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More Money for AI Accounting Startups · The Accounting Podcast

• [00:00:00] Thank you to our sponsor, OnPay David: OnPay is an easy-to-use, full-service payroll and HR app that is the right fit for all your clients, whether they have just one or 500 employees to stay organized, to save time, and get compliant. If you're wondering why OnPay is so great, it's because it was built by payroll experts with over 30 years of payroll experience and has the most robust and customizable QuickBooks Online and Xero integrations of any payroll provider. Stay tuned to hear more from our sponsor, OnPay later in the episode. [00:00:25] Episode preview Blake: Yeah. The move-fast and break-things mentality in FinTech, in just technology in general, is in direct conflict with our mission to protect our customers. And the fact that Veeam could be leaking data like that and could be the subject to a big data breach, maybe not yet, right? But this security research is concern. And I think the biggest concern for me is that Veeam in these email exchanges if they are true, they do not seem to be taking it seriously at all. David: Coming to you weekly from the OnPay recording studio, this is The Cloud Accounting Podcast. [00:01:10] David is recording from Italy Blake: Welcome to another episode of The Cloud Accounting Podcast. I'm Blake Oliver. David: And I'm David Leary. Blake: You're coming to us from Lake Como in Italy. David: That is correct. I have my little cappuccino. So, taking my break here, afternoon break before dinner. If it's not cappuccino, usually it would be Aperol Spritz, been drinking lots and lots of those. I have not started the adventure- Blake: Sorry, David. But I just have to say first, before we get started, I admire your work ethic because in four years we have not missed a single week of recording this podcast. And you finally got to take your trip to Italy, two weeks, and you actually are still recording. I mean if you are not... You may not be an accountant by training, but I think in spirit, you definitely are. You brought your work with you. David: But it's true, right. If we skip one, next thing, we may skip two, and next thing, this whole thing's over, right? So, this is the best way for us to not kill the show is to continue through. But I have not started my accounting adventures yet. So that'll be next week when we get to Florence. So, in Florence, that's really where Michelangelo and Luca Pacioli hung around a lot, right. And then hopefully I'm going to take a day to travel to Lucas's birthplace and see a statue and take a photo there. So that would be the accounting adventure. Up to this point, I've done my work, and there's a lot of churches. Obviously, there's a lot of accounting for money there. I've toured a lot of things, but no real accounting adventures yet. Obviously, there's a lot of tap and chip and pin here, I mean. But really now, the US has started to catch up to Europe on that front. I'm not a fan of the euros because they throw out different sizes and shapes in your wallet. I know my OCD- Blake: Oh, the bills. David: ... that I need my money that I stacked and fold the bills. Yes. It's a little annoying, well, on that thread. Tipping is a mess. You don't really tip. It's not expected. But you really don't know what to do. It's kind of an odd. I've kind of put that on the wife now though. You decide if you want a tip and then give a tip, because I'd probably overtip, and it's not part of the culture. Right. Blake: Right. I thought you weren't supposed to tip at all. But is that not true? David: That's what I don't get because I think there's no tipping. But there's tens of thousands of Americans here on tour or on holiday, right, and vacation. And my guess is the employees assume and expect tips from the Americans. Blake: Got it. So, David, what is top of mind for you? What is top of mind for you this week? [00:03:52] What we're talking about today David: Well, I took time on the airplane flight to review the Karbon's practice management survey results. They're up to 1,000 firms that took that survey. There was that. There's an article about some security with Veeam, saw that. There's fake charities the IRS is approving and then two crypto lenders. So similar news and then just the one app news. So that's kind of it. And then I check... I don't have my PCs, so I have my real notes on paper and stuff this time, little analog here. Yes. Fox news in itself. Blake: [crosstalk 00:04:23] right. David: I'm recording on a tablet. I did not bring a laptop at all. Blake: Yeah. It's kind of amazing that we can do this. There's a bit of a delay, but it's actually working pretty well. We'll see if everything uploads. And we actually have an episode at the end of this. But I'm confident. David: Can just cross, though. Blake: What's top of mind for me? David: Yeah. What about you? Blake: We of course have lots of feedback now, even more feedback about that abortion by the numbers episode. And we're going to get to that in this episode. So, when we hit the halfway mark, David, stop me because we're going to do that. I've got bunch of different just random tech news. David: No pontificating complete. Blake: No more pontificating. Yeah. I have to stop with that. We've got data on IT and technology for accountants, some new surveys. We'll go into that. I've got remote work. Like you said, we've got the new CPA exam stuff. Although we might have to dig into it, because it's like 150 pages or something like that, of course, right. It's always going to be that. I want to talk about that fake IRS charities thing. That's kind of crazy. And then of course, crypto news. There's always more crypto. We talked last episode about Celsius and how that bank collapsed. The contagion has continued into other lenders, other banker banks or... Well, they're not really banks, but they're, I don't know what you call them, crypto exchanges. So yeah. Where do we start, David? And I'll let you pick because you're on vacation. [00:05:47] Karbon's 2022 Practice Excellence Report David: All the pressures on me. Well, since I have the PDF open, I think let's start with the Karbon practice management survey. And let me get to the exact name of this. It's actually the 2022 practice excellence report is what it's actually called. And it's about a 27-page slide deck or PDF, depending on how you... I guess if it's landscape, I'm going to call it slides. I don't know if that's really the way to do it. And you can actually take this. So, it's not like, "Oh, it's a survey for a certain amount of time." You can actually take this and score your own firm, which is interesting. But the way they break it down, they kind of treat it as four pillars. So, you have strategy, efficiency, management, and growth. And what they found is the firms that are leaders in general are kind of good at all four of these things. They're able to have efficiency, but still grow. They're able to add management, but still have efficiency, right? They have an overall strategy that they're marching for a 10-year march, right? And this slide, I don't want to go through all the slides, but there's a couple that I thought were kind of interesting, slide 11, scroll down here. Okay, here we go. So, they have one that's interesting from the practice excellent for the firm's size. So, what's interesting like small firms, so somebody that's a staff of two to five, moving six to 10, that's where you really see that big jump in efficiency. So, people because they're small enough to implement things. But then when you start to see those firms move from six to 10 staff to 11 to 25, you see the big gains in management, they start rolling out management, right? And they're really good at management. And they're really good at growth because you're doubling the size of your firm, and you've gotten your processes down as being efficient. And then the other part that was interesting, all of them, once you get your staff to 100 people, 50 to 100, you start to decline in everything. You're not good at strategy anymore. You're not good at management. You're not good at growth. You're not good at efficiency. It's just interesting how this turns, depending on where you're at and the size of your firm. And then also, there's an interesting one about the timeline. So, firms that are zero to one, you're kind of going up on everything, and firms that are one to two years, you really kind of peak on all four. But then years two to five, everything dips. So as your firm becomes real, and then if you're struggling, you continue to struggle sometimes, and then this is why they concluded a lot of firms don't make it out of that five-year mark, because what... But if you do make it out of the five-to-10-years mark, you start to go up on everything again. So, you start to do better at your strategy efficiency management growth. But the two-to-five-year mark is the struggle for a lot of firms because they can't seem to balance all four of these. And then the other one that I think you would find interesting. I don't know if you have access to the deck, but they talk about- Blake: I do, yeah. David: ... metrics bull or tracking. So, if you scroll down to slide 18, and it's really talking about how firms are measuring their own metrics. So, they're tracking average revenue per client. 48% of the firms do that. 68% monthly recurring revenue. They track that .42% track the jobs completed by the staff. And this is not in here, but I don't even know who I heard it from. It might have been Scott Scarano talked about tracking the amount of time off the partners take or the firm owners take. Real indication of how that firm is truly running. Blake: Well, you know what's not on here, hours build or utilization or realization. I don't see that anywhere here. Leading firms, modern firms are not tracking that. And the closest thing to this would be the jobs completed by staff, 42%. And that's what really matters. It's how many jobs did we do? And then how quickly did we turn them around? Turnaround time is a big thing. So, who cares? Who cares how many hours a job takes? What matters is, did you deliver it to the client in time when they expected it? Right? That's what they care about. Just like at a restaurant, you don't care how many cooks had to work on your meal? You just care that it gets to you within a reasonable amount of time from when you ordered it. David: And the one number I think that'll be efficient to watch as they do this survey over time, because they've only done this three years in a row is the client lifetime value, right? Only 12% of the firms are tracking that. But that's really the game you're in, right, is to have a client for life and maximize that. Blake: So, if you're playing that recurring... If you're viewing your firm like a software company does with recurring revenue, then yeah, customer lifetime value is the most important metric to be tracking. You want that to keep going up year after year because you divide that by your cost to acquire a customer, and that's how much money you're going to get. Every dollar you invest in acquiring a customer becomes ideally three or more dollars in customer lifetime value. That's the SaaS company magic ratio. And we can do the same thing in accounting. There's something here, David. David: And the more [inaudible 00:10:49]. Blake: Well, I was going to say, you were talking about how firms struggle to get past that two to five, six to 10, I'm seeing six to 10. That's the hardest part of growing an accounting firm is like the first five years and then also getting past 10 staff. And that makes a lot of sense to me because that's when I struggled too, is you've got a firm. You're no longer the only one doing the work, but when you're under 10 people, especially when you're in that five people kind of area, it's just you and some staff, and if anyone leaves, it's a disaster because it's a lot of work for everyone else to pick up. And turnover is a problem, right? We got high turnover in the profession. So, it's really hard to get past that because you're constantly training new people, and you're having to train them yourself because there's nobody else to train them. And you actually see this struggle in slides 15 and 16 when it comes to the revenue per person in a firm. So, for a firm that's solo, if you're just a solo practitioner, the average revenue in this report is $119,000. So that means you as the solo CPA or solo accountant are earning 119,000, doing the work all by yourself. As soon as you go into the small firm category where you start hiring staff, and you've got two to five staff, that drops precipitously to 74k per person. So that means- David: Because you're probably not doing as much work. And so, you're just overhead in a weird kind of way. So that just kills these ratios. Yeah. Blake: Right. And all the people you hire, they can't be as efficient as you do. If you want to use this term billable, they can't charge as much, right? You can't charge as much for their work. And so, you lose profitability dramatically. And that really hurts financially too, right? So, there's this drop. Then when you go up to six to 10 staff, which they call small boutique, you still are only at like 79K per person. So, you haven't really grown that much. Even when you go to 11 to 25, you're only at 90. It's only when you get above 25 staff that you get back to the profitability per head count that you had when you were by yourself. So, I would really think about this. If you're on your own right now, unless you want to grow a firm that has more than 25 people, you might be better off on your own. Now, that's not to say that you wouldn't enjoy the profit per head of that larger boutique firm. I mean, your own compensation would surely increase, right. But the firm itself will never be as efficient as you can be alone until you get above the two-dozen-staff mark, at least according to these in terms of revenue. Yeah. David: Yeah. So yeah, you're going to make less money in that timeframe as you're growing it. You're going to be less efficient. Yeah. It's just there's a big risk, you're right. Unless you intend to grow a 26-person firm, you may not even bother hiring any staff, unless you're on that march, and that's your 10-year plan is to grow that point. Blake: Yeah. And you see this in the timeline too. Average revenue per employed by business tenure, zero to one years, 92K. One to two years, it drops 70, call it 80K. Two to five years is the lowest. You're at 62K per person, which is extremely low, right. That's half of what a regional firm would be earning. And then it's only after five years, that's when you start to rise up above your first year. So, you also need to think, and not only am I going to need to grow beyond 10 people, probably closer to 25, if I'm building a firm. It's going to take me five to 10 years to do that or maybe more. So, you really got to be in it to win it, I think if you're going to take that journey. Or you got to merge in with somebody to get to the point where you've 25 people. And that was my experience is I merged with a CPA firm. And then once we merged, we had more than 25 people, and everything got a lot more relaxed and easy, right. Because we had redundancy. It's just there's these economies of scale you get at that point. And interestingly- David: [crosstalk 00:15:10]- Blake: ... there's another dip. There's another dip when you go from 26... so in the regional firm, which they define as 26 to 50 staff. Then when you go to medium, which is 51 to 99, you drop a little bit again. And then you jump up when you get into the top 250. David: The one thing they do address at the end, they feel like, especially when they first gave this survey out, they were a little selection biased, right? A lot of the firms were either using Karbon or kind of in the Karbon sales life cycle if you want to call it that. But now, as they've gotten a thousand firms to do this survey and do the score, they're feeling like these numbers are really starting to normalize and becoming very representative of the industry. So, it'll be interesting to see what this looks like in year four and be interesting to find out what people's scores are. It's funny because I think this exists, thousands of firms have done it. But Karbon must not have... You know a lot of times when you do surveys or things like this. At the end, it says, "Share your results." So, give, write a review on Yelp, so share your results. And then it would share it out on social media. But apparently, Karbon must not have anything like that of like, share your firm's score. I've never seen anything out there. But it would be interesting to see for us to put firms to these scores in our brain, like, "Oh yeah, this makes sense. I see where acuity is landing on the score chart versus a different firm." But I think we probably could guess where people would fall as well. So, I think that's it on the survey, probably that's to death. Blake: Well, I'm really glad you brought it. That's the 2022 practice excellence report from Karbon. You can just search for that. You'll find it. Or you can find the link in our show notes. [00:16:50] Thank you to our sponsor, FreshBooks Blake: This episode of The Cloud Accounting Podcast is sponsored by FreshBooks. Recently, I chatted with Twyla Verhelst, director of the Accountant Channel over at FreshBooks because I wanted to see what they've been up to. For those who don't know, FreshBooks was the first accounting software I used as a freelance bookkeeper back in 2011. So, I've been really curious to see what's new. Turns out a few years ago, FreshBooks launched a new platform that is now more than just invoicing. FreshBooks is now a full general ledger with financial reports, bank feeds, and journal entries. FreshBooks also has your favorite app integrations, even some embedded ones like Gusto for payroll. And with the launch of their new accounting partner program, Twyla and the FreshBooks team are creating a platform and a partner experience that's showcasing that they're really listening to our feedback. If you want to learn about the benefits of working better together with FreshBooks, head over to cloudaccountingpodcast.promo/freshbooks. That is cloudaccountingpodcast.promo/freshbooks. [00:17:59] 76 fake charities shared a mailbox Blake: Let's talk about fake charities, David. This is a great story. I mean, not great, but entertaining. This was in the New York times where I spotted it. The headline is 76 Fake Charities Shared a Mailbox: The IRS Kept Approving More. So basically, the story is that this guy just kept opening up charities with names that were very similar to existing charities. So, this man, his name is Ian Hosang. An example is the United Way of Ohio. He created a fake charity called the United Way of Ohio. It was registered to a Staten Island address. He opened up another one called the American Cancer Society of Michigan, not affiliated with the American Cancer Society, and the real American Cancer Society had already worn the IRS that the leader of this group was running a fraud. And the IRS didn't do anything about it. And he did it 76 times. And he actually didn't make a ton of money. I think it was like $150,000 in donations. And the way he did it was he listed these fake charities on sites where you can donate to charities online, and then people would mistakenly donate to his groups rather than the real one. So, kind of easy fraud, right? David: Yeah. Super easy fraud. Blake: And- David: But the [inaudible 00:19:20] is he used the same address every single time he created one of these charities with IRS and that never [crosstalk 00:19:25]. Blake: PO box at a UPS store in Staten Island. And it didn't raise any red flags. That's the amazing part about it. But again, we're talking about an agency with budget cuts. And remember there was that whole scandal years ago when the IRS got in trouble for investigating the charitable status of conservative groups. I think that was during the Obama era. Do you remember that, David? David: I don't remember that specifically, but I know we've talked about how they don't even have the resources to publish the list of donations they're supposed to be watching, right, with political groups. They can't even update the website to keep up with the amount of groups that are making donations, even though that's kind of a responsibility there. They just don't have the funding to do it. But I don't remember the investigation you're talking about if you want to enlighten me. I hope you don't expect me to know it. Blake: Well, it's all right. We don't have time to go into that. No, no, no. Sure some of our listeners will remember this. Yeah. It was back in that time. And there was allegations of bias, right, at the IRS that they were targeting these more conservative charities and churches and whatnot. And so, as part of the response to that was the creation of a new IRS process for approving smaller charities, which this fraudster took advantage of. Mr. Hosang used the "easy" application, which stripped 11 pages of questions down to three, nine boxes to check in a small blank for groups that describe their mission. So, there's not much information that the IRS is getting. And so, then the idea is with this simplified application, there's not going to be as much bureaucracy. And what was the effect? The denial rate for new charities, which had been as high as one in 53 applicants in the old system fell to one in 2,400. So basically, we created a new simplified application for small charities, and the IRS stopped denying them as a result. And so, yeah, he just went and did this for years. David: And then they created this fast-track system is because they were trying to deal with their backlog and budget cuts. So, they're like, "Well, how do we deal with this backlog of charity applications? Well, let's streamline the application." Not knowing that it really streamlined it too well. Blake: That's right. David: I think the quote in here is the taxpayer advocate, Nina Olson, she said... Oh, she was the former taxpayer advocate from 2001 to 2019. She just said nobody's watching the store, and that's kind of true. Blake: All right. Your turn, David. [00:22:01] Crypto news: Voyager & Celsius David: We could quickly talk about the two crypto plays that have occurred here. Blake: Crypto plays or crypto, what do we call that? David: Crypto news, I guess. Blake: Crypto collapses. David: Crypto collapse. So, there's a crypto lender Voyager. So, they have now filed chapter 11 protection because two weeks ago, they halted withdrawals, right? And this is after already getting a 485 million bailout from the founder of FTX. And then now this week as well, another crypto lender called Vauld, V-A-U-L-D, they've suspended withdrawals because customers have yanked out $200 million. So, people are questioning... They've loaned money to "guaranteed returns" with these lenders, and now they're trying to get their money back out, and they're spending the ability to withdraw the money. Blake: It's a classic bank run, exactly what you would expect when these "banks" are undercapitalized. And The Wall Street Journal did a great story on Celsius talking about how much risk Celsius depositors were actually holding or subject to. So, when Celsius went down, well, they still haven't quite gone down. They've still stopped withdrawals, and they're trying to sort things out, but it's not looking good, right? So, they're probably going to go bankrupt. They had 19 billion of assets and roughly 1 billion of equity as of last summer, before it raised new funds. That's according to Celsius investor documents from 2021 reviewed by the journal. Now, that's a 19:1 assets to equity ratio. The median assets to equity ratio for all the North American banks and the S&P 1500 composite index was 9:1. So Celsius had twice as much leverage as a typical North American bank. And that's really important because regulators will not allow a bank to have that high of a ratio. And that's why we have regulation in place because banks have every incentive to have as little equity as possible and to loan out as much of the money as they've got from depositors, because that's how they make money, right? The more money they loan out, the more money they make. But it also increases the risk on the depositors. And there was no restriction on how much Celsius could lend out. And I think fundamentally, that's what's going on here, right? It's not that complex. It's that these crypto banks lent out almost all of the deposits. And so, there was very little left over, only a billion dollars of equity, right? Only a billion dollars to pay pack the depositors. And so, when depositors come back asking for 8 billion or 9 billion, they don't have enough. And actually, it's not, yeah, 2 billion. David: Actually, to put this into rule for me, I had these euros in my wallet here. And at the end of my trip, it'd be like me going to turn them back to USD and then saying, "No." And now I have euros in my wallet in the states and that juices to me, because essentially, that's what's happening. Right? [crosstalk 00:25:15]- Blake: You can't even withdraw. Let's say you put Bitcoin into Celsius. You can't even get your Bitcoin back because Celsius- David: Yeah. That's the other confusing part of this, that's... Yeah. Blake: Celsius loaned out the Bitcoin. David: They don't even have your Bitcoin. Yeah. Blake: Right. Because- David: Which is even in more insane about this whole thing. So probably another lender- Blake: So Celsius- David: ... which is even crazier. Right. They're loaning to other lenders. Blake: Who then loaned to other lenders, who then loaned. Right. That's why this is a contagion, because if one... I don't even know what you call them, but let's just call them crypto banks for now, because that's what they really are acting as, even if they're not regulated that way. Right. So, if one crypto bank goes under, it can spread to all the others, or it can spread to more, because they are also levered up that if they just lose, if Celsius loses a billion dollars, it doesn't have the money to pay back its depositors. That's really fundamentally what's going on here. It's really not complicated. David: Yeah. [crosstalk 00:26:15]- Blake: Yes, it's just not regulated. David: Yeah. They don't exist. It's a big rift. So well, next week it'll be a different one. It's been what, four weeks in a row now, five weeks in a row. Every week lately, somebody's going under on this space [crosstalk 00:26:31] next week. Blake: Well, and it might just keep continuing, right? Yeah. [00:26:33] Crypto crash causes states to pull back Blake: So, related to this, the crypto crash has halted plans by state houses to accept Bitcoin as tax payments. This was a trend. A lot of states, a good number of them were starting to accept cryptocurrency or working toward it. And I think it was all part of this hype cycle of crypto, right? You had the mayor of New York city saying, "I'm going to take my salary in crypto." I wonder how that went for him. Right. How he's feeling about that now. So, two states are still moving forward. Revenue departments in Colorado and Utah are implementing programs to enable businesses and individuals to pay their tax bills with virtual currencies, such as Bitcoin, Ethereum, and Dogecoin. They should implement that in a few months. Everybody else has stopped. Let's see who else was doing it, California. Betty Yee, California state controller called a crypto payment bill currently before the California legislature fiscally irresponsible, pointing to the price volatility for cryptocurrencies and a lack of robust federal regulatory framework for digital assets. So, California, looking like it might not happen. But basically, all this hype slowing down. [00:27:44] Thank you to our sponsor, OnPay David: This episode of The Cloud Accounting Podcast is sponsored by OnPay. As a small business owner, I've had my share of accounting tax, bank feed and app issues. Some could say I'm a mess, kind of like some of your clients. But as I reflect on the last three years of my business, the one app that I have not had any problems with is OnPay. It has been set-it and forget-it payroll. I quickly sign in each week, run payroll in minutes, maybe seconds, and I'm done. I get a perfect sync to QBO. I never think about payments reports to government agencies because OnPay is doing it all for me. OnPay can do it all for your clients too. On pays partner program offers free payroll for your firm, discounts, a dedicated support team of in-house payroll experts who will do all the heavy lifting from setting up your dashboard to adding your clients in their employees. They'll even enter any prior wages to make it easy to switch. To learn more about switching your clients to the award-winning OnPay payroll and HR, head over to cloudaccountingpodcast.promo/onpay. That is cloudaccountingpodcast.promo/onpay. OnPay, switch to better payroll. [00:27:44] Veeam’s cyber security troubles Blake: All right. What do you want to talk about next? You want to do app news? David: We should jump into app news. So, there's an article about Veeam. It's a little deeper. It's not some of the normal places we go hunting. And I forgot who... Somebody said this to me on Twitter, but the ton of the article is a FinTech horror story how one company prioritizes cybersecurity. And this is by the chief research officer of a website called Dark Reading. And I think it's a security website on the dark web and security holes and exposing companies and some of these people involved in that site do bounties, where, hey, if you find a security issue on our app, we reward the developers, right? Google. Companies have done this in the past, Google, Facebook, where they give rewards to expose things. And this is a pretty long article about Veeam. But if you read it, this could be probably any startups. And from what I can tell went on is that it may not be in the UI, but personal information, social security numbers, last names, personal identifiable data may be coming through in the payload, unsecurely. So, HTTP, not HTPS. So, there's some data that could be... Maybe you don't see at the UI, but they can watch the packets as they come through to the browser and seems like something was exposed. And what triggered this whole thing was a reset to a password, right? Blake: So- David: Usually if I request a password reset on a site, right, that should expire. And apparently, this password reset link did not expire. So he went back to his inbox, clicked on it. It didn't expire, and it was still good. And that's concerning because Veeam used MailChimp, which means that means this email is sitting on MailChimp servers with this link that anybody could click in any time and reset the password. So that's what started this. And then because of that, this person, Serudo, kind of dug in more, right? And then [crosstalk 00:30:56]- Blake: This is a cybersecurity researcher writing an article on his side or on a cybersecurity side. So that's why we may be seeing more about this in the accounting press, in the tech press as it's investigated by journalists. David: Yeah. I could see this getting more attention going on. So, there's a lot of email threads going back and forth between the cybersecurity researcher and Veeam. And the conclusion is even with some of the Veeam's responses is they kind of prioritized user experience and feature functionality over privacy and security. And this article, even at the end, the conclusion when I had this conclusion before I even got to the end of it was that this could be any app in our space, easily be any app in our space. And some of this is affected because of like VC money, right? It's grow at all costs, grow as fast as possible, right? It's not slow and steady growth. And it puts pressure on these startups and quarters get cut on purpose, not purpose, right? Or mistakes happen, or quality assurance. Maybe they're hiring 10 salespeople instead of four quality assurance folks, right. There's things like this that occur at these startups. And this could be any company. And I wouldn't be surprised if these guys dug on most of the apps that we use in the cloud accounting world. They're going to probably find similar issues, right, across the board. And the one funny thing was there's the SOC compliance, right? And the SOC compliance essentially, correct me if I'm wrong, is really approved and guided by the AACPA, right? Blake: Yeah. I think the rules around- David: [crosstalk 00:32:47] that's what you get for your website, right? Blake: Yeah. The way a SOC audit, which... It's a security, internal controls audit. And it's set up by the AACPA. They decide what's in a SOC 2. I think SOC 2 is the most common, right. David: And you get that little sticker. Blake: Yes, those stickers. David: Yeah. You get that little sticker, you put it at the bottom of your website, and it's definitely has an AACPA logo in there, and they got one of those. Right. But then I hear companies all the time. There's these companies that advertise. They're startups that will help you streamline your process to get your SOC compliance, to get that little sticker from the AACPA on the bottom of your website. So where does the blame fall? Right? I don't think this is a, oh, shame on Veeam thing. Right. I think this is like, Veeam just happened to be the one this person stumbled across, and their Veeam has an issue, and they need to get it resolved, et cetera. But this could be any app that we use as accountants and bookkeepers. And it's a little scary, actually, because they got the SOC compliance. They got the sticker. It's on their website. So- Blake: Well, I- David: And this goes back to what we talked about weeks ago. This is why accountants have to be slow and steady adopting technology. Blake: That's right. Yeah. The move-fast and break-things mentality in FinTech and just technology in general is in direct conflict with our mission to protect our customers. And the fact that Veeam could be leaking data like that and could be the subject to a big data breach, maybe not yet. Right. But this security research is concern. And I think the biggest concern for me is that Veeam in these email exchanges, if they are true, they do not seem to be taking it seriously at all. David: Well, even the email to cybersecurity of veeam.com went unanswered for so many days. Blake: Yeah. Yeah. That's disturbing. David: And they do take it serious eventually. But they're not prepared to answer for it. Right. And some of that's just maturity of companies. Right. Because there's probably a security person at Veeam who doesn't know how to do PR is like, "I can't respond to this." Right. And some of it's maturity and that type of thing. But in general, I think this is a bigger issue that probably needs to be taken a look at. Everybody should be in... All you app developers that I know you listen to the show probably need to audit themselves and go read this article and just swap out Veeam's name for your own app's name. It's probably true. I don't know. That is my guess. [00:35:14] VCs investing more in accounting AI Blake: Well, here is a positive story, a very exciting story for technology and accounting. I spotted this in the CIO Journal, which is part of The Wall Street Journal. And the headline is VCs Target AI Accounting Startups as Companies Look to Control Spending in Uncertain Economy. Many investors are betting that inflation, higher interest rates and recession fears will prompt companies to redouble efforts to track and manage spending. Here's the data point from the article. So, startups making AI-powered accounting software worldwide amassed 233 million in venture capital between January and the end of March, which actually surpassed the 210 million in funding for all of 2021. That's according to PitchBook Data, a research provider. By contrast, funding declined over the first quarter for startups building AI enabled tools in areas like media and entertainment, processor design and autonomous vehicles among dozens of other software categories. So, AI has been going through a bit of a pullback. We saw that with... What was the story? Everyone talked about Tesla fired a bunch of AI researchers for their self-driving division in California or something like that, closed an office. And I've seen other pullback on AI. It's sort of going through a dip in the cycle of hype, right. But accounting is doing just great. Botkeeper was featured in this story. An investor, an AI accounting startup, Botkeeper. Bonita Stewart, a board partner at venture capital firm, Gradient Venture said, "Core accounting has become increasingly complex due to economic factors like supply chain disruptions, labor shortages, and inflation. Oh- Blake: It's interesting too because... Oh, go ahead. David: One more thing. One more thing here. Lemonade Inc, a New York-based insurance firm with 1.5 million customers, I've seen their ads around. They do insurance on the phone, right, and the app. They use AI accounting platform developed by... They use a platform developed by Trullion to automate the process of managing entries and its general ledger and regulatory disclosures. And Trullion has been a sponsor of my Earmark podcast. I did an interview with their founder, Isaac. And yeah, it's worth checking out. Go check out the Earmark Podcast, podcast@earmark.com. You can listen about that. It was really neat to see them featured in The Wall Street Journal. That's not easy for a lease accounting startup to achieve. So, there's momentum there. Yeah. It's an interesting article. I saw that article as well, and I didn't fully bring it to the show because it feels a little hype-ish a little bit. But the interesting part about this is the investments going to the same people. So, I know we talked about Decimal a few weeks back. I think Decimal raised 8 million, right? They're an accounting firm with engineers, like I've always called them over this time. And obviously, they have AI, know that's probably in their pitch deck. Well, a listener, David gave me a heads up and said, "Hey, go check out the people that work there." Lots and lots of scale factor people so that the head of recruiting, was it scale factor recruiting other scale factor people? So, it's like, okay, great. So, these VCs are still betting on AI to the point where they're just betting into the same people that tried to do it before, and it wasn't successful. So, we'll see where this all winds up. But yeah, if you start researching the employees at Decimal, lots and lots were ads- Blake: That- David: ... skill factor first. Blake: That's funny. [00:38:52] Do clients want portals? Blake: Here's another app news story that I saw that I've been holding onto. The headline is Clients Would Switch for Portals. This is a report in CPA Trendlines on a survey from Atomik Research’s 2021 client expectation study. It shows that CPA firms without portals, apps, and solid security face a high probability of losing clients. So- David: So just to rewind, I'm going to make sure I'm on the same page as this. If I'm with a firm, and they don't have a portal, I'm going to be like, "I'm out. I'm going to go to the firm with a portal." Blake: So, I think we're actually reaching point. David: That the conclusion if I'm hearing this correctly. Blake: So, well, let me read through this, and we'll figure out if that's true. 78% of small businesses say they would consider switching accountants to one that uses "the latest technology". They aren't necessarily expecting the latest in accounting software, but a burgeoning majority think an accountant with a portal might suffice to get them to jump the fence. The importance of a secure portal increases with firm size. Here are the numbers for small business owners who say it is somewhat or very important that their accountant offer an online portal. One to five employees. It's 48%. Just about half. David: [inaudible 00:40:07] BS in a article. I need you to give me the link. I want to see who wrote this article. This is paid. It's written by somebody that works for one of the portal companies. There's no way. Small businesses don't give a crap about the portal their accountant uses. They do not. They do not care. And actually, probably are some that hate them. It's just like when you go to your doctor's website, and they have that stupid portal. Blake: Okay. Well- David: So, there's no way people... [inaudible 00:40:36] the link who wrote this article. Go to the bottom. Who's that person, the author. Blake: No. So, the byline is CPA Trendlines. And the research is from Atomik Research, A-T-O-M-I-K Research. And it's their 2021 client expectation study. So [crosstalk 00:40:54]- David: [crosstalk 00:40:54] the research article. Blake: Well, there's some more stuff- David: [inaudible 00:40:58]- Blake: ... in the study. Maybe you can call BS on this too. So, by the way, the interest in the portal increases with size. So, the, the bigger the business, the more they want their accountant to have a portal or their CPA firm to have a portal. Interestingly, a lot of businesses are ready to switch. So, a CPA firm without tech to a CPA firm with a portal, it's like over 50%. The lowest is 61% all the way up to 95% of firms would change or businesses or clients would change. They also want mobile apps. They say that it's important that their accountant offer a mobile app. So anyway, David, you'll have to investigate this and tell me if I just brought BS to the show, if this is a real thing or not. I feel like CPA Trendlines does a pretty good job with what they report in terms of survey data. So let us know. We'll follow up on that. You're looking right now. You're trying to call- David: Yeah. [inaudible 00:41:53] follow up next week. Trying to Google it, trying to find it. Yeah. So, you'll have to send me the link. I'll go to the show notes, click on the link, and then I'll look at the article, and then maybe I'd follow up next week. Blake: All right. Well, David, do you have anything else you want to add, or shall we get to the listener feedback? [00:42:11] Toast POS to acquire Sling David: Yeah. One quick piece of app notes. No. So Toast. You know the point of sale, Toast. We talked about that before. And we talk about these ecosystems, obviously Aquare, or what's it, Block now is an ecosystem that's kind of threatening to somebody like QuickBooks, right? You have Shopify, which is an ecosystem now that's big ecosystem play. Well, Toast itself is like this restaurant ecosystem play. And I think we've mentioned before how half of all businesses that get on Toast opt into Toast built into payroll product, right? So, they're keeping people in the ecosystem. Well, they now just announced they're making plans to acquire an app called... It's an app called Sling. And this app would be allowed... It's for managers to schedule their employees shifts. And so, if you and I both worked at a restaurant, Blake, we can also communicate like, "Hey Blake, can you take my shift?" Okay, I'll swap shifts with you. 11 million employees use that in the US. So, Toast is getting very serious about being a full-blown ecosystem play, where yes, they're your point of sale. They're managing inventory or... They added I think some B2B payments now. Now they're doing payroll. Now they're doing the payroll management or employee management function. So, Toast is a very big... They’re a threat to Intuit. And this is why I think Intuit went down MailChimp [inaudible 00:43:29] and Credit Karma to build their ecosystem stronger. Right? I think we're seeing a lot more of this ecosystem players happen. Blake: Makes sense. [00:43:38] Thanks to our sponsor, LedgerGurus David: This episode of The Cloud Accounting Podcast is sponsored by LedgerGurus. Do you want to work for a firm that offers balanced flexibility? Do you want to work with a team that takes ownership, solves problems, follows through and gets work done? Do you want to work where you feel valued as an individual? If you said yes to any of those questions, you should check out LedgerGurus most recent job opening. LedgerGurus is a successful all remote cast, only firm that specializes in eCommerce clients. And they're looking for a director of service delivery to lead their growing client accounting services team of 50-plus people. They're looking for someone who is a team-builder, is flexible, has a learning mindset and is a leader who will join the senior leadership team to help LedgerGurus grow to eight figures and beyond. If this is you, head over to the cloudaccountingpodcast.promo/ledgergurus. That is cloudaccountingpodcast.promo/ledgergurus. [00:44:39] Listener feedback Blake: All right. Time for listener feedback. I'm going to play the voicemails first, because I do think if you send a voicemail, this is a radio show. This is a podcast. Please send us voicemails. We preference to those, and then I'll get to the emails. Tony: Hi, David and Blake. Just looking to your podcast read-out usual with Lorilyn, Abortion by the numbers. And I'm calling because of the point in the podcast, when you started getting into state law issues and presuming this specifically has to do with accountants, state law compliance for accountants is critical. And your comment was well, we're straying off the topic or getting into deep where we didn't intend to. My comment is this is where the discussion begins for accountants. Now, granted, my background is a little bit heavy on this side. My tax law background is employee benefits design and taxation compensation planning, and my companies have always served people throughout the United States, regardless of state. So, differences in state laws have been key. That was the case with my company, Medsave, freedom benefits, and also our online advisor service that I operate under now. So, these issues have to touch the practices of every accountant who touches our employee benefit plan, design, and administration, whether it's just providing advice on what's deductible of a tax return versus how to design compensation or how to administer the technology to protect the employer, the employee, and the accountant. So that's my two bits. I'll be putting out a series of articles and probably a CE course on that in the very near future, tonynovak@tonynovak. Thanks for hearing me out, guys. Blake: Thank you, Tony. Thank you for that message. And that's a really good point, right? State law often is more important for us as accounts to know. And that's why it's so difficult to be a CPA in the US in the cloud because we all want to go to this place where we have clients all over the place. But then you have to know all the different laws in the different states and maybe even different municipalities. And it's hard to do that. Well, and I was just online hearing about this. For instance, Ohio has incredibly complex, I think it's sales tax or something, different laws locally. And so, if you serve Ohio businesses, you're really kind of better off just focusing on that. And there's this question as to like, "Why do businesses care about working with their accountant locally when they can work with anyone anywhere?" Well, that's a good reason, right? Is the local person is more likely to know your local laws? And that's just the way our system is set up here in the US. David: And I think the big takeaway for me of that voicemail is goes back to us doing the show, like everything has attacks and accounting slant. And he's really reinforcing that like, "Oh, no, this is bigger than maybe we even considered in the show." Blake: Okay. Voicemail number two. Erin: Hi there. My name is Erin Millie Smith, and I'm calling you from Guelph, Ontario, Canada. And I just listened to your podcast today with the topic Abortion by the Numbers. And first of all, I wanted to say, thank you so much for tackling this topic. I'm sure it was a difficult decision, and you're probably going to get some unpleasant feedback as a result. But I listened to the entire thing and really enjoyed it and thought it was helpful. A couple of points that I wanted to vent with you that I thought your listeners might also find interesting as their numbers related. The first one was you touched on plan B emergency contraception. And I know that there is often an argument made that if birth control failed or if somebody is sexually assaulted and there's no birth control used then, a plan B is an option to prevent pregnancy. And one thing, a lot of people don't know is there's actually a weight limit to the effectiveness of plan B. If women is over... sorry, if a person who gets pregnant is over 165 pounds, plan B is not as effective. And if a person who can get pregnant is over 195 pounds, plan B can just simply not work. And if you're thinking, well, those might be outliers, that's a pretty high weight limit, it's really not. You're looking at a lot of women who you probably know, people who bear typically size 12 or 14 in women's clothing. It's not people that are, are extremely, extremely heavy. It's just that's pretty normal size for a lot of the women you know in your life, and plan B is not likely to be as effective for them. So, I thought that was an interesting tidbit that a lot of people aren't aware of. The other one is as a Canadian, I find it interesting listening to these conversations because I have enjoyed traveling to the United States in the past. I've gone to accounting conferences in the United States in the past. And this is really changing my plan for travel and for accounting conferences or for any purpose to the United States. If I or anybody who has a uterus now need to consider that they may require life-saving surgery if they have an ectopic pregnancy that births while they're traveling, if they are very early in their pregnancy, don't even know they're pregnant and they have a miscarriage and it doesn't clear completely or safely, they may need abortion services care that would now be denied under these laws that are coming into place. I noted that zero con is coming up in New Orleans in a couple of months, and Louisiana is one of the states that has abortion bans on the books that they're hoping to put back into place or put into place. once this ruling is settled. And that really changes my decisions about travel and whether I would try. That's a very myth, just continuing the earlier message I was talking about traveling to conferences or traveling to the United States in general and being concerned about being denied necessary healthcare based on the new abortion restrictions. Even if I'm not traveling to a state that has an abortion restriction, let's say a conference is being held in California, if my plane's diverted, for some reason, there's no guarantee. And as someone traveling through the United States, potential medical costs are already a concern. We already have to buy travel insurance in case we need medical coverage while we're in a different country. But adding onto that now the possibility of being denied medical coverage, because it would be covered by these abortion bans or the possibility of being potentially prosecuted for having a miscarriage or for needing surgery for an ectopic pregnancy really changes my decision-making about whether I'm going to travel to the United States for business or for personal reason. So, I thought though that you might find that interesting additions to your conversations on the topic. And again, I really thank you for having this conversation and making this podcast. I really appreciate it. Take care. Blake: Thank you for that message. Yeah, that's something to add to our economic discussion of this. What is the impact of these restrictions on the economies of the states where they take effect? Will it reduce tourism? Will it reduce the number of conferences that happen? A lot of big companies now are taking moral stances in favor of pro-choice. And will they decide not to have conferences in those places that are restrictive to protest it? David: I mean, her concern is not even the states. It's the country as a whole. I just won't spend any money coming to the states because it's just way too risky. My plane has to emergency landing in different state. Now I'm at risk. And yeah- Blake: What is that... Yeah. David: Yeah, it's interesting the bigger number of how this rolls up, which we didn't even talk about at all before we record the episode. Blake: No. David: It's a really good [inaudible 00:53:31] point. I love these voicemails. They're all raising these other number-related issues that we did not know about. And I did not know about the body size or weight issue with the plan B pills either, so- Blake: Yeah. I had no clue of what we were... As our episode with Lorilyn demonstrated, we were kind of clueless on some basic stuff about reproductive health. And there's another one. I learned something. Now we're going to get to the emails. Here is an email from a listener who asked to remain anonymous. Hi guys, longtime listener of your show. I've barely missed an episode since the beginning. I am disappointed that you brought abortion into the discussion. I got about five minutes into the intro. And as soon as your guest made her leanings clear, I had to sign off. As a staunch pro-lifer, I would rather not have my accounting shows presented with a left-leaning angle, regardless of the potential financial implications this ruling may have. That may be naive, but I feel like ideology matters, and this guest will not be seeing the numbers from the same worldview that I do. Thanks for all you do. And I look forward to future episodes. PS, I know you often read emails on the air, but I'd like to remain anonymous. Thanks. David: Thanks for listening. And this is the nice thing about podcast is you can pick and choose. And it's not... If you think about the old days of television network news, you don't have all options, right? You either turn the TV completely off, or you've got what you were fed. And yes, if you want to choose not to listen, then that's just the beauty of podcast. Blake: I guess so. I guess the thing that frustrates me is that we tried. I know that Lorilyn has a point of view, David. David, you have a point of view. I think it's obviously pro-choice. So, I can see why somebody who defines himself as pro-life would... And I don't know if I stated my view on the show, but I don't like labels like that. I don't like it being a binary decision because I'm also not... Most Americans are not actually one or the other. You ask them questions about this, and they come down in very different ways on this issue. And most developed countries don't have an either/or. It's not like you can abort a fetus up to the moment of birth, or you can't even have contraceptives, right. There's a compromise that's reached. And so, I don't like defining myself that way because I'm not one or the other. I'm sad because I feel like there was a lot of good data in that discussion. And you can make your own decisions based on the data. And we have an email from a listener who wanted to offer a different point of view on the data that we talked about on the stats. David: And the episode may still be worth listening to because I feel like it's... I think we handled it as balanced as we could, the episode and going back and been listening to it. Because even after we recorded, I was like, "I wonder how that turned out." Right. And then to go back and listen to it again. But I also think all three of us, Lorilyn, you, and myself, we all, I think, understand the other position, from our own different ways. I think Lorilyn, she raised from the anti-abortion or pro-life point of view. I think you, Blake so that [inaudible 00:57:02]- Blake: I was too. David: ... to that is very heavily into this. You've seen these views. I've not so much a race thing, but I've been on both sides of this. At some level, holding a baby at 17 weeks to your hand, you get the argument on the other side. I get it. But I think we handled it pretty well, I think. It's not easy. We have two more voicemails, you said, or another email. Blake: So, I would encourage the writer of that email to just put it on, turn it off if you don't like it, but just listen a little longer than five minutes, because I think there was some interesting discussion. And we're going to get to the opposing point of view on the economics, on the impact in terms of numbers. So, let's hear that. This is an email from Paul. Paul said, "Hi, Blake. There was quite a lot in your abortion discussion I would like to take issue with. But for the sake of brevity, I will limit myself to addressing the central argument that Lorilyn made. She argued that restrictive abortion laws are ineffective in significantly reducing abortions. She cited statistics that countries with restrictive abortion laws do not have significantly lower abortion rates than countries with liberal abortion laws. Those statistics are valid. They are factual. But the conclusion she inferred from those stats was incorrect. Why? Because countries with restrictive abortion laws tend to be different as a group than countries with liberal ones. Consider that countries with restrictive abortion laws are disproportionately poorer countries from the developing world. They generally have higher fertility rates, higher unintended pregnancy rates, higher poverty rates. There are all kinds of disparities in confounding social and economic factors that may account for their higher abortion rates. If you could hold constant all those other factors that affect abortion rates, then simply looking at how abortion rates vary with changes in abortion laws, as Lorilyn did, might be more dispositive, new word for me. But the study cited by Lorilyn did not attempt to do this. "To illustrate let's compare Finland, a nation with liberal abortion laws, to Nigeria, where abortion laws are very restrictive. Of those two countries, Finland has a much lower abortion rate. Does that mean that restrictive abortion laws in Nigeria are ineffective? No, because Nigeria and Finland are not otherwise identical countries where only the abortion laws are different. They're different countries in a lot of ways. Consider this one fact, that the number of children Nigerian women want to have on average is 6.7. This fact alone suggests a higher order of magnitude in terms of the number of pregnancies that women in Nigeria typically have over the course of their lives, relative to women in Finland. Conventionally, abortion rates are measured in terms of number of abortions per 1000 women of childbearing age in Nigeria. There are simply many, many more pregnancies per 1000 women of childbearing age, many of which will no doubt be unintended and unwanted. That's why comparing abortion rates in countries like Nigeria to countries like Finland is apples to oranges. That's why Finland's lower abortion rate really tells us nothing useful about whether Nigeria's restrictive abortion laws are lowering that nation's abortion rate. "To seriously evaluate whether restrictive abortion laws are effective, we should look at what happened in places where restrictive abortion laws were either enacted or loosened. It's a challenging question for social scientists to study directly. One reason is the ease of travel. For example, the abortion rate measured in Poland clearly plummeted after restrictive abortion laws were enacted there quite recently, but it probably gave rise to a certain amount of abortion tourism in which polls seeking an abortion would travel to nearby countries to obtain the procedure. So, it's unclear how much it actually went down. But there was a study in 2004 that studied this exact question in an ideal setting. It took data from countries in Eastern Europe where abortion laws were significantly liberalized after the fall of the iron curtain. It's ideal because there wasn't much travel to and from Eastern Europe under communism. The study is full of interesting insights and is worth reading and full, but I'll skip to the bottom-line summary. "It found that "modest restrictions on abortion in Eastern Europe reduced abortion rates on the order of 25%". That is obviously a significant decrease. It is good evidence from the best, most direct study of this question that abortion rates can be quite sensitive to changes in abortion laws. So, when you ask Lorilyn whether abortion laws stop abortion, I would suggest the answer she should have given was yes, according to the best evidence we have, restrictive abortion laws significantly reduce abortions." So, this makes sense to me. And this was one of the things I was thinking about after we recorded the episode, how could these restrictions not to some extent reduce abortions, right? It makes sense, right? And especially for the people who can't travel. So, if you are a person who doesn't have means to travel outside of your state and your state has a restrictive abortion law, you're not getting one most likely, unless you can get help. And it's going to reduce the number of abortions that happen. Now, the question is how many of those formerly legal abortions become back-alley ones? Which is worse because now you're putting both the life of the mother and the baby and the long-term health risk. Right? David: Sure. Risk. Yeah. Blake: And I just think we probably don't have data on this because it's not happened in a very long time. But now we're going to be able to collect it. Right. So now we're going to find out what the real result is. But I guess the answer is, it's somewhere between 0% and 25% is what happens when you pass these laws. Now, if you have to put these negative consequences or positives, negatives and positives in a pros and a cons column and weigh them, right, if you are pro-life, will that 25% reduction be offset by negative consequences of this? In other ways, if you are somebody who believes that life begins at conception, then probably you're going to say it doesn't matter. And so that... Yeah, go ahead, David. David: Oh, good. I think the other part of this that is missing, when you do this country comparison, right, you can't just look at abortion. So, Nigeria, yes, there's a lot more pregnancies per a thousand women. But I'm willing to bet the access to contraceptives is probably not like it is in Finland. Right. And birth control and things like this. So, it's very hard to make this like a micro decision. It's bigger yeah. In a way, you can lump it all under healthcare at some level. Right. It's all related. Blake: And I don't have the stat in front of me, but we do know that access to free contraceptives dramatically reduces the rate of unintended pregnancy. So, if you really want to bring down abortions, that would be the way to do it, more than a restrictive law. David: From an accounting perspective, it's very black and white logic. If there's no pregnancies, there's no abortions. It it's very easy [crosstalk 01:04:04]. Yeah. Blake: Right. It's always kind of blown my mind that people who are pro-life aren't pro-free-contraceptives. But then you got to remember there's the religious argument. There are people who believe that contraceptive are wrong. And I don't believe that. I think most people don't believe that. I mean, even most Catholics, when I was growing up took contraceptives, right, in California, anyway. That's a very small minority viewpoint. But it seems to drive a lot of the rulemaking in this country, which is sad because there's an easy way to really, really reduce this. Anyway. David: On the same block within spitting distance, there was a condom machine and a Catholic cathedral right here. Blake: In Tucson? David: Right here in Italy. Blake: Oh, in Italy. Interesting. Yeah. David: In Italy. Yes. So, it was a convenient store, and then there was like a condom machine, and then the next buck over is the church, so- Blake: All right. David: Both can exist. Blake: Both can exist. We got one more email, and I do want to read this. This is the last thing we'll talk about in this episode. So, if you're done with the whole abortion discussion, you can go ahead and turn us off now. But I do want everybody to be heard and the opposing viewpoints to be heard. So, we are going to... I'm going to read this one too. And this is a little bit of a longer one as well. This is from Daniel. Hi, Blake. I appreciate your willingness to address a hot topic from an accounting perspective. I'm taking you up on your invitation to email you, as I believe you have materially missed the mark in several areas but want to emphasize at the outset that we need logical thinking minds, such as accountants to apply their logic to issues like this one that tend to be so fraught with emotion. So please interpret my comments as seeking to join you and striving to be better, not as criticism, just because our beliefs on this issue may not put us in the same tribe. You state that there are other solutions which would do a better job at reducing the number of abortions. Regardless of the effectiveness of banning abortion or not, I don't think you would make the same argument about other causes of human rights violations. If an unborn fetus is a human person, and I believe science and embryology make it clear that it is, then the issue is not just about which methods are effective in lowering the number of abortions, but of setting legal standards in line with the basic American values of the right to life, liberty, and pursuit of happiness. Number two, similarly, you spend a lot of time discussing the costs of pregnancy birth and childcare, indicating these costs are a factor and why abortion should be a personal decision by women and families to improve their quality of life. Again, you seem to have sympathy for the moral argument against abortion, and yet did not acknowledge that the same discussion you held about costs would apply to women raiding toddlers. A toddler is dependent on their mother for family and will continue to be expensive to raise. However, I don't think you would conclude that the mother's decision over her toddlers continued existence is a personal family decision. Number three, while highlighting the fact that a higher rate of abortions are performed on women of color, you attributed this entirely to their socio-economic status. Although it is documented that this population group is targeted for abortions due to eugenic reasons, historically, at least, and arguably continues to be targeted for this underlying reason. If better access to birth control would reduce the abortions as Lorilyn claims, why has the increased access to birth control through the facilities in these areas not yet reduce the number of abortions in this population group? I would disagree that abortion is a net positive for this community, as you seem to present. Lastly, you conflated those opposed to abortion with a specific political party and painted Republican votes against improved access to resources for women as a pro-life position when in fact among those I know in the pro-life movement, these items would be widely accepted. Again, the folks I know who advocate for life want to use any and all methods to reduce the number of abortions, including better support for women and families. Here are a few numbers you didn't cover, but to keep a balanced perspective, you may want to, if you address this issue again. As of 2019, there were 2,700 pregnancy centers in the United States providing an estimated 266 million in free services to women and families. Though the numbers are obstructed, even the American Psychological Association's Task Force on Mental Health and Abortion concluded it is clear that some women do experience sadness, grief, and feelings of loss following termination of a pregnancy, and some experienced clinically significant disorders, including depression and anxiety. And if you want some interesting numbers, it would be relevant if admittedly a bit crashed to dive into the 990 of planned parenthood and see the real financial incentives behind the abortion industry. As CPAs, we can see and interpret the numbers on these forms. But I bet many Americans would be surprised just how lucrative abortions are for a "non-profit" like planned parenthood. Their claim that abortions only amount to 3% of their services is easily discredited by somebody with financial mind like yourself. These things said, I would be remiss if I didn't express appreciation for you highlighting the fact that companies are paying for abortion because it saves them money overpaying for maternity care. I believe that your surprise reaction to this thought is more indicative of how these policies should be understood than the media's bias spin that this is altruistic of these corporations. Consumers should recognize this is ultimately just a policy to help their bottom line. In ending. I want to point out that I agree with your desire to see the world be a better place. I applaud Lorilyn for a desire to recklessly love those around her. I mourn David's heartbreaking story of infertility and loss. So, I resonate with some of your underlying motivations for tackling this topic. I hope that responding to your invitation to email you feedback on this topic is understood in the spirit of reaching for a common goal, despite my very different interpretation of the numbers from what you presented, Daniel. David: I think yeah, jumping the 990s would be very, very interesting. I think that could be a whole podcast's on its own of just going one nonprofit after another and tearing apart the 990s because I think in general, there's what's in those is not usually kind of what's the forward part of their missions are. Right. So, I think that's an interesting challenge. Blake: Yeah. There's a lot to- David: And volunteers. Blake: There's a lot to talk about in this to respond to. I guess the only things I would say is I get the first point was about the moral argument, right? If you believe it's murder, then it doesn't matter. Right. You should make it illegal. And I understand that argument. If that's what you believe, then I'm not going to argue with you on that. I mean, that wasn't the point of the episode, right? Wasn't to litigate that. That's already out there. You can go debate that wherever you want. The point was to talk about the economic, the numbers, the impact, how do we actually reduce it? How do we practically reduce it? When it comes to the costs, I don't know how to respond to that. I think what I wanted to point out with the... Well, I said the party that is pro-life. I did mean the Republican party. And I do find it, as we just talked about earlier, strange that there are practical ways to reduce this. But it seems like not providing education and not providing contraceptives is antithetical to the mission of reducing this thing. So, if you believe that abortions are murder, shouldn't you be willing to compromise in order to provide education and contraceptives to prevent this from happening? I've never understood this position. I think that's all the feedback. I believe that's all the emails we got on this issue. Let me check and make sure we got to be thorough. David wants to get back to his vacation, which I totally understand. Yeah, I think that was it. So, I hope we didn't miss anyone. I really appreciate your feedback. I thought it was actually very civil and wonderful. We didn't get any hate mail. David: And I think just testament to you, Blake, having the courage to suggest that we even do this, to even address. This is huge that you did that. And frankly, no other accounting media touched this. Nobody else did. And they probably won't. Blake: No. David: Right. And because a lot of it is driven by the numbers in the machine, right? It's not an easy issue to address. And we talked about the [inaudible 01:12:22] before is there's not the perfect one black and white answer to this. But we appreciate that everybody's listened to different points of feedback. The response has been great. Even the fact that people are taking time to write opposing view emails, and these emails are long, right? The fact that people are taking the time to communicate with us about it just is a level up that's occurring. Blake: And I'm grateful because this is actually making me think about things and question my beliefs and question the numbers. And this is healthy. This is what political discourse should be like in this country. And this is what we could do as accountants of CPAs if we were willing to take a risk. We could try elevating the discussion rather than it just going into that. What's the lowest quality of discussion in the world? It's probably like YouTube comments, Facebook threads. Can we- David: Twitter, Steven [inaudible 01:13:20] wrote some of that. Blake: David, hey, I- David: All right. I'm going to go. I have Aperol Spritz waiting for me outside here. I've been getting [crosstalk 01:13:28]- Blake: What time is it in Italy? David: So, I just set my phone in military time because I did not want to miss any. So, I am at 1955. So that's what? [crosstalk 01:13:39]- Blake: It's time for you to go out and begin your dinner. David: Yes. Dinner at the dinner, and yes. Blake: And next time I talk to you, you will be back in Arizona. David: I'll be back in Tucson next Saturday. Yeah. Blake: Wonderful. David: All right. I think we'll record on Sunday. You're going to give me a data [crosstalk 01:13:55]. Blake: I'll see you around, David. If you want to reach David on Twitter, David, where should they go? David: I'm just @DavidLeary. Blake: I'm @BlakeTOliver. Email me your thoughts. Voicemails are preferred, blake@blakeoliver.com. And thanks everyone for listening. Hope to see you here next week. David: Bye, everyone David: Time for classified. [01:14:19] 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 Lizanna online coaching membership, Future Firm Accelerate. Sign around Ryan's experience taking his cloud firm 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. [01:14:54] Get W9 David: Tired of clients not remembering to get W-9. Get W-9 automates and streamlines the collection and storage of W-9s. Get W-9 has a QBO integration, and they have a partner program that pays 25% commissions. Get W-9 plans started only $19 a year. Visit getw9.tax today to get started. That is getw9.tax. Are you looking for a dream job in cloud accounting? We have the job for you. Advisors for Change delivers cloud accounting systems to small and medium nonprofit organizations. Join our team of friendly and collaborative nonprofit accounting professionals while working from home. Our systems associate will join our experienced systems manager to implement and support cloud accounting systems such as QBO, Bill.com, [inaudible 01:15:40] and others. To learn, more head to our website at advisorsforchange.com/join-our-team. That's advisorsforchange.com/join-our-team. You'll find a link to the full position description on Indeed. [01:15:55] Royalwise Solutions David: Are you a bookkeeping clients driving you crazy asking the same questions over? They need QuickBooks training, and you have more important things to do with your time. Let Royalwise be your training partner. Create your own customized client training program and outsource your QuickBooks training department. Listeners of this podcast are invited to join our partner program and receive a 10% referral commission when you sign up. Join us at royalwise.com/partner to learn more and get started today. Again, that's royalwise.com/partner. [01:16:25] 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. [01:17:23] 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.