The Accounting Podcast

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Adam Zaki: [00:00:05] Would you trust a mechanic who's never worked on a car but could tell you everything about the engine? Like I wouldn't.

David Leary: [00:00:11] Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:21] Hello and welcome back to the Accounting Podcast, your weekly roundup of news in the profession. I'm Blake Oliver.

David Leary: [00:00:28] And I'm David Leary Blake. We made it to episode 500, which is 500. Kind of amazing. Like we've never skipped. We've actually, I think we had one hiccup where we had to double record one week, but essentially 500 weeks in a row, we've released the show. I it's a, it's.

Blake Oliver: [00:00:43] Hard, it's hard to believe. And, uh, we should tell the story of how this podcast started because it's a fun one. I get asked about it a lot, and I don't know if we've ever shared it on the show.

David Leary: [00:00:55] So after we shared on the show. Yeah.

Blake Oliver: [00:00:57] Yeah. After we thank our sponsors, we'll talk about that. I also want to thank our two special guest co-hosts for this episode. We've got Adam Zaki, reporter@cfo.com. Adam, welcome.

Adam Zaki: [00:01:10] Thank you guys. I'm happy to be here. Congratulations. I'm a listener of not every not all 500 episodes, but I've been listening to you guys for a while. Thank you for putting your podcast together, I love it.

Blake Oliver: [00:01:19] Thank you for all the great stories that you write. Like they, they inform our show. That's what we talk about on the, on the show. So it's great to have you here. We've also got Adrienne Gonzalez, managing editor of Going Concern. Adrienne, great to have you. I all right, let's thank our sponsors, David, who are our sponsors for this week, our sponsors.

David Leary: [00:01:37] This week we have on Pay Canopy Thomson Reuters and Cloud Accountant Staffing. Are you tired of payroll headaches getting in the way of the client experience that you want to deliver? Manual workflows, creating bottlenecks, compliance, nightmares, and endless support calls that go nowhere? There's a better way for your team and your clients on pays the payroll partner that accountants and bookkeepers actually love Y because it's easy to use, packed with value, and backed by support that actually supports you. Their teams get great reviews for being fast, expert, and actually reachable when you need them on pay handles all the heavy lifting. You get a dedicated on board onboarding coordinator who sets up worker profiles and transfers year to date data from previous providers, all at no extra cost. Their seamless QuickBooks and Xero integrations eliminate manual journal entries, and they support any type of businesses you serve farms, restaurants, nonprofits, you name it on on pay can handle the unique requirements without adding complexity. And on pay keeps pricing simple to everything your clients expect, from multi-state filing to off cycle pay runs is included. No hidden fees, no surprises. To book a demo. Head over to The Accounting Podcast dot com slash The Accounting Podcast dot promo forward slash ONPAY.

Blake Oliver: [00:02:48] And thank you for. Thank you to Onp for being an incredible sponsor of this show, supporting the show over the years. We really appreciate you. Please do visit those links to let them know that's how you found us? All right, let's get into the origin story, David.

David Leary: [00:03:01] Well, do you want to welcome our live studio audience that are starting to show up here?

Blake Oliver: [00:03:05] Oh, yeah. That's right. Look at all the comments. Boring. Accountant as always, Arcola. We've got Oswego Sharks and Kobe and VMZ and James and Linda and Melanie and, uh, thank you for commenting. Let us know as you watch. What are the favorite stories that you've heard on the show? Favorite moments? Uh, anything you want us to discuss? We'd love to hear from our listeners. So David, do you remember how this all started?

David Leary: [00:03:34] Yeah. So you were kind of you had your blog, the @BlakeTOliver blog, and then you, it evolved to where you had, it was called, you had a cloud accounting blog, right? Or cloud.com. You had that and you were, you basically were using the squarespace blog site to record a couple podcast interviews over Zoom or something you did about eight episodes and then in.

Blake Oliver: [00:03:56] David, we have to go back even further.

David Leary: [00:03:58] Oh, yeah. Before that. That's right.

Blake Oliver: [00:03:59] This is where we met.

David Leary: [00:04:00] Yes, yes, yes. That's right. Right. I forgot about that part of the story.

Blake Oliver: [00:04:03] Yeah. I mean years. So we were at expensive con at in Maui at the Andaz resort. And I remember this is how I remember it. I think this is the first time I ever met you. Perhaps I'm lying on a lounge chair by the pool like. And I've got my one year old there. No, he's not even one yet. He's Thomas. He's he's not even walking. He's rolling around. Yeah. And I'm exhausted because we got we're traveling with a kid and at a conference and I'm like lying there and I've got my eyes closed and I'm getting like, my, my, you know, one minute of Zen, right? And all of a sudden I hear my name and I open my eyes and standing over me is David Leary. And I think within the first few minutes of talking to me and introducing yourself, you were like, we should have a podcast.

David Leary: [00:04:53] Yeah, I did.

Blake Oliver: [00:04:54] That's how I remember it anyway.

David Leary: [00:04:55] Yeah, it was like over beers or drinks. And like two years later, we finally have a podcast. It was just like, yeah, it really, there's a big gap of no podcast, no actual planning. And then you were doing a podcast on your own. Intuit bought t shirts and you had me on because you wanted to talk about that story. And then as soon as we were done recording, I said, let's just do this every week. And I've never left. So I just crashed your podcast and I just never left it.

Blake Oliver: [00:05:18] Well, you know, what you did is you planted the seed in my mind, and then it grew. And I totally forgot about it until you reminded me when you were a guest on the show and you were episode six or something. And it went so well that basically after that you were always on. We just that's how it happened. So thank you. And you know, I love that about us because I feel like it, it sort of is like how our working relationship works, right? Is you plant these ideas in my mind that then grow and then we work on them together eventually. Yeah.

David Leary: [00:05:49] So the best story, I still think, and the reason we've been successful and hit 500 episodes is I'm a Gen Xer. Blake's a millennial. I don't know, maybe episode 14 or so. Blake was like, I want to skip this week. And I just told him, if you skip this week, we'll skip next week and this whole thing's dead. And I didn't let Blake skip. And because of that, that's why we hit 500 episodes. If we would have skipped this thing, would have died at episode 15.

Blake Oliver: [00:06:13] That's true. That credit goes to you for that. And, uh, we're getting comments here in the chat. We'll check in on you later. Thank you all. Um, let's get to the news, shall we? Adrienne, I want to start with you. Um, going concern is probably the first accounting publication I ever started reading when I just entered accounting. And I feel like actually, it's it's really popular with a lot of young accountants because of the issues that you talk about the, the irreverent attitude, the, the, the, uh, brave, unvarnished coverage of the big four and all that. And so I wanted to ask you, like, you know what, what do you want to talk about today? What is top of mind for you? Uh, let's start, let's kick it off. And actually, it looks like we may have lost Adrienne. Oh, no. If you can hear us, Adrienne, go ahead and refresh your browser and come back and we'll get back to you. So over to Adam Zaki.

Adam Zaki: [00:07:09] Adam, I got it.

Blake Oliver: [00:07:10] Great to have you. What's top of mind for you?

Adam Zaki: [00:07:12] Listen, I'm a kid in a candy store here. Adrienne's one of the best writers writing about accounting right now. And you two are the best. So I can't thank you enough for having me. But I got a lot to talk about. I want to, I guess we could open up with the future of the billable hour, because this is something that I just did a story on. I interviewed the co-CEOs of Cross Country Consulting, and they told me that the future of billable hour is waning. And CFOs would love to hear that, right? Because the idea of product based or outcome based pricing is huge for my audience. Right? Especially now, like we've seen it in your world where which one of the big four firms was asking for a reduced rate because their auditor used AI, I believe it was KPMG or PwC. I want to get that wrong, but one of them did do that. Right. And so if the if the firms themselves see that the value of things like auditing is going down because of AI and value, meaning the cost, I should say the cost, why can't we all get that cost benefit? That's what my audience is saying. And so I think that the move to outcome based pricing is totally legit in the consulting world. I don't know where it will come first. Right. Will it be consulting? Will it be in accounting? But it's coming. I just don't know when and where.

Blake Oliver: [00:08:19] I'm I, I believe it. I mean, my own experience was in outsourced accounting. And once we got all these like cloud based accounting tools and we could automate a lot of repetitive right up work, like literally typing transactions into accounting systems are billable hours dropped by 80%, 90%. And we as a, as a team, as a department inside of a firm had no choice but to move to fixed fees. Whether or not you value price, you fixed fee. Right. Like we had to do it. We we couldn't bill hourly anymore. And I'm wondering what what you're hearing and what you're seeing from the consultants about like the effect of AI on their hours, on their timesheets and how that how they're going to adapt. Like, what are they thinking? What are they doing?

Adam Zaki: [00:09:05] Well, that's where, you know, my job gets hard, right? Is getting into the nitty gritty of, okay, so you have this plan, but what is the plan? Right? I think first it comes down to training, right? People are trained to work off the billable hour. Like the more time you put into a client, the more money you make for the firm. That's a mindset that people have to grow inside firms, and that goes for accounting and consulting. So I think that's step one, right? Is to remove the mindset of hours equal dollars right. And outcomes should equal dollars. If the greatest example in my audience is ERP transformations, right. When you when you put in a new ERP system, a lot of times it's a separate firm that does the implementation process, not the company that sells you the ERP. A lot of times they have a partner that will help you, and it's recommended you could bring in whoever you want, but they have a recommended partner, right? And so in situations like that, like when there's, when accountability is hard to come by because somebody who sold you the product is not the person that's implementing it for you.

Adam Zaki: [00:10:04] And then the time they spend on implementing it may be different than what the salesperson told you in the sales process. And so there's a lot of hiccups in finance technology implementation right now. And I don't know if AI is necessarily like the end all be all answer for solving them, but if it can reduce time, it might be a great start. But I just like I said before, I don't know where it's going to start first because accounting looks like it has a lot more solutions, but consulting is a much lower stakes in a lot of different a lot more regards. And so it might be more ripe to try new stuff in consulting and not like your audit, right? No. Cfo wants to be the guinea pig with AI technology in their audit, right. Especially if they're paying for the name of a Big Four from a Big Four. Yeah, I think that's huge. But what do you guys think? Are we going to see an accounting or consulting first?

David Leary: [00:10:51] Well, who's going to drive the behavior changes. Are CFOs now just like, hey, I'm expecting next year to pay less for accounting and consulting services. And the year after that, even less the year after that, even less is the market going to put price pressure and force them to change their business models to a fixed price type thing? Or is this going to be. I just don't see the accountant accounting firms working out of the goodness of their heart to switch this model just because unless the market's telling them to.

Adam Zaki: [00:11:20] Well, the market is advertising to my audience. Everybody is AI powered, right? Everybody's using these new tools. So if they're advertising that we're saving time and being more efficient, they're going to want the cost benefit on the buyer side, right? And so I think, I think that's the key. If you are dealing with a firm and let's just say we're talking about the top ten firms right now that is marketing out there. We are an AI first, a genetic AI powered accounting. So and so, you know, that's where you're going to say, all right, if you're saying this and give me the cost benefit, but there's a lot of boutique firms out there. And this is where I think the and this is something we can get into in a while. But this is where I think the future of accounting will lie is boutique firms, niche services. If you are a food and beverage company, a mid market food and beverage company, I feel like in the future you would want to do business with a. With a small accounting firm that specializes in your industry and the idea of dealing with a firm in the top ten because of the name, or we can say Big Four two is losing its appeal. And I'm just talking about the mid market, maybe even the small business part of my audience. The enterprise CFOs will always deal with the big four. But I think mid market, which is where a majority of the CFOs work, the majority of my readers are that post startup pre IPO CFO. And that's where a majority of CFOs are. And there I think there will be more trust in the future and boutique niche accounting firms that can show experience, right? Maybe if they have a partner that worked at Big Four for 20 years and then they bring them on board, that might be enough legitimacy to give a boutique firm a chance, I think, in the future. Not for the enterprise CFOs, but for those mid-market, small business type CFOs. I think that will be the future.

Blake Oliver: [00:12:59] I agree with you, Adam, for another reason, which is that when we step back and think about why do bigger businesses work with bigger firms, the answer in my mind is, well, midsize businesses, enterprise size businesses, they need more knowledge. The firm has to have more knowledge to be able to handle all the complexity of what that business is doing from an accounting and finance perspective and tax perspective. And the only way to get that in the past was to simply add more experts. Right. Add more partners. And now it feels like with. With AI, a smaller firm with fewer people can have more knowledge. Like that's what it gives us, is access to all this knowledge that we don't have to gain through experience necessarily anymore. Or maybe not as much experience. And so that's, that's why the small firms, we're going to see more and more solo firms, small firms competing with the mid-market accounting firms.

David Leary: [00:14:05] Because the smaller firms would have to merge with other firms to get that level of expertise across their firm. And now, in theory, if the knowledge is becoming democratized, a lot of smaller firms can run solo for a lot longer.

Blake Oliver: [00:14:18] Yeah, exactly. Like like for instance, traditionally, if you wanted to do, I don't know, uh, if you wanted to handle sales tax for clients like mid sized businesses, you had to have a whole team that just specialized in all the state and local taxes in order to have the knowledge, to be able to advise them on what they need to do. But now maybe you you just need one person. Or maybe you can have a partner who does a bunch of different areas of specialty. Like people can be more generalist because we have access to all that knowledge. Maybe that's like, I don't know. I tell me if you feel differently, but I feel like I know so much more now because if I know where to know how to ask the question, I can give me the answer. I have to be able to, uh, you know, validate it, know enough to figure out whether or not it's getting me in the right direction. But it's like, you know, it's like Google when we got Google, but ten 100 X that.

Adam Zaki: [00:15:16] So I think my readers would be concerned about if it's a one man or two man accounting shop, AI powered, what are you doing with my data that's allowing you to do that? Right? Are you uploading all my financials in the cloud? Because if you're doing that, we can't do business. And I think that's a that's a real concern. And I just did a story about this. I attended an open AI webinar about their. They had finance technology webinar. There was. The word governance did not even come up on the webinar. Right. And this is a big thing that CFOs want to know what where is my data going and what are you doing with it? And if we're going to work with small firms, I think they need to address that.

Blake Oliver: [00:15:51] That's a great point. Adrienne. We've got you back. Tech challenges solved. You hear us, you see us.

Adrienne Gonzalez: [00:15:58] I do sorry, I'm on uh, 20 tens internet aka Comcast Xfinity, whatever they call it these days. I'm back.

Blake Oliver: [00:16:07] Welcome back. Great to have you back. Um, just before you cut out I was tossing it to you for your top of mind stories this week. Whatever you want to talk about, you know, let's do it. Let's hear it. What's going on?

Speaker 4: [00:16:21] Well.

Adrienne Gonzalez: [00:16:22] We're on the accounting podcast, so I suppose nobody wants to talk about PlayStation ending physical disc production in 2028. But that's, that's been top of mind for me.

Blake Oliver: [00:16:31] End of an era.

Adrienne Gonzalez: [00:16:32] End of an era. Um, I've been buying PlayStation three discs that I probably won't play, just look at and admire. Um, top of mind for me. Um, that I think we should talk about is PwC ending the impact, uh, intern get together and the, as Cory Doctorow said, the acidification of everything has now spread to the intern experience. You know, like they take away everything now they don't even get to go to Disney. And I think that's sad.

Blake Oliver: [00:17:01] Wait. Yeah. So tell me about this because, uh, you know, I never did Big Four. Uh, I never got that experience. Uh, what what what what, what does PwC have to do with Disney?

Adrienne Gonzalez: [00:17:14] So they used to, it's been like, I don't know, um, 15, 20 years, like one of our oldest readers on going concern, uh, remembers attending and he's definitely old, but, um, they would have this get together at Disney. And if you go on YouTube, you can actually find, you know, nowadays kids with their fancy cameras and they take these really great, you know, they cut together these great clips and everything. Like, it looks like a lot of fun. I've never been either. But, you know, I've heard it's a lot of fun and it's just a cool thing where they get together for a couple days and, you know, get to see the people that they're going to be working with and get to talk about, you know, all that stuff and network and kind of not think about the fire pit that they're about to get thrown into as PwC interns. And, um, it sort of quietly went away this year. Um, I happen to just see something on Reddit, you know, that it's just, it's off. And apparently they're still getting a gift, so they still get to apparently choose from like an, I don't know if an iPad is better than Disney, but they're still getting something. Um, apparently we haven't confirmed that, but, um, yeah, it's a get together for them to kind of, you know, have fun before the, the work starts really, honestly.

David Leary: [00:18:21] It's part of the onboarding, right? They bring everybody to Orlando, they do an in-person onboarding, professional development, blah, blah, blah. And then one of those events during that week or whatever is a private theme park excursion. And now they've cut that out.

Adrienne Gonzalez: [00:18:34] And like, you know, meals and dinners and stuff. And I think it's, it's kind of good too, because I feel like it's a good bridge from college to work, you know, instead of going straight into that environment, you have this kind of buffer where you're expected to be professional, but you can still kind of, you know, chop it up with people your same age and your same experience level before you get to that next level of being fully professional. I remember years ago, I think that the only related scandal was when I think it was e y who, um, stopped providing alcohol some years ago. I seem to remember because somebody had an incident with alcohol or whatever, but, um, yeah, so now it's over. There's no, there's no impact.

Blake Oliver: [00:19:14] Well, why would PwC do this?

Speaker 4: [00:19:19] Well, um.

Blake Oliver: [00:19:20] Are they, are they. I don't think they're hurting for money. Right.

Adrienne Gonzalez: [00:19:23] I think that cost is certainly an issue. I think that revenues haven't been great the last couple years. I mean, they're certainly not hurting for money. That's, you know, without a doubt they've got money. Um, some people might say Paul Griggs, the current CEO, is just, you know, cutting, cutting, cutting until there's really nothing left. Um, honestly, I don't know why they would it, it does kind of signal that they can't afford it though, right. When they cancel something like that. Isn't that your first thought?

Blake Oliver: [00:19:50] Yeah. I mean that's what I always think. I mean, they're an accounting firm. So maybe they're maybe they're watching their expenses.

David Leary: [00:19:55] And actually this is an iPad.

Blake Oliver: [00:19:56] Go for it. Adam.

David Leary: [00:19:57] Okay.

Speaker 4: [00:19:58] I was going to say.

Adam Zaki: [00:19:59] How many iPads are worth admission to Disney. Sounds like a cost cutting effort to me. Probably probably cost you ten iPads to get into Disney. Right.

Blake Oliver: [00:20:07] But but but you know, the whole idea of doing a trip like that is to get the interns excited about coming to work at PwC as associates, getting them. It's their first. It's their first drink of the Kool-Aid.

Speaker 4: [00:20:22] And it's a.

David Leary: [00:20:22] Recruiting.

Speaker 4: [00:20:23] Thing.

David Leary: [00:20:24] Like I'm looking at a website right here for USC and it's for undergrad, prospective undergrad students. And there's a blog post that's titled my Summer as a PwC start intern. And it's a photo of this intern in this friends, coworkers in front of the Magic Kingdom. Like, yeah, like literally there's like when your interns are making blog posts about their summer experience. It's a recruiting tool. So now that's gone, nobody's going to write a blog post. I got an iPad. I got it right. Yeah.

Speaker 4: [00:20:51] Okay.

Blake Oliver: [00:20:52] Right. Here's a theory then. So maybe it's PwC is deciding we don't we don't need to do this special trip because we don't need to recruit as many associates.

Adrienne Gonzalez: [00:21:02] Well, that is true. They are cutting down their their recruiting numbers. Another interesting thing we've heard, um, that's sort of developing in the last couple of years. So it used to be if you were a Big Four intern, you were basically guaranteed to get an offer unless you did something really egregious or, you know, whatever. Um, that is no longer the case. Um, It's kind of emerging now where it's like, you're not guaranteed enough. First of all, they're cutting down their graduate numbers. And then also, you're not guaranteed an offer and you don't have to take a dump on the seniors desk in order to not get an offer. Like there's so much, you know, it's just you could be at a high level, but you're just not at this level. You know, there's just not enough room for you. So that's something to keep an eye on too. I think it's just further and shade of everything. Like everything just sucks now.

Adam Zaki: [00:21:52] I want to back you up on that. I have a good source of mine. I won't say which firm, but a recruiter in the big four recently just shared the same thing with me, that it used to be your job to lose. And now many more are doing exactly that. They're losing it on their own accord. It's their fault. They do something, they mess up or they're, you know, there's a lot of weird things even there's a famous stat out there that how many Gen Zers brought a parent to a job interview? Right? There's some crazy things these kids are doing, but it's funny you say that because I just heard that, that these jobs now are no longer yours to have, and that they're being more selective in who they hire. But all you hear is how they're cutting entry level hiring, but not, you know, new hires. But in the interim program, there's seldom information about out there about how, hey, it used to be if you get into yours, but I haven't seen that story out there of, hey, this is changing. Could be a good story for us.

Blake Oliver: [00:22:42] I want to come back and talk more about career paths, both at the associate level and at the executive level, because that's changing a lot. But first, let's thank our next sponsor. And that is Kanopy. Let me ask you something. How much of your day is actually spent doing accounting? If you're like most firm owners, 30 to 40% of your time is eaten alive by the work around the work. We're talking, chasing client documents, drafting the exact same emails over and over again, manual filing and trying to remember what a client said on a call last Tuesday. It's an administrative tax and it's killing your Near profitability. That's where canopy comes in. Canopy actually delivers on the all in one practice management promise. It handles everything from proposal to payment and all the steps in between smart client intake, tax workflows, month end, close automation and billing are all in one unified platform. No more duct taping ten different apps together. Plus, they have Canopy Coworker. It's a secure AI assistant that lives right inside the platform and actually does real work. It drafts context to where emails, summarizes client histories, takes meeting notes, and turns them into tasks automatically. Early access firms are already seeing what's possible when AI works inside your workflow instead of alongside it. To see what a truly modern automated practice looks like. Go to The Accounting Podcast dot ProAdvisor canopy. That's The Accounting Podcast dot io forward slash COPY. And now I want to put up a chart. And ironically, well, not ironically, but just completely coincidentally. It's part of an article written by Luke Fry on Cpapracticeadvisor, and he's the accountant in residence at Kanopy.

Blake Oliver: [00:24:29] He's a CPA, and the headline here is Diamonds May be a Firm's Best Strategy. How AI is Rewriting the structure of Modern practice. Artificial intelligence is changing. Who does the work, and that change has the potential to reshape the very architecture of your firm. And that's what I want to talk about, which is the future of the business model, not just of the big four, but basically any accounting firm of, of, of any size has traditionally been a pyramid type structure, we call it. You know, the pyramid, right? Like you go in and there's more people at the bottom layer. And as they move up the ranks, it's up or out. And that's been the way accounting firms have have been built for who knows how long. Right. And so there's an actual diagram of it. The change that We are seeing. And it is that pyramid getting the corners cut off. And so now it looks like a diamond upside down, like sitting on the face. And you've got the entry level and individual contributors on the bottom. And then you have middle management, which basically they are just inverted and they are the same size. And then it gets skinnier as you go up to senior management and C-suite. So an inverted diamond, if that makes sense. And I wanted to get your take on this. Adrienne. Adam. David, what do you think this is? This is what's going to happen. And if it does, what does this mean for the profession? Because this is a big shift.

David Leary: [00:26:07] I think at first, like, sure, it's going to be a diamond in this little transition time because there's still a huge layer of middle management. So if you're hiring less because you're using AI and the training there's this bottom is getting smaller, but eventually it's just going to be a smaller pyramid like that, that layer, it can't, it's not just going to keep going like that because where are the where does the fattest part come from? Where are the where, how does it get fat if it starts out skinny and small, like, like, like this could be a snapshot of what the migration of firms for a little while it will be diamond shaped, but it can't go on forever. It's just going to become a triangle again.

Blake Oliver: [00:26:42] So you're saying it's not sustainable.

Speaker 4: [00:26:45] It just doesn't.

David Leary: [00:26:46] Make any sense. If you bring in 100, how do you get 125 at the next tier?

Blake Oliver: [00:26:51] Well, no, it's it's supposed to be smaller at the next tier. Right. But I think.

Speaker 4: [00:26:55] That would have.

David Leary: [00:26:56] To be a pyramid. If you have 100, then the next tier is smaller. Yeah. The diamond, it gets bigger. It gets fatter at some tier.

Blake Oliver: [00:27:02] Well. Well, I think if you look at the chart let me try to put it up again. So if you look at the chart basically, I mean there's different ways you could like visualize this, right. But it is um in this version it is.

David Leary: [00:27:16] You're not sharing right now. Blake. Here it comes.

Blake Oliver: [00:27:18] Yeah. Here. I'm going to put this back on the screen. I had an issue with my screen sharing. So like, I put it back on and I can't zoom in on it for some reason. Oh, I know why. Because I'm looking at the wrong screen. Here we go. Oh, dismiss that pop up. So this is the chart. This is what I'm meant to be sharing the whole time. Here we go. So we've got sorry David. We've got here we go zooming in. Can you see this now.

David Leary: [00:27:43] I think it's.

Speaker 4: [00:27:43] Good.

Blake Oliver: [00:27:44] Okay. So you see like with the the area, the total area of the bottom layer is now basically the same size as the middle layer. So if you were looking at an accounting firm like this, basically the associates and all the staff would be the bottom layer. And then the next layer would be the managers and directors, let's say, or just managers, right. And, and basically it's, it's, you're getting the same number. So you would in this version of a firm, you would have like the same number of staff as you have managers. And my question is, if that's the case, like you have to be able to retain 100% of your staff to have the same number of managers that you used to. But firms don't do this now. So how does it work? Like that's, that's my concern, which is essentially the same as yours. David. I think.

Speaker 4: [00:28:37] Yeah.

David Leary: [00:28:37] Because like, how do you, if you have 100 entry level, the next level is going to be smaller, which now you're a pyramid, you're right back to being a pyramid. Like I just don't see it. Or it's a tower and it's all the same all the way up. But that doesn't work either.

Speaker 4: [00:28:50] Like Adam.

Adrienne Gonzalez: [00:28:52] Where's offshoring? Where's offshoring in that? In that pyramid? I don't see that anywhere.

Blake Oliver: [00:28:57] Oh yeah. Well, I guess I guess that's you do it either way. Right. Reduce the entry level people with offshore or AI. I don't know.

Adam Zaki: [00:29:06] The only.

Speaker 4: [00:29:06] Thing I'll.

Adam Zaki: [00:29:07] Go ahead please. The only thing I have to add is I think you mentioned it, this idea of the up and out model. We've written about this on the consulting side of the business@cfo.com, but it applies, like you said, directly to accounting to that may go away because if you're not providing value up front early on, they might toss you like why why keep you around for ten years and let you grow? If at the entry level, that's where the automation is happening, right? So those people who are maybe, you know, a slightly above average employee at the entry level that grow up in consulting or accounting, that that don't go on. They're not on the outside of the up and out, right? That stick around. I think those people will be less, there'll be less opportunities inside the firms to grow. And it'll kind of act as a talent filter. You know, if you're just above average, just slightly above average, you're probably not going to be able to stick around and hide in a place like McKinsey or Deloitte as easy as you would be in ten, 15 years from now. It's just my guess.

Blake Oliver: [00:30:03] Richie in the live stream said, and I believe this was in a comment on what I was talking about. Richie said. Uh, not necessarily. That assumes people stay in each rung the same amount of time. If you need the middle to be fatter than the bottom, you just keep people in the middle longer. So that sounds like what you were talking about, Adam. Right.

Speaker 4: [00:30:24] Like that. Yeah.

Adam Zaki: [00:30:25] Just like the idea of growing over in one firm over the course of your career. I mean, we see it like CFO in my world, the average CFO tenure is about three and a half years, right? Years ago, that was much different. Right? And so I think that the idea of the up and out being this idea of if you're not growing here or leave. I think it's, it's going to be very clear early on if you join a firm, whether or not they want you to stay, and if that's clear early on, then this up and out may happen much quicker. Yeah, I think it'll speed up the process of getting the the average talent out and be able to keep the great talent in-house.

Blake Oliver: [00:31:02] Right. But stuck at manager level.

Speaker 4: [00:31:04] Yeah. And not managerial level. No, no.

Adam Zaki: [00:31:07] Stuck at manager.

Speaker 4: [00:31:08] Level.

Blake Oliver: [00:31:08] Which Adrienne, I believe has actually increased even before all of this AI stuff that it used to be that to become a partner at a firm, it took like an average of, I don't know, a decade. And it's creeping closer and closer to like 20 years.

Adrienne Gonzalez: [00:31:24] Well, not to mention they, they put, they put another level in there of non-equity partner. You know, you have people that are sticking at director. What I think is going to happen, honestly, is I think the primary function of I'm speaking, you know, we write a lot about Big Four. So I'm speaking about maybe the bigger firms mostly, but I think they're just going to be salespeople. I think the technical aspect is going to be, you know, not as important because like you were talking about, you have the technical aspect covered by AI, automation, all this other stuff. I think it's going to be primarily sales. And that definitely then filters out. You know, you can put a bunch of trained accountants into a role auditing, accounting, and they don't necessarily have to have, you know, they it's a different skill set. But people who are good at selling and that's the priority. I think, I think it's going to completely change, you know, what even the firms are looking for and what they're training up and and you know who stays, honestly. But yeah, there is definitely there's another layer in the partner track. Um, and it is, it's even no longer guaranteed that you stick around X amount of time, you'll get a promotion, you know, just this last round of promotions, you had people that were stalling because you have people who don't want to quit. Attrition is too low, blah, blah. Um, so it's definitely changing for sure.

Blake Oliver: [00:32:44] I want to keep talking about the, um, promotion pipeline. Adam, you've got a story about the pathway to CFO changing and maybe becoming impossible for some folks that are currently on that journey. I want to get to that next. But first, let's thank our next sponsor and that is Thomson Reuters. David, do you have that one handy?

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Blake Oliver: [00:34:31] Let's talk about the pathway to CFO. One of the end jobs, right? Right. The what do you call it? Final destination as a as a CPA, as to either end up as a partner at a firm or a CFO. And that's changing. Adam, tell us.

Adam Zaki: [00:34:51] Especially the way you get there. And I will just say one response to what you just said. I think the the new landing spot is CEO. Lots of CFOs that we talk to now want to be CEOs. They want to take over their own companies and take that position. So the landing spot may be CEO for CPAs in the future. But in terms of this story, super interesting because this is the first time in my career@tff.com. The CFO told me the pathway that he took is gone, and if somebody replicated his career, he would never get to the CFO's seat. Right? This is somebody who started out in NetSuite as a senior analyst in PHP and a finance manager, then became head of finance at a tech company. And he said he basically developed his knowledge by building systems, right. And developing, developing, you know, the finance function of these businesses and the fundamentals is what taught him, not his education. And this is something we've talked about on this show. The three of us, me, me, you and David Blake is this idea of how entry level talent learns. And at the CFO level, if places like the big Four, going back to accounting, like we're just talking about eliminate entry level hiring. Where are the nuts and bolts of corporate finance learned for future CFOs? That is the question, because according to this CFO, he learned it all on the job. And I'm sure a lot of CFOs who I've interviewed would tell me that. Right. But he was very candid about this. And and I think he is in not a unique situation whatsoever.

Adam Zaki: [00:36:21] So there's a risk, right? What is the future? See, if I look like is it the obvious question? But I think the deeper question is like, what does it take to get there? Like if you are in public accounting now and you say, I'd love to be the CFO of a publicly traded company in the year 2035, the path to get there is not clear. And it was 15 years ago. Right. If you wanted that job, the the map was pretty much cut out for you as long as you, you know, followed the protocol. But that is not the case. So I do this for a living, and I couldn't tell you what the CFO of ten years, what in ten years from now, what their resume will look like, right? I mean, it's dependent on company, but I think there's a real issue in terms of what makes up the fundamentals of the future CFO, because it's either an Fpna CFO or an accounting CFO, kind of like bisected in terms of experience, right? There's two career paths you can take, but what does that mean in ten years from now? I don't know. And so I did this super interesting interview. It's with a company called Tika Metrics. Brian Beaupre is his name. He's the CFO. You can find it on cfo.com, but it just really stuck with me because we're changing the way people traditionally built their knowledge in corporate finance, and it's going to impact the executive level. And I don't know, I mean, I try to talk about it, but I don't know if it's talked about enough.

Speaker 4: [00:37:39] Because.

David Leary: [00:37:39] Right now we talk about how we need to have human oversight or human in the loop for AI. And if somebody has experience, they could kind of recognize that AI might be wrong or it's not taking the right path. But that experience was gained pre AI for decades of in the trenches. So now the the next generation is not going to have anything in the trenches. They've only used the AI. What are the do we just lose human in the loop and we just take AI? It's just that's the only way we do it because we don't have any expertise of human in the loop in the future.

Adam Zaki: [00:38:12] Yeah, I don't know. I mean, would you would you trust a mechanic who's never worked on a car but could tell you everything about the engine? Like I wouldn't. Like that's the thing. It's like, do you what is the value? We talked about it before. Like what is the value of knowledge now with AI? Is it it's obviously gone down, but is it it's gone down so low to the point where it's it's almost an afterthought. I would say no. But the way that the, the movement of incorporating these into systems, you would it says, yes, but to me, I say, you still need that, that fundamental of, of, especially in this industry of the knowledge of how systems work and in order to develop them. And at the CFO level, if you don't have that, who knows what the CFO in ten years will look like.

Blake Oliver: [00:38:56] So maybe the. Maybe your boss will be a an AI someday. Uh, currently I just looked this up. Currently, only 15% of workers are okay with swapping a human manager or a CEO for an artificial intelligence system. That's still a pretty hefty number. 15% of people would be okay working for an AI instead of a human.

Adrienne Gonzalez: [00:39:23] These are general. These are general.

Blake Oliver: [00:39:25] Everybody. Survey of everyone. Yeah. Everyday workers.

Adam Zaki: [00:39:28] How many people in that group hate their boss?

Speaker 4: [00:39:30] Right.

Adam Zaki: [00:39:30] That's the question I would ask.

Blake Oliver: [00:39:32] I mean, maybe it could be an upgrade. Um, but I don't know. You might you might be held more accountable. It was a survey of like 1400 adults in the United States by Quinnipiac. And I was in March of this year. Um, I also want to highlight another stat related to what you were talking about, Adam, which is, um, Uh, the, uh, it was the percentage of CFOs who came up as CPAs because it used to be years ago that most CFOs were CPAs. It was 55% in 2012. And that dropped to about about 40% in recent years. And it's been on a decline. So where did those CFOs come from instead of accounting? I think like you said, finance.

Adam Zaki: [00:40:30] Yeah. Investment banking.

Speaker 4: [00:40:31] Consulting. Yeah. Consulting.

Blake Oliver: [00:40:34] And so.

Adam Zaki: [00:40:35] Sorry.

Blake Oliver: [00:40:36] No, no please. I. So yeah, that then that begs the question. Okay. Well, uh, if if now consulting is being eaten by AI where the, where the future CFO is going to learn what they need to know.

Speaker 4: [00:40:50] So that's a great question, right? It is.

Blake Oliver: [00:40:53] Uh. And if our listeners have any ideas, we want to hear from you in the chat here. All right. Where do we go from here, Adrienne? Training the next generation. Have we talked about that enough yet, or do you have more on, like, how we actually train people? Oh, and I want to highlight a comment here, um, that I saw. This is, uh, one of our loyal listeners, HK geek HK says there's an influx of individuals skipping entry level. If AI can do more for us, then you gain the knowledge and start right at level two. I have some questions about that. Like just can you just skip level one? Can you can you just.

Adrienne Gonzalez: [00:41:35] I think that's the that's the whole question here. And I think I, I'm kind of with I think Adam is kind of hitting on it, but I'll, I'll say it more enthusiastically. Like, is this being talked about enough? Are we talking about, you know, KPMG is talking about AI is going to do all the cash testing. There was, you know, comments a year before that from it might have been them talking about, you know, all our cash testing is done offshore. So, you know, the associates don't even touch that anymore. You know, the onshore associates, I see it talked about. But what is the plan here? Because time is going to fly by and suddenly we're going to realize we have all these, you know, young people who came into the profession they didn't learn on. And we're talking about rote sort of repetition of tasks, right? That's how they were trained in the past. It was doing it over and over again is how you learn it. Okay. What is the alternative? Because now we can't be talking about, you know, what should we do about this? Like, it needs to be discussed now. And I've seen as an article in Wall Street Journal about how, you know, KPMG is doing like this AI boot camp that's there. They're going to teach critical thinking.

David Leary: [00:42:43] I mean, it's muscle memory, right? People aren't building up the muscle memory. I remember when I came up through tech support and you know, Intuit would put us in six weeks intensive QuickBooks training. Then you get out there and you start taking phone calls and you suck for nine months and think you have to. You have to build the muscle memory. You just can't take the course and be like, I'm at level two now. I know the knowledge you you don't have the muscle memory of the knowledge. You just there's, there's a gap. And you're right. Like this is, this is going to bite us. It's going to catch up here soon, ten years from now, five years from now, I don't know.

Speaker 4: [00:43:13] Well, I think.

Adrienne Gonzalez: [00:43:14] Five years from now it's gonna.

Blake Oliver: [00:43:15] Ai powered simulations. Is that the answer? I think, uh, KPMG right. Working on that.

David Leary: [00:43:23] So you're going to play.

Speaker 4: [00:43:23] Games.

David Leary: [00:43:25] Basically.

Speaker 4: [00:43:25] Like.

Speaker 6: [00:43:25] How do you.

Adrienne Gonzalez: [00:43:26] But how can you the question is, and maybe this is we're coming at it from the perspective of older people. So maybe we don't get it because to us, the way to understand it is to do it. And maybe there is some other way. Maybe simulations are the answer, but can you teach critical thinking in young people if they haven't been exposed to the you know how? And that's the question that I think is is unanswered. I don't think you I don't think you can.

Blake Oliver: [00:43:51] Well, with simulations that I've experienced right in the past, I would say no, it's it's not enough. Like the real world, right. Like the simulations that we all do to study for the CPA exam and those.

Speaker 4: [00:44:05] You're.

Speaker 6: [00:44:05] Triggering a lot of people right now.

Adrienne Gonzalez: [00:44:07] Bringing up simulations.

Speaker 4: [00:44:08] Yeah.

David Leary: [00:44:08] Like we do all the simulated trainings for sexual harassment. And that still happens at the big firms. It doesn't nobody learns from simulations.

Blake Oliver: [00:44:15] That's true. That's not exactly a great a great case study there. Yeah. The simulations that you do for the CPA exam, they're they're not real world at all. Like you actually, you know, like the simulation is like create the set of financial statements and then you have to, you know, manually create like, you know, an income statement and balance sheet from a statement of cash flows from a trial balance. Like nobody does that in the real world anymore. The simulations are not real world. Or it might be like you got five emails, you know, now you have to do this, this job, I don't know. Yeah, maybe if they can make them realistic enough. Right. But that's that's the tricky part. How do you make something, how do you actually educate people to do real world work when like academia is so not real?

Adrienne Gonzalez: [00:45:02] Hopefully you don't have any educators in the chat right now. I think, I mean, it wasn't KPMG kind of trying to do that with the whole metaverse thing. Wasn't that kind of going to be close metaverse.

Blake Oliver: [00:45:12] Oh, you're triggering metaverse, Adrienne, with that metaverse stuff. I actually had I actually had to attend an online virtual conference in the metaverse during Covid.

Speaker 4: [00:45:22] You did.

Blake Oliver: [00:45:23] And I think that.

Speaker 4: [00:45:24] You spoke.

David Leary: [00:45:24] At it, I think even. Right. Didn't you have a avatar and you spoke at this conference?

Blake Oliver: [00:45:27] Yeah, yeah. It was like you walked around. Um, it was like, uh, what was that? Was that the original metaverse like thing like.

Speaker 4: [00:45:35] Roblox.

Blake Oliver: [00:45:37] Before that even? But yeah, let's say it's like you're walking around Roblox.

Adrienne Gonzalez: [00:45:40] Oh, second.

Speaker 4: [00:45:40] Life.

Blake Oliver: [00:45:41] Second life. Yeah. You're walking around. And then in order to talk to to somebody, you have to come within a certain proximity to them, and then you can hear them and then you can speak. And the whole thing was just so bizarre and weird and uncomfortable.

Speaker 4: [00:45:55] Please tell me.

Adrienne Gonzalez: [00:45:56] Video of this exists somewhere because I am dying to see.

Speaker 4: [00:45:59] It.

Blake Oliver: [00:46:00] I hope not, please.

Speaker 4: [00:46:01] It might be an episode.

Blake Oliver: [00:46:02] Go dig it out.

Adrienne Gonzalez: [00:46:04] I'm going to go look for it. I'm going to make it my mission to to find it.

Blake Oliver: [00:46:08] All right. Let's thank our last sponsor for this episode. Last but not least. And it is Cloud Accountant staffing. Are you tired of the endless search for qualified accounting talent? You're not alone. Growing accounting firms are struggling to find available and affordable team members when they need them most. Cloud accounting staffing has the solution with their revolutionary candidate portal. Unlike traditional staffing agencies that waste your time with sales calls, paperwork, and deposits, the Cloud Accountant Staffing Candidate portal gets you instant access to highly vetted, qualified accounting professionals. There's no waiting, no hassle, just top talent right now. What makes this different? Speed and simplicity. While other firms make you wait weeks or months with cloud account and staffing, you could interview someone as soon as tomorrow. Their boutique support ensures you're getting quality talent that's both available and affordable. Exactly what growing firms need. The candidate portal puts you in control. Browse live candidates, make selections on your timeline, and build your offshore team without the traditional headaches. To find, review and book interviews with potential team members, all in less than ten minutes. Head over to The Accounting Podcast dot com slash SaaS. That's The Accounting Podcast dot promo forward slash CAS, and that's our last ad of the episode. So it means we're not getting paid for anything after this, so we can wrap up whenever we like. All right.

Speaker 4: [00:47:32] David. Yeah, you take it. Go for it.

David Leary: [00:47:35] I don't know if this is a silly story, but it's it's kind of what are you thinking? So there's a company called BigQuery their kind of a crypto company. And they, they build investigation agents and they target them at law enforcement and criminal investigations to track money across over 40 different blockchains. And so, so it's anti-fraud fraud detection tools. Well, the co-founder and former CEO has now had a lawsuit filed against him for allegedly siphoning $5 million from a company accounts. What caught my eye is right before he, uh, left, he deleted 194 financial records from QuickBooks. So like, they're literally in the business of fraud prevention, financial fraud prevention, and they're committing financial fraud. It's, it's, I can't get my head around it completely.

Adrienne Gonzalez: [00:48:27] That's an insane story.

David Leary: [00:48:29] Yeah. So the lawsuit was filed in Manhattan Supreme Court in June of 2026. It claims that he deleted 194 financial records from QuickBooks right before resigning in October 2025. 194 expense and bill records deleted from QuickBooks. And apparently he still has the company's banking logins and won't return them either. Like, this is the problem of having people with too much control. And, but, but they're literally an anti-fraud, like an, uh, criminal investigation software for crypto, but it doesn't.

Blake Oliver: [00:49:02] And that is the correct use of the term irony right there.

Speaker 4: [00:49:06] Yes.

Blake Oliver: [00:49:08] All right. I want to touch on some listener comments. We got so many listeners who have joined us live. Thank you for joining us. Uh, our says that's an amazing milestone. Congratulations to Blake and David here. Since episode one, you've been listening since since episode one. I don't even think I've been listening since episode one. We've got boring accountant here with five coffee emojis saying Happy Friday. Happy Friday to you. Oswego Sharks says congrats on 500 episodes. Thank you. And Carl says congrats on the 500 milestone. I don't often make it to the live streams. Excited to be here. We are happy to have you too, Carl. Congrats on 500. Coby. Congratulations. Uh, let's see 500 and going strong from Melanie. Awesome. Thank you so much. David says way to go guys. Let's see. Oh, here. Linda says my absolute favorite. This is her favorite episode. My absolute favorite. And the one that got me hooked was the two part episode that you did on the employee that stole the payroll tax withholding or something like that. It was fascinating. I remember that, David. That was my payroll HR.

Speaker 4: [00:50:21] My.

David Leary: [00:50:21] Payroll HR.

Blake Oliver: [00:50:23] That was, uh, do you remember that? Do you remember the gist of that story?

David Leary: [00:50:27] Yeah. So he was basically it's old school kiting, right? He's moving funds to the one thing, but he was trying to get funds because he runs some basketball camps or something. But he also had this payroll company. And what they did is he modified the ACH. So instead of the. So he with pulled the ACH from the employers. Right. Pulled all the money and the tax liability, pulled it all in. But then instead of moving it to the IRS and to the employees, bank accounts kind of just funneled it to his own account, right? Basically.

Speaker 4: [00:50:58] And he was what he did.

Blake Oliver: [00:50:59] He was check kiting until it got so large that the, the payroll accounts overdrafted. And then nobody.

Speaker 4: [00:51:07] Thousands of companies.

Blake Oliver: [00:51:08] That was a lot of companies that didn't, a lot of people not a payroll.

Speaker 4: [00:51:11] And it was extra.

David Leary: [00:51:11] Complicated because there's another company that actually moved the funds. And then what they put money into people's bank accounts like Wells Fargo, etc. and then they realized, wait a minute, we just got hosed on the back end. So they tried to pull the money back so people would see their paycheck go in their bank account and then be pulled out of their bank account. And it was a big story.

Speaker 4: [00:51:29] It was.

David Leary: [00:51:30] A really big.

Speaker 4: [00:51:30] Story.

Blake Oliver: [00:51:31] Karl says. I'm in Fresno, California, and I even have memories of traveling to see one of my groomsmen in Oklahoma and listening to one of those episodes while on a run around his neighborhood. One of the MyPayrollHR neighborhoods. That's great. Linda says, my husband and I were on a driving vacation in that payroll episode kept us so entertained while driving. Um. Let's see. Oh, Carl said, uh, this is regarding the, uh, hourly billing conversation. Adam. Carl says, I bill flat fee for tax prep and planning. I still have so many seemingly future focused people, clients, financial advisors who still make comments about my effective hourly rate. It's so ingrained.

Speaker 4: [00:52:20] And have you.

Adrienne Gonzalez: [00:52:21] Guys had Ron Baker on the podcast, The King of the Kill the Billable Hour.

Blake Oliver: [00:52:26] We must have at some point. I, I'm almost.

David Leary: [00:52:29] In person at a conference.

Speaker 4: [00:52:30] We've talked. Yeah.

David Leary: [00:52:31] We've talked.

Speaker 4: [00:52:31] No on, on the podcast. Yeah.

Blake Oliver: [00:52:34] Well, and, and you know, Ron, he makes all the excellent arguments logically as to why it makes no sense. And then people keep doing it. And it's that ingrained behavior. I think it has something. I think it's something that is like, like Carl said, ingrained in us when we go into any job as a, as a first year where we have to fill out a time sheet.

Adrienne Gonzalez: [00:53:00] Time sheets. Yeah.

Blake Oliver: [00:53:01] You, you do it long enough and you know you hate it at first, and then you get used to it. And then in a perverse way, you start to enjoy it. And I think here I'm going to I'm going to I'm going to play the other side of this. I'm going to say what I like about a time sheet. Let me know what you think if you agree. So so here's, here's why timesheets are great. It's because I as an employee Know that if I fill up my time sheet with enough billable hours for the right clients, I've done my job. I can look at that timesheet at the end of the week and say, I hit my target. I, I can go off for the weekend hopefully and rest and know that I was I was successful. It is a very easy metric for me to see my own success or failure.

David Leary: [00:54:00] And to show how ingrained it is in people. We are using some time tracking software at earmark for some employees, and Blake is obsessed about it. He's obsessed with tracking other people's time kind of on like, and it just shows you how ingrained this is, arguably somebody who is against it. And arguably for fixed fee pricing and killing the billable hour. Blake is still obsessed with timesheets. Like it's so in his DNA now because he worked at accounting firm. He went down that career path.

Blake Oliver: [00:54:27] Well, you know what it is, David. It's that if you don't have something else, it's the best thing you've got and you need something you. If you if you're not going to be able to evaluate outputs, then in tracking inputs, you have to do it right. And we have remote workers. We have we don't have an office. We don't know when they're working or where they're working. So if they're not tracking their time automatically, it does it automatically for them, right? Then we really have no idea what they're doing.

Adrienne Gonzalez: [00:54:59] So but is there a is there a task that they're doing? Like that's the question. Right? Can you you can't evaluate the task and say, this task that I gave them was completed.

Blake Oliver: [00:55:09] Well, is that we could because these are developers of the earmark app and CPE course reviewers, and we could develop a system to evaluate their contributions to the team. But like turning that into a metric like how to quantifying the tickets that they have closed, or the code that they have contributed or the features they have built. That's hard, right, David? I mean, you run product.

Speaker 4: [00:55:39] Yeah.

David Leary: [00:55:39] It's hard because you could count how much code they write. Well, somebody could write five lines of code that's better than somebody else's 200 lines of code.

Speaker 4: [00:55:46] Right?

David Leary: [00:55:47] Right. So you can't you.

Speaker 4: [00:55:48] Have to or.

David Leary: [00:55:49] It's really hard to measure. And you're at times an easy, very black and white, easy way to measure something. It's very, very easy.

Blake Oliver: [00:55:55] And somebody might spend months working on a feature that like is unimportant, right? And somebody might ship a major feature in a week. But if we just call them both features, it's equal, right? So I think that's now that I have both like filled out a time sheet and then saw the need to manage people with them. Like I understand why accounting firms don't do anything else because it's hard. You have to really dedicate the time to it, create the system for it. And I don't know when you don't have a lot of time. Like we don't have a lot of time in our startup. It's like, that's the last thing we want to figure out how to do, but we should do it. That's the funny part. We know we should do it.

Adam Zaki: [00:56:37] Well, that's what I was going to say, Blake, is how much do you want to pay people to log their time? Right. It's got to be easy. I know you're a business owner. You want to know what your employees are doing. But from an employee perspective, I mean, my output is you can Google it, right? It's pretty easy for my job to say whether or not I'm doing my work. But for somebody who doesn't have output like that, it's got to be a system where it doesn't take up, you know, three hours of my week to tell you what I'm doing. Right. And that's what time sheets in my experience at previous jobs were, right? Like, how much time am I going to spend telling you what I'm doing? I could be doing what I'm supposed to be doing.

Speaker 4: [00:57:10] So here's.

Adam Zaki: [00:57:10] What that's the.

Speaker 4: [00:57:11] Battle.

Blake Oliver: [00:57:11] So here's what we do. That that's different is we use automatic time tracking. So like when you log in and start working on your computer, it just tracks your time. And if you're active working, it counts it. So you don't have to like keep tabs in a, you know, in a spreadsheet or in software or whatever yourself. It just does it. And the other thing is we don't make our people allocate their time to different customers or projects. It's just, how much were you active? So, you know, that is that's sort of one way, one possibility, you know, a way for firms to, you know, reduce the administrative burden. And I don't know if anyone's listening, um, who's doing this. I mean, there are plenty of firms that track time down to the individual client and individual engagement. I think that's pointless in so many ways. Like it's too much detail. I think that firms would be much better off tracking at a higher level and not making your people. That was the part I hated, right? Having to allocate my time, you know, in six minute increments to A client or a project.

Adam Zaki: [00:58:26] Well, let me ask you then. What is your what if your best developer was only logged on for two hours a day? Would that upset you?

Adrienne Gonzalez: [00:58:33] This is so this suddenly turned so serious.

David Leary: [00:58:35] I mean, that could that could be true. But here's my observation that I've seen in this. Asking somebody to use some tool to, to track their time, which is a relatively simple ask. And I think it's almost like a leading indicator. If you can't seem to accomplish that, what else are you not accomplishing? So this hypothetical atom, honestly, my belief is we would never have that issue because the best developers also does everything else they're asked to do. Does that make any. Does that make any sense? Like, yeah, the tracking would be aligned. Like it would be perfect time tracking from the best developer because I think it goes hand in hand. It, it's really a leaning in. If, if somebody can't fill out their time sheet correctly, they probably can't do anything else correctly. It's kind of my point of view on this.

Blake Oliver: [00:59:20] Here we go. 500 episodes and we are completely inverting the discussion on the timesheets. I guess they're essential. Necessary? We're total hypocrites. Look at where we've been. Look at where we've come. I want to keep highlighting some more comments before we go. Uh, this is regarding, um, let's see. Oh, this here's another congratulations from Shelly. Uh, congrats on 500 episodes changing careers. And so glad I found the pod early on in this journey. Learning a lot and having fun doing so. Nightlight says knowledge is power. Uh, what was that in relation to? It must have been the AI stuff, right? Knowledge is power sometimes, but sometimes like like bad knowledge is the opposite. Like like listening to a teenager repeat information that they got from YouTube, like influencers. Wait, are we on? Oh, no. We're on YouTube right now.

Speaker 4: [01:00:21] Yes.

David Leary: [01:00:21] That's us. Don't repeat us.

Blake Oliver: [01:00:25] Don't, don't don't take anything we say as fact. Do your own research.

Adrienne Gonzalez: [01:00:29] Do your own research.

Adam Zaki: [01:00:31] You can find yourself on one of Jasmine Deutch's videos. Blake, if you talk out of turn. So be careful.

Blake Oliver: [01:00:36] I mean, that would be a milestone for sure. Uh, I'd probably get more impressions being in one of her videos than our entire podcast ever has. Boring accountant life says, can I onshore my accounting work to Blake? No. I'm retired, thank you. Though, uh, Ray says, uh, regarding the Diamond Org chart, David is right. Regarding the mathematical logic, the solution is to snipe experienced staff with 2 to 5 years experience. Uh, so. But like sniping, you know, that's expensive, right? You gotta, you gotta offer people a lot more money and there's no guarantee they'll stay with you, right? Sniping. It just it just shifts the problem elsewhere. Anyway, um, here's, here's Richie's comment about AI. I'm a CPA with no math degree. Ai helped me solve a 40 year old math problem and get published. This took audit, not math, verify claims, etc. will CPAs do far more varied work because they can audit AI. Oh, I like that. I have not. I have not thought about that. Maybe auditors, because of what we are, what auditors are taught are are well positioned to be AI users because they're skeptical.

Adrienne Gonzalez: [01:02:01] Supposed to be.

Blake Oliver: [01:02:03] Supposed to be skeptical. Uh, who else? Boring accountant. Life says, can I get an AI babysitter? Chatgpt and Gemini can't last four minutes with my six year old before having a mental breakdown. Yeah. Why don't we have, um. Why don't we have, like, AI robot child care at this point?

David Leary: [01:02:23] You don't even need that. They've made YouTube. You have YouTube made Furbies.

Adrienne Gonzalez: [01:02:28] They're making, uh, little stuffies that have AI in them. Yeah. I just saw them there.

Blake Oliver: [01:02:32] Oh, no.

Adam Zaki: [01:02:33] Wait. Before we wrap, can I ask a listener question? Something we didn't get to that I wanted to ask. I need an update on this. I'm sure other listeners do. I wrote a story about this on cfl.com. It did so well. What happened with you and Nasba? We've kind of been left out in the open on the how this all ended. Can you share with us what happened, please?

Blake Oliver: [01:02:51] Yeah, absolutely. So, um, well, the short story is that I spoke at a conference and I gave my typically unvarnished opinion on how CPE courses are developed and taught and administered by the National Association of State Boards of Accountancy. Nasba. And I did not intend for any of my comments to be perceived as negative or, or insulting or whatever it is that they didn't like. But after I gave that presentation, I got a letter from Nasba saying that my conduct was unprofessional and not in compliance with the standards, uh, agreement that I signed as a nasba sponsor, which says that I can't make negative. I forget the exact terms, right. But essentially I can't make negative comments about Nasba. And, uh, they threatened our sponsor license. They threatened to take away our ability to offer Nasba. Cpe. And so that was like a tough moment because this is our business. It's the existence of earmark. It's everything that we've worked for for five years potentially on the line. Do we just say, okay, I'm not going to speak out of line anymore and ask for forgiveness? Or do we stand up for our rights. And well, you know me, I, I.

Speaker 4: [01:04:19] Stir the pot.

Blake Oliver: [01:04:20] You know. Yeah. I can't help myself. And so, um, I wrote them back. I first of all, I shared their letter on the air with our listeners, um, and with you, Adam and, and you wrote about it and thank you for sharing that. A lot of people came to me and said that they don't agree that this is acceptable, that Nasba shouldn't be acting like this, that they're a bully, you know? Uh, and then I wrote a letter back to them and I basically said that, uh, you know, I told them I didn't intend my comments to be negative, that it was trying to be constructive to, to help move CPE forward, to modernize education, which needs to change. I think anybody who's taken CPE webinars understands the issues with that system. And, um, and I said, I'm not going to, I'm not going to apologize and I'm not going to change what I said, because I don't believe that a nasba has the authority to regulate the speech of CPAs to essentially violate my First Amendment rights, because no board of accountancy could do that. If a Board of Accountancy tried to tell a licensed CPA what they can and cannot say, that would be instantly struck down as unconstitutional.

Blake Oliver: [01:05:42] And a lawyer, an attorney for a large organization that fights for the rights of professionals like CPAs, reached out to me and offered to sue Nasba. I don't know if I mentioned that to you, Adam, but wow. Yeah. And so then I had to decide, you know, do I want earmark to become party to a lawsuit against the National Association of State Boards of Accountancy? Because I do believe that what they did was unconstitutional, even sending the letter is a suppression of speech, because it forces me then to decide the next time I'm speaking about CPE, whether or not I will be honest because my business could be shut down. Um, I decided not to do that because while I want to help Nasba move forward, um, well, I, I do want to help Nasba move forward. I want it, I think it, it has value, it's necessary and it needs to change. But I don't think that like going to war with it is the way to do that.

Speaker 4: [01:06:52] So good.

David Leary: [01:06:52] For ratings.

Speaker 4: [01:06:53] Though.

Adam Zaki: [01:06:54] I was going to say what she did. It would have been a great story for me. I wish I did so.

Adrienne Gonzalez: [01:06:57] I would have loved it personally, but I understand where you're coming from.

Speaker 4: [01:07:01] Me too.

Blake Oliver: [01:07:01] It was that that would have been a step too far. So I, I, I used my better judgment and didn't do that. Um, and thankfully they read the letter and they resolved it without, uh, without any issue. Basically, they considered the matter resolved and we're not going to have another problem with them, I hope.

Adam Zaki: [01:07:20] So water under the bridge. Nice bow on that story, huh?

Speaker 4: [01:07:23] Yeah.

Blake Oliver: [01:07:23] And it was great because I'd actually never spoken to anyone at Naspa before. And they reached out and I got to know them. You know, it's funny. They sent that letter without even talking to me. And so, um, now I am connected with some people there. And I do believe that there are, you know, in any large organization, there are people who are holding it back and there are people that want to move it forward. And I do believe there is interest in moving it forward. And I'm I said, I'm happy to help in whatever way I can.

Speaker 4: [01:07:56] So, and.

David Leary: [01:07:57] And I, this story really parallels what our five year journey has been, especially with AICPA and the 150 hour rule and the state societies. It started out but you kind of got on the soapbox big and heavy, and AICPA didn't like it. And then we'd slowly get the state societies. Like there'd be little buckets of people that, yeah, we need to change, keep doing it. And they encourage you, encourage us to like draw more attention to it. And ultimately, we just gave it a voice. Right? But that was kind of the same thing as like, we're raising the awareness of the ways nasba should change in the same way we kind of did with 150 hour rule, I would say it's very, very, very parallel the journeys.

Blake Oliver: [01:08:36] I just want to hit on a few more listener comments before we go. I know we're way over the hour, Adam and Adrienne. So if you need to drop, please don't let me hold you. Um, Tino says, I remember being a guest on this show way back when, when Blake first moved to Arizona and had questions about multi state income taxes. That was over 200 episodes ago. Uh, let's see.

Adrienne Gonzalez: [01:09:00] Blake, you used the show to get tax advice on multi-state. Tax advice after moving. Is that what that comment said?

Blake Oliver: [01:09:08] I mean, you know, I'm just um.

Speaker 4: [01:09:11] I'm I'm just asking.

Blake Oliver: [01:09:13] Yeah. No, it's it's like, uh, well, what is it? It's a trope, right? That like accountants are always getting asked for free advice. So if I didn't do it myself, then, you know, I'm missing an opportunity here. Let's see. Fluffy Hammer Bookkeeping says regarding the AI training VR headset. Fill out this 1040. That that, you know, you want to talk about the acidification of the world. Adrienne, can you imagine going to work at your cubicle and putting on a VR headset and then and that's your cubicle inside the cubicle.

Speaker 4: [01:09:49] But you.

David Leary: [01:09:49] Have to actually go in person to.

Speaker 4: [01:09:51] Person to do it.

Adrienne Gonzalez: [01:09:52] Of course you would have to. So everyone's in cubicles, but wearing the headset.

Blake Oliver: [01:09:56] Wearing the headsets, not able to see each other or talk to each other.

Speaker 4: [01:09:59] And you don't get.

Blake Oliver: [01:10:00] That looking at our Zoom screens, right?

Adrienne Gonzalez: [01:10:02] You don't get a fleece. When you join the firm, you get like an outfit for your avatar or something.

Blake Oliver: [01:10:09] Yeah, you have to pick one. You have to buy it with credits that you purchase. Yeah. From, from your like.

Adrienne Gonzalez: [01:10:16] You know, we're joking, but I don't think we're that far off from that, honestly.

Blake Oliver: [01:10:20] Sadly, it could be coming. The the dystopia. Is it going to be a dystopia or is it is it going to be a utopia of AI? As with everything, maybe it'll be both.

Adrienne Gonzalez: [01:10:33] A little bit of both.

Blake Oliver: [01:10:34] A little bit of both. Um, all right. Too many comments to get to them all. Well, no, I got to get this one last one. Hazardous items says Blake needs to start his own Maga movement. Make accounting great again. I have a funny story about that. When I worked at Floqast, I made a hat. I made a red hat that said make Accounting Great again in the exact same font as the Trump hats. The Maga hats and, um, I had it, you know, it was like it was a joke, right? Uh, and I had it on my desk or like above my desk and people could see it walking by. Uh, but the problem was people don't read. They just saw the red and the white. They just saw the hat and they they didn't read it.

David Leary: [01:11:25] Well, I'm sure they tied it back to you being the president of the Young Republicans in high school and stuff. And they tied two and two together. Blake.

Blake Oliver: [01:11:32] I did start that club. But, you know, that was a different era. I just want to say I'm I it was, uh. God, we're like, we're going on three decades now. Different era in politics anyway. Let's wrap it up. Adrienne. Adam, thank you for all the hard work you do, reporting and and summarizing and being just an incredible resource for me and David to be able to do this show, because if it wasn't for you, this show wouldn't exist. So thank you.

Adam Zaki: [01:12:09] Thank you.

Adrienne Gonzalez: [01:12:11] I feel that way about you guys as tweets. Sometimes when you tweet out stuff, I'm like, oh, that's something interesting that I didn't see. You're like my, you're like my Google news sometimes.

Blake Oliver: [01:12:20] Happy to return the favor. David, I just want to say to you personally, it has been an honor to do 500 episodes with you. Uh, it is the longest, uh, personal or business relationship. And I, you know, I just, uh, really appreciate you. And this has been so much fun.

David Leary: [01:12:37] It is. It's the highlight of the week every week. Uh, somebody called us out, though, that this is the only work we do all week. There was a comment that.

Blake Oliver: [01:12:46] They are the only work we do.

Speaker 4: [01:12:47] Honestly, we only.

Blake Oliver: [01:12:49] Work 90 minutes a week during the podcast and nothing off air. Uh, if only I would love to spend all the time on this podcast. But we have, we have other jobs to do, like bringing you earmark the app that gets you free CPE for listening to podcasts like this one. Go to earmark.app in your web browser, or get the free earmark CPE app on the App Store. Create a free account. Earn one free CPE per week. And if you want to support the work we're doing and get unlimited on demand podcast based CPE, subscribe for the low price of $200 per year. It's the best deal in CPE. We're crazy for pricing it that low. What are we doing, David? I guess it's a good thing we have this podcast to pay the bills. Thank you everyone who joined us live. Thank you to all of our loyal listeners who have supported us over the years. We appreciate you. Thank you. And we will see you around here next week for our 501st episode. Bye, everyone.