The Accounting Podcast

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Blake Oliver: [00:00:05] Ai is auditing s biggest disruption since the corporate failures that led to the PCB's creation, which was Enron, and the separation of audit and consulting work. It's the biggest thing since Enron.

David Leary: [00:00:18] Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:25] Hello and welcome back to the Accounting Podcast, your weekly roundup of news in the profession. I'm Blake Oliver.

David Leary: [00:00:31] And I'm David Leary.

Blake Oliver: [00:00:32] And David today. Lots of news to cover. I've been tracking Nvidia, the AI stock market bubble. And Enron came up in the news in regard to Nvidia. Michael Burry, who predicted the financial crisis. The mortgage backed securities crisis, says that Nvidia's new 500 billion AI funding deal has shades of Enron. And I want to talk to you about that, because we've been talking about the cyclical financing arrangements on this show, and there's a lot there.

David Leary: [00:01:05] And you can't like, you can't ever say Enron and not think accounting like they're forever tied. It's the same thing.

Blake Oliver: [00:01:11] Oh, it's like the number one case study that you learn in accounting when it comes to like financial fraud and manipulation of, of accounting and financial accounting standards and all that.

David Leary: [00:01:21] And half the thing, half the things that have to occur compliance wise are because of that event, right?

Blake Oliver: [00:01:26] All the Sox compliance, they have to do all of that.

David Leary: [00:01:29] Even existing right is because that's right.

Blake Oliver: [00:01:31] That's right. So the fact that like this looks like that little sketch, um, E is saying that they have over doubled their productivity for audits. So audits are now 125% to 150% faster. But they're not having to cut fees. We've got a case of ancient tax fraud in ancient Rome. You've got coverage of the Pcob inspection reports from 2025. It's gotten better. Fincen ending BOE reporting. Tether finally got a full a full audit, and QuickBooks Live is dead. And we're going to try to get to all of that in this episode. But first, David, let's thank our sponsors.

David Leary: [00:02:14] Our sponsors. This week. We have digits on pay. Thomson Reuters and cloud accountants staffing. Let's be honest, accounting software hasn't changed much in decades. The prices keep going up, but all the software still expects you to do all the work. Digits is different. Digits is the world's first AI native general ledger with built in AI agents trained on your firm's standards across every client. In your book, they code transactions, prepare schedules, reconcile accounts, run quality checks, even chase clients for open items. So your team moves out of prep and into reviews advisory in the work that actually grows your firm. And because everything runs, runs inside one platform, your ledger, reconciliation schedules, reporting bill pay, client collaboration. There is no more stitching together six tools just to close one client's books. Firms on digits are reporting a 70% gain in workflow efficiency, shipping actual cleanups in days instead of weeks, and running monthly bookkeeping in 1 to 3 hours per client. Accounting software that actually works for your firm. To see why hundreds of firms are making the switch to digits, head over to The Accounting Podcast dot promo digits. That is accounting podcast dot promo forward slash DIGITS.

Blake Oliver: [00:03:25] You might not know the name Michael Burry, but I guarantee you know who he is. If you saw the movie The Big Short or you heard about.

David Leary: [00:03:32] The drummer, right? The guy who's drumming.

Blake Oliver: [00:03:34] Oh, yeah. He he, uh, that's how he got out his frustration. Yes. Well, he's the guy who predicted the financial crisis. Was it decades ago now? And he bet against the market, a lot of money and took an enormous risk to do that. And it paid off. He won that. I mean, nobody won. But, you know, he he predicted it and made a ton of money and did it. So when he speaks, people listen. And he is criticizing Nvidia's new $500 billion AI funding deal. Now what is this deal? It is Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR. Kkr. David we talked about on the show before. Yeah. Big private equity with one bank Goldman Sachs getting together to create a massive fund $500 billion to invest in AI data centers to fuel all this demand for compute power. And Nvidia, which makes the AI chips, needs these data centers to get built because it needs a place.

David Leary: [00:04:45] Where if I sell them chips and they have no place for them to work, they're not going to buy my chips. So I have a vested interest in data centers now.

Blake Oliver: [00:04:53] And this money would go to buying the chips and building the data centers. And so it's a it's a way for Nvidia to keep getting its customers to pay like they like. Right. Like it's giving money to its customers so its customers can buy its products. And the way they're going to do this is it's looking like they're going to use special purpose vehicles. These SPVs, which are separate entities that would then own the data centers and buy the chips and build the data centers. Those entities would then lease computing power to Nvidia's customers, right? So it would lease computing power to Anthropic or ChatGPT, OpenAI, these AI companies and the loans to build these data centers, all that debt would be secured by compute. So if the customer doesn't pay the, the, um the debt would be secured, meaning that, you know, these, these, these private equity companies would own the compute and they could lease it to somebody else. Right? That's, that's how they're going to be secured. And Nvidia is going to guarantee it sounds like 25% of the debt. So think about this, right. You've got the manufacturer of the AI chips guaranteeing a portion of the debt to build the data centers. So it's money is being loaned to these entities to buy chips from Nvidia. Nvidia is going to guarantee a certain portion of the debt that is used to buy the chips. And so Michael Burry is a little bit skeptical of this right. Because this is what Enron did right. They to keep debt off balance sheet they created other entities that controlled assets. And so Nvidia. They could do this themselves. They could build their own data centers if they wanted to, but they're not doing it. Why? Because they want to actually book the revenue by selling the chips to these other entities. If they built the data centers themselves and put in the chips.

David Leary: [00:07:01] They'd have all those expenses and all this.

Blake Oliver: [00:07:03] Yeah. And they. Exactly. They don't get to book the revenue until they actually sell the compute. But now this way they get to do it up front. So he has increased his short positions. Michael Burry has increased his short positions against major AI companies, although we don't know what ones those are. The quote with about Enron is that this structure has, quote, shades of Enron's effort to make wholesale power and investable class. Enron, for those who may be too young to remember, went bankrupt in 2001, and they used opaque funds to keep billions in toxic debt away from their main balance sheet. And they created all these complex products linked to energy contracts to inflate prices. And when it went bankrupt, it's $60 billion. Collapse was the largest U.S. bankruptcy. Burry described Nvidia's financing as a potential attempt to use unnatural credits to prolong momentum late in the bull phase, unquote. Calling it a, quote, sign of desperation.

David Leary: [00:08:00] So yeah, because you have to keep exceeding the previous quarter, and then you get to the point where this is going to stop unless we create, we creatively come up with some other way to keep our revenue increasing.

Blake Oliver: [00:08:12] Yeah. So this all goes to that circular financing, the money flowing around in a circle that we've all been following, where the AI startups, which are now huge anthropic and OpenAI, spend money with owners of data centers, uh, Amazon, Google, what have you. And then those companies then invest back into, uh, anthropic and OpenAI. So the money just goes in a circle and it books revenue on both sides. But there was, you know, the money's just moving around in a circle and revenue is going up. So that's the circular. That's the circular revenue. I forget what you call it. Exactly right. That's how the revenue gets created with the circular arrangement. And then this is a way to then keep that going with off balance sheet financing. Because one of the issues that these big public companies have is that these AI chips, the the useful life of them is very short. And they've already been pushing that up from an accounting standpoint, estimates are that these chips are only good for 2 to 3 years because everything's changing so fast, they're going to have to swap them all out, but they've been pushing them up to like 5 or 6 years, which allows them to have less depreciation each year, which increases profits. So they've like, we're already playing accounting tricks to, to stretch this out. And this these special purpose vehicles might just be another way to continue that.

David Leary: [00:09:46] What do you think the accounting impact of this is going to be? So obviously this could completely crash the stock market. It might put our economy into a deep depression. Who knows. Right. But what do you foresee like an accounting thing occurring here? Is it going to be tied to a firm? Is it going to be tied to all the big firms? What.

Blake Oliver: [00:10:04] Well, there's no fraud happening here. This is all happening in plain sight in that.

David Leary: [00:10:09] So so it's it's, uh, we might have regulation change and I mean, rules or GAAP, right?

Blake Oliver: [00:10:14] Maybe, maybe the problem is that GAAP allows this, right?

David Leary: [00:10:18] That's. Yeah.

Blake Oliver: [00:10:19] Uh, anyone, um, anyone can do this. This is, this is not, they're not, they're not doing anything wrong. They're allowed to. So yeah, maybe it would result in an accounting change. Would it result in a recession? I mean, who knows. It's like, just think about it. These big tech companies, the Faang, right. Facebook and Amazon and Google and Nvidia and who else? I'm not thinking of anybody else at the moment. Meta, meta, Facebook, meta.

David Leary: [00:10:47] All the big.

Blake Oliver: [00:10:48] Ones. They are powering the growth in the stock market. Those stocks have just, um, just skyrocketed. And part of the reason is because they've got these investments now in the AI companies that the public can't invest in. So if you buy Amazon stock, you're getting a piece of anthropic. And so the stock market, like the S&P 500 is heavily weighted toward these big companies. It's been what's been driving the stock market growth. And so yeah, if the bubble pops, a lot of people are invested in index funds that just track the market. And if those companies are heavily weighted in those funds, when the bubble pops, a lot of regular people, average Americans are going to lose a lot of money.

David Leary: [00:11:34] And if these bubble pops and these some of these companies go away, Other corporations that were now dependent on these AI tools. They're not going to get the efficiencies that they thought they were getting, which, you know, kind of the second headline, right? How odd is being sped up?

Blake Oliver: [00:11:49] And before we move on, I just want to say that like, I think that the reason that OpenAI wants to go public as quickly as possible is because they see it coming. And if they can go public, then all of the founders and investors up to this point can cash out at least enough of their position to have booked the gains, and then they just have all upside with no risk.

David Leary: [00:12:15] Then it's the street's problem.

Blake Oliver: [00:12:17] It's and it's the public that then take on the risks, the small investors and then the institutional investors. So I will be tracking this. David, what was the second story you wanted to tie into that?

David Leary: [00:12:29] Oh, the second headline. So this ties into these AI efficiencies, right? Like. Um e wise, like they're claiming what you said 125 to 150% increases in throughput or efficiency when it comes to audits.

Blake Oliver: [00:12:45] Yeah. And they're also saying that clients aren't asking for lower fees.

David Leary: [00:12:51] But tying this back to the other article, if all the AI companies go under now, E just lost all those efficiencies.

Blake Oliver: [00:12:58] Well, AI companies aren't going to go under, right? It's just what's going to happen is that their stock price is going to plummet when they can't deliver on the the results, the future projected results, the profits that are.

David Leary: [00:13:10] Well, that's the thing. If the profits don't happen and the circular money stops. Well, they're not just going to get free power like somebody's going to pull the plug. These are companies.

Blake Oliver: [00:13:20] They're not going to pull the plug. They're going to raise the price. So all of these tokens are going to become way more expensive. It's all being funded or what's the word discounted.

David Leary: [00:13:32] It's this.

Blake Oliver: [00:13:32] Subsidized.

David Leary: [00:13:33] Subsidized like Uber by the VCs when you used to take Uber rides for six bucks. Yeah.

Blake Oliver: [00:13:39] Here's another thing that's interesting. E has been putting AI in, getting all these efficiencies, cutting hours on routine tasks. They just posted their best pcob inspection ever. 5%. That's down from 28% the year before.

David Leary: [00:13:57] And they're attributing it to this work, to the the billion dollars they've invested in people and technology and AI. They're claiming that's the reason why. Now, I'm not sure I buy that fully because like PCAOB fines are so teeny. Who spends $1 billion to avoid paying some fines to PCAOB? Like I'm not sure I fully buy. I fully buy into this.

Blake Oliver: [00:14:18] Well, you know what I think it could be is that this is just my theory, right? So Pcob, as I understand it, their inspections are really difficult because you have to have checked all the boxes when you do that audit, it's not really about the quality of the audit. It's about having done everything you're supposed to do, gotten all the sign offs, checked everything right. As long as you did that, as long as you followed procedure, that's what matters, right? And that is getting a lot easier because what is AI really good at? It's helping you check all those boxes, not necessarily getting the right answer. It can create outputs that look really, really, uh, solid and sophisticated, but they can be wrong. And so it should be easier in a world of AI and audit to pass a pcob inspection, because the AI will make sure that you didn't miss any of the steps along the way. It's really good at that.

David Leary: [00:15:20] Well, I kind of agree with you a little bit on this, but I'm going to play devil's advocate and tie into the next story. So the reason this is in the news as well is Pcob just released its annual inspection reports for the Big Six. And guess what? All of them improved, some of them dramatically improved. Deloitte and EY posted their best results ever. Right. Um. Pwc improved. They had their down to a 9% deficiency rate. That's down from down 16% uh, with the BDO number. Bdo improved from 60% to 34%. Grant Thornton dropped from 48 to 33. Kpmg cut it almost in half right now. Am I supposed to believe that this just because of AI, like all six firms all got better? Think about this. You've worked for big companies. Organizational change is hard, right? Changing. And these accounting firms are gigantic. And that's a big ship to steer. So changing the culture and having that much of an improvement to me seems a little ridiculous. I'm not buying it. So maybe, just maybe, it's because the pcob is trans transitioning from an inspection report to focus more on the overall quality control systems of a firm. So the bar has been lowered. So they're going to find.

Blake Oliver: [00:16:37] Less because you just have to have a good quality control system. The individual audits are not being inspected as much exactly.

David Leary: [00:16:43] But in theory with AI shouldn't the PCOBPCAOB be using AI themselves to inspect tons of individual audits and finding even more audit deficiencies? Like I just I found it kind of ironic, right? We have this entire industry that was worried about lowering the bar for individual CPAs, now wants the bar basically lowered for themselves on how they're going to be tested and judged. I just, I just don't buy the I just don't think it's possible for all six to get better in one year because of internal controls and internal process improvement. I think the measuring changed.

Blake Oliver: [00:17:19] I'm going to let you read this comment from Frank that I just put up on the screen, and then I am going to thank our next sponsor.

David Leary: [00:17:24] Okay. Ui is standardized. Oh, this is from Frank. E has standardized a lot of workflows to reduce inspection findings. Lots of checking the boxes. I audit private credit funds, but we don't follow the real risk. The AI bubble. Software insurance exposure.

Blake Oliver: [00:17:41] All right. Let's thank our next sponsor. And that is on pay. Are you tired of payroll headaches getting in the way of the client experience 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 pay. Is the payroll partner that accountants and bookkeepers actually love? Why? Because it's easy to use, packed with value, and backed by support that actually supports you. Their team gets rave reviews for being fast, expert, and actually reachable when you need them on pay. Handles the heavy lifting. You get a dedicated onboarding coordinator who sets up worker profiles and transfers year to date data from previous providers, all at no extra cost. There's seamless QuickBooks and Xero integrations. Eliminate manual journal entries, And they support any type of business. You serve farms, restaurants, nonprofits, you name it. Amp can handle unique requirements without adding complexity on page. Keeps pricing simple to everything your clients expect, from multi-state filing to off cycle pay runs. It's included. There are no hidden fees and no surprises. To book a demo, head over to The Accounting Podcast dot com slash pay. That's The Accounting Podcast dot promo forward slash ONPAY. Where do we go from here? David, do you want to talk about FinCEN and BOE?

David Leary: [00:18:57] Yeah, so, Boe is officially dun dun dun dun dun. It's really done this time. So in March of 2025, they had the interim rule. Well that's finalized and now permanent. Um, essentially all U.S. businesses will not have to participate in providing this, uh, all your, uh, beneficial ownership information to the database anymore. And it looks like, based on the National Federation of Independent Businesses, they say that this is going to save small businesses from more than $128 billion in regulatory and compliance costs. So this is a it's a big deal. Like it's a big win for small businesses. It's a big win for accountants and your clients. And it really is just it never made sense. Right? Like to like the criminals are not going to fill this out. It just it just punished the honest people. So it's official now. It's gone. Gone forever.

Blake Oliver: [00:19:52] I saw a stat from Gartner from a webinar. They did they did a webinar for audit pros 743 responded to a poll. And they found that 93% are reporting some level of AI use. Only 7% are not using AI at all. But then the question is, how do they use the technology? It's isolated right now engagement, pre-planning, drafting, audit issues, reviewing drafts. It's not across the whole cycle yet, only 30%. So just about a third are using AI for audit testing, which is interesting because that seems to me like to be the fastest way to increase productivity is to have AI do the testing. Only 12% are doing it for quality assurance reviews. And another one more stat here. 38% of those audit leaders have an AI strategy. Only 38%. So basically, the situation in audit right now in general is that everybody's using it, but they're only using it in narrow ways, and they're not even using it for testing. Like only 30% are using it for testing. And I also wanted to talk about this article by Jack Carson. So we've had Jack on the show before. He is a professor, an accounting professor at Hofstra University and a CPA, and he wrote an opinion piece for Bloomberg Tax, arguing that AI is auditing biggest disruption since the corporate failures that led to the PCBs creation, which was Enron, and the separation of audit and consulting work. It's the biggest thing since Enron. And he's writing this piece in response to the Pcob, asking for comment on whether it should pursue AI related research and standard setting. And Castonguay is saying that the board should already be doing this. They don't need to ask. I think that's actually really funny that the Pcob is wasting time asking whether or not it should do this. Like, yeah, talk about bureaucracy, right? Like, don't ask whether you should do it. Just go do it. That's your job.

David Leary: [00:22:07] Especially when it's something that's obvious, right?

Blake Oliver: [00:22:08] Yes. Um, they've got an inspections modernization council that they've put together and He and Castonguay is saying that, like what the Pcob is doing right now is going to be insufficient because they are taking existing standards and applying them to a fundamentally new operating model. So for example, um, if an AI hallucinates audit evidence or if auditors fail to review and supervise AI agents that are gathering and analyzing evidence, what happens to that audit report? Ai related audit failure may have already occurred. And that goes back to that pcob inspection finding. Maybe the way the Pcob is inspecting these audits is not going to find AI hallucinations because it's not designed for it. It their whole process-

David Leary: [00:23:06] Yeah, so, it's going to test- So it's really checking all the box ticking. It's not stepping back and looking at the bigger picture of the audit.

Blake Oliver: [00:23:15] So and if we just look at how audits are conducted right now, it doesn't make sense in the new world sampling. Let's take sampling as an example. I mentioned that 30% of auditors are now using AI for some kind of testing. And when you do testing, you do sampling, meaning that you grab a smaller selection of the whole population because you in the past, you couldn't test the whole population, you couldn't check every invoice.

David Leary: [00:23:43] I mean, that's what the Pcob does. They only check, you know, 60 of those audits, right?

Blake Oliver: [00:23:49] They only sample a portion, right? Yeah. So traditional standards emphasize sampling because we could only do a, we could only look at a small fraction of a large company's revenue or expense transaction.

David Leary: [00:24:02] Historically speaking physically that's all that could be done. It was just impossible.

Blake Oliver: [00:24:06] But now with AI, now with AI, we can do it for every transaction across billions of dollars. So we could have 100% visibility when we do that audit. And the standards are not built for that. So the question is how often and to what extent does a human auditor have to remain in the loop when an AI can process the full population? Because if the standards now require that an auditor is in the loop, it doesn't matter. If we can test everything with AI, we still have to have the human there, and they're the bottleneck. Here's an independence concern that the Pcob should consider from Jack. An AI enabled ERP system could be audited using an AI platform trained on the same underlying data, potentially compromising output validity without the auditor recognizing the conflict. So you've got an AI, ERP audited with an AI platform. They are both trained on the same data. You know, that's like an independence conflict, right? That's like if the same person was creating the financial accounting system and auditing it. That shouldn't be the case, right? The two minds, the minds have to be different. Right. And they have to have. Otherwise you have like your your auditing yourself. Here's a hypothetical risk. An AI agent conceals a subsequently discovered error to avoid being recoded.

David Leary: [00:25:31] Or just or it just changes the data. Oh, this is wrong and just changes it to what you think it should be.

Blake Oliver: [00:25:38] So Jack is saying that we shouldn't restrict these AI tools, but the Pcob should establish standards for acceptable use, human oversight evidence, reliability, agent supervision, and independence while supporting innovation.

David Leary: [00:25:53] So since we're talking about all this public company stuff, um, SEC proposal to not do quarterly reporting anymore.

Blake Oliver: [00:26:01] Switch to biannual.

David Leary: [00:26:02] To switch to bi annual or semiannual updates, semiannual. They opened this up in August and they've had public comments, 225,000 public comments about this. And they range all over the place from we support it. No internal systems won't change. There's audit quality concerns. But like, if you really step back and think about there's a massive amount of comments, we only have 4000 or so public companies in each company probably has what, one CFO and one CEO? In theory, that would be two comments per company. They got 60 comments on average per public company. And so it makes me wonder you had a story last week or the week before that the IRS was getting flooded with fake AI bot comments. Right. Did this happen again with this? Um, but then I'm also like stepping back.

Blake Oliver: [00:26:52] Did you say it was 250,000 comments? Okay, so I just have to throw this in here because you brought this up. So the Pcob asked for comments on what they should be working on, what we were just talking about. Right. And, uh, this is Adrian Gonzalez reported this in going concern. Apparently during that comment period, Pcob only got 33.

David Leary: [00:27:15] Which is probably more realistic. I think that's probably realistic. Like how 225,000 comments about quarterly reporting, like nobody's even paying attention to this.

Blake Oliver: [00:27:25] Well, but but maybe it's realistic. And I mean, maybe some of those could be AI generated, right? But there's a lot of investors in the world. Yeah.

David Leary: [00:27:32] And maybe investors.

Blake Oliver: [00:27:33] I mean, this is this is really going to affect them, right? Because if you are a diligent investor, if you're a day trader, if you, if you just do this for fun, if you're a professional, those quarterly reports are what you rely on. That's, that's all.

David Leary: [00:27:46] You're a day trader, you.

Blake Oliver: [00:27:49] Know, I mean, if you're doing it the right way, you know, if you're like Warren Buffett, you know, and actually reading the financials, if you're not, we're not talking about like the, the gambling on the Robinhood and all that stuff, right. And options. So like, that's really important to them. So, but just, you know, just for perspective, how many people care about audits? Only 33 comment letters were received.

David Leary: [00:28:12] Yeah. So and I'm glad you brought up how Jack thinks we have to change. Right. And that's kind of the in my head that I put a comment on this to myself. I said, like in theory, right? Because of AI and technology, we're headed to a never close or an instant close. Correct.

Blake Oliver: [00:28:29] Continuous close, perhaps continuous close.

David Leary: [00:28:32] Right. So then if we following that logic in theory, could we get to the point where we have automated instant daily reporting?

Blake Oliver: [00:28:39] Why not?

David Leary: [00:28:40] So then like we have 250,000 public comments arguing about something that may not even matter in 3 to 5 years. Like, shouldn't the discussion be, we should just skip this. Should we get rid of quarterly and be like, should we move to daily? Like we should just jump right in because the accountants.

Blake Oliver: [00:28:55] The accountants don't need to sleep, you know? Well, the code, the transactions during the day and then, you know, do your do your reporting at night. Perfect. Yeah.

David Leary: [00:29:08] It's just it's it's an overwhelming amount of opinions on this public comments. It's how do they even go through all that? They have to use, obviously AI to sort these and rank them.

Blake Oliver: [00:29:17] So tether got an audit David.

David Leary: [00:29:21] Oh, finally.

Blake Oliver: [00:29:22] Yeah. Uh, they're saying they did anyway. Let's see. Where is it? Here. Why don't I see it on my list? You've got you got the story up.

David Leary: [00:29:30] I have the story here.

Blake Oliver: [00:29:31] Okay.

David Leary: [00:29:32] So after years of dodging the issue, tether finally got what? The crypto world has been demanding a full audit from KPMG. Um, and now let's go back in history a little bit. If you remember that tether settled with the New York State Attorney General's office in 2021 because with allegations they were lying about their reserves, reserves and co-mingling funds. And they also paid a $42 million fine to the CFTC. Sorry, I don't know who that what the government department it is if that's even US based or.

Blake Oliver: [00:30:06] It is.

David Leary: [00:30:07] It is. Okay. So but see what's happening is they want to go public now. They want to go public at a $500 billion valuation. They need to get some real audits done. Now, what's weird is they use tether used to claim that the big four firms were too scared of the reputational damage because they can't actually audit these nonstandard crypto rules and ledgers. Right. So that's why they couldn't get audited. But now what they said, they announced the completion, but they haven't actually published the report.

Blake Oliver: [00:30:43] About the audit report. Yeah. So they so tether said they got a unqualified opinion for 2025. And KPMG US confirmed that they issued the unqualified opinion. But the audit report has not been released. Why is this important? Because tether is the world's largest stablecoin issuer, and its tokens are used as a substitute for U.S. dollars in crypto transactions, which are a huge part of the global economy now. And so the fact that they got in trouble because they were apparently not maintaining the reserves that they said they were, is a big deal, because that would be like a bank not maintaining the reserves that it says it will. And if your bank is, you know, if the if there's no money in the vault at the bank, that's going to create a run on the bank someday.

David Leary: [00:31:42] Well, I think that happened with one of the crypto companies there was like, they, they're issuing more than they actually had in reserves. And that, that started all this in the, uh, mid 2021.

Blake Oliver: [00:31:54] So tether is trying to raise, or at least they previously were trying to raise as much as 20 billion at a $500 billion valuation, and the investors had balked because they hadn't been independently audited. So hey there, that's it. The investors wouldn't invest in tether because they hadn't been independently audited.

David Leary: [00:32:13] Somebody up to that point, it was always that, um, what do firms do for some easy income but doesn't mean anything the annotation reports or something.

Blake Oliver: [00:32:22] Well, yeah. That so that's what tether was doing was these quarterly attestation reports, which are it sounded like to me like agreed upon procedures, engagements. But those are essentially useless reports because all the firm is doing is like one specific thing. And like looking at the reserve at a specific point in time. And as we discussed on the show, as you said, David, like they could just be moving the money out and moving it back in. If you don't do a full audit, there's all that, all that funny business could be going on very easily.

David Leary: [00:32:52] And then what's happening is they were exploiting the big firms by trying to give, hey, look, I'm legit. We've been audited. They were using the word we got audited by, and they would put the firm right up on the top of the website. So they were exploiting the the firms never actually doing a real audit. So now now they've done it. But if they don't publish the reports, did they really do it? Like they got to show it. So we'll probably be picking this up here. We'll look at it once the report comes out and see what it means.

Blake Oliver: [00:33:18] All right. Let's thank our next sponsor. And that is Thomson Reuters. If your tax workflow still feels like a grind every busy season, you're not alone. We hear from firm owners every week who are buried under disconnected systems. Manual data entry and staff stretched way beyond their limits. But it doesn't have to be that way. Thomson Reuters built the tax automation suite to solve exactly this headache. It connects safes and Sure Prep and Ultratech CS into a single ecosystem that covers every step with true end to end automation, from gathering a client's documents to final delivery. We're talking 65% fewer clicks per return. Ai powered data extraction that saves 90 minutes per return. A 58% increase in capacity with current headcount and a 55% improvement in profitability. Because those time savings go straight to your bottom line. This isn't some patchwork of tools bolted together. It's a purpose built suite where data flows automatically between every stage. That means no rekeying, no bottlenecks, and no back and forth with clients. Firms using it aren't having to bring on additional staff during peak season while still growing revenue. That's the power of real automation. To see why tax professionals across the country are making the switch to Thomson Reuters, head over to The Accounting Podcast dot com slash tax automation. That's The Accounting Podcast dot com forward slash tax automation. And please do follow those links when you go check out our sponsors. It helps them know that you heard about them on our show. And it, it, it helps us. So thank you.

David Leary: [00:34:53] What do you want to go next? Here?

Blake Oliver: [00:34:55] I've got a story about real ways small firms are using AI. I always love actual examples. That was in.

David Leary: [00:35:04] The first half of the show talking about the big firms and let's talk about small firms.

Blake Oliver: [00:35:07] Small firms. But but first I want to do this ancient Rome tax fraud story, okay? Because, you know, it's like, it's always nice when you can bring in a little history and accounting, you know, might be, you know, they always say prostitution is the oldest profession, right? But it might be accounting, honestly. So like they might share that hashtag in ancient Rome, hashtag accounting.

David Leary: [00:35:36] Forever. I'm an accountant. Hashtag accountant has just meant the same thing since forever.

Blake Oliver: [00:35:40] Well, because remember we played that video that bassist made, which was so wonderful because it laid out the history of accounting. And like the beginning of writing was accounting. The very first writing we have is actually symbols put on clay tablets that indicate a count of grain or livestock. And then that morphed into the symbols that became letters and hieroglyphics and all that. And that's how language developed. So anyway, I love the history part. And the story here is that, uh, archeologists in Western Turkey have discovered late antiquity stone tablets initially that were initially believed to contain funerary odes, funerary odes, like I guess for, you know, like, uh, R.I.P. on the tombstone kind of thing.

David Leary: [00:36:29] Okay.

Blake Oliver: [00:36:30] And instead, they realized that the inscriptions were missing details about a widespread tax fraud case that lasted more than a decade and implicated implicated the estate of Placidia, the daughter of Emperor Valentinian the Third. So here's the scheme. The ancient fraud scheme in or around 465 CE. Tax officials in Western Asia Minor started issuing payment receipts without recording specific amounts collected. So these are the receipts that you would get when you paid your taxes to the tax collector.

David Leary: [00:37:09] This is like when you go to the goodwill and you donate something and they give you a receipt, but there's no numbers on it, you just fill it out yourself.

Blake Oliver: [00:37:14] Well, these tax officials were issuing payment receipts for nothing. They weren't getting the taxes.

David Leary: [00:37:22] They were they weren't collecting receipts, not even collecting anything.

Blake Oliver: [00:37:25] Well, but they were collecting taxes, but they were issuing extra payment receipts for taxes they didn't collect. Why would they do that? It's because that allowed them to report lower totals to the imperial treasury in Constantinople, and they could pocket the difference. So they collect 100 hundred dollars in taxes. And then they say, um um well payment receipts. Right. So what would the payment receipts have been for. Anyway it deducted.

David Leary: [00:37:56] You just say I only collected 70.

Blake Oliver: [00:37:59] Right. So they're basically um reporting that they collected less tax or they're deducting some payments that would have reduced the amount that they owed to the Treasury that they were supposed to have collected. And so then they're not remitting enough. Um, it took 15 years for Rome to figure out how to handle this. And then in, I guess in 480 CE, Pretorian. Prefect. Flavius. Elias. Cassius. Dionysius. Dionysius. Dionysius. Wait. I'm gonna say that again. Flavius. Elias. Porcius Dionysius threatened to strip the estate from his special envoy if the envoy failed to resolve the corruption. And he also declared that anyone convicted of the tax scheme would be put to death. Death for tax fraud. Why the severity? Well, if you think about it, what was imperial authority back during that time? It was basically pay your taxes, pay your tithe, pay your tribute to us, or we will come and destroy you with our army. So that was power, right? That's that was everything. If you didn't pay your taxes, you were denying the authority of Rome. There you go. That's the that's the historical tax case there.

David Leary: [00:39:14] I could talk about a current fraud if you want.

Blake Oliver: [00:39:17] Let's do it. First. I want to read this comment from Tate in the YouTube live stream. Tate says, my clients are driving me nuts with AI generated requests they can't afford. Everyone wants me to create a dashboard link to their CRM payroll, but they can't pay for it. It's frustrating. So they want you to use AI to do work, or they don't want to pay you for it.

David Leary: [00:39:38] Oh yeah. Did you talk about the small firms AI?

Blake Oliver: [00:39:40] No, no, I have to do that.

David Leary: [00:39:42] Do that. This is perfect. It's tastes a small firm. Let's see.

Blake Oliver: [00:39:45] Okay. Um, real life ways small firms use AI. This was published in the Journal of Accountancy by Anita Dennis. And it profiles for firms with fewer ten employees that are using AI to build real workflows delivering faster tax research. Uh, an improvement in conversions on sales, cheaper client monitoring, more capacity without hiring. The four firms are one stop CPA, agate, CPA, public trust, CPA, and I was pleased to see high rock accounting owned by my friend Liz Mason, CPA. So what does one stop CPA using it for? They're using it for faster, complex tax research. Brian Davis has a fully digital firm with four accountants and three non accountants. And they serve doctors, real estate investors and entrepreneurs. They are using Blue Jay for cited source backed tax analysis. Then they apply their own judgment and use ChatGPT enterprise to organize research into memos, slides, roadmaps, infographics, meeting recaps, and PDFs. So for an M&A client changing states, the firm used that tech to develop an answer in two hours, covering transaction and residency tax implications without increasing their workload. They keep reusable prompts in Google Docs templates. And that's it. That's pretty simple, right? But that's a pretty great result. Two hours to give an answer on a complex, uh, M&A multistate question.

David Leary: [00:41:19] Yeah, it adds up. Right.

Blake Oliver: [00:41:22] The gate CPA is a six person firm, and they used lovable to build a better website intake form and then clod to help embed it after vendors struggled to deliver what the partners wanted. So if you're a website Developer can't give you what you want. These days, you can build it yourself. Right. David, you've played around with.

David Leary: [00:41:43] Tools like this. I mean, zero is betting on this, that accounts are going to build tools for themselves and clients. And that's I believe that's the direction we're headed.

Blake Oliver: [00:41:52] The response is on that website flow through APIs and automations into Clickup so they can track it in that task management system. They say the project costs hardly any money and increase their conversion rate by about 25%, while reducing unproductive sales calls. Public trust CPA Sheryl Hannafin of Public Trust, CPA used Microsoft Power Automate with assistance from copilot and ChatGPT to improve invoice approvals for nonprofit clients. Vendor invoices get sent to a dedicated email address, and that triggers an Adobe Sign approval request. Once approved, a QuickBooks bill is created and the signed documentation is attached to the bill in QuickBooks, producing a complete audit trail. So for your nonprofit clients or any kind of client where you have to have like an actual sign off, an approval on a bill, you could she did that with Adobe sign and a workflow.

David Leary: [00:42:56] And that eliminates entire app like, um, approval max or something. Right.

Blake Oliver: [00:43:01] You just and the best part is there's no new logins, subscriptions, software training. It's all just via email through a secure signing platform. It's brilliant. Last one high rock accounting. They are an eight person cast CFO and tax advisory firm. And they used Claude and Claude code to replace costly client satisfaction and net promoter score total tools. Ashley Rowden, the CEO there, built a customized app integrating with carbon in 4 or 5 hours. It updates the active client list requests feedback after major projects or monthly, depending on scores and feeds results back into the firm's system. So they are now getting client satisfaction scores automatically through the system. Every time there's a major project or monthly.

David Leary: [00:43:54] So so that's part just part of their firm DNA constantly happening instead of, hey, we should survey our customers and do this project and you do it once and then a year later, maybe you do it again. Now it's just this is part of their systems and processes.

Blake Oliver: [00:44:06] Highrock now holds an AI happy hour to identify repetitive tasks, workflow roadblocks, and software that the firm might replace itself. They are using a cloud team account to do this. Um, one of their tax leaders, Susan Hosanna, despite having no tech background, built a working onboarding and tax organizer prototype in a few hours using cloud and cloud code. Pretty neat real world examples. David, should we thank our last sponsor before we finish up?

David Leary: [00:44:39] Yeah.

Blake Oliver: [00:44:40] And that is cloud accounting. Staffing. I'll put up the banner here.

David Leary: [00:44:44] 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 Accountant Staffing has a 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 gives you instant access to highly vetted, qualified accounting professionals. 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 a growing firm needs. The candidate portal puts you in control. You can 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 ProAdvisor that is The Accounting Podcast dot promo forward slash CAS.

Blake Oliver: [00:45:50] Tino on YouTube says I use cloud for government to help with research. Gao findings, various federal acquisition regulations, and approving purchase order requests to ensure proper general ledger recording. Tate says that his clients are asking all these AI generated questions and from their angle, they are saying it's stuff I should be doing for them and insight they should get from their business. Ai is not going to get rid of accountants. Ai is increasing the expectations gap. Clients are expecting a lot right now, Tino says. Totally agree. It's definitely requiring accountants to step up their game. Yeah I agree. And so going back to that E story. E has doubled the speed of their audits. I wonder if clients are going to start asking for more from them. Or maybe it's just because like audit is such a shoehorned thing, that audit actually is going to be the best place to be in the sense that the fee gets fixed and the efficiency goes way, way up. And so now the margins are incredible.

David Leary: [00:46:53] The margins are going to.

Blake Oliver: [00:46:53] Get better. And the clients don't care because the audit fee as a percentage of it's just a fixed kind of cost for them now, like, and they're.

David Leary: [00:47:01] Not used to paying it. Yeah.

Blake Oliver: [00:47:02] And there's not a lot of competition in the big four. It's just big four, right? So there's not going to be price competition for them unless.

David Leary: [00:47:10] None of them are going to lower it. Like why would they lower it?

Blake Oliver: [00:47:13] Right. They all know each other too. Like they wouldn't do that. So it's like a cabal, but maybe the top 100 firms like the 96 below could eat some of their business by coming in at lower prices, but delivering the exact same product. And this has, I don't know, echoes of what happened in client accounting services and bookkeeping. When firms like mine use the efficiencies that we got from cloud accounting to increase our margins and then lower our prices so that we were way more competitive than the bigger firms that were charging like 80, 90 bucks an hour for bookkeepers to key transactions into QuickBooks. Right. And we just crushed them. We just took their business, you know, and then they had to buy us in order to get our talent and technology. And like, I wonder if that could happen with audit like this, the regional firms eating the big firm's business and then the small firms eating the regional firms business, that's what technology allows.

David Leary: [00:48:13] Yeah. It's disruption.

Blake Oliver: [00:48:15] So I think the disruption is coming. But right now the big four are really probably enjoying the profits they're going to see. I don't know um see what happens. Will the profits flow to the partners? Will it flow to the staff and the managers? Will the client start to demand fee reductions? Where will this all end up?

David Leary: [00:48:36] So I might have a story here that maybe indicates accounting. Ai is not even close to where we think it is yet. Um, and it's a pretty big story if you go back to like rewind back in February 12th of 2019, episode 59 of this show, we broke the QuickBooks Live story. Remember, they put up the little test like we were the first people to talk about QuickBooks Live.

Blake Oliver: [00:49:01] Yeah, Intuit is going to be competing with accountants to do accounting services.

David Leary: [00:49:06] Offering book tests, bookkeeping services. Yeah, well, they just killed QuickBooks Live. Well, I don't know if kills the right word. They, um. It's being shut down, slash rebranded, modified into a new offering. The new offering is going to be referred to as Intuit experts bookkeeping, and they're changing up the offering from like some of it will be a setup, some will be just like a somebody you could talk to. But the one, the thing that caught my eye is what's not included anymore. Invoicing, bill pay, inventory management, HR, AP payroll tax filing, or 1099 preparation. Wait, wait. The business. What business has to. Yeah, exactly. The business has to handle those themselves. Like you're just getting monthly cleanup and, like, you know, an advisor. But I'm looking at that list of things that are not included. And I'm like, that's all the stuff AI is supposed to be doing in QuickBooks. So does this tell me like Intuit, like the AI can't do these jobs because if you could do them, you would just roll them part of your book. Quickbooks Live service, right? You'd be really good at it.

Blake Oliver: [00:50:12] It can do it, but it still needs a human to review it. And, and that's what.

David Leary: [00:50:16] The expensive part.

Blake Oliver: [00:50:17] That's the expensive part. It's can't be fully automated yet.

David Leary: [00:50:21] So what I recommend is if you want to listen to an hour all about this rebrand or the death of QuickBooks Live, the unofficial QuickBooks accountants podcast episode 154. I'll put it in the comments right now or the chat so everybody can get to that.

Blake Oliver: [00:50:38] They have a good, uh, coverage of it.

David Leary: [00:50:39] The whole hour talking about it and episodes.

Blake Oliver: [00:50:42] You can earn free CPE for listening to the unofficial QuickBooks accountants podcast just like ours. Get the free earmark app on the App Store, search for earmark CPE, or go to earmark.app in your web browser. Sign up for free! Earn one free CPE per week. Subscribe for unlimited for the low price of $200 per year, it's the best deal in on demand CPE where you actually learn something and you can do it anytime, anywhere. David, I'd like to close out with an Instagram reel I saw.

David Leary: [00:51:14] I'll let you do that real. And then we also, I caught up with Valerie at an. Okay, great. So we can play that video after your video.

Blake Oliver: [00:51:23] So this is from, uh, Jake Cho in Taiwan, and it's a video about receipts and taxes. And I think, ah, I think, I think you'll enjoy this.

Speaker 4: [00:51:38] This is called the uniform invoice lottery. And it wasn't designed just for fun. It was designed to stop businesses from hiding income and dodging taxes. So now regular people become auditors. Everybody wants a receipt because this might hit. Think about that. A government that said instead of chasing fraud, let's incentivize honesty and turn everyday life essentially into a scratch lotto. You know, I mean, we're buying tea or coffee could change your week. And maybe that's the bigger idea that sometimes systems don't work until you make people actually want to participate. You know what I mean? Yo, did you know that in Taiwan, the government basically turned every receipt into a lottery ticket? Like you buy a coffee or tea at a 7-Eleven or a small boutique coffee shop like the one behind me. And boom, there's receipt right here. Could win you thousands, sometimes even millions in Taiwanese dollars. This is called the Uniform Invoice Lottery.

Blake Oliver: [00:52:43] And I started it in the middle, so that's why it looped back around. But yeah, every receipt is a lottery ticket in Taiwan.

David Leary: [00:52:51] And they did that because businesses would not issue receipts because they would not record their sales and then they wouldn't pay taxes. And this is the way for them to accomplish that.

Blake Oliver: [00:53:01] And I love this because it employs psychology and the behavior of people to get the desired result as opposed to enforcement. So our method is not to require something like that. Our method is to hit businesses with audits and then audit them. So we're scaring them into reporting all of their revenue in addition to, you know, hopefully people are ethical, right? But that's the enforcement mechanism is punishment and audits. But here they, they created a system where everybody wants a receipt and, and when you scan the receipt to see if you won, it sends the information to the government.

David Leary: [00:53:43] So the sale, the record.

Blake Oliver: [00:53:44] So like you said, the individuals, the people, the become the auditors. And that's what we need to think about when we design taxation systems auditing systems regulations is how can we do this in a way that's less about punishment and audits and more about incentivizing the right behavior.

David Leary: [00:54:02] And it's super disruptive because I think like some countries are going to start doing like instant sales tax calculations and they want instant collections. And I think companies like Avalara are in that space a little bit. This. So so basically when an invoice is created and sales tax is calculated, it instantly reports to the government and the money's transacted pulled out. And so essentially, instead of having to get a third party app, third party company, the government can just have the citizens do this on their behalf by doing all the work now as every receipt going to get scanned. Probably not, but there's almost there's no one, there's zero, almost zero investment, right, to make this happen.

Blake Oliver: [00:54:38] Exactly.

David Leary: [00:54:38] It's just the citizens are doing it.

Blake Oliver: [00:54:40] All right, David, let's hear from Valerie at AMP. You talked with her and recorded a launching.

David Leary: [00:54:48] They're launching their enhanced employee benefits experience. And I just said, Valerie, come on and tell us about it.

Valerie Heckman: [00:54:56] Thank you so much for having me back. And congratulations, by the way, congratulations on 500 episodes. I think that I've probably listened to like 420 of those. Maybe. Maybe I've been a listener for a long time.

David Leary: [00:55:14] That's amazing. And I'm glad you're on, because I want to personally thank and pay for being a big part of our history on pay, really enabled us to take that next step, go full time on this and on pay has been heavily involved in at least 450, 460, maybe 470 of these episodes, and less talking about us in the Accounting podcast, our 500 episode I really want to talk about, I have a press release here. So on pay recently launched enhanced employee benefits. Like what is that like? What is the enhanced employee benefits experience? What does that mean if they get a press release? A little broad, but I want you to clarify for me what this is.

Valerie Heckman: [00:55:49] Sure, sure. So for those who don't know, on pay is a full service payroll and HR and benefits platform. And we've had an in-house insurance team, an in-house benefits team for a long time. But a lot of what you did to work with them was happening over the phone, happening through emails. We have enhanced the experience outside of the product. So if you are shopping for benefits, if you're utilizing benefits with us, or if you'd like us to be the benefits administrator, so say that you come, come to on pay, you've got a plan already, and you want us to be the broker of record. We can work with you. So we have that great expert team of licensed agents that can help you, you know, you or I, I'm saying you, but it could be you or it could be your clients. Of course. Um, probably your clients. Right. Um, we can help them shop for benefits and then do all of the pieces along the way for getting employees set up, open enrollment, etc. so there's more tools inside of on pay. You still get to work with our great team. Um, and really continuing to enhance how we sync all of that with payroll and the administration over time. Um, you've, you've done a little bit of looking at our benefits.

David Leary: [00:57:06] Yeah. We've started shopping, but I. Plus, I'm getting the old experience, which is I just get handed off to an email and everything's in email and a couple Zoom calls and it's completely out of the app. Like there's no, I'm not clicking or doing anything in the app. So you're saying now you can start shopping, start that process, see your progress on that process all in the app. So the, the enhanced part is for the small businesses or the account sign up their clients. That's the enhanced part. But what about features like is there new things for the employees or new benefits?

Valerie Heckman: [00:57:36] So we, we work with top carriers, Um, we can do a whole lot beyond just health benefits. So if clients have, you know, the need for different voluntary products, um, like, you know, life insurance and hospital and critical illness and all those types of things. Uh, we can help with that as well. So yeah, continuing to expand that out. Um, so you're still getting that hands on support with us, but now there's even more that you can do kind of inside of the program itself.

David Leary: [00:58:03] So is this additional fees is as part of a different tier.

Valerie Heckman: [00:58:08] Great question. Um, so what's awesome with OMP is we are incredibly transparent about our pricing. So we have our base plan. And then anything extra you do with us is an add on. So you can add on our HR toolbox. You can add on benefits. You can add on time tracking. So the benefits admin, what's awesome is that you're just paying the premiums. We don't charge you extra for the administration itself. Um, and we don't have any employee limits for that. So there's a lot of payroll providers out there that you've got to have 20 employees or something for them to do that. Uh, we will work with employers of all sizes. So one employee.

David Leary: [00:58:45] So if I have smaller clients, five, six, seven people I can still use on pay to get health insurance for those clients.

Valerie Heckman: [00:58:51] Because a lot of the brokers out there don't.

Valerie Heckman: [00:58:53] Necessarily pay attention to the little guys, right? They're chasing after the deals that have hundreds of employees. Um, our team, we focus on very small businesses all the time. So and we even will help them navigate some opportunities that might be available to them for cost savings, like special enrollment opportunities. Um, you know, different things that they can get through, maybe associations that they're involved with. So, uh, our, our team is used to really supporting the little guys and, and, you know, you're bigger and bigger midsize clients as well.

David Leary: [00:59:26] So where does the accountant fit in this benefits workflow? I guess like payroll is obvious. Like my accountant is going to calculate payroll, make sure all my tax forms get done. You know, if they without on pay, they would manually calculate the paychecks. They cut the paychecks, they'd file the 941943 etcetera. W-2s obviously on pay is doing all that, but it still makes sense for the accountant to be involved in that process. But where like, is the accountant, just start this process, then hand it off to the small business owner and say, hey, finish it. Like, where do they fit in? I'm trying to understand that.

Valerie Heckman: [00:59:57] Sure. Good news for you. We are doing a webinar at the end of August on earmark on this very topic. I know you're asking outside of that, but yes, we're having a how to talk to your clients about benefits webinar and earmark, where our VP of insurance, who has been in the space for a really long time, is going to go through the different nuances of like what you can and cannot do as a, if you're not a licensed broker in that, in that setup, in that equation. Um, the short story is I think that a lot of clients are looking towards their accountants for some places to be pointed to for this, especially if they've run into some of those experiences. I was just talking about right where, um, they don't feel like they're getting attention or they have opportunities or they're going to pay a ton of fees or something, or they're getting pushed towards a Po or something that's out of budget. Um, we can work with the accountant, bring them into those conversations. And then of course, our team can handle the stuff that you really need to be a licensed agent to advise on and discuss with business owners.

David Leary: [01:01:04] So pretty much, if I'm hearing things correctly, if you're big enough to justify having payroll on on pay, you're big enough to possibly get health insurance and other benefits.

Valerie Heckman: [01:01:13] Yeah. I mean, we can set up benefits if somebody, you know, one employee. Right. They can be very small. Uh, and it's a great, you know, small businesses aren't required to offer benefits, right? There are some state mandates and things for retirement and other stuff, but like health benefits, right. And, um, but it can be, it can be a really great way to attract and retain talent to show that you care for your employees. So, uh, yes. And, um, I think that that is an area that accountants can take a proactive approach to at least saying, hey, you've got your payroll on, on pay. You can check this out or removing clients like, oh, we could switch them to be a broker of record and then they can handle the admin pieces without additional costs. So I think there's a couple of different lanes where accountants can enter the conversation for sure.

David Leary: [01:02:06] So so health insurance obviously. What about vision.

Valerie Heckman: [01:02:10] Yep. Vision dental.

David Leary: [01:02:12] Dental.

Valerie Heckman: [01:02:12] Life insurance. Um, the various kind of add ons to health insurance, right. Like there's cancer insurance, there's hospital insurance, there's like ambulance transportation, there's all sorts of things out there. Um, wellness programs, right. Like things that people can navigate.

David Leary: [01:02:28] And then retirement plans. You guys are handling that stuff too.

Valerie Heckman: [01:02:32] Yeah. So we have partnerships with Betterment and Vestwell for retirement. And then we've also got some options. If you're using something outside of those two, uh, you know, to be able to like transfer the funds and stuff.

David Leary: [01:02:46] All right. Enough about benefits. If people want to meet you face to face because you're one of our favorite people in the space. How do people meet the on a team? Where are you going to be the rest of the summer? Are you going to be in the fall? You know, we're starting. We're almost in like fall conference season. I mean, it's August right now, but it's getting close.

Valerie Heckman: [01:03:01] I know, I know it is getting close. Um, yes, I'm, I'm so excited that your audience might have the opportunity to meet us this year. Please, please come and say hello to me and my team. Uh, our next stop is Zero Con, uh, in Denver this August, a couple weeks from now, um, depending on when you're listening to this, it might be right around the corner. And, uh, the pre-con is happening at zero con with ignition. There's a party before. So even if you're not going to zero con, if you're in the Denver area, just.

David Leary: [01:03:34] Come to the party and.

Valerie Heckman: [01:03:36] Pre-con and come and hang with us. We're co-sponsors of that event. Uh, and then zero con itself should be great. Um, we are also going on tour with the advisory Amplified tour. Uh, I'll be speaking at all six cities, and you should definitely check that out. It's a one day event, hands on, very workshop style activities throughout the day to really work on a variety of things inside of your firm. So that's, um, putting AI into action, um, building out advisory for teams, like figuring out how to help your team navigate that transition and a whole lot more. Um, and I'm actually speaking on, uh, the kind of navigating and driving your team through change when it comes to software implementations and other types of changes you might be implementing in your firm. So that'll be a great tour.

David Leary: [01:04:31] And that's going to be Raleigh, North Carolina, Nashville, Tennessee, Minneapolis, Boulder, Phoenix and Seattle. So if you're any of those cities, look, check out the advisory amplified tour.

Valerie Heckman: [01:04:42] And then the follow up to that. So, uh, we recently joined the Alliance. So we've got some folks on the team going to their big event for their firms in Dallas at the end of October, which happens to overlap with Intuit Connect. I'll be going to Intuit Connect. My teammates are going to go to the April Alliance event. So if you're part of the alliance or you're, you know, thinking about joining one check. Check that out. Uh, and then Intuit connect, we're doing the ignition pre-con there as well. So come hang with us. Uh, and I will be, I will be around.

David Leary: [01:05:17] I have one more question regarding more logistics of like mid-year set up versus first year set up. Like if I want to move my clients, obviously we just missed the July 1st quarter, right? So should I like try if I'm going to move clients or transition from a different payroll system to on pay? Should I be shooting for like a September 1st or does it matter? Could we do an October 1st rollout or should I wait till January 1st? Like what? How much lead up time do I need to prep a client for? How does this, you know, what's the logistics on this? Is it something that's a snap of a finger and on page just handles it for me? How does this work for me? Yeah, yeah.

Valerie Heckman: [01:05:52] Great question. Great question. So, um, when you're switching payroll providers with on pay, we do a ton of the heavy lifting. So we will put all of the payroll history for the year in. We'll get the employee profiles set up. Uh, we'll, we'll give you the checklist of everything we need from you to do the tax setup. And all of that is, is really handled by an onboarding coordinator with MP. So you can switch clients whenever you want. And we're going to do a lot of that work. Now, that being said, from a communication standpoint with your clients and with their employees and making sure that everybody's kind of on the on the same page of this, a lot of accountants and bookkeepers will tell you the end of a quarter is a good time to make a switch. Or some will say, no, no, no, never during the year, only January. I would say that that was true five years ago, ten years ago, definitely. Um, that, you know, waiting until January is probably the best time because you can do the line in the sand. But we've gotten so much better at getting prior payroll history. I've been working payroll on and off since 2011, and it used to be a grind to get payroll history put into a software and make a switch, and it was like multiple weeks to implement something.

Valerie Heckman: [01:07:06] Now it can be a pretty quick turnaround depending on how frequently they run payroll and the timing. Like if you've got a client with weekly payroll, right? We'll work with you to figure out the timing, but typically it just takes a few business days to turn it around. I like saying, you know, give everybody a week, especially if the client is engaged and they're going to get you everything you need to facilitate that if you're going to be part of the transition. Um, but yeah, you could switch them now. I mean, it's August, you know, only seven months of payroll depending depending on the client, what they've got going on. It's, it's not a big deal. People switch mid-quarter or at quarter breaks all the time. In fact, I don't particularly love a January switch because people are out of the office for the holidays. And if you've got to get employees to go in and put their direct deposit info in and check things like, it can be a real burden.

David Leary: [01:08:01] Yeah, you almost want to roll it out and have them set up their employee profiles and everything's ready. So you just run the first payroll in January 1st. Right. But you have everything else done before the January 1st week.

Valerie Heckman: [01:08:12] Yeah, yeah. So ideally you time it out. But what inevitably happens is people wait and then they're trying to do it. I remember talking to a friend of mine who was like their, their employer didn't tell them that they were switching payroll providers and they had to get their whole team to like enter. This wasn't a non-pay. It was in a different payroll system, but like entering data, you know, on, on Christmas Eve. And then they, they were concerned that if they didn't do something by a certain time, their first paycheck of the year would be late. And nobody wants that. You've got holiday credit card bills to pay, right? So, um, I'd say depending on the client, definitely think through the considerations of the timing, but know that if you're working with us, we've got your back for getting it all up and running.

David Leary: [01:08:59] Sounds like a great plan. Hopefully we'll cross paths and we can toast to 500 episodes. Yeah. And, uh, again, thank you for supporting us. It's been really a privilege and an honor, and having you guys to support us has just made made this dream come true for everybody. I mean, none of this happens without support from on high, ultimately.

Blake Oliver: [01:09:19] All right, David, that's all the time we have for this week. Thanks everyone who joined us live. If you haven't seen us live, go to YouTube, search for The Accounting Podcast. Follow us. Subscribe. Hit that notification bell icon. Also, go to earmark.app to get your free CPE for listening.

David Leary: [01:09:36] Bye everybody.