The Accounting Podcast

When Kenji Kuramoto and Matthew May founded Acuity, an innovative, cloud-based financial services firm, could they have possibly imagined that they would someday be hosting The Cloud Accounting Podcast for a live recording session with 80 staff as our audience? It was our privilege to present/record a session called "The State of the Industry" at the first AcuityCon, a gathering of the Acuity team who nearly all work remotely. We chat with Kenji, Matthew, as well as several key team members: Lisa Gilreath, VP of Operations, Ann O'Dea, Controller Team Lead, Sammy Siddique, Cloud Accounting Team Lead, Graham Wood, CFO, and Kai Moon, Senior Customer Success Advocate.

Show Notes



OnPay is offering an exclusive promo code only for the listeners of The Cloud Accounting Podcast to get three free months of OnPay payroll service for any of your clients that you set up by February of 2020! Visit the sponsor link, and use code "CAP3FREE" to take advantage of this offer!

Show Notes
  • 01:17 – Acuity - firm of the future today - operating almost completely with a remote workforce! 
  • 03:54 – Is your job on the automation chopping block? Find out, here 
  • 04:30 – Even with the gloom-doom reports, the demand for accountants is still going up | University of Oxford – Oxford Martin School 
  • 06:14 – Kenji notes that the fear of automation is driving curiosity and adaptation in the face of such huge changes
  • 08:30 – Meet Sammy and Lisa!
  • 08:59 – Sammy defines bookkeeping as a combination of traditional bookkeeping services,  some more  listening, and more advisory
  • 09:37 – Lisa's definition of customer success is matching clients with the right tech, at the right time, so they can benefit from Acuity's full range of services
  • 11:29 – Bank feeds are a constant source of frustration for accountants and clients alike
  • 13:38 – Acuity's bookkeeping team uses a standard tech stack, including QBO and Xero, to ensure consistent service
  • 16:53 – Accounting FOR food trucks FROM a 'food' truck - a new career move for your hosts? 
  • 17:42 – We ain’t afraid ’a no oversized accounting-tech ecosystem chart! | Accountex
  • 18:29 – Lisa thinks that eventually, the mind-boggling array of accounting apps are going to consolidate into bigger, better tools. 
  • 19:01 – The Cloud Accounting Podcast - World-class recruiting tool! Listen, learn, and find excellent new hires! 
  • 20:17 – Meet Graham and Ann! 
  • 21:06 – Ann gives the rundown on Acuity's controller team functions
  • 23:02 – Graham explains how Acuity's CFO group makes life easier for clients
  • 23:52 – The bigger the data stack, the bigger the responsibility. 
  • 24:19 – When do you need CFO services? 
  • 27:01 – Graham shares some advice on getting into the advisory game
  • 30:04 – What is community-adjusted EBITDA? 
  • 30:34 – Non-GAAP metrics can be used to get a clearer picture of a company's performance
  • 31:06GAAP might not be fairly addressing human capital, but Acuity is by investing in its people
  • 32:08 – Is accounting still relevant? 
  • 32:51 – When it comes to providing stellar service, data is king, even if it's non-financial
  • 35:10 – The WeWork snafu is proof that the free market works
  • 37:02Adapt or die? | TechRadar
  • 37:59 – David says data is going to level the playing field and what really matters is people, culture, and company values 
Connect with the Acuity Team
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

Meet Blake and David in person! 
Limited edition shirts, stickers, and other necessities.

TeePublic Store:


Creators & Guests

Blake Oliver
Founder and CEO of Earmark CPE
David Leary
President and Founder, Sombrero Apps Company

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

Kenji Kuramoto: One of the risks the profession has, in general, is that it's gonna be slow to adopt change. It's gonna be slow to move ...

Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.

David Leary: I'm David Leary.

Acuity: And we're Acuity!

Blake Oliver: We're live in Atlanta with Acuity.

David Leary: So, Atlanta's famous. They have ... What's here? Chick-Fil-A?

Blake Oliver: Yes.

David Leary: Waffle House. Home Depot. Coca-Cola.

Blake Oliver: Coca-Cola. [00:00:30]

David Leary: Delta ... Industry titans, and now, there's the next industry titan for accounting coming up.

Blake Oliver: And that is Acuity.

David Leary: Acuity.

Blake Oliver: We are joined today by-

Matthew May: Matthew May.

Blake Oliver: And-

Kenji Kuramoto: And Kenji Kuramoto.

Blake Oliver: You two are ... How would you describe yourselves, Matt?

Matthew May: Oh, I'm a recovering auditor-

Blake Oliver: Recovering auditor.

Matthew May: -that now helps companies that need accounting.

Blake Oliver: And Kenji?

Kenji Kuramoto: I mostly try to manage Matthew, which is a very difficult challenge ... But yes, we consider ourselves recovering CPAs. We're basically [00:01:00] now trying to help small businesses with their outsourced accounting.

Blake Oliver: You guys decided to have everyone in your firm, Acuity, get together. Is this the first time you have done AcuityCon, or is the first ...?

Matthew May: This is the very first AcuityCon.

Blake Oliver: Wow! And we are so honored to be joining you.

David Leary: But to rewind that, though ... They're not a traditional firm. It's just not like all these people are here in your building every single day.

Matthew May: No, we're meeting people face to face for the first time that we've worked with for five or six years. Where, like, Cyndi Cole was like, "This is the [00:01:30] first time I've met anybody!"

Blake Oliver: Who was it that hasn't met anyone in person for five years?

Matthew May: Cyndi.

Blake Oliver: Cyndi! Wow! That's amazing. So-

David Leary: Because you're all virtual; you're all remote.

Matthew May: All of us.

Blake Oliver: I went up to the office that's upstairs. We're in the Atlanta Tech Village. It was shockingly small for ... How many people work at Acuity now?

Matthew May: About 80.

Blake Oliver: 80?

Kenji Kuramoto: We're just over 80, and it's the smallest square footage of an office we've ever had. We like that ratio - highest headcount - smallest square footage of office seems to be a metric that we're interested in. [00:02:00]

Blake Oliver: Yeah. Good KPI for that, right? Well, that's awesome. We are here at AcuityCon in Atlanta, and the title of this session that you have graced us with is The State of the Industry. David, and I, about two hours ago, started frantically trying to figure out what exactly is the state of the industry? Because this is how we do all of our episodes. We record every week, and about 30 minutes before the episode, we realize that we need to record something, so we take all the articles that we have been reading throughout the week, and we try to [00:02:30] come up with some sort of theme.

Sometimes, we achieve that, and sometimes, it's just a random string of articles. Those of you who listen are well aware of that. But I think that, actually, what's great about this session; great about being here is that we spend a lot of time talking to each other about what we think is going on. But now, we get to actually listen to you guys. So, we're gonna flip the script, and we're gonna ask you what you think the state of the industry is, as what I would consider one of the leading [00:03:00] firms that has invented a new way of accounting.

David Leary: Well, whenever we do the podcast, and we're talking about all these things - remote working, technology, the way you treat your employees, the company culture [crosstalk]

Blake Oliver: Moving to advisory services ...

David Leary: In our brains, we're hoping people like you are listening to us. So, the fact that we're here, and you're actually facing us and rolling your eyes [crosstalk] is pretty exciting.

Blake Oliver: We're hoping that you can share some of your stories [00:03:30] with our thousands of listeners. So, we have prizes today. David, do you have ...?

David Leary: I have a very limited number of shirts. I think I have seven. So, I guess the way we'll figure out if you get to interact with us ... We'll get a shirt size and then, if that fits you, you get to [crosstalk] ask a question.

Kenji Kuramoto: Or someone in your family or close to you that has that size [crosstalk]

David Leary: That's true.

Matthew May: Close relative.

Blake Oliver: So, I thought we'd just lay the groundwork with a few statistics, right. We're accountants; we love [00:04:00] the numbers. Let's talk about what is the state of accounting right now. There's a lot of doom and gloom. I don't know if you read any of those blogs or any of those accounting sites about the threat of automation to our jobs, right? There's a website, actually, called You can go there, and you can look up accounting. There's a page dedicated to accountants and auditors. It says right there, "You are doomed." [00:04:30]

This is all based on a report that was done in 2013 by Carl Benedikt Frey and Michael Osborne. It's to report called The Future of Employment: How Susceptible are Jobs to Computerization? They analyzed 702 jobs, and ranked them, and found that accountants and auditors have a 94-percent chance of being automated out of a job, which is kind of terrifying. But at the same time, the near-term growth of accounting [00:05:00] is fantastic, as I'm sure you can attest. There's a lot of demand for accountants. The job market is really tight. What's going on here, when we have 11-percent projected growth of accounting jobs, and yet we're all supposedly gonna get automated out of existence?

David Leary: Yeah, why are you hiring people? Why do you have [crosstalk]

Blake Oliver: Why are there 80 people in this room? You guys have grown fast, right? I mean-

Kenji Kuramoto: We have, yeah.

Matthew May: Yeah, we were eight people, six years ago.

Blake Oliver: Wow. So, eight to 80 in six years, kind of defying that 'we're all gonna get automated out of a job.' [00:05:30]

Kenji Kuramoto: Yeah. Who were those guys again? What were they talking about? I was talking earlier with Frank from, and we were just having a discussion right after we came up here, just about what's- those same fears about automation coming. We were actually kind of joking about other jobs in the past, and things like that, that were supposed to come in and disrupt.

Yeah, I think that one of the risks the profession has, in general, is that it's gonna be slow to adopt change. It's gonna be slow to move. We were just talking about it being adaptive. We talked in an earlier [00:06:00] session about this, to where one thing that's been good about our team, and I think has been attractive for people wanting to come and work at Acuity ... Which is the same way, too, I think a lot of ... The reason why we've- you guys, we've hung out with a good bit; Amanda Aguilar and her firm, we've always talked a lot.

There's a lot of us who are very interested and curious about some of that change. It's allowed us to be adaptive. So, I think that in, yes, some of the traditional, very manual roles we've been in are gonna be disrupted. Those are gonna go away, but I think we're [00:06:30] already starting to see all kinds of other roles and responsibilities that are a much more better fit for accounts because, really, accountants are knowledge workers. We're not manual ... It's not a manual task we should be doing. I think that's where people are forgetting about the opportunity to eliminate some of the manual jobs and open up more the knowledge-working jobs. I think that's where the growth is coming from.

David Leary: Do you have positions currently now in your company that maybe didn't exist as a job anywhere [crosstalk] years ago?

Matthew May: Oh, this year ... This year, we [00:07:00] added our tech-specialist roles, where we have people that just evaluate the bill-pay technology, or just evaluate the expense-report technologies that are out there. That's a new role in our team that we've added over the last 12 months. It's crazy.

Blake Oliver: Their only job is to evaluate the tech ...?

Matthew May: No, we do a lot of player coaching ... They're on one of the teams. I think both those people are on-

Kenji Kuramoto: Controller team-

Matthew May: The controller team, and then they have a role that is evaluating those technologies.

Blake Oliver: Well, you know, you guys get to talk a lot as [00:07:30] the face of Acuity, but we have decided that we want to hear from the people who make up Acuity.

Matthew May: Okay.

Blake Oliver: So, I understand that you may have taken volunteers in advance to come up here, or you may just be picking on people-

Matthew May: We can pick on whoever we want-

Kenji Kuramoto: Maybe; maybe; yeah, that's right.

Blake Oliver: Who wants to come up and talk with us a little bit? No pressure.

Kenji Kuramoto: It's easy. It's all edited, too, right? You can just ...

Blake Oliver: It's easy. Yeah, we edit this thing. Who wants to come up? You get a Cloud Accounting Podcast T-shirt. David, would you mind modeling one of these shirts?

Kenji Kuramoto: He's [00:08:00] already wearing one. You guys are both wearing them [crosstalk]

Blake Oliver: -these are limited edition ...

Matthew May: I don't know what you ... Where are the easy ones? Sammy knows everything. I feel like you need Sammy for sure.

Blake Oliver: Sammy?

David Leary: Yeah, Sammy should come up.

Blake Oliver: Sammy, Sammy? You wanna come up?

Matthew May: Yeah. [applause]

Blake Oliver: Awesome. One of you will have to give up your seat.

Matthew May: Kenji'll allow me to do that, probably.

Blake Oliver: Okay, cool [crosstalk] Actually, how about we take two people from the audience, and that way it's easier. So, who else wants to come up and take Kenji's spot, and Matt's spot?

Matthew May: Oh, I'd totally bring [00:08:30] Lisa up here.

Blake Oliver: Lisa. Yes! All right! [applause] You can just put that headset right there. Let's do some introductions. So, Sammy, who are you?

Sammy Siddique: I'm Sammy. I'm the team lead of the bookkeeping team. I've been with Acuity since 2013.

Lisa Gilreath: I'm Lisa Gilreath. I'm the VP of operations at Acuity, and I've been here for about five years, and I'm responsible for customer success.

Blake Oliver: Fantastic. So, let's start with Sammy. How do you define bookkeeping these days?

Sammy Siddique: It's broad. We [00:09:00] really- we changed our name a couple years ago to the cloud-accounting team because we wanted to really highlight about how our team services our clients in all different manners and not just traditional bookkeeping, but a little bit more advisory, a little bit more listening. So, we're a lot more broader than just the traditional- the bookkeeper role.

David Leary: Just to make sure I heard you correctly - you do not call your staff bookkeepers anymore?

Sammy Siddique: Correct. They're technically cloud-accounting specialists.

Blake Oliver: We approve of that title. That's good. Lisa, [00:09:30] tell us a little bit more about what customer success is, from an operational standpoint.

Lisa Gilreath: Yeah, I think for Acuity, it is evolving, especially this year. Customer success was born out of the SaaS-based space, and we're professional services, so we've got a different flair on it. But it really is making sure that we are matching our clients with the right technologies at the right time, enabling them to grow, and making sure that they are using [00:10:00] the full spectrum of services that we have to offer.

Blake Oliver: So, what's top of mind for you guys? When we talk about the state of the industry, is there anything that is worrying you, or concerning you, or is it just business as usual?

Lisa Gilreath: I think it's changing, and it's changing quickly. I think, for our group, the number-one question they have is when is the banking system going to settle down and be consistent? We talk a lot about bank feeds in our group, and broken bank feeds, and some of the frustrations that that brings, in terms of our serving our clients. So, seeing [00:10:30] where the consolidation is going to happen and how that consolidation affects all the ecosystem products at the same time has been a little bit of a challenge.

Sammy Siddique: We have definitely had a lot of discussions about automation. We are looking to embrace the automation to see how the team members can refocus and help clients in other areas besides the basic level. Of course, we're always looking to grow and expand in better ways that we can serve.

Blake Oliver: Both of you are working from home, or are you working in the office here?

Sammy Siddique: We do come [00:11:00] into the office occasionally, but yes, primarily, we're working from home.

David Leary: What would you say, Lisa, as far as going to bank feeds ...? Because I've heard this gripe a lot about bank feeds. Let's say there's-

Blake Oliver: And this is something that folks in Australia and the UK just don't understand-

David Leary: They don't understand, our listeners there ... Now, maybe there's an executive at Chase, right? They're in the small business division. They want to really understand what this problem is. What are the problems you're seeing- running into with bank feeds - besides them just being down - that you have with your clients?

Lisa Gilreath: Yeah, I think [00:11:30] one of the biggest challenges for us, on the customer-success side, is that customers do not understand why the bank feeds don't work and why they have to continually go in and connect them. Every time a bank makes a change, Hubdoc goes down, Xero goes down, QuickBooks goes down. Then, we're left in the position of saying that we can't deliver the work because we don't have the banking information. It leaves a bad taste in the customer's mouth, in terms of delivering services smoothly and on a timely basis. We're [00:12:00] little in the whole scheme of things; Chase isn't taking my call-

Blake Oliver: Not yet.

Lisa Gilreath: Not yet.

David Leary: They will now, now that you've been on The Cloud Accounting Podcast ...

Blake Oliver: Yeah, exactly-

Lisa Gilreath: It's a whole new world now.

Blake Oliver: Let's talk about Chase, all right? In a perfect world, people don't realize- clients don't realize that bank fees are screen-scraping tools, right? They're literally logging in on our behalf, and there's no API connection between the bank and the accounting system, in a lot of cases, right?

David Leary: Yeah, there's ... I mean, billing APIs would be coming from [00:12:30] that app side, right?

Blake Oliver: Yeah.

David Leary: Building an API for your own use is hard. It's work. It's very scalable once you do it but building an API for the rest of the world to consume is a whole 'nother monster. Banks are not used to making their data public, so they're going through a learning curve right now, and it's gonna be hard.

Blake Oliver: Have you thought about just making your clients go on all one bank; trying to do that? That's impossible. I hear laughs.

Lisa Gilreath: Yeah ... We're pretty transparent in all the softwares. We can't even make them go on to Xero or QuickBooks alone; [00:13:00] or we don't choose to make them do that. We make recommendations, in terms of who we think the better banks are, in terms of ease of working, but that really actually changes from month to month.

Blake Oliver: That's an important thing to point out and emphasize is you are agnostic, when it comes to which general-ledger application ... Do you standardize on anything, or do you just say, "We're gonna try a little of everything, we’re gonna work with whatever the client's working with ..."?

David Leary: Maybe this is a question to Sammy, since [00:13:30] you're looking into automation. How can you automate anything, if you don't have a standard tech stack, and you're just using whatever apps the clients are using?

Sammy Siddique: We do have a standard tech stack in bookkeeping. Each client has to choose QuickBooks Online, or Xero for their basic, and then we'll have ... We do; we partner with Expensify, Gusto, different things. So, as long as they're sticking with our preferred technologies, the bookkeeping team can service them.

David Leary: So, you have some sort of guardrails of streams; you're not [00:14:00] gonna support 25 different ' take a photo of receipt' apps, but you're gonna [crosstalk]

Blake Oliver: What if I come in with this really great small payroll processor, called MyPayrollHR, and I'm like, "These guys are the best!" ...

Lisa Gilreath: Honestly, if they fall in the similar parameters, we'll be willing to try it out and work with them. We can service clients that are not on those, but just not on my team. We'd probably dip into the controller, and the CFO team. So, we won't necessarily say no. It's just like maybe, "Just not in our team ..."

Blake Oliver: What about verticals? [00:14:30] I think Kenji mentioned earlier some refocusing on different verticals, or you went broad-

Lisa Gilreath: We have not had verticals up until this year, and we're still not walking away from all of our clients that aren't in those verticals. But we have taken the stand to really start building deeper in verticals, starting with SaaS and creatives being the top ones that we really see a concentration in our client base; then really kind of building the tech stacks around those [00:15:00] specific verticals and marketing out towards them, specifically.

This episode of The Cloud Accounting Podcast is sponsored by OnPay. Many times, when choosing a payroll service, you have to choose between a new startup with a great app, or an established company whose tech may feel a little behind the times. With OnPay, you get the best of both worlds - a great app from an established company that's been providing payroll for over 30 years in all 50 states.

OnPay is an easy-to-use, full-service payroll with simple, straightforward pricing, and it includes all their features - employee self-onboarding, HR tools, health insurance, worker's comp tracking, and 401(k). With an accountant's dashboard and partner program combined with best-in-class integrations with Xero, and QuickBooks, OnPay is the right fit for all your clients, whether they have just one or 500 employees. They also handle all the complicated stuff that other payroll providers don't, like agricultural payrolls, including Form 943, multi-state payrolls, and employees with H-2A visas.

I'm really excited to tell you that OnPay is offering an exclusive promo code only for the listeners of The Cloud Accounting Podcast to get three free months of OnPay payroll service for any of your clients that you set up by February of 2020. Head over to That is Cloud Accounting Podcast dot promo forward slash O-N-P-A-Y, and use code "CAP3FREE," when you sign up your clients. That is C-A-P, the number 3, F-R-E-E. And to be clear, you cannot get this promo anywhere else. It's only available to the listeners of the Cloud Accounting Podcast.

David Leary: In a way, wasn't Acuity, just from the get-go, in the startup vertical? I mean, this building, the Atlanta Tech Village, if I understand it correctly, only allows SaaS-based startups in here. The only business that's not a SaaS-based startup is Acuity - the accounting firm. That'd be like, if your niche was food trucks, and they have those food-truck roundups, and you or the bookkeepers showed up with your food truck, but you didn't sell food; you just did bookkeeping-

Blake Oliver: Oh, my gosh ...

David Leary: -and you were there every single time.

Blake Oliver: David, this is brilliant! We should start an accounting truck and just drive up to all the other food [00:17:00] trucks-

David Leary: And just do their books.

Blake Oliver: -and do their books. We could drive around to them wherever they are-

David Leary: This is it.

Blake Oliver: -and have a Twitter account, right? That's how people know where we are, and they-

Lisa Gilreath: You could compete with QuickBooks Live.

Blake Oliver: You're right! We come to you. It's not just in a little box on your screen. Literally, we will drive to your house, or your place of business and do the-

David Leary: Right.

Blake Oliver: I feel like this has been done.

David Leary: Don't release this until I spin it up.

Blake Oliver: Okay.

Lisa Gilreath: They may wanna pay you with free lunches. You might wanna reconsider there.

Blake Oliver: I don't know. I mean ... In L.A., the food-truck scene is pretty awesome. [00:17:30] I might take them up on that.

David Leary: All right, bank feeds are fixed. We have this amazing, perfect world; everything's automated. What do you solve for your clients then? What services are you gonna provide?

Lisa Gilreath: Systems recommendations.

Blake Oliver: Systems recommendations.

Lisa Gilreath: There are so many. The ecosystem is huge. In onboarding our staff, when they first come on, there's always a sense of intimidation, a little bit, about they don't know all the softwares; like, "I don't know to give the right ones." Then I always pull out the Accountex picture, and say, "Good luck ..." [00:18:00]

Blake Oliver: That's terrifying. Have y'all seen that ecosystem diagram with like 500 apps?

Lisa Gilreath: Every software that is in each space, and that kinda thing. It is very overwhelming.

Blake Oliver: David knows them all. He learned them all [crosstalk]

Lisa Gilreath: Yes. Alphabetically, right?

David Leary: I have them in my CRM, actually; every one of them.

Lisa Gilreath: That's where I really hope that we become better in making good system recommendations based on our verticals. Then, also, preparing for eventual consolidation in some of those spaces.

Blake Oliver: What do you mean by consolidation?

Lisa Gilreath: I think [00:18:30] we're gonna have apps that are gonna be really good at certain things and, at some point, they're gonna gobble each other up.

Blake Oliver: We've already seen some of that, right?

Lisa Gilreath: Right.

Blake Oliver: Auto Entry; Sage; Hubdoc; Xero.

Lisa Gilreath: Exactly.

David Leary: I think even bill pay ... Two years ago, I feel like nobody used to be with, and I feel like every single ... Some of the news I even brought today, every time I turn around, another app's announcing, "We now do bill pay."

Lisa Gilreath: Right.

Blake Oliver: Well, thank you so much, Lisa and Sammy. Really appreciate you jumping on the podcast with us.

Lisa Gilreath: No problem.

Blake Oliver: Any parting words for our listeners? [00:19:00]

Lisa Gilreath: Yeah. So, first of all, if you are a listener, you should know that The Cloud Accounting Podcast is a great recruiting tool.

Blake Oliver: Really?

Lisa Gilreath: Because our newest hire, Kai, back there in the corner, hiding behind the camera, actually was a referral that called into you guys, or reached out to you guys, and you sent them our way. We're very thankful to have her. So, listen; network-

Blake Oliver: We'll take our 20-percent commission on the first-year salary. [00:19:30]

David Leary: I have a question, because I feel like Matt, and Kenji are pulling my leg a little bit because he says, "Oh, we make all our staff listen to every single episode." Is this true or not true?

Sammy Siddique: We definitely recommend your podcast. At least once a month, we are reminding the team; make sure we are blasting it. We are huge advocates of the podcast, so, please, please, if you are not listening, start listening.

Lisa Gilreath: Yeah, absolutely. If, on one of our team calls, you've heard me say, "Oh, that was recently discussed on The Cloud Accounting Podcast," raise your [00:20:00] hand.

Blake Oliver: Wow, and I see half the room [crosstalk]

Lisa Gilreath: You make our job a lot easier.

Blake Oliver: Well, thank you. Thanks for that. Lisa, Sammy, you made this episode much easier, so thank you for your participation.

Lisa Gilreath: Thanks for having us.

Sammy Siddique: Thanks for having us.

Blake Oliver: All right, so we've got our next two victims here. We have Graham; "Graham Wood, CFO," is what your name badge says. Is that an apt description or can you elucidate upon that?

Graham Wood: That pretty [00:20:30] much says it.

Blake Oliver: And we have Ann; Ann O ...

Ann O'Dea: O'Dea.

Blake Oliver: Ann O'Dea. Thank you for joining us. What's your role?

Ann O'Dea: I'm the controller team lead.

Blake Oliver: Controller team lead, all right. Would you mind tipping that microphone just down- you can adjust it down a little bit.

David Leary: You have an accounting-firm name - O'Dea and Associates.

Blake Oliver: Yeah, that's a good one.

Ann O'Dea: Yeah. No ... I wanna be at Acuity.

Blake Oliver: That's right. Ann, what's your role?

Ann O'Dea: I'm the controller team lead.

Blake Oliver: Controller team lead. Okay, let's talk about controllership if you don't mind, Graham. We're gonna go controller, [00:21:00] and then, CFO ...

Graham Wood: Go for it.

Blake Oliver: So, what is controller ... What's the controller team do at Acuity, Ann?

Ann O'Dea: One of our main tasks is when a client wants to be accrual basis rather than- the cloud-accounting team handles cash basis. Then, if they move to accrual, you bring on a controller; or just to help out with the tech stack that they don't do, you bring in a controller?

Blake Oliver: Gotcha. All of those month-end close procedures to get ... You do GAAP financials? [00:21:30]

Ann O'Dea: Yeah, GAAP financials. Then, we also help in the beginning with new clients, doing cleanup. So, before the cloud-accounting team takes over, controller will come in and straighten up the books; get them so that they can go from that point.

David Leary: Is it kind of like a virtual controller? You have multiple clients each ...?

Ann O'Dea: Yes.

Blake Oliver: When does a client generally graduate or need controller services? At what point ...? Are there any indicators when you know, like, this is the time? [00:22:00]

Ann O'Dea: Well when they need the accrual basis. Definitely, if they're in the SaaS area with deferred revenue, they want that, so-

Blake Oliver: They're gonna go raise money?

Ann O'Dea: Yes.

Blake Oliver: Okay, gotcha. You mentioned, SaaS. That's one of your big verticals that you're serving there.

Ann O'Dea: Right.

Blake Oliver: Any others in particular where you focus a lot in?

Ann O'Dea: Well, myself, personally, also professional services, just because my background was in professional services.

Blake Oliver: Okay gotcha. What were you doing before Acuity?

Ann O'Dea: Right before Acuity, I actually was at a private school; a non-profit. [00:22:30] Before that, it was an accounting firm. I did a lot of the lawyers, doctors, creatives, that sort of thing.

Blake Oliver: How long have you been at Acuity?

Ann O'Dea: I think this is actually my one-year anniversary, like this week.

Blake Oliver: Congratulations [applause] Graham - Graham Wood, CFO - how long have you been at Acuity?

Graham Wood: 10 years.

Blake Oliver: 10 years. Wow. We only thought Acuity was around for eight, so you were like [crosstalk]

Graham Wood: I was [00:23:00] ahead of my time.

Blake Oliver: That's great. What does the CFO group do at Acuity?

Graham Wood: We're more strategic. We look at funding exercises. We build financial models. We give advice. All of us have been around for maybe not quite as long as me, but we have a lot of experience. We've got a lot of stripes on our back, so we impart whatever wisdom we can, possibly, on the existing [00:23:30] CEOs, COOs, sometimes board members.

David Leary: Would you say ... My understanding is Acuity really started out as trying to just be a virtual CFO, or CFO-only firm.

Graham Wood: Correct.

David Leary: Has your job gotten easier now that you guys have worked backwards and do bookkeeping, where you're controlling the whole data stack to the data that now gets to you to make decisions?

Graham Wood: No. It's gotten more difficult, actually-

David Leary: Interesting. All right.

Graham Wood: -on our side. It's one of those things that, yes, we do get more information now, and we believe it's better information. But with that comes a lot [00:24:00] of responsibility of transcribing it, basically, to the existing staff, management, managers, you name it.

Blake Oliver: We talked about when a client needs controller services, generally, they need to go accrual.

Graham Wood: Right.

Blake Oliver: They may need GAAP financials, raising money. When do I need CFO services from Acuity?

Graham Wood: Well, the biggest that I see is when they're ready to go out for funding. It's one of those that now, it's time to build a financial model. It's time to really go through the financials, [00:24:30] make sure they make sense, and once you do that financial build, defend it.

Blake Oliver: How did you learn to build financial models?

Graham Wood: Trial and error.

Blake Oliver: Really ... Did you learn from somebody? Did you teach yourself? Did you buy a book?

Graham Wood: No. It's mostly self-taught.

Blake Oliver: Self-taught?

Graham Wood: Yep. Been around long enough that I can claim that now.

Blake Oliver: So, just building up a three-way financial-statement model from Excel from scratch? [00:25:00]

Graham Wood: Well, when I joined Acuity, we were fortunate enough to have a model that we used. It wasn't the easiest, shall we say. Had to have a lot of technical help from the founders trying to decipher how in the heck is this thing working, and why is it not working? So, we went through that. After two or three years of struggling with that, I decided I'm just gonna do it myself. So, I gave up the company model-

Blake Oliver: And [00:25:30] you just built your own.

Graham Wood: I built my own.

Blake Oliver: What do you enjoy most about being a CFO?

Graham Wood: The interaction with the people, and that comes through the CEOs. They're asking for expertise, and I've been around long enough now that there's a lot of experience. That's what people pay for now. When you think about a CFO, you think experience. You don't think on-the-job training. It's just not gonna happen.

Blake Oliver: You mentioned companies going out to raise money. You've been there. You've done that. How many times [00:26:00] have you helped companies raise money even now?

Graham Wood: Well, not really, but the last time I tried to add it up, it's over $200 million.

Blake Oliver: $200 million in fundraising-

Graham Wood: In fundraising.

Blake Oliver: Okay, got it, wow. So, I'm a CPA. I am in a traditional firm. We do a little bit of bookkeeping and maybe some GAAP accounting, a little bit, but really we're tax and audit. That's most traditional firms - tax and audit. We want to get into the [00:26:30] advisory side of things. Do you consider what you do to be advisory? Am I using the right term? Or do you like dislike that word? Do you like that word?

Graham Wood: No, advisory is probably the correct word to use. I actually like that more for me ... For my side ... It's just, they ask me, "What's your experience been? What have you been through? What do you feel like is gonna happen?" They'll ask me, "How's an investor going to react?" So, I tell them what [00:27:00] I've been through before.

Blake Oliver: What's your advice to firms that want to get to that advisory point? Because David, and I go to all these conferences, all these sessions, all these webinars, where we hear people say, "You gotta move your firm to advisory services!" We see you guys doing it. How do you actually do this?

David Leary: Before you answer that, though, I think there's a lot of [crosstalk] There's a lot of mindset that, "Of course, he's a CFO. Of course, they can get into advising. It's easy. They're a CFO ..." But just a show of hands - a lot of you are bookkeepers, [00:27:30] I think, that are here on the bookkeeping team. How many of you consider what you do sometimes advising to the clients, like you're offering advice? What, 20, 30 percent, 40 percent-

Blake Oliver: Yeah, at least.

David Leary: -all consider themselves being advisors.

Blake Oliver: Well, there's definitely advisory work you can do at any level, right?

Graham Wood: Right, and they are right. They are advising the client because they're asking, "What should I do?" That's great, when you've got the bookkeepers, controllers being asked, also, "What should I do?" But when you're talking to a CFO, then, there's [00:28:00] a lot at stake; the future of the company, sometimes. "Can I make payroll in two weeks? When am I going to be out of cash? How much money should we raise? What do you think the valuation is going to be? What's my option pool look like?" You name it.

Blake Oliver: Going back to my question, David, if I may-

David Leary: I'm sorry, go ahead.

Blake Oliver: I want to become ... I want to be like you someday, Graham.

Graham Wood: Old?

Blake Oliver: You know, this podcast host game is just not what it was cracked up to be. I really want to get into [00:28:30] the CFO stuff ... Do I just have to do trial and error? Do I follow you around and learn your secrets?

Graham Wood: No-

Blake Oliver: Can I shadow you?

Graham Wood: Good luck ... No, you just have to do it. You just have to get out and experience it. You can't do it from sitting behind the desk. You can't do it ... I mean, you've literally got to be in the trenches.

Blake Oliver: To be fair, maybe we should have the tax team come up here ... They have to do a ton of advisory on the tax side, right?

Graham Wood: That's right. They do. [00:29:00]

Blake Oliver: The planning for owners of businesses, and all those tax strategies. Enormous. But maybe people don't always think of what they do as being advisory, even though it is.

Graham Wood: I get a lot of advice from my tax guy. "Don't do this. Don't do that. What did you do ...?"

Blake Oliver: Does anyone have any news stories? We like to talk about the news on this podcast a lot. Is there anything that, in particular, [00:29:30] is of interest to you that you've been following - accounting/finance-related - in the world of accounting? I'm not ... I don't mean to pick on you, Graham, and Ann; just, you're here. But we can also take questions from the audience, too. We're happy to do so. I believe Matt has a microphone. We've got a microphone if anyone wants to talk. We're here to talk! Let's talk about some of the burning issues and fun stories that we've had going on.

Acuity: I've got a question.

David Leary: Okay.

Acuity: What do you guys think [00:30:00] about community-adjusted EBITDA?

Blake Oliver: Yes, the question is what do we think about community-adjusted EBITDA? Which, I believe, is a WeWork non-GAAP financial measure.

Acuity: Correct.

Blake Oliver: Woo! Yeah, I've been doing my reading. This is a question I'd love to hear opinions on is the rise in non-GAAP financial metrics in reporting by public companies ... There's been some [00:30:30] chatter, some articles written about whether that's a good or a bad thing.

Graham Wood: Well, it's more data, that's all. Just use it for what it is. I mean, is it something the SEC's going to rely on? No. But if it gives somebody a better insight into the company's performance and the metrics therein, I don't have a problem with it.

Blake Oliver: Well, and it is good now that we require that companies reconcile their non-GAAP measures to [00:31:00] GAAP, right? We didn't used to do that. That was only a few years ago that that happened.

Ann O'Dea: Right.

Graham Wood: Right.

Blake Oliver: That's good, but it still raises the question ... David, and I actually just had a great interview, the podcast episode that dropped today ... We did an interview with Ethan Rouen of the Harvard Business School, who wrote an article about how GAAP doesn't fairly address human capital, investments in human capital, because we are expensing all of our investments in people.

Actually, Kenji [00:31:30] and Matt know what I'm talking about, right? You're paying today to ... This is a training, right? The reason you're bringing all these people here together is an investment in your people. Is that an expense that should just happen once and you're done? No, this is an investment in the future. But the way that we account for it doesn't seem to suggest it's an investment.

Graham Wood: What do you do? Capitalize it and amortize it? Over what period of time?

Blake Oliver: I don't know [crosstalk] That's your job-

David Leary: -this is why we brought in the Harvard professor last week.

Blake Oliver: -Ann's supposed to figure that out.

Graham Wood: What was his [00:32:00] answer?

Blake Oliver: Yeah, he didn't have ... He wouldn't ... We couldn't nail him down on anything specifically.

Graham Wood: That's Harvard.

Blake Oliver: But there's this question of the relevance of accounting. We do all this hard work to put together these financial statements. It's a lot of work - from the bookkeeping, to the accounting, to the controller, to the CFO. Then, who looks at it-

Ann O'Dea: Right.

Blake Oliver: -a lot of the time, right?

Ann O'Dea: Right. Your assets are at book cost. They're not at fair market value. Then, [00:32:30] the client saying, "Well, that's not even what anything's worth."

Blake Oliver: Right. Then, we're expensing all of our research and development in the period, but that's all to generate intangible assets in the future, a lot of times, right?

Graham Wood: We don't have a perfect system. There is no doubt about that, but at least you know what's there and can theoretically trust it.

Blake Oliver: What about non-financial metrics? When you create reports for your clients, do you put in that stuff? Do you go beyond just [00:33:00] what's in general ledger?

Graham Wood: Minutes spent on the website by each customer, or things like that?

Ann O'Dea: Yeah. You try to figure out ... When you're talking to your client, you're trying to figure out what they are interested in. If minutes on the website is gonna drive their sales, then you wanna capture that for them, or if ... Whatever it is ... What's that driver of sales so that they can see - is it growing; is it shrinking? So, any of that can help them. I mean, it's what you just said. It's more data. The more data they can look at ... Accountants [00:33:30] always get back to the numbers of the data, basically, but it can help them.

Blake Oliver: Right.

Graham Wood: True. Human resource capital is something else we tend to watch very carefully because, at least in the software side of the industry, that's 70-75 percent of your cost structure, so you'll wanna know it.

Ann O'Dea: Right, and turnover can be very important.

Graham Wood: And turnover.

Blake Oliver: Yeah, turnover, right? If I was investing [00:34:00] in a company that had really high turnover, that would be a very strong indicator that there might be a problem.

Ann O'Dea: Right.

Graham Wood: Unless that's a norm of the industry.

Blake Oliver: Right, yeah, compared to industry norms.

Graham Wood: Exactly [crosstalk]

Acuity: -go back a second to my thought?

Blake Oliver: Yeah.

Acuity: Community-adjusted EBITDA-

Blake Oliver: Oh, yeah. I got away from that real quick [crosstalk]

Acuity: When reading about this, and I think most of us accountants understand EBITDA, but the definition that WeWork gave of community-adjusted EBITDA not only subtracted out earnings, [00:34:30] interest, depreciation, and amortization, but also expenses like marketing, E&A, and development, and design costs ... That is crazy, isn't it? Aren't we just completely making things up at this point? Maybe it's not a reason that they didn't go public, and this whole ... I don't know. That, to me, starts getting to where that is ...

Blake Oliver: David had a really good point on a recent [00:35:00] episode about like-

David Leary: I did?

Blake Oliver: Well, you brought up a really good point. I don't know if it was your point. But you said something like this proves that accounting works, right? The fact that ... Was it you ...?

David Leary: Oh, no. Sean Stein Smith wrote a really good article we talked about. It's the free market works ... The fact that they reported this. People started looking at the numbers, and because of that, people discovered, hey, maybe it's not there. Then, the IPO didn't happen. Ultimately, that's what we want in our society. There's no perfect GAAP numbers, but it [00:35:30] doesn't matter. They were just good enough for people to dig under the covers-

Graham Wood: But they didn't start looking at it until he was ready to go public, right? It was the investors that started.

Blake Oliver: Right. So, that's a success story, right? The failure, the massive failure of WeWork is an accounting success story because we saved all those investors from a terrible investment ... That's how we should be ... That's what we should be saying to our friends and family, like, "Guys, WeWork losing $40 billion in value is awesome!" You know?

Graham Wood: In a matter [00:36:00] of days.

Blake Oliver: In a matter of days, right, which just goes to show you that the whole thing was insane to begin with.

David Leary: Except for I saw an article now, arguing ... We've got another question coming up here ... Arguing that the founder, that he's gonna be like the poster child of every MBA now, because he figured out how to extract $1.7 billion dollars of value by destroying value. They're saying he might've planned this the whole time of just knowing the capitalization, and the investors were just begging him for something like [00:36:30] this-

Blake Oliver: And all the self-dealing, right? They had to basically pay him off to leave. It's like a billion dollars to leave his company-

David Leary: He may have planned this whole entire thing is what the article ... It's a very egotistical move ... If that's the fact, he is the king of all kings.

Blake Oliver: Yeah, and I'm glad you said that, and not me, because he now has $2 billion dollars ... Another question? All right, Kai Moon, customer success; welcome to the show.

Kai Moon: Thank you. I'm happy to be here. I had looked at a few articles before you guys [00:37:00] came.

Blake Oliver: Yes!

Kai Moon: One of them was back from the 22nd of this month. If you've heard of Splunk, their CEO ... I read this article about how he kind of says, "In the coming age, there will be only two types of companies. There will be those that are willing to seize the opportunity to make things happen with data, and those who will no longer exist."

So, as we're talking about this issue of automation and maybe [00:37:30] folks seeing risk to their jobs, how could we maybe leverage this? I think we have a whole history of ... Data's always been around, but we're better at capturing it. So, now I think the next step is how do we get better at interpreting that and maybe making that a new part of accounting and financial services? It's already there, but I think it's gonna have to have a really big learning curve.

David Leary: I don't necessarily know [00:38:00] if that's true. I think the data is ... There's more, and more, and more data and, to some extent, it's just gonna be an equal playing field. Everybody's gonna have the same access to all the data. Nobody'd gonna have a competitive edge. Right now, we're probably in a time where there's a competitive edge, but eventually, it won't matter. What it's gonna come down to is your people, your culture ... It's the same important values of a company that- the data is not gonna bridge those gaps.

Blake Oliver: Well, but somebody like Graham is always gonna need to be there to interpret that data, make sense of it, and tell people, "Here's what to do based on past [00:38:30] situations," right?

Graham Wood: Yeah, you're right, but I ... The only thing I can add to that is the term artificial intelligence is now becoming ubiquitous. I mean, nobody really can define it as to what it is. Nobody is really sure what the output is yet, but that will happen. You'll have machine learning, and deep learning, to where then interpreting for you, but how do you interpret [00:39:00] what it's interpreting?

Blake Oliver: Well, here's a great example, on this show, is transcriptions. It used to be you had to pay a transcriptionist to manually transcribe your episode, or any audio. It was very time-consuming, and expensive. Now, there are services out there that will transcribe 90-percent accuracy, and then, our transcriptionist, her job is to verify that it's correct.

Then, she adds value by putting together the show notes that [00:39:30] you may read. She's not just transcribing anymore; she's suggesting ... She's saying, "Hey, let's organize things this way. You guys should do this next time." I think that's kind of a nice parallel to bookkeeping or accounting in that it's not just about entering the data anymore, it's about how can we ...

Graham Wood: Right. Well, you know, data is a cold fact. That's all it is. A CFO, a bookkeeper, or a controller is [00:40:00] actually putting a human touch on it. I don't think you're ever gonna see that go away.

Blake Oliver: Love that.

David Leary: So, we're not gonna see a chatbot CFO-

Graham Wood: And that was free.

Blake Oliver: Yeah. You're gonna send me your hourly bill, right, after this?

Graham Wood: It's already prepared.

Blake Oliver: It's already prepared. The AI bot has prepared it, based on your calendar [crosstalk]

Graham Wood: Exactly.

Blake Oliver: That's great. Well, Kai, thank you so much for that question. I think we may be ... That's really our time. Graham Wood, thank [00:40:30] you so much for joining us.

Graham Wood: Enjoyed it.

Blake Oliver: Thank you, AcuityCon! [applause]