Accountants favor Trump in election by large margin; New Job Cuts at CPA Firms; Is It Insane to Start a Business During Coronavirus? Millions of Americans Don’t Think So; Not One PPP Loan Has Been Forgiven; Trump's tax returns show chronic losses and years of income tax avoidance; FreshBooks Buys Mexico's Facturama; Intuit launches new QuickBooks Commerce platform; 2 Shopify Employees Took Consumer Data; Avalara debuts suite for alcohol industry; Blackbaud Ransomware Breach Victims, Lawsuits Pile Up; QuickBooks Recurring Transactions now available to third-party apps; New audit evidence standard allows for non-human evidence collection.
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David Leary: [00:00:21] I think the accounting industry might skew a little toward Republican, a little, so I'm gonna say it's 58% Republican.
Blake Oliver: [00:00:30] Well, you're very close. 55% of accountants plan to vote for Donald Trump and 38% plan to vote for Joe Biden; 7% are voting for someone else — I assume that's gonna be somebody Libertarian ...
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Blake Oliver: [00:03:03] Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
David Leary: [00:03:06] I'm David Leary.
Blake Oliver: [00:03:07] David, what were you up to this weekend that we are recording on Monday morning?
David Leary: [00:03:10] I went up to Phoenix from my sister's 40th birthday party and, obviously, you're in Phoenix, I'm in Phoenix ... But for those of you that aren't familiar with Phoenix, I was still like 55 miles away from Blake even though we were in the same city.
Blake Oliver: [00:03:24] Phoenix is like the state. It feels like it just goes forever. I still haven't explored even a tiny fraction of it.
David Leary: [00:03:31] Yeah, and to try to ... "Oh, yeah, sure, Blake. Let's try to connect and record in person ..." It just wasn't logistically gonna happen, so that completely got scrapped, and here we are, Monday morning.
Blake Oliver: [00:03:41] I am really excited because I have some good news — a good news story this week to share with you — which is all about the new businesses that are starting up amidst all the shutdowns that are happening. Creative destruction is something that happens in a downturn, where businesses that can't survive go out of business, which creates opportunities for new ones to spring up. We can talk about that. I don't know? What's on your plate, David?
David Leary: [00:04:05] We could try to touch the New York Times article that came out about Trump's taxes, but it literally took 50 minutes to read the article. I don't even know how to ... I don't even know where to start digesting it. It's a gigantic article that came out-
Blake Oliver: [00:04:19] To be honest, I haven't read the article, but I could give you my hot take on it without having read it. We'll pretend that we're on Twitter, and people don't read the articles [crosstalk] just the headlines. I'll give you that. I have a survey of accountants and who they plan to vote for. Since we're talking politics, and we're getting close to the election, maybe we can successfully do that without alienating our entire listener base. A ransomware attack, big ransomware attack against Blackbaud; possibly one of the biggest ransomware attacks that we've ever talked about. Then I've got a just a ton of updates. I know that QuickBooks released their new e-commerce solution that's built into QuickBooks Online. That's a pretty big deal. What else? You posted something about an API that is a really interesting change to QuickBooks with recurring transactions.
David Leary: [00:05:05] All right. Thank you for reminding me about it. I totally forgot I did that. That's the way this week's gone-
Blake Oliver: [00:05:08] Yeah, well, I've been following you. I've been trying to keep up with all your happenings. You're a busy guy. We have some reviews, right? We got a couple of voicemails that we gotta get to, and we got some reviews.
David Leary: [00:05:20] Let's knock out the reviews really quick because one was pretty funny.
Blake Oliver: [00:05:22] Okay, let's do it.
David Leary: [00:05:23] This is a five-star review from Daniel Sears. This is on Podchaser. "Not a bot, but my twin brother is totally a bot. Very smart commentary." That's his review. Simple as that.
Blake Oliver: [00:05:33] I love it. Short and sweet. Thanks, Daniel — if that is your real name. Our second review is from Tyler Trenda; five stars "New to the field — I'm just starting out in the Accounting/Bookkeeping field and looking to start my own small bookkeeping business. The Cloud Accounting Podcast has been a great way to get up to speed with the current events happening in the Accounting space. I've sent a couple of emails out to Blake directly and he has responded promptly and provided invaluable knowledge to me. Love the show and I'm always listening at work." Awesome. Thank you, Tyler!
[00:06:04] I've actually saved a couple of emails from Tyler, just in case we needed something to talk about. I think those were some great questions. Tyler was asking if there are any certifications he should look into getting, beyond the QuickBooks ProAdvisor program should he having an associate degree in accounting and being a certified QuickBooks ProAdvisor program. Should he, having an associate's degree in accounting and being a certified QuickBooks ProAdvisor, should he look into getting the certified bookkeeper license?
[00:06:30] Now, I'm aware of that license and I actually, at the very beginning of my bookkeeping career, considered doing that. I did not because then I ended up taking that long arduous path to the CPA, but I'm curious to know if anyone out there is a certified public bookkeeper who's listening, and if you have any thoughts on that. If you do, maybe you could give Tyler some advice. So, if you wanna call and let us know what you think, we have a voice mail number. It's a Google Voice number. It goes straight to voicemail; you can call it. That number is (202) 695-1040. Give us a call. We'll take a listen, and we might even play it on the air.
David Leary: [00:07:08] Do you wanna talk PPP really, really quickly?
Blake Oliver: [00:07:10] Yeah, I saw there was a few updates.
David Leary: [00:07:14] So, let's quiz you, Blake.
Blake Oliver: [00:07:15] Uh-oh ...
David Leary: [00:07:15] How many PPP loans have been forgiven to date?
Blake Oliver: [00:07:18] Probably not many, right? I think most people are holding off on forgiveness.
David Leary: [00:07:23] What'd be your guess? Because there's been millions of loans, right?
Blake Oliver: [00:07:25] Yeah.
David Leary: [00:07:25] What's your guess?
Blake Oliver: [00:07:27] Maybe a few hundred thousand?
David Leary: [00:07:30] Zero? How does zero sound?
Blake Oliver: [00:07:33] I filled out my paperwork, and I still haven't heard back, so I guess I'm not the only one? What's going on?
David Leary: [00:07:41] Some lenders are accepting people's applications, but the Treasury Department and the SBA, they're just not ... None of them have officially been forgiven yet. I think they're in one of those stalls. I think we're gonna see this automatic rubber-stamp forgiveness because they obviously don't have the program and procedures to do it. The reality is, if you think about it, if there's gonna be some ... There's gonna be another round of stimulus.
Blake Oliver:[00:08:03] Right.
David Leary: [00:08:03] It might be- It'll probably be post-election, but there's gonna be another round of stimulus, and they'll have to deal with that. They're not gonna be able to have time to deal with the forgiveness application. I just don't see it happening.
Blake Oliver: [00:08:12] Yeah, that makes a lot of sense to me. One more small update about PPP. The IRS has notified lenders that they should not file cancelation of debt information returns, or furnish pay statements to report the amount of qualifying forgiveness with respect to covered loans made under the Paycheck Protection Program; which in plain English means that you are not going to get a 1099-C for the forgiven PPP loans because that could cause people to report that as income, and we all know that the PPP forgiveness is not taxable. Although they still have not addressed the taxability of the expenses or the deductibility of the expenses yet, I don't believe. That'll probably be another thing in that stimulus package that will someday arrive.
[00:09:00] Let's talk about good news. Is it insane to start a business during coronavirus? Millions of Americans don't think so. That is the headline in a Wall Street Journal article that made me feel good, for once, talking about the economy. Apparently, the data shows that Americans are starting new businesses at the fastest rate in more than a decade, seizing on pent-up demand and new opportunities after the pandemic shut down and reshaped the economy. We know this because applications for EIN, the employer identification numbers that you need if you want to start a business and pay people–
David Leary: [00:09:37] Or a file for a PPP loan.
Blake Oliver: [00:09:38] Or get a PPP loan [crosstalk] Yeah, that could be distorting things. I don't know. But let's keep it positive here. We have passed 3.2 million, so far this year, compared with 2.7 million at the same point in 2019, according to the U.S. Census Bureau. More businesses are being started. Now, admittedly, small business revenue overall is down. It's down 21% as of mid-September versus January levels. There are people who are figuring out how to navigate this new economy and new buying behaviors.
[00:10:08] There's a baker who looked into buying a bakery and couldn't afford it; didn't have the capital and, due to the coronavirus, was able to lease commercial space for just $350 a month; started her own bakery; bought an espresso machine. Place is packed every day. There is a fitness founder who had a publicity business. She was a publicist and started an online fitness studio that holds classes, attracts instructors that were holding free classes on Instagram Live. It's now a platform- has created a platform for online workouts. There's a guy who was a personal trainer, a fitness trainer, who realized that his business was not going to survive if the gyms closed, so he started a bike repair business. Now he's busy every single day going out and fixing bikes, which we know are much more popular now because people don't wanna take public transit [crosstalk]
David Leary: [00:11:02] Super demand for bikes. Yeah, you can't get bikes anywhere. Obviously, if you can't buy new bikes, there's totally a business market for fixing old bikes.
Blake Oliver: [00:11:10] Yep. The last one, which is one of my favorites, is a woman who had a job as a school-based therapist in Chattanooga, Tennessee, and that looked uncertain as the schools started to close. She created a plan in April, and May, and then by June had completed the requirements to become a licensed clinical social worker and pivoted to doing telehealth, which is growing. People don't wanna go to people in person. They wanna do it on Zoom, or the HIPAA-compliant version of that. She has a thriving telehealth practice, consulting with people as a clinical social worker.
[00:11:42] My takeaway from this is it's not just great for the economy. I think there's gonna be a lot of accounting firms that serve these new small businesses and those are gonna be the ones that really take off, as the virus recedes in the next two years. I just think that's something positive. If we can support those new business models – the e-commerce-type business models, the telehealth business models – this is all innovative, and it's all happening very quickly. It's all–
David Leary: [00:12:07] This is why I've always felt like Intuit, historically, has been recession proof. So, what we'll probably see is, in Intuit's numbers, and in Xero's numbers, and probably FreshBooks' numbers, all these entry-level accounting-package numbers, you're gonna probably see a bump in the numbers because when people can't get jobs, they start businesses because you have no other option.
Blake Oliver: [00:12:27] Actually, it's why the accounting profession, as a whole – the service providers – are very recession-proof, too. There's some new numbers courtesy of CPA Trendlines about job levels in the accounting world broken down by different types of firms. Overall, the accounting profession is down 2% for the year, which that's a lot of jobs, but way better than the overall economy. Staff employment is down 4.7%.
[00:12:55] If you have a CPA- they call them accounting professionals, but given it's CPA Trendlines, I think that means, in this survey, that you have a CPA license. It's not quite clear to me. Anyway, if you have a CPA license, you're pretty insulated from this. Employment at CPA firms is only down 1.2%. Tax prep services down 1.4%. Now, payroll services, they took a big hit. They are down 13.5% for the year. They went up a bit in August, almost 2% in August, but still, down 13.5% for the year. That makes sense, right? A lot of businesses closing; not running payroll-
David Leary: [00:13:28] A lot less volume.
Blake Oliver: [00:13:28] Right, restaurants, all that stuff. Bookkeeping down 1.2% for the year; the same as CPA firms. They broke out this by women – just women in accounting – overall, jobs are down 2.2% for the year, so a little bit, 10%, worse than the overall profession. Now, in CPA firms, it's only 0.5%, so they've actually ... Women in accounting have weathered the storm better, if I'm reading this survey correctly; assuming they're working in a CPA firm. That's my economic news of the week. We can talk politics. We can talk this survey about accountants before we jump in app news. If you don't think it's too hot-button- I don't know. Maybe we shouldn't touch it. Maybe we should avoid it. I don't have anyone to talk politics with.
David Leary: [00:14:16] I know I sent you the text of the article yesterday, but as soon as I saw it on social media start coming through, everybody started posting it on Facebook; all the accountants and bookkeepers. It started showing up in all the groups, and I was like, "Oh, this is gonna be a big deal." Then, I was like, "All right, let's go see what this is." I didn't realize that it's a New York Times story that, for 45 minutes on your phone, you keep scrolling. The same story. It's not- it's not TikTok, where you just scroll and it's 15 seconds; you move on to the next thing.
[00:14:42] It is a gigantic four-year investigation by The New York Times looking at 15 years of Trump's tax returns from ... Some of them, they actually have the real returns; some of them are working backwards from other public information that's out there ... Almost like a forensic-type experience – they're recreating all the data. The article's actually super-super-hard to completely understand. The gist of it is there's many years he did not pay any income tax because it's the way [you play] the game a little bit, right? I'll take out a $100 million loan; spend the whole thing on a building. Well, now, it's $100 million of expenses. Some of the things I saw that've been trending was that, in about three years, he has a lot of mortgages that are come due for these golf courses and stuff that are not making money still.
Blake Oliver: [00:15:29] I think that's the thing that's most interesting to me that got buried in all this because the top-level conversation, which is not productive or helpful, is on the left, criticism: Donald Trump paid 40 times less taxes than I did as a contestant on Jeopardy. He paid $750 in taxes the year that he won the presidency. Now, on the other side, it's actually a lot of tax preparers, a lot of experts saying, "Well, yes, of course, because you are allowed to offset your income with losses."
[00:16:01] This is how the system works. He's not doing anything wrong. Everybody does this. People who support Donald Trump are saying this is what an intelligent person should do. Then, of course, what is missing in all this is what you pointed out, which is the reason he has the losses is because he has the hundreds of millions of dollars of debt that are coming due.
[00:16:20] I don't care about the tax situation. The tax system is the way it is – avoid taxes if you can. There's nothing wrong with that. We shouldn't go back to what happened in the Great Depression, when FDR and his cronies went after all of the wealthy people in the country, saying that tax avoidance was unethical. This has happened before, by the way. Anyway, it's the fact that there's all those millions of dollars of loans that are coming due that concern me a little bit because-
David Leary: [00:16:47] I think was in the article- I think that it's like he's more of a tax genius and 'how to play the tax game' genius maybe, and less of a businessman genius.
Blake Oliver: [00:16:56] Well, it's not that Donald Trump's a tax genius; it's he has a really good accountants. He pays for really good advice. They minimize his tax liability. They help him avoid, legally, all the taxes that he's entitled to avoid.
David Leary: [00:17:09] He's not hiding behind this either. He said that in the debate, I think, with Hillary Clinton that, "I'm very proud that I maximize my tax burden or lack of tax burden."
Blake Oliver: [00:17:20] As he should be. Don't hate the player, hate the game. Fix the tax code if you've got a problem with it. Don't go after high earners for taking advantage of the situation. That's just my hot take. Of course, I haven't read the article, so I could be completely off base here.
[00:17:35] This is gonna be the news all week. This is a gigantic story. Kelly Phillips Erb, @taxgirl
on Twitter. She wrote a Forbes article: "The Ordinary Taxpayer's Guide to the Extraordinary Story of Trump's Tax Returns." She breaks it down a little bit more in laymen's terms, so if you don't have time to read the 45-minute article, I'd say go to her article and look at that. Even with reading that, it's still all over the place. The nice thing is she shows other historical stories or articles she wrote in the past; links to those. At the bottom, I liked her little summary here. "I'm reminded of something that departing IRS-CI Chief Don Fort used to stress - voluntary compliance is the basis of our tax system, and no one is above the law."
Blake Oliver: [00:18:20] David, this might be a good chance to transition into who we plan to vote for, or maybe – if we don't wanna discuss that – who accountants plan to vote for. Do you have any idea what the polls say, if you haven't peeked at my notes yet?
David Leary: [00:18:37] I have not peeked. Who the accountants plan to vote for? In theory, right now, the country's very, very- we've been very split for a long time. I think the accounting industry might skew a little toward Republican, a little, so I'm gonna say it's 58% Republican.
Blake Oliver: [00:18:54] Well, you're very close. 55% of accountants plan to vote for Donald Trump and 38% plan to vote for Joe Biden; 7% are voting for someone else — I assume that's gonna be somebody Libertarian. That is according to a survey by the parent company of Accounting Today – survey of over 400 accountants. Doesn't surprise me because we know that accountants tend to be more conservative – at least that's my experience. Why wouldn't we be, given that the Republican Party has branded itself, and policy wise, is the party of small businesses, and accountants generally serve small businesses? What's interesting about this is ... Let's see, party registration is 48% Republican among accountants; 23% Democrat, and 27% Independent. That is different than the national because national is very split. National, it's more like 40–40.
David Leary: [00:19:51] I question the logic in this. If we vote in Donald Trump, chances are, taxes aren't gonna change too much- tax policies, which means less work for you, as a tax professional. If you vote in Biden, he's gonna reverse things that Trump did; there's gonna be a new tax code; there's gonna be new laws to learn, which means it's more engagements from your clients. You're gonna make more money. It seems like accountants are not being very logical with their wallet. They should always vote for the other person, every single time.
Blake Oliver: [00:20:20] Well, yeah, if you're being completely opportunistic about it, right? But this is something that, as a CPA, I find interesting is that people don't go into accounting because they're looking for the easiest job. They get into it for very different reasons. I think that the Republican support, and the support for Trump, as you pointed out, a lot of it is to do with taxes. Many people are concerned that if Joe Biden wins that he's gonna raise taxes, and that's gonna be bad for business.
[00:20:51] Although it might be good for accountants to have changing laws, I think they're really voting in sympathy with their clients and with the businesses that they work for, in that I think Trump is gonna be better for small businesses, excluding the whole coronavirus thing, which ... That's the thing that's dominated my vote. I've said this before, I believe, on the show – I'm a Republican. I started the Young Republicans Club at my high school. It's kinda like I was born into it. My parents were Neocons, and Clinton were a bad word in our house when I was growing up.
[00:21:28] It's tough for me, personally, as a Republican, because I've never been a Trump supporter. I think the whole coronavirus response has been just awful. That is worse for small business, I think, than the potential tax increases. It's like with the whole discussion around the tax return, I feel like the whole conversation in this country, at the top level, is on all the wrong things. It's possible, for instance, that we can have a virus that is deadly that we need to control, but also that lockdowns- Draconian lockdowns that I fled in California are not effective. Both can be true, but there is no party for that. Right? It's like we're so extreme, there's no compromise. I find that frustrating.
David Leary: [00:22:06] Rhonda Abrams wrote an op-ed article for USA Today. She's USA Today columnist; she has her own company called The Planning Shop. She's all about business plans, business planning, that type of stuff. She's been around a long time. I think she has a column inside the Costco magazine, as well, if you get that magazine. She does a small business column in there. She wrote an op-ed about – if your small business died, blame Trump.
[00:22:28] She really breaks down every one of the policies. You have the PPP, and you have the loan programs because they weren't grants. She breaks down every one of these and makes an argument how that plan wasn't focused on small business – that plan; that part of the stimulus – was not focused on small business. She really breaks down – everything that's been done so far truly has not been set up to help the smallest businesses. Then, she points back to the latest numbers from Yelp that we talked about last week, or the week before that 73,000 businesses are gonna be closed for good.
Blake Oliver: [00:23:02] The stimulus bill, if we go to that, that was a collaboration between Pelosi and Mnuchin. That was a bipartisan thing. Now, they may be deadlocked on the next step, but if there are problems with the stimulus bill, both parties deserve the blame for that. I do believe that the biggest problem for small businesses in the biggest states, like New York and California, is due to shutdowns; being unable and prevented from making a living by the government. This has never happened before in the history of our country where we have simply said to businesses, "You must stay closed. You cannot go to work. You cannot earn a living."
[00:23:36] I personally – I'm not a constitutional lawyer, but I feel like this should be unconstitutional. You can't just have an ongoing pandemic that just goes on for months and months and months, maybe years, and prevent people from earning a living. One of the reasons I left California – you mentioned that Yelp data; one in six restaurants are gonna close and not reopen. In California, it's double. They're predicting one in three restaurants will close and not be able to reopen. Why is that? Because of the different measures that are being taken, the controls. It's horrific. There's no party for me.
David Leary: [00:24:09] You can join the largest party in Arizona, which is the Independent party.
Blake Oliver: [00:24:12] I think I might have to. Are you an Independent party guy?
David Leary: [00:24:16] Yes.
Blake Oliver: [00:24:17] You are? Okay.
David Leary: [00:24:18] Yes.
Blake Oliver: [00:24:18] I feel like it is the small businesses that get caught in the middle of all this, right? Anyway, I was trying to start this whole show with a positive story, but ...
David Leary: [00:24:26] Positive spin [crosstalk] open our reviews, again.
Blake Oliver: [00:24:31] Let us know what you think. We try to be reasonable here. Wanna hear your feedback. You wanna talk about ransomware since we're in this world?
David Leary: [00:24:39] Yeah, let's jump on that.
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Blake Oliver: [00:25:58] There are worse things that could happen to you, as a business, I suppose, than even a lockdown. It is a massive ransomware attack. Blackbaud, which is a maker of cloud software for not for profits – they don't use this term, but I would consider them to be like an ERP provider. They provide full comprehensive cloud solutions – fundraising, financial management, all that stuff to not for profits.
[00:26:25] As of Thursday, more than three dozen Blackbaud-related health data breaches affecting about 6 million individuals had been posted to the Department of Health and Human Services' HIPAA Breach Reporting Tool website. It is commonly referred to as the "Wall of Shame." Businesses are required to list health-data breaches that are impacting 500 or more individuals.
[00:26:47] Why is this happening? It's because Blackbaud, back in May, suffered a ransomware attack where their database was hacked and stolen. They started notifying their customers in June and July which actually was late. Now there are 10 lawsuits against Blackbaud. It's significant because there's a lot of hospitals and healthcare providers that use their software. Interestingly, a little detail in here, it was a ransomware attack – apparently, Blackbaud paid the ransom but they have no proof that the data was actually deleted. They're just believing that the hackers deleted the data after they paid the ransom.
David Leary: [00:27:22] You can't trust them. You can't trust the hackers. This is that fine line of – dd you just always refuse to pay the ransom because you can't trust that they're gonna get rid of the data, but if you're locked, and you can't access the data yourself ... It goes back to that having backups – offsite backups, multiple backups.
Blake Oliver: [00:27:41] Yep, and this is why it's so lucrative to do ransomware, right? Because companies have to do it. They'd go out of business if they didn't. They have to get their data back. That is, I think, maybe a good point to kick off app news?
David Leary: [00:27:55] Yeah, I can transition this, as well, because I have a fraud story that's related to app news. Shopify, they had a blog post and they stated that two "rogue employees" have stolen data for – and they say – less than 200 merchants. They've launched an investigation. They've contacted the FBI. Two members of their support team apparently were involved in a scheme to take transactional records from individual customers, which would be small businesses that sell on the Shopify platform. Who knows what they were doing with this data – if they were selling it to somebody: was Amazon buying it? – nobody knows. It's being investigated.
[00:28:38] I was actually surprised that Shopify- how upfront they were about it, and they just put it out there. It's not even a blog post. It feels like this is a community board of Shopify, and the Shopify staff put it out there, and they talked about this. Now, there's not a lot of clarity as far as have they told everybody about this; if they have to buy GDPR, and some of those other policies that are out there, but the fact that they communicated it ...
[00:29:03] The thing is, remember, one of the things that people are accusing Amazon of- let's say you sell hip pouches on Amazon; they see your sales of hip pouches; they know all about how many hip pouches you sell a week, blah-dee-blah, blah-dee-blah, blah-dee-blah ... Then, Amazon, all of a sudden, starts Amazon Basics, and they're selling a hip pouch.
Blake Oliver: [00:29:19] And it looks just like yours.
David Leary: [00:29:20] It looks just like yours. They control the search words, and you're just done. Obviously, this data, at the merchant level, is super-super-valuable. Now, who they were stealing this for, or what they planned on doing ... Maybe they were just targeting yoga-mat sellers, and they're gonna open up a yoga-mat business, but nobody ... There's no details at any level. But this is a little scary, right? Everybody's worried about hackers but what about the internal employees?
Blake Oliver: [00:29:43] Yeah, that's a good point. Well, you mentioned Shopify. Let's talk about QuickBooks Commerce.
David Leary: [00:29:48] Remember Intuit, six weeks ago ... Was it eight weeks ago, they acquired TradeGecko. TradeGecko is an e-commerce omnicommerce automation platform for inventory management, and e-commerce sellers. They've rebranded it. If you go to TradeGecko.com, today, it immediately flips and has a banner that says TradeGecko is now QuickBooks Commerce. It's completely rebranded. Not only is it rebranded, the marketing pages, the whole product has been reskinned. I've never seen a rebrand at Intuit happen this fast.
Blake Oliver: [00:30:22] Yeah, I was surprised because the acquisition was announced and then, like you said, six weeks later, we've got the product integrated in the app, so obviously this was going on behind the scenes.
David Leary: [00:30:32] Yeah, and it's not integrated into QuickBooks. It's still a standalone product, but they skinned it. It looks and tastes like QuickBooks Online.
Blake Oliver: [00:30:41] Do you access it though inside of- you don't access it inside of QuickBooks Online?
David Leary: [00:30:45] There might be a launch point, possibly. That, I'm not clear on, but it's still a separate ... It's just been rebranded and reskinned, so it looks and tastes like QuickBooks Online. Like I said, I've never seen this happen so quickly with an acquisition like this. It was so good that the vast majority of people out there on the interwebs thought Intuit launched a brand-new product.
Blake Oliver: [00:31:09] Wow. That's good marketing there.
David Leary: [00:31:11] They've done a very good job about this launch and release, and we'll see where it goes next. It's a good sign, though, that they redid this. I remember years ago, I was at Intuit, and there was Digital Insight, which was ... It was a company that Intuit bought, and that company actually provides software for banks, and credit unions, and smaller FIs. Intuit bought that company, and five years later, they still didn't have their email addresses working with us, with Intuit. It's amazing when you see an integration take place like this.
[00:31:40] The other thing I thought was really interesting ... I was thinking about this TradeGecko thing. TradeGecko is based in Singapore, and my understanding is that's the next battleground for cloud accounting. Xero's doubling down there ... I wonder how much of this acquisition- just how Xero acquired Hubdoc because it gave them a good foothold in the North American market, I wonder how much of this is also a way for Intuit to get a foothold in Asia?
Blake Oliver: [00:32:06] Well, one more quick QuickBooks update. They've made recurring transactions now available to third-party apps in the API. David, you got really excited about this on Twitter. Explain why.
David Leary: [00:32:18] It's a personal reason ... A lot of developers want this. If your app – for example, Melio ... Melio will let you create recurring payments. If I have to pay somebody every single month, you wanna create that bill payment and have it sync to QuickBooks. It doesn't sync too well, and the reason why is QuickBooks never had the API calls available for a developer to write that. Now, a developer can go and create recurring transactions right inside of QuickBooks, instead of you having to manually create them outside of the app you're using. It's just a super-huge thing that developers have asked for, for a very long time, so it's good to see developers get support to make their apps better because that saves everybody time.
Blake Oliver: [00:32:58] I could see this being super-helpful because one of my biggest problems was exactly that, what you mentioned, having to manage the recurring transactions outside of the GL. I would always have my clients' regular payments, when I managed their bill pay, entered as a recurring bill because if the bill didn't come in, in the mail, then I wanted to make sure we still paid it; we didn't get a late notice, or if something happened ... We were using Earth Class Mail to scan the mail, and there can be issues. It doesn't get scanned, yada yada. We always had problems because we were managing the recurring transactions outside of QuickBooks or Xero, and now, you can actually just manage that inside. It'll just be more efficient. It'll be more foolproof. That's great.
[00:33:41] Let's talk about Xero. Some quick updates from Xero. You now get page breaks in reporting in Xero, and this is global. This is one of those little things that I think has annoyed folks for a long time, not being able to control page breaks in reports. I remember people in QuickBooks complaining about this, as well. Now you can do that on your layouts. You can get the reports looking exactly how you want when they go to PDF.
[00:34:05] You can also now use e-signature on documents in Xero HQ. You can assemble a package of documents and upload a bunch PDFs into Xero HQ, which is their client management that's built into Xero. Then, you can send those to your clients and get them e-signed. It could be perhaps a set of financial statements, a tax return, whatever you want. That's now built in ... That's been available to Xero Tax users in Australia; now going global.
David Leary: [00:34:34] FreshBooks buys Mexico-based digital invoicing firm Facturama. I don't know if you understand how invoices work in Mexico.
Blake Oliver: [00:34:44] I know that they have to go through the government. They get stamped or something?
David Leary: [00:34:49] They have a special QR code, basically, in the corner of all these, and both the person sending in the request, and then the person paying ... Then, when it's paid, you have to include the same barcode. It's super-super-complicated. I know that, in the past, Intuit's partnered with somebody to work on QuickBooks Online, so their invoices are compliant. It looks like, now, FreshBooks is making a jump down into Mexico.
Blake Oliver: [00:35:12] Interesting.
David Leary: [00:35:12] The fact that they purchased a firm, they're serious. You're not gonna do that, unless you've already made the decision – we are going after that market. That's gonna be another battleground, here, is in Mexico. Yeah, FreshBooks has jumped down there.
Blake Oliver: [00:35:27] Some quick payroll updates. OnPay has released a custom report builder, where you can build a custom payroll report using up to 50 data points from your payroll and HR data. I love this, when developers do this, because the stock reports are inevitably not exactly what you need, and you end up having to export to Excel. Any time you can do a custom report, this should be default. Everybody should have this. Please, if you're a developer, and you're listening, allow for us to build custom reports.
David Leary: [00:35:56] Especially for payroll because, by default, the payroll reports are great for the payroll clerk, who's allowed to see all that data, but as soon as you need to run a report for some department head, or a department, or maybe for the board, or somebody else, there's a lot of details in payroll you don't want in the report.
Blake Oliver:[00:36:12] Exactly.
David Leary: [00:36:12] If you don't have control over that ... What are you gonna have? You take a black marker and black out ... Probably what you do, right? You're like, "Okay, they're not allowed to see this data. I'll just scratch that off the report and just give them this."
Blake Oliver: [00:36:23] Continuing on with payroll, Wagepoint, another payroll provider in the cloud, has taken on $10 million in new capital from Providence Strategic Growth. Inflo, a data analytics company, has introduced Workpapers, a new audit module for end-to-end external digital audits, which I am sure are growing when you can't go to the office.
David Leary: [00:36:44] Digital audits.
Blake Oliver:[00:36:45] Yes, and actually I have a story. I don't know if we'll get to it this week – it's been buried in my notes – all about the new audit evidence standard. I know this is riveting to you David, but it's a story from the AICPA about how they have created a new audit evidence standard for private companies that allows for non-human evidence collection.
[00:37:07] They are specifically saying it is okay to collect data using bots, or robots, or Ais, or whatever it is. or just systems. The PCAOB, which regulates the audits of public companies, is considering revising their audit evidence rule, as well, to do the same. This is stuff that should have happened a long time ago, but Coronavirus is now putting that into the forefront and making it finally happened.
David Leary: [00:37:32] Avalara has some alcohol-related news. Avalara, who's the sales tax compliance ... They're in the compliance game, but then, Avalara also has ... I don't know if you ever have heard about Avalara's corporate headquarters. They have a tiki bar right inside the facility. Avalara has some- they have double expertise here. They have expertise in alcohol, and they have expertise in the compliance.
[00:37:56] They've released a new product called AvaTax Beverage Alcohol, and it basically has compliance solutions for wineries, distilleries, breweries, importers, retailers. Not only does it keep track of all the sales tax and use case and all that ... Because now, with COVID, shipping alcohol has been a little bit easier. Moving alcohol's a little bit easier. They've lowered some restrictions, but you still have to comply.
[00:38:19] It's interesting because they've released this, but it's not just the tracking from the sales tax tape, and the reporting. From day one, how to properly even register and maintain your state license. They assist you with that. Registering all your products because maybe your product has to be labeled properly, or it has to have the- in some states, you have to ... I think in the state of California, they always have that- there's a separate warning you always see on products, and maybe you don't see this on the East Coast, but I definitely see it in Arizona; it has a special California warning.
Blake Oliver: [00:38:46] Oh, the cancer warning that's on everything in the state? Literally everything in California gives you cancer – every parking garage, every product ... Yeah.
David Leary: [00:38:55] What I like about this strategy is, yes, their expertise, and ultimately, their goal, was to get you to do tax remittances, correct reporting, and all that, but the fact that they're helping you get your business license set up properly, your labeling – they're keeping you in compliance across all three things instead of just the tax compliance.
[00:39:14] This goes back to what we talk about with QuickBooks and having a small business bank account. Getting people going correctly from day one is what these apps have to do, and these companies have to do. Don't let people start a QuickBooks business without a business bank account. It's just better for everybody. It's better for them. It's better for the accountants and bookkeepers. Make them create a small business account for free; a checking account for free. It's just kind of that same thing. Don't just help people file their taxes, if they haven't labeled their alcohol correctly, and they haven't even gotten their license set up correctly.
Blake Oliver: [00:39:46] David, we've got five minutes left. I wanna make sure we get to at least one of these voicemails.
David Leary: [00:39:51] Okay.
Blake Oliver: [00:39:51] This is app-news-related. We'll end with this, and we'll get to the next one next time. This is from Jackson Wilcox.
Jackson Wilcox: [00:40:00] Hey, Blake and David, this is Jackson Wilcox. I'm a financial advisor in Franklin, Tennessee, but I used to be a tax accountant, and I still hold my CPA license. I found your guys' podcast recently. I've been really enjoying it. I feel so caught up on the tech and what's happening that I feel like I could almost go out and start my own consulting business.
[00:40:18] I just wanted to comment on something you guys shared in the last podcast about Noko Tools. I don't know if you've ever talked about it, but there's one out there called Knowtion, and it's really taking the world by storm. I recently used it for a problem that my team was having. We were just really surprised with how easy it was to get everyone an account, and everyone on the same page, and having the document update simultaneously on a desktop platform, an Android app, and an Apple app. It's pretty cool. I think they're pretty large, but I do think they are privately held. Just wanted to throw that out there. Thanks so much. Appreciate what you guys do.
Blake Oliver: [00:40:57] David, have you ever used Knowtion?
David Leary: [00:40:59] Melio just adopted it. I will be using Knowtion this week for the first time, so I can report back out on that.
Blake Oliver: [00:41:05] That's awesome. I tried to get my last firm to use Knowtion for our CaaS practice as a way to create an internal wiki. I could not, unfortunately, do that. It's part of one of the reasons I'm no longer in public accounting was my frustration with that. The way I would describe it is like a Google doc on steroids. It's a bunch of documents that are collaborative, where everyone can edit, but you can also hook in Zapier type of activities. There's automation; there's different types of data. It's all these sheets tied together, so you can create ... If you ever used an internal intranet, think of that, but it's much easier for everyone to collaborate and update, and it's not a static thing.
David Leary: [00:41:46] It's a consolidation of tools, it looks like Knowtion is. it has a little bit of a Trello killer; it's attacking that. It's attacking the typical media wiki. You just have a wiki ... In a way, it's what's ... What was that Microsoft thing that Microsoft constantly pushed for years, and everybody hated it?
Blake Oliver: [00:42:10] Not OneNote.
David Leary: [00:42:10] No, not OneNote. They had ... Anybody who used, you had to host it yourself-
Blake Oliver: [00:42:16] SharePoint?
David Leary: [00:42:17] SharePoint. It's like everything that, on paper, SharePoint should have been, but it just never worked; it looks like Knowtion is. There's other products like this. I even think the 37Signals, the Basecamp guys, have something along the lines of this. It's very interesting. Going back to no-code, remember last week, we talked about Airtable's big raise?
Blake Oliver: [00:42:36] Yes.
David Leary: [00:42:36] And we talked about, oh, yeah, there's a rumor Google is gonna have something to launch, too. Well, they launched a new product called Tables, which is very similar. No code. It's like, you're right, a spreadsheet on steroids. A lot of accountants like to- a lot of people use spreadsheets like a database, but they don't connect very well to each other. They do on a formula level, but not in that more of a database conceptual level. I think over the next year, I predict that accountants and bookkeepers are gonna start loving Airtable; this product from Google. Microsoft has a product. There's a lot of these that are out there, these- they're just super-super-powerful spreadsheets.
Blake Oliver: [00:43:12] Comparing Airtable and Knowtion, they're basically solving similar problems but they're approaching it from different lenses. Knowtion goes through the lens of the document. Think of you start with a Word document, and you go from there to extend its functionality; whereas something er table starts with Excel and goes from there from that spreadsheet. Main view but you can dig down into fields and then you have a document, and with Knowtion, you can dig down from a document into a sheet.
[00:43:39] It'll be interesting to see where they end up meeting in the middle and what wins. I like the idea of starting with the document, just from a visual presentation standpoint. I can really organize my thoughts like it's a notebook I think, for a lot of us, that's why OneNote is so powerful because you think of it like a notebook, and it's something familiar to us, and we can all understand that concept. Spreadsheets work really well for some people, too. anyway, David if people wanna touch base with you online, in the meantime, between episodes, where is the best place for them to do that?
David Leary: [00:44:10] Easiest way is on Twitter. I'm @DavidLeary; also, on LinkedIn, @DavidLeary. And Blake, don't forget, on October 20, we are going to be joining the Accounting and Finance Show Virtual Conference. It's October 20–21. We'll have a link in the show notes to register, but we are going to be doing a keynote on October 20, and we'd love for all of you to join us.
Blake Oliver: [00:44:29] A live episode, so you can type at us as we speak. That should be really cool. Maybe we'll do some polls, too. You can catch me on Twitter. I'm @BlakeTOliver. If you connect with me on LinkedIn, just let me know you're not a bot. David, until next time, don't let those Zoom calls get you down.
David Leary: [00:44:45] Bye, everybody.
Blake Oliver: [00:44:46] Bye.
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