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The best and worst 2020 predictions (and some of our own)
SponsorsJirav: www.jirav.comHi, this is Blake, and I just wanted to let you know that this episode of the Cloud Accounting Podcast is sponsored by Jirav, my employer. “Jirav” sounds a lot like “giraffe” — and that’s no accident. Giraffes are the tallest animal in the world. That gives them a great view. Our goal at Jirav is to give you a similarly great view of what’s going on with your business.We do that by helping you understand where your business has been, and most importantly, predict where it’s going. Jirav connects your cloud-based accounting, payroll, CRM, and billing data together to automatically update shareable online dashboards, monthly reporting packages, and sophisticated financial plans and budgets in real-time. If you’re using Excel for reporting and forecasting, you’ll save hours every month with Jirav.Learn how accounting firms are using Jirav to deliver connected insight, strategize growth, and help their clients make more profitable decisions. Visit and start your 30 day free trial. That’s J-I-R-A-V dot com. See farther with Jirav.Show Notes 00:38 – Looking back - how many 2019 predictions came true?  03:17 – Blake's first prediction for 2020 comes true less than a minute later ... Well, sort of ...  03:38 – Culling All Accounting Conferences – less definitely may start to be more! | Accounting Today 05:33 – Is there any value in free?  09:01 – Duh ... Overstating the obvious isn't really making a prediction | E27 09:31 – Dynamic pricing is just not a thing, at least not for the smaller players 11:09 – Hmm - is "used" the new "new"?  11:28 – What's going to have the biggest short-term impact on accounting? One hint: it's not humans | Journal of Accountancy 13:25 – Blockchain in 2020 - boom or bust? | Enterprise Times  14:50 – Armanino releases blockchain-powered app for instant attestation | Accounting Today 16:49 – Government still says no to crypto | Real Daily 19:58 – Everybody’s losing their minds over 5G! But, why? | The Verge 21:14 – Blake takes issue with 2020 being the breakout year for 5G – lack of speed isn’t the problem; lack of use is  23:25 – 2020 just might be the year of foldy, rolly, hidey devices ... Maybe 25:12 – 2020 sees the hiring of non-accounting grads at CPA firms continue | Journal of Accountancy 26:25 – Blake says it's going to take a good decade to create and implement the changes needed in the CPA exam and curriculum  27:49 – Want to stay relevant, and innovate? Pull your head out of last year! | LinkedIn 29:33 – Millennials might be so 2019, but they still have some decent asks when it comes to employment |  31:31 – Open banking in the US? Maybe in 2030 ... | Accountancy Today 33:19 – What's the most important issue facing the accounting industry? Here are at least 100 | Accounting Today 35:30 – Things are different all over -  2020 Accounting Changes from Down Under | Accountants Daily  37:42 – Automation - great for those with actual skills; not great for the not-so-great ...  37:55 – What do accounting regulators actually DO? | CFO Dive 40:17 – For your reading pleasure - 120 AI Predictions For 2020 | Forbes 42:17 – Speaking of Voice AI – 46 industry pros share their 2020 Voice AI predictions | 45:01 – VR will continue to make people nauseous in 2020  45:08 – Four (just four?) Creepy Applications That Will Change Your Business In 2020 | 47:36 – Is Netflix going to be your next bank? | Banking Innovation 49:24 – The moment we've all be waiting for - David and Blake offer up their 2020 predictions! 🎉 49:30 – Nobody's staying in their lane! David says watch out for blurred, crossed, and muddied lines more than ever.  50:59 – According to Blake, 2020 is the year that one of the GL players - think QuickBooks, Xero, et cetera - becomes a bank.  52:28 – David's no-brainer prediction - Xero and Sage will have to launch their own version of Live product to compete with QuickBooks Live. Mark his word! (For the record, Blake disagrees)  54:24 – Podunk is not the proper nomenclature, David ... 😁 Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!   Limited edition shirts, stickers, and other necessities.TeePublic Store: Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast:   TranscriptBlake Oliver: The accounting regulators aren't really doing all that much. It's not that significant. We talked about this last week. The big thing they're gonna be working on over the next six months is deciding whether or not to allow public companies to amortize goodwill. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: And I'm David Leary. Blake Oliver: This is our special 2020 predictions episode. David Leary: Should we check back in on our predictions from 2019? [00:00:30] Do you remember yours? Blake Oliver: Oh, I don't. I hope you don't call me out for making some bad predictions. David Leary: I don't remember yours, but I remember mine. I predicted that it was gonna be the year of instant payments. We kind of saw that across the board. QuickBooks announced you could get paid within 24 hours. In many cases, you can get instant deposits now if you're … Instead of putting your bank routing numbers in, if you put your debit card number in, you can get an instant deposit, or instant payments back for vendors or customers. So, I think I'm gonna declare victory on instant payments. Blake Oliver: Yeah, I think you're right. David Leary: Okay, good [crosstalk] It’s a wrap.  Blake Oliver: No, it's great. [00:01:00] Zelle is actually working really well; Venmo, Apple Cash. I can pay, pretty much, anyone with any app, although I have to have a variety of apps because we're not all using one app. Actually, we'll get into that as one of my predictions regarding fintech for 2020, so that's a good lead in. David Leary: I think, actually, even the explosion of all these getting-paid-two days-early-type-payroll plays that are out there, right? Blake Oliver: Oh, yeah. David Leary: People are getting paid faster than instant; they're [00:01:30] getting paid early. So, I'm gonna declare that prediction as a win. I'm glad I only made one prediction. It's harder to be wrong, right? It's a numbers game. Cool.  Blake Oliver: Well, so I'm actually going back right now to our old show notes from 2019 and looking and seeing if I made any predictions that came true or didn't. Let's see. My big prediction back in 2019 was that firms are going to have to figure out how to communicate with their clients and deliver really good customer service mobily. That [00:02:00] means letting your clients text you and being more responsive in that way. I'm wondering, did that come true? I don't know. I haven't seen any surveys about that. I guess it's more of a long-term prediction, and it has to go with customer experience. Good CPAs, good accountants, bookkeepers have always focused on customer experience. The key now is just merging that responsiveness with technology moving forward. How can we meet our clients where they are? Whatever [00:02:30] tools they want to use, we need to be using. David Leary: I'm gonna give you that you're right because we talked about this over … It was a theme of many episodes, not specifically about texting, but how you're communicating with your clients; how you're engaging your clients. Blake Oliver: Yeah. Don't send them this giant email when they ask a question. Give them your opinion in one or two paragraphs. If you go beyond that- nobody reads long emails. That's why texting can actually be good if you have a way to do it without having to pull out your own phone. If you have some sort of service [00:03:00] that can pull those in to a support ticket desk kinda thing. I don't know. The way that we can communicate with software companies, we should be able to communicate with accounting firms. There's software to do it, so people are gonna figure it out. I do have one prediction for 2020 right off the bat, David. David Leary: What's that? Blake Oliver: Which is that we have just way too many accounting conferences. Everybody's doing one now, and some of them just aren't gonna survive. We're gonna have a culling of the conferences. David Leary: A culling? Blake Oliver: Yeah. David Leary: Of [00:03:30] multiple? Blake Oliver: Well, at least one. We're gonna lose at least one accounting conference this year, yep.  David Leary: All right, Blake. I'm gonna give you this one already. Blake Oliver: Oh, yeah? David Leary: Accountex USA sent out an email yesterday. I don't know if you've checked your email, or if it's in your spam folder, but you're right. An accounting conference, Accountex USA, is not gonna do their 2020 event here in the United States. They'll still have their UK event, but they're not gonna do their event in the States. Blake Oliver: That's crazy. I have to admit, I cheated. I saw that email before I made my prediction. Do you remember- [00:04:00] David Leary: You could edit this in a way so nobody will know that. Blake Oliver: Nobody will know, but I'm not gonna do that. I'm not that smart. So, credit where credit is due … It was surprising to me, although not so surprising, given the decline that that conference has had. It used to be SleeterCon. It was the Sleeter Group's conference, which was- my first conference was going to Sleeter, and it was great. It had some of the best content in the industry. David Leary: That same goes for me. SleeterCon 2007 or something. I don't even remember how long ago. It was 2007 or 2006, but yeah, it was [00:04:30] a long time ago, and it's an end of an era. Doug Sleeter sold SleeterCon three years ago to the Accountex Group? Blake Oliver: Diversified Communications. Yep. They're a giant company. They run a ton of conferences. He sold it to them, and they just destroyed it, it's sad to say. They ran it into the ground. David Leary: It was interesting because they filled it with sponsors, though. I mean, you and I were there in Boston. We did some of those interviews, those episodes, but the attendees … There was almost more sponsors than attendees, and that was the struggle. I think there's this big argument with the conferences, [00:05:00] like, do you charge people, or do you not charge people? Because, in theory, you're like, "Don't charge anybody. You'll have so many people go. The vendors will be happy,” and just charge vendors, but I feel like people don't have skin in the game, so they don't show up. Blake Oliver: No. Well, part of the problem is that XeroCon started, QuickBooks Connect started, and they made those conferences almost free; essentially, free, they're so cheap because they're marketing activities, in addition to being educational. Conferences at the level of a SleeterCon, or an Accountex just can't compete with that, so they had to go free as well, which then … [00:05:30] People don't value free, actually. They're more likely to go to a conference if you have to pay money because they know at least the sessions are gonna be educational and good, and it's not all pay to play by the vendors. David Leary: You're right. I wouldn't be surprised … I feel like we've gone to the other shows that used to be owned by [inaudible] Management. Now they're owned by- is it Turpatin? They put on the Accounting Show- Accounting Show LA [crosstalk]  Blake Oliver: Terrapinn. Terrapinn, yeah.  David Leary: Terrapinn. I think they do the New York City Technology Show and the [00:06:00] LA Technology Show, and those are not very well attended either. Blake Oliver: No, yeah.  David Leary: I wonder if they … They also do a Toronto one that, I guess, is decent, and I think they do one in Asia that has really good attendance. Maybe your prediction’s more of some of these shows are gonna pull out of the U.S.  Blake Oliver: What's happening is the best shows are becoming vendor-sponsored - XeroCon, QuickBooks Connect. The shows that used to be independent can't compete with that. People aren't gonna go to … People have limited time to go to conferences; most [00:06:30] small- especially smaller practitioners. You can't leave your business for more than one or two weeks a year to go to get CPE and go to these shows. So, who are you gonna go to, right? You're gonna go to the one- the GL tool that is doing the conference. Yeah, I think it'll just continue to happen. We're gonna have just vendor-specific events. David Leary: I think I saw, either on Twitter … I feel like I haven't seen any confirmation of it, but that QuickBooks is not going to do a QuickBooks Connect in Sydney this year. Blake Oliver: Yep.  David Leary: In lieu of that, apparently, [00:07:00] do more of the smaller roadshow-type events. You're right, maybe 2020's the year of … The way people think of conferences is being changed. Blake Oliver: I wouldn't say it's a bad thing. It's that a lot of the stuff that used to happen at these conferences is moving online. People are engaging in Facebook groups a lot. David Leary: You can get your CPE online now. Blake Oliver: Yeah. You’ve got CPA Academy giving you all your CPE online, and you can get as much of it as you want, whenever you want. You've got podcasts like ours. This is something that has [00:07:30] developed over the last 10 years. Used to be you had to go in person to get this stuff, and now you can go online. In a way, it's just much more convenient. David Leary: Yeah. I feel like the in-person part of it, the important part of this now of the conferences is not the training you go to get; it's just the connections, the physical- the hugs, and talking, and eating with somebody that you've chatted with every other day, virtually. Blake Oliver: Yep.  David Leary: I feel like the conferences are more important than ever, but what the business model is and what the purpose of the conference is, I think, is what's being reinvented here. Blake Oliver: I agree. David Leary: It may not be solved in 2020. [00:08:00] It could take two or three years before whatever this new model of bringing people together is. Good one, Blake! Good prediction! I went through one, two, three, four, five, six, seven- about seven to 10 prediction blog posts that are out there - e-commerce, blockchain, tech gadgets, accounting things, audit, AI … Like 150 things in AI.  I don't wanna bring everything to the table, but what I did with each article, I just kind of went through and I'm like, "Oh, here's the "duh", obviously; that's [00:08:30] not much of a prediction;" something that I completely have no faith in like, "Yeah, right. That's never happening;" and then something that I didn't even think of.  So, we can kind of go through some of these and talk about these predictions. I know you have a couple articles and predictions of your own. Then, I will have my own predictions at the end of the show, if people wanna stay tuned for that. No skipping! No skipping!  Blake Oliver: Yeah, let's go through it. Let's go through it sort of by topic. Then, if our articles overlap in terms of topics, we can have a discussion. David Leary: All right. Wanna tip-toe in the water [00:09:00] with an easy one for e-commerce? Blake Oliver: Yeah, sure. David Leary: All right. This is from a website called It's “E-commerce trends: What to expect in 2020.” My "duh" one – one of their predictions is people will find your product and website via Google search. Blake Oliver: Wait, isn't that what- David Leary: That's one of the predictions. Blake Oliver: - that people are gonna find you via Google search. David Leary: Yes. Blake Oliver: Okay. All right. David Leary: That was a "duh", and then the "yeah, right" was dynamic pricing. [00:09:30] I just don't see dynamic pricing happening for most e-commerce players, right? It’s a bigger platform.  Blake Oliver: What do you mean by dynamic pricing? What is dynamic pricing? David Leary: When you go to buy airline tickets, or hotels, or you have to book a hotel room, or you, yourself, when you shop on Amazon … You might see dynamic prices depending on who you are. I think, at a big platform level, this is gonna happen, but I don't see somebody who has their own website set up for selling their product online is gonna dynamically price things real-time for their visitors to their website. I just don't buy [00:10:00] that. Blake Oliver: When you say dynamic pricing, you're saying that the price changes depending on who is going to the website and when they're going, right? Because I know that airlines have been doing this for a long time, where if you shop on the weekend for a ticket, you're gonna pay more than if you shop on a Wednesday in the middle of the day. David Leary: And if you've visited the site before and your cookies. There's all kinds of stuff. I don't think smaller players are gonna do that. I think big platforms are doing it, but I just don't see that coming down the pipe there. Blake Oliver: Yeah. Well, you know where it should happen and where it could easily happen is that [00:10:30] as busy season approaches, frickin' raise your prices. If somebody comes to you in March, they should be paying a lot more than somebody who comes to you in January to get their tax return done in April. Everybody should do that. David Leary: I think you're right, yeah. Then, the thing I didn't think of that I thought was interesting in this article was rental and "re-commerce" are gonna increase because there's so much sustainability push and then, ultimately, people just want lower prices. If you can get lower prices through buying something that's used, or possibly renting [00:11:00] something … I thought that was an interesting prediction that we're gonna see a big jump in used goods. Blake Oliver: Well, and a great example of that, which we've talked about before, is Rent The Runway, which is that company that lets you rent high-end fashion; you'll wear it for one night and then return it, and they can get 25 rentals out of a single item or something. David Leary: That was it for that article. That was my three things. Blake Oliver: Okay. David Leary: Do you wanna jump into one of yours? Blake Oliver: Yeah. Let's talk about RPA - robotic process automation - a [00:11:30] big term in corporate America. In small business, we don't use the acronym so much. We just call it automation. David Leary: Or we just call it Zapier. Blake Oliver: Yeah, Zapier. Donny Shimamoto, he's the founder and managing director of Enterprise Technologies, and he's been a guest on the show. He said, in an article in the Journal of Accountancy called “What to Expect in 2020,” that, “RPA is the technology that will have the greatest short-term impact on accounting,” and that's because it could be used by management accounting, by audit, and by tax. [00:12:00] I really respect Donnie's opinion, so I'm just gonna go with him on this one and say RPA is gonna be the big thing this year. It's gonna continue to grow the most, probably, and have the most impact of any technology. Like you said, for those who aren't familiar with RPA, Zapier is a great example of RPA connecting different systems and automating the flow of information; stuff that you might have had to key in manually before. There's also really sophisticated RPA software that are essentially like [00:12:30] macros that you would have in Excel but that can live outside of just a spreadsheet application. They can act like a person clicking a mouse and typing a keyboard, going in between apps. They use some artificial intelligence to be able to work like a human, follow detailed instructions, and kind of overcome some of the issues that an Excel macro couldn't. This is basically a more advanced version of that. David Leary: It's the ability for the common folk to do automation. Before, an engineer would have to do it, and I think it's coming down [00:13:00] to a level where an average accountant or bookkeeper can automate some tasks now. Blake Oliver: Oh, yeah. We're doing that right now in marketing at Jirav. We're connecting our Google ads to HubSpot, our CRM, and we're using Zapier to automatically create contacts. That's something that, in the past, I would have had to go and manually enter all of those, and we don't have to do that anymore; fewer entry level people needed. David Leary: Got it. Wanna talk blockchain? Blake Oliver: Oh, yeah, That was the big one for the past few years. It kind of hit the peak of the hype cycle, [00:13:30] and then it just fell off the radar, didn't it? David Leary: I feel like we talked about it all the time towards the end of 2018, and then we barely talked about blockchain for all of 2019. I feel like we barely spoke about it. This article is in the, “Blockchain 2020 – thoughts, comments and the future.” Blake Oliver: What is gonna happen with blockchain because there was all this doom and gloom about how it was going to automate audit, and get rid of auditing, and all that stuff? Still gonna happen? David Leary: That [00:14:00] was my "yeah, right". One of the predictions was, over and over again, the predictions were talking about, "This is the year of enterprise adoption. Enterprise is gonna adopt the blockchain." The words ‘enterprise adoption’ just kept coming up over, and over, and over, and over again, but it was a little gray, right? It was almost like [crosstalk]  Blake Oliver: Yeah, what are the actual applications of this? David Leary: I don't know. It wasn't clear, but that was the safe prediction - enterprise adoption. If [00:14:30] any of the Fortune 500 use some sort of blockchain technology at all, people are gonna say they're right. That one, I was a little skeptical of because I feel like enterprise just takes so long to adopt anything. Blake Oliver: There was one story last year that did catch my eye about blockchain and suggests that there is some progress being made in real-world applications. My old firm, Armanino, they created a tool called Trust Explorer 2.0. This was reported back in the end of October in Accounting Today. It's [00:15:00] an app that uses blockchain technology to provide a secure downloadable report which Armanino backs with its opinion. The idea is that if you can put it on the blockchain, then you can get an audit opinion from Armanino in seconds. That's kind of a cool application, right? David Leary: Yeah. Blake Oliver: It's not eliminating audit because Armanino built this tool, and they are backing it. So, if anything, it's allowing them to do an audit on a blockchain more efficiently. David Leary: Then, [00:15:30] my "duh" was regarding currency. There's gonna be government regulation and pushback against it from governments. The governments are anti-coin. They really are, ultimately [crosstalk]  Blake Oliver: Yeah, because it's an existential threat to fiat currency. If people decide that Bitcoin, or whatever comes after Bitcoin, or some other cryptocurrency is safer than the U.S. dollar, the U.S. government loses a ton of power over the global economy. David Leary: The U.S. government should just make their own Bitcoin [00:16:00] and the whole world just adopt it as a standard; it would be like that. That would be the smartest. Blake Oliver: There was a great article last year that we never talked about suggesting exactly that, that if the Fed really wanted to be on the cutting edge, that they would create digital dollars, a cryptocurrency linked to the U.S. dollar that they controlled. It would give them amazing powers like the ability to infuse money, in a financial crisis; instead of loaning [00:16:30] tons of money to banks and hoping that banks loan money to businesses and stimulate the economy that way, they could actually create an account for every citizen- David Leary: That’s true.  Blake Oliver: -and then infuse money directly into our accounts that way and skip the banks entirely, make the banks obsolete in that regard. They have, so far, just rejected any possibility of pursuing something like that. David Leary: Then the thing in that article that I didn't think about or opened my eyes a little bit is this whole concept of Internet of Blockchain. Essentially, the Internet of Blockchain [00:17:00] communication - separate blockchains will start talking to each other. Blake Oliver: Mm-hmm. David Leary: That's something to think about. Blake Oliver: Well, and continuing along with blockchain- I don't know if this is gonna happen in 2020; probably not; maybe over the next 10-20 years, but blockchain has the potential to disrupt Google's monopoly over information and could basically do … What the internet did to Microsoft, cryptocurrencies or crypto networks could do to Google, in that you have [00:17:30] this open database of information that doesn't get controlled by one algorithm or one source, such as Google. That's the potential long term of blockchain, if we're storing information beyond just financial information on a blockchain. David Leary: Yeah, and I think that's one of the big problems with blockchain is this decentralized approach. The problem is we've grown … The whole history of the world is about centralizing power. The natural order of the world has never been about [00:18:00] equal distribution of power. Essentially, it's all centralized. Blake Oliver: The problem with this theory that you can create a completely decentralized blockchain and have it succeed is there's a lot of hubris involved in that because that means that you've written it perfectly. That would be like imagine if the founders of our country had said, when they wrote the Constitution, that, “This Constitution can never be changed, and you can never amend it because it's perfect the way it is.” [00:18:30] In a lot of ways, that's what a blockchain algorithm is like, if you don't have ways for people to change it. Currently, the only way to change Bitcoin is to break off from the network and split the chain, which has happened before- David Leary: Then, everybody wants people to use my Bitcoin; David's Bitcoin instead of Blake’s bitcoin, and it's like … Which is centralizing onto one chain. Blake Oliver: That would be like if the only way to change the U.S. Constitution was for us to split into two countries and then, people have to decide which one they're gonna join. [00:19:00] David Leary: That's what churches do, right? When churches wanna … They can't agree on a change, they just split the church [crosstalk]  Blake Oliver: Right!  David Leary: -believe the one set of beliefs, they go one way, and the other one … Yeah. Blake Oliver: Yeah. David Leary: Churches are blockchains. Blake Oliver: I don't know. You need some sort of authority to manage a blockchain, I think, in theory, because it's not perfect, and there's gonna be changes that need to happen. That's one of the big problems with blockchain right now, is that if- or Bitcoin in particular, is if you make a transaction, and you screwed [00:19:30] it up, and let's say you sent money to the wrong wallet, or somebody steals money from you, there's no way to reverse those transactions. There's gotta be some sort of balance here. Can you have the protections of fiat currency that the banking system provides, while also having the flexibility, and openness of a blockchain? I think that's enough about blockchain, right? Should we-  David Leary: Yeah. Blake Oliver: How about I pick the next one? David Leary: Okay. Blake Oliver: Let's talk about a trend that isn't going to impact us very much that … I don't know why people are talking about this so much - 5G. I keep hearing 5G, 5G [00:20:00] is the next big thing for mobile technology, right? We had 4G. I think everybody's on 4G right now, right? 5G is somehow gonna change the world with greater speed, and all this stuff. David Leary: The next article I was gonna go to about, “What's Next for Gadgets in 2020,” and that was one of my "duh" - 5G phones are everywhere, but 5G networks are nowhere. Blake Oliver: This, specifically, was called out as a big technology to expect in 2020 in the Journal of Accountancy. Rick Richardson was quoted, "2020 [00:20:30] will be a breakout year for 5G, as handset manufacturers begin to make a 5G chipset standard equipment."  Okay, so it's gonna make cellular data transfer as much as 100 times faster than current 4G networks, but how is that really gonna change accounting and auditing? I mean, my 4G phone is plenty fast to do what I need to do as an accountant, and I can do video chat and conferencing and all that stuff.  Here's another quote from the article, "Faster, more [00:21:00] efficient broadband connections are essential for the real-time data connections needed to power continuous auditing and KPI dashboards that provide live results and analysis." Tell me how 4G is not fast enough to do that right now. I mean, the problem isn't that we don't have enough speed; the problem is that people just aren't using the tools. David Leary: I read that you can do cloud accounting from an airplane now, so ... Blake Oliver: Right. Yeah, we've got satellite internet. When I fly Alaska Airlines going up to Seattle, I can get 20 megabits per second. That's plenty fast to do what I need to do. David Leary: As [00:21:30] an accountant [crosstalk] bookkeeping type stuff. Blake Oliver: Yeah, 5G has big potential for self-driving cars, and all that stuff, but we're talking about accounting, auditing, bookkeeping.Hi, this is Blake. This episode of The Cloud Accounting Podcast is sponsored by Jirav, my employer. Jirav sounds a lot like "giraffe" – and that's no accident. Giraffes are the tallest animal in the world. That gives them a great view. Our goal at Jirav is to give you a similarly great view of what's going on with your business.  We do that by helping you understand where your business has been and, most importantly, predict where it's going. Jirav connects your cloud-based accounting, payroll, CRM, and billing data together to automatically update sharable online dashboards, monthly reporting packages, and sophisticated financial plans and budgets in real time. If you're using Excel for reporting and forecasting, you'll save hours every month with Jirav.  Learn how accounting firms are using Jirav to deliver connected insight, strategize growth, and help their clients make more profitable decisions. Visit and start your 30-day free trial. That's J-I-R-A-V dot com. See farther with Jirav.David Leary: This is in the magazine called- or website called “Here's What's Next for Gadgets in 2020.” Yes, 5G phones is one of the "duh" that's everywhere. Then, somebody in that article predicted that the streaming TV wars are gonna be here. Come on, how hard was that? [00:23:00] Blake Oliver: It's already here. David Leary: It's so obvious. It's here. That was a really obvious one. The thing I didn't really think of a lot is – it's two words – folding and rolling. You're gonna see screens, phones, tablets, TVs- TVs that roll. Think about shutters. Blake Oliver: Roll up? David Leary: They'll go up out of a box on your table, or they'll pull out of your ceiling. Screens are gonna be folding and rolling this year. We’re gonna see that.  Blake Oliver: Okay. I mean, we had the whole folding [00:23:30] screen fiasco last year with that phone from- was it Samsung that tried to do the folding phone that didn't work? It kept breaking. David Leary: That was just one phone. Blake Oliver: Yeah. David Leary: We're gonna see hundreds; hundreds of devices that fold and roll this year. Blake Oliver: Interesting. David Leary: You’re gonna see … That's gonna be everywhere. That's gonna be a big one. Then, the "yeah, right," was a lot of predictions about this is the year of smart home security. My "yeah, right" about that is most- every time you turn around, those smart home security devices, [00:24:00] Ring doorbells, et cetera, are getting hacked. Blake Oliver: Oh. David Leary: It seems crazy. You're gonna bring in a "security device" that’s more hackable than any other device in your house. It's the most hackable device. Blake Oliver: Yeah. David Leary: Nobody can hack your toaster yet; nobody can hack your refrigerator; but they can hack your doorbell. Blake Oliver: I'm okay with having the doorbell; just don't be stupid and use a very hackable password on your doorbell. I would never put a smart security camera in my home, like a Ring security camera. I just … That's beyond … [00:24:30] I'll do a smart speaker, that's okay, but a security camera? No way. David Leary: Yeah, I just don't buy- I think the tech nerds are gonna buy that smart security stuff. There's gonna be enough hacks, but I think the average person's just gonna get creeped out by it and not do it. I just don't see the explosion of smart home security yet because there's a fundamental flaw that those devices need usernames and passwords; they're calling home on the internet; they're connected to Wi-Fi.  There has to be a smart home security that's not connected … Maybe that's where 5G comes in? I don't know, but they're fundamentally [00:25:00] flawed. A security device is fundamentally flawed if it's dependent on your username and password, which everybody knows your username and passwords suck.  Blake Oliver: Let's talk about practice management. That topic also covered in the Journal of Accountancy's 2020 predictions article. The trend toward hiring non-accounting graduates at CPA firms is expected to continue, as firms seek the expertise of technology specialists. We've discussed before how non-accounting graduates consisted approximately [00:25:30] of 31 percent of all new graduate hires in public accounting in 2018, which is an increase of 11 percentage points over 2016. Dramatic change there. That is expected to continue.  The CPA license exam curriculum in schools has not, thus far, adapted to the new reality of what it means to be a CPA firm, so non-accounting graduates are needed. We need skills beyond accounting. Now there is that project going on [00:26:00] at the AICPA to change the curriculum, but I am not predicting that's gonna happen any time soon. They're still collecting commentary. I don't think that's expected to complete …  The proposal- The draft proposal for the changes is gonna happen this year, but that's just the proposal. Then, there's the years and years of actually making the change happen with the exam, and then there's the years and years of actually making the curriculum change happen, so that might be a 10-year kinda thing. Expect to see more non-accounting graduates in CPA firms [00:26:30], and really good career opportunities if you are a CPA who learns those skills that are missing from the license right now.  There's a quote from a firm in Chicago, Lauterbach & Amen, LLP. It's a mid-sized firm. They have decided that one in every four new hires needs to come from outside the traditional recruiting target population of accountants and CPAs. The non-traditional recruits are sought for their technology and data analytics expertise and also for skills such as project management, financial services, [00:27:00] and forecasting. They have made that a deliberate recruiting goal is to make sure– David Leary: I am now the perfect accounting firm candidate. Blake Oliver: Oh, you are, yeah, if you wanted to go do that to yourself. David Leary: I am not from the traditional background in any way, shape or form, but I am the ideal candidate of 2020 for accounting firms. Blake Oliver: Yeah, exactly. Although, accounting firms are notoriously ageist when it comes to hiring staff, so you might be out there. They only want those fresh- David Leary: I'm too old? Blake Oliver: Yeah, basically. They want the fresh college graduates who [00:27:30] don't know any better and are willing to work 60 to- hours a week for no overtime. David Leary: Oh, all right. Well, all right. You smashed my dreams for 2020, I guess [crosstalk] I have an accounting-related one-   Blake Oliver: You don't wanna fill out a time sheet do you, David? David Leary: No [inaudible]  time clocks. I have an accounting-related one, as well. Blake Oliver: Okay. David Leary: This is a blog post on LinkedIn, “The Accounting Profession and Accelerating Technology - the End to Many Firms?” My "duh" of the article was "the profession does not like change". I [00:28:00] was like, "Really? That was kind of obvious." My "yeah, right", and I'm gonna read this straight out, "The combination of big data and machine learning is driving a plethora of new data analytics tools that, frankly, can be used by anyone. Therein the issue, the do-it-yourself threat.” I think that's "yeah, right" because the do-it-yourself threat's been there for 25 years already with QuickBooks, et cetera. I don’t-  Blake Oliver: And TurboTax, right? David Leary: This "used by anyone" is just crap. Blake Oliver: Yeah. David Leary: I just don't buy that. The [00:28:30] thing I liked about that article, though, is he used an acronym that I thought was really cool. It probably applies really well to accounting firms is see the risk of SALY - S-A-L-Y - mindset, and that's ‘same as last year.’ Blake Oliver: Yeah, well, because if you keep doing it the same as last year, you're never gonna change. David Leary: I've never really seen that referenced as a mindset- or as an acronym, so I kind of like that one, going forward. Blake Oliver: It's a great analogy, or acronym that represents the mindset of the profession because it's [00:29:00] how accountants learn to work. When they go into a firm, this is how you learn. You look at what happened last year, and you're instructed to copy it and only make changes if necessary because that's the easiest thing to do. That way … People don't learn. They keep repeating bad processes. It's endemic to the profession because that's the way we learn to learn. David Leary: Let's stay on accounting. I have one or two other articles we could jump in. I don't know if you have any more accounting predictions? Blake Oliver: I do have [00:29:30] some more predictions. Let's see here. Let's talk about millennials. There was a lot of chatter about millennials over the last couple years, and 2019. I think we have hit peak millennial content, or topic, or derision. It's kinda over, so hopefully this will be the last time we talk about this.  This was an article by Jim Boomer on the Boomer Consulting Blog, “Four Things Millennials Want From Your Firm.” I liked how he talked about flexibility. That was one of the things that he said millennials [00:30:00] want. In recent years, millennials have become the face of the shift toward remote work. In a survey from American Express, 70 percent of millennial workers in the U.S. indicated that they want their work environment to be "flexible and fluid" rather than enforcing a rigid structure on employees.  Flexibility offers several benefits for employers, blah, blah, blah. Basically, the 8 to 5 office hours don't work with millennial employees, and firms should be offering more flexibility. So, offer some core hours; don't [00:30:30] require people to be in 8 to 5; maybe you do 10 to 3; let them start later or leave earlier. Hey -  and I'm adding this -maybe don't even require them to come into the office every day. Don't focus on overtime hours, focus on results. That's gonna continue to be something that firms have to change. They have to become more flexible. David Leary: That makes sense. Blake Oliver: Maybe that's kind of a "duh" thing at this point, David. I felt like Jim Boomer [00:31:00] expressed this very well; in addition to some other things, like, we need more stimulating office space, a sense of community. The last thing is the ability to not have to wear a suit every day to the office; let them dress flexibly for their job. David Leary: Yeah, with their torn up jeans or their- what's it called? Fast fashion! Blake Oliver: Fast fashion? David Leary: Fast fashion is the … It's like fast food but clothes, right? Blake Oliver: Yeah, exactly. David Leary: This is an article from Xero that was in the It's, “Four Accounting [00:31:30] Trends That Will Shape 2020.” The "duh" was pesky data entry will be gone. I'm like, "Yeah, it kind of already is." You put everything through Receipt Bank, AutoEntry, or Hubdoc, and you're not actually doing-  Blake Oliver: You could do that five years ago. It's just getting better and better, yeah. David Leary: My "yeah, right" was open banking. Okay, I'll give it credit. Yes, open banking in the UK and AU, for sure, but in the U.S., we're not seeing open banking [00:32:00] in 2020. Blake Oliver: No. David Leary: If we see it by 2030 … We'll be celebrating if we see true open banking in this country. It's gonna take a long time to get here. Blake Oliver: It's gonna take legislation, and that's what they have in Europe. The EU has a law called PSD2, which is like GDPR for payment data. It forces banks- large banks have to make consumer data available to any fintech, which the consumer permissions.  That would be like Bank [00:32:30] of America- I, as a customer of Bank of America, could say, "Bank of America, you have to make all of my banking data available to Venmo." That's a big deal, and it would take a law here in the U.S. for that to happen. We can expect to see payments and banking get more and more advanced in Europe. Maybe that'll stimulate regulators here to make changes, or lawmakers, even. David Leary: That part of that post that I didn't really think of or I wasn't aware of - it's a little specific because it deals with Brexit – but it's Brexit will essentially cause cashflow pains [00:33:00] for small businesses and clients, and they're gonna need help to address that. If you have the opportunity to come in as the adviser and understand how to solve those problems … But there are gonna be new problems that didn't exist before strictly because of Brexit. Blake Oliver: This is sort of like a predictions article. It's about the critical issues facing the accounting profession. Accounting Today asked their Top 100 Most Influential People, including you and me, David-  David Leary: Oh!  Blake Oliver: What is the most important issue currently facing the accounting profession? [00:33:30] Then, they took all those responses, which I didn't realize were gonna become public - I thought that was just part of the application - and posted them for everyone to see on a blog, and it's a lot- David Leary: I hope I gave a good answer. Blake Oliver: Actually, yeah, I didn't read yours. Let me go check it out. Let's see what David wrote. You said, "The struggle to show clients the value that they, as professionals, provide. As more hourly billable work gets automated to the point in which there isn't much left to bill for, clients are gonna start asking, “What am I paying you to do if it's all being done automatically?" That [00:34:00] was your top critical issue facing the accounting profession.  I said- I just kept mine very short, "As with many jobs in America, and around the world, automation is the biggest threat." I didn't read every single response. It’s 100 responses. It's a giant article. So, to automate that, I made a word cloud of the keywords that people used in their responses to see if there are any trends. David Leary: You just created our cover art this week Blake Oliver: Yeah. David Leary: That's gonna save me some work [crosstalk]  Blake Oliver: I’m gonna save you some work here.  David Leary: I can just use that as our cover art.  Amazing. Perfect. [00:34:30] Blake Oliver: Here are the top words. Technology was the most frequent word; then change; then clients; then tax, audit, talent; and then a bunch of other ones – management, models, partner, processes, people, succession, value, future, compliance, consulting data, automation, advisory, adapt.  You get a feel there, though, especially with those top words - technology, [00:35:00] change, clients, tax, and audit … Technology is changing how we work with clients is how I would stitch those together, when it comes to the world of audit and tax, most specifically. That's the trend. It's not just us saying that, right? That's the Top 100 Most Influential, according to Accounting Today. David Leary: Good, good, good. I have two more accounting-related ones, and then we can get back into fun things like creepy applications, and the such. Blake Oliver: All right, cool. David Leary: This is out of It's an article from [00:35:30] Down Under. It's, “Further Changes Expected in Accounting in 2020.” My "duh" in that article was that accountants will have more available to them than ever before. My "yeah, right" was that clients want to be inspired and led by their accountant. Do you buy into that? Blake Oliver: Clients want to be inspired and led by their accountant? Uh, no … I think clients want an accountant who will be responsive, who will get them the information they need, give them the opinion [00:36:00] that they want. I don't want to be inspired and led by my doctor; I want my doctor to tell me what I need. That's different. I come to them with a problem, and I want them to give me the options, and tell me what they recommend. David Leary: Yeah. I felt like this would be the dream as an accountant, "All my clients come to me for inspiration," like that would be the … I just don't buy it, yeah.  Blake Oliver: That's not for accountants; that's for business coaches. That's the whole coaching industry. Accountants [00:36:30] should not be coaches. It's a totally different mentality and personality. It's not for us. If you're an accountant who likes to do coaching, you're in the wrong business. You should be doing something else. David Leary: One thing I liked about this article, it got really specific about how accountants will survive "the media extravaganza that AI and bots will replace your job," but really, the belief is while technology will do the heavy lifting, it doesn't mean that accountants will work less. The accountants will still have work to do, it's just the [00:37:00] heavy lifting's gonna be done by AI and bots, et cetera.  Blake Oliver: Well, it's like that Google algorithm that's now checking out mammograms and does a better job than doctors. It's going to allow radiologists, the good radiologists, like the top 50 percent, those above the average, to do more because now they can use the algorithm to check their work, and we can basically get rid of all the crappy radiologists, right?  Same thing with accounting. You can get rid of the crappy accountants, and the ones who are really good can do double the work, or triple the work … In my case, [00:37:30] it was four or five times the bookkeeping work that I could do before. David Leary: It’s amazing. Blake Oliver: Yeah, so it's really good for some people; the people who are listening to this podcast, most likely, right? But it's not gonna be good for the people who aren't. David Leary: I have one more last accounting one, then we'll get into some fun, crazy stuff like creepy applications, and AI, and voice, and all that type of stuff. This is an article in, and it's, “Regulators Eye Accounting, Audit Changes for 2020.” To be honest, Blake, I read this article, and I looked at it, and I looked at it, and there [00:38:00] was nothing I could form an opinion of like "duh," or "yeah, right," or "I didn't think of that." I was just … I'm not saying it was a pointless article, I just struggled with it. Blake Oliver: That makes sense to me because the accounting regulators aren't really doing all that much. It's not that significant. We talked about this last week - the big thing they're gonna be working on over the next six months is deciding whether or not to allow public companies to amortize goodwill on [00:38:30] their balance sheet over a period of time rather than having to do a valuation every single year, and then decide if goodwill is impaired. This is just not important stuff, if you ask me. I mean, hey, I'm not a Big Four accountant guy, and I've never audited big public companies, but it kinda seems like they could be working on some more important stuff. This is the reason why accounting has become less and less important, when it comes to investors. We've made accounting complex. [00:39:00] We've made GAAP four or five times more complex than it used to be over the last few decades, and it doesn't provide, really, that much more useful information. It's just all kind of meaningless. I feel like that feeling you got, when you read this article, is the feeling we should all get when we look at what FASB is doing. It's just a bunch of people who love GAAP making the rules more and more complex. I think the people at FASB are the people who like to play those really complicated strategy board games that take five hours to play. David Leary: Like the Settlers of [00:39:30] Catan and those types of games. Blake Oliver: Oh, Settlers of Catan is just entry level, man. We're talking Axis & Allies … These games with 10,000 pieces and stuff like that like; a giant rule book … That's the kind of people running FASB. David Leary: That sounds boring. Let's do some fun things. Blake Oliver: I hope I didn't piss off any of our listeners here, but if you disagree with me- if you think that the work that FASB is doing is valuable and is making a difference in the world, let me know. David Leary: All right. This is like a pick your poison - voice, virtual [00:40:00] reality, creepy applications, AI, fintech. What do you wanna jump into? Blake Oliver: What about AI? David Leary: AI, okay. Voice AI, or just AI, in general? Blake Oliver: Yeah, include voice in there; AI, in general,  yeah.  David Leary: All right. We'll try to jump on both. Okay, so I have an article from Forbes. This is, “120 AI Predictions for 2020.” So, 120 predictions, right? I kinda had to really summarize the theme of this article to some extent. Chatbots are everywhere; that's [00:40:30] the "duh". Yeah, duh - every website you go to there's a chatbot, these days.  The "yeah, right" - this one I thought was really interesting. In 2020, AI will dramatically improve the employee experience. The ability to automatically and instantly collect data from across multiple channels, analyze it, and provide actionable insight that will enable support agents to more quickly, easily, and accurately address customer inquiries that come to highly satisfactory issue resolution. Blake Oliver: That's a big, bold claim.  David Leary: The reason I think [00:41:00] it's "yeah, right" because if all of these things were working correctly, and collecting data, and speaking correctly, you, as the customer, wouldn't need to contact anybody because you'd have access to the data, and you'd get your answer already. Blake Oliver: Right. David Leary: Right? This is total crap, so that one I didn't buy. The thing I didn't think of, which I thought was interesting is, right now, we live in this world where – we talk about it all time – there's apps, right? People are buying apps, and software, but the prediction here is they'll just buy the AI - one small piece of software, or logic, [00:41:30] or AI that detects one small thing, like, maybe when a toaster's gonna break. You're just gonna buy that one teeny micro sliver; it's not even an app, it's just a piece of AI. I thought that was interesting that we're gonna start seeing AI for sale at that level. Blake Oliver: AI for niche applications versus some AI that's gonna be able to understand a million things? That actually goes to voice AI, right? Our smart speakers in our home … We've talked before about how they're really dumb, and people are just [00:42:00] using them for playing music and setting timers. It hasn't gotten good enough to where people can actually have a conversation. You have to know specific commands. It's gonna take longer than 2020 to make this work well. David Leary: Well, I have an article about, “Voice AI 2020 Predictions from 46 Voice Technology Experts.”  Blake Oliver: Is it gonna get good? Is my Alexa actually gonna become smart? David Leary: Okay, so, I don't know. One of the things was voice will dominate search in the car. It's like, [00:42:30] "Yeah, of course," right? Blake Oliver: How else are you gonna search? David Leary: That wasn't much of a prediction, right? So, that was kind of an easy one. The "yeah, right", so do you know who Jony Ive is? Blake Oliver: Yeah, the former chief designer at Apple, right? David Leary: Legendary designer, now, right? In the grand history of the world designer, right? Designed the iPhone, designed the MacBook Pro, et cetera, et cetera, et cetera … Well, the prediction is that the Jony Ive of voice will emerge, and voice UI will be amazing this year. Blake Oliver: I think that is not gonna happen this year. [00:43:00] It's just too much of a [crosstalk] gap. That's the thing, for voice AI to get better … I mean, I can't even ask good follow-up questions of my Alexa. I had a conversation with her this morning. I think I asked her to repeat something that she had just said, and she couldn't do it. She's like, "I don't know what you're talking about … " Like, "You forgot the conversation we were just having?" David Leary: This is the prediction that could help you with this. There was one prediction that I saw that I was like, "This is genius. Why didn't I think of [00:43:30] that?" is you get to teach your own device. Instead of, right now - we talked about this in the past - recordings of what you ask Alexa are going off to India, the Philippines, or some other countries. Somebody's listening to that and then trying to teach the device what you tried to talk to the device about, Blake. What if you could just teach the device? Like you were talking about a couple weeks ago, you wanna turn the lights on in your hallway but not your living room. If you could just have some control and teach your own device about the context in your house- Blake Oliver: That would be great. David Leary: -that, I think, is a very interesting prediction in 2020 that we can actually teach [00:44:00] our stupid devices the things we need them to know because you really only need to teach them five or six things, and then you'll be super-happy with that device. Blake Oliver: Well, that would be a much more amazing experience because I've talked about … I control my lights with my Amazon Alexa in the house. I had to go and program every single light into my phone and then set specific names for every device in my phone before I could actually use any of the voice commands. I should be able to just set that up via voice. I should say, "Alexa, this light over here is called this," and [00:44:30] it should just walk me through it in a conversation. David Leary: Maybe that's something that these big companies are missing on, like people need to be able to … Maybe the pendulum's gonna swing back to you get to control your tech devices here a little bit more and not depend on these other companies to control your tech. Blake Oliver: We're running out of time here today. I think you said, David, that you had some predictions, in addition to what we just talked about? David Leary: Yeah. Let me just scan, really quickly, these last articles, and make sure there's nothing I don't wanna miss out on. Nothing exciting in VR, I don't think. Blake Oliver: No, continue to [00:45:00] make people throw up; that's what it will do … At least me, anyway. David Leary: Yeah. The one thing I liked- this was on This was an article from Gene Marks, “Four Creepy Applications That Will Change Your Business in 2020.” The "duh" was apps that track your field salespeople, and I'm like, "Yeah, of course. Field service apps have been out there tracking the field service people for years," right? Blake Oliver: Gene said that because his firm implements CRM systems. David Leary: The "yeah, right" is there's software [00:45:30] that watches how your employees are using apps, and that's gonna suggest better ways for them to use them. I just see a rebellion happening internally at companies; tracking every single click I'm doing in every single app and then reporting that up to management - that seems kind of ridiculous. Blake Oliver: With the new California privacy law, in California anyway, or if you have employees in California, you have to tell employees that you're tracking them and what you are tracking. David Leary: Yeah, we talked about that in the last episode. The thing I liked about this article, or that I didn't think of fully, is this concept of augmented writing, and [00:46:00] it really makes sense. If you think about it, first, we had spellcheck; then we had autocorrect; and now, keyboards are doing words suggestions; to the next level of communication suggestions … Like you start your paragraph, it knows where you're headed, and it just finishes the paragraph for you. It's augmented writing. Blake Oliver: This is one of the best AI implementations that has helped me in the last year. Do you use Gmail, David? David Leary: No, not regularly. Blake Oliver: Okay. This is now in Gmail. If I'm typing in Gmail and I've enabled this feature, it will, [00:46:30] as I'm typing, in a lighter gray text ahead of my cursor, suggests the end of my sentence. David Leary: Wow! Blake Oliver: More often than not, I can just hit tab and it finishes my sentence for me. The more that I do that, the more it learns how I like to finish my sentences. Often, I can just type a few words, especially if it's a welcome, or the beginning of the email, or the end of the email where it's pretty standard, and it just knows what I want to say, and I just hit tab.  On the mobile device, they've also got these quick responses. At [00:47:00] the bottom of every email, instead of having to hit reply and then type my response, I get three choices. I can say … It'll say like, "Okay, thanks, or I'll be right on that," stuff like that. Like short answers to questions. I can just hit that button, and it sends email without reply. Google's already doing this, and it's really good-  David Leary: So, we're gonna see this more mainstream this year. Blake Oliver: Yeah. David Leary: That's actually exciting. It's one of the more interesting things I saw. I have three more articles, but there's not really any major takeaways. The one that really made me say, "Hmm" and that probably affects our industry a lot is … [00:47:30] There's a [inaudible] talking about how about how big tech is coming for banking. Experts are predicting fintechs 2020. The interesting one I saw was this concept of other players getting into fintech that we would never think of. The example they brought up was Netflix. Blake Oliver: Netflix and fintech. David Leary: Netflix is already producing movies and television shows. They're writing big, huge checks for [00:48:00] $40-$50 million dollars for a movie or a TV show, whatever they're purchasing, right? They could just pay all the subcontractors. They could just create their own accounting and payroll system for subcontractors and manage the whole process. I was like, "Ohhhh … "  Yes, we're gonna see more players. I think we talked about that once this last year. Everybody wants to be a bank. That's another example of this. Netflix could actually just circumvent all these other players in the middle and just start paying. "Oh, you have actors. We're gonna pay your actors [00:48:30] and actresses, too, and the sound guy, and the editor, and everybody else down the whole chain." They'll build, and track, and they'll create some ecosystem-funnel app to do all this. Blake Oliver: Your average consumer doesn't want to have to open up a bunch of different apps to do finance activities. They want it in one place. They want consolidation. That's why you see Facebook trying to do Libra, and you see Apple doing Apple Cash.  We're gonna see more and more of our phones, the social media embedding [00:49:00] finance into those apps because that's where people wanna do it. I love it. If I need to send money to my father-in-law, I just open up a text message, and I send him the cash in the text message because we're both on Apple devices. It goes straight from my Apple Cash balance, or from my credit card, or bank account, to him. David Leary: That's a perfect transition into my prediction. I'm gonna give my prediction for this year. Blake Oliver: Okay. What's your prediction? David Leary: My prediction is the lines are going to get blurred [00:49:30] and crossed more than they ever have. Examples of this is, you have, right?, historically, has always been payments. Now they have some AR involved; but they've gone public. They gotta keep growing. So, maybe they have a credit card come out. Receipt Bank; they have a Receipt Bank purchase card that comes out. Maybe QuickBooks launches a credit card; maybe Practice Ignition now gets into practice management. A lot of the credit card players, or spending [00:50:00] card type players, they're getting into bill payment now.  Everything's getting very gray, and I think you're gonna see this- more competition than ever because people aren't staying in their lanes anymore because they wanna keep growing, so they keep adding more features. I think, with that, you're gonna see more competition than ever. I don't think the competition's just gonna be for these apps. I think you're gonna see competition for QuickBooks and Xero at levels. I mean, we've talked about Square in the past … I think some of these other apps they're gonna … If you're owning the workflow of all the inbound payments, and [00:50:30] the expenses, well, just add GL, and now you're a competitor to QuickBooks. I think you're gonna see competition at a level we have not seen before, and it could actually help prices, right? Blake Oliver: Oh, yeah. David Leary: It could help drive prices down. I don't think it's gonna be a QuickBooks versus Xero world. It's going to be a QuickBooks and Xero versus everybody else world type of thing. I'm not saying that they'll be a team, but I think it's a different world. QuickBooks and Xero are gonna have to not focus on each other, and they're gonna have to focus on 40 other companies. Blake Oliver: Interesting. My prediction for this year is that either [00:51:00] QuickBooks or Xero, one of the GL apps - or maybe Square … I mean Square's essentially already done it - is gonna create a bank. They're gonna become a bank. I could totally see Intuit doing this, where when you sign up for QuickBooks, you get a bank account, and it's already integrated, and it's integrated to the point where it's just perfect. You get all the information you could possibly want out of that bank feed because it's integrated, and Intuit partnered [00:51:30] with a bank that does it, or it's gonna be Xero who does that or something. David Leary: Yeah, because then all the data just moves perfectly. Kind of like, right now, with QuickBooks Merchant Account Services, right? Blake Oliver: Right. David Leary: People like that and pay a little more for it than they do standard services because the data just gets in QuickBooks. You don't have to ever think about. It's perfect. Blake Oliver: Well, and QuickBooks is already offering loans, so why wouldn't they wanna have access to the data at an even more granular level? It's so sticky, too. Once you have somebody using your banking services … I don't know, [00:52:00] it just seems natural to me. I mean, if they're gonna go to the trouble of doing QuickBooks Live, it seems like a fintech partnership like that would be natural, too. David Leary: Yeah, and you're right. Maybe as more players try to become more like QuickBooks and Xero, QuickBooks and Xero are like, "Okay. That's fine, but we're gonna go play in a new pool. We're gonna go become banks too," right? To stay a step ahead of all this competition … That's true, that's coming on.  Then, the easy one, and you can title this to the episode if you want - Xero and [00:52:30] Sage will have to launch some sort of Xero Live or Sage Live type product to compete with QuickBooks Live. Mark my word - that will happen in 2020. It has to happen. Blake Oliver: I disagree with you on that one. We're gonna agree to disagree, I think. I feel like it's a competitive advantage now for Xero, and for Sage. Why would they then … If they can use this to peel off accountants from Intuit, use it. Don't become like Intuit then. It's a differentiator. David Leary: What if QuickBooks uses it as their differentiator against Xero in Australia? I mean, it's free, "Hey, you get [00:53:00] a free bookkeeper with your QuickBooks in Australia," to go after market share. Blake Oliver: They might. I mean, they did that whole, like, making QuickBooks almost free, it was so cheap, right? David Leary: Yeah, it's like 10 bucks or something, yeah. I think it's super-super-cheap there, yeah. Blake Oliver: That could be. I don't know. It's different. See, this is the thing that these big companies sometimes fail to understand is that these markets are very different. Australia and New Zealand, business owners are much more likely to go work with an accountant when they start their business; whereas here, entrepreneurs are [00:53:30] much more like go it yourself, do it alone, kind of do-it-yourselfers, and it's a very different mentality.  That's why the accountant channel in Australia and New Zealand is so important, and here, it's not, for selling software. Here, you can go direct, and that's what Intuit has done for a long time, and the ProAdvisor channel is really secondary to them. That's why they can do QuickBooks Live and not threaten their major business because their real customers are business owners, their major customers. I'm not saying that … Obviously, it's a huge [00:54:00] business, and accountants are important to that business, but not as important as the business owners. David Leary: In summary, I think our predictions are … Yours is one of the big GLs – Square, or QuickBooks, or Xero – is going to become a bank. Blake Oliver: Or maybe one of the banks buys one of the GLs and integrates it, right? We're gonna have that fusion of fintech and accounting software. David Leary: I mean, banks are buying some of these little podunk … Podunk's not the right word … Some of these cloud-accounting [crosstalk] that are out there, that-   Blake Oliver: Yeah, these are potential sponsors, David …  David Leary: But some of these ones [00:54:30] that nobody's heard of, right? Even you and I don't even know the names of some of these cloud-accounting packages that have been purchased by banks, so banks are doing that. I think that the prediction is a major thing's gonna go down; a very major shift in this will happen. Blake Oliver: I wouldn't be surprised. Awesome. Well, this was a really great, fun episode. If people wanna get in touch with us and complain, comment …  David Leary: Send us your predictions. Blake Oliver: Yeah, send us your predictions. You can reach me on Twitter. I'm @BlakeTOliver, or you're [00:55:00] welcome to email me at David Leary: I'm on Twitter as well, @DavidLeary, and you always can email me, but Twitter's the best. People have to get to their point. Blake Oliver: That's right. If you want to do us a huge favor, leave a review. Where can people give us a review, David?  David Leary: If you're on Apple, you're an Apple person, you can go to Apple Podcasts and do reviews there. For everybody else who is not an Apple person, you can go to and leave reviews there. Those Podchaser reviews start showing up in other players, so you [00:55:30] can leave your review in one spot, and it shows up on other sites. It’s great.  Blake Oliver: If you wanna combine your commentary with a review, you can leave a review, tell us what you think, and we will read it on the air. David Leary: Kill two birds with one stone. You could put your prediction in your reviews so the whole world will see it. Blake Oliver: I would love that. David Leary: That's a good idea. Blake Oliver: I would love that. David, until next week, it was great talking with you and have a great 2020. David Leary: And on to the future! 
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.  
Next Level Women Leaders 🎙 Live at QuickBooks Connect
SponsorsIntuit QuickBooks Notes 00:57 – Meet the women behind Next Level Women Leaders - Stacy, Nancy, and Laura! 01:49 – Next Level Women Leaders focuses on helping women align who they are inside with how they appear on the outside 03:09 – Women tend to absorb the stories we're told growing up, along with the cultural expectations when creating their own stories 04:40 – In the accounting world, women have the dual challenges of finding their own value, as a woman, and as an accounting professional 06:23 – How do we fix the imbalances?  06:56 – Establishing personal values is the foundation for creating the most fulfilling path in career and life 07:45 – Momentum happens wherever you're at 08:31 – We all, men and women, need to get back some of the hope we had before we grew up 09:28 – Go here to hear what else Jina has to say about diversity  12:30 – It was actually Episode 124 – Our discussion on women CEOs and women-led companies  13:15 – These Next Level women define success  14:59 – So many people compromise their own values so they can fall in line, instead of carving out their own space 16:39 – As more women find their power, and voices, the better off we all are 18:14 -- We get the elevator version of a Next Level Women Leaders two-day workshop 21:41 – E&Y has yet to get on board with allowing women to define their own style | HuffPost 22:48 – The Next Level founders took their belief in each other and the impact it made on them, as individuals, and combined forces to start sharing that powerful force with other women 23:58 – Don't toy with me - we talk about the, still, lack of diversity in the world of toys  Connect with Nancy, Stacy, and Laura Nancy Buffington, Owner, Nancy Buffington, LLC LinkedIn: Website: Stacy Ennis, CEO & Founder of Creatively, LLC LinkedIn: Twitter: Website: Laura Tully, Wardrobe Styles and Owner, Laura Tully, LLC LinkedIn: Website: Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! Sadly, we do not have any 2020 travel plans as of yet.    Limited edition shirts, stickers, and other necessitiesTeePublic Store:  Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast:   Episode Art Photo Credit: Will Farnell TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you.Stacy Ennis: And I think a lot of us lose that - men and women, young and old; we lose that hope so early in our lives. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Stacy Ennis: I'm Stacy Ennis. Nancy Buffington: I'm Nancy Buffington. [00:01:00] Laura Tully: I'm Laura Tully, and we're from Next Level Women Leaders. David Leary: Next Level Women Leaders ... We are here at QuickBooks Connect in San Jose, 2019. We are recording live. All of you are on the QuickBooks Connect speakers page, and I start poking around because I'm like, what makes a good podcast? What's interesting? Usually it's like, "This one'll be interesting; something I don't know a lot about." I start drilling down on everybody's profiles, and I noticed all of you were founders of the Next Level Women Leaders. Me [00:01:30] being a father of a powerful 13-year-old girl, who's- she's the president of her school, and she's very career-focused, and very driven, and very strong-minded ... Why is there a need for a communication platform and leadership training for women? Why does that need to exist, or why'd you found that? Stacy Ennis: Well, we started Next Level Women Leaders because we noticed a gap with women that we were working with. It was really a gap between what they knew [00:02:00] was inside of them - the potential that they knew they could achieve - and what the world believed they could deliver. So, our training is really about helping women align who they are on the inside with how they show up on the outside. Nancy Buffington: I'm gonna say a little bit more there. More power to you and your daughter for having- for her being a really powerful 13-year-old. I was a really powerful and eccentric girl in the 1960s, surrounded by artists and all kinds of crazy people, and when I turned 12, I got [00:02:30] real quiet real fast, because at 12 years old, you're developing; you suddenly have peer pressure that you're aware of.  I went absolutely silent from sixth grade until the end of graduate school. Never said a word in class. That's kind of what Stacy was just talking about - this huge gap between what you have inside, and the potential you've got, and what you're showing to the rest of the world. So, I had a lot to get over, personally, in order to be able to share that, and that's why I feel like we all wanna give back in that kinda way. David Leary: Is it just [00:03:00] stifled, actually, by stereotypes and other people's behaviors? Nancy Buffington: Learned, at 12 years old, that it really was not okay to be a smart girl. Laura Tully: I think it's a combination of all of it, too. I think we take in the stories of what we're told, where we should be placed. We take in the stories of cultural expectations. But I think we also craft our own stories about where we feel like we- where we fit in, or where we belong.  I think what's cool about Next Level [00:03:30] is that we really allow women to have that space where we could have these really hard conversations about showing up in your own way. That doesn't have to be, "I gotta be like a guy, or I have to be really feminine." It can be on a term where you're actually defining it in your own way. I don't think most women get to have that space for themselves because it's always been carved out for other people. [00:04:00] Blake Oliver: A lot of the, I guess ... Maybe not so much now, but at least in the past, a lot of the advice to women was, "Act more like men if you wanna get ahead." Stacy Ennis: Right. Blake Oliver: And there's still, I think, still some of that messaging that goes on. You're saying it doesn't have to be that way? Stacy Ennis: Yeah, absolutely. Laura Tully: Absolutely.  Nancy Buffington: That's right. Stacy Ennis: We're in a really exciting time to be able to gather women together in a space, and talk about these issues, and to help each other feel emboldened to take that next [00:04:30] step, and maybe take a risk or at least define for ourselves what our lives can be, and then take the steps to get there. I mean, that's really what we're aiming to help women do. David Leary: So, our last interview we did was- there was a bunch of accountants' coaches. One of the big problems for accountants and bookkeepers is value- charge charging for their value or finding value in themselves. It sounds like that's almost a double-edged challenge for women because you have to get over this women stereotype - am I valuable as a woman? Then, now I gotta figure out if I'm valuable as [00:05:00] an accountant or bookkeeper. That's what you guys do is help people - entrepreneurs - then get over these hurdles. Laura Tully: Yeah, and I think it's more than just, "Get over it," but I think it's really intentionally carving their own space. Whether you're a man or a woman, I think it's really having that space where you can actively participate in how you are showing up. I think what Next Level does is [00:05:30] give these women the space to really immerse themselves in conversations that are, quite frankly ... Our two-day training is very challenging. The feedback that we get from our attendees are that it pushes them in ways that made them really uncomfortable, but I feel like that is part of the growth. That's part of the process of really getting to where you're gonna thrive. Blake Oliver: So, gender diversity is a ... Diversity, basically, [00:06:00] in general, is a big problem in the accounting profession, right? I don't know the stats off the top of my head, but it's like less than 20 percent of partners at firms, at least the big firms, are women, right? I'm close to that number. David Leary: I think it's almost 50 percent, at the beginning, as far as entering the profession. Then, as it goes up - each layer of management to partner - it just gets less. There's just so much attrition. Nancy Buffington: That's typical. Blake Oliver: What advice do you have to women who are in those firms [00:06:30] who are not partner, and aspire to be partner, and want to break into those ranks? How do we fix this imbalance? Or do I try to work my way into the system that's already there, or do we just say that's failing, and we can never fix it. Nancy Buffington: One of the things that I would say, and it goes back, David, to what you were saying about value, is we really start with values. What is my value, and what are my values as an individual? Not those that are given to me, but what am I carving out for myself? That's a real mindset piece, and that gives you this clarity to then realize [00:07:00] that you actually have a fair amount of choice and freedom about do I wanna go do my own thing? Do I wanna do this corporate thing? Do I wanna create something entirely new? It's really based on your values and what you wanna get out of your life and what you have to contribute. Then, everything else builds on that. That's the foundation. Stacy Ennis: I could build on that, as well. I think one of the things that we hope women take out of this training is to recognize that they actually have more influence than they believed previously and teaching them [00:07:30] ways to influence the people above them, around them, below them, in their lives, in their work, and to begin to feel this, I think, hope for having more influence in their work. Laura Tully: Yeah. Just to add to that, I think it's also recognizing that momentum can happen wherever you are. Whether you're at an entry level, whether [00:08:00] you're about to put yourself in the position of advancing in your career, or asking for that big raise, or whatever it is, I feel like the point for progress is to plug ourselves into all aspects and all arenas to make our physical selves, and what we think, and how we think visible, because, if I'm not in the room with you guys, you're not gonna know what I'm thinking- Stacy Ennis: I think this applies to men, too [crosstalk]  Laura Tully: Yeah, vice [00:08:30] versa, totally. Blake Oliver: Right. Stacy Ennis: I have a daughter, and she's six; her name's Lilly. I observed, one day, just kind of ... I'd seen her do this a bunch of times, but it just struck me this one day that when she looks at herself in the mirror, she has this huge smile on her face. It's like she can see what's inside of her. She sees all this greatness, and potential, and hope. I think a lot of us lose that - men and women, young and old - we lose that [00:09:00] hope so early in our lives. I think that there's room for us to reclaim that and move forward into a vision- a life that we really, truly want. Laura Tully: Yeah, and I think it's both arenas, too, of women giving men the space to be vulnerable and men allowing themselves to not act as the- what's the word? Stacy Ennis: Status quo? Laura Tully: Status quo.  Blake Oliver: Right.  Laura Tully: Yeah.  David Leary: We had another guest in the past, Jina Etienne-  [00:09:30] Blake Oliver: Jina Etienne.  David Leary: -who was on, and she really opened our eyes. She talked about the whole ... If you have a room of just white men, you have to have diversity in that room because even men will get together and they'll assimilate into the same role and none of  them will be themselves. Until they can be themselves, how are they gonna be even open to letting other people be themselves? Blake Oliver: She connected, for me, this idea that ... Think about it, the reason these firms can't move forward and can't embrace new technology and new ways of working together is because there's not enough diversity of thought [crosstalk] in that room, period. It's [00:10:00] about creating like diversity of experiences in life-  Nancy Buffington: Absolutely.  Blake Oliver: -and you can't have that, if you're all from the same group that has this limited life experience. Nancy Buffington: Absolutely.  Blake Oliver: So, I think that's something that, I don't know, white guys have trouble understanding; at least, as a white guy ... Hey, this is something I can actually talk about from my own experience! There's this feeling, and especially, I feel like people in accounting have this idea, like everything [00:10:30] should just be merit-based; like we should ... The people who - and this is the way the big firms are set up, right? Like whoever works the hardest and bills the most gets the partner, and that's the way it should be, and it should always be that way, right? But the way the way it's set up, you see the fall off. It's designed to create this narrow group of people that can succeed in that environment, and that's bad for the firm [crosstalk]  Nancy Buffington: It's absolutely bad for the firm. The other piece of that is that, when you ask ... If you start backing up, [00:11:00] and you go, okay, let's even say that it's merit-based and who's doing- who's making the most contributions, and who's bringing in the most work or whatever? The way you define those-  Blake Oliver: How do you define merit? Nancy Buffington: Right?  Blake Oliver: How do you define achievement? Nancy Buffington: And who feels like they can actually come out and say, "Here's what I just did. Let me share my story ..." [crosstalk]  Stacy Ennis: Yeah, who's given that space? Nancy Buffington: -it's gonna be people who feel comfortable already doing it; those who feel more tentative, may be doing incredible work, but no one knows it because they're keeping [00:11:30] it private. Blake Oliver: Yeah, and I saw that for myself ... It's very easy to take credit for other people's work on a team-based environment like an accounting firm, and people would do it all the time. People would stay late, just to be the last person leaving, even though ... It doesn't mean they did any better work, or they did more work. Then, the mom who leaves to pick up her kids gets penalized in the eyes of the partner for not being as hard-working, even though maybe she is the one who supported [00:12:00] all of this to happen. We value hours put in rather than client relationships- Stacy Ennis: Yeah, or quality of work. Blake Oliver: Quality of work ... It's all set up in a way that, you know, if I'm willing to ignore my family, sacrifice my personal relationships, and do nothing but stay in the office all the time, which is traditionally easier for white males to do, then you'll succeed. But, it's just ... I couldn't do it. David Leary: The value's not there. Two episodes ago, I think, we [00:12:30] had news story about female-led companies/female CEOs ... If you have a female CEO, or a female CFO, they're more profitable. Remember [crosstalk]  Blake Oliver: Yeah,  yeah, there's a study. I forget where it showed up, but- Nancy Buffington: And also, females on the board - more profitable. David Leary: More profitable. I wanna tie this back to some stats you have on your website, and I'm just gonna read that here. "Even though women make up 57 percent of college graduates, they comprise of only 38 percent of management positions and a meager two percent of CEOs ..."  Blake Oliver: Two percent of CEOs. That is- Nancy Buffington: It's astounding [crosstalk]  David Leary: What does success look like? Obviously, [00:13:00] you have individual client success, but what do successful women look like? If they're percent of college grads, or 57 percent being CEOS ... What is success? What's the world you imagine for our daughters? Laura Tully: I think what I want for myself and what I want for my daughter is to be able to choose. I think just having the space for options and not feeling like, "This space [00:13:30] isn't for you. You can't go to that space. You don't belong here because you've never been in this space ..." I feel like just being able to have the option of accessing as many different spaces and arenas would be a huge progress. Nancy Buffington: I like that a lot because- what I like about that is that it speaks to what you were saying earlier, Laura, about not having your space carved out by other people, but it's this kind of more opened-up space where I can decide that I'm gonna work hard, do [00:14:00] awesome stuff, and be a CEO. I can decide that I'm gonna create my own business. I'm gonna decide that I'm gonna take time and be with my kids. Nobody is telling me I have to do either one of those things. I'm the one in charge, and I have a clear sense of how and why I wanna make those decisions. Laura Tully: Absolutely. I think, too, just as a woman, and as a black woman, I think that one of the things that has always struck me is that I am now having the ability to [00:14:30] see that I can belong in a lot more places where I've just never seen anyone that looks like me, which was mind-blowing, and I'm a grown-ass woman. Just the fact of seeing women in spaces where you thought like, "Oh, I didn't know I could exist in the space," and that you belong, and you're competent, and capable of being here, I think that's gonna be huge. [00:15:00] David Leary: The takeaway for me, I think, is this not carving out your own space, and it's the same, if you're using Blake's example of the guys working at the firm. They're not controlling their space. They're not making their value choices. They're just doing whatever they need to do because everybody else told them they have to do that. Everybody keeps compromising their own values- Stacy Ennis: It's a very American way of working. I've lived in four different countries outside of the U.S.; I'm in Portugal, right now. Nancy Buffington: Not right [00:15:30] now. Stacy Ennis: Well ... [crosstalk] calling in. Yes, but I find ... It's interesting because I feel it when I come back for any extended period of time, in the U.S., just the difference in workplace culture. Everything shuts down for two hours in the middle of the day, where I live in Portugal.  Blake Oliver: That sounds nice.  Stacy Ennis: Yeah, including government [crosstalk] It's annoying when you're trying to get something done, but it's nice when [00:16:00] you live in a place where it's accepted that you spend time with your family. People meet together for meals during the day, and it's a really, really nice thing. I wish we had more of that here.  Blake Oliver: Spending time with family. Stacy Ennis: Isn't that a concept? Blake Oliver: I love the flexibility that I have. I get to work from home. I get to go pick up my son from school, or I get to see him in the morning. My father lived a life in corporate America where he was gone when I woke up, and he came home when I went to sleep, and if he [00:16:30] was on business trips, I would go weeks without seeing him. That was just normal. I thought that's the way it was when you grew up. So, I'm glad that things are changing in that regard. David Leary: I think the stronger women get, it's gonna make the world better for us men. Nancy Buffington: Absolutely. Blake Oliver: My wife doesn't put up with anything. She's changing our small family by saying, "Hey, this is gonna be 50/50. I'm not gonna be the caretaker, and you're not gonna be the breadwinner. We're not gonna do it that way."  Nancy Buffington: That's great.  Laura Tully: I totally [00:17:00] agree, David; both of you ... I feel like it gives you guys more freedom; so much more freedom to choose in a way that you probably are pretty constrained right now in choosing. So, I feel like it goes both ways. Blake Oliver: I like it. I actually- I think every dad should have the flexibility that I have. We need to change the way that we work in this country- Nancy Buffington: Absolutely right. Blake Oliver: -so that [00:17:30] families can spend time together. Nancy Buffington: Going back to your question earlier about what does success look like? I think it would be similar for women and men. How about if we just were able to be and to do things, instead of always having to second guess, and work ourselves up for things, and compare, and go, "Oh, I'm not qualified for that." How about if I just go, "Hey, here's a thing. Let me spend all my energy just doing and being that thing instead of all the internal stuff." That goes for men, too, but [00:18:00] it's certainly a challenge for women. Blake Oliver: So, I know that you do a two-day course, and I'm hoping, maybe in the time we have left on the show, you could give us a preview of some of the- David Leary: A two-minute course [crosstalk] Stacy Ennis: Let's speed this up - a minute per day.  Blake Oliver: Well, we've talked about - we need to do this. We need to make this happen. What are the things that you teach in your course - some of those key learnings, if you can share? Anything you'd like to share? Stacy Ennis: Well, Abbey, our other co-founder, Abbey Louie, is [00:18:30] not here. She starts off our two-day training with a session on vision and values. So, she actually starts with values and then goes to vision. One of the things that's different about what we do is there's a lot of introspection and work. People don't just sit there and listen to us talk. Most people don't enjoy just sitting for two straight days and listening.  There's a lot of Sticky Notes involved, and we have art supplies, and people are moving around; they're interacting. She's [00:19:00] walking the people who are there through this process of defining their values, beginning to define a vision for themselves. Then, I get to take over after her and work through defining your core leadership message. So, how do I define myself? Who am I? How do I show up? Then, it goes over to Nancy. Nancy Buffington: I take the baton from Stacy and we go, "Okay, here's this cool core message that is unique to you and really reflects [00:19:30] your values and your vision. How do you begin to tell that story, physically, even?" What we're leading up to, again, is that they're going to develop a story and share that live in front of each other; in front of 29 other women.  We start with a piece on physical presence, and that's where we make that ... We begin to make that shift from the internal work to the external work - how do you show up? What does physical presence look like? Then, we spend a fair amount of time helping them develop a story [00:20:00] that really helps people understand who they are and what kind of leader, what kind of professional they are. They share that, and their laughter, and tears, and those kinds of things. Then, Laura- Laura Tully: The process, as you can see, is we work from the inside out. Where my part is - how do you create this really great package with all the work that you've done from the inside to make sure that it's expressive in the most authentic [00:20:30] way on the outside, through wardrobe styling, and just putting on a damn good outfit that you feel and look good in?  One of the main things that I dive into is letting our attendees recognize that you have the space to really create how you are showing up to the world, and you can choose how you define that in a really powerful way. Whether it's feeling good [00:21:00] in those jeans that you're putting on or rocking that most awesome blazer, or whatever it is, it's just having ownership in that you are being authentically you and not someone in a magazine or something you saw on a mannequin ... It's being reflected from the inside out. At the end of day, it just makes getting dressed a lot easier. Nancy Buffington: What is interesting about the fact that we all chose to [00:21:30] kind of wrap the whole thing up with this great bow of the wardrobe styling with Laura is that a lot of women's trainings really shy away from that. I understand why - it's a little [inaudible] like, "Oh, really? Are we gonna do clothes?" Blake Oliver: Well, I read ... Ernst & Young apparently didn't shy away from it. I don't know if you saw that story. We talked about it recently. Nancy Buffington: No. Blake Oliver: Some of their internal training materials for women were released; leaked ... Nancy Buffington: Oh, yes, you're right.  Blake Oliver: It wasn't exactly the most flattering type of training. Nancy Buffington: Correct. Right. So, instead of creating [00:22:00] more constrictions and saying, "Here's what you must do, and can do," and all that, it's like, "Let's show you how to do it, and then you take it from here. You decide how you wanna do things. You have ownership over this." Trainings that don't give women at least that information leave them kind of- they're very hungry for it, we've realized. They get really, really into it, and they go, "Oh, you mean I could do this? I could do that?" There's a lot of self-doubt and even self-hatred that comes out in these sessions, and it's [00:22:30] a pretty healing experience [crosstalk] David Leary: I can tell there's a domino effect of this. If you could get somebody to just like ... "You can pick what you wanna wear to a business meeting. You don't have to wear what you're told you have to wear to a business meeting ..." It's a domino, right? That leads to another decision you make. "Oh, I can make the decision, or the choice."  Stacy Ennis: It's intentionality, really, at the end of the day. Part of it, for all of us, is we've all been impacted by each other and our own growth. Part of why we came together is because we believe [00:23:00] in each other and the impact that they've had on us. So, Nancy, Laura, Abbey have all had a really profound impact on me. We were working with all these people and referring them between each other, so we were able to pull it together into this really powerful experience rather than kind of jostling people between us. It's been pretty neat to see the impact. Nancy Buffington: Yeah. Blake Oliver: Well, to end on a slightly- a lighter note, holiday season is coming up, and people are gonna be buying [00:23:30] toys for their girls, their daughters. I don't know where I saw this, but I saw Barbie recently - entomologist Barbie. I wanna get your opinion. Knowing that Barbie hasn't always been exactly the best role model, but, is this a good thing? Laura Tully: You know, I ... Stacy Ennis: I have so many feelings. Laura Tully: I wanna see the outfit first [crosstalk] David Leary: We're gonna lose our Mattel sponsorship ...  Laura Tully: Look, Barbie [00:24:00] is an iconic figure. Mattel is a giant in the toy industry. I think it's important that we, as consumers, hold these giants ... Have our expectations met, as far as what we want for our children and for our family. I think that an anthropologist [crosstalk]  Blake Oliver: I [00:24:30] had to actually ... Yeah, it's somebody who studies insects. It's a very specific Barbie occupation, but I think it's good, because used to be [crosstalk]  Stacy Ennis: It used to be a pink Corvette Barbie ... [crosstalk]  Blake Oliver: She's still wearing pink. Don't get me wrong, but she's also wearing science-y stuff, too [crosstalk]  Laura Tully: I think it's a drop in the bucket that we need to fill. These small micro-movements [00:25:00] matter, and we're not gonna fill the bucket overnight, and that's okay, but I think every step, or every drop [crosstalk]  Stacy Ennis: I feel like, honestly, we've sworn a couple of times ... So, I think it's been a kind of half-assed effort from most of the toy manufacturers. Where are the non-white toys? Why don't we have more colors represented in the outfits? I don't know [crosstalk]  David Leary: -stats about management, right?  [00:25:30] Blake Oliver: My son is obsessed with the game Guess Who? Have any of you played that recently?  Laura Tully: Oh, yeah.  Stacy Ennis: Yeah.  Blake Oliver: I looked at Guess Who? ... We've been playing it for a little while, and I'm like, "God, these are all super-white names." [crosstalk]  Stacy Ennis: Yeah. 100 percent.  Blake Oliver: Even for the people of color [crosstalk] I'm like, "You haven't fixed this yet?" It's like John, Sally, Will ...  Laura Tully: I don't remember the photographer, but there is this image of a little [00:26:00] white girl, and she's standing in a toy store, and it's all black dolls. Blake Oliver: Oh, that's cool. Nancy Buffington: Oh, right. Laura Tully: When I saw it, I got choked up because I think there was a part of me that felt like could this ever ... It just seems like, oh, my gosh, like I can't even imagine that ever happening. I think the fact that that space exists for [00:26:30] a lot of young black girls and boys to be in many spaces where they just never see themselves, it's a big deal.  Nancy Buffington: Two quick things I wanna say about the Barbie. One is it's cool to have them do, like, Entomologist Barbie, and there's a Frida Kahlo Barbie, and a space- astronaut! That's the word! Astronaut Barbie. It'd be really cool if they would take away the tiny little feet that are also jammed into high heels because I [00:27:00] heard about the entomologist Barbie. It was really hard for them to get the boots on her feet.  Blake Oliver: Right. Nancy Buffington: The other thing is that it's cool to have entomologist Barbie, but wouldn't it also be cool to just like buy your daughter an insect collection kit, or a microscope? Blake Oliver: We need a PwC partner Barbie, right? Stacy Ennis: There you go- Blake Oliver: A Big Four accountant Barbie.  Nancy Buffington: That's right. I will also say that my 25-year-old son, when he was little, had a Barbie, and his father was so embarrassed to have him take it around on plane trips and things, but it was his Barbie. So, [00:27:30] if you're gonna have Barbies, they should be ... Boys should be able to play with them, too.  Blake Oliver: I like it.  Laura Tully: Definitely. David Leary: So, you guys have a busy schedule. You guys are doing coaching, right? Nancy Buffington: Coaching, presenting, mentoring. David Leary: So, what's the best way, if somebody who's listening wants to go to your boot camp in Boise?  Stacy Ennis: We're at, and we're also on Instagram at the same handle. Blake Oliver: How about each of you personally? Our listeners, they can't see us, so would [00:28:00] you mind going down the row again and just saying who you are and how people can get in touch with you? Stacy Ennis: Yeah. I'm Stacey Ennis. I'm an author and consultant. My website is Nancy Buffington: I'm Nancy Buffington. I'm a public speaking coach and trainer, and my website is Laura Tully: I'm Laura Tully. I'm a personal wardrobe stylist and influencer, and you can reach me at Blake Oliver: And, as always, I am @BlakeTOliver. And you, David? David Leary: I'm @DavidLeary. Blake Oliver: Thanks for joining us. Stacy Ennis: Thanks for [00:28:30] having us [crosstalk] 
Value pricing panel becomes value pricing consultation 🎙 Live at QuickBooks Connect
SponsorsIntuit QuickBooks Show Notes 02:05 – Meet Lee and Mary from Breakwater Accounting and Advisory! 02:48 – Meet Rhondalynn, author of "Pricing Value"  03:50 – Rhondalynn speaks to some of the challenges when it comes to adopting a value-pricing model 05:19 – How can you do value pricing if you never talk about value?  06:21 – Breakwater's challenge in moving to value pricing - really understanding the true value of the services they provide 08:31 – Another challenge for Breakwater has been the pricing itself, and how to determine their value on a per-client basis 09:29 – People only pay for what they value  10:22 – What does it cost a client - personally, financially, or strategically - to not have a solution to their problem?  11:54 – It doesn't take a lot of time to figure out when clients are solely focused on cost, and not value 12:52 – Peace of mind is one of the most difficult values to put a price on 14:18 – A large majority of small businesses suffer cash-flow and working-capital pain. Focus on finding ways to solve for that pain, and showing them what they could be saving  15:32 – Rhondalynn gives a practical example of adding value and solving a client's pain point 17:20 – The value-pricing conversation is very different than the conversations clients typically have with accountants 18:14 – Adopting value pricing means moving clients  towards accountability and action - creating a valuable partnership   Connect with Lee, Mary, and Rhondalynn Lee Leonard Podolsky, President & Founder of Breakwater Accounting + Advisory LinkedIn: Twitter:  Website: Rhondalynn Korolak, Managing Director, Imagineering Now LinkedIn: Twitter: Website: Mary Hambleton, Director of Operations, Breakwater Accounting + Advisory LinkedIn: Twitter:  Website: Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! Sadly, we do not have any 2020 travel plans as of yet.       Limited edition shirts, stickers, and other necessitiesTeePublic Store:  Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast:   Episode Art Photo Credit: Will Farnell TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you.Rhondalynn Korolak: People wanna do all kinds of crazy, silly stinkin' thinkin' to do it, and they just can't make the transition. Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Lee Podolsky: Lee Podolsky. Mary Hambleton: I'm Mary Hambleton. Rhondalynn Korolak: Ronald Baker. [00:01:00] No, just kidding. Rhondalynn Korolak.  Blake Oliver: Hey, Rhondalynn. Thanks for joining us so much! This is the end of day one, the Accountant Day, at QuickBooks Connect.  David Leary: We've made it. Blake Oliver: We made it. Rhondalynn Korolak: Woo hoo!  David Leary: A full day of recording. It's very exciting. You have to roll with the flow at big conferences like this because everybody's schedules change. People don't show up to interviews; people have personal things. But it's great because, Blake, we have to just go with the flow. Blake Oliver: We're gonna go with the flow. Two of our interview subjects could not [00:01:30] be subjected to the podcast today, so we have some substitutes. David Leary: But it was meant to be because we were gonna have a podcast to talk about value pricing. Blake Oliver: Yeah. David Leary: Rhondalynn wrote a book recently on value pricing. I was like, "This is gonna be awesome. We're gonna have the three thought leaders on value pricing," and two couldn't show up ... Blake Oliver: Yeah.  David Leary: But a fan of the podcast showed up, and her firm is currently moving from the billable hour to value pricing. Blake Oliver: So, Lee and Mary, are you at the same firm? Lee Podolsky: We are.  Blake Oliver: Give us your full [00:02:00] names again and tell us about your firm so that we've got a little context here. David Leary: Yeah.  Lee Podolsky: I'm Lee Podolsky, President of Breakwater Accounting and Advisory in Wilmington, Delaware. We do outsourced bookkeeping and accounting for small to mid-sized businesses, non-profits, and, most recently, family offices. Mary Hambleton: I'm Mary Hambleton, and I'm the Director of Operations at Breakwater. We're trying to move towards value pricing; we're looking to be more profitable and offer more value to our clients. Blake Oliver: Fantastic, and how [00:02:30] many staff/partners/people at your firm?  Lee Podolsky: Currently, we have 31 on staff and two interns. Blake Oliver: And Rhondalynn, for our listeners who may not be as familiar with you and what you're up to, what brings you to the value-pricing discussion today? Rhondalynn Korolak: Oh, look, I think, earlier this year, I published a couple of books and a workbook called "Pricing Value,"  and "Implementing Pricing Value." It's being distributed out of ... It's my first New York publishing contract. Blake Oliver: Ah, congratulations!  Rhondalynn Korolak: Everything [00:03:00] I've done has been very Australia-focused. But Ron Baker has taken me under his wing, and the guys at VeraSage introduced me to my first publisher. That book is actually going into all the universities and business schools in about 26 different countries because of that deal. So, it's pretty cool that we're gonna teach accountants, right from the get-go, how to price properly. Blake Oliver: Wow. That's gonna pay dividends down the road. That's great. David Leary: To those accountants and bookkeepers-  Blake Oliver: To those accountants and bookkeepers, yeah. For those of us who are learning it now, what can we distill, in [00:03:30] 20 minutes of a podcast episode, when it comes to moving from the billable hour to a value-pricing model? What are the challenges that you are seeing in the American market? I guess maybe that's a good place to start. Then we can hear what Mary and Lee- what their experience has been, as well. Rhondalynn Korolak: Look, I think there are many challenges; the biggest of which is people's mindset. Everyone comes into this thing with a lot of baggage. [00:04:00] When we're doing "Pricing Value," you're not actually learning something from the beginning. It's not as if you didn't know how to speak Spanish yesterday, and you are now learning how to speak Spanish. We actually have to unlearn all of the bad habits that we had that were around the concepts of hourly or cost-based pricing before we can do value pricing, or pricing value properly.  That's a big thing because it takes a lot to shake bad habits. So, that would be the big one for me. People [00:04:30] wanna hang onto time sheets. People wanna do all kinds of crazy, silly, stinkin' thinkin' to do it, and they just can't make the transition. The second is you need to control your own bloody fear. The biggest thing I hear is people saying, "I don't think I'm worth it. I don't think I can do it. My clients are price-conscious." Hang on a second here ... It ain't about you. The value isn't about your value; it's about what is it worth to the customer? So, we need to reframe that conversation. We get to the value of what it's worth ... How [00:05:00] thirsty is the customer? Is the customer at their home, where they can get a glass of water, or are they basically crawling across the desert after not having drank anything for 48 hours in 40 degrees Celsius heat, dying of dehydration? The level of value is different for those two different people. We need to get to the heart of that. We need to have better value conversations. Everybody just wants a price. We were in the panel discussion and someone said, "I'm value pricing ..." I knew things were gonna go bad as soon as I heard them this ... “.. value pricing, and we [00:05:30] sent out a letter to 700 clients telling them that our prices are going up." Well, I got news for you. You're not value pricing, if you're not pricing every single client individually. You can't just send out a mass email and then try to sell the value in the back door. The value has to be set, and established, and agreed upon before you ever quote. Premature quotation is just as bad as premature ejaculation, and there ain't no blue pill for it, right?  Blake Oliver: That's gonna be the clip at the beginning of this episode. [00:06:00] David Leary: Episode title ... Blake Oliver: On that- that's a great transition point now. So ... Rhondalynn Korolak: No one wants to talk after that ...  Blake Oliver: So, Mary, Lee, where is your firm now in that whole journey? What's the status? Mary Hambleton: So, we have been working towards value pricing. We definitely don't wanna be ... We're not doing billable hourly anymore, but a lot of times [00:06:30] when we're figuring out our pricing, or how we have figured it out in the past is we're figuring out how many hours do we think this will take? Then we're coming up with our price, and then we're giving them that quote. Blake Oliver: Right. So, that's not really value pricing [crosstalk] Mary Hambleton: Right. We're saying- we know that's not the way to do it, so we're working towards getting away from that and understanding the knowledge that we have is something that they don't have and letting them do what they do well, so we can do what we do well, but we should get paid to do what we do well. Blake Oliver: What are the biggest obstacles for [00:07:00] you when it comes to actually making that vision happen of doing the value pricing? Lee Podolsky: I think just getting comfortable with the conversation to have with each client. As we get more confident each time, I think we'll get better and better at that. We already are very focused on each client relationship - getting to know them, what their pain points are, and everything - so it's just sort of moving that along towards our pricing in how we do [00:07:30] proposals and have that conversation upfront. So, it's a learning process for sure. David Leary: Did you have to let go of any clients? Mary Hambleton: Yes- David Leary: You have?  Mary Hambleton: We have.  Blake Oliver: So, there were clients that just said, "I don't wanna switch"?  Lee Podolsky: They didn't value- Right, and they didn't have the value; they just weren't a good fit for us because they didn't have the value for what we were providing to them, and it just wasn't a good fit. David Leary: Did they give you the axe, or did you kinda fire them? Mary Hambleton: We fired them [crosstalk] yeah. Lee Podolsky: In a nice way. David Leary: Yeah, yeah ...  Blake Oliver: What [00:08:00] kind of services are we talking about here? Bookkeeping? Accounting? Lee Podolsky: Yep. We do bookkeeping, payroll processing, controller services; anything up to the tax returns. We don't do tax returns. Blake Oliver: So, no tax in the firm at all? Mary Hambleton: No tax.  Lee Podolsky: No. By choice.  Blake Oliver: Oh, interesting. I see ...  David Leary: What has been the hardest, hardest thing so far? Has it been selling it internally to your team? Has it been killing your time sheets? As you move on this journey, what's been the hardest thing [00:08:30] for you? Mary Hambleton: I think figuring out what's the right price, what's the right package to put together for a client, and then, do you offer multiple ones? Do you look at each client individually and figure out what they need? A lot of times when people come to us, we've been fortunate that they're coming to us. We're not having to go out looking for clients, but it's always an emergency, and sometimes, we don't have the luxury of time to figure out what they need. We need to solve an emergency right away.  Blake Oliver: Right. Yeah, Rhondalynn, hat is something [00:09:00] that I always had a challenge with when I was trying to value price - and I'm not sure I ever really, really did it - was somebody comes to me, and I need to get working right away. Under the hourly model, it was easy, right? I just tell them my rate; I get going; I start billing them. With value pricing, I have to have this big conversation, understand all of their needs, and try to ... It just seems like it takes a lot more time. Do you have any tips?  David Leary: Do you have to give some value away for free? Rhondalynn Korolak: I [00:09:30] think that helping someone clarify and quantify what it's worth to them, right? I think that, first of all, one price is always gonna be the wrong price, so that's job number one. You should never, ever, ever be giving somebody one price. It should always be a set of three prices, and there's reasons for that. Question number two is around this value thing. People pay only for what they value, and it doesn't require you'd have an hour-long conversation to get to the heart of value with a client. At the end of the day, what [00:10:00] you need to establish, in a nutshell, is one very simple thing, and it's often missed by a lot of people - what is the cost to that client of continuing to ignore the problem or not have the solution? If you can just ask questions that get to that one thing, you can value price. Blake Oliver: Because they'll be willing to pay anything less than the price of not fixing the problem is the ... That's the baseline. Rhondalynn Korolak: Correct. The biggest drama that I see- people say, "Oh, somebody didn't like my price, or somebody didn't see the value." It's because you have not assisted [00:10:30] them to quantify and acknowledge what it actually costs them - personally, financially, or strategically - to not have the answer to that problem. If you can do that, you can value price. Then you want to think about things like deal-breakers. I would wanna throw in ... What you wanna do is you wanna create so much economic value, it's a bloody no-brainer for them to do it, right?  What you're trying to do is you're trying to create a situation where your economic value is so huge, you immediately disqualify your competitors. That could include [00:11:00] a lot of things. Like if somebody came to you, and if it was for a tax return, you could be saying ... They could say, "Well, I'm really afraid - because I'm running a tech company, and I've got this R&D thing - that I'm gonna get audited." Well, then you just take audit insurance, and you make that part of the value of your package. You're looking for their deal-breakers. What causes David to walk away from this? That is part of the value. But you've gotta think ... You've gotta practice this, and think on your feet, and ask the right questions, but it shouldn't take you hours to get to value for something [00:11:30] specific. Somebody comes to you, and they're like, "If I don't have my financial statements turned around, I can't buy my dream home." "Oh, okay. So, what would it be worth to you?" You start to have that conversation. You can get to the heart of value pretty quick.  David Leary: Have you guys had a conversation like that? Do you ask your clients? Mary Hambleton: We ask them a lot more, I think, in the initial conversation about what their business is about, or what their struggle ... I mean, I guess we do- what they're struggling with ...  Lee Podolsky: Right. We're listening to them and their pain points. We can identify right away if [00:12:00] they're just focused on price; that's the cost and not ... It's trying to get them past that and talking to them about what really is driving them. But what I think would be really helpful for us is sort of more of the tactical- the types of questions to be drawing that information out. So, maybe we'll be reading your [crosstalk] Rhondalynn Korolak: When you read "Pricing Value," I sort of explain it. Then, in the workbook, I basically literally have created a set [00:12:30] of checklists and scripts; everything is color-coded. It's like, "Ask these questions and then take this information ..." and that goes to economic value. So, it's like a road map to implement it. Blake Oliver: So, Mary and Lee, we've got a little bit time. You basically have a free consulting session right now with Rhondalynn. Do you have any-  Mary Hambleton: I was just thinking the same thing.  Blake Oliver: Do you have any questions that you would like to ask her to help you with your value-pricing journey? Lee Podolsky: Well, so we really are working on this in our firm right now, in our strategic planning for the next five years. One [00:13:00] thing that came out when we're talking about what we're offering is something that is possibly hard to quantify - the peace of mind; like having clients tell us, "I can finally sleep at night." That peace that ... How do you put a dollar on that? I don't know, but that is something that comes up a lot. Blake Oliver: It's like a MasterCard commercial - it's priceless. Mary Hambleton: Yes, yes. It's priceless.  Rhondalynn Korolak: Not all pain is financial. There's personal, and strategic, as well. So, when you're dealing [00:13:30] with something like that, you would wanna be asking questions ... "If you were able to get a good night's sleep, what would that be worth to you?" Or, "If you were not getting woken up every night because of these things, how much extra time would you have?" You can start to back your way into questions around that to get more specificity. Blake Oliver: You mean actually asking the clients, "What is that worth to you?"  Rhondalynn Korolak: Yeah, straight out. It's on the script. It's just straight out? I just ask ... I say, "Look, when you thought about acquiring a solution to this problem that we're talking about right [00:14:00] now, what is the most difficult thing associated with finding the solution?" [crosstalk]  David Leary: If I'm an accountant or bookkeeper, that's a very scary question for me to ask my client because I'm afraid that they might say, "It's only worth $200 a month to me ..." It's a scary- to ask an open-ended question of my client like that, it's a little scary. Rhondalynn Korolak: Look, a lot of the pain that our clients are in is pretty big, right? When you take a look  ... Because I'm talking about cash flow tomorrow, so I've done a lot of stats in America and compared them to what I know about Australia. 87 [00:14:30] to 93 percent of small businesses have severe cash-flow and working-capital pain. If you start to actually figure out how much cash is trapped in their business, if you start to figure out how much interest-carrying charges they're doing ... I did a pricing session last night for a bunch of people, pre-con ... We sat down, and we practiced. One of the ladies said, "Oh, it's costing us $560 a month in credit cards because we're not able to pay our credit card." The interest alone was $560 a month. Well, now you know, right, and you ... Lost [00:15:00] opportunity costs ... If you don't collect your debts quick in your business, you actually possibly have to hire somebody and pay a wage to hire somebody in your accounting department to try to collect money, that's a lost cost that you- it's not even on your radar. You start to add up all of these things - opportunity costs, interest-carrying costs, debt factoring, the cost of somebody- receivables chasing stuff - that's a lot of money, and if you add that up ... The whole point is you get your client to acknowledge [00:15:30] the magnitude of those losses. I had a client ... I'm just gonna take this back to when I was coaching SMEs, right? I had this client that was a $24 million electrical contractor. So, it's a big company, but they were carrying $2 million of receivables a month at 92 days to collection. I kept telling them, "You need to collect your debts quicker," and they all sat there going ... One day, I went in and said, "It costs you $234,000 that you're flushing down the toilet every single year because you haven't collected your debts." Well, boom! I had their attention because [00:16:00] I said, "If you got that money, you could both pay your mortgages off." So, we need to make it ... If someone's problem is $234,000, it's not that hard to tell them, "Oh, and by the way, my cost to you to fix this here and put all the systems in place will be $40,000. Thank you very much. I take Visa, MasterCard and check." David Leary: So, you guys said you're starting to go for family offices. Is that because there's opportunity to- there's just more money in that? What made you choose the family offices? Lee Podolsky: Actually, by just by being asked [00:16:30] several times. Actually, the services that we provide to the family offices are very similar. We already have the set-up, and the technology, and everything to do this for our business clients, so it's an easy addition to be using. It's just a different client segment that has a lot more concern around security, and confidentiality. Blake Oliver: Any other questions? Lee Podolsky: I guess my only other question would be around  ... To me, it sounds like we would- we're almost talking to them about the return on their investment. They invest [00:17:00] in us, and this is what they would get in return. Is that right? Rhondalynn Korolak: Yeah, it's about a whole bunch of things. It's about their feelings, the solutions to their pain points, and the desired transformations in their business. "You're right here and you wanna get to there. How is that gonna happen?" So, it's more than just pain points; it sort of encompasses ...  Lee Podolsky: It's interesting because that's a very different conversation than they're used to ever having with an accountant, or attorney, or anything. [00:17:30] So, it is gonna rock them a little bit- Mary Hambleton: For sure.  Lee Podolsky: Because they're so used to ... "Well, I've got these proposals from these three firms," and they're trying to sort of match it all together; so, to just veer it to that conversation and really get them engaged in that is key.  Mary Hambleton: Yep, absolutely. Rhondalynn Korolak: Well, and don't be afraid to shy away from this stuff ... I've done a three-hour session at QB Connect in Sydney and Melbourne several times, and I did one last night for pre-con. It is not uncommon to see tears. One [00:18:00] of the participants that was in the workshop felt uncomfortable about that, and I said, "Look, we need to be asking these questions because they may have never voiced these concerns and fears that they have to a single other human being on the planet."  When you know that, and you've developed that rapport with them, you now have leverage; leverage in two ways - leverage, because you know what to price it, but also, they are extremely motivated to fix the problem. If somebody doesn't realize they have a problem, they've got all the procrastination and excuses in the world, but [00:18:30] if you can help them crank it up and realize that this is a $234,000 problem, you're gonna get action. You wanna get action because you don't wanna do the work. When you transition to value pricing, the whole thing is also about them being accountable, and stepping up, and taking action in their own business. It's not your responsibility to fix the problems. They need to step up, as well, too, and that's part of it. Lee Podolsky: Well, it makes it a true partnership? Rhondalynn Korolak: Yeah, a collaboration. David Leary: Lee, and Mary, how do people get a hold of you if they're listening to the podcast, and they wanna contact you? Lee Podolsky: You [00:19:00] can visit our website, which is  David Leary: Rhondalynn, how would people get a hold of you? Rhondalynn Korolak: At [crosstalk]  David Leary: What about Twitter? Rhondalynn Korolak: My name -@Rhondalynn. There's probably only one of me, so it's the easy one. David Leary: Perfect and enjoy the rest of the QuickBooks Connect!  Mary Hambleton: Thank you so much!  Lee Podolsky: Thank you.  Rhondalynn Korolak: Thank you.  Blake Oliver: Thanks for joining us!  David Leary: Bye, everybody. 
The Legends 🎙 Live at QuickBooks Connect
SponsorsIntuit QuickBooks Show Notes 01:25 – Meet the legends!   02:54 – Our guests share their biggest takeaways from QuickBooks Connect 2019 03:04 – For Michelle, it's AAA - apps, automation, and AI 03:28 – For Laura, it's the evolution of advisory 03:47 – Clayton's takeaways included latest iterations of cloud evolution and getting ready for new opportunities 04:54 – Clayton sheds some light on what he's doing now 06:04 – Laura's got her head and her firm in the cloud! 06:59 – Michelle's recent focus revolves around app selection and integration along with consulting and training 09:05 – What's changed since the very first QuickBooks Connect?  09:49 – Michelle's seen a huge improvement in networking over the years 10:18 – Just because you hit legend status doesn't mean you stop learning new things! 10:30 – Laura see a shift to development now that the majority have found their way to the cloud 11:16 – Clayton thinks people are moving away from "appstraction" and moving towards action 12:41 – After all the hype of cloud fades, you can now focus on the actual productivity  14:44 – More talk of what's to come for these three  Connect with Michelle, Clayton, and Laura Laura Redmond, CEO and Founder of Redmond Accounting Inc Twitter: LinkedIn: Website: Clayton Oates, Founder of QA Business Pty Ltd Twitter: LinkedIn: Website: Michelle Long, Owner of Long for Sucess, LLC  Twitter: LinkedIn:  Website: Get in TouchThanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram!  Meet Blake and David in person! Stay tuned!  Want to book us for your event? Check out the prospectus or get in touch for more details!    Limited edition shirts, stickers, and other necessitiesTeePublic Store:  Subscribe Apple Podcasts: Spotify: Google Play: Stitcher: Overcast:   Episode Art Photo Credit: Will Farnell TranscriptThis episode of The Cloud Accounting Podcast is sponsored by Intuit QuickBooks. Accounting professionals and bookkeepers have long been at the forefront of using cutting-edge technologies to take the profession to the next level and to ensure they're delivering the best possible service to their clients. Whether you want to grow your firm or sharpen your skills, Intuit QuickBooks provides you with the AI-driven products, services, and the resources that you need to help all sides of your career take shape. To learn more about how QuickBooks Online, QuickBooks Online Accountant, QuickBooks Live Bookkeeping, and the ProAdvisor program can help you grow your practice and scale your impact, head over to That is Cloud Accounting Podcast dot promo forward slash Q-U-I-C-K-B-O-O-K-S. QuickBooks - Backing you.Michelle Long: ... Because I don't do taxes. I'm a CPA who hates taxes, right? I'm unusual.  Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: I'm David Leary. Michelle Long: And I'm Michelle Long. Laura Redmond: Laura Redmond. [00:01:00] Clayton Oates: G'day, I'm Clayton Oates.  David Leary: Wow, we have Laura, Michelle, and Clayton here. We're at day two of QuickBooks Connect. Yes, they had some famous people on stage, but we have the accounting famous legends with us for this podcast. Blake Oliver: So great to have all three of you sitting at the table across from us. Thank you for joining us. Michelle Long: Thank you for asking us. Clayton Oates: I'm wondering about that word legend. That just sounds old. Michelle Long: I know! I know, right? Clayton Oates: I'm talking about myself here. Laura Redmond: Me, too.  David Leary: I truly think all of you guys are legendary in your own way, right? Michelle, you're legendary [00:01:30] because back in the day for QuickBooks, there was this QuickBooks community. It was like when companies used to host their own forums - pre-Facebook, pre-Facebook groups, pre-LinkedIn groups - and you answered 35,000 or 40,000 questions. Michelle Long: A lot. David Leary: Every night for four years. Then, that led you to become a legend there. Then, they shut that down. You moved to LinkedIn, and then 100,000 people joined your LinkedIn group. Then, Laura, you were the first person, the first QuickBooks ProAdvisor to move to cloud in 2011; nobody was in cloud then. Laura Redmond: We had our firm and our first client on in 2005. 2011 [00:02:00] is when we pushed all clients. David Leary: All clients to it- Michelle Long: Oh, wow!  David Leary: Then, Clayton, you kind of discovered QuickBooks in Australia. I think it was the Reckon product then. You saw there was a conference in the states, and you were like, "I'm gonna fly out to the States. I don't know anybody there. It'll be fun!" Clayton Oates: It was in Vegas, baby! I could do that. Blake Oliver: I will never forget meeting Clayton Oates in Las Vegas. He used to wear costumes to all of these parties. Clayton Oates: Oh, that's right. Blake Oliver: I think one year you were Austin Powers. Michelle Long: Yep [crosstalk]  Clayton Oates: It was smashing, baby! It was amazing! Laura Redmond: I remember that, and Jacinta looked amazing. [00:02:30] Clayton Oates: Oh, behave!  Blake Oliver: One year, you were Crocodile Dundee. One year, you had a crocodile with you. Clayton Oates: Yeah, mate, that was [inaudible] crikey, I'll tell ya. Blake Oliver: I wanna thank you, Clayton, for teaching me, as a first-time attendee to one of these conferences, as a newbie in the accounting tech industry, that it could be fun [crosstalk] It could be really, really fun, so, yeah-  Clayton Oates: -totally, and you guys are carrying that candle bright into the future for sure! So, this is gonna be good. David Leary: For all of you, this is, I think, your sixth QuickBooks Connect, like myself. I've been to a bunch of these. [00:03:00] What's the big takeaway this year that you guys have seen?  Blake Oliver: Who wants to go first? Michelle. Michelle Long: I think the big thing is apps, and automation, and AI. Like Sasan said on the main stage today, our technology's been changing rapidly in the past, but over the next five years, because of AI, it's gonna change faster than ever before. I love the idea that Intuit is here to help us, to bring us along on that journey and to help us keep up with the technology. That's kinda what I've been thinking, anyway. Laura Redmond: I see the industry trying [00:03:30] to keep the conversation about advisory going and try to ... It's evolving. I think they're trying to define what exactly it is. How do we do it? They've been talking a lot about doing things like value pricing, and advisory, and we're getting more into the how to do it for everyone as a collective industry. Clayton Oates: I suppose I'm seeing a couple things. One is from Intuit' side, the step up in innovation and delivering. I think Ariege's session yesterday was, "Wow! Okay ..." We're really starting to see, perhaps, that next iteration [00:04:00] of evolution of cloud. The other piece is preparedness by the advisor of certain mindset, probably more than anything. It's been interesting watching Australia, New Zealand, and the U.S. sort of being in both markets really, over the last six, seven, eight years here. Definitely the mindset and opportunity preparedness of the audience to adapt, and adopt, and run with the new solutions. No longer are we the, "You're way out there five years," and all that, and so forth. It's just this convergence [00:04:30] now where people are really starting to run on the same road globally. I'm excited to see where this country can take this future because this is a big tap, and I think it feels that it's getting turned on right now. David Leary: Where are your guys' practices at? I know you guys have all had practices grown. I know some of you do training, you do other things. Clayton, I don't even know what you do anymore. Clayton Oates: That's a great question [crosstalk] David Leary: You just do conference travels. Clayton Oates: I might use this podcast as the catalyst for our dinnertime conversation, "This is actually what dad does." For me, I [00:05:00] still have kept the firms. I had a firm grow out of an accounting practice - software advisory, consulting, recommending solutions, training, and support. This is 1994. I thought this thing was gonna be over in about two years. I thought everyone's gonna have all this sorted [crosstalk]  David Leary: 1994; Blake, were you alive then? Blake Oliver: I was [crosstalk] up and kickin', yeah [crosstalk] Clayton Oates: -I was 12. No, I was later than that. The thing was, now being independently owned and operated for the last 18 years, we came out of the accounting group. For [00:05:30] me, it's ... We've still got the consulting business, so we're actually out there as a team. I do a little bit of this, of walking through clients' businesses, and doing the site reviews, and walking through their business systems, and now, just trying to plug in what we know and learning at QB Connect, for example, and what can suit and fit that market need for clients. We're not the accountant. We're not the bookkeeper. We're the software advisory guys, and we hopefully play a role in connecting the accountant with stronger connections with their clients; also [00:06:00] the bookkeeper's and, importantly, the technology vendors, as well. Laura Redmond: This is gonna sound cheesy, but in the cloud, that's where we're located. Let me explain. I live in Silicon Valley. That's where I am, but my COO is on the East Coast. We have staff on the East Coast. I have people in different states. We really do have Zoom meetings and Google Chat. We are on all day. David Leary: All remote? Laura Redmond: All remote. Then, I've got Aero. We're all remote. We're headquartered in Charlottesville, Virginia. Three of us are out here, though, on the West Coast, so our meetings are all ... There, [00:06:30] we're in Slack and on Zoom-  David Leary: Aero ... You have an app. Laura Redmond: Have an app, sorry, called Aero Workflow. David Leary: You run your app company and your accounting firm- Laura Redmond: And accounting firm.  David Leary: -all 100-percent remote. Laura Redmond: Correct. David Leary: Got it.  Blake Oliver: Wow! Laura Redmond: We have a new Advisory Institute, all remote. Michelle Long: Very cool. Blake Oliver: I'm excited. I see more and more firms ... I'm meeting new ones I'd never even heard of that are completely remote, and we're not talking six people, we're talking 60. It's getting- Michelle Long: Well, and it's not just accounting firms, it's the small businesses now. Blake Oliver: Yeah.  Michelle Long: They may not have a physical [00:07:00] location. They have salespeople that are doing their thing, and they may have us or somebody doing the bookkeeping, and the owner. They may not have a real physical office anymore. They're all working virtually, too. I think that's pretty cool. I've been focused lately on doing app selection and integration and working with other ProAdvisors and things. As always, I love the consulting and training, so I love it when I'm on the road. I had a hard time this spring because of my foot surgery. I didn't get to go on the tour, and I sat home, and I watched everybody posting all this stuff, and I'm like, "Oh, I'm missing out!" So, it's thrilling to be back- Laura Redmond: But she's [00:07:30] back on, and we're teaching together next week here [crosstalk] So, we also are on the road traveling for things; conferences like this or when we teach QuickBooks. Michelle Long: Right. Clayton Oates: That's one of the great things, too, actually getting out to the community.  Michelle Long: Yes.  Clayton Oates: I love roadshows. I've done over 100 roadshow events in the last 10 years, often with vendors. Our own business was built off the back of roadshows; going to where the community and the audience is. David Leary: Tell everybody your secret. You go to all these conferences, but you don't look aged. It's not wearing on you. How do you do this, Clayton? Clayton Oates: I love the fact that this is a podcast. Laura Redmond: Yeah [crosstalk]  [00:08:00] Clayton Oates: Look at my hair.   David Leary: Should I describe how he looks? Michelle Long: No, he looks fabulous, and you don't age-  Laura Redmond: Kinda gorgeous. Clayton Oates: It gives you an energy, doesn't it? Fulfilling work, and fulfilling contribution - this is what it's about, ultimately. We happen to do tech. We happen to do accounting ... We're all in the client relationship/client service business. Blake Oliver: I'm starting to think the secret is the Vegemite. David Leary: That's his secret. You've got Vegemite [crosstalk]  Michelle Long: That stuff is awful! [crosstalk] Oh, my gosh.  Blake Oliver: It must have health benefits. Clayton Oates: Well, the thing is with Vegemite, if [00:08:30] you have a really late night and that's conference scene, and a really big night, the next day, if you take some smashed avocado, because that's the thing these days, and a slither of Vegemite, and you eat that, you may feel marginally better for 30 seconds!  Blake Oliver: This episode is brought to you by Vegemite. Vegemite, it keeps you younger longer. Michelle Long: That's just awful. I tried it when I was down in Australia. The only way I could describe it is it's [00:09:00] like car oil or something. It's just awful. Clayton Oates: When you're brought up on it, you don't know any different. Michelle Long: I know. Blake Oliver: We're at QuickBooks Connect number six. You all were at number one? What is the biggest change that each of you has noticed from one to six? Michelle, I'll start with you. Michelle Long: I think I notice way more networking and interactions, and the accountants are really coming out of their mold. They're not as quiet, and they're welcoming to new people. The thing I love is seeing all these people who know one another online from [00:09:30] social, and everybody here is like a hugger ... "Oh, my God! It's great to finally meet you!" People aren't sitting in their own little corners, and I think it's just really a great conference with a lot of networking going on. I encourage people to do that. I'll tell them, "Don't sit by somebody you know, or somebody you came with; go sit by new people, so you get to know more people." I think the networking has really improved a lot over the years. David Leary: Well, then there are those brain dates or whatever. Michelle Long: Yes. David Leary: You sign up appointments. If you wanted to learn from Blake, I could have signed up for an appointment. Blake was not [00:10:00] in the brain dates, but this is the concept of it. I could sign up, and Blake could teach me how to do a podcast [crosstalk] voice. Blake Oliver: I'm gonna make David officially sign up for brain dates with me from now on. David Leary: Everybody could have a brain date with us every week if they subscribed to the podcast [crosstalk]  Blake Oliver: That's right. Laura Redmond: I signed up for a brain date with a marketing person yesterday. Michelle Long: Awesome! David Leary: Even if you're a legend, you still can learn more. Laura Redmond: Oh, my! Michelle Long: Oh, yeah.  Laura Redmond: Oh, my!  Michelle Long: We're always learning. Laura Redmond: We are constantly working on our businesses. Blake Oliver: Laura Redmond, what is the change for you? Laura Redmond: Difference between one and six? Blake Oliver: Yes, yes. Laura Redmond: I [00:10:30] would say - I have no data on this - but I sort of feel a shift from maybe Intuit dollars on marketing and ... Just go on; go to the cloud ... Everyone kind of gets that. We're all in the cloud, yeah, yeah, yeah ... I see, it seems maybe, a shift to dev, right? I feel like big, big features are coming out and being built faster, it seems, so I love that. That's fantastic because that's what we really need. We do love each other as a family, and that is a great part of this, but when we [00:11:00] go back to our clients, we need features. We need tools. Michelle Long: Wasn't that exciting some of the stuff Ariege brought out yesterday- Laura Redmond: Yeah, yeah. That was amazing. Michelle Long: -with the Bookkeeping Review, and the KPIs, and stuff? I'm like, "Yes!" I love that stuff. Laura Redmond: Yes. Michelle Long: That's amazing. Laura Redmond: Now we have a visual to sit down and talk to our clients about. Michelle Long: Yes!  Blake Oliver: How about you, Clayton? Biggest change from one to six? Clayton Oates: Yeah, well, it's hard to remember back six years. I can hardly remember yesterday. Look, I think it's the preparedness of the audience to ... It's gone in waves where people have, perhaps ... When they first come into this arena ... This [00:11:30] whole space is new; 10 years, think of it, in other vendors and independent events around the world ... There was this overwhelm, you know? People would come into the audience and just ... Appstraction, I suppose, is what I call it. We're distracted by all the apps. It's like, "Wow! I need to know it all." There's this stress and anxiety, basically, built up.  I sense we're getting over that hump. Different people will go through at different stages, but there's a base-camp level, perhaps, that we've helped establish, in a way, to put that sort of concerns [00:12:00] and fears to one side or alleviate them very quickly so that we can get on with actually partnering, and taking action, and creating a future for ourselves and people you're serving. David Leary: That's an interesting observation because somebody last night was saying it just felt like there was a downer in the room. But I think you're right, the energy level is just ... That anxiety, that stress isn't here now. I think you're right [crosstalk] They're like, "Oh, my God! I'm gonna fall ... I'm gonna lose my whole practice if I don't go to the cloud, right now, today; if I don't do advisory ..." [crosstalk] The stress is gone. Clayton Oates: - if you look at the garden of hope cycle ... I [00:12:30] don't know if you're familiar with that, or people out there, but take a look at it. There's this- effectively, this technological change that happens at cloud- platform-type shift, and we tend to over-hype the whole thing. You think of the driving cars-  David Leary: Like podcasting-  Clayton Oates: The podcast is a thing. That's a thing. Then we get out into this over-inflated expectations, and we sense that, "Oh, we're missing out, or we're the only ones that don't get it ..." if everyone's gonna move to it straightaway, but then you move to this trough of disillusionment. It's like, "Oh, no, it's not that," but we have over-inflated [00:13:00] expectations. Then it moves out to this plateau of productivity ... Slope of enlightenment; plateau of productivity. That's boring, in one sense. It's not as hyped up, and over-hyped as exciting, but that's where the stuff actually meets the road. David Leary: Is that where we are? Clayton Oates: Yeah! Laura Redmond: Party's over, back to work? Clayton Oates: Which is great ... Yes! In Australia, we have definitely, on that slope, almost passed the slope of enlightenment, into the plateau of productivity, and that's not a place to be afraid of. That's where we actually get out there and start implementing, making real change to [00:13:30] the clients and people that we're serving. Michelle Long: I couldn't agree more because I remember, five to seven years ago, we were doing Freedom in the Cloud tours, where we were introducing people to the cloud and all that. Now, we're talking about the apps - app stacking, app integration, app selection. I call it 'appifying' the processes. Like you say, helping these clients and ourselves to automate these processes to get significant efficiency and time savings ... People have accepted it now. I agree with you. Blake Oliver: Now that we're out of that trough of disillusionment, [00:14:00] you see the larger firms deciding now is the time to make the shift. I met a woman this morning. Firm is 70-plus people. No cloud accounting whatsoever. All desktop-based Thomson Reuters GL product. She is here. She's been hired by the firm to move all of their thousands of clients from that product to QuickBooks Online. She's here scoping out the apps, and gonna build a stack, and gonna do it. Michelle Long: Oh, wow ...  Laura Redmond: Does she have someone to hold her hand through that-  Michelle Long: I know! Does she need some help? Laura Redmond: -because we just took a firm ... Our firm helped another firm do that about nine months ago. David Leary: The important part - did you tell her to start with The Cloud Accounting Podcast? [crosstalk] that first? [00:14:30] Blake Oliver: Exactly, yes. Clayton Oates: Binge listen. Blake Oliver: Binge listen [crosstalk]  Laura Redmond: She needs a partner in that. David Leary: What's next for you guys? Can you be more legendary? What are you doing next? What are you doing next week? What do you think you're gonna do a year from now? What's coming up? Michelle Long: I don't know if I wanna say.  Blake Oliver: Oh, breaking news? Clayton Oates: Exclusive. Laura Redmond: Oh, that's exciting! [crosstalk]  Michelle Long: I'm hopefully working on another book. [00:15:00] Laura Redmond: Oh! Blake Oliver: All right. Michelle Long: I'm not gonna give the name or the details or anything, but hopefully I will have another book coming late spring. I'm hoping over tax season because I don't do taxes. I'm a CPA who hates taxes, right? I'm unusual. I'm hoping to get it done, so we'll see. Fingers crossed. Clayton Oates: Maybe you can get an Audible deal and Clayton could read it on Audible. Michelle Long: Oh, there you go! Clayton Oates: I was hoping I'd get you to write my book. I know I've got one in me. Blake Oliver: Laura, how about you? Laura Redmond: Well, next week, Michelle and I are on the road teaching [00:15:30] Grow your Practice in QuickBooks. With Aero Workflow, we have two big launches coming right now starting beta. We've got a whole new interface, and then we've got Aero Advisory, which allows you ... With all of your knowledge capital, your documented processes, all your checklists of how you do things as a firm, you can now open an Aero account connected to yours that your client could log in to. You can pass your checklists right onto them- Michelle Long: Oh, great!  Laura Redmond: -and you can have them run their own accounting department, sort of like extending without having [00:16:00] to staff it. You're the advisor; you're the knowledge capital; they depend on you. You're not just giving away a PDF of how you do things, which lowers the value a bit. You can have a subscription service, sort of, and help be the advisor in that capacity. For Redmond Accounting, we're growing our advisory side, and we've got a new Entrepreneurial Advisory Institute, which ... Is anyone familiar with EOS program - Entrepreneurial Operating System? This is used by hundreds of companies. We're getting into that. That's [00:16:30] all about leadership, and executive teams, and things like that. Blake Oliver: What's coming for you, Clayton? Clayton Oates: That sounds exciting. Well, the very near future is, in about two hours, I fly to Melbourne to my wife's family reunion, so that's [crosstalk] That's good. Laura Redmond: My first question is how many days does that go on? Clayton Oates: Well, it takes two days to get there. It goes for three days; from one party to the next. Laura Redmond: I just knew it. I knew it wasn't a two-hour something Clayton Oates: No, no, it's three days. Beyond that, I suppose what I'm curious about, and I'm trying to explore what contribution I can make is, having [00:17:00] been around this for nearly 30 years, actually, is I'm always curious, having grown up in the accounting profession, as to the challenge of a client-focused, ethical-based profession co-existing with essentially what's been a sales-based, product-focused industry, and the coexistence of the two parties, because we tend to have quite different agendas. I think, together, we've gotta really come together stronger. The [00:17:30] profession needs to have conversations that are, perhaps ... Maybe they're not having at the moment with vendors around the world as to how can we work better together to actually help the small-business client and customer? I suppose the other thing that I'm starting to do more of is actually working with app vendors in terms of working out their strategies around actually partnering with professionals. You know, in some instances, we may have that conversation, and it's not a strategy they should adopt. You've got to know that [00:18:00] before you actually start doing it. Therefore, yeah, just helping them at more of an advisory board type level, helping them with their go-to market strategy. Actually, even for accountants and professionals, there is nothing wrong with being a channel to market- totally nothing wrong. In fact, we should partner deeply with software vendors. The challenge is where you don't know that you are a channel to market. That's where expectations are misaligned. We need to bring a few things ... Technology companies bring innovation. Control [00:18:30] what you can control. They need to bring innovation, which is fantastic. Bring great partnership. If you're going to partner, partner really, really well, forever ... Forever mindset, because that's what we have in the profession with our clients. Then, bring manners and respect. When I talk about that, also, I talk about, hang on, professionals! We need to do exactly the same thing. We need to participate in the feedback loop, spot challenges, but never take a problem to a vendor without two solutions. Work on that before you go and talk about what you've found that's wrong and [00:19:00] bring empathy and understanding -understanding commercial reality, understanding the world that the vendor lives in ... A whole lot of competing forces there. Understand, have empathy, but also bring your manners and respect, as well. I think that piece ... There's so much latent potential here, so I wanna see more of that and play a role in that. David Leary: Okay, so if anybody wants to get a hold of you who's not already following you on LinkedIn, and Twitter, and the socials, how do they get a hold of you, Michelle? Michelle Long: David Leary: On? That's it. Michelle Long: Yeah. David Leary: What about Twitter? Michelle Long: I have my links out [00:19:30] there on my website, but it's @MichelleLongCPA on Twitter. David Leary: Okay, and Laura? Laura Redmond: I'm David Leary: And Clayton?  Clayton Oates: or @Clayton_Oates on Twitter. I'm in Australia, so come visit. Blake Oliver: Yes, I'm gonna take you up on that. David Leary: We're taking the podcast there to Clayton's backyard.  Clayton Oates: Bring it!  David Leary: We'll broadcast from there Blake Oliver: As always, you can find me on Twitter. I'm @BlakeTOliver, and how about you, David? David Leary: I'm @DavidLeary. Blake Oliver: Thank you all so much.  David Leary: Bye, everybody.  Clayton Oates: Wow, thanks for having us on the show with these legends. Laura Redmond: Thank you.  
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
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
LIVE from QuickBooks Connect! [Day 2] #QBCONNECT
Subscribe Listen on iTunes Listen on Google Play TranscriptDavid Leary: This episode of The Cloud Accounting Podcast is sponsored by Elefant. As a listener of this show, I'm pretty sure you've already embraced technology, and practice efficiencies, but sometimes, it's hard to find training in those areas. Some of you look to your state societies to get CP credit, but those tend to be tax-, or audit-focused, and, quite frankly, from what I've heard, pretty boring.  Thankfully, our friends at Elefant have created education for tech-savvy accountants, and bookkeepers like yourself. They offer training on platforms like Xero, QuickBooks, and Zapier; webinars on topics like cryptocurrency, and firm marketing; have all-star instructors, who not [00:00:30] only understand technology, but are using it to run their own practices. Just for you, Elefant has a special offer for Cloud Accounting Podcast listeners. Visit - that's E-L-E-F-A-N-T training dot com slash CAP - to receive 50 percent off your first webinar. Again, that's for 50 percent off your first webinar. Elefant, building better practices, one bite at a time. Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver- David Leary: And I'm David Leary. Blake Oliver: We are reporting live today at QuickBooks Connect - Day Two, the main day, the main event. David Leary: I think your voice is in much better shape than mine, at this point. Blake Oliver: No, no- David Leary: So much talking.  Blake Oliver: Can you hear me? I'm all raspy. By the way, David, did you eat your sardines this morning? David Leary: I ate my sardines. You have to bring your own protein, because you get here, and you're talking to so many people, then you miss eating, so you have to bring your own protein to survive. Blake Oliver: Okay, I understand protein, but why- why sardines, and where did this come from?  David Leary: They travel. They travel. They actually came from [00:01:30] Tim Ferriss. Blake Oliver: Tim Ferriss?  David Leary: Tim Ferriss. This was his thing start, and you start eating ... They travel well. Put 'em in your backpack; you take 'em with you. I've met four people at the conference that are fully in support of my 'eat sardines when you go to a conference.' Blake Oliver: The reason I ask is because, before the conference, you put out a post, where you said, "These are the five things that you need to do to survive a conference, " and the one ... I'm not quite on board with the sardines, but I do agree with your tip to drink lots of tea, with honey- David Leary: And lemon water? Yes.  Blake Oliver: Lemon water-. David Leary: Because coffee dehydrates [00:02:00] and-. Blake Oliver: I've been doing that. David Leary: -you lose your voice. That's good. Yes, Day Two. I think until people come here ... If you're listening, and you've never been here, it's super-exhausting. It's such a big conference, but it's also just amazing to meet ... Even for us, the first night ... We've met so many people that listen to the podcast, and came to QuickBooks Connect, that Blake, and I, neither of us, they knew, so, it's just ... You really get connected with people at QuickBooks Connect. Blake Oliver: It's great. Everybody is here. There are two exhibit halls. I've never been to a conference with two expo halls. How many exhibitors are there? David Leary: I think I counted [00:02:30] 107- Blake Oliver: 107-  David Leary: No, no, no, sorry ... Yeah, it's 107, because I think it's like 97, then, the App Showdown ... The finals for App Showdown is another 10, or something. It's like 107. Blake Oliver: Attendees, it's thousands, right?  David Leary: Yeah, I think yesterday, for the accountants, it was close to 2,700, or something like that. Then, they filled the rest in with small businesses, and entrepreneurs, today, so, it's just completely packed out on the floor.  Blake Oliver: It's been amazing. Definitely check it out. Come next year, if you haven't been.  David Leary: JLo's here, I heard. I heard somebody say they saw JLo on a golf cart. Blake Oliver: And A-Rod.  David Leary: Well, yeah, but [inaudible] of A-Rod, if they wanna see JLo?  Blake Oliver: Let's [00:03:00] talk about the takeaways from this morning's keynote address. What's first?  David Leary: Brad Smith came out, and opened, this morning. I think the news, there, is Brad really reflected back on the last four, or five QuickBooks Connects; talked about little moments; talked about moments of connections, and the support, and how we're all packed together. Brad went on to be really genuine ... He almost cried for a second, right?  Blake Oliver: Yeah. David Leary: Because, this is his last QB Connect, and Brad was a little emotional about it. People [00:03:30] really gave him a standing ovation. People loved having him here. It was a really heartfelt speech. He didn't really cover a lot of technical things. It was really an emotional "Thank you, this was an amazing journey" type of a speech. I thought it was really heartfelt. Blake Oliver: I was really excited, because I've never met him before, and I got to meet Brad Smith. You, and I have talked about this before, on the podcast, that he really has done something almost unique in the U.S. tech world, in turning [00:04:00] such a large company as Intuit around so quickly from being desktop-centric, QuickBooks-Desktop-heavy, to, really, an online platform. David Leary: Yeah, I think it's one of those history-book stories. People are gonna look back at business, going "Wow, how did Intuit do it?" Because, if you would have bet a decade ago if Intuit could do it, it was safer money to say, "No way."  Blake Oliver: No, I didn't think so. I have completely come around. It's incredible what has happened in the last few years. David Leary: It's a testament to Brad- Blake Oliver: Thank you, Brad Smith. [00:04:30] We'll miss you.  David Leary: Absolutely. Blake Oliver: But he's not going anywhere. He's gonna still be the chair of the board, right? David Leary: I think so, yeah [crosstalk] I think he just doesn't have to be here every day. Blake Oliver: After Brad said his tearful goodbye, Sasan Goodarzi came on stage, and he had a bunch of announcements about the product. David Leary: Yeah, and Sasan's gonna be the new CEO. Blake Oliver: Yes. David Leary: Gonna replace Brad. Sasan really had all the work to do. He talked about all the new features of QuickBooks. I think there was like three big, high-level things. It [00:05:00] was smart money, smart decisions, and smart connections. Blake Oliver: Tell me about smart money. David Leary: Smart money ... I think the word ... The word, in general, at QuickBooks Connect, is instant. We've moved from automated data moving into things, to instant. They talked about instant deposits. If your customers owe you money, you can actually get that deposit in your bank account, instantly. Now, I think there was a fee. I saw the little animation, there's a one-percent fee, maybe. I don't know if you remember that? Blake Oliver: Yeah. You're [00:05:30] talking about the ... Basically. it's invoice factoring, right?  David Leary: Yes-. Blake Oliver: With the QuickBooks Payments. With the invoice factoring, he showed how you could take $10,000 of invoices and have that money deposited in your account in 30 minutes. Then, Intuit collects on that. David Leary: Yeah, and I don't know, obviously, maybe Intuit's floating this, or paying the bank in between to eliminate those ACH delays, but it's instantaneous, because that's small business problem. It's all about getting that cash. The same thing has been extended, now ... They're [00:06:00] going to do next-day, and same-day payroll-. Blake Oliver: That's really cool.  David Leary: -to pay a subcontractor; if you have to pay your employees ... You can pay them the same day, instantly. Then, I was confused, but they said it saves like $9,000 a month saved, on average. What does that mean? I didn't understand that number. Blake Oliver: With traditional payroll systems, you have at least like a five-day lead. The money is taken out of your account for payroll, say, on Monday; your employees get paid on Friday. Now, you get to keep those funds, that $9,000 dollars, [00:06:30] on average, that people are paying for payroll, all the way until Friday. David Leary: Because, by the time I pay the payroll, I gotta spin up the next payroll, so it's almost like an escrow account, where I just have $9,000 constantly sitting in there to run payroll. Blake Oliver: Yeah-. David Leary: Got it, got it, got it.  Blake Oliver: It's helping you with your cashflow.  David Leary: It's amazing. Then, to continue on that, I think in the same day, they're gonna give out same-day loans. Blake Oliver: QuickBooks Capital-. David Leary: With QuickBooks Capital. You could apply for a loan in the morning, and have the cash in your bank account, later that afternoon, which, like I [00:07:00] said, it's instant. It's amazing we move to one day. It's game-changing.  Blake Oliver: You don't have to fill out any special loan paperwork. Intuit has your data in QuickBooks. They can look into your file, determine how creditworthy you are, and give you a loan. The thing that I really found interesting was the stat that Sasan gave out. He said that 60 percent of the folks who are using QuickBooks Capital, now, wouldn't qualify for traditional bank loans. David Leary: Yeah [inaudible] on the side, but it's really impressive. Then, that's the problem, and I feel like I'm even ... I'm [00:07:30] kind of in Small Business 101 pain, and even just getting a credit card is hard. It's not easy for small businesses to do these things, and the fact that Intuit's coming in, they're really taking Intuit's financial structure, and money, and really supporting small business. Blake Oliver: That's smart money - payments, same-day payroll, QuickBooks Capital. Moving on, smart decisions was the next category. David Leary: Yep, smart decisions. Blake Oliver: That all revolved around QuickBooks Assistant, which [00:08:00] we got a preview of last year. David Leary: Yes. Sasan had a QuickBooks Assistant. It's like a chat bot built into QuickBooks. You can ask it questions, like What were my ...? How many shoes did I sell? What were my sales last week? He demoed it last year, and it was a little rougher. He had to restart the phone in the middle of the demo. This year, it was a lot tighter. Over this last year, I think the impressive part of that is QuickBooks users have asked the ... It's called Hey QB, or is it Q ...? Blake Oliver: I don't recall.  David Leary: I don't remember the name of it. It's a QB [00:08:30] assistant. It's built in, and you can use your voice to ask questions. Apparently, over the last year, 1.5 million were asked last year. Blake Oliver: Wow. That's a lot.  David Leary: The number-one question, which totally made sense: Who owes me money? Blake Oliver: Yeah, that's what business owners care about. The second one was how much money am I making? Profit- David Leary: Future profit. Blake Oliver: Yep, and, actually, Sasan did a live demo of the QuickBooks Assistant, which is gutsy, when you're talking about voice recognition on stage at a conference, and it worked. I thought it was really neat, [00:09:00] when he asked, "How much money am I going to make by the end of the year?" the assistant actually was able to do a profit projection. David Leary: And it was after taxes, which was even more amazing. Blake Oliver: Yeah, how does that happen? David Leary: I don't know. I even made a note to myself, "After-taxes projections. Wow." I thought it was really cool. Blake Oliver: Pretty cool.  David Leary: I think the theme, there, from that, was, "Everybody keep asking questions, and we're gonna figure out what we have to build. We didn't know we had to build an answer to ..." He said, basically, they didn't know they had to build an answer to who owes him money, [00:09:30] or who owes me money, until enough people asked that question. The more questions that get asked to the QB Assistant, the more answers there'll be. Blake Oliver: What I found interesting was, this year, looking back on yesterday, and today, was when you actually look at the features that are being developed right now at Intuit, it seems like a lot of them, this year, are focused on the business owners, not so much the accountants. Yesterday, we had project profitability; that's a big one for the business owners. There [00:10:00] was the statement auto import, email-to-work type features for the accountants, but, hey, we can live without those. This one, in terms of the payments, and the same-day payroll, and the Capital, it all seems to be really focused on cashflow. David Leary: Small business pains ... I mean, it's their number-one small business pain is that cashflow.  Blake Oliver: Yeah. Well, that's it for the features this year, but there was also one last bit at the keynote, [00:10:30] which was they announced the App Showdown winner. David Leary: Yes, the App Showdown. Last night- Blake Oliver: Wait, for those who don't know, what is the App Showdown?  David Leary: The app showdown is ... Intuit Developer Team puts on the App Showdown. There's lots and lots of apps that integrate with QuickBooks. [inaudible].com. Every year more and more integrate. There's thousands that actually just integrate with QuickBooks Online. This is an opportunity for the newest apps, the top newest apps that have only been published in the last 365 days, to give it an [00:11:00] equal foothold in the market right. What we do is we ... It's almost like a Shark Tank type experience. David Leary: Over the year, they compete; they get public voting phases; they are rated on a couple different things. Then, the top finalists, the Intuit Developer Team bring them to QuickBooks Connect. They all get a booth, which is a victory on its own. Then, last night, they get to pitch in front of a panel of judges for $100,000. These guys were pretty nerve-wracked last night, going into this. Blake Oliver: It was fun to watch. David Leary: It's fun to watch, [00:11:30] because it's like the most important three minutes of their life. Blake Oliver: Who were the judges? It was like Jeannie Whitehouse. They had Clayton Oates- David Leary: Jeannie Whitehouse, Clayton Oates, and Hugh [Molotsi] ... I cannot pronounce words, right now, at this point. He's a former Intuit person, who was at Intuit for about 22 years, and he has his own start up now. It's an all-star panel of judges. Then, the next day ... These people pitch. They have to wait all night to announce the winner the next day. The winner was G1ve; it's G1ve with a one. G-1-V-E. You can find them on [00:12:00] Blake Oliver: They won $100,000 dollars, pretty cool. David Leary : $100,000. I'm gonna read right from the description, just because I won't be able to do it, if I don't read it. "G1ve makes it easy and rewarding to give to charities; you strengthen your brand and reach new customers. Customers want to know, and support businesses who give. G1ve is the charity portfolio manager, and marketing evangelist." David Leary: It's a play, where you can set up donations, and, as your own business, you can donate money. This [00:12:30] allows your customers to take advantage of market opportunities that you put out there; marketing promotions. Then, parts of those promotions, as kind of getting a customer match on your donations. Blake Oliver: Basically, let's say I, Blake, make custom widgets. When I'm selling, I can say, "I donate 1 percent of all of my revenue, all of my sales, to charity. When you buy from me, you are giving to charity." That makes customers feel good; lets you, as a business owner, get a nice deduction, and they keep track of it all. David Leary: The nice thing is, it's all integrated with QuickBooks Online. Donating, [00:13:00] and getting that tracked properly for taxes is a little bit difficult, and it gives peace of mind. Now, the accountant can help a small-business owner donate, and give back, and it's all set up, and tracked properly. The small-business owner doesn't have any work, and the accountant doesn't have any work, which is amazing [crosstalk] It'd be nice to see if accountants do this. Accountants could use G1ve, and, like, "Hey, if you come give me your bookkeeping work ..."  [crosstalk]. Blake Oliver: We donate to charity. David Leary: We donate to charity, exactly.  Blake Oliver: Well, that's all I've got from Day Two of QuickBooks Connect. It's [00:13:30] time to go see the celebrities, right?  David Leary: Who's your favorite celebrity? Who are you looking forward to seeing?  Blake Oliver: I mean, A-Rod, right? David Leary: A-Rod?  Blake Oliver: Who else is here? David Leary: Mindy, from The Office. Blake Oliver: Mindy Kaling, right?  David Leary: Kaling, yeah. Apparently, she's a big deal. She was a producer on there. Blake Oliver: Yeah, she was a writer [crosstalk] David Leary: A writer on there. She was a writer on Saturday Night Live, maybe, as well. Blake Oliver: She had her own show.  David Leary: She's a big deal. Yeah, yeah, yeah. She's a power player of this, but I heard that ... I said JLo was here. I forgot the other two people that are here. I guess we'll [00:14:00] find out though. We're gonna head over to the celebrities. Oh, Blake, and David'll be there. Blake Oliver: Oh, yeah, exactly. David Leary: Way to go. That's Day Two, and we’ll probably check back in on Day Three, because I think there's another accountant closing talk tomorrow.  Blake Oliver: Oh, hey, cool.  David Leary: We'll check in there. All right, everybody, see you around. Blake Oliver: Have a good one.  David Leary: All right, bye. 
Accountants feeling challenged to adapt to new tech, Intuit’s plans to win the mid-market, and Sage Group’s new CEO is no big surprise
Show NotesAccounting firms challenged in adapting to technology changes — Accounting Today — Only 25 percent of accounting firms feel extremely confident about their ability to keep pace in the current environment of technology changes, according to a report Accountants in small and midsized practices embracing more technology, but feeling pressures — Accounting Today — Accountants who work in small and midsized practices are using more technology to serve their clients better, as well as attract and retain top talent, but are feeling pressures to lower fees and differentiate themselves from competitors, according to a new survey by the International Federation of Accountants. Intuit's incoming CEO: 'We have a huge opportunity to win the mid market’ — Silicon Valley Business Journal — Intuit's incoming chief tells the Business Journal why it thinks it can win the mid market as its aggressive plans to do so. Sage Group Elevates CFO Steve Hare to CEO — CFO — The U.K. software firm had launched an external search for a new CEO but was impressed with Hare's performance as interim COO. Subscribe Listen on iTunes Listen on Google Play TranscriptDavid Leary: This episode of The Cloud Accounting Podcast is sponsored by Elefant. As a listener of this show, I'm pretty sure you've already embraced technology, and practice efficiencies, but sometimes, it's hard to find training in those areas. Some of you look to your state societies to get CP credit, but those tend to be tax-, or audit-focused, and, quite frankly, from what I've heard, pretty boring. Thankfully, our friends at Elefant have created education for tech-savvy accountants, and bookkeepers, like yourself. They offer training on platforms like Xero, QuickBooks, and Zapier, webinars on topics, like cryptocurrency, and firm marketing; have all-star instructors, who not only understand technology, but are using it to run their own practices. Just for you, Elefant has a special offer for Cloud Accounting Podcast listeners. Visit - that's E-L-E-F-A-N-T training dot com slash CAP - to receive 50 percent off your first webinar. That's for 50 percent off your first webinar. Elefant, building better practices, one bite at a time. Blake Oliver: Welcome [00:00:30] to The Cloud Accounting Podcast. [00:01:00] I'm Blake Oliver-. David Leary: And I'm David Leary. Blake Oliver: We are back from QuickBooks Connect. You're at home, right, David? David Leary: Finally, back in the closet, yes, yes. Blake Oliver: Ah, the sound ... It sounds so nice in there. David Leary: Are you recovered yet? QuickBooks Connect is a lot to take in. A lot. Blake Oliver: Yeah, my voice is still recovering, but I got a lotta sleep last coupla days. I'm excited to hear about Day Three. Unfortunately, I had to leave at the end of Day Two. I didn't get to stay for the half day that finishes the conference. Was there anything interesting? [00:01:30] David Leary: Day Three, it's kind of a half-day. It's really for the accountants only. Day Three, there's still sessions, and a lot of 'em, sometimes, are repeating sessions, because, if you went to a session on Monday, but it conflicted with a different session you wanted to go on Monday, it was repeated on Wednesday. It was really a way for accountants to maximize the sessions they attend. Then, that day's always the inspirational day, at the end. I think there was just one speaker. It was Alex Banayah. He recently authored a book called, "The Third Door." The [00:02:00] gist of it is, let's say you go to a nightclub, and there's people standing in the main line, and that's a door. Then, you got a VIP door, for the movie stars. That's a door. His argument is there's a third door. It's that you sneak through the kitchen, and you bang on the door, then sneak in. You go through a window; you hop through the bathroom. There's always a third way in. It's a way to apply that to life. He kind of discovered a lot of people's success. He's interviewed Bill Gates, Quincy [00:02:30] Jones; just tons, and tons of interviews to write this book. He really discovered that all of them had this third door they used to really cross that line to the next level. They all discovered ways to do it. He had a really good speech. He was walking around; he was in the crowd. Very engaging, very motivational. Then, he brought Brad Smith on to interview.  Blake Oliver: CEO of Intuit.  David Leary: CEO of Intuit. Then, after that, they transitioned to introducing to Sasan Goodarzi up on stage, cuz Sasan is now in that transition from Brad [00:03:00] Smith to Sasan. Sasan's gonna be the new CEO of Intuit, starting in, I wanna say, January 1st, or January 31st. It's in January of 2019. They embraced; they gave hugs. It was really a symbolic passing of the torch from one to the other, publicly. Then, that kind of wrapped up QuickBooks Connect. Maybe it should be noted, as well, if you go to QuickBooks Connect's website, for those of you that maybe missed anything, all the keynotes, it looks like, are recorded, and on the front page, it looks like. Blake Oliver: Oh, great, so you didn't [00:03:30] even have to go. David Leary: They have some recaps there, as well. You can actually see the official Intuit media of the recaps, which will be different from Blake's, and mine.  Blake Oliver: So, David, I got a bunch of stories, stats, that we should share with our listeners from the last couple of weeks, because we have been so focused on the conference, on QuickBooks Connect. We should run through those, right? David Leary: Yeah, let's jump through a couple stories. Blake Oliver: All right, cool-  David Leary: The world kept moving, while we were at QuickBooks Connect. Blake Oliver: This is a survey that was reported in Accounting Today. The article is Accounting [00:04:00] Firms Challenged and Adapting to Technology Changes. The lead is that only 25 percent of accounting firms feel extremely confident about their ability to keep pace in the current environment, through technology changes, according to a report by Wolters Kluwer Tax and Accounting, at its CCH Connections User Conference, in Miami Beach. David Leary: Is there any size they have these firms that were in the survey, or was it just kind of general? Blake Oliver: I'm not sure exactly who was surveyed. [00:04:30] I think it's a pretty broad survey. The top five concerns of the firms that it polled were 1) keeping up with technological change; 2) to growing the business; 3) meeting client expectations; 4) data security, and 5) completing work accurately, on time. 43 percent of the firms polled felt that the pace of technological change might be moving too fast. It was a bit more at small firms, than at midsize, and larger firms. David Leary: Yeah, but even a lot bigger than that. Then, half [00:05:00] of everybody thought it was moving at just about the right pace. The vast majority are like, "It's going just about the right pace," or, "It's going too fast." There was a couple exceptions, I think. One percent of the firms said it's going too slow, in comparison to what clients' needs are.  Blake Oliver: Yep, those are the super-early-adopters, right there. Then, about eight percent said that tech change is moving way too fast for their firms to keep up with client needs. Makes sense. Everybody's facing a challenge. [00:05:30] It ties in to, I think, the challenge that many accounting firms are facing, which is they're having trouble finding the right mix of skills, when they're hiring. This is another stat from another survey in Accounting Today. The article is Accountants in Small and Mid-sized Practices Embracing More Technology but Feeling Pressures. This article is based on a 2013 IFAC Global S&P [00:06:00] survey, which had over 6,000 responses from small, and midsize practices in 150 countries. This is a global survey, and the stat I wanna call out here is that a 54-percent majority of the respondents said they have difficulty attracting next-generation talent, with 66 percent saying that the number one reason is the lack of candidates with the right mix of skills. I think, probably, what they mean by 'right mix of skills' is both the technology skills, [00:06:30] and the soft skills that everybody really wants these days. David Leary: Technology just doesn't mean Excel anymore- Blake Oliver: Not just Excel. David Leary: You just can't be like, "I got Excel."  Blake Oliver: Excel's important- David Leary: Not just Excel-  Blake Oliver: Yeah, not just Excel. You've gotta really understand information systems; how to move data around.  David Leary: What's interesting about this ... I feel like both these articles can contradict an article we had, a couple weeks ago, that was about ... In the UK and making tax digital. So many firms, they [00:07:00] were so confident. They were gonna have all their clients ready for making tax digital, which is basically getting rid of all paper, and having everything in a technology stack. Some of these numbers are not reconciling across here. I guess we'll find out, because the making-tax-digital deadlines are coming. Blake Oliver: Maybe those firms are just pushing that onto the client, saying, "You've gotta get an accounting software," because, again, we make some assumptions here, where we ... Those [00:07:30] of us who are in more modern firms, and have outsourced accounting as a practice area ... A lot of firms don't. They're still really just doing tax, and audit, and not dealing with that for their clients. That's my theory. It's just that maybe, in the UK, those firms that are confident about it aren't even having to deal with it. David Leary: All right, gotcha.  Blake Oliver: Does that makes sense?  David Leary: They're just punting it.  Blake Oliver: Yeah, they're just punting it over to the clients. David Leary: My client said they could do it; I guess I'm gonna count that as a win. Okay, that makes sense. Blake Oliver: What else is new?  David Leary: I think we had bigger mid-market news, right? Something about [00:08:00] Sage, and then, Intuit actually made a comment, as well, about mid-market. Blake Oliver: Oh, yeah. Let's talk about this. This article in Silicon Valley Business Journal; this headline caught my attention: Intuit's Incoming CEO "We have a huge opportunity to win the mid-market." Where did this come from, David?  David Leary: I saw it, I think, on Facebook, or Twitter. The reason I even saw it is because I think Brad Clemente, who's in the picture in the article, tweeted it out, like, "That's me, right there inside this biz journal!" The [00:08:30] photo almost trumped the headline. Yeah, it looks like ... There was an announcement from Intuit, recently, about how they're gonna start going QuickBooks Advanced. It's gonna have more features; a bigger QuickBooks Online, but I have not ... There's no real announcements about this, so, it's interesting that this quote was out there, from Sasan. I didn't see anything at QuickBooks Connect, this week, about QuickBooks going upmarket. Blake Oliver: I was expecting that, if this is a big push, there would be some big announcement about QuickBooks Online Advanced, [00:09:00] which has been released. There was a press release about it; there were a few articles about it, ahead of the conference, but, then, I didn't ... Maybe there was a breakout session about it, but I didn't see anything on the main stage. Apparently, Goodarzi, Sasan Goodarzi, gave an interview with The Silicon Valley Business Journal, and he said that they are gonna go after the mid-market, now. Curious to know how they define mid-market, of course, because definitions [00:09:30] are always different. Here's the quote from the Sasan. He said, "It's a market that's very over-served, and expensive. Some of these companies are over-served by Sage, or NetSuite, and we believe we have a huge opportunity to win the mid-market. We already have customers on Desktop, and we're just taking that game to the cloud." David Leary: I think that's a valid argument. I would argue, even, some people who have QuickBooks Enterprise are oversold. It kind of happens naturally. If a company has enough [00:10:00] money, sometimes, they're sold the more expensive product, just because they could afford it, but maybe they don't need that. Just as there's people using QuickBooks Enterprise - they coulda just used QuickBooks Pro, back in the day - there's probably people using Intacct, or a large, mid-market Sage product; that they probably coulda just used QuickBooks.  I could definitely see how that window's there, but I've never seen Intuit make such a statement like this, or a stake in the ground. This could go back to Matt Paff's interview, and article, from six months ago, that, "Hey, you [00:10:30] American guys, QuickBooks, and Xero are coming." Maybe Matt saw the future a little bit on this one. Blake Oliver: Another interesting tidbit from the article: the author reports that Intuit hopes to capture the 200,000 clients, who have to move on from the product, annually, because they outgrow small-business category. This is attributed to Alex Chriss, Intuit's chief product officer, and leader of its Small Business Group. He said, "Mid-market is really exciting for us, and one of the biggest reasons [00:11:00] is that many mid-market companies start as a small business, and today, they face a challenge. They have to make a choice to move off of us, and the current choice is not only an exponential increase in price, but a massive increase in complexity, as well, so, they have to learn new tools in the middle of growing." David Leary: I find that 200,000 number extremely high. Blake Oliver: There can't possibly be 200,000 clients - 200,000 QuickBooks Desktop, or Enterprise users - moving to ... Or just 200,000 QuickBooks users, period, [00:11:30] moving to Sage, or NetSuite, annually-  David Leary: You would see the numbers of growth in those other companies' financials, right?  Blake Oliver: Yeah, because, together, I think the last time I saw numbers from NetSuite, and Sage, they don't have more than 60,000 customers between them, so, I think that's a mistake in the article.  David Leary: I've always kinda felt like there's-. Blake Oliver: You know what I think he's saying? You know what I think he actually meant is there's about 200,000 Desktop/Enterprise [00:12:00] users. David Leary: Got it. That could go other places, if- Blake Oliver: Yes.  David Leary: [crosstalk] If they make a new cloud decision, which is a vulnerability for Intuit, actually.  Blake Oliver: Yeah, and that's what we've been talking about is there are these 100,000 to 200,000 Desktop users that Intuit needs to move to the cloud, if they wanna have a single-platform strategy. David Leary: Maybe this is less of Intuit winning mid-market. It's really keeping the mid-market we own, you know, or even, Intuit saying, "We [00:12:30] own this mid-market. We own 200,000 mid-market clients, already, and we're gonna keep 'em.". Blake Oliver: Definitely on the lower-lower end of the mid-market, for sure. All right, well, that's interesting. Speaking of mid-market, there was some news about Sage. We've been talking about Sage a lot, recently, because their CEO got sacked, and they've been searching for a new one. Sage has struggled to find its way in the cloud. They have a lot of different products; not [00:13:00] a cohesive strategy. Their initial cloud strategy has kind of fizzled, and they're facing a lot of competition from Xero. Who have they selected for their new CEO? I was thinking they were gonna go outside. I think a lot of people were thinking that. Come to the US and find somebody who has done really well in SaaS, but, they didn't. They elevated their current CFO, Steve Hare, to CEO. They picked an insider. David Leary: Yeah, and I am not familiar with him, in any way, shape, or form, and any [00:13:30] exposure to this was people's reactions on social media. I think people were like ... I think Sage made a claim that, "We're gonna find somebody with SaaS in their veins." Blake Oliver: That's what the chairman said. He said, "We need to find somebody to be CEO who has SaaS in their veins," so that's what I thought they would do. David Leary: People said that they missed the boat on this. They should have ... I'm not familiar with his name, but whoever the CEO of Intacct was; bring him in to run all of Sage, just not Intacct. [00:14:00] Blake Oliver: I guess Rob Reid?  David Leary: I guess we'll watch this one, but I feel like nobody was like, "Ah, what a great move, Sage!" Nobody was tweeting that out.  Blake Oliver: Yeah, that doesn't inspire a lotta confidence in me. We'll see. Steve Hare joined Sage, in January 2014, after serving as an operating partner at a private equity firm, called Apax Partners. He has also been the CFO of several UK public companies, including Invensys, Spectris, and Marconi. I don't know any of those names, do you? David Leary: No, not [00:14:30] any of 'em, at all. He's gonna combine the roles of CEO, and CFO, until a replacement finance chief is-. Blake Oliver: That makes sense. David Leary: He's gonna not only [crosstalk] double-duty, as well. He said the right sentence. "We'll be able to succeed in our journey to becoming a great SaaS business." Blake Oliver: There you go. David Leary: It's the right speak, but based on who they said they were looking for, and your thoughts about them getting external, or using something they already have that has built a successful SaaS business ... It kind of explains the way Twitter reacted, and social media reacted [00:15:00] to this article. Blake Oliver: Well, David we got so much more we could talk about, but maybe we should just save it for next week. David Leary: What is next week? Well, holiday's Monday, right, so people are taking off work. Hopefully, the news'll slow down just enough, so you, and I can catch up. I feel like I have 500 articles, I haven't plowed through yet. There could be a diamond, here [crosstalk] to read.  Blake Oliver: It's good, though, because, when we started doing this, we were worried that we wouldn't have enough to talk about for a weekly show, but, not a problem. David Leary: I think one thing we should do, though, before we forget ... A lot of you met us for the first time at QuickBooks Connect. A [00:15:30] lot of you discovered The Cloud Accounting Podcast, when you were at QuickBooks Connect. This might be the first episode you're listening to, so welcome all our new listeners. If you have any articles, or ideas, or something we should be talking about ... Like, "Hey, I saw this article in The Wall Street Journal; you guys should discuss it on The Cloud Accounting Podcast," you can get that to us through Twitter. Blake, what's the easiest way to get to you?  Blake Oliver: I am @BlakeTOliver, and you, David? David Leary: And I'm @DavidLeary. Blake Oliver: Tweet at us. Connect with us online. If you [00:16:00] happen to be at the AICPA Controllers Conference next week, I will be there from the 14th of November, through the 16th. I'm gonna be presenting on the top five technology trends that controllers, and CFOs need to know. David Leary: Awesome. On that note, have fun in Vegas, and we'll chat on Friday. Blake Oliver: Talk to you later. 
What Intuit’s quarterly results say about its battle against Xero, how high growth accounting firms are eating the world, why blockchain won’t eliminate accounting, and more
Show NotesIntuit Reports First Quarter Revenue Increased 12 Percent Led by 42 Percent Growth in Small Business Online Ecosystem Revenue — Intuit Investor Relations — The company announced financial results for the first quarter of fiscal 2019, which ended Oct. 31. QBConnect 2018 - the review no-one else will write — Matt Paff on LinkedIn — Intuit’s theme for QuickBooks Connect was “Anything is Possible” but Matt thinks it should have been “Legacy.” Blink and it’s a Bank: Intuit Blurs Boundaries of Accounting Software — Digital First — Sholto Macpherson highlights Intuit’s not-so-secret plan to disrupt traditional lending with its new releases announced at QuickBooks Connect. 38 Percent of Employees Don’t Want Management Dictating the Tech They Use for Work — SmallBizTrends — According to a new report from NexPlane, 38% of employees don’t want management dictating the tech they use for work. And more than half have pushed back on IT or management when they tried to dictate the technology they use. Will Waiting For Pay Day Soon Be A Thing Of The Past? — PYMNTS — According to a CareerBuilder report, 75 percent of consumers reported living paycheck to paycheck in 2017. That’s why an increasing number of firms embracing instant payments as an option for workers, and as a tool to both recruit and retain employees. The Best Day For Payday — NPR — Most Americans get paid biweekly. One of The Indicator's listeners wanted to know why. So they looked into it. 2018 High Growth Study - Hinge Marketing - Check out this survey of over 1,000 professional services firms from across the globe.  Blockchain Promise to Revolutionize Accounting Hits Reality Wall — Bloomberg Tax — Blockchain a year ago seemed poised to revolutionize accounting. Now, it doesn’t quite seem so hot. A leaky database of SMS text messages exposed password resets and two-factor codes — Tech Crunch — A security lapse has exposed a massive database containing tens of millions of text messages, including password reset links, two-factor codes, shipping notifications and more. Microsoft details the causes of its recent multi-factor authentication meltdown — ZDNet — Microsoft has posted a root cause analysis of the multifactor authentication issue which hit a number of its customers worldwide last week. Here's what happened. Subscribe Listen on iTunes Listen on Google Play TranscriptBlake Oliver: Remember I said about 23 percent of firms are considered high- growth? [cross talk] average ... The median growth rate of the high-growth firms is 56.4 percent. David Leary: Wow. Blake Oliver: Yeah. Welcome to The Cloud Accounting Podcast. I'm Blake Oliver-  David Leary: And I'm David Leary. Blake Oliver: David, you are back from Mexico. You did Thanksgiving in Mexico. How was that? David Leary: Thanksgiving in Mexico is the best, because it's ... You're sitting on a beach; you [00:00:30] even get real turkey dinner; you get gringo Thanksgiving, which is nice. You just check out. It's the way to go. The accounting news, though, it was nice, because I time; I got caught up on all my news. I have no more articles in my backlog. Blake Oliver: Yeah, you have like 12 things that we've gotta talk about, so we'd better jump into this, if we're gonna get through it all. David Leary: Yeah, absolutely. This'll be a test, because I think we've gotten some feedback through social media ... Some people say, "Hey, you guys should do more articles." Some people are like, "No, keep it tight at 20 minutes." Right now, it's 50/50. I think I'm gonna put out [00:01:00] a real-deal survey this week, so we get a better quantitative number here, on Twitter, but, as of right now, we have a lot to go through, so let's jump in. Blake Oliver: Let's do it. We're gonna compromise; we're just gonna pack an hour of stuff into 20 minutes. Go. David Leary: Yes. Today, we are, for sure. I think big news last week was Intuit released their earnings. Blake Oliver: Mm-hmm.  David Leary: The big highlights from that were, I think, that we really care about, or like to watch are the QB Online subscriber growth. They're now at 3.6 million subscribers, Intuit is. It grew [00:01:30] by another 41 percent, if you can believe that. I feel like it's been growing at 41 percent, every quarter now, for maybe three years. I think cloud accounting, in general ... I think Xero's been growing at the same clip, as well. Cloud accounting, itself, is growing at 40 percent a year, I think it's safe to say. Anyway, they're up at 3.6 million subscribers. also talked about their US numbers, as well. US subscribers is at 2.7 million, and international subscribers grew at 61 percent, is now approaching ... It's now at 880,000. [00:02:00] Blake Oliver: Wow. David Leary: I thought was interesting because I think I've sent you the picture in your chat, but they have all the US numbers. It's interesting to look at those, versus Xero's numbers. We talked about Xero's last podcast, because Xero had that mid-year report out. If you look side by side, Xero had ... They hit 1.6 million worldwide, and their North America, what we reported, is 178,000. Intuit's was ... I just lost [00:02:30] it. Blake Oliver: Well, it's 2.7 million US subscribers. Internationally, QuickBooks is at 880,000. David Leary: Yeah, and I think it gets ... It's interesting that we both report it, because Xero's just says, 'rest of the world,' but Intuit has their numbers broken out by some deeper regions, like France, and India. I thought the interesting number was in the UK. Xero and QuickBooks are pretty much equal. I think Xero reported 350,000 in the UK. QBO's now at 305,000. It's almost 50-percent [00:03:00] equal number of subscribers in the UK. Blake Oliver: Wow.  David Leary: Australia, definitely ... Australia, and New Zealand, for sure, Xero's still winning that market. In the North America, QBO by far is destroying Xero in that market, but rest of the world's pretty equal, outside of those Their two original markets, if you wanna think of it that way. They're dominating the original markets, but then, outside of that, it's 50/50. Blake Oliver: There were a couple of articles that came out [00:03:30] that were written as a follow-up to QuickBooks Connect that are a great tie-in to this, which is Matt Paff wrote an article ... He always writes the article that nobody else will write.  David Leary: Yep, it's always a good one. Blake Oliver: Sholto MacPherson also had a great summary. They had some great takeaways that we, to be honest, we kinda missed, especially when it comes to where Intuit is headed, in terms of new products, or whatever their direction is, right?  David Leary: One thing I totally missed, or we missed, is QuickBooks Online [00:04:00] is kind of the legacy brand. It used to be you'd have Intuit QuickBooks, and the word 'Online' in the logo. Now, it's just QuickBooks. It's just Intuit QuickBooks, and that, it's QuickBooks Online, right? Blake Oliver: Right.  David Leary: Desktop gets the lower billing. Intuit QuickBooks has a sub-brand, Desktop, now. Blake Oliver: They've changed the logo ... They've changed the logos now. Now, it's just plain old QuickBooks; that means Online. QuickBooks Desktop means the ... That's now the legacy product. David Leary: Exactly, right? There's this hand-off, and a lot of Matt's [00:04:30] article is all about legacy, and hand-off, which we've talked about a little bit, before. There's parts we've talked about with Brad Smith, and Sasan, but ultimately, the things we missed is we missed the logo. That was really interesting. Then, the other big one [cross talk] Blake Oliver: -they didn't make a big deal about that. Intuit just sort of did it.  David Leary: Yeah, exactly, but Matt picked up on it-. Blake Oliver: Yeah, Matt noticed.  David Leary: Thinking about legacy ... We talked about these things, real time, that day; Matt took two weeks to write his article here, so he had a lot more time to digest a little bit. Blake Oliver: That's our excuse. [00:05:00] David Leary: One thing I think Matt starts to lay the theory of, and then, we can talk about it a little bit more in the next article ... Matt kind of makes the theory of QBO could just be a loss leader on Intuit's journey to become a bank. Blake Oliver: Right, with all of the announcements about QuickBooks Capital, and some other ... Same-day payroll, same-day invoice factoring. What are they calling that? I forget the name. They're not calling it factoring-. David Leary: Same-day payments.  Blake Oliver: Same-day [00:05:30] payments, where they take one percent. Intuit has kind of always done this, that the QuickBooks subscription. or license fee is really cheap, really affordable, and they make their money on add-ons, which, in the Desktop world, was primarily payroll, and merchant services. You might pay a few hundred dollars for QuickBooks, but you could pay thousands of dollars for payroll, and merchant services, as a small business. Now, that is expanding in the Online world [00:06:00] into loans. David Leary: Yeah, and I think it falls along the logic I've always argued about whoever owns the customers is gonna win the heart, and the mind share. The best example I could give is American Express and Costco. American Express used to be the official credit card for Costco. They thought customers loved American Express. The contract was up. Costco and American Express played hardball with each other. Costco bet that people loved Costco. Millions of people, including myself. stopped [00:06:30] using an AMEX card, and switched to the Visa card, because now that's the official card of Costco. It's kind of that same thing, I think with Intuit's play, here, is the customers love QuickBooks, and they love Intuit more than they love the banks. It's very easy to market to them ... This is also Sholto's point, when we go the next article - it's very easy to market to them, and just get them to be loyal to your other product offerings. Blake Oliver: Right. When it comes to lending, that is a traditionally terrible, inefficient process [00:07:00] that requires business owners putting together all sorts of reports, exporting information from their accounting system, which they may not even have. It's not good. It's not a good experience.  A lot of business owners get denied, but Intuit has access to all of this really, really valuable general-ledger information, sales information, that they can use to make loans automatically. They can automate that entire process, and pre-qualify their customers for lines of credit, and whatnot. David Leary: Then, flipping over to Sholto's article, [00:07:30] he really kind of takes a thought that Matt had in his article, and really lays out a case with real numbers, and real calculations. Talks about different parts of the funnel, the pain awareness. Then, Intuit has the ability to put promotions right in front of people. Then the middle of the funnel ... We can look at they're ... Intuit can look at the data, and then market based on the data in the file, and then, already have them pre-approved at the bottom of the funnel. When somebody's actually finally ready to make a purchase [00:08:00] decision, the answer's already there. Intuit knows the answer before the customer asks. He really ties this back to guess who's a trillion-dollar company that does this really well? Amazon, with one-click ordering. To some extent, all these financial services could turn into one-click, because of Intuit. I think he makes a really good argument in this article, and everybody should read it; both these articles, actually, are really, really good. Blake Oliver: All right, we'll post those in the show notes. Thank you, Matt, and Sholto.  David Leary: Before we jump to something else, though, one thing that was Intuit's earnings, which I [00:08:30] just thought was staggering to look at, has nothing to do with cloud accounting, but it's really the TurboTax space, and just the US tax-industry landscape. This is the last decade of the tax industry. Overall, there's 143 people that had to file tax returns 10 years ago. Now there's about a 152 million, so it's grown by 10 million, the number of taxpayers.  The interesting thing, if you look at these numbers, TurboTax used to only do 22 million of the tax returns in the country. Now, TurboTax is doing 41 [00:09:00] million. The manual taxpayers was at 15 percent, or 15 million, and now it's down to 4 million. About every two years, it drops by another million. Manual, in six years, is gonna be gone. There will be nobody doing manual tax returns. The weird side ... The really interesting number that, if you look at the tax stores, their market share is just shrinking astronomically, as people that do it themselves, either through TurboTax, or other DIY software, they're just crushing the tax stores. [00:09:30] Even the CPAs are still growing, because the number of taxpayers ... The number of all tax returns is going up, so the CPA firms, and professionals are growing, but the tax stores are getting slaughtered. They may not make it across the board. Blake Oliver: Wow, TurboTax has grown so fast, from 22 million to 41 million over 10 years, from 2008 to 2018. David Leary: The interesting thing'll be is where does this ... Six years from now, [00:10:00] when manual stops, then, based on the decline for stores, what happens when TurboTax takes away all what's left of the tax stores? Will it ever start dipping into the CPAs, and the professionals, or will some balance finally form here? For last 10 years, it's been a machine.  Blake Oliver: The more sophisticated that TurboTax can become, the more at risk the professional shops are, that the accounting firms are. Great examples of that are the individual returns [00:10:30] that go along with the business returns. I think that CPAs are protected, because a business owner isn't that price-sensitive, when it comes to their tax work. They're more interested in quality. Are they going to take that individual return, and go fill out their own TurboTax? I doubt it. Not likely to happen. David Leary: I think I remember Brad Smith saying this years ago ... There's always business talk about the one-minute tax [00:11:00] return, or tax-form reinvention. There's always been talk about this, about simplifying the tax process, et cetera. He was always saying chances are, if they ever ... If it ever truly got too simple, everybody would do it themselves. It's kind of the opposite. Everybody would use TurboTax to do it themselves, if it was super-simple, because then nobody would justify spending ... 69 million people that go to a CPA, or a professional, would not do that anymore, if it got simple. It's [00:11:30] kind of the opposite theory of Intuit wants it complicated. Really, Intuit would want it simplified, because they would steal another 69 million returns from that part of the market. Enough about Intuit, though; enough about Intuit. Let's talk about important things like employees. I think I have a couple employee articles, here. Blake Oliver: Yeah, let's see what you got here. David Leary: Interesting one about tech. 38 percent of employees do not want management dictating the tech they use for work. I know I have been on that kick, myself. I [00:12:00] hate using any tech IT wants. I've always thought my laptop ... I grew up doing construction, and my dad ... You'd bring your own saw, and your own hammer to the job site. Nobody told you to use this hammer. It's kinda that same thing, and I think you're on that page, right? You wanna use your own tech, correct?  Blake Oliver: Yeah. One of the really attractive things about going to work for FloQast was that they said I could use whatever I wanted. I could use a Mac. I could use PC. I could install my own apps. Such a magnificent [00:12:30] change, after being forced into one platform in my last accounting gig. David Leary: It's interesting that that affected you getting hired there, because the article talks about that.  Blake Oliver: I probably would've been okay ... I don't think I would've turned down the job, but I also think that if we didn't have that policy in our team, that we would have trouble attracting people. Overall, I think it just represents a different approach to employees; not dictating what tools they're gonna use. We'd [00:13:00] be a different company, if we didn't have that philosophy. It's not just about the tech - the specific computer I use, right? Does that make sense? David Leary: Yeah. Ultimately, I think this is the best. The key is for businesses looking to keep their workforce happy, and productive. If you do that, you're gonna have to give up some IT control, and let people have some freedom with that. I think there's a couple interesting takeaways. I saw this happen at Intuit, back in the day. Intuit was only IBM PCs, Lenovo ... When Apple [00:13:30] iPhone came out, and people really started having that brand loyalty to Apple, people would just start ... They'd bypass IT, and start getting MacBook Pros. Then, eventually, now, MacBook Pro is the official computer of Intuit, I think; if I remember correctly. It's kinda funny how the employees drove the tech adoption.  Dave Barrett has a great blog post about this, from ... Dave Barrett is the CEO of Expensify. I think for the last eight years, that's been Expensify's business model is just get the employees. I [00:14:00] think I've even heard stories of TSheets, where employees will go to a new company, and they'll demand TSheets, because they used it at a different company. Blake Oliver: Just to give everyone a little context, this stat that ... The stat is that 38 percent of employees don't want management dictating the tech they use for work. They wanna choose it for themselves. It's from a report by Nextplane, called The Fight to Collaborate – A Growing Rift Between IT and Teams.  I agree. Expensify's entire [00:14:30] business model, at least for the early years, was built on this grassroots type of IT approach, where one person, or a small group of people in a corporation would hate the way they were doing expense reports. Maybe they were forced to use some legacy system. Maybe there wasn't even a system, and they had to create an Excel sheet, and tape receipts, and fax them in, that sort of thing. Expensify said, "Okay, well, you don't have to get IT approval to [00:15:00] use our software. You can just start using it for free, and you can make a beautiful expense report that you can then email to your accountants at your company." What happens is that enough people start doing this that the accountants are like, "Oh, shit, this is amazing. We should we should do this." Then accounting, and IT all get on board, and they buy it. It's totally from-the-bottom-up type of approach, and-  David Leary: I think I saw it even with some sharing utilities, like Dropbox [cross talk] Blake Oliver: Yeah, Dropbox is a great example. David Leary: I wouldn't be surprised [00:15:30] if some of our bookkeeping, and firms are going to start seeing this, where their employees are like, "I only wanna use the cloud software, because the bank feeds are better. I don't wanna use some desktop app that you have our clients on."  Actually, I know this, for a fact, has happened with an accounting firm, where they have a mix of desktop ... QuickBooks Desktop customers, a mix of clients that are on QuickBooks Online, and they discovered the employees were ... All the bookkeepers in the firm were kind of neglecting the Desktop customers, because they hated working in it. This is already happening, from the accounting standpoint, as well. Obviously, [00:16:00] if you let people pick technology, you can retain your employees, right? You don't have that hammer over their head. Another interesting thing that's kind of bubbled up is paying your employees the same day. I have two links we'll get in there. One is there's a podcast from NPR's Daily Indicator. It kinda gives a history of payday; why paydays used to be ... When people were harvesting oil from whales, it used to be you got paid every two years, when you returned [00:16:30] with the boat, to people were getting paid, for a while, every Saturday. As taxes came in, it kinda went to a biweekly payroll; super-super popular, right?  There's an NPR podcast I already listened to, which is really good. Then, recently just announced, ADP ... Well, QuickBooks talked about it's coming, same-day payroll, but apparently ADP has released it. One of the customers was talking about that, most [00:17:00] of all ... First, I think employees-wise, one thing that was voted, 70 percent of the people surveyed want shorter pay cycles. The vast majority of employees wanna be paid much sooner than every two weeks. Blake Oliver: Yeah, two weeks is a long time. Usually, by the time you get that direct deposit, it's even longer. You've got the two weeks are up, and then you have to wait another week for your actual pay. David Leary: This is a hotel company, they have some hotels, and some museums, or something, but they're reporting [00:17:30] that since they've switched to daily payments, they are able to recruit employees easier, and have higher retention rates. We could be getting to a point, where, at the end of every day, you'll have that direct deposit in your bank account. It's weird. It's definitely gonna be here. Those are just two quick ones worth people checking out. I think you had a survey about high-performing firms, right? Blake Oliver: Yeah. I came across this really interesting survey by Hinge Marketing. It's a 2018 survey, so, this [00:18:00] year. It's called the 2018 High Growth Study. Hinge is a marketing agency, a small marketing agency that serves just professional service firms. They did a really nice job with this report, so check it out. I'll put the link in the notes, as always. Some items that are just really interesting to call out ... By the way, over 1,000 firms participated in this study - accounting firms and consulting [00:18:30] firms - with 176 billion in combined revenues, and over 1 million full-time employees. They, together, have over 20 billion in marketing budgets. Not a small survey. What was really interesting to me was the growth rates. If you compare accounting and finance to other professional-services areas, like tech consulting, architecture, legal, accounting has the lowest growth rate of all, at 6.1 percent. That's [00:19:00] the median growth rate for 2017 - 6.1 percent. Even legal is growing faster than at 8.3 percent. Then, tech is at 11.4 percent, of course. Good time to be a professional services person in tech. Blake Oliver: Accounting is not growing all that fast, compared to other professional services; not shoddy, but not fast. What's interesting is, if you break that down into different firms, and you look at, well, inside of accounting and finance as an overall industry, [00:19:30] who's growing, about 23 percent of firms are considered high-growth, meaning that they are experiencing over 20 percent growth annually. That's really, really fast. A little less than a quarter of firms are high-growth. 60 percent of firms are average growth, which means they are growing less than 20 percent, but they're still growing. Then, about 17 percent of firms are not growing at all. They're either not growing, or they're shrinking. David Leary: If the market's not expanding very [00:20:00] fast, if somebody's growing ... If firms are growing at 20-percent-plus a year, they're stealing clients from other people. I mean, stealing's not the right word, but, I kinda used that same, when I was talking about the TurboTax numbers, before. They're eating the lunch of the other people, and they're just taking the [cross talk] and I guess the A&B clients, as well. Blake Oliver: Here's what's interesting, actually. You would think that, but the data doesn't support that. I think what's happening is that the vast majority of firms are growing very [00:20:30] slowly, or not at all - like three-quarters of firms - or shrinking, and that one-quarter of firms that is growing is taking all the new customers. David Leary: Oh, okay.  Blake Oliver: Remember I said about 23 percent of firms are considered high-growth [cross talk] average ... The median growth rate of the high-growth firms is 56.4 percent. David Leary: Wow. Blake Oliver: Yeah. High-growth firms, the minority of firms that are growing fast are growing at [00:21:00] an average of 56.4 percent annually, which totally makes sense to me. I was part of that in my own small firm, just being in the right place at the right time, with Xero, with cloud accounting. It's hard not to grow, when you're the only ... The second bookkeeper in the country that's using Xero, right? That was that was my particular situation, so I got lucky. There's tons of other firms that have caught on to this that are now doing this, since QuickBooks Online got good; [00:21:30] since Xero got good; since Sage Intacct became a viable option; since NetSuite really started taking off. I think the firms that are using cloud, and, of course, all of the add-ons - Expensify,, TSheets ... It goes on, and, on, and on - they're the ones who are just eating up all the new customers. David Leary: I think this covers a lot of marketing stuff. Does it talk about whether or not these high-growth firms, what technology stacks they're using? I think I've seen a survey, before - year and a half, two years ago - about firms [00:22:00] that are 100-percent cloud were growing at 14 percent, and firms that had a mix of cloud, and desktop were growing at about four to six percent, and firms that only have desktop-clients only were losing more clients. Blake Oliver: Yeah. This is just an executive summary. The actual report's like 500 bucks, and I just don't feel like spending that kinda money. If you're a listener, and you wanna donate to The Cloud Accounting Podcast, so we can get the full report [cross talk]. David Leary: Or, if you're at Hinge ... Is it Hinge Marketing? [00:22:30] Blake Oliver: Hinge Marketing, yeah. If Hinge Marketing would like to share their report with us, we can dig into that. David Leary: Yeah, that'd be great to look at some more of that. Absolutely. Blake Oliver: I don't have that information for you, but I can tell you that my suspicion is, yes, it's gotta be that way. The high-growth firms are the ones that are- David Leary: I agree. Blake Oliver: You can see this in the fact that average-growth firms, that 60 percent of firms that are just growing average, they're only growing seven percent. The no-growth firms are shrinking on average by almost two percent [00:23:00] every year. David Leary: Yeah, because going cloud, automating some of your workflows, and processes, by using other cloud apps, you can just take on more clients. It's simple math. Blake Oliver: Yeah, and you can stay on desktop, but you are not gonna grow. I think a lot of partners, and firms, where they are desktop-based, and they are not moving to cloud are really just ... They just wanna pull in checks until they retire, and they're not interested in modernizing. David Leary: Well, everybody doesn't know this is a high-growth firm, so, I think we're [cross talk]  Blake Oliver: -even if you're not ... Yeah, [00:23:30] exactly. We can we can dish out on them, on the no-growth firms all day long, and nobody will get mad at us. One more chart from this report, and then I'll shut up. Of the high-growth firms ... If you compare high-growth, and no-growth firms ... Actually, they don't talk about the particular technology being used, but they do say that the high-growth firms, 43 percent of them- actually, [00:24:00] rather, 34 percent of them are offering specialized services, whereas only 24 percent of the no-growth firms are. High-growth firms are more likely to be industry specialists. They're much more likely to be able to serve a specific role, or organizational function, solve specific problems [cross talk] and interestingly- David Leary: They're niche. They're solving niche things. Blake Oliver: Interestingly, the high-growth firms are actually less likely to be using specific technology, which means to me that they're more likely to use a variety of tools. [00:24:30] David Leary: Which, full circle, goes right back to the article of keep your employees happy by utilizing whatever technology your employees wanna use. Maybe these high-growth firms are actually really ... They're technically able to use whatever technology their clients bring to the table. Blake Oliver: Yeah, I think that's exactly it. They're willing to experiment and make mistakes. This is why, when people ask me about the cost of moving to cloud, and how disruptive it is, I say, "Yeah, it's painful; it's expensive; you're gonna lose people, but [00:25:00] the upside is so humongous." Right here, I'm staring at this chart. I'm gonna paste it in the show notes. This is the reason why it's worth that risk, that 56-percent growth; on average, which means that ... I'm sure there's firms that are out there doubling every year. It's gotta be. David Leary: This is pretty staggering. This is a great find, actually. It's dumbfounding, these numbers that are in this. We're coming up to a half hour. I don't know if we should go past this, per se. I'll just go [00:25:30] rapidly through those two more articles, quickly. There's an article from Bloomberg Tax. Blockhains Promise to Revolutionizing ... Let's rewind the title here. Blockchain Promise to Revolutionize Accounting Hits Reality Wall. Some of the article is basically this; blockchain's not gonna change a lot of our workflows in our space for a decade. You can read the article, but that's the gist of it. A year ago, everybody was like, "This is gonna change everything in six months." As [00:26:00] people are really starting to have serious conversations about blockchain in the accounting industry, people are starting to come to the consensus that this is way far off. We might never have to talk about blockchain again, for a decade [cross talk]  Blake Oliver: I'm so glad that this is finally ... People are realizing that blockchain is not in it. It's just ... I've been saying this. I don't understand. How is blockchain gonna change audit? Tell me, in the next five years, what ... Are people suddenly gonna start using it, and we're not gonna be using banks anymore? No, it's [00:26:30] not gonna happen. It's gonna take a long time. It's gonna make the audit more complex, actually. The auditors I talked to say no, blockchain gets ... It makes the audit more difficult, because now, you have to audit the actual technology, too. David Leary: Yeah, and some of the arguments is companies are not likely to share their general ledger with another company [cross talk] Blake Oliver: -public information. How do you ... David Leary: I think it's worth reading. It's actually a really good article, and it brings some sanity to this that we've been having. Then, I don't know if [cross talk]. Blake Oliver: I would like you to say ... If you're [00:27:00] at a conference, and somebody gets up there, and starts talking about how blockchain is gonna automate the audit, just walk out; just stop listening to them immediately, because they have no idea what they're talking about. David Leary: Even Sean Stein, who we had-. Blake Oliver: We had him on the podcast. David Leary: There's a quote from him in this article, so we can use this as our quote, right? "I am fully confident that 10 years from now, blockchain is not going to be some new, radical idea. It's gonna be part of how business is conducted." It's good that even he, who is crazy [00:27:30] in love with bitcoin, and blockchain, has a 10-year perspective on this. Blake Oliver: Meanwhile, Bitcoin hit a new low today. David Leary: I saw that.  Blake Oliver: Let's see, Bitcoin ... What's the current price of Bitcoin? It is now at $3,640 to the Bitcoin, down from a $20,000 high, something like that, earlier this year. David Leary: I wrote my January predictions, and Bitcoin was in one of those, the Bitcoin collapse. I'm feeling really good now that I'm gonna make it out to the end [00:28:00] of the year with a huge ... My prediction was people are gonna lose their ass, and they did. Blake Oliver: Yeah. David Leary: Bad, bad, bad, bad. The other thing is there was some multi-factor news that we could just put the links in; we don't have to discuss much, but a lotta people do multi-factor authentication, when they sign into websites, and they get a text back. Apparently, there's some security issues, some leaks in that. Maybe that makes you kind of second guess, like are you doing the right thing, security-wise? Then, Microsoft had a 14-hour outage with their multi-factor authentication. [00:28:30] On one hand, more people are becoming dependent on the security stuff, but even some of those higher security levels that we're taking has its own headaches. Blake Oliver: The big takeaway for me from these articles ... The TechCrunch one about the leaky database of SMS text messages, that is bad. If your app, or you're using an app that is still sending you a text message as a way of multi-factor authentication, you put in the code, that is actually no longer considered to be secure, because [00:29:00] it's too easy for hackers to intercept those text messages, since ... Text messages are a lot like email; they go through multiple servers, and it's hard to know if somebody didn't intercept that. They could spoof your phone number and get it; they can steal your phone number, get the text message, log in as you. That's good. People really should be using stuff like Google Authenticator LastPass Authenticator, those types of multi-factor, where it's just a randomly generated code or an algorithmically generated code on your phone [00:29:30] that you enter. Hopefully, folks will switch over to that eventually, but ... This whole everybody getting locked out of all their Microsoft accounts for eight hours or something? That's just an unfortunate consequence of being secure. Sometimes, your security gets the best you. David Leary: And, on that note-. Blake Oliver: It's worth it. It's worth it. David Leary: On that note, assuming I can log into Twitter this week, or you can log in to Twitter - there's no security issues - how would somebody tweet with you, and track you [00:30:00] down? Blake Oliver: My username is @BlakeTOliver, and you, David? David Leary: @DavidLeary. Blake Oliver: We'll look forward to hearing from you. We hope you enjoyed this Thanksgiving-sized podcast episode. David Leary: Ah, good perspective; it's the Thanksgiving-sized episode. Way to go. I'm caught up. I'm all caught up. There's no more articles. Blake Oliver: You are, now? Do you feel a sense of satisfaction, and completion, now that you've digested all of your articles?  David Leary: We'll see. We'll see what happens this week in cloud accounting.  Blake Oliver: Or, are you, like me, going [00:30:30] to start having regret about how much you ate? David Leary: Oh, I had that regret. I need to go run, right now, so, on that note, we'll go hit the gym. Blake Oliver: All right. Enjoy your run. David Leary: All right, Blake.  
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.  
The beginning of the end for QuickBooks Desktop, NetSuite soars, and Walmart deploys blockchain in the real world
Blake and David reconnect to talk about what's new in the worlds of QuickBooks and NetSuite. Intuit is discontinuing their QuickBooks Desktop Advanced ProAdvisor Certification — could this be the beginning of the end for desktop? Meanwhile, NetSuite is soaring according to the latest Oracle quarterly results. NetSuite also announced their new "Banking as a Service" or "BaaS" offering, which will allow banks to connect directly to NetSuite's ERP to process payments and reconcile transactions, just to start. Also, blockchain is no longer a much-hyped theory. Walmart will require all its suppliers of leafy greens to use IBM's blockchain to track its supply chain starting in 2019.For this and more, listen to Episode 38! Show NotesIntuit Discontinues QuickBooks Desktop Advanced ProAdvisor Certification — Insightful Accountant — Intuit has just announced the discontinuation of the QuickBooks ProAdvisor Desktop Advanced Certification effective December 31, 2018.  They cited a 'declining number of certifications' over the last several years as the basis for this decision.QuickBooks Online Advanced - September Update — Firm of the Future — QuickBooks® Online Advanced is a new offering for customers who are outgrowing QuickBooks Online Plus. It includes up to 25 simultaneous users with full access, a dedicated customer success manager, priority technical support, and free online training. NetSuite soars in Oracle results — Enterprise Times — Mark Hurd says, "NetSuite ERP had a spectacular quarter.” He added that revenues were up 26% and bookings up 40%, 39% in the quarter. He also added that the growth followed a huge fourth quarter where bookings growth for NetSuite had been 70%." Customers Achieve Efficiency and Cost Savings with NetSuite Banking as a Service — NetSuite Blog — The recently released Oracle NetSuite Banking as a Service (BaaS) Program strengthens bank-to-customer relationships in a digital transformation where banking services are delivered within the ERP system. The US Census Bureau says there are 32m small businesses. They're wrong — The Guardian — According to Gene Marks, only a third of these reported ‘businesses’ have actual employees – the rest just report extra income on their tax returns. Maybe in 2018, Every SaaS Contract Should Have An Automatic Out Clause — SaaStr — Jason Lemkin argues that SaaS companies should stop selling annual contracts, make onboarding and buying as simple as possible, and let customers cancel whenever they want.  Walmart Requires Lettuce, Spinach Suppliers to Join Blockchain — Wall Street Journal — Walmart Inc., in a letter to be issued Monday to suppliers, will require its direct suppliers of lettuce, spinach and other greens to join its food-tracking blockchain by Jan. 31. The retailer also will mandate that farmers, logistics firms and business partners of these suppliers join the blockchain by Sept. 30, 2019. The AICPA’s Twitter Totally Got Hacked by Bitcoin Scammers — Going Concern — The AICPA Twitter account was recently hijacked by someone masquerading as Coinbase. The hackers then used the @AICPA account to tweet out cryptocurrency scams.   Subscribe Listen on iTunes Listen on Google Play TranscriptDavid Leary: Apparently, somebody just took over AICPA's Twitter handle, and changed the image, changed everything. Blake Oliver: You know, they really shouldn't have made their password 'cpaexam,' all lowercase. 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: David, we're back from New Orleans, from the Cloud Accounting salon, not getting our hair done, but talking [00:00:30] with a small group of amazing, intelligent accountants providing outsourced accounting services; some people from software. I had a great time. It was great to see you. David Leary: Yeah, we got to hang out for two or three days, face to face. We got to enjoy some great New Orleans food, had some drinks. Got to talk cloud accounting. We should've been more motivated, and pulled out the microphone, and recorded something live. There was this great ... I'm much more comfortable standing in my closet. Blake Oliver: Exactly. I [00:01:00] was having too much fun to even think about doing work, but plenty of stuff happened, while we were gone, so, let's talk about it. What's new? David Leary: This is on Insightful Accountant: Intuit discontinues the QuickBooks Pro Advisor Desktop certification. Blake Oliver: End of an era.  David Leary: Yeah. As of December 31st, of 2018. They said it's because of a declining number of certifications over the last few years, and that was the basis of the decision. [00:01:30] Blake Oliver: That makes sense. David Leary: It'll still be ... If you're currently certified, you'll maintain your certification for three years, starting, it looks like, January 1st of 2019. You'll still be listed in the QuickBooks Pro - Find a Pro Advisor site, but it's really just anybody new, you can't get certified Desktop-. Blake Oliver: And you really shouldn't. David Leary: Yeah, hopefully, anybody listening to the Cloud Accounting Podcast, right? It is not ... We're not getting certified Desktop. Yeah, you're right. It's probably a lot of work, and effort to get a badge that maybe [00:02:00] doesn't matter, going forward, as much. Blake Oliver: Well, speaking of QuickBooks, the online version has a new feature, and actually a new version called QuickBooks Online Advanced. I saw this pop up on the Firm of the Future site. What is QuickBooks Online Advanced, you ask? Unfortunately, it is not enterprise in the cloud. It is basically the same as QuickBooks Online Plus, except now you can have 25 simultaneous users online. That's it for now. David Leary: Wow, so, it's [00:02:30] really just if you have to have everybody in your QuickBooks, all at the same time. Blake Oliver: Yeah.  David Leary: It's interesting. How do you feel about that? I kinda have the theory of ... In the olden days, with QuickBooks Desktop software, you'd get QuickBooks Enterprise, and you have your warehouse staff in the accounting system, and the bookkeepers in the accounting system, and the lawyer in the accounting system. Everybody's all in the accounting system at the same time. In the new world, I kinda feel like you could just have only the bookkeeper, or the accountant be in the accounting system, and have all the rest of the staff in apps, right? You have [00:03:00] that separation to where the accounting system's your domain. In theory, you don't need 25 people's fingers in the books. What's your take on that? Blake Oliver: In theory, right ... There are, I think, a small percentage of companies that are taking that app ecosystem approach and integrating lots of different front-end apps with the back-end accounting system, but, I'm gonna guess that's less than 20 percent of companies. I have a feeling that the vast majority are really not doing a lotta integrations, and for them, this is important, because they do have a lot of people that need to access [00:03:30] the system at once. My hope is that that ... It would make sense that eventually, as Intuit adds enterprise features to their online product, which they have to do, in order to move up market with the product, that it will be added to this Advanced version.Pricing is $150 per month. You also get a dedicated customer success manager, priority care for technical support, and [00:04:00] you get up to 5 online training courses, annually, included. David Leary: Yeah. It seems to make sense. It probably, technically, is not any different. They could probably even do 100 users at the same time. There's probably no technical limits to this. It's interesting how it's being phrased as this 'Advanced.' It looks like it's setting the table for an enterprise. Blake Oliver: Mm-hmm.  David Leary: Coincidentally, it's a similar number of users, simultaneous access ... It's starting to set that table for maybe a more advanced version of QuickBooks Online, right? Enterprise [00:04:30] level. Blake Oliver: Well, and I think they're doing this, because they're starting to face competition from cloud ERP providers, like, NetSuite, and Intacct, who overlap in that $100-$150 segment, per month. Those guys are coming down market, right? Intuit really needs to figure out a way to get those enterprise folks happy with QuickBooks Online. Hopefully, this is the beginning of that. Speaking of NetSuite, NetSuite did [00:05:00] really, really well in Oracle's third-quarter results. I've got an article here talking about how NetSuite had a spectacular quarter. Revenues were up 26 percent, and bookings were up 40 percent; 39 percent in the quarter. Annualized revenue for NetSuite is now 800 million. It says, "A significant contributor to Oracle revenues,” which, actually, if you dig into those Oracle numbers, it's [00:05:30] a good thing they bought NetSuite, because they're on-premises, and hardware business is declining. David Leary: Yeah, I think deeper in the article it actually says that. It's like, "NetSuite is becoming the most significant buy that Oracle has ever made." Blake Oliver: Mm-hmm. It's great for Oracle, because, as those customers outgrow their application, then they become Oracle customers.  David Leary: Blowing some dust off, back to the [inaudible] days, when did they acquire NetSuite? Do you remember when Oracle bought NetSuite?  Blake Oliver: I think it was a couple of years ago, now.  David Leary: Yeah, it's interesting, because Oracle has [00:06:00] so many different possible revenue streams, so, obviously, many are drying up, but, reading between the lines, cloud accounting is what's growing Oracle now. Blake Oliver: Mm-hmm. Yep. Hey, I do have some more NetSuite news. They also are announcing [crosstalk] some new features. Pretty cool. The latest .... Oracle, and NetSuite are really good at this, making boring things sound sexy. They've announced what they're calling Banking as a Service, or BaaS. This [00:06:30] is going to be basically an API for banks to integrate with the NetSuite ERP. Initially, it will be around payments and account reconciliations. They don't give specific examples, but the way I imagine this working is that I will be able to make payments from within NetSuite, and those payments will be processed by my bank. Paying a bill, for example, and then from account reconciliation, [00:07:00] from that standpoint, when a payment is received in the bank account, the bank will push the reconciled transaction into NetSuite, into the general ledger. It won't have to do that on its ... I won't have to do that. David Leary: Yeah, it's interesting how they're presenting this. I think Xero recently talked about how they have a bank API, and the banks can integrate with Xero. I think, traditionally, you talk about APIs, right? You have QuickBooks Online APIs right, or, even go with the Xero API. Really, off [00:07:30] the shelf, a third-party developer, whatever app it is, it's cleared-a-law-firm software. They don't need to talk to Intuit. They can just go and integrate with QuickBooks.  I think, with this, they're presenting it that way, but I think it's really a back and forth. The banks are creating their APIs, but, in order for the banks, and the accounting system to communicate better, together, the accounting-software apps also have some sort of APIs for the banks, and they're kind of meeting in the middle, right, if that makes any sense. I don't see any [00:08:00] oddball bank going and using these APIs. There's probably a biz-dev deal done. There's some agreements, and these APIs are just really helping to make the customer experience better, ultimately. Blake Oliver: Yeah, and I'm sure plenty of banks won't take advantage of this. Actually, cited in the article is a prediction from Forrester Research. It says that, "More than 50 percent of banks will fail to exploit open banking, starting [00:08:30] down the slow, painful path to becoming an unintentional utility." That's the way banks are for me, already, when it comes to my clients. I set them up on I set them up on various payment services, various extraction services, so I don't have to go in, and get check images, or whatnot. The bank is just a utility. It's not important, other than you have to have it. David Leary: Yeah, cuz once [00:09:00] you have your client set up with the, and you said you're fetching bank statements, or the check images. Once they're set up, you could swap the bank out, and swap in a new bank, and it truly doesn't matter. Blake Oliver: Right. The value to the bank, and the reason they should want to participate in this program, is that if they do it, then they have less worry about being disintermediated by FinTechs. They are basically becoming FinTechs, themselves, [00:09:30] with Oracle's help. David Leary: Ultimately, I've always, and I felt like this a decade ago. I remember when I first started using Mint, and for those of you listening, Mint is personal finance software that's in the cloud. You connect all your bank accounts, just like you do your bank feeds in QuickBooks, and Xero. I remember, like a decade ago, banks wouldn't connect; sometimes, it wouldn't work with this credit card, or work with this one; it would disconnect. It's the typical problems we're still having now, a decade later. I always felt like [00:10:00] a good way to solve that was just to have somebody put out ... Like one of the software apps put out a blog post. It's like, "Here's the 10 banks that have the least problems. Here's the 10 banks that have the most problems," and update it every month. Because, if the banks ... If they really care about their customers, and not losing customers, they're going to make sure they have good connection to the accounting systems. It's really the only way you're gonna keep your customers, in the long run, is how well you connect to other things. Blake Oliver: Yeah, and it's not [00:10:30] just about keeping customers. They could do so many cool things to add more services, if they connected to accounting software. Some examples from this article are getting data that allows them to very quickly, and easily provide loans, or working capital to businesses. Which, if you look at what's happening in the FinTech space, there's tons of companies doing that, now. All the credit card processors, like Stripe, and Square, and PayPal are offering [00:11:00] working-capital loans, because they have the data to support it, without having to make the business owner do a complicated application for a loan. Those companies can see what credit card transactions you have, and can figure out from there, whether or not you're safe to loan money to. The banks could do the same thing, if they just plugged into the accounting. David Leary: Then, you might take the point of view that maybe the banks could get cut out of the whole picture. If you really look at a lotta these ... Apple [00:11:30] has so much cash in the bank, right, but even companies like Intuit ... They did QuickBooks Capital, and I think some portion of that money ... Yes, there's banks involved, and there's traditional lending sources involved in that process, but I think Intuit, themselves, is acting like a bank. I'm pretty sure Square has a bunch of cash, and these other- some of the other people you just mentioned. They can almost give out these loans, and cut the ... The banks could be completely cut out of this game, if they don't play nice, and utilize these other things. We'll have to keep watching this. This could be a whole podcast, itself, on banking APIs. Anybody wants to start that, it's free. I'm sure you can get it on Twitter. Go [00:12:00] for it. Blake Oliver: You're just trying to create more podcasts that have fewer listeners than we do, David. I can-. David Leary: Yeah, yes, yes.  Blake Oliver: -up our ranking that way. What else? What else do we got this week? David Leary: Gene Marks wrote an article that the U.S. Census Bureau says there's 32 million small businesses out there, and he's taking this point of view that they're just wrong. His point of view is you can't count people that have a side hustle, or, they're just filling out some additional [00:12:30] income on a schedule C. Right now, they're counting those people as business owners, and they're counting a lot of independent contractors as a business owner, like a barber or something like that. Even then, he's like, "Okay, fine, count those guys," because, in a way, that is a business. Life coaches, dieticians, etc., real estate agents ...  There's so many more that are hobbyists, or they just have shells. Maybe somebody owns 10 [00:13:00] properties, and for whatever reason ... Yeah, maybe arguably, that's one business, but he's filing 10 returns for all 10 properties that he might own for tax reasons, or what have you, and so, that's bumping up the numbers. By the time you get through the article, at the end, he's taking a pretty strong stance that there's just around 7.8 million. Blake Oliver: Yeah, that makes sense. David Leary: That feels a little low to me, but I also think, yeah, 23 million seems ridiculous. I've seen numbers, like there's 220 million small [00:13:30] businesses, globally, and that seems a little ridiculous to me, as well. 7.8 maybe, possibly, could be small, but ... I think you recently talked about numbers, and what defines small business, and midsize business, recently.  Blake Oliver: Yeah. What's his criteria for a business?  David Leary: Good question. This is a very opinion piece, and I think ... Somewhere, [inaudible] sentence, yet ... True business owners sign paychecks. They have vacation policies. They struggle to find people. They do performance reviews. He thinks it should be counted [00:14:00] like that, like what [crosstalk] Blake Oliver:  Yeah, and we call those employer businesses, businesses that have employees. Yeah, that makes sense. Of course, if that's his definition ... It's not very clear, but if that is how he's defining the 7.8 million businesses, honestly, a good chunk of them are just corporations that employ one person, or one person, and that person's spouse that they are using simply for tax purposes, so that may even be, actually, a high [00:14:30] number. David Leary: Like I said, it's definitely an opinion piece. It's worth people reading, and checking out, because he does take that funnel, and starts chipping away at it, to get down to that 7 million. Blake Oliver: The thing that really blew my mind, when I started looking into the number of businesses in this country, is that over half of our economy is created by under 3,000 businesses. Think about that. Those are the big businesses, like Walmart, like Amazon, that generate [00:15:00] half of economic activity in this country. Then, you get down to say something like 200,000 businesses that are mid-sized, and then, everything below that, there might be millions of businesses. It's really hard to count what is a business, or what isn't, at the small-business level, but below $10 million a year in revenue. It's a pretty small segment of the entire economy. I think it's less than 20 percent- David Leary: Go podcasting.  Blake Oliver: But I think it's smaller than that. Oh, yeah, they're all podcasting, [crosstalk] and making [00:15:30] lots of money podcasting. David Leary: Yeah, down at the very bottom, there. Before I jump in, and let you go again, I do have another opinion piece-. Blake Oliver: Let's hear it.  David Leary: There's an association called SaaStr. It's Software as a Service; it's an association of, basically, the app developers, if you wanna think about it that way. It's a blog site, et cetera. There's a recent blog post that came out, and he's kind of just taking this take that every SaaS contract should have an automatic out clause. He talks about [00:16:00] some of the pains of buying software, and I think I can read a couple of these, because I feel like our audience would definitely identity with these, when they go to try apps, and they try accounting software.  I'll quickly read these. Things like: vendors selling you software that you never use or deploy; salespeople pushing you to sign multi-year contracts that you don't really want to do; less-tech-savvy buyers being told software does things it doesn't do; being qualified out by a business-development representative. In that case, "Oh, you're too big [00:16:30] for this plan. You'd need to buy the QuickBooks Advanced," something like that. Not being able to talk to a salesperson, or always having to go through a business-development representative, first. Not be able to do a free trial, or even try out the product, at all; salespeople discouraging you from doing a free trial, even when it's available, or salespeople discouraging a pilot. They hate that whole situation, and then, the whole thing ... A lot of SaaS companies, they have VC [00:17:00] money; they have pressure to gain users. Their goal is to get as many people on a one-year contract, as possible. That's kind of his point of view, that it's a game, but he really goes on to say, ultimately, it doesn't really matter, in that everybody in our space that's building SaaS software should be just giving the customers what they want. Because, if the customer signs up for a year contract, and they cancel, four months in, they're not a real customer, anyways. Let people who wanna sign up monthly, sign up monthly. Let people who wanna do it quarterly, sign up quarterly. Let people that wanna sign [00:17:30] up for a year, sign up for a year, but don't constantly push everybody to the year, because it's really ... A) You, as a business owner of a SaaS app, you’re probably misstating your numbers, internally, but give the customers what they want is really the argument. Hopefully, we have cloud-app developers, and cloud-accounting software packages that really pay attention to this, and take it to heart, going forward. Blake Oliver: I'll make a counter to this argument, which is that if you are selling to mid-market companies, if you make [00:18:00] software for mid-sized companies, like we do, here at FloQast, you really need to be having your customers sign annual contracts. That's what we do. We do not sell monthly. We do not put you on a monthly credit card charge. You have to pay upfront. The reason that we do that is because it is so expensive for us to go out, and find you, and convince you to buy the software, that we have to do it, in order not to lose a ton of money on sales. David Leary: It's the enterprise sales model. [00:18:30] Blake Oliver: Yeah. I think, for consumer software, it's great. If people are finding you, and signing up on their own, and you have, pretty much, an inbound strategy, that's great. If your strategy is primarily outbound, which ours is majority outbound, at this point, meaning we have people calling controllers, and CFOs, and saying, "Hey, would you like to close faster, and more accurately?" Then, getting 99 out of 100 hanging up. That's a bit expensive to have people [00:19:00] doing that all day long; that's why we do it annually. It's great, because it helps fund our product development. If we didn't do that, we wouldn't be able to improve the product as much as we have, over the years, and it would stunt our growth. I think it depends on what sort of business you are. Same thing for accounting firms, for service providers. I think that all accounting firms who provide recurring services should be charging [00:19:30] at least a portion of their fee upfront, if not all of it. If you do tax, why are you billing in arrears? You should be charging at least 50 percent of the tax return, upfront. Get paid for half before you deliver the return, or maybe you can get all of it, or maybe you can charge throughout the year, so you're getting paid monthly for that tax return that is gonna be filed in April. If you provide bookkeeping services, get paid on the first of the month by all [00:20:00] of your customers, so that you have the cash to pay your staff.  David Leary: That makes sense. I see that you have a couple more articles. You talk about robots, machines ... There's a couple [crosstalk] Blake Oliver: Oh, yeah, I got a lot, and we've already hit the 20-minute mark, here, I think - unless I can edit this down a little bit, so I'll be brief. I'm just gonna pick my favorite story to finish this out, on my end, at least. Then, I think you have one more. Here is my top story. It's blockchain, woohoo! If [00:20:30] you're not sick of it yet, this is actually a good blockchain article. It is a real blockchain article, meaning this is blockchain used in the real world. I think, actually, we may be hitting, like, blockchain is no longer hype. That's how big this is. The story is in The Wall Street Journal. It is about Walmart. Walmart is requiring its lettuce, and spinach suppliers to join a blockchain created by IBM that Walmart is going to use now to track its inventory, [00:21:00] its supply chain. They have to be on board by January 31st, and then, all of the farmers, logistics firm, and business partners of these suppliers must join the blockchain by September 30th of 2019. It's a big deal, and the reason Walmart is doing this is to improve ... A few reasons: to improve public safety. You may recall that, every year, there is at least one major food recall, [00:21:30] related to green produce. E coli [crosstalk] and lettuce. People get sick, people die. Dozens of people have died, every year, as a result of this, and it costs a lot of money, because, even though the outbreak is typically limited to a certain part of the country, when this happens, people stop buying lettuce everywhere in the country. Millions of bags, and heads of lettuce have to be thrown out, and everybody loses-. David Leary: Because you can't track it, ultimately. You don't know ... We know, based on time of the year, you [00:22:00] kind of know, regionally, where the lettuce might be from, but that's about it. Blake Oliver: Exactly. People just wanna play it safe. They're like, "I don't wanna risk it," so, they stop buying. What this blockchain is gonna do is allow Walmart, and the government to trace, within minutes, the source of any foodborne illness, so that we know exactly where it came from, and we can [00:22:30] destroy any of the lettuce in the stores that came from that area and assure the public that everything is okay. It's a big deal. I think that it'll probably be used in any area that impacts food safety, or any area, where you have concerns about kids toys ... I could imagine all the parts having to be on a blockchain, at some point; that sorta thing-. David Leary: I think I've seen something like this for fish, so that way, they know if it's been sustainably captured fish, versus not sustainably [crosstalk] the change. I don't even know how I met the guy, but somebody [00:23:00] who's in that space. There's all this fraud. People get fish. They say it was sustainably caught. It gets on the market illegally. The blockchain can definitely solve for some of that stuff. No, this is really interesting, and the interesting thing about this - it's Walmart. If Walmart tells companies like Rubbermaid, "You have to shave a nickel, and half your distribution people have to jump ..."  This is really, really interesting that Walmart's the one pushing this. Blake Oliver: I think, ultimately, we'll [00:23:30] see all major supply chains move over to blockchains to public ledgers, or semi-public ledgers, just because it improves efficiency that much. Pretty cool. David Leary: That makes sense. Why don't you do another one of yours. The only other thing I had was this teeny, teeny, teeny-  Blake Oliver: We're almost outta time, so, if you wanna ... Do you wanna do the AICPA Twitter account, and we'll end with that? David Leary: Yeah, we can do that. Apparently, last week, the AICPA's Twitter account got [00:24:00] totally hacked by Bitcoin scammers. I just read that [crosstalk]  Blake Oliver:  Oh, it ties into blockchain. We were just talking about blockchain.  David Leary: Perfect, yeah, so it goes right over. Its ongoing concern, and there's lots of screenshots, and you can see it. Apparently, somebody just took over the AICPA's Twitter handle, and changed the image, changed everything. Blake Oliver: Well, they really shouldn't have made their password 'cpaexam,' all lowercase.  David Leary: You know that for a fact? Blake Oliver: Or 'password123.' Really, [00:24:30] guys, gotta step up the security. David Leary: Well they could get [inaudible] two-factor, Twitter does. It even supports YubiKeys, so you could have that truly locked down. Blake Oliver: You really do not want your Twitter account to get hacked, because it's hard to get it back. It took the AICPA, I think, several days. Meanwhile, bitcoin scammers are putting out fake links to send them bitcoin, sucking in probably some unsuspecting [00:25:00] CPAs. Bad news. David Leary: Well, with that, we can close this down, but people, be careful. Change your passwords; update your passwords. Stay on top of your stuff. David Leary: We will chat next week. I have a birthday tomorrow, and then I'm going on a little cruise. Blake Oliver: Hey, it's your birthday? David Leary: Yeah, I'm getting nice and old.  Blake Oliver: Happy Birthday, David.  David Leary: Then, I'm going on a little cruise, and then next ... Hopefully, there should be internet, or, I'll try to watch for the news; stay on top of things, and next week, we'll come back and do this again. Blake Oliver: Sounds good. Enjoy your trip, and I'll talk to you [00:25:30] next week. David Leary: Awesome. Actually, Blake, you know what we forgot to do?  Blake Oliver: What?  David Leary: How would we get a hold of each other. Blake Oliver: Oh, screw that, this week. David Leary: Perfect.  Blake Oliver: Nobody ever does, anyway.  David Leary: I should just stick this in [inaudible] does the payroll. That's funny. All right, I'm gonna stop recording.