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Blake Oliver: [00:02:43] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: [00:02:46] And I'm David Leary. Blake Oliver: [00:02:48] How's your Wi-Fi doing these days, David? David Leary: [00:02:50] Yeah, so it took an extra week, but I now have a Wi-Fi mesh network. Blake Oliver: [00:02:54] Nice. And the mesh network is where you have what appears to be a single network through your whole house, even though you have multiple access points or multiple routers? David Leary: [00:03:03] Exactly. You really notice it when I go to a different room and I can't see the printer. I have to go to the other room with the printers and then reconnect to the network. Now with a mesh network, just everything's on the same network. It all works as one beautiful, cohesive system now. I already had a NETGEAR Nighthawk router that did the tri-band. They actually have an extender that's tri-band, so I bought two extenders, one for both ends of the house, and then linked those up. I didn't go by a specific mesh system, but these work as a mesh system [crosstalk] Blake Oliver: [00:03:34] Oh, good. You didn't have to completely start over? You just expanded your existing system? David Leary: [00:03:40] Exactly, because basically what it does is it's a tri-band, and so it uses the one band to communicate all the router and the extenders on, and that still gives you the 2.5 and the five-gigahertz bands for devices. Blake Oliver: [00:03:52] Nice. Well, I've been having a few Wi-Fi problems. I was on the Accounting Salon session that I did with Will Lopez on Tuesday. I only learned, after the fact, that my audio was apparently cutting out, because for some reason in this complex that I'm in here in Phoenix, it gets really bad around like 2:00 or 3:00 every day. I don't know why. David Leary: [00:04:17] I have a theory that people are cutting out of work at 2:00 and they're just starting to watch Netflix. That's what's happening. Blake Oliver: [00:04:22] That's what Californians tend to do just in general, even when there's not a pandemic. Maybe the whole country has taken that California vibe. Not me, I never do that, but I hear people do that. Anyway ... David Leary: [00:04:35] I'm glad you mentioned the Accounting Salon. That was the big deal from this week. Blake Oliver: [00:04:39] Yeah. David Leary: [00:04:40] I helped run the Accounting Salon with Amanda Aguillard, and we were basically nine straight hours of a virtual conference. We had nine sessions - back to back to back to back to back. It was pretty exhausting, but we got through it. The praise ... Everybody loved it. Blake Oliver: [00:04:57] That's good. David Leary: [00:04:57] It turned out to be a great event. I have never done any webinar that huge and that many. Blake Oliver: [00:05:04] Well, it was really big. It was over, what, 1,200 registrants? David Leary: [00:05:07] Yeah, we had 1,200 registrants, and people ... There were probably a good solid 300-350 people that moved. As soon as we disconnected the one webinar, five minutes later, they had to be on that because it's CPE credit. You have to get your full 50 minutes, so we'd disconnect one; start the new one; people would rejoin. It was exhausting, but people loved it. It turned out really, really good. Blake Oliver: [00:05:28] That's great. Well, I've got a ton of CPE. I made it to seven of those sessions. David Leary: [00:05:32] Wow. Blake Oliver: [00:05:32] Yeah. David Leary: [00:05:34] Trooper! Blake Oliver: [00:05:34] I stayed on the whole time. I was eating my lunch, doing a session. It was great. Let's get to the news of the moment, which is, of course, still again, PPP, COVID-19, IRS tax season. I think the big shocker that just came down the wire was this concept that the White House may delay tax season again? David Leary: [00:05:59] Oh, I'm glad you ... I saw that. I didn't even grab that article. I almost forgot about that. Blake Oliver: [00:06:03] NBC News is reporting that the White House is considering pushing the tax deadline now from July 15 to September 15, or as late as December 15, though administration officials are stressing that no decision has yet been made. I'm not sure if this is a good thing or a horrible thing, because it will be the tax season that never ends, if this does happen, won't it? David Leary: [00:06:27] PPP is already gonna cause it to never end. Blake Oliver: [00:06:30] Well, and then, the other issue is that if people aren't making their tax payments, if they're just delaying those, too, then they're gonna owe more and more and more and just pushing the can down the- kicking the can down the road, at that point. I saw a survey on Twitter by Intuit Accountants, their Twitter handle (@IntuitAccts) asking: "During these challenging times, what best describes your workload?" You could reply: "I've seen a decrease," "Not much of a change," "A slight increase," or "I'm buried." With 904 votes counted, "I'm buried" won, with 38.5 percent of the vote. David Leary: [00:07:08] That's it? Jeez. I would assume it would be way more. Blake Oliver: [00:07:12] Way more? "A slight increase" was 18.5 percent. 21 percent of folks, one in five, say, "Not much of a change." Then, another 22 percent, one in five, said, "A decrease." Maybe the extension will come as a good thing. I don't know. I don't think so. I have a feeling, no, it won't. We'd rather just get it done with. I've also got some COVID-19 stuff; some more PPP stuff, as we mentioned, but I don't know where you wanna go from here, David. David Leary: [00:07:42] We should set a true budget for PPP. Like, it's eight weeks; we get eight minutes to talk PPP; then we move on to other articles. Blake Oliver: [00:07:49] All right, you wanna just do the PPP right now? David Leary: [00:07:51] I can start. Blake Oliver: [00:07:52] Okay. David Leary: [00:07:52] Early in the week, I think on- this was Tuesday morning? No, Monday morning? Blake Oliver: [00:07:57] There are no days anymore. It's all the same. David Leary: [00:07:59] One these days this week, I woke up, and I attended a webinar, a town hall that QuickBooks hosted that had Senator Marco Rubio, who I've invited on the show plenty of times via Twitter, and- Blake Oliver: [00:08:11] Still won't accept our invites [crosstalk] David Leary: [00:08:14] He's a Republican representative- senator from Florida, and then, Ben Cardin, who's a Democrat from Maryland. My big takeaway from it was they were hinting that the forgiveness is going to get easier, which, for me, struck me as the 100-percent opposite of what we're hearing from the SBA, and the Treasury, and Mnuchin. Blake Oliver: [00:08:37] Right. David Leary: [00:08:38] Right? Blake Oliver: [00:08:38] Yeah. What's up with that? Well, I think I have a clue. It was that ... The Wall Street Journal is reporting today that, of the second tranche of the PPP, the $310 billion that was added on April 27, 40 percent of that is still available. Apparently, the SBA and Treasury were so successful in scaring off people and scaring off bigger businesses - these public companies; the small public companies; these venture-funded companies - they scared them away with all these threats about loan forgiveness, and audits that nobody's applying anymore. Now, we may end up with this weird situation where there's money just available; anyone can come get it, but nobody wants to because they're afraid to do it. David Leary: [00:09:26] They've gotten scared. It's so confusing and so hard to track that it maybe is not a great option now. Blake Oliver: [00:09:34] Yeah. The footwear company, Allbirds, is gonna return their loan. David Leary: [00:09:39] Are they even a U.S. company, or are they based out of Australia? Blake Oliver: [00:09:41] They're out of New Zealand. David Leary: [00:09:42] New Zealand ... Blake Oliver: [00:09:43] Yeah, but they have like 300-something employees in the U.S. David Leary: [00:09:46] Okay. Blake Oliver: [00:09:48] The founder was on Squawk Box on CNBC and said that even though they fit the criteria of a small business, they're gonna return the loan. Perfect example, maybe they didn't need to go after these businesses. I think everybody got scared, or at least Treasury got scared, that the money was gonna run out. Now, they've done this, and now, apparently, it's not gonna run out. I don't know. David Leary: [00:10:09] You get this big pile of free money, so you get the press, right? The White House, and, arguably, the SBA, and, arguably, the Treasury - those are all Trump people - they're out there praising how great this is, and all this money they're gonna give out. Then they made it so complicated and so intimidating. Now, they're going and arresting people that ... Some people created some fraudulent businesses, and the FBI has arrested them. Now, it's like, "Oh, give the money back by the 14th." There's this new May 14 deadline. Blake Oliver: [00:10:39] Right. Yeah, they extended it. David Leary: [00:10:41] It's a no-brainer, at one level. It's free money, but they've put so many headaches now involved in it that you can't even trust that it's gonna be free- Blake Oliver: [00:10:50] No. I wonder if they're gonna have to now loosen it up and be like, "Actually, we retract that guidance. It's okay if you take the money." That would be so silly, wouldn't it, if that happened? But I could see it happening. David Leary: [00:11:02] They keep changing the guidance. This week, every day ... The laid-off employees who refused to be rehired ... They changed the guidance on that. Blake Oliver: [00:11:10] Yeah. This is a problem is if somebody refuses to come back to work, and they wanna stay on unemployment, what do you do? So, now they're saying that the loan forgiveness amount will not be reduced based on that employee, if they don't come back- if they don't wanna come back. You mentioned the foreign employees. Foreign employees, now, they do count against the 500 max, apparently. That wasn't clear before. If you're a company that has a foreign parent, and there's foreign employees, or you've got two entities in different countries, you've gotta consider the foreign employees against that max. Safe Harbor has been extended from May 7 to May 14 to return funds without potentially getting charged with a crime for a false certification. Then, corporate groups can no longer receive more than $200 million, together, of PPP loans. I think this is because of that hotel guy we talked about last episode who got just a ridiculous amount of PPP money. David Leary: [00:12:13] It's close to like $90 million, right? [crosstalk] Blake Oliver: [00:12:15] Yeah. That was just what had been disbursed. It was over $100 million of PPP money in total. Also, now, if you've had a change of ownership after February 15, they made it clear that you can get a loan, because originally it was if it was a new business, you couldn't get a loan if the business wasn't in existence before February 15. So, that could preclude some changes of ownership, because you might start a new entity to take over the business. If you did that, now, you can still get the loan. Yeah, just guidance getting issued late. We're now how long into this program? Five weeks, something like that? David Leary: [00:12:52] When they turned the computers on, that was April 3. Blake Oliver: [00:12:56] Yeah. David Leary: [00:12:56] And it was announced two weeks before that. Blake Oliver: [00:12:58] It's been awhile. We're not alone in this opinion that maybe the guidance hasn't been clear. The Small Business Administration Inspector General, the auditor of the SBA, did a report that came out today finding that the SBA's interim final rules for implementing the PPP mostly aligned with the CARES Act, but there were some deficiencies where it didn't align with the law. Those areas are prioritizing underserved, and rural markets, loan proceeds eligible for forgiveness, guidance on loan deferments, and registration of loans. [00:13:35] They are making recommendations. They have some suggestions for how the SBA could improve, which is to issue guidance to lenders requiring them, the banks, to prioritize borrowers in underserved markets, and also update the requirements for loan forgiveness; be more clear on that; then issue guidance to lenders on the deferment process for PPP loans. Then, apparently, one of the suggestions is to register PPP loans by taxpayer identification number, but I thought they were doing that. David Leary: [00:14:03] I don't know if it's registered, but I think I saw something that there there's talk of them releasing it as public information. Blake Oliver: [00:14:10] Yeah, so- David Leary: [00:14:10] Here's all the loans, and here's all the EINs. Blake Oliver: [00:14:12] Who was it? Somebody was on Twitter, who was on an AICPA webinar and heard this. Andrea Carr, CPA; she was on an AICPA town hall on May 7 and heard on that, from the AICPA, that all the PPP loan applications will become public under the Freedom of Information Act, eventually. Which I could totally see happening. This is a public program. Somebody could file a request. David Leary: [00:14:41] That was my point of view on day three, or that first day, when they started announcing all the successful numbers. It's like, show me who's getting this money. Maybe they could obfuscate it? I don't know ... Especially when you get down to those independent contractors, who don't have EINs, and they're using their own Socials. Blake Oliver: [00:15:01] Yeah. David Leary: [00:15:03] How do they release this information if it's somebody's Social? Blake Oliver: [00:15:06] This is why people aren't taking the loans now, because they're afraid they're gonna get called out for taking a loan, for taking the PPP money. David Leary: [00:15:13] Well, good news for them, or bad news, I guess. Maybe you don't wanna do the PPP, and you still wanna try to get that emergency loan from the disaster relief loan, from the SBA? Blake Oliver: [00:15:23] Oh, yeah, the EIDLs. David Leary: [00:15:25] Yeah. They changed that. It's no longer can you get $2 million; the max is now $150,000. They've pretty much shut the door to any new applications. They're just not taking anymore. Blake Oliver: [00:15:37] This is a really big program that's normally the main program in a natural disaster like a hurricane, right? David Leary: [00:15:42] Yes. Blake Oliver: [00:15:43] It's been such a disaster that we haven't even been talking about it, because nobody can get any money from it, it seems like. David Leary: [00:15:49] Yeah, the success rate of this is even worse than the PPP program. Blake Oliver: [00:15:56] Yeah, and that's after they got $50 billion in new funding. The last update to the CARES Act that Congress passed gave them $50 billion more. I guess there's still so much demand for these loans that they can't give up to the max, which is $2 million, normally. David Leary: [00:16:14] It's almost like the same thing with the unemployment. There's just so much demand, they just can't keep up, and it's the same thing. They just can't keep up. Now, you're seeing this swing the other direction. They're shutting off money from small businesses over here, on one hand; but then, there's this big push. ADP is really arguing for this now, because a lot of ADP's customers are the- we talked about it last week, the Main Street Lending Program. Blake Oliver: [00:16:42] Yeah, the larger small businesses. David Leary: [00:16:43] The larger firms with 500 employees. Those firms that have 50 to 499 workers they only lost about 5 million jobs, but larger firms, with over 500 employees, have lost 8.9 million positions. ADP is pushing- that program has to be better taken care of now. You have the emergency loans; you have the PPP; you have this Main Street program; you have the unemployment. Across the board, it's like the stimulus money is just not getting there. Blake Oliver: [00:17:17] Or it's getting there and there's too many restrictions on it, which is the criticism of that PPP money that- "Will I have to use it for these specific purposes - 75 percent on payroll - over the next eight weeks, and that period starts as soon as the money hits my account? How am I supposed to plan, when my business is basically shut down? How do I use this money?" David Leary: [00:17:38] It's more difficult than that because, yes, when it hits your account. Well, I tried to be smarter than the PPP. I was like, "This makes sense. I will put it in its own account. I'll connect my payroll software to that account." Well, every time you do things like this, it takes ... You have to do the ACH; you have to verify that you have the correct account connected. It just starts adding up. Then I was like, "Oh, I'll make the company portion take out of my different bank account, when I run payroll," because you can't have that be part of the PPP, right? Blake Oliver: [00:18:07] Yeah. David Leary: [00:18:07] But a lot of the payroll software packages don't support that, or if they do support it, the APIs, when they talk back to QuickBooks, or the accounting software, doesn't support it. I'm trying to track one loan, and I'm just shaking my head with my hands in the air. I don't know how accountants and bookkeepers ... If you have to track this PPP loan for dozens and dozens and dozens of clients. Blake Oliver: [00:18:30] Yeah, well- David Leary: [00:18:30] Unless you have every client on the same accounting software, at the same bank, using the same payroll software, it's gonna be- you're gonna be pulling out a lot of hair to try to and track this properly. Blake Oliver: [00:18:42] That's why they're super-busy [Crosstalk] David Leary: [00:18:44] -they did change one other rule, the IRS. Blake Oliver: [00:18:47] What's that? David Leary: [00:18:47] Let's say the IRS successfully actually got the money out, and they've sent a check, and it came to your house, but it was for your dead mom. You gotta send the check back. Blake Oliver: [00:18:59] I thought that they said, when these stimulus checks went out, that if they made incorrect payments, they weren't gonna try to do that. But now they're changing their mind on that? I just ... David Leary: [00:19:08] You have to send it back. Yeah. Instead of just letting people just cash a $1,200 check and just keep it, it's probably gonna cost the government five grand to get the money back and account for it, really. It's rather insane. At the same time, they managed to send out all these checks to dead people. What about everybody else? Blake Oliver: [00:19:29] Yeah, right. David Leary: [00:19:29] How did this get in the priority stack? I don't understand. Blake Oliver: [00:19:33] Well, remember how, at the beginning of all this with the PPP, the fintechs were gonna get involved and solve the problem? David Leary: [00:19:41] Yes. Blake Oliver: [00:19:42] They did. QuickBooks built their PPP loan application process inside of QuickBooks. As soon as they did that, the first tranche of money ran out. Well, I have some numbers for you on the fintech companies, and how many loans they have funded, and for what amount. David Leary: [00:20:01] This is for all the fintech companies, or just QuickBooks? Blake Oliver: [00:20:04] Just a few, actually. I don't have information on Intuit. David Leary: [00:20:07] I do. I picked that up from the webinar. Blake Oliver: [00:20:10] Okay. David Leary: [00:20:10] I'll just throw it out there really quick [crosstalk] and then you can go on with the rest. Apparently, QuickBooks' average loan amount is only $7,000. Blake Oliver: [00:20:17] Wow. David Leary: [00:20:17] They're really getting that bottom end of the market and then helping out with truly the smallest of businesses. Blake Oliver: [00:20:22] Yeah, those solopreneurs. That's interesting to hear because I have some numbers from Ready Capital, PayPal, Square, and OnDeck that are a little bit bigger. This was reported in American Banker, and these numbers come directly from those firms. Ready Capital funded $1.2 billion in loans that averaged $73,000; PayPal has $1 billion approved, averaging $35,000 per loan. Square Capital has $520 million approved, averaging $12,000. Then, OnDeck Capital apparently has only been able to file a handful of applications. They never were able to get it working. That's interesting. That's so much lower than what the banks were doing. Makes sense, because the banks prioritized their big customers; they held their hands, and they made all the small ones go through this portal kinda system. Whereas the fintechs only ever had a portal, so everybody kind of was equal in that regard. David Leary: [00:21:22] Can you just show these numbers to make sure I'm hearing them correctly? Blake Oliver: [00:21:25] Yeah. David Leary: [00:21:25] OnDeck was not successful? Blake Oliver: [00:21:28] No, they failed. David Leary: [00:21:29] Okay, but the other ones that were successful are ...? Blake Oliver: [00:21:32] PayPal, Ready Capital - about a billion each. Then, Square did about half that. David Leary: [00:21:38] I'm not super familiar with Ready Capital, but I know OnDeck's game is giving out loans at 19 to 29 percent. What is their interest in helping people get one-percent loans? Blake Oliver: [00:21:48] Right. Well, maybe that's how this didn't work. David Leary: [00:21:51] Square, and PayPal, or even Intuit - they have a vested interest in just keeping small businesses open, because they have other products that they sell small businesses, right? Blake Oliver: [00:22:00] Right. David Leary: [00:22:00] It's just that- what would be OnDeck's motivation? It makes sense these other companies ... I don't know that other capital company, what they do, but I'm not surprised that a company that only has a loan product didn't give out many. Blake Oliver: [00:22:13] It's disappointing how little the fintechs were able to get funded, because they got into the game so late. That's not their fault. It takes a while to build software, and they did it amazingly fast, all things considered. One silver lining to all of this may be that these fintechs are now hopeful, because they have been working with the SBA, and they now have access to the SBA systems, that they could now become participants in the traditional SBA programs going forward; those 7(a) programs where- those are the traditional SBA loans that you can get. Funding Circle is trying to enter the regular program. Square Capital is open to being included in that. They're considering trying to get involved. That would be good if you could - when you have your Square terminal - apply for an SBA loan right there. How cool would that be? David Leary: [00:23:13] Maybe it would give the SBA - which, in theory, is supposed to be there for all small businesses - a lot better reach and make it more accessible. They might get an extra chance at this, because in that town hall, those senators said PPP V3 funds would be coming. So, Blake, it's being planned as we speak.
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Blake Oliver: [00:24:44] That's all the PPP news I have, but I do have more about the overall coronavirus situation. I've got a survey, a really good survey from Accounting Today, about how COVID-19 is infecting ... Infecting ... Affecting accounting firms. I'm happy to share that, if this is a good time? David Leary: [00:25:04] Absolutely. Jump in. Blake Oliver: [00:25:05] This is a survey that was done by Accounting Today in the third week of April, sponsored by ADP, asking specifically how firms have responded, in terms of their staff operations and more, to the coronavirus pandemic. Some of the highlights from the survey. Do you expect your firm's revenue to decrease because of the pandemic? 26 percent of firms, a quarter of firms, said no, they do not expect their revenue to decrease. The rest said yes, by varying amounts, between, let's say, one to 25 percent. That is kinda the bulk of the respondents. [00:25:47] That would be like 65 percent are saying between one and 25 percent. More than 25 percent, only 10 percent of firms are saying that. That's actually good news for the accounting profession because up to, I don't know, 20 percent, that is typically a firm's profit margin. A good firm can make 20-percent profit. You could actually survive. You could weather the storm. You're not gonna have any profit, but you could make it through. That's a good sign, in my opinion. David Leary: [00:26:18] What's your gut take on that? Is that a realistic view of the world? Blake Oliver: [00:26:23] I think so. I mean, you look at industries that thrive in a recession, and accounting is one of those. That's because people need numbers, right? When things are not going well, you need to know how your business is doing even more than when things are good. It's easy to just coast when things are good and not seek professional help. David Leary: [00:26:46] Yeah, and things are more complicated than it's ever been, as far as with this PPP loan stuff [crosstalk] It hasn't been this complicated in decades [crosstalk] Blake Oliver: [00:26:53] It's a huge opportunity. David Leary: [00:26:57] I'm trying to reconcile it versus these numbers of ... 70 percent of all small businesses do not have the cash flow to make it another six weeks. If that's the case, who's gonna pay these accounting firms, if all these businesses go under? I guess we'll find out. Blake Oliver: [00:27:13] Well, you have to segment the small business community, because there's just this huge number of small businesses where it's like one person. Those typically are not the customers of an accounting firm. Accounting firms were serving larger small businesses, on the whole. The top 20 percent of businesses, by employee size or revenue, tend to get the business of accounting firms. David Leary: [00:27:36] Got it. Blake Oliver: [00:27:36] A great example of how firms are responding is 73 percent of firms are offering CARES Act consulting services in response to COVID-19, helping their clients do that. I'm kind of shocked, though, that 27 percent, right over a quarter, are not offering any CARES Act consulting for their clients, helping them with PPP and whatnot. David Leary: [00:27:57] Are they just doing it for free, and they're not doing it as a part of their service offering? Blake Oliver: [00:28:01] No, no. Because charging for it is a different question. This is just ... Three-quarters are doing CARES Act work for their clients; the other quarter are not. Those are probably the ones who are just like, I only do tax. I only do your tax return [crosstalk] David Leary: [00:28:14] Or they're just being really smart [crosstalk] "I don't wanna deal with it." Those are the smart accountants and bookkeepers. Blake Oliver: [00:28:19] Some interesting things, too, in terms of the services. I think this is an opportunity. 36 percent, so just over a third, are offering business continuity consulting. I'm not sure exactly what the definition of that is, but I assume that means helping people ensure that their business survives. David Leary: [00:28:37] Yeah. Blake Oliver: [00:28:37] That seems kind of low to me, actually. Cash flow forecasting, only 30 percent of firms are offering that. That could be way higher. Cash flow is super-important right now. Why aren't firms doing that? To answer your question about whether firms are charging, this also- amazing, here, a third of firms are not charging for coronavirus-related services at all. They're just doing the work for free. David Leary: [00:29:04] I've seen there's some Facebook chatter about this. People are either doing work for free, offering discounted rates to small businesses. There's some arguments that, "Hey, you're doing more work for them, and they're desperate; you should charge more." People should call and leave us a voicemail, I think, and let us know what their take is on this, because I don't know what the proper thing is. Do you use this as a way to gain new clients, possibly? Not just gain new clients, but just ensure your clients survive, so you still have clients in the future. I don't know what's going through people's mindsets when they decide how to treat one client versus the next client. Blake Oliver: [00:29:36] Yeah, I understand that. You want your clients to survive, and it's also hard to charge them when they're seeing a decline in revenue themselves. But I would say, then, don't not charge for the services; defer the payment, and defer it a long time, if you need to. Say, "You can pay me for this in three months, or six months, or I'll come up with a plan for you." But to not charge? We're in business. We're business people. We have to make a living, too. It's very selfless, and actually, accountants like we often [crosstalk] David Leary: [00:30:05] Could you value-price this? Blake Oliver: [00:30:07] Yeah, of course. David Leary: [00:30:07] Like, "Hey, if a year from now, we get you through this, and you're still in business, you cut me a check for blaa ..." Blake Oliver: [00:30:14] Yeah, why not? It could be a big number. "I'm gonna give you free CFO cash flow forecasting for the next year." That would be a lot- a long time. "After that, you've gotta give me this money, if I help you get through it." I don't know, could be doable. Worth considering, right? David Leary: [00:30:33] Yeah. Blake Oliver: [00:30:33] Some other stats here. How about whether or not firms have closed their offices? You wanna take a guess at how many firms closed their offices? David Leary: [00:30:44] 100-percent closed, or like work from home, office is still open? Blake Oliver: [00:30:48] Yeah, 100-percent closed. David Leary: [00:30:50] I'm gonna guess it's very low. Two percent, three? Blake Oliver: [00:30:54] Actually, it's 13 percent. 13 percent of firms closed their offices completely. 36 percent have not closed their offices at all. Still operating. To me, that means operating as usual. Then, the others are kind of a mix; some staff are remote; some are in the office. But a full third have kept going to the office, which is doable, because in, I think, pretty much every state, accountants are essential workers. [00:31:23] Have you re-assessed your staffing due to the coronavirus pandemic? Seven percent of firms, or respondents, I should say - not necessarily firms ... Seven percent of respondents say they have laid off full-time employees, and four percent more plan to lay off employees. So, 11 percent total are gonna lay off people. 77 percent say no, they are not gonna change any of that, which I think is good news, because in many other industries, it's way worse. In other industries, everybody is losing their jobs. One last thing here- David Leary: [00:31:56] Before you jump to the other one, people that are keeping their offices open ... BDO is gonna do biweekly. Every two weeks, they're going to test for Corona their 5,500 UK staff. Blake Oliver: [00:32:11] Wow. David Leary: [00:32:11] So, they can return the offices after they're locked down. It ties right back into the people who haven't closed their office. BDO is going really extreme. They're gonna make sure people can come to the office. Blake Oliver: [00:32:23] Yeah, well, it's great they can get tests. That's amazing. David Leary: [00:32:25] Yeah, where are they getting these? Blake Oliver: [00:32:25] Where are they getting these tests? They must have a client [crosstalk] David Leary: [00:32:29] Every two weeks- Blake Oliver: [00:32:29] Maybe they've a client makes them. That's all I can think. Okay, last stat, here. The question is: have you changed your communication strategy since the start of the pandemic? Only 54 percent, so just over half of respondents, say they have contacted individual clients to specifically discuss COVID-19. I think that's a missed opportunity. Why not call all of them? I guess if you're super-super-busy, and you don't have time, then that's unrealistic. But I think it's a big opportunity to reach out and just say, "Hey, how are you doing? How are things going?" David Leary: [00:33:04] This is just client-facing communications, not your internal staff-type communications. Blake Oliver: [00:33:09] Correct. I don't know about that. That's not in the survey. David Leary: [00:33:12] Because I guess that would have to be like 100 percent has changed, because you figure there was a decade of people saying we can't work from home, and now every accounting firm has their staff basically working from home, so they've had to change their communications. Blake Oliver: [00:33:26] Yeah, it's amazing, actually. It's so crazy that for years, and years, and years - we're talking decades - firms said, "We can't work remotely." And now, within weeks, they've figured out how to do it. Isn't that funny? David Leary: [00:33:40] Except for those 13 percent of firms that have closed their doors. Blake Oliver: [00:33:43] Yeah, or the third of firms that are still going to the office every day. David Leary: [00:33:48] Before we were at the other end, wasn't it like less than one percent of all businesses could work from home? Now, even the accounting industry has gone past the historical percentage. Blake Oliver: [00:33:59] Yeah, it's crazy. Just a few percent of Americans, like three to five percent, I believe, prior to COVID-19, were working remotely full-time. Now, that number has just skyrocketed. I don't know what it is right now, but if you're a professional, and you don't need to be in the office to work, then you're working at home. We probably multiplied that three or five percent by 10 times is my guess David Leary: [00:34:29] Yeah, people are at least working til noon, and then you start drinking, or something like that. Blake Oliver: [00:34:33] Well, no, you can start drinking White Claw at 10:00 a.m. is what I hear. David Leary: [00:34:37] 10:00 a.m.? Blake Oliver: [00:34:37] Yeah, as long as it's clear liquid, then it's acceptable. I'm having a Sierra Nevada Pale Ale right now. David Leary: [00:34:46] I had a webinar with an accountant, a Zoom call, and he made sure he pointed out that he was not drinking a beer, and it was kombucha during the call? Because it was a little bit of the same shade of yellow there. Blake Oliver: [00:34:58] Okay, but kombucha has some alcohol content in it, if it's authentic. David Leary: [00:35:02] If you buy that kind. Yes, it's true. Blake Oliver: [00:35:03] All right. So, that's it for COVID. That's it for PPP, EIDL, and stimulus. What else is there even? David Leary: [00:35:14] Did you see the thing about the AICPA delaying effective dates for ethic rules? Blake Oliver: [00:35:19] Yes, I did see that [crosstalk] David Leary: [00:35:21] I think this is your beat. Blake Oliver: [00:35:22] My beat? I don't know if that is the same as the delay that I saw for peer reviews. There's been a six-month delay granted for peer reviews. That's not a really big deal. It kind of makes sense, right? Everybody is super-busy right now. When are they ever gonna do it? So, that's good, I suppose, for CPAs. Oh, here's one more item on PPP. I apologize, but this is important. Apparently, senators have introduced a bill to allow tax deductions for forgiven PPP loans. This is a bipartisan group saying that they are gonna try to get those deductions allowed. Last Thursday, the IRS issued a notice that said small businesses couldn't deduct the expenses related to PPP loan forgiveness [crosstalk] David Leary: [00:36:11] Then Friday, during the show, the AICPA said they were gonna fight it. Blake Oliver: [00:36:16] Right. The AICPA said they were going to support getting those deductions back, and now there's a bill in Congress, so maybe the AICPA had something to do with that. The idea is that the loan will be forgivable. That will not be taxable income. Then, the deductions will also be allowed. Therefore, it will be basically a tax-free benefit. Yeah, so that's it. David Leary: [00:36:45] It's the least they can do at this point [crosstalk] It's the least they can do. Blake Oliver: [00:36:50] I think we're ready to move on to our final segment - app news. David Leary: [00:36:58] Shopify is now Canada's most valuable public company. Blake Oliver: [00:37:03] Really? David Leary: [00:37:04] Yes. Blake Oliver: [00:37:05] Well, I guess that makes sense with e-commerce, right? David Leary: [00:37:07] Yep. I don't know if you saw, they've started to [inaudible] ... They eased people into it. First, it was an app just to check if your shipment came, and now it's an app to do shopping in. They're kind of directly competing against Amazon now. Everybody's messy; everybody's competing different directions. You can get the Shopify app, and you can access lots of peoples' Shopify stores and products. I think it's really more product-driven, not so much store-driven. You'll see see products that you might wanna buy, and it's just gotten- I saw this, if you think about it like, do you remember when it was BlackBerry? Blake Oliver: [00:37:42] What was BlackBerry? David Leary: [00:37:42] BlackBerry was the big company of Canada at one time. Blake Oliver: [00:37:46] Oh, really? I had forgot they were Canadian. David Leary: [00:37:47] They were Canadian, yeah. Now, they have a very huge, gigantic tech company again. Blake Oliver: [00:37:54] Well, hopefully, Shopify won't go the way of BlackBerry. David Leary: [00:37:57] Hopefully not, but there's always competition because they're competing with Square and PayPal. Blake Oliver: [00:38:05] I've got an app-news story here. I saw that Right Networks has purchased Rootworks, which is a- how would you describe Rootworks? They're described as a firm-improvement organization. David Leary: [00:38:20] It's like a network of ... You have your accounting firm, and you join the Rootworks network to get support, procedures, policies. It's not a franchise model, but in a way, you're getting kind of the things you would get if you bought a franchise from McDonald's; you'd be getting all these standardized procedures. I think that's kind of how Rootworks works. Blake Oliver: [00:38:39] Yeah, it's it's educational in nature. Professional development; very rigorous. So, Rootworks founder, Darren Root, is going to be joining Right Networks as the general manager ... He's gonna stay general manager of Rootworks, and he's going to be the Right Networks VP of market strategy. He says that the move offers his organization, "Enterprise-level support for its modern firm-performance platform, a platform composed of front-office tools, and resources, supported by ongoing guidance, and an established peer community to manage, organize, and execute on all aspects of tech-enabled firm function." When you parse through that press release, David, what does this mean to you? David Leary: [00:39:28] It sounds like it's gonna be one-stop shop. Right now, Right Networks, if I have an accounting firm, I would have to go to Right Networks, so you can get your whole IT department completely outsourced. But then, I would have to go, "Hey, I wanna manage my employees; I wanna develop my employees in my firm; I want policies for my firm." I'd have to go find [Rootworks]. Now, I can just do everything in one spot. What I really find interesting is that Right Networks, of all the hosting companies, they're the only one trying to figure out how to not be a hosting company. Because I think we kinda ... As we talk about cloud, being a hosting company is probably not a good place to be in five years from now. Blake Oliver: [00:40:08] It's a shrinking ice cube. It's eventually going away. David Leary: [00:40:12] Right Networks, if I look at that whole landscape of the hosting companies, they're the only one not buying other hosting companies. They're buying other companies to not be a hosting company eventually. Blake Oliver: [00:40:22] Yeah, the one that really interests me from - I don't know if it was a year or two ago - it was Autofy; when they purchased Autofy to build integrations. I thought that was really cool. David Leary: [00:40:33] Autofy. They also acquired Trans Importer or ...? Blake Oliver: [00:40:36] Transaction Pro- David Leary: [00:40:39] Transaction Importer Pro, I think is the name of it. Basically, what that is, it just takes data from spreadsheets and moves them into the accounting systems. Yeah, they're just reinventing themselves, one acquisition at a time, and not just an acquisition of the exact same business they're already in. Blake Oliver: [00:40:53] Anything else? David Leary: [00:40:56] Sage announced that they have some new updates to their product. Sage has their Business Cloud Accounting solution, which is kind of their version of QuickBooks Online, or Xero. It looks like they're starting to build it out as ... It's starting to get legs. They're adding some better bank feeds with bank rules, and recurring invoices. They actually added some ... I saw a picture in the UI, and it looks kind of similar to QuickBooks Online, where it's like you can see that [inaudible] invoice. It was created. It was sent. It was viewed. It was paid. You can see that. [00:41:28] They've deeply integrated AutoEntry into it, so you can scan your documents, and they're right there inside the accounting system ... You don't really use a third-party app because it's just embedded inside. It feels like it's getting rounded out, and then, they're adding some HR tools with [CakeHR]. In a way, I feel like nobody's really ever given Sage Business Cloud the time of day, from a look, but they're starting to- it's starting to get robust. It might be worth checking out one day. Blake Oliver: [00:41:58] In Sage-related news, Sage Intacct, the mid-market ERP company, has canceled their in-person Intacct Advantage Conference, which is not until October. I find that really interesting because a big question in my mind has been are these fall conferences going to happen? I'm skeptical, given the trajectory of COVID-19 and how long this could last. We're talking a year or more, two years. Some people are even saying three years. The fact that they've canceled, and they're moving to a virtual experience, I think, could be significant presage- that was no pun intended. It's presaging what will happen with other conferences potentially. David Leary: [00:42:50] Well, I know, recently, Xerocon canceled their Sydney event, and I can actually see the companies canceling their own conferences because, at some level, for those companies, their own conference is just a big marketing expense. So, QuickBooks ... Maybe with QuickBooks Connect, or Xero canceling Xerocon, or even you just talked about Sage canceling Intacct Advantage. It's a marketing expense. But if you're just ... If your business is conferences - you're a software company, et cetera - you're probably gonna have to still have your conference because that's your revenue stream. You're not doing a conference because it' this fun thing for your end-users, and it's a marketing expense. Those people are in the business of running conferences. I have a feeling those conferences ... Scaling New Heights is an example. Those conferences are still probably gonna try to move forward because that's the business. The conference is the business. Blake Oliver: [00:43:43] Right, and they have to do it to survive. All right, David. That's all the time I've got today. I've gotta go. We did get a voicemail, and I wanna play that for you. Here we go. [00:43:56] You've got mail. Shawnna Weber: [00:43:57] Hi, this is Shawnna Weber with Edgewood Business Solutions over here in California. I just wanted to say thank you so much for this podcast. It's so informative. and I really appreciate it. I have a network that I'm in, and I hear different things that are happening in the industry, but I love that you have a wider network, and you share, so that I feel somewhat normal when it's been a little crazy with PPP. I loved the video from the CPA that you played today - hilarious ... And how we've all been feeling. I just wanted to reach out to say thank you. I appreciate you both, and I hope you have a great week. Take care. Blake Oliver: [00:44:35] Awesome. Thank you, Shawnna. David Leary: [00:44:37] That was very, very nice. Blake Oliver: [00:44:39] Yeah. David Leary: [00:44:39] It feels connected. I got a little bit of a chills there, to be honest. Blake Oliver: [00:44:42] Thank you so much, Shawnna. That is really great to hear. If you want to leave us a message, call our number. It's (202) 695-1040. That is (202) 695-1040. It's a Google Voice number. It goes straight to voicemail. Leave us a message. Let us know how you're feeling. Let us know your feedback. Just say, "Hey, what's going on? " We'll take a listen and we maybe will even play it on the air. And David, if people wanna get in touch with you, where's the best place for them to do that? David Leary: [00:45:11] I'm now on TikTok, but I don't know my TikTok name, so don't follow me there. I might be either like The Real David Leary or The David Leary. I'm not really sure. Blake Oliver: [00:45:21] The real David Leary. That's great. David Leary: [00:45:22] I signed up to monitor my kids. Blake Oliver: [00:45:23] Oh, Okay. David Leary: [00:45:23] But I am on Tik-Tok. Blake Oliver: [00:45:26] Good excuse. David Leary: [00:45:27] If I get a lot of followers, maybe I'll start making some weird dances, or whatever you do on Tik-Tok. I'm not actually sure. Best way is probably Twitter. I'm @DavidLeary. You can also find me on LinkedIn. But if you're on LinkedIn, please put a message because I just get too many messages of, "Looks like we have a lot of contacts in common ..." and- Blake Oliver: [00:45:46] Well, you know, those are fake immediately. David Leary: [00:45:48] I know they're robots, and I'm talking to them, and it's not good. So, please identify yourself as a listener- Blake Oliver: [00:45:53] And as a human being. If you wanna reach me online. I'm @BlakeTOliver on Twitter, and you can email me: firstname.lastname@example.org
. And until next week, David, stay healthy. Stay safe. Stay sane. David Leary: [00:46:09] Enjoy the hot week up in Phoenix. David Leary: [00:46:11] Thanks. Bye.
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