Subscribe
Share
Share
Embed
In this episode, Blake and David talk app integration frustrations, Gusto's new payroll feature, increased fees for tax professionals, a tragic accident involving an IRS agent, low job fulfillment among accountants, and an employee stock ownership plan at BDO. They also dive into Amazon's new product review feature and the appointment of a former Intuit executive as the new CEO of PayPal. Rounding things out, they speculate on Alex Chriss' move to PayPal and the potential benefits for accountants and bookkeepers.
Chapters
Need CPE?
Sponsors
LiveFlow - http://accountingpodcast.promo/liveflow
Aero Workflow - http://accountingpodcast.promo/aero
Keeper - https://cloudaccountingpodcast.promo/keeper
LiveFlow - http://accountingpodcast.promo/liveflow
Aero Workflow - http://accountingpodcast.promo/aero
Keeper - https://cloudaccountingpodcast.promo/keeper
Chapters
- (00:04) - Preview: BDO's new equity model
- (00:55) - Welcome to The Accounting Podcast
- (02:35) - Every app for accountants should have a spreadsheet view
- (05:59) - We have reached peak user interface: How AI will simplify app design
- (07:22) - Why Bob from accounting could soon be a bot
- (12:30) - NATP study shows tax pros raised prices by over 20% in 2023
- (20:57) - IRS agent accidentally killed by fellow agent at gun range
- (24:12) - Sam Bankman Fried sent to jail
- (25:19) - 60% of accountants rate their job fulfillment at C or lower
- (27:20) - BDO USA borrows $1.3 billion to create an employee stock ownership plan
- (32:05) - How to solve the accounting talent crisis
- (35:50) - Amazon using AI to summarize customer reviews
- (37:25) - PayPal's names new CEO: How Intuit, PayPal, and X are all connected
- (47:24) - Wrap up, where to reach us, and checking in on the live chat
Need CPE?
Subscribe to the Earmark Accounting Podcast: https://podcast.earmarkcpe.com
Get CPE for listening to podcasts with Earmark CPE: https://earmarkcpe
Get CPE for listening to podcasts with Earmark CPE: https://earmarkcpe
Show Notes
PayPal Names Alex Chriss as Next President and CEO
Alex Chriss Succeeds Dan Schulman as the new CEO of PayPal
IRS agent accidentally shot, killed by fellow agent during training at Phoenix gun range
AICPA, NASBA Team to Help Ease Path to CPA Licensure
Withum and Seton Hall launch CPA apprenticeship
Large firm shakes up business model with employee stock ownership plan
Intuit Names Marianna Tessel General Manager of Small Business and Self-Employed Group
Can PayPal’s incoming CEO jump-start profitable growth?
BDO to create ESOP with $1.3B credit deal
Former eBay CEO Still Wields Influence over PayPal as It Names New CEO
Elon Musk's 25-year obsession with 'X' explains what he did to Twitter
With plans to hire 200, a former PayPal CEO launches new digital bank in Miami
Outspoken: Bill Harris, Founder and Chairman of Personal Capital and former CEO of Intuit and Paypal
5 things to know about Intuit’s small business guru Alex Chriss—PayPal’s incoming CEO
https://www.fastcompany.com/90938418/paypal-ceo-alex-chriss-dan-schulman-what-to-know
https://www.fastcompany.com/90938418/paypal-ceo-alex-chriss-dan-schulman-what-to-know
X.com names former Intuit brass its CEO
5 ways the IRS funding boost is paying offhttps://www.washingtonpost.com/opinions/2023/08/17/irs-funding-tax-season-wait-times/
How Amazon continues to improve the customer reviews experience with generative AI
BDO partners in line for windfall after $1.3bn debt deal with Apollo Global Management | Financial Times
Sam Bankman-Fried Sent to Jail After Judge Revokes Bail
Get in Touch
Thanks for listening and for the great reviews! We appreciate you! Follow and tweet @BlakeTOliver and @DavidLeary. Find us on Facebook and, if you like what you hear, please do us a favor and write a review on iTunes, or Podchaser. Interested in sponsoring the Cloud Accounting Podcast? For details, read the prospectus, and NOW, you can see our smiling faces on Instagram! You can now call us and leave a voicemail, maybe we'll play it on the show. DIAL (202) 695-1040
Need Accounting Conference Info?
Need Accounting Conference Info?
Limited edition shirts, stickers, and other necessities
TeePublic Store: http://cloudacctpod.link/merch
Subscribe
- Apple Podcasts: http://cloudacctpod.link/ApplePodcasts
- Podchaser: http://cloudacctpod.link/podchaser
- Spotify: http://cloudacctpod.link/Spotify
- Stitcher: http://cloudacctpod.link/Stitcher
- Overcast: http://cloudacctpod.link/Overcast
- YouTube: https://www.youtube.com/c/CloudAccountingPodcast
Classifieds
FinDaily - https://findaily.io/
Forwardly - https://www.forwardly.com/
Royalwise - https://royalwise.com/
FinDaily - https://findaily.io/
Forwardly - https://www.forwardly.com/
Royalwise - https://royalwise.com/
Want to get the word out about your newsletter, webinar, party, Facebook group, podcast, e-book, job posting, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad? Hit the link below to get more info.
Go here to create your classified ad: https://cloudacctpod.link/RunClassifiedAd
The full transcript for this episode is available by clicking on the Transcript tab at the top of this page
Go here to create your classified ad: https://cloudacctpod.link/RunClassifiedAd
The full transcript for this episode is available by clicking on the Transcript tab at the top of this page
Creators & Guests
What is The Accounting Podcast?
The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.
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: [00:00:04] So instead of people like burning out in two years and just leaving now, you're going to be burnt out after two years. But then you have these golden handcuffs. You can't leave because you've invested yet to cash out your vesting. Is it just going to like, like just shift when people burn out a little long? Like people are going to hang around a little longer, but then if they're still burnt out, it's almost worse. It could turn out to be an unintended consequence. It could turn out worse. Coming to you weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:39] Hello and welcome to the show. I'm Blake Oliver, CPA.
David Leary: [00:00:43] And I'm David Leary. Not a CPA.
Blake Oliver: [00:00:47] But you know what? David, you do really good accounting. I just want to say I'm always impressed when I go into QuickBooks and I look at the work.
David Leary: [00:00:53] You've done behind. It's just behind. That's the problem. And actually, you know, actually, to be honest, it gets behind is apps.
Blake Oliver: [00:01:00] Apps tell me.
David Leary: [00:01:01] More like because you got to like you connect an app and then if you don't take the time to go configure and connect all the pipes of that app perfectly. So then you just kind of have stuff sitting in limbo like, I know these are in the bank feed because I haven't configured that app to send the transactions over to the bank feed will match them. Like I hear you.
Blake Oliver: [00:01:18] I hear you. You know, I deal with this with my like the gusto integration into Xero. I've got to make sure that that journal entry sinks in as a bill properly and sometimes it does and I got to go in and you know get that to sync. I mean that's that's the era we live in. But hey, it's better than making it manually, right?
David Leary: [00:01:36] Yeah. I have not on is great like once you said it it just said it forget it so on page is never the issue but when you try out new apps which I'm always constantly doing which is probably the worst I don't know. I have mixed opinions on this. Some piece of me says don't use anybody else's apps because and just or outsource our bookkeeping. But I feel like I have to use these different apps and do the bookkeeping so you and I can stay in the weeds. We have to understand how this stuff works. But yeah, we got to understand how frustrating it is or it's constant pipe massaging. Yeah, we cannot.
Blake Oliver: [00:02:08] Outsource our own accounting and bookkeeping, otherwise we'll lose touch with the tools. And you know, that's why I love running the payroll and reconciling the books. And last week I went to a user conference for a payroll company. I went to Gusto. Next Gusto's annual get together for accountants. About 100 accounting partners came to Gusto's headquarters in San Francisco. They have a beautiful office on, I believe it's Pier 70 over near the port on the Embarcadero, and it's in an old submarine factory. So there's still cranes hanging from the ceiling that the submarines used to hang from. And they've built the office out inside of this old structure.
David Leary: [00:02:53] And they built that right, if I remember correctly. Like they just finished it and just opened it like. Right. And then Covid hit. Yes. Right. You never got full attendance.
Blake Oliver: [00:03:01] And, you know, it was a great place to have their user conference because a lot of people are still working from home. And actually, one of the one of the issues that I discussed with some of the gusto people there is this they're doing a return to the office policy at gusto. They're going to start requiring employees to come in two days a week to that office. And they're getting a lot of resistance. And that is something that every business that's trying to do a return to office is seeing firms are seeing that a lot of people have moved away from the city, don't want to commute an hour or more to get there. It's not the easiest place to get to, right? You've got to go across bridges, you've got to take public transit. So it's a real challenge for them. And it'll be interesting to see what happens because, hey, they're an HR business. But the thing I wanted to talk to you about, David, the most interesting thing that I saw at Gusto next was a new feature that they have released. It is, get this, a spreadsheet view of your payroll. Yes, yes, yes. Instead of going through running payroll like it's a Typeform or a wizard, you can actually switch views and you can see all the employees as rose and you can see all their different hours and stuff. Is as an interactive spreadsheet embedded in the application. And the accountants in attendance loved it. And it reminded me of you, David. It made me think of you because you have said to me, I don't know if you said it on the show or in.
David Leary: [00:04:33] Developers I've consulted with for years when they're like, What about this for the accounting UI, like the greatest accounting UI ever is Excel. Make it be like Excel so they can hit the tab key, hit the enter key type with their ten key and just burn through it. Yeah.
Blake Oliver: [00:04:47] Yeah. So it's great to see Gusto listening to their accounting partners and building that every app should have a spreadsheet view. You can have that simplified view for the non spreadsheet users and you can have the spreadsheet view for the people who need to see all that data in one place. Spreadsheets are powerful, they're great. There's a reason that they are the killer app of computers and still are.
David Leary: [00:05:09] So I'm glad you mentioned Typeform because I think that's the epitome of what accountants don't want. Right? Here's one field and then you don't give it to them like a tax form show, show an accountant all the fields at once on one screen. They'll fill them in. It's their nature. They'll fill them in. Yeah, just. Just. But but let them see the field. That's coming up next. Like. Like, it's. It's just it's great to see like, it goes against all the sexy one screen modern. New eyes, but it's super efficient when you can just hit tab and go to the next field. And that's what we want.
Blake Oliver: [00:05:43] And you know, what's going to end up making this all work is I, I did a webinar on Tuesday where I interviewed Jason Stats all about AI and productivity for accountants, and he said something that stuck with me. I'm paraphrasing here, but it was something like we have reached peak UX, peak UI peak user interface. There will never be more bells and whistles in a user interface than there is today. And that's because. Conversational AI. Chat bots are going to end up eliminating a lot of the user interface because we'll simply be able to tell the bot what we want it to do and then it'll go and put all that into the database, into that spreadsheet, that table view for us. So users who are not needing to access the spreadsheet type of view or the database directly will simply chat with a bot that will do it for them, and that's going to solve a lot of problems.
David Leary: [00:06:40] Yesterday I was lazy. We were at a conference and we got a list of names and email addresses. But our CRM needs first name and last name and separate fields, and I know there's a formula in Excel we could have done to separate the first name and last name, but it was easier just to give it to ChatGPT and say, give it back. So when that actually is in Excel, you're right, it eliminates a bunch of UI. I just tell Excel, make this two columns, first name, last name.
Blake Oliver: [00:07:05] And we have a comment from a viewer on our YouTube live stream. Adam says, Is there a reason why you guys simp for ChatGPT so much? There it is. Yes. I'll tell you, Adam, the reason I simp for ChatGPT is that I believe it is a truly transformative technology. I have been following AI in this profession for ten years or more and it's been total bullshit up until now. Most of it has been utter marketing bullshit, and I can say that with authority. As somebody who spent four years working in marketing for different software companies, it's total bullshit. Chatgpt generative AI is the real deal. And I did another experiment this week to validate that. On Wednesday I gave a presentation to the San Antonio chapter of the Institute of Management Accountants, all about AI and accounting and how I believe I will save accounting. And in preparation for that presentation I thought, Hmm, I wonder if anyone has tested ChatGPT on the CMA exam, the Certified management accountant exam. I wanted to impress my Ima members who, you know, if you're if you're a certified management accountant, you've passed that exam.
Blake Oliver: [00:08:19] And so I found a bunch of sample questions and I put five of those sample questions. The first five I found on the Ima website into ChatGPT, it's multiple choice. It got five out of five. Five out of five, and I'm running some more experiments with more questions. It's nailing them. And not only is it getting the answer right, but it's providing a detailed explanation of how it got to the answer, along with calculations. It's incredible. So this technology is going to change our lives very rapidly. It's going to end up doing the job or performing certain functions that are currently being done by humans. And you're going to interact with a bot that will very much seem like an accounts payable specialist or a payroll specialist or any of these other kind of lower level jobs that require us to process data and manipulate data in systems. That is going to come within. 5 to 10 years, it's going to completely change how we work. Our colleagues will be bots, many of them.
David Leary: [00:09:21] And we're not full blown simps for it. I'm equally as frustrated with ChatGPT as I am, and I think I'm more frustrated with it than I am happy with it because I see the potential and I just it's just not it's so close. It's so close. They're at the edge and the way I don't own a 3D printer.
Blake Oliver: [00:09:39] Blake So my son goes to a coding academy and one of the rewards they can earn, they earn points for completing, you know, coding assignments. If you get a lot of points, you can do a 3D printer thing. And so they have 3D printers in the in the dojo. And you can. So I've seen them in action.
David Leary: [00:10:00] Okay. So, so I have a 3D printer because my kid wants a 3D printer, you got a 3D printer. And of course, like most things, what do you make with garage? And they're not using anymore. But I installed air conditioning to my recording studio. So as you can see, it's a nice 76 degrees in here. It's not you're not sweating.
Blake Oliver: [00:10:14] David.
David Leary: [00:10:15] I'm sweating. So but I had to connect basically two pieces of the fan to a vent through my wall. And I was trying to figure out these different ways to do it. There were two different sizes. Like, You know what? I bet you I could 3D print this. And yes, I did 3D print it after 300 messed up prints. Do you know what I'm saying? Yeah. Yeah. Like the potential is there, and it's like, This is so great. I was able to print it eventually by myself, but it took like, 300 messed up prints, like the temperature was too hot, too low. The string went off, you know, the filament got jammed in the thing. Like all there's so many points of failure. And I think it's kind of that same thing, like it's right there. But at the same time, I'm like, This is too much work. This is so annoying because I actually have to print a second one now and I haven't started it because I just know like how much of a nightmare it is to get to actually print successfully.
Blake Oliver: [00:11:03] You know, these things take time. I mean, we got to remember ChatGPT generative AI. It's less than a year out in the world and it can take years for.
David Leary: [00:11:12] Which I printed this.
Blake Oliver: [00:11:14] Our our livestream viewers can see that David has printed some sort of funnel looking thing that I guess that's an air duct.
David Leary: [00:11:23] It put my whole arm through it. Yeah.
Blake Oliver: [00:11:24] I'm impressed. So it took you several tries to get that right. How much was the printer, by the way?
David Leary: [00:11:30] I think you can get them on Amazon. It's just like ChatGPT 20 bucks a month. You can get a printer for, like, 100 bucks. 112 bucks, $129. It's nothing.
Blake Oliver: [00:11:38] Amazing. Well, David, that's my story about being in San Francisco at Gusto. Next, cool features. Oh, I should mention that I got an interview with Liz Wilkie, the chief economist at Gusto. And we talked all about rising interest rates. We talked about her new podcast, Gas Dynamics, which everyone should check out. I'm going to put that in the feed as a bonus episode. So do check that out and give it a listen when it's available. It's really good. Liz is brilliant and Gusto is doing some really cool stuff with their research. Well, my top story for this week is a study by the National Association of Tax Professionals, the Natpe, that found that tax pros have hiked their fees by more than 20%. The 2023 fee study found that the average cost for a new client in 2023 was $218 versus $174 in 2001, an increase of just about 23%, said Tom Osborne, director of tax content and government relations at Natpe.
David Leary: [00:12:49] I'm glad you brought this because I think I saw this on Twitter, on Twitter, and then trying to get stuff into our workflow now with Twitter and their APIs is like so bad. So I never actually I go in today in my article for about this wasn't here so I'm glad you brought this but don't they break it down like each return per state of how much they charge.
Blake Oliver: [00:13:08] So I'm just looking at the summary of the study in accounting today. I have requested a media copy of the full study so that we can dig into this more next week. Okay, great. Yeah, but the thing that kind of shocked me when I read this is just how low that average fee seems to me $218 for a tax return. Now, I'm assuming this is an average of all tax returns. So there's a huge weight weighting towards individuals. And we know that individual returns are less than business returns. But like even if this is just for individual returns, it's like not a lot of money. It costs. How much does it cost to file your taxes with TurboTax?
David Leary: [00:13:54] Well, we paid 1500 bucks without seeing. We could have got it done for maybe 600. Blake, I saw the Twitter. That's why I'm upset.
Blake Oliver: [00:14:02] Well, so actually, it's funny. I just saw a coupon code come through from Intuit for that full service business thing we bought at full price. I think it was $500 off. They discount it. So I want everyone who heard that episode to know that 1500 is the lowest price. Intuit has been discounting it to as much as 750 for a business return. But even then, right, this is way lower than that. And I know that there's a chronic problem in our profession of tax professionals under charging for their work. And I'm just curious, like on the individual side, are we under charging? I mean, it seems like it's very low and we could be we could be doing a lot better. So anyway, I want to dig into this, right? Obviously depends on where you are, what kind of clientele you serve. If you're in a small town and you're serving, you know, middle class main Street, average Americans, you're not going to be able to charge a lot of money for returns. Right. The people who are making, you know, under six figures, it's just not possible. And I would love to see a breakdown. So I've asked to see that report. There are some other insights from the overview that I wanted to share. Unwilling or never getting paid for your work. 6% of work goes unbilled, so usually it's tax strategies and IRS state correspondence. It's work that tax pros do, and then they never bill for it. Those are the two top areas. Almost two thirds of practitioners gross revenue is earned during tax season, with another 12% coming during the extended tax season. So. During tax season At that time, two thirds of revenue is earned during that time. That, to me indicates that there's an opportunity to spread this out over the year. Put your clients on subscriptions. Get them paying you every quarter or at least twice a year. Spread the income out so you don't have this feast and famine type thing going on. And then here's a chart.
David Leary: [00:16:08] And then spread the work out. Right. Hey, we just filed an extension for everybody automatically, and you just start pumping out the returns. Yeah.
Blake Oliver: [00:16:16] And then now I know clients push back on that. They want to get their return done. But I've also heard from tax pros who successfully have made this the default in their firm where you want to work with me, I'm going to extend everyone and then we're going to get you done. But before the extended deadline, here's a chart on the screen. The headline is Before, during, or after, when clients pay to have their taxes prepared. When do clients pay? In an ideal world, every client should pay before you file the return. But that does not happen. Only 4% of clients paid beforehand or on retainer. Just 4%, 59%. So more than half paid on completion. But before filing. Okay, that's second best, right? You've finished the return, but before you file, that client has got to pay and that's how TurboTax does it. They will not file your return until you pay. And we we got that message from our preparer. Right now, 37% of clients are still paying after they after the filing is done. So that means the tax pro is filing the return and sending a bill to the client and hoping that they pay. That makes no sense to me from a business perspective. Why would anyone? Run a business that way. Do you as a tax pro do that with everything that that you buy? If you if you. If you place an order for furniture, you're at least putting down a substantial deposit before it gets delivered. You're not paying after the day.
David Leary: [00:17:53] Somebody could still come and take the furniture or repo the car. But like, once the returns filed, you have no recourse over that other than not taking them as a client. Yeah.
Blake Oliver: [00:18:03] So I thought those were good insights. So basically, going back to the.
David Leary: [00:18:08] Coupon you got. Yeah. So you said Intuit send a $500 coupon. Is that is that a coupon? Like, hey, if we use it, if we pay for next year, we get $500 off if we book. Now is that one of those types of coupons?
Blake Oliver: [00:18:19] It was a if we filed by the end of the month. So folks who are maybe waiting for that October deadline, it's incentivizing people to get the work in.
David Leary: [00:18:32] Get it done now.
Blake Oliver: [00:18:33] Yeah, get it done now so that it's not all compressed for the TurboTax people in September, in October and firms could do the same thing. You could offer a discount to your clients who get you their documents sooner rather than later. So if you're really speedy, get me your documents in January. Get me everything you need. You know, you get you get a significant discount. And I think discounts work really well as opposed to penalties. But I've seen. Both being used, but incentivize people to save money. Otherwise, what incentive do they have really to get the documents to you? And that's the problem that everyone complains about. My clients don't give me the documents in time. That's why I have this workload compression. I mean, there's things we could be doing to incentivize them. Well, if you ask.
David Leary: [00:19:27] Me, speed is going to solve that problem. Getting the documents, it can.
Blake Oliver: [00:19:30] Go bug them for us. Right? That's the dream. What else you got, David?
David Leary: [00:19:36] So we just talked about taxes. Did you see the. This is in Phoenix, the IRS agent who accidentally killed the other IRS agent at the gun range. The shooting range.
Blake Oliver: [00:19:46] I saw that this morning. I couldn't believe this when I saw it. It was here in Phenix. Yeah. It was during a routine interagency exercise at a federal prisons gun range. The agent was taken to a nearby medical center but did not survive. The name of the agent has not been released and the circumstances surrounding the shooting are under investigation by the FBI's Phenix Field office. No other injuries were reported.
David Leary: [00:20:17] And the the the the bigger issue with this is that it's just the optics, right? Because then all all the 87,000 memes, about 87,000 IRS agents with guns coming to your door and then this is the headline, look, they really do have guns and they're shooting each other. The it just it's just not a good look for the IRS to have this unfortunate accident and unfortunate timing. And I think the one website I saw there was a link to an officer down Memorial page. There's only been like 4 or 5 deaths ever in the history of the IRS agents.
Blake Oliver: [00:20:51] Oh, dude, like, like, dude, dude. Of the three of them were car.
David Leary: [00:20:54] Accidents, I think. Wow. Like an active duty. So this might be a terrible situation. Yeah, it's just not in the headline. It just doesn't help the, you know, for all the people that are paranoid about the IRS having guns, this sure reinforces those those arguments. Unfortunately, it's just bad, bad. It's a shame.
Blake Oliver: [00:21:11] Well, speaking of bad optics, did you see that Sam Bankman-fried has been sent to jail? Yeah. A judge revoked his bail, so he was under house arrest. This is the founder of Ftcs who was put under house arrest and is under criminal investigation while he's been charged criminally for running a massive fraud on this on his crypto currency exchange. And he was apparently trying to influence witnesses, including by giving documents to reporters who gave documents to reporters that made his ex-girlfriend look bad, who was also an executive at FTX. And yeah, you do that and the judge is not going to look kindly upon you and sent him to federal jail. It's good. Yeah.
David Leary: [00:21:58] At some level, like. He's just clueless. I don't know. I don't know how else to say it. And what's amazing is like, how can somebody who operated the way he did just give people money like this? It's I guess like Americans just get blinded by greed, like at the end of the day. And it's an opportunity to get rich and people just go for it.
Blake Oliver: [00:22:19] I saw another stat this week that stuck out to me. 60% of accountants rate their job fulfillment at C or lower. This was discovered in a survey commissioned by Floqast, my former employer. The study revealed that many accountants lack fulfillment in their jobs and desire financial transformation in their organizations. It was conducted in partnership with the University of Georgia Consumer Analytics Program and gathered insights from 284 accounting and Finance professionals. Key findings include that 42% of accountants are not completely confident in their work. 60% rate their fulfillment in their job as a C or lower, and they want to be more strategic partners and have a greater impact on their organizations. They want to have better technology. And the survey also highlighted the need for financial transformation in companies with 70% of accountants stating their company is in strong need of it.
David Leary: [00:23:17] I think that headline, though. So flip this around. So that means 40% of accountants have satisfaction B or higher. Right? So which I think I don't know. I'm trying to think like in a bell curve, like this feels like it's just an average survey. Like, I don't know if it's if it's really as bad as maybe the headline feels like it's bad. It's I mean, obviously there's room for improvement. I guess it's slightly bad.
Blake Oliver: [00:23:40] I don't know. I just feel like I would hope that most accountants would be happy in their jobs. Right. We want.
David Leary: [00:23:47] That. Yes.
Blake Oliver: [00:23:48] This doesn't surprise me based on reading online forums like Reddit, which, you know, the happy accountant is a rare accountant on Reddit. But I always thought that was an anomaly, that it was just an unhappy people on these forums. But it seems like there's actually quite a few accountants who are, you know, not happy in their jobs. But, you know, maybe that's also just like a personality thing, like, like maybe a C isn't that bad. I don't know. We need to investigate it more.
David Leary: [00:24:18] What else do you want to talk about? The stock purchase stock options thing.
Blake Oliver: [00:24:24] Yeah. That was big news. So BDO top ten accounting firm BDO is they've borrowed $1.3 billion from Apollo Global Management, and they're going to use that money to create an employee stock ownership plan. So I guess.
David Leary: [00:24:42] It's for us, right? So it's about 10,000 participating employees. Apparently the US has about 11,000 employees. So somewhere, you know, somewhere in there. Now BDO overall has 111,000 employees. So this is just the US division of BDO.
Blake Oliver: [00:24:58] So they're using the money. And this follows BDO converting to a corporation. So like BDO is no longer a partnership. They are converting to a corporation and they're using this money to buy out a good chunk of the partner equity. So partners are getting paid out now and they're creating this employee stock option plan. And I believe. Employees will earn 10% of their salary. Each year in terms of stock options. So it wasn't clear to me if this is every employee or just some. I think that's why I.
David Leary: [00:25:39] Went and looked up the number of employees is because when I said only 10,000 participating, that doesn't make any sense. And then I went and looked. I was like, Oh, there's about 11,000. So it sounds like maybe everybody in the US.
Blake Oliver: [00:25:49] That's Yeah.
David Leary: [00:25:50] Which close.
Blake Oliver: [00:25:51] So, so this is really this is really interesting. Think about that. Like you start work at BDO and you are earning equity in the form of options that you can buy into every year. You don't have to wait to be a partner.
David Leary: [00:26:07] You don't have to go to a tech company. And you've talked about this, the partnership model, it's different. But actually was thinking about this a lot. I mean, you've worked for startups. I've worked for startups. Usually what goes along with these options? A cliff. Yes, Right. And a lot of times sometimes it's three years, sometimes it's four years. You got to work four years before you actually get these options right or before you vest in these options. Right. And I was kind of thinking about this. So what if these these firms switched to this options model? They start giving people options, but you have a four year cliff. You can't even earn them for three years or four years. So instead of people like burning out in two years and just leaving, now, you're going to be burnt out after two years. But then you have these golden handcuffs. You can't leave because you've invested yet to cash out your vesting. Is it just going to like, like just shift when people burn out a little longer, people are going to hang around a little longer. But then if they're still burnt out, it's almost worse. It could turn out to be an unintended consequence. It could turn out worse. It could be.
Blake Oliver: [00:27:08] Abused. I think that's fair. I would hope that they wouldn't have a cliff that long. My my cliff in the tech companies I worked for was a year, so I had to work for at least a year to get any. And then they vested every month.
David Leary: [00:27:23] You have.
Blake Oliver: [00:27:24] Each month over over the course of 4 or 5 years that I was granted that block of stock options. Now, the problem in a lot of tech companies is that the employees don't exercise their options as they earn them, and so they end up after 4 or 5 years with a large amount of options, That becomes kind of pricey to purchase even at the reduced price that you were given.
David Leary: [00:27:47] Accountants won't make this mistake. They understand tax law and these types of things, correct.
Blake Oliver: [00:27:53] So that's what happened in my first job is I didn't exercise until I left and then I had to put a lot of cash on the table to buy my options, to buy my stock. And in the next job I had, I exercised every month. When I got the notification that I had vested, I would immediately go in exercise and pay the money. So. I hope people do that. If they don't, then this is not going to help them. I've seen.
David Leary: [00:28:19] It, but.
Blake Oliver: [00:28:20] But.
David Leary: [00:28:21] It's better. It's a step in the right direction. But I want to.
Blake Oliver: [00:28:24] Say like, be.
David Leary: [00:28:24] Careful about the options.
Blake Oliver: [00:28:26] This is what we've been talking about. This is great. Like if this works out and employees truly do get equity now and can earn it like this will give, I think, a big advantage over other firms that are saying, Oh yeah, you can make partner and then, you know, then you get equity. But that's like ten, 15 years down the road. Like BDO is saying, No, no, you can start earning equity right now. It's the way to go. We want to compete. So we'll see if other firms do this, too. I mean, it's the partnership model could be on its way out. Below the big four.
David Leary: [00:28:59] Yeah, there's a lot a lot people are going to have that that C suite style model. Right.
Blake Oliver: [00:29:05] So I think it's my turn. What do I got? I got. We got so much to talk about this week because last week we talked with Jen Kreider of the Pennsylvania Institute of CPAs, and we had a great time talking with her, but we didn't cover our regular news.
David Leary: [00:29:21] Could we review for a second that that. Yeah, sure. So one of the big things we talked about last week was the the announcement from AICPA and their ELA program, the experience learn earn the partnership with Tulane. Right.
Blake Oliver: [00:29:36] So you can work at a firm, take classes online at a reduced cost like 150. Well, I don't know if they have a price, but I think they're trying to keep it under $5,000. Yeah. To get your fifth year.
David Leary: [00:29:49] So, so I'm a little confused on this because like make sure my interpretation of the last three, 4 or 5 years is correct. Right. They've continually hammered both Nasba and AICPA that they have no data about the 150 hour rule being an issue. And I think they've already said we survey students. It's not a barrier over and over again. That has been the message we've seen. Is this correct observation by me?
Blake Oliver: [00:30:16] Say that again?
David Leary: [00:30:17] Oh, over the last few years, the messaging we've gotten from Nasba and AICPA is the 150 hour rule is not a barrier. And we have we talked to students. We have no survey data. It's not a barrier. Yeah, the.
Blake Oliver: [00:30:29] Students the students are not saying it's a barrier.
David Leary: [00:30:32] Yes, they would tell us that or tell us the public that. Right. So if that's true, why would they implement this program unless they have some data telling them it's something else now, because I'm sure this didn't spin up in the last three weeks like this. Probably took two years of planning to roll out. Yeah, well, we.
Blake Oliver: [00:30:48] All know it's a barrier. The data is very clear that it's a barrier. Um, Illinois did the study. There was another study that was done just ask people was the, was the extra 30 hours a barrier to becoming a CPA? Yes. I think what the AICPA is arguing is that, oh, they would do it anyway, right? Like if you take away the extra 30, it's not going to change the pipeline is what they're saying. I, I think it would make a big difference. But, you know, that's a hypothetical, right? You can't test that necessarily.
David Leary: [00:31:21] All right. So so maybe they have data, maybe they have the data.
Blake Oliver: [00:31:24] But to me, this is like a half measure, right? We know that the 30 hours does not add value. We know it doesn't make better CPAs. All the evidence says this. All the studies say this. So why go halfway and create this like reduced cost, You know, learn while you earn program, which by the way, is going to just make it harder to be a first year associate because now on top of working the hours you got to work in your first year, you got to take classes like like to me, this actually compounds the work life balance problem. It's going to make work life balance harder for these kids. Right out of school, it would be easier to go get the Masters and then go work right from a work life balance perspective.
David Leary: [00:32:07] And it looks like with them, worked with Seton Hall University and they're doing something similar. Yeah. With this now as well. So a lot of firms are trying trying this out, this apprenticeship program.
Blake Oliver: [00:32:19] To me, we need massive change. We need we need to make immediate, significant changes now to create a pathway that doesn't require five years of education. If we aren't willing to do that, we're not going to make a dent in the problem. Because the problem is we're we have a gap of tens of thousands of accountants every year. So we can solve some of that with AI. But we also need to solve it with bodies. And like this is just, you know, it's a half measure. Something I saw just if we can pivot to tech news. Yeah. And I since we're since something that I saw that I really liked in real life was I was going through Amazon looking for something to buy. And at the top of the reviews section, there was a summary of the reviews saying like in general. People agree. I was looking for a swim cap. I've gotten into swimming recently. You know the heat. Arizona. Do I have to say more? And you know, I want to go a little faster in the water, right? I'm starting to figure this thing out, so I'm looking for a swim cap. But I have a giant head, you know, like my it's just it's way too big. Like normal hats don't fit me. I have to buy special 3D print.
David Leary: [00:33:38] You a swim cap? I bet.
Blake Oliver: [00:33:40] So, you know, I'm looking at the reviews and it said on this hat that I had ordered previously, I was looking to return it. It said actually that like people like the quality, they like the comfort but not the size like, so that indicated to me, oh, if I if I'd seen this before, this brand new feature before, I would have realized that it was going to be too small. And so anyway, that's I in action is Amazon is now looking through all the hundreds or thousands of reviews for a product and summarizing the feedback for you so you don't have to go read all the reviews. That's a time.
David Leary: [00:34:13] Saver because basically what I do is I click on the five stars and peek at those. Then I go down to the one stars and I peek at those, and then my brain, I'm probably summarizing, you know, coming up to a conclusion. So yeah, this would be a time saver.
Blake Oliver: [00:34:25] Now, David, I think you had some news about the new CEO of PayPal.
David Leary: [00:34:30] Yes. So let me change screens here a little bit. So, yes. So the news is the big headline. And it was in my newsfeed 300 times. 500 times. It just was in so many times. Essentially, Alex Kris, who he has been 20 year veteran of Intuit, he essentially, I want to say since 2017, he's been leading the QuickBooks side, the small business division, for over a year and a half. They renamed whatever that division is. But let's it's the non TurboTax side of the business, right? He drove the MailChimp acquisition. Et cetera. He is now been announced. He's going to be the new CEO of PayPal. And so when I saw that headline, I was like, wait a minute, this is history repeating itself. So let me I'm going to share something here and I'm going to tie some stuff together with some people before I share the screen. So a couple of different people. So Bill Campbell was this Intuit CEO from 94 to 1998, right? He was one of the first CEOs, and then he returned to be a temp CEO in 1999, right before Steve Bennett came, who was there till 2007. Then Brad Smith was the Brad Smith era, 2007 on. But in there you had Bill Harris. So Bill Harris was the president of Chipsoft, right, in 1999 to 1994. But then Intuit went public, merged in with Intuit. That's TurboTax. So so you went through this merger, then he became the executive vice president and then eventually CEO between 93 and 99. And then he he basically started the launch of quicken.com and the move to online services and Internet services. He started that thing. Well then the other player in this whole story is Elon Musk you know the guy who just bought Twitter and changed the name to X.com.
Blake Oliver: [00:36:09] Yeah, I think I've heard of him before.
David Leary: [00:36:11] So look at this headline X.com names Former Intuit Brass at CEO. So this headline literally is from 1999. Cnn.
Blake Oliver: [00:36:21] When so so. Elon Musk. Elon Musk renamed Twitter to X, which is this old startup that he had. Is that what we're talking about?
David Leary: [00:36:31] That's what we're talking about. So if we kind of go so I'm going to go back to like 1999. I was like a lowly tech support employee. And I remember getting invited to one of those like CEO skip level lunches where you get to like eat lunch with the CEO. And I remember sitting distinctly, remember sitting in the room with Bill Harris and he was talking about this XRP thing and that he was getting involved or Intuit was getting involved or something like that. Right. So so back to this article. Essentially, this article is naming Bill Harris as joining X.com as its CEO. He's going to replace Elon Musk, who's the founder as the CEO, and then Elon Musk will stay on as chairman and oversee the product development. And so essentially, Bill Harris was the founding CEO of X.com in 1999. So an Intuit executive was the CEO of X.com.
Blake Oliver: [00:37:18] Which became PayPal, which.
David Leary: [00:37:20] Merged with PayPal because guess who had experience merging companies? Bill Harris Who did the merger of TurboTax into Intuit? Right. So X.com launched This Is Crazy December 7th of 1999 with him as a CEO and within two months, X.com attracted 200,000 signups. Wow. And so in my brain, I've always had this tie to intuit. So over here you have X.com, and then you have this other company called Confinity, which had a product called PayPal that lets you take Palmpilots. Remember Palm Pilots?
Blake Oliver: [00:37:52] Yes.
David Leary: [00:37:53] Okay. And you could my dad money. My dad had.
Blake Oliver: [00:37:56] A Palm Pilot.
David Leary: [00:37:56] Through the infrared port that was PayPal. You could send money through the infrared port. So Elon Musk figured out like sending money and email is the way to go. Screw this infrared port stuff. So the crazy thing is, both companies were in the same business. They're the same office building together, both these companies and it was.com 1.0 days. So both companies are like, Hey, Blake, I'll pay you $20 if you join my app. And then anybody of your friends that join, I'll pay you another $10. So both companies were just bleeding money. So then in March of 2020, so you're thinking December of 1999 to March of 2020, you're going four months later. These two companies merged together and the new company is called X.com. And so Bill Harris did all the work to merge the two companies together. And then Musk, who handpicked Bill Harris to come to X.com, ousted him and takes over the CEO role himself because he's now the biggest shareholder. Well, but then here's the great part in typical Elon Musk drama, right? In September 20th, September of 2000, Elon Musk goes to Australia for his honeymoon. The X.com board voted to change the CEO from Elon Musk to Peter Thiel, which everybody knows who Peter Thiel is.
David Leary: [00:39:08] Part of that, you know, very politically motivated these days. He's the co-founder of Confinity. So in June 2001, X.com was officially renamed to PayPal. And wow, so, so deep relationships with these two companies. And I always thought like some part of me thought Intuit could have gobbled up PayPal at one time. Yeah. So Scott Cook, the founder of Intuit, was on the board of PayPal, eBay, eBay, PayPal from 1998 to 2015. And then when those two companies split, so when they split. So this goes back to Bill Campbell. Bill Campbell, who was the two time CEO of Intuit, he he mentored Steve Jobs. He mentored all the Google guys. Like he just was really involved in Silicon Valley. He was mentoring the former CEO of eBay who named PayPal's current CEO. And so John Donoghue, who was mentored by Bill Campbell, had a say in naming Schulman's replacement this week. So it's like full circle. This whole Intuit train from this headline leads us to Alex. Chris being named the VP VP Now it's all connected. It's all tied. So that's all the history.
Blake Oliver: [00:40:13] Thank you for that history lesson. David. That was that's fantastic.
David Leary: [00:40:18] So I know if people know about Alex. Chris So I think we talked about before he did all the QuickBooks business side of the business. It looks like they searched, talked to 20 investors, searched for a bunch of different people and he was the final finalist from a pool of nine candidates. And that was that's it. And now Marianna Tessel is going to take over the small business self-employed group at Intuit. I think my only $0.02 on this is it makes you wonder what he's going to do there. And my gut is just like other companies that had Intuit executives go to them, e.g. LegalZoom, what did they do? They rolled out accounting and bookkeeping services.
Blake Oliver: [00:40:58] Yeah. You think that's what PayPal might do? I don't know who. So who's using? I know PayPal is enormous and they've got Venmo, but like, when was the last time you used PayPal? David?
David Leary: [00:41:12] I use it any time I'm on a site that I know I'm never going to do business with again. And it's not that they're sketchy, but like, I don't know. So if they have a PayPal button, I'll pay with PayPal to put that level of separation of my credit card and my identity. But that's usually when I use PayPal for situations like this. But mostly it's Venmo these days.
Blake Oliver: [00:41:30] Yeah, I feel like that's the big area of growth for them. I mean, I never see anyone using PayPal dongles, you know, or PayPal. They've got like a PayPal point of sale. I've never seen that in the wild ever.
David Leary: [00:41:41] So and it could be because like I know Alex Chris, he, you know, he was very big on self-employed, maybe overly zealous about it, possibly at Intuit, the QuickBooks self-employed. But in the last two years, you know, the QuickBooks Group launched their own Venmo, PayPal small business thing kind of in a way like reminds you of the new expensify, this kind of super app chat send money type thing, right? I think it was it might actually just be called QuickBooks Money. It might be, which is crazy because I think the bank account is called QuickBooks. I don't know, but it might be called QuickBooks Money. So I think he's been keen to this idea of payments in a app or something. And what's also tells me I always thought he'd be in line for CEO of Intuit, which tells me maybe investors in the board are super happy with Suzanne, and Suzanne must not have any future plans to go anywhere anytime soon with Intuit. But it'll be a it'll be a ride and it'll be interesting to see what somebody with a QuickBooks small business background and accounting background does with PayPal. It could make PayPal better for all the accountants and bookkeepers in the clients. Right. But well.
Blake Oliver: [00:42:53] David, thank you for that history lesson.
David Leary: [00:42:54] I know, I know. I know. No.
Blake Oliver: [00:42:56] It's good. It's good to know. Like the dots. The dots. I never I never realized how connected these companies were. So I appreciate that. Thank you. I think that's a great place to leave it. I know you've got to go. It's Friday afternoon as we record this, so let's go enjoy the weekend. It's cooled down a little bit here in Arizona. If our listeners want to get in touch with you, David, where can they do that?
David Leary: [00:43:19] You could go to Xe.com and find me there.
Speaker3: [00:43:21] No.
David Leary: [00:43:23] I'm on all the socials, just @DavidLeary.
Blake Oliver: [00:43:25] And I am at Blake T Oliver. You can email us. We are the accounting podcast at earmarked me. That's the accounting podcast at earmarked me. Thanks everyone who joined us today in our live stream. Follow us on YouTube, subscribe on YouTube and you'll get notified when we go live. You can jump in. Is tuning in from Croatia. Great to great to have you on the stream. Yelina, I wish I was in Croatia right now. That sounds amazing. Thanks, Giles and David and Adam for commenting. I appreciate having you on. Oh, Giles asked, How do those employees cash out? And that's a good question because they may have stock. But the question is, you know, how are they going to sell it? I mean, I know you can always sell your stock off of exchanges, right? Like I it's really hard, but it's not easy. And hopefully the firm will have a way to buy back stock from employees. They better create that or it's not really going to work. That's a really good point. Yelena, we will see you at Connect. Oh, that's awesome. Um, yeah, follow us online and let us know what you think. The accounting podcast at earmarked me. Send us your listener mail. Send us your voicemails. We love getting messages from our listeners and it's been a little while, so I want to make sure you know about that. And don't forget, you can earn free CPE for listening to this episode. And almost every episode of the accounting podcast at this point, just download the free earmark app on the App Store or on the Google Play store. Sign up, find us in the channels page and and take a quick quiz. It's five questions and you can get your CPE certificate. The CPE is Nasba approved. We are a Nasba sponsor of CPE at Earmark and it works for CMAs. The tax content works for enrolled agents. You can even use this if you are in the UK as a chartered accountant. Ks and CPAs in Australia and New Zealand, I understand in Canada can also use Nasba CPE to fulfill their license requirements. So don't miss out on that.
David Leary: [00:45:37] I didn't know that that earmark was international.
Blake Oliver: [00:45:39] Now we are. We don't advertise it really we should. But yeah, it works globally. The the standards or the rules about continuing education are actually looser. Elsewhere in the world. So they accept all of our CPE because it's so rigorous. Oh, that's good. No, not and I don't know for sure. You got to check with your local your local licensing body if they accept CPE. Often they do because it is verifiable. Cpe meaning that you had to take a quiz, you had to verify that you learned the material. And our quizzes are not the easiest. You really got to listen to our episodes to pass.
David Leary: [00:46:17] I can't do the ones for our own episodes. Every time I demo your mark, I never get the quiz right. I don't think I've gotten a certificate successfully yet. Cpe Certificate. Good thing I don't need them for my job, but I have not passed the quiz yet. But on that note, I'll try to do some in the car while I drive.
Blake Oliver: [00:46:33] Safe travels and we'll see you all here next week.
David Leary: [00:46:36] Bye, everybody.