A rundown of QuickBooks Online news from #QBConnect

We're recording at QuickBooks Connect 2019 in San Jose with David DiNardo, owner of ENVOLTA Inc (one of the fastest-growing cloud accounting firms in Canada), and Valerie Heckman of Intuit. Join us for an episode jam-packed with the latest QuickBooks Online product updates announced at #QBConnect, as well as lots more accounting and bookkeeping technology news!


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Show Notes
  • 00:45 – Meet Valerie! 
  • 01:44 – Meet David! 
  • 02:09 – Live fast, cloud-account hard! David’s firm, ENVOLTA, has hit Hubdoc’s Top 50 North American Cloud Accountants and The Ottawa Business Journal’s Fastest-Growing Companies list multiple times! | Ottawa Business Journal
  • 03:00 – Breaking news! The world does not stop when we attend accounting conferences! 
  • 03:47 – News from QuickBooks Connect! | Accounting Today
  • 07:08 – Like a spell-checker, only for accounting processes - one new QB feature, Bookkeeping Review, helps you find, and correct errors, with customization options for each client
  • 08:52 – Bookkeeping Review gives users almost real-time accounting, and eliminates a lot of year-end close headaches, especially around tax
  • 10:26 – What makes QuickBooks's Business Performance Overview tool outperform similar tools from competitors? 
  • 12:39 – Benchmarking tools are splendid, but how do you know the data is solid? 
  • 15:35 – Using powerful review and benchmarking tools provides a solid foundation for effective advisory
  • 17:29 – How do we build, a bigger, better Cadillac of accounting tools? 
  • 18:34 – Will too many apps spoil the tech stack? | Financial Times
  • 21:44 – When FASB speaks, accounting apps, like LeaseQuery run with it! | Business Wire 
  • 23:14 – Bankifi is throwing down the Banking-as-a-Service gauntlet | Forbes
  • 27:11 – Is another tax software company getting ready to bite the dust? 
  • 28:37 – The MyPayrollHR dominoes keep falling – Cachet ceases accepting ACH deposits for payroll | Cachet Financial Services
  • 29:57 – Cachet’s decision leaves companies, like Vermont-based PayData, holding the bag | VTDigger 
  • 32:15 – CYA with insurance – the best way to protect yourself and your firm when you’re stuck in the tangled web of apps and services
  • 33:02 – David DiNardo's parting wisdom: accounting and bookkeeping firms should go social! Not only is it good for marketing, but it's an excellent way to network and stay on top of what's going on! 
Connect with David and Valerie
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Valerie Heckman:
If we keep the books clean, and we do those reviews, and we've put things in place to automate, the tax return should be a breeze, as well.
Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
David Leary: I'm David Leary.
David DiNardo: I'm David DiNardo.
Valerie Heckman: And I'm Valerie Heckman.
Blake Oliver: Awesome. Thank you guys so much for joining us today!
David Leary: Valerie, and David ... For this interview, I'm gonna use Leary, I guess. I will not be David for this interview. Is this correct, Blake?
Blake Oliver: Yes, Leary ... [crosstalk] Leary it is, and maybe going forward. [00:00:30]
David Leary: Going forward, possibly, okay ... So, we are at day three of QuickBooks Connect. It's after the big party the night before; we're up bright and early. We ran a contest this week, and we have our guest hosts. One guest host was not a contest, who is Valerie. Valerie, you're with Intuit. Do you wanna just give a little quick background on who you are?
Valerie Heckman: Absolutely. I am with Intuit QuickBooks, and I am a senior product consultant for QuickBooks Online.
David Leary: What does that mean?
Valerie Heckman: That means that I help accountants get more comfortable using QuickBooks Online and showing them all the exciting things that it can do as they start their journey to the cloud.
Blake Oliver: Perfect, and [00:01:00] you're based in Chicago?
Valerie Heckman: I am based in Chicago, yes.
Blake Oliver: But you go all over the place? A lotta travel? 
Valerie Heckman: I do. I do. I carry a bag, and I'm on the road most of the year.
Blake Oliver: Awesome. 
David Leary: We have to go fast today because you have a flight to catch, right? 
Valerie Heckman: I do, yes.
Blake Oliver: Got it. 
David Leary: David DiNardo ... We ran a contest this week. We wanted to give one of our loyal listeners a chance to be on the podcast and guest host. You wrote a big ... You weren't on Twitter; you kinda came in from the side. Twitter, there was a lotta people talking about, "I wanna host, I wanna co-host, I wanna co-host!" Thank all of you for trying to get on there. David wrote this great post [00:01:30] on LinkedIn, and Facebook, and his friends and family commented on it - he'd be a great guest host ... What caught my eye is a) you're a young millennial, started a cloud-accounting firm; and you have 35 fully remote employees, and it's one of the fastest-growing firms in Canada. What's the firm name?
David DiNardo: So, I own ENVOLTA Cloud Accounting, located in Ottawa, Canada, and we specialize in, really, the cloud-accounting world. We started in 2014, and we've grown the business exponentially in the last five years to [00:02:00] the fastest-growing business in Ottawa, two years in a row.
Blake Oliver: Fastest-growing business, period, or ...? 
David DiNardo: Yeah.
Blake Oliver: Wow.
David DiNardo: Top 10 in Ottawa for two years in a row-
David Leary: Very impressive. 
David DiNardo: -and Ottawa is the capital of Canada, so there's a lot of major businesses there. Then, we won fastest-growing business- we came 51st in Canada for a three-year trend. We are just leveraging the technology and growing it.
Blake Oliver: What's your headcount?
David DiNardo: We're at 35 people. We're hiring 10 more people by January. We're just landing [00:02:30] the contracts and keep on going.
Blake Oliver: Nice!
David Leary: And I'm assuming you jumped straight into cloud from day one.
David DiNardo: We started on some desktop, but the vision ... We started five years ago, and the cloud apps weren't there yet. So, we definitely adopted to QuickBooks Online first and now, everyone's on QuickBooks Online. We have an app stack, and all of our employees work remotely across Canada.
David Leary: So, I think this is gonna be our regular [00:03:00] news episode-
Blake Oliver: Yeah. 
David Leary: -because we've been here; we've been doing interviews, interviews, interviews, but there's news! News happened here this week at QuickBooks Connect and news has happened outside of QuickBooks Connect. Believe it or not, there's a world happening of accounting news that still happens.
Blake Oliver: Yeah, let's talk about what is new from QuickBooks, and from Intuit. We're lucky to have Valerie Heckman here to help us get the overview. So ... 
Valerie Heckman: Yeah, yeah. So, it has been an exciting week at QuickBooks Connect. There have been so many different pieces of news across the board; [00:03:30] many things shared on the main stage on Accountant Day with Ariege. I'll go through some of that, and then, there was also a lot of news in the booths, right? This year, we had a lot of the new innovations being really showcased in the booths so that you could come and see a bit of a presentation around it.
Blake Oliver: So, our friend of the show, Ranica Arrowsmith, wrote a great article on Accounting Today, kind of summing up three of the main key announcements that we heard from Ariege on, I think it was day one, the Accountant Day. The [00:04:00] first one that caught my eye - I saw tons of tweets about this - was the Optimization Center. We got a peek at that. It will actually score your clients and show you how effectively you've set them up, based on, I think it was like bank rules; whether you've got those in place.
Valerie Heckman: Yes. Yes. So, we're actually showing you an objective measure of how efficiently each client is set up, and then also recommendations to improve. So, it has to do with how many times a transaction [00:04:30] is touched or interacted with in QuickBooks Online, which is super-exciting.
David Leary: David, you obviously have a firm. How do you know, when you have all your clients, that you're handling one client with super-efficiency and all your clients are being handled efficiently? Do you have any way to measure that right now, internally, or are you really excited about a tool like this? 
David DiNardo: A tool would be amazing. We're doing a lot manually, right now, but it's all part of the onboarding process. That's where it defines everything - setting the tone with the client at the beginning; setting them up properly; and then doing the ongoing work. If you don't have a process, you won't be able to do [00:05:00] any of these KPIs or anything in order to measure it. Then, you become more reactive rather than proactiveness.
David Leary: Yeah, I could see how ... It's great if they're gonna open this up to ProAdvisors ... If you don't have any processes, you're gonna run this tool, and three of your clients are gonna be like 90-percent efficient, and your other ones are like 22-percent efficient. If you don't have any processes, you'll never know why those three are that efficient.
Valerie Heckman: Exactly. Exactly. So, we're saying how can we help the accounting professionals really get their arms around what that looks like and how they can improve it? One of the things [00:05:30] I really thought was cool with that is that you can create those bankrolls from there and then, copy them to other clients within QuickBooks Online, without having to do an export/import to Excel. It's gonna be really easy to go through a workflow and standardize across clients if you want to. Are you excited about that?
David DiNardo: Yeah, very excited. I think that's great.
Blake Oliver: And it's sophisticated. It's not just let's copy all the rules from this one client to another. You can pick which rules specifically you want-
Valerie Heckman: Right. 
David Leary: Which means you could almost create a fake QuickBooks Online company and almost have like a template of rules that you copy over [00:06:00] to every one of your clients, because it's pointless ... Right now, there's 150,000 QuickBooks ProAdvisors, and every one of them has individually created a rule to code Starbucks to meals and entertainment [crosstalk] 
Valerie Heckman: Sure. 
David DiNardo: -but what's gonna be exciting is if you niche your clients out into different industries and you master one of those niches, then you can roll it across all your clients in a very streamlined way- 
Valerie Heckman: I've actually seen that happen with the rules, today. I was working with a firm in Seattle that they have real estate clients, and every one of them goes to FedEx, and goes to the same gas stations, and goes here and there, and has all these [00:06:30] very similar expenses; then, even the income coming in from certain places is pretty standard. So they create a standard set of rules that they upload every time they have a new client, and we're just making that easier to do, because you don't have to go to into Excel and deal with the import, and mapping, and all those things.
David Leary: Rule standards are the new chart-of-accounts standards.
Blake Oliver: So, that's all about getting the data in efficiently; the most effective way to do that, as possible. Second on the list of features was what happens after that, right?
Valerie Heckman: Yes. 
Blake Oliver: How do we actually close the books? That was called Bookkeeping [00:07:00] Review. So, as I understand it, it's like a really cool checklist integrated into the product. Am I describing it, right.
Valerie Heckman: Yeah. It's a checklist and more. The idea here is that QuickBooks is going to automatically find errors and surface mistakes for quicker resolution, of course, and then also enable you to say, "If this particular client has certain things that we need to look at closely, I can create my own kind of checklist around them and keep an eye on things." We surface [00:07:30] all sorts of things that might need attention, right? 
If there's, I don't know, things that don't have vendor names, transactions without pays, and things like that, we may give you that bump of, "Hey, take a look at this more closely." Then, what I think is really awesome is we've already started doing this, so there is the Bookkeeping Overview in QuickBooks Online today, but we've gotten so much feedback from our professionals that we are building out even more kinda smart-scanning things that can surface more items that need attention.
David DiNardo: So, I love this. We're [00:08:00] actually presenting- my chief operating officer, Victoria, is presenting in QBO Connect on quality control. We do year-ends every month, so our data ... We send out reports by the 15th of the following month. If your books are cleaned ... We have an internal checklist. The fact that that's going external to everyone, that's very important. When we talk about real-time accounting, this is the real-time accounting. Make sure the books are clean before you go to the next month and not carry over any slack [00:08:30] from month to month.
Blake Oliver: When you say you're doing a year-end close, you mean like a hard close every month?
David DiNardo: Yes. 
Blake Oliver: Not this soft close of, 'well, it's reconciled, but is it?'
David DiNardo: We have that checklist, that quality checklist that we go through - the balance sheet, the whole nine yards - and we actually lock the books after the month, so that the user doesn't go in there and mess things up or anything.
Blake Oliver: This is what separates the firms that are doing good workflow from the ones who aren't, because you're saving yourself so much time [00:09:00] and eliminating the possibility of errors later down the road [crosstalk] 
David Leary: -that's technical debt- it's debt you're carrying forward and eventually, you're gonna have to pay that debt, and it might be a lot of time at the end of the year.
Blake Oliver: Yeah ... That's a software term, right? Technical debt is messy code that you end up paying for later when you fix it.
David DiNardo: And guess what happens? You do the year-end ... You're fixing all the problems throughout the year. The year-end takes no time, and it's clean, and you're just ready to automate the tax now. [00:09:30]
Valerie Heckman: Right. 
Blake Oliver: Do you guys do tax, too?
David DiNardo: Yeah, absolutely.
Valerie Heckman: Right, exactly. Yeah, so why should we have to file extensions every year for clients? If we keep the books clean, and we do those reviews, and we've put the things in place to automate, the tax returns should be a breeze, as well.
Blake Oliver: You could theoretically start on that like the first weekend in January.
David DiNardo: Absolutely, once the banks are reconciled at the last month, you could do the tax return and start doing tax planning, and now, that advisory piece comes into place.
Valerie Heckman: Exactly because you have the time now.
David DiNardo: Yeah, exactly.
Valerie Heckman: You have the time now. I was talking to somebody at the conference that said it used [00:10:00] to take six hours or more per client to get things ready for the tax return. Of course, if we have that across all of our clients, we have to file extensions to gain that time. Now, they're like, "It's an hour, because we've been keeping the books up to speed, and we're not looking back at what happened; we're working in as real time as possible.
Blake Oliver: So, the third big feature announcement on the main stage was the Business Performance Overview. 
Valerie Heckman: Yeah. 
Blake Oliver: It's interesting. This is one that I'm actually the most [00:10:30] skeptical of, personally, because I come from the Xero world. That's where I started in the cloud. Xero tried to do a Business Performance Overview tab. I'm not sure if you guys are aware of that, but nobody uses it. At least nobody I know actually uses it. Let's talk about what it is, and then, I know, David, you can give us your perspective.
Valerie Heckman: Yeah. So, it is a tool that's going to show us key metrics and trends in industry comparisons. We have our ecosystem data from over 4 million [00:11:00] small businesses, and we really want to help accounts have a better understanding of their clients, in relationship to each other, and help drive an impact for that, and give you tools that you can use to look and see how the business is doing, as you prepare for those advisory conversations.
David Leary: It's funny, because, Blake, I remember six months ago, you were like, "Why doesn't Intuit just do this? Why don't they just have benchmarks built in the product? It's so obvious! They have the data ..." and now, they've done it. 
Blake Oliver: Right. 
David Leary: Just for you, Blake, they've added this feature. 
Blake Oliver: So, that's the thing is you get these charts of KPIs trending over time - that's really cool - from the [00:11:30] QuickBooks data of your client. Then, you also get a ... We're gonna get benchmarks. You'll be able to see, okay, what is an appropriate gross margin for a business with 10 to 50 employees also in the restaurant space? 
That's the idea, as I understand it, which I think we've talked about ... Maybe it was you, and I, David; maybe it was with a guest, but like, this question in my mind as to can I trust that data? How do I know those books are clean? If I'm gonna use benchmarking data, I wanna know [00:12:00] where it came from ... I don't know. I think it's really cool. There's a lot of potential, but I think also-
David Leary: But, in theory, if you think about layering this, right? The efficiency of the data entry, and you have the  closing the book checklist-
Blake Oliver: Yeah. 
David Leary: There's gonna be a score where Intuit eventually will be able to, for the benchmarks, the only companies that'll be included in that are people that are at some X score. Like, "We have confidence that the data's good because ..." 
Blake Oliver: As long as that is happening [crosstalk] As long as there is some sort of confidence ratio that is being used to rank the data, right? 
David Leary: Yeah, because the other eight plumber [00:12:30] businesses I'm being compared to, in my zip code, they're only putting invoices in; they don't put any of their expenses in QuickBooks or something-
Blake Oliver: And what if they don't have David DiNardo's firm closing the books every month?
Valerie Heckman: Right, right. 
David DiNardo: I think the main thing is the third-party apps. You have the Spotlights, the Fathoms, the Jiravs out there doing this in some context ... That I would rather, and talk about skeptical, I would rather leverage an app to be integrated specific for what I'm looking for than [00:13:00] that generalized data that I don't know if I can ... What's the data count? What's the metric around it? There's all these questions behind it.

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Blake Oliver: Well, this is ... I guess this fits a trend that Leary, and I ... I'm gonna say Leary, so we don't get confused [crosstalk] Leary, and I have talked about, which is the GL providers - the QuickBooks apps of the world - are becoming very broad.
David DiNardo: Right.
Blake Oliver: Building features like that, where ... As soon as QuickBooks came out with receipt-scanning, my question was - what's [00:15:00] gonna happen to all these OCR apps? 
David DiNardo: Right. 
Valerie Heckman: Sure. 
Blake Oliver: But then there's always a use case where they're not gonna cover it, because the receipt-scanning will be simple in like a QuickBooks and will fit the needs of those people who don't need a specialized tool; maybe this will be the same way, right? 
David DiNardo: That's exactly ... It depends on your clients. But I want that content behind it to deliver that advisory services. I don't wanna generalize anymore. I think, when you're starting out, it's great for that business owner, but once you start growing a business and you start wanting to deliver [00:15:30] that key advisory stuff, then you need that specific content.
Valerie Heckman: My hope is that us having it - and this is my opinion, right? - my hope is that us having that really gives people a taste of what it could look like to use a tool that's even more powerful; that, "Okay, this is what's included in my QuickBooks Online, but if I look at one of these other apps, it's gonna put that on steroids and give me capabilities beyond what's here. But at least what's here will help me get- [00:16:00]
Blake Oliver: Get started. 
Valerie Heckman: -that conversation started."
Blake Oliver: It could actually grow the market for those kind of apps, in that people get a taste of it and then, they want more.
Valerie Heckman: Right. 
Blake Oliver: The Bookkeeping Review is almost the same way. We've got the Jetpack workflows, the Arrow workflows [crosstalk] 
David DiNardo: Carbon; throw in Carbon- 
Blake Oliver: Yeah, Carbon, for sure. People will start doing the checklist thing for the first time and then, they'll say, "Okay, what else do I need, maybe, when I'm ready to get something more robust ...?" 
David Leary: It's just good enough, right? You get the phone apps on iPhone and Android ... You can take a photo, but [00:16:30] then there's all these other apps-
Blake Oliver: A million of them- 
David Leary: -that would let you use filters and all these other things, and then, eventually, they put that stuff in the phone. You never knew you needed those things, and now, "Oh, I can do filters?" Then, it makes you go seek other apps to do crazier filters, and meme creators [crosstalk] 
Valerie Heckman: Well if we think about the audience [crosstalk] 
David DiNardo: I think that's a drawback, too. If you're starting an accounting firm right now, and you walk into all these apps, you are overwhelmed.
Blake Oliver: That's right, yeah. 
David DiNardo: I could see a high anxiety around that, just walking in and not knowing the direction. Then, on top of it, QuickBooks and [00:17:00] Xero, or whoever, are building similar apps, or similar functions than a Hubdoc. Clients are actually coming to me, and be like, "I just seen this upload-in receipt for QBO, but you've trained me on Hubdoc. What's the difference?" So, now I'm having those-
David Leary: It's interesting that clients are noticing this now- 
David DiNardo: They are.
David Leary: It's not just us talking inside baseball, here on the podcast. Clients are noticing, "Oh, there's an app, and there's this other app, and they have overlapping functionality ..." and they're out there questioning their accountants and bookkeepers about it.
Valerie Heckman: Right, but the [00:17:30] general audience - the folks that aren't lucky enough to have someone like you - they don't even know that OCR stuff exists. Then they see it, and they say, "Oh, wow! Gosh, I wish that this had the ability for me to do this with expense reporting, and have my employees use this, and have more ..." You're like, "Yeah, that exists, too," but it's an additional thing that not everybody needs that capability. So, it's like how do we take the core of accounting and then, take the core of the cool automation tools and build that into QuickBooks [00:18:00] Online and still leverage the ecosystem for the Cadillac version of some of these things? 
Blake Oliver: I love that. Great analogy. There was other news that happened in the last week or two, while we have been in the enclosed world of QuickBooks Connect, which I feel like normally I listen to the news every day; I watch the news. I have no idea what happened over the last 48 hours. The world could have ended outside of this building, and I would not know. Let's see if we can talk about some of the news in the accounting world, David. Do you have any stories [00:18:30] that are ...? 
David Leary: I have a story that's tangent to something David said about being overwhelmed. It's an article on Financial Times; the title of the article is "Lawyers' next challenge: too much technology." So, it's that there's just too many app choices. How do they know which ones? Because lawyers move slow, and if they're gonna build a tech stack and redo their firm, they want to do it for the next 10 years. There's so many startups; there's so much choice. How do they pick the tech stacks to go forward? I just thought it was an interesting article because I feel like it's the same pain accountants and bookkeepers have been having. I [00:19:00] think we're getting more comfortable with it in our space.
Blake Oliver: It's not just accountants, right? Everybody has app overload.
David Leary: I guess that's true, yes, yes. Podcasters ... 
Blake Oliver: I read an article about how a typical business, across all of its departments ... We're talking midsize/large business will have 200 or more applications being used for different things. Can you imagine being that like chief technology officer trying to corral all of these apps, and maintain data security, and all that stuff? It's crazy.
David DiNardo: I think this is a big problem [00:19:30] that you can turn into an opportunity, right? If I was giving any advice to a business owner, build that app stack and just stick with it. Start with one or two. Don't try to do four or five at the same time. From a lawyer's perspective, Clio raised $250 million a couple months ago. Now, when we deal with lawyers, it's, "Hey, we know Clio. We know it integrates great with QuickBooks Online. If you're not on Clio, we can't take you as a client because we're not trying [00:20:00] to learn another app ..." [crosstalk] 
David Leary: -there's 1,250 legal technology companies, right now, building software apps for lawyers- 
Blake Oliver: Did you say 1,250?
David Leary: 1,250, and that's just that industry. Now, go construction; now go restaurant industry ... It's insane. It's really crazy, industry to industry.
Valerie Heckman: Then, what's interesting, too, is like what's missing, right? Cause I feel like so many of my conversations over the last few days, it's that, "Oh, I've gotta find the app for this ... Who's doing that amazingly perfect?" So, it's how do we piece through all of this [00:20:30] and figure out a strategy for ... I'm curious to know from you, how do you go about evaluating multiple legal apps and landing on Clio? What does your process in your firm look like? 
David DiNardo: I'll give you a shout-out. Go to QBO Connect, and then just learn.
Valerie Heckman: Yeah! 
David DiNardo: Before you start implementing anything, do an analysis of three or four apps - what works well for your company and your clients? Get your company trained on it. We have five managers. Anytime I'm doing an app analysis, [00:21:00] I'm bringing them involved, and I'm doing a demo with them and getting the perspective of every single one of our employees before we make a decision, because they're gonna be using the tool-
Valerie Heckman: You've gotta get the stakeholders' buy-in [crosstalk] or the app's not gonna get adopted, right? It'll just be, "Oh, we've got one or two clients that are using it," but not at scale.
David DiNardo: Another thing we do is every month, we do a tech session. We would either bring in an app partner, or we would do a demo of a specific app so that [00:21:30] the whole company sees it before we implement it.
Valerie Heckman: That is so awesome. That's awesome. You do it like lunch-and-learn style? 
David DiNardo: Yes.
Valerie Heckman: Awesome.
Blake Oliver: So, I've got some more app news. 
David Leary: Yeah? 
Blake Oliver: LeaseQuery ... Were they here at QuickBooks Connect? I'm not sure. We've talked about LeaseQuery in the past.
David Leary: Yes.
Blake Oliver: They're an app designed basically around an ASC 842 on lease accounting. It's funny, now that FASB issues an accounting pronouncement and an app is created, or like a dozen [crosstalk] Turbocharging [00:22:00] the ecosystem. Well, LeaseQuery announced $40 million in Series-A funding, so more money pouring into the niche-app space. It was Goldman Sachs' Merchant Banking Division that invested $40 million in them. So, congratulations ... 
David Leary: So, I have a question on this ... Think about this, because we've seen this, right? There's a change in the accounting standard, and people have to do this; now, an app to solve that problem pops up. What if there's a new political administration and the accounting standards possibly change. I mean, are these apps dead [00:22:30] in the water if there's ever a change?
Blake Oliver: I mean, yeah, if somebody ... But here's the thing, the SEC, FASB, they don't go backwards on this stuff, generally [crosstalk] It just gets more and more convoluted every year. So, I think they're probably okay.
David Leary: Okay, got it, got it. 
Blake Oliver: Think about it. It's like a sunk-cost fallacy, right? Everybody's invested so much money in adopting the new guidance. If they turned it off, then everybody would be pissed off, right? 
David Leary: I have an article about Bankifi. They're a European fintech company, and they really help banks, and they just do modern tech services - invoicing, [00:23:00] payments, nudges - I don't even know what a nudge is. It might be reminders to pay? - cash management, and accounting to businesses. They're a software-tech play. What's interesting, in the article ... I'm gonna scroll down here and read you the quote here. 
It's really a stake in the ground, and it's this convergence of ... We've talked about this - tech firms are becoming banks; banks are trying to become accounting-software companies. I'll read it carefully here: "In the foreseeable future, accounting, banking, cash management, treasury management systems, and ERPs all use the same [00:23:30] date ..." That probably should say 'data,' but they typed 'date.' "This will, over time, merge into one banking-as-a-platform service," which I thought was a really interesting quote, and a stake in the ground-
Blake Oliver: I don't see that ever happening. All of these different apps are going to actually use the same format? [crosstalk] That would be like if we all had the same plug for our phone. Is that ever going to happen? No! 
David Leary: We can't get the same plug for our phone, that's true ... I don't know how this would happen [crosstalk] So, you're not buying into this convergence?
Blake Oliver: Well, I'm just playing devil's advocate.
Valerie Heckman: What's interesting with that is the complexity [00:24:00] of all the different banks and how they all operate so differently. It makes certain things hard to have happen and to standardize, when you're trying to accelerate, because you get slowed down by banking. I've seen firms ... I had a great conversation this week around, "Oh, do we tell our clients, 'Hey, not only do you have to use Clio, but you also have to use this bank because we like how they operate and what they do ...'?" 
David DiNardo: I'm going to say the opposite. Canada, we're fortunate [crosstalk] 
Valerie Heckman: You don't have that many banks ...  [00:24:30]
David DiNardo: We have five major banks, so we're able to be even more progressive, because we don't have that [crosstalk] 
Valerie Heckman: -don't have over 16,000 financial institutions in the U.S. connect with QuickBooks Online, and those are the ones that connect. I have people tell me all the time about how so-and-so bank doesn't connect. So, what is the total number? I don't know, but what's interesting to me is that I've had some conversations ... We didn't talk about this in our main-stage news, but having those statements get fetched in and brought into QuickBooks Online-
Blake Oliver: The Automatic Statement Import. 
Valerie Heckman: is coming in spring [00:25:00] to the U.S., and we were able to roll it out much faster in Canada because there are not as many financial institutions to get those statements from, so it's [crosstalk] ... Yeah, it's an exciting thing.
Blake Oliver: Yeah, it's huge. We're not talking about just the bank-feed data, we're talking the actual PDF, is that right?
Valerie Heckman: Yeah, the statement. The statement, yeah ... That's one of the things that Ariege talked about- 
David Leary: The clicking that it's just saved to go get this ...
Blake Oliver: Well, because, if you think about it, if you have 100 clients, and you have to download their bank statement every month, [00:25:30] which you should be doing, if you're doing a hard close and filing that away, that's like a five- to 10-minute process for every client, assuming that somebody hasn't changed the password, and assuming that you even have read-only access.
Valerie Heckman: Right, right ... 
David DiNardo: I think the moral of this is we're coming into a world where accountants have to be that problem-solver. So, my solution would be find the CSV and then do an upload to save the time. We have to look at that automation in different ways to get that file, and that's what the [00:26:00] role of our profession is becoming.
Valerie Heckman: If you think about where ... From this article, it sounds like the banks are realizing that it's costing them customers, if they don't have some sort of future plan to align things and build out platforms in ways that help customers navigate that differently than they have consumers, right? 
David Leary: I just heard some comments around QuickBooks Connect yesterday. They're starting to get the vibe that maybe the banks are gonna start ... You want bank feeds? You gotta pay us 15 bucks a month. You wanna download statements ... The [00:26:30] banks wanna create their own accounting platforms and keep you in-house, because if you're just downloading that, what's the value the bank at this point? You don't need them at all.
Blake Oliver: That's why I think Chase and Bank of America now use Bill.com as their white-label business-payments platform. They get you in there and then, they take away the ability to export the data? Because once you set up all your bill pay, you don't wanna change banks, right? 
I've got a little more app news. This one's not as positive, unfortunately. This is a little bit of a downer. Are you all familiar with Canopy? Tax software in the cloud, [00:27:00] which is a very welcome development. There hasn't been a lot of opportunity in that. Well, they were just growing like crazy. We've talked about this on the show, Leary. But it seems like they expanded a little too fast.
Canopy founder and CEO Kurt Avarell, stepped down Thursday as the tax software company laid off 73 employees after already laying off 100 employees in March. Chief Revenue Officer Jordan Ray will become the interim CEO. Back in March, 100 employees - that was a third of their whole workforce. [00:27:30] So, now, that's like half of the workforce that's left.
What's crazy about this is that, prior to the layoffs, they'd been expanding really rapidly. They were opening this really fancy office in Utah, in Lehi. I don't know, it's kinda crazy to think what happened. We obviously don't know ... You hire, what, like 300 people, and then suddenly, you have to like to lay most of them off. How does this happen?
David Leary: Yeah, because I think before we covered that, it was a surprise because we've seen Canopy ... Even though I tend to [00:28:00] be on the business side - I'm not in the tax-management side - but I've seen them at conferences. You see them growing. I always heard good things about them, and then, that one day, they laid off half their staff, and now, the CEO's been let go. 
Blake Oliver: Yeah, so- 
David Leary: I don't know. 
Blake Oliver: What else do we got this week?
David Leary: An update on MyPayrollHR ... Not so much MyPayrollHR, but Cachet. So, Cachet is no longer going to process payroll transactions.
Valerie Heckman: Wow! 
David Leary: So, Cachet, if people remember, with MyPayrollHR, Cachet was the ACH money-moving company.
Blake Oliver: They were the ones who got caught in this whole scam.
David Leary: Well, they [00:28:30] got caught holding the empty $26-million bag. They didn't do the scam. They just are the ones that had got hammered the most by it.
Blake Oliver: Right.
David Leary: So, they're basically not going to do ACH transfers into their company anymore. If you're an employer using one of these payroll services, the payroll service will need to wire transfer that money to Cachet.
Blake Oliver: Which is causing tons of trouble, right? They had a bunch of late payrolls with different other payroll providers that are not MyPayrollHR that use Cachet suddenly couldn't deliver their payroll on time, because they didn't have the means to do these wire transfers. [00:29:00]
David Leary: Yeah, they weren't set up for it. Again, it feels like, with Cachet, they've been in reaction mode. They reacted when they found out the scam happened, and that bad ACH file was uploaded that they tried to do, and that caused pain for employers, or employees of companies. Now, this is causing pain because, for whatever reason, they had to make that decision to no longer let people transfer stuff in ACH. I don't know if they're in trouble, not in trouble; how that's gonna impact them, because that was their business model. They're called Cachet, as in A-C-H is in their name.
Valerie Heckman: I wonder if that's a temporary [00:29:30] thing. Do we know? 
David Leary: It doesn't say. 
Valerie Heckman: Does it say that's forever, or have they just decided to stop that until they can get ducks in a row?
Blake Oliver: I don't have the story in front of me, but I think it was a problem with their bank. This whole system is so complicated; there's so many layers, right? You have the payroll service provider; then you have the ACH processor, Cachet; then you have the bank that actually makes the ACH transfers, which is ... We don't even know what that is. I can't remember that Cachet uses.
If the bank says, "We're not gonna take the risk anymore," that [00:30:00] has this ripple effect. A great example is this company called PayData, which services Vermont clients ... MyPayrollHR affected a lot of New York employers. This PayData company services Vermont employers. So, PayData had to spend $1 million of its own money to cover the paychecks of 1,000 employees, because Cachet told them that, at the last minute, they couldn't do ACH anymore. 
David Leary: This is just an unbelievable domino. It just keeps [00:30:30] rippling because of one guy ... One guy and his bullshit moves. 
Blake Oliver: But also because he was kiting checks for like a year and a half, and nobody caught- 
David Leary: No, 10 years- For 10 years ... 
Blake Oliver: Well, he was doing the fake businesses for like 10 years, but the kiting of checks, I think, was shorter than that.
David Leary: Okay.
Blake Oliver: Yeah, but still, that nobody caught it? That there's not some AI? 
Valerie Heckman: Well, right. I think that's the lesson that I hope everybody who's been listening to you all cover this story over the last ... Was it two months, now, almost? It's that if [00:31:00] we're going to move in the direction that we want to, we have to put pressure on all these other institutions to also ... The theme of QuickBooks Connect, "Own the Future," right? To get to that point where we don't run into these things because people will always find the holes in those opportunities. It's kind of amazing to me that this hadn't happened sooner in a big way.
David DiNardo: Well, as a business owner, how do we know apps out there that are not doing the [00:31:30] same thing, or what's the regulation around it? We're advising our clients to use X app, but we don't know what's going on in the background with the security around it to ... Then, it's on, somehow, the businesses and the advisors because we're giving them that advice.
David Leary: Yeah because every app that's here has all these dependencies. Everybody's using these micro-service architectures. That app's built on Amazon. Well, [inaudible] since Amazon, but then, maybe they're using some credit-card processing from Stripe. [00:32:00] So, now, they have that dependency in their app. It just trickles down ... They're using some piece of code from some other company; oh, and they're using a bank-transfer service, and they've partnered with this other regional bank. Those are all dominoes, and once one falls, that app, all the sudden, is useless for all your clients, and you're the one who feels the effect of that.
Valerie Heckman: This might be a dumb question, but are there- is there insurance around that? What would an insurance plan for a business, or an accounting firm look like when it comes to those things? I don't personally know.
David DiNardo: So, after this story, I contacted my insurance, and [00:32:30] got data-breach insurance-
Valerie Heckman: There you go! There you go! 
David DiNardo: -to protect my company because that could happen.
Valerie Heckman: It's the world we live in, right? 
Blake Oliver: Every accounting/bookkeeping firm should be looking into that as an option because we're relying on this world of cloud apps. There's a lot of them, hundreds of them, that we might be using, and we need to protect ourselves. So, I think that's a wrap. I know, Valerie, you've gotta get on a plane back to Chicagoland.
Valerie Heckman: I do, I do. Yeah.
Blake Oliver: And [00:33:00] David DiNardo, it was so great having you on the show.
David DiNardo: One other thing. I just want to give a shout out to my marketing team. I wouldn't be on here if we didn't do the social media gig. I recommend all accounting companies to do social media, and get out there, and really look at the marketing around it, as well.
Valerie Heckman: Yeah, yeah, Twitter ... Twitter it up; LinkedIn, Facebook, all of it.
David Leary: Speaking of those, how would they contact you, David, if they want to?
David DiNardo: You can go on my website at www.ENVOLTA.ca, or on [00:33:30] LinkedIn - David DiNardo.
David Leary: David, you need to get on Twitter, as well [crosstalk] could not find you on Twitter-
David DiNardo: You always said pick one social media and then do it! 
Valerie Heckman: Fair enough ... If you want to get in contact with me, probably Twitter is the best way to do it. I'm @VHeckmann.
Blake Oliver: As always, I am @BlakeTOliver. And how about you, Mr. Leary?
David Leary: I'm @DavidLeary on Twitter.
Blake Oliver: Thank you both.
David DiNardo: Thanks. 
Valerie Heckman: Thank you for having me. Bye-bye. 

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