The Accounting Podcast

[00:00:00] Thank you to our sponsor, Canopy

David: What is accounting practice management software? Is it the operating system for your accounting practice? Is it an all-in-one software solution for accountants? Is it the crucial tech standing between your practice and utter chaos? Accounting practice management software should bring together all of your practice’s mission-critical functions in one place to make your life and your practice easier.

Stay tuned to hear more from our sponsor, Canopy, later in the episode.

[00:00:23] Episode Preview

Blake: I don’t know the specific numbers, but I do know there’s been a trend of more and more companies who are staying private longer and longer, and avoiding going public because it is so expensive. It’s such a hassle to do the reporting and the requirements for- public company reporting have just gotten more and more onerous.

So, you add ESG into the mix, and you might discourage even more companies from going public. And that has the unintended consequence of then exempting them from all of these SEC regulations, right? So, you make it too hard to be public, and then you defeat the purpose of what you’re trying to achieve.

David Leary: Coming to you weekly from the OnPay recording studio, this is The Cloud Accounting Podcast.

[00:01:11] Are accountants the best kissers?

Blake: Welcome to The Cloud Accounting Podcast. I’m Blake Oliver.

David: And I’m David Leary.

Blake: I’ve got a fun story to kick us off this week.

David: Fun?

Blake: Accountants are voted- yes. Accountants are voted the best kissers in Britain, ahead of doctors and nurses. This was in the Daily Mail. I don’t know the publications in the UK all that well, but I feel like the daily mail is not exactly the most journalistic of publications. Our UK listeners can correct me if I’m wrong on that. But I did like this headline.

David: But I think those things like that, the National Enquirer, all those types of things, they tend to be the truth, just two years ahead of time. So, I would put some stake in it.

Blake: Well, yes, this surprised me. Accountants voted the best kissers ahead of doctors and nurses.

David: Now, have you kissed an accountant?

Blake: Um, have I- no, I don’t- I don’t think so.

David: I don’t think so either, so. Not knowingly.

Blake: But I guess I’d have to go and ask, you know, somebody who I’ve kissed.

David: If somebody became an accountant after the fact.

Blake: Yes. This was a poll of 2000 Britons by the dating site, Plenty of Fish. Claire hunter of Norwich, 37, married Accountant Chris, after meeting in a nightclub. The coffee shop boss said, “I remember dancing with Chris and then going off for a snog. It was definitely the best kiss of my life.

And I’ve not stopped kissing him since.” Some 55% of those polls said their current partner was not the best kisser they had known. A total of 11% said their most recent ex-partner had been the best. So, accountants got 23%, and then-

David: Now, I have a prediction or a thought on how this happens, right? You present people a list, and accountants are always on the top of the list. And people are lazy. And this is why, like, if any of you have a CRM, and you, for some reason, you always have way more accountants in your CRM as the industry type.

Because if you give somebody a list of 50 industries, they’re just like, “It’s too much work.” They just pick the first one on the list. And then that’s why you get this-

Blake: And accountants up here.

David: Every- yes, accountants, accounting firms tend to-

Blake: AT the top because of alphabetical order.

David: They tend to be at the top of the list. So, we’d have to redo this where that list is randomly exposed.

Blake: Well, now that you’ve questioned the validity of this survey, I don’t know if I wanna share more about it, but I feel like I should, just ‘cause it’s fun. So, the order is accountants, then doctors/nurses, engineers, teachers, and waiters/chefs. Now, at the bottom of the list, the worst kissers were voted as civil servants, bankers, lawyers, estate agents, and IT workers. It workers were the worst at 7%.

David: Wow. Well maybe, maybe- here’s how we could test this. All of you listeners can go to your spouses and you can ask them, get them to give you an honest answer if you’re their best kisser.

Blake: Well, I mean- and if they married you, like, hopefully, you know, that was part of the criteria. But I don’t- I don’t know. Maybe it’s just because you have a stable job, right?

David: That’s what it is. Well, alright. Well, it is what it is. Maybe we’ll find out other amazing factors about accountants in the future from the Daily Mail.

Blake: What do you got this week, David?

[00:04:34] How will ESG impact be measured?

David: I have some follow up on ESG.

Blake: Environmental, social and governance reporting. Tell me.

David: So, this is an article in cfo.com, and the title of the article is, “How will ESG impact be measured?” It’s an interview with someone named Ronald Cohen. He’s the chair of leadership council of Harvard’s Impact Weighted Accounts Initiative. And he also, is a co-founder of a London-based private equity firm, Apax Partners.

So, he’s kinda got his fingers in two things here. And his kind of goal is- one of his quotes is like, what needs- this is the quote. “One of the key things that needs to be done is to develop an accounting system, a way to put monetary values on transgressions or successes at ESG principles.” And what interesting about this is- and some of this is like obvious, I guess, but they’re trying to talk about how like, it has to get widely adopted or mandated to be adopted, right?

So, no matter what you- if anybody comes up with any standards or any ideas for standards, there’s gonna be lobbying to get those adopted, right? Or widespread.

Blake: You said something though that stuck out to me. An accounting system for ESG, is what he’s talking.

David: Yes. So, they are working on this at Harvard, a framework for this. But then also, there’s other people also working on this, other organizations. You have the Sustainability Accounting Standards Board, SASB, you have something called the Task Force on Climate Related Financial Disclosures. And then the Big Four Accounting firms are also working on some sort of standards on how to account for this. So-

Blake: So, a lot of competing stnadards.

David: Yes, there’s competing standards. Exactly. And what’s interesting about this is this, like, conclu- like, it’s a weird conclusion. You know, they’re saying that once this is accepted or mandated, investors are going to look at this impact on the income statements and compare those income statements against other companies’ income statements when they make investments, which is like the argument we’ve been saying for a long time, which is like investors aren’t using income statements to make investment decisions.

Blake: Not right now. Yeah.

David: So, you really just have to create the impression that your company is good with ESG to get investors. It doesn’t actually have to be measured. Now, the really interesting thing in this is this goes on. And I thought this was really the hypocritical thing of the whole thing. At the end, it talks about the SEC, and there’s a sentence. The SEC has zero jurisdiction over private enterprises.

This guy is a founder of like a 50 million-dollar or 50 billion or whatever it is. So, think about the hypocrisy of this. He’s over here in his left hand, pushing to make it very difficult for public companies to do their bookkeeping. ‘Cause now they gotta track all this ESG crap and report on it. But private companies aren’t subject to this. He just happens to own a gigantic private equity company.

Blake: Mm-hmm.

David: Like, I just find it very- like, he’s making the free market harder for basically, public companies. So, that way, [INAUDIBLE] chooses not to be a public company anymore ‘cause it’s a nightmare- Zendesk just did this, right?

Blake: And we’re already seeing that.

David: Zendesk just pulled back and went back to private equity, and they’re gonna not be a public any more.

Blake: I don’t know the specific numbers, but I do know there’s been a trend of more and more companies who are staying private longer and longer and avoiding going public because it is so expensive, it’s such a hassle to do the reporting. And the requirements for public company reporting have just gotten more and more onerous.

So, you add ESG into the mix, and you might discourage even more companies from going public. And that has the unintended consequence of then exempting them from all of these SEC regulations, right? So, you make it too hard to be public, and then you defeat the purpose of what you’re trying to achieve.

[00:08:19] Tesla sells 75% of their Bitcoin holdings

Blake: Hey, did you see that Tesla sold 75% of its Bitcoin holdings?

David: Oh, I think I saw that over the last previous quarter or something or.

Blake: I don’t know when they did it. It was recent.

David: Because it was in their earnings announcement, right? So, it was between the last earnings announcement and this one. So, a quarter, basically.

Blake: The second- so, sometime last quarter. Yeah. Apparently, the reason for this, that Elon Musk says the reason is that they’ve had production challenges in China and they’re having a cash crunch. So, they need to sell the Bitcoin in order to raise cash.

David: Could be.

Blake: They sold- let’s see, how much did they sell?

David: I think it was three quarters of their billion-dollar stake, right?

Blake: Was it a billion dollars? Yeah, it’s a lot, right? So, they lost money on this. I don’t know how much, but they gotta have lost a lot of money on it.

David: Because you bought it three months ago. Yeah. You were at some of those pretty highs.

Blake: Mm-hmm. Mm-hmm.

[00:09:09] FBI warns about scams involving fake crypto apps

David: Well, if you wanna talk, touch on crypto really quickly. So, the FBI warned that people are creating fake crypto apps and scamming people. Now, this is a teeny scam in the grand scheme of crypto itself, but they say there’s about 277 people have lost $42.7 million. And so, essentially, you create an app that looks like Bank of America.

You put it out there. People think it’s the real Bank of America app. “All right. I’ll buy crypto.” So, they spend money on crypto. It looks like it’s growing in value. Then they try to withdraw the money. And this is the really genius part these guys, that they’re doing, “Oh, if you wanna withdraw the money, Blake, you gotta pay some taxes.”

Some people pay more money. And then that whole app just shuts down. You can’t get anything out. So, they double dip from you, which is kind of genius.

Blake: So, it’s an- a lookalike app in the app store.

David: A lookalike app. Yeah.

Blake: Oh, interesting. Watch out for that.

David: So, and then I think like, this is just the start. And I heard an interesting podcast today. The Odd Lots Podcast and Jason Calacanis was on there and he’s like, “We’re just probably at like the first pitch of a nine eating baseball game of investigations and state attorney generals going after crypto people.

Blake: Yeah, yeah. Absolutely.

David: When Web 1.0 happened and that blew up and exploded, no Web 1.0 people were on the FBI’s Most Wanted List. But now, there’s somebody on the FBI’s Most Wanted List and the chances are there’s going to be three or four, or five crypto people on the FBI’s Most Wanted List. Like, this is going to get dirty and expose a lot of people, including probably other VCs in big funds and hedge funds who’ve been pumping and dumping this stuff on the consumer investor, if you wanna call it that. So, just kind of interesting.

Blake: We’ll see. We’ll see the money- the people with the money tend to get away with it because they’re not the ones committing the fraud.

David: The big money.

Blake: Yeah. The big money never pays the price and they always get out before.

David: Which is why somebody like Martha Stewart went to jail, right? It’s kind of that same.

Blake: Yeah. She wasn’t, you know? Right? That’s the fun -that’s the interesting one. Even though she was a celebrity- is a celebrity- she wasn’t big money.

[00:11:14] FASB scraps project on goodwill accounting

Blake: FASB has scrapped their project on Goodwill Accounting. Listeners of the show may recall that I’m a critic of the current Accounting for Goodwill, which is, it just sits on the books until there’s some sort of event that causes it to be written off.

David: So, they were going to reassess how it should be accounted for, or what was the plan of this project?

Blake: No, not how it should be accounted. Well, this was my criticism, is that it wasn’t about- the project wasn’t to figure out like, if we should change how to account for Goodwill. It was to figure out what to do with it. So, currently, Goodwill sits on the balance sheet, and then there’s an impairment analysis that happens and perhaps, it gets impaired annually.

And there was this argument that we should move back to the old method, which was amortize it over time. So, it just gets written down over time, every year, over a period of whatever years, 30 years, who knows? There was a time- there’s a- you know, it’s an arbitrary amount of time.

But they’ve just like given up on that. That was actually something that was reported in June They may return to it at some point. Like, I wonder, what are they so busy with, doing, that they can’t deal with this Goodwill thing because the Goodwill issue just keeps getting bigger. Well, there’s more and more Goodwill on corporate balance sheets. And there’s actually quite a few companies in the Fortune 500 where if they had to write off all their Goodwill, it would give them negative equity.

David: I think I just saw Amazon acquired that doctor’s office yesterday. And that’s another $4 billion that’s eventually- a lot of that’s probably gonna go on Amazon’s balance sheet as Goodwill.

Blake: That’s Goodwill. Yeah. And it’s because- it’s because we don’t have good accounting for intangible assets. And so, when you acquire a company with a lot of intangibles, it just goes into Goodwill. This is evidence that Accounting standards have not kept up with the digital economy, intangible assets, the knowledge economy.

David: Well, instead of solving that, we’re solving how to account for ESG.

Blake: Right, right. So, that’s right. We’re totally looking at this shiny object over here, ESG, and not focusing on the real problem, which is intangibles. And ESG is like an intangible actually, but it’s a small piece of all of that.

David: Maybe we could solve both here, Blake.

Blake: How?

David: When you have crappy ESG scores, we deduct your Goodwill and maybe we solve for both at the same time.

[00:13:48] Thank you to our sponsor, Liscio

David Leary: This episode of The Cloud Accounting Podcast is sponsored by Liscio. I have to admit, I love email, but as soon as I’m in the zone, head’s down, focused, working on a task, something may require me to go look at a related email to the task at hand. I jump over, open my inbox and just like that, I get distracted and derailed by hundreds of other unrelated emails.

By the time I find the email I was looking for, I’ve wasted a half hour or more. If you and your team are still using email to communicate with your clients, I suspect you have a story similar to mine. Even if you don’t, using email with your clients is probably a bad idea. It’s like sending postcards back and forth.

Anyone who could read, not very secure. And let’s admit it, clients are probably ignoring your emails anyways. Maybe it’s time to move all your client communications out of your email inbox and into Liscio. Liscio allows you to have secure, real-time communications with your clients via mobile app that includes reminders, task management, e-signatures, document scanning and uploading and unlimited storage.

If you’re ready to significantly improve your staff’s focus, collaboration and relationships with clients, head over to cloudaccountingpodcast.promo/liscio. That is cloudaccountingpodcast.promo/liscio.

[00:15:05] The Wall Street Journal covers LIFO and FIFO

Blake: Here’s another Accounting story, Accounting standard story. I always love it when Accounting methodology gets into a headline in a major publication. Wall Street Journal reported, “Inflation puts spotlight on company’s use of last-in, first-out Accounting.” And this took me back to my Accounting classes when I learned about the two different methods of the two major methods of inventory costing.

You’ve got FIFO, first in, last out- or no, you’ve got FIFO, first and first out. So, the inventory that you bought earliest is what you use for costing when you sell, right? So, it’s the oldest stuff, right? Gets used. Last in, first out, it’s the newest stuff gets used for costing. And in an inflationary environment, that can have vastly different values because under LIFO, you’re using the latest stuff you bought, which has the highest price.

So, LIFO is really good at showing lower profits in an inflationary environment, right? You have higher-cost inventory cause it’s the most recent inventory you bought and that’s what you’re using for your cost of goods. So, you show lower margins, which is good for not financial reporting, but for tax purposes. So, there’s all these companies in the U.S. that use LIFO because they wanna have low taxes.

They wanna show less profit for lower taxes and it shows this disconnect between wanting to show profits in your financial statements, and to show that you’re a profitable company, but also not wanting to do that because if you do that, you have to pay taxes.

David: If I remember correctly from way back in, you know, Accounting 101, 102, it kinda- after a few years, it all averages itself back out, right?

Blake: Right. So, in the- there- this is all just Accounting that has no impact on cash flow. So, it has nothing to do with how the business is actually operating. It’s just a arbitrary way of allocating costs.

David: Yeah. Cost accounting.

Blake: Right. So, that’s why it’s really important to understand the inventory costing method that a company uses when you look at their financial statements, because depending on the economic environment, it can have a huge difference in their profits.

David: And then that’s the-

Blake: So, Kroger- here’s an example. The example cited in the article is Kroger, the grocery store chain. They said that they took a 93 million LIFO charge during the quarter ended in May 21, compared with a 37 million LIFO charge in the year earlier, period. But sales rose 8%.

David: So, sales went up 8% and the cost of the inventory went up how much?

Blake: So, 93- from 37 million to 93 million.

David: So, 2X. Wow.

Blake: But- yeah, more, right? Way more. They’re gonna take a full year LIFO charge of 300 million this year, compared with a 197 million LIFO charge during the prior year. And that’s all due to inflation. So, it’s gonna take from their profits, even though there was no economic impact. Like, it’s just an Accounting method.

David: Yeah.

Blake: And obviously, the inflation affects their costs and their profits, right? But it’s-

David: So, do you think when there’s an article like this, like you said, it’s kind of the mainstream article, and they’re- they start using Accounting jargon. Do you think the average person reading this is even- knows what they’re talking about? Or is the average person like, “Oh, I remember this LIFO, FIFO stuff from Accounting 101,” and they just stop reading the article entirely.

They just move on with their lives.

Blake: I don’t know. It’s Wall Street Journal, right? So, it’s already a niche audience, I think. Anyway, repealing LIFO in the U.S., right, which you can only use in the U.S., not in international Accounting standards. It would raise about a billion dollars in annual tax revenue. So, that’s how much it saves companies. And that’s why it stuck around for so long is because of, you know, lobbying.

[00:19:07] EY payroll issues

David: Did you see EY had a payroll problem?

Blake: Yes. 55,000 EY employees had their paychecks deposited and then withdrawn due to a processing error at ADP.

David: And it’s this that had happened. Remember we talked about the MyPayrollHR fraud or my- what was that company?

Blake: MyPayrollHR.

David: MyPayrollHR had the big fraud because it’s just ACH and these ACHs, it’s very easy to like put money in, pull money out. Doesn’t take much, these ACH files are just CSV files. And that’s probably something that happened.

Somebody got uploaded the wrong way and caused the money to get pulled out of all these people’s accounts. What’s interesting is this sentence in this article. So, this is the article from Accounting Today. And it said, “In some cases, the problems may have led to overdrafts on some of EY’s employees’ bank accounts.

Like, are EY’s employees paid that like they’re paycheck to paycheck? Like, they’re paid- I mean, obviously they have different range of employees that give different wages, but geez, EY pay your employees so they have enough- they have emergency fund that they’re not overdrawing their accounts.

Blake: Well, this is the thing that always kind of shocked me. The stat that I have a hard time believing, but I do believe because I’ve seen it in many, many studies. It’s that a lot of Americans live paycheck to paycheck. So, I just Googled this ‘cause this stat comes up all the time. CNBC reported that 61% of Americans are still living paycheck to paycheck as of February 17th, 2022. Nearly two thirds of Americans live paycheck to paycheck.

And it’s not just among like, low earners. It’s all across the board. People tend to use the money they have, they spend it. It’s like human nature to spend all your money.

David: Anything stacked against you, right? As soon as you think you’re turning a corner financially, you get married and blew a bunch of money, then you turn a corner and then next thing you know, you have some kids and like every time you think you have a cushion, it just gets blown. And it takes you a while to build it back up again.

Right? Yeah, so.

Blake: Yeah. Yeah.

[00:21:16] McKinsey remote work study

Blake: Here’s a story about remote work, which we haven’t talked about in a little while. McKinsey did a study that got widely reported recently about, is remote work effective? And the headline is, “Is remote work effective? We finally have the data.” So, David, what do you think? Do you think remote work is effective?

David: So, you said this is a study by McKinsey.

Blake: Yes.

David: Now, was this on their own or was this a paid-for study from somebody else?

Blake: I don’t see- I don’t see like a branding on this report or anything like that. And I feel like if it was done for somebody else, it would be on there, so.

David: But Mackenzie makes their money by consulting and advising big, huge corporations. And my guess is big, huge corporations want people in the office. So, I’m gonna say that their survey somehow reflects some data that is not effective to work remotely. That’s my guess. Work from home.

Blake: Well, let’s dig into this and see. So, how many people can work from home? This survey says that 35% of job holders can work from home, full-time, and 23% can do so, part-time. So, that means 58%, the equivalent of 92 million people in the United States can work remotely, at least part of the time.

David: Have some flexibility in there. Yeah.

Blake: Yes. Now when offered, almost everyone takes the opportunity to work flexibly. 87% of employees like getting to work remotely and take that option. Most employees want flexibility, but the averages hide the critical differences. There’s remarkable consistency among people of different genders, ethnicities ages, and educational and income levels.

The vast majority of those who can work from home, do so. However, the opportunity is not uniform. There was a large difference in the number of employed men who say they were offered remote working opportunities and women. At every income level, younger workers were more likely than older workers to report having work-from-home opportunities.

So, men 61% of men got remote work opportunities, but only 52% of women. That’s interesting.

David: Wow, actually, that’s in-

Blake: Yeah. That’s a significant difference. Now, obviously, this will come as no surprise. Most industries support some flexibility, but digital innovators demand it. So, like, if you’re in a computer or a mathematical occupation, it’s like the vast majority of people get to work remotely. Like it’s over half can work remotely full-time.

David: Yeah. If everything you do is on a computer, you’re 100 percent on a computer, it is very hard to make an argument why you can’t just work anywhere. And so, you’re right. As the employees of that skillset, those knowledge workers are gonna demand it. I could see that.

Blake: So, business/financial operations, which I can’t tell exactly if Accounting falls into that, but I don’t see another category in this report that fits it. 61% can work full-time remotely. That’s- like, that’s enormous, right? And then 25%, part-time. A flexible working arrangement is a top three motivator for finding a new job.

So, it goes, in terms of motivation for a new job, greater pay or hours, then better career opportunities, and then flexible working arrangement, such as working remotely. But the greater pay, by the way, is by far. 47% said that’s like the important thing to them. 21% said flexible working in terms of you know, how important that is, as being your like, top. There’s factors affecting ability to effectively perform work.

David: So, did they say that they’re more productive? Is it- are you still getting to this?

Blake: But I don’t- I’m actually not finding that in the survey.

David: It’s just the headline. You got click baited in by the headline.

Blake: Well, they- that was the headline. I’m so confused. I thought- I thought they had this in the survey. I mean, I guess the fact that so many people are working remotely and that like, you know, the world hasn’t fallen apart, proves that it’s effective.

David: Maybe it’s no better. Maybe it’s just equal. Maybe there is no argument here. Maybe it just doesn’t really matter. It truly is just facts and all.

Blake: Well, I feel silly now that I asked you that question and then I didn’t have actual like, data on that. Thank you so much click bait headline by McKinsey.

David: It’s okay. Without the answer. Should we get into app news or do you have anything else outside apps? Or we could transition, right? Like XeroCon was this week.

Blake: Well, so-

David: We could- we could-

Blake: Quick- yeah, we’ll transition to that, but quick follow up just so I can get it off my list.

[00:25:50] Accounting firms taking private equity investment

Blake: Accounting firms taking private equity investment. Follow up on that. Cherry Bekaert, top 25 firm based in Richmond, Virginia became the latest Accounting firm to receive private equity funding with a strategic investment Thursday for an undisclosed sum from Parthenon capital, a PE firm based in Boston.

So, they now join- who are the other ones that got PE investment?

David: Though this is like, it’s getting to the point where I don’t remember.

Blake: EisnerAmper and Citron Cooperman. Oh, I didn’t- I didn’t know this. In January, Parthenon acquired RSM’s wealth management practice, but they didn’t take any other piece of RSM.

David: So, the trend continues on that.

[00:26:37] Kabbage under investigation for PPP fraud

Blake: And then, PPP fraud follow up. Two U.S. attorneys are investigating Kabbage’s PPP lending. So, we speculated that due to all the PPP fraud, eventually, the fintechs would get targeted for investigations because a lot of the fraud went through the fintechs.

David: Yeah.

Blake: And not through the banks. Because the problem with the banks was, they were too slow and they were not approving loans for people who weren’t already customers.

So, all those people who weren’t already customers, which included fraudsters, went to the fintechs. Kabbage was one of the largest PPP lenders. They did so well that it got them acquired by American Express.

David: Even that company outta Scottsdale didn’t even exist until March of the pandemic.

Blake: Yeah. Yeah, yeah.

David: And then they did billions. Billions. And that was the money they made, their revenue, not the amount of loans they gave out.

Blake: Yeah. So, how did this come out? Kabbage disclosed in a Florida lawsuit that it is under investigation by U.S. attorneys in Massachusetts and the Eastern district of Texas for its PPP lending practices. These investigations are being coordinated by the U.S. Department of Justice’s civil division. And there’s a quote here from Ben Curtis, the former assistant chief of the criminal division fraud section at the DOJ.

“Any time you have two U.S. attorneys’ offices that have separately drawn the same inferences based on evidence that reach them from independent sources, it’s not a really good sign.” And he said that it’s unusual that this was disclosed in a civil investigation. This was disclosed in public because civil investigations usually aren’t public. So, this is like-

David: So, just thinking out loud, like, what are they guilty of? Are they guilty of just not having good due diligence, and not having good controls and guidelines in place? Or is there something else going on here? Were they actually targeted and encouraged? You remember how then the big- the loan bust in 2008 when they were, “Hey, we’ll help you.

Like, yeah, you just took just right on that line, how much income you got and we’ll give you a loan.” Do you think there’s those types of practices were happening? And that’s where they’ve done- because then that means they’ve done something criminal. There’s those practices, but if they just didn’t have good due diligence, like why would they- the state general- attorney generals be going after them? Do you follow me?

Blake: So, the question is whether or not Kabbage followed the guidelines for approving PPP loans. So, the PPP program required lenders, even Kabbage, which was not a bank, to establish robust anti-money laundering and customer due diligence programs.

David: Which going back to last week, we talked about those- that payments guy, the founders of that payments company who were going after ‘cause they were letting all this fraud go to Nigeria, go through their app. Okay.

Blake: Right. Know your customer, right? You gotta like do due diligence. Well, Kabbage has been linked to nearly one in five federal PPP fraud prosecutions to date. 20% of all the fraud prosecutions for PPP are linked to Kabbage. So, the question is, you know, did Kabbage do enough to know who they were giving these loans out to? And I think it’s arguable that they didn’t. If you could just go into a form, fill out some information and then it was automatically approved with no verification, which it seems like, given the volume they were doing, maybe that was happening.

David: Wait, ‘cause there were stories, right? Like of a- in a ZIP code in Chicago where there was only like 18 actual registered businesses.

Blake: Or all of them sharing-

David: Like 110 all in the same building, right? All in the same apartment building. They all got- they all created an entity and got a loan. Yeah.

Blake: Yeah. So, this will get fought out in the courts, basically, is like, did they follow the rules or not? And it’s probably gonna be a fine print kind of thing. And it’ll depend on what a judge or a jury thinks.

[00:30:29] Thank you to our sponsor, Canopy

David: This episode of The Cloud Accounting Podcast is sponsored by Canopy. Accounting practice management software should bring together all of your firm’s mission-critical functions in one place - client management, document management, workflow, time, and billing and payments, to keep your team organized. Canopy knows that not all firms are on the same practice management journey or timeline.

So, Canopy lets you build your practice management platform as you need it. You start with the client management as your foundation. Then you can choose the modules that your firm needs. Since nobody likes paying for modules they don’t use, they offer modular pricing as well. Canopy integrates with QuickBooks Online, Xero, FreshBooks, CRMs, form builders, spreadsheets, calendars, email, and Zapier.

They have a mobile app, centralized file management, fillable PDFs, a client portal, task management, and the list goes on and on. Via their integration with the IRS, you can easily retrieve all your clients’ transcripts notices and childcare tax credit payments without leaving Canopy. To try Canopy free for 30 days, head over to cloudaccountingpodcast.promo/canopy.

That is cloudaccountingpodcast.promo/canopy. It’s time to streamline your firm with Canopy.

[00:31:47] Heather Smith’s dispatch from Xerocon London

Blake: All right, shall we move into app news? Let’s do that. And we’ll start with a report from our global correspondent, Heather Smith, who attended XeroCon London, which was this week. It must have been hot there, right? Like that’s what I’ve been hearing about the UK, super hot.

David: It’s hot everywhere.

Blake: Here we go.

Heather Smith: Hello, Blake and David, and the fabulous Cloud Accounting Podcast listeners. It’s Heather Smith, your favorite roving reporter here. And I’m coming to you from London XeroCon. After 980 days, XeroCon is back. To celebrate, mother nature threw in an additional challenge of record-breaking scorching high temperatures. For me, at 11:00 PM the night before traveling to XeroCon, I received an email that my train ticket had been canceled, and all trains after 7:00 AM to London were canceled. Challenge accepted.

Like many XeroCon attendees, I had the most bizarre journey to XeroCon. Mine involved running through a country lane for about two kilometers at 5:00 AM in the morning with luggage in tow, and then hitch hiking to the train station once I’d hit a main road. So, let’s talk about product announcements. What were the product updates from XeroCon?

All of the product updates really seemed to be UK-centric. They were either not available outside of the UK yet, or the functionality that for me, we already had in Australia. So, it’s being rolled out here in the UK. Xero Go is a new freemium app made specifically for sole traders, for your clients who are too small for a standard Xero solution.

It’s aimed at the massive and growing gig and side hustle economy. I recall a decade ago, Rod Drury saying to me, “If you’re building an app, the first layer of people who will pay for it are small business.” So, I think it’s an expected move to sweep up the massive micro business market. Matt Puff shared on Twitter, that it was part of his 2018 biz-tech predictions.

Xero Go is currently free to download on apple, but not yet available on Android solutions. So, I’ve not been able to try it out. After the 31st of March, 2023, it will be four pounds Sterling a month. It offers expense tracking, simple reporting, the ability to connect with the Accountant’s platform with optional paid add-ons available.

I’m not across UK tax requirements, but it seems that it will enable UK sole traders to comply with UK making tax digital for income tax self-assessment regime in 2024. Currently, Xero Go is only available in the UK. Maybe something similar will be announced in New Orleans next month, who knows? Another announcement was Xero and GoCardless are offering instant bank pay for UK customers. Seemed like a pretty neat solution offering there.

Other updates brought their offerings in line with what we already had in Australia around practice solutions. Xero are retiring the older version of reports. New reports has been in Xero, has been around for years. I was writing about how to use them, how to create management reports using new reports, in the third edition of Xero for Dummies. And the fifth edition of Xero for Dummies has just been released.

And I think we removed all reference to old style reporting. New reports are robust. They have far more flexibility options. I find personally, I sometimes get confused with how to save them ‘cause I’m so used to working in G Suite that saves instantly. But other than that, they do have a lot of offerings.

I’d also like to mention, I was grateful for the opportunity to meet with an occurs on with Anna Curzon, chief product officer at Xero. So, Blake and David, as some of your lessons may be aware, I’ve been focusing my attentions and have been pushing for a single core product feature request now for over five years. Xero recently relaunched their product ideas platform and relevant in the existing feature requests were brought across into the new platform.

And my request was also brought across into that platform. And it is reconciliation - the ability to reconcile clearing control and non-bank accounts in Xero. I shared this with Anna, what the feature request was, what were the timely and cumbersome workarounds, and the benefit of having the functionality of being able to reconcile or mark off all accounts, all of your accounts.

So, you are reconciling to the balance sheet. So, hopefully, that conversation will push the feature request a little bit further up the ladder. So- well, so long. Cheerio and farewell from Britain. And my updates from XeroCon, London. So, this is Heather Smith signing off, and I look forward to seeing you all in New Orleans next month.

Blake: Awesome. Thank you so much, Heather.

David: Yeah, I wish we were going to XeroCons all around the world.

Blake: I know, right? We gotta figure out how to get ourselves out there. Although, you know, now that I’ve been at home for like two years, I kind of like it. I don’t like traveling like I used to.

David: She mentioned that- how hot it was.

Blake: Mm-hmm.

David: QuickBooks Connect was in London, 2018, I think. April of 2018. And that’s when they had that crazy cold weather where it snowed at the Vatican. It snowed in Rome, and it was- it snowed London, which it only does like once every 30 years. So, it’s funny that just bad luck of both conferences had the like coldest day in history in London, and then like the hottest day- one of the hottest days in history in London. It’s kinda- it’s kind of interesting.

Blake: Well, XeroCon in the U.S. is happening in new Orleans in August. So, we’re gonna give London a run for its money in terms of the how-it-feels temperature.

David: Yes. The humidity will be there.

Blake: Yep.

David: Specifically, the-

Blake: What else do you have in app news this week David?

[00:38:02] What’s new in Xero

David: Well, specifically, just to touch on the self-employed product. First, I’d say I do like that name, Xero Go, for the self-employed product. ‘Cause if you think about it, like QuickBooks has its own QuickBooks self-employed and they’re in the UK. But the thing is it’s a little bit clutter- a crowded market there ‘caus you know, Dext has a self- so, Dext, you know, formally Receipt Bank, they have a self-employed product in the UK. I dunno if you knew this or not.

Blake: No. A GL.

David: Yeah. So, it’s a GL. I think it even has a spend card, right? It connects in with bank feeds. Yeah. They kind of have a product just targeting self-employed. So, it’s kinda a little bit crowded there, but there- maybe there’s room. There’s 2.6 million sole traders, they call them in the UK. So, there’s probably some room in there.

[00:38:48] Microsoft Excel Live

Blake: We’ve got an update from Microsoft Excel. It’s a name that caught my attention. Excel Live, announcing Excel Live. Transform Microsoft Teams meetings with real-time collaboration. And there’s a short video. I’m gonna play the video. And then I’ll try to describe it for the listeners who aren’t watching this on YouTube, and you, David.

Excel Live: Excel Live delivers a new way to collaborate in real time during Teams meetings. When you select an Excel file from the share tray, it doesn’t just share the screen for others to see. It allows attendees to collaborate with the Excel file, right from the meeting itself. The view will follow the presenter, but you can also interact, explore, and simply, sync back to the presenter view to rejoin the discussion.

The best part is that you can easily edit the Excel file, right from the meeting window, without anyone having to leave the meeting screen or open the file separately And just like with PowerPoint Live, you can also initiate the same experience directly from Excel, by clicking share, followed by the Work Together in Teams option.

David: So, can I summarize what I think I just heard?

Blake: Yes.

David: All right. Normally, I have a spreadsheet and I wanna share it, either a Google Sheet or Excel. And I gotta like open up Excel or Google Sheets, go to sharing, invite you to share the doc, and then you can edit and do whatever you want. And previously, when I’ve been in meetings, I’m like, “Oh, oh wait.” You have to pause what you’re doing in the meeting.

Go invite the people that are in that meeting so they can see the doc. Basically, if I’m in a Microsoft Teams meeting, instantly, anybody in that meeting is just gonna get access to the doc when I open it, kind of, or share the screen.

Blake: And I think it’s just for that meeting. It makes the screen share interactive for them.

David: Which is genius, it could go on and off. So, then after that meeting, they don’t need access to it anymore.

Blake: Well, and that I’m not clear on, does it- does sharing it in the meeting give them access permanently or is it just temporary? But it is nice, right? It saves a lot of time as opposed to having to drop the link in and share it.

And then somebody- that’s what would happen, is we’d share the document and then somebody would share their screens that we can all see what everyone’s doing in one place. But this, and then you have to have it open on two screens.

David: Or you’d forget to unshare it after and all these things. Like if sharing gets a little bit more smarter like that, like, this could be a start of a trend for lots of things.

Blake: Yeah, yeah. I thought that was good.

David: ‘Cause you could share like a Slack channel or a Teams channel, and everybody in that channel has access to the doc. But then you forget to kick somebody outta the channel or they- or you kicked them outta the channel. They’re no longer part of that channel, but they still have access to the doc. Like yeah, if they could tie their permissions of things to the work you’re doing, it’s a very interesting concept. I love that idea.

[00:41:28] Microsoft and Sage kind of announce “active”

David: So, Microsoft actually was in another news article. So, this article is on Enterprise Times. It’s “Sage deepens Microsoft partnership and “unveils” Sage Active. And unveils is in quotes. So, I click on the article, you read it all thing. And essentially, the article does not talk about anything of what the hell Sage Active is. So, that’s why the title of the article has this in quotes.

‘Cause you don’t know what this product is? What is Sage active?

Blake: Right. So, it’s like a product announcement, but then there’s nothing about the product, just the name?

David: It’s like an interview with executives. I don’t know. It’s just like, it’s got like the typical, like, why you would do something on Microsoft because you know, it’s reliable, someone’s on Azure and it’s productive. But like the actual product itself, this new thing.

Blake: Right.

David: Nobody talks about. So, we’ll keep an eye on that. I’ll watch for Sage Active. Maybe I’ll have an update, but I just thought it was really funny that they didn’t really announce anything.

Blake: Yeah. Yeah.

David: Yeah.

[00:42:27] Thank you to our sponsor, RelayFi

David: This episode of The Cloud Accounting Podcast is sponsored by Relay Financial. For those listeners that haven’t been following along with my drama caused by PNC when they purchased BBVA and botched the migration, to quickly summarize, PNC bank feeds won’t work with QuickBooks Online, the website had all my old BBV transactions just listed as debits and credits, with no vendors or payees.

And to top it all off, the June bank statement was just missing. Like June never happened. Let’s just say my 2021 books were a mess. So, for 2022, I made the commitment to stop using PNC and switch everything to Relay. Relay as a no-fee, online banking platform built for you and your small business clients. Relay understand themselves, all the things we as accountants and bookkeepers care about – security, bank feeds, automation, reconciliation.

I invited both my interns to my Relay account. They created their own user ideas and passwords. And within minutes, they were using Relay to create virtual debit cards, physical debit cards, download statements, and reconciling. Now the bank feeds and my QuickBooks Online are reliable, and my 2022 books are in order.

To stop fighting with an unreliable bank that doesn’t care about you or your small business clients. Head over to cloud accounting podcast.promo/relay.

That is cloudaccountingpodcast.promo/.

[00:43:46] FreshBooks allows easier customization of chart of accounts

Blake: Well, FreshBooks has a new feature that accountants who have clients on FreshBooks will appreciate. You can now customize your chart of accounts in FreshBooks more easily. So, that means that you can take their default chart of accounts and you can now change the structure. You have the ability to customize the parent and sub-account structure, create, edit, and archive accounts, reorder cost of goods sold, and operating expense accounts, and then track more details for each account with a customizable account number and account description.

That’s one of those things that we’ve been asking for, for a long time, so great that they did that.

David: Well, it’s interesting, ‘cause you think about like Intuit and QuickBooks is kind of starting to swing the pendulum the other way of you’re not allowed to customize. The dream is to not let people customize that chart of accounts because it allows you to do way better automation at a grand scale in QuickBooks.

It’s kinda interesting to see the pendulum swinging, depending who the app is and what they wanna let people do and not do.

Blake: What I’ve always wanted as an Accountant, as a bookkeeper, is the ability for me to lock it down so that my clients can’t add new accounts and can’t change the accounts. Like, once I’ve set it up for them, they should ask me to do it. And too often in the small business Accounting systems, you can’t lock it down like that.

And then they go and they make a bunch of accounts throughout the year. And then you’ve gotta go do all cleanup later.

David: Clean up. Yep. Especially if they- and then a lot of- and sometimes, you get going too fast and even in QuickBooks Online, I’ll do it sometimes where you create a second account on accident and then you forget to take it out. You just- ‘cause it’s trying to quick fill a row it’s doing, right? And I think I’ve done -even our Xero instance, I’ve created an account mistakenly, on accident. Next one.

[00:45:22] Adaptive raises $6.5 million for accounting optimization

David: There’s an article about Adaptive, a company called Adaptive. They raised $6.5 million to optimize Accounting for enterprises. Title was kind of weird.

Blake: So, this is not Adaptive Insights?

David: No, this is-

Blake: This is a different Adaptive.

David: So, the article’s actually incorrect of who they link to. It’s actually- the company is adaptive.bebuild. Dot build.

Blake: Oh, they fixed it. Are you looking at the TechCrunch article?

David: This was an enterprise talk, was the website.

Blake: Okay. They linked to the wrong adaptive.

David: They linked to the wrong adaptive. So, it’s adaptive.build. And so, I went out there to look at it and it’s kind of interesting. It kind of looks like an auto entry/Dext type product, like scanning of bills, right? But also, it has payments of bills, so similar to a Bill.com or a Melio, right? But what it does, it’s because it’s for construction, all the job costing, and the classes, and all that detailed stuff you need from a construction app, that’s their kind of sweet spot. They’re kind of getting into that area.

So, it’s kind of- it’s interesting when to look at. What I also was interested in about this raise is it talks about how well-known financial technology startup executives from Airbase, Brex and Ramp. So, these are all kind of three competing companies, right, for expense management, but all three of those products have also in the last year, year and a half, have introduced bill pay in bills.

So, my guess is these people are at these companies and they’re realizing, “Oh, our products are not a good fit for construction.” So, when they saw an opportunity to invest in an app that’s good at scanning construction bills, right? It’s the typical thing. You go to Home Depot, it’s great. If you can scan the receipt for Home Depot, but the Receipt for Home Depot might be for six jobs.

And how do you get that accounted for properly in the Accounting system? And this is the type of stuff this app, Adaptive- it’s called Adaptive Real Estate Inc is actually, the company, but it’s easier just- it’s adaptive.build, is the actual website.

[00:47:16] NetSuite updates

Blake: NetSuite has a new inventory solution, a new inventory Accounting solution, as well as improvements to its analytics warehouse. NetSuite Smart Count allows for automated inventory counts, which can even be conducted live, without having to freeze transactions. If activity does happen during account, then the software will alert the counter who can then take appropriate actions.

The embedded NetSuite product, which integrates with its existing inventory management solution supports the following additional features. And there’s a lot of features here. You can go read the article on Accounting Today, if you want all the detail. And then they also announce improvements to their already existing NetSuite analytics data warehouse.

New features include a bunch of detailed stuff that I’m sure the analytics folks who are into that will really appreciate. And that caught my eye because we’re attending Suite World in Las Vegas in September, as we did last year. And we’re gonna get to talk with NetSuite executives and learn about updates on the product and meet customers. It’ll be fun.

David: And it’ll be interesting to see their dynamic on the show floor. ‘Cause I think last year when the observations was there was no payroll people because they introduced their own payroll as part of the suite. And last year, they launched bill pay. So, it’ll be interesting to see if there’s any bill pay apps on the show floor this year.

Blake: Will they- yeah. And you know, I’m gonna be honest. Like, I love that Oracle NetSuite cares about our show and brings us out there. But I do think it’s a bad idea to block folks from your marketplace because they have a product that overlaps with your core features or your modules. I mean, if they follow that forever, then eventually, there will be no third party apps at Suite World because-

David: Well, hence the goal of the suite, right? That’s kind of their play on that. Everything will be part of the suite. That’s kind of their play.

[00:49:07] Follow up on QuickBooks dropping out of India market

David: I have some- remember we- some follow up on Intuit in India.

Blake: Intuit pulled QuickBooks out of India for the Indian market.

David: That’s correct. And they actually- so, they’ve now have a kind of a blog post about this a little bit. It was dated July 20th, 2022. It’s on the QuickBooks blog, QuickBooks.Intuit.com. They’ve actually based on listening to feedback from customers. They’re now extending the date to April 30th of 2023.

Blake: And I think that was because the- most Indian companies have a different year.

David: There’s like a timeline deadline they had to meet. So, as of July 1st, no new signups to QuickBooks products in India, and this is gonna apply to all subscriptions. So, it’s QuickBooks Online, QuickBooks Online Accountant, the QuickBooks mobile app and QuickBooks Time. So, all those products are being pulled out.

They link out to a Indian government site that links to a page that supposedly has free Accounting software solutions, but the page crashed or it never opened for me. I couldn’t get that- I couldn’t actually navigate to the page. It kept timing out. So, I don’t know where that goes. And then there’s an article from MMCconvert.com.

And they’re a company that specializes in converting from other Accounting systems into QuickBooks Online. And they had a blog post. And I mean, to some extent, the blog post title is, “Why did Intuit decide to stop offering QuickBooks in India?” And I thought this was gonna be like this really good take. And I read the article and it really just throws out two reasons.

Like, one is that the market in India is very competitive and Intuit didn’t really wanna try to compete with these other Accounting systems because a lot of these other Accounting systems are just coming in at a lower price. And then the second reason why is Intuit just wants to focus on other countries, right?

So, they weren’t mind-blowing revelations here. But just the last piece of India news, Zoho, which is basically starting to become the alternative now for people in India, Zoho just-

Blake: I think it’s really already big and like Zoho dominated the market in India, right? With Accounting.

David: Well, it’s built in India, it kind of dominates. But they’re- Zoho’s big in the states and it’s big in Europe. So, Zoho is decently sized, but it’s a suite of products.

Blake: See, that’s so strange for me. It’s really strange to me about Zoho. Like, I’ve a question about this, David. So, like, I don’t know anyone who uses Zoho as their GL.

David: You mean accountants and bookkeepers?

Blake: So, where- yeah. So, where are they big? Is it like-

David: So, there’s a lot of small businesses that use it because they have a suite, right? Use the Zoho CRM. It’s like 60 apps.

Blake: That, I understand.

David: So, people that don’t wanna spend the money on QuickBooks or Xero, or probably an Accountant, probably wind up getting Zoho books, right? They kind of fall into that group. Now with that said, like Zoho, I mean, we’ve seen them at the accounting conferences, they’re starting to, you know, embrace accountants more.

They’re starting to show like the suite ‘cause they have expense tracking. I mean, you have this whole tech stack built together and built in. But here’s another announcement. Zoho, they are actually gonna hire 2000 more employees in India across engineering, technology, part development to expand, you know, there and around the world.

Blake: Amazing.

[00:52:06] Listener Mail

Blake: David, I think that’s all the time we have for app news, ‘cause I have two listener messages. One is a voicemail from Donny Shimamoto, friend of the show. Guest on- frequent guest on podcasts and prolific presenter. So, I’d like to get to that. And then we have an email that I received. So, let’s hear from Donny first.

Donny: Hi Blake and David, Donny here. You know, after listening to the last three weeks of your podcast, I really felt compelled to call in. I think you’re really missing the point on the abortion issue. The key point of the pro-lifers is that every life should be saved. Their argument isn’t about what produces the better outcome or economics that’s saving lives, regardless of the other impacts.

While I agreed with a lot of what you presented in the abortion episode, I think you wasted your time because your arguments wouldn’t have swayed any pro-lifers to your side. Along the same lines, I’m increasingly feeling like you’re preaching to the choir on a lot of issues. I think many of us listening to your podcast are the more forward thinkers in the profession, and those that are not, probably don’t listen to your podcast.

So, I’m gonna echo Byron Patrick’s request that you stop pontificating so much and just get to the news. That’s really why we all started listening to your podcast and there’s less and less of the actual news, episode after episode. Finally, I had to laugh when you and David said that you guys were rejected by the, AICPA as press. I’ve said it before and I’ll say it again. I feel like you guys are infotainment, and more entertainment than serious press, you know, kind of like the Inquirer.

If you guys try and pick up stories and angles that are gonna cause controversy or make people go, “Ooh and aah,” like real press actually have fact checkers. And often, you’re not presenting the real facts, but your opinions. And the rare exception being the abortion episode and maybe a few others. Another example of this is that your discussion of the PPP loans, and whether there should have been more restrictions and applications approvals, versus the fraud that was found afterward.

It felt like for a few episodes, you’d be saying, “Why are they making it so hard to get the loans?” And then you found a fraud story, and then you guys were like, “Hey, look, these people are committing all these frauds. Why aren’t they catching them?” And then another article would come all about people complaining that they can’t get loans, then you’re back on the, “They should make it easier to get loans.”

Like, choose a side. Real press reporters, you know, they focus on the facts and they don’t waiver back and forth with whatever will create the most sensational story. All right, I’ll get off my own soapbox now. Thanks for letting me share some honest feedback with you. And I look forward to hearing more real news on future podcasts. Take care, guys.

Blake: You know, live reaction, David. Tell me how you feel.

David: All right. So, live reaction. I mean, there’s a lot to digest there. A, yes, we’re a news commentary, right? Like, we commentary on the news, so we don’t make the news. Occasionally, we have, we broke some stories that other people did not break, but we are bringing our years of experience and knowledge to the space.

Now, sometimes, the articles are fraud. Like, PPP has evolved over time on the way that that has gone. And obviously, our opinions have evolved over time. But I wouldn’t say, like going to the abortion stuff, like we didn’t create that to try to change people’s minds. Like, that was never an intention, right? That was not the intention in any way, shape, or form. So, I don’t know how to respond to that.

And then the whole, like the argument that only like forward thinkers are listening to this, I don’t think that’s true. Like, I know a- we know a lot of people that are forward thinkers in this industry. People like Donny, but every time I go to a conference, I get more and more people I’ve never met before that come up and say they listen to the show.

So, I don’t know. Like, if we wanna make a show just for like the thought leaders of Accounting, great. We’ll have 200 listeners. And like, we’re not making that show. We could, but I don’t wanna make that show.

Blake: Yeah. Yeah. I think you had a good point, David, about us being not news, but news commentary. And that’s a big difference. If we were just reporting the news, then we’d be Accounting Today. Or we would be CPA Practice Advisor.

David: We could literally, word for word, read press releases. Word for word, word.

Blake: Which is- right? Which is what they do. They just publish a lot of press releases in a lot of cases, right? If- funny enough, they don’t actually do a ton of original reporting, they just take press releases and issue those and do- I mean, they do some good stuff, right? But a lot, you know, a lot of the original reporting comes from like Wall Street Journal. Those are real news. I don’t claim to be anything like that.

And a lot of this is us reading the story and then reacting to it. Having an opinion.

David: And connecting it to the other pieces of the other stories that are in this space. ‘Cause a lot of these things are all- they’re kind of tied together. You just can’t take a press release and be like, “That’s the news story,” then move on to the next news story. These things are very connected and dynamic.

Blake: Yeah. And the reason I wanted to start doing this show is because I feel like there isn’t a lot of independent news commentary. Like, before we started doing this four years ago, could you even name somebody who’s doing news commentary in the Accounting space? It was basically, all of the commentary, all of the opinion came from the AICPA, the state associations, the leaders of firms in our profession.

It was all top-down people who are entrenched in the, what I would call the Accounting establishment. And we are independent as much as we can be ,while still making a living. Luckily, we’ve been able to, over the last year, become fully independent, you know? Like, we don’t- we are no longer employed by app companies.

So, now, we can speak freely, more freely, about, you know, how we feel about the situation in our profession. And what’s going on both with technology and in the profession. So, like, no, I’m not going to just report the news. That is not what is necessary. I could- you can just- you can go read stories online, right? You don’t need me to tell you what’s happening. You can just get a feed reader.

David: I could just even look at our PPP coverage. Like we were some of the first people questioning where this money was, public at all. And I set up that like PPP fail loan site or whatever, and we were getting 15,000 views a day. Then six, seven weeks later, the mainstream media finally picked up on the PPP money, and the distribution, and the claims that SBA was making and all that. But what we really- they did because of that early on, I think the, AICPA, Erik Asgeirsson, right?

He came on, and I forgot who was- was it Mark [INAUDIBLE]? They both came on to talk about the loan process, right? And their take what their knowledge, the AICPA had in this, right? And remember, there was problems with the fees, and accountants were getting the fees, and the recommendations, and there was a lot going on.

But what really came out of this was, because we were out there pushing the narrative. And to some extent, we were the only ones talking about it, we were controlling the narrative, but what came out of this is the AICPA now does a weekly webinar and publishes at a podcast. And they’d be doing every single week because they weren’t out there having the conversation. And our behaviors, and the way we reacted to PPP loan has gotten the AICPA to do one of the, probably the best things they’re doing right now.

I don’t know if you listen to that. I probably- every other week, I download it and listen to it as a podcast. I don’t actually watch the webinars, but it’s actually them being in touch with their members in a good, modern way. And that is the direct result of us. They would not have done that if they weren’t so pissed off at us, ripping on their part and the failures of the PPP. But it’s good because now everybody’s getting a benefit. If you’re a member of the AICPA, they do this every single week. They put out a decent summary of content of what’s going on in their world now.

Blake: So, I don’t wanna say that, like- I don’t wanna discount Donny’s opinion here. Donny, if you’re listening, like I value your opinion. And I know that we won’t always agree. And I just wanna talk about what people wanna hear about. I wanna be talking about what’s interesting to our listeners.

So, hopefully, like what we’ve been talking about kept our listeners interested enough for a whole hour to listen to this, and now you’re at this point here. And I wanna say to you, to our listeners who are still here, hey, if you think we should be talking about something else, tell us. If you think that what we’re talking about is relevant, tell us. I appreciate it.

And we’ve gotten feedback on both sides of this. Like the abortion issue was an experiment for us, to see if we could take an analytical approach with the numbers, which comes from our long time in Accounting and apply that to a current event story that is not directly in our space.

And I think it actually stimulated a conversation. Like we got more feedback from that episode, both positive, and negative, and just sort of in the middle, than anything we’ve ever done before. And our numbers are up in terms of listeners. So, I guess, you know, I’m gonna try harder, when I have an opinion, to be as even keeled as I can to see both sides. That’s really my goal with all of this is, how can I see both sides of this issue, and I try to do that. I don’t always succeed, but I try.

And again, with the abortion issue, it’s funny to me because I’ve had people on both sides like think that I’m agreeing with them, right? I’ve had like-

David: We’ve been accused over this time. We’ve been accused as Trumpers before and as crazy liberals before. We’ve been accused on both sides, like- which is good, ‘cause actually, that’s actually the best scenario in my opinion. Because if we do like what Donny says is just like pick one opinion and stick with it, now we’re just gonna be like this echo chamber, and the only people are gonna listen to us are the people that agree with our one opinion. And I don’t think- this is not about one opinion.

Blake: Nobody wants, nobody needs that, right? You don’t need me to validate your existing point of view. Regarding the PPP specifically, at the beginning, yeah, we were on it, the money wasn’t getting out. And then when the fraud stuff started happening, we were on that. And that’s because, you know, I think our job is to sort of point out the flaws. It’s to point out what’s wrong, what’s going wrong, not what’s going right. You don’t need us to point out what’s going right.

And the whole structure of the thing from the beginning, having the SBA do the whole thing, was a total cluster and was wrong. Like you should not give an agency with like, what, how many people? They have few hundred people working there or something. This massive job, it was going to fail. And then delegating it to the banks. Like it was all designed to fail.

David: And then putting it on the IRS’s plate.

Blake: Putting on the IRS- yeah. So, it’s like, of course. But that doesn’t- I don’t know. We couldn’t have predicted what was- I mean, we kind of did predict what was gonna happen. If we went back to those shows, like we were talking about how this didn’t make sense. So, then the fraud is not a surprise to me at all.

David: Yeah. And I think the, issue, and I’ve said this to other people before, cause we’ve broken some stories, and a lot of times- and I’ve said this, what comes outta my mouth many times is something that kind of has been the word on the street for months. And sometimes I have to wait till a story comes out before I can actually say what I already knew four months ago on a lot of things. Because we tend to wait till it actually becomes news. Like we are not TMZ, we’re not a rumor page or rumor site.

Blake: Yeah. If we hear something from a listener and we can’t substantiate it in some way, we don’t talk about it. So, that’s the news element of it, right? And we try to be accurate. Unfortunately we can’t afford a fact checker yet. I hope we can get one someday and then we can be even better. That would be really great.

But yeah, you know, I think, just to tie this up, right? Like my point of view is that our profession, the Accounting profession, is falling behind, and has been behind, and in many ways is already irrelevant. There’s all this talk about how Accounting risks becoming irrelevant. In many ways, it already is. Like when we talk about how investors don’t use financial statements to make investment decisions, that’s true. It’s a very small piece of it. Different surveys have different numbers, but it’s like low, single dig- low double digits, you know. Like less than 20% of investor decisions have- like, I’d have to pull out the number.

And that’s because Accounting standards haven’t evolved. Audits have declined in value and relevance. People don’t really pay attention to that anymore. And you can just see that with like Tether, not even having ever been audited, and having $80 billion under management as a crypto bank. It’s crazy that this happens, and I think it’s because of, you know, we’re not staying up on this stuff. And my goal is to help push the profession forward.

And sometimes it’s uncomfortable. Change is really uncomfortable and being challenged is really uncomfortable as a profession. But, you know, when you go to the gym, if it doesn’t hurt, you know, a little bit, or a lot, right? You’re not getting stronger. So, if, when you listen to this, maybe it causes you a bit of like, I don’t know, you listen to us and you’re like, “Those guys don’t freaking know what they’re talking about.” Write us an email, send us a voicemail, and set us straight on specific issues, right? That’s what I really would love.

And we need to figure out a way so that our listeners can give us their feedback more easily. Right now I say, “Email me a voice message,” and those of you who do, and I really appreciate that. So, Donny, next time we say something that you don’t agree with, send us a voicemail, I’ll play it on the air. Just try to keep it-

David: Just tweet.

Blake: Hopefully everybody doesn’t do that. Or tweet at us, right?

David: Actually, this is my advice for all listeners. Don’t let it fester up over three or four episodes. Let it out Donny.

Blake: Yeah. Actually, that’d be great.

David: Let it out.

Blake: Tweet a video at the Cloud Accounting Podcast on Twitter, and then we can play the audio on the air, right? And then we can all talk about it, I would love that. So, I got one more listener message. I hate to end on this.

David: No, it’s okay.

Blake: All right, here we go. This is from Keith. I have really enjoyed listening to your podcast over the past two years, but your episode on abortion was a real disappointment and made me realize how little you care for your conservative audience. In the last episode, David made a comment that basically said, “If listeners were turned off by his comments on abortion, they are free to stop listening.” I have made the decision to no longer listen to your podcast. Thanks.

Now I don’t think the comment you made was exactly that. I think you said something to the effect of-

David: Well, it’s like, you can stop listening to an episode, right? That’s the beauty of it. You just stop. It’s not like the old days of TV where like there’s two channels, and you watched what came on next. This is the beauty of like a podcast, it’s on demand. You listen to it, “Yeah, it’s not interesting,” you skip it.

You pick this episode, “Oh, that guest looks interesting. I’m gonna listen to that one.” Like, that’s the beauty of a podcast, and that’s where I was coming from on that. It doesn’t mean don’t listen forever, but this is this- like, we’ve been accused on both sides, right? So, I don’t know.

Blake: Right. Remember when I wrote that op-ed in Accounting Today about Expensify and David Barrett?

David: Oh, yes. ‘Cause you jumped on David Barrett for his behavior.

Blake: Yeah. I criticized David Barrett for writing an email and sending it out to every Expensify user, including all the clients of accountants saying that a vote for Donald Trump was a vote-

David: Clients of the accountant and of the [INAUDIBLE]. Yeah, like it’s pretty major.

Blake: That a vote for Donald Trump- And he said, basically, in his email, which was extremely aggressive, that a vote for Donald Trump was a vote against democracy. And I wrote an op-ed in Accounting day about how that was like not only a ridiculous statement, but also totally inappropriate. And people on the liberal side jumped on me.

So, you know, I don’t consider myself to be anti-conservative. And I think the whole liberal and conservative only-two-sides thing is stupid, because there’s so many issues where it’s not that, it’s not two sided. And I moved to Arizona partially because I couldn’t stand the lockdowns in California. So, don’t call me, anti-conservative. You know, I’m more conservative than probably a lot of people in this country.

So, like, if you- but don’t label me that way either, because I don’t believe in these labels.

David: So, this is like- we’re in a situation here, right? Like if you even take the feedback that Donny just gave us, which is like, “Pick an opinion, take a stance and stick to that one stance,” right?

Blake: Is that what he said? I guess he did say something like that.

David: And then over here, we’re being accused of having a stance and this guy’s like, “I’m out, I’m not gonna listen anymore.” And it’s like, we don’t wanna be like- I don’t wanna be, we’re just MSNBC or we’re just Fox News, or- for lack of better examples, right? Where we just are like this one echo chamber, the other echo chamber. We’re kind of like just people in the middle.

Blake: Yeah. This is what you and I- David, like, what I like about this show is you and I, if we got together and we just had a beer, and we weren’t recording, this is how we would be talking. And that’s real.

David: Probably yeah, exactly.

Blake: You know, we talk about stuff the way we talk, which, you know, we have to, probably, moderate a little bit of what we say on the air, right? We don’t wanna-

David: Well math- we always do the math ‘cause it’s horrible real time. Like it’s bad. If we can’t do math, we have to delete that- all the episodes. And hopefully he comes back. Hopefully he come back.

Blake: So, I’m sorry, Keith. Well, yeah, he’s not listening anymore, I guess, but you know, I hope that if, if you were listening to our episode and you were turned off by something, we said, yeah, you can just turn off the episode. I hope you come back, but also let us know what you think. I wanna hear it. I wanna know what your opinions are, and yeah, I learn from that, too. I’m not perfect.

David: But I also don’t wanna optimize our show based on everybody else’s opinions, because that’s what major media does, and they’re good at it. And they like do like six-minute blocks on TV, and based on the ratings, and they reoptimize.

It’s like running an optimized Facebook ad campaign. I don’t want us to be like, “Our listeners really liked that kind of story. So, let’s do more stories like that.” Like, I don’t wanna optimize for what the audience wants, like specifically. It’s more of the overall.

Blake: I don’t think we should optimize our opinions. So, it’s like, this is why I can’t watch MSNBC or Fox News or CNN anymore, because they’ve basically figured out what their audience thinks, and then they spout opinions that match what those people think. It’s just validating what you already believe, right? And it gives you this good feeling or this angry feeling. It depends on what the audience wants, right?

Fox News tends to be a little more like, “I’m angry at, at this thing,” right? And that’s the feeling they give you. It’s just a drug. So, you know, I think we’re be- like, I try to listen to stuff where, yeah, I disagree often, you know. Like I listen to NPR as long as I can because I think it’s important for me to hear that point of view. But then I go on and I read the Wall Street Journal opinion section, and I feel like it kind of balances itself out. And I’m pissed at both of them sometimes, you know.

I get so tired of the like, “World is ending, everything is horrible,” tone of voice that you hear on NPR stories. And then, you know, I feel like I read the Wall Street Journal, it’s like the two old guys from the Muppets are in the opinion section, right?

David: That’s good. You mean us? If wants to do the Photoshop contest, we are the two old guys, we are the two Muppets. We are becoming those guys.

Blake: No, no. Like I just have to give you an example of like the most grumpy-old-man headline on the Wall Street Journal that just killed me. It was like, “What’s that new telescope that’s out there that’s like giving us all these great pictures of the world?”

David: It’s named after some NASA-

Blake: James Webb.

David: James Webb.

Blake: Yeah. So, the headline was- I’m paraphrasing it, something like, “James Webb Telescope proves that we don’t need humans to explore outer space.” And basically, saying like, it’s a waste of money to send people into space to explore, right? Because we can just do it with robots. And I’m like, “Oh man, that’s so depressing, right? Like, you know, isn’t there something to be said for like landing a man on the moon or like taking somebody to Mars?

David: That headline is this, “Because of AI, we do not need accountants anymore to do taxes.” Like that’s the same headline. That’s the same headline.

Blake: Oh.

David: Accountants are not necessary.

Blake: And you know, I do hope that like AICPA invites us to one of their conferences, because, you know, unlike the mainstream Accounting press, we have opinions, and we will question what they’re doing.

And actually, I would say that’s an important part of journalism that we do, right? We may not always get the facts, right? But we do ask questions and we challenge people.

David: But even, I just said, like that article today, they had the wrong stuff in the article. So, like even reporting other people’s news has incorrect facts.

Blake: Right. But I’m saying we go to the conferences and we don’t just like repeat talking points from that event, we try to actually ask questions and challenge the people there. And that’s good journalism too.

But I think that, you know, AICPA didn’t want us doing that. Because guess what? It’s inconvenient to have people challenging your point of view.

David: Yeah. I mean, but at the same time, like I said, rewinding back to the PPP thing, we are the reason they do a weekly webinar for their members. We are a 100% of that reason. ‘Cause they kind just have us only being the only voice out there, which is fine. That’s good for everybody. I’m so glad they’re doing that.

Blake: Yeah.

David: It’s actually decent.

Blake: I hope we get more voices out there, right? So, that’s what we’re doing with Earmark, is creating more shows. Donny, if you wanna have your own podcast where you get to talk your opinion, and maybe more people will listen, will produce it. I think that’s important.

David: I don’t wanna be on another podcast. I’m more than happy to help produce other podcasts.

Blake: We wanna bring more people’s voices into the profession and visible in the profession. I don’t want it to just be the CEO of your state society or Erik Asgeirsson or-

David: This why I’m bringing the Accounting Twins, right? Like here’s the opinion, here’s the views, here’s the journey of two 22-year-old females that are becoming accountants. One’s going CPA, one’s going public, one’s going private. They’re the first Gen Zs entering the workforce. Like, it is a different view of our industry, listening to them talk about it.

And it’s not our, you know, two-white dudes view. Like, I’m very conscious of that. Like, there needs to be other opinions, and making other shows is the way to bring more opinions, there should be lots more. In the grand scheme of things, there’s what, 1.6, 1.8 million accountants and bookkeepers in North America. I don’t know how you wanna count it, right?

Blake: Millions, yeah.

David: None listen to podcasts yet. There’s so much room for all your coworkers and the people you know that work in this industry that don’t listen to podcast. Yes, they all should listen to The Cloud Accounting Podcast, you should tell them that, but there will be a bell curve of a podcast for them to listen to depending on where they at in their career and what excites them. Maybe it’s an audit podcast, maybe it’s a fed tax podcast who knows, right?

There’s gonna be something for everybody to listen to, but everybody should listen to The Cloud Accounting Podcast. That’s the only thing everybody should do.

Blake: David, if people wanna reach out to you online, follow you, where should do that?

David: They should just email Blake@BlakeOliver.com.

Blake: Follow him @DavidLeary. I’m @BlakeTOliver.

David: I’m on all the socials, just @DavidLeary. Super easy.

Blake: See you here next weekend.

David: Bye.

[01:15:43] Classifieds

David: Time for the classifieds.

[01:15:47] Classifieds: Get W9

David: Tired of clients not remembering to get W9s? Getw9 automates and streamlines the collection and storage of W9s. Getw9 has a QBO integration and they have a partner program that pays 25% commissions. Get W9 plans start at only $19 a year. Visit getw9.tax today to get started. That is getw9.tax.

[01:16:12] Classifieds: Royalwise Solutions

David: Are your bookkeeping clients driving you crazy, asking the same questions over and over? They need QuickBooks training and you have more important things to do with your time. Let Royalwise be your training partner. Create your own customized client training program and outsource your QuickBooks training department.

Listeners of this podcast are invited to join our partner program and receive a 10% referral commission when you sign up. Join us at Royalwise.com/partner to learn more, and get started today. Again, that’s Royalwise.com/partner.

[01:16:42] Oh My Fraud: A True Crime Podcast for Accountants

Blake: Hey, podcast listeners, it’s Blake, and I wanted to let you know about a new show I’m working on with CPA/comedian, Greg Kyte, and blogger/former CPA, Caleb Newquist. It’s called “Oh My Fraud,” and it’s a podcast all about financial crimes. That’s right, a true crime podcast for accountants, by accountants.

Caleb and Greg are going to come together every couple of weeks to unpack their favorite frauds, and explore the circumstances, psychology, and interpersonal dynamics involved. They also fully indulge in victim-blaming the defrauded widows, orphans, infirm, and feebleminded – because who can resist?

If you fancy yourself a trusted advisor, or prefer your true crime with spreadsheets instead of corpses, listen to this show to learn what to watch out for, and to keep your clients, your firm, and even yourself, safe. To subscribe, go to ohmyfraud.com, or search “Oh My Fraud” on Apple Podcasts, Spotify, or wherever you get your podcasts.

[01:17:41] How to advertise in these classifieds

David: Want to get the word out about your newsletter, webinar, party, Facebook group, podcast, e-book, job posting, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad? Hit the show notes for the link to get more info.