Latest / The Accounting Podcast / Excel Still Trumps AI, Tariffs Under Threat, QBO Price Increases Justified?

Transcript

Excel Still Trumps AI, Tariffs Under Threat, QBO Price Increases Justified? · The Accounting Podcast

• Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding! Blake Oliver: [00:00:05] You can't just say that the president can modify tax rates on its own. Congress has that authority. It's not the president's authority. And so there has to be like very limited circumstances in which the president does that. David Leary: [00:00:18] Coming to you weekly from the OnPay Recording Studio. Blake Oliver: [00:00:24] Hello, everyone, and welcome back to the show. This is the Accounting Podcast, your weekly roundup of news in the accounting profession. I'm Blake Oliver. David Leary: [00:00:34] I'm David Leary, I'm Blake summers here or almost here. Even the kids. Blake Oliver: [00:00:39] Like it. David Leary: [00:00:39] Here. So summers. Summers here feels like it's here. Blake Oliver: [00:00:42] It's a it's going to be let's see, 99 degrees here in Scottsdale, Arizona today. Great. Uh, so, David, do you have a do you have a summer reading list? David Leary: [00:00:53] I do have a summer reading list. Let me, uh. And actually, I got my summer reading list. Blake, you were in Chicago for school. So you're familiar with the Chicago Sun-Times, correct? Blake Oliver: [00:01:03] Yeah, we used to. I, I remember when we got it delivered to the door at the dorms. David Leary: [00:01:10] Well, it's still printed, right. And it's very reputable. And they syndicate as well. So they write an article and then it goes to newspapers all over the country. So I got to get an article from the Chicago Sun-Times, and it's my recommended reading list for 2025 summer. I'm going to share it here. Blake Oliver: [00:01:28] Okay. David Leary: [00:01:30] And if you can see it's pretty straightforward. It just lists 15 books and the authors and gives a little summary of each book I should read. Only problem is, only five of these 15 books are real. Blake Oliver: [00:01:43] Oh, no. David Leary: [00:01:45] So this is printed in in in newspapers all over the country. Only 15 of these are real. Blake Oliver: [00:01:52] How did that get past the editors? That is so embarrassing. David Leary: [00:01:56] Yes. So think about all the editors and layers of management, because it's not just editors at the Chicago Sun-Times. Every newspaper who chooses to buy that article or print it themselves. A version of it. They also have editors looking at this. Nobody, nobody picked up on it now. My favorite part of this, though, is on Amazon. This is what's great about America in general, right? So on Amazon, people started to create knockoffs of these books and instantly print them on Kindle and publish them the same week as the article. So, so there's a new book called The Last Algorithm. And if you look actually on the list, there's a book called The Last Algorithm by Andy Weir. Somebody made an Amazon book under weird and Andrew's so kind of similar name but not the same name okay. And they basically used AI to quickly write a book and put it for sale in Amazon. Blake Oliver: [00:02:48] That's smart. That's clever. I guess maybe they'll make some money, but wow. David Leary: [00:02:52] The reason that I kind of brought this is when we start thinking about we're going to have I do more and more and more and more for us, right? Blake Oliver: [00:02:59] Yeah. David Leary: [00:03:02] As we go forward, like the need for due diligence and review and QA work is going to be more important than ever where you're probably need to change all your workflows. Um, but I also suspect, though, somebody's going to think that takes up too much time and they'll try to use AI to do that part of the job, too. Blake Oliver: [00:03:21] Well, you can, you can. And actually, the yeah, the the editors of the Chicago Sun-Times could have avoided this whole issue if they had used an AI agent that did a first round fact checking pass on this article, which I've created those. You can do that. David Leary: [00:03:37] Yeah. And it could have been easy. It could have been go get the Amazon links for all these books, and it would have come back and couldn't find any of them. Blake Oliver: [00:03:44] Um, that is really funny, actually. Um, we could actually do that now. There's a new tool. Perplexity labs just came out. I want to demo it. I've got some examples of prompts that accountants could use to showcase this new feature. It's pretty impressive. But, David, I don't want to cut you off. You were gonna finish your thought. David Leary: [00:04:05] I was just going to say the last thought of this is. It really got me thinking. This ties back, and we'll talk about it, about the price changes and the pricing of AI. But the odds of me hiring somebody who just makes shit up are kind of low. But the odds of me using AI and making shit up is way high. Right. So when I think about the pricing and we talk about we'll get into the QuickBooks pricing, all these apps and these companies are trying to justify charging higher prices to use AI because it's going to eliminate your employee. But there's this fundamental issue here with the quality. You're going to get a huge issue. Blake Oliver: [00:04:43] It actually creates more work on the review side. And we have seen that in the studies that have been done, the limited studies that have been done of AI show that it actually creates more work on the other side. So all these companies that are out there raising money to eliminate jobs. I don't know if that is really going to be what happens. You're going to eliminate part of the job, but then you're going to create more work on the other side. And I think that's what's good about AI for accountants is that our whole job, or a good chunk of our job is review quality control compliance, ensuring accuracy. And so the more I that's out there, the more of that is necessary to ensure that what you're looking at is real. And I don't know if you saw the videos that people are creating now with Google's new AI video generator. I think it's called Vo. I could have that. David Leary: [00:05:37] I probably have just I don't think it was acknowledged as being the video creator, but. Blake Oliver: [00:05:41] So we are at the point now where AI video is so good, you can't tell the difference between the AI generated videos that were generated with prompts and real videos on a phone screen. Like I watch these videos on on TikTok and Instagram. These demonstrations, I cannot tell the difference. You can do man on the street interviews. You can do news reports. You can do anything like you could. You could recreate this show, and it would be very difficult on a small screen to tell the difference. And so it has massive implications for like fake news. You can just make anything now and put it out there on the internet. So how do we trust what we see. And taking it down back to like accounting and finance. How do we trust the financials? How do investors trust what they're getting from companies. There's going to have to be a human in the loop signing off. David Leary: [00:06:31] And this goes back to the whole argument. Quickbooks has created more work for accountants than they had before, and small business owners mess it all up. Now, if I starts messing it all up, there's going to be even more work for accountants and bookkeepers. That's right, people with the expertise to handle that right. Blake Oliver: [00:06:49] It lowers the barrier to entry for the small businesses, but somebody still needs to come in and clean it up when that business needs a loan or when they grow. So that's actually going to be great for us. Welcome to our live stream, viewers. Anthony Blackpill. Frank. Great to see you all. Put a comment in the chat. We've got a new live stream comment feature where it just shows up on the right side of the screen, like like on Twitch. So you. Whatever you type in there goes out on onto YouTube live. So do be kind some. David Leary: [00:07:18] Some coffee emojis please. Blake Oliver: [00:07:20] That's right. Uh, well, we're getting a little started a little later, and I think maybe a good chunk of folks have already checked out of the office for summer. Um, a lot of companies are doing that, you know, leave at noon kind of thing. Anthony asks, is this a real show or I. That is a good question. Um, are we all prompts? Who knows? Maybe we're all just, you know, prompts inside of somebody. Lm Mm. David Leary: [00:07:49] Could be. Blake Oliver: [00:07:50] Um. David Leary: [00:07:51] Let's take our sponsors before we jump into the new stories. Blake Oliver: [00:07:54] Let's do it. Who are the sponsors for this sponsors. David Leary: [00:07:57] This week we have Pay Hawk, Reframe and Team Up. So stay tuned for ads from those three companies later in the episode. Blake Oliver: [00:08:03] I appreciate you. Please use the links in those ads when you hear them, remember them. Go visit those websites that lets the sponsor know that you heard about them on our show, and it helps support us. So what are we going to talk about in this episode? David, you mentioned the QuickBooks price increases. We talked about that last time. You've got. David Leary: [00:08:24] Now we have a. Blake Oliver: [00:08:25] Week. David Leary: [00:08:25] Perspective. Yes. Blake Oliver: [00:08:28] That's right. Um, we've got news about alternative CPA pathways. We've got a bunch of AI survey data. Excel still beats AI when it comes to the skills that hiring managers, CFOs, controllers are looking for in accountants. And I've actually got a demonstration of how I can help you level up your Excel skills. That's probably the best use case for it. You can do incredible things. Now we've got a bit of an update from Elon Musk and Doge. The pcob getting whacked in the big beautiful bill. I want to talk a little bit about that. Where do we start, David? Spin the wheel. Take your pick. David Leary: [00:09:10] I did you mention Doge? Blake Oliver: [00:09:14] I did. David Leary: [00:09:14] Okay. Blake Oliver: [00:09:15] You want to talk about Doge? David Leary: [00:09:16] Officially dead like I haven't. I know Elon's going back to Tesla. Like is Doge dead? Did Doge accomplish anything? Like, what's the end result here? Blake Oliver: [00:09:26] Doge is not dead, but Elon Musk has completed his tenure as head of the Department of Government Efficiency. He had a 130 day limit as a special government employee, and that ended this month. In May of 2025. What did Doge accomplish? Well, they didn't quite get to their trillion dollars in savings. They are claiming $175 billion in savings through asset sales, contract cancellations and workforce reductions, although some observers are calling these figures inflated. So I don't know. Let's say we reduce that and call it an even 100 billion. They'd accomplish 10% of their goal. And unfortunately, the original goal was actually 2 trillion. I misread that not not a trillion. So 5% of their goal seems a little bit disappointing there. Musk had to get back to his companies. He really had no choice because Tesla sales dropped something like 70% or more from the previous year. David Leary: [00:10:29] He saved the US government. He was losing $2 on his side. Blake Oliver: [00:10:33] It's a lesson to business, folks, is like if you get involved in politics, there could be severe consequences for your companies. And Musk is, you know, You know, sadly disappointed actually, because the Republicans bill, the big beautiful bill does not do anything to reduce the deficit. So yes, Doge has cut government spending, but the bill actually increases government spending more. David Leary: [00:10:58] Than spend more. Blake Oliver: [00:10:58] Yes, more than Doge cut and increases the deficit. And Elon Musk actually came out publicly to express disappointment with Trump's tax bill. Uh, he went on to CBS and said, you know, that like the goal should be to reduce the deficit. Unfortunately, that's not how politics works. I feel like it was a bit naive of of Musk and his supporters to think that it would. I guess you could put me in that camp. I was naive about this, but it doesn't surprise me in retrospect at all. There's like no short term incentive to reduce the deficit in politics, especially in the House of Representatives, is all short term because these guys got to go up for election all the time now. Will it survive? The Senate will. The big, beautiful bill actually make it through the Senate unscathed? I don't think so. I think it's going to have some massive changes just because of the the blowback against certain provisions that people are discovering as they go through this massive bill. There's a lot in it and some stuff that I didn't even know until this week, because nobody had been talking about it. One of these is the revenge tax. Have you heard about the revenge tax? David, this is like this is taking trade wars to another level. Uh, section 899 is dubbed the revenge tax, and it would dramatically increase tax rates on foreign investors from countries with tax policies the US deems discriminatory. Blake Oliver: [00:12:31] So similar to those reciprocal tariffs where if somebody in the Trump administration deems that the tariffs are not fair or the trade policies are not fair in another country. The US can implement higher tariffs on those products coming into the US from those countries and try to, I guess, use that as a negotiating tactic to loosen up either tariffs, lower tariffs in other countries or the trade barriers that are not tariff based, like restrictions on, you know, I don't know, meat from the United States. That's a good example, right. Hormone meat with hormones in it or something like you can't import that to Europe. Right. Well this is taking that to another level. What this would do is. Well here's an example like that additional tax in Europe now on like social media companies. That was like the last few years. Um, that would be deemed that could be deemed by the Commerce Secretary a discriminatory tax on US companies. And what could we do under this legislation is federal income tax rates on passive income would increase by five percentage points initially, then rise by another five points each year to a maximum of 20 points above the statutory rates. So we could raise it would give the executive, the president, basically the executive branch, the power to raise tax rates on individuals and corporations. David Leary: [00:14:06] On select individuals and corporations. Right. Blake Oliver: [00:14:08] Sovereign wealth funds, pension funds, government entities, retail investors holding US assets in those countries. They could raise the tax rate up to 20%. More on those on those people. And basically, it takes that trade war and turns it into a capital war. And the big concern is we're going to drive away foreign investors. And what would that do? Well, if we're going to run a deficit every year, a bigger and bigger deficit, We need foreign investors to buy. David Leary: [00:14:40] Us. Blake Oliver: [00:14:41] Bonds, to invest in the US, to give us the money to do it. And so if you drive them away, what's going to happen? It's going to increase interest rates, because we're going to have to pay more in interest on our debt in order to get local Americans to buy it instead. I guess it would weaken the dollar. Um, this just seems like a really terrible idea. I don't think that the executives should have this power. Uh, if you if you don't like what's happening with tariffs, you should oppose this in the bill. And it gives basically the Commerce Secretary the authority to decide what is or isn't a discriminatory tax. So that's just another example of of what's in the bill that we hadn't even been aware of that a lot of people don't know about. Um, another, another, uh, industry or another group that's being hurt by the bill is the solar market. We have a $20 billion home solar market here in the US. They're already in trouble because the tariffs on China, because a lot of those solar panels come from China. Yep, yep. The legislation, the big beautiful bill would strip away their tax credits. The companies that lease solar rooftop systems would lose tax credits. It would eliminate tax credits for homeowners who buy solar systems. It would repeal much of Biden's Inflation Reduction Act. David Leary: [00:16:07] Which has been so upset he built a whole company on that. Sunrun was built on all those subsidies and tax breaks. Blake Oliver: [00:16:15] And Sunrun has gotten hammered. Uh, Sunrun, their stock plummeted. It lost a third of its market value, uh, which concerns me, because I have a Sunrun system. I don't want them to go bankrupt. I need somebody to maintain that thing. There's a problem. So, yeah, that's another example. Um, the Tax Foundation did a great example or an op ed, I should say they did an op ed about, you know, the big problems with the bills, which we talked about in the last episode. Um, you know, it's the numbers just don't add up, right? 4 trillion in reduced revenues. They are only calculating a 0.6% boost to long run GDP, which is not enough to offset the the deficit increase 1% GDP growth. Um, oh, they're saying that if they had created a focused business only package, that would cost just $629 billion and deliver 1% GDP growth. So it's like we're spending a lot of money for not a lot of growth. Is there criticism and the Tax Foundation, you know, they're nonpartisan. They just really care about GDP, tax revenue, low taxes and all that stuff. The math. David Leary: [00:17:28] The. Blake Oliver: [00:17:28] Math. It just doesn't math out really. Um, you know, so. I'm just, I don't know, I'm disappointed. I guess I'm like, I'm like musk. I'm disappointed here in in where we're going as a country. Aicpa is still not happy with the big, beautiful bill. They sent another letter to congressional leadership complaining about the elimination of state and local tax deductibility for pass through entities, which hurts accounting firms in blue states the most. Those partners are going to pay tens of thousands more in taxes each. It's kind of ironic, right, that I'm imagining that many of these partners are Republicans. Right? Pretty leaning Republican, for sure. And they're the ones getting hit hard by this. David Leary: [00:18:17] And they're maximizing any tax strategies they can to pay less taxes. That's going to make it the worst. Blake Oliver: [00:18:24] All right. So anyway, I don't want to talk any more about that because we got too much else to talk about. We got to talk about tariffs. But first uh, let us thank our first sponsor, which is. David Leary: [00:18:35] Hey, Hawk. Blake Oliver: [00:18:36] Hawk. David Leary: [00:18:37] Are you still drowning in month end expense chaos? Imagine getting multiple days back each month that you're currently losing to manual accounting processes. That's why I'm excited to tell you about Hawk, a leading spend management solution that can automate your financial processes while giving you total control and instant visibility over all your company spending. Hawk unifies your corporate cards, expense management, accounts payable, and procurement into one single platform. The best part? It works with your existing credit cards and tracks transactions as they happen, giving you real time insights into your spend. No more chasing receipts. Pay Hawk's automation handles that. No more end of month surprises. See exactly where your money is going in the moment it's spent, and with real time integration to systems like NetSuite, QuickBooks, and Sage Intacct, reconciling expenses is faster than ever. Finance teams using Pay Hawk are saving days of work each month while gaining better cost control, real time visibility, and the ability to focus on strategic priorities instead of expense reports. Ready to transform how your company manages spending and see how payoff can work for your business? Head over to The Accounting Podcast. That is The Accounting Podcast. Blake Oliver: [00:19:50] Thank you and thank you to our live stream viewers. Hey, Jessica, light em up is here. Light em up says just got here. Did you hear about the taco trade that people on Wall Street are calling it? Trump always chickens out for tariffs. David Leary: [00:20:05] Taco trade. Blake Oliver: [00:20:06] So he announces the tariffs. The markets go down. Then he extends or backs off from it. The markets go up. So if you just bet that he's going to chicken out you'll win. Which so far has seemed to work you know. And the reason I think it works is because I have a theory about how Trump runs his presidency, which is He runs his presidency like he runs a rally. This was always his genius, too. This is why he won. Because he would go around the country. He'd get huge groups of people together into stadiums, and then he would just talk and he would listen to the crowd. And when the crowd cheered, he would say more of that. And when they booed or they didn't cheer, he would stop talking about that. And that's how he figured out what his platform was going to be. He really listened. Yeah, he listened to the people directly and he doesn't do the rallies anymore. So the way that he runs his presidency is he. He does something, and then he watches the markets and the bond markets. The stock markets react. And then if it gets too bad, then he backs off. It's exactly the same operating philosophy. David Leary: [00:21:26] He always wants to be liked. At the end of the day, he wants the attention and adoration all the time. He just he can't, he can't. He doesn't have the discipline to ride out. Bad news for a long time. He wants the adoration. Blake Oliver: [00:21:38] That's one way to look at it, I suppose. Uh, all I know is that's what seems to happen. So I guess that's the taco trade. And I think it I think it it makes a lot of sense. Um, but the thing is, in politics, I probably said this before on the show, but I just love it so much. Um, in politics, everything is so difficult. It's like a game of football played on the ground. So if you say you're going to laugh at me, right? Because you're the you're the football guy. But like, this is something Obama said, uh, when he got interviewed, he, he it was, uh, Anthony Bourdain interviewed Barack Obama on his show in the white House cafeteria. And Obama said, politics is like football. It's a game of yards and inches. You go forward three yards, you go back a yard, you go forward two yards, you go back a yard. And so that's what I mean when I say it's like played on the ground. It's like a running game. David Leary: [00:22:50] A running game. Got it. Blake Oliver: [00:22:51] Right. It's like imagine if like and it's like it's it's like a situation where like you almost never complete a pass. It's I don't know what kind of situation that is, but it's like the ball, you know, the conditions are so bad you can't throw the ball. It's too windy. So, um, the way Trump is operating is like, he's throwing all these Hail Marys. That's what this crazy interpretation of the the law to do these tariffs is, is ultimately it will probably get struck down by the Supreme Court. And so it's a very risky strategy politically, because all it takes is one ruling and the whole thing falls apart and you don't make any progress. Right. You go back to where you started, or worse, you turn over the ball. And so like if you actually want to make change happen as a politician, you have to be really patient and go really slowly and go yard by yard by yard. I just love that episode. It's such a good interview. It's a great analogy. David Leary: [00:23:49] He's just checking and see what sticks and not a lot sticks. Blake Oliver: [00:23:52] And regardless of what side you're on, you know whether or not you're a Democrat or a Republican, that's generally how things get done. Is that like the Affordable Care Act, for instance, did not happen all at once. It was a very slow process. So if you are a Republican and you want to, you know, improve American manufacturing, it's not going to happen with 100% tariffs, all of a sudden, it's going to be a slow process that takes decades to do with continuous, concerted, unified effort by the party. David Leary: [00:24:21] And I was thinking about that with Doge. Right. Those came around and just punched everybody in the gut, stomach. A bunch of government divisions there buckled over there in pain, but all of them are going to stand back up and just keep on going on, because nobody has the time and the patience to make change happen over decades to really actually change these organizations and these organizations. You talk about deep state. They existed before President Trump was around. They existed before the previous president and the previous president, previous president. And if you think you know, Musk is going to come in one day and punch people in the stomach and they're going to change their behaviors, it's not happening. Like that's what I mean. He probably didn't accomplish anything in his historically speaking, we're going to look back in a decade and be like, Doge didn't accomplish anything. Well. Blake Oliver: [00:25:06] I disagree that it didn't accomplish anything. I mean, they did cut over $100 billion of spending, probably most of it. David Leary: [00:25:13] All be back. It all, be it all, cut it back. It's not really. Blake Oliver: [00:25:15] Without continuous effort. It will just come back. Because what do politicians do? They want to increase funding to their district? And so they're going to vote for the pork to come home. And if everybody does that, spending just goes up and up and up and up. There's got to be some other strategy. So let's talk about the tariffs real quick. Because there was a court ruling that puts the whole thing into jeopardy like this. All might get struck down or most of it. Two federal judges this week blocked Trump's global tariffs that relied on the International Emergency Economic Powers Act, or, as I like to call it, EPA. This is the Court of International Trade, and it ruled that Trump went too far in claiming fentanyl and trade deficits constituted emergencies requiring broad executive power. The law gives the president the authority in a in a national emergency to regulate trade, although it does not explicitly authorize tariffs. Now an appeals court has stayed that ruling so the Trump tariffs can continue under the International Emergency Economic Powers Act. But this is likely going to go to the Supreme Court. And my armchair legal analysis is that it will get struck down because there's a provision in the Constitution, there's a there's a rule that Congress cannot delegate its powers to the executive branch or to another branch of the government. Blake Oliver: [00:26:49] And the reason that's in there is to prevent Congress from creating a dictator. Right. Which has happened. And that's specifically in there to stop Congress from saying, all right, you know what? We love the president. We're just going to give the president all the authority to change all the taxes in the country forever, and we're going to not have it anymore. Right? You can't do that. So it's not to say Congress can't delegate, but when they do, it has to be in a way that is like, uh, there's there's limits to it. Right? And the way that President Trump used the, uh, the EPA act is basically saying that the status quo of trade deficits, which have existed for decades, is a national emergency. And if you use that logic, you could say that anything, any situation is a national emergency. And so that I think, is what is going to ultimately get it overturned at the Supreme Court. And I know there's a lot of people who say, oh, the Supreme Court is packed with, you know, Republican judges, but that's just not true. If you look at the way that they have ruled, Trump has actually lost more important cases in front of the Supreme Court than any president in modern times. He's got like a 35% win rate. On the really important question. David Leary: [00:27:57] You throw Hail Mary's, you only complete about a third of them. That's how it works. Blake Oliver: [00:28:01] Is that right? There we go. The analogy fits. Um, so the the crazy thing is all this damage is going to be done before the case actually gets decided by the Supreme Court, although who knows how quickly they might, uh, might take it up. Now, there are other ways that they're looking at implementing the tariffs under other laws. But like this is the problem when you throw those Hail Marys, right. You get too aggressive. It could all be reset. You could you could go all the way. You could do a turnover. So and some people have asked me online, well what about Obama's tariffs. What about Biden tariffs and all that. Well those were done under different laws that had much more established like limits. You know, you can't just say that the president can modify tax rates on its own. Congress has that authority. It's not the president's authority. And so there has to be like very limited circumstances in which the president does that. Um, like the the tariffs on steel, for instance, the 25% tariffs on steel, that's for national security. And you could see a judge agreeing with that because, yes, there is a very good national security reason to continue to produce steel in this country that you need to make warships, for instance. Yes. Right. David Leary: [00:29:17] So a wine importer? Maybe not. Blake Oliver: [00:29:20] Exactly. Right. To correct trade deficits. I think that's on much shakier ground. So. David Leary: [00:29:27] I want to talk about the QuickBooks price hikes, which some people call their tariffs. A little bit last week when we so this story broke last week the morning of our show. So we didn't digest it very well. Now with a week of digesting it I have some perspective on this. So just to review and recap the quick what's the QuickBooks plus plan was $99. And now the new monthly base price is $115. And QuickBooks justified this because they're adding all these AI agents to their product. And then I saw a tweet. So somebody there was a tweet thread about the price increases and an account, a CPA said this and I quote unquote they tagged puzzle. Puzzle is one of these AI general ledger accounting startups. It said at puzzle when can you replace QuickBooks? So I went to puzzles pricing page. So here's your prices for puzzle. They have a $0 plan. They have a $50 a month plan, and they have $100 month plan and $100 month plan is the one where they say you get automation and accuracy. Blake Oliver: [00:30:33] So can you get automation without accuracy? David Leary: [00:30:37] Yes, you can get Accounting plus which does not does not offer accuracy. It's it's half the price. So so so that's 100 bucks. Then I was like well wonder what digits is doing. Oh and then I'm sorry. Puzzle has a $300 plan. Also like their big plan. Well what's digits charging digits 100 bucks a month if you want I accounting and bookkeeping. Full service is $350 a month. It's 100 bucks a month, right? And there's a company we'll talk about later on when I cover the prices. A company called uplink. When I cover our app news, uplink their pricing page. The starter plan is $300 a month for their AI bookkeeping service. Really, who's more in the enterprise space doesn't even list prices. And then this new company, Altman that is out of Dublin, Ireland, they just raised a bunch of money. They don't even put prices on their page. But what they do, which is interesting, they have all the features listed. And instead of saying like the features they have and the features QuickBooks has and the features Sage has, they compare it to a human bookkeeper. Right. And so where all this is going, I could argue that Intuit they probably are just pricing up to match the other AI competitors, the AI. If you're an accountant and you think these AI GLS are going to save you money, you're 100% wrong. I actually I think the opposite is going to be true, because you could see what they're doing is they are going to price their AI functions based on you hiring a human body. So if it costs you 40 grand to hire somebody to do this bookkeeping work in your firm, these AI companies are going to price this at 20 grand that you're they're going to try to extract as much of that human replacement value out of you. So the AI companies aren't good. Maybe they should. Maybe they shouldn't. Blake Oliver: [00:32:21] Well, that's what I tell accounting firms when they do pricing. If you want to get away from hourly billing and you're offering client accounting services, you're going to do the job of a bookkeeper for your client, figure out what it would cost them to go hire somebody and do it. Base your pricing off of that as a fraction of that. Not on an hourly rate. You make way more per hour that way. Yeah. David Leary: [00:32:44] So Intuit's really just coming up in price to match the market. All these AI companies are charging more than QuickBooks. Blake Oliver: [00:32:53] Well, and you know why they have to charge a lot is AI is really expensive to do that kind of agent work. I mean, it's a lot of tokens, a lot of calls, a lot of calls, and it has to be constant. So that's the thing about AI agents is you're not just running a single prompt, you're running prompts constantly in order for the agent to simulate thinking like a human, you got to run these prompts constantly for every transaction that comes in. And then probably many, many more times, depending on the result of the prompt. Because that's how these agents are getting smarter, is they're they're doing research, they're thinking they're taking notes, and then they're looking at the notes and thinking about what to do next. It's a lot of tokens going back and forth and a lot of data. And and so, you know, a single transaction could cost many dollars to analyze and to code potentially. I don't know exactly what it is, but even if it's just like, let's say pennies per transaction, how many transactions does a company have, right? It adds up very quickly. And so you got to charge a lot of money for these features. David Leary: [00:34:07] And that's the way a lot of these AI companies are doing. They're basing on number of transactions. They adjust their pricing based on a transaction volume. In many cases. But it just the. It goes back to the the book list. Right. Blake Oliver: [00:34:23] The summer. David Leary: [00:34:24] Reading list. Yeah. The summer reading list. I can hire an employee. And the odds of them not making stuff up is very low. But if I hire this AI to do my bookkeeping right, or to be a bookkeeper in my firm, the chances of them making up data is super high. So I'm not going to want to pay more for crappier work. And that's the logic. I think the AI companies, they think they're doing higher quality work at this point, and I don't. Maybe they will eventually, but I'm not sure it can justify the prices they're charging. Blake Oliver: [00:34:58] Well, even if even if they're doing quality work, somebody still has to review it. So you can't replace the whole person. Yeah, that's what you're saying, right? So you still have to hire. You either have to do it yourself, or you have to hire an accountant to look at it and say, who's more expensive? David Leary: [00:35:16] The person? The reviewer is going to be even more expensive. Blake Oliver: [00:35:18] Right? David Leary: [00:35:19] Because now they're doing the jobs of two people, the person whose job it would have done to do it right. You have to review it. That's like doing the work well. Blake Oliver: [00:35:26] And one thing I learned when I started my firm was that reviewing the work can often take just as long as doing the work if you review it right. If you have the automation tools, doing the work is actually not that much time. David Leary: [00:35:41] So I. Blake Oliver: [00:35:41] Mean. David Leary: [00:35:42] We. Blake Oliver: [00:35:42] Yesterday. David Leary: [00:35:42] Just went through this with my own quick, my own QuickBooks for my S corp with my daughter. I'm behind for 2024. So, you know, she's going through the bank feed and hey these things don't have receipts. So I just go download all the receipts from GoDaddy and I'm using the the agent, this bill scan feature or receipt scan feature of QuickBooks. So I'm getting some benefit from I on one side. Right. It's scanning these recording the transactions. Now they're matching in the bank feeds. But then every time we open the reconciliation screen, it's off by 30 grand because all these other rando transactions are getting check marked that have nothing to do with that reconciliation period. Because at some other level, I stupid. Yes. Blake Oliver: [00:36:18] Well, the edge cases are what trips it up. David Leary: [00:36:21] Yeah. So we're. Blake Oliver: [00:36:21] So. David Leary: [00:36:22] We had to keep pausing every reconciliation to fix mistakes that I was doing or I assumptions if you want to call it that to get the reconciliation out. But there was a little proud dad moment. Cassie started to every time it would hit zero on the reconciliation screen. The 0.00 cash was always pumped. She got really excited. Blake Oliver: [00:36:40] That's how you know she might be an accountant someday. It could. That could be the tie up right to me. To me, she was like this. David Leary: [00:36:47] Every time it happens. Blake Oliver: [00:36:48] Yes, exactly. To me, the that feeling is the drug of accounting and finance when everything just ties out and you see that zero. Yeah, it feels so good, especially. David Leary: [00:36:58] When you. Blake Oliver: [00:36:58] Go there. You agree with me? Let me know in the comments. David Leary: [00:37:01] When the I made it seem like you're off by 20 grand. Yes, it does feel good when you find it and fix it. Blake Oliver: [00:37:06] And the best feeling is when it ties up the first time. That's incredible. All right, let's thank our next sponsor. Reframe. Are you an accountant? Feeling threatened by AI? Overseas outsourcing and tech companies muscling into your territory. Here's a sobering truth. The narrative that AI and automation can replace. What you do is gaining momentum, making clients question your value. But what if accounting could be seen as the most creative and innovative field in a post AI world? Introducing Reframe 2025, the transformational conference themed pricing with confidence, created by industry leader and CPA Hector Garcia and friend of the show, reframe teaches accounting professionals to think beyond spreadsheets and reposition themselves as irreplaceable and deep thinking human advisors. This isn't your typical accounting conference. You'll learn a new approach to confidence based pricing strategies inspired by best selling authors like Ron Baker and Blair Ends. Master client conversations that command premium fees and join a supportive community of forward thinking professionals who refuse to be replaced by algorithms. Reframe is an annual event, but it is also a permanent movement to make accounting the most human of all professions. Get your ticket before the 2025 event sells out. Head over to The Accounting Podcast. Promo E20-e25 The Accounting Podcast promo for reframe 2025. And now that's a perfect lead in to my next story, which is about Microsoft Excel. Solutions did a survey of 218 finance leaders and found that Excel is still more important than AI, according to building. Blake Oliver: [00:38:53] According to these finance teams, that's what they want. 14.7% prioritize advanced Excel knowledge as the most important skill for building a strong finance team, compared to 4.6% for AI. So excel more than three times as many responses as AI when it comes to the most important skill you need to have. Some more stats from the survey. Over half 57% of finance teams are already using AI for operations like data entry, reconciliations and forecasting. An additional 21% have acquired AI tools but haven't implemented them yet. So I guess if we add those numbers up, that's 77% are on the path. We're already doing it. So here's the here's here's here's my take on this stat right. I cannot replace Excel because AI is statistical. These these llms are statistical. So if you need a deterministic output if you need to, uh, get the same answer every time. Yes. If it needs to be exact, it's got to go through something deterministic, like an Excel spreadsheet with formulas. You cannot replace that with AI, because AI in its current form is going to give you a slightly different answer every time. So the way we solve this, the way we improve the situation, is we use AI to help us build the spreadsheets and Perplexity Labs released like a really cool tool. Um, that can help you do this. David Leary: [00:40:36] I'm going to pause you right there before you continue on with perplexity. Can we just make an observation here that excel, which people have used to create hundreds of millions of dollars of income for themselves, does not upcharge them and try to extract the value they're creating out of them, or the humans you've replaced with Excel, right? You maybe have replaced the job over the 20 years with Excel. They're not trying to extract that value out of it. In the same way the AI companies plans are. And the people charging for AI are. Blake Oliver: [00:41:07] Well, that's been a winning strategy for Excel. That's why it became dominant. I was listening to the Technology Lab podcast. Uh, Brian Tankersley show. David Leary: [00:41:16] Yes. Blake Oliver: [00:41:17] Who does he do that with? It's with, um, Brian Tankersley, and I'm blanking right now. Sorry. Apologies, guys. David Leary: [00:41:25] I know it looks like. Blake Oliver: [00:41:26] They did a great they did a great episode and all about Excel. Excel is 40 years old this year. And how did Excel beat Lotus 123. Well they bundled it with Microsoft Office and they changed the license versus Lotus one two, three where a one license would let unlimited network users use it. So this was back in the day, like when you had like what? Terminal PCs, I suppose. Yeah. So you buy a license of Excel and anyone in your office could use that license. And so it just took over and became dominant and has been a cash moneymaker, arguably like the reason that people buy Microsoft Office outside of word. And it's been a success. So like that strategy of not charging ridiculous prices works in certain cases anyway. David Leary: [00:42:23] Besides, Randy Johnson is who he does. Blake Oliver: [00:42:25] Randy Johnson with apologies. Randy. Okay, so I'm a big fan of perplexity. Uh, it's a it's an AI, um, app built on top of other llms. They have their own. But what's really cool about it is that you can use whatever model you want. So, uh, if you're looking at my screen right now on YouTube, you can see that I can select to use perplexities model called sonar, or I can use cloud for sonnet, or I can use GPT 4.1 or Gemini 2.5 Pro. It gives you access to all of them. Okay. You pay 20 bucks a month for this. And so that's nice because you can basically build stuff in perplexity. And then when the models improve, you can just choose a different model. You don't have to rebuild it like in Claude or in ChatGPT. If you want to switch things around. So perplexity just released this feature called labs. The last one they did was research deep research on any topic. Super cool if you want to do like research, but labs takes it another step. So, um, labs creates spreadsheets. It creates like downloadable assets. And it also if you just click on labs, it gives you examples of what you might want to do with it based on your previous prompts. So here's an example, uh, based on, I guess, what I've been researching, prepare a report on unauthorized immigrant tax contributions in the US for 2023, including state by state charts and policy analysis. So I could click that and it could it would just start building that. It can also build slide decks. Here's one. Build a slide deck on the ethical, security, and regulatory considerations of AI adoption and accounting with real world examples. Here's another one. Compare the security costs and compliance implications of migrating the IRS master file to the cloud versus maintaining the status quo. Include tables and diagrams. So I think that's what's different about research is it can actually include tables slides diagrams. And you can download those and use those. So I'm just going to give it something really hard. David Leary: [00:44:22] Like create a summer reading list. Blake Oliver: [00:44:24] No this is even better 15 books. Okay. This is a really this is crazy. So build a consolidation spreadsheet for a holding company with four subsidiaries across different states. Create automated elimination entries for intercompany transactions. Currency conversion formulas for the Canadian subsidiary and rollup calculations include pivot tables for segment reporting and automated journal entry generation for consolidation adjustments. Like this is basically asking it to create a big workbook. David Leary: [00:44:52] Yeah, this is a good 80 hours of work. Easily. Blake Oliver: [00:44:55] I mean, yeah, if you knew how to do this right. So now what's happening is that we're seeing a little timeline, and labs is estimating that it will take nine minutes to gather sources, compiled data, and create the project. And it's walking me through its thinking. So we're actually seeing its thought process. And what this is, what this is showing us is all the prompts that are running behind the scenes based on my initial prompt. So this is all stuff that just a year or two ago, I would have had to do step by step by step in a series of dozens or even hundreds of prompts, which was extremely difficult to do. And now. David Leary: [00:45:35] Essentially what it does is it figures out what it thinks it needs, and then it creates prompts to go get these things it needs and then starts to build like layers. It's like building a layer of cakes. Blake Oliver: [00:45:45] And if it doesn't know what to do, because it's perplexity and it's built on the web and it can go and research social media, websites, academic publications. It goes out and does the research to figure out what it should do next, just like you would. David Leary: [00:46:01] So so so if I created a blog site that said how to create consolidated reports, it might use my blog site and I could be an idiot and do it wrong and it might try to use it. Blake Oliver: [00:46:11] So it's still going. But just like on a cooking show, uh, I've already I've already done this. And so I'm gonna, I'm going to skip to one that's already done. So it's already complete here. And what we have under there's different tabs here. Right. So what we have under labs is basically the deep research report that you would get under the deep research, um the research function. So it's just like a narrative of how we should do this, explaining what we should do. How should we deal with the intercompany eliminations. How should we deal with the corporate hierarchy, the subsidiary integration methodology. It's got sections for all of us. It's thinking through it all. And what's new is this other tab called assets. So here we have all the code the Python code that perplexity generated that you could use if you knew how to use this in like you could use this to say automate the creation of this in some app, but you don't have to because it also gives you. Csv files. So it gives you the the worksheets that are going to go in this workbook. And you can see I've got a consolidation data CSV, I've got intercompany elimination, CSV, currency rate, CSV and journal entry CSV. And then I've got a guide for how to set up the Excel workbook. So step by step it's showing me I have to create the Excel workbook and then paste in all these CSV files. And there's ten different sheets. You know we've got four subsidiaries here. We've got a California Texas, New York and Canada subsidiary. Got the currency rates, the intercompany elimination entries, journal entries. And then it tells me what formulas to use. So here's the Excel formulas that I have to implement and and where to put them. Now I haven't tried to do this. And I'm sure if we did we would run into some issues. Right. But this is a starting point. This is going to give me the framework for how I would do this sort of thing. David Leary: [00:48:32] Well, if you could hand off these instructions to Excel and Excel's copilot, I could just take all this and build the spreadsheet for you in theory. Blake Oliver: [00:48:42] And so that is also possible. Yeah. I think, you know, perplexity can't do this because perplexity doesn't have Excel. But if you had an AI that was connected to Excel, then yeah, maybe it could actually take this information. You could download it all. And like you said, you could give it to copilot and then you could build that workbook. I feel like this is sort of the accounting or finance version of vibe coding that you've seen, where I don't know if you've seen those videos online of people that are vibe coding, Fortnite or Roblox. You give it a prompt and use cursor, the AI code editor, and it will just set up a whole environment and all the code and create like a 3D environment that you can walk around in. And yes, it's like super basic, but it works. It's the foundation. It's like the all the building blocks of what you need to actually create an app like that. And that's the sort of thing that would have taken weeks in the past to, to build. So it just jumpstarts you. So that's where I see accountants. Using AI is to make themselves into Excel. Just like not even Excel ninjas like Excel Zen Masters. I could learn how to do anything now in Excel without ever taking a course. Just talking to perplexity. If I had the time. David Leary: [00:50:06] I bet you going back and forth. Yeah. Blake Oliver: [00:50:09] And same thing with QuickBooks or with some ERP system. I could figure out how to do almost anything. So really cool tool. Check out Perplexity Labs. You will not regret it. Um, I want to try doing one more prompt while, uh, while we go on to our next story so that we can see, you know, the result. David Leary: [00:50:32] Um, why don't you start typing it and then I'll read the ad. Will you do that? Blake Oliver: [00:50:37] Okay, so the prompt I want to try is something with, like, um, tax research. And I have one here. So. Actually let's do this client onboarding checklist. Here's one. Develop a complete onboarding process for new accounting clients, including document collection checklists, initial consultation questionnaires, and timeline templates. Organize this into a professional presentation format that can be shared with new clients. Um, and you know what? Let's change it to new tax clients. To see what it does. David Leary: [00:51:15] So now it's working. So I'll read the ad while it's working. Blake Oliver: [00:51:18] Go for. David Leary: [00:51:18] It. All right. And by the way, you're not sharing. You're sharing. Team up. If you're growing firm, struggling to scale or turning away clients because you can't find the accounting talent you need, listen up. You probably want to hire a person, not a company. You've heard about hiring in the Philippines, but using outsourcing companies comes with endless turnover and mediocre talent. Introducing team up. Team up helps accounting firms hire top Filipino talent directly. No middleman, no corporate policies getting in the way. And when you hire direct, you own the relationship completely. Training them your way and building your own culture. And think about it from the accountant's perspective. They'd rather work directly with you than sit in a corporate cubicle. And these are accountants. They can do the math. They know what they're getting is a fraction of what you're paying the outsourcing company. Ready to see what hiring a person in the Philippines could cost? Team up just released their 2025 Salary Guide for Accounting Talent in the Philippines, and it's completely free for our listeners. You'll get current market rates for various roles, real candidate profiles, and everything you need to hire confidently to download your free copy today. Head over to The Accounting Podcast that is The Accounting Podcast. Blake Oliver: [00:52:32] Thank you. Team up. David. You had a story here about fundraising Amazing for a bunch of eagles. But now that I say that, I think we should talk about the alternative CPR pathways. David Leary: [00:52:47] Yeah. Blake Oliver: [00:52:48] Let's just mention this real quick, right? So, um, five states since we last talked about this, have passed legislation that offers an alternative to the fifth year of education for CPAs. Those states are new Jersey. David Leary: [00:53:04] South Carolina, Oregon, Minnesota and Illinois now have all. So we're getting up to what is the total states now? Six. 15, if I'm counting correctly, 15 have passed legislation and 123. 456789, ten. About another ten have introduced legislation. So we're we've crossed the halfway point now in states that have proposed or passed legislation to alternative pathways. And I'm still every time we talk about this, I'm just dumbfounded how fast this happened. Post-it Berry, uh. Blake Oliver: [00:53:44] At the ACP. David Leary: [00:53:45] Leaving the ACPa. Exactly. Blake Oliver: [00:53:47] It just keeps on coming. All right, let's talk quickly about the PCAOB. That is one of those provisions in the one beautiful bill that is not so beautiful. I know our listeners will recall. You know, David, I've been critical of the PCAOB in the past. I feel like they have really failed to accurately measure and report on audit quality, which makes it really hard for them to justify their continued existence, which I think is one of the reasons why. David Leary: [00:54:16] Audits and frauds have keep, keep occurring since Enron. Well, they have not. Blake Oliver: [00:54:20] But there hasn't been another Enron. David Leary: [00:54:22] Oh, not that bad. But so? So that's that, judge everything. Everything is like, oh, it's not. Blake Oliver: [00:54:27] As. David Leary: [00:54:27] Bad. Seriously. Blake Oliver: [00:54:27] I mean. Well, okay, so everyone who wants to hear about this, if you care about audit and public company accounting Oversight Board, subscribe to the earmark podcast. Go to podcast.com. Subscribe to it. Because my next episode coming out is a panel discussion with Maureen McNichols of Stanford, Nemat Shroff of MIT and Daniel Ayodhya of Penn State. Three heavyweights in research on audit and the PCAOB, Nemet and Daniel both have worked with the Pcob. Maureen, uh, previously, did they know a ton about it? Um, and talk about what would be the implications of the pcob if it were to be eliminated and the responsibilities going back to the SEC. And I am now very concerned actually, after that conversation, and we're going to publish that very soon. So do stay tuned to it. Um, the problem is that there's there's no provision for the SEC to have the funding to do what the Pcob does. And there's all these agreements that the Pcob has with other countries to inspect their audits, like in China, that the SEC wouldn't have. There's a lot of reasons, actually, why this is a bad idea that I wasn't as aware of. So I don't understand why AICPA is not talking about this. Like the number one concern they seem to have is about like the the Salt deduction for pass through entities like the, the, the, you know, the the partners making $1 million a year who are going to have to pay a little bit more in taxes. And like the PCAOB, getting disbanded is the most world changing event in accounting since the collapse of Enron and the establishment of the PCAOB. David Leary: [00:56:19] I mean, is the AICPA for them getting abolished because the AICPA really made a big stink when the Pcob was going to have all these new data metrics they wanted to track from firms like hiring. Who worked on the engagement. Yeah, yeah. Hours worked. Right? And the ACPa really pushed back on the Pcob. So maybe the AICPA, AICPA, all these acronyms, AICPA doesn't really like PCAOB and hence them not coming to their defense right now. Blake Oliver: [00:56:48] Well, it makes sense, right? If you're an auditor, it's kind of annoying to have somebody looking over your shoulder and checking your work all the time that you're accountable to. But the auditors have to be accountable to somebody. And my view is that if the business model isn't set up so that the auditors are truly independent, which it isn't, because they are hired and paid by the companies that they audit, you need to have an independent third party checking their work. If you don't, we will go back to the situation we had with Arthur Andersen, where they were just signing off on whatever Enron did. And you're going to have another massive fraud like inevitably. And the thing that Nemet pointed out that is still sticking in my head is that the budget of the PCAOB is $400 million a year. The cost of any of these giant frauds is in the billions. So it's reasonable. It seems actually reasonable insurance to to have somebody doing something. Now, could the pcob be doing a better job? Yes. There's lots of ways they could improve. But eliminating them completely is not the solution here, in my view, based on this. So stay tuned to the podcast. You can get CPE for listening to that when it comes out. Um, would it's going to be a great episode. So thank you to Maureen McNichols for reaching out and setting that up. Now. Should we talk briefly about Billy Long? David Leary: [00:58:13] Yes. Blake Oliver: [00:58:14] The future IRS commissioner. If he gets through the Senate confirmation hearings. David Leary: [00:58:19] I'm hoping you have clips like he's in these hearings. Is there any clips of him doing crazy stuff? Blake Oliver: [00:58:25] You know, we need an you know what we need, David, I'm just going to put this out there. We need a research. We need an intern for the podcast. We need somebody who can do research and go out and get clips. And guess what? Ai is not there yet. No, I cannot give perplexity to the task of going out and finding the clips from the confirmation hearing and teeing them up for us on the podcast. So unfortunately. David Leary: [00:58:47] Better. Blake Oliver: [00:58:48] Just talk. David Leary: [00:58:49] You can make arrangements to get Billy Long to join the podcast. That would be the home run. Blake Oliver: [00:58:54] Well, I don't know if you will, after what I have to say or the story I have to report here. So in his confirmation hearing, the senators Senator Ron Wyden pressed Billy Long on tribal tax credits, which he he earned money promoting. So there's this, this thing, these, these tribal tax credits that are not real. The IRS has said this is false. These are fraudulent. They're non-existent. Billy Long earned $65,000 promoting them. And then when he was pressed about it in his confirmation hearing, long said, quote, the jury is still out on whether these credits actually exist. That's despite the IRS saying that they're fraudulent. Long also promoted the frog Plaid Irtc in YouTube videos, claiming that virtually everyone qualifies and advised viewers to ignore CPAs who said they didn't qualify. Democrats question whether long would follow Trump's orders to audit specific taxpayers or remove tax exempt status from organizations, even if illegal, and long declined to explicitly say he would defy orders from Trump, saying only, quote, I don't intend to let anybody direct me to start an audit for political reasons, unquote. We also talked about this on the show in the past, but I want to reiterate it because I find it to be very concerning. Immediately after Trump named him, IRS Commissioner, Billy Long got $165,000 in campaign donations for a campaign that he ran in 2022. He then took that money and paid himself. Yeah. David Leary: [01:00:28] So that happened. And then we found some of his statements about ignoring your CPA when he was doing some of the IRC mail stuff, and then those videos in that podcast vanished off the internet. So there's a scrubbing that took place as well. Right. And the bad thing about this is, like, he's going to be the pick for IRS and it's clearly he does not understand any taxes at all. It feels like this. He has no tax knowledge. And I'm not saying that maybe that's the requirement to lead an organization. Blake Oliver: [01:01:00] Well, he was an auctioneer. He was never a tax professional. Yeah. And yes, I agree with you, David. David Leary: [01:01:04] Like he has that certificate that when we view that financial planner certificate, he took it. It's a fake. Blake Oliver: [01:01:10] Certificate. It's a fake. It's a fake credential. I mean it's like a made up. You did like a two day course. The guy's an auctioneer who ran for Congress, was in Congress for a while, and then did irtc milk promotion stuff like not not who you would traditionally consider to be qualified to lead the Internal Revenue Service. David Leary: [01:01:29] We're hoping you want somebody with perfect integrity running the IRS. That's the hope. That's the best for all citizens is. Blake Oliver: [01:01:36] Or at least knowledge. If not, you know, if you can't find somebody with perfect integrity, find somebody who knows how it works, you know, worked inside it, worked as a tax professional. I mean, that's why Danny Wuerffel, wasn't he like a tax pro? That's that's why he was effective. Uh, you know. David Leary: [01:01:52] So speaking of podcast episodes you should tune into, I'm going to put a link to the Federal Tax Updates podcast. They actually interviewed Danny Wuerffel, and that episode comes out next. So I'm going to put the link for that. Blake Oliver: [01:02:05] That's the Federal Tax Updates podcast. We will put the link up on the screen, and I'll read it as soon as David gets it up there, because I don't remember it's federal tax updates.com. That's easy. Federal tax updates.com. If you want to hear former Commissioner Danny Werfel on that show which we are proud to produce. Go check it out and you can earn CPE for the Federal Tax Updates podcast as well. And many of those episodes, by the way, qualify for IRS Continuing Education credit through earmark. So look for the IRS CE banner, the purple button on those courses, and you can get IRS credit for listening. Now let's talk. Let's talk to a listener, Jason Farley. He's has he been on the show before? David Leary: [01:02:55] He was on the show one time. Just some background you may have if you've listened to the show for a while. He's an accounting student who had a carpet cleaning business, and then he's pivoted now to become an accountant. And not only that, next steps. I think he's on course to be a CPA, if I remember correctly. Blake Oliver: [01:03:11] He is an intern at actuate, a fully remote cloud accounting firm. He's finishing up his accounting degree at the University of Pacific, and he Chose to turn down the Big Four path in favor of a tech forward small firm. And so he is joining us today to talk about the disconnect between accounting education and the real world, the outsourcing crisis that's eliminating entry level opportunities, and why he believes cloud accounting firms need to step up and invest in the next generation. Last time we had you on the program, you were talking about what was it? It was your experience basically like deciding as an accounting student where to go, what to do, and you were considering going to work at EY and you did not. Chayton Farlee: [01:04:04] That is correct. I, I met a cloud accounting firm now thanks to you guys. Blake Oliver: [01:04:09] That's amazing. It's a connection that we made through the show up. And you decided to not go Big Four. You went to a small firm tech enabled called actuate. Congratulations. You've been there. How long have you been there? Chayton Farlee: [01:04:22] Uh, a little over a year now. Blake Oliver: [01:04:24] Okay. And so you've been doing an internship, I understand. Chayton Farlee: [01:04:29] So it started as an internship, and then I became an associate, and, uh, our team has grown a lot, so it's been really exciting. Blake Oliver: [01:04:37] And you're still finishing up your accounting degree at the University of the Pacific. And that's going to be wrapped up real soon. Chayton Farlee: [01:04:45] That is correct. So I'll finish in December. And hopefully if California can get the 150 hour rule change pushed through this summer, um, I'll be able to sit for the CPA exams next year. So. Blake Oliver: [01:04:58] Awesome. So it sounds like you're pretty happy with your decision to go to a small firm versus, uh, a big one. Chayton Farlee: [01:05:06] Incredibly so. Funny enough, uh, I started my internship at actuate and was still planning on going to UI afterwards. Um, but I went to E Y's, uh, student leadership conference. Uh, last summer. And they must have hated me because I sat there and drilled the partners and the senior managers on work life balance, how they're using technology, how I would be enabled to grow professionally and, you know, make decisions for myself. And I didn't get any of the answers I wanted to hear. Uh, I met a senior manager from the New York office. She has a young baby, so she takes care of her child during the day, and she's working e all night, so she's just not. She's not sleeping. Um, that. Blake Oliver: [01:05:59] Doesn't sound healthy. Chayton Farlee: [01:06:00] No, no, not at all. And, you know, they're pushing. They have semi remote work, right? It's a hybrid. So you have like, three days in the office and two days home. But I think remote work is the future. And the firm I'm at right now we're 100% remote. We will never have an office. And I think that's where the future is. That's what the best situation was for me and my family. And, um, you know, your window to become a partner at a big four firm is like 20 years right now. But at a smaller firm, you know, that can be much more manageable and, you know, a much shorter time frame, which is what I want to do. David Leary: [01:06:44] So and what I like about you is you've been able to form an opinion about the accounting industry as a young person. Now you're a career switcher, right? So you're a little older than maybe some of your peers. But you you have an opinion. You know what you want out of the industry. You know the direction the industry should or maybe should not be going. And you're willing to take a stand on that. And I think that's that's amazing because most people, you know, the funnel is this you go, you graduate. All the accounting programs are just funneling people into Big Four grind out your eight hours a week. Do what you're told. Maybe there's a promise of a partner one day. But you you never went down those paths. You figured out your opinion and you stick to it, which I really like. Chayton Farlee: [01:07:28] Well, and I've it's surprisingly I've gotten a lot of pushback in the classroom. Right. In the classroom. It's still all Big Four, you know, go to big corporate America. Uh, I brought up zero to a few of my professors. They didn't even know what zero was. And, uh, that's crazy to me. It's crazy that our professors, the people who are bringing the next generation of accountants into the profession, are not even aware of the things that are happening in the classroom. I mean, I would listen to your guys's show, and I would go and take all the the news clippings that you guys go through. And I would announce that to my audit class this past semester, every single week, because the professors aren't telling the students what states the 150 hour rules changing in, uh, you know what? Mergers are happening, how private equity is affecting firms. Students have no idea this stuff is even going on. And to me, that should be a critical part of, you know, their education into the profession. Blake Oliver: [01:08:29] What about offshoring? Outsourcing. Is that something that is being discussed in the classroom? Chayton Farlee: [01:08:37] Not not at all. Um, and I don't think students are aware of how much outsourcing is going on as, as well. Um, in my opinion, that's why wages have stagnated for entry level accounting roles. And it's why at the cloud based firms, it's so hard for interns to even get a job at a cloud based firm because they're all outsourcing. Um, right. I love the cloud accounting space and all the things that these tech forward firms are doing. Um, but I our firm is the only one I know of that's bringing on interns consistently To their small, fully remote, cloud based firm. Right. Most of the bigger firms were the ones who were burying the responsibility of bringing interns into the profession. Blake Oliver: [01:09:28] So that's that's something I've heard is a big problem at the big firms, is that if you go in as a staff accountant these days, there's so much outsourcing, so much offshoring, that it's hard to actually get real experience doing the work. I mean, is that like, what have you heard is going on like at the big firms when you go to recruiters or, you know, you talk to people working at these firms, what do they say about it? Chayton Farlee: [01:10:02] So at the big four, it's going to be interesting because, uh, they're actually making huge changes with AI right now. Um, so ee UI and um. Deloitte both announced partnerships with Nvidia earlier this year, uh, to develop their own AI platforms. And a lot of that work is going to switch to AI and away from interns. So it'll be really interesting to see if they enable interns to do higher level work or if they cut back their workforce. I think it's still, you know, too early to tell how much that's going to happen. Um, right. But at your smaller to medium sized firms, I actually see interns and associates having a really hard time finding jobs. Um, a lot of the work that they would do is being outsourced. And soon, in my opinion, it's going to be done by AI. We're going to have a whole generation of seniors that are managing AI and managing outsourcing, but when they bump up and go to the next level, there's not going to be any seniors to take their spot because there's no training for the interns and associates. Um, so I've posted quite a bit on LinkedIn about this, and I've gotten a lot of pushback from smaller firm owners because us interns are too expensive, or I don't want to spend the time to train an intern. Um, I think we have to think much bigger picture, though, than just, you know, bottom line revenue. It's got to be about the future of the profession. If we don't train interns, there's not going to be any interns to take over cloud accounting firms in ten years. David Leary: [01:11:45] Because if we think about the the it's a craft, right? You're you're a craftsman, right. And you want to bring somebody as a mentor and you invest in them and training them. But even an intern, you're going to pay some dollar an hour. And but you don't have experience. And the decisions being made at firms is I'll just hire I'll just hire some outsourced labor that already has that's already trained. They're way cheaper. Why do I want to invest time and effort into an intern and, you know, help them improve their craft. You know, we're all artisans, not the right word, but craftsmen. I mean, you know, this is this is a skill. It's a trade, right? Blake Oliver: [01:12:20] It's something that call it a trade. You're going to piss some people off, David. But I agree, right, that there is like there's a big aspect of our profession that's learned on the job. And that's where it is similar to a trade. Chayton Farlee: [01:12:35] Almost all of it I would say it's very the the classroom is so technical and so boring. Uh, it's I would tell students all the time about how excited I was about accounting and they're like, you're crazy. Like, this class is so boring. Blake Oliver: [01:12:50] Right? Chayton Farlee: [01:12:51] And I would tell them, well, you got to get outside and see what it's like outside of the classroom, because if you don't, you're not going to know. And that's my argument to the profession as well, is we are causing more damage to the profession by not offering internships than the 150 hour rule is because students think that accounting in the classroom is what accounting is like in the real world. That's not true. You're not doing, you know, consolidation, you know, year end journal entries every day at your job. But of course, you have to take an exam on them. At at my job, I'm getting to implement new tech. I'm using. I, um, I get to use Xero. And there are so many of these things that are exciting and new that that Gen Z would be excited about if they knew it was going on in accounting, but they just have no idea it's even happening. Blake Oliver: [01:13:46] Right? Well, then what's the solution? I mean, I understand why firm owners are outsourcing offshoring instead of hiring interns because it takes less time and it may be even less expensive, but they're not building up the pipeline of talent in their own firm or in the profession. Um, so then what's what's the outcome? It's just that when you need to do a succession, you sell to private equity. So it's all tied together. It feels like that's ultimately where the profession is going, is where, you know, medical went where it's like there aren't that many doctor owned practices anymore. The doctors work in the practices or work in the hospitals, but they're they're owned by non professionals right by professional managers and private equity. Like do you see any other pathway. Chayton Farlee: [01:14:43] I think we're doing it. So we've hired four interns and it's been successful with each one. Um I think there's a couple of solutions and some of it's on part of the firm owners, and some of it's on us students to do. I think students need to be better prepared for internships and especially a cloud accounting internship. So students need to be learning how to use zero, how to use onpay, how to use gusto. Uh, how does tax and carbon work? If they could get familiar with these things, you'd already be way more valuable than a student who doesn't know any of that. Day one. Blake Oliver: [01:15:21] Um, that that's really something that can be improved at the education level. Chayton Farlee: [01:15:28] Yeah. Blake Oliver: [01:15:28] And colleges, universities need to teach this stuff, right? Chayton Farlee: [01:15:31] Yeah. And I've been told that it's the student's responsibility. Right. But if the students don't know this stuff exists, how can we expect them to do it? Yeah. Um, so I think cloud accounting firms could get out there and talk more about what they need. Like, I don't see cloud accounting firms at career fairs. Um, I think that'd be a great place for firm owners to go. Not just to recruit, but to share the good news that accounting is bigger and better than the students think it is. Um, I think the other thing is, if you have really good processes, if you've built out your SOPs, if your firm is running the way it really should be running, bringing on interns is not as much work as you think it is. The partner and the owner should be mentoring and and helping the intern at a high level, but on the very low level stuff, they should either be able to work with a senior or another associate, or they should be independent, right? They should be able to use the resources you've developed as a firm to answer their own questions. And I don't think a lot of firms, you know, want to go down that avenue and develop those things. But we've even seen firms who want to sell, they're selling for much higher, um, exes of EBITDA if they have their processes built out and if they are managing their firm the right way. So already I think that's something that firms should be doing. Um, and I think I think firm owners just need to talk to students more. If, if we got more cloud accounting professionals talking to students, you know, I've been to zero con bridging the gap. I'm going to be at several conferences this year and I'm the only student there. Well, why is that the case? Why can't we have more students invited to these things? And and, you know, show them how exciting and and how cool this stuff is. Blake Oliver: [01:17:31] Yeah. You're the you were the second student I think I'd ever met at a conference in ten years. Jaden. So, uh, all the students listening, I think that's that's what you should do, uh, is go to one of these professional conferences, check it out. Um, walk around, meet people. You could probably get a job right there, right there and then. David Leary: [01:17:52] And there's. And there's nothing stopping you as a student from going getting certified in zero, getting certified in QuickBooks go, getting certified in a payroll product like Gusto or Onpay, etc. it's nothing stopping you from doing those things and getting those certificates. It's not your degree, it's not your CPA. But if you have those certificates, a smaller firm might be like, hey, he knows QuickBooks. We need somebody to do QuickBooks work and it could get it's a way to get your foot in the door at these firms. And so that way you're presenting yourself as I'm an intern, but I'm a valuable intern, right? Blake Oliver: [01:18:22] Yeah, right. Chayton Farlee: [01:18:23] Because it is a cost, right? It's a it's a. It can be risky for firms, right? You hire an intern and they just leave to another firm or, you know, they don't they don't end up working out. Um, so if students do their part and firm owners get out there and show students this exists, I think it could be really beneficial to the firms themselves and to the future of the profession. Blake Oliver: [01:18:54] Thanks for joining us. I loved talking to you and, uh, hope to have you again on the program soon. All right. I want to go back to my perplexity prompt and let's see what it's doing. No idea if this is going to work or not. Our prompt was to develop a complete onboarding process for new tax clients, including document collection checklists, initial consultation questionnaires, and timeline templates. Organize this into a professional presentation format that can be shared with new clients. And what do we have here? We have it looks like it created like some sort of app. Do you see this, David? David Leary: [01:19:37] Or is that a slide? Blake Oliver: [01:19:38] It's like a no. It's like a website. It's got a. David Leary: [01:19:41] Website. Yeah. Yeah, I see that. Blake Oliver: [01:19:43] Here's the process. So this is something you could put on a website, I guess. It's got documents. It's like a checklist kind of thing. David Leary: [01:19:58] Oh my God. Blake Oliver: [01:19:58] You. David Leary: [01:19:58] Built a portal. You built, you built it. You built the. Blake Oliver: [01:20:03] Timelines and deadlines. David Leary: [01:20:05] Onboarding portal. Blake Oliver: [01:20:06] Engagement letter overview. Sample engagement letter. Um. An FAQ. Contact information. I'm not sure exactly what that is, but, um, let's see. Let's see what. I guess that's the app. Yeah. So it made an app. App. It made an app. And we could download the code for this app. Wow. And it's pretty neat. It's got like steps for the process. Okay. Number one initial consultation 60 to 90 minute meeting to understand your tax situation 1 to 2 days. Number two engagement letter review and signed engagement letter outlining our services. It's got like the whole process. Wow. Okay let's look at the assets. So we've got the code. We've got a tax document checklist CSV file that we could import into a spreadsheet. It's with with it's got the document category name, whether it's required or optional. And the deadline. We've got a questionnaire and a tax client initial consultation questionnaire. David Leary: [01:21:11] We've got keep scrolling on that. How big is that. Blake Oliver: [01:21:15] Oh it's short. It's short. Oh no wait. No, it keeps going. It keeps going. Well it's going, it's really going. It's giving us a comprehensive, uh, what do you call. David Leary: [01:21:25] Oh my God. Yeah. If you if you said that to your clients, you get your clients. Blake Oliver: [01:21:29] Well, I could ask it to to make the questionnaire into, like, a website. Into an app, maybe. Here's the sample tax preparation engagement letter template that it created. David Leary: [01:21:40] So basically just built a whole tax form. Blake Oliver: [01:21:44] Basically it's got a timeline a visualization of the timeline like a waterfall view. We've got Tax season. Phases. Timeline. A visualization of that. We've got a process diagram. You know, I mean you have to go through this and see if like any of this makes sense. But like I mean, if you kind of. David Leary: [01:22:07] Knew this in 20 minutes later, you have this, you now have something to iterate through and work. Blake Oliver: [01:22:12] I wonder if I go back to the list, like I guess it gives me like a checklist that I can complete. That's kind of neat. This app is this app that it built is kind of neat. Well, anyway, that's the kind of stuff you can do. With Perplexity Labs. All right. We've gone way over. If you are listening to this and you've gone past the one hour mark and you want CPE for this, please don't complain that we're only offering one CPE that has happened to us. Um, you get one CPE even if we go over the hour just because we can't. David Leary: [01:22:54] Don't get greedy. Blake Oliver: [01:22:55] Don't get greedy. Go back and listen to a shorter episode, or listen to any of the other podcasts on earmark that are less than an hour. If you want more CPU than that, it's free, by the way. So you know, if it was more than a one CPU, we'd actually have to charge you, or you'd have to subscribe because that's the way our app is programed. We didn't want to change that. So don't forget you can earn free CPU for listening. Go to earmark app, sign up for free, create your free account, get a free CPE every week. If you want to support us, subscribe for the low, low price of $150 a year, and David and I are going to be at a few different places in the next few weeks. I'm going to be in Atlanta at the Sage Future Conference with David. So if you are at Sage future, if you're going to Sage future and you hear this before then send us an email The Accounting Podcast at me. Or better yet, mention us on social media. We'll be there as press Suppress and we'll also be at ACP engage. At least I will. Looking forward to going to AICPA Engage in Las Vegas the following week. So, uh, if you're going to be there on Tuesday. David Leary: [01:24:03] Back to back conferences, back to back. Blake Oliver: [01:24:05] Tuesdays, the best day for me to meet up. Uh, so yeah, hopefully you're there on Tuesday. Shoot me a message. We'd love to connect with you all if I haven't met you before, come say hi. Um, that's all I got. Do we thank all our sponsors? Are we good on that, David? David Leary: [01:24:22] Yeah, we're good on that front. Um, I've just pushed these two other APS stories. I have to next week. They're not that, you know. It's not. Everybody's can move on with their life without hearing these two stories. It's okay. We can let everybody go. Blake Oliver: [01:24:34] All right. See you all here next week and have a I don't have a great start to June. See you soon. Chayton Farlee: [01:24:44] Bye.