Reflecting on a Decade of Cloud Accounting

We look back from the end of 2019 all the way to 2009 — a decade in which technology changed our lives and the accounting profession. Listen for what worked, as well as the tech predictions from the 2010s that aged badly. QR codes, anyone? Also, hear the new Ghostbusters-themed QuickBooks Live commercial, stories about businesses adapting to life in a post-Wayfair sales tax world, what's new with cloud computing accounting rules, how much firms are spending on tech vs. marketing, and what firm leaders can learn from Old Navy.



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David Leary: I see where you're headed with this article. I see it.
Blake Oliver: Where do you think I'm headed?
David Leary: Accounting firms need to empower their employees to better serve customers-
Blake Oliver: Yes! 
David Leary: -by either letting them work remotely; giving them mobility options; giving them the tools and apps they need to do their jobs. 
Blake Oliver: Exactly! 
Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
David Leary: And I'm David Leary.
Blake Oliver: It is December 29; the tail end of 2019. We're [00:00:30] coming up on a new decade, David.
David Leary: This is our last episode of the decade.
Blake Oliver: And quite a decade it was! I spotted this article in The Wall Street Journal about how technology has completely changed our lives in the last 10 years. I was thinking back on this, and I have to say I agree. It's kind of amazing what has happened. The very first iPhone was, what, in ...?
David Leary: I think it was 2007. So, 2010 - so a decade ago - the iPad came out.
Blake Oliver: Yeah. [00:01:00]
David Leary: That kicked off the decade - the iPad. 
Blake Oliver: That's amazing to me. In 2009, Apple started selling the iPhone 3GS, which had a 3.5-inch screen with a 480 x 320 display, less than half the resolution of a 20th century TV set. The hot feature was a built-in digital compass, and it cost $199, and it sold  hotcakes; and nobody would want one now. Now, in And now in 2019, we've [00:01:30] got these phones with displays that have higher resolution than our televisions. They cost $1,000, and they can do basically anything you want. Cloud computing wasn't really that much of a thing 10 years ago, in 2009. Cloud accounting was barely happening at that point. I don't even know ... I mean, it's pretty much desktop hosting, right? Was QuickBooks Online even a thing?
David Leary: QuickBooks Online existed, but the iteration [00:02:00] of the platform, and the app ecosystem was kind of reinvented around 2011-2012. The big launch, the big push, the big tipping point was November 2013. That's when Intuit really put a line in the sand and said QuickBooks Online is the future; put 90 percent of their resources there; stopped letting people build on the QuickBooks Desktop API version, and really started pushing people towards the future.
Blake Oliver: Xero, they were founded in 2006. Took them many years to gain traction, right? At least [00:02:30] a few years ... So, you could honestly say that this was the decade of Xero, QuickBooks Online, NetSuite, Intacct - all of these cloud apps. We have the IPO as sort of the candle on the birthday cake-.
David Leary: That caps off the decade. You're right.
Blake Oliver: Yeah. 
David Leary: Because it is a SaaS app that couldn't have existed without cloud accounting, which couldn't have existed without ... In 2010, there was 1.3 billion subscriptions to the internet - people that had internet access, right?
Blake Oliver: 1.3 billion.
David Leary: 1.3 [00:03:00] billion. Now, it's 7.2 billion. 
Blake Oliver: Wow.
David Leary: It all stacks, and you're right, the is the top. None of that would've been possible; would not exist.
Blake Oliver: The subscription economy goes hand-in-hand with all of this. This Wall Street Journal article that I started with talks about how Netflix started streaming movies in 2007, but almost all of its growth took place in the past 10 years; and now we have all of these different services. I don't know about you, but I just finished watching The Mandalorian on Disney+, another subscription service that I'm gonna be [00:03:30] paying for, for the next however many years until they stop making those.
David Leary: But not everything went up, right?
Blake Oliver: Yes, definitely. We had some challenges-.
David Leary: Digital cameras dropped. Digital cameras ...
Blake Oliver: Digital cameras.
David Leary: It was at its peak in 2010.
Blake Oliver: It's funny, I went to Phoenix for Christmas to visit my family. We have a beautiful handheld camera- a camcorder, and I didn't bring it because I have an iPhone, which has a great camera. I'm gonna use it. I'm not [00:04:00] pulling out the camcorder. Great example of that.
David Leary: Some other things that were interesting ... Oh, distracted drivers? Deadly crashes because of distracted drivers is up.
Blake Oliver: We actually just bought a new car yesterday. It has all of the bells and whistles with the electronics. It has a backup- not only a backup camera; it has a 360-view camera. So, somehow it takes the video from the side mirrors and the back and something in the front and stitches together a 360-degree view. So, I can look [00:04:30] at the car from the top, on a screen, and drive like I'm in a video game, when I'm parking. This is the world we live in. What was it like 10 years ago? I can't even ... I don't- did we even have backup cameras most of the time. I don't even think so.
David Leary: I don't think so because I feel like people were still backing into each other in parking lots, right? 
Blake Oliver: Now, my car is gonna alert me ... It's almost foolproof. It's been amazing, and here we are, going into 2020 ... It's amazing what is happening. So much fast-changing stuff going on in [00:05:00] tech, but also, as we've talked over the whole year about very slow-moving government agencies; the profession can be slow-moving ... Think about, if you haven't been really paying attention over the last 10 years, how much has changed while you were just doing the same thing from the year 2010 to, now, 2020 - how much passed you by?
David Leary: People used to not have to scroll, right? Now, people are scrolling through social media for 34 minutes a day now; just scrolling through [00:05:30] social media ... 
Blake Oliver: It's what we do instead of watching TV, right? It's instead of zoning out and watching TV; or we watch TV and then we have the phone, too, and we do both sort of halfway, at the same time.
David Leary: I mean, no ... Podcasting ... Podcasts existed in 2010, okay? 
Blake Oliver: Yeah.
David Leary: I know they did exist. Maybe me and three other people that were nerds were listening to them, but we ... There would not be ... This has happened in the decade. There is now an accounting podcast, right? There's just been [00:06:00] so much change. There's Instagram influencers. Those didn't exist a decade ago.
Blake Oliver: That's right.
David Leary: I have kind of an add-on article to that about seven technologies that did not prove out in the last decade- 
Blake Oliver: Oh, so, instead of talking about things that changed our lives, these are things that failed. 
David Leary: Things that aged badly is the ... I'll read the article title. It's from a magazine site called Econsultancy: "Seven Technology and Marketing Predictions from the 2010s that Aged Badly." 
Blake Oliver: Well, hopefully, [00:06:30] we won't be on the one in 10 years from now.
David Leary: No ... Yes, exactly. So, number one is QR codes are gonna be the future of mobile marketing. 
Blake Oliver: That's funny. It was such a big deal. Everybody had QR codes everywhere, and now - gone. Completely gone. If you don't know what those are ... There's probably people listening who don't even know what QR codes- because it happened, and it was a thing that people tried to make happen and then disappeared.
David Leary: Well, they worked. People used them. They're on your boarding passes. You use them. People are using them. But everybody thought they were gonna be used [00:07:00] for marketing [crosstalk] you'd have a magazine, you'd open it up, and then there's a QR code. You'd pull out your phone because you're like, "Oh, that ad is so intriguing to me. I really wanna go to that website now.".
Blake Oliver: Right.
David Leary: I think what really passed on that is the- you just take a picture with Google, and Google will just take you to that website. They'll just figure out what you're looking at.
Blake Oliver: Yeah, or you just say to your phone what you're looking for and it finds it for you. You don't need a QR code to do that.
David Leary: My favorite thing about QR codes, though, was they were invented in 1994. It's amazing, it took another [00:07:30] 10 years before they even get any traction at all. It was 2004, and then ... And now, they're already dead.
Blake Oliver: Like you said, they got used for another purpose. Now, it's our mobile boarding pass; that weird-looking barcode thing on our mobile boarding pass. That's what your QR code, or your- the app you pay with at the store; if it's your Starbucks app or whatever QR code. All right, so tell me some more.
David Leary: Augmented reality. So, do you remember the Google Glass?
Blake Oliver: Yeah. Well, yes ...
David Leary: What'd they call those guys? Glassholes, right?  
Blake Oliver: Glassholes, yeah. 
David Leary: Glassholes ... Nobody's walking around with those. Nobody has ... Nobody's wearing Google [00:08:00] Glasses, the last time I checked.
Blake Oliver: No. Although the car we've just bought has an augmented-reality feature, David. It projects how fast you're going and the speed limit of the street, on the road in front of you, so [crosstalk] 
David Leary: Oh, like a holographic pop-up display on your windshield- 
Blake Oliver: It's a heads-up display, yeah- 
David Leary: Okay, cool. 
Blake Oliver: A HUD, yeah. It's kind of distracting. I haven't gotten used to it, so I kinda ... I'll try it and then, I'll turn it off because it's just weird. But, yeah, it's [00:08:30] there, in the windshield. Maybe it will become more popular, I don't know. But, yes, the Google Glass thing did not work out very well.
David Leary: So, here's another one that I thought was a good one. It says, "Insert name of social network here. 'We'll kill Facebook.'"
Blake Oliver: Nothing has done that.
David Leary: It just lists ... Some of these I don't even know - Path, Ello, Google+, Snapchat ... Just this list of these other services that just never killed Facebook [crosstalk]
Blake Oliver: Well, because Instagram was gonna do it and then Facebook bought Instagram, right? Solved [00:09:00] the problem ... What about virtual reality? Is that on the list?
David Leary: It is. Virtual reality will go mainstream [crosstalk] 
Blake Oliver: Nope ... Well, there's a VR store, or, I don't know, like an experience- a VR experience place just opened up at the mall. Well, I thought you were gonna tell me about your car.
Blake Oliver: No, it doesn't have the VR stuff. Yeah, but ... The problem for me with VR is I just get nauseous if I do it too much. Have you ever tried real good VR?
David Leary: Yeah, I just ... [00:09:30] I think my nose is too big. The screen- the mask doesn't fit on my face well. It's just not- it's not a great experience, still [crosstalk] 
Blake Oliver: No, that's not good.
David Leary: So, this one is another one - voice interaction. Everybody thought everybody's gonna do things through voice; everything - search, e-commerce, user interaction. The latest data is like only two percent of people have ever bought something on their Amazon Echo. 
Blake Oliver: Yeah, right. Most people are just using it to play music, check the weather; very basic stuff.
David Leary: Yeah, it's barely getting used. Mine hasn't been plugged in [00:10:00] in months. It just sits there on the desk-.
Blake Oliver: As a wannabe tech guy, I have all my lights- well, three-quarters of the lights in our house are hooked up to Amazon Alexa, and I can't ever get them to work correctly. I mean, I can, most of the time ... It works like 80 percent of the time, which is just not enough to make it [crosstalk]
David Leary: That won't pass the wife test.
Blake Oliver: Yeah, so, my wife-
David Leary: That's the problem [crosstalk] 
Blake Oliver: She freaking hates it! She's like, "Why [00:10:30] did you do this? I just want a switch. I just want a dimmer ..." But my son, who's five, he loves it. This is the amazing thing is that- and I gotta give it to Amazon for accomplishing this. It can actually understand a five- I mean, it started understanding him when he was three, four, five. It understands him very well now, and that's an amazing thing.
David Leary: Yeah.
Blake Oliver: But, yes, it has a long way to go, right, because [00:11:00] it doesn't understand meaning; it can't infer exactly what you want it to do, like a human being could. It doesn't ask follow-up questions. It does stupid stuff. It's like, you say, "Alexa, turn on the family room lights," and it says, “Well, you have lots of lights. Which ones do you want?" You say, "Family room," and it's like, "I can't do that with the family room. What do you want? Do you want the lights?" Just dumb stuff ... 
David Leary: Well, it's very like DOS-based computing in the '80s, where you had to know what to say next, or what to type next-  [00:11:30]
Blake Oliver: You have to give it the exact command is what you have to do.
David Leary: Yes.  Yep, exactly. So, the other one that I think that's an interesting one that I think might even tie back to your car, but it says, "Tablet computing will explode."
Blake Oliver: As a replacement for laptops?
David Leary: For laptops; replacement for your phones. Everything's just gonna be on this tablet. You'll have it with you all the time. Remember, people even mocked the iPad. They were ... Like it was a big telephone; people would be walking around with it. What happened is, really, cell phones just get stronger-
Blake Oliver: Yeah.
David Leary: -and a big enough screen. You don't really need to have a tablet. [00:12:00] But I kind of feel like I slightly disagree with this one, because what's happened is I think of touch screens. 
Blake Oliver: Mm-hmm. 
David Leary: They're in your refrigerator now; they're probably in your car, right? So, in a way, those are all tablet-computing devices. It's just a replacement for your PC. 
Blake Oliver: Yeah, no, it's not a replacement. To me, I use my iPad all the time with a keyboard; I have the keyboard case. For me, it's an in-between device. So, I'm at the table [00:12:30] having breakfast; I read using that; or I'll check social media using that. Then, when I need to get real work done, like do emails, and write, and whatever I do, then I get on my work computer for that. But, I'm not putting my computer at risk, having it on the table with all the food and stuff like that. I don't know. It's like an in-between spot, but it definitely didn't kill the laptop. Yeah, for sure ... Although, I hear really good things about Surface tablets now being a laptop [00:13:00] competitor.
David Leary: Yeah, yeah, I have one of those, but it's essentially just a laptop. It's a laptop that's the screen detaches off- 
Blake Oliver: Where the keyboard comes off, right? Yeah.
David Leary: Yeah, but Microsoft's been trying that since the '80s, to build this tablet thing, but I think they ... 12 iterations later, they finally [crosstalk] nailing that down- 
Blake Oliver: Finally got to it. 
David Leary: We'll see, a decade out. We'll see. Maybe desktop PCs will finally be gone a decade from now. What else? What else happened? So, that's it- That's it for, I think, the decade. I think there's the stats ... Decade's been interesting.
Blake Oliver: Some [00:13:30] other things that happened. We had the really big sales tax ruling from the Supreme Court - the Wayfair decision-.
David Leary: Oh, for this year. Well, I mean ... Yeah, it was a little bit last year, but it really took effect this year, hot and heavy.
Blake Oliver: But it took basically a decade for that to happen. That's my argument, because e-commerce had to grow to be so big in the economy. It took a long time for e-commerce to get to that point. E-commerce had to grow to be a big part of the economy before states started to say, "Hey, where's my sales tax revenue?" So, [00:14:00] we got the Wayfair decision. The Supreme Court said states have the authority to make online retailers collect sales taxes, even if they don't maintain a store, warehouse, or other physical presence in that state.
My publication of choice, apparently, for this episode - The Wall Street Journal - wrote a really great article talking about all these challenges that retailers have had adopting new technology to manage filing, and collecting, and remitting sales tax to many, many, many states, because something like, I don't know, 36 states [00:14:30] now or- it's a few dozen states who are requiring out-of-state retailers to not remit tax, right? It can be pretty small amounts; it can be a few hundred sales or $100,000 in sales where you have to now collect and remit. There are some really good examples in here, like, this one store, Darn Good Yarn, Inc.? 
David Leary: I saw that; in Clifton Park.
Blake Oliver: Yes! Which ... It's the same place where the payroll-
David Leary: MyPayrollHR- 
Blake Oliver: -was located. Yes. Darn [00:15:00] Good Yarn in Clifton Park. They had- 
David Leary: We're gonna have to go there, and really go and do a live broadcast from Clifton Park. There's so much happening there cloud-accounting-related! 
Blake Oliver: So, they're featured in this article, and they had to hire a part-time CFO, and they had to buy new software in response to this change. They spent $25,000 this year to collect and remit just $90,000 in taxes on $5.4 million in sales to buyers in 34 states.
David Leary: It's a burden. This is ...It's an anti-small-business law.  [00:15:30]
Blake Oliver: $25,000 to collect and remit $90,000 in taxes ... Huge compliance costs as a percentage of the actual tax revenue, and it's only going ... It's being split between 34 states, so it's like nothing to them. It's just ridiculous. Let's put this in perspective. Look at everything that's changed over the last decade, and still, we have this crazy system where we've got dozens, hundreds, thousands of sales tax jurisdictions in this country. We can't - from a legislative [00:16:00] point of view - seem to figure this out and make it easier.
David Leary: If I was a state and I wanted to grow my state, and I wanted businesses to move to my state ... Because these numbers are fairly small, I would have a policy that, hey, if you're a small-business owner, I will take care of ... My state, let's say the state of Arizona, will take care of your sales-tax liability for all your other jurisdictions for you.
Blake Oliver: Oh ... So, like-
David Leary: We'll just pick up the bill. We'll pay your nine grand-
Blake Oliver: That's-.
David Leary: -we'll pick up the bill for you. You just have to move your business to Arizona.
Blake Oliver: David, that is genius. I love this idea. You [00:16:30] should like make- propose this to some legislators in Arizona.
David Leary: The Yang Gang? 
Blake Oliver: Yeah, the Yang Gang might pick it up. Tweet it at Andrew Yang.
David Leary: Yeah ... I'll bring this up to my local representatives and kind of go there, down that path.
Blake Oliver: Before we jump off this article, I wanted to share with you my favorite quote. So, another business owner in this article is Joe Wood. He's the owner of, which sells two-way radios in [00:17:00] all 50 states; online store. He runs this company out of his bedroom. He said it took more than a week to determine whether or not he had tripped any state sales tax requirements. It didn't, but he said- Joe Wood said, "It's the single biggest moment of anxiety I've had, business-wise, in the last 10 years. We would have had to bring on an accountant, and I can't fit one in my bedroom."
David Leary: There's a whole niche now; like virtual accountants [crosstalk]  [00:17:30]
Blake Oliver: Well, we need to ... Somebody needs to reach out and explain to him that we've got this whole thing - cloud accounting. You can work with your accountant remotely. 
David Leary: Doesn't even have to come to your bedroom.
Blake Oliver: He doesn't have to come to your bedroom, right? 
David Leary: You just put tape over the lens of your laptop when you do your Zoom conversations, and you're good. I have one more decade story, though, if you're ready to- if you're done with sales tax.
Blake Oliver: Oh, yeah, yeah. Let's talk more about the past.
David Leary: The past. So, this is- his name's Scott Greenberg. He's on Twitter (@ScottElliotG).
Blake Oliver: Okay. 
David Leary: What I love about Twitter [00:18:00] is people have to get to their point. So, this guy summarized what happened in federal tax policy in the 2010s in seven tweets. He covers the Affordable Care Act; the tax relief; the American Taxpayer Relief Act of 2012; Ways and Means Committee; the draft of the tax reform plan in 2014; protecting Americans from tax hikes of 2015; when Paul Ryan released the blueprint for tax reform in 2016. It's great. We'll have a link to the show notes ... Everybody [00:18:30] should just get to their point. It's beautiful. He just has eight or nine tweets in a row, and he covers a decade of tax law.
Blake Oliver: Well, hey, so while we're talking about regulations, something is changing in a few days that could have major implications for public companies, and it relates to cloud computing, and potentially cloud accounting. So, ASU 2018-15 is effective for public companies and their fiscal year beginning on or after December 15, 2019. Oh, actually, forget [00:19:00] that ... It already happened-.
David Leary: ASU is an acronym for something?
Blake Oliver: Accounting Standards Update? These are the accounting standards that are part of GAAP that the FASB issues. To sum it up, companies now have to capitalize certain costs associated with implementing cloud-computing arrangements. So, David, you have a business that makes a podcast, and I'm gonna sell you some amazing cloud-podcasting software. In the past, you [00:19:30] woulda just paid me for that software on, let's say, a monthly basis, or annual basis, and would have expensed that right away. But now, because of this new rule, you're gonna have to capitalize some of those costs the same as you would for internal-use software - if you'd built your own software - which is always ... Parts of that have always been capitalized. An example might be the setup fee. You can't just expense that right away. You've gotta amortize that over the life of this subscription that you're gonna have with me. So, [00:20:00] what does this mean? It might make cloud computing more appealing because the immediate impact on your bottom line is mitigated because you're not expensing as much, necessarily, upfront. You might be capitalizing a portion and then expensing, or then amortizing that over time.
David Leary: I'm feeling déjà vu here. I feel like we've kinda talked about this in the past. Does it only affect certain size businesses or a certain amount of spend? 
Blake Oliver: Right now, it's public companies only [crosstalk] Private companies [00:20:30] don't have to comply until 2021, but they can early adopt. So- 
David Leary: Pretty soon, that poor guy in his bedroom there is gonna have to deal with this. It'll be another headache - the burden of this.
Blake Oliver: What else? 2020 predictions, or ...
David Leary: What else? We'll do predictions- let's do predictions next week [crosstalk] for the new year.
Blake Oliver: Okay. We'll hold those- 
David Leary: We'll do predictions ... Lots of prediction-type stuff. College football playoffs were yesterday. Did you happen to catch those?
Blake Oliver: No, I'm not really a sports guy, but maybe you can [00:21:00] fill me in.
David Leary: So, I was alerted about something that happened during the football game yesterday. This is the college playoff football games. Jan [Halgo], she's JazzFun on Twitter, she alerted me to a commercial for QuickBooks Live Bookkeeping. So, we've been saying this for months that there will be a QuickBooks Live Bookkeeping commercial in the Super Bowl. 
Blake Oliver: Yeah. 
David Leary: I think we're gonna be dead right about this. So, maybe you can put the audio in. I don't know if it's possible or not, but it's a Ghostbusters [00:21:30] theme. Do you remember the secretary from Ghostbusters?
Blake Oliver: I haven't seen Ghostbusters in like 30 years, so ...
David Leary: Okay. Well, she's in it. I think her name's Annie Potts is the actress.
Blake Oliver: Yeah. 
David Leary: Then, Slimer; he's the ghost [crosstalk] slime on people-
Blake Oliver: The ghost, yes. 
David Leary: He's in it, as well. The premise is she's so ... She has more free time on her hands now because she's using QuickBooks Live Bookkeeping.
Blake Oliver: So, what does that give her free time for?
David Leary: To take a stupid marketing survey that she got a dumb phone call for. 
Blake Oliver: Oh, okay ... 
David Leary: Which I thought was kinda [00:22:00] funny. It really definitely makes a push for the QuickBooks Live set-up service that we talked about two episodes ago. 
[Clip from the QuickBooks Live Bookkeeping Commercial] 
Ghostbusters. Of course, I'd love to take an informal poll! I used to be a little cranky. Dealing with our finances really haunted me. Thankfully, I've got QuickBooks and a live bookkeeper are helping customize for our business.
You're all set up. 
Great! Hey, you got burnt marshmallow out!
He slimed me.  [00:22:30]
Get set up right with a Live Bookkeeper with Intuit QuickBooks, the easy way to a happier business.
David Leary: They also have a Karate Kid-themed one in the hopper. So, it's looking like these are some '80s-type movie commercials for QuickBooks Live that could be coming out. So, I'm hoping there's a Breakfast Club version. There's a bunch of bookkeepers sitting around in a library somewhere ... That could be kinda fun.
Blake Oliver: So, this makes me think ... They're clearly trying to appeal to millennial/Gen-X business owners [00:23:00] of a certain age, who grew up with those films, and they're gonna get our attention with that. Interesting. 
David Leary: But they're not gonna get just our attention. We've talked about this before; people are very upset because there's been advertising to their clients about QuickBooks Live inside the QuickBooks product; there's messaging on the website. I was able to find some data from Ad Age magazine. This is just QuickBooks data for the last 30 days of their commercial runs. 734 million [00:23:30] impressions.
Blake Oliver: 734 million?
David Leary: Think about that. That's 734 million impressions of QuickBooks Live Bookkeeping. Bookkeeping is getting- the word 'bookkeeping' and 'bookkeepers' are getting attention.
Blake Oliver: Sorry, I just wanna clarify ... Impressions means, generally, people saw at least a portion of this ad.
David Leary: Exactly. Yeah. The commercial was in their face on TV. For those of you who still don't think QuickBooks Live is gonna be a big deal, it's gonna a big deal. [00:24:00] I think we are gonna see a Super Bowl ad of some type ... Which is great, right? Bookkeeping is the- telling the world, and small business owners, "You need a bookkeeper along with your QuickBooks," is kind of a big deal. I think it's gonna raise the boat for everybody. It's a massive message that's going out there.

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Blake Oliver: So, bringing it back to somewhat breaking news, I suppose-.
David Leary: News coverage, right? That's what we're supposed to be doing? 
Blake Oliver: There was one somewhat [00:26:00] significant story over the holiday break; not ... Fortunately, the world didn't burn down while everybody was with their families and relaxing. But the Fed, the Federal Reserve, did have a glitch that delayed direct deposits to bank accounts. This was reported on I think there was also an article on CNN. Not a ton of coverage because it didn't end up being a huge deal, but-
David Leary: We didn't see it til after we recorded last week, even though it happened the day before we recorded, so it was kept pretty quiet. [00:26:30]
Blake Oliver: So, this happened a week from- a week, as we record this ... Like, what? 10 days ago? So, a "glitch" at the Federal Reserve on Thursday delayed direct deposits and other financial transactions at banks across the United States. A statement from the Federal Reserve Bank Services said its automated clearinghouse network began experiencing a disruption on December 18 at 3:30 p.m. Eastern Time. This is a disruption in the ACH network, which is for transferring [00:27:00] money for internet bill payments; direct deposits; especially payroll deposits, are often paid with ACH. The Central Bank said that payment files for December 18 were delayed, then completed, and did not comment on the cause of the temporary glitch. So, that's all we know is there was a glitch, it got fixed, and then the payments finally went through.
David Leary: I'm sick of the word 'glitch.' It's constantly used for ... A plane crashes, it's a glitch. What was the church that burned down in France?
Blake Oliver: A [00:27:30] glitch?
David Leary: It was a glitch! They said it was a glitch!
Blake Oliver: Really? 
David Leary: The fire alarm had a glitch, yes! 
Blake Oliver: Wow. 
David Leary: Reporters aren't pushing back; like, "Can you please explain exactly what the glitch is?" There's no such thing as a glitch. It's either somebody messed up; it was a bug; maybe people thought it was Christmas, and they changed the date wrong. Right? 
Blake Oliver: Mm-hmm. 
David Leary: There's a reason something did not work. Server crashed ... Just give the real reason! Glitch is not okay because it trickles down, right? Because then, I think I saw Gusto had to ... They were impacted. I [00:28:00] imagine all the payroll processors were probably impacted, but it impacts end-users, right? 
Blake Oliver: Right. They were the ones that were the most impacted because a lot of payroll processors support same-day payroll now, or next-day payroll. So, for them, any delay was a problem because it would push it out to, say, the next day. I think Gusto had to end up wiring funds for some customers in order to make it happen, but they apparently did and got it all resolved. Yeah, there was a lot of ambiguous communication, right? People [00:28:30] didn't know what was going on- 
David Leary: That was the first communication I think I saw was Gusto's that was out there. 
Blake Oliver: Yeah. 
David Leary: Versus everybody else. To make this worse, I imagine, because of the holidays ... You already have banks that are closing. They don't do ACH deposits on the holidays, on the bank holiday.
Blake Oliver: Right. 
David Leary: So, yeah, the domino effect of this could've ... It could have been a lot worse, but it'd be nice to know what the problem was so people can avoid it in the future. Yes, glitch ... Get very suspicious of the glitch.
Blake Oliver: Speaking of the holidays, do you ever shop at Old Navy, David? Ever been in ...?
David Leary: I just shopped there yesterday, in fact. 
Blake Oliver: Oh, really? [00:29:00] Well, did any of the employees pull out a phone and use an app to help you in some way in the store?
David Leary: Not at Old Navy, but I've had that happen at other Old Navy properties, like what's- Banana Republic. I've had that happen there, where they do it. Then, what's the ... Athletica?
Blake Oliver: Athletica? Yeah, that's another Gap brand [crosstalk] The New York Times did a profile on Old Navy, which is one of Gap's brands [00:29:30] that is doing very well or relatively well. Gap - which owns Banana Republic, Old Navy; of course, Gap, itself, the flagship store; they have a few others I can't remember - has been kind of struggling, as have many retailers because e-commerce is on the rise. Traditional retail-
David Leary: Old Navy's struggling-
Blake Oliver: Yeah ... Well, no. Old Navy is doing well. That's why The New York Times wrote this article- 
David Leary: Interesting because ... That's interesting because my guess would be the economy is really doing well right now; that people [00:30:00] would be like, "I can buy clothes that are nicer than Old Navy," but the economy's bad, you kinda gotta shop at Old Navy. That would be my take. 
Blake Oliver: Well, I think it's kinda like the H&M thing; although H&M had problems, too. But people like disposable fashion is the thing, right? You like cheap clothes. You buy; you wear them once or twice, and you donate them. That's a thing that's been going on for a while, and- 
David Leary: I think I learned that at QuickBooks Connect from the founder of Rent the Runway. Half of all clothes wind up in a landfill within a year and a half, or something [crosstalk] 
Blake Oliver: Right, because we have so many clothes that we can't [00:30:30] even donate them because the homeless people don't even want them. There's so many clothes, right? Actually, I saw this amazing documentary about the clothes that we simply ship overseas now. It's just crazy. But, anyway, so there's this ... The trend right now is cheap, disposable fashion. Old Navy is one of those companies. They're actually doing fairly well. Gap is actually thinking about spinning them off into its own company. They plan to open 800 new stores ... The reason this article [00:31:00] caught my eye is because the headline is, "Her Job Requires Seven Apps. She Works Retail." I thought to myself, holy crap, the whole idea of app overload isn't just in professions like accounting. Even retail workers have to deal with-
David Leary: Seven apps ...
Blake Oliver: -half-a-dozen apps; more than half-a-dozen apps on their phones that they then use to work with customers. In the article, they talk about- 
David Leary: Does it say what kind of apps it is, by chance? 
Blake Oliver: Yeah, there's an article [00:31:30] called- or an app ... There's an app called In Stock On Shelf, which helps people on the floor look up if there is a product- not in the back, but on the floor. There's a an app called Order In Store, which allows you to order something for a customer if it's not in the store. They can then order it from warehouse to ship to the store, or to the customer. There's an app called Sell, so you can actually just process an order, or you can process a sale right on your phone, not have to take them to the register. There's one called Ship [00:32:00] From Store, so you can ship something from the store to somebody who is not at the store. It's kinda crazy, right? This is one of the reasons that Old Navy is doing well, is that they have empowered their entire sales force to do all this stuff that they used to have to go to a terminal to do, or to a point-of-sale to do. Now, they can do it on their phones anywhere in the store. That is really helping to serve customers, because you no longer have to redirect people; you no longer have to say, "Oh, go to the register, and this [00:32:30] person will help you." You can actually help the person the whole way.
David Leary: I see where you're headed with this article. I see it.
Blake Oliver: Where do you think I'm headed?
David Leary: Accounting firms need to empower their employees to better serve customers-
Blake Oliver: Yes! 
David Leary: By either letting them work remotely, giving them mobility options; giving them the tools and apps they need to do their jobs.
Blake Oliver: Exactly. The quote that I love in this article is from one of the Old Navy store employees. "Our focus is getting more customers that come in to purchase more." [00:33:00] What a great focus, and it's so great that an employee recognizes that because, for most businesses, the problem is not getting the initial customer. It's the same thing for accounting firms, too. It's not- the problem is not actually getting the customer; it's getting your existing customers to buy more from you. If you could just get those existing customers to buy more, you could grow your business tremendously-
David Leary: If the car dealership could've got you to buy two cars [00:33:30] yesterday, they would've doubled their revenue.
Blake Oliver: Oh, trust me, they tried! Car dealerships are actually really good at upselling you, right? They always try to get you the ... They have you drive around in the model that has all the bells and whistles.
David Leary: Yep. 
Blake Oliver: Then, when you go to buy, the price that you see is the base price, and then to add all of the cameras, and the lane assist, and the adaptive cruise control, and the heads-up display, every [00:34:00] one of those things is an add-on. Do you see a lot of accounting firms that have a ton of add-ons like that? I'm not saying we should go to the car dealership model. I think that's a little extreme, but, come on ... At least try to get your customers to buy more from you, right? Another quote in the article: "Retail, for the most part, is not a place where they're looking for salespeople. They're looking for a retail transaction enablers." So, be an enabler for your clients. Give them what they want and then enable them to purchase more from you and-.
David Leary: And be able [00:34:30] to answer questions.
Blake Oliver: Yeah. 
David Leary: Because that's something that happens at retail. You ask somebody for help; they're like, "I don't know." Then they walk away and then they never come back; but if they have everything on their phone, they can actually help you.
Blake Oliver: Yeah. 
David Leary: This makes a lot of sense. It makes perfect sense.
Blake Oliver: So, that's what we can learn from a failing-
David Leary: Old Navy. 
Blake Oliver: -industry such as retail.
David Leary: Take notes! 
Blake Oliver: Yes. 
David Leary: Take notes. 
Blake Oliver: One of the success stories in retail, I suppose.
David Leary: So, do we have any other new current stories, or should we kinda just take a step back and talk about what we've covered [00:35:00] this year - our top stories on the podcast?  
Blake Oliver: Oh ...  I've always got more than I can talk about. Let me just add one last thing before we do that- 
David Leary: Add one? Last week, you added one, and it was [crosstalk] 
Blake Oliver: This is my last story of the year. I'm a big fan of Ryan Lazanis's newsletter, Future Firm. I think it's the Future Firm Top 5. He emails out, every week, his top five stories. I used to have a newsletter. I see this as actually a much better version because [00:35:30] he limits it to five. He does a really great job of doing a synopsis of them. It's awesome.
David Leary: I used to have a newsletter, too; but he actually gets it out-.
Blake Oliver: Yeah, he gets it out every week.
David Leary: Every week. 
Blake Oliver: So, anyway, if you wanna read a great newsletter, read Ryan Lazanis's Future Firm newsletter; you can subscribe at five. I wanna highlight an article that he shared a few weeks ago that appeared in Accountancy Age. This is about UK accounting firms, in the United Kingdom. It [00:36:00] asks: are firms investing more in technology? How much are they investing, and does it make a difference?"
This is of great interest, I think, to anyone who's listening that has a tech budget for their firm and wants to know what's gonna happen if I increase my spending? Is it really gonna give me more results? Am I gonna generate more revenue? Well, in the UK, according to this 50+50 Ranking survey, which surveys the UK's leading practices, investment in technology [00:36:30] increased year on year, rising from 0.93 percent of annual fee revenue to 1.37 percent. So, across the full ranking of firms, firms invested between half a percent to one percent of their fee income in new technologies - half a percent to one percent. Now, among the top 25 firms in the UK, it's a bit higher. It could go up to four percent of annual fee income. So, there's a lot of room in there.
But there is- this is the part that's [00:37:00] really interesting to me. There is a correlation between investment in the new tech and an increase in growth. So, the more you spent on tech, the more growth you had. Firms that spent over one percent of fee revenue on tech grew by an average of 9.73 percent, almost 10 percent; if you spent over one percent of your revenue on tech. Those who spent less only grew, on average, by four percent. Not say that [crosstalk] 
David Leary: Is it the spending causing it, or just the [00:37:30] mindset of that firm?
Blake Oliver: That's the thing - is it correlation or causation? I think, either way, it's probably worth it to spend more. I would. Baseline, this might take away from the survey ... I don't know if this translates to the United States, but, hey, it's not that different in the UK versus here. I think firms should be spending at least one percent of their revenue on new technology investments and, hey, maybe even more because the firms that are growing twice as fast [00:38:00] are doing that. So, if you wanna be like those firms, you gotta spend more.
David Leary: So, I actually killed an article that relates. It was- Microsoft had a survey out. Essentially, as your tech ages, you get more unproductive [crosstalk]  
Blake Oliver: More unproductive or more productive?
David Leary: -more unproductive as your tech ages because it either breaks down; it's subject to viruses and ransomware; and it's just slower, so your employees are less productive. So, it really reinforces that point, right? You [00:38:30] have to maintain some level of tech spending to have working tools. You can't just neglect your tech tools.
Blake Oliver: Well, and look at this in comparison to the budget you have for other things, right? How much are you spending on marketing? I just spotted this survey from and Hinge Research Institute. They analyzed data from 100 accounting firms across the U.S. and found that the typical marketing spend among accounting firms is 1.5 [00:39:00] to 3.1 percent of revenue - 1.5 to 3.1 percent of revenue. So, that means, if we just assume ... Let's assume that U.S. firms are spending about the same as UK firms on tech; that means they're spending half a percent to one percent on tech. They're spending way more than that on marketing. That, to me, seems ... I mean, I'm a marketing guy, but that, to me, seems crazy. We should probably be spending the same on marketing and on tech because the marketing's [00:39:30] all about getting those new customers, but how are you gonna serve them well, if you're not investing in the technology that's gonna give them a great experience? 
David Leary: Yeah, there's probably a churn number on the other end of that, somewhere. 
Blake Oliver: Mm-hmm. Well, and then, again, going back to that story about the retail, it's all about getting your existing customers to spend more. If you give them a great experience, make it easier for them to work with you, they're gonna come to you for more stuff, right? It all kind of is a feedback loop. That's all I got for 2019. What are we gonna close out with, David?
David Leary: Yeah, well, we've wrapped up, right? We've [00:40:00] had ... This our first full year together. Full year. We did an episode every single week this year, no matter what-  
Blake Oliver: Well, to be fair, though, we did start recording, what, at the very beginning of 2018 ... So, it's almost been two years now.
David Leary: Yes ... Yeah, it's almost been two years, but this is our full- 
Blake Oliver: Yeah, first full year together.
David Leary: Full year. Solid year. I just was like ... I think we should take a moment to just acknowledge some of the top stories we talked about this year. So, for me, I think the number one is QuickBooks Live. It has, by [00:40:30] far, been the biggest story of the year, and it just keeps bubbling up over [crosstalk] I mean, even, it made this episode again. It continues to be the number-one story this year.
Blake Oliver: How could it not be? Right? A giant multi-billion-dollar technology company getting into accounting services - it's amazing. I'm so eager to see what happens in the Super Bowl. Is this gonna be an ad? What if they get tens of thousands of people wanting to sign up? How are they gonna deal with this?
David Leary: Or what if there's a ripple effect? [00:41:00] People are just asking their own bookkeepers and accountants, like, "Hey, can I get this service?" Which, ultimately, they just want video chat. You should have a response ready, as a firm owner, right?
Blake Oliver: If I were doing marketing for an accounting firm right now, I'd be buying- like prepping up Google ads for QuickBooks Live keywords to steal business from Intuit. 
David Leary: Well, even if you don't do that, just your landing page, your homepage, probably should have some sort of screenshots of you doing a Zoom or a video chat with your client.
Blake Oliver: Yeah, absolutely.
David Leary: Just [00:41:30] really showing them, "Hey, we can do this type of stuff, too." What's some ones? Obviously, MyPayrollHR was a big focus for a good six, eight weeks; that fiasco with the fraud.
Blake Oliver: Yeah.
David Leary: Botkeeper was exciting there for a little while, when we had the Botkeeper news.
Blake Oliver: That was a fun one.
David Leary: That was fun. Ransomware, two or three different times, right? We've had to discuss about ransomware. We already talked about That's kind of the tip of the cake, or the candles? Is that what you call that? [crosstalk] 
Blake Oliver: We need a [00:42:00] better analogy for this. It's like the capstone, or the ... 
David Leary: Hopefully, it's not the peak of cloud accounting- 
Blake Oliver: No, no [crosstalk] After, it just went all downhill from there [crosstalk] 
David Leary: -then we had some small things ... The acquisitions of Hubdoc and AutoEntry were pretty major- 
Blake Oliver: Those were big. 
David Leary: -I think, by major accounting players. We had the Visor Tax fiasco. It's interesting the amount of fiascos we've had this year.
Blake Oliver: Yeah, a good number [00:42:30] of them.
David Leary: But they're kind of fun to cover. I enjoy covering them.
Blake Oliver: Well, and we actually had a listener email us about Visor Tax; not an accountant, but a former customer who used Visor to do his taxes. I hadn't really thought about Visor in a while. Their prices have gone up. Did you notice this, David? $399 is now the base price-
David Leary: Yeah, I think it- 
Blake Oliver: Wasn't it at $99 at one point? They had [00:43:00] the whole ... It was 99 bucks, and-
David Leary: Yeah, well, that solves your volume problem, right? If you're not- if you can't handle the volume, you have to raise your prices.
Blake Oliver: So, that's interesting. We'll see- we'll keep everybody posted on what happens with Visor in the 2020 tax season.
David Leary: In our next episode, we'll do predictions. So, this person emailed us, right?
Blake Oliver: Mm-hmm. 
David Leary: What are all the ways they could get ahold of you, Blake, besides email?
Blake Oliver: You can follow me on Twitter. I am @BlakeTOliver. Actually, since you mentioned it, David, for those who are [00:43:30] not into the social media, and I totally understand if you aren't, why don't you just email me, as well? I'm at How about you, David?
David Leary: You can email me. I'm I'm on the Twitters, and the social things. You can just find me - David Leary - it's fairly easy. It's fairly easy to find The Cloud Accounting Podcast on all the socials, as well. The last other piece of that, I think, was going to be-
Blake Oliver: Well, if you got some Visa [00:44:00] or MasterCard gift cards, you wanna spend that money, you could go to our merchandise store and buy a Cloud Accounting Podcast T-shirt, right, David? Where can people do that?
David Leary: You can do that. You can go to our merch store.
Blake Oliver: It's a great gift for your children, if they've been awful these holidays; buy them a Cloud Accounting Podcast shirt.
David Leary: I'll have to get the picture up. I got all my kids Cloud Accounting Podcast shirts for Christmas; the cassette-tape limited-edition [crosstalk] 
Blake Oliver: Are they all frowning? Thumbs down? 
David Leary: No, it's gonna be great. I will get a good picture ... Happy family. We already took the tree down. We'll put up a Festivus [00:44:30] pole and then take a picture. The other thing I think people should be aware of is the newsletter, right? If you want to get the show notes directly emailed to you- 
Blake Oliver: Oh, yeah ... Go to and scroll down, and you'll see a little place where you can subscribe to the newsletter. Join our newsletter, enter your email, hit Subscribe. I will periodically email you out the new episodes. So, if you're not into the whole listening to podcasts on a regular basis thing, and you don't wanna miss it, get that. You can listen on your browser on your computer at work sorta thing.
David Leary: The [00:45:00] last thing, I think, is probably to mention that we would love to have your review on either Podchaser. com, or Apple Podcasts.
Blake Oliver: Yes, please! Leave us a review and we will read it on the air.
David Leary: I think that's a wrap, Blake. 
Blake Oliver: David, it's been a great decade, and a great year. All the best to you!
David Leary: On to 2020! 

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