The Accounting Podcast

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David Leary: [00:00:04] Accountants will lose their jobs if people at the top end management level are not doing ethical things, or if the firm's culture is not ethical. Coming to you weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:20] Hey everyone, and welcome back to the Accounting Podcast, your weekly roundup of news in the profession. I'm Blake Oliver.

David Leary: [00:00:26] I'm David Leary.

Blake Oliver: [00:00:28] David. This week we're talking about E Bonusing staff. $100 million Deloitte paying $21 million to settle a d e case. I've got a story about using cloud Cowork to do two tax returns yesterday in record time. And you've got an interview with Jordan over at Cloud Accounting Staffing about offshoring and onshoring and how all of that onshoring.

David Leary: [00:00:53] That's the big thing now.

Blake Oliver: [00:00:55] Onshoring. Um, and, uh, before that, Before we get into all that, let's thank our sponsors, our sponsors.

David Leary: [00:01:02] This week we have on page Thomson Reuters, Savant Labs 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 pay as 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. Onp handles the heavy lifting. You get a dedicated onboarding. You get a dedicated onboarding coordinator who sets up worker profiles and transfers your 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 business you serve farms, restaurants, non-profits, you name it. I can handle the unique requirements without adding extra complexity. And on pay keeps pricing simple to everything your clients expect, from multi-state filing to off cycle payroll runs is included. No hidden fees, no surprises. To book a demo. Head over to The Accounting Podcast dot com slash pay. That is accounting podcast.io/onay.

Blake Oliver: [00:02:20] Thank you on pay. And don't forget, dear listeners, please use those links when you go visit our sponsors websites. It helps them know that you found them through us and they really appreciate being able to track that. And welcome to our live stream viewers. We've got boring accountant here with two coffee emojis. I'm on number three already and we've got Benji who says, I love your podcast. Benji, thanks for listening. If you want to catch us live, go to YouTube, search for The Accounting Podcast, subscribe, hit that notification bell icon and you'll get notified when we go live, especially if you've got the YouTube app installed on your phone. Uh, tune in and you can chat with us and let us know what you think. All right, David, before we talk about E and their bonuses and this Deloitte settlement, I want to share a story with you about using cloud Cowork yesterday with taxes. I don't do a lot of taxes except our own tax returns. And I decided this year that instead of just working through it myself, which I did last year, I would use Co-work and see what it's capable of. I guess I did use it last year. I used maybe it was ChatGPT last year, but more in just a Q and A way. I was just checking my work with it in the sense of like, if I if I wasn't sure what I was doing when I went through the, the interview that you do.

David Leary: [00:03:42] As a research partner last.

Blake Oliver: [00:03:43] Year. Yeah, yeah. Like helping me try to figure out what a particular box was for instead of using the built in help, I could actually ask those questions and get answers, but I was still driving it all myself, you know, pulling the numbers from the GL. Uh, the trial balance. Right. Creating the work paper. Entering the numbers. And anyone who does this sort of work knows that's time consuming, even if you're fast at it. Right? It would have taken me days, you know. Day each probably to assemble all the paperwork and do the returns. And you know, I know a tax pro could probably do it faster, but hey, you know, it's if you're doing it yourself and you're not doing this all the time, that's about what it takes, right? And so I use Co-work to do it. And, uh, I wanted it to run it with me, monitoring it as much as possible. So getting Claude to do the work, getting the AI to actually do the work. And I was really, really impressed. So the first thing it did was it opened up the GL for each of these entities, uh, ones an S corp. And one is our partnership, uh, return for our media business. And the S corp is my personal.

Blake Oliver: [00:04:54] And so the S Corp in zero for the GL and Earmark media are. Partnership LLC is in QuickBooks. So I got to see how it worked with both GLS. And the first thing it does is the first thing that any accountant would do, which is it goes. And it, it checks the numbers. It looks at the PNL and the balance sheet and the trial balance and tries to make sense of it compared to the prior year return and make sure that all balances and the S corp was fine because I had locked the period and there were no changes, but it got confused in QuickBooks, right? It thought there was like a change that you had made, but that was because of actually issues with QuickBooks reporting where cash and accrual were not like selected properly. Like there's some issue right now with the dropdown. And so the reports that was running were accrual instead of cash, even though it thought it was running cash. And then it couldn't make sense of it and it actually solved the problem, it realized there was a bug in the UI and it reran the correct reports. Tied them out to the prior return. So then it it pulls the trial balance, right.

Blake Oliver: [00:05:59] It pulls the PNL in the balance sheet from both. And it created the work paper. So it asks me all the questions. Uh, that it, it, it needs to ask in terms of, uh, adjustments book to tax. And it did all of the book to tax adjustments in a spreadsheet in excel spreadsheet for each entity. And then I started with my S Corp and it, uh, I told it once I was happy with the work paper and its analysis and like what's deductible and what's not and what are we going to do with this? I said, uh, let's go into tax act. Let's do it. So it opened up Tax act business in a tab in Chrome. And it started working through the interview and it went through and it entered everything. And then it, you know, ran the checks that you get in the software. You know, how when you, when you, uh, enter everything. It then runs like error analysis and work through those. And then here's the part that really blew me away is it found errors in tax acts calculations. It it found mistakes that the software was making and it manually corrected them by changing the entries in the forms. And so the the.

David Leary: [00:07:11] Now did it pause and like review this with you along the way or did it just go and do these fixes?

Blake Oliver: [00:07:17] It just went and did the fixes and then told me what it did so that I could verify it. So the error it found was that Nondeductible expenses in Tax Act auto filled at an amount that was less than the amount it should have been. It ignored entertainment, which is 100% disallowed under section uh 274 A, and it corrected that value. So that would have been understated. So it corrected it. Schedule M one had no line for the entertainment add back after that. So it had to create a custom entertainment 100% Nondeductible line and enter that into the schedule M one it had it had defaulted distributions to $0 when the actual distributions were tens of thousands of dollars, and so left alone if it hadn't done that schedule K line 16 D, and the k one, box 16 D would have been blank, which would have been an error ending retained earnings auto computed at a slightly incorrect value. That's a serious one, because schedule L wouldn't have balanced if TaxAct hadn't overridden it. And then when it came to the state filing, there's a weird thing with the software where the name change box was like checked on the federal form and the and, and Claude found it on the state form and realized it shouldn't be checked.

Blake Oliver: [00:08:42] And then it went back to the federal form and unchecked, that as well. There's an issue with the Arizona check box on filing selections that defaults to unchecked and resets every time you ran to the flow. And so the AZ state return would not have transmitted if it hadn't been fixed. There would have been an error with that. So like Claude Troubleshooted, all of this fixed it all and made sure that the, uh, schedule, uh, schedules M and L tied out, which is of course, one of the trickiest things when it comes to doing a partnership return, is getting that stuff to tie out. Right. And last year, I remember actually like trying to get the software to do it was a challenge. And Claude did it. And then I transmitted the returns both returns myself at the end of the process, and I had to go do one more check before I did that, downloaded the PDF of the return, ran it through like a fresh instance to make sure that everything tied out and it did a fresh analysis versus the values from the GL and the tax return and confirmed it. And all of this. It did it over the course of a few hours yesterday with me coming back and checking on it from time to time.

Blake Oliver: [00:09:50] So it wasn't like instant because I had to keep coming back and I was doing other things. But like, if I had just been able to sit with it and wait while it worked, I mean, we're talking like maybe an hour per return. Wow. And so this really has convinced me of the, the power of these AI agentic AI tools that can spin up subagents and do these complex tasks and do them reliably and check its work. This is all possible now with just the off the shelf cloud Co-work. And I'm using opus five as my default model. I didn't even use fable because I didn't want to burn through all my credits. I think last month I spent like a thousand in cloud credits because I've been going crazy with it, and I didn't want to do that for this case because I didn't think it was necessary and it wasn't. So that is, uh, that is my latest AI use case. Uh, if you're in tax prep and you aren't using this right now, you are missing out big. Or if you're a CPA who just does their own returns still and you want to save a bunch of time, it is wild. And so.

David Leary: [00:10:54] Essentially, you use Claude Cowork or the AI to bridge the gap between the goal and the tax return, essentially. Okay.

Blake Oliver: [00:11:07] And actually, it's like I'm also using it to like check the goal detail and suggest, you know, recoding in advance of actually exporting the trial balance. So like all that, all that cleanup work, it can go and do that too. And it's been doing that like on a monthly basis because I'm using it to close the books as well. So, but I did have it do like a final check on that.

David Leary: [00:11:26] So I'm glad you brought this up because this, what you did explains the reason for a big story that broke today just this morning accrual. Are you familiar with accrual.

Blake Oliver: [00:11:37] I know that they're doing AI. But remind me.

David Leary: [00:11:39] They're doing AI tax returns. It almost reminds me of basis a little bit when you go to the website, but they're basically fully creating a tax return, right? And they just announced today that they are acquiring puzzle. So puzzle is essentially a QuickBooks competitor. It's one of the new AI GLS, right? So that way they can be on both ends. Right now you have your AI. You have puzzle that's doing AI GL, you have your AI based tax return, and now you don't need a coworker in between because in theory, now they're going to talk to each other.

Blake Oliver: [00:12:09] And you know what's interesting about that, David, is that like accrual is I think like basis and these other tools like Meridian, the pilot has built, they are GL agnostic. And one of the issues with puzzles AI is that it only works inside of puzzle. And that's a limitation for a firm that needs to support clients on QuickBooks and on Xero and on whatever other general ledger they're using. You can't switch all your clients if you want to use that. And so now it's a really compelling offer from accrual to be able to say, not only do we have AI agents that will work in your jail, but we have our own as well and it works even better with ours.

David Leary: [00:12:48] Hours. Exactly. So I feel like there's two narratives on this story. Narrative A, which is just this is another example that SaaS jails are not dead. And then narrative B, this is just a simple combining of forces. And I'm starting to lean towards its probably narrative. B but let me let me kind of show you my thought process on this.

Blake Oliver: [00:13:07] Okay.

David Leary: [00:13:07] So let's assume due diligence was done up, down, left, right by all parties that could have possibly be involved. So you're a startup puzzle, for example, you get in a financial situation or maybe your runway is not going to last as long. So so what's your first move? You hope sales can bridge that gap, right? Then maybe your second move is to hit up existing investors. Maybe the third move is to possibly talk to outside investors. Then, you know, eventually you get to this like shopping for a possible acquisition. So if true due diligence took place, you're probably going to make a phone call to Intuit and zero Sage in Oracle, right? If you're doing due diligence, you've got to talk to all the players about being acquired.

Blake Oliver: [00:13:50] Absolutely.

David Leary: [00:13:51] And then let's just say they did. Let's meet. They chatted with Intuit, right. Or they chatted with zero and they had their own meetings. So that means Intuit or Xero did due diligence and they looked at the covers. Right. And the reason maybe we're not seeing an announcement of Intuit bought digits today is maybe they got under the covers behind the curtains and realized that's not really a threat. Maybe they don't have as many customers as they maybe said they did. Maybe the tech isn't as impressive. Or maybe in house they're like, we're building the same tech. We'll have it done next week. Right? So they there's insights to this, right? Maybe they don't need the engineering talent. Maybe the price was too high. Right. But I think like this would be the second week in a row going on narrative A that we had this example of the established SaaS players are not being disrupted by these AI players. Last week it was all the p money buying work day, not going into the. I start up now we have this where apparently this AI GL was up for purchase and the established players didn't even didn't buy it. Right. Or the second narrative, which is possibly what it might actually be, is it's a combining of forces. So general catalyst. Well, actually, before I say that. So puzzle raised about $50 million in their lifetime.

David Leary: [00:15:07] A cruel raise has raised about 75 million. The major investor in both is General Catalyst. So General Catalyst incubated or created puzzle and then later incubated a cruel. So this could just be a merger of Casse and tax. And I'm starting to think it might be because they. Instead of just having their own silos, they just, hey, we already. We're investing in both these companies. They're kind of doing overlapping work. Let's just put them together. A cruel, apparently used puzzle as its GL. But all incubators are like that. They buy each other's products, so that's not like a super impressive thing. Um, but it could be if you imagine like a cruel on its own, it's QuickBooks to the accrual AI to the accountant and a tax return. Now it's just going to be puzzle, like you said, you have puzzle to an accrual AI to a tax accountant and tax return. And so I think at the end of the day, this is just investors saying it'd be easier if they just combine forces. Maybe the narrative A doesn't exist. Um, and because there's not really an acquisition like money wise here, if you're the same investor, are you really buying anything? Are you spending money? Like it really just feels like a, we already own these two companies. They have shared resources. Let's just put the whole GL together or the well.

Blake Oliver: [00:16:27] And it creates more value for the firms they're selling to. Because if you're going to buy a genetic AI, an AI agent platform, I think you want to buy one for the firm and have it be able to access tax and books, because those two things need to work together in an ideal, uh, client engagement. Makes a ton of sense. David. Um, I want to talk about EY and Deloitte and I'll let you kick that off when we get back from our next sponsor break. Our next sponsor 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 where buried under disconnected systems, manual data entry and staff stretched way past 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 safe, send Sure Prep and Ultra tax 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 up to 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 automation. That's The Accounting Podcast dot com forward slash automation.

David Leary: [00:18:19] So yeah, EY announced that they're going to give $100 million in bonuses to staff for quote unquote, human skills. So the way I'm imagining this, like they want to reward people that adapt, they use innovation, judgment and critical thinking. Not just like I blindly follow AI because I think one of the big four, right, just had all these fiascos of putting out bad AI generated stuff. I think all big, all the big four, it's.

Blake Oliver: [00:18:46] All for the big.

David Leary: [00:18:47] Four had an issue.

Blake Oliver: [00:18:48] I've now gotten in trouble for their fabricated citations in their consulting divisions.

David Leary: [00:18:55] So it's going to include both spot bonuses. So let's say you're like, hey, this is AI slop. In this tax return, maybe you get $500 spot bonus for discovering that as a human. And then if it's material contributions, you could get up to $25,000 bonuses, 25,000.

Blake Oliver: [00:19:11] Nice.

David Leary: [00:19:12] Up to $25,000. Yeah.

Blake Oliver: [00:19:14] That's amazing.

David Leary: [00:19:14] Or, or there's team awards up to 25000.

Blake Oliver: [00:19:18] So incentivizing the staff to check the AI, not to blindly accept this.

David Leary: [00:19:22] Really feels like it. They, they wrap it up as human skills because I think they're trying to make it softer, but that's all they're doing is they're just saying like, be the human in the loop, and we're going to pay you to do that, which should just be your job. If you're using AI, right, it isn't like, I mean, this is brilliant.

Blake Oliver: [00:19:40] This is brilliant if you ask me though, because like, you want to align your staff's incentives with your problems that you have in your firm. And so like, it's just like a whistleblower tip line. Uh, you got to incentivize people to actually like report this stuff. And financial incentives work great. So kudos to ey and, uh, I mean, $25,000 for material. I mean, material, uh, issues. Like that's a big deal. But it makes sense because EY is charging like millions of dollars for some of these reports.

David Leary: [00:20:10] And, and if you think about the.

Blake Oliver: [00:20:11] Hundreds of thousands anyway.

David Leary: [00:20:13] All every one of the big four have announced they're going to invest a billion, 2 billion, 1.5 billion into AI, right? If $100 million, 10% of that as rewards to make sure humans are in the loop. Doesn't really seem like that much of an expense.

Blake Oliver: [00:20:29] No, it's worth it. Totally worth it. Let's talk about Deloitte and this $21.5 million settlement over Department of Justice allegations that it's Dei practices, diversity, equity and inclusion, violated federal anti-discrimination requirements and consequently the False Claims Act. We should note that Deloitte denies the allegations and admits no liability under the settlement, and has not responded to comment, at least from cfo.com, where I saw this article, they had not responded at press time. So we don't have the Deloitte side of the story, just the facts. Here's what happened and what the Department of Justice alleges. Doj alleges that Deloitte used race and sex based employment practices from January 2017 through August 2026 in hiring, promotions and staffing. So basically the last ten years or so, those decisions allegedly pursued nonpublic workforce composition goals based on race and sex. Deloitte allegedly set demographic goals for employees working on federal contracts and restricted some training, mentorship and development opportunities based on race or sex. Attorney General Todd Blanche said government contractors can't reward or penalize workers based on race or sex simply by calling the practice Dei. The big winner in this is David, a whistleblower that brought this case to the Department of Justice. It was the American Alliance for Equal Rights, and they're getting. How much is it?

David Leary: [00:22:11] $4.3 million.

Blake Oliver: [00:22:14] Which is 20% of the settlements recovery.

David Leary: [00:22:18] So just to rewind. So pre pre Trump obviously we've had known this is an issue in the industry for a long time. We have a diversity in the accounting industry. So Deloitte, all the big four, they all have tools and practices to try to make diversity hires. Right? Kind of what's happened. Then Trump comes Trump, uh, white House, they you're not allowed to do this stuff anymore, right? They, they pass the, uh, what are they? Does it actually have a program or is it just an executive order?

Blake Oliver: [00:22:51] Um, well, so this is actually this case was a part of a alleged violation of a federal anti-discrimination law, which is the Civil Rights Act. So title seven, which prohibits making employment decisions because of race or sex. And so Deloitte had federal contracts and therefore has to comply with this. Um.

David Leary: [00:23:18] But but this isn't the American Alliance for Equal Rights like the They're fighting against die.

Blake Oliver: [00:23:30] I don't know.

David Leary: [00:23:31] Is are they are they paying this because they they're being penalized because they didn't do correct die hires? Are they being penalized because they kept doing die after the Trump administration said no more die? That's what's confusing. And, and I feel like this is the whole like abortion issue, right? Where both sides confuse the message so much. You don't know what side, what they stand for. Like the American Alliance of Equal Rights has this great name, but I don't think it's pro die. I think it's an anti die group. But I'm not positive on this. It's just. And this is what on purpose right. It's all done on purpose to keep it confusing right. Did they. And so it's really confusing. Is is Deloitte in trouble because they failed to properly um positively affect die hiring or are they in trouble because they kept doing it when they were told to stop. Well, remember.

Blake Oliver: [00:24:27] The rule is that you're not allowed to use race or sex to make hiring decisions. So that rule can cut both ways, right? It can cut in in against AI just as much as in favor of it, depending on how you implement it. If you are saying if you are discriminating right by setting quotas for hiring. Yeah, right. Companies have done that in the past by excluding minority candidates, by saying, we don't want any minorities or, you know, we don't we just want a bunch of, you know, white guys on our in our company. Right. But it can also swing against you because if you are creating quotas for hiring and you are, then, you know, like discriminating against white candidates, you know, as an example, right? That is also discriminatory. Now you're discriminating in It's for different objectives and goals, right? But the way the law is written, you can't do that. You have to be very careful about it now. Like would, uh, would this case have been brought under the Biden administration? Absolutely not. Right. The Trump administration is pushing against the AI. And so they're using they use this tool, right? They use this violation of law against Deloitte.

David Leary: [00:25:45] Yeah. So this is this, this this organization was founded in 2021 by activist Edward Blum. And its purpose is to end preferential hiring based on Dei. So this is an anti Dei, uh, organization.

Blake Oliver: [00:26:00] That's why we've seen the big four pull back on all their Dei programs.

David Leary: [00:26:05] Yeah.

Blake Oliver: [00:26:06] Yeah.

David Leary: [00:26:06] But but the thing they don't understand is a $21 million fine doesn't affect the Big Four at all. Like, like this. This is not going to have any impact.

Blake Oliver: [00:26:13] But it did change their behavior.

David Leary: [00:26:15] Yeah. Because they don't want to be in Trump's radar. Exactly.

Blake Oliver: [00:26:17] Ultimately, they don't want to lose their federal contracts. Yeah. All right. Let's go ahead and hear from our next sponsor. And that is Savant Labs. If your finance team is using AI for drafts and research, but still closing the books by hand, you're in the same spot as most enterprise accounting teams. Claude and Copilot handle the easy stuff, but what about the clothes, the reconciliations, and the tax provisions? Still manual, still spreadsheets, still eating up days every cycle. The real issue isn't effort. It's trust. General purpose AI gives you a different answer every time, and an auditor can't follow the trail. That's why savant exists. You describe a finance task in plain language, and savant turns it into a governed agent. It pulls, cleans, and reconciles your data across ERPs, spreadsheets, and PDFs. With over 500 connectors, every workflow runs the same way every time. Same inputs. Same output. Every cycle. Data lineage approvals and Sox reports are built in automatically. The result is up to 70% less manual work and 80% fewer errors. And here's the best part. Bring savant a complex use case that's eating 20 plus hours a month, and they'll build you a custom agent for free with a 30 day trial. To learn more about savant and start building your first agent, head over to The Accounting Podcast dot com slash savant. That's The Accounting Podcast dot promo forward slash SAVANT. Accounting firm salaries are up. David a lot. A little. Should we care? What does it mean?

David Leary: [00:27:52] Yeah. So yes, accounting salaries are up. Right. Uh, but the real key in the information on this is the median salary for entry level has fallen. So even though overall, like P firms are paying a premium because they're trying to bring in that higher level. But where's the real shortage in the industry. The mid-level management talent. Yeah. Right. The people that are going to watch the agents write.

Blake Oliver: [00:28:21] The senior managers.

David Leary: [00:28:22] Seniors and managers.

Blake Oliver: [00:28:23] Not interns, not grads, not not not first year staff.

David Leary: [00:28:29] So for entry level, it dropped from 75,000 to 73,000. Wow. Since 2000. So that's not a good trend right? We if entry level falls all this work that just happened increase the accounting grads, the 150 hour rule, all these things to help add people to the profession. But if entry level salaries are falling, that's going to be a leading indicator. And then we're going to see accounting enrollments fall, accounting graduates fall, CPAs fall.

Blake Oliver: [00:29:02] I've got a story here about, uh, KPMG in Australia. Let's do some follow up, shall we? Okay. Kpmg Australia is cutting 360 employees and 27 partners. That's about 5% of its workforce there, which is no surprise when you realize that consulting revenue fell nearly 17% year over year. So they've got about 10,000 people in Australia. Cuts are going to be primarily in consulting with some business services roles also affected. And this is amid those allegations of client data leaks and broader scrutiny of KPMG Australia. They have lost a bunch of clients in Australia due to that violation of client confidentiality when they used audit information. Information about clients obtained from their audit engagements to when consulting work, which is a big no no.

David Leary: [00:29:58] What was that? And then they had the whistleblower hotline stuff got shut down. But they've just had a.

Blake Oliver: [00:30:05] Oh yeah.

David Leary: [00:30:05] Yeah.

Blake Oliver: [00:30:06] That's what they did is that they, they, they did, you know, substandard investigations, multiple investigations due to the whistleblower investigations came back with nothing, and then the. But this wouldn't go away. And so basically they were like trying to. They were trying to quash it. Right. That's what they were doing. And they. They got out. And now their CEO is being pulled in front of Parliament and, uh, castigated on, on live television. There's stories I'm being sent like, like eight minute, uh, major television news coverage of this about KPMG. Such bad news in Australia.

David Leary: [00:30:43] They had stuff in lockers and letters and.

Blake Oliver: [00:30:46] That's how they were sharing the information. Yeah, putting it in lockers and like passing it around.

David Leary: [00:30:51] But I mean, it's really clear, like, uh, non-ethical behavior happening over here results in losing clients, which results in people losing their jobs. That is the real impact of this. That's right. Accountants will lose their jobs if people at the top end management level are not doing. Accountants will lose their jobs. If people at the top end management level are not doing ethical things, or if the firm's culture is not ethical things, or if the firm's culture is not ethical, there's 5%. You said 5% of their staff.

Blake Oliver: [00:31:20] 5%? Yeah, 5%. So I've got some more Big Four bad news. Pwc was the Auditor of Evergrande, which is the massive construction company that collapsed a few years ago in China. In that case has been proceeding against PwC for a while now. We've got an update for you. A Hong Kong court is refusing to dismiss charges against the international, uh, entity of PwC. That's part of the lawsuit filed by the China Evergrande liquidators against it. The Deputy High Court judge, Patrick Fung, called PwC international is evidence supporting dismissal inadequate and unsatisfactory. This ruling doesn't decide the merits of the claims, it just keeps PwC international on the hook in this case, so the liquidators might be able to extract money from PwC international for this collapse, which would be a big deal, because that means that all the PwC member firms might end up having to pay for PwC China's audit failure. The liquidators are alleging negligence and misrepresentation in PwC Evergrande audit work. They're seeking ¥57 billion, which is about 8.5 billion US, making this one of Hong Kong's largest corporate claims ever. And of that total, this is what PwC international could be on the hook for ¥38 billion. So I don't know exactly what that is in US dollars, but, you know, 57 billion was five 8.5 billion US. So we're talking billions of dollars that the liquidators are seeking from PwC international.

David Leary: [00:33:12] So if this happens, the PwC international has to pay. Do you see firms changing this model of this. You know, we have the international or the global. Then we have the. Every region has its own separate firm. There's like where they there's more delineation breakage between the entities.

Blake Oliver: [00:33:29] Will they try. That's like they set. That's why they set all these entities up this way. Right. In every country, right. You've got the local firm that has PwC logo. That's a separate entity from the international firm, and they're tied together and money flows, but hopefully liability doesn't. But in this case, it might. And just think about what the impact would be. We're talking billions of dollars of potential exposure. So in the past we've talked about how these audit failures don't result in meaningful fines for the auditors. This could be the most meaningful fine in history.

David Leary: [00:34:07] Because it's not a fine. It's going to be a lawsuit.

Blake Oliver: [00:34:09] It's a lawsuit. Yeah, a lawsuit that then results in a claim against PwC. They might have to pay. So it's not the regulators, right. It's the investors. It's the it's the bondholders. Right. It's the the liquidators. Uh so. Evergrande's debt is about 44.6 billion. So that's why they're seeking so much money because Evergrande collapsed owing almost 45 billion in terms of US dollars to its, uh, to its investors, to its bondholders, whatever. And PwC international, of course, is saying no, there were just the coordinating entity of the network. We didn't provide services to Evergrande. We didn't have a relationship with the client. And we'll see if that. We'll see if that sticks or not. Okay. Um, one more follow up while we're here on Cbiz. Cpa Trendlines wrote up an analysis of the CBI's acquisition by Grant Thornton. Grant Thornton bought CBI's for $55 per share, or they made that offer for $55 per share, which ends CBI's as a public company. They were, I guess, 29 years on the market or they were rolling up for 29 years. I don't know if they were public the whole time. And and CPA Trendlines did sort of an analysis of how did the shareholders do, how did the investors do? So. If you were a long term investor, here's how it shook out for you.

Blake Oliver: [00:35:52] If you bought it at $17, 25%, $17.25 per share back in 1997, that equals a nominal compound annual price return of about 4.14% over 28.6 years before taxes and costs. So not great, right? I mean, like you could. Well, I guess during those years, like money markets were not producing any interest or whatever, but like, you know, 4% is, you know, for a stock. I don't know. You didn't you didn't lose money, right? I don't know, maybe you did. If you if you factor in inflation, maybe you did, I don't know. We have to actually do that calculation. I don't know if that calculation actually includes inflation or not. Anyway, it doesn't matter. Not a big deal. Cbs historically paid no cash dividends. Right. So all of the uh you know, not that's the nominal return you would have gotten as investor, um, if you bought it though in the end of the year in 2000, you could have got it at $1.13 after the first roll off roll up collapsed. And that means if you bought it, then you made 4,767% on your investment, which is a 16.4% compound, 16.4% rate of return compounded annually over, 25.6 years. Um. Their all time closing low was actually just under $1.97.

David Leary: [00:37:15] That was in 2001 ish.

Blake Oliver: [00:37:17] Yeah. So if you bought the stock after the, uh, merger collapsed back then, man, you did really, really well. Now, if you bought it at the record price in 2025, it was $88.65. After the Marcum transaction expanded its scale, uh, you would have lost 38% only 17 months later. How about the partners? Uh. How did the partners do? Final purchase accounting recorded $934.7 million of share consideration, representing the fair value of 13.6 million shares, plus just over a billion in cash for the Non-attached business. And the, uh, $55 offer is 28.4% below the announcement benchmark value. So how did the partners do? I don't know. It's not really clear. But I mean, the nano test business got 1 billion in cash. All right. That's the follow up. I don't really have an answer on how the partners did. Couldn't quite figure that out. Where do we go next, David? Here.

David Leary: [00:38:34] We could talk about how the IRS tax revenue has reached an all time high.

Blake Oliver: [00:38:39] Really? I thought we had a I thought we had like a big tax gap problem.

David Leary: [00:38:43] Tax gap might still be there. But, uh, 5.3 trillion was collected in fiscal year 2025, the highest ever unadjusted for inflation. And that kind of makes sense a little bit. Economy is a little bit of an upswing. This makes sense. The amount of income coming in they're collecting. But believe it or not, examination revenue dropped 35% from fiscal year 2024 to fiscal year 2025.

Blake Oliver: [00:39:10] So this is the revenue they get when they do audits.

David Leary: [00:39:12] Exactly. That, in theory would be the filling that gap, right. The top.

Blake Oliver: [00:39:18] 35%.

David Leary: [00:39:19] Is down down 35%, driven probably by the 27% decrease in the workforce. So we're if. We're just leaving money on the table because we got rid of the people that would go get the money, it doesn't mean it's still I can't fathom this. You're getting rid of your sales team that's making sales. They're bringing in the revenue just doesn't make sense to me.

Blake Oliver: [00:39:42] Well, so yeah, the revenue generators. So basically what you're saying is that like tax revenue grew to a record number despite enforcement dropping. So basically the voluntary compliance is offsetting the involuntary compliance enforcement revenue.

David Leary: [00:40:03] Well, I think also that the they sent out 3.2 million automated notices to individual filers that they owe money. And that helped maybe move it between fiscal year 23 to 25. But I also feel like that's not a great indicator because didn't they after Covid or they just turned off all the notifications they were sending people. Do you remember that?

Blake Oliver: [00:40:25] Because oh yeah, temporarily.

David Leary: [00:40:26] People couldn't pay their taxes. Right? Right. And so they, they turned off all the notifications people were getting. So it's kind of.

Blake Oliver: [00:40:33] Just turned them back on.

David Leary: [00:40:34] And just turned it back on. So it's kind of an unfair comparison. You'd really have to compare a time period of when we had the automated collections going out, not to 2023, right? When I think they were still turned off. I'm not positive on that.

Blake Oliver: [00:40:49] Let's check in on our live stream chat here. We've got Mexican Iron Man who says, checking in from my accounting office in Hilton Head, South Carolina. Great to have you with us, Iron Man. And we've got Dustin. Dustin says, sweet, I'm catching this live. Dustin also says, I am interested to see if some of these other AI gels do the same, or if we really just start using clod with something like ledger TB. This is the big question is, and I don't know exactly what ledger TB is, but I assume that this is one of those like home brewed gels. And you can even ask cloud cover to like make you your own gel and it'll like code one up. That's like balances the forces, the debits and credits, the balance and all that stuff. Like it's not that hard. Like accounting theory is actually really simple to code for an AI. So I do wonder like what the future is going to be sometimes. Like, are we going to have a bunch of use cases where we just are doing accounting with clod in like a local database for some clients? And that makes sense for right up work. Like if I was doing right up work for clients and I've been previously just like getting all their, you know, bank statements and importing everything for the whole year or for multiple quarters and doing that all at the end of the year to get a tax return done. And I'm doing that in like QuickBooks and paying a fortune. I would not be doing that anymore. Right. I'd be, I'd be like, I'd figure out a way to just do all that write up work with like Claude Cowork or. Yeah.

David Leary: [00:42:17] Because you always have those set of clients that maybe you can't justify getting them into QuickBooks yet. And you're like, all right, here's a spreadsheet. I want you to log every check that you write. And you'd, you'd create a Google sheet and you'd have them just use something like that. I could see a world where you're, you're building a special teeny custom app just to get the client to track stuff. Right, right.

Blake Oliver: [00:42:36] And so Dustin says that ledger TB is an open source GL that you can use AI with. So that could also be the mid way, the mid path, the mid middle path in the sense of like, we're not all going to be coding our own GLS using Claude, but we are going to be using AI with an open source GL that's been built by a community and that we can rely on and then not having to pay software subscriptions that are like pretty ridiculous, right? Like to pay, you know, 50, I don't know, anywhere 30 to $100 a month for a GL where you're just doing like basic work doesn't really make a lot of sense. And that's why I think you're also going to see prices come down on the low end of these gels to compete with that, because the value that they provided in the past was there were things that the open source deal couldn't do, like have bank feeds. But now I can just drop 12 bank statements for the whole year into Claude and have it create the import file and import it into whatever software I want. So it's like that feature that I was paying for before doesn't I don't need it. I can have a workaround, right? Just get the client to give me their bank statements. And then my software with AI does that. So something to keep an eye on. I gotta we gotta test that out. David Ledger TV give.

David Leary: [00:43:55] It a try. Looking at the website right now.

Blake Oliver: [00:43:57] Cool.

David Leary: [00:43:58] We can check it out.

Blake Oliver: [00:43:59] Okay. What is our next story here? Here's a story that I've had on my list for a while. And it really goes to like the impact of AI on niche areas in accounting. It's impacting everyone because clients are starting to use it, and we're starting to get the work that they send us. And a great example is in the cost segregation industry. And cost segregation is a sort of fascinating niche in accounting that combines engineering and accounting to create cost segregation reports, which if you buy a property you can use to accelerate depreciation by separating out the different components of the property into their various useful lives, which allows you then in certain areas to accelerate depreciation. So instead of just having the same, you know, here's my purchase price for this building that I bought with a bunch of land and having to like depreciate that over. I don't know what it is. Like, you know, the standard was it decades? Right? 30 years or something. You can, you know, just isolate the cost for the roof and depreciate that over the life of the roof and get.

David Leary: [00:45:09] Historically, this used to be a lot of work and a lot of tracking for a firm to do for a client or for a client to do themselves.

Blake Oliver: [00:45:17] Well, it's still is.

David Leary: [00:45:18] It still is.

Blake Oliver: [00:45:19] Because there are certain guidelines. The IRS has a whole manual as to how you're supposed to do these cost SEG reports. Well, it's actually not how you're supposed to do them. It's it explains how the IRS audits them, how they evaluate them. And then what you do as a cost SEG Pro is that you build your reports so that they're going to be compliant with what the IRS wants to see. And therefore, when your client gets audited, they aren't going to have an adjustment that reduces their depreciation and makes them pay a bunch of penalties and interests and all that, right? So getting it right is important because there's a lot of money on the line, anywhere from hundreds of thousands of dollars for a single family home to millions, tens of millions, hundreds of millions of dollars for property, plant and equipment or buildings, land, you know, all that. Like buy a factory, you build a factory, all that stuff. So anyway, getting to the actual story here, it's a it's a piece that I saw in Accounting Today by Heidi Henderson of Engineered Tax Services, and she brought a real story of clients doing their own cost segregation stories or cost segregation studies and bringing them to the firm and saying, hey, can you use this, you know, do my cost seg report for less money because I already did it. I just want you to bless it.

David Leary: [00:46:45] There's an explosion of AI all these there's so many new cost seg companies that have popped up. Right? Yeah. So it's either a combination of that or people just going to out of the box. Yeah. Just doing it themselves.

Blake Oliver: [00:46:59] You can do that. You can go into ChatGPT or cloud and you can be like, hey, I need a cost segregation report for my new building. Can you make me one? And it'll do it. Is it right? Well, Heidi took a look. She had three prospective clients come in over six weeks, bringing studies created using ChatGPT and Google Gemini. And the clients asked her license engineering firm to validate them to sign off on them. And the firm declined. And she they declined because these studies just didn't hold up the Gemini spreadsheet. It had six rows and $100,000 of bonus eligible basis on a $400,000 property. The ChatGPT workbook had a. It was a it was for a $4.7 million athletic facility, reclassifying 1.24 million or 26% of basis to short life assets. So that's, that's a, that's, that's a, you know, $1 million, uh, acceleration, right, of depreciation. That's a lot. And scored against the 13 elements of the IRS audit technique guidelines, right? The. 13 principle elements that examiners look for in these reports. Chatgpt scored one and Gemini scored zero. They failed miserably. And of course engineering tax service engineer Tax Services gets a 13 because they designed the reports to be compliant. The ChatGPT file included contractor invoices, so it got credited with documentation, but it lacked a stated methodology engineer of record engineering, takeoffs reconciliation and section 121245 statutory analysis also about 1.59 9 million. Of trade level basis was assigned 0%.

Blake Oliver: [00:48:51] Short life. Treatment where qualified engineering analysis might identify partial reclassification opportunities. So people are using AI. They're doing the work that are trying to do the work that these firms get paid to do. And they're asking the firms to come in and bless it. And it's just like the quality is not there, at least the way the clients are using it. Now, could you use like something like cloud Co-work now, if you know what you're doing to actually do a compliant cost segregation report, I think that if you built a project and you gave it the IRS guidelines and you trained it, like gave it all of your firm's methodology and processes, like all in that folder. And you used like a, a frontier model like fable 5.1, which is the latest one. Now I wonder how good it would be. I think based on my experience with these tax returns, that it could do a lot of it. There's still parts it can't do, right? Like the cost seg thing, you know, you need to have like an engineer, you're supposed to have an engineer on site go on site and like walk around and like verify that this stuff is there and take photos and all that. But if you did that part as a cost seg firm, could you then take all the inputs and have it do the report, do the work paper?

David Leary: [00:50:21] So it sounds like if you think about last week, you covered Thomson Reuters and how they used an open source AI model and built their own AI tool. It seems like there's something engineering resources could do. Engine resources could take an open source model and create their own cost seg AI and charge people to use it because obviously people, the demand is there. People are trying to do it and there's no proof they're paying for it, but they're.

Blake Oliver: [00:50:46] Get the humans to train it. It's like you said, create a not a dumb AI. I mean, that's the term you use, but like a special, an AI that only does one thing like a savant AI or.

David Leary: [00:50:55] It's.

Blake Oliver: [00:50:56] Just a.

David Leary: [00:50:57] It only knows cost seg. I don't know about anything else.

Blake Oliver: [00:50:59] A Rain Man AI right that.

David Leary: [00:51:01] Only.

Blake Oliver: [00:51:01] That only plays poker, right? That only does cost SEG reports that only does tax returns. Uh, then you get like, and it's trained by the humans and evaluated. So it's, it's going to not, you know, make stuff up. And that's the problem with like the off the shelf tools is they're very convincing, right? They'll do their best to get it to get you an output, but they'll BS their way through it. And that's why clients come to us with like crazy answers because of those eyes that are trying to do their best, but are just not equipped to do it because they're general purpose and they're not specialists. And I think with that, why don't we go into.

David Leary: [00:51:44] Our last add unless you have another article.

Blake Oliver: [00:51:46] Let's do our last ad and then we're going to hear from Jordan at Cloud Accountant Staffing, which is fitting because they're our next sponsor. 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 Accountant 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 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 Accountant 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 A. S that's Accounting Today dot com forward slash CAS. And now let's welcome Jordan from Cloud Accountant Staffing.

David Leary: [00:53:05] Welcome to the show. I think this is your first time ever being on the accounting podcast, correct?

Jordan Sublette: [00:53:11] That's right. Long time listener, first time guest.

David Leary: [00:53:14] First time guest. But Cloud Accountant Staffing has been a very great sponsor. And we've been talking about cloud accountant staffing. Now, I feel like for three years on the podcast, maybe a little bit longer, I've been around for easily over almost half the episodes. Um, but I've been meaning to talk to you and catch up with you and get you on the show because you had an announcement about two months ago that kind of blew up people's heads a little bit. Uh, part of it was you now have Jason's stats. He's either an employee or he bought the firm or you bought him. I don't know what's going on, but I would like to have some clarity around your announcement with Jason stats. And this leads into this other concept you guys kind of introduced. So right now you guys do offshoring, you do Nearshoring and this concept of onshoring. And I think it ties into the Jason thing a little bit. So I'd love to understand that. And that's a good reason to have you on the show. But then before we do that, just to rewind on your background, so you had a firm, you did some outsourcing, got good at it, and that's what drove you to create cloud account and staffing. Can you explain that a little?

Jordan Sublette: [00:54:16] Yeah that's right. I was a former firm owner and actually started my career at a big firm in Indianapolis and kind of got the entrepreneurial bug and went and got an SBA loan and bought a really small firm from a guy who was retiring. And it was in a really rural area in Seymour, Indiana. And there was just kind of this moment between the talent shortage and this pandemic, and everyone's scrambling new tools that they were using to work from home that, uh, I was like, you know what? I'm going to try to, I'm going to try to hire overseas. So I tried hiring in India, South Africa, the Philippines, and ultimately had a bunch of success building the a team in the Philippines where we, before I sold my firm, we were, um, we were 15 people and ten of them were in the Philippines. So still a small firm. But.

David Leary: [00:55:06] So tell me about this Jason announcement. I want to understand this more.

Jordan Sublette: [00:55:10] Yeah. So Jason is someone I've admired for a long time, like what he's doing for the profession and the accounting community. Um, and he was, you know, as soon as he started blowing up online, for lack of a better term, we, I was following his content and started advertising with him pretty early. And he was just a great partner. He won. He. He cared in the beginning to. He like. And I'm sure it's even more rigorous now, but like he really vets his partners and I know he turns away a ton of partners and, um, but we were an ad partner of his for years and just developed a relationship. And so like when this opportunity arised it, it kind of felt like a no brainer. And you said earlier, like, what's the, like, what is the relationship or like, how does he fit in? He is an owner. So he's my business partner. So Connor is also my business partner. Um, so there's, there's three of us. It still is like a very like closely held, privately owned business with Jason stats. You know, it's not some kind of messy cap table that he's just in the mix. He's like, he's a meaningful owner in the business.

David Leary: [00:56:29] Okay. It's just, it's just not a face relationship type thing.

Jordan Sublette: [00:56:32] Yeah. That's right. Yep.

David Leary: [00:56:34] So where does this overlap with the type of offerings you have. I mean, because cloud accounting, staffing has always been offshoring, like you said, started with the Philippines then I think now you do some nearshoring in South America, right? And then now there's this new concept of onshoring, like hiring U.S. talent, right?

Jordan Sublette: [00:56:52] Yep.

David Leary: [00:56:53] Paint that picture for me.

Jordan Sublette: [00:56:54] For us. I mentioned this earlier, and these crazy numbers get thrown out all the time. I don't I can't say for sure what's true, but I think we're something like three 400 000 jobs short in the US. Right. And I know you got you and Blake have talked about the, the pipeline and um, there's kind of mixed reports there that now all of a sudden college grads are like, it's trending up. But either way, the amount of people that are retiring, there's not enough people coming up to.

David Leary: [00:57:21] Correct the imbalances.

Jordan Sublette: [00:57:22] Right? So we, you know, that's the constraint that firm owners feel and that why they turn to hiring overseas and building teams offshore. And so we, you know, we started this business five years ago. We have just over 300 people. Most of them are in the Philippines. You're right that we started hiring in Latin America. That was that was in, um, gosh, late 2025. Admittedly, we haven't had as much success there yet as we would like to. So we're still we're still trying to figure that out. There's some cultural stuff for us to still like, try to navigate and understand to get better at recruiting the right folks. But, um, yeah, it just the onshore part of this made a ton of sense, especially if you think about back to Jason, his, his distribution, he, the people who consume his content, there's a ton of accounting firm owners. And there's also just a ton of like high agency accountants who work at big firms who either just like the content because they're like sick accountants, or they maybe want to go out on their own. But he speaks to both of those. Right? And so for us, it's kind of this unique advantage of, Okay. Jason can kind of solve supply and demand for us where he can recruit accountants and firms.

David Leary: [00:58:41] In the past. Didn't he try to set up some sort of matchmaking service between accountants and firms so they could hire them or something in the past?

Jordan Sublette: [00:58:49] Yeah, that's right, he did. I don't know if that was in 24 or 25, but he like.

David Leary: [00:58:53] Yeah.

Jordan Sublette: [00:58:53] He like dipped his toe in the water. And, and I, you know, the, from what I heard from him, they were just overwhelmed with like, how much came back from that? How many accountants like raised their hand and how many firms raised their hand and they're like, oh, man, like, this isn't like, this is a full recruiting business like right now. And I think he just decided that it'd be too big of a distraction. So. But I think that, you know, that always stuck with him of that, like, hey, this is a good opportunity. And he really wants to help accountants get out of bad firms and bad careers and work with firms that are the type of people that listen to his content.

David Leary: [00:59:35] Got it. It makes sense. So explain the onshoring. Like, is this just a placement service? Like how does this work? Like I understand the, the offshoring makes a lot of sense because sometimes, uh, budget wise, it's cheaper for you to, to, to offshore. There's just more talent to pick from. But how do you offer accounting talent onshore when there's no bodies left? Like I'm trying to comprehend how this is even possible to offer.

Jordan Sublette: [01:00:02] Yeah, I don't know. We're going to try to figure it out. There's you're right though overseas there's not the same supply constraint that there is here in the US. Um but again, we, we think we have kind of that advantage because of Jason's audience, but we also something unique about our business. And I honestly don't know. Like this kind of feels like it should be table stakes for recruiting firms now. But we have a portal. I don't know if you've seen it, David, but it's kind of like we've almost like Evolved into semi marketplace style business where, you know, it's great for us operationally, internally, because a lot of recruiting businesses, you show up on a discovery call, you tell me who you're looking for, I take a bunch of notes, then we go recruit that person and it's just like manual takes a long time. Then I send you this person. You're like, I don't really like. Whereas we only work with accounting firms so we know who they want to hire. So we just go recruit all those folks, put them on the portal and just make it more of a matchmaking so that like.

David Leary: [01:01:04] It's like a shopping cart to some extent. Yeah. Picking who I think is going to be you already, you found these people that you're pretty sure are a good fit for most people browsing. And then yeah, they, they, they pick and go from there and that.

Jordan Sublette: [01:01:18] So that alone doesn't solve like the supply constraint, which I'll go back to in a second, but it does still make it an easier business for us and a better customer experience and most importantly, candidate experience. Because again, like because of the supply constraints, the candidates, they have all the leverage, right? So we this is kind of a weird shift in our business where we now, when we're building teams overseas, we're probably admittedly more focused on the customer experience. And now we're almost like representing candidates to firms because they have they got all the leverage. Um, so there's, if you get into our portal, there's a toggle between offshore and onshore. So now if you toggle over to onshore, you'll see all the US based candidates. And one important distinction to right is the like the traditional BPO model for building teams overseas is you pay us, we pay the staff just on an ongoing basis. We we don't. That model is not like we don't do that in America for hiring. Right. So we are like, it's very it's the traditional recruitment one time placement fee model. But we have we've decided that if firms want to hire and pay one lump sum, they can pay us 15% of first year salary or because we work with a bunch of small to midsize accounting firms where this is a big hire and a, you know, a big investment for them, they can pay over six months and then they pay 20%, which if if you go look at most recruitment shops now, it's 25 plus percent usually for these hires. So we're trying to be super competitive on the pricing and let people pay over time.

David Leary: [01:03:04] So and what I find interesting is like, I'm come from that point of view of like, I don't want to have to go to eight different websites, eight different services, eight different relationships. So I can use you now I could build my team with, I could use it to find talent in the US. If I want some in person or US based talent, I can build my team. Maybe I want same time zone so I can get a couple people in South America or near shore, and I can still get talent in the Philippines. I can just build. I can really, but I only have one relationship with you. I don't have to like start a new relationship, new account manager, a different company to get this kind of talent than another different company to get x, y talent. I can do it all under one roof, which to me as a business owner, like I like services like that. I don't have to go to 15 different places.

Jordan Sublette: [01:03:47] Yeah. That's right.

David Leary: [01:03:48] So if we have listeners and they want to, hey, I'm looking to maybe get a new job, how would they submit themselves to be in the portal?

Jordan Sublette: [01:03:56] So we have a careers page on the site, on our website, on cloud accountant staffing.com. They can jump on there, um, drop an application in we, you know, there was a, the way we got a bunch of people in kind of in our initial push was when Jason dropped an announcement video. We just had a landing page for people to just kind of raise their hand and say they're interested. And then our team reached out and had them fill out an application. But for now, it's, uh, it's the careers page on our website. And like We. Part of part of our offering to them too, is just that we're not. I don't want to say any names of big firms, but like we're our our clients come from firms who listen to you and Blake's podcast and consume Jason's like, these are like usually more modern firms that are better places to work, that are tech forward and just care about their people more. And they're not asking people to come and work 70 hour work weeks. So that's part of the pitch to people as well.

David Leary: [01:04:58] And then because my, you know, there's so many people, there's so many vendors, so many things, I feel like you guys at one time, maybe you still do you have like a, like a guidebook, right? And it tells me how I'm going to manage my real employees, what tools I'm going to use, how I'm going to interact with them, how often I should do check ins. Is this, is this something you guys currently offer still?

Jordan Sublette: [01:05:22] Yeah. So during during onboarding, we'll send out our best practices guide. We actually started doing something recently too that is like our through the first 90 days, we're really hands on. As long as firms will allow us to be. But we try to almost mandate this to where before this person starts, we'll jump on what we call an activation call with the client and just build a scorecard for your new staff that where you have to tell us what the outcomes you want from this staff are so that we. And then those outcomes need to be communicated to your new staff or when they start, because we don't want an email six weeks in that's like, hey, they're not doing a good job. And we're like, well, what specifically aren't they doing a good job on? And performance management from really small firms has been like a tricky thing for us to navigate. So we're trying to like be super hands on and how we help firms build teams overseas, which again, just includes like, hey, you need to define the outcomes you want from this person. And then what activities lead to those outcomes?

David Leary: [01:06:25] So we already talked about if you're an accountant looking for. A new job, how to do that. You just go to cloud accountant staffing.com/careers and you can apply and get your your face onto the marketplace. But now from a firm, what do I do? How do I, how do I go see what I need, what I want to see? Obviously they can use our URL, the Cloud accountant staff or accounting podcast.io/cast. You could use that. Is there anything specific you want to tell them? Like, hey, if you're thinking about hiring, when you get to the site, do this, don't do this book a demo. I don't know. Well, yeah.

Jordan Sublette: [01:06:57] Use David's link, go to the go to the portal and it takes 10s to complete the information. Now you have access to the portal where there'll be 50 plus vetted offshore accountants right there. And then if you just toggle over to onshore, I think right now there's about a dozen accountants onshore. You can literally book like you can have an interview booked on your calendar and less than three minutes. So you jump into someone's profile. Their resumes, their. There's a quick video there too, so you can, if you want to like. They're just introducing themselves and talking. If you want to get a feel for this person's communication and maybe you think that you can tell if they're going to fit in. We have personality tests sitting there, um, assessment results sitting there. So you can, you can really get a good feel for who this person is without wasting time. And then literally book the interview right there on the spot.

David Leary: [01:07:47] And their salary or their the price.

Jordan Sublette: [01:07:48] Yeah. Of course. Yeah. Sorry. That's important.

David Leary: [01:07:50] It's truly a marketplace that way.

Jordan Sublette: [01:07:52] Yeah. And, and also, let me add one thing to on the candidate side, this is like flip the model, right? Whereas if you, if you're like applying for jobs on indeed or monster LinkedIn, you're one candidate competing with thousands of candidates for one job. Whereas in this case, we upload you in the portal and now there's the firms come to you and they're competing for you and you have options and you're not doing all this work. Your interviews just land on your calendar.

David Leary: [01:08:22] Got it. I said one more question and we'll let you go here today. So you support the firms, right? With training those first 90 days, what do you do for candidates? Do you hey, we noticed you're a little rusty and you know QuickBooks, but you don't know Xero. We're going to train you up in zero and recommend you. How do you how do you grow? How do you nurture the candidates?

Jordan Sublette: [01:08:43] So they have required continued learning. And we talk to firms about that all the time too. So, um, just have and a lot of that content to David. Sometimes it's we might have like you and Blake in there. Like we try to do topical accounting, like modern firm owner stuff, especially since a lot of these firms, that's where they're coming from is from listening to you guys or listening to Jason. So like a lot of the like, that's what we want them consuming as well. And of course, technical, like actually learning accounting too, which so we have an LMS platform that's just full of that stuff for us. We were now to the point where I think we're getting almost 3000 applications a month. So it's just vetting for us and making sure we're truly getting serious professionals and, and just good accountants, because less than 1% of those people ultimately get placed. So, um, we feel really good about our vetting on the candidate side.

David Leary: [01:09:36] Oh that's great. So just in closing, I know you guys just recently moved to a new office, a bigger office, a huge office in Minneapolis. So if people want to connect with you face to face or meet you, you and your team, should they go to your new office? Should they should they? Are they going to see you at a conference in this fall? Like, how can people come shake hands with Jordan?

Jordan Sublette: [01:09:56] Yeah, well, definitely at the conferences I'll be at connect. We're everywhere too. I don't get to be everywhere. I have three young children, so I go to like a handful of conferences a year, but I'll be at Intuit Connect. Um, yeah, we just moved into an office in Indy. It feels giant to us because we were in a very small office in a coworking space, but there's, a dozen of us here in the Indy office, and we just have fun. And yeah, we like if people want to come hang out, come hang out.

David Leary: [01:10:25] And one cardboard Jason stats, I saw that.

Jordan Sublette: [01:10:28] Oh yeah. That's right. Yeah. Yeah that's true. Jason's here as well. Come meet Jason in Indianapolis.

David Leary: [01:10:33] Great. Thanks a lot, Jordan. I appreciate you coming on and catching us up on all this. Um, I'll let you go. And, uh, thank you for cloud accountant staffing, continued support of the accounting podcast. We do appreciate it. Thank you for joining us today. And for those of you who want to get CPE for listening to this episode, you can head over to earmark.app. You can listen, uh, take a quiz on this episode, get your CPA certificate. And we have, I think, almost 1800 other podcasts and episodes you can take courses on and do those as well. And you can subscribe for the low, low price of $199 a year. Uh, just head over to earmark.app. See everybody next week.