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Sign up for Inclusion Without Assimilation
, an event for for finance, accounting, and fintech, in Boston, on Friday, September 6 from 9 AM to 11:30 AM EDT at the WeWork at 501 Boylston Street.
- 00:22 – Can you charge premium fees if you call yourself a bookkeeper?
- 01:11 – What are the odds that David will escape federal grand jury duty and get to attend Accountex 2019?
- 02:56 – Meghan shares the inspiration behind the Inclusion Without Assimilation - Encouraging Diver…, featuring some of The Cloud Accounting Podcast’s former guests – Jina Etienne, and Nayo Carter-Gray
- 07:57 – The reviews are in! David and Blake run down some more reviews of the show from iTunes and Podchaser
- 10:37 – Intuit’s ecosystem, and revenue continue to grow, according to their latest earnings report | Intuit
- 13:20 – Well, they do say imitation is the sincerest form of flattery .. QuickBooks’ latest addition, employee benefits opt…, looks a lot like Gusto’s product offering | Intuit QuickBooks
- 15:07 – The Xero-OnPay partnership - in search of a bountiful harvest from the ag industry | Xero Blog
- 15:32 – In light of Expensify’s recent CPE-credit offering, Blake explains why this might be a no-brainer when it comes to increasing engagement | Business Wire
- 18:07 – Cash – more than $6 billion of it - is still king in some of Uber’s global locations | MarketWatch
- 21:31 – Strategic move or smokescreen? UPS eliminates 60+ accounting jobs in Texas | The Dallas Morning News
- 24:13 – Tax preparers who don’t raise their rates are leaving a load of money on the table | Accounting Today
- 26:15 -- Meghan talks about changing the scope of services along with raising rates, and why bookkeepers are typically the first to try out new strategies, like perpetual accounting | CPA Practice Advisor
- 27:55 – 34.3 billion reasons the IRS needs a bigger budget | Indiana University
- 29:07 -- Why Matt Paff (another former CAP guest) is showing MYOB the door | LinkedIn
- 30:53 – In the aftermath of last week’s WeWork discussion, a listener, Amy Walker, CPA, shared how she’s witnessed coworking spaces, like WeWork, evolve into more of an enterprise solution
- 32:55 – A Work-from-Anywhere strategy benefits both companies and their employees | Harvard Business Review
- 34:43 – Can help desk software help accounting firms help their customers? | Future Firm
- 37:19 If you’re not into more software, Blake, David, and Meghan share some other strategies for tackling customer service
- 39:00 – Bookkeepers, who’s really your client? Why there’s more value-add when books are done for the business, not just the tax return | AccountingWEB
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Meghan Blair-Valero: The name of my firm is Fogged In Bookkeeping. Although, interestingly, we're undergoing a name and branding change to Snow & Blair and that's what we will start calling ourselves this fall, because bookkeeping doesn't pay. It's become commoditized. The computer can do that. We've, for a long time, provided a premium service, but you can't charge a premium when you call yourself a bookkeeper. Blake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver. David Leary: And I'm David [00:00:30] Leary, and Meghan, we didn't coach you up at all, sorry. Blake Oliver: That's your cue. Meghan Blair-Valero: I'm Meghan Valero. Blake Oliver: Awesome. David Leary: Meghan, you're here on the podcast. Welcome! Meghan Blair-Valero: I'm so excited to be here today, guys. Blake Oliver: Yeah, I've followed you on Twitter. We have followed each other, and now we get to talk to each other. Meghan Blair-Valero: And I heard we might actually get to meet real life eventually. Blake Oliver: Yes! David Leary: Yes! Blake Oliver: I'm gonna be at Accountex in a couple weeks. The podcast is going to Accountex. I understand you'll be there, too, and I'm [00:01:00] really excited to meet you and everyone else who's gonna go. David Leary: Three's a 78-percent chance I get to go. Blake Oliver: Oh, yeah. You have a federal jury duty- David Leary: Federal grand jury duty, and I did some research. There's a 22.4-percent chance of me being picked [cross talk] Blake Oliver: You asked people on Twitter, what should you do? Should you buy the non-refundable plane ticket, or should you buy the refundable plane ticket for twice as much? I think the smart answer was, since you have an 80-percent [00:01:30] chance of going, you should buy the cheaper ticket. David Leary: That's where I'm at, well, because I'm kind of in the mindset of if I buy the non-refundable, the more expensive ticket, and I go, I'm gonna be mad that I overpaid 2X for a ticket. Blake Oliver: And you'd be out the same amount, which is approximately $300. David Leary: Exactly. I'll be less upset or equally as upset if I don't go, and I'm just out 300 bucks. Hopefully, though, if everybody can do a little cheer [00:02:00] for me, maybe I won't go, or maybe I'll just tweet out some crazy stuff. Then they won't let me in the jury. Meghan Blair-Valero: I think the real risk-management-analysis question here - what are the consequences of not showing up? David Leary: I don't know. Am I even allowed to be talking about this? Blake Oliver: I don't know, man- David Leary: This could be bad ... This might be the end of me being on the podcast. Blake Oliver: You can actually get out of jury duty now, because you can say, "I already talked about it on the show, on The Cloud Accounting Podcast, and everybody listens to that. So, I'm now biased!" Meghan Blair-Valero: You're a member of the press. Blake Oliver: Yeah, [00:02:30] you're a member the press, David. David Leary: Oh, so I can't serve on a jury, maybe. That's true. Blake Oliver: Yeah, exactly. The real lesson here is, everybody, if you're going to Accountex, you're gonna be in Boston, look for The Cloud Accounting Podcast, and definitely come by and say hi to Blake. Blake Oliver: I'll be there doing a bunch of interviews. Not sure exactly who we're talking to yet. We're finalizing those details, and I'm looking forward to having a booth at the event. David Leary: Then, Meghan, you are running an event in Boston- Meghan Blair-Valero: Around the same timeframe; Friday morning. Blake Oliver: Tell us about that. Meghan Blair-Valero: Friday morning from 9:00 to noon, we are gonna be hosting an event [00:03:00] called Inclusion Without Assimilation, encouraging diversity and inclusion within the accounting, finance and fintech world. We're gonna be right down the street at WeWork on Boylston Street. So, less than two blocks. Blake Oliver: What was the inspiration for this event that you're putting together? Meghan Blair-Valero: I think we all recognize that, within the accounting and CPA world, there is not enough diversity of people. We see that reflected in not all, but a lot of the [00:03:30] accounting conferences and professional forums that we attend. We wanted to provide an event for folks where that was not the case. The case has been made to myself and others, repeatedly, that there's not enough qualified people of color, women, or LGBTQ, whatever your diversity-inclusion makeup is. I think we all just know that that's malarkey; [00:04:00] that these people are out there. You might have to look for them. You might have to travel outside your own real close social circle, but there are plenty of qualified people out there. So, in a period of about two-and-a-half weeks, we have put together a qualified panel, found a space, found sponsorship, and are executing an event in Boston. We hope it will serve as a model for others that want to do this. David Leary: Is this [00:04:30] event just one panel discussion, or is it gonna be two or three speakers? Can you elaborate on who's doing it, or who's [inaudible] Meghan Blair-Valero: We're gonna have two featured speakers, and then a panel. We are lucky enough to have Adrienne Penta. She is the founder of The Center for Women & Wealth at Brown Brothers Harriman. She recognized very early on that the conversation with women around investment and family wealth transfer needed to be a little bit different. She is going to come and speak to everybody about, [00:05:00] even in a big business environment, a big bank, you can create these opportunities and change up the conversation in a big way. She is going to be followed by Jina Etienne, who you have had on your show; it's how I discovered her. You guys had her on at Scaling New Heights, and I think she really has hit the nail on the head that, when you have conversations about inclusion, you don't leave out the white guy. The inclusion has to be for everybody. If you're asking people [00:05:30] in your company, no matter the size, to leave their true self outside the door, you're not actually being inclusive. She has real rubber-meets-the-road ideas about how we can do this better. She's gonna give a short presentation. Then we're gonna bring in Nayo Carter-Gray from 1st Step Accounting, Michael Ly from Reconciled, and Jagathi Gururajan, who is the founder of Fintech Women in Boston - locally to us - along with Jina and [00:06:00] Adrienne. We're gonna have a panel discussion about really being inclusive in our work environments, encouraging diversity in our industry, and how we help promote and move forward a variety of different people from all different backgrounds and create welcoming environments that hopefully change up the makeup of our industry, as we go forward in a time of a lot of change. Blake Oliver: That event, again, for our listeners is Inclusion Without Assimilation. [00:06:30] It's September 6th in Boston. Should we put the link to that Eventbrite page in our show notes? It that the best place for people to go to sign up, Meghan? Meghan Blair-Valero: It is. It is. Blake Oliver: All right. We'll have that link there in the show notes. Head over there and register. David Leary: Maybe we should jump into the news this week. Blake Oliver: Yeah. David Leary: Before that, we do have reviews. Let's preview the news, quickly ... Intuit released their earnings. Blake Oliver: I've got some QuickBooks Online updates. Expensify has a new CPE course you can take, if you need some CPE; we've got layoffs. [00:07:00] I think I mentioned the layoffs last week, but never got to them, so I'll be sure to talk about them, this time. David Leary: I have a think about Uber taking cash. Blake Oliver: Okay. David Leary: It's very hard- it's an accounting problem. Blake Oliver: Interesting. I've got a bunch of tax stories. The IRS is actually so underfunded, it's losing out on billions of dollars of revenue. A great article about bookkeeping and advisory that I think will be interesting, and maybe Meghan could give her input on that. Security issues, again; lots of security problems. This [00:07:30] one definitely we gotta talk about is Ryan Lazanis has an article about using Help Desk software in your accounting firm. David Leary: Perfect. So we'll jump into the reviews. We have a lot of reviews this week, and the reason why is we finally have popped the cork, and now people can write reviews - not on iTunes. We have about seven reviews, I think, for this week. So, I think I'll just jump in with the first one, and Blake, I'll let you read the next one, and we'll just hammer all these out. Blake Oliver: All right. Sounds good. David Leary: All right. So, this one is an iTunes review. [00:08:00] It says "Nerd's podcast ... Top podcasts for accountants. Want to know what's happening in our industry. You have found the place to go. David and Blake are engaging, cutting-edge, and do their homework to provide an insightful and engaging podcast. Keep your practice relevant by staying in the know. Listen to The Cloud Accounting Podcast." Blake Oliver: Thank you! cflaherty said, "Five stars. This podcast is a great way to stay on top of the latest trends in accounting. It's a must listen!!" David Leary: Steve Chase, "This is the podcast to listen to if you are a bookkeeper or an accounting firm owner. I enjoy listening to so many great tech news accounting [00:08:30] discussions and interviews. It's great content and I'm very excited to be tapped into this podcast as we journey together in the knowledge economy. Thanks, David and Blake!" Blake Oliver: JimBrown said, "A great podcast that even touches on the UK perspective directly. As a mid-sized firm over here trying to look at digital workflows, adopt a cloud first policy, and connect all our applications seamlessly, it's hard to keep up with everything that's going on, and you guys do a great job of providing an overview of changes and some insight into what they mean." David Leary: Joel Lacayo left a five-star review. "This is the most up-to-date current content [00:09:00] for the entire accounting industry! Whether you are getting into the industry or are an experienced pillar of your own professional network, this podcast will allow you to always have a grip on the pulse of where the accounting world is headed." Blake Oliver: blueprintbrian said, "There's no better way to hear about top news stories in the accounting ecosystem. David and Blake share the news of the day, but I love it when they have special guests on that share their stories. That Shawn Kanungo interviews from Xerocon San Diego 2019 was amazing!" And it was. If you haven't heard that, go check out the archives and listen to Shawn Kanungo talk [00:09:30] about moving from being a linear accountant to an exponential account. David Leary: Amy McPherson, "I am the owner of a small firm working exclusively with nonprofit organizations to help them build efficient financial management systems. This podcast is a must-listen for our entire team. Blake and David have deep roots in the SaaS accounting community and really understand what's important for us to know. They provide an invaluable service of finding the interesting news stories that impact our work and package it into a dialogue that is easy to listen to. I never miss an episode and don't know how [we got] [00:10:00] along without it. Thanks, guys, keep up the good work!" Blake Oliver: And finally - thank you, everyone, for sticking with us through all these reviews - Nayo Carter-Gray said, "This is the absolute BEST podcast to stay up to date with all things going on in the future forward accounting space! Blake and David have a great chemistry and they often have great guests on the show. I tune in for every episode." Thank you, everyone, for all those reviews. David Leary: The reviews help, and they mean a lot. It means a lot to me, personally, to read these and hear from everybody, but they really help others discover the show. So, it's super-important. Either on iTunes, leave a review, or on Podchaser.com, [00:10:30] leave a review there, as well- Blake Oliver: And we will read it on the air. Let's talk about Intuit earnings, right? What's new? David Leary: Intuit earnings. Yeah, so, Intuit announced their earnings Thursday; yesterday. I think the big news is just the revenue's up like crazy; up 15 percent, year over year. The QuickBooks Online ecosystem grew by- revenue grew by 35 percent. The number that's really amazing is QuickBooks Online finished the year with 4.5 million QBO [00:11:00] subscribers. Blake Oliver: Wow ... David Leary: That grew at 33 percent. Blake Oliver: Yeah, that's amazing. David Leary: Did you have a chance to listen to the conference call at all? Blake Oliver: No, I did not listen to that. Anything interesting? David Leary: I did not think there was anything that we haven't already spoken about. But Sasan did talk about- they think they can disrupt the mid-market. QuickBooks Online Advanced, they're looking to go up mid-market. They're very, very bullish on QuickBooks Online- I'm sorry, QuickBooks Live, which we've talked about before in the past. The only real nugget [00:11:30] that I think came out of there was there was a comment that they're really gonna possibly focus on product-based businesses, specifically omni-channel. 40 percent of all QuickBooks users are product-based businesses, and they wanna make sure if they're selling a product and the product's in QuickBooks, they can get it onto all the e-commerce stores they need to get it on. It's interesting that Intuit wants to attack that, and if they can solve it, it's great. But it's also super-super-hard. The whole e-commerce, multi-stores, multi-channel ... A lot of people are trying to attack that. If Intuit can do it, it would be amazing. [00:12:00] It's just- it's gonna be tough. It's a really, really tough space to pull everything together perfectly in one spot. Blake Oliver: So, Meghan, you're a ProAdvisor, am I right? What's the name of your firm? Meghan Blair-Valero: The name of my firm is Fogged In Bookkeeping. Although interestingly, and not because of QuickBooks Live, but sort of simultaneously - they sort of hit us at the right moment - we're undergoing a name and branding change to Snow & Blair. That's what we will start calling [00:12:30] ourselves this fall, because bookkeeping doesn't pay. Blake Oliver: Oh, interesting. Meghan Blair-Valero: It's become commoditized ... The computer can do that. We've, for a long time, provided a premium service, but you can't charge a premium, when you call yourself a bookkeeper. David Leary: Oooooh. Blake Oliver: Wow. So, this is the QuickBooks Live effect in action, right here. Meghan Blair-Valero: Yeah, yeah. Blake Oliver: Not that QuickBooks Live is completely responsible for it, but a lot of these companies that are getting into this game - commoditizing bookkeeping for a flat [00:13:00] monthly fee that is just way too low for most of us, as professionals, to compete with, right? Meghan Blair-Valero: Exactly. We had started this process six months before that announcement came, and it just felt really well-timed. Blake Oliver: Well, I've got to update about QuickBooks, the August 2019 What's New in QuickBooks Online? The big news is that Intuit has added employee benefits to QuickBooks Payroll. Now you can compare, buy, and manage employee health benefits through QuickBooks. When [00:13:30] I saw the screenshot of the different plans available and all that, I said, "Oh, wow, this looks a lot like Gusto." I don't know if you've seen that, Meghan. Do you use the Intuit Payroll in QuickBooks, or are you using something else? I'm curious to know. Meghan Blair-Valero: No. We offer a payroll services outside of Intuit QuickBooks. The majority of our payroll clients are here in the state of Massachusetts, and we have found that they have a really hard time with those smaller state taxes. The things that change more frequently have funny thresholds. [00:14:00] We've just never found it to be a good solution for us. Now that Massachusetts is rolling out this paid family medical leave, which they put a pin in for a little bit, and now we're back at the deadline again, it just doesn't meet our needs. The paid family medical leave in Massachusetts will cover independent contractors, as well as employees. Blake Oliver: Oh, wow. Meghan Blair-Valero: Which is a huge change for all the payroll software companies, including Intuit, and Intuit just doesn't have a solution for how to deal with that yet. Blake Oliver: What do you use? Meghan Blair-Valero: We use Evolution [00:14:30] software, and we partner with a CPA firm outside of Boston that provides our tax filing and advisory piece of it. We do the client services and the administration and the payroll, and it's a really profitable market sector for us. Blake Oliver: Gotcha. David Leary: I have a payroll-related story. Blake Oliver: Okay. David Leary: Xero, who previously we've covered, has gotten into a deep partnership with Gusto, which is a payroll provider. They're now getting into a deep relationship with OnPay. So, OnPay is an online payroll [00:15:00] service, similar to what we were just talking about, but OnPay must have some sort of better understanding of farm payroll and farm credit ... Xero, who's obviously chasing agriculture here in the U.S. is now gonna go into a deeper partnership with OnPay, targeting agricultural. Blake Oliver: So, this is interesting because my mom grew up on a farm, and that family farm is still in the family. So I'm gonna have to tell my cousins about this. Maybe they can use OnPay and Xero, now. David Leary: We'll get some in-the-field [00:15:30] reporting. Blake Oliver: I have more app news. Expensify has added CPE credits to their training and certification course. When I saw it, I thought, This is brilliant!" Every single app that offers a training course should offer CPE for it. Why don't they? Because, it's not that hard to do. I've been doing it for a few years now at FloQast, doing ... We got CPE-certified. We do webinars that are CPE. It's amazing just how much more engagement you get. We doubled our webinar attendance rate just by offering CPE. I'm [00:16:00] thinking every single app that has some sort of training course for their app - offer CPE. Give it away for free. I think this is probably just the beginning of a whole Expensify CPE program, where it would make sense to offer more courses down the road. I've seen a number of apps do this successfully. So, if you are a developer and you're listening, it's worth it. Go fill out the form, so you can offer CPE, or, if you don't wanna do that, you can partner with somebody who [00:16:30] is already doing that. Amanda Aguilar, of Elefant Training, she suggested online, "Hey, we can help you create those courses and offer them with CPE, and you don't have to go do it. David Leary: With both of you being accountants, if you're going to continue your CPE, if you have a choice - I'm gonna learn about App A or App B - and App A has training with CPE, are you buying it by default, and gonna do that training first, regardless, even if the other app might even be the better app? Is that the logic? Blake Oliver: I'd be curious to know ... Meghan, do you have [00:17:00] to get- do you need CPE? Meghan Blair-Valero: I don't need CPE. I very conscientiously made the choice to work within the accounting field without being a CPA, and I think that there's pros and cons to that. I'm sure that that's a great debate in the industry that we won't soak up time with here. I'm not required to get the CPEs, but I do attend a lot of those classes throughout the year to try to stay involved in the industry, and make sure I know what's going on, even though I'm not [00:17:30] required to be professional. Blake Oliver: As a CPA, I don't think it would make me take one class versus another. It would really depend on the application. I'm not gonna choose between competitors because of the CPE, but it would certainly make it more likely for me to actually take the time and effort to do the training course, which, if you're a developer, you need people to do that, so they understand how things work and [00:18:00] they're successful in your partner program. David Leary: Yep, that makes sense. Blake Oliver: All right, what's next? David Leary: I have a thing about Uber. Blake Oliver: Let's talk about Uber. David Leary: Uber's customers paid more than $6 billion dollars in cash last year. Blake Oliver: I don't understand this, because I've never paid cash for Uber. How does this work? David Leary: This is like 30- sorry, 13 percent of all the rides were cash. Blake Oliver: What? Meghan Blair-Valero: What? David Leary: Because they're in places like India, Brazil, Mexico, some parts of Europe, the Middle East, Latin America, they take cash. It's [00:18:30] a very risky, hard thing to account for. Blake Oliver: Right. David Leary: That's basically the article. It's just a shocking, jaw-dropping amount - $6 billion- to have to account for. Blake Oliver: Wait, how does that work? The driver takes the cash, and Uber ... How does Uber ever get their cut? David Leary: Well, they have to implement very expensive systems, so the drivers can collect it and deposit it. Blake Oliver: Oh, wow ... David Leary: Then it rolls up. The interesting thing, for me, the observation, is the whole selling point I always liked about Uber or Lyft is it eliminated [00:19:00] that weird, "Oh, I gotta have cash for the taxicab driver ..." Blake Oliver: Yeah, that's the worst part. David Leary: They get there, and they want a tip, and you never have enough ... It's all weird, right? Blake Oliver: Yeah. David Leary: [That all went away]. You'd press a button and get out of the car, or get out of the car, and press the button 20 minutes later, if you want. I'm really surprised that big percentage of their business is that old model. Blake Oliver: Wow. Meghan Blair-Valero: I'm not [cross talk] Blake Oliver: Go ahead, Meghan. David Leary: You said you're mad? Meghan Blair-Valero: No, I'm not surprised. In America, and even more so in Australia and the UK, we're [00:19:30] very credit card and such focused, but internationally, cash is still king. When we look at clients that are doing things across borders, and even when we get large groups of employees that are coming internationally on visas, cash is still king. They're very suspect of the check. It's just a different cultural attitude towards the exchange of value. I'm actually not surprised that, internationally, once you said that that was the [00:20:00] bigger market ... Which is one of the challenges of fintech, is how do you work and expand in those markets? David Leary: Uber actually admitted this in their prospectus, because now that they're public, they have to put this information out there. They said that sometimes there could be violent crime; there could be tax avoidance. There's real genuine concerns that sometimes they may not see this cash at all. It's a risk, now, which they probably never talked about before, because they weren't public company. This episode of The Cloud Accounting Podcast is sponsored by BQE Core. 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Core offers a full-function mobile app and recently launched a cutting-edge, voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to CloudAccountingPodcast.promo/core. 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: Speaking [00:21:30] of business models that don't work, or inefficiencies, I should say, UPS is eliminating 64 accounting jobs at its facility in Coppell, Texas. The reason? Outsourcing. A UPS spokesperson told The Dallas Morning News that the package delivery company is outsourcing transactional finance and accounting work, in order to let employees, "do more strategic work that can make a greater impact on our business and provide them with enhanced career opportunities." Small number, but I saw this [00:22:00] on Going Concern, and it follows United Airlines- their coverage of United Airlines laying off people; Walmart laying off accountants- David Leary: Every week, it's another story. Blake Oliver: Yeah, it's interesting because there's always ... We're talking a lot about there's not enough CPAs; there's not enough accountants; that the job market's really tight. But I think what this shows is that it's only tight if you're keeping your skills up to date. If you're still doing the same thing you were doing 20 years ago, and I imagine these employees are probably cutting paper checks and just [00:22:30] doing really old-school type of accounting work, then you will get outsourced, and somebody is gonna take your job that's using automation. David Leary: We talked about this a few weeks back, where, ultimately, their data shows and the senior management is approving budgets to give to accounting departments to improve processes, and it wasn't getting done. Then, what's happening is two-three years in a row of that, they're just saying, "Forget it. I'll just outsource the whole thing." Blake Oliver: Mm-hmm. David Leary: If any of you have budget money from your upper management to implement some [00:23:00] automation and to improve your accounting department, you probably should do it, because if not- Blake Oliver: You probably should use it. David Leary: -you're gonna be on the podcast next week. Blake Oliver: Hey, so, Meghan, I'm curious, you do bookkeeping now, primarily. In your new firm - what's it called again, the new enterprise? Meghan Blair-Valero: Snow & Blair. Blake Oliver: In Snow & Blair, are you gonna be still doing that, or are you gonna be doing tax? How do you do the taxes for your clients? Meghan Blair-Valero: We partner with CPA firms and accounting firms to do the tax piece. We really are focused on bookkeeping, [00:23:30] general advisory, compliance, really getting good technology and fintech implemented to streamline processes and eliminate waste - a lot of the same things we're talking about there. Blake Oliver: Do you know how often that CPA firm you work with raises their rates? Do they do it every year, every couple of years ...? How often do they do it? Meghan Blair-Valero: We see on average of every two to three years. Frankly, in my opinion, they're not doing it often enough, because the CPA firms that we [00:24:00] work with, we vet pretty heavily, and they're doing a lot of advisory. We require quarterly meetings with people's CPAs. They should be doing their tax planning as we go. There shouldn't be any tax planning happening April 1st. Blake Oliver: That fits really well with a chart that I saw in Accounting Today on how often tax preparers raise their rates. Apparently, only 37 percent of tax preparers raise their rates every year; 32 percent do it every two years; 16 percent do it every three years; and then other [00:24:30] is 15 percent. I don't even know ... Maybe they don't raise their rates ever. I saw this and I thought, wow, that's crazy that they're not raising ... That everybody isn't raising their rates every year, because it's money left on the table, big time. Even if you manage to catch up with, say, somebody who is doing it every year, you have to do it more. If you raise your rates five percent every year, in order to catch up - if you do it every two years - you've gotta raise your rates more. That just seems like bad management, or bad practice management, [00:25:00] if you're not doing that. David Leary: Maybe these firms are getting extra-efficient, and their costs are going down. They don't need to raise their rates, because their margins are increasing. Blake Oliver: Actually, that's a good point, David. I didn't even think of that. David Leary: Sure, yes- Blake Oliver: You should be raising your rates, anyway, just for inflation, right? Actually, I understand this ... When I was in a practice, it was hard to do it, because I didn't have necessarily a system for always raising rates every single year. Well, I did. once, I implemented proposal software. We did Practice [00:25:30] Ignition. Then, there was the annual renewal, and that was an opportunity to raise rates. But I'm curious to know, Meghan, do you raise your rates every year? Are you systematic about it? How do you do it? Meghan Blair-Valero: I'm completely guilty as charged. We've been really focused on, the last three years, getting people onto sort of fixed-fee engagements - what's popularly known in the industry as value pricing. It's more of a change of scope that comes with a change in price. So it's not that people are seeing, "Well, I'm paying [00:26:00] more for the exact same work." There's usually some change in that scope. It's not that we're trying to hide anything, but it's more of a conversation and more of a rolling thing that's happening. I think that's becoming more of an industry trend. There was recently an article - I think it was in CPA Practice Advisor - about the perpetual accounting methodology and really seeing a move towards doing away with annual engagement letters and some of the formality that we associate [00:26:30] particularly with CPA practices. That's always been the trend within the bookkeeping industry, because we're not bound, again, by the same sort of rigidity. I think you see some of the trend movement happen in bookkeeping first, because it's easier. Blake Oliver: Gotcha. So, you mentioned you're doing value pricing now, or you've transitioned your firm to doing value pricing. What about a CPA firm that you work with? When they do the taxes and the tax planning, are they still billing hourly or are they doing ...? How [00:27:00] do they price it for your clients? Meghan Blair-Valero: Nearly every CPA firm we work with is working on a fixed-fee engagement; although I doubt they would call it value pricing. Blake Oliver: How would they price out a typical return? Meghan Blair-Valero: They would price out the typical return based on the number of K-1s, and various investment portfolios that they would be needing to work with. The majority of our clients are high net worth individuals and people that make private equity investment - seed to A stage - so that really drives what's [00:27:30] going on, once we've established a relationship with them. They know the consistency of the bookkeeping that they're getting, but they don't have to worry about sifting through the mess. Blake Oliver: Interesting. Not raising your rates is basically leaving money on the table every year. I was guilty of it. A lot of us are guilty of it, obviously, according to the stat - only 37 percent do it every year. That's money being left on the table by tax practitioners. The IRS is also leaving a lot of money on the table, according to [00:28:00] new research from Indiana University Kelley School of Business. The IRS left $34.3 billion dollars in revenue on the table from big business in the last few years. That's because the IRS is underfunded, and they don't have enough auditors to audit big business. This is the first study that actually attempted to estimate just how much revenue is being lost, because we don't have auditors [00:28:30] going out and questioning the aggressive tax positions of some large corporations - $34.3 billion. Meghan Blair-Valero: That's a lot of money to leave on the table. Blake Oliver: I know, right? That's the thing that's funny ... The IRS should be the first thing that we fund, because you're spending money to make money, essentially. If you ask me, underfunding the IRS is just another way of creating a loophole for big corporations, which gives them an advantage over small businesses that may not be taking these aggressive tax positions. David, have you got any other stories? [00:29:00] David Leary: Yeah, I have an entertaining article from Matt Paff. He's down in Australia. He was on the podcast once. He really talks about how Xero- QuickBooks Online, they can really start, with apps, attacking mid-market. He's a big believer in that, and his focus has really been on that mid-market enterprise-level type software. He wants to stay close to his roots, and he has three clients, or three businesses he runs. He's been running them as an experiment. One company on Xero; one on QuickBooks Online; and one on MYOB. [00:29:30] He's so frustrated now he's stopping the experiment on MYOB. He has a nice little "7 Reasons why I dumped MYOB Essentials." It's a LinkedIn post. It's kind of shocking. Number-one reason was reports don't have totals. Blake Oliver: What? David Leary: Yeah. There was no total on a report, and he puts a screenshot in there. Many of the reports are just PDF. You can't get to them any other way. You can't output them to Microsoft Excel. He's upset about that. He's upset that they [00:30:00] don't have integrations to very many apps. He gave a specific example, because he uses LivePlan to monitor their business plans, and it doesn't integrate with MYOB. It only integrates with QBO and Xero. You can't do recurring transactions; it's very light on payroll; it's super-light on mobile - the mobile functionality is not great ... It was such a painful experiment, he's just done using that. That's probably not good for MYOB. Blake Oliver: No, yeah, not [00:30:30] that great. David Leary: It wasn't like, you know, people do those articles - "I'll compare these three apps side by side," and they write a blog post, and they looked at each app for two hours. This has been going on for a couple months, and he just can't handle it anymore. Blake Oliver: So, David, you remember our talk last week about WeWork? You brought that story about WeWork's financials. David Leary: Oh, yeah, WeWork and the questionable business model. Blake Oliver: Yes. Well, Amy Walker, CPA, had some feedback for us on that story. She is in a coworking [00:31:00] space in Houston. It's not a WeWork. She also picked that coworking space up as a client. Since moving in three years ago, she says that the dynamic has shifted more to enterprise. Companies in other cities are using it for a satellite office. Some downtown companies are letting suburban employees office at the coworking space, instead of spending hours on the freeway. She's had the chance to watch it evolve over the last few years, which I thought was interesting, because when you and I talked about it, I [00:31:30] mentioned that I was at the WeWork in Hollywood, here in Los Angeles, and when I was there back in 2015, I didn't see a lot of big businesses at the WeWork. That has apparently shifted, and Amy's story backs that up - that more and more big businesses are using coworking spaces for their employees. David Leary: Yeah, because I think coworking spaces used to be- I don't wanna say hipster places, but it's gonna be your independent, your web designers, your independent coders, subcontractors, people like that. But just like everything else, like South by [00:32:00] Southwest, eventually the corporations discover it, and they've rolled in. Blake Oliver: Meghan, where do you work? Do you have a coworking office? Do you work at home. How do you do it? Meghan Blair-Valero: So I actually built an addition on my house five years ago that has some office space, a reception area for the occasional walk-in client - because we still have a few of those - and then the rest of my team works remotely from around the country. We have office space because it's convenient, but not because we need it. Blake Oliver: Gotcha. Everybody on your team works [00:32:30] from home, or do they work from like coworking spaces? Meghan Blair-Valero: I have two people that come into the office, and everybody else works remotely; although, we did have our whole team on Nantucket Island for the first time ever in the history of our company, all at once, this summer, which was special. Blake Oliver: Wow, that's awesome. So, Meghan, you might be interested to hear about this survey- not a survey; it's a research study in the Harvard Business Review. The article is, "Is It Time to Let Employees Work from Anywhere?" If [00:33:00] you're a listener of the show, you know that I'm a big fan of remote work, and there's a lot of studies that find that remote work is great for employees, and that people are actually more productive. Here's another one. We haven't had a big one in a long time. These researchers, publishing in the Harvard Business Review, studied the effects of a work-from-anywhere program instituted in 2012 among patent examiners at the U.S. Patent and Trade Office. They analyzed productivity data for patent examiners, which, you know, they're highly educated, specialized professionals. [00:33:30] Maybe we could think of them kind of similar to bookkeepers or accountants. They analyzed productivity data for patent examiners who switched from a work-from-home program to a work-from-anywhere program. After switching to work-from-anywhere, the examiners work output increased by 4.4 percent with no significant increase in rework. Another study that shows that if you let people work from anywhere, they're more productive. Meghan Blair-Valero: We have security [00:34:00] protocols built in for our employees, but we really do encourage that. Many a person, for me, has fired up a hotspot on a soccer field, or someplace else, so that they could do what they needed to do as a parent, or as a child of a sick adult, or whatever that might be and get the work done and meet the deadline. David Leary: You have to work anywhere. I actually tweeted this out this week. I was at the car dealership getting my wife's car serviced, and I thought I was being super-productive. I had [00:34:30] my laptop. I took a meeting. I was hammering away. I was just in the zone. Then some guy shows up, pulls out his laptop and a second monitor, and just one-ups me. People are gonna work where they can get work done at, when they can get it done. Blake Oliver: Here's something that may help you build a work-from-anywhere program for your firm, and that is help desk software. Ryan Lazanis over at FutureFirm.co wrote one of my favorite blog posts I've read in a long time. It's called "Help Desk Software For Accounting Firms - What & Why" and [00:35:00] he basically dives in deep to the concept of help desk software, which, if you work in software, you are very familiar with this, because these are the apps that you use to do customer support. People email support at 'MyApp.com' and then all of those emails go into a shared inbox, where they can then be worked on by your customer support staff. We're all very familiar with the using this when we contact Xero, or QuickBooks, or any of these apps. Well, [00:35:30] Ryan says the accounting firms should be using help desk software, too. He lists out some options - Zendesk, Teamwork Desk, Groove, Freshdesk. There's lots of them. He mentions a lot of the benefits. Some of the benefits include having a centralized place to search all client communication. You can avoid email slipping through the cracks, because whoever received it didn't remember to respond. You can get a pulse on support. You know how quickly your team is responding to client questions, to client [00:36:00] emails. If you have a, say, 24-hour response policy in your firm, then you can actually monitor and implement that and make that happen, and you can use automation. You can create these templates that you use over and over again to respond to clients for questions that they have all the time and save time. You get the analytics ... I'm a big fan of this. I didn't actually ever use help desk software in my firm, when I had my firm, but it is something that, if I did it again, I would absolutely [00:36:30] use. I'm curious to know, Meghan, if you use any help desk software, or if it's something you've looked into, or if you're curious about that. David Leary: Or chat software, even? Blake Oliver: Chat software, too, yeah. Meghan Blair-Valero: We are users of Slack, internally, for chat, and we do queue up a ticket-type system in there, but, for the most part, our customers don't need a lot of support in that way. We are just on a regular system. So, no, we don't use a ticketing system like that, but we do use [00:37:00] Slack to remotely, on the fly ... When bookkeepers are making their own hours, and somebody else is picking up any sort of a support need, or bookkeeping need on the fly. Although I'm always a big, big believer in that there's no such thing as an accounting emergency. Blake Oliver: Yeah, that's true. Most of the time, there isn't, right? David Leary: There are small ways to tiptoe into this. Just create an email address for your company; a generic either 'help@blah-blah-blah' or 'support@blah-blah-blah' and make [00:37:30] all your clients use that one universal inbox for your company. Then, you can start distributing the email that way. You could even do just rules and distribute that out [cross talk] Blake Oliver: -did is I used Google Groups. I had Google Apps for my firm, and you can create as many email distribution lists as you want, using Google Groups. I had a distro list, or I had an email alias for every client. So, it would be ClientXYZ@cloudsourcedaccounting.com
. Then, [00:38:00] if they emailed that address, it would go to all the people on the account, and it would be all saved in a shared inbox there. So, at least we had the emails all going to the right people. Everybody had a copy of it. Then it was nice, because I - as I was handing off clients that I'd worked on personally to staff as we grew the practice - could still go into that shared inbox, and I could see all the emails for that client, but I could unsubscribe from those emails, or I could receive them as a digest if I wanted to. Meghan Blair-Valero: That's [00:38:30] why we're use utilizing Slack is we're taking a similar methodology, but we're getting things out of the inbox, because that just creates, for us, more of a security risk of malware, or ransomware, or something like that sneaking in. We've really taken all of our internal communication out of email. The only things that end up in email are from clients. We've tried some other ways around that, and we just really haven't been able to find a replacement for our email inbox yet. Blake Oliver: I've [00:39:00] got one last story that I want to get Meghan's input on, while we've got her. This is "Bridging the Gap Between Your Roles as a Bookkeeper. It's an article that appeared on AccountingWEB, by Billie Anne Grieg. She writes from the perspective of an independent bookkeeper who is preparing the books for a CPA firm or a tax preparer to do the books. So, Meghan, I think this kind of fits what you do, currently- Meghan Blair-Valero: Right up my alley. Blake Oliver: I love this article because [00:39:30] she challenges- or she asked the question of the reader - who do you work for? As a bookkeeper, do you work for the CPA, or do you work for your client? Who's really the client? I think what we would wanna say is not the CPA, right? I mean, yeah, we work with the CPA, but the CPA is not the client. She says the way that most bookkeepers are trained to prepare the books, or the way that we actually do it, really is making the CPA the center and making the CPA [00:40:00] the client, because the books are often done on the tax return basis. They're done cash basis. Any expenses that can't be deducted on the business tax return are excluded from the books, are posted to equity, owner's draw, shareholder distributions, et cetera. Depreciation is only done once a year, using the numbers the CPA provides and the purchases that fall under that Safe Harbor threshold are posted as expenses instead of assets, even though it might make more sense to show them on the balance sheet. The [00:40:30] disadvantage of doing books specifically just to satisfy the compliance aspect of the tax return is that you're not getting the full picture; that the books can be a useful management tool, in addition to being a tool for the tax return. She says if you want to really create value, as a bookkeeper, then it's worth not doing the books for tax prep only and doing their bookkeeping for management purposes. This is what I would do for my bigger clients is we [00:41:00] had them on accrual basis books, so we could then convert to cash, and we would include a lot of that stuff that may not be tax deductible, but it's a part of their business. An example in this article is baseball tickets, which may not be deductible, but they're still a business expense. You have to do a little more work to get it ready for taxes, but as long as you have that understanding, you can still do it. I thought this was a great article because everyone's talking about advisory - how can we all move to more of an advisory model - and what better way to do that than [00:41:30] to actually be preparing books that are more useful, month to month, not just once a year. David Leary: That's what she says; she's like, just have one conversation about - your books have two purposes. One, to run your business and make business decisions, and the other is for taxes. That's advising, right? Blake Oliver: Yeah. David Leary: I agree. It's a good article. It's good find. Blake Oliver: So, Meghan, I'm curious to know what do you think about this? How do you do it? Meghan Blair-Valero: We start every conversation and every engagement with that conversation, almost verbatim. We work for the client. The purposes [00:42:00] of the books are primarily to run the business. It is your management accounting system. The taxes, which are important - they're very important - but they should be secondary to running your company and making informed decisions. You can almost always create a tax return out of a set of books that's been prepared for the purpose of running a business. Blake Oliver: Well, that's all I've got this week. David, if people wanna get in touch with us, they wanna talk to you, where should they go to find you? David Leary: The [00:42:30] best place is gonna be on Twitter. I'm @DavidLeary. Blake Oliver: And I am @BlakeTOliver. And Meghan, if people wanna connect with you online, find out what you're up to, what's the best place for them to go? Meghan Blair-Valero: Twitter @foggedinbooks. David Leary: Now, are you gonna have to change your Twitter handle, now that you're getting away from using the word bookkeeping? Meghan Blair-Valero: I think so. David Leary: It's a full-blown rebrand. Blake Oliver: Rebranding is so much fun. Meghan Blair-Valero: Full-blown. David Leary: You can find The Cloud Accounting Podcast on ... Just search for it. It's on Facebook. It's on LinkedIn. [00:43:00] It's on Twitter. Please follow us there, as well. Blake Oliver: If you wanna get the show notes emailed to you every week, automatically, head over to my website, BlakeOliver.com and click the blue Subscribe banner at the top. Put in your email address, and you'll get a link to the show notes whenever the episodes are published. That will include all of the links to all of the articles that we talked about, making it really easy for you to go and dig in deeper to any of these topics if you liked them. David Leary: When you listen this week, email the episode to a friend, so they can listen, too. Blake Oliver: David, I'll [00:43:30] talk to you again next week. Meghan, I look forward to seeing you soon in a couple of weeks at Accountex. Until then, have a great weekend. Meghan Blair-Valero: See you soon. Thanks for having me. David Leary: Bye, everybody.