The Accounting Podcast

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Blake Oliver: [00:00:04] Accounting firms. Despite all of this, AI anxiety are seeing their revenue, profits and compensation rise even as staff salaries rise. Partners are making more money than ever. Firm revenues, according to an AICPA survey, increased 6.7% median in fiscal year 2024 following a 9.1% growth rate the prior year. Net profit per partner surged to nearly 12% over two years, reaching 252,000 in fiscal year 2024.

David Leary: [00:00:43] Coming to you weekly in the OnPay Recording Studio.

Blake Oliver: [00:00:49] Hello and welcome back to The Accounting Podcast, your weekly roundup of news in the accounting profession. I'm Blake Oliver.

David Leary: [00:00:55] I'm David Leary, I'm Blake. You're done traveling for last week or this week? You're at San Francisco, right?

Blake Oliver: [00:01:01] I was I was at the Gusto showcase event in San Francisco one day. It was so great to see some accountants that we know. Erica Goodie was there. Chris Williams was there. System six. Uh, I got to see Yusuf West from relay. We were on a panel together about AI. I caught up with Tomer London, one of the founders of gusto, and got to, you know, learn about, you know, what's going on with their product. You know, I could share some of those details with you.

David Leary: [00:01:32] Uh, Tomer is an interesting founder of all the founders I've met. He reminds me a lot like Scott Cook, the founder of Intuit. There's, like, his temperament. There's. There's something about him that just resonates. Scott Cook. So that could be a good sign. Yeah, it could be as big as Intuit one day.

Blake Oliver: [00:01:48] It was great. We were we were like standing around and I got I asked him a question, I asked Tomer. So thinking back almost 20 years to when gusto was founded. I think it was that long ago. Uh, what what was it that was like the magic moment for you and for gusto when it came to, like, just taking off as a product. Like, what was it that you did different than all the other payroll apps out there? And he thought for a moment. He didn't have to think very long. And he said, being able to submit your payroll on your phone without having to call or fax. And it's hard to remember just how difficult it used to be to run a payroll. And that's what you had to do. You had to fax it in, you had to call it in. You couldn't you couldn't do it online. And they just made it easy to do that. And so we all take that for granted. Now it's the same way we take ordering stuff online for granted from Amazon. But that again, also like 20, 30 years ago was not a thing.

David Leary: [00:02:57] I remember when Intuit first got into payroll and they bought that payroll company. It was called cry at the time. It eventually became to payroll. They were up in Reno, Nevada, and I remember talking to somebody in the tech team that went into that building and he said, there's nothing but banks of fax machines. So this is when people would fax in the employee hours every week and they would manually cut the paychecks. It's just a room of fax machines, just not constantly amazing. Every Thursday night it would just start flooding with paper. Yeah.

Blake Oliver: [00:03:24] Welcome to our live stream, viewers. Great to see you. Boring accountant. Hey, geek. Awesome to see you as well. David, let's thank our sponsors.

David Leary: [00:03:32] Yeah. Sponsors. This week we have Onpay Team up and Blue Book.

Blake Oliver: [00:03:36] I want to highlight a piece of news that we have not yet covered on the show, because I saw Yusuf West from Relay at Gusto next, and that is that relay now manages over $1 billion in assets. Small businesses have deposited over $1 billion with Relay Financial. That is over 110,000 small business owners. That's kind of amazing to think about.

David Leary: [00:04:06] And we are 99% of that balance. No I'm kidding. It would be nice to be.

Blake Oliver: [00:04:11] I wish uh, and it was interesting thinking about that. And also being on the panel, I was on a panel with Yousuf and it was interesting thinking about relay success and Gusto's success, because those companies have something in common, which is unlike a lot of tech startups where they focus on serving other startups, especially fintechs. Like they're all going after startups in the Bay area. Both Gusto and Relay, they have been for years targeting Main Street businesses. And in my opinion, if you want to build a long term successful technology company, especially a fintech, you can't just go after the startups.

David Leary: [00:05:05] You have to. I remember it's funny you bring this up because I remember the first time I met Zenpayroll at a conference and I was talking to them.

Blake Oliver: [00:05:11] And payroll was what.

David Leary: [00:05:13] It was. Gusto.

Blake Oliver: [00:05:13] What people don't know that.

David Leary: [00:05:15] Gusto used to be called Zenpayroll. And at that time, they were really the darling of San Francisco startups. That's who mostly used them. And I say, go get a small business owner in Iowa to use your product. And they really do. Now you're right. They've embraced small business in a way that a lot of tech companies can't seem to do.

Blake Oliver: [00:05:34] And when it comes to relay, in particular in all these like app based banks, these fintech banks, a lot of them are going after the startups. And what they do is they they also go hard after accountants and they they try it for a while. They spend a lot of money. They come to conferences, they sign you up, and then they disappear and they back off of their account and partner program. And we saw that with Roe. I've heard that Roe is another fintech bank right there backing off their accounting program. And why is that? Why do they do that? Well, it's because it takes time. It takes years to build relationships with the accounting community. We're not just going to sign up and start referring clients over next month. You've got to take years to build that program. And that's what is great about Relay and Gusto is they have built these long term relationships with accountants, and it's not this short term play where, you know, we're going to give you a rev share and you're going to put your clients on that for that. You know, it's like a monetary arrangement, that sort of thing. This is about I like apps that work with accountants for the long term benefit of our clients.

David Leary: [00:06:46] Well, I mean, the thing with relay, what I always thought was unique because Joseph came from Hubdoc. He already knew accountants. He knew all the banking problems that existed in this space. And he basically built. Yes, it's a small business bank, but he built it from the accountants perspective first. No more sharing of passwords. No more like inviting users. Like he just he really attacked it from the accountant's point of view. And like you said, gusto over time has built that relationship with accountants as well.

Blake Oliver: [00:07:13] Related to relay, gusto announced a new feature called Gusto Money. And so now in gusto, you're going to be able to pay bills, not just run payroll. You can and not just pay contractors. You can actually like, pay just a bill to a vendor. And you're also going to be able to take payments like send an invoice and get paid. And I was trying to figure out how did they build that so fast. And they didn't. They are integrating with Melio to do it. So this is fascinating because Zero. Just bought Melia or is buying Melia?

David Leary: [00:07:50] Yes.

Blake Oliver: [00:07:50] And now gusto is integrating Melia deeply into gusto. And so then the next question is, well, what is the relationship going to be between zero and gusto? Because zero has embedded gusto as their payroll.

David Leary: [00:08:05] And so they weren't. They partnered with gusto at one time. Then they took it out because zero was going to build it themselves and they re-embedded it again like it's been this journey that never ends, right? Their relationship.

Blake Oliver: [00:08:15] So keep an eye on that. Right. What is what is the relationship between Melia and Gusto and Zero. What are these three companies going to do and what does that mean for Intuit? I'm fascinated.

David Leary: [00:08:30] I'm more fascinated than this, like Frankenstein ledger concept that deals like a lot of apps are doing this. We're going to add some expense tracking and some payment collection and some invoices and some bill pay. And maybe, maybe there's a bill pay app that's adding payroll function. Now there's He's like, they're not really a gel, but for a small business owner, there's no better. They're like, yeah, this is good enough. And they just move on with their life. It's hard to say.

Blake Oliver: [00:08:53] All right, so that's just a showcase. That's where I was last week. Next week I am going to be on the Advisory Amplified tour. And if you are in any of the six cities that I will be in, I would love to meet up with you. Get a ticket for Advisory Amplified. It's a one day event that is being put on by Fearless Foundry and Madeline Reeves, and is sponsored by Carbon Relay on Pay, ignition, Fathom and Earmark. And I'm going to be presenting about building a technology stack for your firm, the importance of it, what to think about. I'm also going to be doing a live podcast recording in every city at the end of the day with different folks, and so Seattle and Los Angeles are or next week. Then there's Chicago and Austin, and then Atlanta and Boston. So if you're in Seattle, Los Angeles, Chicago, Austin, Atlanta or Boston or nearby, go to Advisory Amplified Comm and get a ticket and come out and spend the day with us or part of the day. It's a steal. It's like $99 for a ticket. So lots of great speakers Jason Plummer, Twila Verhelst, Ian Vacin, Jeanie Whitehouse, Madeline Reeves, Logan Graf, Valerie Heckman uh, we got Dan Gertrudes, Ryan Embree, Kenji Kuramoto, Kayla Hill Traywick, and Jeannie Whitehouse will be emcees at different cities.

David Leary: [00:10:23] This is great. It looks fun. A little bit of FOMO, maybe, I think FOMO now and until I realize, like, I've been on the road for five days in a row or five different cities in ten days and you're exhausted. I don't have the FOMO anymore. Three weeks in one of those cities go to one of the cities. Don't try to do all of them like Blake. That's a little dangerous.

Blake Oliver: [00:10:43] All right, David, we thank our sponsors. We've welcomed our live stream viewers. Hello. Welcome. Live stream viewers. Let us know what you think. Type in the chat if you've never. If you've never commented, leave a comment. I'd love to hear from you. And what's next, David, do you want to pick the next story? Where do we go?

David Leary: [00:11:01] Yeah, I'll just because this ties into apps connecting with accountants. So a tech founder has admitted now on LinkedIn how much AI their app can actually do. And I really appreciate this story because it's a series of actual LinkedIn posts from the, uh, and really kudos in general. This is a Junos founder, Jack Flitcroft. He started out he did a post about three weeks ago just talking about how they're designing a new feature that's designed, or they're building a new feature that's designed to replace your work, paper and binder tools. And it's the first post he created, and I'll quote him. This is the first post where I'm trying to be more public about what we're doing, and include everyone in the conversation. I'm not sure how it'll go, but I'm all ears, all ears to ideas and feedback. And obviously people give feedback about how they think this new feature should work or not work. And then another week later, he did this other post talking to CPAs, and he. And this is the not the title, but the first sentence tax folks and CPAs you need to level set on AI. And he goes on to talk about how his own experience is as an engineer and all the AI coding tools, and how in the beginning, engineers were just like, hey, my job is safe. Those tools are a joke, right? And the whole hype cycle. So he's coming to the realization of the hype cycle, and I think he's realizing like, oh, he's part of that. Like they're full circle. This hype cycle is happening with accountants in AI. But he had that that had a tone of a little bit of like, you can't wait till AI is flawless before you start using it.

David Leary: [00:12:38] Get right and developers that weren't using the past do use it now and then. His most recent post kind of reflected on his previous post. Um, and this is the post where he, like, really came out. And I'll read some of the quotes from this. Uh, we've we've been struggling with two big things, failing to properly outline our workflows and managing the manic perception people have about AI products. I'll say this up front, Juno doesn't do everything. We don't claim to cover 100% of Prep. Our AI fails in some cases, sometimes badly. And right now we don't explain that clearly enough. Honestly, I debated posting this at all. It feels like a risk to admit shortcomings in an industry where so many companies are shouting perfection, but I just don't believe in that. Let's be real, there's probably isn't a single perfect AI tool yet, unless we're counting Clippy, which is kind of funny, but nobody does this anymore. Where you, like, talk to customers, put your stuff out there, get feedback, just be honest to what you do and don't do a lot of because we get pitched by AI AI companies all the time. Every day there's another AI op interview, our founder interview this. I'm like, do a demo accounts. Want to see the AI? There's so much talk about it right now. And so it's very refreshing to see somebody in our space. One of these AI tech founders, it's almost like he he went through this like, oh, there's value in communicating honestly and openly with accountants. He went on this journey the last three weeks on LinkedIn. But like kudos for that. And hopefully other founders should use this as an example of how to behave.

Blake Oliver: [00:14:05] So did tell me more like what did he say is working? What did he say is not working?

David Leary: [00:14:10] Oh sorry, I have to. I didn't paste in some of those I took. I didn't get the exact details.

Blake Oliver: [00:14:14] So you're saying he's being honest, right? I'm just curious. Like what? What is working and what is not. Because like I agree with you, I, I, I see this all the time. Startups that are promising to completely automate bookkeeping or completely automate tax prep, and that's that's not true. There is nobody that is doing that right now and nobody that has come close.

David Leary: [00:14:35] So yeah.

Blake Oliver: [00:14:36] There's so much hype.

David Leary: [00:14:37] He said here's some quotes from his things. We fall short. We do k-1's and multi-state statements, but not very well. Accuracy of their multi state K-1 sits in the low 90s, right? Um, right. He says as a data scientist, that's exciting. But as an accountant you're saying, yeah, that's not good enough, right?

Blake Oliver: [00:14:55] Exactly. So so you, you pull in these multi state k-1's and you get 90% correct. Well how much time does that really save me as an accountant. Because now I have to go through and check everything. And so if I don't have confidence that it's like 100% or 99.9% like whatever, that, you know, accuracy needs to be, which is very, very high, then it's it doesn't actually save me time necessarily.

David Leary: [00:15:24] And that's a it's interesting because his argument for developers, if you are writing code as a developer and then AI slaps in a chunk of code and you have to review it and then you start writing some more code. Then AI sticks them in. You're actually scaling pretty quickly, but you're getting a benefit. Even though you're having to review the code, it's still faster than writing the code. But think for a lot of accountants, they're like, if I have to review math, that's wrong. The only way to review that and to recalculate it correctly is to do the work right. So I think so there's a disconnect on how an engineer or a data scientist would interpret AI versus how accountants are interpreting it. And I think that Bell went off for him, and I hope all the other AI companies, the founders read these posts and understand this is how you engage accountants. Like, if I had to bet money, I have not actually seen Juno. I really don't know anything about that. Based on this, I would invest in this company. Like he's going to figure it out because of the conversations.

Blake Oliver: [00:16:21] Yes. Tate in the live stream says, if I had to take a shot every time I hear AI on this podcast, I get wasted in less than five minutes.

David Leary: [00:16:30] But it's the news. What am I supposed to do? We'd have no show. Everything's AI these days.

Blake Oliver: [00:16:36] Tate also says, Blake, in your opinion, what are the three most impactful use cases for accountants when it comes to AI? Okay, I can think of one right off the top of my head, and that's just the meeting note takers. And that leads me into another story, which has to do with an app called vinyl. Vinyl, like Vinyl Records, has raised $2 million to build AI meeting assistants for accounting firms. And when I first heard about vinyl, which was earlier this year, I thought to myself, well, there's already a lot of great note takers. There's fireflies, there's there's a fathom note taker. Not the same thing as the fathom forecasting tool. I don't know, can you name a few others? David. There's half a dozen.

David Leary: [00:17:22] At least Google builds it in now. Zoom builds.

Blake Oliver: [00:17:25] It in. Zoom has it.

David Leary: [00:17:26] Built into Zoom. But that's what my thing is like. Why do you need a separate note taker just for accounting firms? Like, how is this a product? So what's the secret here?

Blake Oliver: [00:17:34] That's what I asked when I went up to Trent McLaren, who's one of the founders, and I said, like, why are you doing this? And he said, I totally get it. It's the integrations. So they are going to build and they are building, or they have built integrations from the meeting note taker to your practice management software. And the idea is that you're going to be able to have a meeting like an internal meeting, a client meeting, and the tasks that are identified in the meeting note taker by the AI can go in as tasks automatically into your practice management software.

David Leary: [00:18:08] That's huge because that's my biggest issue of every time we record meetings. And I just get I just have emails with tasks in them and it never gets on my task list.

Blake Oliver: [00:18:15] Correct. And they have to be delegated. Right. And so then you have to take time and it's it helps you creating that like post meeting follow up email, which we should have been doing all along, but then actually turning that into like action items that get followed up on. So there's this gap, right? We have this amazing tool that takes unstructured data and now creates structured meeting notes. And for accountants who are in meetings all the time, like capturing that information has been super time consuming in the past. And now AI note takers like make that super easy, but you still have to cross the gap from now we've got that in some sort of document or in an email. Now we have to put it into practice and that's where the integrations come in. So that's that value that I think founders serving accountants should think about that a lot. What are the general purpose AI tools that are really impactful for us, and how do you build a special version for accountants that integrates with the software that we use? And I guess that's what we're seeing in the tax prep space, is you have all these document collection tools, these portals, and we've always struggled to get adoption and to benefit from Portals in our firms because yes, now you've got a secure place for your clients to put stuff. But then actually putting all that info into our systems has been manual. So whoever can figure out how to go through those docs and put that info into the tax return, or put that info into QuickBooks or whatever it is I think is going to win. But that is not easy to do with super high accuracy, which is what we need. We need to be able to rely on the note taker, not missing critical action items, and to be able to put them into the right client in carbon or jetpack or canopy or client hub or whatever. The, you know, the dozens of tools that we have. And I think the challenge will be for them is actually building the integrations to all the different practice management tools.

David Leary: [00:20:19] Yeah. So that's that's smart because that's the ultimate problem. I'm sure there's probably lots of accounting firms using note takers now and then. What happens to the notes? They just sit in an inbox. Because then how do you get you need to get the inbox always the death of everything once it gets to the inbox. Great. Now what? You still got to get it everywhere else.

Blake Oliver: [00:20:38] Hk says my current use is meeting note taker. Sending a follow up now for a meeting yesterday. I'm taking the draft from my AI adjusting and sending to the client. Boring accountant says AI is great for assisting in job description and job performance review for accountants and leaders. And Bernie Ackerman hey Bernie, great to see you. Bernie says Blue Jay for tax research is a wonderful AI program. David, you were just playing around with Blue Jay.

David Leary: [00:21:06] Yeah, I was playing around with Blue Jay, uh, last week. I don't know why. I don't know how I got out. I was on the Blue Jay website and it has like screenshots of their app and you can do tax research on there. And then I opened up ChatGPT five and typed type the same question and everything's there. Like, it's kind of I wonder how these apps that are, you know, Blue Jays trained on all the state tech stocks and the salt docks and everything, right. But I think we'd be naive not to think. What's his face at ChatGPT? What's that guy's name? I forgot.

Blake Oliver: [00:21:40] Sam Altman.

David Leary: [00:21:41] Isn't feeding that same data into the main GPT tools.

Blake Oliver: [00:21:45] Oh, I mean, you know, the tax.

Blake Oliver: [00:21:46] Code is in there.

David Leary: [00:21:48] Yeah-

Blake Oliver: [00:21:49] -that's not- that's not proprietary. Everybody can do that. The whole tax code. I'm sure like it has to have been I mean, we could test it out and figure it out, but, yeah.

David Leary: [00:21:57] But how how is an app that's like $900 a seat? How much is Blue Jay? Let me pulGVl it up the website fast.

Blake Oliver: [00:22:02] It's a lot of money, but. So you did a you did a comparison. You did a, you did the exact same thing in Blue Jay and in ChatGPT five, and you got a more detailed.

David Leary: [00:22:12] Okay. Let's just all I did was Blue Jays marketing on their website had an example questions. And it was basically the question on if you go to I'll share my screen. Actually, let's do that.

Blake Oliver: [00:22:25] Okay. Yeah, I want to I want to show everyone this because this is why you should be like trying out the tools with the same prompts, like the same use cases, testing them out because it's wild what you did.

David Leary: [00:22:39] All right, so let me share my screen. I think I've never been on the podcast before. I don't even know how to do it there. You share.

Blake Oliver: [00:22:45] CEGVCpa says using AI agent ChatGPT to prepare client understanding in audit file. Okay, using the agent mode in audit file, I actually here's my favorite use case. I had to. I have to put in my CPE for my CPA license renewal and it's manual. In Arizona, you have to go onto a website and type in enter in every single CPE certificate, and it's like all the fields you have to fill them in. There's no import, no file import, as far as I could tell. So I used ChatGPT agent mode and had it log in as me to the website, and I could upload ten PDFs at a time and have it enter all the all the CPE. And it was very accurate. It took a long time to figure out how to navigate the website. It took like 40 minutes for ten CPE certificates, so I had to do it over a long period of time, but eventually it did it.

David Leary: [00:23:43] So like this is the Blue Jay website and there's an image here. There's one of their marketing images and it says what is an applicable corporation for a CMT under the Inflation Reduction Act. So I typed that exact thing into let me go to ChatGPT.

Blake Oliver: [00:23:58] Wait, go back to the screen because I just put your go back to what you were looking at because I just put this on the screen-

David Leary: [00:24:01] Oh, sorry, it wasn't on the screen?

Blake Oliver: [00:24:02] Okay, so for those watching on YouTube, you've got one simple question. What is an applicable corporation for CMT under the Inflation Reduction Act? And the answer that Blue Jay shows is like one paragraph.

David Leary: [00:24:14] Yes. And this is a screenshot. It's obviously the marketing image. Is it that everything? Yes. No, that I don't know. Um, but we'll go to ChatGPT and ask the same question. Can you read me that question again, Blake?

Blake Oliver: [00:24:25] Uh, sure.

Blake Oliver: [00:24:26] Um, well, I can't, because you've got the tab.

Blake Oliver: [00:24:28] And I can't switch tabs.

David Leary: [00:24:29] I gotta move to a different tab. I'll move this.

Blake Oliver: [00:24:32] Over.

Blake Oliver: [00:24:32] Tell you what, David, why don't you set that up?

Blake Oliver: [00:24:34] I'll take that. And I will add, I will.

Blake Oliver: [00:24:36] Read our first.

Blake Oliver: [00:24:37] Ad. So.

Blake Oliver: [00:24:38] Um, let me get that going here. All right. So our our first sponsor, this episode is on pay Forbes and CNBC rank on pay number one for small business payroll on pay really knows how to get payroll done right for every client you serve, no matter how complex their software is, easy to use and backed by outstanding service levels, they handle new client onboarding for free and have experts on call to keep you and your clients on track. The system includes multi-state payroll, local tax filings, integrated HR tools, and more with no hidden fees. When you join on Pace Partner program, you get a custom dashboard to easily manage all clients in one place. Plus, you, you can gain exclusive perks like revenue sharing or discounts, free payroll for your firm, co-branding opportunities, premium swag, and more. Onpay helps you run your practice efficiently while providing exceptional payroll that your clients can count on. To learn more about using Onpay for your firm and clients, they could be farms, start ups, restaurants, bars, doctors, nonprofits, gyms, franchises, even dentists. Head over to The Accounting Podcast. Proadvisor. That's The Accounting Podcast. Promo 1099.

David Leary: [00:25:47] All right. Now I think I can. I have this now. So this is a marketing image on Blue Jays website. What is the applicable corporation for CM KMT under the Inflation Reduction Act? The image they have just is like one image. And it basically says under section 15, section 59 K of the IRS code, blah, blah, blah and gives some links. I guess those look like links, maybe at the bottom or documents the regulations and the notices. So I typed the exact same thing into ChatGPT five. No training. There's no like, use these IRS guidelines. I just asked that exact same question and it gave pretty much the same data, but way deeper and more. Right?

Blake Oliver: [00:26:27] Right.

David Leary: [00:26:27] And so I get like for me, and I didn't expect to have to demo this, but Blue Jays pricing where the.

Blake Oliver: [00:26:35] 100 and.

David Leary: [00:26:36] $1,400 a year per.

Blake Oliver: [00:26:37] Year, $1,500 dollars a.

David Leary: [00:26:39] Year per user for what you kind of get out of the box for free out of ChatGPT five.

Blake Oliver: [00:26:47] The thing is, though, you'd have to. We do not have the expertise to evaluate the quality of the response. So I think what you're paying for when you use a tool like Blue Jay is.

David Leary: [00:26:58] Is the curation.

Blake Oliver: [00:27:00] Well, and and the accuracy is what you hope and that like it's only sourcing from certain sources. But here's the thing. You can actually now with like perplexity or ChatGPT, you can limit its its research and you can see all the citations. So that advantage that moat might be going away for a company like Bluejay. So these wrappers around ChatGPT that's they may not have much of a competitive moat long term because a firm is going to look at $1,500 a user and then they're going to look at $30 a user. And what is the incremental value of the $1,500? If you can just train your people to use ChatGPT properly?

David Leary: [00:27:46] I know internally you trained a GPT with all the Nasba CPE requirements, so our team could use it to research things and utilize it internally at earmark. And then one day I got lazy and I just started asking ChatGPT for off the shelf with no training. It was giving me the similar answers, just as good because it was going and getting the nasba stuff itself. And so it is there a market for all these little specialized research tools? I don't.

Blake Oliver: [00:28:12] Know.

David Leary: [00:28:12] So it's.

Blake Oliver: [00:28:13] Not that.

David Leary: [00:28:14] It's not good. It's just it seems like it's a lot of money for what you get for free.

Blake Oliver: [00:28:18] That's the. That's the impression I'd love to hear from our listeners what you think about these tools or any others that you've tried. Is the value there or do they not have a competitive moat? And Tate says, I don't think Bluejay has a moat. Let's thank our second sponsor, which is Team Up. You know that feeling when you're turning away clients because you just can't find the right people? You're not alone. Most accounting firms are stuck in the same boat, either at capacity or desperately trying to scale, but can't find reliable talent. Maybe you've tried outsourcing before and it didn't work out. The graveyard shifts, the constant turnover, and the middlemen taking their cut while your accountant barely sees a fraction of the pay that accountant that you're hiring. It's frustrating. Here's what talented accountants in the Philippines actually want. They want to work directly for you, not some BPO with cubicles and monitoring software. They want to be part of your team, build a real career and contribute fully to your firm's success. That's exactly what Team Up helps you do. They connect you directly with top accountants in the Philippines. No middleman, no corporate policies, just talented professionals who become part of your team from day one. The best part? It's more affordable for you and your accountants.

Blake Oliver: [00:29:25] Earn their full wage. You build lasting relationships, shape your own culture, and scale your firm the right way. To see why forward thinking accounting firms are making the switch to team up, head over to The Accounting Podcast. That's The Accounting Podcast. Promo 401 (K) up now. David, we got to get to our headline here, which is that accounting firms, despite all of this AI anxiety, are seeing their revenue, profits and compensation rise even as staff salaries rise. Partners are making more money than ever. Firm revenues. According to an AICPA survey, firm revenues increased 6.7% median in fiscal year 2024, following a 9.1% growth rate the prior year. Net profit per partner surged to nearly 12% over two years, reaching 252,000 in fiscal year 2024. That's an increase of over $25,000 per partner. The growth is driven by audit, assurance, tax and client accounting services. All of it is growing. Entry level salaries are jumping significantly. Bachelor's degree holders their salaries are up 11% to a median of about 61,000 per year. Master's degree holders. They are up 17% to an average of 68, or a median of 68,000. Partner comp rose 10% overall. The largest increases were concentrated at the associate through manager levels.

David Leary: [00:31:10] What do you think is contributing to this? Because obviously not many businesses are going to have record growth and profits if major expenses are going up. So if salaries are going up, that's a major expense in an accounting firm.

Blake Oliver: [00:31:22] Yeah.

David Leary: [00:31:23] Where's this difference coming from? It's because they're raising rates on the other side so high.

Blake Oliver: [00:31:27] Yeah.

Blake Oliver: [00:31:27] I firms have a lot of room to raise their rates. We've seen surveys recently about pricing and pricing continues to go up. And there's tons of room for it to go up more because most firms that raise prices do not report losing clients. So there's tons of demand. There aren't enough firms. There aren't enough accountants in the United States. So it's a great career to get into. If you can find the right firm that is going to work you 60 hours a week and they exist. And so it's up to us as a profession to demand good work conditions. And I think that the firms that want to attract and retain the best talent are going to do that, and they're going to move away from billable hours. They are going to focus on outcomes. All this AI automation stuff. Take a drink is going to just enable that. Just help us do that more. Did you hear, David, that Nasba has launched a mobile app.

David Leary: [00:32:29] That did not hear that?

Blake Oliver: [00:32:30] Yes. The National Association of State Boards of Accountancy has released a free mobile app designed to streamline the CPA exam process for candidates, bringing their web portal functionality to iOS and Android devices. The Nasba CPA mobile app provides candidates with exam documentation. You can access and download your notice to schedule forms, which you need to get a testing window to take your test at Prometric. You can view your exam scores directly on your mobile device, so now you can obsessively check for your exam scores from anywhere. You can manage payment, coupons and international administration fees. You get notifications such as deadline reminders and important alerts. You can access state specific requirements and guidance and monitor your exam eligibility and application status in real time.

David Leary: [00:33:21] It's funny if you go to the website for it or not, the website, but the Google Play Store that the features they call out are basically mobile features like log in with your fingerprint, have notifications appear on your phone. It doesn't actually say the value the actual app is going to provide.

Blake Oliver: [00:33:36] Well, it's.

Blake Oliver: [00:33:37] Basically the same stuff that you could do on the.

Blake Oliver: [00:33:39] Website.

David Leary: [00:33:39] The wrapper from the.

Blake Oliver: [00:33:40] Website now.

Blake Oliver: [00:33:40] It's now it's in the.

Blake Oliver: [00:33:41] App.

Blake Oliver: [00:33:42] Yeah. So kudos to Nasba for joining the mobile revolution. Well done. Drake software Drake software has launched workflow automation. This is a big deal because Drake is incredibly popular. I did a Do a search on this. I did a prompt on this asking quantify how popular Drake tax software is with tax pros in the United States. And the answer is basically that 70 Drake says 70,000 tax pros use Drake. And then within CPA firms, it's like roughly 1 in 6 CPAs use Drake. That's according to an AICPA survey. And among solo practitioners, it's closer to 1 in 3. So Drake, having launched workflow automation, is kind of a big deal. And it's it was announced last week or this week actually September 16th. And here's what it's going to do. It's going to do automatic status updates. So return statuses are updated automatically as work progresses. You're not going to have to track it there. Promising you're not going to have to track returns and spreadsheets anymore. There's going to be smart task routing, where tasks are routed to appropriate team members based on the status. Built in flags highlight items needing attention. There's going to be a comprehensive dashboard showing the status of all client returns and time management or team management tools. You can drag and drop to change the status. You can delegate tasks. There's going to be payment tracking and it's going to integrate with Drake Tax, Drake portals, Drake E-sign Drake Pay, and Drake Tax Online, which is their newest cloud based product. So I don't have like a ton of details on exactly what this will look like. I think whether or not it's any good will just be up to like the actual app itself, right? The you have to test it. You have to try it to see if it's any good. I guess why it's a big deal is because I've always wondered why these tax prep companies don't build workflow software, because there's all this workflow software that is being built for firms, and it doesn't integrate with the tax software. And that's what you really want, right? If you want.

Blake Oliver: [00:35:58] The you.

David Leary: [00:35:58] Already have the customers. Like you have the base. You're there.

Blake Oliver: [00:36:01] Right? Yeah.

Blake Oliver: [00:36:02] And the tax workflow like has always been terrible and firms have been using it. Or the practice management suites like they're just ancient desktop based. So like it's a huge opportunity. So maybe like this could actually be like really good for small practitioners because I think there's like it's very difficult if you're a small shop or a solo CPA to buy workflow software, because often that software is designed for firms, and the pricing for a firm of like 10 or 20 people is often prohibitive for a very small firm of like 1 to 5 people. And you need some of this stuff, but you don't need all of it. So there's a there's a there's a spot in the market for this. So I'm excited to keep an eye on it.

David Leary: [00:36:54] And is this launching like Like is it in beta? Is it launch launched? Did it have.

Blake Oliver: [00:36:58] Anything? They've announced.

David Leary: [00:36:59] It like.

Blake Oliver: [00:36:59] That. So they've.

David Leary: [00:37:00] Announced it.

Blake Oliver: [00:37:00] Okay.

Blake Oliver: [00:37:01] I mean, it's like it was announced on, let's see, September 16th. Why don't you go to your next story, David, I'm going to try to figure out if you can actually get this right now.

David Leary: [00:37:13] Well, get your shot glasses ready because I have two AI stories I want to touch on back to back for a moment.

Blake Oliver: [00:37:17] Oh, sorry.

Blake Oliver: [00:37:18] I got the answer. It's rolling out to beta is rolling out in beta right now okay.

David Leary: [00:37:23] So customers have Drake can use that now. So two. Two more AI stories. They're a little shorter and quicker. So one, there was a survey that recently came out that said 97% of surveyed workers have used AI workplace or AI for workplace advice, citing safety, speed and less judgment compared to their human leaders. So basically, people would rather go talk to AI than confide or talk to their boss for advice. And this is another crazy one. That's probably probably true for accountants, if not more for emotional support. 49% say ChatGPT has been more supportive than their manager during stress. So hopefully that's not 49. That's not our industry. But employees, if your employees are stressed managers, human managers do human things to your human employees. Don't make them opt into ChatGPT to get emotional support. That's that's shame on you managers. But this is also like that pendulum because didn't you a couple weeks ago how all the managers were using AI to write employees reviews?

Blake Oliver: [00:38:30] Well, executives.

Blake Oliver: [00:38:31] In general are way more likely to use AI than frontline workers. It's like four times more likely.

David Leary: [00:38:39] And so then you wonder why frontline workers are now using AI to eliminate their boss.

Blake Oliver: [00:38:44] Well, it's think.

Blake Oliver: [00:38:45] Of it as like.

Blake Oliver: [00:38:46] Uh.

Blake Oliver: [00:38:48] To augment. It's your boss.

Blake Oliver: [00:38:50] Isn't your boss.

Blake Oliver: [00:38:52] Right? You know, my goal is I would love it. Earmark. If I could set up some sort of chat bot where if somebody has a question for me and I'm not available, it can, it can like do that triage for me and somehow like just have all the information that's in my head. Because one of the biggest challenges when you start hiring people in a firm is that everybody's coming to you with questions all the time, and you have to sit there on teams or on slack or whatever your messaging is, and answer these questions all day long, or people get stuck or you're in meetings all the time. And so the the hard part is getting all your knowledge out into like a workflow system, documenting it so that people can learn it and do it, and then answering all those questions until you have transferred that knowledge to enough people in your organization where they can answer the questions. And that takes years. And that's the like, uh, that's in a firm journey. Going from 1 to 10 people is the hardest thing you will ever do. For that reason?

Blake Oliver: [00:39:53] Yeah.

Blake Oliver: [00:39:53] Because it just takes so much time.

Blake Oliver: [00:39:55] And I suffer from.

Blake Oliver: [00:39:57] You're going to have turnover at the same time. And for us, with our journey at earmark, that was basically the hardest part was me and you. And it was first it was just me. And then when I added when you came on. Right. Like we when we came on to work on this full time with me going from that just us to like the the ten people part. I don't know about you, but to me that was like all the time having to be available. But now that.

Blake Oliver: [00:40:24] We've scaled, it feels like we have.

David Leary: [00:40:25] 25 now. Yeah, it feels like 25.

Blake Oliver: [00:40:27] I counted 16, I counted 16.

Blake Oliver: [00:40:30] Okay. Wow.

Blake Oliver: [00:40:31] On our Google Workspace active accounts. Yeah.

David Leary: [00:40:33] Um, another quick AI story, because I don't want to, like, get people upset here about too much AI.

Blake Oliver: [00:40:38] But that's.

Blake Oliver: [00:40:39] Why. So you're going to share another AI story.

David Leary: [00:40:41] I just need to get it done. Just get it.

Blake Oliver: [00:40:42] Out of.

David Leary: [00:40:43] The.

Blake Oliver: [00:40:43] Way.

Blake Oliver: [00:40:43] I can't promise that I'm not going to do more.

David Leary: [00:40:45] You've used Fiverr, right? Are you familiar with Fiverr?

Blake Oliver: [00:40:49] Um, I've used Fiverr.

Blake Oliver: [00:40:50] Before.

Blake Oliver: [00:40:50] Yeah.

David Leary: [00:40:51] What kind of jobs do you use? Do you hire on Fiverr to hire people? What kind of work do you do?

Blake Oliver: [00:40:56] It's like small tasks. It's sort of like the the small. The more, I don't know, cookie cutter version of Upwork.

David Leary: [00:41:03] Small jobs, little things that can be done.

Blake Oliver: [00:41:05] Like like I need to. Well, it used to be like, I need to edit a photo or I need you to like make, make a, make a one image for me. And here's five bucks to do that or something.

Blake Oliver: [00:41:16] Yeah.

David Leary: [00:41:16] So Fiverr they announced they're going to lay off 250 employees as they have a major restructuring to rebuild the company around artificial intelligence. But I see this announcement. I'm like, is it too little, too late? Are they screwed? Because if I look at Fiverr, most of the work you're going to go use Fiverr for probably is automatable through AI now. Like, are they just a dead man walking? Well, like you said, I want to edit this photo. Well, you could just upload that to a AI. Now edit the photo for you.

Blake Oliver: [00:41:45] This is an interesting thing about it. Yeah.

Blake Oliver: [00:41:48] So the difference between Fiverr and Upwork is that Upwork is more about hiring a contractor for you can do it for specific tasks, but I think people tend to do it for a role, an ongoing relationship. And you might define it by projects, but it's.

Blake Oliver: [00:42:04] Really a good way to.

David Leary: [00:42:04] Think about it. Yeah. Ongoing relationship versus a task.

Blake Oliver: [00:42:08] Fiverr is I need this done and I just want to pay a set price for it. And then there's these contractors who specialize in just doing this one thing. And maybe they have a bunch of different things. But yeah, I think Fiverr stuff is totally at risk because AI is good at doing tasks. Ai is not good at managing workflows.

David Leary: [00:42:28] So a lot of times you just want the task done once you're not going to ask that person to do it again and again and again. And that's where AI struggles. You want the same output and it can't seem to do it over and over again.

Blake Oliver: [00:42:37] Well, you just want reliable outputs. And I mean honestly Fiverr can be really unreliable.

Blake Oliver: [00:42:43] So yeah, it's.

David Leary: [00:42:44] Person to person. You. You don't know what you're getting.

Blake Oliver: [00:42:46] Yeah. Um, and see how.

David Leary: [00:42:48] That works out for them. Good luck. They're getting rid of all their employees.

Blake Oliver: [00:42:52] Mhm.

David Leary: [00:42:54] All right. No more AI stories. That's it.

Blake Oliver: [00:42:56] That's it. Okay.

Blake Oliver: [00:42:57] Well, my next story is about Floqast launching an AI agent builder.

David Leary: [00:43:01] But just kidding, folks.

Blake Oliver: [00:43:03] That was actually. This is so Floqast is, uh, close financial close software for corporate controllers and CFOs. I used to work there. I interviewed Mike Whitmire of Floqast on the podcast about AI agents and what they're building, and they've officially announced their new AI agent builder at their annual conference. And what's neat about it is that you can actually have full visibility into the AI in their platform. So it shows you in the workflow what the AI is doing at each step. Like the AI is a worker in your organization and there's a full audit trail. Rail. You've got all the agents, all the agent actions logged, and every agent requires human verification and sign off before the tasks are completed. So anyone building AI agents into software, like take a look at what Floqast is doing, because I think they're doing it the right way. It's what I would want to see. All right, let's try to do some non non AI stories. Oh you want to hear the latest uh crazy idea from Donald Trump related to accounting.

Blake Oliver: [00:44:13] Yes I actually like this.

Blake Oliver: [00:44:15] I like it. I like this idea. Uh, on Truth Social. Donald Trump said subject to SEC approval, companies and corporations should no longer be forced to report. Report is in quotes on a quarterly basis. Quarterly reporting exclamation point, but rather to report on a quote six six month basis. This will save money.

Blake Oliver: [00:44:38] In Australia.

David Leary: [00:44:39] Right?

Blake Oliver: [00:44:41] Yes, I think I think so.

Blake Oliver: [00:44:42] Like a lot of places in the world, it's bi annual instead of quarterly twice a year. His argument Trump says this will save money and allow managers to focus on properly running their companies. Did you ever hear the statement that China has 50 to 100 year view on management of a company, whereas we run our companies on a quarterly basis? Three exclamation, three question marks. Not good. Three exclamation points. So I mean, this is here's why this makes sense. Quarterly reporting four times a year is I don't know, it's not twice as much work as twice a year, but it's definitely a lot more. Do we really get that much of a benefit from quarterly reporting? You've made the argument many times, David, that quarterly reporting causes bad incentives. It makes companies.

Blake Oliver: [00:45:37] Yeah, right.

David Leary: [00:45:39] It really almost hurt into it really bad for a while because they they had a CEO that came from GE and GE was about Six Sigma, and squeezing that blood out of the diamond and meeting the numbers for Wall Street every quarter over and over again. And then then people start playing games to hit the numbers every quarter. And it's ironic because I think I saw an argument that, like, if they don't have to report every quarter, that it's that people are trying to imply that, well, the cat's away, the mice will play type of a mindset, but I think it's actually probably better because it's going to get rid of these incentives. Like companies won't be playing games constantly, every quarter just to make that quarter's numbers.

Blake Oliver: [00:46:18] They'll still be playing games, but it'll just be on a slightly longer time horizon horizon. And which is good, right? Um, now the question is, well, would this hurt accountants because our jobs are currently in the US, uh, putting together those quarterly reports?

Blake Oliver: [00:46:35] Does this mean.

David Leary: [00:46:36] Less closes, less audits? What does this mean?

Blake Oliver: [00:46:38] Well, yeah it does. It would be less work. But that's a good thing because we do not have enough people to do all this work. So we just have to hold the line and say, we're not cutting our fees because the work still has to get done. It's just not as frequent. And we're going to do a better job and the financials are going to be more useful. And so everybody wins. But like with many ideas, I think this is it's an idea. Will this actually happen. I would I would like to see it I would love to see this this happen. I'm curious to know what our listeners think. Do you think this is a terrible idea? Do you think this is a great idea despite your political leanings? Can we have a discussion about the frequency of financial reporting?

David Leary: [00:47:24] Where does this fit into your point of view of that? You know, people are investing in companies. They're not even using the financials anymore.

Blake Oliver: [00:47:31] Yeah. I mean, I think that we have a long way to go to make GAAP financials actually useful to investors like we don't we don't spend as a profession nearly enough time talking with the users of the financial statements to find out what they actually need and want. And I'm betting that if we went out and talked to people who read financials and asked them would, does it matter if we do this quarterly, or could we do this twice a year? I bet we'd find a lot of people that say no twice a year is fine, because the rest of the world does it that way.

Blake Oliver: [00:48:01] Yeah.

Blake Oliver: [00:48:01] You know what makes us special when it comes to quarterly reporting? I mean, you could also make the argument like, why don't we do it every month? We don't. So why not do it twice a year? But like these are the big picture changes that unfortunately, regulators just don't seem to be interested in asking those questions. It's always like nitty gritty, like little tiny changes adding complexity. It's not about reducing complexity. I think that's the big problem with our system.

David Leary: [00:48:28] I'm for it. I think it makes a lot of sense to me.

Blake Oliver: [00:48:30] To.

David Leary: [00:48:31] Not do it. That quarterly pressure is just crazy. You just. You're just. It's a treadmill. Mindset of your company.

Blake Oliver: [00:48:40] Let's take our final sponsor for this episode, Blue Book. Most people in accounting know that AI is powerful, but very few know where to start or how to make AI actually useful. It doesn't have to be this way. Introducing blue book. Blue book. Turns AI into practical accounting workflows that save time, reduce errors, and make accounting teams more effective. Blue book agents are changing how accounting teams work. Instead of hiring more people or using clunky automation tools, you can delegate tasks to AI agents that actually understand accounting. Blue book's agents review your general ledger for compliance issues, scan incoming bills for red flags, and handle the repetitive work that's eating up your time. It's purpose built for accountants. So simple to use, but sophisticated enough to handle complex finance workflows. Baker Tilly is already using Blue Book, and over 500 companies are on the waitlist. But as an accounting podcast listener, you'll get priority access and bypass that waitlist. Onboarding takes just 15 minutes. To see why CFOs and accounting firms are making the switch to Blue Book and get 20% off your first three months. Enter the code earmark. When you sign up, head over to The Accounting Podcast. That's The Accounting Podcast promo 401 (K). And that promo code is all capitals. Earmark. All right, let's talk about private equity.

Blake Oliver: [00:50:03] Pe not have any.

David Leary: [00:50:04] Of those stories. So I'm glad you brought one.

Blake Oliver: [00:50:06] So this is a big deal. The AICPA peer review board. They want to centralize oversight of nontraditional accounting firms by requiring their peer reviews be administered by the National Peer Review Committee instead of state administered entities. So if you are an accounting firm that has this alternative practice structure and has taken private equity money, they want the peer Review Committee of the AICPA to do your peer review.

David Leary: [00:50:36] So they're basically saying states, we want to be in charge. You don't get to be in charge anymore.

Blake Oliver: [00:50:41] And I'm. Yes. Basically you have to you have to your firms, the firms with this structure have to do it nationally. I wonder.

Blake Oliver: [00:50:51] What AICPA.

David Leary: [00:50:52] Doesn't have any authority at all. Right.

Blake Oliver: [00:50:56] Um.

Blake Oliver: [00:50:57] Well, I mean, it's delegated.

Blake Oliver: [00:50:59] It's it's like the states are it's it's so funny because it's right. It's. The states are the regulator. It's the boards of accountancy at the states. But then they delegate some of this stuff to the National Association, the National Association of State Boards of Accountancy and the AICPA. And so it's this complicated relationship. So the AICPA gets more power and then sometimes it loses power. And we've seen that with the 150 hour rule where the AICPA lost its its power in many ways over that. And Nasba did because they failed to listen to the people and to the states, and now they're trying to, I don't know.

Blake Oliver: [00:51:39] I wonder what.

Blake Oliver: [00:51:40] The point of all.

Blake Oliver: [00:51:40] This is.

David Leary: [00:51:41] Follow the money. Like like I'm trying to understand the logic.

Blake Oliver: [00:51:43] Is it a.

Blake Oliver: [00:51:43] Power.

Blake Oliver: [00:51:43] Grab?

David Leary: [00:51:44] Is it a money grab? Is it a power grab? Like, what is like, why do they want this control?

Blake Oliver: [00:51:50] Because they want to. This is what they say. They want to monitor the independence and professional standards compliance of these firms. Now that there is private equity in there. So it's it's about maintaining service quality, maintaining independence. Um, but my question is how do you do that? You've allowed these alternative practice structures to exist and to be created. Like how does this help?

Blake Oliver: [00:52:16] Yeah.

David Leary: [00:52:16] Is this a cover your ass type scenario like, oh, we want to we want to monitor it. So that way if something's not right, we get to do damage control ourselves versus somebody else discovering something maybe not right. Yeah.

Blake Oliver: [00:52:28] We've also smell test.

Blake Oliver: [00:52:30] Follow up from a previous discussion that no tax on Tips regulations the the list of occupations that leaked. Remember that and we we found out that digital content creators are on there. So David, you and I might be able to get some tax free tips if we set up a tip jar. Well, there's now proposed regulations officially. So what is different from what leaked. I think the one big thing that's different is the major exclusion which is specified trades or businesses SSBs. So they are excluded even if you're on the approved occupations list. So performing arts, health and athletics, law and finance and other professional services like accounting are specified service trades or businesses. So I guess they're excluded and they can't get the the no tax on tips deduction. But there's a contradiction here, because digital content creators are on the list and are expected to qualify based on what was leaked. So if you're in the performing arts and you create content digitally, what does that mean? How does that.

Blake Oliver: [00:53:41] Work?

David Leary: [00:53:41] That's only the tips you get digitally. Possibly.

Blake Oliver: [00:53:44] Also, David, this is really important for you. Um, tips from illegal activities are prohibited. Prostitution is prohibited, pornography prohibited, and OnlyFans creators are likely excluded. So I'm sorry, David, but your OnlyFans account is going to remain taxable. Um, yeah.

David Leary: [00:54:03] I shouldn't have followed that. Tiktok advice. Tax advice? I put everything in there now. Now what am I supposed to do? So we have more news on AICPA Nasba.

Blake Oliver: [00:54:13] What's that?

David Leary: [00:54:13] So they're shutting down the Earn and Learn program. Do you remember this?

Blake Oliver: [00:54:18] Yeah. So yes.

Blake Oliver: [00:54:20] I remember this. I remember thinking this is a terrible idea. So.

David Leary: [00:54:24] So obvious. So that's Ben AICPA before they finally copped in down and said 150 hour rule might be an issue. They were creating these alternative ways to help people pay for college. And one of them was a pilot program they rolled out with Tulane University in 2023, where a 260 students could work for firms and then pay for college at $150 a credit hour. So it's like an earn and learn type situation. They are pulling the plug on this and sunsetting it as of December 13th, 2025. That'll be its last semester. Which makes sense because I think we're now at what, 27 states that are having alternative pathways. It's just not needed program at this point.

Blake Oliver: [00:55:04] By the year end.

David Leary: [00:55:05] And then after.

Blake Oliver: [00:55:05] All that, they only.

David Leary: [00:55:06] Ever had 260 people participate in it. It was hardly used.

Blake Oliver: [00:55:10] And that was the issue is that it just wasn't scaling. It wasn't scaling fast enough. It wasn't going to address the talent shortage. So thank you for the follow up, David. All right. That is all the time we have for this week. Thank you everyone who joined us live. Tate. Boring accountant. Thank you for commenting. Hk geek, keg VC and us. Hello Bernie. So great to have you Bernie. Hope to see you in Las Vegas. Intuit connect. That would be amazing. Melanie. Oh Melanie I missed your comment earlier. Melanie said loom creates SOPs from your videos. I created a payroll processing tutorial for a client and was able to send the SOP along with a video link to the client. I love that use case. That's a great one. Documenting your processes. Loom is good at this. And Mo. Mo, thank you for joining us as well. Thank you for commenting. Thank you to all our livestream viewers, John. John said what about mandatory tips? Where more than X guest means a minimum of 18% are mandatory, tips are not Are excluded from this mandatory tips. So the tips have to be voluntary, which is very interesting from a tracking perspective. What if you have both mandatory and voluntary tips.

Blake Oliver: [00:56:32] Because people.

Blake Oliver: [00:56:32] In a restaurant.

David Leary: [00:56:33] Can tip beyond the 18%.

Blake Oliver: [00:56:35] Right?

David Leary: [00:56:36] So that part would be nontaxable, right?

Blake Oliver: [00:56:37] Yeah.

Blake Oliver: [00:56:38] So in a restaurant nightmare, this is.

Blake Oliver: [00:56:39] The situation in a restaurant, you have a mandatory automatic 18% tip when there's often it's like more than 6 or 8 people at a table, a lot of places that would have to be tracked separately. Then the voluntary tips when you like. What a what a.

Blake Oliver: [00:56:59] Just a.

David Leary: [00:57:00] Tax credit, right? If you work for one of these industries, you get a $2,500 tax credit on your at the bottom of your taxes. Like this would have been easier than the tracking of this.

Blake Oliver: [00:57:10] Congress never thinks about the actual implementation of these rules. Maybe that is what we should do is like when Congress. When Congress drafts a law or a bill, the CBO has to score it and they score it for the cost of the bill. What will the bill cost? I think there's also scoring that happens in terms of like the paperwork, but I feel like the the follow on effects of like all of this for like changing how we report W-2 all the payroll providers have to change the W-2s and all of the POS systems are going to have to somehow track this differently. I feel like that is not included in this analysis.

David Leary: [00:57:55] And the.

Blake Oliver: [00:57:56] The.

David Leary: [00:57:57] The overhead of tracking is.

Blake Oliver: [00:57:59] Never included.

David Leary: [00:58:01] Speaking of overhead and tracking, um, this is a quick story. Did you see that FinCEN has announced it's going to destroy all the previously collected benefit ownership information data? They're going to destroy it all.

Blake Oliver: [00:58:12] Oh, good. Well, we never submitted ours in the first place because I was betting that it wouldn't happen.

David Leary: [00:58:16] So of the people that did submit it. They're going to destroy it. Like what? A complete waste of government. We went from like.

Blake Oliver: [00:58:23] That's crazy. Yes. It's just.

Blake Oliver: [00:58:24] Absolutely. But I mean, that's a good thing. It's it's good that we didn't do the beneficial ownership information stuff because, like, criminals.

Blake Oliver: [00:58:33] Were smart enough. It was not.

David Leary: [00:58:35] It didn't pass the sanity test.

Blake Oliver: [00:58:36] Basically.

Blake Oliver: [00:58:37] Yeah. It was designed to designed to trap criminals or something, but like they're not going to self-report. So all it was doing was creating an administrative burden for small businesses, which is the last thing they need. Last thing we need is more paperwork. Right. David, great to see you. Everyone who is listening. You've been here with us for an hour. You can get a free CPE credit with the earmark app, go to earmark Dot app in your browser, or download the free app on the iOS store or Android Google Play Store. It's free to sign up, free to earn one CPE per week. Get started now! Get your CPE requirement done before the end of the year if you're a calendar year. Cpe reporter. Subscribe before October 1st and you can get the annual price of $150. It's going up October 1st to what is it, 199.99. Okay. So basically $170 starting October 1st, if you subscribe now, you can lock in that price. We'll definitely honor it for next year. And so far, we have managed to avoid raising the price of anyone who has subscribed. So we've got we've got folks grandfathered in. So get that price and we're going to do our best to keep it low and accessible for y'all. So see you here next week after I hit up Seattle and LA. Hope to see you there at the Advisory Amplified Tour. Uh, I will be reporting on that. And, uh, yeah. See you next Friday, David.

David Leary: [01:00:06] Almost the perfect hour. Good job.

Blake Oliver: [01:00:08] By everyone.