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Why Women Leave Accounting Firms · The Accounting Podcast

• Have you ever said no to a client because you didn't have a bookkeeper available to handle the work? With BooksTime, you can take on unlimited bookkeeping engagements. You'll never again have to turn away a client because you don't have a bookkeeper available. Stay tuned to hear an exclusive offer from our sponsor, BooksTime, later in the episode. Blake Oliver: [00:00:20] If you had Robinhood, your accounts- you couldn't access them. You couldn't make trades. What a disaster! Then they were down again on Tuesday- David Leary: [00:00:26] They were down again. Blake Oliver: [00:00:26] -for part of the morning. Yeah. David Leary: [00:00:29] They're saying that it's because of the volume; they weren't able to handle the transaction volume. I listened to a podcast, and they mentioned that they had a bug because of the leap year. Blake Oliver: [00:00:40] Are you serious? ____________________ This episode of The Cloud Accounting Podcast is sponsored by ClockShark. Way back in October of 2013, I became ClockShark's very first Twitter follower. Today, ClockShark has grown into a highly rated and very-much-loved time-tracking app that is now used by over 5,000 small businesses. With features like crew tracking, scheduling, overtime notifications, routes, geofencing locations, job costing, budgeting, and reporting, the ClockShark team has built a robust mobile time-tracking app to handle the unique that face your clients who have mobile workforces. By using ClockShark, you and your clients will be confident that their time-tracking data is correct and perfectly synced with their QuickBooks, or ADP, allowing payroll to be on time, and accurate. While other time-tracking apps are charging as much as $8 or more per month, per employee, ClockShark offers ClockShark Standard Plan for just $6 a month, per employee. Head over to cloudaccountingpodcast.promo/clockshark. That is Cloud Accounting Podcast dot promo forward slash C-L-O-C-K-S-H-A-R-K. ____________________ This episode of The Cloud Accounting Podcast is sponsored by BQE Core. If you are focused on niche clients that are architects, engineers, consultants, or lawyers, BQE is the app for them, and BQE SUCCEED is the conference for you to best connect with companies in those niches. BQE Succeed is happening from May 31 to June 3, 2020 at the Encore at Wynn Las Vegas. Listeners can get $200 off registration by using code "CAP2020." The Cloud Accounting Podcast will be there. Will you? Head over the cloudaccountingpodcast.promo/bqesucceed. That is Cloud Accounting Podcast dot promo forward slash B-Q-E-S-U-C-C-E-E-D. ____________________ Blake Oliver: [00:02:20] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver. David Leary: [00:02:23] And I'm David Leary. Blake Oliver: [00:02:24] And neither of us has coronavirus yet, but we don't know because we can't test. David Leary: [00:02:30] I'm not gonna leave my closet, so I'm not gonna get it. Blake Oliver: [00:02:32] You're quarantined in Tucson. I'm here in L.A., and I just received a text message from my father-in-law that there's a kid who went to Italy for a ski trip; now he has coronavirus, and he's under quarantine at the Tarzana Hospital, and his family are under self-quarantine in their home. So, this is like right next door to me, now. David Leary: [00:02:49] I don't know. Blake Oliver: [00:02:49] You were telling me, before we started recording, that you're out of toilet paper? David Leary: [00:02:56] I saw on the news all the Costcos in Tucson, I guess, apparently are out of toilet paper. People are hoarding that. Blake Oliver: [00:03:01] I haven't even tried to go buy toilet paper, so I hope ... We didn't do any doomsday prepping, so I don't know what I'm gonna do. Anyway, what's the tie-in to accounting? Well, The Wall Street Journal- no, the Journal of Accountancy had an article about the disclosures about coronavirus in the annual reports and interim reports from some big companies, because we would expect that there would be some disclosures. [00:03:27] Nothing super-surprising. Yum! Brands filed their annual report on February 20. They're talking about how their restaurants in mainland China have been closed or shortened hours. Their suppliers there can't provide food or supplies. Significant sales declines in Hong Kong and Taiwan. They're unable to predict the impact on results because nobody really knows how severe this is or how long it's gonna last. Yum! Brands, by the way, is a big chain of restaurants that includes, I think, Pizza Hut. Do they own KFC, too? I don't remember- David Leary: [00:04:00] I think that's the same. Yeah, that might be the same. Blake Oliver: [00:04:00] So, really popular brands in Asia. Apple, of course, disclosed in their quarterly guidance, on the 17th of February, the iPhone supply worldwide is gonna be temporarily constrained. Factories have reopened, but they're ramping up more slowly than they anticipated. Demand in China is down due to their stores in China still being closed. David Leary: [00:04:27] That all makes sense, right? If companies truly have dependencies on China and now it's rippling out to other factories- like, airlines, now, are worried about some losses they're gonna have, like people buying tickets, and flights are down. The cruise industry ... So, I think there's some- I also feel like I'm just seeing story, after story, after story of companies just claiming this. They probably had a bad quarter, and now they get an out. Blake Oliver: [00:04:50] Right, yeah [crosstalk] David Leary: [00:04:50] You get to have a bad quarter, this quarter, and you get to have a bad quarter, next quarter. You get to play this card now. Everybody's gonna play the card. So, it's almost just like stamp- Every financial statement's just gonna have that on the top. Blake Oliver: [00:05:01] Well, it's like whenever there's a big story in the news, it can provide cover for you. If you have bad news that gets pushed to the second page, or the third page, or maybe it doesn't even make it into the newspaper, or onto cable news, that's a good thing for you. That's also the case, potentially, for Wells Fargo. We talked about the Wells Fargo fake account scandal. I think you'd have to have been living under a rock not to know about this by now. It happened over years, and they got basically found out a few years ago. They were fined $3 billion recently. Spotted that in CFO Magazine. [00:05:38] There was a deal announced last month with the Department of Justice - Criminal Investigation Unit. This was $3 billion they got fined for falsifying bank records, and ID theft, and all sorts of stuff there. The reason I'm bringing this up, in the context of coronavirus, is that the CEO of Wells Fargo is getting called before a House committee in Congress next week. So, maybe he'll give his testimony, and then we'll all be so distracted by the coronavirus that none of us will take in the news that not only did they do this stuff, and they got fined for it, but there's a new House report about this Wells Fargo scandal that says that Wells Fargo continues to abuse customers. David Leary: [00:06:24] Oh, wow. Blake Oliver: [00:06:24] Yeah, it's really bad. They released this report. He's going in front of Congress next week. In any other news cycle, this might be a top story, but I haven't seen any of this on cable news. David Leary: [00:06:35] It's not gonna get covered. You're right, you're right - between the election coverage and [crosstalk] Blake Oliver: [00:06:39] Well, so we're gonna talk about it because I feel like accountants advising their clients on what banks to use should know about this stuff, right? They are accusing the board of Wells Fargo of failing to hire managers with sufficient compliance experience; allowing management to repeatedly submit inadequate plans in response to the 2018 regulatory consent orders. Apparently, former CEO Timothy Sloan gave false statements to Congress in March of 2019. Lastly, Wells Fargo prioritized financials and other considerations rather than working on fixing the issues identified by regulators. Finally, the report says that the bank continues to engage in customer abuses and that the potential for widespread consumer harm still remains, even after $3 billion of fines recently. Then I think there was $7 billion before that. So- David Leary: [00:07:30] Amazing. Blake Oliver: [00:07:31] Yeah, amazing, right? David Leary: [00:07:32] So, which direction should I go? I have stories about banks. We could keep going on the bank trail, or we could try to knock out a little bit more about the virus - a little on that. Blake Oliver: [00:07:42] When you say the bank trail, are you talking about the Shark Tank- the Shark who got her money back? David Leary: [00:07:48] We could do that one. That's fine. I was actually gonna go down some other bank trails- Blake Oliver: [00:07:52] Oh ... David Leary: [00:07:52] -but yeah, we can do an update from last week. So, last week, we reported in that the Shark Tank judge- I'm gonna let Blake say her last name ... Blake Oliver: [00:08:01] So it's ... I'm gonna get it right this time - Barbara Corcoran. David Leary: [00:08:04] So, she got her $400,000 back, Blake. Blake Oliver: [00:08:07] Apparently, she was fast enough ... The money was going through a German bank. That was where the bookkeeper wired the money, and the German bank froze the transfer before it was deposited into a bank in China, which is where the scammer is. David Leary: [00:08:21] So, do you think your average client would be able to do this and get their money back? Blake Oliver: [00:08:27] As Jacob Oberlander said on Twitter, it's probably only because she's famous. Most banks, I doubt, would bend over backwards to help. But, hey, we don't know for sure. David Leary: [00:08:39] Maybe the bank saw the irregularity, right? Blake Oliver: [00:08:44] It's possible. David Leary: [00:08:45] As far as like, "Oh, wow, that's interesting. Why is this money moving through us just to go into a separate account in China really fast?" or something like that. Blake Oliver: [00:08:50] We don't know. David Leary: [00:08:52] But, lucky her. Blake Oliver: [00:08:54] Yeah. David Leary: [00:08:54] She got her money back. Blake Oliver: [00:08:55] What was the other banking news that you had? David Leary: [00:08:57] How about this? LendingClub- have you ever seen a commercial for LendingClub or heard of LendingClub? Blake Oliver: [00:09:02] I've heard of them. I don't really- I've never used them. I don't really know much about them. David Leary: [00:09:06] So, they they're kind of in the loan space for personal loans; similar to ... I think there's a company out there, LendingTree. You go; you apply for your loan there; then they go match you up with a bank. Blake Oliver: [00:09:16] Okay. David Leary: [00:09:16] They finally IPOed two years ago; they had like an $8 gain. They are the first fintech company to buy a bank! Blake Oliver: [00:09:25] Really?! David Leary: [00:09:26] We've talked about this over, and over again about the fintech companies are trying to become banks. They wanna become banks. They're getting bank charters. They just said, "Forget it," and they bought a bank. You know how much it was purchased for? Blake Oliver: [00:09:37] I'm looking at it right now because I found the story in our show notes. $185 million in cash and stock. Wait, that's not very much. David Leary: [00:09:45] So, it was either struggling or ... It was Radius Bancorp is who they bought. It's a bank [inaudible] and they got it cheap. So, we were talking about it last week, what are the things Intuit could've spent money on- Blake Oliver: [00:09:54] Yeah. David Leary: [00:09:54] Intuit could've bought a bank! Blake Oliver: [00:09:54] They could've become the Bank of QuickBooks, right? How great would it be if you opened up a QuickBooks account and you got your bank account at the same time? It kinda makes a lot of sense, right? David Leary: [00:10:03] Bank feeds would never go down. Blake Oliver: [00:10:05] Bank feeds would never break. David Leary: [00:10:07] This is gonna be a trend. It's started to happen when fintech companies are now buying banks to bypass the charter. Blake Oliver: [00:10:13] Well, let's stay on the fintech beat- David Leary: [00:10:15] Yeah. Blake Oliver: [00:10:15] -and let's talk about Robinhood. David Leary: [00:10:18] Yes, I was just gonna click on that tab next. Blake Oliver: [00:10:21] Going back to the whole coronavirus thing, the markets have been swinging up and down. I don't really follow it that closely because it makes me seasick to think about my 401(k) going up and down like that. We're talking about gains of, what, three- to five-percent drops, of two, to three, to four, to five percent in the market in the same day? Lots- trillions of dollars. David Leary: [00:10:44] If you were super- a little lucky and actively trading, you could've made a 15-percent swing between, I think, Wednesday afternoon and Monday night- Blake Oliver: [00:10:54] Yeah, if you caught the bottom and the top at the right time [crosstalk] Well, some people, unfortunately, didn't even get the chance to do that because they used an app called Robinhood for their stock trading. Robinhood, we have talked about in the past, on the show. I don't remember exactly in what context, but- David Leary: [00:11:11] Well, they were- they tried to become a bank without a bank charter and got in trouble for that. Remember? Blake Oliver: [00:11:15] Right, right ... David Leary: [00:11:15] They were opening checking accounts for people, and they didn't have a bank charter. Blake Oliver: [00:11:20] That got shut down really fast. This is one of those hot fintech startups that disrupted the stock-trading apps, or companies because they offer free stock trading. Recently, all of the other providers of ... What do you even call this whole market of services? David Leary: [00:11:40] It used to be called discount, right? It's like the Target [crosstalk] and Walmart of stock trades, but now, it's just free, right? It's Ameritrade- Blake Oliver: [00:11:47] E-Trade- David Leary: [00:11:47] E-Trade, yeah- Blake Oliver: [00:11:50] Merrill-Lynch. David Leary: [00:11:51] They're all owned by the big players now, right? Blake Oliver: [00:11:53] Yeah, and they all went free because of Robinhood. So, Robinhood came in. They have raised $912 million dollars. They are valued at $7.6 billion. There are 10 million users using Robinhood. They have a premium product called Robinhood Gold, but most of these people just use it for free to trade stocks. The news is, on Monday, they were down from 6:30 a.m. Pacific to 11:00 p.m. Pacific, and that was the day that the markets roared back, and it was the biggest gain in the markets in history in a single day - $1.1 trillion in gains. If you had Robinhood, your accounts- you couldn't access them.; you couldn't make trades. What a disaster. Then, they were down again on Tuesday- David Leary: [00:12:35] They were down again. Blake Oliver: [00:12:35] -for part of the morning. David Leary: [00:12:36] They're saying that it's because of the volume- that they weren't able to handle the transaction volume. I was listening to a podcast, and they mentioned that they had a bug because of the leap year. Blake Oliver: [00:12:51] Are you serious? They didn't have a fail-safe. They didn't have a backup. That's actually why they're getting sued now. There's a class action lawsuit, that I just saw before we started recording, down in Florida. David Leary: [00:13:02] Yeah, they're going to get sued. This is gonna be very hard for them to recover. Blake Oliver: [00:13:06] Well, and you know what they're offering their customers in exchange for their trouble? David Leary: [00:13:11] Amazon gift cards? Blake Oliver: [00:13:12] No, it's better than that. The users of Robinhood Gold, which is the $5-a-month paid offering they have, they're giving them three months of service for free. So, that's $15. David Leary: [00:13:22] For new sign-ups only? Blake Oliver: [00:13:25] I don't know. David Leary: [00:13:26] It sounds like new sign-up project. It's not good. Blake Oliver: [00:13:28] Not good. David Leary: [00:13:28] Maybe it's a testament of why it takes so long to get a bank charter; that it takes a decade. Blake Oliver: [00:13:34] Yeah. David Leary: [00:13:34] Because you just can't ... It's okay if you're building a social media app, and it's just like, "Hey, build it fast, break stuff, who cares?" Blake Oliver: [00:13:42] Yeah. David Leary: [00:13:42] But you can't do it with people's money. You just can't. Blake Oliver: [00:13:47] No. Can't have this kind of outage. David Leary: [00:13:49] So, let's stay on banks. How about a survey of bank executives? Blake Oliver: [00:13:54] Let's hear it. How are they feeling? David Leary: [00:13:55] So this survey went out to bank executives. It is the Fourth Quarter Bank Executive Business Outlook Survey that came out. Blake Oliver: [00:14:03] All right. David Leary: [00:14:03] There's a couple of takeaways in it, but one of the questions in the fear is: are banks afraid of payment and money transfer apps? Blake Oliver: [00:14:11] Oh, this is what we've been talking about. David Leary: [00:14:13] Tech. Apple Pays, the PayPals, the Stripes, the Venmos - are they afraid of that? More than three-fourths, 76 percent, said they fear these new platforms. Blake Oliver: [00:14:22] Wow. David Leary: [00:14:24] So the banks are- they're scared because these tech companies are very aggressively becoming banks. Blake Oliver: [00:14:31] Yeah. I'd say terrified. That's a huge number. More than three in 10 said their first read in the morning is a cable TV network's website. Oh, that's stupid. I'll skip that crosstalk David Leary: [00:14:41] Yeah. It's stupid because they should- I mean, they should be listening to The Cloud Accounting Podcast every morning, and then they would be able to compete better with these fintech players that are out there. Blake Oliver: [00:14:51] Let's go quickly to app news- David Leary: [00:14:53] Okay. Blake Oliver: [00:14:53] -because we have an app update. NetSuite has released their 2020 Release 1, and there's a ton of stuff in there because NetSuite- I think they do like four releases a year, and it's a huge ERP system, so they jam a bunch into these releases. A lot of it is niche or very specific to a certain module, but one caught my attention, David. It's gonna blow your mind. It's called Intelligent Cash Management. North American companies can take advantage of the Bank Feeds SuiteApp, which allows them to link their bank and credit card accounts and automatically imports transactions and account balances from financial institutions directly into NetSuite, providing real-time access to cash balances. So, in other words, bank feeds are coming to NetSuite, which they never had before, which blows people's minds when they come from the QuickBooks world into the world of ERP that ... "Wait, I had to download this stuff manually and import it?" We solved this 10 years ago in the world of cloud. David Leary: [00:16:00] Bank feeds. That's amazing. Congratulations. Welcome to our world. Blake Oliver: [00:16:06] Here's the thing, they're taking it a little further. This is something I would love to see Xero or QuickBooks do, if they don't. Maybe you can tell me if they do or not, David. So, for those companies outside the U.S., or for companies looking to create their own framework to import financial transactions, NetSuite has also introduced the Bank Connectivity API, which allows developers to build their own plugin to NetSuite to connect to any bank they choose and access all the same data flows available through the Bank Feeds SuiteApp. So, you can plug into a bank that has a connection, or you can build your own connection from a bank or maybe even your own app into the bank feeds in NetSuite. David Leary: [00:16:49] Which is interesting because I'm willing to bet bigger companies who are using NetSuite have probably already built some level of bank feed-fetching on their own. Remember when we interviewed the- Blake Oliver: [00:17:04] Yes! We interviewed a Sage Intacct user at Intacct Advantage, and her group had built, essentially, a bank feed. It automatically posts a journal entry summarizing the daily transactions into Intacct from their bank account because there wasn't a bank feed available. David Leary: [00:17:21] Yeah, so I imagine these- Blake Oliver: [00:17:22] That was DonorsChoose. David Leary: [00:17:25] DonorsChoose. So, I imagine there's companies just like that. They have a team; they've already built some bank-fetching bank feed internally, and they've been pulling it out, and they're just dumping a CSV, or an export, a batch file, and then shoving it into NetSuite. Now, they'll be able to plug into that via maybe an API or something. That's really, really cool. Blake Oliver: [00:17:40] Really cool, right? They also have intelligent rules engine, as well. So, there's bank rules available, so you can automate matching and coding. We're moving on. We're moving forward. David Leary: [00:17:51] So, I have some news about Sage. Blake Oliver: [00:17:54] Okay. David Leary: [00:17:54] Speaking of app news. Sage is pulling out of Brazil. So, they're offloading their Brazilian operations, and then they're also offloading Sage Pay here in the U.S., which is their payroll product. Blake Oliver: [00:18:06] Really? David Leary: [00:18:08] As they focus more on the cloud, they're starting to cut other initiatives that maybe don't match their strategic focus going forward. Blake Oliver: [00:18:18] Well, I know that Brazil is a very difficult market because there's some really unique stuff going on there. For accounting software and ERP, you have to be locally compliant with a bunch of stuff. David Leary: [00:18:29] There's an app called TOTVS - all capitals - [TOTE-VIS] maybe? Apparently, it just dominates the ERP market in Latin America; so it's very hard for others to scratch the surface and get in there. ____________________ This episode of The Cloud Accounting Podcast is sponsored by BooksTime. Save precious time by outsourcing your clients' bookkeeping work to BooksTime. With BooksTime, you get a dedicated team of tech-savvy, experienced, and responsive bookkeepers that have expertise in cloud apps, like QBO, Xero, Bill.com, Hubdoc, and more. The self-managed teams can scale to meet your needs, even when your needs change. They'll even follow your processes and use your systems, so you don't have to change a thing. You'll never again have to worry about recruiting, training, or managing bookkeepers again, allowing you to focus on your high-margin services, building client relationships, and growing your practice. BooksTime has a special offer only for listeners of The Cloud Accounting Podcast. If you sign up by April 30, 2020, you'll get $500 off your first invoice. To get started with a risk-free trial and see why leading modern accounting firms around the country rely, and love BooksTime. Head over to cloudaccountingpodcast.promo/bookstime. That is Cloud Accounting Podcast dot promo forward slash B-O-O-K-S-T-I-M-E. ____________________ Blake Oliver: [00:19:53] All right. What's next? David Leary: [00:19:53] So, there's a startup, Atrium- Blake Oliver: [00:19:55] Oh, yes. David Leary: [00:19:55] -that was building kind of a QuickBooks Live model but for law, right? Blake Oliver: [00:20:02] Right. David Leary: [00:20:02] They started years ago doing this. They took $75 million in startup money. They're completely shutting it down. They're giving some of the money back to investors. They laid off their staff. TechCrunch has an article, and they've interviewed the founders about this. I just thought there was a couple of quotes that really are eye-opening because, in lieu of the- two weeks ago, we talked about ScaleFactor possibly pivoting. We talked about how tough this is for somebody like Pilot, Pilot's offering these other services. You said, historically, when you started your original bookkeeping firm, you thought you'd be building this scalable thing. Blake Oliver: [00:20:34] Yep. David Leary: [00:20:34] Right. So, I'll read his quote. It's pretty blunt: "If you look at our original business model with the verticalized law firm, a lot of these companies that have this kind of full-stack model are not going to survive." Blake Oliver: [00:20:48] Was that Justin Kan? David Leary: [00:20:49] Yes. Blake Oliver: [00:20:49] So, he has an interesting background. He founded Justin.tv, which later became Twitch, and he sold that to Amazon for $970 million. David Leary: [00:21:05] Yep. Blake Oliver: [00:21:05] You wonder- I wonder, how do you go from video game-streaming, live streaming, to a law firm/software company? They originally started as software-plus-a-service, so it was more like an inDiner, or a Bench type situation, where you have - "We're gonna provide this service using our own proprietary software." Then, they later tried to pivot, when that wasn't working, to just doing the software and then farming out the legal work. So, they separated the - David Leary: [00:21:42] Which is- that's where ScaleFactor just announced they're gonna try to do next. Blake Oliver: [00:21:46] Right. So, it's almost ... ScaleFactor is having the same journey. David Leary: [00:21:50] Similar, right? He talks about how other companies similar to his, including theirs, did not figure out how to make a dent in operational efficiency. So, they took a service business, and they thought, "We're just gonna put engineers and software behind it and make this happen," and they weren't able to do it. Blake Oliver: [00:22:07] Yeah. David Leary: [00:22:08] This reminds me of kind of a story ... Because now we're seeing this, right? It makes you- we're starting to question like ScaleFactor possibly pivoted, Pilot's possibly feels like they've got a little bit of a pivot happening, right? We talked about it last week - maybe this is harder than we think, and- Blake Oliver: [00:22:20] It is! It's a lot harder than people think; especially people coming from outside the professions. David Leary: [00:22:27] I was thinking about this all week. A lot of these companies are small. You've got 100 people on it. So, you probably have- 50 of them are either your bookkeepers, or your lawyers, depending on if you're building this business model for law firms, or if you're building this model for accountants and bookkeepers. So, half your staff is accountants and bookkeepers. You've got, obviously, tons of marketing people because these apps, like ScaleFactor, et cetera, are just being marketed everywhere. How many engineers do you actually have? 10-15, really working on this problem of building this out? Blake Oliver: [00:22:53] Right. David Leary: [00:22:53] It reminds me of a story at Intuit. So, Intuit, early in the hosting days of hosting software for app developers, Intuit had a product called Intuit Partner Platform and Intuit was going to host people's apps. People were built on it. The very first product I built, ViewMyPaycheck, was actually on that platform. At that time, Intuit eventually just shut it down, and I ... I was asking why because, obviously, I was emotionally invested in it. I'm like, "I built on this platform!" At that time, that's right around when Amazon's launching Amazon AWS, and this was when Google was running their app engine- whatever it's called. I always forget the name. Then, Microsoft's launching Azure. All these cloud-hosting products are out there for hosting software, Software-as-a-service, right? The short answer was this- he's like, "We put five engineers on it, and Amazon put a thousand." Blake Oliver: [00:23:44] Right. David Leary: [00:23:44] So, now I'm thinking about, okay, so if these companies can't seem to build this QuickBooks Live model, but they're only putting 15-20 ... Let's say they put a hundred engineers on it. Intuit's probably putting a thousand on this. Blake Oliver: [00:23:54] Yeah. David Leary: [00:23:55] I'm not saying it means Intuit's gonna solve it. It's just the problem's so enormous, you just can't do it with 10 engineers in a startup. It's gonna have to be this massive effort to really build this out, long term. Blake Oliver: [00:24:06] Yeah, we'll see. Based on what I've seen on Facebook about people inheriting books that were started by QuickBooks Live or done by QuickBooks Live, so far, it's not a challenge. I mean, so far, they haven't figured it out. It's a mess. David Leary: [00:24:21] Yep. Blake Oliver: [00:24:21] But we'll see. Maybe they'll figure it out, and they'll get it to work. David Leary: [00:24:25] Yeah, so I wouldn't be surprised if we see other stories about some of these startups that are trying to create this model, going forward, either pivoting, or changing the business model, or running out of money. Blake Oliver: [00:24:36] Well, I don't have really good transition here, David. We could talk about Deloitte and virtual reality. You saw this article, too. David Leary: [00:24:44] I didn't think you would actually bring it to the show because that's how ridiculous I thought the article was, but ... Blake Oliver: [00:24:48] Well, I have a reason to bring it to the show. I think it could actually be really helpful. I don't think they're using this technology in maybe the best way. David Leary: [00:24:56] Okay. Blake Oliver: [00:24:56] Let me explain what I mean by laying the groundwork. What exactly are we talking about? So, this was a story in Accounting Today. The headline is "Deloitte Introduces VR Platformer for Relocating Staff." My first reaction is this is gonna be ridiculous, right? So, the story is that, as part of its Tax in 2020 Initiative, Deloitte has introduced Immersive Mobility, a virtual-reality-driven service that helps orient transitioning employees to new locations. The new offering is designed to reduce the financial and environmental costs of relocation. Immersive Mobility offers 360-degree city tours, virtual home tours, on-boarding, and mixed-reality training, combining virtual reality, video, and more. The goal is for staff members and their families to have an easier transition when they move for work. That sounds really nice, but then I thought to myself, wait, if you work at Deloitte, when do you ever see your family? So, maybe they should be using this VR technology to help their employees at the office interact with their families back at home. David Leary: [00:25:57] I see. That's a good idea. Blake Oliver: [00:25:58] You don't know what your kids look like anymore. Let's put on a virtual-reality headset, and you can go see what they're like when they're awake because you never actually see them when they're awake because you come home when they're asleep, right? David Leary: [00:26:11] Oh, boy, unbelievable. Blake Oliver: [00:26:12] That's how they should be utilizing this technology. I think it would be really helpful for the employees there. David Leary: [00:26:19] I think there's some PCAOB news, but before we get into that, do you want to talk about reviews and then maybe talk about conferences? Did you know that QuickBooks Connect was canceled? Blake Oliver: [00:26:28] I did- David Leary: [00:26:29] In London? Blake Oliver: [00:26:29] QuickBooks Connect. Was that supposed to be now? David Leary: [00:26:32] I think so. Third and fourth, so yesterday and the day before. It was supposed to be happening, pretty much. Blake Oliver: [00:26:36] Probably a good precaution. I think everybody generally was supportive of that. Probably not a good idea for people to be getting in close quarters. David Leary: [00:26:46] Yeah, and so there's a lot of conferences being canceled. So, lucky for our listeners, yesterday, our staff of robots- actually got a lot of bots working for us ... We spun up a new website, accountingconferences.com. Blake Oliver: [00:26:59] You know, David, I think Chrissy might be offended that you called her a bot. David Leary: [00:27:04] Many of you, I think, met Chrissy at QuickBooks Connect. So, Chrissy spun up a site - 100 conferences are in there, and she's updated all the statuses if they're canceled, postponed, and she'll continue to monitor that and keep that site updated. So, if you go to accountingconferences.com, you can stay on top of the current status of any conference you might be attending or find other conferences and discover conferences you may want to attend. Blake Oliver: [00:27:26] So that URL is accountingconferences.com? David Leary: [00:27:29] That's correct. Blake Oliver: [00:27:30] How was that not taken? I am amazed. David Leary: [00:27:32] Because I own it. Blake Oliver: [00:27:33] You bought it 20 years ago, right, when domains were brand new? David Leary: [00:27:38] And here's the best part, Blake. I set it up so people can get an iCal feed of these events and just stick it in their calendar if they want. There's some background on this. Every year for the last six years, at the beginning of the year, I'm like "What accounting conferences are we gonna do this year?" I go on and make a spreadsheet of every conference. You and I did this exercise for the podcast this year. I was like, "That's it. We gotta put this so it's external, so people can get to it. I'm sick of building this from scratch every year." It's my gift to the world. Here's accountingconferences.com. Blake Oliver: [00:28:03] That's great. Well, thank you for that, David. I'm gonna go check it out, and maybe I'll find some that I missed because you said it's a hundred conferences? It's very comprehensive. David Leary: [00:28:12] I think we have- 101 conferences are in there. Blake Oliver: [00:28:14] Amazing. Well, let's talk about taxes, because it is tax season. I spotted a story in Politico. The headline is, "Mnuchin Directs IRS to Boost Audits on Wealthy." We talked about this very briefly in the past. I think you said something along the lines of- what was it? David Leary: [00:28:35] I think there were some studies done. It might have been on ProPublica, as well, where it was very clear that the IRS would audit more poor people, as a ratio, because the audits are easier. It's too much to work to audit a rich person's tax return. Blake Oliver: [00:28:49] Yeah, and I didn't realize that that was actually happening. So, Treasury Secretary Steven Mnuchin basically acknowledged in a congressional hearing that the IRS has been auditing fewer people at the top of the income scale and more people at the bottom, recently. Representative Judy Chu, a Democrat from California, said that 30 percent of taxpayers at the top of the income scale were audited about a decade ago, but just seven percent of them faced audits in 2018. So, from 30 to seven percent. Meanwhile, those at the low end, particularly taxpayers who claim the earned income tax credit, now account for 39 percent of all audits. She asked Treasury Secretary Steven Mnuchin about this, and he said that he's gonna direct the IRS to ramp up their audits on higher-income taxpayers with the funding that they have proposed for 2021. David Leary: [00:29:45] They are gonna have to fund and hire for this because I think that was the problem. They just don't have the bodies to do it. Blake Oliver: [00:29:51] It's a lot harder to audit high-income taxpayers than people who are just taking the standard deduction and claiming some dependent exemptions ... I'm not sure what the biggest fraud is, but the one that people do is they claim dependents they shouldn't claim. That's the easiest thing to do. You just get somebody's social-security number and claim them as a dependent. That's where all these tax shops have gotten in trouble a lot in the past that we've talked about. David Leary: [00:30:19] People are just turning a blind eye to it when it happens. Blake Oliver: [00:30:21] Yeah, or even encouraging it, saying, "How many dependents do you have?" Wink-wink ... Not easy for the IRS to verify unless somebody is stupid enough to use the same dependent on two returns. So, that's it for tax news. You mentioned PCAOB. David Leary: [00:30:35] Yeah there is PCAOB. We can jump into that. Blake Oliver: [00:30:38] Yeah. So, you sent this on to me, so thank you for that. The backstory is that we talked about how the Trump administration proposed eliminating the PCAOB and rolling its responsibilities into the SEC. We covered a few opinion pieces - one by the former head of the SEC, and one by Francine McKenna opposing that, saying that the PCAOB is necessary and important. Then we looked into actually how effective they are based on an oversight agency report. David Leary: [00:31:13] You found that exposé article about how it's just a bunch of people who work there eventually just go work for the Big Four then people work for the Big Four worked there, and it's just like a revolving door of criminal activity is what this article implied. Blake Oliver: [00:31:26] This is very common - like you said, in the past - with regulatory agencies, regulatory capture is where the folks in the industry go work for the regulator, then go back into industry; so they have no reason to actually enforce the rules in anything but a hand-slapping kind of way, or a nominal way, which is what's happened with the PCAOB, where they have levied less than one half of one percent of the fines they could have, over the last 16 years, on the Big Four for audit failures, which are massive. They found like 800-something failed audits or audits that weren't done right, and they didn't really do much about it. [00:32:03] Anyway, there was a letter to The Wall Street Journal, and somebody actually said ... They acknowledged this. It was Professor Jay H. Heizer from Texas Lutheran University, and he wrote in response to the former head of the SEC, Mr. Levitt, saying that, "A significantly better arrangement is to have truly independent auditors. All we need is the major pension plans and institutional holders to insist that any organization in which they hold stock be audited periodically by a truly independent auditor. Most of the periodic scandals to which the Big Four subjects stakeholders would disappear." [00:32:38] That's the argument I made, which is we don't necessarily need the PCAOB, if we simply remove the conflicts of interest that audit firms have, which is they do stuff that's not audit, and they work for the companies they're auditing. They get paid by the companies they're auditing. If we just had a third party select the auditor, then maybe that would do a lot to reduce this conflict of interest. David Leary: [00:33:01] He's right. I think the major pension plans and huge institutional holders, they have a vested interest to see books that are on the up and up, right? They want audited books and correct financials. So, if people aren't using it to make investment decisions but these institutionalized investors that are probably buying and holding for a long time want to make sure things are still on track. Blake Oliver: [00:33:22] Yep. David Leary: [00:33:22] The day traders using Robinhood are not really using these reports. Blake Oliver: [00:33:28] Yeah, they're just gambling, a lot of them. David Leary: [00:33:31] Exactly. So, speaking of gambling, did you see that ransomware hit the Four Queens Hotel and Binion's Casino in downtown Las Vegas? Blake Oliver: [00:33:40] Oh, yes. You sent me this story. Normally, ransomware attacks there's not a visual to go with it, but there's some great video in the story. People walking through the casino, and the machines are just showing error messages and stuff. The whole slot-machine floor is just a ghost town. What happened here? David Leary: [00:33:58] They say all signs point to it's a ransomware attack, but they're not obviously giving out a lot of information beyond that. Somehow or another, a ransomware attack has rippled into disabling these slot machines. Blake Oliver: [00:34:10] Apparently, the slot machines are not very well-secured in the first place. So, if you can gain access to a network, you can do a lot. I wonder if, maybe, we'll eventually see like in Ocean's Eleven type movie where, instead of actually physically getting into the vault, they're just in front of computers hacking into the slot machines. David Leary: [00:34:29] It's hitting everybody. Blake Oliver: [00:34:30] It's hitting everybody. David Leary: [00:34:32] This is a bigger threat than coronavirus, possibly. I still insist that. The odds of your client getting affected by coronavirus versus ransomware, my money is on the ransomware, first; but this is preventable. It's super-preventable. Blake Oliver: [00:34:47] So, the last thing I've got to talk about is women in the accounting profession and the challenges that they face. It's kind of a heavy topic, but I definitely want to at least address some of it in this episode. David Leary: [00:34:59] That works. Blake Oliver: [00:34:59] There's an article in the Journal of Accountancy by Joey Havens. He's a partner at a big firm. He's a CPA Executive Partner at Horne LLP, where he leads the 600-employee firm's strategic visioning for culture growth and client experience. Apparently, he attended the AICPA Women's Global Leadership Summit in 2019, and two stories stuck with him. He shared them in this article, and they're pretty terrible, I have to say. [00:35:28] The first story involves a woman who was recognized in her organization as a star performer and fast tracker. Upon the arrival of her first child, she began a reduced work schedule and still continued to perform at a very high level. Her evaluation was outstanding. She was noted as delivering great client service, but the meeting with her bosses at the firm ended with her being told, "You will not be eligible for a bonus promotion or raise until you return to a normal work schedule," and she ended up quitting the firm; decided to open her own firm with two other women partners. [00:36:01] So, that sucks. You're a star performer. You're delivering great client service, and then, when you do your performance review, you're told that you can't get a bonus promotion or raise until you return to a normal work schedule despite you now having a kid, which I think anybody who has children, who spends any time with them, knows that it's really hard to work 60 to 80 hours a week and have a family that you actually get to see, right? Blake Oliver: [00:36:27] Then there's a second story in this article. Another rising star who was on the partner track, while she was pregnant with her first child, the firm obtained the biggest engagement in its history. They gave the client to this woman. They said, "This client is yours. The engagement will help you make partner." She was only given four weeks of paid maternity leave, which required her to take another two weeks of paid time off, so she would have at least six weeks with her new baby daughter. It was made clear to her that she had to return to work as soon as possible to manage this new client. [00:36:57] So, she comes back after six weeks. Client demands that she work onsite every day, even though the office is two hours away from her home. So, she has a four-hour commute with a new baby, and she tried the arrangement for three months, became sleep deprived, had an automobile accident as a result of falling asleep on the way to work once. So, she goes to the managing partner to explain the situation is unsustainable. She can't keep doing this. The partner basically says, "You can leave work when you need to." When she asked for clarification, the partner says, "I you can't do the job, you can quit." These are just two stories, right? I think we can guess that this is pretty common. David Leary: [00:37:34] Yeah. And this is just two stories related to work-life balance- Blake Oliver: [00:37:39] Yeah. David Leary: [00:37:39] -to some extent, and the ripple effect of that. A listener sent us an article that's on Reddit. It's a Reddit discussion that has about 500 comments, I think. So, I think we'll stick it in the links, but it's somewhat related to a female's experience at PwC; it's her sexual harassment experience at PwC. Blake Oliver: [00:37:59] Yeah, it has almost 6,000 upvotes on the r/Accounting subreddit, which is a lot, I think, for accounting ... Tons of comments. We all have heard about these sexual harassment lawsuits going on for the Big Four - there've been a few - and work-life balance. Obviously, like these stories that we just talked about, totally I could see that happening at a Big Four firm. This is definitely worth read. It's a pretty awful experience with HR, but it doesn't surprise me. Yeah, check it out. There's a lot of problems in accounting with gender disparity at the partner level. I think surveys show year after year that managing partners, just partners, in general, are less than 20-percent women David Leary: [00:38:43] And it gets worse, the bigger the firm, right? Blake Oliver: [00:38:46] Well, and that's what's interesting about this is, actually, at firms between two and 10 CPAs, it's 50/50. It's actually slightly more women who are on executive committees at those firms; so it's really quite equitable in small firms. As you go up to 100-plus CPAs in a firm, less than 20 percent of women represented. That's where the problem is. It's in these big firms. [00:39:16] They don't have a culture that is conducive to having a family or being a caretaker for your family. You've got to be in the office. You've gotta commute to work every day. It's not flexible, in a lot of cases. Even if they offer flexibility, if you take the flexibility, you limit your career trajectory. They're not gonna promote you to partner. So, women have to make this choice, it seems to me, that you either dedicate time to your family, or your job, and you're not given the option to do both. Even if you are an all-star performer, you can't make partner on a reduced schedule. David Leary: [00:39:53] Accounting Today had an article that's related to this about remote work options; they could actually boost gender diversity based on an AICPA survey. AICPA put out their CPA Firm Gender Survey. They conducted it in August of 2019, and now they've announced the results. They have a graph but essentially what you already said about two to 10 CPAS versus people that are partners in the bigger firms that have 100-plus CPAs, but really talking about ... This goes to those work-life balances, like making somebody drive for two-and-a-half hours, and maybe she could've just worked from home, worked remotely. Blake Oliver: [00:40:27] Right. David Leary: [00:40:27] It could solve a lot of this. Blake Oliver: [00:40:29] Not even willing to go to bat for you with the client basically saying, "Nope, we're not gonna try to get another arrangement for you." It's inflexible. It's the culture; problem with the culture. Maybe that explains why I enjoy talking to people who run small firms, who own small firms, who work in small firms, because I feel the culture is completely different than in the big-firm world. David Leary: [00:40:47] So, should we talk about listener feedback we got? Blake Oliver: [00:40:58] Oh, yeah. So, at the end of the last episode, I gave out our new number. We have a phone number that you can call and leave us a voicemail. The number is (202) 695-1040. You can call that number and leave us a message, and we might play it on the air. We'll definitely listen to it. We got our first voicemail. So, shall we give it a listen, David? David Leary: [00:41:24] Absolutely. Lauren: [00:41:30] Hi, this is Lauren from California, and I was out of the workforce for six years at home raising my four kids. I just jumped back into full-time accounting, and I'm able to offer my employer a hybrid work schedule, where I can have the flexibility to work from home two days a week, three days from the office, all because of cloud accounting. Your podcast has really helped me keep up to date and catch up with all the new updates in the accounting world, now that I'm back to work, after six years being a stay at home mom, and I just wanted to say thank you, and I listen to your podcast religiously now. I definitely recommend to all my coworkers and any other stay-at-home moms looking to get back into the workforce, I recommend remote accounting work. I tell everyone to learn QuickBooks, learn cloud accounting. That is the future, especially for a flexible work schedule, if you have a family at home. Thank you. Blake Oliver: [00:42:32] Wow, thanks, Lauren for that message. That's so great to hear. David Leary: [00:42:35] Last week, I asked if people would say who should Intuit spend that $7 billion on? Hector Garcia sent me a message in Facebook. He said, "Intuit could have bought Neat, the receipt-scanning product. They could have bought Receipt Bank. They could have Gusto. They could have bought Bill.com. They could have bought MoneyThumb. They could have bought Saasant. They could have bought Webgility. They could have bought Toast, which is a restaurant point-of-sale." He's right. They could buy all of these. This whole ... We just talked about it in this episode; they could've bought a bank. It's kind of amazing, they bought one company, and they could've bought a bunch. Then, I actually had ... I know we got a voicemail, right, on the phone. I actually had dinner with a listener! Blake Oliver: [00:43:11] Really? David Leary: [00:43:12] So, Amy McPherson, she's from Advisors for Change. It's a nonprofit-focused remote-bookkeeping firm. She listens to the show. She was in Tucson visiting her mother, and she reached out to me on LinkedIn and said, "Hey, I'm gonna be in town. Let's go to dinner." So, I had dinner last night with a listener. Blake Oliver: [00:43:28] That's awesome. So, if you want to have dinner, David will buy you dinner. Just go to Tucson; hang out outside his house. David Leary: [00:43:37] As always. Blake Oliver: [00:43:37] Oh ... David Leary: [00:43:37] I have some news, actually, about me. Blake Oliver: [00:43:39] Oh, yeah, you have some big news! I can't believe we forgot. David Leary: [00:43:42] We forgot. So, I am now joining an app company. So, my time at AutoEntry, now that they got acquired by Sage, is over, and I'm joining a new company called Melio Payments. Blake Oliver: [00:43:53] Cool! David Leary: [00:43:53] I'll put the link in the blog post. It has a lot of information on that. But I fundamentally have always felt like there's room in the market for a payments player for the average small business owner that's almost free - free and cheap - the way they're ... Easier to use than going to their bank's website, but not as complicated to use, where they need 15 approvers to pay their bills. I always felt like there was room in the market for a product like that, and I kinda found it, and stumbled upon that, and I'm joining the Fa-Melio, as they like to say it. Blake Oliver: [00:44:22] Fa-Melio, I love that. So, it's a totally free payments tool and ... Does it integrate with anything? David Leary: [00:44:30] It integrates with QuickBooks Online, right now, and hopefully will integrate with lots of things. My role there's gonna be- I'm the Director of Accounting and Bookkeeping Evangelism. That's the kind of ... It works two directions, right? That's why I like that term 'evangelism.' In one direction, I'm going to be getting accountants and bookkeepers excited about the Melio product. On the other hand, I'm going to get the Melio team excited about accountants and bookkeepers, so they solve everything that accountants and bookkeepers need - workflows, and onboarding your clients, and accountant dashboards, and approvals ... Just the list goes on. The list I'm making is growing very fast. I actually even had- already today, people are sending me LinkedIn messages. "Hey, does it do this? Does it do this? Can we add this?" So, it's already started. I have a lot of work cut out for me. Blake Oliver: [00:45:13] Well, congratulations, David. David Leary: [00:45:14] Thank you. Blake Oliver: [00:45:15] I think that's all the time we've got this week, right? Safe travels. You are traveling to- where are you headed? David Leary: [00:45:23] I'm heading to Tel Aviv, in Israel. Blake Oliver: [00:45:24] So, that's where the Melio headquarters is? David Leary: [00:45:29] Yes. I head there tomorrow. Blake Oliver: [00:45:31] Until next time, you can reach me @BlakeTOliver on Twitter. I'm on LinkedIn. Email me: blake@blakeoliver.com. How about you, David? David Leary: [00:45:40] Twitter or LinkedIn? I'm just @DavidLeary - very easy to find. Blake Oliver: [00:45:43] Give us a call if you want. Use our new voicemail number - (202) 695-1040. Let us know what you think, tell us about a story. or just leave a review. I'll see you next week, David. ____________________ Classifieds High Rock Accounting is searching for rock stars. We’re a growing accounting firm looking to increase our team. Our ideal candidate will be self-motivated, eager to learn, and grow with the firm. We help businesses succeed by utilizing cutting-edge technology to provide accounting solutions that increase business efficiency and competitiveness. Our goal is simple – enhance accounting operations, improve accuracy, and reduce costs. As a High Rock star, you'll be responsible for full-cycle accounting in a cloud environment. E-mail careers@highrock.co. That's careers@ highrock.co. ____________________ One of the biggest hurdles accounting firms face is finding training that is current and relevant. There is an answer - Elefant Training. Elefant offers webinars and training on Xero, QuickBooks, and cloud-based apps and modern practice management issues like remote leadership and creative compensation. Their instructors are firm owners who also happen to be international experts in cloud accounting. This year, Elefant is offering recordings of their most popular webinars, plus valuable resources in their brand-new learning library. You can use code "CAP20" for 20 percent off your subscription. Bulk licenses for firms are also available. Visit elefanttraining.com for more info. That's elefanttraining.com. ______________________ Accountants and bookkeepers, are you itching to make a career pivot and escape the 9-to-5 grind and the [00:53:30] busy season stress and start to build your own career path where you work virtually on your own terms? Then you need to get your copy of the newly released Bookkeeping Side Hustle Guidebook and learn actionable steps to become a virtual bookkeeper without the overwhelm. 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