What Intuit, Xero, and Sage Earnings Say about Cloud Accounting

We kick things off with an analysis of Intuit, Xero, and Sage earnings announcements, plus a roundup of new cloud accounting app features, and a new blockchain app from Grant Thornton. Then we return to the PPP with the latest guidance from the SBA. Plus: How Deloitte is (apparently) screwing up the UK effort to make more PPE for its national healthcare system, and what Congress going remote means for the future of working from home.

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Clients are looking for trusted advice and a sense of stability as they navigate the new normal. 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: [00:00:24] That's the problem I had was the touting of this being the greatest thing since Tom Brady was born. It's completely ridiculous. That's where I have a problem with it. It's the pre-celebration of something that was arguably still not a success ... 
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This of episode of The Cloud Accounting Podcast is sponsored by OnPay. Paycheck Protection Program, CARES Act, unemployment insurance, furloughs, layoffs, cash flow, CDC guidance, employee safety, paid leave, tax credits - tracking all of the constantly changing COVID-19-related information for your clients is getting overwhelming. With OnPay's COVID-19 Resource Center, you'll have a one-stop shop for your up-to-date HR, and tax information.

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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: [00:02:28] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
 
David Leary: [00:02:32] And I'm David Leary.
 
Blake Oliver: [00:02:33] What day is it? What month is it?
 
David Leary: [00:02:36] It is the middle of the holiday weekend here. We're recording on Sunday, which is probably good because there's constantly new information that gets released on Friday nights, lately, by the Treasury, or the IRS- 
 
Blake Oliver: [00:02:47] By the SBA. Yeah, we may just need to permanently switch to recording on Sundays, so that we can have time to digest all of this guidance or lack thereof.
 
David Leary: [00:02:56] Think we could put a request in? Maybe the AICPA can- since they're in talks with them, can be like, "Hey, by the way, you're kinda messing up David and Blake's recording schedule. Can you do all your releases on Wednesday?"
 
Blake Oliver: [00:03:07] Well, nobody can get the SBA to talk to them. There was an article in The Wall Street Journal this week about how, on both sides of the aisle, senators are complaining that Jovita Carranza and the SBA leadership are not being responsive to their requests for information. So, unfortunately, we're not ... I doubt we will have any more success than Marco Rubio in this.
 
David Leary: [00:03:31] Obviously, there's PPP news, right?
 
Blake Oliver: [00:03:33] Yes. 
 
David Leary: [00:03:33] I have the earning season - Xero, Sage, and Intuit have all released earnings. That's gonna be exciting to talk about.
 
Blake Oliver: [00:03:38] That is.
 
David Leary: [00:03:39] I have lots of interesting app news. Maybe the summary is apps are banks ... It's very interesting, and soon to be GLs. 
 
Blake Oliver: [00:03:50] Yes, they are. They are broadening into the whole fintech world. I think that we should definitely talk about that. Probably hit on that first, since we haven't done it in a while, and we'll hold off on the PPP and stimulus stuff. I also have remote work that I wanna talk about, which I teased at the end of the last episode. Before we do all of that, we have a review.
 
David Leary: [00:04:13] I see that it is our worst review we've had. 
 
Blake Oliver: [00:04:14] Worst review ever, but it is ... I would like to say it's not a bad review because it's a critical review, and I actually like getting critical feedback. I mean, I love the five-star positive reviews. Those are great and everything. Thank you, everybody who has left a glowing review. But take a listen to this review, and let us know what you think.
 
David Leary: [00:04:39] This was on Apple Podcasts. Go ahead. I'll let you read it. 
 
Blake Oliver: [00:04:48] So, this is Jay; Jay says, "I enjoy listening on my morning runs, but you guys are getting over-the-top, doomsday depressing. There are ways to track the PPP funds. Google the QBO solution. Your underlying anti-Trump tone forbids you to see the good going on with all the government funding. Any other president, and you might be less whiny about the efforts to help businesses, small and large. I know a lot of businesses that have received the funding, but you say it's not getting to businesses; perhaps because those businesses don't keep their books, so they are scrambling to apply? Why should a bank or my government give money to businesses who can't even show a 2018 return? How about being more helpful to those of us trying to build businesses and less dreadful about everything else? Jay." That was in specific regards to Episode 174, which I believe was our May 18 episode.
 
David Leary: [00:05:42] Yeah. It'd be two episodes ago.
 
Blake Oliver: [00:05:43] The last- yeah. 
 
David Leary: [00:05:44] But at that time, that would have been the fourth or fifth straight episode on PPP. So, feedback taken, for sure. We've been talking a lot about PPP, but, to some extent, there hasn't been any other news. Now, today, there's other news, finally. 
 
Blake Oliver: [00:05:55] Yes. 
 
David Leary: [00:05:55] I'm actually excited that we're getting back to the normal news cycle.
 
Blake Oliver: [00:05:59] I just wanna address the Trump thing because that is always the elephant in the room whenever politics is brought up. Everyone is ... It's like you hate him, or you love him. I would like to say, just for the record, I am a Republican. I dislike Joe Biden. I dislike Donald Trump. I don't like either of them, okay? That's just the way it is. So, I apologize if you really, really love Donald Trump. I'm just not a fan. I don't know, David, if you are willing to reveal your political persuasions or not or if that is too much. but I just wanna [crosstalk] 
 
David Leary: [00:06:32] -so, if we're gonna disclose here, I'm currently, right now, registered as a Democrat because, in the state of Arizona, if you register as an Independent, you don't get to vote in a primary. So, I temporarily changed my registration to Democrat, so I could vote against Joe Biden. So, that's where I ... That's kind of where I was on this stance. So, I have to switch it back, and I have to go through- jump through the hoops and switch it back to Independent, because that's the biggest party in Arizona. Now that you're here, you should think about joining the Independent party.
 
Blake Oliver: [00:07:01] Now that I'm no longer living in California, my vote matters, especially as a Republican. It's so exciting. Honestly, I don't know what I'm gonna do, but here's where I am critical. I'm critical of ineffective government response to a pandemic, and it's just been a disaster. I'm sorry, that's just the way it is; especially this whole stimulus thing, the PPP thing. We'll talk about it later. I have my opinions. I do not apologize for them. I will justify them. If I'm wrong, tell me why. If you have feedback for us, go ahead, put it in a review. We will read it on the air. If you have a specific issue, the best way to let us know and to make sure that we see it is to put that in a review. Please do. 
 
David Leary: [00:07:40] That's true. Put it in a review. My beef wasn't so- it's not so much ... Obviously, this got rolled out not perfectly. We can talk about that forever. The big problem I had is, on day one, within an hour and a half of this launching, the GOP, the Trumpers, the SBA, and the Treasury had an orchestrated campaign of tweets and social media go out touting how much of a success the PPP program was; how successful it was, when if you were talking to any accountants for two or three days before and that morning, you knew it was absolutely not a success.
 
Blake Oliver: [00:08:16] Right. 
 
David Leary: [00:08:16] That's the problem I had was the touting of this being the greatest thing since Tom Brady was born. It's completely ridiculous, and that's where I have a problem with it. It's the pre-celebration of something that was arguably still not a success. Paychex had a survey; they surveyed 300 business owners. They've been doing it every week. Only 29 percent have received their loan payment yet.
 
Blake Oliver: [00:08:40] Wow. 
 
David Leary: [00:08:40] We're still at basically a third have not gotten their cash. It's crazy. So-
 
Blake Oliver: [00:08:46] It is. So, Jay, thank you very much for the feedback. We really appreciate it. We hope you keep listening. Please continue to let us know your thoughts on ... Twitter is great, actually. I'm @BlakeTOliver, and David is at @DavidLeary.
 
David Leary: [00:09:01] We should get Jay a special shirt because Jay is ... Yeah [crosstalk] 
 
Blake Oliver: [00:09:06] Yeah, no, they- while you run, actually ... 
 
David Leary: [00:09:06] They blemished our perfect five-star record, and they should get a special trophy for that, for calling us out. 
 
Blake Oliver: [00:09:14] No, if the algorithms are working- if the algorithms are working properly, if you only get five stars, then it'll- it's not as good as if you get a mix of reviews. Okay, so, David, I think we should kick off with app news. What do you think?
 
David Leary: [00:09:27] Yeah, let's jump in.
 
Blake Oliver: [00:09:32] Xero released their earnings first, so maybe we should hit Xero, quickly?
 
David Leary: [00:09:36] Yeah.
 
Blake Oliver: [00:09:36] So, they had a fiscal year ending March 31, so a lot of this is not gonna be impacted by COVID yet. They reported 30-percent growth in operating revenue. They're up to $718 million, globally. They've had 26-percent growth in total subscribers; 2.285 million subscribers. Tons of growth in global, which means outside of Australia, New Zealand, North America; actually, quite a lot of growth there. Their North America subscribers grew by 24 percent, so they've got 241,000, now; although that still pales in comparison to the QBO subscribers in North America, as David will tell us ... Or not, right? Because I think Intuit stopped releasing subscriber numbers for QuickBooks?
 
David Leary: [00:10:23] Yes. Intuit stopped releasing subscriber numbers, but you can kind of step back and look at Xero's. I mean, they grew their subscribers over the year by 26 percent; The previous two or three years, I feel like QuickBooks, and Xero have both been growing subscriber base by almost 40 percent-
 
Blake Oliver: [00:10:37] 30, or 40, yeah. 
 
David Leary: [00:10:38] Yeah, so some things have slowed down, and it's not so much they slowed down because things are bad. They slowed down because it's just you can't maintain that pace. If you project this out, I mean, Xero's now at what? 2.2 million. Intuit probably grew it 20 percent, which means they added another million, which means QuickBooks Online is probably close to 5 million now, if not breaking 5 million. The numbers are still amazingly great. That's putting seven-eight million people on cloud accounting; that's still huge numbers. We can jump into ... You wanna jump straight into Intuit and [crosstalk] jump over to Sage, because Sage had interesting numbers, too.
 
Blake Oliver: [00:11:10] Yeah. Give me those numbers.
 
David Leary: [00:11:12] All right, let's take a look at Intuit. So, Intuit obviously saw a slide in revenue. Everybody's gonna see that for the last quarter. Then, then just for the listeners to be aware, Xero only releases numbers every six months. They're not on a quarterly basis. In the U.S., we're on quarterly basis, so it's very hard to get these things aligned. Then, on top of that, it's worse because Intuit's fiscal year, and Xero's fiscal years don't line up, either, so it's always been a bit of a game to compare apples to apples on these.
 
[00:11:39] Probably the main thing is the decline for Intuit was really due to the tax deadline getting extended. If you remember, the past couple years, Intuit keeps reporting ... Some of it's just because TurboTax is easier and easier and easier. People just wait til the last day to file. They just wait longer and longer and longer in the tax season.
 
Blake Oliver: [00:12:00] Yeah, that's me.
 
David Leary: [00:12:01] Right. So, now, since the tax season just got delayed four more months, all that revenue Intuit usually would have gotten by mid-April has now been pushed out to the future. So, it's a short-term hit they're taking on their consumer group, but it should pick up. When they get out to their end of next quarter, it should just recoup.
 
Blake Oliver: [00:12:18] Well, because, right now, the tax deadline is still July 15.
 
David Leary: [00:12:22] July 15, right now. If it got pushed out more, that would be a mess.
 
Blake Oliver: [00:12:26] Yeah, let's hope not. 
 
David Leary: [00:12:28] The Small Business Group, this is Small Business and Self Employed Group, the revenue's up 11 percent to $1 billion. The QuickBooks Small Business Online ecosystem, that grew 28 percent. I think the way they count the ecosystem revenue, it's all the add-ons to QuickBooks, but not Payroll, because I think they always report Payroll separately. Then, again, the Consumer Group revenue declined 15 percent. Usually, this is the quarter the Consumer Group revenue always grows. TurboTax just grows from the previous quarter year, and the previous year. 
 
Blake Oliver: [00:12:59] Right, right. 
 
David Leary: [00:12:59] So, that's been a little bit of a struggle for them. One interesting stat is they released the numbers about Online Payroll. So, Online Payroll increased 20 percent, year over year, until about mid-March. But since mid-March, it's seen 10 percent of workers drop out of their Payroll system, which I thought was a very encouraging number. If you think about QuickBooks Payroll, they have a million Payroll subscribers; average amount of employees is about 12. That's a lot of small businesses that use Intuit Online Payroll, and only 10-percent reduction in people getting paid by that system seems encouraging, versus 40 percent. Because, I mean, unemployment's now gonna be pushing 35-40 percent, so it seems- 
 
Blake Oliver: [00:13:38] Well, I wouldn't say it would go that high, but definitely 20-25 percent is possible.
 
David Leary: [00:13:45] So, that's probably encouraging for Intuit that they have a much lower number of people dropping out of their Payroll system.
 
Blake Oliver: [00:13:49] The question is when did that report ... What's the end date on that? Is that March 31?
 
David Leary: [00:13:54] Yeah, and this could be a temporary. Eight weeks from now will be the true test of the number, when PPP funds run out, and now you don't have any cash possibly to pay your employees, and now they're out of the payroll system. So, that's an interesting number to watch. The other one, they have a lot of loans receivables. They now have $89 million in loans receivable on the books. So, Intuit's cash and cash equivalents are now at $3.37 billion compared to January 31 of $1.64 billion.
 
Blake Oliver: [00:14:22] Yeah, so they're well-prepared to weather the storm.
 
David Leary: [00:14:26] Well, not just weather the storm, but ... We'll see this when we talk about apps. Xero and Intuit are gonna have to be banks [crosstalk] 
 
Blake Oliver: [00:14:32] Lend out money.
 
David Leary: [00:14:33] They're gonna have to keep lending money and become more of a bank. Like I said, we'll get into that. A couple other interesting things that'll carry us over to the Sage earnings ... Before we do that, I wanna tie Intuit's earnings back over to Xero. So, Xero's concerned about COVID's impact. Intuit, obviously, has those concerns, too, but Intuit has this historical perspective. What happens is when QuickBooks services the small business market, some firms are likely to fail, but what happens is you get all these new businesses taking their place because if you cannot get a job, you start a new business. This could actually bode well for QuickBooks, and Xero. I saw this, historically, the previous- the Dot-Com 1.0 bust, the 2008 crisis. Intuit, it really doesn't affect them. For every business that goes under, somebody new starts a business. It's just kind of they're recession-proof. I don't wanna knock on wood, or anything, or jinx anything, but ... That could actually be encouraging for Xero, as well. Then, the other piece from Intuit was some Desktop News. So Desktop ecosystem revenues were down six percent, year over year.
 
Blake Oliver: [00:15:33] No surprise.
 
David Leary: [00:15:34] One interesting other number that something was down is their tax-generated revenues by the ProTax group are down 18 percent. Now, I don't know if that's due to filing because I'm not totally- I don't totally understand that business model; if you're a ProSeries user, do you pay per return you file? Because everybody's [crosstalk] 
 
Blake Oliver: [00:15:49] Yes. Some of that work that way. You pay per return.
 
David Leary: [00:15:54] They touted about how to TurboTax Live, and QuickBooks Live are gonna keep helping them get new customers. Highest customer satisfaction scores ever for TurboTax Live. So, that's that. Then, let's tie this all the way back to Sage's earnings. So, Sage had their results come out last week. Sage, and Xero were last week, and Intuit was this week. So, pretty close timing. Really, the big thing, I think, from Sage's numbers is management's primary focus now is to migrate Desktop customers and attract new customers to Sage's Business Cloud.
 
Blake Oliver: [00:16:28] Yeah, well, should ... Hopefully. 
 
David Leary: [00:16:30] Sage finally is turning a corner. Their cloud solutions have delivered recurring revenue growth of 31 percent, and Sage Intacct delivering recurring revenue growth of 31 percent. So, it looks like the other Sage cloud products are kind of getting in line with the rest of the industry, as far as growth is concerned.
 
Blake Oliver: [00:16:50] Their revenue, overall, is up about two percent, so they're managing to convert these Desktop folks to Cloud and not lose money.
 
David Leary: [00:16:59] On their side, their Desktop revenue is down, as well. There's been a decline- now, they're okay with it because they expected this to happen because of their business strategy. I'm wondering if we're now finally, finally in the year where desktop starts to really die. Is this finally the year? I know we've been thinking, oh, it's gonna be 2016, 2017 ... 
 
Blake Oliver: [00:17:20] Yeah. If COVID is accelerating remote work, then it's gonna accelerate cloud adoption. You said it ... Did you not say this on the last episode, something about how the economy is being- the stock market is being held up by these cloud technology companies? That is what's supporting our entire stock market, right now, is belief that these companies are gonna keep growing.
 
David Leary: [00:17:44] Yep. 
 
Blake Oliver: [00:17:44] So, this is good. This is good for cloud. It's terrible for everything else, but it's great for cloud. So, that's it for earnings, right?
 
David Leary: [00:17:53] That's it.
 
Blake Oliver: [00:17:54] All right. Let's talk about features. What is new in the world of cloud accounting features? Because that, ultimately, is what is gonna drive the growth - that we make these apps better and better. Xero, released a new integration with Relay Bank. You've used Relay, right, David? 
 
David Leary: [00:18:11] Yes. Well, we use Relay for the podcast. They were a sponsor ... But, I use Relay, yes. 
 
Blake Oliver: [00:18:15] I've logged in like twice, and it worked great. You sent me an invite, and I was able to log into a view where ... Because you own the bank account, under your entity, and you were able to invite me to view just that one bank account, so I can have full visibility.
 
David Leary: [00:18:31] Yeah, it's kinda cool. I have three bank accounts, all at Relay Bank, but I wanted to have you to have visibility, so I spun up a new bank account and invited you as somebody who has View Only access, and you can get in there, and see it. It's almost like an accountant's use case.
 
Blake Oliver: [00:18:44] It's so cool. Relay, for those who aren't familiar, is a virtual bank. You can sign up for an account online through their app, on their website. They now have a deeper integration with Xero. So, what does that mean? It means you get a bank feed via API, not screen scraping. So, it's a native bank feed. It is updated every three hours and supports enriched transaction data in Relay that is piped into Xero. The really cool thing is that Relay will import unpaid bills from Xero into Relay for payment in Relay, and it does that every few hours.
 
[00:19:19] So, you could have a workflow, where you enter your bills into Xero through- either manually, or through some sort of document processing solution, like a Hubdoc, for instance. Then, it automatically pulls those bills into Relay so you can pay them. That's pretty neat. I mean, that, to me, is the future of banking - the way it should work with accounting software; rather than having to rekey stuff or rather than having the document go into the bill-pay solution and then, sync into the accounting system. That's just backwards.
 
David Leary: [00:19:48] Yeah. I mean, anything you can do to avoid gonna the bank website is huge, right? Did you see QuickBooks finally released their QBO bank statement fetching?
 
Blake Oliver: [00:19:56] Yes! People were really pleasantly surprised. I think we've been waiting like two years since this was announced at QuickBooks Connect.
 
David Leary: [00:20:03] I think people have been waiting even longer than that. I mean, it seems like such the obvious feature. You do a reconciliation, and you've gotta pause; go out to a bank website; download your PDF of your statement; bring it back ... Just the amount of clicking is crazy. So, now, when you go to the reconciliation screen, it just has your bank statements right there. They're just ready to go.
 
Blake Oliver: [00:20:20] That's really cool.
 
David Leary: [00:20:21] You can open them up ... Then, if you don't have the bank statement ... It's like a two-part feature. Let's say they can't fetch your bank statement; your bank's not supported. For example, Relay, you can't download the bank statement yet. But you can go, and you can attach a bank statement. When you're done with the reconciliation, you can- the PDF you took the time to download that you don't know what to do with, you can actually just attach it, so now it's the record ... The reconciliation and the bank statement are constantly tied together in QuickBooks. It's such an obvious feature. It's amazing that it's finally at market here.
 
Blake Oliver: [00:20:53] So, some other new features that came out in May, QuickBooks Online Advanced now supports 48 custom fields, up from 36, giving you up to 12 fields each for customers, vendors, sales forms, and purchase orders, and other expenses.
 
David Leary: [00:21:12] That's gonna be important because I think a lot- there's a lot of developers that have built very deep custom integrations to QuickBooks Desktop Enterprise, and a lot of that, they can't go to QuickBooks Online because of custom fields ... A lot higher ability to create custom fields in QuickBooks Enterprise and access that through the old QuickBooks Desktop STK. So, if you built an app, and you have a bunch of custom fields, you can't really go to QuickBooks Online. The app developers are gonna love this. I think Enterprise is, especially now, like you said, in the COVID era, are going to- they're gonna be able to move to QuickBooks Online when maybe they previously couldn't. 
 
Blake Oliver: [00:21:49] There have also been some updates to the Business Performance dashboard, which is an area in QuickBooks Online, where you can visualize your data. Now, you can compare periods when creating a custom chart. So, you can say, "Let me look at April 2020 versus April 2019." You can also import sales receipts in batch transactions in QuickBooks Online Advanced. Oh, and I should say that that Business Performance dashboard is also an Advanced-only feature.
 
[00:22:21] There is Workforce Bulk Invite in QuickBooks Online Payroll, so if you need to invite all the employees to go view their W-2s online, you can now do it all at once. Just put in their names, and email addresses, and send them an invite to do that rather than one at a time. In the Online Payroll, you can also have default hours now for employees. You can set default hours, and days, and that'll just flow through onto Payroll, every time you're in Payroll, rather than you having to remember to put in that information. That's it for QuickBooks. 
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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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David Leary: [00:24:10] Do you remember when we talked about Revolut? 
 
Blake Oliver: [00:24:11] Yes.
 
David Leary: [00:24:13] They are the fintech new bank out of Europe that people just love and now they're starting to come to the States. They had a lot of news come out this week. They're now partnering with Clear Books, which is an accounting software package in Europe. They're going in deeper with that. It sounds like kind of a little bit of a bank feed, but they're gonna tie it back to whether or not invoices are paid or outstanding. So, it feels like it's gonna be like a souped-up bank feed of some type. If you invoice out of Clear Books, and then you get paid through Revolut, it's going to tie that back together. The more impressive parts is Revolut's numbers. They already have 4,000 business accounts-
 
Blake Oliver: [00:24:49] Here in the U.S.. 
 
David Leary: [00:24:49] Not in the U.S., just overall. I think they still are just slowly trickling out. Not only that, they have their own Revolut Business  Connect ecosystem. So, they have an app store, and they're allowing their business accounts to more easily track expenses and match bills to invoices, which is kind of heading towards GL territory, right?
 
Blake Oliver: [00:25:08] Yeah.
 
David Leary: [00:25:08] They're kind of expanding down into that. It's amazing how fast - they only started in 2015 - like how fast they've came up to market.
 
Blake Oliver: [00:25:15] Yeah, that is amazing.
 
David Leary: [00:25:17] Then, you can set up rules, and smart rules, and matching in just one click. So, essentially, they are- they're going deep with an accounting system. But they also- apparently, they do integrate with Xero, and Slack, and Freeagent. So, they are integrating with other products, but no ... I don't feel like anybody's ever talked about the Xero one, or I just have not seen that one as of yet. So, obviously, Revolut, bank, small business, heading towards GL ... You know Shopify, right? We talked about Shopify two, three weeks ago. They're now Canada's biggest market cap company; the biggest company in Canada.
 
Blake Oliver: [00:25:49] I just bought something on Shopify.
 
David Leary: [00:25:50] Got it. So, Shopify has now- they're launching- they just announced they're gonna launch a product called Shopify Balance, which is a business account built for independent businesses and entrepreneurs.
 
Blake Oliver: [00:26:00] They're becoming a bank. 
 
David Leary: [00:26:02] They're becoming a bank, and they wanna help merchants manage their stores' money. Essentially, instead of you getting paid and then moving that money to your bank account, you're gonna keep it inside Shopify's world-
 
Blake Oliver: [00:26:12] You sign up ... Where you sign up for your online e-commerce store, and you get your bank account when you sign up, and it just stays in there. 
 
David Leary: [00:26:22] It just stays in there. Now, let's go to Square's recent news. Square released their earnings, and this is more indicative.
 
Blake Oliver: [00:26:30] Yes.
 
David Leary: [00:26:31] We'll just jump right to their cash app program. They have that cash app program. We talked about that before.
 
Blake Oliver: [00:26:36] Yes. This is the direct peer-to-peer payments app.
 
David Leary: [00:26:39] That's correct. Small businesses have it, but then consumers can get it, as well. Direct deposit volumes are surging three times, up to 14 million customers. So, people are connecting their traditional bank account to put money into their cash app bank account.
 
Blake Oliver: [00:26:54] Yep. 
 
David Leary: [00:26:54] Follow along on that ... Right now, customers have stored more than $1.3 billion in their cash balances in April. 
 
Blake Oliver: [00:26:59] $1.3 billion.
 
David Leary: [00:27:02] That's double the tally at the end of the year. They didn't break this down, of that $1.3 billion, how much of this is just small businesses just keeping the money in there instead of moving it back to their traditional bank [inaudible]. 
 
Blake Oliver: [00:27:11] Hey, so speaking of Square, their big competitor, Stripe, just raised a bunch of money. They raised $600 million at a $36 billion dollar valuation in a Series G extension. Stripe now says it has $2 billion on its balance sheet. Series G, I didn't even know the alphabet for startups went that far. That's amazing, right? 
 
[00:27:35] Why are they raising all this money? They don't need it to fund operations, most certainly, considering how much cash they generate, right now. It's gotta be for lending, because Stripe, just like Square, is doing a bunch of lending to its customers, where you can essentially factor invoices. They have all this data on you because they can see into your bank account and then, they can just withdraw the payments automatically, which reduces so much risk.
 
David Leary: [00:28:05] Then, Kabbage was in the news a little bit. Kabbage, I think in March, we talked about how Kabbage- they furloughed lots of employees. 
 
Blake Oliver: [00:28:14] Yeah. Kabbage, again, for those who aren't familiar, a fintech lender for small business, so small loans. 
 
David Leary: [00:28:22] They're small loans, but they're also pretty much focused on inventory gaps. Maybe you had a seasonal business; they could help you stabilize that cash flow. It's like a line of credit. You can get some loan; pay it down. They started to get a little bit more traditional loans, but, to some extent, when everything went crazy here, they were ... They had increasing debt on their balance sheet. 
 
Blake Oliver: [00:28:43] They reminded me of payday loans for businesses, essentially-
 
David Leary: [00:28:45] You could say it that way, yeah.
 
Blake Oliver: [00:28:47] That's what it was ... It was high interest rates, short-term, low-dollar-value loans that were automated through a QuickBooks connection, or a Xero connection. They weren't really meant for more than a month or two, right? 
 
David Leary: [00:29:03] Yeah, and I know we talked about, last week, there was some Twitter chatter about them doing PPP loans. There are some numbers that have came out. They've issued 110,000 Paycheck Protection Program loans for more than $3.5 billion. It's  interesting, they've received $175 million in fees. So, really, they found a new revenue place because they didn't get into the PPP loan- they're not giving out normal loans ... Who's gonna take a 30-percent loan out right now, or 29-percent- very high-rate loan? They really kind of not saved themselves, but kind of survived, themselves, because of the PPP.
 
Blake Oliver: [00:29:40] Did they say the average amount of those loans? I mean, we can figure it out from the numbers. What was it, $3-point-something billion?
 
David Leary: [00:29:47] Yeah, the average loan amount was $31,000, with a median of $14,000, which I think we talked about QuickBooks two weeks ago. They said theirs was $7,200 or something. 
 
Blake Oliver: [00:29:57] There's was even smaller, yeah. 
 
David Leary: [00:29:59] So, Kabbage did loans that were a little bit bigger. We can talk about- there's a payroll company that's coming on the market called Deel, D-E-E-L. They raised $14 million just to do remote-worker payroll services. I don't know enough about what they're doing, but it sounds like this is more of a global payroll product because they say that it uses just one single software for this purpose as opposed to a multitude, like many others have used in the past. So, if you have just U.S. employees, maybe this doesn't make sense, but if you have employees in a foreign- other countries, think about outsourced labor, that's what I think they're solving for. Now, with everybody going remote, maybe they have a bigger opportunity here. So, things are good for Deel. Then, Zenefits ... Remember good ol' Zenefits?
 
Blake Oliver: [00:30:47] Yeah, well, driving around Phoenix, I see the Zenefits sign on the building over near ASU.
 
David Leary: [00:30:56] Okay, so it's still around, still around ... They went from the fastest growing SaaS startup behind Salesforce. Salesforce was always the fastest; then Zenefits was the fastest; then everything went bad. Bad news for Zenefits, right? They were found out- people were cheating on the insurance exams to get certified. They had employees doing inappropriate things in that building you drive by in Phoenix. There's not a lot of ... 
 
David Leary: [00:31:23] There's an article about their headcount. Over the last four years, their headcount's been slashed by 52 percent and now, they're noticing- somebody's noticing that their openings on LinkedIn, their job openings, there were like- it was about 28 positions were open at the start of the year; then it dropped to nothing; then it went back up again, in March, and now it's completely gone. They've always had ebbs and flows, but this year it's really been erratic. They said the only thing up for Zenefits is their Twitter account. 
 
Blake Oliver: [00:31:49] Why is that? 
 
David Leary: [00:31:51] I have no idea [crosstalk] They've gained more Twitter followers, but, in general, things are not going well for Zenefits, considering Gusto, OnPay, Rippling, who actually is the former founder of Zenefits ... All these payroll companies seem to be doing well and growing to some extent, and Zenefits continues to struggle.
 
Blake Oliver: [00:32:12] Well, I have one last piece of app news, which is blockchain-related. So, ding, ding, ding, you get to fill that out on your Bingo card today. Grant Thornton has released inter.x, a blockchain platform for managing intercompany transactions. The firm has implemented the new platform in-house, but it is also available to clients to manage dealings between financial entities of a business, which account for 30 to 40 percent of the global economy.
 
[00:32:42] Now, normally, David, as you know, I am a blockchain skeptic. I find most of the blockchain stuff out there to be completely ridiculous. Thankfully, during coronavirus, all of that thought leadership about how blockchain is going to eliminate the audit profession has disappeared. Blockchain is no longer going to destroy accounting and all that. But I think this is a really cool application of blockchain and, potentially, an incredibly useful one. 
 
[00:33:08] Intercompany transactions being all the things that happen between businesses that have common ownership. According to generally accepted accounting principles, you have to eliminate those transactions when you present your financial statements. Pulling that all apart after the fact is really difficult, but blockchain could potentially automate that in the same way that bank feeds automated bank reconciliations, to a large extent.
 
David Leary: [00:33:34] I think we talked about app before that does that, called Modern Treasury. I think there's a SaaS startup that's kind of in that same space now.
 
Blake Oliver: [00:33:42] It's really cool. Of course, the devil is in the details. You've got to figure out how to get this blockchain app to integrate with all the ERP systems for all of the entities and configure it properly in order for this to work. So, there's gonna be plenty of work for accountants keeping this whole engine running as opposed to doing the eliminations manually. Pretty cool. Go check it out. Link is in the show notes to the article in Accounting Today. Shout out to Accounting Today for covering that.
 
David Leary: [00:34:13] There's two articles in Accounting Today that- I don't know if we wanna go deep on these, but Mazars creates another PPP analyst tool. That was a press release in Accounting Today [crosstalk] -I think they were charging like two grand for a spreadsheet template before. Then, Crowe has created a PPP loan forgiveness management solution, but for lenders. They've created a set of tools ...Because the lenders probably ultimately don't wanna deal with any of this. They probably even have requests for work out there with the big firms.
 
Blake Oliver: [00:34:46] This is the whole thing about PPP that is the big unknown and just seems insurmountable in many ways, to me. How are the banks and the SBA gonna process all these loan forgiveness applications? It was hard enough for them to process essentially a one-page application with one number on it. Imagine this really extensive loan forgiveness application, which requires you to do calculations for every single employee. Who's gonna validate this stuff. I think it's just gonna end up getting shoved through and approved.
 
David Leary: [00:35:16] They're either gonna- it's either gonna be outsourced to all the big firms, and they're gonna create little factories, and do all this. They're the ones that are gonna make a bunch of money, or it's all gonna get rubber-stamped. It's one or the other that's probably gonna happen. 
 
Blake Oliver: [00:35:28] If they outsource, David, then hopefully, they won't follow the trend of what's happened in the UK, which is-
 
David Leary: [00:35:35] What happened there? 
 
Blake Oliver: [00:35:36] The UK government has outsourced some aspects of their coronavirus response to Deloitte, and apparently, Deloitte hasn't done the best job, according to small businesses, when it comes to sourcing PPE; not property, plant, and equipment. We're talking about personal protective equipment. The UK government- the Prime Minister's office put Deloitte, in the UK, in charge of presiding over a system for providing PPE to the National Health Service staff. They set up an email address where all the small businesses that produce PPE in the UK could send offers- 
 
David Leary: [00:36:15] It's like the PPE eBay.
 
Blake Oliver: [00:36:17] Yeah, it's [crosstalk] government needs PPE. Here's a place where small businesses who produce it can go send their quotes. Apparently, it's been a disaster because the business owners haven't been getting responses. Deloitte has not figured out how to staff this thing, and it's  completely useless.
 
[00:36:33] There are some really great quotes. "Hiring Deloitte to manage PPE procurement was a funny thing to do. If there's a fire, you don't call the auditor, you call the fire service." That's a clothing manufacturer based in northern England, as told to openDemocracy. "The firm has been offering to make medical gowns since mid-March and has not yet been able to contact anyone."
 
[00:36:54] "Deloitte has been useless!" says Kate Hills, the founder of Make It British, which promotes brands that manufacture in the UK. "They have been an unnecessary step in the process; another middlemen only focused on price." 
 
[00:37:04] "This is yet another story of a government project being handed over to an outsourcing company, like Deloitte, which has failed to deliver, and which lacks any transparency," said Labour's Reeves, echoing calls from the campaigners who say the government's COVID-19 deals must come under more scrutiny." Now, granted, that's a Labor Party person opposing the current government, but ... 
 
David Leary: [00:37:22] So, what you're suggesting - if Big Four gets involved in processing these PPP forgiveness applications, it's only gonna get worse.
 
Blake Oliver: [00:37:30] It's just gonna get worse. 
 
David Leary: [00:37:30] It's not gonna help the banks [crosstalk] 
 
Blake Oliver: [00:37:32] Well, think about it, because the way they're gonna charge the government is by the hour. so they've got no incentive to ... 
 
David Leary: [00:37:37] Oh, that's right [crosstalk] 
 
Blake Oliver: [00:37:37] Yeah, so that's the problem [crosstalk] 
 
David Leary: [00:37:41] Billable hour.
 
Blake Oliver: [00:37:42] So, anyway, don't hire Deloitte to do this. Yeah. There's a great article in Going Concern about the same thing. Pretty funny quotes. It's just apparently the manufacturers have had better luck just contracting directly with different NHS offices.
 
David Leary: [00:37:56] So, last week I talked about how the AICPA- I couldn't find the link to their forgiveness spreadsheet. They created an Excel file. So, it turns out-
 
Blake Oliver: [00:38:04] They put out a press release, but there was no link to the actual file- 
 
David Leary: [00:38:08] No link to that. Since then, I've seen dozens and dozens of accounting firms- everybody and their brother is building either an Excel template, or a Google sheet for forgiveness templates. We just wanna put out a warning that everybody has to be very, very careful. So, Microsoft just alerted everybody - Microsoft Security Intelligence - that they're tracking a massive campaign that delivers a legitimate remote-access tool ... Basically, your whole system's compromised, via an Excel macro. They have about 100 different versions of this Excel spreadsheet, basically called COVID-19 Data.
 
Blake Oliver: [00:38:42] Oh, no ... 
 
David Leary: [00:38:42] It's being sent out as an attachments. People are like, "Hey, check out this. It's the Arizona COVID deaths ..." and you forward it on to somebody. 
 
Blake Oliver: [00:38:52] They open it.
 
David Leary: [00:38:53] Now you're infected. So, I'm not saying that this is happening, but if I was gonna be a hacker, I probably would create a loan forgiveness spreadsheet next time, right? 
 
Blake Oliver: [00:39:01] Yeah. 
 
David Leary: [00:39:01] It makes a lot of sense. Not only that, I would be able to compromise better computers because it would be business computers instead of personal computers, probably. So, just be really aware ... It might be even proactive just to remind your clients: "Don't click on forgiveness spreadsheets unless you ask me first." 
 
Blake Oliver: [00:39:20] Well, this is one of the reasons why I prefer Google Sheets to Excel. I know it's heresy to say that for a lot of people, but Google Sheets works in your web browser. It doesn't have access to your local system, and it's in a sandbox in Chrome. As far as I know, it's impossible for a macro in Google sheets to infect your computer. So, that's the solution to this. The calculations are not that complicated. Google Sheets can handle it.
 
David Leary: [00:39:45] Yeah, the danger in the Google sheets problem is the plugins for Google Chrome. That's the danger in that. Somebody's like, "Hey, here's a forgiveness plugin," and you install that to your Google Sheet, and now you're in trouble. Just really warn your clients, right now, because they're everywhere. Everybody and their brother is releasing a PPP Forgiveness Excel file.
 
Blake Oliver: [00:40:07] Yep.
 
David Leary: [00:40:08] I'm sure, three weeks from now, there'll probably some ... One of these spreadsheets are gonna be infecting people. It's just only bound to happen. If it happens, it wasn't me! It wasn't me, folks!
 
Blake Oliver: [00:40:19] So, you brought us into PPP, so shall we talk about the latest guidance? I have digested it.
 
David Leary: [00:40:24] Oh, good, good. Go for it. 
 
Blake Oliver: [00:40:24] On Friday, The Wall Street Journal reports that SBA released their 14th interim final rule. So, who knows how many interim final rules we will have to have before we get to the final rule? These are not the final rules, but we have a little more clarification; unfortunately, on the really important stuff, we don't have guidance.
 
[00:40:46] We don't have guidance that clarifies who is eligible for the program beyond what we have already talked about. All that stuff about necessity, certifying the need, whether you have access to outside capital ... None of that is really clarified any further in this. It doesn't change the 75-percent payroll requirement, which, by the way, was never mandated by Congress. SBA could change that, if they wanted to, because they made up that rule, and they didn't take it out.
 
[00:41:15] Here's what we do know. The SBA is saying that they may review PPP loans, "of any size, at any time, in SBA's discretion," which conflicts with what I have heard in the news about how they're not gonna audit people under $2 million. That's what Mnuchin was saying lately. So, I don't know what's up with that? 
 
[00:41:33] They're saying that you have to retain documentation for six years after the loan is forgiven or paid in full, which suggests that they could come back and audit you six years down the road. Companies seeking loan forgiveness have to alert state unemployment offices if workers refused requests to return to work. That is gonna be awkward. Businesses won't be subject to reduction in loan forgiveness if employees refused to come back to work. That's pretty much it. It just formalizes a lot of the info that was provided with the forgiveness application that came out last week.
 
[00:42:04] By the way, that forgiveness application is ridiculous. Accountants have a hard time figuring out the loan forgiveness application. What are the chances that your regular business owner, who doesn't have access to accountants ... What are they gonna do? It's just- it's way too complicated, and they have to do something to fix this. Congress, the Senate adjourned over the Memorial Day weekend until next month. Well, actually, I don't know when they come back, but they adjourned for Memorial Day weekend without doing any of the stuff they were talking about, without extending the PPP window, which is what Marco Rubio was trying to get. He wanted to extend it from eight weeks to 16 weeks.
 
David Leary: [00:42:46] Yeah, he wanted legislation passed to make PPP forgiveness easier. 
 
Blake Oliver: [00:42:52] Yeah. I like to make fun of Marco Rubio a little bit, but he's doing good work here. This needs to happen. The problem is that, under the current rule, the earliest recipients of the PPP funds, the people who got it right away, have to finish using those funds by May 29, which is ... We're recording on Sunday, May 24; so five days from now. What are the odds that the Senate is gonna come back on ...? Do they come back Tuesday? I'm not sure. What are the odds they're gonna come back next week, pass a law, get the House to pass it, get the President to sign it?
 
David Leary: [00:43:25] This Rubio bill, is this is this separate from the $3 trillion stimulus package that Pelosi, and the Democrats pushed through the House, and they're waiting on the Senate now?
 
Blake Oliver: [00:43:36] Yes. 
 
David Leary: [00:43:36] So, it's different. It's not wrapped up in that; this is a standalone thing- 
 
Blake Oliver: [00:43:40] The problem is that the Democrats in the House have put some new stuff for PPP in that $3 trillion bill, but that bill, as we discussed last episode, is dead on arrival. Senate's not gonna consider it. The House wants to actually remove the requirement that 75 percent of the money be used on payroll. That was in the House bill, I believe. That's not gonna pass. The House bill also would give people 24 weeks to spend loan funds.
 
[00:44:10] I think there's a big question, or just this bill doesn't know what it wants to be- or this program doesn't know what it wants to be. Is the Paycheck Protection Program for employees, or is it for small businesses? Because if it's for small businesses, then all these restrictions, and all these complications are really bad and don't fit the intent. If it is, in fact, for employees, then, yeah, that's why you put in these restrictions. But it would have been better just to put more money into unemployment or just more money into stimulus payments, rather than trying to funnel money to employees through this convoluted process. That's just my opinion.
 
David Leary: [00:44:45] Other people's, as well. I think I saw Mark Cuban ... Basically, he's putting a fork in it. He's just like, "The PPP program is a complete failure. Let's move on. Let's just send every single person $1,000 every week. That'll help increase spending on the bottom side of this." So, yeah, I think, to be honest, Cuban's making a play at running one day for politics [crosstalk] not this year, but he's making a play. Did you see the Texas man who was- he's the latest PPP fraud? 
 
Blake Oliver: [00:45:15] No. What happened to him?
 
David Leary: [00:45:16] He tried to get over $5 million in forgivable loans. Basically, he sought millions from two different banks by claiming he had more than 400 employees, when he actually had zero employees. He used a name generator to create a bunch of fake employees, and he created fake reports, and he applied for the loans. They're getting him on wire fraud, bank fraud, loan fraud, false statements to the SBA lenders, et cetera ... It's pretty gutsy. I mean, that's a huge claim-
 
Blake Oliver: [00:45:50] Did they say how they caught him? Because I'm wondering if ... Maybe he used a name generator that was for fantasy board games, or something, and everyone sounds like they're from Lord of the Rings ... 
 
David Leary: [00:46:05] So, in his first application, he claimed he had 400 employees and an average monthly payroll of $2 million  and obviously, he didn't [crosstalk] 
 
Blake Oliver: [00:46:13] That's ridiculous because it's way more than ... Yeah, he should have just done a much smaller amount, and would have probably gotten it through, right? 
 
David Leary: [00:46:20] Then, in the second application, Yates said here he employed 100 individuals and obtained a $500,000 loan. So, he actually got the other- the second loan. He obtained- Yates submitted a list of faux employees he obtained from an online name generator- 
 
Blake Oliver: [00:46:35] That's amazing. 
 
David Leary: [00:46:35] -and submitted forged tax documents for each application ... You're right. If he would've kept it under $2 million, he probably- nobody would've noticed [crosstalk] just make sure the math is a little insane.
 
Blake Oliver: [00:46:45] He went too big. He got greedy. 
 
David Leary: [00:46:45] Yeah, he shouldn't have done that. Here's the good news. For those of you that think, hey, we're hammering on the U.S. too much about the failure of the PPP. I know you touched on, and I've seen this with our UK accountant friends ... There they have- they call it a scheme. That's the official name of this.
 
Blake Oliver: [00:47:03] I think it's so funny. Scheme is not a negative thing in the UK. 
 
David Leary: [00:47:06] They call it a scheme. But then, also, we have our Australian counterparts, and I've been watching the JobKeeper program in Australia from the side. Their program was misstated from 6.5 million workers and had to be revised down to 3.5 million workers.
 
Blake Oliver: [00:47:24] People receiving benefits or what?
 
David Leary: [00:47:27] Because the reported figure ... When you're a small business owner, and you're filling out the form, apparently the form allows ... The way this works - I don't know all the exact math - you get $1,500 per employee. What's happening, a bunch of employers that had one employee were check-marking the box that they had 1,500 employees. The form, itself, was confusing. 
 
Blake Oliver: [00:47:49] Oh, got it. 
 
David Leary: [00:47:49] So, 500 businesses claimed they had 1,500 employees.
 
Blake Oliver: [00:47:55] Just because the form was confusing.
 
David Leary: [00:47:57] So, the original estimates the Treasury was putting out in Australia was ... They were talking about they were gonna have to subsidize wages for 6.5 million workers.
 
Blake Oliver: [00:48:05] Oh, that's great.
 
David Leary: [00:48:06] Now, it's really only 3.5. This is not ... All the governments suck at this. There's nobody doing this the right way, and the best way. They're all taking different approaches, and nobody's doing it right. So, just rest assured, this is not us going after the U.S. government thing. They all suck at it.
 
Blake Oliver: [00:48:24] Well, big news in remote work, if you don't mind flipping over to that topic for- to [crosstalk] things out. I didn't get to mention this last time; it's so fascinating, actually. Maybe a lot of people didn't notice, but the House of Representatives recently acted to change their rules to allow remote voting, and virtual hearings. This is the first time in American history - in the history of the United States - that the House of Representatives has allowed remote voting.
 
[00:48:55] Now, they're saying it's gonna be a temporary thing, but I imagine they'll keep this in their back pocket in case there's another need for it. You could make the argument that, yes, national security demands that they be able to operate remotely. Just to put this in perspective, the Philadelphia yellow fever outbreak of 1793 didn't do this. The Spanish influenza of 1918 didn't do this. Not even the September 11, 2001 attacks did this. So, you wanna talk about an era of remote work? When the U.S. Congress adopts remote work - at least half of it; Senate still hasn't done that, but the House did it - that's a big deal. That's a moment! I think this will be in the history books.
 
David Leary: [00:49:39] This is kind of scary because they already don't go into work enough, arguably, right? Now, tons of people are gonna be no shows on these votes.
 
Blake Oliver: [00:49:48] I think this is a great thing because it means that representatives will get to spend more time with their constituents rather than going back and forth. I think one of the-
 
David Leary: [00:50:00] You mean their donors? Their donors are their constituents.
 
Blake Oliver: [00:50:02] Hopefully, they'll add their constituents along with the donors. Right now, the problem is they're traveling back and forth so much. It's a tough job to be in Congress. They work a lot. They have to have two different homes. So, I think maybe this will open up the job and make it more attractive to people who otherwise wouldn't do it. That's good because you want better people in Congress, right? It's like any job - when you make the job easier to do, and more open, and accessible, then you get more candidates. So, to me, this is a great thing.
 
[00:50:35] Part of the argument against having remote Congress is the same arguments you hear from accounting firms saying that we can't work remotely. "Oh, we have to have that in-person collaboration. You need to be able to slap somebody on the back, and look somebody in the eye ..." Really? We can't figure out other ways to do this. They can't at least operate remotely some of the year? I mean, there's a lot of state legislatures that don't even come into session more than two times a year, anyway, so this could just allow them to sort of meet in the middle, do something ... At least be able to do work while not having to be in Washington.
 
David Leary: [00:51:14] I can only imagine these Zoom calls.
 
Blake Oliver: [00:51:16] Sometimes, I'm very negative about our government, but I think this is a great thing. This is a good thing, and the Senate should do it, too. It's important. One other funny story about remote work, David. There is one country in the world that is taking remote work more seriously than any other country, and that is - no surprise - Singapore, which tends to do everything very seriously, it seems, at least as an outsider.
 
[00:51:42] A judge in Singapore has sentenced a man to death via a Zoom video call for his role in a drug deal. One of just two known cases where a capital punishment verdict has been delivered remotely. So, if you thought it was bad that companies are firing people via Zoom, at least they're not executing people via Zoom. 
 
David Leary: [00:51:58] I saw that Weight Watchers this week let go of everybody via Zoom. 
 
Blake Oliver: [00:52:03] They did. They did a bunch of terminations, yeah [crosstalk] What else are you gonna do? Call people into an office, give them coronavirus, and then send them on their way?
 
David Leary: [00:52:10] Well, I think the problem- the beef people are having is they're not one on one. You're not getting a one-on-one heads up. You're just getting into a Zoom call that you wouldn't- you really don't know what's going on. Because I'm sure the hallway chatter is slower now.
 
Blake Oliver: [00:52:25] Right. 
 
David Leary: [00:52:25] Like, "Hey, I heard layoffs are coming ..." I think some of the hallway chatter may be a lot slower. That, I don't know, actually, because I'm not ... It's gotta be slower because I'm not I'm not getting any rumor-y hallway talk, right now, from anybody, so it's gotta be slower. So, that's something to keep an eye on with remote work. There's a story we ought to at least just keep our eye on. Did you see that there's a class action suit representing the accountants against the banks?
 
Blake Oliver: [00:52:51] No! Tell me about this!
 
David Leary: [00:52:53] The agent fees ... So, this is an opinion piece that was written. It's arguably not an opinion piece, but it's an independent contributor on Forbes. There is a law group. It's Michael Adler of GrayLaw Group, Inc. has started the ball rolling on a class action lawsuit. Basically, 19 lawyers are involved to represent the accountants for ... Traditionally, with loans at the banks, you get that agent fee, right?
 
Blake Oliver: [00:53:21] Yeah.
 
David Leary: [00:53:21] With PPP, you could not get it [crosstalk] 
 
Blake Oliver: [00:53:23] -about this, six weeks ago, when the program started.
 
David Leary: [00:53:27] Loosely, we've done the math before. The banks stand to make, what, $25 million, if not $30 million- I'm sorry, $25 billion, if not $30 billion?
 
Blake Oliver: [00:53:36] Yeah. It's between one and five percent of all of the money for the whole program, which is up to $600 to $700 billion. So, yeah, it's a lot of money.
 
David Leary: [00:53:49] Yeah, so there's a lot at stake here. Then, accountants really couldn't charge for doing the application. They weren't getting a fee back. Now, I actually believe there's ... If this gets rubber-stamped, everything's gonna get forgiven. I truly, deeply down, believe that. Which now means all the work accountants or bookkeepers could do to charge to fill out that forgiveness paperwork isn't gonna be necessary. So, accountants are really left holding an empty bag.
 
[00:54:14] This is gonna be something to watch - this a class action suit. Now, what this will mean is every accountant, or bookkeeper will get a check for a dollar, when it's all said and done because the lawyers are gonna take the rest of it. The interesting thing from this article, a sentence I liked, was, #TaxTwitter transformed itself into almost all Paycheck Protection, all the time." That's really true, so it's not just us who were just Payroll Protection Program for the last six to eight weeks. All of Twitter was.
 
Blake Oliver: [00:54:41] Yeah. 
 
David Leary: [00:54:41] That's all anybody's talked about. It's a little bit- it's been crazy. Unfortunately, there's still no end in sight. There's no resolution on this.
 
Blake Oliver: [00:54:49] Well, hopefully, Congress will come back, and do something sensible, and make this simpler, this week. It needs to happen ASAP because, like we said, a bunch of businesses are gonna- they're gonna hit the end of that eight-week period this month.
 
David Leary: [00:55:05] I got my loan five weeks in, and I've had it now for three weeks. So, yeah, we're in week eight, and nine, right now.
 
Blake Oliver: [00:55:12] They've gotta act soon. So, hopefully those senators will have a nice Memorial Day weekend, relax a little bit, and come back refreshed so they can fix this.
 
David Leary: [00:55:23] Maybe they'll listen to the podcast a little bit.
 
Blake Oliver: [00:55:25] Maybe they will. That's all I got, David, for this week. Plenty more for next week, I'm sure. If people wanna reach you in between episodes, let you know what they think, where should they go?
 
David Leary: [00:55:37] Couple of options. You can get ahold of me on Twitter, or LinkedIn. I'm @DavidLeary; very easy to find. You can also give us a phone call.
 
Blake Oliver: [00:55:45] Yes! (202) 695-1040. That is (202) 695-1040. Give us a call. Leave us a message on our Google Voice. We'll take a listen, and we might even play the audio on the air. As I mentioned at the beginning, if you wanna let us know what you think - positive, negative, either way - please write us a review. I really appreciate these reviews. I had the feeling we were getting a little crazy on the PPP and maybe a little bit over the top on the politics. It's good to hear that from people. We wanna cover what you wanna hear. So, if you liked the focus on the app news that we did more, if you prefer the PPP, or you've got other thoughts, write a review; let us know. You can reach me on Twitter. I'm @BlakeTOliver.
 
David Leary: [00:56:30] That's a wrap.
 
Blake Oliver: [00:56:31] Have a great Memorial Day weekend, David, and I'll see you here next week.
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