PPP Round 2 May Be Over Before It Even Started

In this episode, we cover a survey that shows the impact of COVID-19 on the accounting profession, why the second installment of Paycheck Protection Program money may already be spoken for, how federal CARES Act unemployment benefits are ruining PPP, and a half decade of SBA security lapses. We'll also talk about resources to track PPP loan forgiveness, how having a digital currency could spare us all of this stimulus payments pain, and how to decide who to let go.

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Clients are looking for trusted advice and a sense of stability as they navigate the new normal, and by using Bill.com, accounting firms can free up more time for valuable strategic advisory services by helping clients shift their accounts-payable process online. Stay tuned to hear more from our sponsor, Bill.com, later in the episode.
 
David Leary: [00:00:22] He agonized over getting this loan. He did take the loan. He said he put it in a separate bank account. He plans to maintain his payroll, and he understands that this loan was intended to help companies that were gonna have to shut down, or suffer major losses, or lay their employees off. But there's nothing in the program to differentiate his company that's financially stable, and a company that is operating at 50-percent capacity, or anything. Regardless of the stimulus, his company could have probably weathered the storm, he thinks, possibly.
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This episode of The Cloud Accounting Podcast is sponsored by AccountingSuite. AccountingSuite is cloud accounting software that acts like a customizable ERP system. It lets you start out with just the features you need today and, in the future, as your business grows, you can easily add AccountingSuite extensions to give you the features you need. 

A major strength of AccountingSuite is its robust set of inventory management tools to track inventory levels, orders, sales, and deliveries from anywhere at any time. AccountingSuite has an extension for multi-channel online sales. After connecting your online marketplaces, AccountingSuite will download all your transactions for you to approve prior to entry into the accounting system. It's similar to working with bank feeds. 

AccountingSuite is offering Cloud Accounting Podcast listeners 50 percent off forever by using the promo code "CAP_50_2020." To take advantage of this exciting offer and to learn more about how AccountingSuite offers an upgradable path for your firm and company's future, head over to cloudaccountingpodcast.promo/asuite. That is Cloud Accounting Podcast dot promo forward slash A-S-U-I-T-E.
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This episode of The Cloud Accounting Podcast is sponsored by BQE Core. As firms everywhere are positioning themselves to work remotely, BQE Software is committed to supporting you and your employees during this critical time. BQE's Core products operate 100 percent on a native cloud platform that's uniquely able to help you in your efforts to embrace remote work while maintaining your productivity. In response to the impact that COVID-19 has had on your firm and your clients' businesses, the team at BQE has let us know that Cloud Accounting Podcast listeners will now receive three months of BQE Core for free with an annual subscription package purchased on or before May 31, 2020. To learn more, head over to cloudaccountingpodcast.promo/core. That is Cloud Accounting Podcast dot promo forward slash C-O-R-E.
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Blake Oliver: [00:02:49] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
 
David Leary: [00:02:52] And I'm David Leary.
 
Blake Oliver: [00:02:53] We're recording on Saturday. Normally, we do Fridays, at least during quarantine, but we're recording Saturday because yesterday, we talked with Mike Whitmire from FloQast. We did an interview about his new book, and that is coming out as a bonus episode, right after this one. So, everybody be sure to check that out. David learned a little bit about the financial close in the mid-market.
 
David Leary: [00:03:16] Yeah, it was eye opening for me to understand the difficulties that exist in that space. It's really hard to just digest things and comprehend things with the news all week, and then work, and Zoom calls. I'm starting to hit the limit. I'm actually looking forward to us doing the show today because I had a breath now, and it's Saturday. You're my only person I'm talking to today. It's amazing.
 
Blake Oliver: [00:03:39] Oh, that's great. Well, I ... You're not talking your family?
 
David Leary: [00:03:42] Well, not through Zoom, or- 
 
Blake Oliver: [00:03:45] Right, right, got it. Yes, Zoom fatigue is a really big thing, I know. I suffer from it, too. Actually, there was a great article that I tweeted out. I'll find the link for that; stick it in the show notes. One of the recommendations - and there's a lot of these recommendations, but this one's a good one - is schedule 5, 10, 15 minutes in between all of your Zoom meetings because, otherwise, you're not going to have the break. You get more of a break when- even if your schedule's completely packed in an office because you're walking from one room to another. You're getting up, you're standing, you're moving around. There's intros in these physical meetings. Whereas with the Zoom, you're just constantly going from one to another, and you're not moving from your chair.
 
David Leary: [00:04:30] That's really good because, right now, my experience is no Zoom meetings are starting on time, either. So, maybe people just build 15-minute- give people 15 minutes to get to the meeting on time; just build that into your schedule. Zoom should just make that a feature - you can't attend meetings back-to-back. 
 
Blake Oliver: [00:04:48] Calendly- these calendar apps almost all have it. I think, actually, with Google Calendar, you can go into the settings, and you can- there's a setting called Quick Meetings, or something, where it gives you a 10-minute buffer at the end of every meeting. So, it makes an hour meeting, a 60-minute ... It makes a 60-minute meeting, a 50-minute meeting, and it makes a 30-minute meeting, a 25-minute meeting. Check that out.
 
David Leary: [00:05:11] There are some tools to get some control over it. All right. I'll give that a ride. 
 
Blake Oliver: [00:05:16] So, how are you holding up, David?
 
David Leary: [00:05:17] I think I'm good. I'm holding up fine. I'm having Wi-Fi problems, though. 
 
Blake Oliver: [00:05:21] Oh, no, that's the worst. 
 
David Leary: [00:05:23] I'm starting to ... I found an article about people working from home, and their connectivity issues; had some interesting data in it. But I'm almost starting to feel like COVID-19's killed more routers than it has people, possibly ... Every time I turn around, somebody's like, "Oh, yeah, I had to go buy a new router and upgrade my router situation," over and over again.
 
Blake Oliver: [00:05:42] Yeah, it's actually- 
 
David Leary: [00:05:42] So, I'm gonna try to switch to a mesh network. This'll be a project I'll update next week, maybe.
 
Blake Oliver: [00:05:47] Let me know- do you know which mesh you're gonna use?
 
David Leary: [00:05:49] I have no idea. I've been putting this off. I have three routers in the house, in three different parts of the house. It's always been a little bit of a headache, but not enough of a headache to fix. But now, I think my main router is starting to see its day.
 
Blake Oliver: [00:06:03] Yeah, well, I highly recommend you go check out the Wirecutter and just search for mesh wireless on Wirecutter.com because all their stuff is really well-tested. I personally have a Google router, the one that they sell. It's a mesh network, and that always worked great for me. It makes a big difference when you're walking around the house; you don't lose your connection. You get good coverage everywhere-
 
David Leary: [00:06:26] And you can always print, right?
 
Blake Oliver: [00:06:27] Yeah. 
 
David Leary: [00:06:27] Because that's the problem. I go to the back of the house, and then, I'm not in the same network as the printer. Then, I have to walk to the front of the house and switch networks. It's always this dance. 
 
Blake Oliver: [00:06:33] Yeah, yeah. It's worth it. 
 
David Leary: [00:06:33] Yeah, I'm looking forward to some of the benefits from that. Okay [crosstalk] I'm in. I'm gonna do it. Yeah, I saw some interesting stats about the other people working from home. So, a lot of its connectivity; 16 percent of people have an issue every day- 
 
Blake Oliver: [00:06:48] Ooh, that's bad. 
 
David Leary: [00:06:48] -22 percent are having an issue weekly, and 15 percent monthly; just connectivity issues. People are comparing their survey from March- I'm sorry, October 2018 to March 2020. People are reporting good signal on their cell service. It's increased from 36 percent to 40 percent, but people reporting excellent, or very good has dropped from 40 to 29. Then, for people with- reports of bad signals, or no signals, or very bad have all increased. So, people are struggling with not only their connectivity at home, but even just their phone/cell service. The other graph that was really interesting is ... Oh, disinfecting of your phone. How often do you disinfect your cell phone?
 
Blake Oliver: [00:07:34] Like never, before this, but I've done it maybe two or three times since quarantine.
 
David Leary: [00:07:40] Okay, so Americans are answering [crosstalk] 
 
Blake Oliver: [00:07:42] I know they're disgusting. I know phones are disgusting, apparently, because we're touching them all the time, right?
 
David Leary: [00:07:47] Yeah. That's what I've always understood, too. It's worse than the bottom of your shoe, I guess. So, I'm like, oh ... Oh, well, but, yeah, 15 percent have never done it once, but now 35 percent are doing it every day.
 
Blake Oliver: [00:07:58] Oh. 
 
David Leary: [00:07:58] An amazing amount, 14 percent, are doing it every time they return to their homes. So, when they get home, they're disinfecting their phone every single time.
 
Blake Oliver: [00:08:06] Enough about you, and me, David. I wanna know how are accountants doing overall? You know I love stats, right? So, every time I get a survey, I'm always so excited. SmartVault came out with this really great survey that Gabrielle Fontaine, Jane Aylwin, and Dawn Brolin did for them. It came out this month, and it's all about how accountants and accounting firms are handling COVID-19. How is it going for them? One of the really interesting takeaways, the key takeaway, from this is that firms that already had at least one cloud system in place prior to COVID-19 fared far better than firms that did not have any cloud systems in place. Kind of [crosstalk] we knew this, right, intuitively, but now we've got data to support it. This is a great report. Check it out. Link is in the show notes.
 
[00:08:56] It is so detailed. There's like a before-and -after analysis. One of the questions upfront is: "Prior to the COVID-19 pandemic, how prepared would you say your firm was for remote work?" Surprisingly, 29 percent said, "Our team already worked 100-percent remote." This is a survey of 1,100 accountants in 18 countries, by the way. So, this is a good survey; good sample size. 29 percent already worked 100-percent remote; 35 percent had team members who were enabled to work remote when needed. So, actually almost two-thirds, right? I have to do the math in my head. Yeah, two-thirds were already setup for this; but the other third were not. They had some systems and documents able to access remotely, or the 7.2 percent of firms that are not prepared at all, no systems, or documents from home, they're really struggling. 
 
David Leary: [00:09:51] I talked to somebody that has a bigger firm here in Tucson, and basically what he made it seem is any of the departments that have moved forward with technology, those departments, those people were able to work at home; But as a total firm, you can't do 100 percent because there were just some parts, they had to be in the office still. They still have to physically go to the office because those parts of the business just have not modernized for whatever reason, right? 
 
Blake Oliver: [00:10:14] Mm-hmm. 
 
David Leary: [00:10:14] So, I can imagine, if your whole firm hasn't modernized, this is a big struggle.
 
Blake Oliver: [00:10:19] Yeah. There's some insight in this report as to what specific technologies seem to have mattered the most in this shift to working from home. Online client portal access is a big differentiator. The most successful firms, 80 percent of the most successful firms in this crisis, have an online client portal; only 55 percent of the least successful do. This success or failure is self-rated. Accountants were asked: "How well is your firm handling this transition to remote work?" Then, we're correlating that with what apps they have. So, online client portal access is a big one. E-signature, as well; 59 percent of the most successful firms have e-signatures, whereas only 34 percent of the least successful firms have it. Another one, both online portal and e-signature, the successful firms double the rate have that; over half have both of those, and only a quarter, about, of the least successful firms have both. The same thing- actually, teleconference might be the biggest difference because it's almost half for the most successful who can teleconference, or do video meetings, like Zoom, or Skype. The least successful firms, only 21 percent of them have that capability.
 
David Leary: [00:11:34] It makes sense, right? You're not just working from home, you have clients that are stuck at home, as well.
 
Blake Oliver: [00:11:41] Yes.
 
David Leary: [00:11:41] If you need to exchange data with them, and you don't have a system to do it, what are you doing? Actually, that'd be great if somebody [inaudible] call us and leave us a voicemail. I would love- but those people usually don't listen to our show; the people that are not ... Because I'm like, what are they doing? If you don't have the digital tools set up to get documents from your clients, are they driving to your office? Are you meeting them somewhere? How is this happening? They set it down, then you go and pick the pile up off the sidewalk? 
 
Blake Oliver: [00:12:09] A good chunk of firms are still going into the office, believe it or not. There's some data in here to support that. So, 8.2 percent of firms are currently still accessing the office is normal; still going into the office despite everything; 22 percent of firms, the clients and team have access, but they're reducing in-person appointments; 27 percent of firms, only team members are accessing the office, so no clients - clients are all virtual. Then, 42 percent of firms, all the team members are working remotely, and client interactions are all virtual. Then, 1.4 percent of firms have closed down operations completely. So, actually, the majority of firms are still accessing the office either entirely or in part.
 
David Leary: [00:13:00] Do you think if it wasn't for PPP and the loan situations - because tax season kinda got delayed - do you think it'd be less? Like people would've taken a little bit more of a step back, and just stayed at home, and opted out? 
 
Blake Oliver: [00:13:09] Oh, yeah. Well, yeah, I think the tax season and PPP together create this really difficult situation. I mean, look in that accounting firm office in the summer. It's  dead in the month of July, right? Yeah. It would- just not a good time. Not only do you have the compression of tax season getting extended, which doesn't really actually reduce any the pressure because of the difficulties of working remote; then, you have PPP, and all these loan things, and all this advisory stuff that has to happen, all at the same time; just makes it really hard to actually fix any of these problems. So, if you didn't have the cloud-accounting app set up, it's not like you were gonna get them implemented during this time. I really- I'd be willing to bet that very few of these implementations are happening [crosstalk] 
 
David Leary: [00:13:55] -almost four weeks ago, now, I talked to- right when the lockdowns all started, I talked to somebody at Right Networks. Apparently, Right Networks does- they have a full outsourced IT service. So, if you're an accounting firm, Right Networks will just take over everything for you - set up VPNs, make you virtual, whatever you ... Take your servers from your house and put it on their servers, whatever you have ... Not house, sorry, but your office, right? My understanding is he basically said they're busier than they've ever been. Immediately their phones were ringing off the hooks because people who've been putting this off for a decade are in panic mode because they're like, "Oh, my god, I have to work from home now, and I still have a server running underneath my desk that I've never actually set up for VPN, or remote access."
 
Blake Oliver: [00:14:40] Well, and this survey backs that up, David. There was another question: "Do you think the COVID-19 pandemic will change the way accountants do business forever?" 62 percent said yes, more firms and clients will be open to working together remotely. Only seven percent said that things will go back to normal or the way they used to be. Then, the rest say it's too early to tell or they don't know. But 62 percent say we're gonna have more remote work as a result of this.
 
David Leary: [00:15:08] I'm really surprised that it's not a higher number than 60 that think this is- it's not gonna go back. I just don't-
 
Blake Oliver: [00:15:17] Well, I think I think the number that really sticks out to me is that only seven percent say that it's gonna go back to the way it used to be.
 
David Leary: [00:15:24] Yeah, I guess you always have that five to seven percent ... They're always just gonna be that end of the curve there that ... They're gonna go back to that old way. 
 
Blake Oliver: [00:15:32] Yeah. 
 
David Leary: [00:15:32] But I'm surprised it's not 85 percent are in full agreement, like, yeah, this is never going to be the same.
 
Blake Oliver: [00:15:39] Well, you know, it's a conservative profession. But 45 percent of all the respondents do say that more technology, more cloud, is gonna be a thing going forward. Then, 30 percent say increase in remote working. Interestingly, the percentage who say that there's gonna be more advisory as a result of this, more advisory services, the successful firms, it was 11 percent of those respondents said that there would be more advisory after COVID-19. Only four percent of the least successful firms said that. Clearly, the successful firms are bullish on the advisory services. 
 
David Leary: [00:16:17] Partially because they possibly have systems in place to manage, and automate some of the work processes, and connect remotely, where they can focus ... Now they have energy left to focus on advisory, and they're doubling down on it, right? 
 
Blake Oliver: [00:16:34] If you ask me, PPP is not just a compliance exercise. There's a ton of advisory going on with PPP from which bank to use, for how to do the calculations, for how to use the money, for how to get forgiveness. I mean, this is a ton of advisory work that's happening right now.
 
David Leary: [00:16:51] Even AccountingWEB had an article from somebody from the AICPA talking about how you can help your small business clients beyond just the PPP. There's the EIDL; there's express bridge loans; there's Score; there's other alternative methods [crosstalk] of tax savings, and the employee retention credit. So, yeah, you're not just filling out loan applications, right now. You're having to do a whole breadth of services ... It's all advising, right? If you're answering questions, you're doing advising.
 
Blake Oliver: [00:17:18] And the big one that I keep hearing about, as everyone wants to know, how do I do cash flow protections for my clients? , how do I tell them what's gonna happen, where they're gonna be cash wise? Like short term? Long term. Everyone's obsessed with that  now because that's a question that clients have. How much money do I need? Well, we touched on the PPP. Let's get into it.
 
David Leary: [00:17:37] Let's get in- 
 
Blake Oliver: [00:17:38] Let's talk about- 
 
David Leary: [00:17:38] Start your engines. 
 
Blake Oliver: [00:17:38] What's new with the PPP, David? 
 
David Leary: [00:17:40] Start your engines. So, Monday, April 27, at 10:30 a.m. Eastern, the SBA.gov is going to turn on the Accept Applications server, and-
 
Blake Oliver: [00:17:52] It's immediately gonna crash. That was your prediction when we were talking earlier in the week, right?
 
David Leary: [00:17:58] I think that could be possible. If you think back to when it first started that first day, and they were reporting out results; there were about 5,000 here, another 2,000, an hour later; another 7,000, three hours later. The applications came in pretty slow at first, but now, my understanding is, starting Thursday night, or Friday - as soon as the President signed the bill - PayPal, Kabbage, Intuit QuickBooks, all the banks ... I've got called back by two lenders ... All the banks- everybody's getting these applications all ready to go. Before, I guess, they were manually typing these applications in, but now, these tech companies have it automated. They're ready to go. What happens to PayPal sends 100,000 applications within two seconds?
 
Blake Oliver: [00:18:43] Mm-hmm. Yeah. 
 
David Leary: [00:18:44] Does this even ... Is it still up by 10:45 a.m. is probably the bigger question.
 
Blake Oliver: [00:18:49] I'd be willing to bet 20 bucks that it goes down in the morning. So, there's the question of whether or not it's gonna stay up. How much money is in this round [crosstalk] 
 
David Leary: [00:19:00] It's $310 billion. It's part of a bigger fund, which was $484 billion, but we just care about the PPP part. They're splitting it up in an interesting way. They're gonna put $60 billion that's basically spun off just for smaller lending institutions. So, smaller lenders are gonna be ones with $10 billion or less in assets. Then, the rest will be the ones that have $10 billion to $50 billion in assets.
 
Blake Oliver: [00:19:28] So, maybe that'll help, I guess. I'm not really sure. I still have huge reservations about this program because they didn't change anything in terms of the guidance except they put out this FAQ, basically, it is intended to discourage larger companies, public companies, from applying for this money; clarifying what the certification is; what the definition of need is, or necessary is, when it comes to getting these funds. Well, let's step back for a second and talk about the whole blowback that occurred; the reason that this FAQ came out- 
 
David Leary: [00:20:01] Let's not go into that yet [crosstalk] Let's talk about what's happening because ... Yeah, we can get into the bad players, and get into the blowback and all that. There's definitely lots on that. But let's just get maybe the rest of the facts out of what else is going on with the $310- 
 
Blake Oliver: [00:20:15] Oh, sure.
 
David Leary: [00:20:16] One other thing with the $310 billion is that banks, based on their own internal data, think they already have all the applications. The money's gone; like, they have enough applications in queue. Nick Simpson, he's a spokesman with the Consumer Bankers Association, right before the House voted, he said majority, if not all the funding Congress is considering right now is already exhausted; and analysts at Bank of America say that ultimately $900 billion in aid is probably gonna be needed to fund all the applications that are coming in. Now, step back and do the math on this. $900 billion. That's $45 billion for the banks that they get in fees. The last stimulus, in 2008, it was twice that. They got $90 billion, the banks did, in the bailout. But to do that, the government got preferred stock in the banks.
 
Blake Oliver: [00:21:06] Right. Now, we're just paying them transaction fees. 
 
David Leary: [00:21:06] They're getting half as much money- they're getting half as much money, and they never have to pay it back. It's just a gift this time. There's nothing on the [crosstalk] 
 
Blake Oliver: [00:21:16] They have to do the paperwork, but that's it.
 
David Leary: [00:21:19] Nothing. Time ... Okay, paperwork. 
 
Blake Oliver: [00:21:19] Yeah, it's- I think it's ridiculous. It's crazy to me that we're paying the banks three, five percent to ... Just to do the paperwork on these loans. Then, of course, there's the issue of the program is never going to have enough money because simply the way it was set up. I think, actually ... I don't like the big banks. There's been a ton of blowback over this whole process against, like Bank of America, and Chase, and Citi, and all the big banks. It came to light that they had a two-tier system. 
 
[00:22:01] All these banks set up a two-tier system, where the retail customers, the smaller customers, say under - in the case of Chase - under $10 million in assets, they had to go through the online portal. They instructed their retail banking staff not to help anyone personally; just to direct them to the online portal; the communication was terrible. People submitted apps; they never heard anything back. But the private clients, the commercial clients with lots of assets, got concierge treatment, and they got to just have their hand held through the whole thing. That's why Chase's average loan size was over half a million dollars. They were the number-one lender, and they also had the biggest loans, apparently. Of course, this is all- 
 
David Leary: [00:22:44] -ultimately the law was written- basically, the instructions were first come, first served. That was never true because they stacked the applications. 
 
Blake Oliver: [00:22:52] Well, yeah, it was first come, first served, as far as the SBA application process was set up. The SBA had to give out the loans first come, first served, but the banks were the ones submitting the applications. There was nothing in the law, or the rules, or guidance saying that they had to submit them in any particular order, even take them in any particular order. So, of course, the banks treated their existing bigger clients better. They want their clients to succeed. The big ones. they definitely want to succeed because the big ones already had loans with those banks.
 
[00:23:25] It's just- that's the way business works. So, why would anyone expect anything else, anything otherwise? Here we are, blaming the banks for this. Well, this is the system that Congress set up. It's not the banks' fault. I mean, the banks are the way they are because they're so big. It's the system has created the banks. It's not like the banks are ... You can't blame the banks for being banks. We know they're dicks. That's the way ... You know what I mean? It's just the way it is.
 
David Leary: [00:23:50] Yeah.
 
Blake Oliver: [00:23:52] So, now we're demonizing the banks and then, we're also demonizing these public companies that took funds because the law said they could. So, you have Shake Shack, you have Ruth Chris Steakhouse, you have a giant list, thousands of public companies that have now taken PPP loans, and people are saying they have to give the money back. The Treasury is encouraging them to give the money back in this new FAQ. I was curious just how much of the money actually is going to public companies? I found a site called FactSquared that is tracking this; kinda how you were tracking PPP funds at your site, David; which, what's the URL for that? 
 
David Leary: [00:24:36] PPPstats.info, which I have to update today to get ready for the V2 distributions.
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This episode of The Cloud Accounting Podcast is sponsored by Bill.com. Through these uncertain times, one thing has become clear. Accounting firms are in a unique and trusted position to help their clients adapt. For your firm, that means leaning into the services your clients have always depended on and more. For your clients, it means helping them move quickly to a remote model and bringing key financial processes, like accounts payable, online smoothly.

Using Bill.com, the Intelligent Business Payments Platform, accounting firms can take a client's time-consuming manual AP process and transform it completely with automation, tracking, mobility, and transparency, easing your client's shift to working remotely and setting the stage for strategic conversations about how your firm can help them navigate the new normal. To learn more about how Bill.com can help your firm automate AP and offer client advisory services, head over to
cloudaccountingpodcast.promo/bill. That is Cloud Accounting Podcast dot promo forward slash B-I-L-L. Bill.com, the Intelligent Business Payments platform.
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Blake Oliver: [00:25:55] So, you're tracking how much money is going out overall. This site called FactSquared is tracking how much money is going to public companies, which we know because they are required to disclose the loans in their public filings. So, they're going through all the SEC filings and looking for PPP loans. So far, they have counted 213 loans that went to public companies for a total value of a little over $800 million dollars. So, less than a billion dollars, and that is for 213 companies. How many of those have been returned? Seven. Seven out of the 213. So, nobody's returning the money, and it's not even actually [crosstalk] 
 
David Leary: [00:26:39] -said that was $800 billion or- 
 
Blake Oliver: [00:26:39] I'm sorry. It's only $800 million; so less than $1 billion of this money is gonna these public companies that are getting shamed. It's not gonna make a difference even if they return the money. The total value of returned money, so far, is only $65 million dollars. This is a program that started out as a $350 billion program that has now ballooned into over $600 billion. I don't even know what it is right now, but it's a lot. It's all just a distraction. Blaming the public companies is a distraction.
 
[00:27:09] The thing that is making this program fail has nothing to do with the banks, in the end, actually. I mean, it sucks that the big companies got priority because of the way the program was set up, and the small guys had to wait in line. That sucks, and it was the wrong way to do it. But, ultimately, what's going to cause this program to not have the effect we want is that it's so broad that everybody- virtually everybody qualifies, and everybody is applying. So, the money's gonna get spread out so thinly and to a ton of companies that don't really need the money, who are successful, that it's just not gonna have the impact. It's not going to actually save that many jobs. So, we're just ... It's just a giveaway.
 
David Leary: [00:27:51] It's a giveaway. There's an opinion piece in The Wall Street Journal. Title of the article is: "PPP Loan Terms Amount to a Legalized Fraud."
 
Blake Oliver: [00:28:00] Yes! 
 
David Leary: [00:28:00] This is a ... He owns a business, a food-manufacturing business, with 200 employees.
 
Blake Oliver: [00:28:07] This is an opinion piece by a guy, Pete Vegas. I read this, too. It's a great ... I'm glad you saw this.
 
David Leary: [00:28:14] He has a business, and he did not have to lay off employees. But he agonized over getting this loan. He did take the loan. He said he put it in a separate bank account. He plans to maintain his payroll. He understands that this loan was intended to help companies that were gonna have to shut down, or suffer major losses, or lay their employees off. There's nothing in the program to differentiate his company that's financially stable and a company that is operating at 50-percent capacity, or anything. So, regardless of the stimulus, his company could have probably weathered the storm, he thinks, possibly.
 
Blake Oliver: [00:28:48] Yeah, he's a food manufacturer. He's got plenty of work. He's an essential business. It's not getting shut down. People are buying food at grocery stores.
 
David Leary: [00:28:55] Under normal circumstances, this would be considered fraud, but there's no wording in the application that prohibits such behavior.
 
Blake Oliver: [00:29:01] Right, because the only thing you have to certify to- 
 
David Leary: [00:29:04] You just get the loan. 
 
Blake Oliver: [00:29:04] -the specific language is, "Current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant." Virtually any business in this economic environment can claim economic uncertainty. I mean, this guy has a food manufacturing business. He hasn't seen the economic impact hit him yet, but it could. Who knows what's gonna happen in a few months? If he deems that it's necessary to support the ongoing operations of his business, who's gonna argue with him? So, everybody is applying for this money.
 
[00:29:39] Then, you've got politicians who are now saying, "Oh, if you apply for this money, and you didn't really need it, the government's gonna come down on you. Marco Rubio was making- I just think they're idiotic statements in that regard. It's obviously not gonna happen. What are you gonna do? Go after 2.6 million businesses?
 
David Leary: [00:29:55] No, they're gonna go after six ... You know, the Shake Shacks. They'll have some example ones, and the narrative will be written like, "Oh, look, we went and got this money back for you." Trump's a hero, or whoever went and did this. But that's not the reality. The rest of these companies, like you already said, they haven't returned anything, and they probably won't because there's no reason to. There's no penalty if you keep it.
 
Blake Oliver: [00:30:15] Yeah, you can't ... Yeah, legally, they're totally in the clear, if you ask me. It would be really hard to prosecute this, so they're not going to, and there's just too many to do, anyway. It's just not gonna help all that much. There are zero jobs that that $3.4 million loan, for this guy, is gonna save. So, that's just $3.4 million that he gets for free from taxpayers. Is that gonna stimulate the economy? Who knows? Maybe. 
 
David Leary: [00:30:42] It could stimulate some millionaire CEOs. Did you see the tweet storm from, is it Judd Legum?
 
Blake Oliver: [00:30:49] No, I didn't see this. 
 
David Leary: [00:30:49] On Twitter ... So, he had- apparently, he runs a newsletter, or a blog site called Popular.info- this is the website he founded. They go through all the SEC filings. He's been going through those filings, and he's finding companies that, they got their PPP loan on a Monday and ordered $290,000 in cash bonuses to executives on Thursday.
 
Blake Oliver: [00:31:09] Oh, geez ... They're gonna find a ton of that. That's gonna happen. I mean, this like the hedge funds that have been rumored to be getting these loans. We're gonna find out about those, I'm sure.
 
David Leary: [00:31:20] He said he identified 32 companies that have paid- they have CEOs paid a million dollars or more.
 
Blake Oliver: [00:31:25] Then there's the whole fiasco where businesses have been getting these loans. They already furloughed or laid off all their workers and now they wanna bring the workers back, but the workers don't wanna come back because they're making more from unemployment, because now the federal government is topping up everybody's unemployment checks with an extra $600 a week. So, somebody making a minimum wage- 
 
David Leary: [00:31:48] We heard rumors of that, right, from- 
 
Blake Oliver: [00:31:48] Yeah. 
 
David Leary: [00:31:48] -accountants and bookkeepers, the previous week, and a half, and now it's starting to hit national media. CNBC has covered it now- 
 
Blake Oliver: [00:31:56] CNBC had an article called: "She Got a Forgivable Loan. Her Employees Hate Her for it." Wall Street Journal had an article, another opinion piece, called: "Our Restaurants Can't Reopen Until August," which it was- it's a restaurant owner who started calling employees to say come back, and they all said, no, thanks. If they return to work, they'll have to take a pay cut. Their plan now is to stay closed until August 1, because the federal unemployment benefit ends on July 31.
 
David Leary: [00:32:27] Yeah, and I saw a graph in an article on MSNBC for Washington, California, and Mississippi. It was a graph that showed what amount of wages you get replaced by unemployment in those states, before the CARES Act, and after the CARES Act, based on your hourly wage. So, if somebody's like a $10-an-hourly wage, after the CARES Act, they're now making 200 percent more than they made before.
 
Blake Oliver: [00:32:51] This is because they just used the same amount for the whole country, right? Because in some places, like New York, or L.A., or Seattle, or whatever, it's not nearly as much extra in a percentage situation.
 
David Leary: [00:33:04] Exactly. The graph really- even at the end, if you make $40 an hour in Washington, you could still be making 90 percent of your wages with unemployment in Washington. I think we loosely talked about this last week, but, yeah, something good over here is kind of causing a different problem that was not anticipated on the other side with the PPP. 
 
Blake Oliver: [00:33:26] It's just like these programs were all just created separately, and they didn't think about the impact. They're gonna have a ripple effect on each other. Anyway, hopefully, though, at least the people who applied are gonna get their money. There are still people from the first round that are waiting on their applications and waiting on money. That is ridiculous to me, because now what? We're a full month out from the passage of the CARES Act, and there are people from the first round of stimulus that still don't have their money, and there's lots of people who haven't even gotten their individual stimulus payments yet - those $1,200 checks. 
 
[00:34:00] A lot of people were supposed to get them; I think like half of the 160 million people who were gonna get those, were gonna get them by direct deposit. But then it turns out the tens of millions of people used tax-filing services, like TurboTax, like H&R Block, like all those services that used intermediary banks to process their refunds. So, those people are not getting their money, and those are some of the poorest people.
 
David Leary: [00:34:29] Yeah, MSNBC has a really good article that ... You might click on it, but it's where the $881 billion in U.S. aid went, in the month of spending. It has all these great graphs that shows where this money got distributed. If you scroll down, there's a graph about the ... Just the IRS. Yes, they sent out $155 billion, but there are still $36 billion that they haven't mailed yet or deposited that they're just sitting on. Four weeks later, half the money just has yet to get distributed.
 
Blake Oliver: [00:35:06] $136 billion still pending. Wow, and $156 billion has been sent. Geez. 
 
David Leary: [00:35:11] Yeah, and that's just that one part, right? 
 
Blake Oliver: [00:35:13] Yeah. 
 
David Leary: [00:35:13] That's not what the airlines got and what the Fed liquidity has, with the Treasury, with the banks. Then, obviously, PPP ... We talked about those numbers plenty of times. Even the state and local governments apparently can tap into a COVID fund. Even that, there's still $54 billion left of that. The money's not getting out fast enough.
 
Blake Oliver: [00:35:37] Yeah. It's not just a matter of how much money is being allocated. It's that the rails that we have to send this money are so ancient, they're not working fast enough. It takes months to send money, basically, through these outdated systems. We've got E-Tran at the SBA. We've got IRS printing paper checks. China is testing a digital currency, now. This is the very first government in the world ... I mean, they might be the first one to actually have a digital currency, using cryptocurrency, that is controlled by the government.
 
David Leary: [00:36:13] So, they issued their own.
 
Blake Oliver: [00:36:15] Yeah. They're testing it out. This is a Wall Street Journal story called: "China Rolls Out Pilot Test of Digital Currency." Last weekend, Chinese and domestic state-run media outlets reported that the trials had started in four cities: Shenzhen, Suzhou, Chengdu and Xiong’an, which is a suburb of Beijing. They've been researching this since 2014. The currency is called DC/EP, which ... It's a working titles. They don't have an official name yet, but it stands for digital currency/electronic payment. The goal is to replace cash in circulation - at least some of the cash in circulation - with an app. You know what it's like? It's like Venmo but run by the government.
 
David Leary: [00:36:57] But I thought they already had that with ... What's the chatting up they all use in China.
 
Blake Oliver: [00:37:03] WePay, or WeChat, which has a payment mechanism, but that's a private company. So-
 
David Leary: [00:37:09] I guess. Depends on how you define private companies in China. 
 
Blake Oliver: [00:37:12] Well, yes. So, the way this is gonna work ... Here's an example. In Xiangcheng, which is a district in the eastern city of Suzhou, the government will start paying civil servants half of their transport subsidy in the digital currency, next month, as part of the city's test run. This is according to a government worker with direct knowledge of the matter that The Wall Street Journal spoke to. Government workers were told to begin installing an app on their smartphones this month into which the digital currency would be transferred. They can transfer that money from the app into their bank accounts, or they can use it directly for transactions at merchants that accept it.
 
[00:37:47] So, think about if we had something like this in this country. If we had a public Venmo ... I didn't come up with that; that's actually a term that a New York assemblyman, named Ron Kim, is using for a proposal he has, along with a Cornell law professor, named Robert Hockett. They are proposing that we, in the United States, create a public Venmo. The other term that we've used for this, or I've heard about, is 'digital dollar.'
 
[00:38:11] It would essentially empower the Federal Reserve to open up retail banking accounts for every American citizen. The idea being that you would have an app on your phone. It's associated with your identification. The benefit of this is that the government could put stimulus money directly into your app, rather than telling the IRS to print checks, or rather than telling the loans ... Rather than telling the banks to do a loan process. Imagine if- 
 
David Leary: [00:38:43] You're talking about the same U.S. government that ... I'm gonna tell you about how the SBA had a data breach about ... It's the same- we're talking about the same U.S. government here. Is this correct?
 
Blake Oliver: [00:38:52] Yes, this is the same U.S. government, and I know ... If China does this ...? Well, I wanna hear about this data breach, but I guess my argument here is that if China accomplishes this, it's gonna give them so much control over their monetary policy to be able to inject stimulus directly into individuals' bank accounts, essentially. It would just be so powerful, right now. It would do so much for our economy. We have a consumer economy. It's driven by consumer spending. If people don't have money, they're not spending, and that creates a terrible cycle that can put us into a depression. So, the fact that people are getting their money fast enough is the biggest problem we have, right now, other than people dying from COVID-19.
 
David Leary: [00:39:38] Yeah, if you could just go to the Treasury website and be like, "Here's my Venmo ID; just transfer the money there," so that way, people that are not banked could possibly get the money ... Yeah, I definitely could see using some of those tech wallets out there to do this, but even that's a logistics thing because then, who's left out are the people left out that don't have smartphones, or there are people left out that don't have one of these accounts. So, it's tricky. I don't know. But the SBA did have a data breach during this whole thing. 
 
Blake Oliver: [00:40:09] I saw you share this article, or I saw it on Twitter, or something. Somebody we both know was featured in an article about it, right? 
 
David Leary: [00:40:17] In Business Insider. Shayna Chapman was featured in this article because she tweeted about a letter she got from the SBA, this weird generic letter that actually almost looked like it was a spam letter because everybody and their brother is sending out fraudulent phishing letters about PPP loans, et cetera. It looked weird, and it basically said that 8,000 people had their loan applications breached, maybe. But this is not a one-time thing. Five years ago, the inspector general's office did audits of the SBA and found that they have longstanding security weaknesses and identified 35 open-information technology audit recommendations. Three times in the last six months, they've been warned about these issues in another report that was delivered on March 30.
 
Blake Oliver: [00:41:04] Well, 8,000 people. That's a lot, actually, given ... It's, what ... They're gonna have over a million loans; 1.6 million applications, at this point. So, 8,000 ... It's quite a lot, actually. 
 
David Leary: [00:41:17] Well, especially, when that breach happened, that might have been like half the applications at that time.
 
Blake Oliver: [00:41:24] Right, so 8,000 out of 800,000, right? 
 
David Leary: [00:41:28] Whatever they were that day. It's not of the full amount - 1.6 million, now.
 
Blake Oliver: [00:41:33] Well, you mentioned fraud. Fraud is a big problem. The FTC has a report out that says that total fraud loss from COVID-19-related scams has reached $19 million in the United States, 25,000 reports, and the median fraud loss is $556. A lot of it is fake websites. There's over 180,000 coronavirus-themed sites that have been set up to steal data or misinform consumers. A great example of that is a website that looks like the IRS site for confirming your banking information to get your stimulus payment. You go to that. It looks like it's official. It's not. You put in your Social Security number, your address, and all that good stuff, and then they use that information to steal your payment.
 
David Leary: [00:42:23] I saw an article kind of from the other direction, where they're just ... They think it's other governments and agencies. The U.S. government is giving out so much money, it's just a grab for everybody. Other countries have organized hacking efforts to just apply for these loans and create fake entities. People are just trying to get this money and accessing the IRS website to try to retrieve ... "Hey, I want my refund ..."; creating fake profiles, fakes Socials, et cetera. It's really being exploited, that tool to check on your status of your loan. Did you hear about landlords using it?
 
Blake Oliver: [00:42:56] Yeah because if you have the information that somebody would give you on a rental application, you could use that info to check their payment. 
 
David Leary: [00:43:02] Yeah, and then go, say, "Hey, Blake, I know you got your deposit from the IRS last week. You need to pay your rent now."
 
Blake Oliver: [00:43:10] Oh, geez ... That's gotta be illegal, right? 
 
David Leary: [00:43:15] No, it's illegal to ask them to give you sex instead of paying rent, which I understand that is happening, as well.
 
Blake Oliver: [00:43:22] But it's not illegal to go check on their rent payment using this tool [crosstalk] 
 
David Leary: [00:43:27] Who knows, right?
 
Blake Oliver: [00:43:28] There's probably no guidance. It's probably ... 
 
David Leary: [00:43:29] Very gray. Let's talk about some good stuff, maybe. There's [crosstalk] 
 
Blake Oliver: [00:43:35] I've got a good one. I've got a good one related to this. So, if you owe money to the IRS, they are suspending all of their collections activities. The IRS agents have been told by the director of the Collections Department for Small Business and Self-employed that they're gonna temporarily not collect. So, anything, any installment agreements that were set up for between April 1, and July 15, you can just stop making your payments on that, apparently. So, it's actually easier for people who didn't properly file their taxes and pay money to get a break than it is for people to get their actual stimulus payment. You just stop making the payments.
 
David Leary: [00:44:20] Oh, we're in ... That is kinda good news, I guess, if you owe money.
 
Blake Oliver: [00:44:23] I know. but why are we giving a break to the people who owe money, right now? These are people who took probably aggressive tax positions. I don't know; I'm just guessing. It doesn't seem like the right time to be giving a break to those folks ... 
 
David Leary: [00:44:36] But that's what we're doing. I saw ... I deleted the article because it didn't have a lot to do with business, but I did see an article about the ultra-wealthy. Two years ago, three years ago, I think, part of the Trump tax thing, they adjusted what short-term gains- long-term gains, and how much you could carry forward your losses for selling stock and things like that. They changed that to where now it's kind of reverted, and it's in your favor. So, you can claim your gains from last year against the major losses you just had in the stock market now.
 
Blake Oliver: [00:45:08] Wow. 
 
David Leary: [00:45:08] That's all- that got shoved into the CARES Act.
 
Blake Oliver: [00:45:12] Oh, so that is the break that could get you millions of dollars of tax savings?
 
David Leary: [00:45:16] Yeah, if you- 
 
Blake Oliver: [00:45:16] If you happen to have a ton of losses because you're really rich.
 
David Leary: [00:45:20] Yes. So, they've changed that up for the rich. But some people are really doing things to help. So, obviously now, let's say you were lucky enough to get the loan. You've gotta track that forgiveness, correct?
 
Blake Oliver: [00:45:31] Yes.
 
David Leary: [00:45:32] We'll put these in the show notes, but there's three things that I found that are kind of helpful. One is a there's a blog post on AccountingWEB. It's how to do the bookkeeping, part one, and how to properly record a PPP loan. This article breaks down from here's how you create a bank account in QuickBooks to do it, all the way through creating a new bank account at the bank, and tracking your expenses separately, and how you wanna bucket them in. So, there's a good article on that. Then, Jacob Schroeder- two listeners, actually, tweeted this out. Two different spreadsheets- sorry, Google Sheets that basically you can use to track your PPP tracking. They're Google Sheet templates. One's from Jacob Schroeder, [inaudible] Consulting, and the other one's from Matthew May of Acuity. So, two listeners tweeted out Google Sheets that could be very helpful for all of you.
 
Blake Oliver: [00:46:21] Those are great resources and perfect examples of marketing that is really effective in this time. These Google Sheets are getting shared all over the internet, and their logo is right there, and a link to their website. It's perfect. It's exactly what you wanna be doing. So what should we talk about next? Do you wanna talk about layoffs? I know you wanted to talk about upbeat stuff, but ...
 
David Leary: [00:46:43] We could talk just a little bit more stimulus stuff, then we'll talk about layoffs. This is app news.
 
Blake Oliver: [00:46:50] Okay, shall we switch to app news now?
 
David Leary: [00:46:53] Yeah, let's switch to app news then.
 
Blake Oliver: [00:46:58] What is new in the world of apps?
 
David Leary: [00:47:01] So, there's kind of two chunks here. One is tons of tech players are now jumping into the helping small businesses. I think we talked a little bit before about the Small Business Relief campaign with Intuit and GoFundMe. The PayToday, which is like paytoday.club. Essentially it's about, hey, if you owe a small business money, pay them. That's Fundbox, Home Base, Gusto are involved in that. Now- 
 
Blake Oliver: [00:47:21] Yeah. I mean, that's really ... It's nice, and cute, and stuff, but it's not gonna happen.
 
David Leary: [00:47:26] Yeah ... American Express and about 40 other apps all came together for #StandforSmall. Even Melio's doing that, as well. PayPal is waiving ... Now, this isn't small businesses, much, but if you need to cash your stimulus check, you can do it through PayPal and not pay a fee. The two interesting ones is Facebook has created a $100 million grant program.
 
Blake Oliver: [00:47:45] For what?
 
David Leary: [00:47:48] For small businesses.
 
Blake Oliver: [00:47:49] What do you mean? They're giving money to small businesses?
 
David Leary: [00:47:52] Yeah, so you just ... A) you have to be a business that has between two and 50 employees. The second part is you have to have been operating within a year- I'm sorry, a minimum of one year. Then, the only other thing - and it's left very loose - the word "challenges." So, if you're a business experiencing "challenges," due to these COVID-19 outbreak.
 
Blake Oliver: [00:48:11] Oh, so it's just as loose a definition as the SBA program, so virtually anyone can qualify for this.
 
David Leary: [00:48:19] Yeah, but you have to say what you're gonna use the money for.
 
Blake Oliver: [00:48:22] Oh, okay.
 
David Leary: [00:48:23] Like, "Hey, I'm essential because I'm gonna ..." Maybe I'm a distillery, and I'm gonna make a hand sanitizer, or whatever it is. You're gonna say what you used it for. So, they're doing that. Then also, this'll be in the show notes - the links for this one, as well - Salesforce is gonna give out $10,000 grants, and it's just about as loose. So, if you're getting denied from the federal government, there's big tech companies that are offering grants, as well.
 
Blake Oliver: [00:48:49] So, I've only got one app news story to talk about, and it's kind of weird. It's this email from Expensify. Did you get this email?
 
David Leary: [00:48:57] Yes.
 
Blake Oliver: [00:48:58] So, I love the emails that come from the CEO, David Barrett. They're always long, but very interesting. They're the only product announcement emails that I will read in detail and not just skim over because he generally talks a lot about what's going on at the company, and it's really interesting.
 
David Leary: [00:49:17] What I like about his emails, it's almost like you're getting a glimpse into their decision-making process and his brain a little bit. You're right, they're very long emails, but he kind of leads you on the journey to the final decision they make, towards the end of the email.
 
Blake Oliver: [00:49:32] This week, I was kinda busy, so I kinda just stuck that email and my Read Later folder, and I was gonna come back to it. Then I saw this discussion happening online; people upset at Expensify, which, , I'm not used to. And I'm wondering what is going on. So, then I go, and I read the email, and it's actually kinda hard to figure out what is going on. It's like David is talking about how they have this concierge service, and they've been investing in customer support, and that, but the COVID-19 pandemic has just crushed their revenues. So, in a very long way, he gets around to saying they're gonna change the pricing, but then, it's not really clear to me, from reading the email what the actual change is gonna be. I think this really rubbed a lot of people the wrong way during this time-
 
David Leary: [00:50:21] I think I saw somebody tweet about it. It kind of is like, "Hey, we know we have not given good customer service, but now we're gonna start. We've improved it, so now, we're giving you more customer service. But guess what? Feel sorry for us because ..." I'm summarizing the tweet [inaudible] right? "Oh, feel sorry for us because guess what? Nobody's doing any business travel, and we're losing money like crazy, and you should feel sorry for us, and now, we're gonna raise prices." It kind of read like that to a lot of people.
 
Blake Oliver: [00:50:50] Well, and I haven't seen any price increases. So, this is the only company that I have seen doing a price increase at this time. I think there's kind of been sort of a general understanding that people just aren't doing it. Accounting firms definitely are not; they're actually doing a lot of free work for clients, so I think this is- that's part of the problem here. So, here's what actually is changing. I had to go to the website to really get clarity on this. What they are doing is, if you move 50 percent or more of your company's approved monthly spend to the Expensify card, which is that new credit card that Expensify has issued ... It's like a charge card, like Brex, and, I don't know, what are these other companies that do this?
 
David Leary: [00:51:34] Divvy does it. There's lots of them. 
 
Blake Oliver: [00:51:37] Yeah, so basically, those companies came out with their cards, so Expensify created a card. Expensify's saying if you move your expenses off of your personal, or company cards, and you use the Expensify card for more than 50 percent- 
 
Thomas: [00:51:50] Daddy? 
 
Blake Oliver: [00:51:50] Thomas, you cannot be in here right now, Bud. 
 
Thomas: [00:51:51] Well, I want to [inaudible] because mom needs to go pee. 
 
Blake Oliver: [00:51:51] Oh, Mommy needs to go pee? 
 
Thomas: [00:51:51] Yeah. 
 
Blake Oliver: [00:51:51] She can go in your bathroom, Bud. Okay, bye.
 
David Leary: [00:52:02] That's awesome. You have to save that. You have to clip that out and put it in his memory box.
 
Blake Oliver: [00:52:09] Where was I?
 
David Leary: [00:52:10] The 50 percent of your users on the new card.
 
Blake Oliver: [00:52:14] So, if you put 50 percent of your expenses on the card, then your fee's not gonna go up, but if you don't, then there's gonna be an unbundling fee on a sliding scale. So, if like 35 percent of your spend for the month is on the card, then you're gonna get charged for 30 percent of the unbundling fee, and then there's ... Basically, the price is doubling for the subscription per user. It's gonna gradually increase over the next 12 months. This calculation, I don't know what it's gonna be. I don't know what the price is gonna be. I feel like a lot of people are frustrated. I don't know. Was this really necessary?
 
David Leary: [00:52:53] Yeah, the timing is a little weird, you're right. Because most fintech companies, right now, are giving away free subscriptions, free discounts. They're trying to help all the small businesses. I'm not saying that Expensify is not trying to help. But it's also interesting because if they're gonna ... Obviously, there's competition, right? You have the Divvys, the Brex-es, those types of products that are out there, where they're not charging anybody to use those products. There's no fees. They're free. 
 
Blake Oliver: [00:53:19] Right. 
 
David Leary: [00:53:19] Expensify was always free, but those companies are- really, where they're making their money is on the ... They get some money every time somebody uses the built-in credit card [crosstalk] If they're going to encourage people to use the Expensify card, those should be free then. They're almost ... Feels like this a business model change to, "Hey, we're gonna be more like Brex, and Divvy," a little bit is what it kinda sounds like [crosstalk] 
 
Blake Oliver: [00:53:45] -sort of halfway. Yeah, it's weird.
 
David Leary: [00:53:48] But you can still use your old one. We're just gonna charge you to do it the old way.
 
Blake Oliver: [00:53:52] Yeah, so it's confusing. It's weird. It's just- I don't know, but I-
 
David Leary: [00:53:59] Would it have been better to rip off the Band-Aid and just be like, "Hey, we're gonna ... You have to take the Expensify card to stay on Expensify," or just that's it ... Or is that kind of dangerous because then people will be like, "Well, I'll just check the whole market for tons of different solutions now ..."? 
 
Blake Oliver: [00:54:11] Yeah. I don't know. I definitely wouldn't have raised ... I would've figured out a way not to raise prices. I mean, if you need to, take on more capital to get through this. Part of the problem, I think, is that Expensify always charged for active users, which a lot of companies don't. They'll just charge you for every email address that has an account on your- in your company, but with Expensify, one of the things I loved about it, as an accountant, is that I could put my clients on it, and if they didn't use it, I didn't pay for them. But that's a big danger to Expensify, in a downturn, because then a bunch of users stop using it; they don't submit expense reports that month; and then Expensify doesn't collect any fees.
 
David Leary: [00:54:46] Yeah, especially as you go up market to the bigger companies. A smaller company, a small business owner, they're still gonna have expenses they still have on a day-to-day basis. They might not be doing travel, but I think corporate travel is 100-percent stopped, right now.
 
Blake Oliver: [00:54:59] Well, David, that's all I've really got today. Oh! There was that one thing I wanted to talk about, the layoffs. So, real quick ... I don't wanna talk about specific layoffs, just like more happening; like we've all heard about them. Ed Mendlowitz wrote an article on Accounting Today. I think it's kind of a funny topic. I mean, I guess it's helpful for partners, but it's a article called: "Deciding Who to Let Go." It's how do you ... It's a list of things to consider when you decide who you're gonna fire in your firm - 19 things, I guess, if you gotta do it, this is a helpful list.
 
David Leary: [00:55:36] Is this satirical or is this-
 
Blake Oliver: [00:55:38] No, this is for real. It's not a joke.
 
David Leary: [00:55:39] For real, okay. 
 
Blake Oliver: [00:55:39] He's actually like- 
 
David Leary: [00:55:40] Here are some tips ... Okay. 
 
Blake Oliver: [00:55:40] What I like about Ed is - Mr. Mendlowitz, I should probably call him - is that he's old school, but like good old school. Like, if you wanna run your firm old school, you gotta listen to this guy.
 
David Leary: [00:55:56] I like him. I've been listening his podcast-
 
Blake Oliver: [00:55:58] Yeah, no, it's good. The stuff on sales, and firm development, and marketing, it's all really good; especially the sales stuff [crosstalk] 
 
David Leary: [00:56:03] -the tax update stuff is good that he does. You're in Phoenix ... He's in Phoenix.
 
Blake Oliver: [00:56:07] Oh, he is? 
 
David Leary: [00:56:07] Somehow, you guys should do a- you should go meet each other, stay six feet away, and ... It would be great.
 
Blake Oliver: [00:56:14] Well, so there's only one thing I wanted to say about this. It's a great list of things to think about. I'll just read some of them, okay? So, here's what you should consider when you're thinking about who to let go. How well do they follow your instructions? Are they learning from each new job so that the third time they do similar work, they don't need instruction? Do they apply what they learned on one project to another or from working on one client to the next? Do they remember what they worked on so they can apply it if it comes up again, either on that client or somewhere else? Do they meet deadlines without constant prodding? Do they take ownership? Do they follow up diligently? Can they handle multiple projects? Do they work relatively error-free? Do they ask for help when they need it? Are they self-starters?
 
[00:56:55] That's just a few of them. They're all great. As I'm reading this list, I'm thinking, you know what is not on this list here? Timesheets and utilization. The only item that is even related to that is the last one, which is: do they help you make more money? But notice how none of these things are about how many hours they're billing and what percentage they're utilized. It's irrelevant to this decision, which makes me wonder why do we track it, at all, for performance purposes? If you're not gonna fire people based on it, then why track it?
 
David Leary: [00:57:28] I think I brought this up two weeks ago, three weeks ago. That's how they determine the layoffs is by your billable hours, and your utilization [crosstalk] 
 
Blake Oliver: [00:57:37] They justify the layoffs with that, but that is not why they actually get rid of you. That's my argument. They get rid of you for all these reasons, like: Are you easy to work with? Are you a self-starter? All of that, because that's what determines both how well you work with people at the firm and how well you work with clients. But the actual time entries, that's not what ... That's just a consequence of all of this. Does that make sense?
 
David Leary: [00:58:02] That's true because they're gonna give you less work to do. They're gonna-
 
Blake Oliver: [00:58:03] Exactly, and that's what happening right now [crosstalk] That's what's happening now at big firms is you're working from home, and you're seeing your hours drop, and that just ... Because people aren't giving you work because they don't wanna work with you, so that's what gets you fired. But it's not not having the hours that gets you fired. It's the thing that happens before that, which is people don't wanna give you work. So, that's all I got this week.
 
David Leary: [00:58:26] I think that's it for me, as well. So, Blake, if people want to ... Actually, a couple of things people need to know about. We're still doing the Reviews4Good promotion. So, if you go to Podchaser.com, you can leave a review on The Cloud Accounting Podcast, and they will make a donation to Meals on Wheels, who are donating meals to the elderly. If Blake and I reply to your review that you leave there, they'll double the amount that's donated, which is very exciting. Then, we have our voicemail. You can still call us- 
 
Blake Oliver: [00:58:53] Yeah, if you wanna ... If you wanna leave us a message, we will take a listen. We will play it on the air, potentially. It is (202) 695-1040. That is (202) 695-1040. We hope to hear from you. I've also been getting some emails. I don't have time today to read through them, but I'm gonna remember next time; we're gonna read through some of this listener mail. If you want to send me an email or otherwise contact me, you can reach me at Blake@blakeoliver.com, or on Twitter, @BlakeTOliver. How about you, David?
 
David Leary: [00:59:24] I am on Twitter, @DavidLeary. If you wanna find me on LinkedIn, I'm @DavidLeary, as well, but I'm gonna ask now when people contact me on LinkedIn to say, "I listen to the podcast," because I just- I feel like I'm just having a conversation with robots on LinkedIn. 
 
Blake Oliver: [00:59:38] I think a lot of people using this automation software that just sends messages to prospect. It's just sales stuff.
 
David Leary: [00:59:45] What I do is I just reply back, "You'll love this podcast," and then, I give them a link to subscribe, over, and over again. But then they reply back. Then, after like the third time, I realize, oh, I've already replied to this same message to this person three times. Obviously, they're not reading it, so that's how I figured out it's a bot.
 
Blake Oliver: [01:00:01] It's a bot ... 
 
David Leary: [01:00:01] We'll get there.
 
Blake Oliver: [01:00:02] Well, have a great rest your weekend, David.
 
David Leary: [01:00:05] Yeah, and hopefully, PPP v2 goes so smoothly on Monday, we don't have to get together and do a show.
 
Blake Oliver: [01:00:13] Uh, yeah ... 
 
David Leary: [01:00:13] I hope it just goes smoothly. I hope it does. We can't ... Nobody has the energy for this.
 
Blake Oliver: [01:00:19] We'll see.
 
David Leary: [01:00:20] All right. 
 
Blake Oliver: [01:00:20] Talk to you later. 
 
David Leary: [01:00:20] That's a wrap. 
 
Blake Oliver: [01:00:20] Bye. 
 
David Leary: [01:00:20] Bye. 
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