Debit Intuit, Credit Karma

We kick things off with the breaking news that Intuit is expected to acquire Credit Karma for $7 billion. Meanwhile, the Nevada Democrats used spreadsheets to caucus without a hitch, Bloomberg and the Democratic Primary debate becomes an advertisement for TurboTax, Warren Buffet again decries the 2018 mark-to-market accounting rule, another ransomware attack puts patient data at risk, plus follow up on the value of the PCAOB ( Public Company Accounting Oversight Board), a congressman who is taking on FASB, a new UX for QuickBooks Online, and more!


Show Notes

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Moderator: Your campaign has said that you would eventually release your tax records-
Mayor Bloomberg: Yes.
Moderator: -when it comes to transparency, but people are already voting now. Why should Democratic voters have to wait?
Mayor Bloomberg: It [00:00:30] just takes us a long time - unfortunately, or fortunately-
Senator Klobuchar: Can I comment on that? Could I-
Mayor Bloomberg: Fortunately, I make a lot of money, and we do business all around the world, and we are preparing it ... The number of pages will probably be thousands of pages. I can't go to TurboTax ... 

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Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
David Leary: And I'm David Leary.
Blake Oliver: Happy Sunday, David. We're recording on a Sunday instead of a Friday.
David Leary: Yeah, I was on plane flights, so I could not [00:02:30] record, for two reasons. A) the neighbor sitting next to me on the airplane flight wouldn't like it; but Delta didn't have any Wi-Fi on the flight.
Blake Oliver: That's the worst. 
David Leary: Can you believe ...? What world do we live in that the Wi-Fi was out?
Blake Oliver: I had that happen ... Well, I fly Southwest, and their Wi-Fi has been terrible recently. I think it's because it's eight bucks, so everybody buys it; if everybody buys it, then nobody can use it. So, I just preload Amazon Prime movies and TV shows onto my iPad now, and I don't even try to work on anything where I need the internet. It's just not worth it; it's too [00:03:00] frustrating. So, we're back to where we started - no Wi-Fi. 
David Leary: Downloading movies? 
Blake Oliver: Yeah. You know who has the best Wi-Fi, in my experience, is Alaska Airlines. They have the newest satellite service. I don't know if it's Gogo- I think it's Gogo. It is unbelievably fast.
David Leary: Is that because they just go up and down the West Coast where there's good service? 
Blake Oliver: I think it's a lot easier for them to do that. So, if I'm flying to Seattle and back, man, it's so great. It's super-fast; disturbingly fast, actually. So, if you fly Alaska, buy the Gogo just [00:03:30] to see what it's like. I think part of the reason it's fast is because they price discriminate, which we were talking about on an earlier episode. If there's more demand, you gotta charge more, and that keeps too many people from hogging the bandwidth, right? That's the way it should be. I'm in favor of all of that kind of stuff. We should have dynamic pricing for freeways in Los Angeles; if you wanna get on the freeway at a low-traffic time, like in the middle of the day - really cheap; you don't pay, even. But [00:04:00] during high-traffic times of day, we start charging admission. It would solve the traffic problems. People would decide to work from home instead of driving to the office, right? Businesses would either have to pay for their employees to come in, or they'd let them work from home.
David Leary: Yeah.
Blake Oliver: I think this is the solution. Limited resources? Price discrimination is the way to go. Economic theory totally backs this up.
David Leary: At one time, that's the way you would treat the internet in your house. Then, at one time, you would have to treat your bandwidth and be sensitive about your bandwidth on your phone.
Blake Oliver: Right. 
David Leary: But because, nowadays, you don't have to be sensitive about [00:04:30] your bandwidth ... But the airplane is still somewhat limited, but everybody's streaming; they're doing all this other stuff. [crosstalk] I get it. We can't solve those problems, though. 
Blake Oliver: Anyway, there was some really big news this week. Tons of follow-up on stories on my beat - the PCAOB, FASB ... Stuff on your beat - Intuit is trying to make a big acquisition. I've got a story about a CFO who got his job because he has a tattoo. I mean, it's just been- it's a great week for news. 
David Leary: Gusto and [00:05:00] Rippling kinda went at it, publicly. Literally publicly - on a public billboard!
Blake Oliver: They did, yes. There's a tie-in to the Nevada caucuses to TurboTax. Can't believe that came up. All sorts of stuff ... So, what should we start with? 
David Leary: Let's start with the breaking news that I woke up to this morning.
Blake Oliver: This is the Intuit news.
David Leary: Intuit news, right. So, "Intuit near deal to buy Credit Karma for $7 billion."
Blake Oliver: You've got The Wall Street Journal version of this article? 
David Leary: Wall Street Journal, yep. I've been using it for a long time. Have you used it before? 
Blake Oliver: So [00:05:30] I am a Credit Karma-user. I was using it for a long time to get my credit report periodically. That's how they started, right? You sign up, you get a free credit report, and they just let you know every few months, when you're eligible, "Hey, your credit report is here. We already grabbed it for you." So, really helpful.
David Leary: It used to be really like a cool tool for you to ... And this was at one time ... It was more of a true tool. It would pull down your credit reports, and then you could mock things in there as a tool; like, "Hey, what if I paid off these credit cards early? How would this possibly [00:06:00] affect my score?"
Blake Oliver: Oh, cool. 
David Leary: It could really do a lot of those types of things. Then, their business model was to stick offers for their credit cards and things like that-
Blake Oliver: Yeah.
David Leary: -which is really similar to the old Mint model [crosstalk] 
Blake Oliver: -I always thought that was really funny because here are people going to a site to get their credit reports so they can arguably improve their credit, and then the company giving them the free credit report is selling them credit cards that will get them further into debt.
David Leary: Well, that's what your credit score is ... Your credit score is not your ability to pay back. It's [00:06:30] the how susceptible are you to take out another loan? That's how you get higher scores.
Blake Oliver: Wait, wait ... No. Maybe we're talking about it differently, but I thought your credit score was ... The thing that will hurt your credit score the most is if you are delinquent on credit card payments, right? 
David Leary: Yes. 
Blake Oliver: So, as long as you're- I guess, as long as you're paying the minimum payment, you're fine. But, also, if you have a ton of debt, and you don't have a lot of ... What do you call it - the amount that the credit card issuer will allow you to go up to? Your balance? 
David Leary: Your max limit [crosstalk]  [00:07:00]
Blake Oliver: Your max limit. If you're way maxed out, then that'll give you bad credit.
David Leary: But if you don't take out debt- 
Blake Oliver: Right.
David Leary: -like, your finances are tight, right? You have tons of cash. You don't take your debt - your score is not as good as somebody who has debt. It's fundamentally flawed. 
Blake Oliver: Oh, no, that's true. The funniest thing was-
David Leary: It's not an indication of your ability to pay back debt at all.
Blake Oliver: The funniest thing was after I bought my house, my credit score hit the max - I started making payments on a mortgage. And now, I really am a bad candidate for anything because I have a [00:07:30] mortgage. I have the most debt I've ever had in my whole life, and now my credit score's like 800-something [crosstalk] 
David Leary: Exactly, because they got you.
Blake Oliver: Right.
David Leary: That's why your credit score's so high. You really can't afford to take on any more debt, but they're gonna give it to you because you've been paying.
Blake Oliver: I'm locked in now. I've got this house. I've gotta buy furniture and stuff.
David Leary: But then, Credit Karma got into ... They actually started doing taxes. They kinda created their own TurboTax-like product. They were creeping in on some of Intuit's- arguably, Intuit's territory.
Blake Oliver: And the really important part of this, though, that you didn't mention, is their tax product is totally free. [00:08:00]
David Leary: Yes.
Blake Oliver: So, how does Credit Karma make money is the question. By the way, my brother uses Credit Karma. I found that out this weekend when he was visiting. He used Credit Karma to file his taxes. He just got a refund. So, how do they make money if they don't charge?
David Leary: Intuit's been also competing with them. So, Intuit started offering credit reports inside of Mint. Then Intuit ... It's confusing because Intuit had this product they kept branding, and they had marketing - it was called Turbo. 
Blake Oliver: Yes.
David Leary: Have you seen that?
Blake Oliver: I tried it, actually.
David Leary: Which is weird because TurboTax ... It was [00:08:30] like a mixed weird message. What does that product do? Even myself, I was like ... I had to work back ... Oh, this is kind of like a Credit Karma type thing- 
Blake Oliver: Got it. It was. 
David Leary: -direction they're going. Obviously, Intuit wants to get in that space. In my understanding, Credit Karma, it's all data play. It's one of those- like Facebook. If you're not paying for the product, you are the product.
Blake Oliver: So, they collect your data. You give them permission to use your data because you're filing these tax returns. They have all this information about you, and then they can sell you products, and they can sell your data to [00:09:00] other companies to sell you products, right?
David Leary: Yep. It's obviously $7 billion worth of data they've collected.
Blake Oliver: Yeah, it's a good business model.
David Leary: So, think about this ... HoneyBook, we talked about a few months back; PayPal bought HoneyBook for $4 billion. What HoneyBook did is basically watched every website you went to, and if there was a shopping cart, it would find a coupon code. They're recording everything you're doing, shopping-wise.
Blake Oliver: Yeah. 
David Leary: That's only browsing you do on the web. Honey ... It wasn't HoneyBook, it was called Honey- 
Blake Oliver: I know what you're talking about.  
David Leary: HoneyBook's an app for wedding photographers and wedding planners, so scratch that. Don't say HoneyBook; it's just Honey. But [00:09:30] they only see what you browse on your web. They don't see any of the other financial transactions.
Blake Oliver: Right.
David Leary: Credit Karma sees ... They don't see the data of the transactions, but they know who you get money from; money you owe; et cetera; your payment structure. But then, if you think about on the Intuit side and the Mint side - because of the APIs connected to your bank accounts - now, Intuit has a full picture of what you're doing.
Blake Oliver: So, that's your theory, then. Your theory is that Intuit just wants more data about consumers - from transaction, to tax return, to [00:10:00] debt. All that stuff, all together, is more valuable, so that's why they're buying Credit Karma, or they're trying to. They haven't done it yet. They're gonna try.
David Leary: They haven't done it yet. I've always fundamentally - even decades ago - I've always hated the credit reporting industry. Early on in my credit journey, I was like 21, 22, and I got my credit report for the first time; it showed that I had a credit card from J.C. Penney's in 1973. Even though I wasn't even born til 1974. I was just ... This is a complete racket. None of the data's correct, et cetera. I always thought that somebody like [00:10:30] Intuit had the ability to disrupt the whole credit reporting play, long term. 
Blake Oliver: Yeah. 
David Leary: If you really think about it, Equifax had ... They were hacked. There's probably an opportunity to disrupt these three major credit bureaus somewhere.
Blake Oliver: So, here's my theory. Credit Karma does taxes for free, and that is an existential threat to TurboTax, which the way TurboTax monetizes is by charging you to do your taxes, and they take it out of your refund. But how do you compete against a completely [00:11:00] free product, like Credit Karma? Meanwhile, all of this controversy around the Free File program ... we just talked last week about the Inspector General's report laying down the law that these Free File companies, including TurboTax, misled us and redirected people who shouldn't have paid into a paid product.
So, there's no way, going forward, even if Intuit slow-plays this compliance, TurboTax slow-plays getting people into the correct products, it's not like the number of customers [00:11:30] they get paying for TurboTax is going to increase. I don't think that, long term, it is. There are some analysts who think that, too. There was an article in Accounting Today on February 14, from Bloomberg News. Apparently, an analyst at Morgan Stanley called out that this whole Free File scrutiny is a risk for Intuit, and TurboTax monetizing their paid service offerings. So, what better way to hedge your bets than [00:12:00] to acquire not only a big competitor to you, but one that offers a free product, so now nobody can complain [crosstalk] 
David Leary: Well, assuming they keep the free product ... Because they say that they're gonna keep Credit Karma as a separate company.
Blake Oliver: Well, they always say that. They always say that at the beginning, but then they don't, right? 
David Leary: I could see the Credit Karma product being a separate standalone product because it's very clear what it does. So, you'd have Mint; you'd have Credit Karma; or you'd have TurboTax, on the personal side. Then, I could see Intuit just pulling the plug on the Credit Karma tax product because that's [00:12:30] just confusing the market [crosstalk] 
Blake Oliver: Oh, no, no ... I think they'll keep it.
David Leary: Just so they can answer to regulators or something, eventually?
Blake Oliver: That's the growth opportunity is ... Because people aren't gonna complain about Intuit funneling all the ... All those people who Intuit was funneling into their paid products that should have gotten Free File; those millions of people ... I think there might be tens of millions - they were paying. Intuit knows they can't have them pay anymore. Well, the only option - other than losing all that revenue - is to funnel them somewhere else, [00:13:00] and they have to funnel them to a free product, and this is a free product they can push them to. The fact that their data is being mined is something that may come up, but probably not because people, thus far, it seems, in our society, don't really care too much about their personal data. Most people are happy to use Facebook and give away their data for free to Credit Karma and all that stuff just to get the product.
David Leary: Yeah- 
Blake Oliver: Or surf Google and be cookied and stuff. People just don't care. 
David Leary: They coulda bought Plaid for $5.3 billion instead, though. That would've been the-  
Blake Oliver: But Plaid's gonna- it has to [00:13:30] go to war with the banks, right? I think this is a really smart move. I think this is a great way to basically put aside a bunch of risk that they had from this Free File thing.
David Leary: If I had to bet any money, Credit Karma's using Plaid.
Blake Oliver: Well, but what would they be using Plaid for? Because Credit Karma doesn't pull in transaction data.
David Leary: I think you can. I think you can ... It has what's on your credit report, and I think there's options in there for you to link up your bank accounts, as well.
Blake Oliver: Interesting.  [00:14:00]
David Leary: I'll have to look and see. I literally twice a year open up Credit Karma. It's just a sanity check; I'm just like, "Hey, let's make sure no account's making me late on every payment for some crazy reason, or ..." 
Blake Oliver: Before we put this story to rest, the funniest part was reading through The Wall Street Journal comments. It's all the Mint people saying, "Maybe they should fix Mint first ..." because, you know, there are some Mint diehard users who are just constantly complaining about how Intuit doesn't invest in Mint. 
David Leary: On Twitter, I saw the same thing; like, "Remember what they did to Mint?" They did nothing to Mint! They [00:14:30] turned Mint ... Actually, they turned Mint into QuickBooks Self-Employed.
Blake Oliver: The Mint product, itself, just got neglected.
David Leary: Yeah, because nobody paid for it. Self-Employed, they added enough features for a small business owner, Self-Employed, and the self-employed person's willing to pay 10 bucks a month for that; but nobody was willing to pay 10 bucks a month for Mint. 
Blake Oliver: That's funny. Well, let's talk about other breaking news. Did you see Bernie Sanders won Nevada? Pretty substantial win.
David Leary: Well, the impressive [00:15:00] thing here is they actually announced a winner, which I still don't think we've heard for Iowa, yet, right? 
Blake Oliver: Yes, and that is actually the tie-in to our show. We don't wanna talk, necessarily, Bernie versus Trump. You can go elsewhere for that. We wanna talk about the tie-in to two things. Unbelievably, two things tied in. Let's talk about the first one, which is that Nevada, after the whole debacle in- it was Iowa?
David Leary: In Iowa
Blake Oliver: With the app ... So, Iowa had this app that they were going to use from [00:15:30] a company called Shadow, which is the first warning that you shouldn't use this company; a political app company called Shadow. They were gonna use this app to tally up all their caucus results. Of course, the boomers ... It was an 'Okay, boomer' moment. It had to have been. I don't know what happened exactly, but the app didn't work. People were trying to call in their results. It was a disaster, and the app got blamed for it. So, Nevada said, "Oh, crap, we've got our caucus coming up ..." and they were using the same company - Shadow. So, they said, very [00:16:00] intelligently, "We're not gonna try to fix this. We're gonna scrap it." And they ... I don't know, David; maybe somebody in the Nevada Democratic Party was listening to The Cloud Accounting Podcast because they followed our instructions, our recommendations!
David Leary: A Google form, and a Google Sheet.
Blake Oliver: Yes. To the T! So, they bought iPads, provided by the party, and sent and iPad to each caucus site and loaded it with a link to a Google Form. There was a password for each person to enter their results into a Google Form, [00:16:30] which then went into a spreadsheet which had all the calculations necessary to calculate the winner.
David Leary: The funny thing about this is all the news media outlets declared the victor after one percent of the caucuses reported in. So, they spent all this money; they shipped this out to all these caucuses and ultimately, they didn't need those totals anyways- 
Blake Oliver: But the key is you don't want something conflicting coming out while the press are calculating their own results because that is what torpedoes everything, because then the press can't report. They [00:17:00] don't feel safe. Which has happened in Iowa, I think. So, this was a huge victory. It's a huge victory for the kind of automation that you and I talk about all the time and that we talk about in our online cloud-accounting community, which is as. As Doug Sleeter called it, digital plumbing - figuring out how to connect apps using off-the-shelf software like Google Forms and Google Sheets. They didn't use Zapier in this case, but they probably could have. It's really cool, and it shows you what you can do [00:17:30] with some off-the-shelf technology. You don't need to go build your own app.
David Leary: Yeah, you don't need to over-engineer things-
Blake Oliver: Yes. 
David Leary: -and it's a testament, again, to that whole, if you can do it with Excel, don't build it on- don't build an app. This is kinda the same thing. It's this victory here for Excel and Sheets lovers everywhere.
Blake Oliver: This is a victory for spreadsheets right here. It was pretty great, and it's transparent.
David Leary: I think what I would love to see, at that next level up, where the spreadsheet, itself ... Now, maybe the form's not public, but the spreadsheet is [00:18:00] public view only- 
Blake Oliver: Yeah, you could do that. 
David Leary: -and anybody with the URL could go and watch the spreadsheet as it's being populated. To be honest, that would create less risk of hacking across the board if you have a million people watching this at the same time, it's very hard for funny business to happen.
Blake Oliver: So, meanwhile, the Nevada debate happened, and Bloomberg - Michael Bloomberg - made it into his first Democratic debate and became an advertisement for TurboTax, apparently. I was watching this when I heard TurboTax, [00:18:30] and my ears perked up. There was a question here, and this is summarized in a CNBC article called, "Bloomberg Botches Tax Return Question in Democratic Debate." "I can't go to TurboTax." 'm just gonna play this segment of the debate for you, David, because I don't think you heard it.
David Leary: No, I did not.
Moderator: Your campaign has said that you would eventually release your tax records-
Mayor Bloomberg: Yes. 
Moderator: -when it comes to transparency, but people are already voting now. Why should Democratic voters have to wait?
Mayor Bloomberg: It just takes us a long time - unfortunately, or [00:19:00] fortunately- 
Senator Klobuchar: Can I comment on that. Could I- 
Mayor Bloomberg: Fortunately, I make a lot of money, [crosstalk] and we do business all around the world, and we are preparing it ... The number of pages will probably be thousands of pages. I can't go to TurboTax, but I put out my tax return every year for 12 years in City Hall. We will put out this one. It tells everybody everything they need to know about every investments that I make and where the money goes. The biggest item is all the [00:19:30] money I give away, and we list that - every single donation I make. You can get that from our foundation anytime you want. 
Moderator: Senator Klobuchar- 
Senator Klobuchar: Yeah, I'm just looking at my husband in the front row that has to, like, do our taxes all the time. We probably could go to TurboTax. And the point of this is, I believe in transparency ...
Blake Oliver: So, that was Mayor Bloomberg responding to a question about why he hasn't put out his tax return yet, when many of the other candidates have; saying, "I can't go to TurboTax. "That [00:20:00] was pretty funny. Then, of course, Elizabeth Warren repeated TurboTax. It came out twice. So, I guess we can say, in summary, David, that all people are tax people, except Mike Bloomberg.
David Leary: Any of you listeners that have Excel skills- I'm sorry, not Excel. You all have Excel skills. Any of you have video-editing skills, I would love to see somebody take the video of the people dancing in the TurboTax ad - The Tax People video - and make Bloomberg- actually,  just make all the candidates in the [00:20:30] video. That'd be even better, but I  would love to see Bloomberg doing the 'All people are tax people' dance. 
Blake Oliver: We might have to ask Will Lopez over at Gusto to do that because I think he's the only person- the only accountant with video-editing skills [crosstalk] Yeah, anyway, Bloomberg basically blew it with that answer, and you could hear the boos from the audience in that. I wonder how he does get his taxes done. I'd be curious to hear more about that. So, that is all of the political news for the week.
David Leary: Actually, he said that he's released the last 12 years, when he was Mayor of [00:21:00] New York.
Blake Oliver: Right.
David Leary: So, you could actually go track one of those down, Blake, and see who did his taxes, right? 
Blake Oliver: I could. 
David Leary: A signed preparer would be on them.
Blake Oliver: I could. Maybe I'll do that.
David Leary: I don't know why ... Just out of wondering ... 
Blake Oliver: Okay, so what is next in terms of big news? I have PCAOB and FASB follow-up. I don't wanna put you to sleep, David, though, so maybe we should cover something else? 
David Leary: Well, why don't you talk about another billionaire?
Blake Oliver: What's that? 
David Leary: Didn't something ... Warren Buffett had a huge profit.
Blake Oliver: Yes. Warren Buffett-
David Leary: It's your beat, right? 
Blake Oliver: Yeah. 
David Leary: It's because [00:21:30] of the accounting rule that you hate.
Blake Oliver: Well, just one of the accounting rules that I hate. Warren Buffett wrote his annual letter to Berkshire Hathaway shareholders. It's sort of a mixed year for Berkshire Hathaway because they had one of their best years ever. The Oracle of Omaha earned for his shareholders $81.4 billion last year, which is a humongous increase from the year before. [00:22:00] Let's see if I can find those numbers. Yes, a 1,900-percent increase ... 1,900-percent increase in earnings from the year before.
Here's the thing - out of that $81.4 billion, $53.7 billion of the 2019 profit was due only to an appreciation in the value of the stock holdings of Berkshire, and this is due to an accounting change that Warren Buffett called out last year. He's been complaining about it. He thinks it's [00:22:30] terrible. He said it again that he thinks it's stupid. Starting in 2018, the rule is now that companies holding stock, like Berkshire - which is, in a lot of cases, a big holding company - they have to include the unrealized gains on the stock that they aren't selling - they haven't sold - in their net income. Which, for Berkshire, it's a lot of stock, right? When the market does well, and the S&P 500 surges by, what, 20-30 percent, then they're gonna have humongous [00:23:00] gains.
Warren Buffett thinks this is a terrible idea. He said that the earnings reports filed under the new system, "Glaringly illustrate the argument we have with the new rule - in what we might call the real world, as opposed to Accounting Land - Berkshire's equity holdings averaged about $200 billion during the two years. The intrinsic value of the stocks we own grew steadily and substantially throughout the period." So, he says that Accounting Land has different rules than the real world, and-
David Leary: Wow, this is perfect! I love this concept [00:23:30] of Accounting Land. This is genius! I love it!
Blake Oliver: I think we need to get some investors, and we need to build Accounting Land, and we can have PCAOB Land; we can have FASB Land.
David Leary: It's like Neverland, where nobody actually has to grow up. Accounting Land's where it's just like ... It's all the stuff nobody actually cares about; but the people in Accounting Land care about it- 
Blake Oliver: Right, right. So, anyway, the argument against this rule, this mark-to-market rule, is [00:24:00] that it creates these huge swings in net earnings that you shouldn't have, because unless you're a company that your business model is to trade in stocks, you're buying and holding, so why are you recognizing those gains in your net income? It just distorts operating income. And I think if Warren Buffett thinks this is a bad idea, maybe we should listen to him, given that he's the greatest investor to ever walk the earth, as some people like to say.
David Leary: So, what do you think ... Would he still be against it, if it worked the [00:24:30] other direction?
Blake Oliver: Well, the thing is, it did work the other way, in past years, and he complained about it then, too.
David Leary: Okay. 
Blake Oliver: He's against it no matter whether it works for his benefit or against him. He's all about that long term, and this distorts that. That's Buffett.
David Leary: Billionaires and their problems. All right, let me ... Do you have any more billionaire articles this week, or can we stop talking about them? 
Blake Oliver: We can stop talking about the billionaires. No more Bloomberg news; no more Buffett news. Yeah ... What's next? 
David Leary: We [00:25:00] could talk about hacking.
Blake Oliver: Okay. 

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David Leary: Ransomware Incident exposes patient information. The article title here is, "Hacking of Accounting Firm Affects Medical Group." 
Blake Oliver: Uh-oh ... 
David Leary: On December 7, an accounting firm, BST Accounting [00:26:30] Tax Advisory got a virus- ransomware, so they were infected [crosstalk] 
Blake Oliver: -at their office? 
David Leary: At their office. One of their clients is company called Community Care Physicians PC, with 2,000 employees.
Blake Oliver: Does it say where this was?
David Leary: The firm is in Albany, New York.
Blake Oliver: Okay.
David Leary: I'm not sure where this network- it's one of those big physician networks. They have 80 locations with 30 specialties in eight countries-
Blake Oliver: Okay, so [00:27:00] this is a big client. 
David Leary: -providing services- care services to hundreds of thousands of patients every year. So, it's just this ripple, right? You think you're just getting hacked, but, really, patients down the line of a hospital may have had their data possibly exposed because of this hack.
Blake Oliver: So, here's my question, right away - did it say what kind of data- what kind of patient data was breached? Because my understanding of HIPAA rules, accounting firms aren't supposed to maintain any of that stuff in their [00:27:30] systems. One of the reasons that it's hard to do accounting for medical practices is - let's say you're using QuickBooks - you're not supposed to have any patient names in the customer file in QuickBooks, because that's personally identifiable information that you're not supposed to keep in a system that isn't rated for it, that doesn't have the HIPAA security requirements. Does this ring a bell?
David Leary: Yeah. The accounting firm, their investigators, said that they could not confirm [00:28:00] that the attackers obtained any individual personal information; but a security research actually found there's a ransomware-gang website called Maze, and they saw that some of the data out there is some backup database files, including an image of a check made payable to a BST unit, one of the health care units. So, at least one image of a check was up there.
Blake Oliver: Well, just another reminder to be really careful about what kind of information you've got.
David Leary: Yeah, I didn't see anything that said how they got hacked, but I imagine it's that [00:28:30] work backwards ... It's probably somebody clicked an email; somebody didn't have proper logins; I'd wanna bet they didn't have ... Nowhere did it say ... You never see a thing where, even though they had two-factor authentication, they still got broken into. 
Blake Oliver: It's so hard to hack somebody with two-factor authentication, you might as well not even try. As a hacker, you might as well just go for the low-hanging fruit.
David Leary: There's too many easy people to hack, exactly. 
Blake Oliver: Yeah, exactly.
David Leary: Yeah, it's just more warnings out there. It's a big responsibility you have, [00:29:00] as the accounting firm, to secure your systems.
Blake Oliver: Those stories are always kind of a downer, so I've got something that's a little fun.
David Leary: All right.
Blake Oliver: Those of you out there who want to someday make it to the CFO job, there's something you might do that's a little nontraditional to get there. According to a article, one way that you can get into the CFO position or advance your career is by getting a tattoo.
David Leary: A tattoo of what, I guess is my thought here. 
Blake Oliver: Let me tell you. Dave ... Oh, man, I don't even [00:29:30] know how to say his name. R-A-S-Z-E-J-A (Raszeja) ... I'm just gonna say Dave. he is taking on his first CFO role on March 1 at Penn Mutual Life Insurance, a $3.3 billion-revenue company that manages some $33 billion in assets. He had been at Penn Mutual for four years when, in 2005, at age 30, he donned a tattoo to memorialize his passion for mathematics.  [00:30:00]He got a tattoo of pi that goes around his upper arm; a bunch of the digits of pi. 
David Leary: Okay ... 
Blake Oliver: He was sitting at lunch one day, as a lowly actuary, at Penn Mutual, and the CEO at the time, Robert Chappell, he had a habit of just randomly sitting down with people at lunch. So, he sits down next to Dave, and he asked what they did - he was with some friends - he asked what they all did, and they explained they were actuaries. Then one of the guys at the table [00:30:30] said, "Hey, this guy's got pi tattooed on his arm. Check it out." So, the CEO asked to see it, and Dave rolled up the sleeve. That is how he impressed the CEO, who then relayed the story to the head of their investment function at that time, who contacted Dave and asked him to come for an interview at the hedging quantitative analysis position. That's how he got into hedging, and quantitative analysis because he's a math guy who had a tattoo of pi. The years passed, and that was how he got started. That launched his career, and now he's [00:31:00] this CFO.
David Leary: So, outside of Byron Patrick, who has a CPA tattoo-
Blake Oliver: Yes.
David Leary: I think I saw on Twitter, and I don't know if it was Photoshopped or not, I've seen a photo of a woman that has debit and credit on her two elbows.
Blake Oliver: Oh ... 
David Leary: I don't know if it was Photoshopped or not. It was hard to say. Anything that comes from the Big Four Accountant Twitter account is questionable. Every single thing's questionable as far as being legitimate or not legitimate. Do you know of anybody else in our industry that you've seen with some industry ...? Does anybody have like an [00:31:30] Excel macro, or anything like that tattooed on them, or a table?
Blake Oliver: Well, I know Madeline Pratt has tattoos, but I don't know if they're accounting- or finance-related [crosstalk] but I think it's cool. It's like we shouldn't be afraid, in the accounting and finance world, to have a little personality. Maybe that involves some body art, or maybe it involves something else ... I feel like this is like Garrett's- who is it with the Green Apple podcasts?
David Leary: John Garrett.
Blake Oliver: John Garrett ... He should be all over this because [00:32:00] his show is all about standing out ... Be a red apple in a green-apple world; or, wait, is it be a green apple in a red-apple world? Anyway, it's all about helping accountants and finance people stand out. Sometimes, something like that is all it takes to make you get that career opportunity.
David Leary: So, if you have a tattoo that is accounting-related, please tweet it at us so we can see this.
Blake Oliver: My personal story is that I was a music major, who then got into bookkeeping and got my CPA and got into accounting to make a living. I love telling that story, and it helps people remember [00:32:30] who I am ... Have a story like that.
David Leary: If any listener wants to get a Cloud Accounting Podcast tattoo, you're on a whole new level! A whole new level! 
Blake Oliver: I don't know if we should be encouraging this. How many listeners do we have to get before you get one, David? That's my question.
David Leary: Maybe soon, here. We'll see- 
Blake Oliver: Soon enough? All right. 
David Leary: I'm fragile, though. I don't have any tattoos. I just imagine it's gonna hurt a little bit. I'm just- I can't do it.
Blake Oliver: I hear it does hurt a lot.
David Leary: I was in New York City, and it was too cold. I can't even handle that. Never mind ... It's a little [00:33:00] windy and cold out, and I can't handle it.
Blake Oliver: Well, this may not be the best time, then, to talk about the PCAOB or FASB, right? Given the pain- 
David Leary: That's painful, too. 
Blake Oliver: It's a painful subject, right? Especially for non-accountants; but I'm gonna put you through a little bit more of this, David.
David Leary: Did it get killed yet?
Blake Oliver: Well, no, because, again, this is just a budget proposal, as we discussed for a few minutes last week in our last episode. The Trump administration, in their new budget proposal, has [00:33:30] said that they want to fold the PCAOB into the SEC. So, the body that audits the auditors - the Public Company Accounting Oversight Board - is gonna become part of the Securities and Exchange Commission and save money that way. 
Not surprisingly, there were some folks who wrote articles saying this is a very bad idea, and I spotted two of them. Francine McKenna wrote an article on - Financial Times - which I guess is kind of confusing to me because [00:34:00] are they even a U.S. publication? I mean, they're a-
David Leary: I think they're Australian because I think I've read some things from their media property before. 
Blake Oliver: Yeah. 
David Leary: So, this is somebody saying it's not a good idea to kill it?
Blake Oliver: Yeah, so Francine McKenna, she's been a critic of the Big Four auditing world for a long time. She says that we should keep the PCAOB. But I thought it was funny because there's a paragraph in here where she says, "The PCAOB has not been the most effective regulator, it must be said." And I have to say, that's [00:34:30] a giant understatement. Wouldn't you agree, David, given what we talked about last week, that the PCAOB has issued, what, less than one half of one percent of the fines that they could have over the last 16 years against the Big Four? 
I am all for effective regulation. My main complaint about this whole situation is that the PCAOB doesn't actually fine the Big Four, so what use is all this- this regulatory body, if they're not actually gonna enforce the law? They [00:35:00] should either work for the benefit of the market, or we shouldn't even waste our time; and in 16 years, when they've only issued $1.6 million of fines, that just seems kind of silly to me.
I was sort of doing a little bit more homework on this, wondering why have they not issued that much in fines? Why wouldn't they do a better job? Another report by POGO, which is the Project on Government Oversight, which is where I got this information from in the first place, they have an article [00:35:30] on their site about how the PCAOB is really a revolving door between the Big Four audit firms.
David Leary: I was just going to guess that. Yes.
Blake Oliver: All right, so this is called, "How Accountants Took Washington's Revolving Door to a Criminal Extreme." I didn't even read this whole thing. I was just prepping in advance of the show this morning- this one stat that's just kind of amazing: "Based on an analysis of profiles from the professional networking site, LinkedIn, as of November 2019, it appeared [00:36:00] that more than 40 percent of PCAOB employees had worked at the so-called Big Four audit firms - Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers." 40 percent ... The Big Four overwhelmingly dominate auditing of the biggest corporations, so 40 percent of the PCAOB employees worked at the Big Four, and then ... It's a revolving door thing, right? You go work at the PCAOB [crosstalk] 
David Leary: -but this is every industry, at the government level, I think, right? 
Blake Oliver:  Yeah, but- 
David Leary: The people have to ... The environmental agencies that look over oil and gas; there are people that have- they're consultants [00:36:30] in that industry, or they've worked in that industry. Then, they do this for two years, and they go back to the industry. It's- 
Blake Oliver: Yeah, but this is extreme, right? I mean [crosstalk] 
David Leary: Our industry just does it better, apparently. 
Blake Oliver: We're very efficient at it, right? A search of LinkedIn turned up more than 340 people whose profiles said that they were currently employed at the PCAOB and that they previously worked for at least one of the Big Four. Then, at the same time, LinkedIn profiles showed more than 160 people working for the Big Four, who had previously worked for the PCAOB. [00:37:00] For context, the staff of the PCAOB, in 2019, was 838 people. That's a lot of people who have Big Four backgrounds and are probably gonna go back there. So, think about it; it makes sense. Why would you wanna fine your employer, who's gonna give you some sweet job after you're done at the PCAOB?
David Leary: Exactly.
Blake Oliver: You're not gonna do it. 
David Leary: Somebody should just feed that story over to Bernie, and Elizabeth Warren. They'll be going off on this.
Blake Oliver: I mean, to me, this is ... If you can't fix this, then it's not worth even having the PCAOB because then it's just [00:37:30] an exercise in ... It's just all for show, and- 
David Leary: Lipstick on a pig. 
Blake Oliver: It'd be better not to have it because, right now, it actually provides an excuse for the Big Four - if there is another crisis, or another Enron-type situation –
they'll say, "Oh, the PCAOB was here. They said everything was fine ... They didn't stop us." Sometimes, having a regulator provides an excuse, if it's an ineffective regulator. I don't see any arguments from Francine McKenna.
There's another article by Arthur Levitt, who was the chairman [00:38:00] of the SEC a few decades ago, saying that we should keep it. But none of them have a solution to solve the problem; to make it actually independent and effective. So, maybe it's time just to bail on it. I'd love to hear from our listeners what you think - if there is a solution; a way that it could be made independent. We'll keep on following the story.
David Leary: But this ties to the whole deeper level because I think the UK's going after this, the whole problem of these firms are [00:38:30] doing the audit work, but they also have their consulting division, and they're double-dipping from these companies, and there's no real independence [crosstalk] 
Blake Oliver: Oh, yeah, yeah, yeah. 
David Leary: It all ties back to that because if there was independent auditing, you wouldn't even need this government decision.
Blake Oliver: Yeah. Here's my uneducated solution; here's what I would do if I were in charge. I would say we don't- maybe we don't even need the PCAOB. What would be a better solution would be to ban audit firms from doing any other work for their clients. So, if you're gonna do audit, that's all you do. You can't do consulting, period. [00:39:00] Then, come up with a random or third-party selection process for those audit firms so that General Electric doesn't get to decide who their auditor is; somebody else picks the auditor for them because then there's more independence. 
David Leary: Yeah. 
Blake Oliver: I think those two solutions alone would probably do a lot more than having the PCAOB in place. 
David Leary: This is not going anywhere [crosstalk] 
Blake Oliver: So, that was my PCAOB follow-up. I've got ... Unbelievably, [00:39:30] David, my beat is just- it's so great this week. I've got FASB news, too. 
David Leary: Okay. 
Blake Oliver: And close to home! This is amazing. So, this was an article in The Wall Street Journal, called, "U.S. House Subcommittee Scrutinizes Accounting Rule Maker." That title alone would make you fall asleep, right? It's a House subcommittee that's gonna scrutinize FASB. But, you know what got my attention, right at the top, was that this is an article with a picture featuring my congressman, Brad Sherman. There's what? Like 500-something [00:40:00] congresspeople in this country?
David Leary: You should request lunch. You should request lunch. 

Blake Oliver: I know! When he's back in town, in Encino ... I think he covers Sherman Oaks/Encino- the Valley, right? When he's in town, I wanna talk to him because-
David Leary: So, he's heading this subcommittee. 
Blake Oliver: I don't know if he heads the subcommittee, but I'm gonna assume so because why else would they be talking him? It's a subcommittee that I bet nobody has ever heard of. It's called House Committee on Financial Services - Subcommittee on Investor Protection - Financial Services [00:40:30] Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets.
The Wall Street Journal interviewed Brad Sherman about how he wants to scrutinize FASB -  the Financial Accounting Standards Board - that sets the accounting standards in the United States, and the PCAOB, more. They had their first oversight hearing in January, and Sherman questioned the chairman of the FASB, Russell Golden, and he questioned William Duhnke, chairman of the PCAOB. They were grilling them about the new accounting standard on [00:41:00] credit losses, which I have to admit I'm not familiar with; but, apparently, some politicians think that's gonna have an unfair economic impact, and he wants FASB to reevaluate certain standards. 
There are two things that are interesting to me in this article, very interesting. One is the response from the leadership at the AICPA and at CFA Institute was immediately ... The quote in the article is - from Barry Melancon, chief executive at the AICPA – the quote was, [00:41:30] "For auditors and others to maintain confidence in financial statements, the standard-setting process should be free of outside influences." Basically saying, "Don't meddle with FASB, Congress! We don't need your outside influence." 
Then, Sandy Peters, senior head of the financial reporting policy at the CFA Institute, said, "Exercising political power to bring FASB in front of Congress to get them to do what they want violates the independent standard-setting process." So, basically saying these are independent groups, and politicians shouldn't be getting involved; which [00:42:00] I kinda understand, right? 
Somebody on Twitter said, "Look at what happens when Congress gets involved in setting rules. That's how we get our tax system," which is fair. We don't want Congress getting to that point with our accounting standards. But part of me says maybe the reason that our accounting standards are so antiquated and are not that great, in a lot of cases, is because we don't have enough oversight. 
Why is PCAOB so terrible at doing its job? [00:42:30] Because we don't have enough oversight. Why is FASB so slow at changing accounting to work for a world of intangible assets? Because there's not oversight. It's just a bunch of accountants sitting in a room in Accounting Land, as Warren Buffett said, right?
David Leary: So, you're saying we need oversight of Accounting Land; somebody needs to be the mayor of Accounting Land.
Blake Oliver: It needs to be a non-accountant, okay? It's just like the head of the military is the president, not a general. [00:43:00] It has to be somebody from outside. Otherwise, you get too wrapped up in the world that you're in. 
Here's what I really like. This was buried in the article. It's a quote from Brad Sherman. He said that he wants to continue to follow up on FASB accounting standards – GAAP. There's two quotes that are really good here. One is, "If you control the definition of earnings per share, you control the vast majority of the important entities in the country. For FASB to exercise that much government power, in what is a separate cloister, is [00:43:30] far away from democracy as they can possibly get." 
Then, this is relevant to that whole discussion we had last year about intangible assets in the book, "The End of Accounting," and research and development. I'll just read this paragraph from the article. "Mr. Sherman said he hopes to push FASB to reevaluate certain standards, such as a longstanding rule requiring that companies expense research and development. He called the standard, known as FASB No. 2,  a 'corrosive, self-inflicted wound on the progress [00:44:00] of humanity,' that he claims doesn't give enough value to investments in R&D and discourages new private-sector research. He said the rules should be changed to allow for money spent on R&D to be capitalized, which means the costs would be recognized gradually over a period of years as opposed to being expensed at the time the cost is incurred."
This is exactly what we should be thinking about in the accounting world. This is the oversight that we need. I'm so excited this is happening with my congressman, [00:44:30] just randomly ... I wasn't even following what he was up to in Congress. This is what he is doing! [crosstalk] 
David Leary: Maybe he's just pandering for your vote. 
Blake Oliver: Maybe he got wind of the podcast and decided, yes, that the very important-
David Leary: Endorsement from Blake Oliver.
Blake Oliver: The coincidence is too amazing. Everyone likes to get down on Congress, but there are people in Congress doing good work. 
David Leary: This theme, I swear, has just been hitting us in the face the last eight to 10 weeks- eight to 12 [00:45:00] weeks. It's just this questioning of the accounting professional organizations, the value of accounting. It's just this drum just keeps beating harder, and harder, and harder, and harder. You're right – somebody's gonna have to step up and represent the industry to stop this slippery slide.
Blake Oliver: It's just a slow decline into irrelevance is what we face if we don't do something about it. I don't think that the change is gonna come necessarily from within the profession. [00:45:30] There's just too many people at the top invested in the status quo, making a lot of money. Accounting is a conservative profession to begin with. I don't know what's actually gonna make it happen.
David Leary: Podcasts. More podcasts. 
Blake Oliver: More podcasts? That's right. We're doing our part, David. So, that is all of the big news that was on my beat this week. I think we had maybe some smaller app updates, if you wanna touch on that? 
David Leary: Well, there's kind of fun news. It was very public ...  [00:46:00] We talked about Gusto versus Rippling. 
Blake Oliver: Yeah, I think this qualifies as app news, right? Yeah. 
David Leary: So, Gusto, payroll product; Rippling, payroll product. Arguably, Rippling maybe is a slightly bigger market. Their play is you get hired, and that's the trigger and ripples everything else that goes on. So, oh, you got hired at this bigger company - you need a laptop; you need access to these six applications; you need to sign for the 401(k); you need payroll. You need all [00:46:30] of these things, but it all starts from the hire, right? Well, Rippling put up a billboard- 
Blake Oliver: Before you get into that, I heard them described as onboarding software, which is something I'd never heard before. That's kind of cool. It's like payroll and benefits plus workflow?
David Leary: Well, plus every ... When you hire somebody at your company, you've gotta create an email account for them ... You have to do a zillion things.
Blake Oliver: A dozen things ... Yeah, it can take hours. 
David Leary: So, it's payroll; it's IT; HR ... It's all these things you need to do. In theory, they're gonna connect [00:47:00] it all through APIs, and you just ... Payroll's the first start, right? You invite the employee to create their account. So, they're going from there. Then, obviously, everybody's super-familiar with Gusto who's listened to the show before. So, they created a billboard ... Go into this article, if you're listening; go to the article. Look at the billboard. There's just a lot of funny across the board. So- 
Blake Oliver: This was a billboard in San Francisco on the [crosstalk] on the 101, where all of these people at all of these companies see it every day.
David Leary: Yeah, I think, actually, that it's the same billboard Xero, [00:47:30] early on, ran an anti-QuickBooks ad or something like that. 
Blake Oliver: Gotcha. 
David Leary: Right on the 101. It's the same exact spot, I think. 
Blake Oliver: So, what'd the billboard say? 
David Leary: It said, "Outgrowing Gusto? Presto Change-O. 
Blake Oliver: And then Rippling? 
David Leary: Then, it says Rippling, yeah. 
Blake Oliver: That's funny. 
David Leary: The funny part about this is Gusto did not like it, so Gusto sent Rippling a cease and desist order to take the billboard down. So, then the lawyers for Rippling replied back with some more poetry. 
Blake Oliver: Do you wanna read [00:48:00] some of it?
David Leary: "Our billboard struck a nerve, it seems, and so, you've phoned our legal teams, who started shouting, "Cease! Desist!' and other threats too long to list. Your brand is known for being chill, so this just seems like overkill. But since you think we've been unfair, we'd really like to clear the air ..." and it just goes on, and on, and on. It's a two-page PDF of this poem that their legal team sent the other legal team, followed by historical cases of fair market competition with advertising and that type of stuff. 
Blake Oliver: I think [00:48:30] the argument that Gusto was making ... Or the reason Rippling put up that billboard is because Gusto, admittedly - they say it themselves - they are not ideal for employers with more than 100 employees. That's not who they focus on, so Rippling's saying, "Hey, we can handle that. Come to us." But then, I guess Gusto ... It's not a hard limit. Gusto can handle larger employers, and they didn't like that marketing. 
So, to me, this is funny because it shows just how insular the Bay Area can be with tech. Is [00:49:00] this really making a difference? How much business is Rippling really gonna get from this? Often, you end up with a bunch of tech companies just selling to each other.
David Leary: Well, some of this is just ego. Most billboards are ego. Some of it's just the temperament of the people involved. Some of it is things are getting serious. These companies have now grown to where you're not gonna have these 100-percent growth years anymore. You're competing against each other. I don't if you knew this or not, but- 
Blake Oliver: But, see, that's not true. ADP, and Paychex are still so [00:49:30] gigantic. They could be ... This reminds me of the Democratic primary, right now, where you have all these moderates splitting the vote, and if they just combined their forces, they could defeat Bernie Sanders, and they're not gonna do it. That's like Gusto and Rippling right now.
David Leary: Some of it's a little bit of culture. So, the founder of Rippling, he used to be the founder- the CEO of Zenefits.
Blake Oliver: Right, yes. 
David Leary: Zenefits did some questionable behaviors along the way on their growth, right? He likes to poke the bear. I know [00:50:00] Zenefits went hard at ADP before, back in the day, and had wars with them publicly. Even Gusto had a war with Zenefits, publicly, three or four weeks ago, over the API stuff. So, it's just ... Arguably, Gusto's probably - as far as these payroll startups - is arguably kind of the hottest, newest- the hottest number-one ... They're not ADP or Paychex level, but Gusto, arguably, has done very- they're very, very successful, correct? 
Blake Oliver: Yep. 
David Leary: Arguably ... They're gonna get a target. Everybody's gonna go after them. So, it's ... I don't know, we've [00:50:30] talked about it in a very boring way, but I'm telling you, go look at the images. Go read the PDF. It's all in the show links. It's pretty funny. 
Blake Oliver: I think it's funny. So, let's talk about actual app updates. Friend of the show, Judie McCarthy runs a practice-management app called Client Hub for accounting firms. I've always thought that's pretty cool because she was an actual practitioner who is solving a problem for herself and selling it, now, to other firms.
They recently released a new feature that [00:51:00] solves a pain point that I had when I was doing bookkeeping. It's a tool that allows accountants to automate resolving unclassified expenses. Client Hub now integrates with QuickBooks, can identify the unclassified transactions, and then you can send them through your client portal to your clients to ask them what are these? Then get that information back and sync it back into the QuickBooks file.
So, something that used to be very annoying because you had to open up your email [00:51:30] and put in a list of the transactions and say, "Dear client, please tell me what these are." Then they, of course, never get back to you,. and you have to remember to follow up on that stuff. The idea being, now, you can automate that process directly from QuickBooks.
David Leary: Yeah, and then, she gets into ... Part of the task management. 
Blake Oliver: Yes, yes. 
David Leary: It eliminates a lot of steps because, before, you'd see this transaction, and make yourself a note - email the client about this ... Now, I have a task; follow up on the task; did it get fixed from the client? So, it's kind of automated that process as part of the task management inside that app. 
Blake Oliver: Yeah. 
David Leary: I think, [00:52:00] interestingly, you said ... I know we were chatting with this a little bit before; exciting to you because this is only a feature an accountant would create, or a bookkeeper.
Blake Oliver: Exactly. All the folks who are from the developer side, the engineers, they all wanna build machine learning, and AI, and automatically categorize transactions, and not deal with workflow task management, which is ... I get it - it's boring. It's not that- it's not sexy; but this is the work that has to get done; the communication that has to happen in; and [00:52:30] there's really not a good solution for it right now, so this is pretty cool.
David Leary: Yeah, and I think I saw another app that was built to do this. Then, I was thinking about it ... Yes, it was built by an accountant, as well. So, accountants are solving problems that they actually have, and sometimes, these apps aren't, right? 
Blake Oliver: Yep. 
David Leary: Am I crazy? I feel like this was something they talked about at QuickBooks Connect, as a tool or something for accountants; they'd be adding directly into the QuickBooks Online Accountant Edition, some uncategorized-
Blake Oliver: Yeah- 
David Leary: -transaction [inaudible]. So you could quickly go in, for [00:53:00] each client, and organize them all, or sort them. 
Blake Oliver: You know, all that stuff, they always talk about it, but I feel like it gets the lowest priority - all those QBOA or Xero HQ features. Do you even remember Xero HQ? Does that even ring a bell? Because they released that years ago, and it's just sort of ... I don't know if people are using it. It's really hard to get it right; to make it so it actually saves you time is really hard, and I think a lot of apps, they start building those portals for accountants, and then they lose [00:53:30] interest, and it just never gains big adoption.
David Leary: I have a QuickBooks news.
Blake Oliver: Okay. 
David Leary: This is about two weeks old, this blog post, but I finally saw it live in the field, and I had a chance to digest and think about it. So, QuickBooks is evolving their UI- QuickBooks Online is. Essentially, what they're doing is they're creating two views of QuickBooks Online. One is gonna be called the Business View, and the other view [00:54:00] is gonna be called the Accountant View. 
Blake Oliver: So, when I log in as an accountant, I might see something completely different than my client.
David Leary: That's correct. With the premise being you're the accountant; you're gonna think about things differently; you need access to a journal entry. Maybe the small business owner doesn't need access to journal entries. Technically, it's very easy to do something like this. You're just changing the menus around. The code's still the same. It's still the same QuickBooks, right? 
Blake Oliver: Yeah. 
David Leary: But new businesses that get on QuickBooks Online, from the default, they're gonna get this [00:54:30] new Business View. It's using terms like Money In, Money Out- 
Blake Oliver: Hey, that sounds familiar. That's what Xero did. 
David Leary: Make a Sale; Send an Invoice ... 
Blake Oliver: Interesting. 
David Leary: So, it's those type of verbiage and that terminology. But you can, as the accountant, flip the view over for your client; so that way, you and the client are on the same view.
Blake Oliver: Oh! See, that's good because that was what I was anticipating would be ... I was gonna say, this is my concern is that it's already confusing enough when Intuit rolls out features to [00:55:00] clients, and then the accountant doesn't have it yet, and the client is asking, "Hey, what is going on with this?" The accountant has no idea what they're talking about. If they had a different view completely, how do you support them?
David Leary: What's good about this blog post ... I'm not sure who- sometimes, on these Intuit blog posts, it doesn't say who wrote it; just says, "Editor's Note." They give all the screenshots; they have a table that shows, "Here's what's called Business View. Here's what's called an Accountant View." So, you can really get up to speed on this. It's really been communicated very, very well by [00:55:30] Intuit. It's pretty impressive the way this blog post is out here. 
Really, stepping back and looking at this at a higher level, this might be the first step to killing QuickBooks Self-Employed because QuickBooks Self-Employed is really about this money in, money out, right? It's really geared towards the non-accountant small business owner that doesn't even know accounting exists. Then, a lot of times, it's built for those people that even co-mingle their business and personal finances in the same bank account.
But QuickBooks Self-Employed is built on top of Mint. [00:56:00] It's not part of the QuickBooks dataset. So, this is why a developer, if they have an API, they can't read data from somebody using QuickBooks Self-Employed. This is also why somebody with QuickBooks Self-Employed really can't migrate to QuickBooks Online. 
This might be the trigger that lets Intuit ... They get the UI down and now they can actually just have one codebase because that takes away, right? If you're building a separate product for Self-Employed people - separate code, separate engineering efforts - that takes away from you building other features. So, [00:56:30] if they can get that into one codebase for QuickBooks Online, that just- everybody wins over that, over the long term, on that.
Blake Oliver: Couldn't agree more. Well, that's all the time we've got for this week. Actually, I should ask, did we get any reviews this week? 
David Leary: We did get a review. "A must listen for everyone in the accounting industry." Five stars. This is on Apple Podcasts. "I am surrounded by accountants every day. I work at an accounting firm, so my colleagues are accountants. Not only that, our clients are also accountants (who outsource their clients' bookkeeping work to us). Plus, our firm is searching for other tech-savvy accounting firms to acquire. So it's really helpful for me to stay up to date on the latest news and trends in the world of cloud accounting. The knowledgeable hosts, Blake and David, make it easy -- and fun! I'm almost tempted to start requiring that all my employees at BooksTime listen to it.." 
Blake Oliver: That's from Jesse at BooksTime, via Apple Podcasts. Thank you so much, Jesse.
David Leary: Sorry about that. The paste I have in, instead of having-
Blake Oliver: Oh, I see. 
David Leary: -punctuation, [00:57:30] it has all the HTML raw code. I'm like [crosstalk] 
Blake Oliver: That was a challenge. You did admirably well! 
David Leary: I didn't say, "&#39" ... Everybody else should also ... If  you've noticed, we've been doing classified ads now at the end of the podcast. So, if you haven't heard them, listen til the end ... They actually work! Liz Mason put a classified ad in; she was looking for help, and she got a resume sent to her for her- she was looking for a bookkeeper!
Blake Oliver: That is great to hear. Where can people reach you, David, if they're interested [00:58:00] in putting in a classified ad or just talking, and getting to know you?
David Leary: Easiest way is on Twitter. I'm @DavidLeary; but I feel like a lot of our listeners aren't on Twitter, and I've been getting a lot of people reaching out on LinkedIn lately; so you can also find me on LinkedIn, at David Leary.
Blake Oliver: You can look for me, Blake Oliver, CPA on LinkedIn. I'm on Twitter @BlakeTOliver. If you wanna leave us a review, we really appreciate those. We will read it on the air. You can do that on Apple Podcasts in the app, or you can head over to- what's that link, David? [00:58:30] 
David Leary: 
Blake Oliver: Go to Podchaser; search for The Cloud Accounting Podcast; leave a review, and that will go on to all of those non-Apple Podcast players, and we wanna get reviews in both spots. All right, that's it for me, David. Until next week.
David Leary: Bye. 


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