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The ROI of IRS Audits | FedNow Payment Network Launching in July · The Accounting Podcast

• Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding! Blake Oliver: [00:00:04] At a certain point, the lack of enforcement is a problem for the accounting profession, and people don't see the value in what we do because they know they're not going to get audited or they feel like they're never going to get audited because the odds are extremely, extremely low. They're so low. David Leary: [00:00:23] Coming to you weekly from the OnPay Recording Studio, this is the Cloud Accounting podcast. Blake Oliver: [00:00:34] Hey, everyone, and welcome back to the show. I'm Blake Oliver. David Leary: [00:00:37] And I'm David Leary. Blake Oliver: [00:00:38] And I just realized we need to update that bumper. David, we update the video. David Leary: [00:00:43] We got to update what I say. We got so many updates. Well, it took us a year, but we'll get it done eventually. We'll get all this rebranded. We had. Blake Oliver: [00:00:52] Two options. We could have done the classic rebrand where you do all the work and then you unveil it and you know, that's it. It's all done. But we're not that organized to get that together. So we're doing it slowly. David Leary: [00:01:04] Well, even if you do that, it's very hard. I mean, for years you're finding the old stuff, right? Blake Oliver: [00:01:09] So, you know, it's a it's a soft launch of the accounting podcast, the accounting podcast, as we like to say. David Leary: [00:01:17] And then I don't even know how fast we want to rebrand it over because we went with the transitional logo where we just took a red Sharpie and crossed out the word cloud until we settle on what the new logo going forward will be. Maybe we have a contest and the people vote. We have. We don't know, but we're going to have to rebrand again. So I think we have to. Well, we got a lot of it'll just be a logo rebrand at that point because. Blake Oliver: [00:01:38] I'm thinking maybe new, maybe new music is in order. That might be necessary. New logo. New shirts. New shirts? David Leary: [00:01:45] Yep. New stickers. Yes. Blake Oliver: [00:01:46] Well, David, today we are talking about the ROI of IRS audits and Fed Now's payment network that is launching in July. Those are our two top stories. But first, I was thinking we could get to some listener mail. We haven't talked about listener mail in a while. We haven't read listener mail in a while. David Leary: [00:02:04] Jump in. Blake Oliver: [00:02:05] This is a tweet from Stephen. He said a while back, Hey, Blake, I appreciate all of your work regarding the 150 hour rule and trying to shake up the current accounting model. One additional thought slash concern I had, which I don't know if you've mentioned, relates to accounting standards and compliance. I'm all for these things in concept, but in practice these things are onerous to abide by and can only be sustained when you have an adequate number of people to know and document them. To me, when I look at an audit report, it's accountants talking to each other and holding ourselves accountable. Clients are just checking a box. We try to say, Let's show value. But for us to do all of our backend work, we rarely have time to do that. Value added work and audits, for example, remain commoditized. Anyway, thank you. Thank you, Stephen. And I think you have a great point. Audits are commoditized and that is the root problem of our talent crisis in the accounting profession. If you really dig down to it, it's the fact that two thirds of grads go into audit and every audit is essentially the same. It's essentially the same to the end user to that client that needs to get the audit done. Now, you might argue, you might say, well, an audit by BDO is not an audit by Deloitte, but among firms of a certain class it is really the same, right? Nobody can tell the difference between nobody cares, no investor cares about it. David Leary: [00:03:27] Nobody's delivering additional value innovation around the audit. Blake Oliver: [00:03:32] You're buying an opinion, right? That's what you're buying. Yeah, right. You just need you just need to get through it. David Leary: [00:03:36] There's no creativity around it. It's. It's all just delivered, like you said, a commodity. It's an orange. It's orange juice. Blake Oliver: [00:03:40] How could we increase the value of audit? Well, we could make it less of a commodity. Make audit reports different. And one thing I like to throw out there is this idea of making audits more like restaurant health inspections, where instead of pass fail, you get a grade. What if auditors gave A's, B's, C's, D's, E's, F's, whatever kind of grading system you want to use, every city has a different one. But that health inspector report is right there in the window of every restaurant. And you, as the consumer, get to make the decision of whether or not you're going to eat there. And some people are okay with a, B, some people are only A's. I'm only going to eat at a restaurant that gets an A. I think there's a lot that we could do to increase the value of audit just by making audit reports more useful to investors. And I think one way they tried to do that in the past recently was with this critical audit matter concept. We talked about that when in the case of SVB, Silicon Valley Bank. Blake Oliver: [00:04:36] And the problem with critical audit matters is that it's still up to the auditor's discretion as to whether or not to include those. And the auditors are paid by the client, so they don't want to issue critical audit matters. So so like this whole hitting them with a stick at the PCAOB doesn't work. It doesn't get them to actually do more valuable audits because in the end they're selling is not an opinion and the client pays the auditors. So like the way we could do it, big picture, right, is we change it so that clients don't pay their auditors and they don't select them, that some other organization selects the auditor and pays the auditor. So the auditors are no longer beholden to the clients for the fees. And then we make it more discretionary as to what is included in that audit opinion. And we we actually create like a grading system for audits. So like the quality of financial statements has a grade associated with it. I think that would be fascinating. I would love to read opinions. David Leary: [00:05:34] Or like if the board members had to pay for the audit separately and it wasn't the company paying the board members. Might they value the audit differently? Right. And they would want to feel maybe, I don't know, maybe board members don't care. Blake Oliver: [00:05:50] Well, so right now it's the audit committee, which consists of the board board that selects and pays the auditors. I mean, they pay it out of the company funds. Right. But but the problem, I think, is that like in a lot of public companies, the board is not aligned with the actual real investors like the the you and me. David Leary: [00:06:08] David Yeah, because they have for them, any bad news is going to hurt their existing investment they're sitting on. Blake Oliver: [00:06:15] Exactly. Yeah. Yeah. So auditors, if they want to if we want auditors to be truly independent, they need to be selected and paid by somebody else. So anyway, enough on that. Let's get to another message. Let's see. This is this is from David. David said, Hi, Blake. My name is David. I'm an auditor at a Canadian national firm out of Ottawa. I've been listening to the podcast for a few months now and have had your article. Our obsession with ours is destroying the accounting profession saved with the intention of reaching out. Simply put, I'd love to get more detail on what you've brainstormed as tangible metrics to replace billable hours as the dominant metric for individual performance in firms. My mentor, who is a partner at the firm, is very supportive and open minded to new ways of working and thinking. We both agree that billables are antiquated, so I've been brainstorming how I could beta test an alternative to billables as a way to move the needle ever so slightly in a positive direction. Thanks for your insights, David. So I'm I'm excited that he's got the buy in from his partner at the firm to come up with an alternative metric to billable hours. And this is always the biggest barrier, I think, to dropping it is like, what do we replace it with? David Leary: [00:07:26] Well, I think the key there, he said, right. If you read this, the he's asking how do you measure individuals if you get rid of the billable hour? I mean, that's like, why are we using that as a measure of effectiveness and success to begin with? Right. There's lots of different ways. Surveys, you could audit people's work. There's lots of different ways to measure somebody's ability and skills. Yeah. Blake Oliver: [00:07:48] So you mentioned surveys, right? That would be client satisfaction surveys. I think that's a great thing to be doing. And so you could you know, we all get those surveys after we have a customer service experience and it asks you like, how did it go? You know, how was it working with Blake at the firm? Like, did you have a good experience? Right when we just. David, we're filing our taxes with TurboTax full service and we are documenting this whole thing, and we're going to release that as a video. So stay tuned on our YouTube channel to to hear our experience, to see our experience. So I just finished that yesterday and I got a survey immediately asking how did it go? Like, would you recommend us to a friend or a colleague? How was the interactions with your agent, All of this stuff, That's one way. David Leary: [00:08:35] And I'm sure that's how TurboTax is measuring that. Agent Yeah, that's right. Blake Oliver: [00:08:41] And another one would be team collaboration. So survey the team, right? So survey other employees at your firm to make sure that they are happy with each other. So is the employee is the staff person getting good feedback from clients but also from the team revenue generation? So instead of allocating hours to a staff person allocate revenue if possible, you know, if you assign clients or returns or whatever to particular staff, you could assign revenue numbers. And there's different ways to break that out, right? If you've got people collaborating on a client, you could do a formula or something like that. That's one way. David Leary: [00:09:19] Or don't focus on the individuals like a team. I've always had a problem with that in general, like focus on the entire output of the company. The one firm view, the one firm success you're going to have, not everybody performing perfectly equally. And what chances are you're going to quickly know without having all these measurement tools who's somebody maybe you have to get rid of or ease out of your firm, right. From an employee standpoint. But but set the goals. So the team is just all worried about the entire company firm's goals and not their own individual. Like like, who cares if that guy has more hours than the other guy you want the whole firm's goals to raised? Yeah, it. Blake Oliver: [00:09:54] Doesn't. I proposed when I was at the large firm a pods method of allocating revenue where we would have groups of 3 to 5 staff working on client engagements and that group would be assigned clients. They could service the clients, among them themselves. Right? That pod. And then we would allocate revenue to each pod. And the pod had a certain goal of revenue. And if they hit that goal, they all got their bonus. That was never adopted, unfortunately, but I would love to see it in practice. David Leary: [00:10:24] I like how intuitive years ago kind of flipped the model because Intuit had all these separate business units and you want to have an ecosystem. And the QuickBooks VP's bonuses were based on TurboTax success and TurboTax VP's. Their bonuses were based on QuickBooks success, right? They should be helping each other, like raise that bar. And that's the same type of thing. Like we talked about this before. Like if you control the bookkeeping in theory, your tax returns are smoother and tax season. And so maybe the bookkeeping division is completely the caste division is completely bonus based on the performance of the tax division. Right. Because the tax division should be ultra efficient if you're doing all the work correctly. Blake Oliver: [00:11:03] Yeah. And that's that's the problem with siloing and measuring these departments by their individual performances like the client is doing. If the client is serviced by both bookkeeping and tax, that's what you should be looking at as a whole, not individual experience. Yeah, another big one. Another way to measure staff outside of billable hours is jobs completed on time. So that could be your monthly engagements. When did the financials get out? It could be tax returns. Like when did the tax return get filed? Like did it get done on time or not? Professional development. Are they getting certifications? Are they completing their CPA, that sort of thing? Quality of work? I think quality of work matters a lot that we don't measure that in firms. A lot of the time. You could give a quality score to every return when it's done, like when whoever's reviewing it gives a quality score and then individual goals like let the employee set some of their own goals and measure them based on that. I think like a lot of the problem is a lack of trust in firms. God, I saw. I can't believe this is real, but I feel like it must be. I saw on on social media somewhere. Some young some some staff accountant posted that their firm is. In lieu of sending everyone back to the office, they're going to have everyone sit on a Microsoft teams call all day long for eight hours and share their screen. Can you imagine how awful that would be? David Leary: [00:12:29] And this is a firm. Blake Oliver: [00:12:30] Yeah, everybody in the firm on a Microsoft teams call for eight hours sharing their screen. That's how you're going to monitor your workers. Yeah. Talk about a lack of trust there, right? Wow. Yeah. Let's see what else? David Leary: [00:12:43] Any voice mails? Blake Oliver: [00:12:44] No voice mails. I'm just catching up on all the emails here. Emails? Okay, here's a good one. Maybe we'll get some of our live listeners interested in answering this question. I could probably use your help. This is this is controversial. David and Blake, should I choose the CPA or EA? What are your thoughts behind this, especially with possible hours changes? And I'm already $60,000 in debt with student loans. I want to be honest. I don't want to do either one, but due to the need in our industry, the passion I have for our industry and the direction that it seems to be going, I want to be heading in the right direction. I do already have my bachelor's, so I would have to complete my master's in order to obtain the CPA license in my state of Florida. Also, due to me being a young female, although I'm almost 40 with almost 20 years in the field I'm working in. I don't seem to be taken as seriously as men in the industry, and I think having an additional designation would help boost my bookkeeping and CFO business. I feel that I would be great at audit, but it's not something that I plan to do. Right now. My bookkeeping firm that does pretty much just the data entry, financial accounting basics, starting to head more into CFO type roles and then eventually possibly tax accounting if I choose to sit for one of the exams. Blake Oliver: [00:13:57] I hate to admit it, but one of the reasons that I have chosen to go towards tax is because I've realized that there are a lot of lazy tax accountants, bad tax accountants, and it seems that a lot of tax accountants don't really look at the details. I'm talking CPAs, EAS and no designated tax accountants. I work with them all in my type of business, but I'm learning there's a very different culture in the smaller firms and how they do business and the advice they give. I'm sure I have a lot to learn, but it absolutely bothers me that they miss vital information and don't ask questions. And I know this because I actually talk to my clients. Obviously, you can't tell me which way to go. Ee versus CPA. However, I would like to hear your input based on the current conditions of the industry, with the industry projecting itself to be AI and other aspects that you guys may be privy to that I may not be. I've started listening to your podcast probably the past few months. It's literally my favorite out of all the accounting podcasts that I listen to. I appreciate what you guys do and any input you can give so I can try to make a final decision. That's from Courtney. David Leary: [00:14:59] So obviously we're not advisors here, but like based on what she's saying, she already has a bookkeeping karst type practice already. She's flirting a little bit with what virtual CFO service is. So I look at work and tax work is like providing a full umbrella of services for a small business owner. And it's very realistic for you to do business returns for small businesses. But if you have a cash division, you're doing bookkeeping work is adding on audit work, a service you can fit into that framework for the customers you're doing well, bookkeeping work for. Blake Oliver: [00:15:34] You can't do it because you've got the conflict of interest. So you kind of got to decide. I mean, it's the independence problem, right? So. If you're going to do bookkeeping and CFO work, you know, financial accounting work, you don't you can't do audit. So that rules out that. David Leary: [00:15:49] Well, that's what I'm saying. Like, unless you make your firm ridiculously big and yeah. Blake Oliver: [00:15:52] Emily in the live stream says, neither do the CMA. Much more valuable these days, especially if looking towards CFO slash advisory. I've heard great things about the CMA. I have also heard, on the other hand, that it focuses a lot on cost accounting and depending on your clientele, that may not be helpful. So look at what exactly the CMA encompasses, I would say. Sam says if she has done CFO work or if she does CFO work, an E doesn't add much to that. What if she starts with the Ey designation and then starts and then works on adding the CMA after that? So I think, David, where you were going was saying like, well, the tax adding the tax is actually very valuable, right? David Leary: [00:16:40] And we I guess I'm thinking about her, her business, not so much her maybe my brains. Blake Oliver: [00:16:45] At Okay. So I had a bookkeeping accounting business. We didn't do any tax. And part of the reason that I merged with a CPA firm that did a lot of tax was because I knew we were leaving a ton of money on the table because when you combine bookkeeping and tax and you provide the whole solution end to end, you can charge a lot more. So adding the tax is smart if you can do it without ruining your life. So probably the best thing to do. Would be to partner with somebody who already does a lot of tax and doesn't do a lot of bookkeeping and create that unified firm. Maybe the air would be good to have so that you understand the big picture of what is happening on the tax team and how to advise those clients. It's also pretty low lift compared to the CPA. You don't have to go back to school. You can just take the three exams like I did part one of the EE, and it was just a lot of studying. It was good. I like learned a lot about individual tax from that exam, so I would say it's very valuable. But yeah, I mean, the biggest problem with the CPA is just like having to go back to school to take all those classes. You didn't take maybe like that. That's the biggest barrier, right? The fifth year. David Leary: [00:18:04] And the cash to do that. Yeah. Blake Oliver: [00:18:06] I would say like if there wasn't that fifth year, then yeah, go take the exam because the brand of the CPA is super valuable in terms of like respect. And like Courtney said, as a female in accounting, you don't get a lot of respect. And I know personally, you know, not being female, but having as a male who added CPA to the end of my name, it really helped a lot. In terms of respect from clients, the brand is excellent. Romeo said. How many 1040 clients actually need bookkeeping, though? I would say that a lot of 1040 clients would happily pass off the bookkeeping for their schedule, see if it was cost effective. But you have to roll that into the tax return fee. And make it all one price. Yeah. So charge monthly or quarterly for all of the bookkeeping and advisory work and then throw in the tax return. So don't charge for the tax return. The tax return is free as long as you're a client of the firm. And that shifts people's thinking because then they're not comparing you to the price of the tax return down the street. Because you're offering bookkeeping and advisory, whatever you want to call advisory, however you define it. But you have a huge advantage. Then, like I was just talking with a friend from college who he's been the CEO of several startups and now he's starting an executive coaching business and I'm sure he's going to be making really good money from his executive coaching business. Blake Oliver: [00:19:38] He's not going to have a ton of transactions every month. Is it worth his time to do all the bookkeeping and accounting? I'm sure if it was a couple hundred bucks a month, he would happily hand it off and think about that. A couple hundred bucks a month over the course of a year is $2,400. How much effort does it actually take to code? 5 to 10 transactions a month or something like that. Not very much. Right. So you're looking at a pretty good price as a preparer. Maybe it tries a little more. I don't know. I was just out. It's crazy. What firms are charging now for tax returns, David? I was just out at dinner with Giles Pearson and Jeremy Eckert. Do you know remember Giles? Giles? Very well. Yeah. Founder of or CEO of a contests. And I got to meet Jeremy on a hike. And at this dinner recently and Jeremy's a small firm owner here in the Phenix area out in Peoria and. He was saying that they get referrals from larger firms that have set their minimum now at $10,000 for a return. David Leary: [00:20:49] This is why I got fired. Yeah. Probably. Yeah. Blake Oliver: [00:20:52] So TurboTax is charging $1,500 for a full service business. So let's say that's the floor. It really should be the floor. You shouldn't be charging less than Intuit is charging for their full service. Right. So 1500 is the floor. And let's say if you're a small firm, ten K is the ceiling. You got a lot of wiggle room in there. David Leary: [00:21:15] Or even if you want to go undercut into it, you should be charging 1400 bucks. Like you can still say, look, we're cheaper than Intuit, but don't. But you're right. And I've seen this. I don't know, I went to a you know, these multi use small these offices suites right You know and there's there's a dentist there's a counselor there's all these people and I walk by the one accounting firm. I should take a photo of this their door. They had a little flier on the door and like returns 160 bucks. The what? Yeah. For an. Blake Oliver: [00:21:44] Individual return. David Leary: [00:21:45] 60 bucks. Blake Oliver: [00:21:46] Individual returns. And I know there's. There's folks out there preparing business returns for, like, you know, under $1,000. Yeah, there's a lot. And the market is saying you can charge more and you can especially charge more if you're doing the year round, talking with the client, helping them out, you know, helping them with their bookkeeping. Maybe they're doing the bookkeeping, but you're just checking in every now and then. There's a lot you can be doing. David Leary: [00:22:12] So it sounds like if you do the ROI on this. Getting the air and adding tax to her practice might be more valuable than just getting the CPA letters. Unless she wants to work, have bosses and be in a career. Blake Oliver: [00:22:26] But so yeah, the CPA is valuable, but it's so time consuming and it's really hard to get as a firm owner. It took me like five years because I was working the whole time. It just takes forever and the exams and all that. So as much as I hate to say it, I think the short term benefit would be to add the Add tax. But I mean, you don't even need to get the E, because if you just partner with somebody who does hacks, then you could run that business as a business owner and don't get sucked into all the tax stuff. I think that's the problem, too. And that's the that's the real risk of like getting into. David Leary: [00:22:58] Somebody on your staff, too. Yeah, I'm both email's together, you know, encourage me and your staff to become an E. Blake Oliver: [00:23:06] All right. Next next item out of the mailbag here. I'm catching up. This is good, Williams said, just started listening to the podcast. Very relevant and easy to understand. For someone like me who is entering my senior year, graduating with an accounting degree would love to see if you can give advice for young professionals. I understand that may not be in the scope of your. Podcast questions like how to discuss salary for entry level staff accountant positions and asking for appropriate compensation. You guys talk about the starting salary issue. Any advice on how it would be suited for recent graduates to talk about this? You also mentioned that computer science technology related jobs will hire at a higher starting salary, as I heard from CS students from my school. I wish firms would do that as well because as a future accountant we know we will have to work hard and bring our best value to the table. I completely understand that firm partners hesitate to pay generously for beginners, but as an employer, not offering a competitive starting salary can be discouraging. It can seem like the eagerness of a young, eager and curious accountant like me will not be fairly rewarded, and it can be discouraging. Anyway, your podcast is intriguing and I find it has no fluff or useless talk. You guys talk about current issues that make the profession fun to hear about. Accounting can be fun. Thanks, William. Thanks for writing in and congrats on getting to your senior year. Guess you're entering your senior year, so you're looking for work. David Leary: [00:24:28] And I think the my thing is it's way more than a salary negotiation. You're better off negotiating how many hours you're going to work. Like that's going to be way more beneficial to you than what the salary is. But I think the big thing is too many undergrads are signing letters of intent to go work for firms their junior year. Yeah, they're signing. End of end of accounting. 101 people are signing internship commitments for the end of the summer of their sophomore year. Like they're getting you when you're so young and naive. And. And then they're. They're filling their funnel. Like there's no like if they're getting you to commit to a salary or junior year, like make make the firm sweat. Nobody should none no college student should be signing any commitment letters at all. Let them chase you in the free market when you graduate, like the jobs will still be there. It's not like they're going to get filled up by somebody else. Like, yeah, that's. Blake Oliver: [00:25:26] A good point. Don't commit so soon. Yeah. There's a reason they want to lock you in that early, right? David Leary: [00:25:32] Yeah, because you're a junior at college. You're like, sounds like, great. Give me $40,000 a year. This is. This is, like the best. Right? Blake Oliver: [00:25:39] Right. Romeo says I'm in the same boat as the asker. I somewhat regret not starting a job immediately after graduation, but there's seriously no way I would knock out the four exams with a full time job. Yeah, I was trying to do it while you're working. I mean, I wasn't working at a firm, but I had my own firm and trying to do that, trying to work at the same time as doing the exams was so insanely difficult, and I didn't even have a kid yet. Romeo says. I had a junior year internship. I hardly remember it, and they hounded me for another internship a month before graduation. Yeah. All right, David. That's all the. Mail that I've got in the mail bag. Oh, no, one more. So somebody wrote in and said that they saw I inside of QBO. And I forwarded that to you. What were they talking about? David Leary: [00:26:33] Or was that MailChimp? Blake Oliver: [00:26:35] Well. So it looked like it was like now MailChimp and QBO are starting to mix together. So on the customer's screen there's a button that says automated lead responder beta, and if you click on that, it takes you to MailChimp and it can draft you emails to your QuickBooks customers in MailChimp. David Leary: [00:26:55] Yeah, because QuickBooks is in a ways is growing that CRM, especially for the accountant edition, that becomes the CRM for your firm. Your clients are in there and it's tying back to MailChimp. And I think if you're in the QuickBooks accounting edition, you get free ish MailChimp. Blake Oliver: [00:27:08] I don't know how it works. David Leary: [00:27:09] I think you do now. I think you get free access to MailChimp or some level of MailChimp anyway. Blake Oliver: [00:27:15] Todd Thank you for forwarding us that screenshot. And if any of you see eye cropping up inside of the products you're using, please let us know. We want to we want to see them in the wild. It's not just theory anymore. David, do you want to talk about Fed now or do you want to talk about the ROI? Roi of IRS audits. We teased those two stories in the title of this episode, so we had better talk about them. David Leary: [00:27:39] So we'll talk about Fed now. So we'll work backwards a little bit, right? If you think about remind me. Blake Oliver: [00:27:44] Yeah. What is fed. David Leary: [00:27:45] Now? Yeah. So fed now is the Federal Reserve's payment network. So it's going to think of it as a replacement for ACH. Blake Oliver: [00:27:52] But is it going to replace ACH? David Leary: [00:27:54] Well, not everything's going to replace everything, but it could a big chunk of it could replace ACH. Blake Oliver: [00:28:01] So right now the banks run Ach, right? David Leary: [00:28:03] Or it's like so, so, so ach is like all banks, but it's a level playing field. All banks get to participate in ACH. It's standards. It's what, 1972 technology. It's reliable, but it's a little it's like QuickBooks desktop. Blake Oliver: [00:28:16] It still. David Leary: [00:28:17] Works great. You know, your bank has a day. The ACH bank or the ACH network has a day, then the receiving bank has a day. So it takes three days for ACH money to move around. Blake Oliver: [00:28:27] But they've speeded that up right? David Leary: [00:28:29] Well, not really. So the bigger banks got into bed and they created the RTP network. So that's real time payments. So think like Zelle, you know, like like Zelle works if you're at Bank of America and Chase. But if you're at some credit union or a smaller regional bank, you can't use Zelle to send money. They didn't invite everybody else to the game. So the Federal Reserve has created the Fed now, and it's going to allow all these banks that got left out of the payments game to move money around on these rails, and it's going to enable instant payments. Blake Oliver: [00:29:02] So this is rolling out in July. David Leary: [00:29:05] Yes, and it has. So the so you're going to see this flood of credit unions offer this to their clients to do peer to peer style payments. You're going to see apps use this. So as APIs built on top of it. And the way it works, they're really thinking this is going to be huge in small business because it's it's going to be instant payments. And the way it works, it's not like currently in the ACH system you can set up like auto pull, right? I can auto debit money from you, Blake, out of your account. Right. The way this works because it's a little bit more secure and a little bit more protected, there's this concept of a wallet. Blake Oliver: [00:29:41] Like a like a blockchain wallet. David Leary: [00:29:43] Well, I won't say like that. So I have to request from you money. So, Blake, I need $300 for this bill I'm sending you or whatever. Right. And then you approve it and then the money comes out. So I don't have access directly to your bank account numbers to pull that money out. It's almost like there's a wallet in the way, you know? Okay. But it's going to probably really enable a lot of instant payments and it's going to be really popular with businesses. Okay. Blake Oliver: [00:30:09] So sorry, I got to stop you on this wallet concept because that sounds really great to me because one of the problems with ACH is. If you give somebody your account routing number and then you later change banks, now you have to go and give your account and routing number. You have to change that everywhere. So is this wallet address going to act as like. A middle man, so I no longer have to do that. I can just change my. You can. David Leary: [00:30:34] Connect any bank on the back end that I don't know because that would be fantastic. Blake Oliver: [00:30:37] Right? David Leary: [00:30:38] Because then there are ties of these conversations, though, to the whole, you know, remember we talking about before, they want to have the post office kind of be a bank and everybody gets their their account. So like when they distributed PGP funds, they just want to shove that money right into people's bank accounts or they're fed now account Right. But but the payments rails for Fed now are officially coming out. Blake Oliver: [00:31:01] So the Federal Reserve Bank is going to run this stuff like they're going to oversee the technology. Yes. Okay. And this. David Leary: [00:31:08] Opens it up to all these other banks, because it wasn't are the big banks. Blake Oliver: [00:31:11] Are the big banks going to participate? David Leary: [00:31:13] Well, the big banks have their own real time payments. So why would. Blake Oliver: [00:31:17] They participate in this? David Leary: [00:31:18] They probably will because because there's APIs. Apps are starting to do it. So one of the opinions I have is there a there's an app called Ford I and there's a company called Ford I. They launched a new product called Fordley. And basically what Ford is currently doing, it offers instant payments. So you could have payments with your clients instantly using the RTP network. But they say they are going to support the Fednow service on its launch in July, which basically opens it up to 10,000 additional banks. And that that's really the key of the Fed now, is you're going to have instant payments now truly happening because everybody's going to be on the Fednow network. And so you're going to see apps. I have zero doubt your Bill.com is your Melio is like everybody's going to be using Fednow to move money. Blake Oliver: [00:32:04] So this could be the end of ACH. How much is it going to cost? David Leary: [00:32:08] A big chunk of ACH. A big chunk. So and they're saying anything under $500,000 is probably going to go through these this network and it's a lot cheaper. So it's instant payments for cheaper. Blake Oliver: [00:32:19] And how much does it cost? David Leary: [00:32:20] I think the fees are going to be. I don't know how much the feds charging the apps to use the APIs to do this, but then the apps determine the fees. Blake Oliver: [00:32:29] Right. But I mean, the the Fed got a charge like is it per transaction? Is it percentage like how does it that? David Leary: [00:32:36] I don't know how that's happening. Blake Oliver: [00:32:38] Okay. David Leary: [00:32:40] So I just want to collect data. Blake Oliver: [00:32:43] So my story this week is. From The Washington Post. How much did Congress lose by defunding the IRS? Way more than we thought. And the thing that really stuck out to me is this chart here that you can see on the screen. If you're in our live stream, if you're listening on the podcast, I will do my best to describe it. The chart is titled How Much the IRS Gets Back for Each Dollar It Spends Auditing. And this is for in-person audits from 2010 to 2014. And on the chart, we've got income percentiles going down on the left to the poor, the fifth percentile all the way up to the 99.9% on the right, the rich, as the Washington Post has described them. And what you see is that at the midpoint, the IRS gets just slightly more than $1 back for every dollar it spends on audits, on in-person audits. So it's like breaking even slightly, like making a tiny bit extra below that. Actually, most of the time they lose money on auditing. They don't get as much back like the middle class, right? David Leary: [00:33:47] Well, that makes sense because they're auditing poor people. So that's a lot of a lot of labor to to gain nothing. Blake Oliver: [00:33:53] And the only time when they make money on audits of poor people is usually with these, you know, like earned income tax credits, child tax credits, all this stuff that's kind of easy to abuse at. Like if there's a lot. David Leary: [00:34:04] Of fraud, somebody claims they have 15 kids and they go there. You only have one kid. Yeah. Blake Oliver: [00:34:08] Now, as you go up the income percentile, it gets much better and you approach, you know, $2 at the top. And then but but for the 99.9%, they make back over $6 for every dollar invested in audits. So you invest a dollar in auditing taxpayers. We're talking the 0.1% top 0.1%. You get $6 back. David Leary: [00:34:34] In that 0.1%. I'm just trying to like put this into real dollars. Remember, with the the new legislation, they're saying we're not going to audit anybody under $400,000 or as much. We're not going to increase those audits. Do you think this actually helped determine that magic number? I mean, it makes sense efficiency thing? Blake Oliver: [00:34:53] Well, I think the number was determined based on politics. Politics, not anything. But. But but this justifies that, right. This idea that you get way more back investing in audits of the ultra wealthy. Like with. Which totally makes sense, doesn't it? You would think that, like, people who can avoid tax evade tax because they can take advantage of all of the loopholes or rules or whatever you want to call them, right? You're going to get more back when you audit them. So anyway the. David Leary: [00:35:22] Washington on this I would also be arguing we should be auditing every single return. Blake Oliver: [00:35:27] Well the audit every single return of the top 1%. Yeah, it probably makes sense, right? I mean, if you could. The problem is that the IRS has not had the experienced agents required to do these audits because of the complexity. They're losing those folks and they haven't been replacing them. And so, you know, the Washington Post article, of course, makes the political argument that taking the $20 billion out of the IRS's 80 billion. You know, the that was cut, right? So the IRS got the $80 billion over the next ten years. Republicans negotiated taking 20 billion back. They said, okay, well, that's actually six times bigger than you think because. Right. That would have been a. Right. Six times 20 billion. David Leary: [00:36:15] Way to present. Blake Oliver: [00:36:15] It right now. Now, we know on this show that's not true because the IRS doesn't have the resources or capability to hire to spend all of the billions of dollars anyway. Right. But it's an interesting thought experiment. So there's some more charts in here. The cost per audit for the bottom 5% is $5,100. The cost per audit for the top 0.1% is $15,000. So it's about three times as expensive. But the revenue collected per audit. You can see this chart going up into the right. Yeah, it's like a it's a hockey stick kind of chart. So you've got the cost down here on the on the the bottom which is going up, you know, three times. But then you've got the revenue collected goes up. I mean, it's like. You're talking a few thousand dollars up to over $90,000 per audit. David Leary: [00:37:09] They should have. This is how the IRS could fill these positions. You get a chunk of the action. Blake Oliver: [00:37:17] Oh, you get. David Leary: [00:37:17] 30 of what you recover because they have enough elbow room in here to go to work for IRS. You get 30% of what you collect and you'll you'll figure it out. We'll get some motivated. Blake Oliver: [00:37:28] Some very wealthy. I don't know. I don't know about I mean, I'd have to think about the issues that might cause, but it's it's, you know, I like I like I like the way you're thinking, David. I like innovative compensation strategies. Yeah. Incentivizing based on revenue collected. Hopefully they wouldn't abuse their powers if they did that right. You have to somehow adjust for that. So yeah, that's how you get to this chart that says for each dollar spent on auditing, you know, the the top 0.1%, you get $6 back. And the IRS is return on investment for the bottom 50% is only $0.96 on the dollar. So by that logic. Right. You should not increase audits on anyone in the bottom 50%. David Leary: [00:38:13] Of income because we're spending $1,500. Blake Oliver: [00:38:15] To. We're losing. David Leary: [00:38:16] Money. But somebody for for for, you know, falsely claiming 1400 bucks, you're. Blake Oliver: [00:38:21] Spending $5,000 to audit somebody who and you're not going to get $5,000 back. Right. David Leary: [00:38:27] And the other thing I truly believe is most the other 99% is the bucket of honest Americans probably that aren't they're paranoid of getting audited. Right. The marketing is really well. Blake Oliver: [00:38:38] Most most Americans are very honest. Like studies show that most the vast majority of Americans are honest on their taxes. And so, like you should be investing the money, not auditing all those folks, but audit the people who, you know, are abusing the system. David Leary: [00:38:55] Run the IRS as a business. Like if you were managing a business, you would be. It's such an easy decision, right? Think about it that way. Blake Oliver: [00:39:03] So the chart also shows. Okay, so I said for the bottom 50%, you get $0.96 for every dollar you spend. So you lose a little bit of money. You're losing 4% of your investment if you look at it that way. And then for the top 1%, you get $3.18 back for every dollar invested. So three X of your investment in the top 0.1%, you get $6.29 for every dollar you invest. Isn't it funny how, like, none of this makes it into the mainstream news? Like nobody's talking about this? Nobody looks at the numbers these ways. And, you know, I know that like most CPAs are conservative and they have somewhat of an adversarial relationship with the IRS. If you're representing clients, you don't want the IRS to have more resources. Right. That's been sort of the general feeling for years and years is is we want to defend our clients, right? We don't want the IRS going after our clients. But zoom out big picture and like more audits of high net worth individuals, extremely high net worth individuals, we're talking people making millions and billions of dollars would be great for the accounting profession because they would need us to defend them and they would need us to come up with legal strategies and they wouldn't be falling victim to all of these, you know, I.R.S. Mills that are able to do what they do because nobody's auditing these people. Right? Like it's it's at a certain point, the lack of enforcement is a problem for the accounting profession. And people don't see the value in what we do because they know they're not going to get audited or they feel like they're never going to get audited because the odds are extremely, extremely low. They're so low. David Leary: [00:40:44] Even if you follow that TikTok tax advice. Yeah. Blake Oliver: [00:40:47] And so still safe. You. You want to know why they don't value what we do? Because IRS audits of millionaires have declined from about 9% of returns before 2008 to less than 2% of returns in 2020. David Leary: [00:41:06] Yeah, because if the IRS was auditing more people, people would be like, Oh man, my ducks buttoned up. I'm going to pay my accountant more to make sure my stuff's together because I don't want to get audited. But if there's no fear of an audit, why would I want to pay an accountant? I'll just. I'll just use TurboTax. Blake Oliver: [00:41:19] Yeah, well, or I'll just. I'll do sloppy bookkeeping, you know? David Leary: [00:41:23] I'll do it myself. Yeah, exactly right. Blake Oliver: [00:41:25] Like we're talking about here. We're talking about people with more than $1 million in income. I doubt they're doing it themselves. David Leary: [00:41:30] Yes, but but, I mean, like. But but the. Why would you pay a premium to your accountant if there's no fear of being audited? Exactly. What's the value? Right, right, right. Blake Oliver: [00:41:39] That's that's what hurts us. So if audits are too low, the profession loses value. What we do loses value because there's no fear. Yeah. David Leary: [00:41:48] So the accountants should be wanting to fund the IRS to create that fear. Stoke the fear. Blake Oliver: [00:41:52] So we've gone from, you know, 9 to 12% audits down to 0.1, 1.8% audits for those with more than $1 million in income for all individual taxpayers, it's 0.3%. So. 0.3%. We're not talking 3%. It's not three and 100. It's three and 1000. That's really low. David Leary: [00:42:16] So we can transition from that to the the UK's Tax Payment and Customs Authority. So we've probably talked about it. You've probably heard about it making tax digital. Blake Oliver: [00:42:27] Yeah, I've heard about making tax digital. David Leary: [00:42:29] Yeah, making tax digital. Blake Oliver: [00:42:30] And that's that's in in the UK. David Leary: [00:42:32] The UK, that's the HMRC. Blake Oliver: [00:42:35] Yeah. All everybody has to file. Well explain to me the making tax digital. David Leary: [00:42:41] So actually, I put in the private chat a tweet I did in 2017 or 2018, if you pull that up. Well, I checked this out. So the HMRC, we should acknowledge this. At first it used to be Her Majesty's Revenue and Customs and now it is now His Majesty's Revenue and Customs because now there's a king, right? The Queen has passed and now there's a king. So they've had to rebrand that. But I also noticed they've they've rebranded it and they tend to just say, Hm, revenue and customs, they've kind of pulled back the tide of the crown a little bit on that. But if you go to that tweet, we are at QuickBooks Connect I think in 2018, and they brought in at that time, for lack of better terms, the CEO of this division. Right. And they were launching making tax digital. And it felt like a startup pitch. Right. Of the hottest tech investment, hottest tech company ever. You know, and it was it was very grandiose. And the vision is every single thing you do is going to be filed electronically. We're going to have APIs, we're going to have this. And, you know, all your sales tax, your VAT tax rate is all going to be electronic, everything. David Leary: [00:43:46] But this really starts to add up in cost. And what's happened now, they've started having reports coming out because there's been so many costs and delays. I think originally they wanted to have this out in 2020. It's now expected to cost the government 1.3 billion, five times the original forecast. But then the businesses themselves, the original forecast was going to cost a I'm sorry, I meant to say a pounds, but for each business itself, they estimate at first it was going to cost each business 330 pounds. And now the reality, it's going to cost each business 1,000 pounds. So to the cost of your systems, right? Yeah. To change your systems, to become electronic, to file these things. And now they're also having problems with just the execution and the way it's been rolled out. For example, in the single year, transferring VAT records into the their new systems created errors totaling more than the is expected to generate by 2033, 2034. So the volume dollar figure of the errors that were put into the system last year, this new electronic system are the total of what they expect the revenues to be until basically the next decade, 2033, 2034. Blake Oliver: [00:44:59] So. Like it's just canceling it all out. David Leary: [00:45:02] It's like a big mess. Like. Like it's not like they built the system and it's just been poorly executed. Oh, no. It goes back to remember the the whole California payroll system or the California accounting system that they're replacing right from scratch or that payroll system up in Canada. These government. And this is what scares me about let's just rebuild the IRS, right? Like from scratch. Well, it'll never happen. It'll never get out the door and never work. Blake Oliver: [00:45:28] Well, I don't think that's quite fair, David, because this is trying to change an existing agency, try to modernize something that's been in place forever. And we see how that. Well, that works, right? It's almost impossible once the bureaucrats are entrenched, whether they're in government or they're in a technology company, it's impossible to change. So the only way to actually make a change is to disrupt. And it might be an outside disruptor or you create your own disruptor. So that's why I've advocated for I don't know if I've said this on the show, but, you know, I like to talk about this idea of like creating an IRS 2.0, create a new. Yeah. And, and then allow a subset of taxpayers to opt in to the new agency, which is completely started from scratch, like if you started the IRS. All over again. What would it be like if you had a new revenue service? Like, that's the way to do it. Create a disruptor. And say if you've got a 1040, an easy 1040, you can file with this agency instead of this one. And you gradually move everything over and you shut down the old one. I think that would be the way that's the way that's the only way to do it. Otherwise, you've got all these people in there that just. They suck the life out of everything. You know, there's just there's just people in this world who all they want to do is collect a paycheck, and they don't really care. They don't really care that everything sucks. You know, like they've got they got no, they got. And they hold everything up. Like those people. You can't you can't change those people. Right. I mean, you need you need people like that out there, like making, I guess, making the cogs of the world turn. But they're not going to innovate. They're going to they're not going to disrupt themselves. Speaker3: [00:47:16] Well, even. David Leary: [00:47:17] Even if everybody's on board, everybody's on board. Nobody's nobody's. Yeah, I used to call them innovation antibodies, right? Yeah. Like if the innovation antibodies don't even exist. We've all done this. You integrate two apps together, and, like, data gets posted wrong in your QuickBooks. Right. Now, imagine you're going to take electronic data from thousands of different apps and try to get them into one system correctly. Yeah. Good luck. Like. Like. Like good luck. That's the reality. Blake Oliver: [00:47:44] So we've managed to talk about, like two stories in this episode, and I have I don't know how many. Can we talk a little bit about remote work before we go? We talked about it at the beginning a little bit. Right. So did I did I say that my wife's company is is doing a you know, they're big like fortune. They might be Fortune ten. I don't know. David Leary: [00:48:07] Not not on air. But I think you've talked to me. Blake Oliver: [00:48:09] Okay. So they're doing a return to office, right? Everybody's trying to get people back to the office. I feel like this has been going on now for, like, years. And and you know, so she's been working. She got she got hired remotely. And now she might have to go to an office. And the thing that's crazy about it is that her team is not in that office. They're all over the country, so they might all have to go back to the office just to dial into Microsoft teams calls from their cubicles in the offices. David Leary: [00:48:38] I used to hate when I'd go up to the Bay Area and I go to the Intuit campus and it's like 20 buildings. It's spread out and I travel all over the Bay Area and then I'd be in a conference room and nobody actually in Mountain View is in the conference room. They're all throwing desks, dialing into a zoom call like, This is crazy. Why do I travel all the way here if we're not going to do face to face? Blake Oliver: [00:48:59] So, you know, Elon Musk is the anti remote work. He's the anti body to remote work. He hates remote work. And ever since he said it, I've been wanting to talk about this quote. He said, that remote work, where is this, quote, morally wrong? Yeah. He called remote work morally wrong. And like, I just hate I hate the fact that such a brilliant guy is so wrong about this issue. Right. David Leary: [00:49:31] Do we have a slightly jaded or different view? I mean, I've worked remotely for a very, very long time, but I also don't think it's for everybody. Blake Oliver: [00:49:38] It's not for everybody. David Leary: [00:49:40] No, I think it's a small percentage at best. Blake Oliver: [00:49:43] But 10%. David Leary: [00:49:44] Can handle it. Blake Oliver: [00:49:45] He called remote work morally wrong. Bullshit. He said it's morally wrong for remote workers to work from home, while others, such as those preparing and delivering food, cannot. He said he compared remote work to a let them eat cake scenario and said that the laptop classes are living in La la land. He believes that remote workers need to, quote, get off the goddamn moral high horse with the work from home bullshit because they're asking everyone else to not work from home while they do. I mean, I could. David Leary: [00:50:11] See this classic art, his classist argument. Blake Oliver: [00:50:14] Yeah, I mean, that's true. David Leary: [00:50:15] It's not fair. Blake Oliver: [00:50:16] It isn't fair, but. But like, I feel like the whole return to office thing, like the reason all these managers want to bring everyone back to the office is because they suck at managing like they haven't bothered to learn how to manage people in a way other than, you know, walking around. David Leary: [00:50:33] Well, if you work from home and you're not driving, you don't need an electric car to drive to places. Yeah. So it's very. Blake Oliver: [00:50:38] Self-serving, right? David Leary: [00:50:39] Very self-serving. And then the last time, you know, if he's going to be on his high horse about elitism, I haven't seen him on a Southwest flight ever. Speaker3: [00:50:47] Like. David Leary: [00:50:48] Come fly with the rest of us. Elon Oh. Blake Oliver: [00:50:50] Yeah. Commute with the rest of us, right? The hour long commutes. And it's crazy because all the studies show that people work more when they work from home. Hey, Heather. Heather Smith is on the live stream. She says early morning. Hello from Australia, 3:30 a.m. here. Wow. Thanks for joining us, Heather. Bright and early. I mean, there's not even any it's not even bright. It's just early. Still in the middle of the night. Great to have you with us. David Leary: [00:51:16] I have a fun app app news story you might want to find interesting. Blake Oliver: [00:51:19] All right, let's do it. David Leary: [00:51:20] So I put a link in to this website. So ESG accounting startup Omniview secures three point million in seed funding. And what caught my eye is they, they they rebranded they used to be called ESG gen, but they basically refer to themselves as the QuickBooks for ESG. They're basically like a London based software engine providing, you know, ESG accounting. And they believe like they're going to be the go to credit bureau for non-financial and ESG data. So their website, you know, they have all the buzzwords everywhere, but they're about to launch something that I just read and I'm like, this is so dumb and such bullshit. I'll I'll read the sentence here. Omniview is soon to launch a fully automated, real time business CO2 estimator tool called view CO2 as in CO2 carbon. Right? Allowing UK and EU businesses to view and report their CO2 impacts securely by connecting their bank account for less than 5 pounds a month. So basically they're going to use bank feeds to figure out your CO2 output. This is. Speaker3: [00:52:23] Such bullshit. David Leary: [00:52:24] It's bullshit. Blake Oliver: [00:52:25] It is. It is total bullshit. David Leary: [00:52:28] And then they have a whole accounting page because they want to get accounting firms to like add these services as a value add right to to your for your clients. Speaker3: [00:52:37] Can we just can we just. Blake Oliver: [00:52:39] Focus on doing like good financial reporting before we get obsessed with ESG? David Leary: [00:52:45] Like, yeah, this just going to be more shit done wrong, right? Blake Oliver: [00:52:48] Well, and we're just adding more stuff to the financial statements. Silicon Valley banks financial statements before they collapsed. Right. Their annual 2022 report was 180 pages. And the most important piece of information that would have helped us figure out whether they were going to collapse or not was like a footnote, like a tiny line, you know, like simplify. We need to we need to reduce complexity, not introduce more complexity. Speaker3: [00:53:13] And ESG is just apps will do. David Leary: [00:53:15] These apps are going. Blake Oliver: [00:53:16] To ESG is just the it's just the distraction. You know, it's just it's because we can't fix accounting standards and make them more useful. We're going to go off and do this other thing. Now. David Leary: [00:53:27] We're creating new standards. You create new. Speaker3: [00:53:29] Standards. Blake Oliver: [00:53:30] We're really good at creating more accounting standards. We're not very good at like creating like simplifying accounting standards. And we don't, you know, as a profession. When was the last time we advocated for tax simplification, which is desperately needed? I mean, we've always viewed tax complexity as a good thing, but you get to a certain point and it becomes too much and it destroys our lives as tax professionals. Speaker3: [00:53:53] Yeah. David Leary: [00:53:54] Or where's the the regulations on, You know, and you've talked about this before, like how many hours a firm runs, right? Like every firm would fail ESG scores. Right. Because one part of that is your governance and your how you treat your employees. Right? Blake Oliver: [00:54:09] It should be. But, you know, we can define ESG however we want. So we won't we won't count that. Heather has some news from Australia for us. On 15th June zero, Australia announced price increases. These are the third price increases in two years. Noting one of those price increases was due to a delay at the start of the pandemic. So it got squished into two years. Okay. So three price increases in two years. Is that typical? Like does Intuit do that here? David I think they usually just do annually, right? At most. David Leary: [00:54:41] It's about every 18 months. It feels like that's the cadence. So but I've never heard of them like, Oh, we skipped a year, so we're going to double up. Blake Oliver: [00:54:48] So to counter that, on June 16th, Intuit Australia sent an email to their partners offering partners $2.50 per month on any plan for two years. This is a direct offer only to partners. Wow, that is insanely cheap. David Leary: [00:55:02] I thought I saw a tweet today go by. So Intuit Accountants QuickBooks Accountants Edition like the global version or something is offering for global customers like a $1 a month subscriptions or something. A dollar a month. Blake Oliver: [00:55:16] This is like dumping. I mean, is this even legal? Like can you, you know. Speaker3: [00:55:22] Like, you know, but. David Leary: [00:55:23] Then again, like what's zero cost in the States compared to QuickBooks? Blake Oliver: [00:55:26] I know, right? Actually, it's insanely I mean, some of the plans can be like $2, $8 if you're a partner. Right. That's what makes it a great deal, is like if you if you get all your clients on zero, especially the smaller ones, you know, it's like the price difference is insane. David Leary: [00:55:41] But if you're in first place. Speaker3: [00:55:42] But you raise the. Blake Oliver: [00:55:43] Prices, it's so funny how it's completely flipped here in the United States. You got zero undercutting QuickBooks. And over in Australia and New Zealand, it's complete opposite. Yeah. Josh Hey, Josh, Josh McGowan's on the live stream and he says, huge. Congrats on the 1 million downloads and the rebrand. Thank you. Speaker3: [00:56:01] Josh Thank you. Blake Oliver: [00:56:02] We really appreciate that. Yeah, 1 million downloads. It was a big milestone and now we are at the accounting podcast. Hopefully, hopefully our listeners will enjoy the I don't know, the I don't think our coverage is going to change that much, although. Speaker3: [00:56:19] We we already had done doing this. David Leary: [00:56:21] Coverage for two and a half years. We haven't changed much. It's really just finally making the title change, you know, what the hell we've been doing. Blake Oliver: [00:56:29] But but names matter. And I found that actually since we've changed the name, I've been thinking about it differently. Like the way I look for stories now, I'm looking for more broad stories. You know, tax audit, accounting, tech is there. It's still there, but it's like one. You know, one leg on the stool. Speaker3: [00:56:45] Yeah. All right. Yeah. We're touching. David Leary: [00:56:48] Politics. We're touching a little bit. Everything. Speaker3: [00:56:49] A little bit. Everything. David Leary: [00:56:50] So next week, I have news. I'm going to be in Atlanta and I will be recording the podcast. The accounting podcast from actually the On Pace Studios. I'm going to be going into the on pay office to and I'll record the podcast there. Speaker3: [00:57:05] Oh, that's amazing. Blake Oliver: [00:57:06] Yeah. So you'll be in the physical on pay recording studio. That's awesome. Yes. Well, we'll look forward to that if people want to track you down online. David, where should they do that? David Leary: [00:57:16] I'm just on all the socials. Speaker3: [00:57:17] @davidleary I'm. Blake Oliver: [00:57:18] At Blake Oliver, our new handle for the Cloud Accounting podcast, which is now the accounting podcast, is simply at Act Pod. At Act Pod. We haven't changed our email address yet, but we will for the moment. You can email us at cloudaccountingpodcast.com at Earmark cpcomm. Send us your thoughts, send us your voicemails. We play voicemails on the air and we love hearing from our listeners. Send us your stories like Heather did on the price increases that Xero recently did. David Leary: [00:57:51] Yeah, and we didn't do anything dangerous to the all the important pipes. We didn't change because we're too scared it might break something. Speaker3: [00:57:57] Yeah, we can't. Blake Oliver: [00:57:57] Change our RSS feed. Speaker3: [00:57:59] That's the. Yeah. Blake Oliver: [00:58:00] That's, that would break everything. Speaker3: [00:58:03] So very. Blake Oliver: [00:58:03] Scary. We might, we might. The RSS feed which it's all behind the scenes so nobody ever sees that. But it might be the Cloud Accounting podcast forever and that'll be the one thing that stays. Yeah. David Leary: [00:58:12] And everybody should check out. Blake wrote a really good article on the Intuit Intuit Accountants Firm of the Future blog about rethinking 150 hour requirement. Speaker3: [00:58:22] Yeah, I think. David Leary: [00:58:23] It's some of it. Obviously, if you've seen the show, you're going to hear Blake's opinions on, but it's a little different take because Blake ties it back to it's really about diversity. Blake Oliver: [00:58:29] It is. It's about. Speaker3: [00:58:30] Getting. Blake Oliver: [00:58:31] Getting you know, I'm a career changer and I'm fortunate where I've had lots of financial resources in my life where I could go off and be a music major and totally screw up my undergrad from a ROI perspective, but still be able to, like, you know, redo it. And so like I was in the classes with all these people who were also career changers who didn't have that, and like so many of them dropped out. This was in LA too. So it was like an incredibly diverse class and they would have made awesome CPAs. But like the only people who made it were the ones like me who had a lot of financial resources. I mean, not the only ones. There were people who really hustled who did it, but so many. I would say like 80, 90% of our starting group didn't make it. David Leary: [00:59:13] This can get to the finish line just too much. Blake Oliver: [00:59:15] While you're working to take all the classes for an accounting major, basically, and then to sit for the CPA exams like it's really freaking hard. So if we want to get people into the profession who are career changers and people who are from disadvantaged backgrounds economically, we got to make it easier. And that doesn't mean reducing the quality, okay, we're just reducing the red tape. It's not about lowering the bar. It's that the bar doesn't make any sense. David Leary: [00:59:42] So maybe the bar goes up because there's maybe very high quality, super smart people that just don't have the financial means to. Blake Oliver: [00:59:52] I would say if you if you have a problem with reducing the education requirement and you think that's lowering the bar, then just make the CPA exam a little harder. There you go. Right. One one lever goes down, the other goes up. Okay. All right, David, always great talking to you. Thanks, everyone who tuned in live. And we'll see you here next week.