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It's A Data Entry Nightmare At The IRS · The Accounting Podcast

• [00:00:00] Thank you to our sponsor, Digits David: What if, instead of sending your clients a report as a PDF from QuickBooks, you could invite them to a suite of interactive reports where they can drill down on any number, gain insights, and easily communicate with you about any report, account, total, or even an individual transaction? What if you could do this for free? Stay tuned to hear more from our sponsor, Digits, later in the episode. [00:00:20] Episode Preview Blake: It's just this disconnect that we have in the accounting profession between the people who are doing the tax, and the people that are doing the books. I guess it's sort of the same as the disconnect between the auditors, and the people who do the books, too- who put together the financials. There's just so much wasted time, and energy, and effort because we're not aligned on what the client really needs and wants. David Leary: Coming to you weekly from the OnPay recording studio, this is The Cloud Accounting Podcast. [00:00:59] Introduction and episode rundown Blake: Welcome to The Cloud Accounting Podcast, I'm Blake Oliver. David: And I'm David Leary. Blake, we have so much to do. I feel like we have a double episode because we missed- we didn't get to all the app news last week, and now, I piled it up. And then there's a bunch of app news this week. And I don't know, I feel like I have 25, 40, 50, 60 stories sitting here, I'm just staring at. Blake: I know, and so much good news or bad news, but good news to talk about. I mean- David: And this is after you eliminated the April fool's news, right? Blake: Yeah. No, no, April fools- there was not much April fools this year. I'm just looking through my list of stories: IRS, paper income tax returns continue to be a major part of the log jam David: That was a crazy story I think I saw. Blake: Oh yeah. No, and that story, we'll talk about it. But I guess they're still keying in all the returns. That's how they're processing them. There's no scanning. David: I have three questions to ask you. Blake: Okay. David: If we were interviewing you for a job at my accounting firm, to make sure I hire the best accountant. Blake: Uh huh. David: So, I have three questions. Blake: Three questions, okay. Well, I hope maybe- I hope I'd get that job, I don't know. David: TurboTax. Blake: Oh, TurboTax, yeah. Is it once again under fire for not really being free? I mean that's what it seems like for you. Advertise this free? David: Yeah, more of the free, free. Blake: But nobody actually gets to file for free. Yeah, what's it going to be? You pick. David: I think we have to go to the IRS first. I think that is the most amazing, eye-opening story for me. Blake: And it has a tech angle- a big tech angle. So, yes, absolutely. Let's talk about it. David: All right. So, let's rewind, actually. Blake: Okay. David: Because we talked about it last episode, or the episode before. I filed my 2020 tax return late. TurboTax- well, the IRS wouldn't let TurboTax e-file it, so I had to print it out- Blake: Because you weren't willing to wait. David: -put it in an envelope, and physically mail it to the IRS. Blake: Okay. David: So, what happens to it once the IRS gets it? Blake: I never realized this. I didn't know just how antiquated the process is. There's no scanning happening now. Somebody gets the envelope with David Leary’s- David: Well, first, it sits in the mail pile for weeks and months, gets out of the mail pile- Blake: Yeah, it sits in a giant container with a bunch of other mail. And then it finally gets opened up, and I'm imagining hundreds of pieces of mail just spilling out onto a floor in an office somewhere, and people just start picking them up, opening up the envelopes. And then, what I would do, in my firm, is, I have a bunch of scanners there, and people would start scanning the paper into some sort of system. That's what I did with bills. Right? So, that was my- David: Especially if they were typed - if they were printed. The numbers were not handwritten, right? You'd OCR it, you'd scan it, you’d try to do something. Blake: Well, that's the next thing, right? You'd scan it, and then you'd run it through software. Often, comes with the scanner- or I don't know, whatever you're using- that would then convert the printed ink into digital characters and numbers. David: And shove it into whatever IRS computer system it needs to be shoved into. Blake: Right. And we've been doing this in the cloud accounting world with bills. That's what I used to do, the sort of scanning the bills, software picks out the important information, like the date, invoice amount, the line item, shoves it into your accounts payable system. And then now, you can go process that, get that paid. David: But even I can go back to in the 80s, when we took standardized tests, and you’d have to write your first and last name, and they give you- and every box, you got to put a letter in each box, right? Blake: Yeah, yeah, the Scantrons. David: And that’s because like a computer, eventually, it would scan it, right? Blake: Right. David: The Scantrons- and I'm assuming this shit has existed for 30 years, not knowing, apparently, if you want to say what- is actually happening at the IRS. Blake: Well, okay. So, this is according to the IRS National Taxpayer Advocate, Erin M. Collins. In the latest NTA blog, Collins announced the issuance of a Taxpayer Advocate Directive, TAD, urging the IRS to implement machine reading technology, OCR, within the next two filing seasons. There's also a description of the archaic data intake process. Those are not my words; that's Erin Collins’ words. Here is how she describes it- I think we should just hear this direct from the taxpayer advocate. The delays in processing these returns result from the IRS’s archaic data intake process. The IRS’s submission processing function today evokes images of what data transcription looked like in the 1960s, prior to the information age. Employees manually transcribe all paper tax returns. Transcription consists of key stroking every digit and every letter on the return. For a moderately complex return, several hundred digits may need to be transcribed. For longer returns with more forms and schedules, the number of digits may approach or exceed 1,000 digits. In the year 2022, this doesn’t just seem crazy, it is crazy. And as of March 18th, 2022, the IRS still has 15 million tax returns backlogged from 2020 and 2021 filing seasons. Your return, David, is in that backlog somewhere, waiting to be keystroked by somebody using technology from the 1960s and 70s. David: The craziest thing is they recommended a decade ago, right, that they should start adopting two-dimensional barcodes because certain states were doing it. Blake: So, that would be, each form has a barcode on it. And then if the IRS scanned the form, the scanner could- the software could figure out what form it is, and then pull out the numbers from the appropriate boxes, and easily, very easily, transcribe those into the system automatically, using optical character recognition or OCR. David: But do you see why they didn't want to adopt that technology? Blake: No, I missed that. David: So, the IRS said that they didn't adopt that because they were afraid by making the paper returns more efficient, it would hurt e-filing. And that's where- around the same time they were kind of tasked to start doing more e-filing. Blake: So, wait, the logic was, if we make the paper return process more efficient, more incentive- David: People won’t be encouraged to e-file as much, right? It might take away our e-file initiatives that we're just now ramping up, right, around the same time. Blake: Right. But my understanding is that there's a lot of stuff you can't e-file, so you still have to paper file often. And there's the cases like you had, David, where you wanted to e-file, but you had to paper file, ‘cause e-file wasn't open, or you- I guess you could have waited, but you didn't know any better, right? David: What TurboTax didn’t tell me was, what’s the difference? Blake: Right, exactly. ‘Cause a tax preparer, this is the value of a professional in this situation, is TurboTax isn't going to tell you; they don't care. They just want you to print the return, so they can get their check, right? Interesting. Interesting. David: I'm still- just mind boggling, ‘cause I think about, you know, 30 years ago when I was in high school, my mom actually worked as a data entry person, but that was her job. She was at a check processing place. So, you mail your check to Southwest gas, and this machine would open the envelope, and she'd have about a blink of an eye to type in the micro line from the check, and the dollar amount. And it goes on to the next check, right? There was no OCR; nobody was scanning checks then. Blake: Right, right. David: And- but people are still doing that job at the IRS, obviously. But I mean, not for a check, but for returns. Blake: I want to meet some of these people. I want to talk to some of these people. Do you think they've been doing the same job for 50 years, some of them? Is there somebody that started- David: Yeah, and they're probably super-fast at it. They're probably super-fast at it. Blake: Right, right. But against millions and millions of pieces of paper. Can you imagine, what would the stack look like on your desk? Do you think there's a team of people working at computers, and there's just this massive pile of paper in the other half of the office, just all the time? And you take- can you imagine being on that team where you take off one return, and you go to your desk, and there's still just millions of them sitting there? David: Oh, and you got some jerk employee that's like, “Inbox zero, I'm at inbox zero,” putting it in everybody's face all the time. Ugh, that’d be the worst. Blake: Well, it sort of reminds me of this show, Severance, I've been watching on Apple TV. Have you- David: It’s on my list. It’s on my list in the office. Blake: Okay. So, I'm not going to ruin anything because it's just that the meaningful- the meaningless job they do on the show is scrolling through numbers and trying to find the ones that are frightening. It's some weird thing they do by feel. It seems like a kind of meaningless, time-consuming task. And I feel like that would be the place that people- where people do transcription, that's the kind of office they work in. Just a strange place. To get back to this analysis by the Taxpayer Advocate, suggests that 50 percent to 60 percent of the individual income tax returns submitted on paper over the last two years were prepared with tax return software, and would not need to be transcribed if 2D barcodes were added. Basically, they could automate the- all this for at least, half. Now, I wonder about the other half. Are they not prepared with tax return software? Are people still doing this by hand? I think I told you once, David, about I have a friend who is an engineer, and was still doing his tax returns by hand on paper because he took pride in being able to figure out how to do it. David: One of the parents from my kid’s soccer, a few years back- they relocated from the UK to the states. So, they had this huge international multi-residential- and he did it all by hand. With the forums, and the books, and the- and he's a professor in the classics, right? Classics literature. And he did all this by hand. I was like, “This is crazy.” Blake: I guess if you can read Latin and Greek, you can probably figure out the instructions on the back of one of these tax forms, right? David: This is it. Blake: It's about that comp, it's about that dense. David: That's where we're at now. Blake: That’s where we’re at. David: You have to have a PhD to utilize the- [00:11:19] How does the IRS modernize? Blake: Well, so then, you know, let's talk about what we always talk about, which is then, how does the IRS actually modernize? And why haven't they done this? Is it A, total incompetence, or is it, B, underfunding, or is it A and B together, right? Because I feel like just blaming them for this situation is unfair when for the last decade, their funding has been cut, and they've lost people. How do you expect an organization to modernize when they don't have resources? David: But then what about the Tax Advocate? What have they been doing for 20 years? If they told them to do this 20 years ago- but I barely have heard from the tax advocate. We've been doing this show for three and a half years, pushing on four years. We have never talked about the tax advocate, until the last four to six weeks, right? All of a sudden, they’re- Blake: I wonder, when did this office start to exist, right? When was it created? David: Well, obviously, in 2002 because they recommended to switch to the 2D barcoding. So, it's obviously, that old. Blake: So, that goes back to- the previous annual reports go back to 2000 on their website. So, they've been around for a while. David: So, I dunno. Blake: So, they obviously- they can advocate, but they can't do anything, right? [00:12:35] Thank you to our sponsor, Scribe David: This episode of The Cloud Accounting Podcast is sponsored by Scribe. Like it or not, your firm is probably going to be impacted by the Great Resignation, which means you'll need to scale both yourself and your staff. But showing the same things to your staff or clients, over and over again, does not scale. Good thing, there is Scribe. Scribe allows you to document your processes, workflows, onboarding app instructions, help docs, and how-tos by automatically recording your actions as you use your computer. Then Scribe automatically creates easy-to-follow, step-by-step visual guides called scribes, that you can share with your staff, coworkers, or clients. You can use Scribe to document processes in cloud apps like QuickBooks and Xero, and with their desktop plug-in, you can use Scribe with all your desktop apps as well. Scribe allows you to customize the automatically created scribes by adding and removing steps, redacting sensitive information, and providing additional comments or instructions. Guides created in Scribe can be shared via link, a PDF, or embedded directly into a website, or the dozens of other tools that your firm may be using, like Notion, SharePoint, Process Street, ClickUp, et cetera. To try Scribe Pro free for one month by using promo code ‘Cloud Accounting,’ head over to cloudaccountingpodcast.promo/scribe. That is cloudaccountingpodcast.promo/scribe. Blake: Anyway, we got more to talk about. Let's keep going. David: Yeah. Blake: So, we want to talk about tax, right? David: Or we should just stay on taxes. Yeah, so, TurboTax? [00:14:07] FTC goes after TurboTax for false advertising Blake: Yeah. So, we got to talk about TurboTax. You were just mentioning it. TurboTax. So, what's the story about Intuit and TurboTax? David: So, the FTC- so, this is the U.S. Federal Trade Commission, for lack of better words, they basically requested that TurboTax and Intuit stop running their commercials because- Blake: They filed a complaint with the U.S. district court for Northern California accusing TurboTax owner, Intuit, of overstating the service’s free file option to the point where it considers such marketing a deceptive trade practice, a charge that Intuit promised to vigorously challenge. David: I mean, they went on to say, “The FTC are use” “in which almost every spoken word is the word free.” Blake: Well, and so, this is true. This is absolutely true, where very few people actually have a simple return. And I experienced this myself when I was right out of college. I had a job where I was- I don't know, I can't remember why- oh, it was something to do with student loan. Not student loan but student fees. Yeah, if you- I had- it wasn't student loans, but I had education expenses that I could get credit for, or deduction for something. And as soon as I ticked that box, I had to pay, you know? If you have anything that is complex. So, yeah, it's true. Very few people actually get to use it for free. And then, by the time you get to that point, and you realize that you've paid with your time, and you don't want it to stop, you really have no choice but to go ahead and pay. David: You're in. You’ve typed all the data in- Blake: Yeah, it’s been hours. David: The refund’s staring you in the face. Blake: Yeah. David: And Intuit’s response, again, is they have been, you know, on this march, hey, the past eight years. They felt nearly a hundred million Americans file their taxes for free. More Americans than ever have filed for free because of TurboTax and Intuit, so. Blake: So, what I want to know is, how many- what percentage of TurboTax users do get to file for free? And especially of those who start thinking they're going to file for free, how many actually file for free? I bet you it's a pretty small percentage. Otherwise, Intuit wouldn't be so profitable, right? David: So, let's see here. 60 percent growth. So, 11 million free filers were in 2018, before Intuit really started their campaign. And in 2021, there was 17 million free filers. And so, the 17 mill free filers in 2021- Blake: 17 million? David: As of last July, it said processed 45 million fed returns. Blake: So, 11 out of the 45. David: No 17 out of 45. Blake: 17 million out of 45. David: So, it was 11 in 2018, and now, it's 17. Blake: Oh. So, 38 percent get to file for free? David: Approximately. Blake: I could see the argument the FTC is making, when your commercial is like, “You get to file for free,” but close to like- it's closer to a third that actually get to do that; two-thirds don't. That could be seen as deceptive, right? David: You're going to go there first because of the free, right? And then you- like you said, you're gonna start, you find out it's not free, but I don't know. How else do you the advertise it? Do you advertise it like, “Hey, $19, $49?” I don’t know. Blake: Well, and that's what- I think that's what some of the other competitors are trying to do, but- David: Well, H&R Block is pretty- run the same thing; free return for- they’re using the same terminology, that super return, basic, whatever they're calling it. Super return. Blake: If I were still in a practice, let's see. What would I do as an accounting firm? I just tell everyone it's free if you're simple, but nothing's ever simple. David: And then as soon as you start the return, then you charge them. Blake: Yeah. Yeah, exactly. David: Well, everybody should just advertise it this way, at this point. Blake: Yeah. Everyone should do this, right? If Intuit can do it, then I think everybody should. [00:18:32] The PCAOB releases audit insights David: We briefly mentioned the PCAOB, and they had, basically, insights they've gleaned from their committees. So, apparently, they had a committee that kind of got a little dismantled when the Trump administration came. And now, they're getting these committees rolling again. So, they had a committee in 2021, and this is 244 of the audit committee chairs at U.S. public companies. And kind of just asking them for their perspective. So, they had five insights, right? One’s where concerns with technology. So, they're not uniformly positive or bullish, regarding the impact of technology on audits. One audit committee chair told the PCAOB, “Automation can make people lazy, which is why checks and balances are essential as automation becomes more prevalent. Automation can make people lazy.” Blake: I mean, that's one way to look at it, for sure. It doesn't surprise me that that's an audit chair saying that. Automation- you know what, actually, that's totally- it's totally the wrong view. It's totally somebody who doesn't understand automation saying that because automation is harder than not automating. Not automating is doing what the IRS is doing, and just doing the same process for 50 years. That's easy. That's really easy to do. It takes no brainpower. Sure, it takes a lot of time, but it's not hard. David: And then some of the other things were just very obvious, like ESG is on the radar, obviously. We just talked about this last week, with the SEC possibly recommending ESG guidelines and reporting. So, this is on their radar. Hot accounting issues; your favorite of all, Goodwill. Blake: Yeah, what about it? David: So, they spend time on it, but it doesn't- it's like they're consuming their time. Goodwill, revenue rec, credit losses, the lease standards, but it's not really- this is just them complaining about it, in a way, right? There's not really any activity happening for them. Apparently, COVID-19 still is causing problems with audit. Blake: Really? David: Going concern assessments, relevant disclosures, liquidity, it's just still causing risk assessment problems. And then the area for improvement which was kind of funny, “more than any other factor, audit committee chairs indicated that their satisfaction with the auditor's work is driven large part by comprehensive timely communication.” I don’t even know if this is an insight. It’s kind of straight. Blake: Comprehensive timely communication is what drives value in the audit? David: Or their satisfaction. Blake: Oh, their satisfaction. Okay, yeah. These are these are mind bombs you're dropping here, David. You’re blowing my mind. David: But this is- I mean- Blake: But this- they got to publish something, right? So, they- David: These are 244 audit committee chairs, right? Blake: Yeah. David: At U.S. public companies. These are, in theory, really smart people. It’s the summary of their thoughts. Blake: Yeah, that's a good way to put it. Nothing new has come out of audit for how long? When was the last thing anything new or interesting happened? And like you said, all these issues that we are talking about in the world of GAAP or FASB, nobody else cares. Nobody cares about lease accounting, outside of accounting. David: We give their insights, their five insights. Blake: All right. [00:22:02] Latest updates on the CBDC David: Did you see the latest possible bill about the U.S. digital dollar? The CBDC. Blake: Well, what about it? Where are we with it? David: So, essentially, the current bill is already starting down a path that it won't be built on blockchain. Blake: Wait. So, there's a bill, there's a law? ‘Cause as far as I knew, it was just a directive from the president, saying, “Let's go look into this.” David: Yes. So, that is happening. But in the meantime, people are starting to create laws that are going to cover this, even though it doesn't exist yet, right? So, this is Patrick Lynch, he's a Democrat from Massachusetts, and four democratic colleagues announced, “Electronic Currency and Secure Hardware Act.” It's called the ECASH Act, on March 28th. And a lot of it is trying to- you know, the fraud, and stop fraud, and those types of things that we already kind of have rules around. But they are proposing in this, is that it should not be built on blockchain. Blake: What should not be built on blockchain? David: The new digital currency. Blake: Oh, okay. David: Based on the test, though- so, the Boston fed worked with MIT's digital currency initiative, and they actually found out that blockchain just may not be fast enough, or scalable enough, anyways, to do the CBDC. Blake: Not even a private blockchain? David: Correct. But they do think the winning solution did have a distributed ledger. Blake: A distributed ledger, but not necessarily a blockchain. David: Correct. So, you know, it's just interesting that we're already seeing laws being passed on what's going to govern this, when it's still in the ‘let's look into it’ phase. Well, it’s not passed, sorry. Laws being proposed. [00:23:41] Thank you to our sponsor, Digits David: This episode of The Cloud Accounting Podcast is sponsored by Digits. Digits’ building accounting tools so powerful that you'll think they're from the future. In collaboration with hundreds of firms, Digits has been thought through, and built from the ground up. Their latest product, Digit Reports, can generate all your clients’ monthly reports, all at the same time, with just one click. These reports aren't your typical, boring, static PDF reports. They're beautiful, interactive, and alive with the latest data. Using Digits is easy. You just connect it to QuickBooks, about 24 hours later, all your data will be fully analyzed, then can begin generating reports, automatically create executive summaries, and start having those much-needed, high-value advisory discussions with clients, either face-to-face, or using the built-in chat features. And in case Digit Reports isn't enough, Digits also offers Digit Search, which you can use to quickly find and navigate directly to transactions inside of QuickBooks Online. To learn more about Digits and sign up for free, head over to cloudaccountingpodcast.promo/digits. That is cloudaccountingpodcast.promo/digits. Digits - finance from the future. Blake: So, we got some voice messages. Shall we listen to those? David: Yeah, let's jump in. [00:24:58] Ryan Pearcy & MHA Cayman's Tether audit Blake: Then we'll come back to all this. So, this first one is from Ryan Pearcy, over in the UK. Ryan Pearcy: All right, David, and Blake. This is Ryan Pearcy from the Digi-Tools in Accrual World Podcast, over in the UK. Just listened to your last pods and found it very interesting that you were delving into the audit of Tether, and they'd been done by MHA Cayman. There's a subsidiary of MHA, MacIntyre Hudson, over in the UK because I used to work there as an auditor over three years ago. And I believe the Cayman entity was set up back then. When you talk about them doing the audit, there is a chance that they subcontracted a lot of the work to MHA MacIntyre Hudson because I believe that was something they were looking to do. But yeah, I don't think that I have any more details, apart from very small world, and found it very interesting. Reading off the pods, we'll continue listening. Blake: Thanks, Ryan. David: Oh, I thought he was going to give us something juicy. Blake: Well, so, that's Ryan Pearcy, and do take a listen to his podcast. The thing about being in a professional services firm, or you know, an accounting firm, is that in a lot of ways, they're just offices with the same logo on them. And you could have them all over the place, and you don't really know any of these people that are in these different offices, right? You all just share the same brand. And so, you do wonder, with Tether, the situation that we were talking about that's so strange is that they're like $82 billion. They're an 82-billion-dollar Bitcoin bank or- not Bitcoin, a crypto bank, a stablecoin. And when you searched for their auditor on LinkedIn, the folks that signed off on their most recent attestation, it's like three people. And so, you wonder, how is this possible? $82 billion. David: Automation. Blake: It's like this tiny little- yeah, automation. Or you know, it's just three people who happen to be affiliated, right? Like they subcontract it out, or who knows? Who knows who these people are? [00:27:02] Tether in the WSJ Blake: So, anyway, on that note, there was another story about Tether this week. Actually, just today, in the Wall Street Journal- at least, I saw it today. Let's see, was it- yeah, April 3rd. So, today, it was in the Wall Street Journal. So, this is starting to hit main- not main street, Wall Street consciousness when it gets into the Wall Street Journal. The headline is, ‘Short Sellers Bet Tether, Crypto’s Central Bank, is Vulnerable to a Run.’ So, apparently, there's folks who are now short-selling Tether, thinking that maybe they aren't as liquid as they are, which is the stuff we've been talking about, where we don't really know what their assets are, that are backing these tethers, which are supposed to be backed one-to-one with the U.S. dollar. Let's say they're not as liquid as they claim to be, or maybe, some of these assets don't exist. That could be a run on the bank, basically, and totally- David: Wipe them out, 100 percent. Blake: Wipe- and it could wipe out a lot of crypto. Because people don't realize this, but yes, the market cap is large, but that's just the latest values of what people have paid for crypto. It doesn't mean there's that much liquidity. And liquidity is, how much money is there in the system? If a big chunk of that money that's actually being passed back and forth for trades disappears, there's a run on the bank, right? Then that could lock up the markets, and then values could plummet. That's how a bank run can cause problems, right? So, that's why I don't invest in this kind of stuff because it doesn't look right. There's just something not quite right about it. But on the other side, there's a lot of people making a lot of money and have been making a lot of money for a long time, and so far, it hasn't been a problem. But can't you see this? This could be- this, to me, feels like the- David: A lot of people made money on Beanie Babies for a long time. There wasn’t a problem. Blake: Yeah. Or mortgages, you know? So, this, to me, feels like the weak point of the entire crypto market is these stablecoins that are not regulated, and they have very little oversight. And who knows who these auditors really are? [00:29:14] Hackers steal $600 million in crypto from blockchain network, Ronin Blake: Anyway, if we’re speaking of crypto, one more thing here. So, this is kind of a crazy story. And I can't say I understand it, but hackers stole $600 million in crypto from a blockchain network. It's called Ronin. David: As soon as I heard that story, I thought of you, actually. I'll be honest. I heard that, I said, “Yeah, Blake, well, I did something for the show.” Blake: Well, okay. So, the Ronin Network- the reason I love this is because it's not just crypto, but it's also video games. So, apparently, there's a crypto- there's a blockchain network called Ronin that's connected to video games. And an online video game called Axie Infinity, where players collect and breed virtual pets called Axies, usually, to battle them against each other, a la Pokemon, and other properties. So, David, you said Beanie Babies, right? David: Yeah. Blake: This is digital Beanie Babies. After paying an initial startup cost, players earn in-game currency that can then be sold on the company's marketplace for Ethereum tokens. The Ronin Network is what linked the game to the company's blockchain. And I guess the network was compromised, and 173,600 Ethereum and 25.5 million in USDC- the non-tether stablecoin; the one that's legit- USDC was stolen. And normally, there would be protections, internal controls against this, but apparently, as the game was scaling up, the developers bypassed the internal controls they should have had in place, in order to allow, I don't know, some another app to come in. It was like an API thing; they needed to like open this thing up to make things happen, and they just opened up the doors too wide. David: Wow. Blake: Yeah. David: So, did it say how many people were affected? I'm trying to get a feel, how many people are playing this game, and the money involved? Blake: Yeah, I don't- see, that's- David: And where's the money come from, to begin with? Blake: Well, so, people- David: But nobody's just going to set up this game in this world, and you get rewarded money for playing this game. So, do people pay to play this game? Do they buy add-ons for their pets, and that's how- Blake: They do. So, you pay to play, right? You put money in to play, and then you can buy and sell these characters, these- you know, you can collect them. David: Okay. Blake: But that doesn't mean 600 million was put into it. It just means that's the current value, right? So, you know, how much money has actually been invested in it, I don't know. But at least 25.5 million in USDC- David: Just gone. They don’t know- Blake: It's one of those things where you try to read about what exactly happened, and it's complete gobbledygook. It's all like complete- you know. It might as well be like Star Trek, you know, technobabble, or worse. And that's what is funny to me about the whole idea, that cryptocurrency is going to liberate us from the tyranny of our existing financial system, which is overly complex. Because you're just trading one complexity for another, right? We're trading financial complexity, the crap that banks do, and all that stuff, traditional banks do with the blockchain. Which is just as difficult to understand, if not more difficult, right? It's not making anything clearer. And so, you end up having to trust people, right? The whole idea that crypto eliminates the need for trust is totally false because you still have to trust the people who develop the code, people who wrote the code, right? And even other programmers, they can't read all of the code. You have to trust people. So, it's not one of the promises of crypto. Anyway. David: Yeah because it doesn't have- and I don't know if it was Planet Money or if it was Planet Money's other podcast, The Indicator. And they were- and basically, traced basically, currency- if you want to call it that- in Russia, post the crash of the USSR, to modern day. And it literally, at first, for a while, was bricks. People would pile up bricks because bricks, you could count them. Bricks had a utility, and then it evolved into some other things, and other things, like leather and shoes. And people would start- kind of almost like a big barter economy. But then, it eventually evolved into gasoline coupons, or gallons or tickets or promise notes or something around gas and oil, right? And then eventually, it was standardized, blah blah blah. But every single iteration of this, it was based on something that had value, real value, right? Blake: That had utility. David: Utility, yeah. Blake: Yeah. You could do something with it, yes. David: But then going by that logic, our fee up money, does ours have utility? I mean, it does because it's strong, but it's still not the same. Blake: I can’t battle- I can't put my $20 up against your $20, and have it battle in a fictional Pokémon-style game. Although, I guess that's what sports betting is, right? David: Yeah. Kind of the same thing. Blake: That’s what we do. [00:34:12] India's MCA delays requirement for businesses to use accounting software with audit trail David: So, India is trying to get things- ducks in order. If you recall this- I covered this probably in like- 2021 was two years ago or one year ago? So, last March, India- this is the Corporate Affairs Ministry, which is abbreviated MCA; like different order than the words, but it's a little confusing- they made a rule that all, even small and mid-size companies, could only use accounting software that had an audit trail features. Blake: I think you mentioned this. David: And that they had to be turned on, right? Because- and it could not be turned off; it had to be on. And they also have to have an edit log of each change made to the books, with proper dates, right? Blake: Mm-hmm. David: But this requirement first was going to be April 1st, 2021, then they said it was April 1st, 2022. And now, they deferred it again to April 1st of 2023. And then, their argument is, it’s just too hard for small businesses to scale and switch to this. Now, I have a question for you. Does Xero have an audit trail? Blake: Yeah, yeah. David: It does, right? Blake: I don't know- I couldn't tell you off the top of my head how far back it goes, or anything about that, but yeah, you can click into a transaction and see who changed what, I think. David: So, QuickBooks has had it since as long as I can remember. Who's making accounting software that doesn't have audit trails? Blake: Probably, you know, solutions all over the world that are not standard, or not ones that we're familiar with. David: Yeah. So, they're trying to get some control over things, and it just keeps getting delayed though. Blake: What else we got here? [00:35:49] David's fake job interview with Blake David: Want to play a game? Blake: Want to play a game? Yeah, sure. David: It's not really a game, but I want to ask you three questions like we’re in a job interview. Blake: You tricked me. You tricked me. David: All right. So, there’s an article- Blake: Wait. So, you tell me you want to play a game, and it turns out it was a job interview. David: A job interview. Blake: Okay, great. Yeah. David: So, it says to ask these three interview questions to hire the best accountant for your firm. So, this is an article that was in Bloomberg Tax. Blake: Okay. David: First question, how do you manage your personal finances? Blake: I have maintained my personal finances for, I think, 10 years now in Xero. So, I have full balance sheet, income statement, statement of cash flows, financial statements for the Oliver family household. David: Oh, that's a good answer because that means that you have experience, you're organized, you can articulate your financial situation, which means you'll be able to do that with clients. If you would have said, “Ah, just go to the ATM and see what's in there,” not a good idea. Blake: Well, that would be- that would generally be not the best thing. Although, I know most people don't do this, what I do, ‘cause it is a lot of work. And I don't know if I really- I don't really- I like being able to look at my annual financials and do a comparison, and I can see it trended over all the years, but it doesn't actually help me. David: It's a hobby. Blake: Well, so, the thing- and the problem, actually, I had was, it's so difficult to budget in Xero, but also in QuickBooks, to actually use the budgeting, that I couldn't figure out how to do it with my wife, as a budget. So, we use You Need a Budget as well. So, I actually do the accounting twice. I do it in Xero for myself, and then I do it in YNAB, You Need a Budget, which is just for simple, personal budgeting. David: All right. So, this is good. I’m excited about the interview. We're going to continue on, sir. Blake: Okay. All right. David: We’ll be hiring you. So, next question. If you had enough money to buy a car outright, would you do it, or would you finance it instead? Blake: So, I actually have to make this decision because I have a lease that is coming due. And we already did the lease extension because we just couldn't handle- the timing was just not good. We couldn't figure out how to get a new car. And even the thought of trying to get a new car right now just gives me hives. So, I have to decide in like three months, what to do. And I'm not totally sure what we're going to do, but I think yeah, I think it would depend on the interest rate, right? So, if the interest rate is low, then usually, the best bet is just to finance it. I don't know, was that the right answer? David: That's it. That's the right answer. It's really to assess your risk, right? If you say, “Hey, I would just pay for it cash, and I'm done,” maybe you're kind of the risk averse, lower risk tolerance, versus like you said, “Okay, maybe if the interest is low enough, I'll just finance it, and then I'll invest my money somewhere else. I'll put my money to work somewhere else.” Blake: If you can earn a better rate of return, if you can earn more than you're paying in interest, then yeah, you should, generally. And that’s why you should pay off- David: But it feels like right now, I think used cars are going up in value. I’m like, “Get your best return on a used car, just buying and selling it.” All right, third question. Are you ready for your third question? Blake: Yes. David: All right. If you could have had your previous boss’ position, what would you have done differently to manage someone in your shoes today? And you could go back to when you worked at a big firm, I don't care. Make something up. Blake: So, my- I think my complaint about all the jobs where I've been unhappy, it's been the same. It has been responsibility without authority, meaning, I am a manager and I'm responsible for the work of others, but I don't have the authority to hire or fire them. And this is the classic middle manager problem. And I don't have my own P&L, I don't have a budget. It's having to ask for everything, not having the ability to do anything meaningful on your own, and just supposed- you're supposed to manage clients and manage staff without the resources or the freedom. So, that's what I've always looked for, I guess. I've never- maybe I've done a terrible job of looking for it. I find that that's actually why I'm very happy running my own business because then, I have the authority, and you know, it's my responsibility, so. David: And I don't think there's a right or wrong answer on this one, but it really- it's a way to detect- it'll show your management style preferences. Blake: Yeah. David: It'll reveal your work style. Blake: Right. David: And then, the value in teamwork, the freedom to choose your working situations, and company culture, how you want to be managed. So, these are just three questions you should ask if you're trying to hire an accountant. Blake: Where did you find those? David: That was in an article in Bloomberg Tax. And you can also find it in the show notes at The Cloud Accounting Podcast. Blake: Who wrote it? I thought- I liked those questions a lot. David: This was- his name- where is his name in this article? He's the CEO and founder of CMA Exam Academy. Blake: Okay. David: His name is Nathan Liao, L-I-A-O. He's a CMA and CMA coach. He mentors accounting and finance professionals in more than 80 countries. Blake: Did you hear about the former School of Medicine administrator who pled guilty to stealing $40 million from Yale? David: I saw this on Twitter, yes. Blake: Jamie Petrone-Codrington pled guilty in Hartford federal court. She was arrested by criminal complaint on September 3rd, released on a $1 million bond pending sentencing. This goes way back. In 2008, she was employed by the Yale School of Medicine's Department of Emergency Medicine. And most recently, has served as the director of finance and administration for the department. The way that she stole $40 million was really simple. But I guess none of these frauds are really simple, but this one was actually quite elegant. She had the authority to make unauthorized purchases for up to $10,000 for departmental needs, without any further review. I don't know if that's- is that normal? David: So, I'm ex-professor, I have a lab, and I'm like, “Hey I need some PCs for my lab.” I would go to her, she's like, “I'm authorized to do this. Let's order your PCs.” He gets PCs, everybody's happy. Blake: I guess so. David: But what she was doing, she was just ordering the PCs randomly, putting them in the back of her car? Blake: So, yeah, she was ordering computers, and then, I'm not sure if they were shipped directly to her all the time. I mean, I guess laptops, right? You could order a lot of- you could order a handful of laptops from $10,000. David: Well, this is how she got caught. Somebody anonymously reported that she was putting equipment that just came in, in her back of her car. Blake: So, she would order the computers, they would come to the office, and then she would put them in her car, and then take them to an out-of-state- it was specifically identified as out of state. An out-of-state business that then resold the computer equipment and gave her a cut. David: And well, apparently, the people reselling it did not know. They were writing checks to whatever her entertainment company, or whatever the hell it was called. Blake: Huh. David: She created this other LLC. Blake: And she never filed tax returns for this. So, she owes the U.S. Treasury $6 million. She pled guilty to one count of wire fraud, and one count of filing a false tax return. It's always the taxes that get you, right? That's what always gets people. But apparently, she was being- David: And she had many nice cars. Blake: Well, so, I'm wondering, how many of these purchases do you have to make? I think it was 10 years, right? So, $4 million a year, divided by 10,000, 400 orders a year? How does nobody notice this? I know that Yale is a big place. David: Every day, for a decade, that she was ordering. Blake: So, more than one order a day, for a decade- David: There's no- Blake: -and driving it away? David: There’s no coworkers noticing the deliveries from UPS? Nobody's questioning- I don't know. Blake: Well, so, I was browsing the Reddit or Twitter thread or something on this. And there were people in there, accountants in there, saying, “You know, this doesn't make sense because with this much equipment, that has to get capitalized and depreciated,” right? David: Yeah. Blake: Where is the- David: Usually, IT department would inventory it because- Blake: Right. David: Yeah. Blake: Where was the inventory control on this? Where was the- where were people asking for, where are all these computers? I mean, that's a lot of computers, right? $40 million worth of computers and hardware. David: Is there just that much money, stupid money, hanging around at Yale? Blake: Well, somebody also pointed out- I don't know if this is true or not- but that the $40 million represented like 0.3 percent of the budget of the Yale School. David: For that department, or all of Yale? Blake: I think Yale School of Medicine or something like that. So, basically, it's like in the big scheme of things, $4 million a year is like a rounding error for them, you know? I mean, but at the same time, you wonder, why can't audits find this stuff? If you ran all the transactions for this department through a computer system that was trained to detect it, it should find this. This seems suspicious, right? If you saw all these transactions to the same- you'd be wondering, “Okay, where's the computer equipment?” David: Well, if somebody [CROSSTALK] a physical inventory of the IT assets, they’re like, “We're missing 300- we're missing 1,000 computers,” if probably three computers- no. How many computers can you buy for 10 grand a day? Blake: I mean, you know, if these are expensive, right? Let's say they're $2,000 each, so you got five computers coming in every day. David: Five. So, if somebody did an ITR, they’d be like, “We're missing 1500 computers.” I don't know. But yeah, it doesn’t- it just doesn’t make any sense. Blake: It would be like 20,000, right? Or- wait, no. It would be 400 times five, so, 2000 computers. Where are the 2000 computers that we ordered this year? David: And then, what about the real computers? Because these departments are probably still asking to get real computers. Blake: Yeah. I mean, they probably ordered those in bigger orders, right? I don't know. Just amazing. And I just don’t understand, is that normal for somebody at this level to have $10,000 purchase approval, with no secondary approval, no review? That just seems nuts, that you would do that. Anyway. David: In the meantime, we've worked with big, huge, gigantic tech companies. I’m not going to name them; they sponsor the podcast. And the hoops they have to jump through to write us a check for two grand one time, it's insane. Blake: Oh, I know, right? Yeah. Per purchase order numbers, all that stuff. So, anyway. David: I got a transition article, if you want to do that to get into app news, or did you have any other regular news? Blake: Well, we've been talking about app news, haven't we? David: We kind of, yeah. Blake: Sort of. Well, wait, wait, hold on. We got another voicemail. I have to get to it. David: Oh, perfect. [00:46:51] Tony's email reply to Nikole's voicemail Blake: And then we'll go to wherever you want. So, this is an email actually, sent by Tony. And it's relating to our coverage, or the voicemail we received from Nikole. This is sort of like a reply to that, from Tony. Let's listen. Tony: Feedback on listening to your episode today: My big goal as a small business accountant operating in the real world is not to do a "correct" financial report on an M-1 reconciliation to satisfy a bookkeeper, but rather, to have my clients meet their legal obligations with the least amount of hassle and expense. On a list of top 100 worries for a small business owner today, this doesn't even make mention. Clients couldn't care less about accrual to cash reconciliation. Thanks for your great contribution to the industry. Regards, Tony. If you plan to use the comment on the show, then I should add, my comment was focused micro-businesses, my own client base, who tend to believe that bookkeeping is only for tax compliance, is only an overhead expense, and has no other intrinsic value. Blake: So, that was Tony replying to Nikole. And to refresh everyone's memory, Nikole Mackenzie sent in a voice message about how she wishes that more tax preparers would do a proper accrual-to-cash conversion for the tax return, using a schedule M-1 reconciliation. And that's because she does GAAP financials, accrual basis financials, for her startup clients, and has that issue with the tax preparers asking for cash basis financials. She's just saying, “Why can't they do the accrual-to-cash conversion and do this properly?” Which is what you should do. And then Tony is replying, saying, “Well, my clients couldn't care less about that. What they care about is getting the taxes done. You know, we don't need to do this crap.” And what I love about this is that they're both totally right. Nikole is right, and Tony is right. And it also depends on who the customer is, and what they want. So, in Tony's case, he's talking about mostly micro businesses, smaller businesses, that they only need the bookkeeping done to get the taxes done. And for them, that's what they need. So, the book should be done on a cash basis, and the taxes should agree; the book should be done for tax, tax books. And in Nicole's case, she has these clients that need the accrual financials. That doesn't work, right? They- and this is all just miscommunication between people doing the bookkeeping, and doing the books, and the folks doing the tax. And I experienced this myself. And this is why I think the firms that can do both are going to win because when you have the people who are doing the books aligned, and on the same team or functioning as being on the same team as the people doing the tax, you can save a lot of time. ‘Cause you're not doing all this unnecessary work you might be doing or having these disagreements that you might be having. David: And solving for the client properly. Blake: Solving for the client need. David: ‘Cause maybe you're over-bookkeeping people who only really need a cash tax report out the door. Blake: Cash, yes. Yes. David: Maybe you're doing too much bookkeeping for those folks. Blake: Right, yeah. If that's all they need, if that's what they want, and maybe we should ask the clients too. I actually love the idea of having different tiers, and you see this on some of the modern, subscription-based firms out there. You'll see the lowest tier on their offering is a just cash, cash basis books to do your taxes. And that's what a lot of firms are focusing on. And even though it's low margin, you can do a lot of volume, and you can standardize that, and you can do a great job with it. David: And that's what all these startups are doing. A lot of these startups are going after that freelancers, the collective, all these ones. So, like, “Hey, you're freelance, you're making 120,000 a year. We're going to do X for you, ‘cause you really need us, but you also don't need bookkeeping, real bookkeeping, you just need enough to get your taxes done.” So, they're doing bank feed, cash-based accounting for them. Blake: And I'm willing to bet that's what 95 percent of QuickBooks Live is, just bank feed, cash basis, put stuff into the standard chart of accounts kind of thing. David: Yeah. Blake: Yeah. But again, they're both right. But it depends on the needs of the client. David: Yeah. Blake: So, in Nikole’s case, her clients need the accrual. The tax people should be talking to Nikole and doing the proper conversion and sending in the adjusting entries that make sense for accrual books. And then in the other case, Tony's totally right for his clients. And it's just this disconnect that we have in the accounting profession, between the people who are doing the tax, and the people that are doing the books. I guess it's sort of the same as the disconnect between the auditors and the people who do the books, too, who put together the financials. There's just so much wasted time, and energy, and effort because we're not aligned on what the client really needs and wants. What else do we have today to talk about? [00:51:42] Xero celebrates 15-year anniversary David: It’s a long article, so we don't have to talk about the details of it. But basically, it's an article about the early days of Xero. Because Xero is essentially on their 15th anniversary now, I think. Blake: And didn't Craig Walker just announce his retirement? I saw that as well He's like one of the original Xeros, one of the first seven. David: Yeah, he’s from the first six. Blake: They wrote the first code, right? David: They created the first company called Accounting 2.0. Yeah. Blake: He wrote the code for Xero when they were around a kitchen table. Kind of similar stories to the founding of QuickBooks, actually. David: And it was just a different time and place if you read this article. The craziest thing is 11 months from putting money into the venture, it was listed on the New Zealand Stock Exchange. Blake: New Zealand Stock Exchange. That was very, very strange, and unusual, right? Something that would probably only ever happen in New Zealand. David: But no. I mean, you go back in time to Firefox or Netscape, back in the day, companies would only- they would IPO pretty fast. Blake: Now, nobody wants to. David: You wouldn't have this round after round, after round, after round, after round, after round, right? And you know, what’s Stripe? Stripe’s like $35 billion valuation or whatever they are, right? Blake: Yeah. David: But it's a long form read, it's an online magazine out of New Zealand or Australia- New Zealand, called Stuff. So, it will be in the show notes, but it's worth reading. It's kind of- it's interesting to read. Blake: Yeah. David: I’m kind of a nerd. I like history of stuff like this. Blake: Well, what I like about it is that Xero's like a national treasure in New Zealand. It's a hero because by going public so early, and giving people the ability to buy into this, they made a lot of people rich in New Zealand. And not just VCs, people who just thought this was a good idea got really, really wealthy. And it’s kind of a shame that in the U.S., it's so expensive to be a public company. There's so much hassle and regulation around it, that nobody wants to do it. And you avoid it as long as possible. And the effect of that is, it puts investing out of reach of most people. There's no point in picking stocks; you might as well just put all your money in index funds because all the really good opportunities are not public companies. They're all private, and you can't get in. David: Yeah because by the time one of these companies go public, there's been so much investors already that you're not getting in it at ground floor, versus the way you could have bought Netscape stock for cheap. That dream is kind of gone, of like, “I’ll buy stock, and it's going to go up.” This is why all this money's going to Bitcoin and these other things because you can't do in the stock market anymore. Blake: The stock market, you can't make money in the stock market. So, you got to make money on crypto. Yeah. David: So, that one will be in the show notes. I don't- I have so many other ones we can talk about- Blake: Well, we don’t have that much time left, so you got to pick. I'm going to make you pick. David: Or we go fast. All right. So, Builder- Blake: Either give me the rundown or pick one to focus on. [00:54:40] Builder AI raises $100 million David: All right. So, Builder AI, they raised $100 million. Builder AI is like automate- no-code software. And what's interesting about this is they- it's not like middleman software in the same way as Zapier is like, “Connect this app, then do this, and then do this,” but you can actually build a real, full-blown app on it, and they have a 600 modules in there. Blake: Wow. David: So, if you're like, “Oh, I need-” maybe, you could have built Earmark on this. Maybe it's got your billing platform, and it's got your- a podcast hosting. I don't know what else is in it, but it's all these building blocks, but I thought that was interesting. And they- currently, they said they have- oh, the 300 percent growth last year. [00:55:22] Trullion and the growth in the accounting software market Blake: Well, here's a quick one. This was a Venture Beat article, featuring Trullion, about how they're applying AI to accounting workflows. And there's some stats in here that I just thought were pretty incredible. The size of the accounting software market is projected to reach 22.9 billion. 22.9 billion by 2027. So, in five years- that's up from 14.2 billion in 2020. So, in seven years, you're going from 14 billion to like 23 billion. That's at a compound annual growth rate of 7.1 percent during the forecast period. So, pretty strong growth for accounting software. Good time. And this was related to a story about Trullion, which just raised their series A, 15 million series A, in February. And they do lease accounting software. So, even though I think that lease accounting, nobody really cares about it outside of accounting, obviously, it's a big deal, and it's a lot of work. And so, companies like Trullion, and all these other lease accounting companies, are going to come in and they're going to capture a ton of value because you can't throw people at it. You can't solve the problem with people. You've got to have software to do it. You can't hire people. Don't have enough people. [00:56:43] Finally raises $95 million David: Finally, the SMB back-office automation platform raises 95 million. And you might be somewhat familiar with this- they used to be called Back Office Ops, is that correct? Blake: That sounds right. It was Back Office something. David: Maybe Backoffice.co or Back Office. So, they rebranded and relaunched. Blake: Yeah, they were formerly known as Back Office; you're right. David: Just back office by itself? Blake: Just Back Office. David: Got it. And they were- you could argue it's another one of those bookkeeping firms with engineers, but now, what they're doing is, they're launching their own debit card or credit card-type offering. And you know, typical, it's going to download transactions, expense-type purchasing product. And so, some of this financing is to supply the debt equity for that card, that offering. But also makes sense. We've talked about this, right? If you're doing the bookkeeping, you- if you can control the spend card, it's just going to help you automate, and do bookkeeping easier. If you can control all the data, and hence, Intuit getting into their bank. You know, if you control the bank, and you do the bookkeeping, it's going to be easier to do the bookkeeping. So, they took that risk. Blake: I'm looking at the website for Finally, finally.com. And they've got some crazy, big logos on their website. Allstate, Mobil, Parkfield, Sylvan Learning, Signal 88 Security, Ovation. David: Probably at franchises. Blake: What do they- well, what do you mean at franchises? David: Well, like you said, it was all state. Blake: Oh, yeah, Allstate offices. David: Offices, right? The individual offices franchises, probably, yeah. Blake: And Mobil gas stations. They got me. Sylvan Learning franchises. David, I didn't even think of that. So, if you go to the pricing, they've got starter, pro, and premium. They offer a lot of stuff, but the all-in-one accounting solution starter is $89 per month. Includes automated bookkeeping, up to two linked financial accounts, quarterly reports, bill pay management, cash-based accounting, tax calendar, expense tool, payment processing, and invoicing: DIY, create, and send. So, I wonder what that bill pay management means. $89 a month is pretty darn cheap, although they do bill annually. you can also just buy stuff a la carte. You could just buy invoicing. You could just buy their corporate card. You could just get expense management. David: Which, of course, you would always- if you have a suite of services, and you have other things to sell people, you'd always let them buy a la carte, so you could sell your other stuff to them, right? Blake: Well, I guess that's true. Pro and premium, you have to call to get a price. There is no pricing for anything other than that. And that's how you get the accrual. Accrual Accounting is pro or premium. David: So, some bad tech news that came out this week. Blake: Oh, what's that? [00:59:35] "Bolt" competitor "Fast" may be in trouble David: So, there's a checkout software called Bolt that exists. People would use it sometimes, maybe in the- as your checkout on your website, and maybe you wouldn't use Stripe, right? You would use Bolt. So, Stripe invested in another competitor to Bolt, called Fast. You know, everybody in their original names here. And Fast- apparently, there was an article that came out this week. They only had $600,000 in revenue in 2021. Last January of 2021, they raised $102 million in their series B, led by Stripe. Then a year- later in the year, last year, in 2021, they tried to do another- raise another $100 million, and nobody wanted to take it. So, they didn't raise any money for their series C. They've hired 400 employees last year, and they're burning about $10 million a month, but they really only have about $50,000 in revenue a month. Blake: Wait, wait, they're spending 10 million a month? David: 10 million, and they only have $50,000 of revenue. Blake: What is this- what does the company do? David: It's a one-click checkout from online merchants. Blake: Oh. David: So, it’s like a- Blake: Well, they're not going to be around for very long, if that's the case, right? David: Yeah. And then to complicate it, apparently, their founder, he already had a startup before this, in Australia, called tow.com.au. It was going to be the Uber of towing. And apparently, it failed. It was “a disaster.” And there's this big- it's an elite, multimillion-dollar billing dispute with the Australian state government over towing and impounding fees, that basically, caused the whole startup to liquidate in 2018. So, you have this startup that's being mismanaged, but not nearly as effective. Apparently, Bolt, their revenue is 50X that number. Blake: Uh. David: Right. And so then, you have a questionable founder. So, we'll have to keep an eye on this because it feels like the- this is falling apart a little bit. [01:01:29] Thanks for listening, get free CPE credit Blake: Well, David, I think that's all the time we have today. If folks want to get in touch with you online, where should they do that? David: I'm on all the socials, just at @DavidLeary. Blake: I am @BlakeTOliver. Send me an email, send me a voicemail if you like, Blake@BlakeOliver.com. We love hearing from our listeners, and we will likely play your message on the air. And if you want to get CPE credit for listening to this episode, and many other episodes of The Cloud Accounting Podcast, and many of your favorite accounting and tax podcasts, download my app, Earmarkcpe.com. Earmark CPE is available in the Apple app store, on the Google Play Store. I kid you not, you can get an hour of CPE in five minutes, if you already listened to this episode. The courses come out about a week after each episode drops. You open the app, find the course, take the quiz, get your credit. It has never been so easy. David: So, if I’ve listened to this episode, and now I just heard you talk about this, I just go download the app, and I just take the quiz and get CPE credit for the episode I just am listening to you right now? Blake: Yeah. If you- David: So if they pause and go download it- Blake: You just spent an hour of your life listening to this episode. If you need CPE, why not get credit? Yeah, go download the app. David: Seems easy. Blake: Now again, takes us takes us about a week to get the course up. So, it hasn't been a week yet since this episode came out. Just wait until next week. David: Right. Just press pause, and check again for- Blake: Open the app. Yeah. But hey, if you listened to last week's episode, that one's probably up now, or the week before, right? So, we're working on ways to notify you, send you a push message when the latest episode is up for credit. And we actually broke the app, David. We broke the app this week. David: I should have covered that in the news. Earmark was down. Earmark was down. Blake: I know, right? Earmark was down. Earmark was down for like a day because we surpassed 100 courses. And the app that we built initially was not designed for more than a hundred. And we didn't realize that we were going to hit it so fast. David: That's like the Y2K, Jesus. Blake: Well, so now, the new one that's coming out has capacity for thousands. But it's funny. It's like every time you- this is how it's been explained to me. Maybe for developers listening, they can chime in, and tell me if I'm being- if that's true. That you know, the first app you build is not the one that you have when you get to the series A, which is not the one you have when you get to the series B. I mean, not that I'm going to go out and raise a bunch of money for anything like this, but basically, the app has to be rebuilt often to scale. The same- the thing you start with is not going to be able to necessarily scale with you the whole way. There’s very- it's the same thing with accounting, too, right? David: Yeah, I went through it with View My Paycheck, when I built View My paycheck. One of the things we learn really quickly is that you can't be emotionally tied to your code. We completely threw it away and just built it from scratch at least four times, five times. Blake: Yeah. And to me, it's sort of like with accounting, where yeah, you may start with QuickBooks, and then at a certain point, you're like, “This is breaking. I can't do it anymore. Now, I got to go to an ERP system.” And then at a certain point, you go to something else, and you grow. David: When you grow. When you grow, right? Blake: Yeah, when you grow. David: You just don’t do it when you grow to the point where you need to move on. Well, congratulations. You have a hundred episodes. Blake: Thank you, thank you. And congratulations to us for having like 273 episodes now. That's what we're at. That is a completely meaningless number to celebrate. We should be- David: 273. Blake: Congratulations to our 273rd episode. David: On that note, we should let everybody go. Blake: Exactly, that's right. Have a great week everyone, and I'll see you here next week, David. David: All right. Bye. [01:05:06] Classifieds David: Time for the classifieds. [01:05:10] Royalwise David Leary: As humans, we're programmed from birth, to learn watching others. Video has the power to engage, entertain, and educate, without ever feeling like work. When you want to become a QuickBooks Online expert in the shortest amount of time, the Royalwise on-demand, web-based learning solutions are the obvious answer. With 40 easy-to-understand QuickBooks classes designed to bolster your confidence and increase your accuracy, Alicia Katz Pollock’s training will take you from beginner to advanced user. Pick just the topics you need or save money by subscribing to their entire QuickBooks Online library and coaching program for one low monthly price. Listeners to The Cloud Accounting Podcast can enjoy their first month of silver membership for only $1 using promo code ‘podcast’. So, head over to learn.royalwise.com. That's Royal like a king, and wise like an owl. Register for a QuickBooks class, become a member for just a dollar, and make learning a hoot. That's learn.royalwise.com. [01:06:04] Future Firm David: If you're looking to quickly grow a scalable, systematic, seven-figure accounting firm, without having to work 50 plus hours per week, check out Ryan Lazanis’ online coaching membership, Future Firm Accelerate. Sign around Ryan's experience taking his cloud from from scratch to sale, so that you don't have to reinvent the wheel. You'll get online learning and topics that help you automate and systemize all aspects of your firm. You'll get coaching when you need help with implementation. And you'll also, join a collaborative community of hundreds of other forward-thinking firm owners. For more details, head over to www.futurefirmaccelerate.com. [01:06:41] getW9 David: Tired of clients not remembering to get W-9s? getW9 automates and streamlines the collection and storage of W-9s. getW9 has a QBO integration, and they have a partner program that pays 25 percent commissions. getW9 plans start at only $19 a year. Visit getW9.tax today to get started. That is getW9.tax. [01:07:07] Oh My Fraud: A True Crime Podcast for Accountants Blake: Hey, podcast listeners, it's Blake. And I wanted to let you know about a new show I'm working on with CPA/comedian, Greg Kyte, and blogger/former CPA, Caleb Newquist. It's called Oh My Fraud, and it's a podcast all about financial crimes. That's right, a true crime podcast for accountants, by accountants. Caleb and Greg are going to come together every couple of weeks to unpack their favorite frauds, and explore the circumstances, psychology, and interpersonal dynamics involved. They also fully indulge in victim blaming the defrauded widows, orphans, infirm, and feebleminded- because who can resist? If you fancy yourself a trusted advisor, or prefer your true crime with spreadsheets, instead of corpses, listen to this show to learn what to watch out for, and to keep your clients, your firm, and even yourself, safe. To subscribe, go to ohmyfraud.com, or search "Oh My Fraud" on Apple Podcasts, Spotify, or wherever you get your podcasts. [01:08:07] How to advertise in these classifieds David: Want to get the word out about your newsletter, webinar, party, Facebook group, podcast, e-book, job posting, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad? Hit the show notes for the link to get more info.