The ERC Jumps The Shark with Snoop Dogg Deepfake

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Blake Oliver: [00:00:04] Oh, yeah. The cyber attacks in Vegas. Well, one happened last month and the other happened is still ongoing. I think so. The one that's ongoing right now is MGM Grand. We'll just all the MGM properties have been suffering from this terrible cyber attack that is like people can't check into hotel rooms. They can't check out. There are people running around with clipboards doing everything on paper. They can't pay out slot machine winnings. They have to do it manually. So they're walking around and paying out. People's slot machines can't buy tickets.

David Leary: [00:00:36] Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:46] Hello and welcome to the show. Happy Friday, everybody. I'm Blake Oliver.

David Leary: [00:00:51] And I'm David Leary.

Blake Oliver: [00:00:53] And we had some major technical difficulties getting started today. But we are through it and we are happy to be with you because there's so much great news to share on this tax deadline day, September 15th to all of you who are still grinding away. We are with you in spirit. I am actually responding to our tax preparer via email notifications as we record to make sure that I'm not the bottleneck. So I'm doing my part and we're going to get that return filed today. Congratulations. Yes. But David, I think we got to start with the voicemail you sent me today or yesterday. You got a voicemail from a celebrity.

David Leary: [00:01:35] Well, we all get voicemails from sales pros, right? Sometimes they call during the show. I have to put my phone on the floor so it doesn't, you know, create a disruption when we're recording. But I got one yesterday. Yes. From a celebrity. And it's perfect timing because did you see the IRS just announced they're shutting down the program because of massive and rampant fraud?

Blake Oliver: [00:01:56] I know. So you sent me this voicemail and I thought, oh, this is the best scam voicemail we've gotten yet. We were going to play it on the show. And then right afterward, we heard that the IRS is shutting down or pausing processing of applications. Yeah. So finally.

David Leary: [00:02:11] Finally, let me read the the IRS believes a substantial portion of the new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing.

Blake Oliver: [00:02:24] Yes, not not news to anybody who's been listening to this program or receiving those voicemails. I mean, like it took them a long time to get around to this, but maybe IRC has finally jumped the shark. I think this voicemail kind of really sets the tone for where we're at with the employee retention credit. Let's give this a listen.

Snoop Dogg Clip : [00:02:45] Now, I got to hit you with some real talk. All you business owners who held it down during the pandemic. I got a gym for you. You know, times were wild. And if you had employees, you might be sitting on a refund that's rightfully yours. But check this out. I got a hookup for you. It's called And they got the game on lock. Now, here's the kicker. These folks at UGK and Volcom, they got connections like no other. They can have them funds in your hands quicker than you can roll up your favorite. Well, you know what I mean. We're talking just a couple of weeks and boom, you got that cash flowing back where it belongs. So if you're a business owner who's been through the thick of it, don't miss out on this golden opportunity. Slide on over to UGK and Let them know Snoop Dogg sent you and watch the magic happen. It's all about getting what's yours, baby UGK and Volcom. They're the real deal. And they got that fast track hookup, y'all. Snoop Dogg. Stamp of approval, baby. Peace out.

Blake Oliver: [00:03:42] So that can't possibly actually be Snoop Dogg, right?

David Leary: [00:03:47] I don't think it is.

Blake Oliver: [00:03:48] But after we had the whole Matt Damon Bitcoin. Advertisement thing. I wouldn't put it past him. Well, you.

David Leary: [00:03:56] Got the guy from Modern Family, the dad from Modern Family. He's in that one ad saying, If your accountant told you you're not eligible for GRC, they don't know what they're talking about. Go to whatever stupid irc that guy's pimping.

Blake Oliver: [00:04:10] Oh, I missed that. I didn't see that. Oh, man. Well, so, I mean, like, that's just too unreal.

David Leary: [00:04:21] Like, it was like. It's like, yeah, this hopefully we're at peak now. This. Yeah. It's all well.

Blake Oliver: [00:04:27] So like we said, the IRS has frozen the IRC processing due to fraud fears. No shit, Sherlock. Right. Like, man, it took them a long time to figure this out. Apparently billions and billions of dollars have gone out the door. They've only initiated 250 criminal investigations involving nearly 3 billion potential IRC claims so far. But we know that so far there have been billions and billions of dollars that have gone out the door. In 2021 the projection was it would cost the government $85 billion over a decade. That was up from an earlier estimated estimate of 55 billion. But on Thursday, the IRS said that it had already paid out $230 billion Billion with a B, 230 billion in refunds associated with the tax credit and that it had a backlog of 600,000 claims, 15% of the 3.6 million claims for the credit that the IRS has received since the program began were submitted in just the past 90 days. And that's due to these IRC mills that are just pumping businesses through this program. I mean, it's really it's really kind of shocking what's happened with this program. So it went up from $55 billion estimate to they've now paid out $230 billion. Talk about cost overruns right. Yeah.

David Leary: [00:05:55] I don't know what they're going to do. I mean it considering they've only investigated 250 and I probably get 250 calls a month, phone calls, like just start with those 250 companies. Yeah. Uh.

Blake Oliver: [00:06:09] Well, hey, thanks, everyone who has joined us in our live stream. If you have any stories to share with us, comments, we'd love to hear from you. Hope you're doing well on this Friday. And if you want to get notified when we go live, just subscribe to us on YouTube, search for the accounting podcast and you can join us live and hang out. And John Oliver said, How many years will the IRS be able to investigate IRC indefinitely per the fraud? And Trinity said wow, 15% in the last 90 days. Yeah. Thank you for joining us John and Trinity. I don't know what the what the statute of limitations is on this stuff. So there's this is the problem also with the fraud even though they're still working through all that and we see these massive criminal investigations happening and people going to jail, there's so many claims, so many examples of it, that they can't possibly with the humans that they have, get through all of them. So, I mean, this is why the IRC mills have been able to do what they're doing because they just know there's not going to be the enforcement and you make your money. Some of these IRC mills have made $1 billion in fees like a billion in fees and you know, when you have $1 billion you can just leave the country and you're done, you know, like so is this.

David Leary: [00:07:23] Kind of like a similar I mean, this is kind of where we're at with society. Obviously, you have, you know, people you see these videos, people just walk into Home Depot and targets and they're just stealing stuff because there's just not enough police enforcement to actually capture criminals for shoplifting and do these things kind of like that. Yeah, it's they know nobody's ever going to bust them. So, like, why not? Yeah. And.

Blake Oliver: [00:07:43] Well, hey, you know what? Let's let's move on and tackle a little bit of positive accounting news or maybe news isn't the right word. It's, you know, one of the criticisms of our show is that we don't talk enough. We don't talk positively enough about the accounting profession. And I want to remind everyone, I'm I'm a big fan of accounting. I love accounting. I was a musician who became a CPA, and I love accounting. So even when I complain, you know, it all comes from a good place, right? A place of love. Yes, but but I think we do need to do a better job of explaining to our young listeners in particular why accounting is a great career. And I want to thank Hector Garcia for sending me this video. This is Mark Cuban on Accounting and a few other people who are really smart people talking about why accounting is important.

Mark Cuban Clip: [00:08:33] But with college you went to IU. Right now you got a lot of people that say forget about school, drop out of school. So you think they're idiots? Idiots. Tell me why. If you're going to have And run a business, if you don't understand accounting, you're already behind the eight ball. Can't you hire a guy that knows how to run and then they still. Have to communicate to you? Right. I mean, there's people that don't understand the concept of the difference between profits and cash. You know, Oh, your accountant might tell you you're profitable, but your cash is going down, you know, not understanding a breakdown. And when you don't. You think you need college to learn that? Yeah, I think you do. Right? Because it may not for some people. Look, if you're so self motivated that you can take an online course in accounting and teach yourself everything you're way ahead of the game anyways. But most people aren't. And I'm not saying you have to go to Indiana. I'm not saying go to an expensive school. I don't care if you go to a community college and take accounting and spend 99 bucks for the class, just, you know, spending the money forces you to be more obligated to do it.

Warren Buffett Clip: [00:09:36] The most valuable thing I learned here, but I learned a lot. But the most valuable was was accounting.

Blake Oliver: [00:09:43] There's that's Warren Buffett.

Warren Buffett Clip: [00:09:44] There's nothing more important. People ask me what they should take in business school and or even if they don't go to business school, what they need to know before getting into business. And I tell them, you know, you have to you have to understand accounting. It's the language. I mean, it would be it's like being in a foreign country without knowing the language. If you're in business and you don't understand accounting. So it you want to get as comfortable with that as you are with the English language.

Warren Buffett Clip: [00:10:13] What advice would you give to a young investor today?

Warren Buffett Clip: [00:10:18] Well, you've got to understand accounting. You've got to that's got to be like a language to you. And so, yeah, you have to know what you're reading. I mean, and unless you know that language.

Warren Buffett Clip: [00:10:29] Right. Tell Mr. Buffett what you plan to study when you enroll in community college later this year. And I'd like to get Mr. Buffett's reaction as to whether that sounds good to him or not.

Warren Buffett Clip: [00:10:39] Well, I plan to cross Major in econ and finance. You know, the two degrees are only a couple of classes off of each other, and to get both is even better.

Warren Buffett Clip: [00:10:47] Yeah. And the one thing I'd recommend is you take all the accounting courses that you can find. You know, accounting is the language of business and and there's nothing like, you know, getting it early and sort of getting it into your system. So whenever you get a chance to take an accounting course, jump on it and it'll it just it'll make it'll make it so much easier, you know, for years and years to come and reading financial statements to get comfortable with it because it is a language all of its own. And, and getting comfortable in a foreign language in effect takes a little a little experience, a little study early on, but it pays off big later on.

Blake Oliver: [00:11:24] So that was Mark Cuban. And then a couple of clips of Warren Buffett talking about why you should study as much accounting as you can.

David Leary: [00:11:31] And who made this video. Do we.

Blake Oliver: [00:11:33] Know? It was like a clip that somebody put together on YouTube. I don't I don't know who this is, the.

David Leary: [00:11:37] Kind of stuff the CPA should be doing. They should be making these hype clips and gathering up testimonials from a bunch of people and get.

Blake Oliver: [00:11:44] Warren Buffett on the town hall. You know, the town halls. That would be great. I'd love that. That would be.

David Leary: [00:11:50] Huge.

Blake Oliver: [00:11:50] What else is new?

David Leary: [00:11:51] I have to feel good stories as well. Okay. So one, so you met your wife at college, right?

Blake Oliver: [00:11:58] I did, yeah.

David Leary: [00:11:59] Okay. Well, there was a couple in Denver. Yeah, they're at the University of Denver. They fell in love. They met in an accounting class ten years ago. They fell in love. This bride and groom. And the way the way it happened was apparently the groom's father happened to be an accounting professor at that university, and he wrote the textbook. And so she leaned over in class and said, hey, do you can you give me some answers? You got access to the answer. Key Well, and that's fine. People meet at college. They get, you know, and get married. But here's the kicker like, guess where they got married?

Blake Oliver: [00:12:35] Uh, they got married at Luca Pacioli statue in Italy?

David Leary: [00:12:39] No, they got married in room 300 at the University of Denver's Daniels College of Business. They got married in the accounting room.

Blake Oliver: [00:12:46] In the class. In the room.

David Leary: [00:12:47] Where? The classroom.

Blake Oliver: [00:12:48] In the classroom where they took accounting. That's amazing. What? Where did you see this story? Who is this couple? What are their names?

David Leary: [00:12:53] This is from when Chachi Worldcom, I think it's a local Denver paper. The couple's names, we have Lexie Carver and Trevor Beasley Bazley. Wow.

Blake Oliver: [00:13:05] And are they I guess they are accountants now. Are they going to become accountants? Are they heading down the CPA pathway?

David Leary: [00:13:13] I'm not sure even talked about that. But there's a picture of them in the rehearsal when they're actually in the classroom.

Blake Oliver: [00:13:19] Oh, my gosh. Do you have that picture? Can we put that.

David Leary: [00:13:22] Up on the screen? Can I share this? Let's see. Share screen to.

Blake Oliver: [00:13:25] Oh, my gosh. I would love to see.

David Leary: [00:13:26] It present.

Blake Oliver: [00:13:28] While you.

David Leary: [00:13:29] Get that up.

Blake Oliver: [00:13:30] While you resize that we got. A comment from aide who said, John D Rockefeller started out as a bookkeeper and Phil Knight started out as a CPA. Two of the most successful businessmen ever. We don't speak much about this. Good point. Oh, I love this picture. Oh, there's a happy couple in the classroom getting married.

David Leary: [00:13:52] And I have another college story that's a feel good. So Purdue University professors in 2019, they made a concerted effort to not let accountants flow to other disciplines at college. Right. Other majors. Other majors. Right. And so they went on this mission to shatter the stereotypical image. And so one part of that is they started doing tailgating at football games. So they buy 200 tickets to the games and they invite 200 accounting alumni and 100 accounting alumni and 100 accounting students. And they mingle and they do this at every game and they tell the students to bring their resumes. And but what's happened now? They've started to push up enrollment. They've pushed up enrollment in their math program like they've. So there's people are making a dent. They're being you have to do this in creative ways, right? You can't just it's not the same path. So to good accounting stories here now, there's no videos of like keg stands or cool tailgating activities at the football games, but, you know, somebody has those. Please send them our way.

Blake Oliver: [00:14:53] I love that. So since you're speaking about education, I figure we should talk about the 150 hour requirement since like it's basically a requirement on the show that we speak about it. You know what I mean? David So I got a survey from the AICPA and I was so excited to see this email from Sue Coffey, Chief Executive Officer of Public Accounting. And the subject line was Blake, Are we focused on the right things? And it's inviting me to take a survey to find out, like if they are focused on the right things, your voice matters. Are we.

David Leary: [00:15:33] In this.

Blake Oliver: [00:15:33] Together? Well, I already did it because I didn't know how long it would take. And in the email, Sue Coffey talks about how talent is an issue that they are convening the National Pipeline Advisory Group to develop an agile, data driven national strategy to address talent issues. She talks about the pipeline acceleration plan, the Experience Learn and Earn program. Would you help us? The call to action is spare 15 minutes to complete this confidential survey and help us continue serving you and the profession. And so I did that. And unfortunately, there were no questions in the survey about any of this. There was no question about like, do you support 150 hours or do you support an alternative pathway? Like none of it, they didn't ask. And what a missed opportunity. A chance to actually ask the members what they think. Do they support 120 plus two years of experience? Do they support alternatives? Like why doesn't the AICPA just ask the members what they want?

David Leary: [00:16:39] So what questions were you asked?

Blake Oliver: [00:16:41] It was like, you know, it was it was like a research survey done by a third party firm and nothing was specific. It was all like very like. Do you think the AICPA is on the right track with this stuff and their CPA and all that stuff, but nothing specific about these issues that were actually mentioned in the email. Like they didn't ask specifically about any of this.

David Leary: [00:17:00] So, so, so the email was like clickbait to get you to do the.

Blake Oliver: [00:17:03] Survey, I guess so. I don't know. But I was very disappointed with that.

David Leary: [00:17:07] I'm trying to imagine you doing this survey. Was it like the next question is going to be the one? And then I was hoping you're at the end.

Blake Oliver: [00:17:14] It was a long survey, too. It was way too many questions. And, you know, it was it was like Qualtrics or something that did this survey. You know, those surveys you do where it's just like a million questions. It never seems to end. And you wonder like, why do they need to ask so many questions? Yeah. So I think all the societies should do this. I would love to see every single state society survey its members and say, you know, do you support the current system or do you think we need a change? I think that's the first question, right? Is it change merited? And if you do support a change, what of these options? What would you support? And give them a bunch of options. And I think you'll find that, you know, based on the anecdotal evidence that we've heard, that the vast majority of CPAs support changing this. And if the leaders, the the chairs, the people on the boards of accountancy like saw that data, then maybe they'd be motivated to change. But I'm not sure they want to see that data. I'm not sure they want to know what the membership thinks. All right, David, what's next?

David Leary: [00:18:16] I mean, we probably should talk about the the. Well, I had it in my bucket for top stories, but then we get distracted with Snoop Dogg and and feel good stories. But the two major outages that happened this week.

Blake Oliver: [00:18:26] Oh, yeah. The cyber attacks in Vegas. Well, one happened last month and the other happened is still ongoing, I think. Do you know if the so so the one that's ongoing right now is MGM Grand. We'll just all the MGM properties have been suffering from this terrible cyber attack that is like people can't check into hotel rooms. They can't check out. There are people running around with clipboards doing everything on paper. They can't pay out slot machine winnings. They have to do it manually. So they're walking around and paying out. People's slot machines can't buy tickets. You know, like you can't use.

David Leary: [00:19:00] The ATMs because the ATMs there. People can't open their hotel room doors. I mean, I've always thought, I don't know. I think you and I, we've gone to Vegas plenty of time for conferences. And I think we've even had discussions about the IT infrastructure. It's kind of amazing how connected everything is there. So if somebody wants it goes down, it goes down hard. I just went to the website before we recorded. You could actually get to the MGM Resorts website and book hotels now, but they were sending people to other third party sites to book hotels, and now they had to issue an 8-K report that says with the SEC that this is probably going to be a material impact for them this week because it's I think they have $13 million in revenue a day and then people are just leaving because nobody has actual cash to to pay for things. The crazy thing is the way they got hacked, apparently these hackers are claiming they found a third party IT person on LinkedIn and within ten minutes basically socially talked their way into getting whatever they needed that opened the doors.

Blake Oliver: [00:20:00] So it was find somebody on LinkedIn and then they called the support desk and guess did they They must it's social engineering. They like impersonated this person. Yes. And got their password reset. And got into all the systems. And this is the one thing about Vegas that's fascinating is basically two companies control the whole strip, right? It's MGM and Caesars or everything. So when MGM gets hacked, it's all connected. All these hotels, they look like they're different hotels, but they're really all the same hotel. All the systems are all connected. Right.

David Leary: [00:20:35] And Caesars, apparently a month or so ago got hacked and they paid a ransom.

Blake Oliver: [00:20:39] I heard it was $30 million that they paid to to not suffer the same fate as MGM.

David Leary: [00:20:45] They've been worth it. Yeah.

Blake Oliver: [00:20:47] Probably right.

David Leary: [00:20:49] In the cyber security cyber hacking community, you know, because there's a lot of bragging that goes on when this happens because people aren't smart enough to just take the money and run like all the people. They brag about it and then they have these abbreviations. So it's a alf. Alf. Alf v has a reputation in the cybersecurity community as being quote unquote remarkably gifted at social engineering for initial access. Like they're, you know, giving them kudos for being gifted and socially accessing these things. The other one that was out, I don't know if you've heard on Thursday afternoon Square was out. So square, you know, the little payment processor and the cash app were both out and so small businesses couldn't take payments. So some small businesses lost 8 to $10,000 that afternoon. Some of them just shut their doors. So why were they weekend?

Blake Oliver: [00:21:46] Why were they down? Like, what did they get hacked?

David Leary: [00:21:48] There is no reasoning that has been disclosed yet on why they were down. Wow.

Blake Oliver: [00:21:53] So it's crazy to me that these companies can like have an outage like that and then not have an explanation like quickly.

David Leary: [00:22:00] Well, and not only that, they were criticizing Square for not communicating it. So they at first they weren't communicating that it was happening. And then some customers got an email, but most found out through Twitter just, you know, there was around since noon Pacific time on Thursday, sellers have been unable to access accounts or process payments due to system outages with square and brick and mortar places were just done. Yeah, they can operate. So I think the bigger thing is and the hotels had to do this, people had to they were checking people in with clipboards to the rooms. Yeah. And like for you, with your clients like you, you probably should go through this exercise with your clients. Like, how do you take money if your systems are down now. Yes.

Blake Oliver: [00:22:44] And have a backup have a backup processor. Right. So every business, if you if your main processor is square, have another dongle, you know, at every location where you can. We have a backup processor.

David Leary: [00:22:57] Yeah. You can have your accounting system be down for a day. Right. But you can't have.

Blake Oliver: [00:23:03] Not your payments.

David Leary: [00:23:03] Your payment, your point of sale or payments. Yeah. You have to have some. And I remember when I worked retail at the mall back in the day, we'd have one day leading up to the busy season where we just only did manual the old credit card and right hand receipts the whole day just to practice it in case because you couldn't have, you know, the day before Christmas and terminals go down, you got to still sell stuff, Right?

Blake Oliver: [00:23:26] Well, back to feel good news, David. All right. I learned something today from Instagram. I learned that the Doberman Pinscher breed of dog was invented by a German tax collector named Louis Doberman. Louis Doberman. He was a German tax collector who was seeking the perfect dog. Muscular, daunting, loyal to serve as his assistant as he collected taxes. It was created in the 1800s and then was refined and made slightly smaller and eventually gained clout as a working dog therapy dog war dog and show dog. And this was via the big four accountant on Instagram, so you can learn things from social media. I guess not a tax preparer, a tax collector, but hey, there's that connection to taxes.

Speaker11: [00:24:14] It.

David Leary: [00:24:16] I mean, you're speechless. Yeah. Yeah. I'm like, should this be the mascot of the IRS? Like, would this be could this be part of the image change? I don't.

Blake Oliver: [00:24:25] Know. Jp Morgan is going to offer online payroll services. Gusto. They chose Gusto to partner with to offer online payroll for Chase small business customers. It's going to put gusto in front of. I mean, I don't know how many small businesses that Chase has. Like it's going to be a lot. Hundreds of thousands. Millions. They say JP Morgan says that they have 5 million small business customers and more than 200,000 users of its payments solutions offering. So this is going to be available to those who are using their payments solution. So not all 5 million, but the potential to reach all those 5 million. I guess eventually. Yeah.

David Leary: [00:25:15] And back. Go ahead. Oh, I was going to.

Blake Oliver: [00:25:18] Say, this is a big deal because Gusto serves 300,000 small and medium businesses right now. 300,000 is their current base. And this is going to give them access to 200,000 in the short term and then millions more in the longer term.

David Leary: [00:25:33] It's so just speaking historically speaking, I remember when Intuit got Intuit payroll into all the Bank of America's, and they had big press releases and, you know, PowerPoint slides and executives high fiving and all of that and was on the payroll. I don't think it ever moved the needle at all, really, because the reality is. So Chase has how many small businesses.

Blake Oliver: [00:25:54] They have 5 million small businesses. How many hundred thousand.

David Leary: [00:25:59] Customers do they have? 100 million.

Blake Oliver: [00:26:02] I mean, it's like, yeah, a lot.

David Leary: [00:26:03] So what happens is in the in the shuffle of things, when you go to call in, nobody keeps track of the small business offerings and then nobody keeps track of some oddball payroll app offering that they have as well. Like it gets so buried in the list of priorities and offerings that it gets forgotten about. It be great. Like you said, even a small bump could be huge for gusto. But like. Keep it tempered. Yes, though that's all I'd have to say about that. But speaking of how Chase is getting into payroll. Right, or offering more small business stuff, I have two other examples of this which is interesting. So American Express saw a headline. This was in a in the tear sheet How Amex is Building a B2B Ecosystem for SMEs.

Blake Oliver: [00:26:47] A B2B ecosystem for SMEs from Amex. Yeah.

David Leary: [00:26:50] So they're starting to build a stack here. So you have Amex business cards, right? Then they had their Kabbage acquisition, so they're doing small business loans, right? They have an app solution called American Express One, which is their Billpay product. And then they bought a company in January called Nintendo an IP Indo. And that's basically a procure to pay process for accounts, receivables and accounts payables. And so they're starting to build a suite of small business offerings and they're stacked. They also have, because of Kabbage, they also offer a small business checking account that they're starting to build a whole set of apps. But then the other story that was interesting that caught my eye this week is Walmart. And the reason it caught my eye is Walmart. The headline said Walmart business has a plan to boost SMB cash flow. So Walmart has spun up a business site called Walmart Business. And think about, you know, for our business, we could get all our employees and say, Hey, just use this site to buy our paper and our coffee and anything. We need supplies for our business. But they also have something called Walmart Business Plus, which is more of a membership site. And you get cash back and you get free shipping and that type of stuff and budget controls. But so that's the thing. Now they've added budget controls and they've added analytics and reporting, so you can see who's spending on what and how much and really replacing your procurement department or if you don't have a procurement department, it gives you some control and it works online and in brick and mortar. But the fact that they're building reporting and analytics for small businesses, I find it a little bit interesting, right? So it's just something to keep an eye on as they because Walmart is really trying to solve. Panes of small businesses right there. They're looking at small business. Small business has X pain. They don't have a procurement department. We're going to solve that. But then what's next? You know.

Blake Oliver: [00:28:39] I wonder how much of this is in response to Amazon going after small business because I don't know if you've gotten these, David, but I get these emails pitches for joining the Amazon Small Business program all the time.

David Leary: [00:28:51] You can sign up every time I make a purchase with our business card and my personal account, I get hit. Yeah.

Blake Oliver: [00:28:55] And it says, you could have saved X percent if you had an Amazon business account. And it's so smart because most Amazon, most owners of businesses are probably Amazon Prime customers at this point. So. I wonder how much of this is a response to that. I want to go ahead.

David Leary: [00:29:14] And Walmart also has a lot more relationships with small businesses now because their their e-commerce site is just like how Amazon can dropship for small businesses. They can have small businesses resell people sell on Amazon. But you're a small business. Same type of things happening on the Walmart side. So their relationship with small businesses probably didn't even exist a decade ago and now it's completely growing. And like you said, they're competing.

Blake Oliver: [00:29:42] I want to talk about. I. Because every week I see new and interesting applications of generative AI.

David Leary: [00:29:50] Like Snoop.

Blake Oliver: [00:29:51] Like. Like the deepfake of Snoop that we heard. I mean, I assume it's a deepfake. If it's not, then I mean, I don't know. It's got to be anyway. It could be, it could very well easily be. It's easy to do that now, and we're starting to see this happen with video and this is where things are going to get scary for security because you're going to join a Zoom call and you're not necessarily going to know whether that person on the Zoom call is an AI avatar or somebody else whose face has been like changed by AI talking to you. So we're getting to the point where we can do real time voice and image translation or modification. Now there's scary applications of that, like impersonating people online. There's also really neat applications of that, such as translating from one language to another with the mouth movements changing also. And so I saw this video on TikTok of this example. It's not in real time yet. You have to, you know, send in the video and then it changes it and you can kind of tell it's a little blurry.

David Leary: [00:31:02] But to pause and rewind. So I'm watching a foreign film and they've they've dubbed English over it. Right? And it never really lines up to the lips. They say, Well. Modify the video so it looks like they're speaking English.

Blake Oliver: [00:31:15] The actors will look like they are speaking English. You'll hear the English and their mouths will line up. So here's an example of this. Our our audio only listeners will not be able to see the mouth, but you'll be able to hear the the voice changing, the language changing. So I'm going to add this video in and I'll skip around a little bit.

Speaker12: [00:31:35] I just had one of those moments that happens sometimes in your life where you're just so mind blown at like the advancement of technology and how quickly it's moving. That happened to me in November when ChatGPT came out and I got an output that I was like so impressed with. I ended up building seven Chrome extensions in seven days. We ended up building a product called Branch UI, which is about to hit 100,000 users. It really kind of has changed the trajectory of my career, and I think I just had another moment like that with a new announcement from a company called Hey Jen. They just announced this mind blowing technology called Video Translate. At the end of this clip, you're going to hear my voice in Spanish. And I didn't record that audio. Right. So it's going to clone my voice. It's going to use Deepfake technology to move my lips, and then it's going to accurately translate the text. This is now available to you. You record it once you record it in your original language, and then you can translate it into the other languages with a single click. Acabo de tener una de esos momentos en la vida en Los hombres de la tecnologia y su rapid evolution in November Cuando salio.

Blake Oliver: [00:32:47] Isn't that amazing, David?

Speaker12: [00:32:49] Like his lips.

Blake Oliver: [00:32:51] Look like he's speaking.

Speaker12: [00:32:52] Spanish. Terminamos con esta por alcanzar in the eyebrows la trayectoria de mi Carrera acabo de tener otro movimiento Como es con un nuevo anuncio de una empresa Yamada hagan acaban de esta tecnologia alucinante llamada. Video translate suena muy basico si traduce to Vos.

Blake Oliver: [00:33:17] Isn't that incredible, David? It's just.

David Leary: [00:33:20] Yeah, you usually, you know, you're looking for these artifacts or things that just tell you it's off. And that was pretty good.

Blake Oliver: [00:33:27] And I don't know Spanish, so I don't know how well it translated or how good the accent was. But I looked through the comments in TikTok and people were saying, Hey, this is this is really good. That it has, that it has the right cadence and the right accent and and all that. So yeah, it's kind of amazing, Like, so we could David put out this podcast on YouTube and have it translated into 100 different languages and anyone in the world could watch it in their native language and it would look like we had spoken in that language. Originally. It's going to open up. It's going to open up whole new markets for services. And just imagine when it'll be real time or just slightly delayed. That's when we get to the Star Trek translator type of technology where you can speak a foreign language and another person can speak a language that you don't know and you can understand each other.

David Leary: [00:34:24] That's that's just destroyed online, Spanish or online language classes for college credit if you need to get your one 50 hours. Take some online classes and it'll just because that's the way those classes work you're supposed to you record and then you upload and you could basically just record a fake view.

Blake Oliver: [00:34:43] Romeo says Bilingual here, Spanish is spot on, but the accent is Central American Spanish. Interesting. So I wonder, you know, like like geographical linguistic differences, the accents, I wonder how good it will get eventually. Will it be able to, you know, could could could I have my own voice translated into a, you know, Appalachian dialect perhaps, or a southern or northeastern, depending on, you know, a Boston accent. Even within languages.

David Leary: [00:35:18] This could make actors less valuable, right?

Blake Oliver: [00:35:23] Well, voiceover actors, right. I mean, I think that's already starting to happen with the Deepfake voice technology you used to have to hire. I mean, you still do, right? It's not the best, but there's projects now where, Hey, I don't need to hire a professional voice actor anymore. I can just use the Deepfake version and it's good enough. And you see that on social media all the time, right? It's just a matter of time until it starts coming to commercials or to podcasts even so.

David Leary: [00:35:50] So, Blake, would you say you're a bridge millennial or millennial?

Blake Oliver: [00:35:54] Well, I'm an elder millennial. I am.

David Leary: [00:35:57] You're not Gen.

Blake Oliver: [00:35:57] X? No, no, because I was born in the 80s.

David Leary: [00:36:00] So I guess you're a bridge millennial. Do you feel comfortable speaking for bridge millennials and millennials?

Blake Oliver: [00:36:07] Well, it depends.

David Leary: [00:36:08] It depends on the story.

Blake Oliver: [00:36:09] I don't think anybody's really capable of speaking for their entire generation. But hey, I'll. I'll try. Why not?

David Leary: [00:36:15] So I found a story. The title said Americans would pay $120 a year to have a reliable, smart voice assistant. And I think I've said this on the show. I'm like, I'd pay $200 to have some assistant chat GPT thing, helping me do things around the house. Et cetera. Well, they're really talking a little bit more like Alexa is Google's series, that type of thing. And I'm going to bring up a chart here. Hopefully you can see this. Do I need to zoom in, zoom.

Blake Oliver: [00:36:44] In maybe a little more? I can see it.

David Leary: [00:36:46] And the question is this when will voice technology be as good as speaking to a human? And I don't understand. But 10% of millennials think it's already as smart and reliable as real people. The question you millennials like, who are the humans you interact with?

Blake Oliver: [00:37:07] Well, I'll tell you, there's some there's some humans that you interact with and you do question whether or not a voice assistant would be better. Uh, so, so the chart is showing basically that that millennials are the most bullish about this, that we think that's a good.

David Leary: [00:37:25] Way to say it. Yes, they're the most bullish.

Blake Oliver: [00:37:27] On voice assistants. And I am. I really am. I think that, you know, once Apple catches up, which they always do, they're going to do it better than anyone eventually. There's always a few years behind. They're never the leader, but they always capture the market or at least the they capture the the profit. And they're going to have Siri with AI generative AI, and it's going to be able to do freaking incredible things, you know, Hey, Siri, can you reschedule? Oh, no, I just activated her. Can you can you reschedule my podcast recording session with David? Because I can't do it. Let's find another time and the agent will be able to go out and do that. I really think that's coming. Like we're talking a couple years, maybe.

David Leary: [00:38:12] That's just going to say, are you saying it's two years, 3 to 5 years? More than five years?

Blake Oliver: [00:38:16] I mean, I guess it just depends on how quickly Apple can build its own. Lm I mean, if they're they should be doing this full throttle, right? So I'd say like in five years, within five years is my feeling we're going to you're going to be able to give I mean, Siri already has access to like all of your stuff, right? Your emails, your calendar. It can make phone calls as you or on your behalf. So it could go out and make appointments. It could go out and call clients, could go out and request documents and information. I think it'll probably be all in the personal side at first because that's where Apple thrives, right? So I think like booking reservations and doctor's appointments and coordinating your personal life. Yeah. I mean, there's a lot of that stuff that's not super high value but takes a lot of time.

Speaker11: [00:39:03] So.

David Leary: [00:39:04] So I don't know. I don't know. I feel like it's going to take longer, like more than five years, only because if you really look at Siri and Alexa and Google Home, they haven't done anything in a decade. They've worked as crappy as they always have been. People. People just use them to set timers. Even Amazon's pulled back on some of their Alexa stuff. Yeah, because they realize people just aren't app developers made all these apps. Nobody uses it.

Blake Oliver: [00:39:28] The reason is that you have to be so precise with your voice command and nobody remembers the exact syntax. So you do it and then it doesn't understand. You end up having to do it like 2 or 3 times. And it's so frustrating that eventually you give up and you just get the remote and you make your curtains go up on their own, right? Or you change the lights on your own. But like, that's a problem. That is a problem that.

David Leary: [00:39:49] Raised it that way.

Blake Oliver: [00:39:51] I got it right.

David Leary: [00:39:52] You got the remote? Yeah. Yeah. Instead of getting up and actually doing, you just grabbed the remote instead of using your voice. Yeah.

Blake Oliver: [00:39:58] Even my son, he's like. He's like, Alexa is so stupid, you know? And I say, Thomas, be very polite to Alexa because you never know when she might become sentient.

Speaker11: [00:40:08] Okay, well.

David Leary: [00:40:09] That's actually great because in the survey, Gen Z actually had the lowest percentage of people that said it's smart as real people. Yeah. So Gen Z recognizes that this technology is not that smart.

Blake Oliver: [00:40:22] Well, you know, it's because millennials grew up without any of this stuff. So we are constantly blown away and amazed by it. You know, we had nothing. Most of us didn't get a computer until we were teenagers, right. Or in college. And so, like for us, it's like the smartphone is the most miraculous thing in the world. But these Gen Zers grew up with it, so they're not impressed by voice assistance. That's my theory.

David Leary: [00:40:44] That's true. It's harder to impress them.

Blake Oliver: [00:40:46] Hey, can we talk about a story that is inspiring and frightening? Meet a 29 year old accountant whose resentment only climbed after her firm raised her salary from 60 to 90 K as she made millions for them. She has her own firm now. This originally appeared in Fortune and was syndicated to Yahoo! Finance. And the woman on the screen is not the woman in the article. That's just an ad for QuickBooks that somehow made it onto this screen that I'm sharing right here.

David Leary: [00:41:17] Oh, okay. Because I was like, interesting because I had the same article and that's not the same lady. Okay. Thank you for clarifying that.

Blake Oliver: [00:41:23] So this is a feature on Stephanie Heredia, who is 29 and started an accountant job at a small Tampa, Florida, firm with the promise that her 60,000 base salary would rise to 100,000 after one year. But at the last minute, she told Fortune, the timeline became two years. Her eventual salary 90,000 plus commissions. As the firm grew from four people to 25. Heredia's responsibilities ballooned. She was charged with opening a new unit in Puerto Rico, which went on to generate an additional 2 million annually for the firm. But asking for a raise felt like talking to a brick wall. Heredia said. She said she had sales of over 300 K annually, but was only making 90 K while doing all the work of the clients I brought in and the other work at the firm. I sadly have way too many spreadsheets comparing the money I was bringing in versus bringing home. So this is one of the challenges, I think, of employing accountants who can actually do the calculations on the gross margin, right. What you're charging versus what you're paying them. Yeah. And she she quit and she started her own firm. It's called Taxes Tampa. And she insists that she has never felt better.

David Leary: [00:42:38] When I saw this headline, I immediately was like, Oh, yeah, we talked about this last week. Remember the ADP study? Well, then I start reading this article and like, this is the ADP PR department pushing this story. It talks about their study. Again, I thought I thought it was like a coincidentally a story that really related to the observation. But it's the ADP has got two weeks of PR man work going on. So congratulations.

Blake Oliver: [00:43:01] You know, I wonder. It's hard to know without knowing all the details. But could the firm have saved this? Could they have given Stephanie a stake, an equity slice, a profit share, something that would have made her want to stay? When you give an employee such management responsibility, like opening a new office, if you don't give them points, why would they stay? You've taught them how to open an office and now they can just go open their own. That's the problem. Right. And I think that's kind of the bigger picture problem with the partner model is that you get these managers who learn how to do it and then you deny them the share in the business and then they go off and they leave and they start their own firm if you don't bring them in. So I'm not saying that's always the solution. I mean, maybe this would have happened anyway, but I think it's a good sort of case study of like an example where the firm lost out because they couldn't figure out how to take somebody who seems like an all star and give them what they wanted, which is the opportunity, you know, to uncap their income. I mean, I was kind of in the same boat as Stephanie here, where when I was at the big firm where, you know, I was a manager and I was responsible for managing all these clients and doing all this work. And I was bringing in tons of revenue for the firm, but I didn't get a stake. And I would have to sit around for 5 to 10 years, probably ten years or longer at that point to become a partner.

David Leary: [00:44:25] But this ties into why you should learn accounting, and we've talked about this before. Accounting gives you options.

Blake Oliver: [00:44:31] So many.

David Leary: [00:44:32] This is a different profession. She may not have been able to just drop it, start her own firm and make and make more money. But accounting gives you freedom that you don't really get in other professions.

Blake Oliver: [00:44:43] I love that, David.

David Leary: [00:44:45] You want to have some app news, but none of it's important enough to talk about. It's like, I don't know. But I do have an article I saw about the different obviously you could outsource, you could offshore your work or you could use AI to do it. And this article, we could share the screen and bring it up. I got he has about 12 reasons to automate instead of doing offshore. And when you go through those.

Blake Oliver: [00:45:11] Yeah, yeah, I'd love to. Let's talk offshoring versus automating. So this is hiring staff outside the US versus automating with technology. So. So who wrote this?

David Leary: [00:45:21] This was written by Andrew Antos. He is the CEO of a company called Clarity with a K clarity. It's I think it's software for like audit work and things like this, but it's for automating accounting procedures internally. So he has a vested interest in this, but I think it's probably nice to go. I probably made this too small.

Speaker11: [00:45:46] Big.

David Leary: [00:45:47] So he has about what is this eight things and let's just go through them. So one is increased efficiency.

Blake Oliver: [00:45:51] So this is automating versus offshoring. So he's in favor of automating automating.

David Leary: [00:45:58] Okay.

Blake Oliver: [00:45:58] Increased efficiency. Why? Why is it more efficient to automate versus offshore?

David Leary: [00:46:02] It's faster than humans, right? It's turnaround times seconds instead of hours and days.

Speaker11: [00:46:09] Okay.

David Leary: [00:46:09] So so it's just increased efficiency depends on the task.

Blake Oliver: [00:46:12] But yeah. Okay. I buy.

Speaker11: [00:46:13] That.

David Leary: [00:46:14] Reduced errors and increased consistency. So systems are more accurate and consistent than humans. I don't know if that's necessarily true. Yes, it depends on the work you're asking it to do, for sure. For the consistency 24 over seven operations, which this makes a lot of sense. That's right. There's no breaks. You know, this is like they don't complain. Chennai is the perfect accounting firm. Should be all over this. The big 424 seven cost savings. So even though the labor costs are cheaper, you can almost eliminate them entirely by switching to. I thought that was interesting. Yep. Yep. Scalability. So you can quickly ramp up and ramp down, which is a lot harder to do with humans. Right? Security and compliance, which is interesting. You could have your system locked down and designed. Right. But it's a lot harder than I've heard. You know, people I've heard a lot of the offshoring where they they have badges and these they have white rooms and they can't take their computers home at night. And there's all these. Yeah, yeah.

Blake Oliver: [00:47:19] That's the I think that's a huge risk. Huge risk with offshoring is, is how do you secure the client data that's for your customers in the US when it's you know offshore could be could be at risk I mean but I guess the argument is that it's the same here too.

Speaker11: [00:47:34] Yeah.

David Leary: [00:47:36] Improved analytics, which I don't think is like that big of an argument and then key in-house experts. So basically hire people in-house in your own time zone versus hiring people on the other side of the world to work as your processors. I think because I've kind of thought about this, because I do feel like. I want to get an assistant and get those to hire an assistant in the Philippines for $6 a day or whatever it is. And I look at that and I'm like, I see it. And I'm like, I just know that this is going to be a headache to on board, a headache to set up a headache to build the relationship. And then I might have to do it again with 3 or 4 of different people until I find the right fit. And I'm like, if I could just take that energy and invest it into an AI chat bot to be my assistant instead for 120 to $200 a year, I'd much rather go down that path, you know? So so that's what caught my eye. And I was like, this is an interesting argument to make, that maybe, maybe this is better to do than outsource or offshore.

Blake Oliver: [00:48:29] I mean, I'm a I'm a big believer in generative AI, and I'm using it all day, every day. I mean, not all day, but I use it every day for different tasks. But, you know, it still can't complete the task 100%. It might be able to get like 80% there, 90% there with guidance, but it still needs a human to edit. You know, if you're creating marketing copy or you're creating social media posts with it or you're brainstorming articles with it, which is that's what I tend to use a lot of it for. It gets you most of the way there, but not all the way there. And that last bit is the part that's the hardest, which is the editing, you know, the critical AI. And I think it's the same way with accounting tasks is you still have to have somebody looking at this, you know, automated coding with a critical eye and correcting the eye so it doesn't keep making the same stupid mistakes over and over again. But, you know, I get the.

David Leary: [00:49:26] Frustration a lot of accounting firms have with their offshoring.

Blake Oliver: [00:49:30] Staff.

David Leary: [00:49:30] Staff.

Blake Oliver: [00:49:31] And so I think like the best combination is you have really smart people here in the US and you empower them with AI tools and you say, I don't care how many hours you work, I just care that you get the job done. Let's use AI to automate this as much as possible and you validate the work. You oversee the bots. And that's where we need to get as a profession. But if we don't get out of the hourly mindset, we can never get there because people are always trying to stay busy. And that's going to be the biggest barrier to adoption in most firms. Is that the same as cloud based bookkeeping, where bookkeepers didn't want to use automation because it would reduce their hours? Accountants aren't going to want to use AI if it cuts their hours because you're just going to give them more clients.

David Leary: [00:50:17] You're billing by the hour.

Blake Oliver: [00:50:18] Yeah, right. Oh, I cut my time by 80%. Now I've got you know, now you're going to give me 80% more clients. That sounds like a nightmare.

David Leary: [00:50:27] No, thank you. Well, can't you give instructions to, like, the AI that says, like, when you're doing this, do it at half speed. Only use a partial of your processing power.

Blake Oliver: [00:50:38] On a related note, I signed an engagement letter with an attorney, a new attorney to do an incorporation. And there was the funniest bit in the engagement letter about hourly billing, because this attorney, like practically all of them, bills by the hour. And there was actually a clause in the engagement letter that said, I don't have it in front of me, so I don't know exactly what it said, but it basically said that we're going to bill you by the hour. But the hours that we bill, you may not line up with the actual hours that we worked. Because we will adjust the hours that we worked to reflect the value that has been created. Basically, right.

David Leary: [00:51:23] Like this goes back to the whole hourly billing model is unethical.

Speaker11: [00:51:28] Right?

Blake Oliver: [00:51:32] Geek says, Dear eye, please process at the rate of my children cleaning their bedrooms. Oh yeah. Ask the eye to slow down. Yeah. Can you take an hour to complete this task? Because I need to catch up on my Netflix.

David Leary: [00:51:46] We have to bill for this much. Yeah.

Blake Oliver: [00:51:47] Yeah. It's like, normally this task would take me an hour, so I need you to slow this down. Um, that's going to be the death of the hourly billing model. I really do believe that AI is going to end. The time sheet. That's my hope. That's my dream. I might be biased because I dislike time sheets personally so much, but I think it would be. Romeo says That's value pricing for lawyers, basically. So it's like then I was thinking as I read this engagement letter, why even price hourly? If you're going to just tell your client that you're going to just make up the numbers based on what you did. So. You know, here I am. I'm asked to sign an engagement letter and I'm being charged hourly. But they could they basically have given themselves permission just to make up the hours.

David Leary: [00:52:36] And my understanding is that it's state to state, right? Like some states, they can't do value billing or they can't do fixed fee pricing. They have to bill hourly.

Blake Oliver: [00:52:46] That's just.

Speaker11: [00:52:46] Ridiculous. Yeah.

Blake Oliver: [00:52:49] Well, David, I always have so many more stories to talk about with you. I could go on for another hour, especially all this stuff with remote work like Michael Bloomberg complaining that remote workers are just playing golf every day. Oh, man, I want to talk about that, but we'll have to save it. We'll save it for another episode. He and the CEO of Chase, what's his name?

Speaker11: [00:53:14] Diamond. Diamond.

Blake Oliver: [00:53:16] They're so anti remote work. And I was wondering like, why are they so anti remote work? And then somebody reminded me that these guys own a lot of commercial real estate, and I bet their portfolios are suffering because the office occupancy is so low and interest rates are so high and they're not going to be able to refi the loans on these big office towers.

Speaker11: [00:53:42] People back in and.

Blake Oliver: [00:53:43] They need people to come back in to pay the rents. I wonder if there's I wonder if it's a little self-serving.

David Leary: [00:53:50] Maybe, maybe next week will be the week we work finally goes under. And we'll have to talk about commercial real estate. And it might be the week.

Blake Oliver: [00:53:58] Yeah. Commercial real estate next week. Thanks, everyone for joining us. Reminder, if you listened all the way through this, you deserve some continuing education credit for it and you can earn that for free with the earmark app. Go to earmark cpcomm. Download the app for your Apple or Android phone. Find the accounting podcast channel and register for this course and take a quick quiz and get your continuing professional education. We are Nasba. We are Nasba sponsor of CPE so you can get CPE for listening every single week and get your requirement done. It works abroad as well. If you have a C or a CPD requirement in the UK or Australia or New Zealand, most of the local licensing bodies accept Nasba credits and you can use our certificates for your renewals. It works for the IRS. Our federal tax classes and our ethics classes are approved for IRS C and we will report those. If you put your ten in your profile.

David Leary: [00:55:00] And if you have friends that don't listen to podcasts, you could just tell them to go get earmark so they can get CPE and they can play our podcast in the earmark app and they don't even know they're listening to a podcast. They just think they're taking a course so you could trick your friends that are like, Don't do podcasts to listen to our show.

Blake Oliver: [00:55:18] Thanks everyone for joining us. I am @BlakeTOliver. David, you are.

David Leary: [00:55:22] I'm a @DavidLeary on all the.

Blake Oliver: [00:55:24] Socials @DavidLeary And you can email us, send us your emails, your voicemails. We are the accounting podcast at earmarked me. Have a great weekend, everybody.

Creators and Guests

David Leary
David Leary
President and Founder, Sombrero Apps Company
The ERC Jumps The Shark with Snoop Dogg Deepfake
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