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Blake and David discuss the slow adoption of AI tools in accounting firms, with a recent study showing low usage rates. They also explore the potential of AI to streamline tasks like email writing and fraud detection, highlighting tools like Superwhisper. Moving on, there are political discussions around tax exemptions for tips and their potential consequences, updates on the Wirecard fraud case, and insights from a study linking corporate ethics language to negative outcomes.
Chapters
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Lendflow - http://accountingpodcast.promo/lendflow
The Small Business Research Institute - http://accountingpodcast.promo/ceanow
Bookkeeping Biz Workshops - http://accountingpodcast.promo/bbworkshop
Practice Protect - http://accountingpodcast.promo/protect
Chapters
- (00:00) - Introduction and Welcome
- (00:59) - AI Tools for Accountants
- (01:21) - CPA Pathway Discussion
- (03:21) - SuperWhisper Demo
- (05:30) - Email Efficiency with AI
- (29:20) - Savannah Bananas Business Model
- (36:54) - LegalZoom Layoffs and Restructuring
- (38:35) - Challenges of Software in Service Businesses
- (38:51) - QuickBooks Live and Bookkeeping Models
- (42:19) - AI in Accounting: JPMorgan Chase's New Tool
- (44:33) - IRS Free File Expansion
- (48:26) - Debate on Taxing Tips
- (54:08) - Wirecard Scandal Update
- (55:15) - Ethical Companies and Investor Skepticism
- (01:00:16) - Listener Feedback and Career Advice
- (01:13:14) - The Accountant 2 Movie Announcement
Show Notes
Study finds accountants slow to adopt gen AI
Why Trump and Harris’s ‘no tax on tips’ plans may not help tipped workers
Beware When a Company Says It Is Trustworthy
Two more Wirecard executives charged over accounting scandal
LegalZoom Announces Leadership Transition
JPMorgan Launches AI Assistant for 60,000 Employees
Eligible taxpayers in 12 states can file for free with IRS Direct File
The Accountant 2: Official release date revealed, here’s when new episodes will air
https://economictimes.indiatimes.com/news/international/us/the-accountant-2-official-release-date-revealed-heres-when-new-episodes-will-air/articleshow/112474832.cms?from=mdr
https://economictimes.indiatimes.com/news/international/us/the-accountant-2-official-release-date-revealed-heres-when-new-episodes-will-air/articleshow/112474832.cms?from=mdr
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Transcripts
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!
Blake Oliver: [00:00:04] You've just got to be fearless and, you know, be willing to learn and you can ride this wave. Um, and I think actually the tax practices, the ones that combine bookkeeping and tax into a single package, which is what clients want, they're going to crush it if they embrace AI to do that.
David Leary: [00:00:22] Coming to you weekly from the OnPay Recording Studio.
Blake Oliver: [00:00:26] Hello, and welcome back to the Accounting Podcast, the number one show for accountants in the world. I'm Blake.
David Leary: [00:00:31] Oliver. I'm David Leary. Still number one.
Blake Oliver: [00:00:34] Still number one by downloads on the Apple charts. Uh, thank you to all our loyal listeners. And thank you to those who are joining us on the live stream today. As a reminder, you can follow us on YouTube and you can get notified when we go live. Hit subscribe, hit that notification bell and help us get to 20,000 subscribers before Jason starts. We want to beat him there, but subscribe to his channel while you're at it if you haven't, because it's really great. And I've got a tool, an AI tool that I'm going to share today that I learned about from his newsletter. And it's crazy. This is like what I've been waiting for for a year. It helps me write emails three times faster, but it also does a whole lot more than that. And I have a demo for you, so I will play that video a bit later. But first, David, I wanted to recall our conversation from last week with Amber setter about the California Board of Accountancy move to begin drafting legislation to provide a four year pathway to the CPA. Jennifer Wilson on LinkedIn said, Blake and Amber, I would love to hold a call with each of you when you've had a chance to read the full national Pipeline Strategy report that includes much, much more than the pledge, including changes to legislation. I would love to discuss the 40 plus recommendations and hear your thoughts on how to move those data driven recommendations forward in your committees. The first cross association implementation discussion will happen on September 23rd and there will be more on top priorities then. And I invited Jen to come on the show today and talk with us. She is the facilitator of the National Pipeline Advisory Group, the group put together by the AICPA to address this problem.
David Leary: [00:02:15] I was thinking you could spin this into a 40 episode podcast. You can. There's 40 points, right? Or 40 things they want to do.
Blake Oliver: [00:02:22] They have a lot of things in there. And of course, our criticism on last week's episode is that they are not specific, that they are not actionable. And I have read the report, and I continue to hold that very few of those positions, such as we must increase starting salaries, actually have actions associated with them, like, okay, you want to do that, how do you actually do it? And I my position is that we need to take action now. And the thing we can very easily do is to streamline the initial licensure requirements without lowering standards. So I look forward to having Jen on the show. Unfortunately, she did not Um, agree to come on today. Uh, I.
David Leary: [00:02:57] Understand it was. I was not ready. I wasn't prepared, so. Well that's good.
Blake Oliver: [00:03:00] But but hopefully we'll find a time. She said that we will find a time that works. And, uh, we'll message us. So Jennifer Wilson, we look forward to having you on the show to discuss the pipeline challenges. But for now, David, I want to talk about artificial intelligence because that's the solution to the talent shortage. Uh, one solution. The other is offshoring. But I kind of like AI better because it keeps jobs here in the US. And, um, I've been playing around with this tool, as I mentioned, at the top of the show called Super Whisper. I found it via JSON stats and it's amazing. It eliminates the copy paste between ChatGPT and my email.
David Leary: [00:03:46] Is this, uh, two words or one word?
Blake Oliver: [00:03:49] Super whisper. One word. All lowercase.
David Leary: [00:03:52] I'll put it in the chat. The comments. Okay.
Blake Oliver: [00:03:54] So yeah, check it out. David's going to put the link in there and well, let me play the video because I explain it all in there. I do a demo and then we'll come back after and I'll talk a little bit more about it because um, this tool for me, it's, it's, it's where we are headed with AI. And it's pretty exciting to be able to control AI with your voice in a really sophisticated way. So here it goes. Hey, everybody, I want to show you a new app that is changing my life. I'm not kidding. Well, okay, maybe not my life, but definitely how I write emails. It's called Super Whisper. It is AI powered voice to text. It's actually a whole lot more than that. But, um, well, let me just show you how it works. First of all, big shout out to Jason Stats and his newsletter. What's next for accounting? I discovered this app through that newsletter. Go subscribe. Okay, so back to Super Whisper. So this is an email from a listener of the accounting podcast. Angel. Angel says, good evening, Mr. Oliver. I enjoy your content and advice about becoming a CPA. I'm a junior at Arizona State University majoring in accounting. Listening to your podcast on your cpa firm.
Blake Oliver: [00:05:10] Could you provide any advice on how to stand out in a competitive job market? Could you share any tips on what influenced your decision to specialize in a specific area of accounting? Thank you for your time, Angel. I get these emails every day, sometimes more than one a day, and responding to every single listener is a real challenge. It takes time to do it thoughtfully, but with Super Whisper, I can do it thoughtfully and I can do it very quickly. So let me show you how I draft an email with Super Whisper. I hit reply and then I use a keyboard shortcut on my Mac. It is option space, So for our podcast listeners, I just want to say that what has happened is that my on my screen, a window has popped up that says recording. You can see a little waveform that shows that I'm being recorded and that is popped up over the email.
David Leary: [00:06:07] Um, so you start the reply and then you hit the the hotkey and that pops up the voice recorder. Yes. That's where we're at. Okay.
Blake Oliver: [00:06:14] And now we'll continue. Hey, Angel, thanks for listening and thanks for writing in. How could you stand out in a competitive job market? That's a great question. My number one piece of advice is get practical experience. The thing I hear all the time from firm owners is that the students coming out with accounting degrees don't have practical experience, and they have to spend years training them. So get experience reconciling books. Learn how to use QuickBooks or Xero. Uh, Get experience doing tax returns. Go get internships. But actual work that you get paid to do is even better. So experience will set you apart from those who do not have it. And if you know how to use the technology tools in particular, that gives you a huge advantage. You want to put that on your resume. Go get QuickBooks certified or get Xero certified. If there are certifications for the tax software or classes you can take on tax software, do that. If you can get experience doing actual audits or helping out in some sort of administrative capacity, do that. Now, as to your question about what influenced me to specialize in a specific area of accounting, I chose client accounting services bookkeeping. And it's because I love technology. And at that time, technology was really changing how we do bookkeeping. And it still is. Um, so I would recommend to follow your passion in accounting.
Blake Oliver: [00:07:46] If there is something that you really like doing, such as reconciling bank accounts, which I actually happen to enjoy. Then focus on that. I would not choose what to specialize in based on the amount of money you will make, because you're going to have to work really hard no matter what, and you should really enjoy what you're doing if you're going to work a lot of hours. So that's my advice. I hope it proves useful to you. Thanks again for listening and I hope that helps. And now I press the same keyboard shortcut to finish recording. And what is happening now is that my recording is being transcribed via a language model locally on my computer. Then that transcript is being sent to OpenAI via the API, along with a prompt that asks it to draft the email. And this is the email that we get out. Hey Angel, thanks for listening and writing in. How can you stand out in a competitive job market? That's a question. It missed that there. Didn't quite get the sentence right there. My number one piece of advice is to get practical experience. I often from firm owners that students graduating with accounting degrees lack practical experience, necessitating years of training. Now you can see there are some issues with this. It's not perfect, but this email is really well structured.
Blake Oliver: [00:09:08] It's cleaned up what I said, it's made it into more of an email. It is not perfect, but it is really good and it is much better than the transcript. And what's really neat is that it has been copied for me automatically into my email client. Now I also use Grammarly, so then I can go and I can clean it up. So I clean this up and there we go. Grammarly is a fantastic tool in combination with this. All right, good enough. We're done. So how long would this have taken me to draft if I had to type it a really long time? Definitely more than what I just did. And I believe that I can improve this even more. And I'll show you how I do that. I'm going to show you what's happening on the back end with Super Whisper. So what happens is the audio file is transcribed using a model that is local on your computer. And I have installed the Pro model, which has speed of six and accuracy of eight. So that audio file which is local doesn't go to the cloud, gets transcribed, and then it is sent to an AI model using one of the modes that I've created. And the mode I've been using is email. This prompt here is sent along with the transcript to ChatGPT, and the prompt asks ChatGPT to draft the email message based on the dictated transcript and gives it a goal.
Blake Oliver: [00:10:35] Your goal is to create a well structured, clear and grammatical message that maintains the intent and tone of the original dictation, and there's all sorts of instructions. And then there's also examples. Giving examples really helps. Here's an example. Input. This is what you might get from an AI transcript. And then here is the example for how to draft the email the format to use. I could improve this by either updating the email prompt or by adding more examples. And I'm working on this every day. What is really nifty about Super Whisper is that you don't just have to use it for email, it's completely customizable to any need you have. So I have a default mode, which includes no special prompt where I can simply speak effectively, speak to ChatGPT, and then the response comes back to me and pastes into wherever I was in any app that I was in. The other option is that I use a lot is messages. I've created a messages mode. There's a different style you want when you are messaging inside of slack or on LinkedIn, for instance. Then when you are creating an email. So I have a different mode and I can switch between them. There's also a meeting mode where you can record the system audio.
Blake Oliver: [00:11:53] So if you're having a meeting, you can turn on Super Whisper, and then it will record both your audio and the meeting audio from Zoom or Google Hangouts, and then will create meeting notes. And I have a prompt here to then create detailed meeting notes from a transcript. The main thing I'm experimenting with right now is email, and it is just so much faster. Even though I have to still sometimes clean up bits, it's really quite accurate and much faster. And I think actually, if I had not spoken so quickly because I was a little nervous making this video, I would have gotten more accurate speech transcription, which would have created a better output in the model. When I'm a little more thoughtful, I tend to get really good emails to the point where I don't even have to change anything. So I wanted to share this with you because this tool is like, I think 8 or $9 a month. And the best part is the security. So I can add a model and I can add in my own API key. When the transcript is sent to ChatGPT or to Claude, it goes through my developer account. So the developers of Super Whisper have no access to the transcript or the prompt or the response. It's basically as secure as if you had used ChatGPT Pro or Claude teams.
Blake Oliver: [00:13:18] So that's why I'm really excited about this. There's no more copy paste going on between you and these chat bots to get stuff done. It's making it much more accessible, allowing me to use it all the time. Anytime I need to respond to a message or an email. And I mean, I would say it's at least cut my time in half and maybe as much as three times. That's what Super Whisper claims. And I think it's totally possible. I mean, it could be far more than that, honestly. And the quality of my replies is just going way up, because by speaking, I can include a lot more information. I might have just done a quick reply to that email before, but now I can be really thoughtful and detailed. So I hope that helps you. Now, one of the challenges of using this app is that the default prompts that you get honestly, aren't that good. So I have developed my own prompts for emails and for messages, and I am happy to share those with you. And I'm going to be sharing those with you in the earmark community. So if you are not a member of the earmark community, go to Earmark Community and sign up and join the AI lab. I'm not sure if we've made that space public yet, but we will immediately after this live stream.
David Leary: [00:14:30] Send me an email. Blake and I will get that set up.
Blake Oliver: [00:14:32] Good. Well it's created. We just need to, like, take it live. Um, and, uh, I'm going to put the prompts I use so you can download Super Whisper whisper, copy my prompts into your prompt window and start using it. Now, if you want to get full privacy, you would have to then go create a developer account at ChatGPT or with Claude in order to use your own secret key for the API. But I will also be showing folks how to do that in the AI lab space that we created. So basically, I'm just obsessed with this tool and I want to show you all how to use it because this is like the the productivity boost we have been waiting for for a year when it comes to AI that you can use in a process that you are running for yourself every day, which is email.
David Leary: [00:15:17] So just to be clear, before all you windows using Microsoft Excel using accountants run out, it only works on Mac OS. It looks like Super Whisper. Yeah, but the number one feature request is a windows version, So there's something.
Blake Oliver: [00:15:30] Oh, I'm so sorry. All windows. That's like everybody who listens to this show. I mean, you know, I'm my bad. So it.
David Leary: [00:15:38] Might be a bit of a tease.
Blake Oliver: [00:15:39] But it might be, uh, might be a good reason to, uh, make the switch to to Mac. Um.
David Leary: [00:15:46] So, so this is in a way, like, for me, it feels like four months ago already. You you're using it was called Zapier Central. Right? And you kind of built this yourself. You kind of a version of this ish where you could get an email, it would draft the reply, automatically, paste it in as a draft email, and then you could use your Grammarly to clean it up.
Blake Oliver: [00:16:06] So the first version of this was creating a custom GPT or a clod project, where you give it custom instructions and it saves those instructions. Actually, before that, the solution was have a Google doc with all of my prompts, and then every time I need to reply to an email, I have to take the email writing prompt, stick that into clod and then copy and paste the email that I received into clod, and then tell it what I want to say. And by the time you've done all that, you might as well have just typed the email. The next version of that was save the custom instructions in a custom GPT or a clod project, which saves one of the copy pastes. But then you've still got to copy paste the email thread, and you still have to type what you want to say into clod. You could use text to speech in there, but still too much copy paste. This eliminates all of that. You just use a keyboard shortcut and boom, you speak it and then it sends it with the prompt to OpenAI or clod, and you get the response back and it pastes it right where your cursor is in whatever program you're in. And that, to me, is the thing that saves a ton of time, because if an email took five minutes to write, maybe now it takes 1 or 2 minutes, or if it took ten minutes to write, maybe now it takes a couple of minutes.
David Leary: [00:17:25] But there's still some experts. So if I think about how much expertise you need, like highest level expertise to build your little Zapier thing right through using Zapier Central.
Blake Oliver: [00:17:34] That's too complex. It's a lot of work, a lot of work.
David Leary: [00:17:37] Then, now this. You still have to have you still have to go in and pull some levers and gears and put some prompts in. So you still have some level of learning curve and skill set to build around this. It took.
Blake Oliver: [00:17:46] Me a few hours.
David Leary: [00:17:47] But as I was watching your demo, I'm like, it's so obvious this should just be part of Grammarly. Grammarly should just record your voice, pump back, write a nice email and be done. Like so. It's interesting to where this goes. But the you can see this the pace we're on of innovation right. Or even I've, I didn't bring any of the stories because everybody's having the same thing. Every tax doc collection software this year is going to have AI that takes whatever they uploaded and gives it a nice name. So if they took a photo with their phone and it's photo 76, it's going to figure out what the form is and give it a very nice name based on your file naming standards.
Blake Oliver: [00:18:25] And I hope it would file the document as well automatically.
David Leary: [00:18:28] Every every document collection tool is going to do that this tax season. So you're seeing these AI things become very like kind of standard across the as soon as it has the skill to do it reliably, you're going to see that feature in every app. And so something like this, you know maybe you're six months ahead of the curve, but this is just going to be an outlook. It's just going to be in everywhere right.
Blake Oliver: [00:18:48] We'll see if if if Microsoft can actually build this in a way that is user friendly. Um, we've seen Gemini roll out in Google Workspace and I'm not impressed. Google is supposedly at the forefront of AI innovation, and I've tried using it to reply to emails. And it's bad compared to what I can do with my own access. And so people aren't impressed because they're getting this substandard experience. They're getting bad AI. So it kind of turns people off. Aaron in our live stream says, can you send to copilot instead of ChatGPT? I don't believe so. You can enter your own API keys for ChatGPT and for Claude. Copilot is not an option, but copilot is built on ChatGPT. If you're talking about the copilot that Microsoft has. So I would just sign up for a developer account with OpenAI platform dot Openai.com, I believe, and you can generate an API key. You got to put in ten bucks or something like that. You can generate an API key. Plug that into Super Whisper and start using it. The cost is extremely low. I'm paying pennies per day because these prompts are actually not that large. Um, you know, the transcript is just maybe a minute long, and then the prompt is not that long. And the costs have gone down a lot on, on, uh, ChatGPT for that sort of thing.
David Leary: [00:20:19] So imagine when they build a windows version, which they said is on their roadmap here, that at that time they'll probably integrate because you're already it's probably from a developer lift accessing that extra API. Since you're already building a windows product, it's probably not that much more.
Blake Oliver: [00:20:33] Amy says super whisper is interesting. Thanks for sharing. I'm using Otter ChatGPT 4.0 and tried cloud projects. Do you offer a free trial? I think that means does Super Whisper offer a free trial? No they don't, but it's like nine, 8 or $9 a month, so very low risk.
David Leary: [00:20:50] Um, a 15 minute trial, I think they saw. Oh.
Blake Oliver: [00:20:54] I guess there's some features that you can trial. Yeah. Um, but I mean, you know, you can you can do a lot of this manually. You can do this with creating ChatGPT custom Gpts or cloud projects and then copying and pasting. Um, I just I just love that this is right there. Keyboard shortcut. I mean, with the default project where you don't include any custom instructions. It's basically like press a keyboard shortcut and you're talking with ChatGPT. It sends your prompt and then the response you get is goes right there into your cursor. So like I was working on the the pitch deck for the seed round for earmark. And I wanted to include a paragraph about how we're using artificial intelligence to create CPE courses at a fraction of the cost of a traditional provider. And so I just spoke about it. I just hit the keyboard shortcut, selected the default project, and then just started talking about what we were doing. And then I said at the end, okay, now take that and turn that into a paragraph for my pitch document explaining how we're using AI. And it did a perfect job.
David Leary: [00:22:04] So really, what we're getting, if I think back to I'm going to go back to when I worked in the mall selling software, and there used to be this thing called a it was like dragging dictate. Maybe it was called and it was this it came in the box and you could dictate letters. So basically what's happening now is you're dictating just like you could do 25 years ago, except for it's passing it off to some AI that massages it to make it a little bit better. And you can. So allowing you to dictate sloppier.
Blake Oliver: [00:22:29] And per your exact instructions, you can customize the way that it rewrites the emails. And you can also give it a custom vocabulary. So for instance, if I talk about Xerocon because I'm going to Xerocon this week, it doesn't spell it with a Z, it actually spells it with an X because I've put that into the dictionary dictionary. I guess Dragondictate had that before, but the difference is that you can you can give it as much leeway as you want. So in my prompt I said, if my thoughts are not organized, please reorganize them, reorder what I talk about and and put the parts that should go together, together. And it can do that like a good secretary would or executive assistant or ghostwriter would. Yeah. So so it's the next level of dictation. Make me sound more professional. That kind of thing. And I think this is going to save accountants a ton of time. So, David, we I mentioned Xerocon, I guess I should let everyone know, but by the time this episode drops, I will already be there. Xerocon starts Tuesday. Uh, August. Well, no. August 14th. Wednesday, August 14th. I'm headed to Nashville tomorrow. Tuesday. We're recording on a Monday and I'm really looking forward to seeing everyone there. So if you are watching the live stream and you're going to be at Zero Con, let me know. Hopefully I'll see you at one of the after hours events or at the show itself.
David Leary: [00:23:53] I won't be there, unfortunately. Yeah, the wife and I are turning 50 this year and we're going to a concert instead, even though I love Nashville. But we're going to be in Denver at a concert.
Blake Oliver: [00:24:04] Big Four.
David Leary: [00:24:04] Transparent rocks.
Blake Oliver: [00:24:05] Oh, well, enjoy. Uh, red rocks is nice. Big Four transparency says thanks for the FOMO. Sorry. Big Four. Transparency. Dominic would be great to see you there, but maybe we'll see you at Intuit Connect. I mean, that one's also pretty fun. All right, David, it sounds like it's time for our first sponsor.
David Leary: [00:24:29] Yeah. So first sponsor is Lean Flow.
Blake Oliver: [00:24:32] As an accountant, you've likely noticed that clients don't always choose the best options when it comes to financing or taking out a loan. Imagine being able to offer your clients a curated list of loan options that you've personally vetted, ensuring they receive great rates and terms that truly benefit their business and increase your firm's revenue. With lean flow, this becomes a reality. Lean flow empowers accounting firms to offer an unparalleled suite of credit and loan products. You'll curate your own marketplace of specialized lenders, providing clients access to a diverse range of financial solutions, from SBA loans and bank term loans to equipment financing and commercial real estate loans, Lend Flow delivers a comprehensive array of options tailored to your client's needs. Lend flow lets you present this entire loan marketplace on your website using your own branding. This gives your clients a professional, fully digitized and streamlined process that sets your firm apart. With impressive approval rates of up to 95% and loan amounts ranging from 2000 to over 5 million, you can confidently meet the diverse needs of your business clients to help your clients secure the capital they need to thrive while simultaneously boosting your firm's revenue streams. Head over to The Accounting Podcast dot Dromoland flow that is The Accounting Podcast dot promo forward slash l e n d f l o w.
David Leary: [00:25:49] Thanks for sponsoring lend flow. It means a lot. And everybody listening go support lend flow. I have an article we can pop into that's going to tie back to your writing emails faster okay. Just you know because it ties back to hourly billing. So pretty much I have. This is a Reddit post, and I pulled out a chunk of it because it really paints a picture of how and what clients think about when they get an hourly invoice from you as a firm owner, as a as a firm. So it caught my eye because the title of the article or the post was weird situation with an accountant. Which one of us is the crazy one? So caught my attention I jumped in and to spare you like a lot of the thread. Basically they switched to a new firm and there was a lot of delays in communications and back and forth because they were trying to access QuickBooks desktop. But regardless, he eventually got a bill from the firm, and I'm going to read that part of this post in the meantime, I received an invoice from them yesterday for $1,300. The invoice includes a breakdown of work they've done, which originally came out to $1,700, but it was discounted to $1,300. The work breakdown includes time billed for literally every single interaction interaction they've had with me. The original meeting where the senior accountant took the time to shoot the shit and show me around his office is billed hourly for $525.
David Leary: [00:27:14] Every email that they have written to me is billed hourly. The time they took to print out and organize the reports I sent over is billed at $78. The time he he himself called to explain to me the QuickBooks access is billed on an hourly basis. There are three separate line items for them. Putting together the budget for this project, again billed at nearly $400. I was literally flabbergasted. I don't have a ton of experience working with accountants, but at any time I did before it was just a flat fee to file taxes and some consulting. I'm pretty pissed because from my understanding, we are no closer to filing than we were when I originally engaged with them in April. Can you guys who have experience tell me if I'm the one who's crazy here? Or are they? I don't mean paying for work done, but I never imagined I would be charged literally for every email and phone call they have sent to me. While the bill does not include any actual filing work. One line item says Helping Stacy and again build on an hourly basis. And Stacy is one of the junior partner staff in the partner. Right. This is what people think when you sell them. You charge by the hour. This is what they think.
Blake Oliver: [00:28:18] Yeah. So what were some of those items that you mentioned helping Stacy. So that is like internal training. You're billing the client for that. That's what that is.
David Leary: [00:28:29] Shooting the shit and getting a tour of the office from obviously a partner at $525 an hour. Yeah, that's the best charge.
Blake Oliver: [00:28:36] Yeah, yeah, yeah. I mean, that's how it was for me, right? I would my clients would come to the office in, in LA and I'd give them a little tour. We'd have some nice coffee, sit down, chat a little bit, look at the look at the view out the window. That was all billable. And then when they realized it was billable, they stopped coming around so often.
David Leary: [00:28:59] Stop asking questions. Yeah.
Blake Oliver: [00:29:01] Yeah, exactly.
David Leary: [00:29:02] But this ties right? If again, here's another example where if you can write emails three times faster, how are you going to make revenue? If you're billing by per email or per hour. Right.
Blake Oliver: [00:29:13] Um, it's not a good experience. And you know who would not bill by the hour? The founder of the Savannah Bananas, Jesse Cole. I now follow Jesse Cole and the Savannah Bananas on LinkedIn, because I got to interview their CFO recently for an earmark webinar. Uh, and like, it was just so amazing getting to know that business and the business model, they have completely rewritten the playbook for sports entertainment. Uh, it's an all inclusive pricing structure where you, you go to a game and you pay one fee for the ticket, and it includes unlimited food and drink. You don't have to pay for the hot dog and the soda anymore. Now, premium stuff like alcohol is not included. I don't think you could have a A game, Again, a baseball game with free alcohol and have good outcomes. But you know, most of it's included, right? And, um, there's this post that Jesse made, Jesse Cole, founder of Savannah Bananas made on LinkedIn that I want to just call out. He said one week ago, the best business model in the world is to stop doing what your customers hate. It sounds harsh, but that's where everything started for us with the Savannah bananas. I remember vividly the day I was watching a baseball game and was bored out of my mind. I hated how long and slow the game had become and I knew there was a better way. Then I remembered buying concert tickets and paying an arm and a leg.
Blake Oliver: [00:30:35] Not just for the ticket, but for the ticket fees, convenient fees, convenience fees, and taxes. I hated that a $50 ticket was over $70 with all the fees. We started the bananas with the idea that we would make baseball fun, fast and exciting and eliminate all the fees while making the experience all inclusive with all your hot dogs, burgers, chicken sandwiches, popcorn, water, soda, and dessert for one low price. Then we kept going, eliminating the friction for our fans by taking down all the advertising at our stadium in Savannah, as we believe no one comes to a game to be advertised to or sold to. Then we started Banana Ball and eliminated hitters stepping out of the box walks, mound visits, and many of the other boring parts of the game. We kept doing friction audits on our fan experience every step of the way. When you believe in being fans first, every single thing you do has to be fans first. And he keeps going. The Savannah Bananas are one of the great success stories of American small business in the last decade, and they did it by being fan first. So I challenge you. If you work in a public accounting firm or you own a firm, think about what would your firm be like if it was like the Savannah bananas and you took a client first mentality? You definitely wouldn't be charging by the hour.
David Leary: [00:31:48] And we've talked about that solving for the client's experience. And like a lot of firms just don't do it. They just can't. They solve for internal controls or internal processes always first.
Blake Oliver: [00:31:59] Yeah it's very anti client in many ways. Um it's almost adversarial right. Like don't call me. Don't bug me I'm going to charge you every time you do. Sweet dude in the live stream says love the idea of a friction audit. Yeah, that's the first time I've ever heard that phrase. And I love that is like, reduce the friction. That's what we should be doing with the accounting profession, by the way, if we want to get more people in here is we need we need to make the accounting profession a profession where students don't hate it to get into it. Right. We make it. It's really a truly awful experience to get licensed as a CPA compared to everything else in your life. It is so stupid and not in a good way where like it discourages, you know, dummies from entering the profession. Only the smart people can get in. No, the smart people experience it and they're like, this is really stupid. I'm going to go do something else because this is a waste of my time, right? This is an insult to my intelligence making me take these classes that I don't need, you know, for stuff I already know. Making me. Making me, like, count all these hours on my transcript even though I already have a bachelor's.
David Leary: [00:33:12] How many pages do you say the, uh, the final report is for the narrative pathways.
Blake Oliver: [00:33:18] Yeah, it's like over, like almost 100 pages, I think. That's just.
David Leary: [00:33:21] Friction. It's all friction. It could be one slide. It could be one slide.
Blake Oliver: [00:33:25] Yeah, exactly. Yeah. So you know, I understand there's like there's an argument to be made that you got to have some complexity in there because a good chunk of our job is untangling complexity. But I mean that's not all areas of accounting. Just because like tax people have to deal with that kind of crap doesn't mean that everybody else should have to do it just to get licensed. And you can test for the complexity stuff in other ways with the exam. All right. I'm going to get off my high horse here. Let's go to actually one more comment here. Light em up says regarding the Savannah bananas. But are they profitable? And do the players and staff get paid a sufficient rate? Uh, they are profitable and they're crushing it with their merchandise sales. This is the other thing that I learned from the CFO there. Uh, Tim. Nati, they break even on ticket sales and they make all their profit on merchandise sales. So the idea is you give fans an amazing experience and you don't try to make money on the tickets. The actual show just breaks even just pays the bills. And then they're also happy that they go out and buy hats and t shirts, and that's where all the margin is made. I find that fascinating.
David Leary: [00:34:38] And I imagine that the players are getting paid well versus because they're baseball players. Yes, but obviously they weren't going to make it in the majors, right? They're arguably performers in the same way the WWE like a wrestler, a professional wrestler. They're athletic, but they're a performer. They're they're an actor or an actress first or.
Blake Oliver: [00:34:57] And part of that and Tim said that on the on the webinar, he said that we are an entertainment company and we're also a sports team, and that's important. And we play real sports. And these are real athletes and they are very talented. I mean, there was a guy who recently went viral on TikTok for doing a backflip, catching a pop fly in the outfield. That's crazy. But if they.
David Leary: [00:35:17] Would have only gone to the minor league baseball Triple-A club, maybe Double-A. I don't think you make a lot of money at all in those. It's like $26,000 a year careers, they're not very good.
Blake Oliver: [00:35:27] And I don't know what these guys get paid, but it must be enough because they've been able to add another team and they're going to add more players. They're expanding. So clearly what they're doing is working. All right David I'm going to get through some of my follow up news. But it looks like you have something important to say.
David Leary: [00:35:44] No I'm trying to decide which way to go next. So follow up seems good because I have some follow up too.
Blake Oliver: [00:35:48] We're just going to jump around if we have to. Okay. Ex-trump CFO Allen Weisselberg, released early from Rikers. Allen Weisselberg, the former CFO of the Trump Organization, was released early from Rikers Island after serving 100 days of a five month sentence due to good behavior. He had pled guilty to two counts of perjury related to that fraud lawsuit against Donald Trump that was led by New York Attorney General Letitia James. His recent prison term was connected to inflating values of properties, especially that penthouse in the Trump Tower where he lied during depositions and at trial. Do not lie in depositions. Do not lie on the stand. It will not go over well for you. As part of the plea deal, he admitted to two out of five perjury charges, which is what resulted in that five month sentence and a $1 million penalty. But he only did 100 days of it. But I suppose 100 days in Rikers, based on my limited knowledge of Rikers from the show, law and order is not a place you want to be for even 100 days. So. Yeah. Old man.
David Leary: [00:36:47] And you're old. Yeah. It's. I'm not signing up for that anytime soon. I have so legal Zoom. And I just talked about this when we talked about Clio, how Legalzoom is really happy. We were talking about their Q1 2024 earnings call. Transcript. And they said how their books to tax platform had a Net Promoter score of 59 and how they were getting 17% of their tax, software or tax clients were importing from QuickBooks, but 17% were coming in from LRS books. So Legalzoom had their own bookkeeping software and platform. Well, this week they had layoffs and they shut down the whole legal Zoom tax branch like it's all shut down. They're not doing the bookkeeping. Shut it all down.
Blake Oliver: [00:37:33] Like they spent years building this thing. This was the competitor to QuickBooks Live. And it's it's done.
David Leary: [00:37:39] And so they they had their press release and the press release didn't say what they shut down. And maybe they learned from Intuit not to put too many details in the press release, but they said so. They announced restructuring efforts that resulted in a 15% reduction of its global workforce workforce. But I did a little googling I didn't know. In July, the CEO, Dan Vernikov, departed. He was the former Intuit executive. So San wound up becoming the CEO and Dan left. I think it was like a competition between those two to be the next Intuit CEO. And obviously there's lots of Intuit people there. They bought that accounting firm. Obviously they were on this March, but in July it kind of quickly departed. And I think the stock was at an all time low. And obviously this may not be going as well as it was, but the conference call in January seemed like this was or not January be the end of Q1 seemed like books. The tax was a great thing at legalzoom. So very confusing. I think you've always said this. It's very hard to software a service business. Yes, it's very, very hard.
Blake Oliver: [00:38:41] I like the way you said that. I don't think I said that. That's. You coined that phrase, David. It's hard to software.
David Leary: [00:38:45] It's Uber. Right? It's very hard to do this because you need people. It's very hard to do this.
Blake Oliver: [00:38:50] It's and these companies are realizing that running a bookkeeping business, even a relatively low end bookkeeping business, is extremely difficult to maintain quality, to standardize, to try and scale something like that, and to do it profitably inside of a legal Zoom is very, very difficult. And I think that's why we've seen QuickBooks Live pivot from the hundreds of dollars a month offering, where we do it for you to the $50 a month offering, where it's we do it with you because the we do it with you is a lot simpler, and you're not committing to do stuff when the client isn't there and they're going to leave that low end bookkeeping work. Um, and let's call it Main Street Business bookkeeping work because there's nothing low end about it. It's just these are smaller businesses. They're going to leave that to the ProAdvisor, which is what they should have done in the first place and not created all that tension between themselves and the accountants who are so loyal to QuickBooks products.
David Leary: [00:39:52] And it's also different because QuickBooks has a business model where they're selling a monthly subscription to a software. So if Intuit takes a little bit of a loss on bookkeeping, but it helps a small business owner be a little bit more successful, they just stay on QuickBooks their whole life because they're not going out of business. It's a different model.
Blake Oliver: [00:40:09] It's a really good point. It reduces churn. That's the value of a QuickBooks Live service for Intuit. Chayton. Welcome, Chayton. Great to see you. Chayton says finally caught a live episode. Loving the content lately. Keeping. Keep up the amazing work, Blake and David. Thank you Chayton and you keep up the amazing work. And now it is time for our second sponsor. Sorry David, I just clicked at the same time you clicked on the sponsor link disappeared and reappeared, and now we've got it there on the screen. We are thanking the small Business Research Institute. Are you ready to take your accounting career to the next level? Introducing the Certified Entrepreneurial Advisor Program from the Small Business Research Institute. As accounting professionals, we're always looking for ways to better serve our clients and grow our practices. That's where the CEA comes in. This isn't just another certification. It's your ticket to becoming a true business advisor. Imagine having access to hundreds of MBA level courses, all designed specifically for accountants and CPAs like you and me. We're talking expert led training on everything from advanced financial strategies to the latest business trends. The best part? It's all available through one affordable membership that includes a 30 day free trial. And with their flexible, easy to follow tutorials, you can learn at your own pace, fitting it around your busy schedule. By earning your CEA certification, that is. That stands for Certified Entrepreneurial Advisor. You're not just adding letters after your name, you're opening doors to high paying clients and exciting new opportunities. If you are ready to transform your career, elevate your advisory services. Stay ahead of the curve and start your journey to becoming a Certified Entrepreneurial Advisor. Head over to The Accounting Podcast promo slash CEA. Now that is The Accounting Podcast dot promo forward slash CEA. N o w.
David Leary: [00:41:59] And thank you, the Small Business Research Institute for sponsoring us.
Blake Oliver: [00:42:02] Yeah, that's a new sponsor. Right David?
David Leary: [00:42:04] It's a new sponsor. And what I like about this is these are those emails and these questions we get. Well, I don't know if I want to go to university or I'm a bookkeeper. I want to do something extra to make me more valuable. These are the type of things you should do. Go become a certified entrepreneurial advisor.
Blake Oliver: [00:42:19] Back to I. Jpmorgan Chase is giving its employees an AI assistant powered by ChatGPT maker OpenAI. This tool is called LLM suite, and it is being rolled out to over 60,000 employees. It's basically a wrapper for ChatGPT, similar to what Wright Works has created with spark. We talked about that for firms. Yep, yep. Firms can subscribe to spark. It wraps ChatGPT in an interface that protects the data and gives you a prompt library, augments the tool, and then uses the API to securely send messages back and forth with the LLM. And you get the data protection. So you know that your prompts are not being shared with anyone outside the organization. They're not being used to train the model, they're not publicly available. All that good stuff. So it's not complicated, but it is innovative in that this is the largest organization that I've heard of so far that has done this and rolled it out to everyone or 60,000 people. I guess it's not everyone because they have like 300,000 employees or something like that. Um, they're exploring applications such as creating marketing content, summarizing meetings, preventing fraud. Preventing fraud, I think, is an enormous application of generative AI, because you can just feed every transaction in and tag transactions as they are identified as fraud. And then the AI can use its black box magic to try to figure out future transactions that are fraud, without you having to create specific rules for thresholds of amounts and places that they're being sent in the world. The AI can just figure out the trend.
David Leary: [00:43:56] And this is when hallucination is great, because it can create fake scenarios that should could possibly show up as fraud, right? It's you want hallucination when you want because fraud is very creative. You want that creativity.
Blake Oliver: [00:44:09] So, you know, we don't usually think of big banks as being super innovative. But if you're not using ChatGPT in your accounting firm, you are now behind JPMorgan Chase, which is like a big, Titanic sized bank. So like, this is the time this year, you know, 2025 is the year of let's get all our people on ChatGPT teams or cloud teams or whatever. Um. Go for it.
David Leary: [00:44:33] I have a quick update on IRS Free File. So this week, New Mexico and Connecticut have joined IRS Free File, and we missed this. But recently Oregon, new Jersey and Pennsylvania also joined. So that's 17 states. So a third of all the states in the union now support this IRS effort, which is impressive I think.
Blake Oliver: [00:44:53] Excellent I love this. This should have been done a long time ago. Congratulations on the IRS for making this happen.
David Leary: [00:45:01] And I still think you should price this at your firm. Like have a column called free and put all the features that they do because they don't do a ton for this IRS free file. Put those in. Then the next column is your basic plan with check marks. Compare what you do.
Blake Oliver: [00:45:15] Compare the free plan that the IRS offers to what you do. I like that actually, and price them.
David Leary: [00:45:21] Side by side. Exactly. So you could still give people free. Hey, you don't want to pay me? Here's free. But they won't do these features.
Blake Oliver: [00:45:27] And when they click the button for the free plan, it just takes them to the IRS free File website so you don't have to talk to them. Yeah, there you go.
David Leary: [00:45:33] Turbotax does it, and I think H&R block's doing it right. Their free plan is almost parity now to the IRS free plan. And then they have their paid plans outside of that.
Blake Oliver: [00:45:43] So continuing on with the AI trend, a recent study revealed that accountants have a very low adoption rate of generative AI tools, with an average user rating average usage rating of only 1.56 out of ten. The survey, which included 136 accounting professionals. That's not very many, is it? Maybe. Maybe the survey is not doesn't have a big enough sample size. Um, it indicated well, organizations encourage the use of generative AI. Actual implementation in daily tasks is minimal with a usage rating of just 0.99. I guess is that out of ten probably makes sense. Um, who did this study? It was reported in accounting today, and it was done by. University of Miami academics Mark Ross and James Zhang. Okay. It's an academic study. I mean, this fits right with my ballpark estimate that maybe 20% of accountants are using AI at this point.
David Leary: [00:46:46] And I think, uh, Thomson Reuters had that survey a couple weeks back. Similar numbers. Yeah. It's it's 2530 at best.
Blake Oliver: [00:46:54] Wow. I'm scrolling through the article and I'm cited in it. Oh, it says, yeah, I gotta show you this. David. I can't believe this. This is hilarious.
David Leary: [00:47:04] We're reporting on ourselves.
Blake Oliver: [00:47:05] We're reporting on myself. Oh my God. Hold on. Yeah. Look, look. So here's the story. Study finds accountants. Add it to the feed so.
David Leary: [00:47:16] I can see it.
Blake Oliver: [00:47:17] Okay, here's the story. Study finds accountants slow to adopt gen AI. Right? And like, I had my AI tool summarize this for me. And then, uh, look, here it is. Around August of last year, earmark CP founder Blake Oliver at the time noted that 50% of executives stated they are currently using AI in their finance and tax departments already. That's great. So, you know, what's interesting about this is like, this is sort of demonstrating the impact that I could have on search results eventually, which is that if you if you use AI to generate content and the AI goes out and sources something and you don't check that source. Now an AI agent might source this, right? So if what I said isn't true, it doesn't matter, because now it's truth in the world of the internet. That's what happened.
David Leary: [00:48:12] A few months ago. It was about that. Those tax breaks that weren't real. These articles kept surfacing up and it was AI creating articles based off the other AI articles. And it created this big rumor of these free, free checks from the government. I want to talk, Blake, about taxes and no taxes on tips.
Blake Oliver: [00:48:32] Yes. Back to politics. Right.
David Leary: [00:48:34] Back to politics to some extent. Yeah.
Blake Oliver: [00:48:36] Well, you know, Donald Trump said he doesn't want to tax tips.
David Leary: [00:48:41] Yes, he was in Vegas a few months ago, said no taxes on tips. Well, Vice President Harris was in Vegas yesterday or the day before. When I'm president, we will continue to fight for working families of America, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers.
Blake Oliver: [00:48:57] Here come the giveaways for the special interest groups.
David Leary: [00:49:00] Yes, but this isn't new Ron Paul. In 2012 I understand ending taxes on tips will give these workers a pay raise, letting them keep more money to put towards things like a house or car payment, the retirement, their own or their children's education even. He is quoted in Vegas as saying it was an outrage that service workers have to pay tips, and far back as 2007, he introduced legislation to Congress about exempting federal withholding from income taxes right up to 1982. A representative from Illinois called for no taxes on tips, and currently there's two bills kind of out there. Ted Cruz has one in the Senate, and then two House Republicans have a bill, um, that they actually wanted to, uh, not do Social Security or Medicare as well. The tips aren't subject to any of that. Um, Nevada's two Democratic senators are backing legislation to exempt tips. Right? Right. So obviously, this isn't a good idea. And like you just said, voter pandering, right? Nevada's a swing state. You're going to go there and tell the voters you're not going to tax them. Um, both sides want it. The National Restaurant Association wants it. And with the tcja expiring next year, there's going to be new tax legislation. Right? Right. I think this is on the table. I think this is going to happen.
Blake Oliver: [00:50:15] And there may be unintended consequences.
David Leary: [00:50:18] I was that's what I want to talk about. What is like what does this mean if this happens? Right. Is this good for accountants? Bad for accountants? Is it more burden and less burden? Yeah.
Blake Oliver: [00:50:28] So on my earmark podcast, I just interviewed for an hour, Scott Hodge, the former president of the Tax Foundation. He just wrote a book called Tax Ocracy and he would be eating this up. I wish we had him right here to talk about this, because he'll tell you what the potential unintended consequences are of this. And we've seen it happen before. Um, so, by the way, go listen to that episode, go to podcast, Earmark comm and and listen, you get free CPE. It's tax CPE. It's great. Um, he's such a smart guy. 20 years running, the Tax foundation, you know, nonpartisan, nonprofit analyzing tax policy. So here's the problem with exempting tips from taxes. And just the the entire concept of like tipping is a major source of income for people is that when you when you have more tipping Economically, you can lower wages. And that's what happens. Is that like for tipped workers, the minimum wage is like a few dollars an hour in a lot of places. So if you make it, if you make if you increase the value of tips, what is going to happen is that to maintain this like balance of supply and demand, is that wages will probably go down and tipped workers will end off. End up with just earning more of their wages in the form of tips, which is not always better because you don't get it might might mean that you don't qualify for like the child tax credit. And it also could hurt Social Security and Medicare because, you know, wages are taxed to fund Social Security and Medicare. So like it may be popular, but it probably won't make in the long run. It won't make tipped workers any better off. And I just really don't like the concept of tipping anyway. I like why can't we just pay everybody a fair wage? Right.
David Leary: [00:52:23] And it's interesting because even QuickBooks. Now, if I send out an invoice in QuickBooks and you get to my page to pay it, it will have a place for you to add a tip, right? I mean, maybe we.
Blake Oliver: [00:52:33] Should just maybe we should just lean into this, David, and start collecting tips from our listeners.
David Leary: [00:52:37] That's the note I have. Like, you know, Will the Rich, I wrote this down, will the rich, as they always do, find a loophole? I didn't make 1.5 million. I only made $110,000. And the rest was tips. Like this is going to be oh my God, right?
Blake Oliver: [00:52:49] Yes. Okay, David, we have to jump on this. We're going to make an app that allows, uh, accounting firms to collect tips from their clients. And those tips will be tax free, and it'll be the tip jar for your accounting firm. There you go. We're going to exploit this for.
David Leary: [00:53:09] We'll build it in a way. So it has a bunch of buttons that have like really ridiculous tip amounts and like to put a custom tip is very very hard. And so you automatically get a 4,050% tip.
Blake Oliver: [00:53:19] The potential for abuse is going to be extreme and advisory. The potential for advisory options will be extreme.
David Leary: [00:53:27] This could be good for accounting firms in general, because your payroll is going to be a little bit more burdensome. Tracking is going to be different. The payroll apps are going to have to add more stuff in. Accounting firms could make a little money off of this if it shows.
Blake Oliver: [00:53:39] Okay, on the side of this in favor of this, I guess the argument used to be that like a lot of tips used to be in cash, but since most people stopped carrying cash, they're now tipping on apps. So all these tips that weren't getting tracked before and reported are now getting tracked and reported. So like in that sense, things have changed, right? Yeah. So this sort of like evens that out I guess. Anyway, let's move on to another follow up story. Remember Wirecard? David, it feels like it's been a while since Wirecard collapsed that $2 billion in cash that wasn't there at the German company. Total failure of audit to detect it. They weren't even verifying the bank balances. Like just shameful. Two former executives of Wirecard AG, including the ex CFO, Alexander von. Nope, nope not nope nope. Alexander von nope. And ex board member Susanne Steidle have been charged by prosecutors in Munich for their involvement in the company's financial misconduct. But still, only a handful of people have been charged. And of course, the auditors have escaped all liability so far, as far as we know.
David Leary: [00:54:53] Um, if you have time, go on Netflix and go watch the documentary. You have to read a lot of subtitles because it is there's a lot, lot of subtitles, but the whole thing's a racket. Like, the whole thing was a scam from day one.
Blake Oliver: [00:55:06] So on this, uh, Fraud story line of thinking I'm going to stick with fraud here. I spotted this story in the Wall Street Journal back in June that has been sticking with me. The headline is, if a company says it's ethical, investors might want to be skeptical. A recent study indicates that companies using terms like ethical integrity and responsibility in their annual reports are linked to various negative outcomes, including reduced investor interest and higher auditing fees. The research found that stock prices of companies avoiding these trust words, so if they don't use these words, their stock prices increased an average of 1.15% within 48 hours of earnings announcements, compared to just 0.11% for those using such terms. Companies employing trust words in their reports tend to pay approximately $100,000 more in auditing fees, which is often an indicator of higher corporate risk. These companies are also about 15% more likely to receive comment letters from the SEC suggesting regulatory concerns over their annual reports, and the study concludes that the use of trust words may serve as a warning sign for investors, highlighting potential risks rather than conveying genuine corporate virtue. And this kind of, uh, passes the gut check for me if somebody is telling you how trustworthy they are, maybe that means they aren't right.
David Leary: [00:56:35] I mean, that's the grifters, right? That's their whole confidence men. Right. They they present that you can trust them. That's how they do frauds, essentially. So it's just it's rolled into corporate America, is what you're saying or fortune.
Blake Oliver: [00:56:49] Yeah. And in case you are wondering about this study, um, I'll put the link to the article in the in the show notes and you can take a look at yourself. It was published. It's funny, it wasn't covered in the Wall Street Journal until recently, but it was published in February of 2023. Can we trust the words in ten days? It was in the Journal of Business Business Ethics. All right, David, I can keep going.
David Leary: [00:57:23] I can do the next ad if you want me to.
Blake Oliver: [00:57:25] Let's let's finish up with our third and final sponsor of this episode. Well, bad.
David Leary: [00:57:29] News, we've got four so.
Blake Oliver: [00:57:30] Oh four. Okay, well, why don't we just do the last two back to back?
David Leary: [00:57:34] Yeah, back to back.
Blake Oliver: [00:57:35] All right, you take one, I'll take the other.
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Blake Oliver: [00:58:49] All right, and thank you to our fourth and final sponsor of this episode, Practice Protect. Practice protect is the leading cybersecurity platform trusted by over 26,000 accounting professionals worldwide. As an all in one managed solution, Practice Protect puts your firm's security on autopilot, allowing you to focus on being your client's trusted advisor. The Practice Protect program is tailored for accounting firms and offers comprehensive protection across five core areas. An access hub for secure logins. Email security to stop scammers. Device security for your computers and laptops. A compliance hub to automate regulatory requirements, and a security training hub for your team with practice. Protect you'll enjoy enterprise grade security standards integration with over 6000 accounting applications and features like one click lockout and IP location control. The platform not only secures your technology, but also helps you meet compliance standards, providing customized documentation and risk assessments for just $34 per user per month. You get unlimited usage of the Practice Protect Access Hub, a dedicated onboarding specialist and white glove support. Plus, Practice Protect offers a 90 day satisfaction guarantee, Demonstrating their confidence in their service. Don't compromise on your client's data security or your firm's reputation to join the thousands of accounting professionals who trust, practice, protect, and to book your security consultation today. Head over to The Accounting Podcast promo slash protect that is The Accounting Podcast promos protect. And now, David, I want to finish out with some listener mail. This is from Shane. Shane wrote a long email that I have condensed into a 62nd version. Be warned, if you write me a long email, I will use AI to condense it, but I will ask the AI to maintain your original tone and intent. Shane said hello Blake, thank you for promoting and supporting the accounting profession. I want to offer a counterargument to your opposition to the 150 hour rule.
Blake Oliver: [01:00:47] I'm against debt and agree that a master's program doesn't add much to CPA exam prep. However, I believe the 150 hour requirement teaches invaluable intangibles determination, critical thinking, drive, and motivation. These qualities helped me pass all four CPA exam sections on the first try. Four year degrees have become commodities, but a master's signals high drive and commitment. These extra years sharpen critical thinking skills crucial for our profession. The 150 hour rule ensures that those entering the field are more driven and motivated, ultimately elevating the profession. Best, Shane. And my counter to Shane's counter is I think you can learn all that in a bachelor's degree. I don't understand why it takes a fifth year to do that. You can learn it in three. Uh, I suppose that's also my counter to those who say, why not just get rid of the education requirement entirely? Because the bachelor's has value. It teaches you to think critically, to communicate effectively, and to succeed in a business environment. You don't need the bachelor's degree to learn specific skills and knowledge that can be gained anywhere. But we do need to maintain that bachelor's degree. And I don't think the master's is what gives you that. Now, maybe in your master's program, Shane, you got that. And that's great. But we shouldn't require everybody to do that just because that was your situation. I mean, it's just an unnecessary cost. A great bachelor's program can teach you determination, critical thinking, drive and motivation. Mine certainly did. And it was in music. You know, I went to a top university, top ten school. I went to northwestern for music. And I learned drive, critical thinking, motivation, determination from studying music at a high level.
David Leary: [01:02:35] You could get that if you're an alternative path, right? Maybe you have another job. You're working part time or full time. You have a family you have to take care of. Trust me, that drive and motivation is probably higher because you have more risk of what you have to lose.
Blake Oliver: [01:02:48] So I'm not saying that the master's doesn't signal drive and commitment, but it's not the only way. Like you said, David, it's not the only way to prove it. And we shouldn't limit our pool of potential CPAs to people who did a master's or did a fifth year. So that's my argument is like, let's broaden, not narrow how we do things. Okay. Coming from Brian. I've condensed Brian's email as well. Brian says, thank you for questioning the CPA pipeline. I graduated in 1995 aiming for a big six audit role, but didn't get selected. Despite my efforts paying my way through college, I couldn't afford unpaid internships. Though I had a knack for tax, it was never suggested. After a brief job in records and tax and a stint at a mutual fund company, I struggled to find my desired career, even being declined for lacking a CPA despite industry experience. Eventually, I joined the IRS, passed the CPA exam and 20 plus years after undergrad got my CPA license. I'm now a tax professional in a specialized firm. College pushed only Big Four paths, making me feel like a failure without their experience. Your podcast reveals the broken system and gives hope.
Blake Oliver: [01:03:58] It assures nontraditional CPAs like me that we have value and can enhance the profession. Thank you for offering this inclusive platform. Thanks, Brian. I'm. I think that you've done something amazing. Earning your CPA after 20 plus years. Well done. That is grit right there. This is from John. John said I recently have been looking for work in public accounting, and all of the recruiters are telling me that 100% remote work opportunities are drying up. They're saying that mostly all opportunities are hybrid and or in-office now. And remote jobs have become very competitive because of this. For an industry that is in such bad shape, why the hell would firms even limit themselves more? Do you guys think this is boomer driven or what? Just wanted to share my recent experience and get your thoughts on this. Thanks. Um, I don't know, really. I mean, maybe it is boomer driven. Maybe it's that these firms all own their office space and they want to justify that purchase. Um, I don't know. It seems like a big opportunity for the firms that are willing to let people work remote because you give people flexibility, they won't demand as much pay.
David Leary: [01:05:11] And it's and if it's illogical, right. We're not going to hire remote, but we're going to outsource work to Philippines or India or wherever you can outsource work to. It doesn't. They're speaking out of both ends. I think it's because the.
Blake Oliver: [01:05:24] People managing these firms have not figured out how to effectively manage people in a remote environment. You've got to manage them based on results, right? Not on butts and seats. And that takes a lot of work. And it's not like if you're, you know, in your 50s or 60s and you're running a firm, you're going to learn how to do that. Most of the most people are just going to do what they learned how to do.
David Leary: [01:05:44] Which is silly, because we had Covid and the whole industry fought for a decade about working remotely. Then everybody worked remotely. And arguably there was more output from accountants ever in that 18 to 24 months. Right? Accountants had to output so much. Yeah. And profits were up. Everything was up. It obviously worked. It didn't fall apart.
Blake Oliver: [01:06:04] I think it's actually because the firms want to get people to quit without having to fire them.
David Leary: [01:06:11] I think I saw something recently about that. We talked about 80% of all CFOs. Yeah, yeah.
Blake Oliver: [01:06:16] Yeah, it's really just a way to get people to quit. And it's a stupid way, though, to pare your ranks because you're going to lose some of the most high performers. So you're much better off doing performance related trimming of your workforce if that's what you really want to do. But, you know, maybe these partners are non-confrontational, right? Ellen, I think it was Al Anderson said, like the number one, uh, bad trait of managing partners is that they don't want to have difficult Conversations in their non-confrontational. So what a better passive aggressive way to reduce your workforce than to require everyone to come back to the office, right? It's almost the definition of it. Well, we really want to see you all in person. And really, we just want you to quit. You know.
David Leary: [01:07:04] It's very passive.
Blake Oliver: [01:07:05] Aggressive. Yeah. It's like perfectly passive aggressive. Here's an email from PJ. Pj says first, I love listening to the accounting podcast. I'm seeking advice on career moves. I started in accounting at PwC, worked in tax and audit, and then moved to a small CPA firm. Since 2020, I've been working for a large corporation in Orlando. I'm 35 with a master's but no CPA and want to start my own bookkeeping firm. Though I lack specific industry or bookkeeping experience. I'm concerned about not having a CPA license, which I feel could help market my services. While I have extensive tax experience, I'm not passionate about it and feel stuck in tax roles. Should I get my CPA license before opening a bookkeeping firm, or should I jump right in? Alternatively, should I leverage my tax experience and open a tax firm? Also with advancing AI and bookkeeping, would it be wise to start a bookkeeping firm now? Any advice would be appreciated. Thank you. All right, let's tackle those questions one at a time. Uh, should I get my CPA license before opening a bookkeeping firm, or should I jump right in? Well, if you did what I did, you would just start your firm, and then you get your CPA license after you sell your firm. Uh, so that's what I did. And I don't regret it in the slightest. I would just jump in because, yes, being a CPA helps you market your services. Uh, it does set you apart, but there's plenty you can do to set yourself apart from those traditional CPA firms by creating a great customer experience that will more than offset your disadvantage. And if you do well, you can just hire CPAs to work for you.
David Leary: [01:08:39] And a lot of these modern firms that are crushing it. So you have Acuities and Dark Horse in full send. If you notice none of them have the word CPA in their name. Well, Dark Horse, CPA Dark Horse does.
Blake Oliver: [01:08:50] And that gave them a huge problem.
David Leary: [01:08:51] Yeah, but but a lot do not. I gave the worst example possible. But a lot of these modern firms don't even put aprio doesn't you know, they don't put their names right.
Blake Oliver: [01:09:01] Yeah. The key is don't be a CPA firm. Like and I would love if anyone wants to argue with me about this, but I don't see the point. If you're not going to do audit, don't be a CPA firm. It just creates a bunch of red tape for you. So that means you don't have to have CPA ownership. You can own it and then you can hire CPAs and they can have CPA after their name on the bio page on their, you know, like that's fine. So you employ CPAs. If you're an entrepreneur and you want to run a firm, you don't want to be doing the work yourself. You want to set yourself up to hand off the work to people to do the work. And that way you get to enjoy, you know, a great lifestyle. Uh, now, if you want to do the work and you want to be the expert, then it's a different story. But I still think you should start working and then get it while you're working rather than waiting. Uh, there is no substitute for experience in our profession now. Next question. Should I leverage my tax experience and open a tax firm? Well, 100% don't. Because you said you don't like tax and don't do what you don't like. You got to at least enjoy the work, even if it's a grind. Enjoy the grind. I liked reconciling bank accounts, even though that can be a grind I put on music, I grind away, I enjoyed it, don't grind it.
David Leary: [01:10:24] Who loves taxes, right? So you could offer both services in your company. Find somebody who loves taxes and have them come work with you.
Blake Oliver: [01:10:31] Yeah, don't do tax if you don't like it. Uh, if you have alternatives, if you have no alternative, then I guess. Go do it right. Okay. Last question. With advancing AI and book keeping, would it be wise to start a bookkeeping firm now? Actually, yes, even more than ever, because you can leverage these AI tools and you can just crush the competition that is not using it. And we know that a bunch of firms are not going to embrace it, or they're going to be laggards and they're going to be slow. For me, there was like a ten year gap between when I started using cloud and the rest of the profession caught up. And in that ten years, I mean, there was a five year period where I just kept doubling and doubling and doubling until I had $1 million firm. You know, I was able to sell that thing, like, with no experience having no business running an accounting firm. So you just got to be fearless and, you know, be willing to learn and you can ride this wave. Um, and I think actually the tax practices, the ones that combine bookkeeping and tax into a single package, which is what clients want, they're going to crush it if they embrace AI to do that. Automate the document collection, the client communication, the status updates. I mean, you can make it a really good experience. And you know, you're competing against services like TurboTax. And you can charge a lot more and you can probably automate it just as much, almost as much as they do and capture a huge margin, especially if you use I people here in the US to do the client communication and then you get like an offshore team. I mean, you can you can really make it work.
David Leary: [01:12:07] Eliminate layers of management because I imagine Legalzoom is a big, huge corporation, lots of mid-level managers, very expensive because but their data, their net promoter scores, the clients wanted it. They want that books to tax. Right? Just like you said, they just couldn't figure out how to do it.
Blake Oliver: [01:12:21] My my guess with Legalzoom is that it's like a lot of software companies where they did a, they did like a return on investment analysis. And you can just make way more money building software than you can camp building a service, and they said this is not the right place to deploy our capital, and that's why they shut it down. Yeah, right. Especially when money is getting more expensive or it's going to get more expensive. That's my guess. Not that it's not a good business, right? It's just not the best business. That's how private equity thinks. Yeah. Uh.
David Leary: [01:13:01] Do you have more time? I have something I have do you want to do?
Blake Oliver: [01:13:04] I have two more emails. If I get to these two more, I can clear out the mailbag.
David Leary: [01:13:07] All right, I'm going to interrupt you, though, and just. I want to do my own mail, and then it's not my mail, but an announcement. And then you can knock out the last two emails. Cool, cool. So this is kind of a follow up story, kind of not a follow up story, but The Accountant two, we've been waiting for this to come out. They finally announced it. Blake, the accountant two is coming out April 25th of 2025. So it's after tax season. That week after tax season, I want to plan a watch party for all the accounting podcast listeners, all the earmark listeners. I have, what, eight months to plan this right now? I please go. I put a link in the the chat. I put a link in the show notes. I want to come to this and let's figure out how to do a global watch party of the accountant two.
Blake Oliver: [01:13:51] So excellent. I'm going to save those two emails for next time, because I realize we've already gone over our allotted time this week. So Victor and Rick, we will get to you, Erik, not Rick. I will get to your emails next week. Looking forward to seeing everyone at Xero Con. I will be coming to you, David, with an update from there. We'll see what's going to happen. It's been a while since Xero had any major updates for the US, so I'm I'm hopeful. That's all I got. See you all in Nashville. Bye. Have a good week.