Did Clio raise $250 million to build "Clio Live"?

In this episode, we cover Xerocon Brisbane announcements, a phenomenal $250 million VC raise by Clio, a niche law-firm app, and their plans to build a QuickBooks Live-type service offering. In other news, we look at some product offerings from SmartBooks, whose CEO claims AI is hype, at least for now, and Surf Accounts, the new kid in town, which claims to automate 90% of bookkeeping tasks. Meanwhile, merger mania hits CPA firms, and David and Blake start investigating, real-time, the MyPayrollHR fraud story that broke while they were recording this episode (for all the details, listen to episode 112) . All this and even more accounting and bookkeeping news you need to know!

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Show Notes

  • 01:21 – Jet lag does cause memory loss ... | ScienceDaily
  • 01:39 – Thanks to everyone who made our trip to Boston for Accountex a success! 
  • 03:18 – Just a little off the top … Hit up Xerocon Brisbane for a trim
  • 04:22 – If you need some insight about pricing, like our listener, Danielbreez, check out the Soul of Enterprise podcast, or read Ron Baker's book on the subject
  • 05:32 – Xero’s small-biz ecosystem just got a little bigger | Voxy
  • 08:12 – Xero revs up the bank engine, partnering with BP on their Australian fuel card program | CIO
  • 09:03 – Clio blows the roof off of VC raises with a $250 MILLION round | The Globe and Mail
  • 10:39 – How long before the other industry practice-management SaaS providers get off the bench and follow Clio's lead?
  • 11:57 – Clio’s biggest competition is pen and paper? | Clio
  • 14:17 – Could this be David's new side hustle - PBFaaS - Psychic Business Forecasting as a Service? 
  • 14:51 – Speaking of additional services, Square's got a new one - the Square EIN Assistant | Square
  • 16:53 – Wake-up call - SaaS providers are starting to fill gaps where accountants and bookkeepers fall short. 
  • 18:11 – Former guest, Sabrina Parsons of LivePlan, tackles yet another challenge - sitting on the board of directors for Oregon Pacific Bank | Insightful Accountant
  • 18:44 – Blake and David are significantly less than whelmed with QuickBooks Desktop's new features for 2020
  • 20:27 – SmartBooks introduces a new practice-management workflow tool - Blake-approved! | PYMNTS.com
  • 22:35 – Ireland-based Surf Accounts catches a wave  (of BS?) into the U.S.  market | Insightful Accountant
  • 23:43 – M&A is hot, hot, hot ... according to surveyed tax and accounting professionals | CPA Trendlines
  • 24:46 – Is this a buyer's or seller's market? Check out Ep. 110 to hear some expert opinions! 
  • 25:28 – Payroll-advance apps, like Earnin, are starting to face regulatory scrutiny | PYMNTS.com
  • 26:59 – Breaking News Alert! We've got early details on the mystery of the missing MyPayrollHR  company (and even more to come in the next episode!) 
  • 27:49 – “The whole place is going nuts!” Is this the payroll-processing version of Boiler Room
  • 29:24 – Governor Cuomo's statement re: MyPayrollHR | Albany Business Review
  • 32:57 – Before we go, though, check THIS out!  The LG G8X ThinQ Dual Screen phone! | Digital Trends
  • 33:22 – Let us know if you've got some intel on the MyPayrollHR 'scandal', and also, whether you prefer one episode at a time, or want us to drop a bunch for your binge-listening enjoyment!

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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

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Transcript

Blake Oliver: Software companies are filling in the gaps that we, as accountants and bookkeepers, are failing to fill, and we need to fill them. Otherwise we're gonna get replaced.
 
This episode of The Cloud Accounting Podcast is sponsored by BQE Core. If you have niche clients that are architects, engineers, consultants, or lawyers, BQE Core is the app for them to best manage their firm, increase their staff productivity, and ultimately increase their profits. Even if you don't have those niche clients, Core is a great tool to use in your own accounting or bookkeeping firm, as well. Core is an easy-to-use, all-in-one platform for project management, but includes advanced functionality, like budgets, labor-cost forecasting, contract analysis, and approval processes. Core also includes a standalone accounting module. Even though Core is an all-in-one platform, it still works nicely with other apps, offering you and your clients the maximum amount of flexibility. Core offers a full-function mobile app and recently launched a cutting-edge voice-based assistant for your smart speaker of choice. To learn even more about BQE Core, head over to CloudAccountingPodcast.promo/core. That is Cloud Accounting Podcast dot promo forward slash C-O-R-E. 
 
Blake Oliver: Welcome to the Cloud Accounting Podcast. I'm Blake Oliver.
 
David Leary: And I'm David Leary.
 
Blake Oliver: We're back from the ... Wait, where were we?
 
David Leary: We were in Boston-
 
Blake Oliver: Oh, yeah, at Accountex- 
 
David Leary: At Accountex USA. We were there for three [00:01:30] days - Wednesday, Thursday, Friday. We probably should've recorded our regular news episode on Friday, but I had to catch a plane flight, and not to mention, I didn't have a chance to really stay on top of the news for those three days.
 
Blake Oliver: Well, I know, because we recorded seven episodes, really good in-depth interviews with some awesome people who were there. Thank you, everyone who came by The Cloud Accounting Podcast booth and said hi - all of our fans, listeners. Thank you so much to the people who sat down at the microphones with us. I think it was a lot of fun. This is the second time we've had a booth [00:02:00] at a conference, so thank you to Accountex for making that happen for us and thank you to Right Networks for sponsoring us and getting us out there.
 
David Leary: Yeah. I think the big takeaway for you listeners and maybe you guys who tweeted us - we were considering trying to take all of these interviews and dumping them all at the same time, almost how Netflix does with a new show, so you guys can binge-listen to them ... Or should we trickle them out over time?
 
Blake Oliver: My concern with that is that- like my podcast player is set to only download the three latest episodes. So, if we did that, then [00:02:30] maybe people would miss episodes.
 
David Leary: Oh ... Nobody should set that setting on our podcast [cross talk] 
 
Blake Oliver: Yeah, so I'm thinking drip them out, but it's not going to take as long as the other stuff we've done, because these episodes, we were a lot more careful to record it well- 
 
David Leary: Like professionals.
 
Blake Oliver: Yeah, professionally. So, I don't have to edit them a lot.
 
David Leary: Plus, the people we interviewed were super-professional, so we don't have a lot of mess-ups. It's really awesome. It's super-exciting- 
 
Blake Oliver: Yes. It's really good. Great to be back, and great to be with you, David, talking about [00:03:00] the news. What is top of mind for you, today?
 
David Leary: With the news? One thing we missed, and I saw it on Twitter a lot, was Xerocon in Brisbane happened.
 
Blake Oliver: Oh, yeah. I had serious FOMO.
 
David Leary: I saw the videos and pictures. There's a half pipe for skateboarders. They were giving haircuts. It looked a little crazy.
 
Blake Oliver: I could get a free haircut at Xerocon!
 
David Leary: Yes.
 
Blake Oliver: They had barbers there giving out haircuts. That's perfect because I always forget to get a haircut before I go to a conference.
 
David Leary: It's funny, I feel like ... At South by Southwest, once, Intuit went, and [00:03:30] I think Intuit brought small businesses that were barbers to South by Southwest to cut people's hair. Apparently, that's the new thing-
 
Blake Oliver: Oh, yeah, and I like it. 
 
David Leary: -tech companies bringing that in. Before we jump into all the big news about the rest of Xerocon - what they announced there - you wanna pound out our two reviews?
 
Blake Oliver: Yeah, let's do it. I'll read the first one here. This is from danielbreez; Just Starting Out - five stars. "I'm just starting my own accounting practice while still working as a finance manager in my 9-5. The role I'm in is all about creating efficiencies [00:04:00] and it is my passion to help clients be more efficient, as well. Listening to this podcast has given me so many insights into the accounting industry and what tools I should be using. There is no other podcast in the accounting industry that can even compare to how much value this one brings. If there was one thing I'd really love for you to talk about, it would be for how to price your services properly. Since I'm just starting out, it's hard for me to figure out what I should be charging."
 
Daniel, thank you so much for that review, and thank you for the feedback. We actually are going to be interviewing Mark Wickersham at QuickBooks Connect. [00:04:30] He's gonna be talking all about his new pricing survey for bookkeeping services, but I know that's a ways away, I think.
 
David Leary: Yeah, I think there's a podcast I actually would listen to. It's Soul of Enterprise- 
 
Blake Oliver: Yes. 
 
David Leary: -with Ed Kless and Ron Baker. That's essentially a podcast about economics and pricing.
 
Blake Oliver: Yes. I would recommend reading one of Ron Baker's books, "Implementing Value Pricing." If you want to know how to price your services, that is the bible; check it out.
 
David Leary: We have another five-star view. This was on Podchaser It's [00:05:00] from Chris Duenas. "The CAP is the best resource for staying on top of what is happening in the accounting technology space. All of my other podcasts take a backseat whenever these guys release a new episode. Engaging, informative, actionable. See you at Accountex! Cheers from Guam!" I met Chris-
 
Blake Oliver: Awesome!
 
David Leary: -when we were at ... He came up and took a photo with us.
 
Blake Oliver: He was our one listener from Guam, right? 
 
David Leary: One listener from Guam. He was super-excited ... It's always nice when people who don't know come up and say, "Hey, I listen to the podcast!"  [00:05:30]
 
Blake Oliver: That's awesome. Thank you, Chris.
 
David Leary: Thanks, Chris. So, let's jump into Xerocon news. So, Xero basically had a couple announcements. They're now doing single sign-on. Some of you have seen 'Sign in with Google,' 'Sign in with Facebook,' 'Sign in with Intuit.' Now you can sign into apps with Xero, so there'll be a 'Sign in with Xero' button.
 
Blake Oliver: All right.
 
David Leary: In theory, the way this works is now when you sign up for eight or nine apps, if you're a small business owner, you don't have to create eight or nine new usernames [00:06:00] and passwords for all the apps you're gonna use with your small business. It all ties back to your Xero account. The trouble is, it's always great on paper ... The experience I saw in the Intuit side, who had the sign-in button for years, was it's extra work to implement, so the developers don't really do it. Then accountants and bookkeepers that say they want it don't use it as much. Some people still just like creating a unique email and password for each site. So, we'll see where this goes.
 
Blake Oliver: I want single sign-on with Google. That's the easiest thing to [00:06:30] use. I want that, or Microsoft.
 
David Leary: If you remember when we talked about Apple's little announcement about their single sign-on, because Xero now offers single sign-on with Xero, they now have to- Xero will have to offer the Apple sign-on, as well.
 
Blake Oliver: Gotcha.
 
David Leary: Because that's kinda the requirement. They're also doing of advisor powered recommendations - basically app creation. Blake, if you go back to when you had your firm, and you had this client ... You could create a view for this [00:07:00] client or this set of clients to only see these apps. Let's say they were construction apps. Then for your restaurant clients, you could create a view of the marketplace and just only show them apps that are suited for a restaurant. You can now- You can actually curate a view for your clients.
 
Blake Oliver: Gotcha [cross talk] Is that it? Is that all we had with product [cross talk]
 
David Leary: I think that was their product stuff? Yeah, that was it.
 
Blake Oliver: All right. Well, so I'm a Xerocon fanboy. Everybody knows that. I have to say Xero ... C'mon guys. I want repeating spend-money [00:07:30] and receive-money transactions. Until I get that, I will not be satisfied. So, don't come back to the U.S. for Xerocon until you've done it. 
 
David Leary: They did release a cash-flow tool, as well.
 
Blake Oliver: Okay, cool. That's good- 
 
David Leary: They're piloting a short-term cash flow for 30-day projections. Then, one more thing. They purchased HubDoc a year ago, right?
 
Blake Oliver: Yep. 
 
David Leary: They're now extracting 70 percent of all financial docs in HubDoc with machine learning versus 20 percent at the time of acquisition. [00:08:00] Somewhere in the last twelve months, this amazing AI and machine learning has happened. They are processing 200 percent more documents a day than at this time last year.
 
They had one more small announcement, which I thought was interesting. Obviously, Xero and Intuit are partnering with banks. Xero is now gonna partner with BP - British Petroleum - for their fuel card in Australia. The charges from the whole entire month, that monthly invoice from British Petroleum, is gonna automatically flow into Xero as a bill for [00:08:30] you to pay.
 
Blake Oliver: Oh, interesting.
 
David Leary: Yeah, I find it interesting, this whole taking that next step with having bigger vendors just show up automatically. It kind of maybe even tied to Hubdoc, to some extent, who'd go and fetch, probably, that bill from somebody like that. Obviously, we have all talked about how fetching is, but now, it's interesting that that's gonna be a future trend here is the bigger vendors are going to start just working together with the accounting platforms.
 
Blake Oliver: That's it for Xero. Clio had some [00:09:00] really big news. What happened with Clio this week?
 
David Leary: Clio ... So, Clio announced that they had a raise of $250 million. 
 
Blake Oliver: $250 million! 
 
David Leary: Yes. 
 
Blake Oliver: Just think about that number for a while. Normally, we're talking like $10-, $20-million, $40-million rounds. This is TWO HUNDRED and FIFTY million. 
 
David Leary: Now, mind you, this is a niche app.
 
Blake Oliver: Yeah ... Wait, let's-
 
David Leary: Rewind?
 
Blake Oliver: Maybe our listeners don't know what Clio is.
 
David Leary: Clio is a niche law-firm software. It's practice management for law firms.
 
Blake Oliver: Gotcha. [00:09:30]
 
David Leary: All in the cloud. They're almost 12 years old now. They've been chipping away at this. They were the first one to go to cloud. They're really competing still with, in the legal space, a lotta pen & paper, or desktop old DOS-based apps people are still using out there. But they've actually kind of built Clio to look and taste somewhat like a QuickBooks, or a Xero, where it is an ecosystem. It's at the center of law- 
 
Blake Oliver: And I have to say, it's a beautiful product. I had a law firm client; actually, it might've been more [00:10:00] than one on Clio, and we were syncing it with Xero. I'd get the invoices in, and they were very similar types of experiences, so I can see why they'd be successful.
 
David Leary: Last April, when we were talking about QuickBooks Live, remember even Xero released that letter that said, "We'll never build a QuickBooks Live!" I've always taken the point of view - we've said this on the podcast - Xero might have to-
 
Blake Oliver: Right. 
 
David Leary: Because they're moving SaaS subscriptions from $50 a month to $400.
 
Blake Oliver: With QuickBooks Live, we're talking about Intuit providing [00:10:30] bookkeeping services bundled with its software. So, you're saying that Xero will eventually have to do something similar to be able to compete with the value prop of having that combination, right?
 
David Leary: If you're Software as a Service, you're just leaving cash on the table not to do this. During that time last April, I've had conversations with people, and I said, "You watch, the niche apps, like Clio, Buildertrend, for construction, maybe Restaurant365 for restaurants ... They're probably watching on the sidelines, and they're gonna do something similar."
 
Blake Oliver: I'm looking [00:11:00] at this tweet from September 4th. You said, "Clio is going to move $149-month subs to $999-month subs ... 'Hey solo law firms, we'll be your Practice Management, Receptionist, CRM, and Bookkeeper all for $1k a month and we'll deliver you new clients.'" You called this. 
 
David Leary: Well, that tweet I actually did after I saw their blog post, but I found some other conversations that were in Slack channels that I've had in the past-
 
Blake Oliver: Okay, got it ... 
 
David Leary: I didn't have it publicly out there on Twitter.
 
Blake Oliver: I remember you saying this to me. I [00:11:30] thought this tweet was from last year-.
 
David Leary: And I thought it was on the podcast. I was trying to like search all our transcripts. I definitely have said this out loud before. It's not just in my head-
 
Blake Oliver: Yeah, I would back you up on that. 
 
David Leary: If you really read their information ... First article, they had a press conference. Jack Newton, who is the co-founder and chief executive, he's ... To quote him: "Sets the stage for our next phase of growth, where we see the company [00:12:00] evolving to become an operating system for law firms, providing features to help them attract and sign up clients." That was in the press conference. Then they had a blog post out, and this is where it gets really interesting, because I read this, and I was like, "This sounds a lot like QuickBooks Online Live and talk that Rich Preece has said, Sasan has said about QuickBooks Live. 
 
Here's a stat that's very similar to the stats we've heard in the accounting industry, where there's a percentage of people using accounting [00:12:30] software that do not have an accountant. But they need an accountant or a bookkeeper, right? They need professional help. So, "84 percent of legal professionals told us that increasing revenue was important to a firm's success, yet 77 percent of legal problems don't ever get legal assistance."
 
Blake Oliver: That's a stat from the World Justice Project, and that is very familiar, yeah. 
 
David Leary: Right. I mean, the percentages may not be exactly matching what we see in the accounting industry with small businesses, but it's the same problem. There's a disconnect.
 
Blake Oliver: There's an underserved market.
 
David Leary: To [00:13:00] finish the quote from their blog, "This investment will make legal services accessible, while also ensuring law firms thrive in the process. And while some people still see this as a problem, we see this as an opportunity. This latent gap between those seeking legal aid and those looking for clients is a hallmark in an industry ripe for disruption."
 
They're gonna essentially, like you said, play middleman. They own a CRM. They have a deep relationship with a virtual receptionist [00:13:30] company. They are practice management software. If they just roll in bookkeeping, they could sell that for a thousand bucks a month to lawyers, and then toss in, "Oh, by the way, we're gonna bring you clients." Essentially, if you think about Clio in the future - you're a lawyer. You just have to practice law. All this other stuff's being done for you.
 
Blake Oliver: So, to be clear, you're thinking that Clio is going to offer their own bookkeeping service along with reception services - basically, all that back-office stuff that a lawyer would need.
 
David Leary: It would make sense, because what [00:14:00] the lawyers suck at- the lawyers suck at getting clients, bookkeeping, their front-desk reception. They do all this other stuff, and it just sucks up all their time, and they don't actually practice law. So, if they just have that all being done for them, and clients magically show up in their CRM, and they just start servicing the clients? Yeah. 
 
Blake Oliver: Well, you heard it here first - David is making a bold prediction: Clio Live will come to you soon.
 
David Leary: And it's not just them. We're gonna see this with the other niche apps. The same sell could be made for construction [00:14:30] companies' the same sell could be made for dental offices ... This model of Software as a Service and actual services being offered is gonna be pretty huge.
 
Blake Oliver: Software PLUS a Service. Well, here's a little bit of news from Square. I like to talk about Square because they're always putting out these blog posts about all these new features they're building every single month. One caught my attention; it's the new Square EIN Assistant. Now, if you are a Square customer, using Square as your point [00:15:00] of sale, as your credit-card processor, in addition to helping you with getting paid, and tracking your sales, Square is happy now to apply for an employer identification number on your behalf. You can do that directly in their website, and they'll fill out the forms for you.
 
I just thought that was a neat example of a business pain point - a small business pain point - that a software developer figured out how to processize and solve. We, as accountants and bookkeepers, should do that, too. If you're [00:15:30] signing up a new client, ask them if they have an EIN, and do it for them; offer to do it for them for a fixed fee, or just maybe bundle that into your onboarding.
 
David Leary: So, I'm starting a business. I go to Target, or wherever, Office Depot, and I pick up a Square dongle. Through that workflow, Square's gonna be like, "Hey, you got an EIN yet?" No ... And they're gonna help me get that.
 
Blake Oliver: Yeah, because you need that, of course, to do their payroll, for instance. It's one of those barriers. I've always said- and we did this, actually, in my firm. When [00:16:00] we got new business owners, we had a lot of business owners coming from outside the U.S., who wanted to set up a subsidiary here. We would take care of getting them a bank account. We would take care of setting up their EIN, their payroll, their legal formation, all that stuff. It had nothing to do with accounting, but it allowed us to do the accounting and the bookkeeping.
 
David Leary: QuickBooks and Xero should have the same thing. For that, QuickBooks and Xero should have estimated tax payments; all these stupid regulatory things that- they fall off the radar. I could argue it's QuickBooks' [00:16:30] and Xero's responsibility to provide these, because everybody's in there. You're using that to manage your business, and those are very, very important management functions.
 
Blake Oliver: Stripe, actually - a Square competitor - has an incorporation service you can use, and it's targeted specifically at similar businesses that I was talking about, coming from outside the U.S. to do business here. So, the software companies are basically filling in ... This goes exactly with what you're talking about with Clio, right? The software companies are filling in the gaps that we, as accountants, and bookkeepers, are failing to fill. We need to fill them. Otherwise, we're gonna get [00:17:00] replaced.
 
David Leary: Well said, Blake. 
 
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David Leary: Sabrina Parsons, who was part of LivePlan, she was on a podcast a couple weeks ago; we interviewed Sabrina and Kathy. Sabrina has been appointed to the Oregon Pacific Bank's board of directors.
 
Blake Oliver: Cool. 
 
David Leary: Everybody who's running an app, go get on a bank, because then maybe we can finally, as an industry, get bank feeds, bank APIs correct. [00:18:30] We can-
 
Blake Oliver: Yes.
 
David Leary: This could save the industry. I hope it's a trend that others follow.
 
Blake Oliver: I agree. Couldn't agree more. What else do we have in app news? You wanna talk about QuickBooks Desktop?
 
David Leary: QuickBooks Desktop 2020? 
 
Blake Oliver: There was an article on Accountex Report about the new features in QuickBooks Desktop for 2020. I had a hard time getting through this, David, I have to say, given my- 
 
David Leary: What was the headline? I think the headline was the eye-grabber, actually, for me.
 
Blake Oliver: It was ... "Improvements [00:19:00] to get paid faster ..." Is that what you're talking about? 
 
David Leary: I killed the article. I after I read it, I was like, "This is not worth talking about," but I think the headline was "QuickBooks Desktop 2020 Offers Enhanced Automation Tools," or something ... 
 
Blake Oliver: Okay, Yeah. Now, get this - here's the number-one feature in the Accountex Report article. Feature one: schedule your payment reminders. So, now you can schedule them to go out, I guess? There's like a zillion add-ons that do this in the QuickBooks Online/Xero [00:19:30] space, where you can do payment reminders. We just talked about one of them last week - getting a bunch of money. 
 
Another feature is adding the customer's purchase order number to the subject line of the email? Oh, man! Wow! Please, let me pay you another fee to download 2020! Combining multiple emails into a single email? Okay ... Collapsing columns and reports for both classes and jobs. Actually, that should've been done like 20 years ago. I don't understand why that [00:20:00] wasn't done already. Do you want me to rag on QuickBooks Desktop a little bit more, or ...? 
 
David Leary: No ... I think it's the same type of thing with very underwhelming announcements from Xero, and underwhelming announcements from Intuit, with QuickBooks. But then, the competitors - these Squares of the world - are adding really interesting features like [cross talk] people need to pay attention to this stuff a little bit.
 
Blake Oliver: Yeah.
 
David Leary: So, SmartBooks is a outsourced [00:20:30] bookkeeping firm, but, just like a lot of accounting firms now, they start to grow. They bring a couple of engineers under their roof. They built their own in-house workflow software for their practice. Now they're releasing it - called Smart SmartBooks Genie - so others can now use SmartBooks Genie and manage their own firm's workflow- 
 
Blake Oliver: Run your practice on it-
 
David Leary: Now, you said you saw the demo of this?
 
Blake Oliver: I did. I managed to escape the Cloud Accounting Podcast [00:21:00] booth at 3:00 p.m. on Friday. So, while everyone else was tearing down, I ran over to the SmartBooks booth, so I could see this thing, because I'm very interested in practice-management software. I have to say I was super-impressed with what I saw. They're doing close automations - automating work papers, and doing cool stuff like pulling out metrics from your clients every month, so you can see how many invoices, and bills, and transactions they have, all in one place, with all your clients listed, so you know if you're pricing them properly. Maybe [00:21:30] they grew, and your value pricing doesn't make sense anymore ... Just really neat stuff that I haven't seen any other developer do, and I think it's because they're dogfooding, right? They're building software that they want to use themselves.
 
David Leary: Calvin Wilder, he's the founder of SmartBooks, he comes out, and he's just very honest about artificial intelligence. He says, "While SmartBooks Genie does include some artificial intelligence," he warned that the profession is putting too much stock into technology, at least for the time being. He said [00:22:00] he goes on to say, "There is a lot of hype in the industry about artificial intelligence and machine learning. And it seems everyone is trying to say that they have the latest and greatest technology, automated everything," he said-
 
Blake Oliver: Mm-hmm. 
 
David Leary: " ... but there's nothing that really works very well that delivers on that promise right now." So, it's refreshing to see somebody releasing tech and not over-promising. Now, with that said, he probably won't get any VC money because of that-
 
Blake Oliver: Yeah, or press coverage, because that's the buzzwords everyone's looking for. So, congratulations. That's great. 
 
David Leary: It is refreshing. 
 
Blake Oliver: Thank you.
 
David Leary: There is a [00:22:30] new cloud-based accounting software package entering the U.S. market.
 
Blake Oliver: What's that?
 
David Leary: It's called Surf Accounts-
 
Blake Oliver: Surf Accounts ... 
 
David Leary: Surf Accounts. They're based out of Dublin, Ireland-
 
Blake Oliver: Like in going surfing on waves? 
 
David Leary: Yes. It almost looks like a surfboard, their logo, a little bit. They are based out of Dublin, Ireland, and they have about 25,000 or 30,000 small businesses on their platform, I think, in Ireland, in the UK, and maybe some other parts of the world. Now, they're rolling out into the U.S. market. They are gonna ... They're as low as $5 a month, and they're offering [00:23:00] the full-blown subscription. The one thing is, though, they are claiming to help accountants and bookkeepers automate 90 percent of their bookkeeping tasks, which is a pretty strong number.
 
Blake Oliver: I think that's a bullshit number. We were just talking about people being honest, you know? Hey, you wanna talk about mergers and acquisitions? Because we just had that awesome interview drop from the Accounting Show L.A. about mergers and acquisitions. I spotted this [00:23:30] article in CPA Trendlines a few weeks ago. It's called "Merger Mania Hot and Getting Hotter," and it's got a bunch of stats from their research division. And I always love when I can use some stats on the show to back up what we're talking about.
 
So, here is what's interesting - three-quarters of tax and accounting professionals are calling the current MBA market for accounting firms as active, with 33 percent of them terming it very, or extremely active, according to the new CPA Trendlines Mergers & Acquisitions [00:24:00] survey. Lots of activity; three-quarters of professionals saying that it is active.
 
Here's the crazy part - 10 percent of firms say they will definitely be involved in a merger over the next 12 to 18 months. And another 15 percent say they'll probably be part of a merger. That's 25 percent of firms saying it's either likely or definitely going to happen, with another 26 percent saying that a merger is possible. So, over half [00:24:30] the profession, half of CPA firms, are somewhere from possible to definitely, when it comes to mergers. Now, curious to know whether it's a buyer's market or a seller's market? We asked that question on our panel discussion. 
 
David Leary: You have to go listen to episode 110-
 
Blake Oliver: Go listen to episode 110 to hear from the experts, but according to this survey, 35 percent say it's mostly a buyer's market. [00:25:00] Actually, it's 38 percent saying it's a buyer's market; 45 percent saying neither - it's balanced - and then 16 percent saying it's a seller's market. So, there's a slight edge to buyer's market, right now.
 
David Leary: I'm leaning towards buyer's market. There's just too many boomers; there's too many aging firms; there's too many people looking to get out of the practice; and there's just, in the grand scheme, not that many modern firms.
 
Blake Oliver: Yep. 
 
David Leary: I'm sure it's a buyer's market, right now.
 
Blake Oliver: What is new? What else is new?
 
David Leary: So, we've talked about some of those- they're not [00:25:30] payday loan apps. They replaced the payday loan industry because what they're allowing you to do - apps like Earnin ... If I work for Walmart, instead of me waiting for two weeks to get my paycheck, every day after I clock out, I can actually get that money that I worked that day deposited in my bank account. Basically, they're interfacing with timesheet apps, if you wanna think about it that way, and payroll companies and then paying you your wages almost instantaneous, as you earn the money. We've talked about this, and it's very interesting. Well, the regulators [00:26:00] are starting to now question this-
 
Blake Oliver: Oh, what's wrong? What could be wrong with it?
 
David Leary: They're worried that nobody's paying attention to it, and they wanna protect consumers. They're worried about interest-rate issues, just like with the payday loans. Many of these, like Earnin, you just pay a tip. You're like, "Hey, thanks. Here's six bucks," or something like that. They're worried about that. But, at the same time, I think some of these companies, themselves, are actually open to the regulation, because I think they want to [00:26:30] have protections that the others have. 
 
Blake Oliver: Gotcha.
 
David Leary: Because right now, if you don't pay or if something happens ... Maybe you get paid, but then you quit your job  and the paycheck doesn't go through companies don't have any recourse against you in the same way the payday lenders do.
 
Blake Oliver: Ah, got it.
 
David Leary: So, something to keep an eye on ... These new apps that- politicians get word of these, and they wanna start digging under the covers.
 
Blake Oliver: I have some breaking payroll-related news, David-
 
David Leary: Okay. 
 
Blake Oliver: Shocking, [00:27:00] shocking news coming out of New York State. Have you ever heard of a company called MyPayrollHR? They're a small payroll company. They're based in Clifton Park. Michael Ly gets all the credit for pointing me to this story. Apparently, MyPayrollHR just closed up, disappeared from their offices, took down all the signs and emailed out to their customers saying, "We're out of business. We can't process your payrolls anymore," and they're gone - overnight. This [00:27:30] happened like last week - Thursday, Friday. There were payrolls in process. Employees were getting their payrolls deposited and then withdrawn again. Entire businesses, their payroll didn't process. One-
 
David Leary: How is this not bigger news?
 
Blake Oliver: It is big news. So, this is article in the Daily Gazette that I'm looking at, but it's also all over New York local news. We had [00:28:00] a story in Florida about ransomware making the local news, right? Well, this is payroll fraud or ... We don't know what it is, but I feel like it must be fraud. We'll talk about that later. This is all over the local news. It was on, I think New York 5. I'm searching through Google News, right now. There's a story on News 10 ABC. I watched one of the videos, where they went to the office. You see the inside the office, everything is gone. It's like that movie, "The Boiler Room," where everyone [00:28:30] just disappears. Everything's been ripped out. There's no phones; there's no desks; there's no signs; anything. The company is gone.
 
David Leary: Wow! Do you think they're sitting on people's tax deposits, and now those are gone? 
 
Blake Oliver: Well, that's the problem. They had about 4,000 clients, it looks like. Employees didn't get paid. The business owners don't know where the money went. It's possible they just cut and run with the money, or it was a fraud. Maybe they were Ponzi-scheming it, and they just ran out or something. [00:29:00] The company's gone, and all these people are screwed. One restaurant owner in this article said that all 12 of his employees quit, altogether, immediately. He lost his employees. It's just a mess. There's some accounting firms who were outsourcing payroll to MyPayrollHR, and their clients are screwed.
 
Governor Andrew Cuomo issued a statement that anyone affected by the shutdown should file a complaint with DFS, [00:29:30] the Department of Financial Services, gave the information to do that, and said, "The sudden and unexplained shutdown of MyPayrollHR in Clifton Park is disturbing and completely unacceptable. Its reckless actions have left employees across the state and nation with negative bank accounts and forced businesses who depend on its payroll services to scramble to find ways to compensate their employees. These businesses and workers deserve answers. And I am calling on the Department of Financial Services to investigate this irresponsible company's actions. This [00:30:00] is not how we do business in New York, and we will not allow these bad actors to take money away from the hardworking people in the state." It stopped over the weekend, but now it's picked up again. There's a private Facebook group that's been set up for the victims of this payroll disaster. I don't know if we can call it a scam, yet. 
 
David Leary: They still have a website up.
 
Blake Oliver: Their website is still up, but they're not answering their phones, and nobody can figure out what's going on.
 
David Leary: Wow! I wish you had told me about this Friday, so I had something to ... We could've- 
 
Blake Oliver: I just found out about it like two hours [00:30:30] ago.
 
David Leary: Oh, my goodness. Maybe we'll have more updates on this next week. This fascinates me.
 
Blake Oliver: Yeah. If you have information about this, let's figure this out, what happened. It's quite shocking. What can we learn from this? Well, definitely payroll is one of those things where you're trusting large sums of money to a third party, and it's a big risk when you are using a local small payroll provider. This has happened before, by the way. I don't have it at the tip my fingers, but maybe we can talk about this [00:31:00] next week. There have been other payroll scams like this, where it's either malicious, and the company- somebody in the company took off with the cash - the payroll/tax money - or it was accidental, and they just screwed up and didn't pay the deposits ... All sorts of stuff happened- 
 
David Leary: Well, there's also the big problem ... I remember Intuit dealing with this a decade ago, and I think every one of these payroll companies ... People commit fraud in these payroll companies. You set up a whole [00:31:30] fake company; you generate a bunch of fake paychecks in QuickBooks, all direct deposited. Then, as soon as that money deposits, you just hightail it outta there. You basically withdraw the money from the other bank account, the funding account, $200,000, $300,000, $400,000 at a chop ... 
 
I think everybody's on top of that stuff better now than it was before. I think it was nobody thought somebody would take the time to create so many fake entities, and set it up, and sign up for a service [00:32:00] like that, but, yeah, they were. This'll be great to watch. Clifton Park ... My father-in-law's in Clifton Park. Maybe I should put him on a little recon duty for us.
 
Blake Oliver: Yeah, call him up! Have him go drive by and snap some pictures that we can use.
 
David Leary: No, he's not smartphone [cross talk] No, no, no. It's not happening [cross talk]
 
Blake Oliver: Maybe we can get him on the phone, right? Have him report live.
 
David Leary: Yeah, he could call; report live. 
 
Blake Oliver: He could use a phone. Does he have a smart- he doesn't have a smartphone, but he can use a regular phone, right?
 
David Leary: No, no smartphone. Flip phone. 
 
Blake Oliver: Flip phone. Okay, good. Gotcha. [00:32:30] So, yeah, we'll be on the story. Follow me on LinkedIn if you would like, or connect with me on LinkedIn, I should say, if you wanna stay up on the news on this. I'm also on Twitter. I'm @BlakeTOliver. How about you, David?
 
David Leary: Yeah, I'm @DavidLeary. I definitely am going to get you reshared, because I think that's really, really interesting.
 
Blake Oliver: Let's figure this out, and we'll come back with some more intel next week.
 
David Leary: One other piece of news - I'll just put the link in for people to take a look [00:33:00] at. LG has a dual-screen phone, which is kind of cool, because you can pop one of the phones out. Maybe you're going to dinner and you don't want to screens, but then, during the business day, you want two screens, you can pop the phone back in and now you have a dual-screen phone.
 
Blake Oliver: Whoa ... 
 
David Leary: It just looks really cool, and I could see it being handy for accountants and bookkeepers that are cloud-connected.
 
Blake Oliver: That's cool. I wanna take a look at this.
 
David Leary: We'll put that in the links for everybody there, and then continue to follow us on all the socials. Let us know [00:33:30] about the payroll stuff, but also let us know if we should drop a bunch of episodes at once or not.
 
Blake Oliver: Great talking to you, David, and I'll see you here next week.
 
David Leary: Awesome. Bye, everybody.
 

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