Blake Oliver: There is the question answered in this post that a lot of people have had, which is will this service be offered to someone already connected to an accountant? The official answer is, "Our goal is to connect small businesses not currently connected to a ProAdvisor bookkeeper, or accountant." Now, [00:08:00] I have a hard time seeing how they can keep those two groups separated - the business owners who are already connected to an accountant, or a bookkeeper, and the ones who don't have one. How's Intuit gonna know that? There are inevitably gonna be people who have a current relationship with a ProAdvisor that see this new option, and that disrupts that relationship, and I'm curious to know how Intuit will handle that. David Leary: The only way they're gonna know is if somebody [has] actually, in their QuickBooks, have added their ProAdvisor, their accountant. Then, there's real data; there's a real connection [00:08:30] there, where Customer A - small-business owner A - is connected to Accountant B.  Blake Oliver: How are they going to only market to the people who don't have an accountant? It's impossible. David Leary: The trouble, I think, is really gonna be for ... Let's say you are a small business, and you are, "Hey, I'm kind of not too keen on my current bookkeeper, or my current ProAdvisor, and I wanna shop around a little bit. Maybe I wanna test out this QuickBooks Live." Blake Oliver: Yeah, exactly. David Leary: Are you gonna be kind of blocked from trying out a new service?  Blake Oliver: No, of course not.  David Leary: Yeah, you're right. That's, again, another open question that's gonna have to be answered over time. [00:09:00] Blake Oliver: All right, cool.  David Leary: More time on high-quality blog posts ... That's the theme here, because this is a really good one that obviously somebody spent some time on. Blake Oliver: Following up on our discussion about the new list, the "Top 50 Women in Accounting" list that Practice Ignition sponsored, I've been paying a little more attention to this, recently. I spotted an article in CFO Magazine, called, "For Management Accountants, Gender Pay Gap is Closing." The really interesting stat in this article is that, in [00:09:30] the United States, the median total pay for women in 2018, for management accountants, was 88 percent of what men earned. Now, that's not that great, right? That's according to a survey by the Institute of Management Accountants. We can certainly do much better. The good news is that's up from 85 percent in 2017 - from 85 percent on the dollar to 88 percent on the dollar in 2018. The really good news in this survey: for women in their 20s, in the 20 to 29 age group, women [00:10:00] earned a median 97 percent of what their male counterparts did. At the other end of the age spectrum, for women 50 and older, the figure was just 80 percent. Clearly, there is a change happening, and globally, there actually is no compensation gap anymore. If anything, women are earning more than men, in certain areas of the world. It's good news, right? Hopefully, though, as those women in their 20s move into their 30s, and 40s, that the gap doesn't widen again. David Leary: Well, I think, though, the [00:10:30] big problem that's always faced females is that they already start out down 12 percent, or 18 percent, from the get-go. Then, even if they get raises that are equivalent to men, by the time it's all said and done, it's like compound interest, right?  Blake Oliver: Right.  David Leary: They're just gonna be way behind. The fact that they're starting out almost on equal footing, from the beginning, at 97 percent ... I know somebody's gonna be like, "That's still not equal!" But, it's just- it's gonna stack up to where that gap should not get as wide, as they go further on in their careers. Blake Oliver: Now, moving on to busy-season news, I've [00:11:00] got a busy-season stat for you, David. David Leary: What's this one? Blake Oliver: This stat is from a report by Convergence Coaching. The report is called the "Anytime Anywhere Work Survey," and it was done in 2018. The one I wanna call to your attention, David, is this question about Saturdays being mandatory, or optional in busy season. David Leary: I think there's another accountant who took a photo of their parking lot that showed all the cars in it on a Saturday morning, and he was really proud that his firm had those employees showing up to work on a Saturday morning, like it was a teamwork effort. Blake Oliver: The stat [00:11:30] from this report that stuck out to me about optional, or mandatory Saturdays is that, in 2016, 39 percent of firms offered optional Saturdays; only 39 percent of firms made Saturdays optional, but that jumped to 58 percent in 2018, so, now, over half of firms have optional Saturdays. David Leary: What if you even are making your employees work all Saturdays, and you still can't get all the work done? What do you do then?  Blake Oliver: That's the thing is that it's not about how much time the people are working. You [00:12:00] don't need them coming into the office; you don't need to mandate that they work on Saturdays, because people will figure out how to get their workload done, if you trust them. That's the difference between the old-school mentality, and the new. David Leary: Got it.  Blake Oliver: That's really important, right? It's really important to trust people, because it is getting harder and harder to hire. I came across another stat that was actually really funny, from the AICPA ENGAGE Conference in 2018. There was an audience survey done there that Accounting Today published about hiring standards. The question [00:12:30] is: how strict is your firm, in terms of who you will hire? Eight percent of firms, or eight percent of attendees said that they'll hire "anyone who is breathing," and 41 percent said they have an ideal, but will settle. Only 51 percent of attendees said that they, and their firms adhere to high standards, when they're hiring. That’s probably because it's getting harder, and harder to find talent. There's a labor shortage in the CPA, and the accounting world. Going back to this question of optional, or mandatory Saturdays, if [00:13:00] your firm still has mandatory Saturdays, especially the kind where you have to come into the office, who's gonna wanna work at your firm? David Leary: That's crazy. Anyone who is breathing ... Eight percent.  Blake Oliver: I mean, who knows? This was an audience survey, so, maybe there were some cheeky answers there, right?  David Leary: They were being funny. Yeah, that could be [cross talk]  Blake Oliver: -clearly, half of firms are having to settle; not getting necessarily who they want. I got one more busy-season story for you, David. David Leary: Okay. Blake Oliver: Last one. This is called, "Point with Your Thumb, Not with Your Finger," published in Accounting Today, [00:13:30] by Kyle Walters, who is a partner at L&H CPAs and Advisors, in Dallas. He talks in this article, or at least he starts off this article by talking about a policy that his firm has, which is that you can only point at people with your thumb, not with your index finger. That sounds a little strange ... Why would you have that policy? Well, it is more a metaphor than anything. The idea is that when you point at people with your thumb, you're really pointing at yourself. He says in this article, in [00:14:00] busy season, it's really important to point at yourself, not the client, and not blame the client for the problems of not getting documentation, or not getting what you need on time to get your work done. He says, "You're not an accountant, you're a luxury service provider." If your clients were organized, and got everything to you in time, and you didn't have to ask them multiple times to get things done, they probably wouldn't need you to do their taxes. They could probably do it themselves if they were that organized, right?  David Leary: He's got a point. He's got [00:14:30] a point. Blake Oliver: He talks about some ways that you can improve the flow of communication, the client experience, and reduce this friction that occurs between the staff, and the clients. For instance, sending a tax organizer in January is not enough. He says you really "need to walk clients through the process without being condescending.". Maybe do some things that are not typical, such as send a courier to your client's house to pick up documents, [00:15:00] or create a short instructional video that walks new, or tech-challenged clients through your portal. How about adding an administrative assistant whose job is to help people use the portal better? If you take those steps to really hold your clients hands, then it'll make everything better for both your staff, and for the clients, who ... Really, how can we blame them for not wanting to do their taxes? It's basically the worst thing for a lot of people; they hate it, right? I just liked his approach of [00:15:30] thinking of your firm as a luxury service provider, rather than a compliance shop. David Leary: Yeah, and I think that the firms that probably need this the most right now are heads down, and will not know this article was written, and did not have time to read it ... If people read this four weeks from now, they can really implement this stuff for next season. Blake Oliver: I like this, too, because there's all these people out there talking about how tax preparers/compliance shops need to go into advisory services. I don't really think that that's necessarily how you have to differentiate yourself. [00:16:00] Yes, it's true that compliance work is becoming more, and more automated; it's requiring less, and less effort, but you can continue to provide incredible value by taking the extra time you have, now that you're not typing in transactions, or manually moving around tax data ... You can take that extra time you have and offer of better client experience. There's many, many, many ways to improve the client experience, right now, that we can think of. It could simply be that by offering [00:16:30] better customer service, you can continue to do the services you've already done, or always done, and continue to see your profits grow. The last thing I liked in this article a lot is about making mistakes. When your firm makes a mistake, you shouldn't just say, "I'm sorry, my firm made a mistake." You should also say, "I made a mistake, and here's what we're gonna do to fix it. Are you okay with that, Mr. and Mrs. Smith?" By doing that, you'll have a much better relationship with the client, and a smoother-running firm the next time around. David Leary: Blake, I [00:17:00] actually ... If you know, I'm a foodie ... I don't know if I'm a foodie, or not. I just made that up. I was reading Eater Magazine, the Los Angeles Edition, and I saw an article ... I actually sent it to you, when I saw it, because I was like, "Hey, Blake's in LA. This could be an on-location investigation for him." The title of the article is, "More LA Restaurants are Going Cashless. Is it Always Best for Business?" This is a restaurant magazine talking about this. They talk about how Blue Bottle recently announced plans ... Blue Bottle's kind of a- [00:17:30] Blake Oliver: High-end- David Leary: -fancy version of Starbucks. High-end coffee- Blake Oliver: A high-end coffee company.  David Leary: They're experimenting with a new cashless-payment model, meaning customers are no longer gonna pay for food and drinks with anything other than a credit card, or a phone app, or your iWatch type of a situation. They really go into some of the bigger news ... There's a salad chain called Sweetgreen, and they had a robbery in New York City, at one of their stores - cash robbery - and it led to a police chase, and somebody wound up being shot.  They have famously [00:18:00] just said, "No more cash," because of the safety of their employees, and their restaurants. I know we've talked about this before, as far as, from a cloud-accounting standpoint, it's super-efficient to just only do credit cards, because then you could just move those in the accounting system, and you don't have to count cash; you don't have to go to bank to do a deposit. It's just easier from a bookkeeping perspective to do that. Blake Oliver: Oh, yeah.  David Leary: But, now, there's a lot of arguing happening on both sides of this. before I jump into the other articles that are related to this, did you actually go [00:18:30] to one of these restaurants, or go to one of these ... I'm sorry, no-cash restaurants in LA? Blake Oliver: I've definitely been to cash-only- or to card-only restaurants in Los Angeles. I can't remember exactly where, but I wouldn't have even noticed, because I can't remember the last time I paid for lunch, or anything with cash. I think it's great, but there are people that are upset about this, and complaining. I know that Philadelphia recently banned cashless stores. Is that right?  David Leary: There was [00:19:00] recent news, this week. They banned cashless stores. The argument is that if anybody is maybe, I'm not saying off the grid, but they don't have credit cards for personal-finance reasons, they are the  unbanked, they just personally choose not to have them, it's a division-. Blake Oliver: Right. David Leary: Some of them are arguing it's haves and have-nots, but a lot of these restaurant owners, if you start reading these articles, make arguments  that like, "Is it really our fault?" What if a restaurant takes cash, but they only sell $50 hamburgers; they take cash, with only $50 hamburgers. Are [00:19:30] they gonna be creating a cultural divide? There's a lot of arguments around this. Gene Marks is saying you're crazy to do cash-only, because he looks at this as you don't- and I'll read-  Blake Oliver: Not cash ... He's not saying ... You're crazy to do cashless. David Leary: Cashless, yes. Yeah, sorry, or even go cash-only. His article is "Cash-less? Cash Only? You've Gotta be Crazy to Reject Any Forms of Payment." I kind of- I get the whole efficiency; I get safety; I get having [00:20:00] to physically count cash. Restaurants are expensive to run, and if you're paying somebody to count cash every night, that's money you could be paying your kitchen staff. I get those arguments. but I think I'm on Gene's page here, where you have to really accept all possible payments. My dream would be is, with Xero, or QuickBooks, when I send an invoice to somebody, I wanna have 25 payment options available to my customer, so they can pay me any way that works for them. That's Gene Marks' argument on this. Blake Oliver: Look, the [00:20:30] problem here in LA is that, in a lot of places, people are just not paying with cash, so, it becomes silly for the businesses to accept it, because very few people are paying with it. I understand the argument that it could be discriminatory, especially towards poor people who don't have banking, but there's gotta be a better solution than forcing all businesses to take cash, which they don't wanna do. Maybe the city could put out free card- ATMs that issue prepaid cards, or something like that. It's expensive, and dangerous to have cash [00:21:00] on hand in a store, so, I disagree with Gene, here. I think that businesses should do whatever they think is best for their businesses ... Clearly, a lot of them have decided that they don't need to accept cash in order to succeed. David Leary: I can see this being a battle, because my small-business advocate - me - is like, "This is super-efficient; small businesses kinda have to do this." They just have to, to survive. It's tough, right?  Blake Oliver: What about airlines? Airlines stopped taking cash on planes a long time ago. Are we gonna start forcing them to do [00:21:30] that again?  David Leary: Yeah. Blake Oliver: You can only pay for your drinks, and your food with a credit card on all the flights that I've been on - Delta, Southwest, American. I haven't paid cash anything. If we're okay with that, why can't stores do it, too?  David Leary: I wouldn't be surprised if this gets bubbling up to the higher political levels. Right now, it's a lot of individual cities, and states that are banning this, but I could see this becoming a national political topic. Maybe it's even in the election, because, you're right, so many transactions are on credit card. Are we gonna have discussions [00:22:00] about getting rid of all cash, at a national level? Who knows? Anybody who has a client, who has a cash register, and listens to this podcast - this is gonna affect you. Blake Oliver: You wanna talk about the Facebook thing next? I couldn't believe when I read it. Apparently, hundreds of millions of people's passwords were being stored in plain text on Facebook's servers?  David Leary: Yeah, not only were they stored in plain text; possibly up to 20,000 Facebook employees had access to this. Blake Oliver: It gets worse, and worse for Facebook, every day. Where did you see this? David Leary: It's on KrebsonSecurity, [00:22:30] which is ... I think we've talked about this once before. This is THE place people go to find out about security hacks, security breaches, and problems like this. They do really deep articles, investigative-type reporting, and journalism. It's KrebsonSecurity. Essentially, the headline is pretty straightforward: "Facebook Stored Hundreds of Millions of User Passwords in Plain Text for Years." This goes back to 2012. Blake Oliver: They're not making people reset their passwords, though, and they're not saying that the passwords were necessarily used in a bad way. It was just [00:23:00] exposed on their internal networks. David Leary: That's correct. Based on their investigation, they're pretty confident it's not being used improperly. Nobody stole these. My bigger concern with this is Facebook, in a way, is hiring the A+++++ of talent. Facebook is; Apple is; Google is, right? They have the highest-flying stocks; they have the most money; the most cash. They're hiring these smartest people in the world, from an engineering standpoint ...  Glaring ... You [00:23:30] could argue this is Security 101. Mistakes like this are happening ... Some of it could be a cultural thing. What about the companies that are hiring just an A+, or an A, or an A-, or maybe a B+ engineer? This is what's kinda scary about this, because even the article talks about GitHub and Twitter both had some similar issue like this, a couple months back. This is kinda scary, because this is like 101. Blake Oliver: If you think about this in the context of all the data that Facebook [00:24:00] has, passwords are the most important thing that they could be protecting, and they are not securing our passwords, which give access to potentially anyone into our accounts. What do you think they are doing to protect all of our personal information that we are out there sharing on Facebook? Well, they're obviously not. That's what the whole Cambridge Analytica scandal was about, that third-party app developers had unfettered access into what appeared to be most of the Facebook database. David Leary: That was a API level; [00:24:30] it was kosher, et cetera, et cetera. Blake Oliver: But internally, imagine you work at Facebook as a developer. Theoretically, those people aren't supposed to be able to go in, and view our Facebook messages, right, David? Well, do you think they probably can? I imagine that a lot of them probably could, if this is how well they were securing our passwords. I wouldn't bet that my messages are safe. David Leary: Up to 20,000 people had access to this. I'm not saying 20,000 people saw them, but-. Blake Oliver: They could have. David Leary: -nobody raised this issue up since 2012? The [00:25:00] whole thing is dumbfounding, and crazy. Blake Oliver: I gotta take the opportunity to tie this back to all of our discussions about third-party providers overseas, serving the CPA profession, especially small ones. If a company like Facebook is not securing data, what do you think the odds are that that "bot" company in The Philippines is securing your client data? I'm gonna say not very good. David Leary: Yeah, it's- Blake Oliver: CPA firms, it's buyer beware in this world, if you are outsourcing your client data; if you're putting your [00:25:30] own data on consumer-quality networks. We really oughta be using B2B software, B2B services, that are audited; that have standards that they publish that will tell you what they're doing with your data, or we're putting ourselves, and our clients at risk. David Leary: The one good thing about things like this coming to light is that this is how they get resolved. Blake Oliver: Facebook seems to just do whatever they want, and nothing gets fixed.  David Leary: I know when ... After, I think, the Cambridge [00:26:00] Analytica stuff broke, I remember, at Intuit, at the time, the board took that very serious; lots of companies took that stuff very serious, and, then, looked at their own APIs, and their own data sets. I'm sure every Fortune 500 company, right now, is performing an investigation on how they're storing people's passwords. There's a ripple effect of how this affects the rest of the industry. I guarantee you, other companies, their CEOs are like, "I don't wanna be on the front page of the Krebs Security thing. What's our security policy around our passwords?" This is gonna- it'll cause [00:26:30] a ripple effect in a good way. Blake Oliver: It's less than one month, really only three weeks until the end of busy season, and you know what that means, David ... It's the beginning of conference season!  David Leary: Conference season. Yes! Yes, yes ... Blake Oliver: Well, one of the big events that are coming up in the next few months, in April, May, June ... What are you gonna be at? David Leary: Mollie Macklin, at Insightful Accountant, she put together a "Training Shows, and Conferences for 2019" blog post. They're not all [00:27:00] here, but it's pretty exhaustive. There's a good 30 shows, and conferences. We'll have that in the show notes, in the links. First off, I think we're both gonna be at The Accounting Salon, which is May 6th, 7th, 8th, correct? Blake Oliver: That is in New Orleans, yes; May 6th through 8th. That's gonna be great. David Leary: Scaling New Heights, and XeroCon are the same week, so, I'm gonna do both- Blake Oliver: Road warrior. David Leary: -I'll be two days at Scaling New Heights, and two days at XeroCon, which will be a little crazy, but I'll make it. Where are you headed? Blake Oliver: Well, actually, FloQast is doing our very first conference, our own user gathering. [00:27:30] David Leary: Congratulations!  Blake Oliver: It's a ton of work already. It's May 16th. It is just for current FloQast users, this first year. We wanted to get our feet wet with that. It's called Take Control, and that is May 16th, in San Francisco. If you are listening, and you happen to be a FloQast user, head over to, and register. I'm also gonna be at the Houston CPA Society 2019 Spring Accounting Expo on May 22nd. I'll be presenting on remote [00:28:00] work, and the chaos of the close. I might go to AICPA ENGAGE, in June. I'm not sure about that yet. I know that FloQast is gonna be there, and then, I will also be at XeroCon San Diego. David Leary: Okay, so we'll both be at XeroCon; overlapping there. Blake Oliver: That's in June 18th, and 19th, and you said that is immediately following Scaling New Heights?  David Leary: They overlap, yes. Blake Oliver: They overlap. Okay, cool.  David Leary: Yeah, they completely overlap, but I will be ditching one early to go to the- to attend the other one slightly late ... That way, I get to do both [00:28:30] in the same week, which should be a lot of fun. We'll do a podcast related to that. This list goes all the way through' ends out in November, with QB Connect - the full, exhaustive list of all the shows you should consider when you have some time here.  I have to vote; my favorite name of any conference listed here ... I'm not going to it, but, the favorite name is Abacus Maximus, which just might be the best conference name of all the conferences listed here. Then, I have one more small article for all of you, when you go traveling to these conferences. This was American Express's small-business trends. You wanna stay [00:29:00] at the Rodeway Inn. Now, do you know why you wanna stay there, Blake?  Blake Oliver: I don't know. I'm kinda getting a little picky with my hotels these days. Why would I want to stay at a place called the Rodeway Inn?  David Leary: Because they have the best hotel Wi-Fi of any hotels, followed by Americas Best Value Inn, Quality Inn & Suites, Days Inn. Blake Oliver: What is it with these inns that have good Wi-Fi? David Leary: They're balancing it out. They're lower-priced. They're providing better service; because the ones with the worst Wi-Fi are the ones that I feel like most business travelers stay at - the [00:29:30] slowest Wi-Fi places. It's the Hilton Hotels, Fairfield, Marriott, Courtyard by Marriott. They have the worst Wi-Fi- Blake Oliver: Aww, man ...  David Leary: -and they cost more. I'm spending twice as much, just to get some Wi-Fi. Blake Oliver: That's why I just gave up, and I bought unlimited on my phone, and I just use my phone as a hotspot, whenever I can, because I just can't- I can't put up with the Wi-Fi that's slower than my cell connection. David Leary:  Blake, is that it? Did we ... We got through everything this week? Blake Oliver: I think we did. Yeah, that's everything for this week. [00:30:00] If people want to get in touch with you, David, online, where can they do that? David Leary: Right. Easiest is Twitter. I'm just @DavidLeary.  Blake Oliver: I am @BlakeTOliver, and don't forget, you can follow The Cloud Accounting Podcast on Facebook. Just go to your Facebook search bar, and type in Cloud Accounting Podcast, and you will find us. Follow our page. Give us a rating on Facebook. We really appreciate that. Also, give us a rating on iTunes, and we'll read it on the air. David Leary: We are now on Twitter, and LinkedIn. [00:30:30] I haven't posted much there, yet, but that's gonna be happening soon. You can find us on LinkedIn, and Twitter. Anywhere it's convenient for you, we're there. Blake Oliver: David, it was a lotta fun. Talk to you next week. David Leary: Bye. Talk to you soon. 
Is Intuit marketing QuickBooks with Live Bookkeeping to clients of ProAdvisors?
SponsorXero: Show Notes 01:21 -- We got some more reviews! Leave us a review on iTunes and we’ll read it on the air. 02:33 -- Scroll to the comments of this review on The College Investor for some pretty scathing reviews of Visor, the $99 tax prep service we covered in the last episode of the Cloud Accounting Podcast (they did not have a good busy season). 03:15 -- Ryan Lazanis says that the only way traditional accounting firms can compete with accounting startups like Visor, Pilot, Bench, and Botkeeper is personalized service.  05:30 -- According to a stat published in the Journal of Accountancy, only 60-70% of small firms (under $1 million in revenue) accept credit cards as a form of payment. 06:31 -- Here’s a story about a CPA who has partnered with other professionals to act as the single point of contact for all his client’s financial needs. It's a great example of how accountants can create plenty of value beyond compliance, which will become increasingly automated over the next decade. 09:31 -- Henry Bloch, the ‘H’ in H&R Block, died at 96. 11:44 -- Intuit appears to be marketing QuickBooks Live to clients of ProAdvisors. 19:24 -- Here’s why there won't be an Uber for Bookkeeping — at least that’s what Blake thought three years ago. Has QuickBooks Live changed that? 21:49 -- Jordyn Dahl, News Editor at LinkedIn, posted about the QuickBooks Advanced Rate Limits. The quantity of comments suggests this is a big deal. 22:32 -- Businesses that invoice via QuickBooks Payments can receive next-day funding for both credit card and ACH transactions. It’s only available to QuickBooks Online and GoPayment customers for now. It costs 1% (max $10) per transaction. Next day is also available for credit cards, with no additional fee. 25:19 -- Intuit sees uptick in TurboTax sales this year. Intuit reported a 5 percent increase in TurboTax units sold this tax season compared to last year, thanks to a 7 percent increase in TurboTax Online sales. Intuit CFO Michelle Clatterback said the company’s consumer group now expects full-year fiscal 2019 revenue growth to be about 10 percent, at the high end of its previous guidance range of 9 to 10 percent. It will be reporting its quarterly earnings on May 23. 26:33 -- Here are the top 10 cities for accountants. A study by AdvisorSmith analyzed 399 small, midsized and large cities across the country based on accounting salary and job availability statistics from the Bureau of Labor, and on the local cost of living from Sperling’s BestPlaces. 28:04 -- The Desktop Accounting Podcast is headed your way soon! 28:55 -- Here are three ways to charge $25K to your customers, courtesy of Greg Kyte. 32:15 -- Listen to “I’m not a Robot” on Planet Money to learn how scammers are paying humans to defeat CAPTCHA. 33:28 -- Slack is bridging email to chat, improving calendar integration and search. Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes.TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Xero. As a listener of this podcast, you are probably keen on getting industry insights, staying ahead of leading technology, and boosting your network. Well, I have some good news for you. This June, at Xerocon 2019, Xero will bring together hundreds of tech-savvy, future-minded professionals just like yourself from across the Americas, and the entire globe. Come join Blake, myself, and this collaborative community in action, June 18th and 19th, in San Diego. To receive a special discounted ticket to Xerocon 2019 in San Diego, head over to That is Cloud Accounting Podcast dot promo forward slash X E R O C O N. Book your Xerocon ticket today, and we'll see you in San Diego. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: I don't know about you, David, but it has been a crazy week for me. We did three webinars Tuesday. Actually, [00:01:00] no, it was two webinars, and one in-person event. Tuesday, I was downtown LA, and then we did two webinars, and I've got two more next week, so, I'm ready for the weekend. David Leary: Yeah, I feel like we just, two hours ago, recorded last Friday's podcast. I don't know what happened to the week, but we're back at it, and we're recording another episode. Blake Oliver: Yeah, I'm excited to hear ... I'm excited to do some follow-up on those stories from last week. What is- David Leary: We do have some follow-up, but we also got two reviews; we got two amazing reviews.  Blake Oliver: Oh, got it. Okay, let's [00:01:30] hear the reviews. David Leary: All right. One was from Canada. "Don't miss this podcast!" Five stars ... "Any accounting firm wanting to keep up with the ins and outs of the cloud-accounting industry must [capital S] subscribe to this awesome podcast. David, and Blake do a great job of educating, and entertaining." I don't have a name on that one, unfortunately, but it is from Canada. Did you wanna read the other one?  Blake Oliver: This is Double Jazz Hands. Five stars ... "Blake, and David approach today's modern accounting news, and trends like two kids in a candy store. As they [00:02:00] gleefully bounce from one side of the podcast room to the other, you can tell how excited they are to share the next bit of news, however good or bad, to the rest of us, waiting with bated breath. These modern-day green-visored Holmes-and-Watson investigative duo are awesome at what they do, helping to advance the conversation of cloud accounting, with all its complex layers. Three cheers to The Cloud Accounting Podcast!" Will Lopez@AdvisorFi.  David Leary: Wow, thanks, Will. That's-  Blake Oliver: That's almost poetic. David Leary: I'm not sure Blake read it with the enthusiasm that it comes through, when you read [00:02:30] it. Pretty amazing. Thank you so much, Will. We appreciate that. Let's jump in. Blake Oliver: Yeah. David Leary: Quick update from last week. Everybody knows about the Visor story, last week. After the fact, I did stumble upon a website called That website had a review of Visor's tax software, but then, in the comments are all the real reviews from all the users. Even as of April 25th, so this is yesterday, somebody left to review; says, "Agreed, Visor's horrible. They prepared my taxes incorrectly, and they took [00:03:00] forever to respond to my request to fix the problem. I now need to return money back to the state. I wouldn't  use this service again, even if they paid me." It's a similar story ... I actually think the reviews on here are worse than it was on Twitter, because people have more space to write. Blake Oliver: I've got a follow-on to that story, as well. I don't know if you spotted this, but Ryan Lazanis wrote a great article on his blog, David Leary: I have it open in my tab. I have the same article. Perfect. Blake Oliver: He [00:03:30] does a really good job of summarizing the model and threat of accounting-tech startups, and the existential threat they pose to the traditional accounting firms. I'm gonna skip through all of that, because we've kind of talked about that; how the app-based interface with your accountant potentially could be disruptive to the industry. Obviously, people want it. That's why they were signing up in droves for Visor. Now, as to whether or not they can deliver it, that's a different question. Let's assume that, eventually, somebody figures out how to do it, whether [00:04:00] it's Intuit with QuickBooks Live, or it's Visor with tax, or any these other modern accounting-tech startups, right? They're gonna figure it out.  Then, Ryan says, "Well, how can we compete with that, as traditional firms? We can't compete on price. We can't necessarily even compete on tech. What we can compete on is personalized service, and that means getting to know your clients so well that it feels almost like advisory service, even if that's not necessarily what you would think of yourself as doing. Get [00:04:30] to know them well enough, where you're creating value." I like that. That seemed a very simple, excellent way to differentiate yourself, and it's something that an app-based company just is not gonna be able to do, because they're going after a volume play. David Leary: Somebody wants to be the McDonald's of this, and you can't be the McDonald's, so you're gonna have to be a nice restaurant, your neighborhood diner that people are loyal to, because you provide that personalized service. What I liked about his article is he really compares the ... He [00:05:00] makes the argument that these startups are doing the 100-percent opposite of what the traditional firms have done for the last 60 years. Who knows if it's gonna work or not? Blake Oliver: Right.  David Leary: But they are doing the exact opposite. It's almost like that George Costanza ... You know, when George Costanza's on Seinfeld, then he- Blake Oliver: His philosophy? David Leary: Yeah, he's just like, "I'm gonna be the Anti-George, and whatever my gut tells me, I'm gonna do the opposite." That's what these guys are betting on. They're betting ...  Blake Oliver: Right. David Leary: Which tells you what they think about the existing industry. Blake Oliver: Yeah, there's a lot of problems with the way it's done [00:05:30] now. I saw a stat in the Journal of Accountancy that something like 60 to 70 percent - well, in some cases, 80 percent - accept credit cards as a form of payment. The firms under $1 million, it's somewhere between 60 and 70 percent of firms accept credit cards today. That, to me, is anti-consumer. It's anti-customer. People want to pay with credit cards, and you don't let them? Am I crazy, David?  David Leary: I [00:06:00] think that's this stereotype of firms, and accountants being cheap, and they don't want that extra two percent being taken away from them by the credit card fees. Blake Oliver: It comes back to in terms of customer satisfaction, and then, they buy more from you. To imagine the accounting profession catching up  ... The ones who are not taking credit cards right now, there's just no way they're gonna catch up. They haven't seen the light, and they won't. Hopefully, those who do, will. I have another story related [00:06:30] to this. Along the lines of Ryan's argument, there was a article on the AICPA blog, "Your tax practice could be on the edge of greatness. Push." It's a story about a CPA who partnered with other professionals to act as the single point of contact for all of his clients' financial needs. It's a really great example of how accountants can create more value beyond compliance. It fits in with Ryan's argument that accountants and bookkeepers have to swim upstream, if they wanna survive, because [00:07:00] all that easy work is going to be automated; is going to be handled by apps, and the VC money is gonna pour in there, because that's the volume play, but, there's no way they're ever gonna be almost like a business manager, which is what this article talks about. The example is really good. The author's father-in-law passed away, and mother-in-law moved in with his wife, and daughter, and himself. Then she was diagnosed with cancer, and then a few years after that, she [00:07:30] passed away. Then, his wife was the executor, which is a huge job, but the CPA, their family CPA, took on that role of coordinating with the lawyer, the investment advisor. Set everything in motion and held the author's wife's hand through the whole thing. That, to them, was amazing. David Leary: It's almost like a even further step, because I know a lot of accountants, and bookkeepers are kind of, to some extent, the technology advisors of a small business, right? "Hey, use these apps. Get [00:08:00] Microsoft Office ... Blah, blah, blah ... We're gonna get you all set up." How about I just advise you in all parts of your business.? I've got a lawyer that I can recommend. I have a website builder that I can recommend ... You're bringing a full suite, just not a tech suite, anymore. Blake Oliver: Yeah, and personal financial planning is part of that. Retirement planning. This actually really reminds me a lot of business management in Los Angeles, which is kind of its own unique space in the accounting world that not a lot of people know about, because it's limited to celebrities, [00:08:30] and athletes, and whatnot. The only time you hear about is when these business managers steal money is when you hear about it; but most of them are really great, and they don't do that. I worked in a firm that had a very large business-management division, because we were right there in Santa Monica, right?  David Leary: Yep.  Blake Oliver: What a business manager does is they're basically an accountant who handles your taxes, and everything else financial in your entire life. They're almost like a fixer - financial fixer. They'll help you buy a house. If you want a new car, just call them up; they'll go figure it out. They'll do everything. [00:09:00] David Leary: It's full service. Blake Oliver: Full service, and they take as much as five percent to do that, right? There is a opportunity now, with tech, to bring that level of service - maybe not quite that level, but some aspects of it - to accounting, and be a family office, or business manager lite, something like that. David Leary: Well, I know it'd be a great experience. Think of your client. If you made your clients feel like movie stars, that would be huge. Blake Oliver: Yeah. David Leary: I have an article that ties back to the same vein of [00:09:30] this whole thing. Essentially half of all VC money goes to Google, Amazon, like hosting Google ads, and then Facebook, all these ads. If you really think about all those companies we talked about - the Botkeepers, and the Pilots, and ScaleFactors, and all those people taking that VC money - a lot of that's going into ads ...  Even, we talked about Visor last week - ads, Instagram models. It's all marketing. Some news that happened last week is Henry Block - he's one of the [00:10:00] founders of H&R Block - he died Tuesday at age 96. Wall Street Journal has a good long-read article about his life. He actually started collecting Impressionist art. The second part of the article is like full circle to what we're essentially talking about now. Him and his younger brother had a struggling bookkeeping firm. They weren't making strides. This is in the mid-1950s-. Blake Oliver: They were in Kansas City, Missouri? David Leary: Kansas City, Missouri. They actually saw their tax-prep part of their business as [00:10:30] a headache, and they were gonna eliminate it entirely, but, one client of theirs, who was an ad salesman, suggested they should run some ads offering to do people's personal taxes for just five bucks. It created such volume of turn- of business, they changed, and pivoted to only focus on tax returns. It's the same game that's happening now, with these new tech companies. They're advertising the hell out of something, and they're basically trying to be the next H&R Block, just different, right? [00:11:00] Blake Oliver: Right. David Leary: Instead of having 12,000 franchises in hard stores, they're gonna be all virtual, and they'll have-. Blake Oliver: An app. David Leary: -12,000 people downloading their apps. Exactly, but I read it in this article ... It's the exact same thing happening, it's just from the 1950s. Blake Oliver: History repeats itself. David Leary: Yes. Yes. Yes. Blake Oliver: Wow.  David Leary: It's worth checking out ... All of us should just pause. Even though H&R Block might be struggling in the grand scheme of things, but it's worth reading about the article, and knowing it's a huge [00:11:30] part of the history of where we're at in this space. Blake Oliver: What's gonna be exciting is watching whoever becomes the next H, in the next version of H&R Block, whatever that is. That's obviously where all this money is going, to be the next H&R Block.  David Leary: There's no doubt that's what this is. Blake Oliver: I think we've beat around the bush enough, David. It's time to talk about QuickBooks. It's time to talk about QuickBooks Live.  David Leary: QuickBooks Live, the story that just keeps giving. Blake Oliver: The drama that doesn't seem to end on Facebook, in these groups. David Leary: The gist of the story [00:12:00] is, if you go back to ... We've talked about this in the podcast, in previous podcasts, and Intuit even had that blog post out about ... It was last month. They really went out, and proactively communicated about QuickBooks Live. The message has been, "We're not going to market QuickBooks Live to any small-business owners that have accountants or connected ProAdvisors. Blake Oliver: Right, and as a reminder/refresher, QuickBooks Live is the new assisted-bookkeeping service that Intuit is testing. Customers will be able to [00:12:30] access inside of QuickBooks, very similar to TurboTax Live, where you can have an EA,  or a CPA help you with your taxes. That's the idea for QuickBooks Live. This was naturally concerning to accounting professionals, and that's been what everybody's been talking about, but Intuit promised they wouldn't be marketing to businesses that were connected to an accountant, right?  David Leary: Correct. So what happened was somebody on multiple... I think it was the same person on multiple Facebook groups put up a screenshot, and this screenshot essentially [00:13:00] showed Live Bookkeeping, which, basically, it was an ad for QuickBooks Live, inside of QuickBooks Online, of their clients file. Obviously, people's heads exploded. The huge chain went on, and on, and on. I was a little skeptical because, for me, I didn't totally believe it, because my take was that screenshot, the way it was taken, you couldn't tell for sure; you couldn't verify for sure [00:13:30] that that QBO file was connected to an accountant. Blake Oliver: Right. David Leary: I actually asked to see the other screenshot, and then, actually, somebody else sent us a private message, so I actually have seen the screenshots. The reason I was skeptical before is because in QuickBooks Online, there's a tab called My Accountant. It uses an 'if' statement: if you're not a connected to an accountant, it shows you a screen with an email field that says, "Put in your accountant's email address, so you can be connected with your accountant." The rest of that 'if' statement is if [00:14:00] you are connected with an accountant, it'll show who your accountant is at the top, and then give you a place to communicate with your accountant, and share documents, et cetera. Blake Oliver: Right. David Leary: I was like, "There's no way ... " Intuit already, or QuickBooks, and Intuit already has the logic to know who is connected, or not connected to an accountant. It's built into QBO. My initial gut reaction was there's no way possible Intuit launched this little ad for Live Bookkeeping, for QuickBooks Live, without doing that same [00:14:30] check. I was very, very skeptical of this thread. It had 85-90 messages in it, and this screenshot. Finally, somebody sent me the screenshot, and my jaw kinda hit the floor. Absolutely, QuickBooks Live Bookkeeping is appearing in a file connected to an accountant. Confirmed.  Blake Oliver: How is that happening? Why is that happening? Intuit said they wouldn't do that. David Leary: Some people think they did it on purpose. I saw some comments like that. I don't necessarily know it's [00:15:00] on purpose. I think it's going too fast; not sanity-checking. Nobody's stepping back, and being like, "Hey, let's be very careful, because there's been a lot of talk about QuickBooks Live, and it's been very sensitive for the last three months.". Blake Oliver: Right.  David Leary: Where's the check of, like, let's pause ... Before we put that ad in QuickBooks Online, let's make sure it's working properly. I'm just very, very shocked that it appears like this. I am shocked, and I actually feel bad for Kim from Intuit's PR, Kim Asbaugh, and the [00:15:30] communications team, because every time this story dies down for a week, something else happens that they have to go out, and do damage control, because this is not good. Blake Oliver: Well, there was another post that I spotted. An accountant received an email from a prospective client, so, not a not a customer yet, or not a client yet,  saying, "I have decided to go with bookkeeping services offered by QuickBooks Online directly through their website. Therefore, please cancel our scheduled appointment. [00:16:00] I'm sorry about this. I appreciate your time." In this instance, it was a prospect of a ProAdvisor who saw the QuickBooks Live advertising and decided to go with that instead. That's not anything that Intuit has promised not to do. There's no way to hide, to know the intent, or whether or not somebody is looking at a ProAdvisor as a potential service provider. My argument has always been that, no matter what [00:16:30] Intuit promises, or tries to do to segment its marketing, it's not possible, and that prospects, and existing customers of ProAdvisors are going to find out about QuickBooks Live, and they are going to decide whether or not to use a ProAdvisor's services and compare them to QuickBooks Live. Which opens up all those questions about is the pricing going to set an expectation, and hurt the ability of ProAdvisors to charge higher fees? Is it gonna still take business away from them? I think, yes, [00:17:00] ultimately ... The whole point of QuickBooks Live is to grow their subscriptions with services. There's no way they're only going to be able to get people who aren't working with a ProAdvisor, or never intended to. It's just not possible. David Leary: This is the nightmare everybody foresaw weeks ago. "I can see it now. I'm gonna get an email from my client, saying they're gonna ... They want the price of QuickBooks Live, or they wanna just switch to QuickBooks Live. Blake Oliver: Yeah.  David Leary: Right, and now, somebody had an email like that. They posted it on Facebook. Everybody loses their mind. The ad showing [00:17:30] up in QuickBooks Online, people are gonna be upset. It all makes sense now. Intuit's also trying to figure out, from the pricing ... I believe they're really trying to figure out how do they do this, so they can employ ... "Employ's" kind of a loose term. Connect; play that middleman, Uber-style, right?  They'd play the middleman between the current ProAdvisors, and small-business owners. It just feels rough how this is being tested at Intuit. Maybe this is one of those ... It has to be rough. The Band-Aid's just gotta get ripped off, and everybody's [00:18:00] gonna get over it. Six months from now, it'll be like, "Yeah, that was no big deal." I don't know, but it's shocking. I was shocked, myself, that this showed up like this, after they kinda have been promising they wouldn't do it. Blake Oliver: My feeling is that this is not going to be a Band-Aid that gets ripped off. This is not gonna smooth over. This is permanently changing the relationship of ProAdvisors, and Intuit, forever. It's-  David Leary: You blogged about that 12 weeks ago. Blake Oliver: Yeah, and you can see it in the commentary. People are very upset about this, who [00:18:30] have been very loyal for a long time, and are talking about switching to Sage, switching to Xero, switching to Accounting Suite; looking for other options, because they don't wanna be partners with a company that's offering a competing service. David Leary: I still subscribe ... I don't even know switching is the answer, because I really, truly believe that - based on your article, and the success of TurboTax Live, and the demands of being a public company, and The Street, and Wall Street's demands, and [00:19:00] shareholders demands - that the other players - Xero, Sage, et cetera - are gonna have to do the same thing, because they're gonna have pressure from The Street. There's no way, if they're charging $39 for a subscription, and then, all the sudden, Intuit's getting $199 a month for a subscription, those other shareholders, or investors are gonna be like, "That's okay, just leave 150 bucks a month on the table; don't go chase it." They're going to have to do the same thing. There's no doubt. Blake Oliver: Well, I'm not convinced that Intuit will actually be able to succeed with this service. I [00:19:30] previously wrote an article called, "Why There Won't be an Uber for Bookkeeping," that I posted on LinkedIn; that was a few years ago. I'm gonna go back and read that again. It's really, really hard to scale a services business for small-business owners. It's hard enough to make software for them, right? To actually-. David Leary: Visor was an example, last week. Blake Oliver: Yeah, Visor completely, and miserably failed to scale their service operation for tax season, which is what they're ... That's their one job, right? You had one job to [00:20:00] do. We'll see. Here's the risk of QuickBooks Live for Intuit: it's that they're pissing off their ProAdvisor community, which has been so good to them, for so long, in helping them obtain market share, and gain mindshare among business owners. Yet, there's no guarantee they'll even be able to scale QuickBooks Live enough to make up for that. The damage that they do, if they fail, is potentially humongous. David Leary: It's a huge gamble. Blake Oliver: It's also giving Xero an inroad into [00:20:30] the United States that is, thus far ... The beachhead for Xero is very tiny, still, and this is giving them that opportunity to win hearts and minds of former- David Leary: That's correct ... I don't think, if I look back at the last ... Xero's probably been in the States now, what, seven to 10 years? Maybe a full decade now?  Blake Oliver: Yeah, I think maybe-. David Leary: But there hasn't been a crack in the dam. They can't penetrate anything. There's not a leak. Now, there's kind of a leak. Blake Oliver: Yeah, because people have been so happy with where they are, so, why [00:21:00] switch? Now, this is the opportunity. This is the crack, and I think if different software companies take advantage of it, they can get in, and they can start chipping away at that wall, and the dam will break. David Leary: I don't know. That's tough.  Blake Oliver: I actually think that would be good for everyone, if there was more diversity, and if there were more firms using different products, because that would increase development, and would ... It's always good to have multiple players in the market. 80-, 90-percent market share is not a good thing for the customer. [00:21:30] David Leary: You also  have to look at Intuit's point of view on this, right? There's six other startups that all took VC money that are coming after the same customers. At some other level, you can't blame Intuit at all, because they gotta do things like this to survive in the future. They've got people clawing at them, right?  Blake Oliver: Yeah, but, I understand there is this impetus, because you need to make profit; you've gotta do something new, but sometimes, doing something new isn't always the right thing. David Leary: That's true.. Blake Oliver: You can see this with the new QuickBooks Online Advanced limits. [00:22:00] I saw a post last week, from Jordyn Dahl, on LinkedIn. She's a news editor on LinkedIn, and she did a long post summarizing the QuickBooks Online Advanced limits, the new limits. She's not an accountant; she's not in the accounting world. She's talking to business owners, right?  David Leary: I know. A bunch of people outside of our little closet are talking about this, yep. Blake Oliver: She got a hundred comments on this post, a hundred comments, which, to me, indicates that there's [00:22:30] a lot of people worked up about it. David Leary: Yeah, and it's sad, because it offset some good news from Intuit this week [cross talk]  Blake Oliver: Oh, yeah, we have some good news about Intuit. I'm actually glad that we do. Let's talk about that. David Leary: Two things that were big. One is they enabled one-day ACH. If I need to pay ... I'm a small-business owner, and I need to be paid, I will get that money in my bank account the next day- Blake Oliver: That's exciting. David Leary: -which is huge, because they added some stats in here that 44 percent of small-business owners are reporting they're not paid on time ... That [00:23:00] barrier of not getting cash in their accounts causes them to have insufficient funds to pay somebody else. This just- it really ripples across. The interesting thing, though, in this survey that Intuit put out is 66 percent ... I'm sorry, 160 ... 60 percent of small-business owners surveyed said they're still paid by check, particularly when the payment value is high. That's a lot of checks still being passed through the [cross talk] still.  Blake Oliver: Well, it's because ACH has been so slow; two days, right? Now, I [00:23:30] was looking into this, because I had the same article on my list this week, and I was curious to know whether or not this change was due to the new same-day ACH rules that NACHA, the organization that governs ACH, has been moving forward on. I actually found out, after doing a bunch of research, that it doesn't, because the way that QuickBooks payments works with ACH is these are [00:24:00] debit payments - I'm requesting to take money out of your account.  That has not been sped up by the new same-day ACH trials, because there still needs to be a two-day window, in which a account holder can contest a debit, since they didn't initiate it. It turns out that it's not using the new technology, or the new processing windows. Intuit is financing this, so that's why they ... It was hard for me to find this, but that's why there's a [00:24:30] charge of one percent for this new service. It's one percent of the transaction, with a max of $10 per transaction. David Leary: Yeah, and I think I remember, if we go back to QuickBooks Connect, when they announced next-day payments, and same-day payroll ... They announced three different instant-payment things. I think that's correct. They even mentioned that they're floating that difference. You can choose not to do next-day, and then, it's the standard ... It's either free, or it's 50 cents, or whatever that nominal fee is, or you can choose to [00:25:00] do next-day for a fee. I think I remember them saying that Intuit is footing this; floating the money for these transactions. Blake Oliver: Right. They're clearly hoping to make a lot of money, if they're taking one percent of everything, up to $1,000, and then, 10 percent per- $10 per transaction, after that.  David Leary: Intuit's TurboTax numbers have came out. Blake Oliver: Let's hear that. How'd they do?  David Leary: Their TurboTax numbers are up again. I think you even mentioned that last week, with the [00:25:30] amount of people not just doing online, right- or not using brick-and-mortar stores, right?  Blake Oliver: Yeah.  David Leary: TurboTax, obviously, is a huge benefactor in that. They had a five-percent increase in TurboTax units across the board, with a seven-percent increase in TurboTax Online. They saw a three-percent decrease in TurboTax Desktop. TurboTax just continues to roll forward, roll forward, roll forward. They've adjusted their guidance, so they'll be at the high end of their previous [00:26:00] guidance range of nine to 10 percent for revenue growth. The thing this article didn't have, and they did not release yet, which would be, I think, the most interesting is how did TurboTax Live do?  Blake Oliver: Right, but are they gonna break that out?  David Leary: That's gonna be the ... Well, they broke it out in the conference call, previously, right, last year?  Blake Oliver: The actual performance? I think they just said that they had really good growth. I don't know if they actually gave the numbers.  David Leary: Good, okay ... That'll be interesting, so tune back, May 23rd, because I think that those numbers we see for TurboTax Live [00:26:30] is going to tell a lot of the story of QuickBooks Live. Blake Oliver: Well, hey, I've got a story here from Accounting Today. This is kind of a fun one. "The Top 10 Cities for Accountants."  David Leary: I'm trying to think ... This is like, hey, if you wanna go and hang out with accountants, there's a bunch of them living there, or is this like top 10 cities where, if you're an accountant, you're gonna have a good quality of life?  Blake Oliver: It's not that there's a lot of accountants hanging out there. It's two factors. This is a study by AdvisorSmith. They analyzed 399 small, mid-sized,  and large cities across [00:27:00] the country, across the United States, based on accounting-salary, and job-availability statistics from the Bureau of Labor. How many accounting jobs are there, and what is the cost of living - balancing those two things.  You wanna be in a place that has lots of jobs, and good salaries, and local cost of living. Even if the salaries are lower, you might have lower cost of living, which makes up for it. I'll go through the list. 10 - Jefferson City, Missouri; 9 - Trenton, New Jersey; 8 - [00:27:30] Birmingham, Alabama; 7 - Denver; 6 - Dallas; 5 - Midland, Texas; 4 - Wilmington, Delaware; 3 - Houston; 2 - Parkersburg, West Virginia, and 1 - Springfield, Illinois. David Leary: Wow, no Boston on that list. For some reason, my brain always thought Boston had a huge accounting firm/Big Four presence, or something. Blake Oliver: I just think it's just too expensive. I liked seeing Denver on that list, because I love Denver. I could live in Denver. I don't know about [00:28:00] Dallas, or Houston. The humidity thing is a problem for me. What else do we got this week? Anything else, David? David Leary: I have one thing - a tweet - but I don't know if you have any news articles, before I talk about that tweet?  Blake Oliver: Well, how good is your tweet?  David Leary: It's super-super-breaking news. Blake Oliver: Oh, well, let's hear it. David Leary: There was somebody tweeted that there is, coming soon, the Desktop Accounting Podcast, believe it or not. Blake Oliver: Oh, wow. I've always wanted to listen to a Desktop Accounting Podcast. [00:28:30] I'm excited about that. Is this for real?  David Leary: Yes ... As far as I know, it's for real. This is not me. I didn't set this up; you didn't set this up. We didn't set this up as a gimmick, or anything like that. Some of the comments were a little bit funny. Somebody said that they were going to distribute it on CD-  Blake Oliver: I like that. David Leary: -which I thought was a little bit funny. Those of you who are open-minded, and you listen to The Cloud Accounting Podcast, but maybe you still have some clients on desktop, there might be a podcast for you to listen to, as well. Blake Oliver: Speaking of entertaining ways to spend your time, there's a great article from [00:29:00] Greg Kyte, on the Thriveal blog. It's called, "Three Ways to Charge $25,000 to Your Customers." I always love Greg's articles, because he makes it both entertaining, and educational. I'll give you the three ways. He uses some stories from his own experience. As a little bit of background, Greg is a corporate controller, so he outsources work; utilizes the work of an accounting firm. He interacts with that firm, and [00:29:30] he uses that experience to understand better, as a customer ... He talks about his experience as a customer of that firm and gives advice to accountants looking to sell to guys like him. David Leary: But he's an accountant, who's also a stand-up comedian. Blake Oliver: Yes, he's also stand-up comedian-  David Leary: Okay. You can't leave that out of his bio [cross talk]  Blake Oliver: I just figure everybody knows who Greg is, at this point. Here's the three ways. Way number one is, "I would gladly pay you $25,000, if you find [00:30:00] me $25,001 of tax savings." This has always amazed me ... If you're a tax firm, and you have tax experts, and you figure out how to save somebody a bundle of money, why are you charging them hourly for that? The ROI is easy to understand. If you save somebody $25,000, charge them some sort of percentage of that, or charge them a fee that expresses the value of that savings. Don't just charge them your hourly rate. That's a good one. In the article, the story was all about the qualified [00:30:30] business income deduction that was new this year, and the fee was way under what they coulda charged, he said, on an hourly basis. Number two, "I'll gladly pay you $25,000, if you create a retirement plan that will earn me butt tons of money." This had to do with a special type of retirement plan that Greg's employer could setup for him, so that he could invest in real-estate properties that the employer is invested in, and that helps out Greg personally. Your [00:31:00] customers will, even if they are not the actual customer, if the firm is the customer, the people working there will wanna pay you more, if you help them out, right? That's another example. Three is, "I'd gladly pay $25,000, if you help me automate to the point where I can fire an employee." That one's pretty easy these days. I think most of the listeners of the podcast would understand that one. A lot of us probably did that, or do that, where we say, "Outsource your AP automation, or outsource your AP work [00:31:30] to me. I'll use automation to do it, and you can get rid of that AP clerk you don't like very much."  It's funny the way he says it. Usually we try to sugar coat it by saying, "Oh, well, we'll help you re-purpose that person into a better role, where they can add more value to your organization," but, honestly, what're you gonna do? Most the time, you're just gonna let 'em go, right? That's an easy way to justify value-billing for technology initiatives with your customers. If you are gonna put in an AP system that allows them to reduce their staff, price it in terms [00:32:00] of how much of a staff reduction- how much they're gonna save on salaries. Don't do it hourly- David Leary: Yeah, frame it that way. Blake Oliver: Yeah, frame it that way. I like this article because it's actually an article about pricing and selling that is entertaining. Thank you, Greg, and go check it out. David Leary: I did listen to a good podcast that could be interesting for everybody. It's from Planet Money. It's called "I'm Not a Robot." It's the history of reCAPTCHA. Everybody's done that. You have to check-mark the box that says, "I'm not a robot," or you have to type in- Blake Oliver: I hate that thing.  David Leary: -the thing from the [00:32:30] book. This kinda gives you the history of it, so you understand why it exists, how it's evolved, and where, arguably, v3 is gonna be in the future. Blake Oliver: Wait, so, what is the podcast about?  David Leary: It's about reCAPTCHA, the history of it-  Blake Oliver: Oh, the history of it.  David Leary: The podcast title [cross talk]  Blake Oliver: -that sounds awful. Why would I wanna spend my time on that? Sell me on that.  David Leary: Here's what you'll like about it. There's farms of people that can be hired by spammers to click the box that says, "I'm not a robot.". Blake Oliver: Oh, [00:33:00] God ... David Leary: There's human-powered automation in clicking through that message. Blake Oliver: Right. David Leary: Maybe that would be a reason for you to listen to it. Blake Oliver: Maybe that's the job I can get, once my job has been automated, is I can click ... I can help the robot; my new employer, which will be a robot, I can help it get through the reCAPTCHA, because it won't be able to do so, itself, you know? That's what we'll be doing?  David Leary: Apparently, yes. It's worth a listen. It's kinda cool. Blake Oliver: I've got one last story here- David Leary: Yeah. [00:33:30] Blake Oliver: -and this is gonna be music to the ears of any Slack users out there. If you're using the team-chat wunder-app Slack, you'll be so excited to learn that Slack has built a new bridge between its service, and email. In the coming months you'll be able to @ mention people in channels, or send them a direct message, and it will route those messages to their email inbox. These are people that aren't in your Slack, as users, but you still wanna be able to communicate with them. You can message [00:34:00] them like any other user. That message will go to them via email. They can respond to that email without having to go into Slack - they're not even in Slack - and those replies will come into your Slack, and the back-and-forth exchange will also transform into a full Slack history, if the person ever does join Slack.  David Leary: Congratulations, Slack you became email. Thank you. Blake Oliver: Well ...  David Leary: We can stop using it. It's done. It's over. I'll just switch back to email. What's the point? Blake Oliver: The reason I think this is awesome is because there are lots of accounting firms that are starting to use [00:34:30] Slack to communicate with clients. I did this, too. I had ... Some of my clients, I was able to get communicating with me in Slack, but, half, I couldn't. They just wanted to stick with email. I ended up ultimately abandoning Slack, because I didn't wanna have two different places for them to contact me. Why this is great is because now, if I am running a firm, I can work with all of those users, in Slack, or not, all from Slack. Slack is almost becoming good enough to use as a practice-management-communication tool. I [00:35:00] think this is gonna give all the apps, like Carbon, and Client Hub, and - what's the other ones, the communication apps for accountants - a run for their money, because, why wouldn't I just do it in Slack?  David Leary: Now, isn't there some risk to this? What I mean by that is, in theory, Slack is secure, right?  Blake Oliver: Uh-huh.  David Leary: As soon as you send that Slack message, and it goes out as an email, it's a postcard. I think you just have to be very aware of what you type in that message, because the [00:35:30] rest of the messages ... If you're used to everything being secure in Slack, and you've just been, I'm not saying careless, but because you're confident you're in a secured location, sharing secure information, if you type that into an external one, it becomes a postcard, as an email. You just have to be very, very ... It's the warning out there, for anybody who tries to do this. Blake Oliver: One of the security measures is that these email-only Slack users have to be added by an administrator, manually. You can't just had add somebody's email, and start communicating with them, because that would create a bunch [00:36:00] of security problems for a company. Hopefully, the administrators, whoever owns these Slack instances, will understand that risk. David Leary: Until people can Slack with us, what's the best way for them to get a hold of you? Blake Oliver: I'm on Twitter. I'm @BlakeTOliver, and how about you, David? David Leary: I'm @David Leary. Blake Oliver: Follow The Cloud Accounting Podcast on Facebook. You can also subscribe to our emails. Just go to, click on the blue Subscribe banner at the top, put in your email address, and [00:36:30] you will get the show notes emailed to you the morning after an episode drops. That way, you've got all the links to all the articles right there in your email inbox, with all the time codes, so you can skip right to that story in the podcast, if you're really excited about it. Great way to follow up on anything that you found interesting in our show. David Leary: Then you get 'em instantly. The second Blake is done editing the podcast, the email goes out even faster than I can make the artwork. If you want the episodes faster than I get them from Blake, get on the email list. [00:37:00] Blake Oliver: Give us a review on iTunes, and we will read it on the air. We really appreciate those reviews. They're the number-one way that you can help us grow our audience. Really appreciate that. We're a Top 50 Business News podcast, David. It's really exciting- David Leary: Congratulations. Blake Oliver: Yeah, congratulations to you.  David Leary: We are beating Marijuana Daily, as of right now.  Blake Oliver: Help us get higher than Marijuana ... Daily Podcast, and climb the charts, and reach the accounting world that remains stuck [00:37:30] in the ways of desktop. Do not let the Desktop Accounting Podcast win. We have to grow our numbers. David Leary: All right. On that note, Blake, I'm out. Blake Oliver: Great talking, David. See you next week. David Leary: Bye, everybody. 
QuickBooks Live Could be a Top 100 Firm by 2020, Fake Bots from Google, Roger Raises $7.35M to Automate Accounting with AI, and Why the NSA Might be to Blame for the CCH Malware Attack
SponsorXero: Show Notes 02:34 -- Blake crunches the numbers and figures that if Intuit meets its publicly stated goals, QuickBooks Live will likely be a $60 million per year accounting firm by 2020, putting it at 73 on Accounting Today’s Top 100 Accounting Firms list.  06:56 -- Sholto Macpherson asks, is QuickBooks Live a "Watershed moment or BAU?" — Twitter 10:02 -- Google’s Duplex Uses A.I. to Mimic Humans (Sometimes) — The New York Times — Google admitted that it’s AI still needs human help, but you’ve got to listen to a recording of a call from Google Duplex (a bot) to a restaurant to book a dinner reservation. 17:13 -- Roger, the accounting automation tool, raises $7.35M Series A — TechCrunch (Guess who is one of the investors? Dan Wernikoff, the former GM of QuickBooks and TurboTax.) 20:02 -- Firms lose cloud access after Cetrom systems breach — Journal of Accountancy — Centrom, a provider of cloud hosting to CPA firms, fell victim to an attack using similar malware to the one that caused the CCH outage. 21:23 -- In Baltimore and Beyond, a Stolen N.S.A. Tool Wreaks Havoc — The New York Times — The New York Times details how a leaked N.S.A. hacking tool might be responsible for the recent malware attacks on CCH, Centrom (a provider of cloud hosting to CPA firms) and the City of Baltimore. 25:53 -- Social engineering: Password in exchange for chocolate — ScienceDaily — A disturbing percentage of people will give out their password to strangers in exchange for little value. 29:38 -- Hands On: The Twin-Screen Asus ZenBook Pro Duo Is a Laptop From the 2020s — PC Magazine — With two built-in screens, David predicts this laptop could be the ideal computer for accountants and bookkeepers on the go. 32:04 -- When You Raise Prices More Than a Smidge ... They At Least Look At Another Vendor — SaaStr — The author cautions software companies that rase prices to dramatically. Meanwhile, David was hit by a 100%+ price increase on his QuickBooks subscription! Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? We have some open sponsorship dates available for the summer season. We also have some “conference special” sponsorship opportunities available, for example, the week of June 16 we’ll be doing 4 daily “conference crossover” episodes covering Scaling New Heights and Xerocon. For details and pricing, read the prospectus.Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Xero. Did you miss the Xero Roadshow when it came to your city? What if I told you you could still attend a Xero Roadshow event? On June 4, 5, or 6, you can attend the Xero Roadshow Online. That's right. You can attend a Roadshow event via your web browser. At the Xero Roadshow Online, you'll learn how your practice can benefit from the full power of the Xero platform, and even earn CPE credit. To register for free, head over to That is Cloud Accounting Podcast dot promo forward slash X-E-R-O-R-O-A-D-S-H-O-W. Don't forget to register for Xerocon! Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: What's new, David?  David Leary: What's new? Short week, right?  Blake Oliver: Yeah. David Leary: I feel like there was not a lot of major-major-major-major [00:01:00] news. There was a event, though. QuickBooks Connect happened in Australia. Blake Oliver: Yes!  David Leary: It was in Melbourne, this time; not Sydney. Blake Oliver: We've got some news about QuickBooks Live, the gift that keeps on giving. It's coming to Australia. David Leary: Wow, so another new week, another major QuickBooks Live announcement. Yes, that's big. Blake Oliver: I really wanna touch on those numbers that we talked about last week, because it's been sitting with me, since Friday, how big this is, right?  David Leary: Could we pause you there, before [00:01:30] you get into how big it is? Could we get into ... We have two reviews that came in. Blake Oliver: Okay, yeah. What are the reviews?  David Leary: We got two reviews. I'll read this one. It's from Jazfun2. It's five stars. "'And now you know the rest of the story.' David and Blake, in true Paul Harvey style, show us the behind the scenes details of the topical headline stories from most media outlets. The insight and depth of knowledge is refreshing, and to hear a podcast where they can laugh at themselves, as well as the industry, makes the listening lively. In an industry fueled by technology - AI -Blockchain frenzy - [00:02:00] Blake and David give us honest perspective. Always waiting for the next one to drop so I can catch up. The Cloud Accounting Podcast is a must-listen if you really want a reality check on what's happening in the cloud." Blake Oliver: Awesome! David Leary: Thank you, Jazfun! Blake Oliver: That's Jan, right?  David Leary: I think so. Blake Oliver: Thanks, Jan. We got another review, as well. "Two great guys keeping you updated on relevant accounting stuff. What a great podcast; fine for staying up to date on all things accounting. I especially have appreciated the accounting-app news updates. Keep them coming. Your fan, MM." Thank you, MM!  David Leary: Absolutely. [00:02:30] All right, now you can give me your big numbers. Blake Oliver: All right. Sorry, yeah, I jumped the gun there. We were talking about QuickBooks Live last week, and the news that Rich Preece  announced on The QB Live Show that QB Live is expanding from the current 50 ProAdvisors to 500 ProAdvisors within about a year. Is that right, David? Did I get that right? David Leary: I think he mentioned like within the next nine months. Blake Oliver: Okay, within the next nine months- David Leary: Which is crazy-fast.  Blake Oliver: Yeah, that's the goal. These ProAdvisors, of course, are not gonna all be working in the Boise [00:03:00] office; they're gonna be distributed around the country, like TurboTax Live. Similar. David Leary: Well, specifically, they're gonna use ... The first 500 are gonna use existing TurboTax Live ProAdvisors, because they're set up, and ready to go. Blake Oliver: Got it. 500 ProAdvisors ... Rich Preece gave us some numbers about the number of customers they have. It looks like the ratio of ProAdvisor to customer is something around 22-23. Let's just call it 25. Let's say ProAdvisor on QB Live could [00:03:30] serve 25 customers. Each of these customers pays $400 per month. 500 times 25 is 12,500 QuickBooks Live customers paying $400 per month; that equals $5 million per month, which is $60 million per year in QuickBooks Live revenue. That would put QuickBooks Live at number 73 on the 2019 List of Top 100 Accounting Firms, according to Accounting Today, right behind SingerLewak, which has 10 [00:04:00] offices, 43 partners, and 305 total employees. David Leary: Okay, so just to be clear, last week ... Last week, two weeks ago, three weeks ago, a month ago, whatever, Intuit was not a bookkeeper, or an accounting firm. Blake Oliver: No. Software developer. David Leary: Now, they're becoming ... Now, they basically are becoming a bookkeeping firm, in a strange way. Blake Oliver: Yeah.  David Leary: Accounting firm ... They're going to be one of the biggest, instantly. Well, within nine months. Blake Oliver: Yeah, a Top 100 firm within nine months. David Leary: Wow ...  [00:04:30] Blake Oliver: They're not calling themselves an accounting firm, though, because it's a ...  I don't know exactly what they're describing it as; I don't really recall. It's kind of indefinite, but a platform to connect businesses, and ProAdvisors. Hey, isn't that what an accounting firm is, anyway? It's a brand that connects ... In most cases, it connects a business owner who needs services - tax, accounting, consulting - to a service provider, typically a partner in the firm, who, in a traditional firm, owns their own book of business. This is basically [00:05:00] the same concept [cross talk] David Leary: Right, same model, because if I have a firm, I have my own in-house ProAdvisors that I might be paying 40 bucks an hour to do the books for my clients. Blake Oliver: Yeah.  David Leary: Then I'm taking a piece of whatever I'm charging the client. Blake Oliver: Whatever they call it, I'm calling it an accounting firm. I think that's what it is. David Leary: I could agree with your point of view on that. Blake Oliver: Yeah, so-  David Leary: Even if it's a slightly number, cuz I think your estimate is going off of each ProAdvisor is handling 25 customers ... I think, right now, the current numbers they released - we talked about it last episode - it's [00:05:30] at about 19 to 20. Even with those numbers, it's probably gonna still be about a $50-million-a-year business. Where does that put them on the Top 100? Is it still Top 100? Blake Oliver: Oh, yeah, definitely in the Top 100. David Leary: Wow. So, just for fun, project this out, year two, and year three. Just quickly, off the top of your head, are they a Top-10 accounting firm in year two? Blake Oliver: Well, I just know to get up to the 50, you gotta to be over 100 million. Yeah, I could easily see Intuit becoming a Top-25 firm. [00:06:00] David Leary: Who does this disrupt, then? Is this disrupting the average ProAdvisor, or is this disrupting bigger firms that are trying to do 3,000, 5,000, 6,000 clients?  Blake Oliver: I don't think it's disrupting the big firms, because I don't think most of them are dealing with small clients like this. Their fees are coming from mid-sized businesses, large businesses [cross talk] It will undercut them in that they're not gonna be able to get a foothold in this space. What [00:06:30] it really is doing is taking all of these small ProAdvisors and aggregating them into what is essentially a large firm. That's what it seems like to me. David Leary: Got it.  Blake Oliver: It's disrupting the independent bookkeepers, for sure. I think it's gonna be very hard for independent bookkeepers to compete with QuickBooks Live, and small firms, small CPA firms, small EAs, just bookkeeping firms, competing. How do you compete with $400 a month for bookkeeping? This is why the discussion going on in Australia right now is [00:07:00] interesting.  You sent me a tweet from Sholto Macpherson, our friend over in Australia, asking ... He asked you, David, he said, "What is your take on QuickBooks Live? Is it a watershed moment, or business as usual? Will it replicate the impact of TurboTax Live?" Knowing what I know about the cost of labor in Australia, I feel like it's gonna be even harder for Australian bookkeepers to compete with QuickBooks Live, if it goes out there at the price of $400 [00:07:30] per month, US. Maybe I'm wrong. David Leary: Just to put some context on that, it looks like Sholto tweeted this during QuickBooks Connect, during one of the keynote talks. A futurist was on stage talking about disruption, and he just found it ironic that it was minutes after Intuit just talked about QuickBooks Live being launched in Australia. He feels like that's kinda gonna be disruptive to the people sitting in the audience. There's a little back and forth between Sholto, and Paul Messner about maybe this is not gonna [00:08:00] impact that audience, et cetera. When he asked me what my take is, I think one thing I would say Australians don't understand about QuickBooks Live is how successful TurboTax Live was. We talked about that last week on the podcast, right?  Blake Oliver: Right. David Leary: TurboTax Live might be the most successful TurboTax offering in 25 years. Call it a bundle; call it whatever you want, it's a way to sell TurboTax, and it's selling better than ever. The other thing I think they don't understand is the marketing machine of Intuit. Everywhere [00:08:30] you turned, you saw TurboTax Live. It was on all the Super Bowl commercials; it was on all the college football championship bowl games. For about a six-week period, you saw TurboTax Live everywhere. I don't think they understand the Intuit machine, and how those wheels get going, and it's gonna happen. Acting like this won't have an impact, I think, is very naïve. Blake Oliver: We'll find out. David Leary: Going to your comment as far as the cost of labor in Australia, and the pricing model [for that] ... In [00:09:00] a way, this could actually possibly disrupt Australia more. The logic on that is I think a lot of these firms in Australia, they're outsourcing a lot of labor already. Blake Oliver: Yeah.  David Leary: A lot of them are doing- they're using some sort of outsourced labor to run their firm. Now, in a way, this is competing directly with those. Blake Oliver: Right. David Leary: If you have a bookkeeping firm, and you're using outsourced labor to control, and keep your costs down, you probably actually have a bigger competitor against you now, than if you were just an independent ProAdvisor that actually [00:09:30] could say, "Hey, I'll take some of the work from QB Live."  This could actually disrupt Australia even more, and then-  Blake Oliver: Yeah, I think you have something there.  David Leary: Then, we were talking about, last week, how TurboTax Live is bringing in new customers. This could help Intuit get a stake in the ground in Australia, because this could get new people to use QuickBooks Online in Australia. We'll see, but there's a lotta discussion about whether ... Now the discussion on this is like ... Now that everybody understands, and believes it's coming, and know it's [00:10:00] coming, now, people are wondering, who's it gonna disrupt?  Blake Oliver: David, we haven't talked about bots in a while. I've got a bot story for you. Fake bots. David Leary: Fake bots? Okay.  Blake Oliver: Yes, and this is not some startup. This is a big company. This is a story in The New York Times about Google Duplex. Have we talked about Google Duplex on the podcast? I love using it as an example of AI.  David Leary: We may not have talked about it, but I'm familiar with it. I could maybe try to give an example. Blake Oliver: The big Google Duplex story was last [00:10:30] year, when Sundar Pichai, the CEO of Google, gave a demonstration of Google Duplex, which is the name they have for their AI voice assistant, calling a hair salon, and booking an appointment on behalf of a Google customer, all by itself. The audience was just blown away that this AI could call the hair salon, talk to a human being, deal with some unusual stuff that happened, in terms of the booking, and make the appointment. Some people were so [00:11:00] blown away; thought it was not real at all. It couldn't be real; it had to have been fake. David Leary: My understanding is that Google is also using the same technology to just call small businesses randomly, and say, "What are your hours this week?" or "What are your hours today?" That's how the update the Google searches. You know, when you search for a small business, and it shows the hours they're open?  Blake Oliver: Yep.  David Leary: Google's- apparently they're using this same robot to go and gather information about small businesses - their hours of operation, et cetera. Blake Oliver: Makes so much sense, right? This is the customer-facing [00:11:30] aspect of it they're experimenting with. You can actually use Google Duplex right now. If you download the Google Assistant on your IOS, or your Android device, you can ask it to make a dinner reservation for you, and it will call a local restaurant, and do it. The New York Times decided, "Hey, let's test this out. Let's see if it works." They did an experiment, and they made four bookings. Here's the rub. Out of four successful bookings with Duplex, only one [00:12:00] was done by a robot. Three were done by people. Google is using a call center to augment Google Duplex, and to help it when it fails. Does this is sound familiar, David? It's fake bots, or it's human-assisted bots. David Leary: It's the same story that was ran ... Was it Bloomberg who ran that three or four weeks ago, about Siri, and Amazon Echo, or about Alexa? Everybody's using [00:12:30] humans to help process some of this. Blake Oliver: Right, because the AI's impressive, but it still can't do everything. The New York Times reached out to Google, and asked  them, after they discovered that humans were assisting the AI, how many of the calls are actually being done by a human? Google said that about 25 percent of calls placed through Duplex start with a human, and that about 15 percent of those that began with an automated system had a human intervene at some point. Now, The New York Times in their testing, they only had- it [00:13:00] flipped. They had 75 percent of their four calls were actually done by a human, and only one of them was completed successfully by an AI, all by itself. This is a fake-bot story, but it's also amazing because they posted the recording of the AI, in its conversation with a restaurant owner - the one that worked; the 25-percent example, where the AI worked successfully - and it is super-impressive. I wanna play it for you. Do you wanna listen?  David Leary: Yeah, absolutely. Blake Oliver: You gotta hear this! Recording-Restaurant: Hello, [inaudible], may I help you? [00:13:30] Recording-Google AI: Hello? Recording-Restaurant: Hello. Recording-Google AI: Hi, I'm calling to make a reservation. I'm Google's automated booking service, so I'll record the call. Could I book a table for Tuesday, the 21st? Recording-Restaurant: Okay. Hello?  Recording-Google AI: I'd like to make a reservation for a client for Tuesday, the 21st. Recording-Restaurant: Okay, actually, how many people? [00:14:00] Recording-Google AI: It's for 10 people. Recording-Restaurant: 10 people. Okay, what time?  Recording-Google AI: At 7:00 p.m.. Recording-Restaurant: 7:00 p.m., okay.  Recording-Google AI: I need a table for 7:00 p.m.. Recording-Restaurant: Okay, 7:00 p.m., okay, and then-  Recording-Google AI: Yeah.  Recording-Restaurant: -are there any kids?  Recording-Google AI: I'm actually booking on behalf of a client, so, I'm not too sure. Recording-Restaurant: Not too sure? Okay, got it. Okay, so, please be on time. That's 7:00 p.m., on Tuesday, right? [00:14:30] Recording-Google AI: Yes.  Recording-Restaurant: Okay. I can put you in the reservation book, so, see you on Tuesday.  Recording-Google AI: Oh, would you like the client's name now?  Recording-Restaurant: Yes. Recording-Google AI: The first name is Kate. Recording-Restaurant: Okay, Kate. What is the last name?  Recording-Google AI: Last name Metz.  Recording-Restaurant: Metz? Okay. What [00:15:00] is the telephone number?  Blake Oliver: That was an AI. That was not a human being. David Leary: What's interesting about that ... I think short interactions like that are very predictable - how that conversation's gonna go. It's like scanning OCR in a business card. Very, very easy because once you figure out where the zip code is, you can work backwards, and there's the rest of the address. You look for a certain pattern. A reservation phone call's always gonna have some pattern to it, in general, that [00:15:30] they can do that. Blake Oliver: Yep.  David Leary: What I find really interesting is, at the same time, if you're gonna automate that from this side, if I'm a restaurant owner, and I'm using an app like OpenTable, when's OpenTable gonna have a bot answering those phone calls, and handle it? Why is that restaurant owner answering the phone, and talking to another bot? The bots could just talk to each other, and then you just show up for your reservation.  Blake Oliver: The bots talking to each other. That's funny. David Leary: It almost makes more sense for the restaurant owner to have a bot answering calls for taking in reservations. Blake Oliver: Well, I was out [00:16:00] looking at apartments, yesterday, and when I called one of the large corporate complexes, they told me that if I pressed one, they would text me, so that I didn't have to stay on the phone, and I could book my whole appointment that way. I pressed one, and I got a text message, and I was able to book the whole appointment via text-message exchange. It's possible that was all a completely automated system that was reading my responses and finding time in [00:16:30] the calendar; because, when I got to the leasing office, the guy who was sitting there at the desk had no idea that I, in particular, was coming in, and the appointment had been booked for him.  That could be a call center somewhere, so maybe human-assisted, maybe artificial intelligence, or a mix; it could be both. That's the thing that I think - the take-away from this story, and all the other coverage of bots that we have done - is that, right now, AI is getting really good, but it's still a mix of human, and machine, and it's really hard to know when. I [00:17:00] think it's important, as businesses, that we ask, and that we find out. Maybe as consumers, we don't care, but as businesses, accountants protecting people's data, we need to know when humans are looking at this stuff, and when it's not humans. David Leary: There's another product, it's called Roger AI. They are an accounting-automation tool that- they just raised $7.35 million. A couple of interesting things I think from this is who is part of the raise. Everybody, [00:17:30] remember Dan Wernikoff, the former GM of QuickBooks?  Blake Oliver: Ah, he's investing. David Leary: And TurboTax. He's investing. He's backed this Series A. This is a company out of Denmark. Now, they obviously did their round in San Francisco, so we know they have a San Francisco office. Looking at their website, looking at the product, it kind of feels like ... Obviously, I have not tried it. I haven't played with it, but it feels a little bit like a Zapier, or an If This Then That (IFTTT) type product, and a little bit like an AutoEntry, and a, and some [00:18:00] Expensify- some OCR products. Then, you can build custom workflows on top of your accounting system, and integrations. Blake Oliver: Well, what does it do? Give me an example.  David Leary: Let's say I take a picture of a receipt. The receipt needs to be categorized and get into my QuickBooks. Maybe that receipt also needs to have three people approve it before it gets billed to a customer for some job, I don't know. Blake Oliver: Mm-hmm.  David Leary: You can automate all these processes, and then maybe it kicks it over to Slack, and then, somebody in Slack can say, "Yes, approve that." I think it's [00:18:30] still pretty rudimentary. They don't integrate with many things as of yet. It's like Dropbox, QuickBooks ... Like six apps it integrates with, so the depth of the integrations is not a lot. They're playing it up to: "Hey, you can use this to automate processes inside your small business, but then you, as the accountant, could use this to automate processes you're doing for your clients."  If I really step back and think about this, if you look back to when we had the Botkeeper demo, and internally, Enrico and his team at Botkeeper [00:19:00] are building all these automation tools, in-house, to massage data, touch data, move data, kick off processes. That's how Botkeeper's able to augment the humans that are helping out. They have these automation tools helping out along the way. Imagine if Botkeeper took all those automation tools, whatever their tech stack is, and said, "Hey, we're gonna just sell that as a separate product," and you could buy tools that smell-taste similar to what Botkeeper showed us. That kind of feels like what Roger AI is here. [00:19:30] Other than that ... I'm only judging from what I've seen on the website. There's no video. I explored around the integrations, kicked around, but I have not signed up. It's so new, like the QuickBooks-Xero integrations say, "Coming soon." The integration says "Coming soon" [cross talk] Blake Oliver: They don't have any- David Leary: Every integration- all the integrations say it's "Coming soon," so I don't know what it actually connects to at this point. I just thought it was interesting that Dan Wernikoff jumped in on this. Blake Oliver: If you're interested in checking it out for yourself, head over to their website at Roger.AI; R-O-G-E-R DOT A-I. I've [00:20:00] got some follow-up on the security issues we talked about last week. We talked about the City of Baltimore getting hacked. David Leary: Okay.  Blake Oliver: We've been talking about Wolters Kluwer getting hacked. Well, another cloud-hosting provider, called Centrum, has reported a systems breach. This was an article in The Journal of Accountancy, published on Thursday. the 30th of May. Apparently, a [00:20:30] whole week ago, on Friday the 24th, Centrum was hit by a malware attack. Now, Centrum - this is the first time I'm hearing about it - seems to be a virtual desktop/other cloud-hosting provider for CPA firms- David Leary: Okay, so they do specialize in our space. Blake Oliver: Yes, specialize in accounting. On Thursday, they posted an official statement on their website, describing this malware attack that happened a whole week before. Very similar to Wolters Kluwer, and they actually said in their statement that it appears to be similar to the one that hit CCH, Citrix, Baltimore, [00:21:00] and Philadelphia. I was curious to know, well, what is this virus that has hit CCH? Because we still don't know. Wolters Kluwer hasn't told us what it is, and what- David Leary: We projected ... I think we talked about that; I found that second article that was out there of that other malware, two or three weeks ago, I think we had a link to it. I'll see if I can find it.  Blake Oliver: Yeah. Apparently, there's a connection between all of these malware attacks - Baltimore, CCH, and [00:21:30] this one now, with Centrum. The New York Times, again doing some really great investigative journalism, has a story up on their site called, "In Baltimore and Beyond, a Stolen N.S.A. Tool Wreaks Havoc." Apparently, all of these attacks are linked to tool, a hacking tool that the NSA developed called EternalBlue. That's a key component in all of these malware attacks. Before it leaked ... They lost control of it in 2017. I [00:22:00] had kind of heard about this before, but now this is really refreshing my memory. I can't believe what a disaster this has been. Apparently, "before it leaked, EternalBlue was one of the most useful exploits in the NSA's cyberarsenal. According to three former NSA operators, who spoke on the condition of anonymity, analysts spent almost a year finding a flaw in Microsoft software, and writing the code to target it." "EternalBlue was so valuable, former NSA employees said, that the agency never seriously considered alerting Microsoft about the vulnerabilities, [00:22:30] and held onto it for more than five years, before the breach forced its hand." This EternalBlue hack has been used by state hackers in North Korea, Russia, and China. It was behind the WannaCry attack in 2017, which destroyed systems in the British healthcare system, German railroads, 200,000 organizations around the world. Russia used it as part of the NotPetya attack, which cost FedEx more than $400 million, and cost Merck, the pharmaceutical company, $670 million dollars. One [00:23:00] of the cybersecurity experts interviewed in the story called this whole episode, "The most destructive, and costly NSA breach in history. More damaging than the better known leak in 2013 from Edward Snowden." The NSA, and the FBI have declined to comment for the story in The New York Times, and have basically denied responsibility, or that they should be held accountable. Admiral Michael S. Rogers, who was Director of the NSA during this whole leak, suggested in remarks [00:23:30] that the agency shouldn't be blamed. He compared it to Toyota. He said, "If Toyota makes pickup trucks, and someone takes a pickup truck, welds an explosive device on to the front, crashes it through a perimeter, and into a crowd of people, is that Toyota's responsibility?" Then he continues, "The NSA wrote an exploit that was never designed to do what was done." This is amazing to me. This is known, and we're just kinda okay with it?  David Leary: Nobody's talking about [00:24:00] it. This will never make mainstream media. This is kind of a big deal, because this is like ... If it's that powerful the tool that we created - we being our country-  Blake Oliver: Yeah. David Leary: Things our taxpayers pay for, that means everybody's at risk, right?  Blake Oliver: Oh, yeah. For our international listeners, who are not familiar with the NSA, they are the most secretive spy agency we've got in the United States; probably using their artificial intelligence, and bots to listen in on this podcast right now. The [00:24:30] National Security Administration. David Leary: Good find! What a story! Very, very amazing story there. The other interesting thing, I think I'd tie this back to is maybe this is an argument of not upgrading the IRS's computer system. Blake Oliver: Oh, because they are using mainframes that are not susceptible to modern hacking? Yeah. David Leary: Yes. Right? It's so much legacy technology that nobody has the technical skills to hack them. Blake Oliver: Well, here's the thing is that the flaw in Windows [00:25:00] that allowed these attacks to happen, that this exploit utilizes has been patched; Microsoft patched it. The problem is that there are so many systems out there that have not been patched, that have not been upgraded by the people responsible for security, that it still exists. You can still use this tool to hack into computers all over the world. David Leary: Okay. I'm not gonna cuss, but I wanna slap my hand on the desk. That is a bunch of crap. I'm an accounting firm. I know that running my own IT is a risk. I [00:25:30] have to keep all my machines updated; I have to keep all my patches. I'm gonna go outsource this to a hosting company, because they promised me to be my IT department, and they're not #$%&ing patching machines? You're gonna have to bleep that.  Blake Oliver: Yeah, and this is the thing. We don't know for sure, but if Wolters Kluwer, CCH, was the victim of this hack, that means that they weren't properly patching their PCs. I've got another story [cross talk]  David Leary: I have no comments on it. Sorry. Don't get me fired up more now. Come on, now. Blake Oliver: I've got another story that'll [00:26:00] make your blood boil, or maybe it'll just make you give up on humanity. This is another security one. Are you familiar with the concept of social engineering?  David Leary: Yeah, so I'm like, "Hey, Mare ..." I called up this front desk of an office. I'm like, "Hey, Mary. I was wondering, can you give me your password, because of blah-blah-blah?" They just give it to me. Blake Oliver: Yeah. David Leary: It's what happened to Podesta, basically, with the Clinton emails. Blake Oliver: Right, cuz people are the weakest link in the chain of security. Psychologists at the University of Luxembourg have been studying social engineering as [00:26:30] a way of hacking - how effective is it? They did a large-scale study involving over 1,200 people to investigate how people are manipulated into sharing their passwords with complete strangers in return for small gifts. What they did is they stood out on the University of Luxembourg campus wearing University of Luxembourg branded bags. They looked like they were affiliated with the university, and they randomly selected passersby, and asked them about their attitude toward computer [00:27:00] security, and then also asked them for their password. They were carrying- the study, the people conducting the study were carrying University of Luxembourg bags, but were otherwise unknown to the respondents. Now, David, guess how many people gave out their passwords?  David Leary: I'd say it's about 50 percent. I'm just guessing ...  Blake Oliver: Yeah, well, because I already hinted that it's so bad, right? They varied the experiment. To some people, they just asked them for their passwords. Some people, they gave them chocolate, and they would do it before, [00:27:30] or after, or during the interview. Here's the crazy part - 30 percent of participants revealed their passwords in exchange for chocolate. David Leary: "Hey, here's a piece of candy. Give me your password." "Okay ..." That's the test- the scenario. Blake Oliver: That was if they received the chocolate after the question was asked. Like I'm gonna ... "Hey, will you give me your password? We've got chocolate here." If the chocolate was given beforehand, 43.5 percent of the respondents [00:28:00] shared their password with the interviewer. The willingness to divulge passwords increased further if the chocolate was offered immediately before the participants were asked to disclose their password. Anywhere between- depending on how you do it ... If you give people chocolate, you can get their passwords, 30 to 48 percent of the time, which is just insane to me that it's that easy to get people to give up their passwords. David Leary: It seems like a very cost-efficient way to hack into things.  Blake Oliver: Right. If you wanna hack into a city, like [00:28:30] the City of Baltimore, just go to a government building, set up a table, put on a City of Baltimore T-shirt, and hand out chocolate in exchange for people's passwords. This is absolutely mind-numbingly insane. David Leary: It makes that NSA tool that we probably spent billions of dollars of taxpayers' money on to hack into people's computers ... They could have just done this. Blake Oliver: It shows the importance ... You harp on this every single time we talk about security - of multi-factor authentication. It's not [00:29:00] just because somebody might steal your password, it's because your people working in your firm, or at your tech company might be dumb enough, and are ... I don't know, maybe dumb is harsh, but just people are not thinking. They're just willing to give away these passwords, and we have to protect our companies from our own staff more than anyone else. David Leary: People need to put their passwords at the level of their loved ones. Like, "Hey, would you trade me your child for some chocolate?"  Blake Oliver: Yeah, education ... We [00:29:30] need some education here. This is just ridiculous. That is my crazy, ridiculous security news for the week. David Leary: Wow. Okay, I have something cool I saw this week-  Blake Oliver: All right [cross talk]  David Leary: I think it's pretty cool. You're an accountant, or bookkeeper. You like to use two screens, right?  Blake Oliver: Yep. David Leary: What happens when you go to Starbucks?  I have to bring my giant screen with me, and find a plug ... I've seen people doing that. David Leary: You're one of those guys? You're one of those guys that bring the huge 22-inch screen to ... I've seen that, as well, playing a video game [cross talk] Anyways, ASUS has a new [00:30:00] ZenBook Pro Duo. We'll have it in the show links. You can see the photos, everything. It looks like it might be the coolest- Blake Oliver: Oh, this is so cool. David Leary: This is the accountant's/bookkeeper's laptop. Imagine if you took the keyboard, slid it down towards your belly, and in that upper half of where the keyboard is, you now have a half-size screen. Then, to the right, you have a touchpad that's also like a screen. Now, you have a 10-key, still, as well. Blake Oliver: Wow. [00:30:30] David Leary: You could have the bottom half- maybe that's the e-mail that came in, and you're reviewing it, while at the top half, you have QuickBooks open, and you're doing some data entry, or whatever ... I'm assuming you're still doing data entry, right?  Blake Oliver: Yeah.  David Leary: You really get that benefit of a huge ... Basically, it's like a monitor and a half, but you still have the same form factor of a laptop. Blake Oliver: What I like about this is that it solves a problem, which is you need two screens, but you don't necessarily need a full-sized second screen. You just need [00:31:00] a place where you can put something that you're referencing - part of a document, or part of a web page that you're looking at, while you work on a full-size screen. This is really cool. The picture looks amazing. It's called the ASUS ZenBook Pro Duo. Click on the link in the show notes and check out the pictures of this thing. It looks fantastic. This is the sort of thing that might actually get me to switch off my Mac. David Leary: Yeah. This is a bookkeeper's laptop, or accountant's laptop, by far. This is a totally slick. ASUS, if [00:31:30] you would like to send a review copy, please contact us on Twitter. Blake Oliver: Yeah, send one to David, and send one to Blake. David Leary: Even for the podcast, because I could have the stories I'm talking about up there, but our recording software could be running on the bottom half. Blake Oliver: Yes. Yes. That's beautiful, and you can be monitoring it. I love it.  David Leary: This becomes a business expense now. We have to buy these for us. Yes, get one of these, for sure. Blake Oliver: All right. What else? David Leary: What else do I have? I have a- oh, I [00:32:00] have a story about raising prices. Blake Oliver: Let's hear about that. David Leary: Okay, two things happened this week. One, I saw this article in SaaStr. SaaStr is a website community for people that build SaaS software. All the app developers would probably go to SaaStr and read the blog posts there. Blake Oliver: Right. David Leary: Makes sense, right? This article is titled, "When You Raise Prices More Than a Smidge ... They At Least Look At Another Vendor." I think the take-away in this article is that ... I'm just gonna quote it. "What [00:32:30] I think is most important is how material price increases make your customers ... look. Look at other solutions ... You've just planted a seed. You've sent them on a fact-finding mission to talk to your competitors." The premise is if you're just charging for your SaaS app every month - X price - and people are just happily using it, they're never gonna pause, and think, "What's the value I'm getting out of that product?" They're just gonna keep chugging away, right? Blake Oliver: Right. David Leary: They could maybe incrementally raise it a little bit here, a little bit here, a [00:33:00] little bit here, but if you do a material raise, people are going to question it, and then-  Blake Oliver: Yeah.  David Leary: Coincidentally, me personally, I had that experience this week. Blake Oliver: Oh, what happened?  David Leary: I got an email from Intuit about my QuickBooks subscription. Blake Oliver: Oh, no; you got hit with an increase- David Leary: I got hit with a price increase. My price is going- I think I'm paying- right now, it's $29 a month for my QuickBooks Online Plus. On July 1, I've been told it's going up to $70 a month. Blake Oliver: That's a steep increase. David Leary: It's [00:33:30] over 100-percent increase. For me, I feel like I probably get $360 of value a year from QBO, but when I start stepping back, and I look at $840 for a year, that all of a sudden becomes my biggest business expense. It's more expensive than the podcasting software we're using. It's more expensive than the social-media tools I used to create the artwork for the podcast. It's more expensive than Canva. It's [00:34:00] the most expensive ... Microsoft Office I got all year for 99 bucks, or 106, or whatever that is. All of a sudden, QuickBooks is my most expensive business expense. With that said, I'm not gonna change. I'm too old to learn a new product. I'm not gonna shift, right? Blake Oliver: Oh, David, don't cut yourself short. David Leary: I don't have the energy for it, but I'm gonna try and downgrade my plan, because I'm not using the features at that level. The only feature I am using is the 1099 Subcontractor feature. [00:34:30] Are you familiar with that in QBO?  Blake Oliver: Yeah, you sent me one, because- David Leary: Oh, yeah. That's right. Blake Oliver: -you had to pay me some money, and it was over the $600- David Leary: Threshold. Blake Oliver: -threshold, so ... Yeah, actually, that's one of the coolest things, I have to say, about QuickBooks Online is I got an email saying, "I need your W9," and I just clicked the button, and I put that in, and it went right into your QBO file, right?  David Leary: It's a really cool feature, but ultimately, what that's really doing ... It's driving subcontractors [00:35:00] to sign up for QuickBooks Online Self-Employed. Blake Oliver: Right. Brilliant; brilliant.  David Leary: I would argue that feature should just be free on all QBO plans, because I used it with somebody else, and she signed up for QB Self-Employed. Blake Oliver: Right. David Leary: That's the one feature I'm using of Plus that I'd argue should be a free feature. Then, not to mention, and this is, I think, the kicker for me, when I think about the value: I send everything through AutoEntry. AutoEntry's essentially doing all the work for twelve bucks a month and shoving the transactions into QBO. It's such [00:35:30] a huge price increase, it's just- the reaction to it, I'm just like ... Then I saw somebody reply to my tweet about this, and they said, "Oh, you can't downgrade."  Blake Oliver: You can't.  David Leary: I guess I'm paying it. Blake Oliver: Or, bringing it back to this article on SaaStr, maybe you shop around. Hey, I'm sure that there's somebody at our episode sponsor, Xero, who would really love to talk to you, David. This [00:36:00] is a really good question: when is it good to raise prices, and when does it do more harm than good? In the software world, I think it is debatable that ... Sometimes, you just want to take your legacy customers, and leave them at the price they were at, rather than disrupt things the way that ... Your relationship with QuickBooks is ... You're questioning it at this point, given the massive doubling of the cost-  David Leary: I mean, $840 of value. I don't see that. That value is hard to measure. [00:36:30] Blake Oliver: I think it is important for tech companies to really think carefully, before they raise prices, because the incremental cost to serve a customer for Intuit, for most SaaS companies is not that much. Your cost of sales is not very high, once you've got a customer. In the accounting world, if we're talking about raising prices in your accounting firm, or bookkeeping firm, in my experience - and I was guilty of this myself - most firms are really bad about raising prices and are seriously underpricing their legacy [00:37:00] customers. By legacy, I just mean customers you've had for a long time. We are not good at raising prices every year, especially the way that Intuit has been, and we need to do more of it. In that case, you actually want your customers to go out, and shop for other options. It's really an easy equation. You just look at your customer base, and you say, "All right, if I raise prices across the board by 20 percent, would I lose 20 percent of my customers?" If the answer is no, that you would lose less than 20 percent, you should [00:37:30] raise your prices. David Leary: Yeah, and I think that's probably the equation Intuit's doing-  we talked about that with the QuickBooks Advanced [cross talk] Blake Oliver: Right. Exactly. It's important to be raising prices, always, because you need to create capacity in your firm for taking on new clients. It's way easier to create capacity by raising prices and shifting some of your customers to other firms that are willing to service them for less, for instance, than to go out, and hire new people. It's just a very easy [00:38:00] way to increase your revenue, and your margins without having to grow your firm. It's so much more efficient. David Leary: Yeah.  Blake Oliver: The problem is most firms don't do ... They don't take the time, and they have these personal relationships with their clients. They feel bad doing it, especially ... I find so many bookkeepers feel bad about charging what they're really worth, and they don't. That's why they're just not making a lot of money. David Leary: Yeah, and I think ... I'm getting a 60-day [00:38:30] warning about this, or whatever it is, from the email ... Somebody said this at the AICPA Executive Roundtable, and I don't know ... It was from the mid-sized firms - small- to mid-sized firms. I don't know who said it, and I apologize if you're listening. If you said it, tweet at me, and let me know. Essentially, this accountant said that they're okay with companies raising prices. It's okay to do, but give people a 12-month heads up, because right now, if you're an accountant, or bookkeeper, if you've gone to a fixed-pricing model, and [00:39:00] you've calculated your costs, and you're rolling those out your client, you need a year window to re-up those contracts you have with your own clients. You can't just give them a 60-day warning; be like, "Hey, by the way, QuickBooks went up in price, so I need charge you more, right?  Blake Oliver: Yeah.  David Leary: Price increases are gonna happen. I think everybody knows that, except them. It's just 100-percent price increases do feel a little on the crazy side. Blake Oliver: It'd be a lot.  David Leary: Yeah, it's a teeny bit upsetting to have to bite [00:39:30] the bullet on that, but I probably will still pay it, because I just ... The headache of switching- Blake Oliver: Right. Yeah.  David Leary: -would be too much. Blake Oliver: Yeah. It's a huge pain to change your accounting system. Well, David, that's all I've got this week. How about you? David Leary: I think that kind of wraps things up here. I think that's it. Blake Oliver: If folks want to get in touch with you online, David, where's the best place for them to go? David Leary: To use the Twitter. I'm @DavidLeary- Blake Oliver: And I am @BlakeTOliver. You can connect with us on [00:40:00] LinkedIn; on Facebook. You can follow The Cloud Accounting Podcast on Facebook, just search for us there. If you are going to be at Xerocon, we'll be there in June. David Leary: I'll also be at Scaling New Heights, so, if you want a Cloud Accounting sticker, Podcast sticker, come find me. Blake Oliver: I will be at AICPA Engage, starting on the 10th of June. If you're gonna be at any of those conferences, reach out to us on Twitter, or message us elsewhere, and let us know. We'd love to ... I'd love to meet up with our listeners, and chat [00:40:30] with you all in person. it's fun. David Leary: We can buy beers for every listener. No, I'm kidding! I didn't say that. We won't do that. I think that's a wrap this week. Blake Oliver: That's it for me. I'll see you next week, David. David Leary: All right, bye, everybody. Blake Oliver: Bye.  
Ransomware attacks continue!
Sponsors BQE CORE: Show Notes 00:08 – Blake and David talk politics for a brief moment in time ...  00:47 – While Andrew Yang has a touch of bot-phobia, he's the only 2020 presidential candidate talking AI in any meaningful way. 01:24 – Yang's take on "reality TV" style elections |The Hill 02:04 – What it takes to hit the debate stage | NYTimes 04:34 – The ransomware wars go mainstream, when the latest attack on QuickBooks hits "action" news channels, like News 6 in Orlando | 06:49 – Hackers are buying kits designed to specifically target QuickBooks Desktop data files | Healthcare Info Security 07:30 – Ransomware rebuilds - new business opportunity for accountants?  09:10 – How many accounting firms suffer ransomware attacks and stay silent about it to save face?  11:37 – Backing up the backups of your backups, and then backing those up on a regular basis is one way to mitigate ransomware damage 12:47 – LinkedIn adds some new marketing tools to help small accounting businesses boost their visibility on the platform business | Accounting Today 14:47 – Ain't nobody got time for updating multiple social sites when you're trying to run and grow your accounting business. David challenges app developers to create an app that's up to the social-media management task 16:49 – Intuit has added a new role in the TurboTax Live arena - tax associate - to assist credentialed agents with a variety of tax-related tasks |Intuit ProConnect 18:18 – QuickBooks Live finally has a landing page all its own, and they're celebrating by offering a free 30-minute consultation! | Intuit QuickBooks 19:13 – What exactly is QuickBooks Live? Short answer: Uber for bookkeeping 20:48 – Intuit provides an actual demo of the QuickBooks Live service in their new add, narrated by Danny DeVito 22:30 – Blake Oliver - Voiceover talent for hire! 23:56 – Does your firm utilize collab tools that include instant messaging? | CPA Trendlines 26:15 – Google Sheets ups its game with some new tools - Slicers, Scorecard Charts, and themes - to create more effective data visualization | Android Police 28:10 – The Federal Reserve wants to create its own instant-payments system, much to the chagrin of the Big Banks | Politico 29:31 – Open call to Elizabeth Warren - Make an appearance on The Cloud Accounting Podcast!  30:38 – Square doubles down on its ecosystem plays | Bank Innovation  32:30 – More talk on Andrew Yang’s automation/disruption platform and why the concept of universal basic income could be beneficial  33:40 – You say you want a revolution? In June 2019, thousands of LA dockworkers marched against the rise of the robots | CNN Business 34:58 – According to a Pew Research Survey, 85 percent of Americans support policies for robot restriction 35:38 – It’s gonna get far worse, before it gets better. Blake talks about history repeating itself, and how the future may not be so bright for millions of workers in industries embracing automation 37:59 – With a reported 40 to 50 percent of accounting work that can be automated, accountants and bookkeepers sit at the top of the list of those who could be replaced by machine counterparts 41:11 – As automation and constant change becomes the norm, how do we tell our kids what to be when they grow up, when the jobs of today may not even exist by the time they enter the workforce? Perhaps investing in education and lifelong learning is the key 43:05 – What do you really think? Give us your issues, your ideas, your suggestions, and even your complaints!  Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.  Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptBlake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: So, David, did you catch the debates? David Leary: I did watch the debates. Blake Oliver: Yeah? David Leary: It's must-see TV. That's like five hours of ... Remember when WWF would put 20 people in a cage match? Blake Oliver: Yeah.  David Leary: It's like that. Blake Oliver: That's actually a very good analogy. My brother is in town from New York, visiting for a week, and he loves debates and [00:00:30] politics. He's a public school teacher, and he's also a Democrat and very liberal. I like to think of myself as more in the moderate spectrum. I'm a registered Republican in California, so whatever that means ...  David Leary: A Democrat everywhere else? Blake Oliver: Yeah, exactly. I'm like a Bush I Republican, which is kind of weird thing to be, because I'm not a Trump guy. So, it's been interesting watching the debates. I'm a big Andrew Yang fan. We've talked about him on the [00:01:00] podcast before-  David Leary: -because he's all about the bots are gonna take our jobs; we need universal basic income. Yeah, he's talked about a lot of things we talk about. Blake Oliver: Yes, exactly. He's the only one talking about automation in any meaningful way, like the humongous societal threat that automation poses. I've actually got a story along those lines that I will not forget to bring up, because it does tie back to the debate with Andrew Yang. David Leary: I think he was the only one that brought up the point that this is like a reality TV show and look what happened last time - we got a reality [00:01:30] TV star as your president. I think that was one of his lines in the debate, which I thought was an interesting observation. It's [cross talk]  Blake Oliver: He doesn't get a lot of time. You can tell the moderators are like, "All right, enough from you, Yang. We know you're a one-issue candidate, so we're gonna get back to the real debate."  Anyway, I hope he keeps going as long as he can. David Leary: Hey, I did my part. I went in and I donated $5 to six or seven of the candidates, because they have to hit that threshold to stay in the debate- Blake Oliver: Oh, yeah. David Leary: -so I did my part and donated to about six or seven candidates [00:02:00] to keep them in the debate. It's entertaining. They should be on every week. I'd tune in. Blake Oliver: Yeah, no ... Very good. Please, let's keep this going; everybody, please, donate all those one-percent candidates so they can get ... What is it they have to get to now, like two percent or ...? They have to get two percent polling, in order to continue? David Leary: And 130,000 individual donations or something, yeah.  Blake Oliver: It's one of the- either one? Got it [cross talk] We'll talk a little bit about automation. We also, of course, have to talk about the ongoing malware security, QuickBooks hacking thing that's going on. David Leary: There's more malware. [00:02:30] I got some QuickBooks Live news- Blake Oliver: Yeah, QuickBooks Live.  David Leary: A little bit of news about the payments, and that's about it. I don't have a ton of articles this week, but they're ... I'm nicely prepared, though. What about you? Blake Oliver: I got a few more small stories like Google Sheets has new features. Here's a survey about how many firms are using instant messaging with their clients; how much businesses are spending, as a percentage of revenue, to manage taxes. I think there's a real interesting value-pricing [00:03:00] lesson there, potentially. What else? Oh, how workers feel about robots, and their jobs, and automation, in general. Shall we get to it with the security updates? David Leary: We got a review, though, so, do you wanna read that?  Blake Oliver: Oh, yeah, let's do that first. David Leary: Five stars. Blake Oliver: This is from Mel Comer, CPA, and outsourced CFO. Mel said, "David and Blake do a fantastic job keeping the cloud accounting world up to date on important topics. Always interesting, sometimes [00:03:30] controversial, and definitely enjoyable. Suggestions - would love to hear more about blockchain, and cryptocurrency stories and how accountants are dealing with the challenges of having clients in that space. For example - show 100, they mentioned emerging companies who track cryptocurrency transactions for clients. Bitwave is one of those, and we'd love to hear you interview Pat White, the founder. This is a huge need for our clients. Thanks, guys." Awesome. David Leary: Thanks for the review and suggestions. Blake Oliver: You know ever app, right? So, I'm gonna leave it to you to track down Pat [00:04:00] from Bitwave. David Leary: All right, I'll track down ... Actually, I think that might have been the company I mentioned that I met at The Accounting Show in LA. Blake Oliver: Oh, cool.  David Leary: We can track that down, if there's more news that makes sense. The one challenge, I think, with bitcoin and cryptocurrency - they're in every news, and every app talks about AI or blockchain, and crypto. What's bubbling into the news is what bubbles into the news, but I could definitely ... Yeah, we'll check it out [cross talk] Bitwave could [00:04:30] be interesting, and I'll research a little bit on Pat White, the founder. Blake Oliver: All right, let's talk about QuickBooks hacking. David Leary: Yeah. It was nice, we were talking about how great TV is, in the news ... Well, so we know a story is getting a little bit mainstream when Action News 6 Orlando is covering a QuickBooks ransomware attack story. Blake Oliver: When you sent me this link, I thought it was just originally an article on their website, and it was written by one of their interns. I'm like, "Oh, okay, whatever ..." but then, I realized [00:05:00] they had embedded the video from the story up top. This actually was evening news in Orlando. David Leary: The reporter went there. He did the ... With the camera, with the microphone, in front of the business; then he's inside the business, interviewing the business owner. We always talk about this. There's this fine line of we're ... I'm in the closet talking to Blake about issues related to our industry, but I feel like when we're talking about stuff, it's because everybody's talking about it, and [00:05:30] this is proof. Blake Oliver: Yeah.  David Leary: What was interesting about this attack - this has nothing to do with the iNSYNQ attack, other than the fact that it's ransomware. Blake Oliver: Right, ransomware and there's QuickBooks involved. David Leary: There's QuickBooks involved. What was kind of interesting about this attack ...There's the TV news broadcast, but then there's also an article from (We'll put both links in the show notes) A couple things were interesting about this. It's a dental office, a dental practice. From [00:06:00] what they can tell, the attackers did not do anything with patient records, medical records, anything. They only targeted the QuickBooks Desktop data file, encrypted it with ransomware, and asked for a $10,000 ransom, and if they didn't pay it within 48 hours, it was gonna go up to $20,000. Blake Oliver: The dentist, apparently, he didn't have backups for about five months. David Leary: That's correct.  Blake Oliver: He had to make this choice. He said, "Okay, do I pay the $10,000 ransom [or $20,000 if he waits too long] or [00:06:30] do I simply scrap it and have my accountant redo five months of accounting?" Immediately after reading this, I said, oh, it's gonna be cheaper to- almost guaranteed to be cheaper to just recreate the five months of accounting. That's what he's doing. What was really interesting about this, to me, is that there's a mention in the article - not a whole lot of detail - but a mention that hackers are purchasing kits to specifically target QuickBooks Desktop files on computers and, like you said, only encrypt those and hold [00:07:00] those ransom. David Leary: Yeah, they're going after that data file, because they know it's a business- Blake Oliver: And they know it's valuable. David Leary: It's valuable, exactly. Because if somebody comes in and encrypts some pictures or something, you're like, "Okay, I lost those pictures forever ..."  Blake Oliver: What if he didn't have backups at all? What if he had years of data in that QuickBooks file and hadn't made any backups or didn't know how to restore them? Then he'd really probably be forced to pay the ransom, because it's so hard to go back many, many years to recreate your [00:07:30] accounting information. David Leary: It very specifically states he's gonna pay his accountant. Somebody on Twitter tagged on to this and made a comment that, "Hey, this is a new service their accounting firm can offer." If you think about it- Blake Oliver: Yeah.  David Leary: As long as you quote the price under $10,000, you're gonna get the business.  Blake Oliver: We'll recreate your- David Leary: "Oh, you need me to re-build your data file?" $8,000.  Blake Oliver: Rebuild your data file, yeah.  David Leary: This actually is going to help drive revenue for accounting firms, possibly, these malware attacks. Blake Oliver: How this relates to what we were talking about last week is that, last [00:08:00] week, we were talking about the iNSYNQ ransomware attack and three other ransomware attacks that hit hosting ProAdvisors - these managed service ProAdvisors. This dentist- his name is, by the way, Carl Bilancione? David Leary: Apparently, believe it or not, he was on Survivor once. He is a Survivor star - the TV show "Survivor." Blake Oliver: I thought that was a weird coincidence, but then I thought there's like 20 years of "Survivor" and how many contestants do they have? So there's a probably good chance that you personally know somebody who was on "Survivor" at some point. Yeah, he was [00:08:30] on Survivor. Maybe he actually saw this as a PR opportunity, right? He calls up the news station and talks about getting hacked, and now, here he is getting free advertisement for his practice. David Leary: Oh, I'm sure. I'm sure he gets that piece of it. One other thing that was interesting is the Seminole County Sheriff Dennis Lemma encouraged businesses to never pay the ransom. But then he went on to say that he's had nine reported incidents of this happening in his Florida county this year. Blake Oliver: Nine incidents? Wow. That didn't get news coverage. [00:09:00] David Leary: This is probably happening, and people probably think they're in a silo ... Also, I think, which is interesting about this, do you think, if you're a small business and this happens to you, it's a little embarrassing, possibly? Blake Oliver: Oh, yeah, right. Well, we know for a fact firms have been hacked, and these are accounting firms, and the partners paid the ransom and never told anyone, because they didn't want their clients to know. Like you said, this probably- if this happened nine times in that county alone, this is probably happening [00:09:30] every day, all over the country, multiple times. People are just not admitting it, or they're not advertising it. This guy saw an opportunity, so it became a news story, but it's probably a massive- it's a massive problem, and when it bubbles up like this to TV news, then you know that there's something going on. David Leary: So, it'll be interesting to see ... I didn't see any other attacks out there, but if any of our listeners- if you've had- your small business owner or your client has been ransomwared, [00:10:00] we'd love to find out about it. I think it's ... The only way this is gonna get prevented is if people are aware that they're a target. Blake Oliver: I posted this story- after you found it, David, I posted this on LinkedIn. Joy Lizotte said, on LinkedIn, that our local government, or their insurance provider just had to pay $400,000 because of a similar situation. David Leary: I think I saw the City of Lodi, right there in your backyard in California, there ... Not your backyard, I guess. It's way north. But [00:10:30] apparently, they admitted that they were ransomwared a few months back - an entire city. This is not stopping. It's just, I think, for our industry, it's very obvious there is a target at QuickBooks data files. Blake Oliver: Yeah. David Leary: Make sure making your backups, or switched full-blown to cloud, because this is happening. Blake Oliver: And because this happened to a guy- this dentist, he wasn't using a hosting provider. He was just- he had a file on his local network. Now he did say that he had an IT firm that had secured it, but the hackers were able to get [00:11:00] through that, so the question is-  David Leary: Well, he thinks- if you read one of the articles, he actually thinks it was another dentist in the office who was shopping for wine on a website in France that got him infected. Blake Oliver: Oh, clicked a download or something? David Leary: Yeah. Blake Oliver: Well, so, users are the weakest link, right? The question is should he have been using a hosting provider, even though hosting ProAdvisors, themselves, are at risk? I don't know how you feel, David, but I still think he's better off using hosting. Well, he's better off going to online, QuickBooks Online, and not having to deal with this issue, but if he's gotta keep the [00:11:30] Desktop for whatever reason, then go to a hosting provider;  just make sure it's one that's at the top of the pack. I don't know what else to do. David Leary: If you have reliable backup procedure ... You're making a backup on a daily basis, right? You're backing up your QuickBooks data, but then you're doing periodic backup, like every week, I make a backup, and I take that home, and I put in my safe at home or something. Then, every quarter, I take a backup, and I take that backup, and I store it at my accountant's office in their safe or something, to where-  Blake Oliver: Every year, I make a backup and I bury it in my backyard. David Leary: Something, right? As long as you have- you're [00:12:00] keeping all these backups- Blake Oliver: Right.  David Leary: If you get ransomwared, you're like, "Okay, screw you. I'll delete the file. I'll restore my new one.  Blake Oliver: It is true. It doesn't matter, if you've got daily backups. I used to make hourly backups when I had a desktop file that I was managing, in my office manager days, and it saved me a few times from losing half a day of work. Backups ... Cool.  David Leary: Anyway, that's gonna be the lesson here is to make more backups, and don't click stuff. The other thing that's talked about in both these articles is about thumb drives. Blake Oliver: Oh, [00:12:30] yeah. Don't plug in thumb drives. David Leary: And actually, I have to lock this down at my house, because my kids take thumb drives to school, then they bring 'em home. "Dad, can you print this?" I have to crack down on the thumb drives, I think, this year.  Blake Oliver: They disabled our USB thumb-drive capability at work completely because of this. You cannot use a thumb drive. I got a story here about LinkedIn and how accountants can use LinkedIn better thanks to some new tools that are rolling out. This was in Accounting Today on July 23rd. [00:13:00] Michael Cohn covered this new, "Open for Business" marketplace that LinkedIn is creating. Basically, if you're any kind of professional, you can now list your availability, industry expertise, skills, and geographic location, and indicate that you are, "open for business," and ready to connect - turning LinkedIn into sort of a marketplace for professional services. I don't have this available on my profile yet. I went in this morning to check and look. Apparently, it's rolling [00:13:30] out gradually, so you might wanna go on to your profile and look. It should be there pretty close at the top in this dotted ... There's a highlighted box, or it's got a dotted line around it. It will allow you, if you've been selected for this beta, to highlight your expertise. Then, I guess, theoretically, business owners can look for you, and find you, and hire you. David Leary: Okay, so I gotta- Blake Oliver: I don't know if they can hire you-  David Leary: I have a firm. I've gotta make sure I maintain my Facebook [00:14:00] profile of my business hours there, and then my Google business profile, and my Yelp profile, and now I've got a LinkedIn profile for my business I've gotta maintain. All right.  Blake Oliver: Mm-hmm, but I think the LinkedIn one is actually more helpful, because it's tied to your actual resume, and your social. If you're active on LinkedIn, you should definitely be using this. Could be a good lead-gen tool.  David Leary: For all you app developers out there, there's ... Nobody wants to do this, so, if you can build one app, where I could just update my stuff in one spot, and you'll go populate this on all the services for me, people would pay for that, because nobody has time for this. [00:14:30] Because then you change your business hours, and "Oh, I gotta remember to go change that on my LinkedIn profile, too." Nobody has time for that. This is just another hassle, but we'll see how that goes. The thing is, any improvements to LinkedIn, I'm always welcome for, because I really have a lotta disdain for LinkedIn. Blake Oliver: Got it.  David Leary: You have to use it, though. You can't not be on it. Blake Oliver: Oh, you can't not be on LinkedIn. Well, I think- I like LinkedIn. You're a little more critical than I am, but just for me, as a resume replacement, I [00:15:00] haven't had to print out an actual resume and give it to anyone for years now, because LinkedIn is my resume. Any company that I wanna work for will accept that, and I don't have to give them some Word document. David Leary: Yeah, but it's the messaging, and writing a message, and doing posts. It's all flaky. It's all ... Aww ... Then the LinkedIn spam is the worst of all time [cross talk] so we can start on that.  Blake Oliver: Right, well, that is unfortunate, yeah.  David Leary: It's worse than any other- it's worse than the blind phone calls you get, the robo-calls. LinkedIn spam is worse than robo-calls. This episode of The Cloud Accounting Podcast is sponsored by BQE Core. As many of you know, I'm all about the niches and niche apps. Putting your business clients in the proper niche app is providing them with a 100-percent solution versus, at best, the 85-percent solution of a standalone accounting app. If you have clients that are architects, engineers, consultants, or lawyers, Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. You don't need to juggle between multiple apps. Core has it all in an easy-to-use, all-in-one app for project management, including time and expense tracking, budgets, forecasting, client billing, and accounting. Even though Core is an all-in-one platform, it still works nicely with the apps like Google Drive, Dropbox, OneDrive, QuickBooks, Xero, and AccountRight, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app, and recently it launched a cutting-edge voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. Did I mention that BQE Core works great for bookkeepers, CPAs, and accounting firms, too? David Leary: I got some updates on QuickBooks Live.  Blake Oliver: Yeah, let's hear about it. Those videos are crazy. David Leary: Well, before we jump in and go that far in QuickBooks Live, I actually saw an update to a post about TurboTax Live. Blake Oliver: Okay ...  David Leary: This article was originally published on October 12th, 2017 and was re-published on October 4th, 2018 and again on August 1st, 2019 with [00:17:00] updates. Basically, it's the hiring page to do TurboTax Live, which we've talked about before. It's very similar to QuickBooks Live. The difference on this one is they talk about ... I'll read this straightforward: "New this year is a tax associate role to assist credentialed agents in assisting the preparation of 1040s. In addition to earning extra money on an hourly basis, tax professionals can take advantage of the benefits of being [ready?] a W-2 Intuit employee, and get bonuses, 401(k) training, [00:17:30] and be part of the community." So, it's a part time job- or seasonal job, but you are truly a W-2 employee, and I think from what we've seen thus far on the QuickBooks Live side, it was more of a subcontractor situation, not W-2. Blake Oliver: Right. Interesting. Most of the TurboTax Live people are contractors then, or are they W-2 employees? I thought they were part-time employees, but now I'm not clear on that [cross talk] from the fact that they're-  [00:18:00] David Leary: That's why this sentence- it does say "New this year." So it's just joined by our theory of QuickBooks Live is following in the footsteps of TurboTax Live. It'll be interesting to ... Is there gonna be an evolution of QuickBooks Live, where some of these ProAdvisors that are doing QuickBooks Live could become W-2 employees?  To continue on that QuickBooks Live now has its own landing page. Previously, if you are shopping for QuickBooks Online, you got to the pricing page. You could set some sliders, and you [00:18:30] could add on. You could add on QuickBooks Live Bookkeeping. Now they have a true landing page, so small businesses will ... Their entry point to the QuickBooks world is through a QuickBooks Live bookkeeper, and then into the rest- buying QuickBooks Online. They are offering a free 30-minute bookkeeping consult. On that page you can just click, sign up, and you can start your QuickBooks Live process for free. Blake Oliver: We [00:19:00] should say that the videos that they have added on these landing pages are very well-produced and narrated by Danny DeVito. David Leary: Yeah, I would argue this is like a Super-Bowl-level commercial for QuickBooks Live- Blake Oliver: Should we summarize for the new listeners- because we even talked about this in a while, and we've got a bunch of new listeners ... Maybe we should summarize what QuickBooks Live is?  David Leary: The shortest answer would be it's like Uber for bookkeeping. Blake Oliver: Okay, so I am business owner. I need bookkeeping done, so I just open up [00:19:30] my phone- David Leary: Your phone or your QuickBooks Online. You can do a video chat with a bookkeeper, and they'll help you through whatever problems you're having. It could be a reconciliation, et cetera; re-categorizing transactions. The way it's more like Uber is you're paying Intuit, you're going through Intuit, and just like Uber, every time I get an Uber, I get a different driver; I'll probably get a different bookkeeper. It's very similar to an Uber-style model for bookkeepers- Blake Oliver: And I'm just looking scrolling down this page and looking at the pricing, because the pricing continuously changes here. Remember [00:20:00] when we started talking about this, it was $200 month? David Leary: Yep.  Blake Oliver: All these prices here, from Simple Start with Live Bookkeeping up to Advanced with Live Bookkeeping - they've got four tiers - it goes from $410, to $420, to $435, to $475, all in the $400 to $500 range. Interesting, it's such a small range. They really seem to have fixed the bookkeeping price of $400 dollars a month. It's really not changing. The only thing that changes is the embedded [00:20:30] price of the QuickBooks software. David Leary: Exactly. It basically looks like, right now, it's for bookkeeping, no matter if you're a sole proprietor, or the size of your business ... It's $400 which is a pretty much across the board. Blake Oliver: Yep, and the scope of services- what is the scope of services these days? David Leary: If you watch the ad, this ad really, truly demos the service. My understanding is that this is a real small business owner and a real ProAdvisor that are both involved in this conversation. This [00:21:00] is the real-deal demo of the offering. What I like about this new commercial is, in comparison to ... You may have saw this, about three years ago, Intuit had a very pie-in-the-sky vision of the future of QuickBooks Online. It was like this Uber driver. He's driving his Tesla, and the Tesla has the big TV screen. His accountant pops up on the TV screen in the Tesla. He's talking about ordering flour for his bakery business that he also owns. It was a little too forward-thinking. [00:21:30] Blake Oliver: Yeah.  David Leary: This ad is very realistic, and there's screenshots, and it shows interactions. I think it's truly showing the service. It doesn't look like it- it doesn't have screen images simulated; little pieces of text that sometimes they put on ads. If you wanna see how it works, hit the show notes. The link to the YouTube video is in there. Blake Oliver: It looks good. David Leary: If you think about this, chances are this is gonna be a commercial, so bookkeeping ... Bookkeeping [00:22:00] is gonna be a commercial. Do you know any other bookkeeping firms that are gonna run a TV commercial during the Super Bowl, possibly?  Blake Oliver: No. David Leary: This is huge. Blake Oliver: It's gonna be big. David Leary: ... I think a lotta people- I think a lotta small businesses have this mindset of bookkeeping - "I'll just have secretary do it," right?  Blake Oliver: Yeah.  David Leary: In their brain, they've never comprehended like, "Oh, there's actual real people out there that just do bookkeeping?" This is gonna educate the market that there's these people called bookkeepers, and they can help you with your [00:22:30] QuickBooks. Blake Oliver: Yeah. Every firm that has enough resources to film ... If you have $10,000 for your marketing budget, you should film one of these videos. It's not gonna be as good; you're not gonna get Danny DeVito to narrate it, but you can do it. David Leary: You could get Blake! You could get Blake!  Blake Oliver: You could get me! We did this when I was at Armanino. Xero came out- they sent a film crew out, because I was a big Xero partner. They filmed an [00:23:00] interview with me and one of our clients and stitched it all together, very much like that, showing how we worked together using Xero and some other apps. It was really cool. Something like that, that shows just how the service actually works in a couple of minutes is really valuable, not only for the prospects, but also for the partners in the firm that are gonna be referring you work, because they need to understand how client-accounting services works. Everybody should be doing this. David Leary: No argument- [00:23:30] Blake Oliver: Shall we move on?  David Leary: Yeah. Blake Oliver: So, I got another stat from CPA Trendlines from their surveys. You wanna guess how many firms are utilizing a collaboration tool that includes instant messaging, David? David Leary: How many internally, or with their clients? Blake Oliver: That's a good question. David Leary: I'm gonna say with their clients, 15 percent, and then maybe internally, 35 percent. Blake Oliver: I think this is internally. The question is, "Does your [00:24:00] firm utilize a collaboration tool that includes instant messaging (IM)?"  Yes is 39 percent; no is 61 percent. Fewer than half of firms are utilizing IM, and I'm guessing the rest are doing email or something. If they answered yes, you might wanna know what tools they're using. 26 percent are using Microsoft Skype for Business, and three percent are using Cisco Jabber, and there's no other answers for any of the others, so it must be really, really tiny. I'm surprised Slack's not on there. It's kind of disappointing. [00:24:30] We're big Slack fans.  David Leary: I think it'll be interesting, like we talked about a few weeks ago, how Microsoft's Teams is really chugging along nicely here.  Blake Oliver: Yeah.  David Leary: That survey, it'll be interesting a year from now to see where Microsoft Teams is, on that survey. I predict it'll be the number-one tool accounting firms are using to communicate within their teams, because they already are already paying for it. They own it. They just have to flip it on. Blake Oliver: I wonder if maybe these results are distorted, because a lot of firms are very small, like one or two people. You wouldn't [00:25:00] need instant messaging internally for that; you could be using it for your clients. But, like you said, we're way ... That's way out, before most firms are doing that. David Leary: Yeah. Blake Oliver: Here's another app update - Google Sheets, the ugly stepchild of Microsoft Excel, but, you know, we really love it, being in the cloud. I learned how to use Google Sheets before I learned how to use Excel, believe it or not. They have added a few new-  David Leary: What?! Blake Oliver: Yeah, I know. Sorry. I'm [00:25:30] in that generation, David, where I had Google Apps through my university for free, so that's what we ... We used Google Docs; we used Google Sheets to do everything, and it wasn't until I got into the business world that I learned how to use Excel. David Leary: Did you ever use Lotus 1-2-3 at all? Blake Oliver: Oh, no, no, that didn't ... That was not a thing. David Leary: I'm gonna guess that you never used WordPerfect DOS either. Blake Oliver: I think we used it in like elementary school for newsletters or something like that but yeah ... I'm a big Google Sheets fan, because when it's something [00:26:00] that you're used to from the beginning, it's very easy to use. I love the collaboration features. One of the things that's been missing is some of the more advanced Excel features that you just can't get, especially when it comes to building dashboards for clients or for any project you're working on. Good news, they have recently released two things that will really help with that- actually, three features that will really help with that. One is Slicers. This allows you to set up a filter on a sheet that any [00:26:30] user can easily access without having to dig into the settings for the chart or a table. If you're filtering a pivot table, basically, all of the charts will update automatically.  Then the other feature is Scorecard Charts. It allows you to key in on a few metrics and see, in a box, a really important number. Maybe, if it's an airline, like in this example here in the article, it's base fare price, and then passengers flown. You got those right up top, like a dashboard you see in one of these apps. Finally, they've got themes now. [00:27:00] Now you can give all your charts a consistent theme and color. Basically, if you don't wanna use a reporting tool to create dashboards for your clients, you could probably do a pretty good dashboard in Google Sheets these days.  David Leary: Well, especially because there's a couple apps out there that you can connect ... I don't know on the Xero side, but you can connect to QuickBooks, and all your QuickBooks transactions go to a Google Sheet. So, you could do lots of creative stuff from that platform.  Blake Oliver: There's a ton of ... Zapier integrates to Google Sheets. All [00:27:30] these automation tools integrate with Google Sheets, so if you can get it in there, in some sort of tab where it's updating automatically, you could update a dashboard live. In the end, it's gonna be more work maintaining than a reporting tool, but just for a one-off kind of client thing, it could be a great way to get started. David Leary: I have another story. Blake Oliver: Okay.  David Leary: Remember we talked about it before, in the past ... I think it was my prediction of this year, if we go way back to the January episode - first one we did - this is the year of [00:28:00] instant payments. Blake Oliver: Yep.  David Leary: Instant payments, instant payments ... I think, even last week, we talked about Gusto and their round; how Gusto's gonna have employees that can be paid at the end of their shift. Everybody's going to instant payments. The Federal Reserve was in the news last week, because they lowered interest rates, but they also made some comments about ... I don't know if you know this, they run ACH. Blake Oliver: Oh, I didn't know that. David Leary: Yeah, essentially it all falls under the same ... It's the Fed, right? They pretty much designed, they run, they do the movement of ACH, and ACH, historically, [00:28:30] because it's a government thing, doesn't really make profits. It just has to charge enough to cover the expenses. That's why ACH is so cheap, and that's why people love ACH. Well, a few-  Blake Oliver: A government program that actually works? David Leary: Yes.  Blake Oliver: And is efficient?  David Leary: It works so well nobody wants to touch it I think is the bigger thing.  Blake Oliver: Right.  David Leary: A few years back, in 2015, they pretty much told private industry to build their own, "something faster." The banks did. The banks basically spent a billion dollars - all the Big Banks - and they built a [00:29:00] payments network that was faster. Zelle is a good example of this, this peer-to-peer instant payments, right? Blake Oliver: Yep.  David Leary: But they kind of just built it for themselves, so you have 10,000 other banks, the smaller banks in the U.S., that don't have access to this fancy network the Big Banks worked together to build. Well, what the Fed said this week is they're now gonna create their own instant-payments system. On one hand, the Big Banks are pissed. They're pissed about this, because it's gonna cut into their profits ... Because they can make a lot of fees on this, long [00:29:30] term. Blake Oliver: Yeah. David Leary: This is becoming very political, because, on the other side of the coin, you think like, here we go, Big Business is gonna influence government decisions. But on the other side of the coin, there's other Big Businesses, like Walmart that do not want to pay the banks these fees, and they want a free government program to move their money around. So you're seeing this big debate, and it's starting to become a partisan, even ... Here we go, Elizabeth Warren worked her way into the podcast again, and I'm gonna read her quote. She's like, "Big Banks want to force [00:30:00] families to use their private systems,” Warren said. Again, Elizabeth Warren, if you're listening, and you wanna come on the podcast ... Every week, you somehow ... In the bottom of the article ... Every week, she somehow gets into an article, and here's another one this week. Blake Oliver: Whoever is doing PR comms for the Elizabeth Warren campaign is really on it. They're in everything, so, good for them. David Leary: I have another related payments story. Previously, we've talked about Square. Everybody knows Square, those little white dongles you charge your credit cards at food trucks [cross talk]  Blake Oliver: The original mobile credit-card [00:30:30] swiper. David Leary: They're huge, right? Square's grown. I've even said that they might be Intuit's biggest threat in the United States. They announced their quarterly earnings, and they talked ... There's a little bit of numbers, and they made some moves. One thing they did is they sold their food-delivery business to DoorDash, but what they're really doing is they're doubling down on their ecosystem plays. Their ecosystem is really their small businesses, their front-end consumers. They're now in payroll. They have a huge ecosystem of stuff. Couple of interesting notes. Their loans grew by 36 percent. They gave about 70,000 loans for $528 [00:31:00] million in Q2. Blake Oliver: Wow. David Leary: Thus far, since 2014, they've given out $5 billion in loans to small businesses. Blake Oliver: Wow. Yeah, that's a lot.  David Leary: I think we talked a little bit about their cash card. They have a Visa debit card for small businesses. So, if you're a Square merchant ... If you're a Square food truck, and you go to buy your supplies for the food truck from a merchant that also uses Square, you can actually buy those with this Visa card and avoid all the fees on both ends, so there's- Blake Oliver: You're just transferring direct from one Square account to another. David Leary: Yes. [00:31:30] What they've done now is they've leveled this up, so now you can pay your employees directly to their Square card. If you think about it- Blake Oliver: Oh, yeah, okay this is-  David Leary: I'm a small business owner. Square has the money. Square's paying my employees. Square still has the money. My employees are going to buy their lunch at different food truck for somebody else who has a Square reader and paying that food truck. They've completely cut the banks out of the entire equation, like the full ecosystem. Blake Oliver: So, at what point does Square have to [00:32:00] become a bank? Because that's what it sounds like they are becoming, at that point. David Leary: We've talked about that in previous episodes, they are trying to do that ... If you think about it, I'm sure the banks know this is happening, but I think they probably never guessed it would happen. They're just being cut out of the complete equation. That's all the stories I've brought this week, Blake.  Blake Oliver: I promised at the beginning of this episode I was gonna talk about automation, and I specifically mentioned Andrew Yang and his platform- are you familiar with Andrew Yang's platform, David?  David Leary: Yeah. I mean, we talked about it in the podcast earlier. [00:32:30] Blake Oliver: Yeah, we've done it in previous episodes. Basically, his idea is that automation is going to disrupt society to such an extent, it's going to eliminate so many jobs that are core to our economy, like truck driving, like fast food - all these jobs with millions, and millions of people; which, by the way, it's not so visible, but includes a good chunk of accounting. His platform is to create a universal basic income, where [00:33:00] everybody in the country gets some set amount of money per month that allows them to fulfill the basic necessities, like food and housing. Sounds like a crazy plan, but part of me really loves it, because you could do away with a lot of social safety net programs that are super-inefficient just by giving everyone a check. The way Andrew Yang it is, "Capitalism that doesn't start at zero." I like this. It's really interesting. One of my friends from college calls it 'robo-socialism.' [00:33:30] I just like the idea. I like that it's out there, because I'm very attuned to the amount of automation that's going to disrupt society. Some other folks are talking about this, too. There was an article on called "The Robot Revolution Is Here: Prepare for Workers to Revolt," by Carl Benedikt Frey. This is in CNN Business Perspectives, and it was published at the end of July. He starts out by talking about how, in June, [00:34:00] thousands of dockworkers marched at the Port of Los Angeles against the coming introduction of robotic machines threatening their jobs. Dockworkers, by the way, are some of the most highly paid middle-class jobs that you can get. The dockworkers in LA are so essential that they do really well. But it's a job that's also highly susceptible to automation. It used to be you had people who physically- all they did was load and unload cargo by hand. Now we have these giant machines that can do it. The [00:34:30] machines are still piloted, but now there's versions of those machines that are unpiloted. They're fully autonomous. So, these dockworkers who are left are protesting that. I think it's a good example of the social unrest that will potentially occur when more and more stuff gets automated, and these good middle-waged jobs start to disappear. One of the stats in this article is a Pew Research survey stat that says, "A staggering 85 [00:35:00] percent of Americans support policies to restrict the rise of robots." Then, of course, he mentions Andrew Yang, who is running to ... He's actually, I think, misunderstands Andrew Yang's platform. He says he's running to protect jobs from automation, where actually he's running to create a safety net to protect people from automation, but, you know, same idea-  David Leary: I think Andrew Yang's take is that it's inevitable [cross talk] Blake Oliver: It's inevitable, yeah. You can't stop it. David Leary: In the short term, for sure, people will lose their jobs. [00:35:30] Blake Oliver: Oh, yeah. David Leary: But, at the same time, there's gonna be new jobs created that we can't even imagine yet, but definitely, in the short term ...  Blake Oliver: That's what this article is all about. It's a great read. It uses the Industrial Revolution as something to look back on and see what can we expect from the automation that's going to happen, because automation with AI is likely going to be as amazing, but also as disruptive as the Industrial Revolution was. If you're a student of history, you may recall the Luddites [00:36:00] who were famous for smashing machinery, and rioting, and destroying all this automation during the Industrial Revolution between 1811 and 1816, but they were just one small part of all these machinery riots that swept across Britain, France, Germany , and China, among other places. There was a lot of growth. Output per worker grew by 46 percent during the Industrial Revolution; between 1770 and 1840, output per [00:36:30] worker grew by 46 percent, but the workers themselves weren't the ones who primarily benefited from that productivity growth. It was the owners of ... As Marx liked to put it, "the owners of capital." It was the factory owners. It was the new industrialists who primarily benefited. Now, eventually, the rest of- everybody else benefited because we ... It's kinda hard to argue with. We all benefited from automation [00:37:00] in factories. Now we have everything we could never have imagined 100-200 years ago. David Leary: On the whole, society, yes-  Blake Oliver: Yes. David Leary: -more efficient, more GDP. Everybody benefits. Blake Oliver: Right, but during that whole process, those decades, it was really disruptive and caused a lot of problems for workers who either had to figure out how to retrain or they lost their jobs. There wasn't any sort of safety net at that time, so it was even worse. That's [00:37:30] kind of the gist of this article. There are some specific jobs that are called out in here. 3.5 million Americans work as cashiers, but Amazon now has stores that they're testing that have no cashiers. There's obviously truck drivers; automated trucks could reduce the number of truck drivers that are necessary. You could have one driver who pilots a caravan of 10 trucks that are all following each other. Now you just need a tenth the number of drivers, that sort of thing. I [00:38:00] guess it's just a cautionary tale of, yes, this is going to create enormous efficiencies and productivity gains, and we will all be better off when it happens, but while it's happening, there's going to be a lot of potential unrest. If you ask me, the political unrest we're seeing now is actually just a preview of what is to come, because a lot of the disaffected folks in our society are people who lost their jobs to manufacturing automation over [00:38:30] the last 40 years. So, imagine what will happen when service industries, or professional work, or office work is automated to that extent. Something big to think about, long term. The tie in, of course, to accounting is that I think McKinsey says that something like 40 to 50 percent of accounting work can be automated. David Leary: Every time you see an article about automation, or what jobs are at the most risk, accounting and bookkeeping is always number one on these lists. Blake Oliver: Well, yeah ...  David Leary: What's [00:39:00] interesting with this is we're past the labor piece of this, the physical labor. If I have a swimming pool business, people would think I'd be insane if I hired people to dig the swimming pool with shovels. It's so common now; of course, you're gonna use a backhoe, even though, hey, that's 10 people that don't have jobs, because I have a backhoe digging the swimming pool, right? We're entering this new world where it's all the mental jobs. People that have [00:39:30] never been affected by this before are the ones getting affected now.  Blake Oliver: To extend your analogy, traditional bookkeeping with data entry, where you're keying in transactions, that's the equivalent of digging a swimming pool with a shovel, but we're still doing it in a lot of businesses, and it's gonna go away. David Leary: I think it's the natural course. It's just, you're right, people are not gonna like it. It's gonna be very disruptive. Blake Oliver: That's why I like that somebody in the Democratic debates is bringing this issue up, because [00:40:00] it may not be here now, but it is going to be one of the defining challenges of our generation - figuring out what to do with the people who are displaced. Do we retrain them? Do we simply give them cash? What do we do? What is going to work the best? Not many people are talking about it. David Leary: Essentially, Trump won because he spoke to people who'd lost their jobs due to manufacturing. Yang's trying to speak [00:40:30] to people that might lose their jobs in the future ... It's gonna be harder for him to make that argument [cross talk] Blake Oliver: Yeah, well, I think he's just trying to talk to the people who are making policy right now to avert further problems, because we didn't ... When we shifted all of our manufacturing offshore, we didn't think long term about the impact of that. Nobody was out there saying, "Well, what is going to happen to these communities long term?" It was all just [00:41:00] short-term gain. Now there's all this effort to bring manufacturing back, but now it's all automated. Even if you do bring it back, there's not a lot of jobs to be had, so it's a ... And on that note ...  David Leary: I think it's a bigger challenge, yes, with raising kids. What do you tell your kids to be? [cross talk] Blake Oliver: Right, and the jobs they think they might have might not even exist. Everyone wants to be a firefighter when they're a kid, right? That's the stereotype. Well, what if we have firefighting robots?  David Leary: No, no, no, everybody wants to be a YouTube [00:41:30] star. Blake Oliver: A YouTube star ...  David Leary: Now, apparently bots are making the YouTube videos, so those people ... That career is dead.  Blake Oliver: I think this just shows that an investment in education is the best thing we could do, because lifelong learning is what allows you to survive in a constantly changing economic environment. You aren't going to learn how to do one thing in school and then do that for your career. That's been true for a lot of people in the professional world for a long time. But maybe that hasn't been true for [00:42:00] a long time. For a long time, it used to be you could just go major in accounting, get a job, have that job for 40 years; doesn't change much. Done. Right? I don't think that exists anymore. David Leary: Not in the same way it used to. You have to be dynamic. There's constantly new jobs being created. But you're right, if you don't have the ability to learn or have the energy to learn something, it's gonna be ... It's difficult. I also think this is gonna have a lot of impact on age demographics. It's really hard to tell somebody that's 58 [00:42:30] years old - they're seven to 10 years away from retirement - "Go retrain yourself and get a new job." Somebody's gonna have to take care of those people. I don't have the answers. Blake Oliver: That's it for me. We will continue to search for those answers in upcoming episodes of The Cloud Accounting Podcast. David, where should people go to connect with you online and to continue this discussion? If you have solutions, I'd love to hear them. David Leary: Solutions, because this has turned into the political podcast. Elizabeth Warren made it. Andrew Yang made it. We've talked about the debates. It turned into The [00:43:00] Politics Podcast here this week. Best way to get a hold of me is gonna be on Twitter. I'm @DavidLeary. Blake Oliver: And I am @BlakeTOliver. I would love to hear what you think about any of these issues. If you think I'm an idiot; if you think these are good ideas; if you've got something to suggest that we haven't even thought of, we don't know what we don't know. Please do consider subscribing to our show notes. You can go to, and if you click on the blue Subscribe banner, you'll [00:43:30] get subscribed to the show notes. They go out every week after the episode drops, and it has a link to the episode webpage, where you can click on all the links that we talk about. David Leary: I think that's a wrap. Blake Oliver: Thanks, David. Great to talk and talk to you next week. David Leary: Bye, everybody. Blake Oliver: Bye. 
Sock Puppets: How many fake profiles are you connected to on LinkedIn?
Sponsors BQE Core: Rewind: Show Notes 01:25 – Why enjoy a nice relaxing Labor Day weekend, when you can go camping instead? 03:30 – Why are sock puppets writing accounting articles?  05:23 -- Blake talks about how to suss out sock puppets on LinkedIn, and teaches us how to do a Google Image Search 08:35 -- Time to clean house on your LinkedIn profile? | LinkedIn 12:30 -- Something’s rotten in the state of accounting content | Leary Theory on Revue 13:13 -- According to a NY Times article, China is using LinkedIn for less altruistic purposes | New York Times   14:06 -- Why do human work, when you can pretend to be a robot? | WSJ 16:45 -- Walmart one-ups UPS and sends their accounting jobs, some 600 of them, to India | Breitbart  18:51 -- Get your Sage accounting advice Down Under -  Intacct opens in Australia | Accounting Today 20:04 -- The subscription economy grows again – Chargebee raise $14M in Series D round | Chargebee 20:30 -- AvidXchange is cozying up to banks with their acquisition of BankTEL | Verdict  21:43 -- Going with the flow, Tesorio (think “Mint for Business”) raises $10M in a Series A round | TechCrunch 23:46 -- Intuit’s TSheets is losing the Race to Zero with increased user fees later this month | TSheets 26:32 -- Might be time to think outside the Box … | WSJ 29:18 -- Listeners – Are you using cloud storage, specifically Box, or Dropbox? Inquiring hosts want to know!   30:57 --  Vanguard Active Funds Struggle to Beat the Market | Money 33:32 -- What to do when your cloud breaks | Journal of Accountancy 35:52 -- ABC – Always Backup your Cloud! Just because it’s in the cloud, doesn’t necessarily mean your data is backed up!   36:40 -- Not even your teeth are safe from ransomware attacks! | Krebs on Security  37:55 -- Is your cyber insurance making you vulnerable to ransomware attacks? | ProPublica 39:18 -- A deeper dive into the ransomware/insurance connection | ProPublica  40:01 --  It’s not what you do, it’s why you do it | CPA Trendlines 43:43 -- Survey says: so long soft skills, bring on the tech! |  Accounting Today 45:51 -- News of the Weird: Liberty Tax, Sears Hometown, and Vitamin Shoppe make strange bedfellows!  48:43 -- Sock-puppet-free, REAL awesome reviews!  51:56 -- Blake and David are Boston-bound for Accountex 2019!  Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptThis episode of The Cloud Accounting Podcast is sponsored by BQE Core. If you have niche clients that are architects, engineers, consultants, or lawyers, BQE Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. Even if you don't have those niche clients, Core is a great tool to use in your own accounting or bookkeeping firm, as well. Core is an easy-to-use all-in-one platform for project management, but includes advanced functionality like budgets, labor cost, forecasting, contract analysis, and approval processes. Core also includes a standalone accounting module. Even though Core is an all-in-one platform, it still works nicely with other apps, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app and recently launched a cutting-edge voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. Blake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: So, David, how was your Labor Day weekend? David Leary: Labor Day weekend, I did the most overrated thing ever - camping. Blake Oliver: Camping? David Leary: It's so much work. There's more labor involved in that than just working. We should just not have the day off. Blake Oliver: I [00:01:30] never go camping. I haven't since I was a kid. My wife doesn't camp. She's never done it in her life. So, at this point, lost cause. I have too many electronics. I don't even know what I would do. Like, where do I ... I'd have to get ... I'd have to bring a generator or something. David Leary: Every place has Wi-Fi now, at all these campsites everywhere, but the problem is, on holiday weekends, there's- the volume overwhelms the network. Everyone's trying to stream "The Bachelorette" or something like that. I don't know. What'd you do this weekend? Blake Oliver: I went through my LinkedIn connections, scrubbing them for [00:02:00] fake profiles. I don't know if you saw my post last week on LinkedIn. It's crazy. It has 30,000 views at this point, which is the most people who have ever looked at anything I've ever done, I think, period. David Leary: Now, are those bot views? Other bots on LinkedIn are like, "Look, he talked about me!" Then, they're liking the post ...  Blake Oliver: That's a good question. No way to know that, for sure. I'm gonna hope not. This post was about- actually not about bots. I was using the wrong term. I was corrected on Twitter by Chris Hooper, [00:02:30] who pointed out that actually these fake profiles are not bots, because they are operated by human beings, so the appropriate term is "sock puppet." There's a human operating the sock puppet, just like there's a human operating these fake profiles on LinkedIn. Have you ever gotten an invite from one of these, David? David Leary: I wasn't aware until you posted it. Because I think it started from, first, you saw an article on a AccountingWEB- Blake Oliver: Yes. David Leary: -and then you thought that her image looked familiar, and then, you [00:03:00] checked around. You either did an image search or something, but somehow, it turned you on to your LinkedIn, right?  Blake Oliver: Yeah, let me back up and tell you how this whole thing started. Part of the job of The Cloud Accounting Podcast, being a host, is reading everything there is to read online about accounting. Just like you, David, I go on AccountingWEB; I go on Journal of Accountancy, Accounting Today. I'm reading all these articles all the time. Occasionally, I get curious. I wanna know who is this author. I've never seen this author before.  I was on AccountingWEB, reading an [00:03:30] article called "How Accounting Firms Can Overcome Staffing Challenges." This article, by the way, no longer is online. If you try clicking the link, you won't find it. It's been taken down. The author of this article was named Annie Marker, CPA. It's this very attractive woman with brown hair, beautiful smile. The photo just looked too perfect to me. Nobody's headshot looks like that, with the black background and every ... It looked like a stock photo. So, then [00:04:00] I got curious. I clicked on the link to her profile on AccountingWEB, and it was- David Leary: Which makes sense, because, in general, you and I know a lot of people in this space. We read lots of the articles. When you see somebody you don't know, you're like, "Who's that?" and you start clicking, right?  Blake Oliver: Yeah. I clicked through, and I see that she's affiliated with this company called Cogneesol, C-O-G-N-E-E-S-O-L, which, turns out, is this outsourcing firm operating out of India. She's somehow [00:04:30] affiliated with them, working with them. That stuck in my head, because I knew that I had seen that before. So, I went into my LinkedIn connections and I realized I have accepted invites from people working for Cogneesol. David Leary: Five of them? Six of them? Blake Oliver: Well, there's just one in recent memory. She had connected with me a week before. Her name, Olivia Morris, CPA ... Similar thing, where it was this younger [00:05:00] woman, attractive. I try to weed out some of my connection requests. I can obviously tell who is a business development representative, who's gonna just immediately spam me and call me. But, generally, if they have CPA after their name, I'll just accept the invite [cross talk] David Leary: Of course. You trust the brand. Blake Oliver: Right. She's connected to me. I go, and I look at her profile. This is a big red flag, is that the banner image on her LinkedIn profile says, "Benefits of Outsourcing," and then it has a diagram that says [00:05:30] "Time Savings, Benefits from Rich Experience, Focus on Business Activity, Cost Savings, Excellent Support." Underneath Olivia Morris's name, her - what do you call it? - subheading says, "Four years’ experience in outsourced bookkeeping, reconciliation, manufacturing, retail, and wholesale accounting." She's based in Los Angeles, California, with 360 connections, and I have 17 mutual connections with her, and she's in four groups that I'm in. She went to the University of Washington. The only employment that is listed there is Cogneesol. Most people tend to have a- David Leary: It's that same date range, I [00:06:00] think. I looked at a couple of these. They all have that ... They all start November of 2015, I think. Blake Oliver: Yeah. David Leary: Yeah. Blake Oliver: It's kinda weird. A very promotional LinkedIn banner. I guess if she was working for them, that would be possible, but then the only company that she's ever worked for is Cogneesol, and all of her posts are super-spammy. I went into her post history. It all just looks like auto-generated, spammy stuff. David Leary: Linking to other articles. Blake Oliver: Right. Now, I've got two suspicious [00:06:30] profiles that are connected to the same company. We've got Annie Marker, who looks like a stock photo, and then we've got Olivia Morris. Her photo looks like a selfie. Then I looked at the photo, and I examined it more closely, and it looks like somebody took it in their car. She's smiling. I'm like, "I don't know. This is weird." Seemed like very young; too young to be a CPA. So, I did something that I don't often do, is I downloaded the photos. I right-clicked, downloaded both profile photos, and I ran them through Google Image Search. [00:07:00] David Leary: This is not a common thing. I didn't even know how to do it. I had to ask you for help. Blake Oliver: Yeah. I've only done this in the past, because if I find a photo online that I want to use or look up, and maybe I want to see if it's in the public domain, Google has this feature where you can go to - I believe that's it. You go to, and if you click the icon that looks like a camera in the search bar, you can upload an image, and Google [00:07:30] will then go find other places on the web where that image has been used. Even if it's just a cropped version of that image, it can find the full image. Dun-dun-dun - Annie Marker ... That profile picture was indeed a stock photo on Shutterstock, on a Spanish-language version of Shutterstock. David Leary: That was on the post that was on AccountingWEB. That was the first fake profile you found. Blake Oliver: Yes. I'm realizing she's a sock puppet. Then Olivia Morris ... This is the part [00:08:00] that was really sad. Turns out that the profile picture being used for Olivia Morris, CPA's profile was actually a selfie of Nicki Allwright, 19 years old, Australian who was killed in a car crash years ago. David Leary: Jesus. Blake Oliver: The picture was on an Australian news website. They had taken the photo, created a fake profile, and used that picture - on the profile - of a dead, deceased person. Immediately, of course, I removed that connection. Then I took screenshots of all [00:08:30] this stuff, and I posted it on LinkedIn last week. I said, "Hey, how many fake profiles are you connected to on LinkedIn? You might wanna go through and check your connections, because this is what happened to me." David Leary: You listed four or five of them, I think.  Blake Oliver: Yeah. I went to the company profile for Cogneesol, and I found at least one, two, three, four, five, six profiles, but I think there may be as many as a dozen. I just didn't have that much time to dedicate to doing the image reverse search. I posted [00:09:00] those links to those and said, "Hey, please report these as fake profiles. Let's get them removed." I'm happy to say that tons of people saw this post. I think people must have reported them, because all of those profiles are now deactivated. David Leary: I was impressed when I clicked on all of them. I was not connected to any of those people. I don't know how that happened, because I accept everybody on LinkedIn.  Blake Oliver: I was just arguing with you about this, David. I was like, "You shouldn't do that." It's not because of the sock-puppet thing, because that argument happened before, but just because you shouldn't just accept everybody's invite. That lowers the quality [00:09:30] of your network. David Leary: I think the scary thing for me, on this, is they're pretending to be a fake person just to get content out there, right?  Blake Oliver: Right. David Leary: AccountingWEB is a reputable media company, right?  Blake Oliver: This was the part that really shocked me, is that I reported this on Twitter by tagging Seth Feinberg and saying, "Hey. I think you have a fake profile behind this article on your site." I thought that was doing him a favor, because [00:10:00] I know AccountingWEB is a community sourced site, so I assumed that they don't vet the authors and that you can create a profile and submit an article, and it will posted if it's not blatantly promotional. But then Seth got upset, I think, that I didn't go through private channels to tell him privately. I apologized to AccountingWEB, to Seth. It was never my intent to call them out for having this content on their site. David Leary: AccountingWEB is 100 percent ... Anybody can just post. I know there's a way for [00:10:30] the guest posts, but that's fundamentally the way it's set up. Blake Oliver: It's set up as a community sourced site. There is some sort of review process. You can't just immediately post something up. You have to create a profile and submit it. But how much review can there really be, when they have hundreds and hundreds of articles going up every year? David Leary: Okay. Blake Oliver: Dozens of articles a week. Anyway, it turned into this big thing. Again, 30,000 people saw this on LinkedIn. I hope it does some good. I think we need to [00:11:00] all be vigilant about these sock-puppet profiles and not letting them into our networks and into our social platforms, where they can just spam us and steal our data. To me, this is very similar to the whole bots issue that we had, that we talked about on the show months ago. David Leary: Yeah. Blake Oliver: It's lack of trust. David Leary: It's not just AccountingWEB. Just doing a couple of Google searches very quickly, you can find these same people have guest blogged for other app companies [00:11:30] that are out there. They put comments on AccountingWEB and other forum posts going back two or three years. It's very, very deep. One that I thought was entertaining is Ace Cloud Hosting. They have a guest blog post on Ace Cloud Hosting about "Most Common Frauds and How Small Business Can Prevent Them." Essentially, this fraudulent sock puppet is posting an article about fraud and how to prevent it, which I thought was a little entertaining. [00:12:00] Blake Oliver: That's ironic. David Leary: This reminds me of ... This was before we were doing the podcast; this was on Accountex, back when Accountex in the US had their own media property, if you wanna call it, that magazine, whatever; blog site, whatever you wanna call it. It was a similar thing. I read the article. I'm like, "Who's this?" I started clicking around. I'm like, "I don't know that person. This is interesting." I could just smell it. You see this and you can just tell there's something not right. Two or three Google searches later, I found they stole the content from some other blog [00:12:30] and they're posting them on the Accountex blog. So, it's that same thing where we just have to be more skeptical of all this stuff- Blake Oliver: Yeah. David Leary: -because there's just a lot of crap out there. Blake Oliver: Yeah, it's not just Twitter. Twitter was, I think, where this all started. Lots of fake Twitter profiles, the whole fake news thing, the whole political thing; Russia and the election. It's on LinkedIn, too. We have to be vigilant. Crazily enough, on August 27th, the day after this whole thing happened [00:13:00] on LinkedIn, I posted that thing on LinkedIn, the New York Times posted an article, and the title is "How China Uses LinkedIn to Recruit Spies Abroad."  Apparently, Western intelligence officials are saying that Chinese agents are contacting thousands of foreign citizens using LinkedIn, including former government officials. They're connecting with them, and they're trying to basically get information from them. Fly them to China for opportunities that don't actually exist and turn them into the spies. This [00:13:30] is not just limited to an outsourcing company that's trying to get our information and market to us. This is broad. This is national security here. David Leary: Yeah. I think the lesson here is just to listen to The Cloud Accounting Podcast and, as long as David and Blake are real people, you're probably safe. Blake Oliver: And don't just accept any invite that you get on LinkedIn. A related article in The Wall Street Journal is called "The Next Hot Job: Pretending to Be a Robot." This is similar [00:14:00] in that it's talking about humans stepping in to take over for AI when it fails. We were talking about this a few episodes ago, David, that Google Assistant that can call and book appointments for you. Remember how there was that article about how it's not actually the AI a lot of the time, it's people? David Leary: Oh, yes. Blake Oliver: This is because AI is still in its infancy; it can't do everything. So, what these companies are doing ... Google has a call center in Ireland. When [00:14:30] you use the AI to try and book a restaurant appointment, if the AI gets stuck, it can't understand something, a human can jump in and finish the conversation. That's sock puppets, right? There's this human-assisted AI that's going on now. This article in The Wall Street Journal cites some specific examples of this human-AI hybrid. One of them I really liked was the real-life Robocop. This woman named Mimi works [00:15:00] at a company called Cobalt Robotics that makes those ... They're like these robots that drive around offices and malls. They're like security robots. Have you seen pictures of these, David? David Leary: I've seen them. San Jose Airport had something like that. I don't know if it was security, though. It was just a welcome robot. You took your photo with it. Blake Oliver: The security ones have cameras, and microphones, and speakers, and they can patrol around and observe for [00:15:30] criminal activity; just secure the environment. This woman's job is to monitor multiple of these robots. She's patrolling them simultaneously. If any of them sense anything, she can take over for one and control it manually.  That is going to be the future of a lot of human-powered AI or human-assisted AI is the idea that maybe there's a self-driving truck that's going to a destination, and it runs into a situation [00:16:00] where it doesn't know what to do. A human can jump in and pilot it remotely past an obstruction, or take it off the freeway, and then once it's back on the freeway, it can just keep going, because it knows what to do. That fits in with a lot of these companies in our space that are doing this, where it's AI until it can't do it anymore, and then humans are taking over for bookkeeping, accounting. It's such a fascinating idea. David Leary: Maybe that bot driver or ... What'd you refer [00:16:30] to this as? Blake Oliver: Human-assisted AI. David Leary: Human-assisted AI, yeah. That could be good news for approximately 600 people that work for a Walmart. Walmart is gonna outsource 600 of the accounting and office jobs. Blake Oliver: This is more ... We just talked about this last week at UPS. David Leary: Yes, more outsourcing of accounting department jobs. A whole department. Blake Oliver: This is a lot. David Leary: Yeah, it's 600. The layoffs will run to January 2020. Employees will be allowed to seek [00:17:00] other Walmart jobs, and they can get a severance package, the statement said. But they did not say how many of the employees have a degree in financing or accounting. I don't know how you would digest that. If you were an accountant, or in the accounting department at Walmart, and they're like, "Hey, find another job at Walmart," but they got rid of the accounting department, what are you gonna do? Go be a greeter? Blake Oliver: They're getting rid of the greeters, too, I understand. David Leary: Oh, boy. Blake Oliver: Here's an important detail. Well, first, two really important details. This in Breitbart. Are you reading Breitbart, David? David Leary: No, I'm not reading Breitbart. I've set up [00:17:30] a Google searches to key onto keywords. Blake Oliver: Okay, just checking. Also, in the story, the jobs are being outsourced to Indian contract workers. The article's focusing on the expansion of the H-1B program for Walmart. That's interesting, because that's not just accounting jobs being outsourced to other Americans. This is talking about jobs in accounting at Walmart [00:18:00] being outsourced to a company called Genpact that uses Indian H-1B workers to do this work. David Leary: Yeah, and that company's a spinoff of General Electric. I know, even in the past, Intuit worked with some of these companies before in the past, as well. Again, every week, there's another accounting department that's having a huge layoff, and lot of it's probably due to automation. If you have a chance to automate your accounting department, do it now-  Blake Oliver: Yeah. David Leary: -before you guys get laid off. Blake Oliver: Another detail [00:18:30] in the article: "If the outsourcing saves $25,000 per person payroll costs, then the company will gain $350 million in shareholder value, because Walmart's price-to-earnings ratio is 25:1." I wonder if that's accurate. David Leary: That's a huge jump. Blake Oliver: What else do we got? David Leary: Sage Intacct is now going to exist in Australia. They've launched in Australia. Blake Oliver: That's big, because, so far, up to this date, Sage Intacct, which is their [00:19:00] flagship cloud product, has only existed in the US, right?  David Leary: I don't think there's been a lot of cloud-level ERP enterprise-y type stuff yet, even though Australia's and New Zealand's been dominating cloud accounting. They were the first, arguably - a lot of people would argue. Australia's so forward-thinking, but they haven't had a lot of cloud enterprise-level stuff, so this is really, really big. It's been covered broadly across the industry, all over Australian press. It's been covered in the US press. It was a pretty big announcement for Sage. Blake Oliver: Yeah. [00:19:30] This really was, if you ask me, the driving reason why Sage acquired Intacct or why Intacct wanted to be acquired by Sage was to use that Sage sales engine, global engine, to expand globally. The product now is gonna go everywhere. That's gonna put them straight up against NetSuite all over the world. David Leary: This continues to be Sage's best growth product. Blake Oliver: In other app news, [00:20:00] a company called Chargebee has raised a $14-million Series D round led by Steadview Capital. Are you familiar with Chargebee? I haven't seen too much of them.  David Leary: I have seen it, yes.  Blake Oliver: Yeah, so, they are subscription management and recurring billing tool. I'm thinking they're like Zuora. They have 1,800 brands in 53 countries as their customers. More evidence that the subscription economy continues to grow. David Leary: Yeah. I have some app news, as well. Avid [00:20:30]Xchange, a lot of people have not heard of them. They are similar to a type play. Blake Oliver: But higher volume, right? David Leary: Much higher volume. They're up-market, but, just like is really heading towards partnering with the banks. If you're a small business owner, in theory, instead of having the typical online-banking experience to pay your bills, you'd see inside your online-bank website. AvidXchange is getting banking tools. They've acquired a company called BankTEL, and BankTEL [00:21:00] is going to integrate the AvidPay Network.  What the AvidPay Network has, it also comes with B2B suppliers. It's not just get a bill, approve a bill, pay a bill. It's a network of people paying each other all the way through the system. They've been around about 17 or 18 years. This is a company not many people have heard a lot about, but they've, I think, taken on just as much funding as, and they're going after the same- very similar space. Blake Oliver: Yeah. That's a big deal, because what makes really successful [00:21:30] is that their network is so big. BankTEL says it services over 20 percent of US banks, so that will help Avid grow their network. David Leary: Correct. Blake Oliver: More app news on my end. Tesorio has raised a $10-million Series A to help companies track their cash flow. This was reported in TechCrunch. This is, I guess, more of an enterprise or a mid-market cash-flow management application. I am also not familiar with Tesorio. They [00:22:00] call themselves, or at least this TechCrunch article said, "You can think of it as a Mint for business. It helps businesses aggregate all of their cash flow, and then runs AI models over it to predict a company's overall financial health. Current customers include the likes of Veeva Systems, Box, and WP Engine, which use the company's systems to, for example, automate their accounts receivable operations to understand when customers are likely to pay. While there are other tools to help you manage the overall workflow, Tesorio is different, because it can pull in data from all sorts of disparate systems [00:22:30] and create a cash-flow forecast based on this," automatically. David Leary: I don't know. I feel like I've seen so many products like this now. It may connect to QuickBooks or Xero. If that's where your data is at and your bank feeds are there, they could just read the QuickBooks or Xero data. But a lot of these AI-predictive models, cash-flow forecasting, it's just another one coming in. Now, they're really playing up that AI term in there.  Blake Oliver: Yeah.  David Leary: In theory, I think, wouldn't this be a true statement - if [00:23:00] any cash-flow tool forecasts out ... If they're predicting something, wouldn't you argue they all should claim they have AI -if it's forecasting or predicting something next month. Blake Oliver: Yeah. That's the thing about AI, is the definition is very broad. It just means a computer or an algorithm doing something that would normally require human intelligence. By that definition, so much of what we use computers for is AI. As soon as something just becomes a given, then we no [00:23:30] longer call it AI. Like Google Search being able to decide if my search is for a definition or a website, that's AI. We don't think of it as that, because we've just become used to it, right?  David Leary: Yep. More related app news. Not really AI-related, but TSheets, who was acquired by QuickBooks almost three years ago, they just announced they're gonna have a price increase. They're going up to $8 a year per user for all their new accounts, on top of the $20- Blake Oliver: Is it $8 a year or per month? David Leary: Per month. Blake Oliver: Okay. David Leary: On [00:24:00] top of the base fee of $20. My observation the last three years was time tracking is a race to zero. You'll see an app, like, "Hey, we're $3.50 an employee." Another app will be $3 an employee; another one says, "We're $0.99 an employee," time-tracking apps; to where I always thought, it's gonna be a race to zero. It's a commodity. Obviously, the TSheets integration with QuickBooks is producing enough value where there's confidence to raise the price on this; that people aren't going to ... Because I always felt, with a time-sheet app, you could just switch to a different time-sheet app. Blake Oliver: Oh, yeah. David Leary: You're not [00:24:30] locked in, the way you are with other apps. Blake Oliver: Yeah, but once ... If you're a big company, once you've trained your employees how to use it, switching out has so many high costs. David Leary: Yeah, if you're decently sized. Blake Oliver: Eight bucks a month per employee for time tracking? That's a steal, in the big scheme of things. David Leary: Yeah, and that's why I've always felt like it's solves that small business owner problem, because they probably have $200 hours a week in headaches, if were doing paper time-sheets, so it pays for itself. Blake Oliver: Yeah. Exactly. Those employees that are just filling out paper time-sheets, how much time would that take them every [00:25:00] month? It would take them an hour a week, sometimes. David Leary: Are you speaking up from an accountant who worked in an accounting firm that charge by the billable hour? Is this your expertise?  Blake Oliver: I would put down 15 minutes- we billed in 15-minute increments. I would bill 15 minutes to doing my time sheet every day. In five days, I'm spending over an hour on my time-sheets every week. This episode of The Cloud Accounting Podcast is sponsored by Rewind. For years, Rewind has been successfully backing up thousands of small businesses' data that is stored in cloud apps like Shopify, Big Commerce, and MailChimp, saving these small businesses from CSV importers, employee mistakes, and app integrations that didn't go as planned. Rewind has also been backing up QuickBooks Online company data, too. That's right, Cloud Accounting World. I did say "back up QuickBooks Online company data." It only takes seconds to install what is essentially an insurance policy against major disaster, or just those small business owners that like to get "creative" in the accounting system. Rewind works automatically in the background, capturing all the changes to your QuickBooks Online in real time. If something does go wrong, Rewind is the only service that gives you 100-percent control over what you need to restore, be it one transaction, multiple transactions, or all the data. To learn even more about Rewind and access a special offer just for listeners of The Cloud Accounting Podcast, head over to That is Cloud Accounting Podcast dot promo forward slash R-E-W-I-N-D. Blake Oliver: Let's [00:26:30] see. Box ... Big public company, Box. I remember when they were just a baby; provider of cloud storage. Their revenue growth is stalling, as reported in the Wall Street Journal. They only had 16-percent revenue growth in its latest second quarter, which is slower than the increase registered in the year-ago period. A year ago, sales rose more than 20 percent. Shares of Box have been down 48 percent over the past year, and they fell [00:27:00] more than seven percent in after-hours trading, when this was reported. David Leary: I'm kinda confused by the need for Box or Dropbox, because they're really cloud file-sharing, first, and then they've added things like, "Hey, we'll do enterprise-level Microsoft Office." Your Microsoft Office docs will be there. You click on them. You can view them, edit your docs there. But if you're just gonna pay for Office 365 anyways, just use OneDrive, right? If you're gonna be a Google company, you just [00:27:30] use Google Drive. I just don't know where those two companies are in the future, where they're gonna fit. Blake Oliver: This is the problem with cloud storage is that it really is more of a feature of a larger suite than it is its own product, in my opinion. The only reason that Box did well is simply because it took Microsoft so long to build a decent OneDrive. Now that OneDrive is good, is there really any need for Box anymore? You get it for free. You get it for free, if you have Office 365 - you get OneDrive. [00:28:00] If you use Google Apps, you get Google's unlimited storage, which is good. David Leary: I think Box's play versus ... In the beginning, Dropbox was the one everybody was using. You'd use it at home; you'd use it with friends and family. Then Box came into the enterprise and was like, "Oh, we're just like Dropbox, but we're more secure for enterprise." I think that was their pitch, but it just doesn't make a lot of sense. With that said, I'm using Dropbox for one thing, and it's the podcast. The software we use to record the podcast [00:28:30] has an API connection to Dropbox. As soon as we're done recording the podcast, it automatically saves it to my Dropbox-  Blake Oliver: But do you pay for Dropbox? David Leary: -but other than that, I have ... I'm not paying for Dropbox. Blake Oliver: Right.  David Leary: But it's the only thing I use Dropbox for. I pulled everything off of Dropbox. Blake Oliver: Same thing for me. I only use Dropbox for integrations like that. I use Google Drive for everything. I signed up for Google Apps, so that I can get unlimited storage, and I just stick everything in Google Drive. David Leary: I think QuickBooks Online actually had ... The Accountants edition [00:29:00] actually had an integration with Box. I would say I know it's gonna age me. It's just Box. I think that partnership was either killed or they pulled back on it. Accountants weren't using it. This would be interesting for you listeners - how many of you guys are actually using cloud storage, but specifically Box or Dropbox? I know a lot of people are using OneDrive. I use OneDrive. I also use Google Drive a lot. But how many people are still using Box or Dropbox? Blake Oliver: If you invested [00:29:30] in Box back in the day or, at least, before their stock price dropped 50 percent, you're probably not very happy. I've got an article here about why you shouldn't pick stocks. I don't know, David, are you an investor? Do you like to pick stocks? Do you do that thing? David Leary: I want to. I just don't have the time and the patience, so I'm just like ... Throw it in my 401K and just whatever happens. Blake Oliver: I read a book 10 years ago, maybe longer than that. What was it? "The Millionaire Next Door" or something like that? I can't remember the name [00:30:00] of the title, but- David Leary: I remember that book, yeah.  Blake Oliver: It was all about ... Well, a big part of it was about investing and picking stocks being a really bad idea. If you wanna be successful, you should go long term. You should invest in index funds with the lowest cost ratio and just bet on the market, bet on the US economy, and don't try to pick winners, because all the evidence says that nobody is good, on a regular basis, at picking stocks, not even the professionals. All [00:30:30] those funds, actively [cross talk]  David Leary: No. None of them. Obviously, not the professionals. Blake Oliver: No. Of course, all of the professionals, all of these hedge fund managers will dispute this, and they use amazing marketing to try and get you to buy into their actively managed funds. But the research shows they are not any better than the index funds. I'll point you to- if you wanna see this, I'll point our listeners to an article on called "Vanguard Active Funds Struggle to Beat the Market." This [00:31:00] article highlights research from Index Fund Advisors, which looked at Vanguard Investments' active funds and compared them to their index funds. If you're not familiar with Vanguard, they're basically the gold standard when it comes to index funds. They created or popularized the concept. David Leary: I think so. Yeah, they were one of the first ones to do it. Blake Oliver: They actually started with active funds, but then, very shortly after, they created their first index funds. Those are the ones that are hugely popular. They have very, very low expense [00:31:30] ratios. That's something that's really important to know is that, in actively managed funds, the people who manage them take a good chunk- they charge a fee every year. Even if they beat the market, you still have to pay their fee, so you may end up making less. David Leary: A lot of times, it's one percent of the total asset value. Blake Oliver: This study - I'm not gonna get into the details - looked at 57 actively managed Vanguard funds with at least five years of a track record through 2018 to gauge their alpha, or [00:32:00] returns in excess of benchmarks. They found that the funds in the study had a slightly better than 50/50 chance of beating their Morningstar-assigned benchmarks. The benchmarks are the funds that they're trying to beat - the S&P 500 or whatever.  The odds got worse when the authors controlled for risk, trying to distinguish between reckless gambles and repeatable management expertise. By screening out dumb luck, the authors found that only two of 57 funds consistently outperformed their benchmarks. The conclusion was that all of [00:32:30] Vanguard's active strategies could be replicated "more cost effectively through the use of index funds." There you go. Don't try to pick stocks, at least with most of your money. You can have fun with some of your money, but most of the time, just stick them in appropriately balanced index funds and let it ride out. David Leary: Or only buy stuff you really, really, really know. If you know you're a cloud accountant, and you're into this space, and you know, "Hey, these companies are winners," invest [00:33:00] in them- those ones you know, because you're gonna know before the rest of the market, if the software's getting janky; it's not working as well anymore; you pull out. Blake Oliver: Only do that, though, if you can diversify enough. Don't go all in on a company that you know, because who knows what could happen to them? There's so many unknowns in life. David Leary: Why didn't you tell me this before I went all in on Uber. Dang it, you should've told me these things. Blake Oliver: Anyway ...  David Leary: Maybe these investors need a fix. I'll show where I'm going with this a little bit. I have a couple [00:33:30] of articles that are a little bit related. The Journal of Accountancy had an article, "What to Do When the Cloud Goes Down." Essentially, they're focusing on contingency plans [cross talk]  Blake Oliver: CCH went down- David Leary: -because of some of the recent outages.  Blake Oliver: iNSYNQ ransomware attack-  David Leary: So, the CCH outage, right. We talked about-  Blake Oliver: Centrum went down; cloud provider- David Leary: Having plans is all fine. Great. Whatever. The quote I wanna call out is something that I brought up a couple weeks ago when we were talking about the iNSYNQ. I'll read this. This is from David Cieslak. He says, [00:34:00] "Whether they're a "true" cloud provider. Software that was designed for the cloud is more secure than software that was built in-house and moved to the cloud later on. Legacy applications that were moved to the cloud or that use an in-house server are vulnerable to ransomware. SaaS - software as a service - multi-tenant solutions don't operate in the same way, so they're more resistant." Blake Oliver: Yeah, that's exactly what we were saying. David Leary: This is what we've been saying. Now, it's in the Journal of Accountancy, Blake. Blake Oliver: Good. [00:34:30] David Leary: It's not just on The Cloud Accounting Podcast. It is right there for everybody to see. Blake Oliver: I wish that quote had come up at the beginning of the article, because there's an unfortunate quote here from Jim Bourke, who - I've never met him. I don't know who he is - he's the partner-in-charge of information technology at WithumSmith+Brown in New Jersey. He says, "It's not a matter of if, it's a matter of when and how an outage will occur, and you need to anticipate that. The same malware outage could happen to any of the cloud software providers. It's the nature of the cloud. It's going [00:35:00] to happen." I think that's ridiculous. It's not inevitable. Like you just said, David, depending on the technology in use, whether it's old technology that has been re-platformed to cloud, or if it's true cloud, that makes a huge difference in the security. We shouldn't just accept this as a given. David Leary: We've really beat this horse that ... I'm skeptical on these legacy companies that are just pushing things to the cloud, and it's still just a Windows box, and that, arguably, it's [00:35:30] no more secure than anybody else's laptop. The true SaaS apps are fundamentally- Blake Oliver: More secure, yeah. David Leary: -architected to be more secure. Blake Oliver: We should say that some of these contingency plans, things you should do, are really good and important in this article. A great tip is backup your data off of the cloud. Just because it's in the cloud doesn't mean that it's being backed up. Either verify that the provider is mirroring it to offsite disconnected servers or make sure that [00:36:00] you're doing that. Then, consider business continuity insurance, which apparently is affordable even for smaller firms, so if your cloud provider does go down, you have insurance to pay. Also, make sure that you request, especially of larger providers - they should have these reports - find out whether the vendor has a SOC 2 report, and a SOC for Cybersecurity report. S-O-C. If they don't have them, then be a little more skeptical as to whether or not they've gone through a proper audit. [00:36:30] David Leary: Thanks for considering and talking about the insurance. Blake Oliver: Yeah David Leary: I'm headed down a path here, Blake. Headed down a path to your guaranteed investment return. Blake Oliver: Oh, really? David Leary: Ransomware. Again, Krebs on Security. It's a great headline. It's: "Ransomware Bites Dental Data Backup Firm." Blake Oliver: I love that headline. David Leary: It's PerCSoft. It's a cloud management provider for digital dental records. They operate an online data backup service called DDS Safe. They archive medical records, charts, [00:37:00] insurance documents, and other personal information for dental practices across the US. They got hit on Monday, August 26th. Their encrypted dental records for all- I'm sorry, for some, but not all of the practices that are using DDS Safe. Blake Oliver: Oh, man. David Leary: It caught my eye, because, before when we talked about that dentist in Florida that had got ransomwared. He was on the news. Do you remember that a few weeks back? Blake Oliver: Yeah. David Leary: I scrolled through the article. It's fine. There's not much in there, but at the very bottom [00:37:30] of the article, ProPublica recently published a piece last week, and there's a link. This Krebs on Security led me to this ProPublica article. Essentially, the premise of this ProPublica article - "The Extortion Economy: How Insurance Companies Are Fueling a Rise in Ransomware Attacks."  Blake Oliver: Wait ... So, the insurance companies are making more ransomware attacks? David Leary: What's happening is, because people are insured ... You just read the Journal of Accountancy. Blake Oliver: Yeah. David Leary: It told people- Blake Oliver: To buy insurance. [00:38:00] David Leary: -to get insured. Buy insurance for ransomware attacks. What's happening now, the cyber criminals aren't stupid. If you're gonna target companies with ransomware, who are you gonna target? Blake Oliver: The ones who have insurance that are gonna pay out.  David Leary: The ones that have insurance. Exactly. The onus isn't on the insurance company to stop the criminal. They're just there to help you get back in business. Blake Oliver: Right. David Leary: But the attackers see there's deep pockets- Blake Oliver: Yeah. David Leary: -and insurance payouts can be great. This vicious [00:38:30] cycle's started to occur now. Blake Oliver: There's a quote in the article, "One cybersecurity company executive said his firm had been told by the FBI that hackers are specifically extorting American companies that they know have cyber insurance." That's actually ... Oh, that's creepy. Buy cyber insurance, and that might make you a bigger target. David Leary: Yeah. Blake Oliver: Certainly, something to consider [cross talk] David Leary: That's the fix, right? Blake Oliver: Yeah. David Leary: There's guaranteed ways to make money here. Blake Oliver: Oh, man. David Leary: And [00:39:00] a bunch of other ways, instead of picking your own stock. There's a third article from ProPublica, also, that's a little bit more of a magazine deep read, that just talks about ransomware, in general, with small businesses. It's a super-deep, more of a magazine-style article with graphics and everything else; multimedia-type experience. It's worth checking out, as well. I just thought it was interesting that people with insurance are the ones getting targeted more than people without insurance. Blake Oliver: That deep dive ... It's called, "The Trade Secret: Firms That Promised High-Tech Ransomware Solutions Almost Always Just Pay the Hackers," that [00:39:30] is going to be in the show notes, so check that out. Let's shift gears a little bit. David Leary: Yeah. Blake Oliver: Let's talk about what accounting even is, David. What do accountants do in your mind? David Leary: People get upset if you say anything bookkeeping-related, but ultimately, they keep a tally of the financial doings of an entity. Blake Oliver: Okay. That's good, but that is bookkeeping; financial accounting, right? What else [00:40:00] do we do? We do tax, audit. Tax and audit are the two big ones, along with client accounting services, now. It's always been a question. What do accountants do? The joke is-  David Leary: Track their time? Blake Oliver: Track their time ... The joke is that the general public seems to think that every CPA knows how to do taxes, even though only a fraction of us do. The reason I asked you that question, David, is because our friend, friend of the show, Donny Shimamoto, CPA, wrote an article that appeared in CPA Trendlines that I really [00:40:30] liked. The title is "Accounting Services Aren't What You Think They Are."  Donny starts out by giving a history- a historical view of the definition of accounting services, based on his illustrious career. He talks about how, in the late 1990s, the AICPA and the CPA state societies collaborated on a project called the CPA Vision Project in which they ID-ed some core services of the profession. Here's what they said in the 90s, that accounting [00:41:00] services included assurance and information integrity, technology services, management consulting and performance management, financial planning, and international services. Notice that tax and bookkeeping are not mentioned, and audits are mentioned under the parent term, 'assurance.' That was the definition in the '90s. Then, when they reconvened to do this again in 2010, Donny Shimamoto was a part of that. He was part of the CPA Horizons [00:41:30] 2025 Advisory Panel. They deliberated. They actually, back then, decided not to define it. They said, "The services provided by CPAs have become so varied and diverse that the concept of core services is no longer representative of the profession." We no longer actually have an official definition of what accounting services encompasses. David Leary: Because you see accounting firms are doing IT, technology consulting. They're doing app consulting. They're doing HR-type functionality now. Blake Oliver: All sorts of business services, right?  David Leary: Yep.  Blake Oliver: Donny has [00:42:00] been clearly thinking about this for a while. He says in the article, "If we don't have a definition, that doesn't sit well with me. How do we describe what we do? It either means that we don't do anything, or we do everything, and neither answer feels right." Then, when he was trying to revamp his website, he came up with an answer. I'll share this with you, David, and you can tell me what you think. He says, and actually he was inspired by Simon Sinek's "Start With Why" video that you can find on [00:42:30] YouTube. Great video.  He said, "Let's not describe our services as what we do. Let's describe them as why people would want us to help them." He came up with three whys for his firm. Number one is peace of mind. Number two, vision and clarity, helping clients visualize their ideas and clarify how to make it a reality. Three is hope. "Clients working with us experience a feeling of hope, because of the way we provide our services." So, peace of mind, vision and clarity, and hope. That [00:43:00] is, to Donnie, what core accounting services really encompass. David Leary: Whatever skills you have to help make that happen ... If you happen to have tax skills, and bookkeeping skills, and IT skills; whatever you need to do, you can-  Blake Oliver: Do that, yeah.  David Leary: -support those three things. Blake Oliver: It's not what you do that matters. It's why you do it. I like that. I really enjoyed that, so I wanted to share that.  David Leary: You could have no skills and just, you're really good at giving hope. Blake Oliver: Isn't that business coaching? David Leary: Business coaching, yes.  Blake Oliver: I will say no more. David Leary: I'm [00:43:30] out of articles this week. Do you have anything else? Blake Oliver: Oh, I got a long list, but we may not have time for all of them. Let me see what's really good. Here's one that I like. Speaking of hope and those softer skills, Accounting Today published an article called "CFOs Seek Candidates with More Tech Skills, Survey Finds." It's a survey about what CFOs are having trouble finding, the rarest skills in accounting job candidates. It was done by Robert Half; a poll of 1,100 CFOs of companies [00:44:00] of 20 or more employees across the United States.  Believe it or not, it wasn't soft skills that's the hardest thing to find. Tech expertise came in on top. Over 30 percent of CFOs say that tech expertise is the rarest skill in accounting job candidates, followed by functional job skills, then leadership, then soft skills, and then culture fit. I posted it on LinkedIn. Tongue in cheek, I said, "Good news. You can skip those soft skill courses and get straight to the software, because [00:44:30] apparently tech skills are what CFOs are looking for." David Leary: It's interesting, because I feel like the last decade, it's been telling accountants, "You need to get soft skills. You need to know how to communicate with people." Either A) they've all gotten them now; or B) they still don't have them, and maybe accountants and people are just correct; they didn't need them, the whole time. Blake Oliver: I think it depends where you are in your career and what you are aiming to do. If you're aiming to be a CFO, then, yeah, soft skills are really important, because the CFO's biggest job is communicating the story of the financial picture of the company to everybody in the company, [00:45:00] and the stakeholders, and everything else- investors.  But if you're just a staff accountant, soft skills are not what's going to drive your career success at that early stage. It's gonna be technical expertise. If you're in a company where you're doing GAAP reporting, it's being good at GAAP, and then also being good at tech, or being good at both. These days, tech is so important, you can be just good at that, like me. You can know enough GAAP to pass a CPA exam, but I never do it. I don't need to know how to do revenue recognition. I [00:45:30] need to be able to learn enough so that I can implement a revenue-recognition platform. David Leary: You would come in, and you'd be like, "Hey, I can do a reverse image search on Google ..."  Blake Oliver: Exactly. David Leary: They're like, "Boom! Job for you." You just beat every other candidate. Blake Oliver: I like that survey. What else? What else? Here's a weird one: Liberty Tax is acquiring Sears Hometown Outlets for $132.9 million. David Leary: Full Circle, right? Because if I remember, as a kid, [00:46:00] H&R Block used to be inside of Sears. Blake Oliver: Oh, was it? I don't know. David Leary: Yeah. You'd go to Sears. You'd get the family photos at Sears. You could get your taxes done at Sears. You could hang out in the tool section with your dad at Sears. You could do everything at Sears. Full circle, a tax company is now buying what's left of Sears. Blake Oliver: I don't even know if the plan is to put Liberty Tax inside of Sears, because they also, earlier this month, bought the Vitamin Shoppe store chain. [00:46:30] Liberty Tax is ... They're going into completely unrelated businesses now. David Leary: I think Liberty Tax, their specialty is franchising. Blake Oliver: Right. They're broadening to run multiple franchise businesses that have nothing to do with tax. I wonder if this is because they see the writing on the wall, which we've been talking about this for months, with the success of Intuit, TurboTax, and TurboTax Live. The only people that are going to [00:47:00] these retail tax shops are old, so the business will not exist in 20 years. David Leary: Yeah, because I think we've looked at it; it's like 11 years, when we started; the numbers- Blake Oliver: Millennials are not using [cross talk] Yeah, these franchises are not attracting millennials. It's done. David Leary: This is not a strategic play to help their tax business; this is a diversification play. Blake Oliver: They're just getting out of it, I think. David Leary: Interesting. Blake Oliver: Yeah. That's my theory. David Leary: That's one to watch. That would be one to watch. Blake Oliver: Yeah. They didn't say that, of course. Here's the quote from their chairman, Andrew [00:47:30] Lawrence. He said, "We are excited about the acquisition of Sears Outlet and its unique model that offers its customers in-store and online access to outlet-value products across a broad assortment of merchandise categories, while serving as a valuable supply chain partner for its vendors. This is a continuation of Liberty Tax's strategy of identifying and acquiring franchised or franchisable businesses while also building scale at attractive acquisition valuations. It's an exciting time for Liberty Tax and its shareholders, as we begin to recognize [00:48:00] the strength in our future-facing franchise business model." David Leary: Yeah, so they're becoming an equity company that's buying other franchise. It's an interesting jump. Blake Oliver: Yeah, and if you like picking stocks, definitely short Liberty Tax, and all the other store-front tax shops. Although, this is not financial advice. Don't take my advice. I'm really ... It's not good advice. David Leary: Yeah. We do have some good things. Blake Oliver: Okay. David Leary: We have [00:48:30] reviews. Blake Oliver: Oh, yeah. David Leary: We didn't read them in the beginning show. We can read them now, though. We jumped right into the fake profiles, the sock puppets. All the reviews, though, I have checked them. None of our reviews are from a sock puppet. Blake Oliver: Oh good. David Leary: That's how you know you've made it, though, right? If we get 100 reviews in one week from sock puppets, we know we've made it.  Blake Oliver: What we should be doing is setting up our own sock puppets and giving ourselves lots of fake reviews, David. That's how you game the system. David Leary: To me, that is just so much work, because these sock puppets were putting [00:49:00] comments on each other's articles. Blake Oliver: Yeah. David Leary: I'm like, "Who has that much time?"  Blake Oliver: Just outsource it. David Leary: Wow, wow, wow, wow ... Blake Oliver: Let's read them up. David Leary: I'll let you take the first Apple review here. Blake Oliver: All right. This is five stars from Destructo Mo: "Interesting content" is the headline. "This is a great podcast for industry news. I would characterize this content as stuff you might learn at a trade show or industry event, except you get it each week." That's from Joel Slatis, CEO of Thank you, Joel! David Leary: This one [00:49:30] is from Podchaser. It's from Jungleboy - five stars - "This is a great podcast for staying current on the trends in accounting. David and Blake make a great combo to discuss current business events." Blake Oliver: Kenji said, "Perfect blend of accounting industry news, witty banter, and investigative journalism. I never miss this podcast." David Leary: Juliet Aurora: "Two of the brightest minds in our industry [and] we get a peek into their brains through this podcast. Always relevant, thought provoking, interesting, delivered with humor. A great resource, whether you're [00:50:00] new to the industry or a long-time veteran." Thank you, Juliet. Blake Oliver: Amanda Aguilar had said, "Blake and David constantly strive to bring the most relevant issues in cloud accounting to the listeners. This podcast is a great resource for accountants and bookkeepers just dipping their toes in the cloud, but it's also a must-listen for those of us who've been around for a while. Love it." David Leary: And Sherrell T Martin - five stars - "The Cloud Accounting Podcast is the best podcast for staying up to date with what is happening in the accounting world today. David and Blake are not afraid to ask the questions that raise the [00:50:30] eyebrows and awareness on issues that affect this industry. They are just what we need to keep conversations going." Blake Oliver: Thank you, Sherrell. DaveOlsen said, "The Cloud Accounting Podcast is my favorite source of news and information about the cloud accounting industry. Blake and David are great guys, in person, and authentic on the podcast. They know their stuff and aren't afraid to ask tough questions and address controversial issues. Thank you for your efforts to make our community better." Thank you, Dave, and everyone who left us a review, for all your help in spreading [00:51:00] the good word about The Cloud Accounting Podcast. David Leary: The gospel. Blake Oliver: If you wanna leave your own review, you can do that at, David- David Leary: You can go to, or you can do that in your Apple iTunes podcast player. Whatever Apple's calling it this week. Blake Oliver: If you wanna get the show notes emailed to you automatically, or a link to the show notes, I should say, head over to, click on the blue Subscribe banner at the top of my website, enter your email address, and you'll get an email the day after [00:51:30] an episode drops with a link to the show notes, so you can go and check out the articles we're talking about on the show. David Leary: And come see us. We are going to be in Boston. I have an update, after last week! My jury duty- Blake Oliver: Oh, yeah. What happened, David? David Leary: I am pausing here, for a second, because I'm a little frustrated. I finally check; I have to wait til Friday night at 6:00 p.m., to check if I'm on jury duty. It says, "Oh, the courts are closed all next week. You're relieved of your jury duty." I'm like, "Why did you even schedule me for?!" I [00:52:00] got on JetBlue. I bought a plane ticket. I'm booked. I will see everybody in Boston at Accountex this week. Blake Oliver: That's great. We're gonna have fun. Come see us at booth ... I think it's 1008? 1008? David Leary: Yes. I think we're facing food, the snack bar. Blake Oliver: Oh, sweet. That's great.  David Leary: Get your hotdog and chips and come by and check out our recording. Blake Oliver: Swing by, say hi. If we're recording, you can snoop on us. If we're not, we'd love to chat with you. David Leary: Come get a sticker. Blake Oliver: Yeah. Come get a free [00:52:30] podcast sticker to put on your laptop, or your iPad, or your face ... We should get temporary tattoos, too, David. David Leary: Of our faces? Blake Oliver: Of us. Yeah, that ... I was thinking more of the podcast logo, but, yeah. David Leary: Maybe I'll add it to the list of cool things to get for conferences. If you are not gonna go to Accountex; Blake, if somebody's not gonna make it to Accountex, how would they get in touch with you? Blake Oliver: You can tweet at me. I am @BlakeTOliver. You're also welcome to connect with me on LinkedIn. Just make sure that you [00:53:00] add a note when you connect with me, so I know that you are not a sock puppet. David Leary: Yeah, say, “Not a sock puppet." Blake Oliver: Yes.  David Leary: That's probably the best, right? You can get a hold of me. Reluctantly, yes, I'm on LinkedIn. It seems like that's where lots and lots of people with connections have been coming in lately, but also on Twitter. I'm @DavidLeary on all the socials. Blake Oliver: Yep and find and follow The Cloud Accounting Podcast on Facebook, LinkedIn, and Twitter. Until next time, David, have a great rest of your Labor Day. David Leary: I'll see you in two days, three days? Four days?  Blake Oliver: See you soon. David Leary: Whatever [00:53:30] it is. All right, bye. Blake Oliver: Bye. 
It’s a Bot! Live Interview and Demo of Gappify Alan with Founder & CEO Jotham Ty Show Notes 00:16 - Welcome to the Cloud Accounting Podcast! 01:02 - Correction: Gappify is true automation (not fake bots) 03:09 - Jotham's background in the Big Four and then SOX compliance consulting 04:06 - What is Gappify Alan and what does it do? 07:13 - How does Alan work behind the scenes? 11:00 - The value proposition of Gappify for a midsize company 13:16 - About Gappify, including their participation in the AICPA startup accelerator 16:48 - Live demo of Gappify Alan 24:07 - Who is a good fit for Gappify as a customer? 25:29 - What does Gappify cost? 26:14 - Do you find challenges with customization? 28:41 - Are you still building a bot to pass the CPA exam? 32:36 - Do you think companies will stop customizing so much? 36:16 - How to get in touch with Jotham Ty and learn about Gappify ( Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptDavid Leary: I still see some progress here on my browser tab. Blake Oliver: I see a notification. David Leary: Okay.  Blake Oliver: Yep, we're live. David Leary: We're live. Okay. Blake Oliver: All right! David Leary: Perfect. Hello, everybody. We managed to get over the technical hurdles here, and we are all set up. Welcome, welcome, welcome! This is the special bonus edition, bonus episode. Our Facebook Live bonus episode, and our second one we've ever done. We [00:00:30] have a special guest, Jotham Ty. He's the founder of Gappify. This episode is sponsored by, so, thanks for making that possible. We'll probably go maybe about 15-20 minutes just interviewing Jotham, and then, Jotham will actually do a demo of Gappify, and then we'll open the floor up to any Q&A. If you guys have Q&A along the way, please use the comments to the right, there, and we'll ... Blake and I will read those, and get those asked along the way. Without further ado, Blake, did you wanna give a little wave? Sometimes [00:01:00] people don't see our faces. Blake Oliver: Yeah, hi, everybody! Blake, here. Thank you for joining us for this special bonus episode of The Cloud Accounting Podcast. I wanted to start off with a correction. I don't know, David, in 76 episodes, have we done a correction? I don't think so. David Leary: That doesn't mean we haven't said anything wrong. Blake Oliver: Right, but this time I made a big mistake, and that is actually the reason why we're having this Facebook Live today. Listeners of the show might recall previous coverage of Gappify, and [00:01:30] everybody, I think, who listens knows that I am a big fan of bots these days. I've been on somewhat of a one-person crusade in figuring out what exactly is going on with bots in the accounting profession, the accounting industry, and tech, and trying to figure out how much of this is really AI and how much of this is human.  Here's my correction is that I mistakenly lumped Gappify in with some other fake-bot coverage. Jotham reached [00:02:00] out and corrected me on that, or at least explained what's really going on. What happened is I was browsing through Gappify's website. I came across your website, Jotham, and I was learning all about Gappify Alan. Alan is what you guys call your technology, your bot, is that right? Jotham Ty: Yeah, technically, we call it a process bot, but I'll elaborate later. Blake Oliver: Exactly. Okay, great. I'm looking forward to hearing about that. I also saw that you had job postings for an accountant or accountants in [00:02:30] The Philippines. I made a connection, thinking, "Oh, this is another situation where we've got bots that are really human beings in The Philippines." You reached out, and you told me that that's actually for internal Gappify accounting, and that there are zero human beings involved in any of your, what do you call it, process-automation technology? Thank you for correcting that, and I apologize for lumping you in incorrectly with some other, perhaps, less-upfront [00:03:00] types of enterprises. Yeah, I'm looking forward to learning more about Gappify ... What do you think we should do, David? David Leary: Let's learn about Jotham, first. My understanding is you're an accountant first, so what's some of your background? Jotham Ty: I started my accounting career in 2002. I left KPMG in 2004 to start one of the first Sarbanes-Oxley compliance practices in the San Francisco Bay area. What that really means is I went around and [00:03:30] created flow charts, and documented controls, and tested controls for mid-market, and enterprise companies. I did that for several years. Spent a couple of years in industry, helped build an accounting team, and take it through its IPO, first 10-K, 10-Q filings, all that good stuff. Then a few years ago, we wanted to, or I wanted to take all the knowledge that I consumed - in, what is that, 15 years? I can't do the math right now - and create a comprehensive solution that can [00:04:00] finally get us accountants out of spreadsheets. That's how Gappify was born. Blake Oliver: Tell us more about Gappify and Alan, and how are you helping to get accountants out of spreadsheets? What exactly does Alan do? Jotham Ty: Alan is a process bot, or a process-automation bot ... By the way, the terminology, across the industry, is not consistent yet, so it definitely lends itself to a lot of confusion. For us, we're [00:04:30] more concerned about what it actually does. As a solution, we want to get skilled accountants, and really high-caliber accountants out of maintaining, and rolling forward spreadsheets. That's something that I saw over the years.  In fact, I managed accounting teams, where folks on my accounting team have asked me deliberately, "I don't want to do invoice processing anymore, I think we can do more," but back then, without automation, I had to say, "Well someone's gonna have to process those 400-500 [00:05:00] invoices, and we don't have an automation solution, so, sorry, you're gonna have to do it." That just kind of stuck with me for a while. I think there are just so many high-potential accountants out there. We can do much better than just maintaining spreadsheets. That's how we kind of ran with the idea. David Leary: During that journey, did you have your employees try some of the off-the-shelf remote process-automation tools that are out there, or did they try to learn code themselves, your whole department? What was that [00:05:30] journey? Jotham Ty: Yeah, I definitely can recall ... Well, this is 2010, so this is when the cloud was first emerging. I remember walking into my accounts-payable lead's desk and seeing stacks of paperwork with expense reports. I just said to myself, "There's got to be a better way of doing this." You can't just manually crunch pages, and pages of expense reports on Excel, and then entering them again into our accounting system, which at that time was Intacct. We set off on a journey to find an [00:06:00] expense-report solution. We ended up going with Coupa; that was when they were earlier. It's still an uphill battle. We may have gotten that person away from processing expense reports manually. The severity of the problem is so huge in corporate accounting and, obviously, FloQast, in the closed-management area, knows a lot about that. Even with these cloud solutions available to us, it's still not enough. We asked our customers, "How much of your day do you spend on spreadsheets still?" They easily say, "Half of our days, even though we have AvaTax, even though we [00:06:30] have FloQast or Blackline," or whatever solution you have. That's where the name Gappify really comes in. We want to fill the gap in between these systems, and I think a process bot is the best way to do that. Blake Oliver: I think you mentioned mid-market, like mid-sized companies. You guys are interesting, because Gappify's working primarily with corporate-accounting teams, automating the work of corporate-accounting teams. I know that one of the examples on your website is NetSuite, so NetSuite AP Automation. You've [00:07:00] also got accounts-receivable automation, collection follow-ups, escalations, over/under-payment inquiries, custom invoice preparation. How does that work exactly? What are you guys doing? Are you getting set up as a user in NetSuite, and then plugging that user account into your ... How does it work behind the scenes? I'm curious to know. Jotham Ty: Yeah, so I'll just use an example you mentioned, AP Automation, earlier. For vendor [00:07:30] setups, it's one of our more popular process-bot tasks that we automate. By adding Alan as a user to your NetSuite environment- Blake Oliver: Sorry, just to pause for a second, so, 'vendor setups' you mean I'm adding a new vendor into NetSuite?  Jotham Ty: Yes. Blake Oliver: Okay, I need to collect all their information like address, tax ID number, all that stuff? Okay. Jotham Ty: W-9. In today's world, you'd usually have someone in AP emailing these vendors, sending an Excel spreadsheet asking for that information. With our bot, Alan, you just add him as a user to NetSuite. We set rules. We [00:08:00] sit down with our customers, and say, "Hey, when do you want Alan to start picking this up?" Usually, they'll say, "Okay, well, we want to assign new vendors that Alan should work on." They'll check a box in NetSuite, and then we have a rule in the background that says, "Okay, if that box is checked, let's go out, and reach out to that vendor, and collect contact/bank/tax information." Not only that, but our customers tell us what kind of app validations they want to apply. In the US, [00:08:30] obviously Social-Security numbers or TINs are only nine digits long. Blake Oliver: Right. Jotham Ty: We can bake in those types of rules and logic. Blake Oliver: How are you reaching out for the information? Are you emailing the vendor? Jotham Ty: Yes. Blake Oliver: Okay. Jotham Ty: It's an email from the Gappify system, or Alan. Then vendors can access the form through a web-based link. They don't need to register; they just go in and provide their information. We can do validations to make sure that the vendor is who they say they really are. Then, [00:09:00] once they complete their information, Alan can either update NetSuite with the information provided by the vendor, or tee it up to someone in accounting, or accounts payable to do additional reviews. Blake Oliver: Got it. That's interesting. It's not something that in a small business you would think would take a long time, or be worth developing a whole automation tool for, but I imagine, with some of your customers, it can be a lot of vendors that they're adding. Jotham Ty: Absolutely. Blake Oliver: Interesting. Jotham Ty: We've got some customers [00:09:30] who have a couple-hundred vendors, and others closer to a thousand. Definitely, it varies, but the level of manual work that's required is all the same [inaudible]. Blake Oliver: You guys can add new vendors, but also, can you update existing vendor records that way? Jotham Ty: Yes. Blake Oliver: That's really nice. David, that reminds me of how, with QuickBooks, when you needed to get my W-9 information for a payment you had made to me, you had an email go out, and I filled in a [00:10:00] form, and then it populated your accounts. David Leary: Yeah, it's just built into QuickBooks, right [cross talk]  Blake Oliver: It's kind of amazing to me how little of that automation, and that's just one example, very niche- Jotham Ty: That's actually just the beginning part, Blake, of the example. There's a lot more that goes on after that, in terms of managing your relationship with vendors; even with vendor on-boarding itself. We build in rules that say, "Okay, if the vendor is a cloud provider, tee up another form, or send a message to IT, and security to go through the due-diligence [00:10:30] process." We really string a lot of these if's ...  Blake Oliver: Mm-hmm.  Jotham Ty: There's no magical AI built into any of this. I want to make sure that's perfectly clear. It's us just figuring out what the decision tree is and programming our bot to be able to follow that. Blake Oliver: Got it. That's why ... You're not using any humans in any part of this process. This is all completely algorithmic, or you've programmed rules and forms that connect these systems and make these processes happen. Jotham Ty: Right. David Leary: At [00:11:00] a high level, just because I'm relating it to ... A lot of our audience, right, is super-familiar; they use Zapier. They could do an on-boarding workflow. Every time I get a vendor, "If I add a new vendor in QuickBooks, or Xero, trigger this event in Zapier," and Zapier could kick off an email that hooks them up to a Google form to get that information to bring it back all the way into QuickBooks. People could build this themselves. I imagine, at large companies, they could have somebody on their staff go, and build stuff like this themselves.If [00:11:30] I'm understanding you, the value prop is, "Hey, instead of having your IT department involved, and your whole accounting department taking a year and a half to learn how to automate, or build some custom process," they can almost, outsource is not the right word, but they could just hire you, and you provide it as a service. You're building remote process-automation as a service in a weird kind of way. Jotham Ty: Exactly. Our future state definitely takes us to a point where we want accountants doing this [00:12:00] as a self-service. That's an important goal for us. I think this is where me, being from the profession, and the industry, we want to see accountants managing, configuring bots, in addition to strategy, and analytics. Right now, we have IT setting up a new chart of accounts for us, because we don't understand our ecosystem enough. Obviously, we're a long-  David Leary: When you say "we", you mean we, accountants in general, and their own companies, not "we," as in Gappify? Jotham Ty: Exactly. [00:12:30] If you're at a large company, say a Fortune 500 company, and you want to create a new department, an accounting manager, sometimes, in certain organizations - a lot of organizations, I should say - can't do that on their own, because they don't know the impact of what that department addition will do to other systems. My argument is that we accountants should learn how to do that. We should be the one doing that. We shouldn't let IT do these types of things, because we have to understand the environment ourselves to know how the numbers flow through. Blake Oliver: Yeah, I'm [00:13:00] with you on that one. When you have to wait for IT to create that chart of account, or that new account, that can take a long time. We just don't have time for that. Jotham Ty: Exactly, and I don't think they want to do it either, Blake. I think it's mutually beneficial for everyone. Blake Oliver: Are you able to show us, Jotham? We'd love to see what it looks like. Jotham Ty: Yeah, I'll just show some examples here. These types of conversations are always fun for me. I don't get to do this much. As a startup founder, they're cracking the whip on me, so this is fun for [00:13:30] me. Blake Oliver: So while you're loading up that demo, can I ask you just some metrics? Have you guys raised VC money? Jotham Ty: We have not raised an institutional round. We're working with Morgan Stanley on that right now, but we have raised three pre-seed rounds. We have about 30-plus angel investors. I'm really proud that two-thirds of those investors are in the profession, so they understand the problems that we're trying to solve. We're really trying to rally the community around what we're doing. Blake Oliver: Do you disclose how much you've raised far? Jotham Ty: I [00:14:00] believe it is public. I should probably pause, and ... This is a moment where I should probably ask counsel whether that's okay. If it's public, it's definitely on Crunchbase. Blake Oliver: All right, I'm looking it up now. How many employees do you have? Jotham Ty: Less than 20. Blake Oliver: Where is everybody located? Jotham Ty: Most are located in Manila, so that's where we have our engineering QA customer support team. Then we have our management team, and we plan on growing here in New York, which is where I'm at right now. Blake Oliver: Your [00:14:30] data, or your bot, where does Alan live? Jotham Ty: In the cloud. [AWS] specifically. Blake Oliver: In the US? Jotham Ty: In the US, yeah. Oregon, specifically. Blake Oliver: Got it. Client data is ... Are you on AWS, or do you share ...? Okay, got it.  Jotham Ty: Yep Blake Oliver: Same as us. It feels like everybody's on AWS these days.  David Leary: I was gonna ask this before ... The AICPA has an incubator, and then you're part [00:15:00] of Morgan Stanley's incubator, as well. Can you kind of explain what those two processes are, what you're getting out of those as a startup, like, what the differences are? Jotham Ty: A lot on both fronts. I think one of the toughest things about running a startup is you're competing with so many talented companies out there with far more capital than we have, so any chance we can get to work with the profession, i.e. the AICPA and, and Morgan Stanley, it's just been incredible. [00:15:30] I actually just got off a call with the AICPA before this one. They helped give me feedback on our upcoming pitch deck for our first institutional round. Just to get industry leaders to weigh in and give us advice ... I haven't raised institutional money before in my career, so I don't know about that process. Then, Morgan Stanley has actually kind of opened up my eyes as far as the work. We're great with numbers - obviously, I'm an accountant - but we suck at storytelling, and storytelling is [00:16:00] an important part to pitching so [cross talk]. Blake Oliver: It's arguably the most important part. Jotham Ty: It is, it is. I've had my priorities all wrong all this time, so good thing we're getting some help with that!  Blake Oliver: Yeah, much less important to have a product that works than to be able to tell a convincing story, unfortunately ... The accountant in me does not like that. I see these startups raising money all the time with just an idea, and a hope, and a dream, and here [00:16:30] we are, creating something that actually works, and creates value for people today, and makes money today [cross talk]  Jotham Ty: Oh, you are striking a strong emotional chord. David Leary: This is why accountants become accountants, and don't become novelists, right? It's fundamental.  Blake Oliver: Yep, or fundraisers, yep. David Leary: Or fundraisers [cross talk] Jotham, if you want to go ahead, and do your sharing - share your screen? Jotham Ty: All right, so just to tee it up, this is an example that we're actually working with a pretty [00:17:00] notable company on right now. They're looking to use Alan to manage their fixed assets. If you're a large company like they are, they actually have dedicated people that, at the end of each month, they send emails to people that own assets, new assets. In accounting, you can't start depreciating an asset until it's in service, so what you have are records like this. This is a fixed-asset record in NetSuite, in our internal environment - the test [00:17:30] environment - so there's no confidential data here. Blake Oliver: Because this is going to go on the podcast, I'm just going to describe what I'm seeing here. I'm seeing a screen in Oracle NetSuite in the fixed-assets register. Looks like it's a Dell computer of some sort, or a server of some sort. We've got the original cost. All the information - residual value, accounting methods, straight line, asset lifetime, 36 - everything we need to do the depreciation, right? [00:18:00] Jotham Ty: Except the confirmation from the owner of that asset that it's ready to depreciate. Blake Oliver: By "owner," you mean whoever in the enterprise is responsible for it? Jotham Ty: Exactly, so if you, Blake, were responsible for that asset, accounting would need to reach out to you, and ask you, "Are you using this expensive laptop right now?" Blake Oliver: Okay, got it. Jotham Ty: In today's world, you have teams, again, that send emails manually to you and say, "Hey, Blake, are you using this laptop yet?" and, if you're not, do it again next [00:18:30] month. Take that times however many assets there are for larger companies and, all of a sudden, you have a task that you're spending 10-20 hours on each month. This is a perfect candidate where Alan can come in ... This is, again, rules-based. Alan can detect this transaction because he's a user in the system. In this particular example, we see that depreciation start, and end dates are blank. Blake Oliver: Right. Jotham Ty: No one's confirmed it yet. David Leary: Jotham, when you say he can see that, is it [00:19:00] because you're making API calls into Oracle NetSuite, or are you just screen-scraping? Jotham Ty: This is API calls, so that's actually how we're different from RPA solutions. That's a great point. Every 15 to 30 minutes, Alan will say, "Oh, hey, this one's blank, and it's the end of the month. Why don't we send an email to Blake?" This is what an example of that email would look like. We work, obviously, with [00:19:30] our customers to figure out the right presentation for these emails, but the whole point is to allow Blake to click on this web-based link. Blake Oliver: I got an email that said, "Please confirm if this asset is in use." You clicked on the link; now we're on a web form that has the asset name, serial number, supplier, purchase date, and cost. The in-service date is blank, and it's highlighted. Jotham Ty: That's what you have to complete. Blake Oliver: Got it. The instructions say, "If your asset is now in use, please enter [00:20:00] the date you began using your asset, and if it's still inactive, please leave this field blank." You just filled it in with May 31st? Jotham Ty: Yep. Now I'll click submit. Blake Oliver: You're gonna click submit; okay, cool. Jotham Ty: We do use a connector called Celigo, which a lot of folks in our industry are familiar with. Instead of us maintaining APIs with NetSuite, and hundreds of other applications, we use third party who specializes in that area to connect into those systems. Blake Oliver: You are programming [00:20:30] specific use cases of Celigo to do this type of automation for accountants? Jotham Ty: The automation happens on our side of the platform. Celigo just comes in to allow us to [cross talk] They call them hooks.  Blake Oliver: -the hooks, and all that. Got it, okay. Jotham Ty: Exactly. All the logic is- all of Alan's logic is within the Gappify system. Blake Oliver: Now we see a message that says, "Thank you for confirming. I've notified the accounting team of your submission." Jotham Ty: In about five minutes, or when I hit refresh here, [00:21:00] and again this is a very simple example. It gets a little bit more complicated when you do different types of translations, and conversions, but that might be too detailed. If I click refresh, and this happens automatically by the way. I just ran it. I triggered it manually right now, because we don't want to wait 15 minutes for that. David Leary: Yeah, it's the life of API calls, right? Sometimes, there's a little bit of a delay there for the accounting system to get the data ... The dates appear. Blake Oliver: We're back in NetSuite looking at that fixed asset, and [00:21:30] I can see depreciation start date is now May 31st; end date is now May 30th of 2022. Jotham Ty: This is the first step in fixed-asset management. There are additional steps that we orchestrate because of the start point. For this particular customer, what we're going to do also is, at the end of the quarter, confirm with you, Blake, if you still have that asset, and that you haven't trashed it, or lost it. Blake Oliver: What happens if I don't [00:22:00] click the link in the email? Jotham Ty: Alan can send reminders. Just a standard reminder functionality. We can set how many reminders accountants want to do. We do want to build a functionality that will shoot lasers at you to remind you to complete your forms, but that's something that's still in the works. Blake Oliver: Got it. I can see this being super-useful in an organization where you've got ... Just look at laptops. Everybody's got one, and you [00:22:30] have to confirm that they are using it, and they're not, and when they stop using ... This could be a lot of work. Jotham Ty: It is. Again, this goes back to the point of you have people that are going to school to be accountants, and, in some cases, CPAs are doing this type of mechanical work, and it drives me nuts. Accountants should be looking into the new lease guidance, for example. I forget the name of ASU, but that's more value-add work for accounting, not this mechanical emailing/data-entry [00:23:00] stuff. David Leary: Can you show a little bit about ... This is kind of the end-user example of how it works, but a little bit under the hood, where ... I think, right now, basically, your team is configuring your tools, but your dream is to have an accountant, off the shelf, go to Gappify, and configure these tools themselves. Could you show us some of those ... Obviously, it's secretive, maybe not so secretive, but show how ... What some of those tools look like, and how you configure them? Jotham Ty: It's configurable in our [00:23:30] back end, and we've coded it such that people like myself ... The UI is very messy right now, so it won't even make sense if I show it to you- David Leary: Okay. Jotham Ty: -but it's designed for people like myself to be able to turn on and off different switches to make what you saw happen. We have to clean that up, obviously, before we give accountants the access to do that. That's something we're working very quickly on, because we really want to get to the point where we don't have to do it for our customers. Customers can do it on their own. Right now, we do this is a free full service for [00:24:00] them when they subscribe to Gappify Alan. Obviously, from a cost standpoint, it's not going to be scalable in the long run. Blake Oliver: Who is ideal for Gappify? What kind of companies are you working with, and who should be reaching out? Jotham Ty: We say any company with more than a thousand employees. Usually, you have a team of 10 to 20 accountants at that point, maybe even more. Teams that do high-volume, repetitive [00:24:30] work are great candidates for Gappify Alan. Obviously, as you go up market, the value proposition grows. Blake Oliver: What accounting systems, ERPs, do you work with that you support? I imagine they have to have those APIs in order for you to do any of this, right? Jotham Ty: Yeah, so whatever ERP systems that Celigo works with, we can integrate with, even if they're not in their standard marketplace. We have a great partnership with them ... Or larger systems, like, older [00:25:00] versions of PeopleSoft even, there's a way for us to connect into it. Blake Oliver: Got it. Okay, and Celigo, basically, they build all these integrations, so you don't have to worry about it. That makes so much sense [cross talk]. David Leary: Celigo's like an enterprise-level version of- Blake Oliver: Like a Zapier, or- David Leary: Zapier, essentially. Blake Oliver: They just provide the API. They don't provide the automation, right? Jotham Ty: Right. [crosstalk] PeopleSoft or [crosstalk] along those lines. Blake Oliver: Got it. What can [00:25:30] a company expect to pay for Alan? Do they pay by the automation workflow? Is it just all in one, all-you-can-eat? How do you do it? Jotham Ty: We sit down with our customers to figure out what pain point they want to resolve. Typically, the pricing is $8,500 dollars per year per bot. It's an annual subscription. Our vendor onboarding one, that's what we would specify as the list price for fixed-asset management. Depending on your volume, what [00:26:00] you saw here, could either be $8,500 dollars, or ... We definitely want to go into a situation where fast-growing companies, like, we can grow with them. Even if you're a smaller volume, we are flexible in providing some kind of introductory pricing. David Leary: Do you find challenges with customization? What I mean by that is most Fortune 500 companies probably have to track their laptop hardware, as an example, but I imagine every single one of them have gone in, and added [00:26:30] custom fields to NetSuite, or ... Does that just become a nightmare as you try to scale this? Jotham Ty: Yeah, it's definitely a nightmare today. Obviously, we have to be flexible. We're the startup here, and we're very grateful for any opportunity to sell into a large organization. We do have customers who have really extensive customization requirements. We work with them to make sure we can meet the requirements. Obviously, as we grow, we [00:27:00] have to standardize the implementations, and limit the amount of customizations, but, for now, given where we're at as a company, it definitely is a resource suck when you have to customize specific to an environment, specific to very rare use cases, but we've been flexible with that, historically. Blake Oliver: That's the beauty of being in the mid-market space or in the enterprise is that because companies are willing to pay an [00:27:30] annual subscription starting at, what did you say? $8,500, something like that? Jotham Ty: Mm-hmm. Blake Oliver: It's doable, right? You can offer this really hands-on, customized setup, and support, which you could never do in the world of QuickBooks Online, where it has to be self-service. That's why Celigo, and Zapier, for instance, are so different. Where people are building their own Zaps, Celigo is more of a platform for companies like Gappify to build the connections or build [00:28:00] the automation for customers. David Leary: That's the problem, I think, right now, in general, if I think about our listeners, right, or accountants, or bookkeepers that are kind of getting good at Zapier. If they build some custom automation workflow on top of Zapier for client A, it's almost impossible to move that. You can take notes, and remember everything you did, and then you can recreate that for client B, but you can't just replicate it over and over. Blake Oliver: Scale it. David Leary: You can't scale it, it just doesn't ... Zapier's just not set up that way. If I'm hearing [00:28:30] this correctly, once somebody builds this workflow for hardware tracking, in theory, off the shelf, I could pull it down, use it, and just tweak it a little bit [cross talk] Blake Oliver: Hey, Jotham, we have a question from a viewer. Tate Henshaw asks, "How is the initiative coming where you guys built a bot to pass the CPA exam?" Jotham Ty: Yeah, so we actually- we believe we can do it, but it was not the right message. I'm going to come on this show and admit that that's [00:29:00] not consistent with where we want to take this company. I think just like a lot of startups who want to do the most exotic- take on the biggest moonshot projects, and that's how we felt at that particular time. We, again, believe we have built the foundation to be able to do that, but our greater concern right now is just providing automation that works today that we can build off of tomorrow. It's not to look acceptable to Silicon Valley VCs. [00:29:30] I would have to admit, earlier on, we wanted to fit in just like most people. I will say right now we have abandoned that effort. It's not important to us. What's more important to us is getting accountants away from manual-spreadsheet work. David Leary: Yeah, it's a very sexy story, but what do any of us get if there's a bot that could pass the CPA exam? But everybody wins if there's one less person that has to be stuck in a spreadsheet tomorrow. Blake Oliver: What I love about what you've shown us, Jotham, and I [00:30:00] now understand ... Thank you for coming on the show, and showing us Gappify, and what Alan can do, because I now understand it so much better. What I love about it is that you are using technology available today to create value from process-automation in a simple way. I know it's complicated behind the scenes, but you're not saying that we are using machine-learning algorithms and artificial intelligence, which, unfortunately, in the startup [00:30:30] world, has become kind of just a marketing tool. Very few people are actually doing it in a way that creates value. This is something that a company can implement today, and see value from, and time savings from. I'm sure you will be looking to add in those AI components as they become more sophisticated and can really help. Jotham Ty: I really see this as the required steppingstone to get into AI, because if [00:31:00] this work is being done manually right now, we don't have data consistency across multiple systems, even within individual customer accounts. I like to use an example of when you process an invoice, one AP accountant can say, "Today's date is the invoice date," and another AP accountant can say, "Well, it's the date on the invoice." You don't even have consistency in that process, so how can you possibly generate, or have enough data to support the AI, and the learning that's required? We think automation is the first step. [00:31:30] Blake Oliver: Yeah. Same thing here at FloQast. Our latest product is a matching engine that helps automate reconciliations. We are using a form of artificial intelligence, if you can call it that. It's like nested "If-then" statements, though, when you actually get down to it. It's really quite simple, but it acts intelligently. We didn't even have to use any complicated machine learning to match 80 percent of transactions automatically. You [00:32:00] can do it with very simple rule sets. Jotham Ty: I'd like to think, Blake, that that's actually better for our companies, because we work with accountants, where trust is very important to us. I can't trust Auntie AI to do my work correctly. I would rather know how the [crosstalk]- Blake Oliver: How it's working. Jotham Ty: -it's working, right. Blake Oliver: That's the problem with machine learning, and the whole "black box" of AI is we don't know. We really don't know how it's coming to its conclusions. Jotham Ty: I [00:32:30] would not feel comfortable signing off on financial statements, where a big portion of my financials were driven by AI that I don't understand. Blake Oliver: That's a great point. David Leary: Jotham, do you predict that companies will start to stop customizing much, and kind of standardize? Where I'm coming from that, if I remember back in the decade-plus ago at Intuit, Oracle wound up buying them. There was a company that was out there... This is pre cloud, Siebel Systems, right? Intuit was using Siebel Systems, and apparently, it got to a point where Intuit customized it so much, they weren't able to take on any [00:33:00] new upgrades. I think Intuit is using Salesforce now, and blah, blah, blah. It's all cloud. Ultimately, Intuit was selling some products, and had sales be like, "How much customization does each company really need?"   I think companies can convince themselves that they're special, and they think they have these needs that maybe is the same across the board. As your accounting departments shift towards more automation, are they gonna have to just give up? If they start pushing back, like, "Unless there's true value being [00:33:30] presented by this extra custom field, we don't want it because it breaks automation, slows automation down, makes our systems incompatible with other systems," et cetera, et cetera ...  Jotham Ty: Yeah, I agree. I think there has to be a very thoughtful process to evaluate customization requests. We, as the software providers, shouldn't be taking the charge on that. It should be the internal accounting teams that have some kind of decision tree to say, "Hey this type of customization doesn't happen that much. Let's not move forward with it because, in the long run, it'll just- we'll just waste more money maintaining [00:34:00] it." Unfortunately, that's more of a manual discipline that you have to instill upon yourself. You can't automate that, or maybe you can automate that logic ... You got me thinking [cross talk] Blake Oliver: Hey, Jotham, before we go, do you want to stop sharing? I just realized you're still sharing your screen. Jotham Ty: My apologies. Blake Oliver: No worries, no worries. David, one of the great things about cloud-ERP systems, and cloud accounting, in general, is that it ... Basically, the way it's setup, the [00:34:30] vendors can't allow for a lot of customization, because then it becomes impossible to do upgrade cycles at the frequency that you need across your entire user base, and just roll stuff out. If you're on NetSuite, yes, you can add custom fields, and do some other customizations. They're not really customizations, they're more configurations. It's configuration versus customization. You're not going to be able to completely customize NetSuite, ever. Jotham Ty: Well, you could run NetSuite SuiteScripts, and we do have a lot of customers that like to take advantage of that to take customizations further, but I [00:35:00] agree, you should just work within the framework of your configuration. Blake Oliver: I should say, you can't customize the database, right? That's what really screws up a lot of upgrades in ERP. Jotham Ty: Yep.  Blake Oliver: Well, great. David, do you have any other questions? If not, I'd love Jotham to share how the people can find out about Gappify, and get in touch, and reach out. David Leary: It was in another article, but I think I saw you just sent a tweet today, Blake, about accountants aren't gonna be replaced by AI; they're [00:35:30] gonna be replaced by accountants that know how to use AI.  Blake Oliver: Know how to use AI, yeah.  David Leary: Is that the tweet? Blake Oliver: That's how I started my career in accounting was building my own practice that was using cloud tools to just be more efficient. The good news is that we don't have enough people becoming accountants, even with the increase in people getting accounting degrees. There's just not enough CPAs, and CMAs, and what not. If you're the sort of person who can leverage technology like what Jotham is- what you're building at Gappify, then you're gonna be fine, at least that's my hope. [00:36:00] Jotham Ty: I 100-percent agree with that. Blake Oliver: Somebody's got to run the robots. David Leary: We'll just pop in and see if there's any last chances at questions ... Anybody that's watching, if you have one, type that in. While you're doing that, we'd love to find out, if I'm a controller of a Fortune 500 firm, how do I get Gappify? Jotham Ty:, obviously, is one place, and we do have demo forms, if you go to our website. [00:36:30] I'd like to work within the community. I like to keep myself open to everyone. We have absolutely nothing to hide. I love hearing stories out there about how organizations are trying to improve their automation environments. Whether it's interest in our bot, or just if you're talking about process, or trends, feel free to reach out to me. My email is David Leary: Where are you gonna be this summer? Are you hitting any [00:37:00] accounting conferences? Jotham Ty: Great question. I'm gonna be at the AICPA Engage, because, as you noted earlier, we're a cohort of the AICPA and program. We're actually unveiling our new marketing campaign called V2 Accountant. I'll just give you the quick CliffNote version. We're going to ask accountants to take a pledge to become better than spreadsheets, and, hopefully, through people [00:37:30] expressing that openly, and in numbers, hopefully, it just generates some kind of a movement to get our profession there. Blake Oliver: I love it [crosstalk]  David Leary: It's the ActiveX old marketing campaign. I'm sure Microsoft's gonna love you. Jotham Ty: I suck at marketing. I'm an accountant, but we're going to give it a shot anyway. Blake Oliver: I'll be at Engage as well, so maybe we can meet up, and I can share some of my marketing tips I've learned over the last few years. Jotham Ty: That would be awesome. Yeah, we are not experts, let's just put it that way.  David Leary: Awesome, thanks for coming on. There's [00:38:00] no more questions coming in. I do appreciate this taking some time. I know you're not the perfect match for the cloud accountant user base, like, we don't have a lot of Fortune 500 people listening to our podcast, and tuning in, but I think the lessons, and the process you're going through with Fortune 500 firms, and these big huge products is the same thing. It comes down market to the QuickBooks, and Xeros, and Sages of the world for sure. Jotham Ty: Great, thanks for having me on. This was fun. Blake Oliver: Thanks, Jotham. [00:38:30] Jotham Ty: All right, guys. Blake Oliver: See you soon. David Leary: You want to wrap it up, Blake? All right- Blake Oliver: Yep, bye everybody.  David Leary: Bye everybody.  Jotham Ty: Bye. 
Accounting Salon Interviews: Nayo Carter-Gray of 1st Step Accounting
SponsorElefant: Show NotesComing Soon! Connect with Nayo Carter-GrayFollow Nayo Carter-Gray and 1st Step Accounting on Instagram. Get in TouchThanks for listening! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, do us a favor and write a review on iTunes. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus.Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptBlake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Nayo Carter-Gray: And I am Nayo Carter-Gray. Blake Oliver: It's So, great to finally meet you and talk to you in person here at the Accounting Salon in New Orleans. Nayo Carter-Gray: Woo-hoo! Blake Oliver: I didn't say that right. How do I say ... Nawlins? Nayo Carter-Gray: You're not supposed to say Nawlins. N'orleans. N'orleans, baby. That's how the locals will say it to you. Blake Oliver: I will say it like somebody from Los Angeles. Nayo Carter-Gray: New [00:00:30] Orleans! Blake Oliver: We go way back. Nayo Carter-Gray: We do! Blake Oliver: First QuickBooks Connect I think we met, possibly. Nayo Carter-Gray: Actually, it was the second one. I missed the one with Oprah. Wasn't Oprah ... Blake Oliver: Oprah was the second one, I think. Nayo Carter-Gray: Oh, So, then it was the third one. Blake Oliver: Third! Man, that is great [cross talk] Nayo Carter-Gray: I know. I found out about QuickBooks Connect, Oprah being there, the week before it happened, and because I'm in Baltimore, Maryland, the cross-country trip was just a little unaffordable.  David Leary: As long as you didn't find out too late, because it's not easy to get hotel rooms in the Bay Area. Nayo Carter-Gray: Yeah, that is true, too. David Leary: Big [00:01:00] huge conference. Now you're coming to a much smaller conference at Accounting Salon. Nayo Carter-Gray: Yes. I like events like this, because they're smaller and you kind of get to know people a little better. Then you learn more about what's working in everybody else's practice. You kind of get to hear everybody's flubs, and mistakes, and learn from their mistakes, so that you don't have to repeat them yourself. Especially when you're newish in business. Blake Oliver: Well, let's [00:01:30] talk about that. Tell us about yourself and your business. Nayo Carter-Gray: I have been full time in my accounting practice since 2009. My business started because I got laid off from the recession, even though I had been doing taxes for over 26 years now. I'll tell you that story. I started, my first summer job I realized that I could get my tax money back, so I charged all my friends that I knew with jobs $25 to do their tax returns. [00:02:00] That's how my tax practice started. After I got laid off in 2018- 2008, I'm sorry, I decided to venture out and try to do this full time, because I am not a morning person. Somebody telling me I have to be somewhere at 8:00, and it's not my decision, just upsets me very much. I love the flexibility and freedom that owning your own business has. David Leary: You took that jump really [00:02:30] at the bottom of the economy. Nayo Carter-Gray: Yes. Yeah, it was- luckily for me, I had a supportive partner. My husband now, who was then my boyfriend, was like, "All right. So, what are you gonna do? Are you gonna go back to work? Or are you gonna try to do this full-time entrepreneur thing?" Because I had already been doing it part-time, I had a small client base. I just told them, "Hey, I'm starting full-time. Anybody you know, send them my way." Luckily for me, my tax practice kind of doubled in the first year, so I [00:03:00] was able to afford to get an office space, and have some money in the bank, and not feel like a broke college student all over again. Then I got a bookkeeping client who wound up having three businesses. It was like starting just out the gate running with three clients, with one client. I was very, very fortunate, and lucky. Technology [00:03:30] has always been my thing, so early on, I decided to start going to some conferences and learning about cloud-based apps and technology that would make the process easier, because, you know, if you streamline processes, if you use things that work and make your life easy, it makes the business better. Because I also don't want to be one of those people who just work-work-work-work-work-work-work and never have time for anything else either. Blake Oliver: Are you just doing tax, or are you [00:04:00] doing other services? Are you doing accounting services, bookkeeping services? Nayo Carter-Gray: Taxes, bookkeeping. I do payroll only for my bookkeeping clients. Tax planning. I'm an enrolled agent, so I also do IRS collections and audits. Blake Oliver: IRS audits. Fun! Nayo Carter-Gray: They can be very interesting. Right now, I'm doing more collections work than audits, but to ... Blake Oliver: What is that? Nayo Carter-Gray: The difference is, say you get a letter from the IRS that [00:04:30] says you haven't filed in three years. We get you all caught up, and then I help you try to figure out how can you pay this huge tax bill. Because usually people who haven't filed in that long know that they owe, and they know that they owe a lot. We come up with some different strategies to minimize how much they pay. Maybe do an offer in compromise, because usually it's not only the federal liability, you also have a state liability, and states are very hard to navigate, too. Blake Oliver: What sort of clients do you have? Nayo Carter-Gray: I [00:05:00] like primarily working with small business owners, those that are in the start-up phase. They've been in business zero to three years, and I like taking them to the point where they're like, "All right, we need to hire someone full-time." I've had a couple of people graduate from me, and I'm totally fine with that, because I don't want to turn into anybody else's employee right now. David Leary: When you have a client that's graduating, do you always offload them to another person, another [00:05:30] accountant or bookkeeper friend of yours, or do you just kind of cut their wings and let them go on their own? What's that process like for you? Nayo Carter-Gray: When I notice that they're putting a strain on my time and resources, I recommend that they probably need to hire someone internally, because it's usually they not only need the accounting/bookkeeping help, they also want help administratively. I'm like, "Yeah, I'm not your secretary, so we're not gonna do that, but, if you hire [00:06:00] someone that has certain skills that can help you not only continue the accounting process piece, but they can help you on the administrative side to automate some of the things that you're expecting me to do ..." Blake Oliver: That was always one of the challenges I had, when I was freelancing in particular, is I was doing bookkeeping, and people would expect me to answer their mail for them ... That's what they think of. Nayo Carter-Gray: They think ... They figure they're paying you, and [00:06:30] they're paying you to do any and everything they ask to do. Blake Oliver: Exactly. Yeah.  Nayo Carter-Gray: This is where engagement letters come into play, because you say, "That is not in your engagement letter. I am not your secretary. Your services are blah-blah-blah-blah-blah, because this is what you're paying for. If you want to add some services on, we can do that." I do have some colleagues who include a support package, where they can pay an additional fee to get that mail answered, get the telephones answered, send out invoices, [00:07:00] and do collections. I personally just don't have the time for that right now. David Leary: There's a lot of services out there, like Ruby Receptionists and services like that … but I've never heard of a bookkeeping firm or an accounting firm ever partnering with a service like that. Blake Oliver: Right. David Leary: So, that way you have a place ... "Hey, I have this other relationship with this other company, and we can get your email checked for you and your calendar appointments booked." Nayo Carter-Gray: It's funny you mention that, because I personally was looking for an answering service for my business, and it is very hard to find one that is affordable [00:07:30] and that can answer the phones and understand the types of calls you get from an accounting perspective. David Leary: Well, we'll just make something like that this week. Blake Oliver: No, actually a very good application of Google Assistant.  Nayo Carter-Gray: It would be. Very much so. It really would be. Now, I found a company, and they take all my calls, but even they screw some of those up, too. Like, what in the world? It's because some things just, to me, seem like it would be common sense. Like [00:08:00] if someone calls and says, "I want an appointment," you kind of direct them to how to schedule the appointment online. Or if they say they want an appointment, you get the name and the telephone number, so someone can call them back, if they don't have access to a computer. It's very difficult when you get a lead and then have no information to call the person back. No name ... It's like-  David Leary: It's like having your kids do it. Nayo Carter-Gray: Yes, exactly. David Leary: They don't write any of the information down for the phone call. Nayo Carter-Gray: Right, and [00:08:30] if that's the case, I might as well hire my kids. Blake Oliver: David is really putting them to work on our podcast, right?  David Leary: I've done some- I've had the kids do some work, but they always want more money. Nayo Carter-Gray: Well, you know, I'm a big fan of hiring children because it's a tax benefit, especially if you have a sole proprietorship and they're under the age of 17. You could throw some money in a retirement account and write [00:09:00] it all off on your taxes. You can set them up for [cross talk]  Blake Oliver: We need to do this- Nayo Carter-Gray: Yeah, I have a whole blog post about it. David Leary: There should be a whole podcast about exploiting your children to do work. Nayo Carter-Gray: Yes. Blake Oliver: My son is 4 years old. When can I start hiring him? Nayo Carter-Gray: As long as you have a job description for him, you can start hiring him right away. The key is to make sure you have the formal job description and you pay him regularly. So, if you have him putting stamps on envelopes, and he gets paid once a month to [00:09:30] do so, then cool. Blake Oliver: Okay. Nayo Carter-Gray: But you can put up to the standard deduction, and payment in cash, and then into a retirement account, and get a nice tax benefit. Blake Oliver: So, these are obviously the sorts of insights that you were delivering to your clients. Nayo Carter-Gray: Yes. Blake Oliver: Maybe not as aggressive as what David and I are planning, I bet. I'm curious to know, where do you see tax headed over the next five to 10 years? Because [00:10:00] you've already- you have a cloud-based practice, right? Nayo Carter-Gray: Yes. Blake Oliver: You're not shuffling paper around. Nayo Carter-Gray: No, I'm paperless. When I started my business, that was key from the jump. I wanted to be paperless. And it was funny because I started with Shoeboxed. I don't know, and most people [cross talk] Blake Oliver: -they were like one of the original. Nayo Carter-Gray: They were original. David Leary: -one of the first three apps I bought on originally. Nayo Carter-Gray: Yeah. Blake Oliver: They were acquired by Earth Class [00:10:30] Mail. I don't know if you ever used them. Nayo Carter-Gray: No. Blake Oliver: Check out Earth Class Mail. They receive and [cross talk] everything out for you-  Blake Oliver: Scan everything. They do a good job of that. It's just their integration sucks now. They haven't kept up with that side of the room. Blake Oliver: Oh, with Shoeboxed? Nayo Carter-Gray: Yeah, but we still use them. If I have people who want to give me a whole box, I'm like, "No, I'm not taking that." I have people that are like, "I'll scan it in." You're not gonna scan it in. Just mail it to Shoeboxed, let [00:11:00] them do all the job, and I can work my magic from there." Blake Oliver: Saved my life. Nayo Carter-Gray: Yeah, but where I see accounting and tax, I don't really see it going away. A lot of people are afraid that it's, you know, turning into the bots are gonna take over. Blake Oliver: Yeah. Nayo Carter-Gray: They will, but they're gonna mess it up, so accountants are gonna be needed on the back end, especially with IRS audits and stuff, because the IRS uses artificial intelligence to figure out who the heck they're gonna audit. They [00:11:30] also use it to figure out when you did your return yourself, what is it that you messed up on. You can't claim a million business miles and not have any other amounts. The IRS knows this kind of stuff, so they're gonna send you that nasty little letter and you're gonna get scared and you're gonna go to a professional, a CPA and a growth agent [cross talk] someone who knows how to navigate those waters. Or, if you ignore it, you're gonna have that $20,000 debt hanging over your head, the [00:12:00] lien on your house. Then you're gonna do something like get married, and your wife's gonna strangle you because her tax refund got snatched, because you had this old debt you didn't take care of. Blake Oliver: So, the bots will create more work for IRS resolution. Tax resolution. I like that.  Nayo Carter-Gray: Absolutely. I definitely see that. Then once you get a resolution client, they want to stay in compliance. So, then they know-  Blake Oliver: They learn their lesson. Nayo Carter-Gray: Yes, they learned their lesson. They also realize, "I need someone to help me, because as much as I would love to do this myself, [00:12:30] I understand that this is outside of my scope. I may have thought I was saving some money, but it just cost me a whole lot of money to get it fixed in the long run." David Leary: Sounds like working on the tax resolution stuff, you get- versus the regular relationship an accountant might just have somebody come in maybe once a year, do a boring old thing, do your taxes, charge you fees, see you later. You kind of get to be a hero. These people are coming to you a little bit more on the desperate side, and you get to come out ahead. Is that more rewarding to do that? Nayo Carter-Gray: It can [00:13:00] be more rewarding. It is stressful for the clients, however, because, one, the process isn't fast, you know? It's so much faster when you just come and get your taxes done, in and out, bam. But with resolution work, you have to gather documents, and it depends on how far back they go. They have to do a little work, so, it's very frustrating. You kind of have to put the client at ease, but once it's all done, the client is then like, "Oh, such a relief!" After [00:13:30] they've already paid your invoice, because that's another thing. Resolution work can be lucrative, depending how much you save the client. Then, for example, there was a colleague who just after eight years- eight years it took them to get some penalties removed from an S-Corp client. Blake Oliver: Eight years. Nayo Carter-Gray: Eight years. So, sometimes it's not as fast, and clients can get frustrated, because they're like, "We want this to happen overnight." Especially, [00:14:00] they listen to the radio, and-  David Leary: Amazon Prime world [cross talk] Nayo Carter-Gray: Yes. Yes. Amazon Prime. Social media. It's like, if I saw you checked in somewhere, I'm expecting you to answer my phone, because I know where you are. Yeah. Blake Oliver: Well, the problem didn't develop overnight. Nayo Carter-Gray: Yes. It's like when you gain some weight, and you go to the gym three times, and you're like, "Why didn't these 10 extra pounds fall off?" Blake Oliver: Why not? Nayo Carter-Gray: Right. [00:14:30] Blake Oliver: That's right.  David Leary: A lot of the listeners can learn things from Blake and myself. Not much, but they can sometimes. But what's the one thing they can only learn from you? Nayo Carter-Gray: This is a good question. Technology is your friend. So, I know they can learn that from you and Blake, as well, but I am a big, big, big supporter of apps. If there is something you want to be able to do, don't be afraid to go to the App [00:15:00] Store and actually look for it and search for it to make your life easier. That is the one thing that I push on people all the time. There is an app for that, for everything. You want to learn how to drink your water, eight glasses a day? There's an app that will remind you. You want to be able to ... Like, I have an app that will remind me to brush my teeth before I went to bed, because I hate brushing and flossing. It reminds me like, "Oh, go do that," and I get some points. You want [00:15:30] to save some money? There are apps out there that can help you link to your bank card and put a little extra money to the side. Although I know they can learn all of that good juicy stuff from you guys, I will push it, push it, and continue to push it. Blake Oliver: It sounds like what you're saying is that you have to be willing to invest the time to learn about these apps, right? Because I'm sure they don't all work. Nayo Carter-Gray: They don't all work, but, yeah ... I do tell people you spend some time on [00:16:00] the toilet every day. This is a good time to test out apps. Blake Oliver: There you go. There you have it [cross talk]  Nayo Carter-Gray: Who doesn't take their phone into the bathroom nowadays? Blake Oliver: Don't spend all your time on Facebook. Nayo Carter-Gray: Exactly. Blake Oliver: Get on the App Store, try out some new apps, and maybe that'll make you more productive. Nayo Carter-Gray: Yes, and depending on which phone you have, they even recommend some apps for you. Blake Oliver: Yeah. Nayo Carter-Gray: Based on what you're looking for, right? Blake Oliver: It's all about continuous learning, right? [00:16:30] We have to constantly invest in ourselves and our firms. Nayo Carter-Gray: And yourself as an individual. You can't be running on fumes and then try to work and be productive during the day. You also have to take some time for yourself to make sure that you are healthy, you are happy, and that you are in a good space to tackle the day. Blake Oliver: I like that. Well, if [00:17:00] people want to connect with you and learn more about what you're up to and your firm, what's the best place for them to reach you online? Nayo Carter-Gray: Their best place? Oh, if you want to see all my good interesting stories, I am on Instagram. [cross talk] I love Instagram stories. I can be followed at Nayo Carter-Gray, or either 1st Step Accounting, and that's the number one - 1-S-T-S-T-E-P-A-C-C-O-U-N-T-I-N-G. I'm also Nayo Carter-Gray on Twitter [00:17:30] and Facebook. Blake Oliver: You are the Nayo Carter-Gray. Nayo Carter-Gray: I am the only Nayo Carter-Gray. Blake Oliver: That's good. It's good to have unique name. I'm the only Blake Thomas Oliver. How many David Learys are there? David Leary: There's a lot of David Learys. The worst part is if you Google David Leary, Google assumes you can't possibly be searching for David Leary and they serve up eight results of Denis Leary. Blake Oliver: Yeah. Nayo Carter-Gray: Really? That is really funny. Blake Oliver: Why would you search for David Leary? [00:18:00] Nayo Carter-Gray: Who is David Leary and why should we care? David Leary: They think for sure you had a typo. A lot of people think his name is David Leary-  Blake Oliver: You should make a page that just explains the difference. David Leary: That's my plan. I talked to an SEO guy, and I can make a page that says, "This is David Leary, not Denis Leary," and I put Denis Leary all over my page, and I'll actually get to top rank. I have a plan to own my own name on Google one day. Nayo Carter-Gray: I love that, you know? SEO is huge. That's one thing that I planned on tackling this year, because that is one [00:18:30] area of my business that I just have yet to figure out. David Leary: Blake has some lessons he can give you offline at the Salon, here.  Nayo Carter-Gray: Ooh! Blake Oliver: That's why we're here at the Accounting Salon. Nayo Carter-Gray: Yes. Blake Oliver: So, let's chat later. Nayo Carter-Gray: Okay, awesome. Blake Oliver: Nayo, thanks So, much for your time. Nayo Carter-Gray: Thanks for having me. Blake Oliver: Thanks for doing the podcast. We'll talk with you soon. David Leary: We're so glad you were on. 
Excel's got a new World Champion and how CAS can cause lots of liability
Stories in this episode: Meet the 15-year-old who's the Microsoft Excel world champion (which is a real thing) — CNN Minding the expectation gap in a CAS engagement — Journal of Accountancy Subscribe:  Listen on iTunes Listen on Google Play Transcript:Blake Oliver: Welcome to the Cloud Accounting Podcast, a show for accountants, and bookkeepers using cloud technology to make their jobs more strategic and impactful. I'm Blake Oliver-  David Leary: And I'm David Leary. Hey, Blake, how's it going this week? Blake Oliver: It's going great. How about you, David? David Leary: Last week- the last two weeks were super-super-crazy busy. I feel like there's not a lot happening this week, which is good. I feel like, also, this is the feel-good week. I have a good feel-good story, if you wanna to jump right in? Blake Oliver: Let's hear it, yeah.  David Leary: This [00:00:30] is on CNN. Meet the 15-Year-Old Who is Microsoft Excel's World Champion, "and yes, this is a real thing," it said. Apparently-  Blake Oliver: I love the picture. I love the picture. It's the guy holding the trophy, and he's got his slicked-back hair, his Transitions lenses in his glasses, and he's holding up an American flag, with a giant medal around his neck. David Leary: Yeah, and he's even got a little American-flag lapel, and he's got his tie, and his vest on. It's amazing. Blake Oliver: That's great.  David Leary: Apparently, there's [00:01:00] a team - Team USA - so, this is a very patriotic victory. I did not know this was such a big deal, but I think, if I just look- scroll in the article, there was 760,000 candidates from around the world entered the competition. Blake Oliver: Wow, that's a lot. David Leary: Think of it, 152 ... The final round, 152 students, 51 countries competed. They competed from the 29th, to August 1st, so it was a couple of days- Blake Oliver: This is an actual competition that- is it Microsoft puts this on? No, it's [00:01:30] hosted by Certiport, a provider of performance-based IT-certification exams. I guess this is the second year in a row that Team USA has won the Excel portion of the competition. David Leary: He had a thousand points out of a possible thousand. Blake Oliver: Wow.  David Leary: I thought that was kind of easy. The only part of this that disappointed me, though ... Now, he wants to be the best at PowerPoint, I was like, "Aww ... There's no hope." It was like, "Just own Excel; be proud," but no, now it's like he's going to join [00:02:00] the doldrums of corporate America, and head down the PowerPoint path, as well. The amazing thing is he started learning Microsoft Excel, only one year ago. In one year, he knocked out the Excel world champion. I did not know there was such a thing. It's a cool feel-good story. I almost thought, reading the article, we should bring him on as a guest. Blake Oliver: Kevin Dimaculangan ... He's 15 years old, from Florida. Go Florida. David Leary: Yeah. [00:02:30] It's a cool article, and hopefully, maybe it'll ... The spelling bees are on ESPN, now. Is this gonna be next, people will watch TV of people working on Excel? Blake Oliver: Of course, the question is, is he gonna become an accountant? Unfortunately, it looks like that's not in the cards for him. He is more interested in becoming a software engineer, but maybe he'll figure out how to make life better for accountants, by developing awesome Excel-integrated software. David Leary: It's [00:03:00] cool. I think, if I go back to my high school days, I think, yeah, 15-16 years old, I remember I was in a math class with upperclassmen, and then, they all graduated, so I had an extra week, because they got out of school earlier. I remember being introduced by the teacher to Excel. It maybe is what got me to where I am, today. I was like, "This is amazing!" I could see the appeal of Excel, when you're 15 years old. Blake Oliver: Well, moving on, I got my copy of [00:03:30] The Journal of Accountancy magazine -August issue, and, a lot of times, I open it up, and I'm ... I have a hard time, as a tech guy, getting interested in GAP changes, or FASB regulations, or standards, that sort of thing. I was really surprised. I found multiple articles in this issue that really appealed to me, so, I thought I'd share one, or two of those with you, David.  David Leary: Yeah, definitely. Blake Oliver: First is actually just a stat from a survey. Deloitte Digital, and MIT Sloan did a survey of about [00:04:00] 4,300 global business respondents. They asked these survey-takers, "Do you think that you need to update your skills yearly, to work effectively in the digital world?" 90 percent said yes. 90 percent of respondents in this business poll say, "I need to update my skills on a yearly basis, to keep up in a digital world.". Then, they asked, "How satisfied are you with how your organization is helping you to do so, to learn those skills?" Only 34 percent said yes. 90 percent say, "I need to update my [00:04:30] skills." Only 34 percent say that, "My organization is helping me to do that.". David Leary: Got it. It's just there's a disconnect. Where they gonna get these skills from, then, if the organizations aren't helping them get them? Blake Oliver: Yeah. I'll bet you that, like in accounting, it's the same situation, and with all the rapid technological change going on in accounting, people need to update their skills. If their organizations aren't helping them, that might be a reason for an accountant to leave, a CPA to leave, and go to another organization, where they're going to be able to get skills [00:05:00] that they need. I would say if you're having a hard time hiring, and finding/hiring/retaining talent, consider adding training into your benefits package. Allow people to go in, go to ERP conferences, or learn new technology. What's worse - if they leave, or if they stay with you, and they learn stuff? I think I said that all wrong, but there's a [crosstalk]. David Leary: Well, it's expensive to ... You've talked about this before, finding [00:05:30] talent's hard; hiring people's hard right now for growing accounting firms. You've gotta keep the people you have. That's the most efficient thing to do. Blake Oliver: The reluctance of firm owners, or team leaders to train is they say, 'Well, if I train my staff, then they'll just go, and get a different job. They'll get a better job. I'm training them to leave." What's worse, if you don't train them, and they stay? They're probably gonna leave anyway, if you don't train them, because they want the training, I guess is what I'm trying [00:06:00] to say. David Leary: Yeah, it's inevitable. Blake Oliver: There's one other article that I really liked, and I gotta find it-. David Leary: Is it in the newspaper? I hear you fitzing around there. Tt's like a physical [crosstalk]. Blake Oliver: I'm reading a physical magazine. It's such a weird experience for me. I wanted to share one of these stats, and I had to take a picture with my phone to get it into my notes. All right, this article is by Sarah Beckett Ference, also in the J-of-A magazine [00:06:30] for August 2018. It's about CAS, client accounting services, my favorite thing to talk about, because I had my own CAS firm. CAS is getting a lot of attention recently, because it's recently hit 10 percent of all CPA-firm revenues are now from client accounting services, doing outsourced accounting, that sort of thing. It's more than doubled since ... It's more than doubled in large firms; firms with at least [00:07:00] revenue of $10 million per year. CAS has doubled since 2014. From 2014 to 2016, it went from 3.9 percent to 9 percent of firm revenues. That's a big thing. Partners are starting to pay attention to it, right? David Leary: Previously, I guess two CPA firms-assume ones that did tax, and audit, etc.-pretty much weren't doing any of this type of accounting services, client accounting services. Blake Oliver: Yeah, or it was just like ... It was like the ugly stepchild. David Leary: Okay, because I feel like, from [00:07:30] my point of view, the last like 15 years, QuickBooks world ... That's what everybody was doing. That was the game. They were all growing, and they were all having success, but, apparently, I was just seeing a small fraction of the rest of the world. Now, the rest of the world's kind of waking up to, "Oh, there's opportunity there." Blake Oliver: Exactly, yeah. That's the world I was living in, as well. Especially in the cloud, these are firms that have embraced client accounting services. Most of their revenue might be from that, but those were small firms; cutting-edge firms. That was [00:08:00] distorting our view. If you look at the entire accounting-firm profession - revenue, all that stuff - if you look at all across the country, it was very small, until recently. Now, it's basically hit 10 percent, which, to me, is like a threshold that says, "This is significant; people should pay attention. It's gonna grow.". This article is about the risks of doing CAS. A lot of firms that are doing tax, and audit, they don't know about the risks of CAS. What [00:08:30] I like about this article is it uses some real-world examples of insurance claims that occurred as a result of liability, from firms practicing CAS, but without the proper engagement letters, and whatnot. Here are the two examples I'll give you. There was a CPA acting as a de facto CFO for his or her client and didn't alert the client to some uncollectable accounts receivable. The client had a [00:09:00] large amount of accounts receivable that was stale, uncollectable, and didn't, or claimed not to know that it was stale.  What happened is that the client borrowed on that A/R, secured a line of credit, based on that accounts receivable. Then, of course, the owner couldn't collect on the accounts receivable, defaulted, and went out of business, and then, sued the CPA, saying, "Hey, you should have notified me that this A/R was uncollectable. You never said anything about it." David Leary: If [00:09:30] you're gonna do client advisory services, you're just putting yourself at risk, because small businesses, now, are gonna expect you to assume the liability for business decisions, and business mistakes they make, because you didn't advise them the right way. Blake Oliver: Right. David Leary: It's kind of where this article heads towards. Got it. Blake Oliver: There's a lot of opportunity in getting involved as a business advisor, but there's also risk associated with that - if the business falls apart, that you might get blamed for it. It's [00:10:00] really important to have clearly defined scope services; an engagement letter that says whether you will, or will not notify about this sort of thing, and whether or not you will, or will not have liability. That may not stop you from getting sued, but if you do get sued, it's going to save you, or at least help a lot, when it comes to settling that. There was one other example I wanted to share with you; an example of a CPA, who was doing [00:10:30] outsourced accounting services, had an engagement letter, and then, the client also wanted sales-tax returns. The firm started preparing sales-tax returns, based on the client's data. This, unfortunately, was never added into the original engagement letter, so they were basically doing the sales-tax returns, without having an engagement letter for it, or a contract for it. During this years-long sales-tax-preparation engagement, the sales-tax law changed, but the firm didn't [00:11:00] change the way it was doing these returns. Then, the government came back, and hit the client with fees, and back taxes, and all this stuff, and the firm got blamed for it. Again, example of when you need to clearly define your engagement letter; what you're doing. You also, if you're providing these ongoing services, you've gotta make sure that you stay up to date with the changes in the laws, so that you're not putting your clients [00:11:30] at risk, or yourself at risk. David Leary: It kinda reinforces the use of some of the tools, like a Practice Ignition, or tools that help you create those engagement letters, and those proposals, because, if you constantly have to ... It's almost not scale, but if you just have a Word doc, and that's your standard engagement letter, you either have to cover every possible thing in it, and then, it's like overkill for people to sign that engagement letter, because, like, "Well, I don't want you to do that stuff for me ..." You're gonna have to have some tool [00:12:00] to dynamically create these, or dynamically modify that contract, right? Blake Oliver: Absolutely. Yeah, every- the author, Sarah Ference, points this out in the article that you cannot just use a standard engagement letter. Every CAS engagement is different, and you have to have a way to define the scope very clearly, and not just one time. You have to periodically review that, and make sure the client understands that, so they have the proper expectation of what you are providing, and what you aren't. That's where [00:12:30] a tool like Practice Ignition, or any of these other proposal-management tools - PandaDoc is another one that I've used - are super-super-critical for outsourced accounting. David Leary: This'd be interesting. We should try to actually bring her on, and the reason why is ... You've been on this side of the fence for a while. I've been on this side of the fence. Outside of payroll filings, and sales-tax filings, people haven't really talked about the risk to their firm very much. I think there's an interesting conversation [00:13:00] that maybe hasn't taken place at all, yet. Blake Oliver: Yep. David Leary: It would be cool. We should try to get her on. I think it would be pretty valuable. Blake Oliver: Let's do it.  David Leary: All right, I'll reach out to her. If you're listening, Sarah, please get a hold of me on Twitter (@DavidLeary), or get ahold of Blake (@BlakeTOliver), and join us, please. Blake Oliver: Well, David, that's all I've got for this week. Oh, and I'm gonna be on vacation in Seattle, so we might skip a week. We might do it. We'll see how it goes with me being mobile. [00:13:30] David Leary: Okay, or we could drop a bonus episode ... It depends on the news. I guess that will dictate. If nothing happens, you just enjoy your vacation, but if we have to, we'll have to pull you out.  Blake Oliver: All right, David. Great chatting. Talk to you again, soon. David Leary: Awesome. Later. Bye, everybody. 
Two future career paths for accountants, how billable hours drive away Millennials, and more
Show NotesNew Bank Feeds using Tokens — Insightful Accountant — This overhaul provides a faster and more reliable method for connecting with your bank so that your account transactions stay up to date with fewer sync errors. Initially, three banks agreed to participate in the new connection type; Chase, Wells Fargo and Bank of America. China Tariffs Threaten Cloud Costs — Wall Street Journal — The Trump administration’s proposed tariffs on $200 billion of Chinese goods includes levies of up to 25% on routers, switches and servers that will raise prices for cloud services in the U.S. According to this Wall Street Journal article, a 10% levy on these imports would slow U.S. economic output by $163 billion over the next 10 years, while a 25% levy would slow output by $332 billion. Tired of Excel hell during planning cycle? Sage Intacct reveals acquisition — Enterprise Times — Sage has announced the release of its own budgeting and planning application for small to midsize businesses. Budgeta is now rebranded Sage Intacct Budgeting and Planning. AI And Machine Learning Could Empower Your Accounting Career Path — Forbes — Levi Morehouse of Ceterus says that accountants "can either become communicators of critical business data and information, empowered to advise key stakeholders on business initiatives based on keen insight; or they can become experts in redesigning traditional industry processes to be more efficient by leveraging modern technology.” Leadership and Life Lessons from Amazon’s Jeff Bezos — Wall Street Journal — CEO Jeff Bezos tries never to schedule a meeting before 10 a.m. and likes to make a small number of high-quality decisions daily. PwC's Digital Accelerators program looks to future-proof staff — Accounting Today — In a constantly changing business environment, the Big Four firm is doubling down on education to prepare its employees. Focus on Billable Hours Drives Millennials Away — CPA Practice Advisor — The point of this article isn’t the age old question of billable hours vs. value pricing. The focus today is the value our people provide to our firms and how we measure that value in a way that doesn’t drive them away. She Didn’t Win Miss America, But Miss Missouri’s Appearance Was a Win for Accountants Everywhere — Going Concern — Miss Missouri, Katelyn Lewis, is a senior at Missouri Baptist University, receiving a BS in Accounting. Subscribe:  Listen on iTunes Listen on Google Play Transcript:David Leary: Nobody told her about the billable hour. That would've been great, if that was the question. Did they ask the Miss America pageants these really in-depth questions? It could be, "What is your opinion of the billable hour?"  Blake Oliver: Welcome to the Cloud Accounting Podcast, a show for accountants, and bookkeepers using cloud technology to make their jobs more strategic, and impactful. I'm Blake Oliver-. David Leary: And I'm David Leary. Blake Oliver: So, Dave, what's new in the world of cloud accounting this week? David Leary: I think an article came out about five minutes ago. This is [00:00:30] on Insightful Accountant. It's talking a little about QuickBooks, but I think it's a little bit bigger of a story here. It's about how the new bank feeds are gonna use tokens. A lot of you have used apps with your cloud-accounting apps, or your accounting-software apps. You authorize the app. You would say, "Yes, can read, and write my QuickBooks data, or my Xero data." You're actually granting them a token to do that. Well, just the opposite's gonna happen now, where your bank account ... If I have a bank account with [00:01:00] Chase, I'm going to grant Chase access ... I'm gonna grant QuickBooks access to my Chase bank account. Instead of giving Intuit my Chase username, and password and then, Intuit, every time they need to get the bank feeds, basically, is mimicking you going to the website, in a strange kind of way. It's scraping that off their site. It'll issue a token, so the connection will be more reliable; it'll be more long term. The banks are happy, because they're in a little bit more control. It's just higher security. Then, ultimately, [00:01:30] in the most token-based models, you can disconnect. I'm sure, somewhere on the Chase website, I could see all the stuff I've granted access to my bank account-. Blake Oliver: Rather than having to change your password, in order to make sure that everything's disconnected, if you get rid of an app, or something like that. David Leary: Exactly. It's usually more of a standard web model, a token-based model to connect. Blake Oliver: It's kinda crazy, actually, that the old way of doing it, like actually giving your username and password for your banking has been the [00:02:00] way that we have granted access to software to our bank feeds for so long. It's just so not secure. David Leary: Yeah, you're giving it to a big huge company, like Intuit, or Xero to get your bank-feed access, or there're some third-party providers that provide that. If you really go before services like that existed, accountants, and bookkeepers were just keeping it in a QuickBase, or they were keeping it written down in a folder. They were keeping their clients' usernames, and passwords, which was really on the crazy side. You're right, if you think about it, in the long, bigger picture, yeah. [00:02:30] Blake Oliver: I actually remember this being an issue with Hubdoc. I think that's still how they do it. Periodically, I will get alerts from Bank of America that somebody is logging into my bank account from Canada. It worried me, at first, and then, I realized what was happening, that they're flagging Hubdoc logging in.  David Leary: Yeah, which is great you're being alerted of that, but the problem is it also ... How do you know, [00:03:00] that one time, it wasn't fraud? Blake Oliver: Right. Also, customers, clients of a firm that's using a solution like that have no clue what's going on, and that worries them a lot. They get scared, and then, they change the password, and then nothing works anymore. David Leary: This'll probably roll out to the bigger banks, first, that are big enough to have their own APIs, but then, when you talk about the mid-sized banks, and even the credit unions, and some of the regionals, a lot of those use tech stacks [00:03:30] they purchased from somebody else. Once that tech stack ... All the sudden, outta nowhere, 2,000 regionals all have the same technology stack, cuz they're using somebody else's software under the covers. You're probably gonna see this, first, with the Chases, the Bank of Americas, the Wells Fargos - the big players - first. Ultimately, the banks - I think we've talked about this before - they wanna be in the API business. They wanna provide API [crosstalk] Blake Oliver: They should be. It's crazy that they don't want access to more data. Cool. Well, hey, speaking of ... Since we started with software news, feature [00:04:00] releases, and whatnot, I've got one here. Sage Intacct has revealed that they acquired Budgeta - I think that's how you say it - back in, I think it was 2017, and they didn't make an announcement at the time, but now, they are announcing that they did, in fact, acquire Budgeta, which is a budgeting and planning application.  They have released a version that they are calling Sage Intacct Budgeting and Planning; very similar [00:04:30] to the TSheets getting acquired by Intuit, and Hubdoc getting acquired by Xero. This is now Budgeta getting acquired by Sage Intacct, this time, in the mid-market. I think they're still leaving Budgeta as a standalone application, but now, you have a deeper integration with Intacct. If you're an Intacct user, you can more easily go, and implement a budgeting and planning tool. David Leary: That makes sense. It kinda goes to that ... After you went to Intacct's conference ... You [00:05:00] came back, and you said that they're kind of adding more consumer-facing features, if that's the right word, in it, right? Blake Oliver: Yeah.  David Leary: I imagine this is going to lead to dashboards, and graphs inside their product ...  Blake Oliver: In Intacct, they do have dashboards. That's one of the big selling points of going to their solution, as you can ... You don't have to have a separate dashboard solution; it's all in there, totally customizable, but they did not have the budgeting/planning side of it. It's interesting. I'm [00:05:30] curious what this means, say, for competitors like Adaptive Insights, Host Analytics. I imagine that it'll be very similar to these other acquisitions that have happened, where nobody tries to muscle out the non-owned add-ons, or the third-party add-ons. It just doesn't make sense.  Just another example of how ERP's cloud-accounting solutions are trying to broaden the services that they offer, or the features that they have, while still allowing [00:06:00] for integrations. You get to have your cake, you get to eat it, too. You can use the built-in budgeting and planning on Intacct, now, or you can go get some other solution that maybe fits your needs better. David Leary: As long as everybody keeps their APIs open, the future will continue down that path, absolutely. Blake Oliver: Yeah. Hey, speaking of API, speaking of wars, the trade war is going on, still - tariffs, and all that - with China. I just heard something about it on the news, [00:06:30] but it didn't have anything to do with cloud accounting, so I wasn't really paying that attention. Then, I also recently saw an article in The Wall Street Journal about how tariffs could actually increase costs on cloud computing. I didn't really think that was possible, because cloud computing ... Hey, it's in the cloud. We're talking about data. It doesn't ... These are not physical things that we have to purchase, right? I figured tariffs are limited to cars, and cell phones, and whatnot, but it turns out that part of [00:07:00] the Trump Administration's proposed tariffs on $200 billion of Chinese goods includes levies of up to 25 percent on routers, switches, and servers that will raise prices for cloud services in the U.S. That's according to Wall Street Journal. What is the actual cost of this? Well, if there were a 10-percent levy on all of these imports, all these hardware devices that we use for cloud computing, in our data centers, that could slow U.S. economic output by 163 billion, over the next 10 years. A 25-percent levy would slow [00:07:30] output by $332 billion.  David Leary: Got it. It's not the actual cloud accounting, the servers ... The companies that provide cloud-accounting services aren't really involved in the tariffs. It's the hardware that all this infrastructure, everything's built on [crosstalk]. Blake Oliver: Yeah, the hardware that Amazon buys for its Amazon Web Services data centers, or that Salesforce buys, or Oracle, or Microsoft. Basically, if that [00:08:00] substantially increases the cost to provide cloud-computing services on the back end, theoretically, that will get passed through to businesses, and then, ultimately, to those businesses - either business customers, or consumer/end customers - at some point. I guess it just depends on how much the cloud-computing vendors can absorb, or if they'll pass it on. David Leary: Yeah, it'll be interesting. We're obviously focused on small businesses, and accounting, and [00:08:30] accounting technology here, but it'll really be interesting ... All the free services, all the consumer stuff that's just free out there; advertising-based models ... Are advertisers gonna have to pay more, or some of these free services just ... Maybe, at X, they were able to offer these services for free, and that this new price, X + 5, they just can't. It'll be interesting to see the impact. You could see prices go up, possibly, and small businesses could afford to pay $2.00 more a month for a SaaS app, or something like that, but, it's these free apps that will be interesting. Can [00:09:00] something go from free to paid, because it just costs more to provide that service? Blake Oliver: Yeah, or are advertisers gonna have to pay more on Facebook, that sorta thing? That affects small businesses, because, if you're an accounting firm, or a small business, you should be advertising on social media. It's a no-brainer, at this point. David Leary: We'll see, we'll see. We'll have to keep an eye on that, and I think everything ... Who knows where things are headed, come November? Midterms are right around the corner. Blake Oliver: That's true. David Leary: I have [00:09:30] another one, kind of swinging all the way back to billable hours, again. Blake Oliver: My favorite topic. Love the billable hour. David Leary: Let's try this article out for ya, "AI and Machine Learning Could Empower Your Accounting Career Path." This is an article from Levi Morehouse. Levi has an accounting firm, Ceterus. It's very, very, very automation driven. Everything is high-volume clients, all automation. His article really talks about there's two [00:10:00] paths. It's not the only path. His firm's like that, and there's a path for people that are gonna automate everything, and take on large numbers, high volume of clients. There's still another path, as we go forward, and that's gonna be that advising-tech path. That's gonna be more similar to like what Jason Blumer preaches with Thriveal, or I guess Chris Farmand's really doing that with Small Batch Standard, which he's only focusing on breweries, and he's nailing it, with just 40 [00:10:30] breweries; just unbelievable. There's kinda two paths in that. Here's a good paragraph, or quote in here. Let me read that out-. Blake Oliver: Oh, I've got it right here. David Leary: You got it? Okay.  Blake Oliver: I love this quote. Levi says, "Accountants can either become communicators of critical business data, and information, empowered to advise key stakeholders on business initiatives, based on keen insight, or they can become experts in redesigning traditional industry processes to be more efficient, by leveraging modern technology." Like you said, there are two [00:11:00] paths to the future for accountants. You can become that adviser/business coach/communicator of financial information/storyteller is how I like to think of it, or you can become a process/automation/technology person, and you focus on getting rid of all of that data entry, and stuff like ... That's basically what I was doing a lot of at my firm. It's great, cuz there's something for everybody. David Leary: Yeah, except for, I think, the third [00:11:30] path, which is kinda flap around in the middle, between those two paths ... It's the danger zone. You're gonna have, or have to have a super-highly-efficient firm that takes on thousands of clients, or a firm that is a super-super-niche, and you're super-super-expert- Blake Oliver: Right, super-hands-on.  David Leary: -and you have to do amazing advising, and you're super-hands-on, exactly. If you're kind of in the middle, it's tough. It's gonna be really, really tough. Blake Oliver: Right. Ideally, your firm, if you're big enough, you do both. You have people in the firm [00:12:00] who are experts at IT, and process automation, and then, you also have people in the firm, who are really good with people, and you let them do what they're good at. Don't make them do everything. David Leary: I think I've spoke to some people that have that, but they have those two parts of their firms very, very separated; almost like they run separate entities, because they just ... You get a lot of conflict [crosstalk]. Blake Oliver: -need to work together. David Leary: You have to work together, but it's really tough, because it's a tradeoff. You [00:12:30] can't give that level of service to 1,000 clients that you can if you only have 40. For the price, you just can't, because if you're taking that model of 1,000 clients, and you're only charging them 150 a month, or whatever, you're kind of doing that super-efficient technology model, you can't provide thousands of dollars of advising [crosstalk] this point. That's where it's a Yin and a Yang, I think, on ... You can't be stuck in the middle. You've gotta start picking a path you wanna take your firm. Blake Oliver: Speaking of career [00:13:00] paths, and the future of the profession, and whatnot, I've got an article ... It's another article from The Wall Street Journal about Amazon's Jeff Bezos. He was at a forum, a panel discussion of some sort, and he gave some advice, or he talked a little bit about his methods; how he works. The thing I love that he said is that he never tries to schedule a meeting before 10:00 a.m., because he likes to have his mornings cleared to think, [00:13:30] and to get ready for the day, and all that stuff, which I really like, because I have trouble with early-morning meetings. As you know, David, I was late getting into the office, so we could record this podcast. David Leary: Traffic. LA traffic, right?  Blake Oliver: Yeah, I can blame LA traffic, but, honestly, it's me. I like to use my morning to read, to catch up on the news, to get ready for the day. I'm gonna take this advice, and we're gonna move all of our podcast recordings to after 10:00 a.m., Pacific time, if you are okay with that. David Leary: That works. Blake Oliver: The other [00:14:00] thing that Bezos says is that he doesn't try to do a lot. Every day, he tries to make a small number of high-quality decisions, daily. If he makes three good decisions a day, he's happy with what he's done. You think about that, and this is completely the opposite of how a lot of us operate, and how we learned to operate in accounting, which is get up at 6:00 a.m., and work until [00:14:30] God knows when. Work constantly; put out as much work as you can, and do a lot, every single day. If you wanna be successful, you ... I think Warren Buffett's another guy who's like this. He doesn't try to do a lot, and he saves a lot of time for just reading, and learning, and educating himself. I'm convinced that we, as accountants, have to figure out how to do less, but do more, at the same time. David Leary: Yeah, that's that treadmill, right? You [00:15:00] get up in the morning, you're sitting there, checking your email, and next thing you know, 14 hours later, the day's over, and you're like, "Oh, I didn't do anything today."  Right. Blake Oliver: Yeah, you did a lot, but you didn't do the things that were really important, the priorities. You didn't work on your firm's marketing, or you didn't build in some automation to a process that you do every single day, and if you just automated it, you'd save yourself 5 minutes a day, 10 minutes a day, right?  David Leary: Yep, and it's that adage of making your bed when you wake up, so that way, at least, at [00:15:30] the end of the day, you're like, "I accomplished one thing. That got done at least ..." because-. Blake Oliver: I feel like those firms, like Jason Blumer's, where they focus on a small number of high-quality clients, you can have that lifestyle. You can start your meetings at 10:00 a.m., because it's not like you have a million people pounding down your door. David Leary: Well, that, but I think it's carving out your time, and controlling your calendar. I think it's a bigger personal-development issue; less how you run your firm. If you can't do it to [00:16:00] yourself, first, there's no way you're gonna really implement this in your firm. Your own time is valuable, and how do you protect that? I've struggled this, with myself, really bad, but I totally understand. Blake Oliver: We're still talking about CPA firms, or we started talking about them. I've got another article about billable hours, if you're up for that. David Leary: Jump in.  Blake Oliver: This is called "Focus on Billable Hours Drives Millennials Away." It's by Garrett Wagner. There's been a lot of talk about billable hours, and why that's a bad idea. Ron [00:16:30] Baker's the prophet, and there are many of us who are followers of him. What I like about Garret's article is that he takes a different perspective on it, and he says that the reason that you need to get away from billable hours, or at least another great reason, is that millennials don't wanna work for you, if you're evaluating them based on billable hours. As it gets harder, and harder to recruit talent, and find good CPAs, we're gonna need to be able to recruit them, and if they don't wanna [00:17:00] work with us, because we force them to have a timesheet, or record billable hours, then it's gonna become a big problem. David Leary: Yeah, well, especially if a lot of millennials are coming out, and if they've been using cloud software; maybe they're familiar with a little bit of automation tools, and their Gmail ... They've been using some things to automate their life. Really, that technology, and being more efficient makes them ... I can see where they're conflicted, like, "What? You're gonna pay ... You want me to bill X amount of hours, but if I just do the job in five [00:17:30] minutes, because I use these five or six tools, instead, to make my job more efficiently ..." I'm sure it's hard for them to reconcile. He's right, people are gonna ... You don't wanna be judged like that. You wanna be judged on how efficient- how fast you got things done-  Blake Oliver: Right. Just think, millennials, we are digital natives, a lot of us. We, at least, experienced the wonder of collaboration tools in college. A lot of us got Google Apps in college. We understand the value of not having to [00:18:00] email stuff back and forth, and whatnot, just to give a small example. If I automate a process, as a millennial, in a firm, I cut my billable hours, and now, I don't make my goal, and I don't get my bonus. I think that is ridiculous. I just made the client happy. I made everything faster, and better, and yet, the firm's incentive structure is completely against that. David Leary: Yeah, it's really how they measure value. Blake Oliver: Yep.  David Leary: If you're still measuring on the billable hour, and [00:18:30] that's how you're measuring the value of your staff, you're just not gonna keep millennials on your team. They're gonna go to more forward-thinking firms, ultimately.  Blake Oliver: Yeah, or they're gonna leave public accounting; they're gonna go to an industry, where they don't have to fill out a time sheet. I think that the big firms, in particular ... Or they'll go to small firms, where they don't get evaluated based on the billable hour, so much. I think the big accounting firms are gonna have a real problem, if they don't make the switch. They're gonna have a huge talent issue, and I don't know how they're gonna recruit [00:19:00] new partners. I mean, if you're smart ... The really smart ones ... If you're really smart, why would you wanna be part of that culture, when there's so many good alternatives now?  David Leary: Maybe, you wanna go ... This is our next article. Maybe they go to work for PWC. I'm smart, but I want extra training. PWC announced they are going to train, in the next ... It's like a digital skills program for the next two years. They're gonna train 1,000 employees on technology; everything from drones to blockchain. The [00:19:30] interesting thing about this article was the 46,000 PWC employees ... 3,500 employees applied, but they only have spots for 1,000 in this program. That's a big funnel drop, down to only 1,000 employees get to do this. It also ties to the article last week, as far as if somebody has blockchain on the resume, they're X percentage more likely to get an interview into that next round. Obviously, this is in demand, so this is like ... Okay, maybe you still judge your employees by billable hour, but maybe, if you give them extra training [00:20:00] on some of these new technologies, maybe they'll stick around. Blake Oliver: Of course, we don't have a lot of details as to what this program is, but we do know the time commitment is pretty intense. It's 10 hours per week, for 18 to 24 months. PWC is not skimping on, at least, the hours for this program. I do wonder, if you participate, if those hours are gonna come out of your pocket, or if you're gonna have [crosstalk]  David Leary: -hours come from? Blake Oliver: Yeah. Am I gonna have to work 60 [00:20:30] hours, instead of 50, or 70, instead of 60, in order to be able to do this program? There's a quote in here that I really liked, and I'm gonna try to find it.  David Leary: While you do that, there's a graph in there that's really interesting. Microsoft Excel has been downgraded to the least important skill set for new hires. Blake Oliver: Hold on, hold on. I hate this stat, cuz this always comes out. All the FP&A tools like to say that Excel is not valuable anymore, or, they try to imply that it's been downgraded. Now, this is true. CFOs are not saying [00:21:00] that Excel skills are as important as being adaptable to new technologies, according to this chart, and of course, it came from Adaptive Insights, but, if you survey CFOs on if Excel skills are important, it's not like that's changed. Excel skills are still just as important as they ever were, it's just not what they are primarily looking for, anymore. David Leary: I think it's table-staged. You just have to have Excel skills, but it'd be nice if you could also collaborate with others and communicate well. It'd be nice if you were able to easily [00:21:30] adopt other new technologies. I think it's that you have to have some base level of Excel, just to get your foot in the door, now.  Blake Oliver: Oh, and here's a quote that I liked: "As long as we're teaching people the right skills, it'll keep them agile. Gone are the days of being done learning, after getting your bachelor's." David Leary: Has there ever been a time, where that was the case? You could just stop learning?  Blake Oliver: I feel like, in the accounting profession, other than your CPE, on tax, or audit regulations, or whatnot, yeah, kinda. You could really [00:22:00] easily just not learn new stuff, as long as you just kept up with those professional CP requirements. No, not possible, anymore. Tech is still such a tiny, tiny part of the accounting curriculum, I can't believe it. It's just absurd. It was one elective, when I was going through school, and I'm a career changer, so that wasn't that long ago. One elective on QuickBooks.  David Leary: Wow. You have to do it yourself, or at least PWC's making an effort to bring it to everybody; well, to [00:22:30] a small percentage of their employees, anyways. Blake Oliver: That's all I've got this week [crosstalk] David Leary: I think I saw an article ... It may have been Miss America just happened, or something, and I think Miss Missouri was an accountant. Blake Oliver: Oh, yeah, I did hear about this. I saw this on [crosstalk] David Leary: Other than that, I didn't see ... I think she didn't win, so I don't know if it's ... If she woulda won, it would've been much bigger news, I think. We would've lead with that story, but I think I saw that, so it's ... Hey, good job.  Blake Oliver: She wants to continue her education, and become a CPA, I believe, so that's [00:23:00] great. David Leary: Nobody told her about the billable hour. That would've been great if that was the question. Did they ask the Miss America pageants these really in-depth questions? It could be, "What is your opinion of the billable hour?" That would've been ... Blake Oliver: Well, I hope she would say that she thinks it's crap, because it's not like they evaluate the Miss America contestants on how many hours they put into their preparation. David Leary: No. Blake Oliver: Right? All they care about is the results. David Leary: That's true, that's true, that's true. Good point. On that, I think- Blake Oliver: Maybe firms should be more like Miss America [00:23:30] Pageants.  David Leary: That's a whole blog post in there. All right, Blake, we have a whole week to go through. Maybe we'll see some new news, new, exciting stuff, and we'll be back here on Friday. Blake Oliver: Sounds great, David. This was a pleasure. Where should people reach you if they want to say hi, send you a story? David Leary: Twitter's gonna be easiest: @DavidLeary. Also, on LinkedIn. You can just find me on LinkedIn: David Leary. Same handle.  Blake Oliver: I am @BlakeTOliver on Twitter, and you can also connect with me on LinkedIn. David Leary: Awesome. Have a good one, and we'll see everybody next week. Blake Oliver: See ya.  
Cloud M&A, get paid to move to Vermont to work remotely, & app updates galore
Stories in this episode: Aprio to acquire HPC — Accounting Today — Aprio LLP, a Top 100 Firm, has signed an agreement to acquire HPC, a cloud-based accounting firm that services its clients online. Top 10 Accounting Firm IT Survey Surprises — CPA Practice Advisor — An IT survey reports that more than half of midsize and large accounting firms (51%) have outsourced their entire IT infrastructure to the cloud. This is a noticeable increase from 2016, when only 23% had made the jump. Vermont will pay people $10,000 to move there and work remotely — CNN Money — There’s a new law in Vermont that will pay new residents who work remotely for out-of-state companies up to $10,000. Gusto Launches Modern Directory of Accountants — CPA Practice Advisor — Gusto, the payroll, benefits and HR technology company, has launched a new partner directory of accounting firms that provide such services. Spotlight Reporting announces new wealth management partnership — Spotlight Reporting Blog — Spotlight Reporting has announced that wealth data software solution, myprosperity, is their newest integration and strategic partner. The partnership will “allow accountants and advisors to report on and advise on both business data and personal or family wealth in the powerful Spotlight Reporting tool-set.” QBO Payroll Done Right: Contractor Direct Deposit — QuickBooks Blog — In addition to helping businesses with employees run payroll more efficiently, QuickBooks payroll now supports businesses that want to pay independent contractors. New Feature: Proposal Reminders — Practice Ignition — With proposal reminders you now have the option to set a practice wide cadence for following up and re-sending proposals - automatically! Once you’ve set your cadence, Practice Ignition will take care of the rest. Slack and ADP: Looking up pay stubs and booking time off just got a lot easier — Slack Blog — Now with the new ADP Virtual Assistant app, you can get that information sent to you where you’re already working — in Slack. There’s no need to switch tabs, switch tools, or switch contexts, everything you need can be conjured up by typing “help” or using simple slash commands. Making payroll a breeze with Xero + Paychex — Xero Blog — Thanks to a new integration with Paychex General Ledger Service (GLS) you can quickly and easily connect to your Xero account, post payroll entries to your general ledger in just seconds and save time and reduce errors. Subscribe: Listen on iTunes/Apple Podcasts Listen on Google Play
Supreme Court sales tax ruling is a windfall for Avalara
Stories in this episode: Last week’s IPO, Avalara, is today’s big winner in internet tax rally — Accounting Today — Shares in the sales tax management firm rose as much as 32 percent after Wednesday’s ruling, extending gains to more than double since its public debut last week.  Supreme Court rules that internet businesses must collect all state and local sales taxes — Los Angeles Times — Check out this article for a chart showing states that will benefit most from the Supreme Court decision, including California, Texas, New York, and Florida Why Amazon is the winner of the Supreme Court sales tax ruling — CNBC — The Supreme Court overturned a ruling from 1992 that allowed online retailers to skirt sales tax collection responsibilities if they didn't have a physical presence in the state. But Amazon stands to benefit from the ruling, experts say. Amazon already collects sales tax on the products it sells directly, and the ruling doesn't make clear how third-party sales should be taxed. Steve Forbes: Internet sales tax would be fatal for small businesses — Fox News — Steve Forbes argued before the ruling that extending sales tax collection requirements to out of state, online retailers will have a dramatic, ugly impact on small businesses and entrepreneurs. The Land Of Duty Free — Planet Money — The Planet Money team follows the surprising origin of duty free stores, and try to answer the question: Are they really saving you any money? A machine has figured out Rubik’s Cube all by itself — MIT Technology Review — Unlike chess moves, changes to a Rubik’s Cube are hard to evaluate, which is why deep-learning machines haven’t been able to solve the puzzle on their own. Until now. Subscribe: Listen on iTunes/Apple Podcasts Listen on Google Play
Midmarket vendors: Watch your back! Also, how labor costs will skyrocket over the next decade, and goes global
Stories in this episode: Hey Mid-Market, Xero and Intuit are coming! - Digital First Labor Costs Will Skyrocket Over the Next Decade - Global Business Payment Is Becoming Much Easier - Subscribe:  Listen on iTunes Listen on Google Play Transcript:Blake Oliver: Welcome to the Cloud Accounting Podcast, a show for accountants using technology to make their jobs more strategic, and impactful. I'm Blake Oliver-  David Leary: -and I'm David Leary. Blake Oliver: David, what's new this week? David Leary: It's like a real back-to-work week, I think, right? There's no more holiday, there's no ... World Cup kind of ended yesterday, after lunch. Well, it isn't ended. There's still a championship game, but it's kind of like, "Hey, this is a real work week."  Blake Oliver: Yeah, it definitely ramped up a lot for us. Last week was dead, so [00:00:30] this is nice. David Leary: We thought about recording the podcast last night, and you were just like, "This is too much. It's too busy today. It's not gonna happen."  Blake Oliver: Exactly, yep.  David Leary: We might as well jump in. I have an article from Matt Paff. He's down under, but he wrote an article called, "Hey, Mid-Market, Xero and Intuit are coming! It's really an article, and an argument he's made about you don't have to go buy these mid-market, or enterprise-type systems. You can almost build [00:01:00] a custom ERP on top of QuickBooks Online, or a small-business-accounting system that has APIs, and apps that plug in on top of it. The article, in the beginning, is a little bouncing around on the background, but he does get, as you get deeper into  it he has this graph, but then, he has his advice, and he breaks it out and in his recommendations, about the claims these sales people are making at these ERP vendors, and how you can think about those differently, [00:01:30] and overcome these, using a small-business-cloud package, built with apps. Blake Oliver: I've definitely encountered this. Since I started at FloQast, I'm learning so much more about the mid-market, because that's our primary market is controllers in industry for mid-sized companies. I suppose we should define that, because there are many definitions of mid-market. I tend to think of it pretty broadly, like businesses over $10 million a year in revenue, and under a [00:02:00] billion. It's a lot. You could be more narrow with that, but generally, it's a business where you've got quite a few employees; you've got an accounting team/accounting department, and you have a need to report to investors, and shareholders. It's a lot different than your mom-and-pop-type business situation. How do you define it, David?  David Leary: To me, it's great, because I think people try to always define it from the number of employees, or the revenue, but then, I always hear stories about, like, Google [00:02:30] apparently was using QuickBooks Desktop, until they were a $200-million company. My understanding is Uber was using QuickBooks Online for the longest time, and they had 70,000 vendors in there. Our engineering-team guy said, he goes, "It was very an engineering challenge," but you hear about these big companies, and it's like what really defines that? Is it the size? Is it the volume? Is it the complexities? The reporting out? Is it just ...”?  David Leary: I've heard stories from some people that work for Salesforce. [00:03:00] He basically is like, "Hey, as soon as a company takes VC money, and they have to start ... I go in there, and I get my million-dollar sale for Salesforce." It's like what defines it? It is the capital they've gotten? Is it the revenue? Is it their size, their employees? I don't really have a definition. Blake Oliver: The market doesn't really, either. Let's set that aside for now and address this article. Matt is talking about the mid-market needs for accounting software, and he's basically arguing [00:03:30] here that it's no longer an absolute that you are going to go to an ERP system, when you get to that mid-market stage, at least the beginning of it. You can use apps like Xero and QuickBooks Online, and extend those applications with add-ons, so that you don't have to graduate immediately. He's saying, potentially, ever, which I disagree with, but we can go into that. I've seen this myself, not [00:04:00] with a lot of folks, but with one controller, in particular, who is on Xero, and he has been just integrating dozens of add-ons, in order to get what he needs out of Xero - Expensify, ApprovalMax,, all that good stuff. He's basically getting ERP functionality without having to go to NetSuite, or Intacct. David Leary: I think some of his article, too, he's kinda making an argument that what's offered, right now, for mid-market, in general, is kind of dated. [00:04:30] I think that's some of his argument. He's like, "Why am I gonna ... Why are we forced to use this old technology stacks that are heading towards 15-20 years old, when there's these other great options that are open APIs, and you can build the tech stack, customized, to some extent?"  Blake Oliver: I think, to be fair, Matt is down in Australia, and I don't think that the mid-market vendors, especially here in the U.S., have done a good job of selling into Australia, so there's not a lot of options there. It's mostly old desktop-server-based systems [00:05:00] that people are using in the mid-market. Basically, what he's saying ... I don't know. Did you mention the title of the article? "Hey Mid-Market, Xero and Intuit are coming!" He's basically saying, "This is a giant warning to you guys." This is based on Matt's experience - 18 years in the mid-market on the vendor side/consulting side - saying, "You guys had better innovate, or your businesses are gonna get eaten by Xero, and Intuit, coming up from below." David Leary: If I'm looking at his graph correctly, he doesn't even have Sage Intacct on [00:05:30] here, right?  Blake Oliver: Well, yeah, because until like a year and a half ago, they weren't international at all. I think, actually, Sage purchased Intacct, acquired Intacct, in order to take them global. David Leary: Got it. You're right, some of it's skewed, based on historical ... There just hasn't been decent cloud players, maybe. Blake Oliver: Matt has some common misconceptions, and myths about mid-market software versus SMB software that he dispels in the article very well, which is excellent. He [00:06:00] says, "Transaction volumes ..." That used to be ... That was an argument why you had to go to a mid-market ERP. No longer necessary. There aren't hard limits QBO, or Xero. P0 authorization, he says you can get around that with ApprovalMax, or an add-on that handles the POs, and the approvals reporting. You can plug in a variety of reporting tools. Same with budgeting, you can do various tools - Spotlight Reporting, all that good stuff. Audit trails, that's getting better. Project-tracking, I [00:06:30] still don't think that's that great, but Matt says you can do it, and it's good enough for a lot of businesses. David Leary: There's definitely add-ons. He doesn't touch on that, as much, but there's definitely ... Depending on what kind of company you are, you can get project software that will project-track for you. Blake Oliver: This is based on my experience over the last six months, networking in the mid-market industry, or on the vendor side. I think that the reason that [00:07:00] you're never gonna have SMB software take over in the mid-market is simply that the customer, the target customer, the buyer, is different - very, very different - and it's impossible to serve two customers that are that different really well. To lay it out there, the customer, the primary customer of Xero, and Intuit, is the small-business owner, and the accountant, who serves that small-business owner - small CPA firms, small-business [00:07:30] owners. The primary customer of ERP software is the CFO, and the corporate controller. Those are very, very different people with very different needs. You're not gonna build the same feature set for both those markets. David Leary: It's been hard to go to a big, huge company with a CFO, and be like, "Hey, go look at this app. It's $39 a month, and this app, and this app ..." Maybe those apps, themselves, aren't set up to either sell to enterprise, or have those conversations with somebody at that level. You're [00:08:00] right. Your argument is mid-market's kind of a niche, small business is a niche, and you've gotta stay focused, because it's hard to do both at the same time. Blake Oliver: I'm all for integrating applications, but even I will admit that once you get beyond five or six applications integrated into your accounting system, it gets kinda out of control, and can become a mess. The benefit of an ERP is that you get more all-in-one-type functionality, and you don't need [00:08:30] a zillion add-ons, so, I think that's important. There's a few other points, features that I've learned about as being really important to CFOs and controllers that I think Intuit's just not gonna build, Xero's not gonna build.  A great example is multi-ledger functionality - the ability to manage multiple entities and do instant consolidations in the same file. QBO would have to be completely redesigned to do [00:09:00] that.  It's just not ... I don't think it's gonna happen. It's not the need of a small-business owner. Most business owners, on the small side, have one entity, or if they do have multiple entities, they can just track it, using, say, classes or something like that. David Leary: It'd basically be solving a use case for .0001 percent of the customer base, right?  Blake Oliver: Exactly. David Leary: Out of millions of users, we're solving this for like seven ... Blake Oliver: I have one other big one, which is dimensions. They go by different names. It's classes in QuickBooks; [00:09:30] it's tracking categories in Xero. The issue that I see with the way that the small-business-accounting systems have been designed is that you're limited in the number of dimensions you can have, and you can't customize them for different types of transactions.  Whereas, with an ERP system, it's not as pretty. The interface isn't as well-designed, but because it's scalable in a lot of different ways, you can add just a ridiculous number of custom dimensions and create all these rules around [00:10:00] them. You can capture interesting data, really useful data, at the point of inception for a transaction. For instance, I can create a bunch of custom fields for my customer invoices and require those to be filled out in Intacct. I can't necessarily do that in the other systems. David Leary: It's that fine line of what's starting to get overkilled, like how many custom fields are really needed?  Blake Oliver: We can argue about that, but when you're trying to sell to a CFO, [00:10:30] if they have a particular custom field that they've always had, and they want it, you're gonna have a really hard time convincing them to abandon it. David Leary: Totally. I think what we should do is ... Matt has a good ... I talked to him a little bit about this, a couple weeks ago, in Sydney. He gives an example of a nonprofit client he had. Basically, he went ... They were having discussions with, I think, MYOB ... Maybe we should have Matt on, as a guest, or something, in the future, to discuss this. Blake Oliver: Absolutely.  David Leary: Essentially, he talked to them, and he went home that night, and within two days, he [00:11:00] spun up basically all their data, all their workflows, using QBO, and some apps, and came back to them, and then really gave them the price quote. These people were just amazed that he was able to move their data through the apps, and the accounting system, for pennies on the dollar, compared to these solutions that other people weren't even giving them the actual solution - it was just all still the sales pitch - and how fast he spun it up. It'd kinda be an interesting story for him to tell that, or have him on, to give more details about that, because it's ... The arguments on this are ... It's interesting, right?  [00:11:30] I've had these discussions before, with some developers, like, "Hey, we're gonna help people not switch to NetSuite, or something ..." The thing is, is QuickBooks Online, or cloud accounting is growing at 40 percent a year. QuickBooks Online, I think, is adding 120,000 new small businesses a quarter. I think maybe two or three are graduating to bigger software, and that's fine. Congratulations, but I think you're right, from a priority standpoint, [00:12:00] how much effort is a small-business-software company, like Intuit, gonna put into trying to keep three customers a quarter from leaving? Blake Oliver: I'm not saying that I disagree with Matt. I think that there will be definitely, as the feature sets get built out, that you'll be able to delay going to an ERP longer, and big, or small businesses will be able to continue using their accounting package, but the vast majority of mid-market companies [00:12:30] are ... They need their own systems. It's not gonna be taken over completely. Probably, the ERPs are not that worried, because the best customers for them are the ones at the larger end of the mid-market. If anything, I think Sage Intacct, and Oracle NetSuite are gonna push up, and try to take business from SAP, and Oracle, which is kinda funny in the case of NetSuite, because Oracle owns NetSuite.  David Leary: Maybe the curve's shifting a little, because I think in the olden days, people [00:13:00] would, because of the cost, they would just stick with QuickBooks Desktop Enterprise until it exploded. People would start new data files every quarter. They'd do anything they could to just not have to spend that money at that next level. Maybe it's more of a shift in the way of hey, you can really run on a QuickBooks Online for years longer than you could ever before. You don't have to make that jump. You're right, maybe the other ones are gonna be able to be like, "Hey, we're gonna start ... You don't have to move to an Oracle. You can stay on us.". Blake Oliver: People are, developers, even [00:13:30] the Big Four, are starting to see this gap in the market. That's why KPMG has partnered with Microsoft to create a custom version of Microsoft Dynamics, called Wiise. I think we talked about this a couple episodes ago. They're specifically targeting the lower mid-market. David Leary: It'll be interesting to watch this, as it grows, because I don't think this is an end of a discussion, or an end of an article. It'd be interesting, also, to see ... Maybe we'll push on Matt, when we talk to him here, to [00:14:00] build his chart, but build it for the globe, instead of just the 'A' market. Blake Oliver: Yeah, that sounds cool. Let's have him on as a guest. Matt, if you're listening, we would love to talk to you. David Leary: Shoot me a tweet. Blake Oliver: I've got another story that is actually related to Australia. We'll get to that. It's an article that appeared in, called, "Labor Costs Will Skyrocket over the Next Decade." It's based on a report from the consulting firm Korn Ferry, [00:14:30] which puts out some really, really great research about labor costs, and labor shortages, and whatnot that are coming up. This report is following up on a May report they did about the looming global talent shortage, which a lot of folks are like, "What? How could there be a talent shortage? I've been hearing that robots and AI are going to take all of our jobs. Why would we have a talent crisis/talent crunch?" The [00:15:00] report goes into some detail about how this is for highly skilled labor - CPAs, lawyers, doctors, professional folks. Actually, not even professionals, just highly trained people. You could be a machinist; there's a shortage of them. Even truck drivers with special licenses. Anyway, to get to the point of this article, by 2030, Korn Ferry is saying there will be a $2.5 trillion increase [00:15:30] in labor costs for skilled labor, as a result of the global shortage of highly skilled workers, and the United States is going to have the largest wage premium, meaning we're gonna be paying, as employers, extra to our employees, over the normal cost of inflation, and it's going to be $531 billion dollars by 2030. That doesn't really mean a lot in the context of the whole economy, but to give you an idea, the [00:16:00] average wage premium - again, the extra money we're gonna have to pay to skilled workers in the U.S. - will be approximately $8,300 per head within the next 12 years. Add that to your budgets for your hiring of CPAs, and your accounting team. David Leary: Pretty much, they're just telling people to prepare. "Hey, you're gonna have this labor increase, even if you're not growing your size of your staff. You're just ... This is going to happen. There's nothing you can do about it." Blake Oliver: We [00:16:30] all know that it's getting harder, and harder to find good accountants. This is part of a trend. We haven't been training enough folks, and simply just due to population shifts, the baby boomers are retiring. There aren't as many Gen Xers, and Millennials replacing them. Meanwhile, the global economy is growing at a fantastic pace. Just to keep up with normal growth, we'd have to be producing more skilled labor, and we're not. It's gonna be a real challenge, [00:17:00] I think, especially in the accounting world. How this ties back to Australia is that they're gonna have an even worse problem than we do. The wage premium in Australia, it's going to be $28,600 per head by 2030. Can you imagine paying an extra $28,000 per accountant? David Leary: That's not actually doing any more capacity, or any more work, but you kinda don't have a choice, right?  Blake Oliver: Yeah. David Leary: The other way to think about this is you're gonna lose that person-. [00:17:30] Blake Oliver: If you don't pay them more, they're gonna go somewhere else and get more, which is starting to happen. I was chatting with Donny Shimamoto, who was our recent guest, on LinkedIn, about this. His question was does this report actually take into account automation, and AI? The report doesn't get into how they did the analysis, but they do say that despite automation, this is going to happen; that there's going to be a talent shortage. That's because most ... I [00:18:00] assume that most of the automation, and AI that we are seeing being developed right now is going to be applied to low-skill jobs, to begin with - jobs that do not require highly skilled training, or a license, like factory work, which we've already seen automated, warehouse work, deliveries, that sort of thing. Korn Ferry says it's gonna create two classes of workers. We're gonna have [00:18:30] an oversupply of low-skilled labor. We're gonna have a shortage of high-skilled labor, which we can talk about the political implications of that, the economic implications of that. It's gonna be a strange world that we live in. David Leary: I don't think it's just our industry, though, either. Blake Oliver: Well, no.  David Leary: You'll see this in Arizona ... Started seeing this spring, before it's really air conditioning season. Air conditioning companies are running commercials on television to hire people. It's that hard for them to find [00:19:00] people that are capable of fixing air conditioning. They're not even advertising their product. They're running commercials not to advertise their, "Hey, we fix your air conditioner," they're running commercials to hire people. Blake Oliver: That's good. If you have the ability, the intelligence, the drive to spend a couple years, and learn a skill like that, or become an accountant, get your CPA, then I think you'll be fine. You're gonna have fantastic employment opportunity. [00:19:30] If you're working fast food, if you're moving boxes around a warehouse, if you're driving a truck, you're probably going to get automated out of a job. It's gonna create a real crisis, I think, in the country, if we don't have a way for these people to get retrained, or if we don't have jobs for them.  What are gonna be the political consequences of it, when you have this highly paid, skilled workforce, and this low-skilled workforce, where wages are stagnant, and they're losing their jobs, or maybe they're getting automated out of work? It's gonna be a strange [00:20:00] kind of ... I can see a potential dystopian future, but also, a potentially utopian future. David Leary: It's interesting, because I think when they count the jobless claims, and the jobless numbers, they don't account for people that just are starting to opt out. They're like, "I don't have the skills to get a skilled job," and they just opt out, because they're not actively hunting. They don't count them as not being employed, because they're just opting out, so it makes the employment numbers always look higher than it probably really is. One thing I'll be putting in the show notes, I'll include a link, because a couple days ago ... I know [00:20:30] we've talked about them before, Planet Money has that indicator, and they have one just on jobs. It's like 10 questions in 10 minutes, and they actually talk about this: what do employers mean when they complain about having a worker shortage? Blake Oliver: They mean very different things to different employers.  David Leary: We'll definitely include that in there. I think it's definitely related to this article, so it's probably worth putting that in the show notes. Blake Oliver: Sounds good. That's all I've got this week, David.  David Leary: I think we have one more, so we might as well stay on this international/global [00:21:00] thing. Big news, I think it just came out last night, or maybe even this morning ... is going to start doing global payments. Blake Oliver: All right, finally. I've been waiting for years. David Leary: I have hundreds of Canadian accountants, who've asked me this question for the last few years. "When does work in Canada?" Now, it's gonna work in Canada, and a bunch of other countries. I don't know if they say in the article ... 25 countries to do cross-border payments, which is a really [00:21:30] big deal-. Blake Oliver: It's going to cost $10 per transaction. They say that's an introductory price, but I'd be curious to see if that sticks around. That will save a ton of money over wire transfers. David Leary: They're claiming here, they'll save you 50 percent on international wire transfers. I'm not an expert on the fees on this, but my understanding is they are way more than $10 a month, so the $10 a month is definitely not the 50 percent. It's definitely an introductory offer, [00:22:00] but it's probably not gonna be excessive, if's worked with the banks, and they're using their rails to move this money around, and they're getting a discount for the customers to do this. Blake Oliver: Do you think this is gonna impact the other international-payments providers in the ecosystems? David Leary: Yes, and no. What I mean by that is I think offers a workflow solution. There's a product for managing those AP workflows, but not all small businesses need that. They [00:22:30] don't have a team that needs to, "Hey, I need Blake to sign off, and then, this VP to sign off, and then somebody else to sign off, before we make this transfer or pay a bill." I think for people that have that situation, right inside their tool, they have the same controls, and audits etc. to send the money. It's gonna be huge for them. I think there's still room in the market probably for smaller players that are like, "Hey, I'm a one-man team. I approve the bills. I could go out to another ... I'm not a customer. I'm gonna go use that other [00:23:00] app, because I don't need the rest that functionality.  I'm just gonna go transfer it, via some app like VM, or TransferWise, or one of the other players that are in that space. It's definitely huge, though. This is a monster move for Blake Oliver: I'll be interested to see what the exchange rates are, how those are computed, because that often ends up being a bigger component of the cost of the international transfer than just the fee, the fixed fee, of say $10, or $20, or $30, whatever that is. I imagine [00:23:30] that just given's relationship with banks, how they've very intelligently decided to partner with banks, than trying to undercut them, that they won't undercut them too much, or that the bank they've partnered with will still make a good amount of money.  While these transfers will be cheaper than traditional international transfers, it's not going to be world-changing. I think it's, again, more of the convenience of being able to do it electronically, inside, with all those approvals, and whatnot, and that Veem, [00:24:00] and TransferMate, TransferWise, they'll still end up being a lot cheaper on the exchanges, because they use systems; they go outside the traditional banking system, like block chain, and whatnot. David Leary: Definitely, I think you can definitely look at the last year and a half for I think they had another round of VC funding. They've done a lot of biz-dev deals, and announcements, and press releases about things they were doing with banks, so you can see where this is kind of stacking up to this being released, to some extent. Blake Oliver: Yeah, but overall, and [00:24:30] fantastic ... Really exciting to see the world economy getting tied together into electronic payments, finally. David Leary: I think some Canadians will be celebrating, like they just won the World Cup. I cannot believe how many people in Canada have been dying for this, for accountants, and bookkeepers. It is a huge, huge deal. Blake Oliver: Well, David, that's all of our time this week. How should our listeners get in touch with us, if they want to let us know about a story, if they're interested in [00:25:00] joining us on the podcast? Where should they contact you? David Leary: Twitter is definitely the easiest. They can find me: @DavidLeary.  Blake Oliver: I'm @BlakeOliver, and we look forward to hearing from you all. David Leary: See you guys next week. Blake Oliver: Talk to you later.  David Leary: All right, bye.  
Blockchain, AI, and why you need to move to the cloud, now!
Stories in this episode: Blockchain: An opportunity for accountants? Or a threat? My Look at QuickBooks Connect 2017 Accountants Gear Up For AI Disruption 50% of Businesses Still Use Paper Checks - But They Won't for Long The Economic and Strategic Benefits of Cloud Computing Subscribe: Listen on iTunes/Apple Podcasts Listen on Google Play
Workaholism, toxic meetings, and remote work
Discussed in this episode: The four drivers of workaholism, and how it doesn't make for more productive employees Why meetings are toxic (according to the makers of Basecamp) How payroll and HR provider Gusto hired more women engineers How to be part of the team, even when working remotely Subscribe: Listen on iTunes/Apple Podcasts Listen on Google Play
Going deep on the MyPayrollHR fraud with Wendy Slavkin of Cachet Financial Services
SponsorPodchaser: Show Notes 01:41 – General Counsel Slavkin describes Cachet Financial Services as a sort of third-party vendor for payroll processing companies.   05:59 – Every ACH provider has their own patented process for payroll  06:45 – How MyPayrollHR’s owner, Michael Mann, did the deed, in technical detail   09:03 – Slavkin claims the  assorted employee banks are to blame for the whole payment reversal fiasco  10:32 – According to Slavkin, banks have 60 days to either accept or reject reversal files  11:29 – Cachet eventually decided to return all funds to the affected employees, using their own funds  12:10 – Though Cachet covered the payroll, some employees have yet to receive their funds back  13:32 – Slavkin notes that employee banks are waiving overdraft and other fees related to this incident  14:18 – NACHA’s statement re payroll-deposit reversals | Personnel Today   14:38 – Slavkin doesn't agree with NACHA's claim about reversing payroll deposits.   16:21 – Lesson learned: ABC - Always Be Cautious ... Before the MyPayrollHR event, Cachet never had controls in place to detect fraudulent activity from the client side. Now, after the fact, they do.   18:56 – According to Slavkin, Pioneer Bank is holding at least some of their money "in trust" ... They just have to find a way to get it.  23:18 – Timeline of the aftermath – from discovery through contacting FBI and more  24:38 – Wall Street Journal reports that Mann is cooperating with the U.S. Attorney and FBI ... | The Wall Street Journal   25:02 – Where in the world is Michael Mann? Either nobody knows, or they're not saying 26:30 – Blood and turnips - Slavkin was unable to accomplish much of anything when she contacted the FBI for help  31:50 – Pioneer Bank – another victim? | Times Union   33:30 – Was this a crime of desperation, or a crime of greed?  Connect with Cachet Financial ServicesThe Cachet Crisis Hotline number is 877-579-8557Connect with Our Guest, Wendy Slavkin, General Counsel for Cachet Financial Services Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus. Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast: TranscriptWendy Slavkin: First of all, the file got manipulated by MyPayrollHR, prior to uploading into our system. They were a client of ours for 12 years. Michael Mann purchased it, I think, about six years ago; had a great relationship with them, never had any problems. So, there was not an alarm when he manipulated that account number. This was something that we just could not foresee. This was our client. David Leary: So, Blake, [00:00:30] I have a special guest interview for us right now. We have Wendy Slavkin. She is the attorney for Cachet. They are the ACH money movement company that was involved with the MyPayrollHR fiasco/mess. I don't know ... Wendy, what would you say is the best way to describe this, at this point?  Wendy Slavkin: First of all, I'm general counsel for Cachet. We have many attorneys, but I'm the general counsel. I've kind of been overseeing all of this. How would I describe it? I would describe [00:01:00] it as - from our end - a $26 million fraud. David Leary: So, I imagine your last 21 days or 20 days have been a little insane. Did you wanna walk Blake and I through that, and then, we'll ask any clarifying questions along the way maybe?  Wendy Slavkin: Can I give you a little background about my client- David Leary: Absolutely.  Wendy Slavkin: -and how they kind of played into this whole disaster? Cachet Financial Services is a company located in Pasadena, California; been around for 22 years. One of the things we do is we get involved in the movement [00:01:30] of money through the ACH - automated clearing house - system. Our clients are hundreds of payroll processors all across the country, much like this particular one we're dealing with, MyPayrollHR. Typically, what we do is we enter into an agreement. We call it a re-marketer agreement, but it's kind of like a third-party vendor agreement with different payroll processing companies. These payroll processing companies, back in the old days, or the 1990s, as I like to call it, they [00:02:00] printed hard checks, paper checks that they would typically mail or messenger-deliver to different employers for their payroll. Nowadays, a lot of employers are going the way of direct deposits, meaning they deposit the money directly into the employee's account, and we're doing away with paper checks. These payroll processors, for the most part, are unable to do the direct deposits themselves. They're just not set up. They don't have the proper licensing, [00:02:30] and facilities, and bank relationships. They'll enter into an agreement with somebody like us, like Cachet Financial Services, to do the direct depo