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NASBA Says No Way To Lower 150-Hour Rule · 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! David Leary: [00:00:00] Are you struggling with managing documents with your clients this tax season? Are you, like most firm owners and don't have the time to implement an entire client portal communications and workflow solution for your firm? Wouldn't it be great to have a way to securely exchange documents with your clients using tech that your firm probably already has? Keeping your team and clients from having to learn something new. Stay tuned to hear more from our sponsors SuiteFiles later in the episode. Blake Oliver: [00:00:26] And this is why SAS businesses always look horrible on paper. Paper because GAAP says that your marketing expense is a period expense and doesn't recognize it as an investment in the intangible asset that is your customer base. And that's why everyone got Amazon wrong for so long by Amazon Prime. Nobody understood that. Now people understand it. But it's funny because accounting standards still have not caught up to it. The most valuable asset of a subscription business is the subscriber, and the subscriber is nowhere on the balance sheet. David Leary: [00:00:57] Coming to you weekly from the OnPay Recording Studio, this is the Cloud Accounting Podcast. Blake Oliver: [00:01:09] Hello and welcome to the Cloud Accounting Podcast. I'm Blake Oliver. David Leary: [00:01:13] And I'm David Leary. Blake Oliver: [00:01:14] And we're joined today by Randy Crabtree of Troy Merritt and host of the Unique CPA podcast. Welcome, Randy. Randy Crabtree: [00:01:22] Well, thanks for having me be here. This is like the thrill of my lifetime being on The Cloud Accounting Podcast This is amazing. Blake Oliver: [00:01:29] And. And you look like you're somewhere familiar. David I feel like. I feel like I have seen that room. Randy Where? And David. David just left. Hey. Oh, my gosh. I see. David is right behind you, Randy. Randy Crabtree: [00:01:44] David is right behind me. I'm hanging out in Tucson with David for the next few days. So this is his daughter's room? I think so. I get to. I get the podcast live from here. It's pretty awesome. Blake Oliver: [00:01:54] Fantastic. Yeah. You're staying at David's Airbnb. David built an Airbnb onto his house so you could actually have the the the Cloudaccountingpodcast.com vacation experience by staying with David in Tucson, if you like. That's the VIP treatment right there. David Leary: [00:02:11] Yes. Randy Crabtree: [00:02:11] I think that needs to be advertised that way. This is VIP for sure. David Leary: [00:02:16] But but I must say, like everybody works remote and does remote traveling. Randy, not only does he have portable monitors, he packs a portable desk. He's got it all. He's like, he's truly a road warrior and remote work. From that perspective. Blake Oliver: [00:02:30] I'm a big fan of that. You've got to have everything you need in your go bag so that wherever you are, you can get work done, right? Randy Crabtree: [00:02:36] Go back. Sounds like you got trouble with the law. Is this It's, you know, just in case you need to get out of town? Blake Oliver: [00:02:41] Well, I think I think if that was the case, you call it a bug out bag, right? Randy Crabtree: [00:02:46] Yeah, we we. So my wife and I, we live in Chicago, so the last few years, we just say we're heading out of town for the winter. So I've been spending a lot of time in the southwest in Tucson is the stop now It's been. David Leary: [00:02:58] Great And Randy's first day here, it snowed, so he didn't get away from anything. Blake Oliver: [00:03:05] Amazing. Well, Randy, for those who don't know you, tell us a little bit about your firm, Troy Merritt. Go ahead and brag. Tell us. I mean, you guys are crushing it. I know you specialize in tax credits and you're not one of those. David Leary: [00:03:18] Oh, it's one of those guys. Blake Oliver: [00:03:19] You not one of the but you're not one of those I.R.S. mills. And I want to talk to you about that today. But yeah, you've been doing this for a long time now. You guys are experts, you know, what's the scale of trimeric? Where have you gotten to? Randy Crabtree: [00:03:33] Yeah, so we're just as a quick background is how I got to here, if you don't mind. So I'm a CPA. I came out of public accounting and was managing partner of a firm in the Chicago suburbs, and and 17 years ago I decided it was time for a change and R&D tax credits kind of just found me. And so we started this firm doing tax credits and incentives, and we've expanded into six different seven different, at least seven different offerings. Now, I always hate saying I.R.S. is one of them because people have this perception of the York mills, which is awful, and we could talk about that. We do it right. We only take credits that we can defend. And so we've grown rapidly. I've told you guys, I've been open about this. We've were I think we built 30 million last year in revenue. So we've grown a pretty nice sized firm. We we work with tax preparers around the country and we support them and their clients to take defendable credits and incentives. Blake Oliver: [00:04:31] Nice. That's awesome. David Leary: [00:04:32] I only have tax firms as clients. Like you don't have client clients. You're not doing tax returns, You're not doing audit work. You're not. Randy Crabtree: [00:04:39] No, we don't do tax returns. We do we do a small portion of the tax return information they need for whatever tax credit or incentive that we work with. We get that to the tax preparer. Our contract is typically with that tax preparers client, but we get the information. We work in conjunction with them. We get the information to the tax preparer, and then they finalize the whole big return. David Leary: [00:05:01] Got it. Side my client to get to that line of the return. I'm like, I don't have the time or the skill set in my firm to handle this. I'm going to outsource this to try. You're going to fill out those five, six, eight lines, give it back. And it's kind of the the game. Randy Crabtree: [00:05:13] You got it. Blake Oliver: [00:05:14] So, David, I think that our episode last week hit a nerve. The AICPA is eight point plan to what does it save the accounting profession solve the talent crisis. We we almost dedicated the whole episode to that and. David Leary: [00:05:31] Well it started out with that tweet. The tweet had, you know 60,000 views now and people keep putting comments on it. Blake Oliver: [00:05:37] And, you know, I would love to talk about something else. But we keep getting news on this issue and it looks like stuff is starting to happen. I mean, this there's an uprising that is occurring. There's a revolution going on at the state level. And the way that we know that is that naspa the National Association of State Boards of Accountancy. Got together recently and did a vote. They voted to uphold the 150 hour requirement. This was an article in the Journal of Accountancy. So they they didn't have to do this. They got together the board got together and voted to say that individual states should not change from 150 hours the fifth year of education back to four years. And the reason they said this is because we want to maintain uniform licensing, which I think we can all agree. We all want to be able to practice across state lines and whatnot. But I just thought it was really interesting that Naspa got together and did this vote because, you know, why did they do it? Well, there must be rumblings going on. And then I dug into this further and I found out that it's because the Minnesota society, the Minnesota I think it's the Minnesota Society of CPAs is is there's a bill in the Minnesota legislature to change the requirement from 150 to 120 hours. So what's actually happening? David Leary: [00:07:01] Well, I just said that like I said that last week on the podcast. And then a couple hours later this article, we discovered this article. But I said a state like Arizona, Florida, Texas, one of these states are going to push for this. And I didn't see Minnesota doing it. But, you know, Minnesotans get away, get along with everybody, but they're also a little they're out, you know, they who's the wrestler they elected as governor once, Jesse Ventura. That's right. Yeah. Yep. And so it's not, I guess. Blake Oliver: [00:07:27] Yeah, they got the independent streak going on, right? I like it. I mean, so this is exciting. And I could see this happening, right? Like, what if this happens? And so, you know, Naspa, if you ask me, they really need to get together, get ahead of this and solve the problem because, like, we're not hearing problems, we're not hearing solutions from Naspa and AICPA on this, like not solutions that could solve the problem quickly. I just read in another story that there's something like 136,000 vacancies per year that will be added to the accounting profession year over year over year. You know, And so if we don't grow, if we just slowly decline, we're not even going to fill those positions. And then, you know, the big risk to the profession is not I don't think, the issue with like people trying to take away CPA licensure and all that, it's it's really if we don't have enough CPAs, then these state legislators leaders will come up with bills to just allow. Non CPAs to do audits. Because if we can't staff it, if we can't do the audits for a reasonable price like business owners are going to go elsewhere, they're going to ask their legislators to do other stuff. So that's the real risk is is if we don't fill this pipeline, we could lose the only franchise we have, which is the audit. David Leary: [00:08:41] And we've seen them already remove the CPA requirement from their internal positions, like to be the state treasurer. I forgot what state that was. They're like, We're not going to make you be a CPA. You can just. I need to hire somebody. Oh, yeah, definitely. Randy Crabtree: [00:08:55] What about do you think? Sorry. Go ahead. Got a question? Do you think? Oh, that's the main thing. I mean, that's the only thing you need to be a CPA for, right? Isn't audit. You. You see audits. Is audits going to become. Everybody talks about the air, be more automated and we're not going to we're going to lose audit. And, you know, you're not going to need to have a CPA do this anymore and blockchain and all this. Do you think that's a major issue that that we'll have less space for audits or do you think just in general, the the I think the the the economy needs accountants. Yes. Cpas are not without accountants. We're in a crisis mode and I think we're getting to that point. So I guess that was a question. It's just curious. Blake Oliver: [00:09:37] Well, I think you're right. I think the big picture is the economy needs accountants. The economy cannot grow without accountants. Now, we can use technology to allow accountants to do more, but we still need more accountants, even with the tech. Yep. And we're not producing them. We're losing them. So we're going in the wrong direction. And then specifically within the CPA niche or that segment audit has not advanced in terms of technology much at all. I mean, we don't hear about it like on The Cloud Accounting Podcast. When was the last time we talked about a story about audit and technology that was in the press? David Does it ever happen? There's a few companies working on solutions like you've got mine bridge out there, and I know there's, you know, other ones like audit board and whatnot, but most audit still seems to be done manually. And so it's really labor intensive. And if we don't produce enough auditors, audit quality is going to continue to decline because you can't do the job. And so if if we have major audit failures, if we don't have enough auditors, audit fees will rise. My concern is that the business community will say the CPA firms aren't doing the job. We have to get audited, so let's get audits from somewhere else, right? If supply doesn't meet demand, the market will go elsewhere to find a solution. And that's the real risk to the CPA license when it comes to the only thing that we do that other people can't do, which is audit. David Leary: [00:10:57] So really it should be certified public auditor. Like we should stop using the word accountant and call it what it really is. And then. Blake Oliver: [00:11:04] Well. David Leary: [00:11:04] I don't want accountants. Blake Oliver: [00:11:06] You know, I don't want my CPA to become a niche thing like audit. 85% of CPAs don't do audit. It's only 15% of the profession. So we run the risk of becoming. David Leary: [00:11:16] Marginalized and becoming a regular part of the license, though. Blake Oliver: [00:11:19] Yeah, it is. But I think the license should be about more than that, right? It should be. What it's really become, which is a CPA, is the recognized, most recognized, most trusted credential that represents that. You have a base level of training and experience and expertise and the public values it. But we run the risk of losing that monopoly that we have essentially on the branding if we don't have enough of us. David Leary: [00:11:48] Yeah. So, Serena, can you talk about you have the letters, you've got the magic letters, your CPA, your educational background. Did you have to do 150? Like, can you what was your early career like? Randy Crabtree: [00:11:58] Well, so I did not get an undergrad degree in accounting and I was computer science. So you would think I'd be up on tech. I'm not that all that good with the technology, but I'm also 60. So that was a long time ago. But I decided after a few years out working that I really should have been a CPA, not really know much about it. I went to undergrad class in accounting, so I ended up going just taking master's classes to get enough hours to be able to take the exam. So I didn't need the 150. I probably am close to 150 just because of the additional hours I took, but I never got a degree. So I don't I don't know if that's a requirement today or not. I don't know if it's still just the hours, but I never I never got an accounting degree. I just went back to get enough hours to take the exam. Blake Oliver: [00:12:48] Yeah. And that's like me, right? I have a Bachelor of Music. I have a ton of credits in college because I took a zillion AP classes in high school, and it took me a little longer to get my music degree because I changed majors and I still had to go back and take a ton of classes because I had to get all of those accounting specific classes. But I did it at community colleges and I did it at UCLA extension. I didn't do a master's because I figured, like most people say, I talk to accounts. They say you're going to learn more doing it than you are going to learn it in school. And I think that's true with a lot of stuff, right? Like, it's certainly that way in music. If you get a PhD in music and you never go out there and perform in the real world, you're useless. You're really, really useless. Actually, it was funny. Like in college, the PhDs who had never performed with an orchestra were awful. They were horrible musicians. And I bet it's the same way in accounting. Randy Crabtree: [00:13:42] Oh, I would think so. I didn't. I mean, honestly, looking back, that I really learned things in college. I mean, not not what I used when I started in public accounting. And, you know, right after I got my enough hours to take the exam, I mean, I learned there. That's where I really learned everything. Blake Oliver: [00:13:58] Yep. Yeah, learn by doing right. And so that's what's interesting about the Minnesota bill. The bill in the Minnesota state legislature is it would reduce I skimmed it before we got on and it reduces the requirement back to 120, but it increases the experience requirement from one year back to two years. So you're replacing school with work. And I, I challenge anyone listening to tell me that an extra year of education in a university is more valuable than a year working in an accounting firm when it comes to actually you. David Leary: [00:14:30] Can get a lot of emails from PhDs or accountancy. Phds are going to email Blake and insist that that they have the right career. Randy Crabtree: [00:14:37] Path and PhDs in music to are going to be emailing him to that they're talentless. David Leary: [00:14:44] So. Blake Oliver: [00:14:46] So we're on YouTube live we are streaming today on a Thursday instead of a Friday because I'm going to Sedona for the weekend. So thank you, David, for adjusting your schedule for me. And thank you to our loyal live stream viewers who have shown up. Anyway, Michael is in the chat and he said, I thought we did this on Fridays. No. Yeah, we normally do. Normally it's like Friday at ten MST, but today it is on Thursday. So thanks for showing up. Thanks, Michael. Thanks, Christopher, for jumping on. Great to see you. And anyone who is watching you can chat with us. Put your message in the chat there in the live stream and we will see it. And if I like it, I'll put it on the screen. So let us know what you think about anything we've been talking on about on recent episodes. When it comes to 150 hours, when it comes to tech. I mean, if you're tired of us talking about the 150 hours, give us a tech story to talk about. Well, we're happy to change the subject. David Leary: [00:15:42] So before we jump off of the subject, though, Blake, so you said you took lots of AP classes in high school. Blake Oliver: [00:15:48] Oh, yeah. I had actually so many that I effectively was a sophomore when I came into college. David Leary: [00:15:54] Did you have any opportunity to take accounting one on one as an AP course? Blake Oliver: [00:15:59] Accounting was not an AP course, and I doubt it still is. I doubt it is. Right? David Leary: [00:16:03] Yes, exactly. So so just time fill in my week. So on Monday, I went and spoke at Career Day, you know, and I spoke up being a podcaster. It was great. People took all these notes. They touched all the equipment like it was. Kind of exciting, but normal. One of the accounting twins spoke about accounting, and seemingly half the people showed up, right? Session There's not a lot of people interested in accounting, but time is full back. You know, I've been, for whatever reason, my newsfeeds. I've been seeing these stories about high school kids tying back to accounting and the concept of this like kind of hit me like the. Instead of that, like senior year, you're on the AP taking calculus your senior year. Right. Instead, this school, high school, should not offered accounting and accounting. But no, you can't get a P for it. Right. But you took accounting. And what they're seeing is high school kids that take business majors, that take accounting in high school are more successful in college accounting classes. Say that again. So if you're a high school student who goes on to be a business major in college, being your fifth, your business major, everybody has to take accounting 101. Right? If you took accounting in high school, you're more successful at accounting in college. So just buy us off. Why is there not AP accounting? Blake Oliver: [00:17:20] Yeah, that's a great idea. There should be. Yeah. Why not? Right. Debit. Learn your debits and credits in high school. David Leary: [00:17:27] I mean, I took AP calculus and how much I use it for nothing. Blake Oliver: [00:17:30] Nothing. Nothing. I did. I did that. It was a fun, fun experiment. I did. I did. I did multivariable calculus so I could learn to I can compute the the volume of a vase, a strange shape, but, like. David Leary: [00:17:47] That's floating in a plane. Yeah. Blake Oliver: [00:17:50] Why can't we take AP excel in in high school? I feel like that would be the most valuable course in the history of AP classes for most people, you know. David Leary: [00:18:00] But do you think they talk about recruiting earlier? It's like if you just because these these these high performing students want their AP credits. So if you offer a county as an AP class, we're going to naturally fill the bottom of the funnel just because they're so these people want that AP credit. Randy Crabtree: [00:18:16] Yeah, I think I think AP accounting is the best idea I've ever heard you come up with, and you always. David Leary: [00:18:22] Come up, I think, retire now I'm done so off. Randy Crabtree: [00:18:25] This is like my week is fulfilled here. I'm alive on this podcast. I'm hearing these great ideas here. I want to run something past you guys because I've been thinking about this as well, especially with high school and end college. But I was going to the high school level, so we, we, I host a conference every year. It's the unique CPA conference. This is the first year we're going to go live with it in person. I mean, not live. It's always been live. But we were talking about giving up scholarships for people to come to this and we're trying to come up with criteria. And I was thinking, why not go down to the high school level? Why not find kids in high school that are interested in accounting and have them come to this conference? We'll pay for everything. They come to this conference and they can see, you know, I'm going to have cool people at this conference like you guys. I hope we'll talk about that and other people that just you know, and like Kristen keeps talking about bringing joy to a county and then and this kind of thing and just see that this is a fun it can be a fun industry. And so my my question to you is, what do you think about that? Do you think we're on the right track trying to bring high school students into a conference setting to see let them see what it's all about? Blake Oliver: [00:19:37] I think that anything we can do to teach high school kids about alternatives to the traditional path, yes, is great because that's what's killing us as a profession. That's it's the the big for bringing in these students and turning and burning them. And then all those 80% that leave within the first few years are posting on Tik-tok and Reddit about their horrible experiences working at these firms. And they hated it. You know, I know you learn a lot, but there's a lot of negatives as well that we have to address. Randy Crabtree: [00:20:11] So I talk a lot about I do a presentation on mental health and I talk a lot about the perception of the industry, but there's also reality. And so the reality is what you just said, I mean, they just churn and burn and knock them out. So everybody perceives that as the industry. But then what you just said, you have these millennial run firms, maybe these starter firms, not these legacy firms that have been around for 50 years or 100 years, these firms that have started up in the last ten years that have grown tremendously and are doing things different, they're doing they're they're just coming up with these great ideas and they're not burning people out. But the perception is still there. And I think that's one thing we need to get rid of is that perception of we are this high stress, high burnout profession. Blake Oliver: [00:20:54] Yeah, it doesn't have to be that way. And somehow we've got to get people the practical training they need without them having to go to a big firm to do it. Yes, that's the problem, right? Because everyone feels like, Oh, I have to go work for a big four or a regional firm because if I don't, I won't have the resume. And we need to counter that. Like, we need to figure out how do we get people into smaller firms directly without them going through this, What do you call it, a meat grinder that's that's causing the problems. It's disputation. David Leary: [00:21:24] People that make it out. And I don't know the exact numbers, but just ratios, the people that make it through those first two or three years and move on to a career in accounting, they're usually like, that was very valuable to me. It was an important part of my career doing that meat grinder in the beginning. But for every one person like that, I think five people just fall out of the other end of the meat grinder and they're done with accounting the rest of their lives. So it's kind of it's great if you can get through it, but most people don't. Not those are bodies that that basically in the worst than that usually they leave and they just leave accounting. They're not just like trying to find other opportunities in accounting. Blake Oliver: [00:21:57] Yeah, they're just leaving it completely. David Leary: [00:22:03] This episode of The Cloud Accounting Podcast is sponsored by Suite Files. I'm guessing that you are probably already paying for Microsoft 365 and use Outlook one drive word and of course Excel daily. Wouldn't it be great if you could just use this existing tech stack that you already know and trust to work with your clients more securely, efficiently and collaboratively? Suite Files has everything you need to manage your client documents, nothing more and nothing less. And because Suite Files is built on Microsoft 365, you, your team and your clients already know how to use it. With suite files, you can easily create and edit documents, including PDFs. Get digital signatures from clients all safely and securely by using the Microsoft 365 folder system that you're familiar with. Suite files makes it simple for your team and your clients to upload, store and retrieve documents. Be it a client engagement letter or last month's reports. Suite Files also offers the ability to work with documents offline. C Version History in case you need to roll back changes to a doc outlook integration, custom branding, PDF annotation and that always needed PDF merging to learn more about using suite files to solve all your document management needs and for advice on tackling the talent shortage, including the Top five Tips to find qualified workers, head over to Cloudaccountingpodcast.com Promo slash suite files That is Cloudaccountingpodcast.com Promo 4/sui. T. E. F. I. L. E. S. Blake Oliver: [00:23:29] We got a lot of chat going on in the live stream, Andrea says. Experience certainly helps. I went back to school to get my extra 30 hours. Seven years after I got my bachelor's. I don't think I would have done well had I done the additional 30 right after my bachelor's. And Dhall says my first two years of accounting was with companies committing fraud, both private industry and public accounting. I can be held hostage to unethical CPAs in order to meet the experience requirement. Oh, man. Well, talk about. I didn't even think about that. Talk about a bad experience. I'm so sorry. And I'm glad you stuck with us in the profession, Christopher says. I think Zero and Intuit would have to take the lead on that. Oh, probably in reference to helping to train accountants in an alternative pathway. Well, allow me to pitch my crazy idea, which is that we create accounting bootcamps like the coding academies that popped up when we didn't have enough software developers. So the idea would be if you have any bachelor's degree, you could go into these intense boot camps where you spend 8 to 12 hours a day just studying for X number of weeks, and you learn everything that you need to know to be successful in a firm. Like if you're going to do tax, you learn all the tax software, you learn all that stuff you don't learn in school and you learn how to manage the clients, the practice management software, so that you can go right into a firm and hit the ground running and understand how to actually be doing work in a firm as opposed to all this theory that we learn in school. School is so theoretical, so that that would be something that like I would love to see earmark turn into someday. David, is we could actually offer that kind of boot camp and firms would support it because they'd say like, I'm going to hire people out of the firm, out of the boot camp that know how to work in my firm, and I don't have to spend years training them. Randy Crabtree: [00:25:24] Yep. Specific paths within their even so, if they even maybe send people to your to the earmark boot camp because they want them to learn la cert or they want them to learn these different paths that goes down and meets into their firm and the firm will pay for. I love the idea. You guys are just full of awesome ideas today. Blake Oliver: [00:25:44] Well, thank you. Thank you, Randy. I appreciate that. And our listeners are as well. David Leary: [00:25:47] Somebody has to do it. Blake Oliver: [00:25:50] Well, Andrea says that she solidified her decision to go into accounting by going to an accounting summer camp in high school. They had an accounting summer camp. That is amazing. Andrea, I would love to know more about what was included in accounting summer camp, and I'm glad there's something even nerdier than band camp, which I went to. So thank you actually that I would have gone to Accounting Summer camp. That would have been great. Like Bandcamp wasn't nerdy enough for me. Let's see, Honey says my hubby is a teacher and most definitely the students would love to attend a conference. There you go, Randy. You got validation there? Randy Crabtree: [00:26:29] Yeah. We're going to need to put that information out there. And that's the plan. It's not official yet. We are going to have some kind of scholarship. But in fact, I'm on a group that we just started, this foundation that is raising money for scholarships, for conferences, not just our conferences, conferences in general. Maybe somebody that's just starting their firm up or somebody that is just came into the country from another country and they want to understand accounting here. So this is a really cool group. I'm very excited to be part of it. We had our first meeting last week, but we are going to be giving out scholarships to conferences in general. It should be a lot of fun. Blake Oliver: [00:27:08] Awesome. Awesome, David. So we talk about accounting technology or do you got more on the future of our profession? David Leary: [00:27:15] I mean, I just had just make you to be clear about this. This is not just a US thing. There was an article in the Accountancy Daily and it looks like in the UK this a third of accountants are considering changing jobs. So turnover figures for accounting and finance jobs hit 30%, which is 3% higher in 2022 than in 2021. So this is not just this is an industry wide thing. It's not just a US accountants problem. And then then you make you wonder, I don't want to let the 150 hour rule doesn't exist. These other countries rule. But so it kind of shows the bigger picture of accounting in general. Yeah, I mean, the problem. Blake Oliver: [00:27:53] And for those who want to actually see that bill that I talked about in the Minnesota legislature, you can go search for hf1749 at the Minnesota legislature website at f1749 and you can read the text of it. And when I read through it, it looks like they have this alternative pathway where you can get 120 semester or 180 career hours at a college or university that's accredited. And then, oh, they even have another one if you so you get the 120 hours and then you have to complete an additional 120 hours of professional education. So CPE, they're swapping CPE for for the classroom education, which, hey, you know, I'm a little biased because you can get CP for listening to The Cloud Accounting Podcast. So it's possible that in Minnesota, CPAs could satisfy their fifth year by listening to The Cloud Accounting Podcast and using earmark and taking classes from all these excellent CPE providers that already do this for a lot less than a university will charge. And the unique CPA podcast you can get CPA CP for that to Randy. Randy Crabtree: [00:29:05] Through earmark, for sure. Through earmark, Yeah. So, so it sounds like what I'm hearing here is earmark is about to take over the accounting profession. And so I'm I'm asking life here, how much money you guys need and investment so I can be part of this. Blake Oliver: [00:29:21] We're still working fine. Yeah, we're still working that out. I have on my checklist of things to do is create the financial model, and it's been sitting there for a long time. I got I got to see those are hard to build. I got to sit down and build it. David Leary: [00:29:34] Well, I think the two major plans, like how do you how to take over the the complete industry leadership. And the other plan is like, how do we get some of that $80 Billion of the IRS money? That's right. So the two are the two major plans that are happening here. So I know we rip on Deloitte a lot. Yes, go ahead. Blake Oliver: [00:29:50] Kim Fish Oh, no, I love ripping on Deloitte. David Leary: [00:29:52] Go for okay, so but so and this is a little like, you know, I saw this article but it's in our backyard. So University of Arizona down here in Tucson. So the business school inside that business school is the accounting school, right? They've partnered with Deloitte. So Deloitte has a scholarship called Made Maddy, making accounting diverse and equitable, and they've committed $75 million in scholarships. And they will pay your full tuition for about 15 different universities they partnered with. Blake Oliver: [00:30:20] What's the catch? David Leary: [00:30:22] It does not say you have to work for them, but they basically it's for students that want to do their fifth year master's degree in accounting. So in a way, like here it goes. It's reinforcing the the extra year. But yeah, somebody's going to pick up the bill, you know. Blake Oliver: [00:30:35] So I do want to go on to tech because we are called The Cloud Accounting Podcast. We need to talk about technology. But I also have a video that I wanted to play. I listen to a bunch of podcasts I listen to like Planet Money and Marketplace and all that. And there was something recently on an episode that spoke to me. Now this is in a totally different industry. This is in the housing industry, the construction industry. And as you all know, we have a shortage of housing in this country. And so one of the reasons that that is, is because it's very expensive to construct homes. And a lot of that has to do with, according to the story that I heard, really outdated ways of building housing. And one of the solutions is to do more prefab homes. But the industry has kind of resisted that. It hasn't moved to that. And the question is why. And I thought this clip was really funny at explaining why. So I'm going to play this clip for you. Podcast Clip: [00:31:34] What's different now is that some of the big builders are looking at prefab homes as they try to insure themselves against a lack of workers. Margaret has a theory about why it's taken them so long to take a look at this. Margaret: [00:31:46] So I came up with this very funny phrase, PMS, that the industry is pale, male and stale. As a professional speaker, a lot of these events, I'm often standing on a stage looking at one thousands of old white guys and wondering why not Things changing, right? And that's why nothing's changing. And it's the diversity of thought. For me, I think generational diversity is absolutely critical, bringing young people in. Blake Oliver: [00:32:12] Now, sorry, I just had to play that because I thought that was the funniest acronym I've ever heard, is, you know. David Leary: [00:32:17] Pms, Pale Male. I should have not framed it up as being a construction story and just played that quote and had me play the game where I have to guess what industry this is because it could be us. Blake Oliver: [00:32:28] Now, as a future old white guy, I've got no problem with old white guys, but I do think that the the point is totally valid, which is that if it's all people who look the same in the room, chances are the diversity of thought is going to be really poor. Right. And this to me is why we have a problem in accounting and why our accounting associations and state boards of accountancy can't seem to figure out what to do because they're all suffering from this groupthink that results from everybody having the exact same experience and that those people tend to look alike. You know, that's the correlation there. Not necessarily causation, but it's totally true. So I'd have to play that. Randy Crabtree: [00:33:03] So I kind of resemble that comment she made there me the old white guy. But you are right, David, that if you didn't tell us what the industry that was, I was thinking they were talking about accounting. Yeah, because it's just historically been that way that I've seen until the last few years when I've met people like you and people like Scott Sparano and the guys at Acuity and Neo Carter and all these people, and I'm seeing this, this what I was talking about before are these younger start up firms a lot more diverse and, and have different thinking and I think that's what's needed. Blake Oliver: [00:33:38] We got a comment from Jtg. I think earmark is one of the greatest apps available. So much easier to get your CPE by listening to podcasts than by sitting through seminars. And many of them are fun to. Hey, thank you so much for that. And a reminder to our listeners that you can earn free CPE for listening to the Cloud Accounting podcast, just download the earmarked CPE app and you can get CPE for listening to Randy's unique CPA podcast. So check out his podcast, get CPE for it. He's wearing the t shirt right now. You can see it on the live stream. It's awesome. And yes, do that. Get your CPE don't don't sit in the seminar if you don't have to or if you don't want to. Randy Crabtree: [00:34:18] Although I have a webinar in about 30 minutes, so sit in my webinar, just not the gist of them. Is that what we're saying? All right. Blake Oliver: [00:34:24] That's right. Actually, because we'll put that webinar up on earmark after the fact if you want, or you're doing that one for live. Cp Right. Randy Crabtree: [00:34:31] Yeah, this is a live webinar I'm doing for OC Industry Professional Group. Blake Oliver: [00:34:37] Fantastic. Well, you're creating that great technical content around all of these tax credits and stuff that people need, right? And it's not like they're going to learn that in university because the universities are getting ten years behind everything there. Nothing's current, right? I remember in my classes we were diagraming tape drives. That was I had to learn the icon to like draw a tape drive with my protractor. I kid you not, I kid you not. David Leary: [00:35:03] Yeah. Blake Oliver: [00:35:03] Because that's how we used to diagram processes was on paper, you know, and that's what I had to learn. David Leary: [00:35:12] This episode of The Cloud Accounting Podcast is sponsored by Life Flo Anita Kumar, one of the founders of Why Flo was telling me about a small business owner who is complaining that his accountant didn't do any cashflow projections with him, causing his business to take an unwanted loan just to keep the doors open. I wanted to learn more and understand from this business owner about what his accountant did or didn't do for him. So I attempted to set up a zoom call with him. This was his reply, and I quote, I would be happy to review this further, but at a later time, due to our cash flow problems, the problems are already here and I have to solve this crisis before I can plan and fortunately, end quote. It makes me wonder how many other small businesses are currently struggling with cashflow crisis and their accountants aren't helping them. If you're not helping your clients with cashflow, stop what you are doing and go sign up for live flow right now. Grab one of the life flow cash flow forecast templates and connect your clients. Quickbooks Online Data. You and the client will be able to see real time money movements, have important cashflow conversations and make impactful business decisions quicker rather than later. Learn more about using live flow and how you can save 20% off your first three months. Head over to Cloudaccountingpodcast.com promo slash live flow that is Cloudaccountingpodcast.com promo for slash Clive flow W. Blake Oliver: [00:36:29] All right, Tech David. Top tech stories of the week of the month. David Leary: [00:36:33] Flip back over there. What did we get? What did we see that was tech related? Jobber So are you familiar with Jobber? Blake Oliver: [00:36:42] I've heard of it, but I don't remember what it does. David Leary: [00:36:44] Jobber Like, you know, they're out of Canada and they were really popular with like, landscapers, lawnmowers, landscapers and then people that do snowplows so they could use the app of parts of the year, you know, because that's usually you have to do each job six months a year, like in Canada. But they've really expanded out. They took $100 million in their most recent raise. And what's interesting about this and maybe this is like you talk about raising money and doing these things they already have. They have 200,000 users and they ran $13 Billion through their system across 27 million households. So this is a little niche app that's expanded out to HVAC, lawn care, plumbing, residential cleaning. But am I just confused? Like if if these companies have this kind of revenue coming in, so the revenues it's bringing in $100 million revenues coming in. Why is it still need $60,000,300 million in VC money? I just wonder this like like is that like mismanagement like that? You can't run your company when you have $100 million revenue. It's always most confused by that a little bit. Blake Oliver: [00:37:48] Yeah, I think it's. Well, when I was in SAS, the idea was you knew you had this cost to acquire a dollar of revenue KPI that you would track very carefully. So you'd say if we spend $2, we'll get a dollar of recurring revenue. And you look at your marketing spend and you look at how many new customers that get to you and what the average contract value is, and you can calculate this, this ratio. And so if if it's higher than one, that means you're spending more than a dollar to get a dollar. So that's why you need the money, because you're but you're getting future revenue. So that's where the burn concept comes in from, right? You're burning more cash than you're bringing in, but it's building this asset on it's not on your balance sheet because GAAP doesn't understand subscription businesses, but it's it's an asset to the investors because we all know that somebody signs up for a job or any SAS app, you know, they're going to last for more than a year typically. And whatever that number is is based on your churn and all that stuff. So the idea is if you know the number really well, you can go out and raise the money because you can say we're going to spend 100 million and we're going to bring in 50 million in recurring revenue. And we know that 50 million is actually. 500 million because our customers stay with us for ten years on average. That's why they do that. If that's the only reason to do that in a SAS business. David Leary: [00:39:06] But where is it? It goes on in this article. Talk about, you know, they they've only made $100 million so far on 13 billion in gross sales and their existence 13. Blake Oliver: [00:39:14] Oh, well, that's because that's because they're reinvesting all of their cash in customer acquisition. And this is why SAS businesses always look horrible on paper. Paper because GAAP says that your marketing expense is a period expense and doesn't recognize it as an investment in the intangible asset that is your customer base. And that's why everyone got Amazon wrong for so long. And that's why they all, you know, Amazon Prime, nobody understood that. And Netflix now people understand it. But it's funny because accounting standards still have not caught up to it. The most valuable asset of a subscription business is the subscriber, and the subscriber is nowhere on the balance sheet. It's not even disclosed. It's not even disclosed. Randy Crabtree: [00:39:56] The data, the subscriber data. Is that what you mean? Or like what's the. Blake Oliver: [00:39:59] Yeah, well, like, like Netflix, for instance, Right. What do we really care about when it comes to Netflix? We care about how many subscribers they have and their churn rate, how many they lose and how many they're gaining. Right. Because and we multiply that by the price of their subscription and we can basically estimate Netflix's future cash flows because. Right. But but that's not mandated to disclose anywhere in the financial statements. The only thing they disclose is traditional metrics like earnings per share, which is not really helpful because if a company like Netflix is doing a good job, they're going to spend every dollar of profit on getting new customers because why wouldn't you? Right? You're getting future revenue. You're you're planting the money tree. But those companies look bad on paper because of GAAP. David Leary: [00:40:46] Because it's it's the way we judge widget creation. We build widgets, we sell widgets and still be good for. Blake Oliver: [00:40:51] Factories and making products and stuff like that. But it's bad for subscription businesses and it's just kind of mind boggling to me that our Financial Accounting Standards Board doesn't get this. They don't they don't get it at all. And maybe it's because all those people like they're they've never they're out of touch. Right? They haven't been part of this amazing revolution that's happened over the last few decades. And they all come from Big four accounting firms where they specialize in these super niche little topics and stuff. And they they spend all their time creating lease accounting rules that nobody wants or needs, like nobody asks for lease accounting that I know of. I've never met a single person that said that the new lease accounting standard is helpful. Randy Crabtree: [00:41:38] Well, I must ask that. David Leary: [00:41:40] They build software for. Randy Crabtree: [00:41:41] It. Yeah, exactly. I was going to say I know a company that does that. I think they're probably pretty happy. Blake Oliver: [00:41:46] We got another comment. Dial says Across California, annual budgets for local planning departments have decreased in the last ten years. There's no new growth similar in accounting. We are not growing the next generation. It's kind of a similar problem, Right. And that's why there's a shortage. Maybe. So I've got one. Our friends at Client Hub have launched a new free Recategorized plan. David Leary: [00:42:12] I may have heard about that in a commercial on The Cloud Accounting Podcast. Blake Oliver: [00:42:15] Oh, really? Yeah, it was it in our commercial. That's awesome. So now Client Hub is a popular practice management solution. Firms using Client Hub can now connect a client's QuickBooks file to that client workspace and client hub. Then they simply designate a QuickBooks account for Uncategorized transactions. So this product is called Recategorized. It's free. So you can take those Uncategorized transactions and send them to your clients and then you can get them to categorize them so you don't have to export to Excel and send them a spreadsheet and get that back. That's great that that's free now. David Leary: [00:42:52] So then what's interesting about this, right, is this feature. I mean, there are some standalone apps that exist that only do on categorization. Digits just announced that they've added this feature they different there's different apps these client workflow portal type apps are are offering this feature and so a client hub is doing is they're going that freemium model which is like hey just sign up and use this feature and then hopefully and this is the whole point of freemium models, you'll like it. Eventually some percentage of those users will churn or turn, not churn, sorry, turn into paid users. Right. And so they're trying something different in the accounting software industry because I don't think a lot of apps have they have like use it for 14 days for free but not really use it for free. Blake Oliver: [00:43:33] A freemium. David Leary: [00:43:34] Model. Yeah. Blake Oliver: [00:43:35] So I got an email from Google calendar. I use Google calendar, we use the G suite or what do they call it Google Workspace now. And apparently calendar spam is a problem. I don't know if this has happened to you, Randy, but have you ever had like a salesperson just drop a meeting onto your calendar without you asking for it? Randy Crabtree: [00:43:55] Yeah, I think I did once or twice, but this hasn't been a huge issue at this point. Blake Oliver: [00:43:59] Yeah, it's it's one of those super sneaky but also kind of super brilliant strategies where if you're trying to book a meeting with an executive that won't get back to you, you just send them a calendar invite. And a lot of times calendars are just configured to automatically add any invites to the calendar. So then the person shows up to the meeting figuring that somebody's booked it. They were supposed to be there and then you can, you know, make the sale. Now, I don't know how ethical that is or how effective that is, but I do think it's a funny way to get a meeting. Google calendar, though, now has a way to defeat that kind of strategy if you have never interacted. With somebody, their invitations won't be automatically added to your calendar unless you indicate that you know them from now on. And that's a setting you can change in the event settings in Google calendar. I'm curious if there's something like that in Microsoft as well or not. David Leary: [00:44:47] My understanding it was happening in Outlook a lot because like Outlook will look if you get your airplane tickets, outlook will just automatically put those on your calendar. Your flights. Blake Oliver: [00:44:56] Yeah, yeah, yeah. David Leary: [00:44:57] Yeah. Without asking and I think I saw something similar to this where people were suggesting a meeting and that was the hack and then outlook would just put it on your calendar and just, just create an invite and put it on your calendar so they don't even have to send you a meeting request. The, the email would just talk about it. And then they were getting into people's calendars that way. So it's kind of similar and that's the LinkedIn in the bots and all that. Right? So our call about LinkedIn bots, but yeah, it's the same type of thing. But yeah, they need to address this. This episode of The Cloud Accounting Podcast is sponsored by Anker. For many of you, getting paid by your client is a multistep and multistep workflow that looks something like this. Send a client a proposal or engagement letter via a quote unquote signature tool. Wait for the client to accept it. Add the client to the accounting system, generate an invoice, send that to the client, wait for the client to pay you, or maybe your advance and you set up separate PDF to collect their ACH or credit card info to set up automatic payments. But again, you wait for them to provide those details. You get the point. It's a messy manual process and I didn't even mention the spreadsheet you'll need to create to track all these steps. David Leary: [00:46:00] Introducing Anker. Anker automates your entire billing process for you end to end with Anker, you create one proposal that defines your scope of work, includes terms of service, allows your client to review and accept disagreement, even collects the client's payment info instantly to establish automated monthly payments for the client. They experience all of this in just one screen. It's really that simple and clean. With Anker's dashboard, you always have visibility in the entire process from penning an approved agreements. It will even surface items that may need additional attention, like when a client needs to update their credit card expiration date and if the scope of work of the client ever changes it monthly services or a one time additional charge, you can easily and clearly modify the agreement keeping you in the client on the same page. And the best part, there is no subscription fee at all. Anker only costs $5 per payment received. No matter how much you charge a client, it is still only $5 per payment. For more about using Anker at your firm, head over to Cloudaccountingpodcast.com promo slash Anker That is Cloudaccountingpodcast.com promo for A and c. H. O. R. Blake Oliver: [00:47:06] So continuing on with technology, I saw a story on CFO about CFOs vowing to boost their tech influence in 2023. Some stats in here that may be of interest. 84% of CFOs expect to be more involved in developing technology strategy than they were in 2022, 75% of them. So three quarters say they plan to increase capital spending on technology for their finance team this year, while only 6% say that they will reduce such spending. So great news for the developers in the audience. Their CFOs are going to be involved and they are going to increase spending on tech. David Leary: [00:47:48] I put a link in. There's a company in New Zealand. They're basically doing self-employed. It's a self-employed bookkeeping platform. So they just raise $35 Million of their series B. Blake Oliver: [00:48:00] But. Henry But without any vowels. H n r y. David Leary: [00:48:04] Which is very like decade ago. Web 2.0. So apparently you still can't get domains, so you have to spell things like that. But if you scroll down, it's like a simple app like, Oh, I'm going to use this to track my income, my expenses. But if you scroll down a little bit to the number three bullet, we become your accountant. Blake Oliver: [00:48:22] We become your accountant. Our team of real human accountants will file your income tax and GST returns whenever they do review your expenses, whenever you raise them so you get tax relief as you go and give personalized answers to your gnarliest tax questions. David Leary: [00:48:37] And so let's tie this back to the this is this is in Zero's backyard. This is in New Zealand. Remember the whole like we're zero and we will never do a QuickBooks lifestyle model. Mm hmm. Guess what? They're coming at you, zero. You're going to have to. You're going to have to probably start doing a model like this. That's the reality there. They're in your backyard. New Zealand companies are basically doing accounting software with bookkeeping. Blake Oliver: [00:49:03] Well, here's another startup that caught my attention. It's called Chat CPA. The domain is chat CPA, I-O, and they are jumping on this whole chat GPT thing. It says get the accounting and tax help straight to your favorite messenger app. 24 seven In any language, chat with a CPA trained AI or you can talk to a CPA. So I'm curious just how much this is a portal to chat GPT that they've built on their own website and they're just going to get people to sign up and ask questions and then book time with them. It's kind of brilliant, if that's all it is. Like it's just a lead funnel, but I think it could be a real product someday. Is somebody take open AI's technology or whatever Google is building and plug into it and then tailor it to accounting questions or tax questions or Randy maybe the unique CPA or triumvirate could have the tax credit chat bot where if I have a question about do I qualify for this credit, I can just go ask the bot and then, oh, if I have more follow up questions, I get a prompt to schedule a call with a treatment specialist or something like that. Would you do you see yourself ever doing this? Randy Crabtree: [00:50:16] The idea is keep coming. You know what? So, so our business in general is not real tech heavy just because it's right now so involved with asking questions to the people just based on credits and incentives. But I see it going there. People are trying to get more technology involved in R&D tax credits. Another thing I see something like this being able to at least do what you said. Let's get through the first round of qualification and now let's dig deeper. If we don't look at this, I think we'd be stupid to to not try to involve something like that so we'd fall behind. The good thing for me is I'm 60. I'm not sure how many more years I'll be doing this. I probably not going to affect me quite as much. David Leary: [00:50:58] For me what I liked about this. Blake, it's not so much the whole chat thing of this. It's this very clear. This is an accounting firms website. Obviously, this very clear differentiation of, Hey, you can do this level of service for free. Or you can talk to a CPA and pay, right. And everybody needs to do that at their firm. Blake Oliver: [00:51:20] Freemium. David Leary: [00:51:22] There is a different conversation to have with a CPA, with an accountant, versus what you can do for free, and you're just providing the free resources on your website. Now this is even free because it's like a free trial for one month. You still got to pay. It's a lot of hoop jumping, but the bit on the presentation level that's every firm should do this. Like, here's what you can get from my firm for free. Here's what you can pay for. Blake Oliver: [00:51:42] And I've seen some accounting influencer types who are big on Instagram doing this, where they create a private community of business owners in a particular niche, and you can pay $50 a month, something minimal to be a part of this forum, essentially. And then you, as the expert, go in and answer questions on the forum, but people don't get access to you individually. It's all one to many type of interactions. And then it becomes this way for you to create content, to interact with an audience, and then they're going to some of them are going to hire you to do the work. So creating these private communities where you support people who are doing their own accounting is a great way to build a lead funnel for your accounting business. You know, like that's another one for you, Randi. With primaries, you know, create a forum where accountants can go in and ask questions about tax deductions and credits and R&D and all that stuff. Randy Crabtree: [00:52:37] Well, that's almost kind of sorta sorta in a vague way what the unique CPA because that's a brand under the trimeric and that's more about just education and that. And so I think that has started that way. We just need to build technology into it as well. And real quick, sorry what you've been saying there, those firms I was talking about at the beginning, these millennial runs, Startup ten years in business, they are doing a lot more of this digital marketing inbound leads that it's just amazing that I don't see these, I call them legacy firms doing. And I think that's the way in the future. And building technology in that is going to be huge. Blake Oliver: [00:53:16] I got one more tech story, David. I saw a great story, great blog post on the Zapier blog, Such a great blog. Everyone should subscribe to it. It's called The Best AI Productivity Tools in 2023. And it's a it's a list of some of the coolest AI tools by category. So content creation you've got copycat I Jasper Surfer for Image Generation. They list out a bunch of the image generators like stable diffusion and dolly and neural love. There's some I've seen here and some that I don't know that I'm going to check out. They've got note taking an app called Mem that connects all your stuff together, like your email and your calendar and helps you take notes better. They've got video creation apps, transcription apps, slide decks and presentations. So, Randy, the next time you need to create a slide deck, you could actually have I help you do it with beautiful AI. And the way that this works is you just type in the headlines and the copy and it will generate the formatting and the images for you on the fly using AI. So we're going to have to do it. Randy Crabtree: [00:54:24] Are we going to generate my voice now too? I'm going to become obsolete. No more education for Randy. Slides are be written. Randy's voice is going to be AI. Jan Well. David Leary: [00:54:33] If you were a podcaster, it's very scary. Blake Oliver: [00:54:35] Well, so that's true. One of these image generating apps is called synesthesia. Synesthesia. I cannot say that word synthetic synesthesia. Cynthia It's not the medical condition, it's synthesis. And what this does is it lets you choose an avatar and then write copy for it. And the avatar will speak using an AI generated voice, and the mouth will move to look like it's speaking. And it's good enough where you can pop the avatar into like a training video and you can have it speak on your behalf. And the beauty of it is when you need to change the video you just put in a new script, you don't have to rerecord somebody standing in front of a camera like, that's so much money saved, so much money and time saved by doing that. Now the question is like, you know, is it going to have the same impact as a typical training video? But considering how bad most training videos are, I bet it's fine if you're talking corporate training videos. There's another one I want to try out. Research. G e n e i. I guess. Jeanie, It's a tool that goes out on the internet and finds research materials, finds documents and helps you collect those into a place so that you can write. Yeah. And Zap you, of course has its own open AI integration. So now and this is something I got to play around with. You can connect apps to Zapier, you can feed it inputs, and then you can output AI generated text back into the app that you were using, even if it doesn't have an open AI integration. And that's one that just could be killer for accounting firms to generate messages to clients, to staff, you know, automatically based on data so that somebody doesn't have to write it. So yeah, check out this blog post. The best AI productivity tool is in 2023 and you'll find the link in the show notes of the podcast episode. Randy Crabtree: [00:56:26] I definitely going to go look at that. I am fortunately going to have to run here in a second. I've got to go do a live real person presentation on the tech season challenge is basically IRC issues you're going to be seeing out there filing taxes this year and then the R&D expense capitalization. That is going to be a really a pain and a lot of people's behinds at this tax season. So I got to go talk about that. I appreciate you guys having me on here. One thing I want to say is I don't know if you saw this headline yesterday because we could have talked about this with the the lack of talent. But I think it was KPMG is letting a lot of people go right now. Blake Oliver: [00:57:10] Yes, same. Randy Crabtree: [00:57:11] Thing with NY I'm hearing and I read them as well and probably other firms. And so there's going to be talent out there. David Leary: [00:57:18] Just what it looks like. It's from the advisory advisory. Probably not. They're probably not accountants. Randy Crabtree: [00:57:24] Okay. All right. Well, I guess that doesn't help. Blake Oliver: [00:57:28] So go ahead and follow Randy's podcast, Subscribe to the unique CPA podcast. Find it wherever you listen to great podcasts. Randy Crabtree: [00:57:37] All right. Well, sounds great. Thanks, David. Randy in about 20 feet and beautiful. And we'll see everybody later. David Leary: [00:57:45] Thanks, Randy. Blake Oliver: [00:57:47] And we got a comment from friend of the show, founder of Acuity Kanji Komodo. Aren't accounting firms firing clients these days, especially 1040 clients instead of firing them, maybe downgrade them to a DIY model that's supported by an AI chat tool for a few bucks a month? David Leary: [00:58:05] Oh, man. Like TurboTax? Blake Oliver: [00:58:07] Well, you know what. David Leary: [00:58:08] You could do? I mean, it's not. Yeah. Blake Oliver: [00:58:09] Well, no, no, it's a totally. Here's what you could do is you could say, look, we think that TurboTax is actually going to be a better fit for you because your situation is fine for it. But we know that you prefer talking to our experts as opposed to TurboTax experts. So for this fee, you'll get access to the acuity forum or to an acuity expert. You can decide if it's one on one or if it's going to be one too many. And you can go and ask your questions as you complete your return. So you're basically acting as sort of like an upgraded version of TurboTax Live. I think that could be a really interesting add on. You become an add on to it where you allow TurboTax live to do all the grunt work of filling out the forms and you just be the tax planner. David Leary: [00:58:50] But is that like a real viable business model, or is that just going to be somebody who's an exception like me that can do most of my return? But there's one section I need to sanity check with somebody. Right. Blake Oliver: [00:58:59] But that is most people most people can fill out TurboTax like that's. David Leary: [00:59:04] Millions and millions, tens of millions of people. That's true. That's true. Blake Oliver: [00:59:07] And so, yeah, like, well. David Leary: [00:59:09] That's not a good testament for y for accounting firms then. Blake Oliver: [00:59:12] Well, but that way you do the planning, right? Which is what TurboTax live can't do. They can help you fill out the forms. But if you try to ask them like, well, how do I actually make this number better? You know, how do I owe less tax and stuff? They can't really give you anything on that. That's not what they're designed for. They're designed to just help you get the return correct and file it. And sometimes they even struggle with that. Right. So this could be a good bridge. Scott says. Great idea, Kenji. Good vibes. Hey, thanks, Kenji and Scott for tuning in. Awesome to have you. And check out both of their shows. Kenji hosts Drink While You Think and Scott hosts Accounting. Hi. So we've got our fellow podcasters joining us. David Leary: [00:59:55] Today. Blake Oliver: [00:59:55] Joining us. It's so exciting. Thank you, guys, for for coming on the show or for coming on the livestream. David Leary: [01:00:02] We don't have time to get into it today, but maybe next week as hinge research. So, you know, hinge marketing, hinge research, they put out a a high growth study for 2023. And it's really about high growth firms. And there's one little piece that ties because we're talking about talent in the sorts of accountants and all that. I just want to talk about this one little piece. But essentially they asked the question over the last 12 months, has a firm consulted with an outside agency, firm or freelancer? Like have you outsourced any things like website, graphic design, SEO, whatever it might be? 20 So of the no growth firms, 22% have not outsourced anything in the last 12 months. 24%, 22%. Blake Oliver: [01:00:42] So 20%. David Leary: [01:00:43] One fifth of firms that aren't growing did they didn't outsource anything in the last 12 months. Blake Oliver: [01:00:50] Wow. I mean, but that's actually I don't know if that seems good because I bet you that number was a lot higher before. David Leary: [01:00:57] Oh, yeah. Actually, that's missing from the study. Blake Oliver: [01:00:59] That's what I see here. Yeah. Historical. David Leary: [01:01:01] Yeah. So we'll dig into this more, but it's just that that little stat caught my eye the most. Yeah. Is like they're not the one that was actually other interesting is website improvements are way higher than I expected. Like half half the firms in the survey basically outsource some website improvements. So because we always bitch like you go to these accounting firm websites and it's very clear they have been touched in decades and yeah, they're getting upgraded. Blake Oliver: [01:01:27] I want to share something I posted on Linked in a while ago. Yeah, this goes back to like how do we improve the profession? How do we make work life basically just the work environment in large firms better. And I was curious what the what the public thought on LinkedIn. And I posted a poll, I asked call it an association, call it a union, whatever you call it. This organization would advocate on behalf of professional accountants who are employees. Would you support the creation of an association to advocate for better working conditions for accountants? Yes. Got 74% and no. Got 26%. So just under three quarters of the 285 people who voted on LinkedIn said that they would support a an association that would advocate for better working conditions for accountants. So I'm curious, you know, like why why don't we have that right? Why don't our current associations advocate for this? Like, this seems to me like the most direct way to solve the accounting talent crisis is to make sure that students coming out of school have a good experience in their first few years in accounting. And like you said, David, most people who leave or a lot of people who leave are just leaving the profession entirely. David Leary: [01:02:39] Yeah. Blake Oliver: [01:02:39] Yeah. Not sticking around. So I want to get that one off of my plate because that was back in, oh, you know, January. I think I did that. David Leary: [01:02:48] And I think something like that, an organization like that ties back to those little concept of mentorship and apprenticeship. And, you know, this is a accountings of craft and art. It's not this thing you just study in theory and you, you know, you have to practice doing. Going back to you said the musicians that didn't actually perform on stage like like it's the same thing. I grew up in construction and you've talked about this with Frank Lloyd Wright, the architects who've never actually built something. Blake Oliver: [01:03:12] You know, they don't yeah, they don't build structures that people want to live in, right? There's a reason we call it the practice of accounting, because you have to actually do it to be good at it. You can't just learn it in school. And that's what that's what I find so funny about the fifth year. I mean, if the fifth year is so valuable, then why don't we make all the CPA's who only did four years go back and get a fifth year? David Leary: [01:03:36] Oh, please send out hate mail to, you. Blake Oliver: [01:03:40] Know, seriously, like if it is that valuable, if it makes that much of a difference, why don't we do that. David Leary: [01:03:45] From a proportion standpoint? The vast majority of practicing CPAs out there right now do not have that fifth year, right? No, vast majority don't. Most don't. And people are getting their tax work. Their service is done correctly, right? Blake Oliver: [01:03:56] Yeah. I mean, until I see any evidence to the contrary, I still hold that the fifth year adds no value. It does not produce better CPAs. Now they may know more than somebody who just comes out with four, but I don't think in actual practice there's any evidence that shows that they're better. Because think about it, most CPAs don't have the fifth year and the work experience is far more valuable. So once you've had a few years of work experience, you're way more valuable than somebody with only a fifth year, right? Like if you took somebody who only has a fifth year and you had somebody with a fourth year, but a full year of work experience on that person, right ahead of that person, who would you hire? David Leary: [01:04:35] It's me who's done that, who's done accounting. Blake Oliver: [01:04:38] Work, the person who actually has experience. Right? So that just proves it right there. David Leary: [01:04:42] So that's a question in the chat and we'll end on this. How long ago was the fifth year added? Blake Oliver: [01:04:48] So I'm pretty sure that Florida was the very first state to do it. And it was the year I was born, 1983. Now it took many more years for the other states to follow and for the Uniform Accountancy Act to solidify this as being the law of the land in all states. But Hawaii. Hawaii still doesn't do this, or I guess they haven't passed the Uniform Accountancy Act. So it was that long ago in Florida, and I've heard that the reason this is what I've been told, the reason this was done in Florida was not to increase the quality of CPAs, but it was because Florida CPAs were worried about all of the retiring CPAs coming down to Florida and taking their work. So it was a way to prevent people from relocating to Florida and practicing a CPA. David Leary: [01:05:36] So many so many decisions are based off of fear. It really is. And protectionism. Blake Oliver: [01:05:42] Yeah, protectionism, Right. And that's essentially what fifth year is to me. If it doesn't really add value, if it doesn't make us better CPAs, then all it does is put up barriers and what is the purpose of a barrier but to reduce the supply. And yes, I understand that if you reduce the supply, you can increase the price. That's economics 101. But at a certain point, if the supply becomes too low, then your customers go elsewhere. And that is the big risk we run as a profession is that our customers, which is the business world. Who need audits and need tax returns will say, well, we don't have enough CPAs. I guess we're going to turn to this other credential or we're going to start doing other. Going to go for other people are going to drop the requirement for CPAs. Right. Which is what we're seeing happen. So it's a it's a two way street. Right? We have to provide enough CPAs so that you can require a CPA license for a position. If we don't, they'll drop it and then the value of the CPA plummets. So it's a gradual problem right now, but it could sort of go off a cliff at a certain point. That's the. David Leary: [01:06:43] Risk. Smells like it's close. Yeah. Smells like it's closer than further. Blake Oliver: [01:06:48] Exactly. What else, David? I guess actually, we're at we're past our time. So that's all we got for this week. We have listener mail on a bunch of episodes. Let me just run through this real quick. Is that right, David? You got anything else? David Leary: [01:07:02] No, I just loosely got. I searched about getting AP credits for accounting. Can you? It's not clear. Blake Oliver: [01:07:11] All right. We'll have to follow up on that one in a future episode. We had a comment from Joseph on our live stream last week. He watched it after the fact. He said, I'm 14 minutes in and the more you play the clips, the more frustrated I get. The AICPA is response is either clueless or purposely ignoring reality. As a CPA in my thirties, this is not reassuring at all. Over our future as a profession, another message from a listener who I'll keep anonymous. I was one of those people who wanted a CPA, but I didn't have the time to study. I was a tax accountant and the busy season slash fiscal year filers took so much of my time. What broke me was tcja that increased my workload. 5xi felt like seven months out of the year were ten plus hours billable. I worked in public accounting for four years and just burned out. I switched my career into it and now I am a software engineer. The hours are much better in the pay I would say is on par or even better. Ooh, that's not good for the profession. We lost him to software. Here is a message from Katie. I was just listening to the episode. David got fired by his tax preparer. Great episode, by the way. Go listen to that one and got to the section on CPA hours requirements. Here is something wild in my state. Al Alabama. Right? Dentists are required to do 20 hours of continuing education a year. Doctors are required to do 25 hours of continuing education credits a year. Lawyers are required to do 12 hours a year in al accountants are required to do 40 per year. I think it's absolutely wild and agree there's going to be an accounting industry meltdown unless there's some changes. So that is wild. Dentists only have to do 20, doctors only have to do 25, and lawyers only have to do 12, but accountants have to do 40 hours of continuing education. David Leary: [01:09:01] We have vested interests in that. We have a we have a company that has continuing education credits. Blake Oliver: [01:09:08] So that creates continuing education credits. Yeah, I guess so. So we should probably. David Leary: [01:09:12] We should be lobbying for more. We want that. There should be 60 hours of continuing education credits required. We should be lobbying for more. Blake Oliver: [01:09:19] That's true. If we were completely self interested and we didn't have any ethics, then we would do that. But, you know. David Leary: [01:09:26] I guess it doesn't matter if all the accountants go away, it doesn't matter. I'd rather see the requirement lower and have twice as many accountants, right? Blake Oliver: [01:09:33] Yeah, exactly. I mean, it should be that way. It's like we should have less fewer hours required, but higher quality. I think part of the problem is that we're required to get so much continuing education that people don't. They get overwhelmed by it. They don't do it. I mean, that's why we made the earmark app to make it easier to do it. 40 hours is a lot of continuing education when you're so busy and so. Yeah. Wouldn't it be better to 20 and have it be high quality and then, you know, Naseby could go out there and actually assure that the quality is high. But we all know that there's a lot of really, really terrible CPE that people do and they don't learn anything. But the CPA is out there because. They checked all the boxes. There's not really a quality filter on CPE. So, like, it's it's kind of amazing, but maybe we don't want them putting a quality filter on because then they might say The Cloud Accounting Podcast is low quality and can't qualify for CPE. So it's all subjective, right? But that's the thing too is we should be trusting CPAs more to take the courses that are important to what they need to do. It's sort of like. David Leary: [01:10:40] Individual determinism or. Blake Oliver: [01:10:43] Responsibility. Yeah, it's like, I mean, if we trust somebody enough to give them a CPA license because they pass this exam, you think we would trust them enough to like, you know, do the education requirements without making them like type in every single class they took into like some online portal. Somebody was saying that that they have like in West Virginia, you have to report every single class and you have to type it manually into their portal. You can't upload a file or pay for it. Florida used to just trust you. You just self-certified that you took the 40 hours and then they would audit random people and you'd have to produce certificates. Now they're actually making you upload them like upload the data into their portal. I mean, talk about a lack of trust, right? One more comment here or a few more comments here from our listeners before we go. Jtc said In regard to the dentist thing, is it because teeth don't change but tax laws so to some changes so often? Well, if that's the case, then you know, the courses you take should have to be about changes to the tax law. But it doesn't have to be. It could just be about anything. I could be talking about tax law that's been around for 20 years and still qualify as a CPA according to the standards. And Amaechi says hitting the CP requirement has been way easier since I discovered earmark. Yes. Thank you. Awesome. Well, everyone, thanks for coming today. Thanks for showing up to the livestream. Thanks for listening to the podcast episode. I don't need to mention you can get CP because I've talked about that plenty today. Anything else we. David Leary: [01:12:09] Should? We're saying they love the last episodes. Like, please go leave us reviews on Apple iTunes. Podchaser. Tweet about it. Share it on LinkedIn. Get your friends to listen. Because I mean, that's how we grow the show ultimately. Yes. And so if you're loving us, share it. Share the love. Let other people know that you love it. Blake Oliver: [01:12:26] Thanks to Randy for coming on. You can follow me on Twitter. I'm at Blake T Oliver. What about you, David? David Leary: [01:12:32] I'm just on all the socials @DavidLeary. Blake Oliver: [01:12:34] We'll see you here next week. And I believe we will be streaming at our regular time, Right. 10:00 pm MST on Friday? David Leary: [01:12:42] Yes, but we will be at this educators conference, so we might have to do some adjusting or we'll be doing it from a hotel lobby. We're going to figure that out next week. Blake Oliver: [01:12:50] So actually the time is uncertain, but we will stream on Friday and we'll give you all the details from the CPA Educators Conference. David Leary: [01:12:57] They're actually letting us go. They're letting us go to this event. Blake Oliver: [01:13:00] I mean, we're professional educators, David. We're not yet. What is it? The CPA asks us to be professional media. David Leary: [01:13:08] Yes. We're not paid. We're not we're not working media. Blake Oliver: [01:13:11] We're not working media according to the. David Leary: [01:13:12] Working press or whatever. Yeah. Blake Oliver: [01:13:14] We'll see. Maybe this year. Do you think this year they'll give us media passes to engage? What do you think the odds are on that, David? David Leary: [01:13:21] Maybe. I don't know. I mean, we'll see. We'll see. Blake Oliver: [01:13:24] Gpt says I'm an influencer, so like, you know, that's got to stand for something. All right, we got to go. Great to see you, David. Great to see all of our listeners. Have a great week. David Leary: [01:13:35] Time for the Classifieds Client Hub automatically sends your clients a task for each expense or deposit marked as Uncategorized in QuickBooks. Your team will save hours of time. And the best part that it's free Introducing the Free Client Hub Re Categories Plan Client Hub is bringing a freemium business model to accounting apps. 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