Earn CPE Credits Listening To Podcasts

Happy Almost New Year! As 2021 comes to a close, we've got a lot to talk about today, including an in-depth look at Blake's newly released app, Earmark CPE! We've got the latest updates on the Trump fraud investigation, and what's going on in the world of COVID relief-fund fraud. We're also spending some time answering four great listener emails on CPA exam stats, that pesky 150-hour requirement, QuickBooks Desktop, and client relationships. In app news, we're covering acquisitions by Sage, and Xero, and a Series B raise by Ekos, a craft-brewery-focused software! Grab your party hat, a glass of bubbly, and join us!

[00:00:00] Thank you to our sponsor, OnPay

David Leary: Many times when choosing a payroll service, you have to choose between a new startup with a great app, or an established company whose tech may feel behind the times. With OnPay, you get the best of both worlds - a great app from an established company that's been providing payroll services for over 30 years in all 50 states. Stay tuned to hear more from our sponsor OnPay later in the episode.

Blake Oliver: Yeah. It makes no sense. Why make the non-CPA owners in a CPA firm get 150 hours? Like is it just to put them on par with the education requirement for CPAs so that-

David Leary: But there's no control over this. Like, again, I'm doing basketweaving; I can do any 150 I want-

Blake Oliver: Right. Yeah. You just have to have 150 hours of education; five years of college, basically. Here's my- what I suspect. The reason they did this is because they don't want people deciding not to get the CPA because of the 150-hour requirement and just become a non-CPA partner in the firm. So, it's to force people to get the CPA, even though there’s this onerous requirement.

Blake Oliver: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.

David Leary: And I'm David Leary.

Blake Oliver: It is December 23rd. We're recording a day before Christmas Eve.

David Leary: Yeah, we didn’t wanna record on Christmas morning. I don't think it's a good idea.

Blake Oliver: No, or the day after would be a bad idea, as well ... It's good to talk to you again so soon, David. We have a lot to cover-

David Leary: It’s a short week, but there's still stuff to cover, exactly.

Blake Oliver: Yeah. We have a bunch of listener mail, and I promised last episode we would get to it. We can start with that. What else do we have to talk about?

[00:01:38] Don't call the manager on me, Karen ...

David Leary: We can talk about Elon Musk. He has taxes to pay.

Blake Oliver: Some $10 billion or more in taxes?

David Leary: $11 billion; he’s gonna pay the most taxes in the history of the country, I think.

Blake Oliver: That's amazing.

David Leary: But the best part of it was right after Elizabeth Warren called him out- because he was on the cover of Time Magazine, and she called him out as somebody who doesn't pay taxes. First, he replied to her, and he said, " Don't call the manager on me, Karen," and he started calling her Senator Karen, which I thought was funny because she always writes the letters, right? Like, she's always writing a letter. And then, he went on, I don't know, like a day, or two later; he replied to her, and he's like, "I'm paying the most taxes that any American's ever paid in the history of America this year."

Blake Oliver: That's amazing. Good for him. Good for him. Well, since you brought up politics, we can also talk about the Trump fraud inquiry. I saw this article, I don't know, maybe it was last week, in the New York times. I wanna get into that because, as an accountant, I actually understand, I think, the issue here, and we'll talk about whether or not Trump is actually gonna be in trouble.

David Leary: Xero, and Sage made some acquisitions. We get to touch on that.

Blake Oliver: Yes, tax in Canada. I'm so jealous.

David Leary: I have some stuff on Secret Service talking about the COVID funds.

Blake Oliver: Secret Service? Oh, yes, the total amount of fraud, right? We're getting a better picture of just how much fraud there was with PPP, and EIDL. I also, uh, like to think about the future of the accounting profession when the year ends; it's always good to think about where we are at and where we are going, and so, I have some stories about that.

David Leary: I’m not seeing a lot of those yet this week. I feel like maybe next week will be the big Top Trends of 2022, like all those kinds of posts; I'm just not seeing them just yet.

Blake Oliver: Well, I've been saving up some, so ...

David Leary: Oh, some people got in early; they’ve been posting them-

Blake Oliver: These are just the stats that I’ve noticed throughout the year, or things that have happened. So, we'll talk about the relevance of the CPA. This is a recurring theme on our show, and we’ll talk about the data around that. Oh! The big news is Earmark CPE – my app that gets you CPE for listening to this podcast and more – is live on the Apple App Store!

David Leary: Congratulations!

[00:03:49] Earmark (the Apple version) lives!

Blake Oliver: Yes, thank you! Just happened a couple of days ago. We're doing a soft launch. I haven't made a big public announcement yet. I think I'm gonna do that next week after the Christmas holiday. Hopefully, by then, Android will be available, as well. Google is taking longer than Apple to approve our app, surprisingly. That's not usually the case. Usually, Google's a little bit looser.

David Leary: But, if you have friends, and family that are, you know, getting new iPhones for Christmas, and you're helping them set that up, feel free to subscribe them to The Cloud Accounting Podcast. Feel free to download, and install the Earmark app on their phone. Feel free, ‘cause it just helps bumping up ratings a little bit.

Blake Oliver: Yeah, we appreciate it. It's almost as good as writing a review. So, if you wanna, our dear listener- if you would like to get continuing professional education credit – NASBA-approved CPE – for listening to this episode, and all the other Cloud Accounting Podcast episodes that you've listened to recently, go to the Apple App Store and download the Earmark CPE app. Now, I’ve gotta warn you, if you type in Earmark – E-A-R-M-A-R-K – into the App Store, right now, it will think that you meant to search for Aramark, and it will correct you, and you will have to then say, “No, I meant to search for Earmark.”

David Leary: It's like searching for David Leary on Google. Doesn't work.

Blake Oliver: Yeah, where you get Denis Leary. Aramark is that giant company that- I think they’re a supplier to hospitality businesses; you know, they're a lot more famous than Earmark, so the App Store has not yet learned that people want Earmark.

[00:05:18] How does Earmark CPE work?

David Leary: To clarify, this episode, they can go over to the app, take a quiz, get CPE credit. Can they go back to the very first episode of The Cloud Accounting Podcast? How many episodes back can they go to still listen to and take CPE credit?

Blake Oliver: We've got a few on there right now, a handful, and I’m backfilling, I don't know, maybe a few dozen is the idea, but I don't think I'm gonna go back further than that.

David Leary: Yeah, I was gonna say, it comes to a point where our show is kind of irrelevant for old episodes ...

Blake Oliver: But every episode going forward is going to be available for one hour of specialized-knowledge CPE. Also, my Earmark Accounting Podcast is going to be available, each episode – most of the episodes; not all of them because some of them are too short – most will be available, and all the that qualify are up there right now. So, if you haven't heard my interview with Ed Mendlowitz, or let's say you did, and you wanna go back, and get the CPE for it, now you can.

David Leary: You and I record a podcast, let's say on a Saturday. By the time we get it out the door, it's Wednesday. Can somebody, on Thursday morning, open up your app, and take the quiz. Like, is there some gap in there?

Blake Oliver: That is the plan. The plan is that the course will be available on Earmark as soon as the episode drops. It may take a few days, but it’ll be that same week, hopefully, and the benefit is ...

David Leary: I’m sure it'll get tighter as systems, and processes come into play.

Blake Oliver: Oh, yeah, yeah. The beauty is that you can listen to podcast in your favorite podcast player. If you listen on Apple Podcasts, you don't have to change how you listen. You listen there, and then you open up the Earmark app, you find the episode, and you take the quiz, and you get your credit. You can simply certify that you listened to the episode in my app. There's no requirement by NASBA that I actually track your every minute of listening, which I think is actually kinda nice.

David Leary: So, the questions, will they be in chronological order with the episode?

Blake Oliver: Uh, the question order is randomized. There are five questions for each hour episode, and they relate to various stories throughout the episode, so you’ve gotta listen to the whole episode.

David Leary: So, I wouldn't keep the app open, while I’m listening to the episode-

Blake Oliver: No.

David Leary: Well, I guess I could. I could kinda preview what those five questions are.

Blake Oliver: You could, but the idea is that they're easy enough where, if you listen to episode, you should be able to get the question right.

David Leary: Okay, gotcha.

Blake Oliver: The beauty of self-study CPE is you can take the quiz as many times as you need to.

David Leary: It's not like, “Your answer for question number one is bacon,” and then, you say that out loud in the podcast, and they go to the app, and get their credit-

Blake Oliver: No, no, it's not like that. No, it's actually about the content.

David Leary: Awesome.

Blake Oliver: Yeah, I'm super excited. I hope that our listeners get value out of this. It's completely free, for now, and I intend for the app to be always “freemium.” So, there will always be a way to earn CPE credit. There will be a subscription, though, so you can support Earmark. We’re figuring out exactly how that's gonna work.

It'll probably be for premium content; for a private community, where you can interact, and talk with me, and other Earmark users, like premium subscribers. We'll probably have like a limit on the amount of CPE you can earn if you're not a subscriber; that sort of thing, but I always want people to be able to go in and get at least one hour per week for free because that incentivizes good behavior. We're not cramming at the end of the year to get our CPE anymore. That's what I wanna do.

David Leary: I take the quiz; I pass it; I get my CPE. Does the app just produce a PDF for me? Do I get a PDF in the email? How do I show proof of my education requirement?

Blake Oliver: Right now, you get an email to your address on file. That is the certificate, and you can print that to PDF, and save that. I'm working with my developers so that we can actually send you an attachment that's a PDF, as well. PDFs are really hard to make; it’s not an easy thing. We’re gonna build that in, and you'll get a pretty certificate. Right now, the email that you get when you pass a course, you email it to yourself, that will satisfy the NASBA requirement [CROSSTALK]

David Leary: Save it to Evernote, or wherever you do; wherever you archive things to ...

Blake Oliver: Yeah, save it to a folder on your computer, or if you need to save it to a- or save it to a folder in your Outlook.

David Leary: You could take a picture of it, and then, you could put that up on Twitter; that way, it’s saved on Twitter, and you can show the world that you got CPE credit for listening to The Cloud Accounting Podcast.

Blake Oliver: You could! I would appreciate that. Tag @EarmarkCPE if you like the app, and point other people to it. I haven't made a big announcement yet. It's a soft launch. I’ll be doing that next week, so, after the Christmas holiday.

David Leary: You just announced it on The Cloud Accounting Podcast. What are you talking about?

Blake Oliver: Oh, I guess, yeah- this is the biggest-

David Leary: Now, it’s launched. I mean ... It’s pretty much out there now!

Blake Oliver: So, again, only for Apple, right now; hopefully for Android soon. Yeah, it’s been a year in the making, so I'm very pleased to get this done-

David Leary: Longer than that! People have been asking for two years.

Blake Oliver: They've been asking, but I haven't actually done anything about it until in January of this year. That's when I made the promise. I think it was in the first episode. I said, “I am gonna figure out how to get you CPE this year.” So, I've delivered on that promise.

David Leary: And you delivered! That's pretty amazing.

Blake Oliver: Yeah, so ...

David Leary: So, now, you’ve set a bar for 2022 – a whole new delivery you’ll have to meet up to. What I think we should do is, like, enough talking about you, and your app ... Let's jump into listener-

Blake Oliver: I agree.

[00:10:19] The Final Four of 2021

David Leary: We have four letters, right? We promised to address these four letters-

Blake Oliver: We did. We did. Here's one about CPA exam stats. This is from Thad. Thad said, “Hi, Blake. Just listening to your recent episode on The Cloud Accounting Podcast on the topic of NASBA saying they will not release exam pass-fail data, and the like. I think one big reason could be that it will take them a while to get the new exam dialed into the correct difficulty. I know I considered those numbers carefully in planning which sections to take when. At the time, BEC had a much higher pass rate than the other three sections, indicating that it was generally easier. I used that info to plan BEC into a tougher spot in my schedule so I would not have as much pressure from that section.

As NASBA makes changes to the exam, that data might become too exploitable for them to want to publish it. Thanks for the great work you, and David do to bring us podcast week in, and week out. I listen to every episode. It was also really helpful for me in launching my own practice in 2019 because it helped me to think about firm-level issues like technology, staffing, trends in the profession, rather than the nuts, and bolts of accounting work that I dealt with a staff accountant at a CPA firm.” Thank you, Thad!

David Leary: So, is his premise on this, or the theory that if people find out one or two sections isn't really tough yet because they just haven't dialed it in fully, more people accelerate their planning to take the CPA exam, and they'll try to take it earlier while it's still a little easy?

Blake Oliver: Yeah, or they'll pick the sections that are known to be easy, which already happens currently. Everyone knows that BEC is generally the easiest section, so people will either take that first, or take it last depending on their preference. We all know that, I think, audit is the hardest for most people, so a lot of people will just load that up first.

You know, there's something about this that's funny to me, which is, I don't know if a lot of people know this, but the CPA exam is not curved. We don't know exactly how it's graded, but NASBA says it's not curved, or at least that's what I've read in the past. I always wondered why; like if the point of the exam is to produce a 50% pass rate, which is generally around what it is, then why not just curve the exam every year and produce the number of CPAs that you need to produce?

Philosophically, I understand why some people don't like the idea of curving, but if, really, the objective is to just limit the number of new CPAs we get, I would just say like set a target, and then curve the exam so that you hit that number of CPAs because we all know that it's not really- the CPA exam doesn't really judge that you have the knowledge to be a CPA. That's why we have an education requirement. I would just say, like, curve the exam. Who cares, right? It would make things easier for NASBA if they did that. I don't know what other people think about that, but ...

David Leary: So, like taxi medallions – there's just so many every year and that's it ...

Blake Oliver: Yeah, and then, what you could do is if there aren't enough CPAs, you could just say we're gonna ... You just set the target of the number you want, and then, you curve the exam to get that target, right? That’s one way to do it. Anyway, thank you, Thad, for that note, and your thoughts on that. I agree, that's probably why; that makes a lot of sense.

[00:13:35] Thank you to our sponsor, FactorAE

David Leary: This episode of The Cloud Accounting Podcast is sponsored by FactorAE. FactorAE was built specifically for architecture, and engineering firms looking for a platform that fulfills their functionality needs without being overly complex. This includes the FactorAE integration to QuickBooks Online. FactorAE lets QuickBooks be good at the stuff it does well – accounts payable, accounts receivable, and financial statements, while FactorAE focuses on the advanced project-management functionality that your architecture, and engineering clients need.

FactorAE includes resource scheduling, budgeting, and revenue forecasting, flexible billing, invoicing options based on phases, and reporting that includes industry specific KPIs developed by architecture, and engineering industry experts. FactorAE offers dedicated support via phone, email, or chat and has a process where they'll do the upfront setup for your clients, getting them up and running in as little as 10 business days. To learn more about using FactorAE with your architecture, and engineering clients, head over to cloudaccountingpodcast.promo/factorae. That is cloudaccountingpodcast.promo forward slash F-A-C-T-O-R-A-E.

[00:14:48] Another listener's take on the 150-hour requirement

Blake Oliver: All right, moving on, here's a note about the 150-hours requirement. This is fascinating, and this listener requested that we not disclose their name for confidentiality reasons. “Hi, Blake. I wanted to give you an interesting update on my story. I passed my fourth, and final part of the CPA exam in early November, but as mentioned before, I still need to get my 150 hours, which should be done by January 15.

The partners of my firm wanted to admit me as a partner, as a non-CPA owner, as they figured it was only a matter of time before my license comes through, but you'll never believe what is preventing it from happening – the 150 hours. Maybe you knew this, but non-CPA owners are still required to have 150 credit hours per the AICPA. I'm not that bitter, to be honest, because I feel it's just a matter of time, but I thought you would find it interesting since your podcast talks about the 150-hour rule every once a while.” This listener included a link to the vote when this happened. It was years ago now. I had no idea. I had no idea-

David Leary: So, did I hear this correctly – just to make sure I'm paying attention, and our listeners are paying attention, in case this is a question on the Earmark quiz – if you, and I start an accounting firm; you’re a CPA, or getting your CPA. You still have to do 150 credit hours, but me, as a part owner, I have to go get 150, as well?

Blake Oliver: Yeah.

David Leary: Did I understand that correctly?

Blake Oliver: Yeah, it makes no sense. Why make the non-CPA owners in a CPA firm get 150 hours? Like, is it just to put them on par with the education requirement for CPAs so that-

David Leary: But there's no control over this. Like, again, I'm doing basketweaving; I can do any 150 I want-

Blake Oliver: Right. Yeah. You just have to have 150 hours of education; five years of college, basically. Here's my- what I suspect. The reason they did this is because they don't want people deciding not to get the CPA because of the 150-hour requirement and just become a non-CPA partner in the firm. So, it's to force people to get the CPA, even though there’s this onerous requirement.

David Leary: Basically, the bet is, okay, you’ve twisted my arm; I've done the education requirement; I might as well just go do the CPA, too ...

Blake Oliver: Or it’s somebody who doesn't wanna go do the 150 hours could say, “Well, I'll just be a partner, but not be a CPA,” and they're discouraging that by making you go get the 150 hours anyway. At that point, you might as well take the exam. I think it's just a way to prevent people from, or to try and stop people from doing that.

David Leary: So, you could be Bill Gates, who didn’t finish college, and you could be a business mogul, and you want to go into business with a CPA, and maybe you have all the business chops, and the CPA is really good at audit, and tax. Together, you could build a great business, but, in theory, you're not allowed to join that CPA unless you go get those 150 credit hours.

Blake Oliver: Yeah.

David Leary: That doesn't help anybody ...

[00:17:54] In re QuickBooks Desktop

Blake Oliver: All right, moving on, here is a letter in response to that episode, “The 4,000-year-old Case of Tax Avoidance.” In that episode, we talked about why people aren't switching from QuickBooks Desktop to QuickBooks Online. You, David, made that argument that it's- what'd you say about it?

David Leary: It holds back the whole industry, right? Everybody gets distracted about it. Your firm has to support it; third-party apps have support it. There's just a lot to do to support QuickBooks Desktop, including Intuit, right? Intuit’s ... The more they support QuickBooks Desktop, the less work they're doing on QuickBooks Online.

Blake Oliver: So, here's our listener’s thoughts; this is from Lauren. “Love your podcast; started listening in 2020. I come from within the traditional CPA-firm background, so I was excited to make a jump to start my own CPA firm with more open-mindedness for cloud accounting which, as you know, most traditional CPA firms shy away from. The Cloud Accounting Podcast gave me an arsenal of information, and tools to get started.

In regards to QuickBooks Desktop, and QBO, reason why accountants are so reluctant to make that switch is the limited functions, and capabilities of QBO. I have switched clients from Desktop to QBO and have found myself in a bind where, one, I can't create GAAP financial statements; Desktop version at least has Statement Writer. Two, there's a limitation on classes/properties/location reporting, whereas Desktop would be more flexible. Three, for year-end analysis, we need a working trial balance report to show unadjusted balances, adjustments, and adjusted balances; Desktop has this, QBO does not.

This forces me to find workarounds or purchase additional software, so it increases time, and costs, when Desktop does it all, and if you need these functions today, can you really wait for Intuit to create, and develop it in the near future? It takes them a long time and we, as users, won't even know if this will be something their developers have in the pipeline – in the near future? Maybe never? I've seen lots of community posts where issues still remain as issues.

Maybe I'm missing a step. Are most of cloud-accounting firms also supplementing their implementation of Xero, and QBO with another cloud trial-balance software, financial-statement software? There's always something to keep in mind when using any software – finding out the limitations, pros, and cons, as I'm experimenting with other applications, as well.

I'm finding it to be costly and not as efficient as marketed, but perhaps I'm trying to tinker with it to make it work since it seems a lot of other accountants are successful. Any suggestions as I put together my tech stack for this new firm of mine? Anyway, keep up with the great work. Sincerely, Lauren.” So, David, I'm curious to know if you have any recommendations for Lauren based on those limitations that she’s experiencing?

David Leary: I think the working trial balance could ... Incidentally, a new sponsor that just started today, Tallyfor, that's basically what they do. They pull the trial balance from QBO, or Xero. I guess you can listen to the commercial, but essentially, they take it; they move it into their app, and then, you do your tax trial balance, and then it shoves it over to CCH, etc. Thinking about this question, we don't even know if Intuit's working on this, or what have you, but this is what's good about Intuit being in the bookkeeping business, and then, TurboTax Live business because now, Intuit has the exact same problem, which means they'll probably have to solve it.

Blake Oliver: That's interesting. So, we generally have seen Intuit competing with us in QuickBooks Live, and TurboTax Live as a bad thing, but you're saying that now that they're in the business of full-service tax prep, in the business of bookkeeping, they'll build the tools to solve our problems, in addition to their own.

David Leary: Because they're eating the dog food, right? It's not just getting feedback, like, “Oh, when do we get our working trial balance?” It's not going into a bucket of a bunch of accountants just asking for a feature. Now, it’s a real problem they're gonna have, as well.

Blake Oliver: That’s a good point.

David Leary: And on top of that, it would make what I believe is a competitive advantage. If you own the bookkeeping, QuickBooks, and you own the tax, like why wouldn't you make this like some beautiful, perfect workflow as a competitive advantage? Because then, either side is used- as an accounting firm, you're gonna choose both products, if they work perfectly together.

Blake Oliver: Yeah.

David Leary: You’d be willing to change off of a different tax software because it works perfectly with QuickBooks Online, or if you have this perfect tax software that worked with Xero, you'd be willing to use Xero instead, right?

Blake Oliver: Lauren also asks if people are using, or supplementing Xero, and QBO with financial-statement software. I think a lot are. I recently was working at a company where we did that, at Jirav. No longer there; I still recommend it as an option for creating financial reporting, and doing forecasting, and budgeting that QBO, and Xero can't do. There's also Reach Reporting, and I think they've been a sponsor, right?

David Leary: Yeah, Reach Reporting is a sponsor. You have Spotlight; you have Fathom. There’s been a lot of third-party- Qvinci is one. There's a lot of third-party reporting tools that do add-on.

Blake Oliver: And if you use those properly, it's a big investment, but in the end, the result you get is actually better than Desktop because those apps do a lot more than what you can get from Statement Writer in Desktop. For instance, in the case of Jirav, it's being able to create a financial forecast, in addition to all your historical reports; or in the case of Reach, you can do these beautiful dashboards, and Spotlight, too, right? You just can't do that in the Desktop-

David Leary: That's always been my point view, as well. Like, you have QuickBooks Desktop Contactor’s Edition, and it was good; don't get me wrong, but QuickBooks Online plus [INAUDIBLE] or QuickBooks Online plus Buildertrend, depending on your client, how big they are from construction, that's actually- those are better solutions than just standalone QuickBooks Desktop. Yes, you’re going to have to buy more apps. There's probably no way around that.

Blake Oliver: The number-two limitation with classes, properties, locations, I think that is annoyingly less flexible, at least in QBO because I think you're- well, maybe correct me if I'm wrong, David, but you're kind of locked into how those work. You can't rename them. In Xero, you can rename your tracking categories, which is nice, and you can use them for whatever you want, but that is less useful.

David Leary: Yeah, and that’s where tags ... QuickBooks has built, really, the solution for this, but until they let third-party developers access tags, it kind of makes it not very well adopted yet.

Blake Oliver: Well, Lauren, thank you so much for that insight. Those are challenges. I think they can be overcome, and I'd be really interested to hear from our listeners who have solved these problems. What are you using? Send me an email: blake@blakeoliver.com. If you are brave, and you wanna share your voice on the podcast, send me a voice memo. Just go ahead and open up your phone, open up the voice-memo app; record yourself answering this question, send it to me, and we will listen and likely play it on the air.

David Leary: And I thought some of this working trial-balance stuff- these are features they've started to build out, or they planned on some of the roadmaps for QuickBooks Online Accountant Edition, right?

Blake Oliver: I think so, but again, there's no timeline specifically as to when this is gonna happen.

David Leary: Yeah. It just shows up at a presentation at QuickBooks Connect.

Blake Oliver: As a promise.

David Leary: Who knows when it’ll be here.

Blake Oliver: Who knows when it'll happen, yeah.

David Leary: Well, you promised CPE credit for podcasts, and it happened, so you never know.

Blake Oliver: It took me a year, though.

[00:25:07] Listener questions the nuances of client relationships

Blake Oliver: One more listener email. This is from Greg. Greg says, “Hi, Blake. I am hoping you, and David can do a future podcast discussing relationships with your clients, boundaries with clients, and responding to clients. Do you respond right away? Do you respond to every client's email? This is super hard for me. I have a great reputation with my clients because I have always responded to everyone almost immediately, but it has created a problem because everyone expects a response right away, and if you don't, they wonder what is going on.

We ended up keeping the business. We emailed a letter yesterday to all 1,800 clients announcing that we are now 100% remote and that we are raising our prices by 80%. We included a link to the fee schedule, and a link to our website in the letter. We are hoping that half of the clients will drop because we can't do them all. Now, a lot of clients are asking about the new fees. We don't to respond to each and every client to tell them how much their new fee is going to be, and we don't have time to respond to tell them again what the letter said, to click on the link to see the estimate of your total fees.

Would it be unprofessional to not respond, or do we need to respond to all these inquiries about the fee increases? Just wondering your thoughts and opinions. My wife says let them figure it out; they are adults, and they can go on the website to calculate their fees. I have a hard time not responding. Merry Christmas, and Happy New Year, and congrats on being a full-time podcaster.”

David Leary: I suffer from the exact same dilemma. I think for me, historically, one of the things- it's like a double-edged sword. One of the things that made me successful was I was always accessible, but then it crossed to the point where too many people have your contact information. I literally got text last night. Some small business in Iowa texted me. They watched some YouTube video about Melio. This was 10:30 Arizona time, so this would be 11:00–11:30 at night in the Midwest, on the Tuesday night before- on the holiday week ... I got a text asking if Melio would be the right fit for their business- That’s this double-edged sword, right, if you’re too accessible?

Blake Oliver: How did you get a text message? Did you give out your phone number at some point?

David Leary: Yes! At least they didn't call because I always say, like, “Don't call ‘cause I'm doing a webinar, but this is my phone number ...” but in theory, my stuff's really out there for accountants, and bookkeepers. This is not even an accountant. It’s just a small-business owner.

Blake Oliver: Right? Oh, man.

David Leary: It's just like my LinkedIn messages ... It can be overwhelming, so I understand where he's coming from because you have an emotional need to respond, and support people.

Blake Oliver: Yeah.

David Leary: I don’t have it nailed down, and it's a huge struggle of my own, personally.

Blake Oliver: And I do think that it is important to respond. Now, when you have 1,800 clients, and you are the main point of contact, I can see how that would be impossible. Your inbox fills up after you send out a blast, and you've got maybe hundreds of people asking, "What is my fee gonna be?" Especially when you've raised prices 80%, which is great; I mean what we've been telling people to do. We know that most tax folks are underpricing their services, sometimes by half, so like Greg's doing the right thing, but the question is how does he deal with this onslaught?

[00:28:13] Thanks to our sponsor, OnPay

David Leary: This episode of The Cloud Accounting Podcast is sponsored by OnPay. If you're wondering why OnPay is great, it's because it was built by payroll experts with over 30 years of payroll experience. They handle all the complicated stuff that other payroll providers don't like agricultural payrolls, including Form 943, multi-state payrolls, and employees with H-2A visas.

Even while handling all the complicated stuff, OnPay remains an easy-to-use, full-service payroll, and HR app that is the right fit for all of your clients, whether they have just one, or 500 employees. It helps them stay organized, save time, and get compliant. OnPay has flexible, and customizable integrations with QuickBooks, and Xero. OnPay's Partner Program offers free payroll for your firm, discounts, and special bonuses for moving clients to OnPay for 2022.

The program also offers a dedicated support team to offer white-glove service to both you and your clients. To learn more about offering your clients the award-winning OnPay Payroll, and HR, head over to cloudaccountingpodcast.promo/onpay. That is cloud accounting podcast dot promo forward slash O-N-P-A-Y. OnPay - nobody takes better care of your clients.

[00:29:19] Blake's take on handling client communications

Blake Oliver: I do have an idea about how I would handle it. One idea is get a virtual assistant; get one that you trust enough to give them access to your inbox, and if necessary, you could set up a separate reply inbox for these sorts of things. When you send out an email blast to people, the ‘reply to’ is different; maybe the ‘reply to’ is like a support email address for your firm; support@myfirm.com, or info@myfirm.com.

That is a shared inbox with your virtual assistant. Then, that person's job is simply to respond to these emails and flag the ones that they can't respond to. This is very affordable now with the rise of remote work, and Upwork, sites like that. You can find a really good virtual assistant who’s, say, in the Philippines, has great English, written English, and can do this kind of thing for you.

David Leary: But even if you hire somebody, and you pay them $25 an hour, I’m finding it totally worth the money.

Blake Oliver: Oh, yeah.

David Leary: That's the lesson I learned this summer; having that intern around for the summer was amazing, but what I didn't do is I didn't have a good plan of when they go away. This fall has just been nightmare. I've fallen behind in everything, but now, I have the two new interns starting, and I'll turn this corner, but having somebody help you is huge. That’s what I do; sometimes, I just have them go into my LinkedIn inbox, and just reply, if I have to, or just figure out, like here's the actual six real messages that aren't spammers that you have to reply to.

Blake Oliver: Give them some email templates; give them some stock responses, or send them examples of replies that you've sent to folks, and then, say, like, “Draft emails similar to this,” and teach them how to go calculate the fee for the client. So, that would be an immediate triage method.
If you don't wanna hire somebody, there's an app that I use called Textexpander, which allows you to create snippets of text. You take something you've written to a client, you copy it into Textexpander, and then, you type a little code on your keyboard, and then, it just expands into that snippet. It's a way of saving email templates very easily without having to install special software for managing email. That's another way to do it.

David Leary: Chris Farmand, he's in the brewery niche, and he has- his firm's Small Batch Standard, and they basically do accounting, and bookkeeping services only for breweries. He has different plans. In one of his plans, you get to basically meet with him once a quarter; there's other plans, if you pay more. You’re paying for access to him. He has plans where you get to meet with him every week, but those plans are crazy expensive, and that's a way to control access to you. Now, you can meet have meetings with his team. It's building that structure around that, right? I get it ... I almost thought I could make a whole podcast of this journey of me trying to fix this.

Blake Oliver: That works really well when you have a team. The problem, I think, that I've learned, that many firms have, is it's just one partner, and Greg's in that situation. He doesn't have help other than his wife. It's like two people, and they've got this many clients. They want to shed half of them, but then, all this communication around that is tough this time of year, right?

I think probably the virtual assistant’s the easy way to, or the quickest way to solve this, maybe using the templates. For next year, what I would consider is using something like Practice Ignition or GoProposal and sending out the proposal to every client way ahead of time, and then, they have to accept it and pay or at least put in their payment information so you can charge them when you deliver the return. Do that in September, October, November, and then you won't have to be dealing with this in December, or January.

David Leary: This is the problem of the whole tax calendar. The AICPA should be lobbying to spread out tax dates somehow, so it's just smoother. That way, you're only dealing with so many clients per month, instead of all your clients Q1 of the year.

Blake Oliver: Why don't we have a system where your deadline is based on like, if you’re an individual, your birthday, or for your business, it's like the date you got your EIN, or something. And then, it would just be a rolling calendar. The deadlines are just different for everybody, and you spread it out over 12 months, so it's not everybody in April. That would make a lot of sense, right? Why don't we have that? I guess the reason is because Congress likes to delay tax legislation until the last minute.

David Leary: Yeah, it would actually be probably really hard to manage, like, “Well, he was in March of that year, and that’s only ...” There’d be a lot more math.

Blake Oliver: But we allow extensions for six months, anyways, so it’s like ... I don't know. Maybe it would be harder, but it could be a way to spread out the work. That's the big problem in accounting. The thing that ruins the accounting profession is the work compression during busy season. I think if it wasn't for that, a lot of people wouldn't be leaving the profession. Who wants to sign up for that these days, when there's so many jobs now that offer easy work year round, if you have the right skills, and the best firms are figuring out how to deal with that, like uncompress tax season. It's by taking on fewer tax returns, doing more client accounting services, advisory work year-round on monthly fees. That's the trick

David Leary: Owning that bookkeeping, and having that bookkeeping populate to a working trial balance all the time during the year-

Blake Oliver: So, the return is basically done by the time tax season rolls around because you've already got everything like mapped.

David Leary: But you can't do that if you don't control the bookkeeping. It goes back to what we talked about this last week, that whole CAS part of it.

Blake Oliver: Yeah, and there firms that do this. I know of them; they exist. So, it's doable. I think making the transition is really tough though because most firms are, you know, just a handful of people. How do you- when you're busy all year round because of all the tax changes, how do you actually make time to make the change? That's the hard part.

David Leary: Could you just put an autoresponder in an email that says, “Hey, I'd love to discuss with you; let's discuss this,” and you give them a calendar link, and it only has dates open in May ...?

Blake Oliver: I like that. Yeah. Starting in January, right?

David Leary: Yeah.

Blake Oliver: David, that's all the listener mail. We are all caught up.


[00:35:25] Trump Trigger?

Blake Oliver: All right, David, can I talk about politics for a moment without alienating half our audience?

David Leary: I don't get alienated.

Blake Oliver: Okay, good. So, I'm gonna talk about Donald Trump. Warning! Trigger alert for those of you who don't wanna hear this; skip ahead. I don't know if you all are aware, but Donald Trump has been- and the Trump organization have been under investigation, a fraud investigation, by New York State Attorney General Letitia James, and we got some details about this in a New York Times article. The headline, of course, got my attention-

David Leary: Can we rewind for a second, just to make sure I'm remembering correctly – maybe four months ago, five months ago; it could be even longer, maybe six months ago, somebody who was a longtime accountant, or bookkeeper for him, for Trump, was keeping really good records. He just [INAUDIBLE] he’s like, “I flew on the Trump jet this time,” or, “I got these basketball tickets,” like this under-the-table kind of pay that he kept track of- meticulous records about this. Am I remembering something like that?

Blake Oliver: Yeah, yeah, it was, I think, their CFO, the Trump organization’s CFO, and we predicted this could be the downfall of the Trump organization because of these super-aggressive tax deductions.

David Leary: Is this tying to where we are now?

Blake Oliver: So, this article is actually on a separate issue. The headline is, “Trump Fraud Inquiry’s Focus: Did He Mislead His Own Accountants?” That obviously got my attention. According to this leak, what the investigation is looking into is these statements of financial condition that Trump's accountants prepared for various banks, and Deutsche Bank, in particular; annual statements of financial condition is what they're called.

I guess the question at the heart of this investigation is did Trump, and the Trump organization commit fraud by inflating the value of assets in order to defraud lenders? I read this article. I think there's zero chance, basically, that he gets hit with fraud for this because, as most of us tend to do, when we're preparing these kinds of statements for our clients, we put disclaimers all over the place, right? The accountants, Mazars USA, did a pretty good job, it sounds like, of putting disclaimers all over these financial statements.

Basically, what happened is the Trump organization sent over these valuation amounts of different properties. This is to get loans from banks. The accountants just took those spreadsheets, and put them into financial statements, and then said, “We didn't audit this; we didn't examine it; it could be completely wrong. Not audited or reviewed. We do not express an opinion or provide any assurance about it.” They even said that, in compiling the information for Mr Trump, they had “Become aware of departures from accounting principles generally accepted in the United States of America.”

With those disclaimers, I think they're protected. This is the same thing that I used to do in my firm, which is- I didn't produce financial statements for my clients, I produced management reports, and we had big disclaimers on the bottom that said, “This report was produced using information from our client, and we make no assurance to it; it's not for outside use; you shouldn't ...” Anyway, I think there’s zero chance that this actually goes anywhere. That's all. That’s my thought on it.

David Leary: Which keeps happening, right?

Blake Oliver: Yeah-

David Leary: The chase continues.

Blake Oliver: It feels like this is a political investigation, at least this part of it. It’s funny, too, because the bank, Deutsche Bank, actually made money, so it's hard to even say there was a victim. You know what this reminds me of? It's sort of like when a client asks for you, or a mortgage lender asks you to provide – as an accountant – what do they call it? Like a letter for your client, validating some sort of income, or whatever, but everybody knows that those letters don't mean anything, but they keep asking for them. All right, that's it. You can turn your volume back up. We’re done with the politics.

David Leary: It wasn’t too political; I don't think it was too political.

[00:39:19] Thank you to our sponsor, Tallyfor

David Leary: This episode of The Cloud Accounting Podcast is sponsored by Tallyfor. Tallyfor is the tax-flow tool empowering CPA firms to automate the tax trial balance, allowing them to save hours on each return by flowing the data from the books to the trial balance to the tax forms in three easy steps – import, adjust, and file.

Import – Tallyfor can connect to Xero, both QuickBooks Online, and Desktop, Sage Intacct, or Excel to pull the trial balance automatically. Adjust – your accounting, and tax teams can collaborate to make all the necessary tax-based adjustments to the trial balance. You can even distribute and assign the work accordingly. File – once the tax trial balance is completed and approved, Tallyfor can automatically send the trial-balance data to any of the leading tax-software apps that you may be using, including UltraTax, Lacerte, Drake, CCH Axcess, Engagement, and ProSystem fx.

Tallyfor’s import, adjust, and file process will help you reduce the time it takes to create a tax return from multiple hours to just minutes. To learn more about using Tallyfor in your CPA firm, head over to cloudaccountingpodcast.promo/tallyfor. That is cloudaccountingpodcast.promo forward slash T-A-L-L-Y-F-O-R.

[00:40:32] 900 cases of stolen COVID relief funds

David Leary: We can continue down criminal, and fraud type stories. The Secret Service put out a press release – I don't even know if it's a press release – a statement talking about how $100 billion in COVID-relief funds have been stolen, and how they're working on 900 cases, and they're working with Green Dot, and PayPal. They've recovered money-

Blake Oliver: So, this was specifically unemployment insurance, and loan fraud-

David Leary: PPP, as well. They're basically combining all the numbers together and coming up with this $100 billion number. I'm trying to understand like why because, to some extent, these are known numbers. Why is the Secret Service out there doing this, other than, is it for budget? Like, “Hey, look at us! We’re getting this money back. Give us more budget for these criminal investigations ...” but then, you kind of think, is it more effective for us to fund – this is the way it went through my head – for us to fund the Secret Service and chase down this $100 billion in fraud, or is it better to invest in the IRS, and have Elon Musk pay $11 billion? Where should we be putting our resources, as politicians, and the government have the budget?

Blake Oliver: Well, depending on who you believe, the tax gap is either non-existent or close to a trillion dollars a year. The tax gap is way bigger than the fraud from the pandemic-relief funds. Even if that is $100 billion, I believe we have a much bigger tax gap.

David Leary: So, we should be funding the IRS over Secret Service, when it comes to these types of cases?

Blake Oliver: Absolutely, if you believe that funding the IRS will result in more compliance, but again, it's like there's all this dispute about what is the actual amount of the tax gap and will investing in the IRS actually deliver the 10X results that the administration is promising? I think everybody agrees that giving money to the IRS has a positive ROI. The question is just how much. The last thing that accountants want, and this is what the Republicans have been saying- the last thing that accountants, and small-business owners want is more audits, but maybe more audits is what we need to get the worst bad actors to comply.

The question is just who's gonna get audited, right? Is it gonna be the actual bad actors, or is this just gonna create a hassle for everybody else? It kind of depends on what the IRS uses the money for, and will they use the money to improve service levels, which is what everyone really, really wants, right? Everybody agrees service levels are terrible, but can't improve service levels without giving them the money to do it.

David Leary: Yeah.

Blake Oliver: You know what's interesting here is the percentage number. This was in the CFO article, so I'm not sure if this is correct, given that they got the billion, and million mixed up, but-

David Leary: I know where they got the $100 million, before you go into this. So, this article, at the very bottom, talks about $100 million in fraudulent funds have passed through investment accounts since Congress passed the CARE Act, last March. They've cracked down. It’s hard. A lot of the PPP loan companies aren't working with the instant banks; they're not working with Chime; they're not working with some of these banks now. You can’t get a Cash App bank account, and go get a PPP loan, and have it deposited in there. They've started to lock that stuff down, but even since March, there's been $100 million. That’s where they’re probably getting that $100 million mark.

Blake Oliver: Got it. These numbers are really big, so it's hard to make sense of them. A percentage can help. So, CFO says that the amount stolen funds across all these programs – the Paycheck Protection Program; the Economic Injury Disaster Loan Program, and the Pandemic Unemployment Assistance Program – the amount of stolen funds across all those programs represents approximately 3% of the $3.4 trillion disbursed. That's how much fraud we've had – 3% of the total has gone out the door to fraud. Do you think that's a good amount, or a bad amount? I feel like anything more than 1% is material; it's too much. I think under 1% would be good. When you think about it, in the big scheme of things, to lose 3% to fraud for what it's achieved, assuming that it doesn't achieve massive inflation-

David Leary: Going back to that theory of keeping the economy from collapsing.

Blake Oliver: Right. If that’s what it, in fact, did, which is keep the economy from collapsing, then it was worth it.

David Leary: What if the economy collapsed, and we had a whole different kind of criminal activity arise?

Blake Oliver: Yeah, I don't know ... It's hard to know what would have happened otherwise but, on the whole, I feel like it was good. It worked, and it sucks to have that fraud, but as everybody knows who deals with retail, you're always gonna have a certain amount of product walking out the door, and there's nothing you can do to stop it. You could try and stop it, but it's not worth it. I guess that's the takeaway – what is the appropriate of shrinkage in a pandemic-relief program? I wonder what the number is for retail.

David Leary: I'm sure we have listeners that specialize in retail, and they can give us a voicemail, and tell us what's an acceptable amount of shrinkage in a company. I think that's it for non-app news for me.

[00:45:24] Comparing pandemic shrink to retail shrink

Blake Oliver: Oh, I have a stat I just looked up. National Retail Federation says that theft fraud, and losses from other retail shrink, which is basically shoplifting, and employee theft, totaled $61.7 billion in 2019. That represents 1.62% of sales. It's about twice as bad, let's just say, the fraud from pandemic programs, as the typical retail.

David Leary: But I imagine they're getting it back. They’re starting to recover billions of this, so-

Blake Oliver: They should be able to, right? They should be able to recover a lot of it because they can trace it back to people, ultimately. It's just a matter of like how long will that take?

David Leary: A lot of retail fraud’s like nickeled, and dimed. It’s hard to-

Blake Oliver: You're never getting that back.

David Leary: It’s a lot of $50, $60, $70 shirts, or $70 sweatpants, as I quickly discovered, recently.

[00:46:16] Criminal crypto seizure

Blake Oliver: Well, hey, since we're talking about the recovery of the PPP funds, just another interesting stat here: cryptocurrency is used a lot for crime. That's one of the number-one uses for Bitcoin, and whatnot. The IRS has seized $3.5 billion in cryptocurrency in the past year. That makes up 93% of its overall seizures from October 1, 2020, to September 30, 2021. 93% of IRS seizures are cryptocurrency. That just tells you how much cryptocurrency is used in financial crime these days.

David Leary: Especially something that the reason people are choosing to use that for financial crimes is, in theory, it's not supposed to be traceable; nobody can get it; nobody can grab it, but obviously, that's not true-

Blake Oliver: Well, that's the funny thing. Yeah, the blockchain is an immutable record. If you have the time, and the resources, you can trace it eventually and get it, which is funny. I don't know. Maybe, as the IRS gets smarter with this, and the Secret Service, and all these- FBI, all these agencies get better at cracking down on it, maybe it will not be as favored anymore?

David Leary: Maybe- Remember we talked about how they brought down all those criminals because basically the FBI just created like cell phones that were “non-trackable,” and all these criminals were just using them, and selling them to each other, and they really just- all the cellphones were made by the FBI. Maybe this whole cryptocurrency thing, it’s all being ran by the government, so they're watching it all, anyways. It’s not ... Under the covers, it’s really just the government.

Blake Oliver: What they should do is set up like honeypot servers for criminals to hack into and ransomware, and then pay the ransomware, and then track the money back to them. That would be a great service. They're probably doing that already, I bet, or they're gonna do it soon.

David Leary: Wanna jump into app news?

Blake Oliver: Let's do it!

David Leary: Sage made another acquisition.

Blake Oliver: They are on a tear!

[00:48:12] Sage acquires Brightpearl

David Leary: They acquired a company called Brightpearl for £225 million. Apparently, they already own some portion of it. They owned 17% of it before, and now, they finished the acquisition completely. Brightpearl is basically a cloud-native multichannel retail for retailers and wholesalers. It’s getting into that, you know, the everything-businesses game, right?

Blake Oliver: Inventory management; order management; shipping; and fulfillment; warehouse management; purchasing, and supplier management; POS; everything.

David Leary: CRM ... And so, this is where they're really trying to get this into the Sage Intacct stack because it's really for midsize businesses. It’s gonna enable real-time insights and automate workflows to save time and money. Really, I think the key here is- the ultimate goal for the combined companies is to offer a suite of tools encompassing financial management, inventory planning, sales, supplier relations, CRM, fulfillment, warehousing, and logistics in one place. That could be a sentence about Intuit's current moves. That could be a sentence about some of Xero’s moves. This same sentence is applicable to many people's press releases lately.

Blake Oliver: Brightpearl integrates with Xero, QuickBooks Online, and QuickBooks Desktop, so I'm curious what's gonna happen to those integrations, now that Sage has bought 100% of it.

David Leary: I think CakeHR still integrates with both of those. They bought CakeHR; they bought AutoEntry; it still integrates with QuickBooks, and Xero.

Blake Oliver: Let’s hope.

David Leary: That was the talk we got, right, when we talked to Aaron Harris from Sage Intacct? He said they plan on keeping open platform with all their apps, and their partners, but we'll see. We'll see.

Blake Oliver: We will see.

David Leary: Sometimes, that always looks good on paper, then push comes to shove, one day, and people turn products off.

[00:49:55] Xero acquires TaxCycle

Blake Oliver: Speaking of acquisitions, Xero acquired Canadian tax-software provider TaxCycle – one word, TaxCycle. Based in Calgary, Alberta, TaxCycle was founded in 2010 by Canadian tech-industry veteran Cameron Peters. Cameron created some of the first tax software for electronic filing in the mid-‘90s and has been continually innovating in the space since then. TaxCycle software provides a full Canadian income-tax suite with almost 4,000 tax firms, and over 16,000 individual accountants, bookkeepers, and tax preparers using its solution. That's according to the Xero blog. What are your thoughts on this, David?

David Leary: I think TaxCycle had like a retail product, but it sounds like, based on these numbers, they also have a professional product, as well, considering that tax firms are using it. So, this goes back to rewinding to our listener email from Lauren. We talked about that end-to-end – you have bookkeeping, and you have tax, and getting them all connected together. Xero could essentially do this in Canada. They already have this pretty well locked down in Australia, right, this end-to-end?

Blake Oliver: Yeah, this is their main value prop in New Zealand/Australia is it's an end-to-end solution; everything in one place – workpapers, tax, accounting, and all the data flows. We just don't have that in the U.S.

David Leary: Now, they have the freedom to this in Canada-

Blake Oliver: Yeah, they could do this in Canada, and own it. They could own the Canadian market with this, at least among accounting firms, for sure. I'm jealous. When are we gonna get this in the U.S.? I think the problem is our tax code is just too complicated, and the all the tax-software providers are too big to acquire. It's not like Xero's gonna go out and buy CCH, or Thomson Reuters, or whatever else.

David Leary: They can afford H&R Block. Somebody could buy H&R Block. Was it a $4 billion market cap, last week? Somebody can afford-

Blake Oliver: I think so, yeah. Maybe they could, but we don't want Xero also competing with accountants, and bookkeepers in providing services. That, to me, is the difference now between Xero, and Intuit. It’s not that the software is that much different, right? It's Pepsi/Coke when it comes to the software, but the difference is that Intuit is directly competing with accountants, and bookkeepers for bookkeeping, and tax work, whereas Xero has stayed out of that game. Now you think, David, that they’ll get into it someday, but I think if they want to-

David Leary: Eventually, The Street's gonna force them. They're kind of doing it-

Blake Oliver: I disagree. I disagree.

David Leary: I think they’re doing it a little under the radar a little bit, by the way they’re partnering with H&R Block. They're letting other people kind of do it. I don't know We'll see where it gets to.

Blake Oliver: I just think it'll never happen because, globally, Xero is so aligned with accounting firms that they would never compete with them. I guess never say never ...

David Leary: I think it's a good move. I mean, ultimately, it's very clear- like you said, from her email, this is what accountants want. They want that end-to-end. They don’t wanna have to get third-party middleman apps to move data around. They want this full connection.

[00:52:48] Tax change for payment-app providers

Blake Oliver: Here’s a tax change that’s coming that’s gonna affect payment apps. David, I'm curious to know if you've encountered this with Melio. Did you know that payment-app providers are going to have to start reporting to the IRS a user’s business transactions if, in aggregate, they total $600 or more for the year; a business transaction is defined as a payment for a good or service.

Now, prior to this change, app providers, payment providers only had to send the IRS a form 1099-K if an individual account had at least 200 business transactions in a year, and if those transactions combined resulted in gross payments of at least $20,000. So, most people who used apps like PayPal, and Melio, and Venmo didn't get 1099-Ks, but now, a lot more are gonna get that. So, that's something that accountants, and bookkeepers need to be aware of, and I would, if I were you, send out a note to your clients letting them know to expect this form coming their way and to hand it along to you.

David Leary: Yeah, because I think this was like- it started out as very ... The political drum was banging on this couple of months back.

Blake Oliver: The informational reporting? Yeah.

David Leary: Yes, the requirements, and the $600 thing. I think what it is – and I wouldn't be surprised if, you know, the Venmos, and the PayPals – a lot of people are using these apps, the personal apps, for business to avoid paying fees, right?

Blake Oliver: Yeah.

David Leary: I think this is gonna help those apps push people towards their business product. I think it's gonna surface those up, and then, who knows where it goes from there.

Blake Oliver: Maybe. PayPal recently put out a Q&A for users PayPal, and Venmo saying, “In the coming months, we may ask you to provide tax information, like your employer identification number, individual tax ID number, or social security number, if you haven't provided it to us already,” because they need those numbers to create these forms for you. It's gonna create a lot of hassle for the users because they're gonna get a pop-up saying, “If you want to keep using our app, you have to put this in,” because it's the only way the app is gonna be able to send you the form.

David Leary: And, I mean, all the apps that are truly designed for business, like Melio, etc., it’s a requirement-

Blake Oliver: Already get that.

David Leary: You’ve got to provide that information. It's ‘know your customer’ type stuff. That's where I think the crackdown is on this. It's about the money moving around for non-businesses, or people that probably are a business, but they're not acting like a business, other than the fact they’re just getting money for goods, and services. They’re trying to get people that are not paying their share or reporting their share to report.

I think it’s a lot harder because, in theory, you’ve got to create a business to get your EIN, right? You have to be a business, and a lot of the apps that are truly for businesses are gathering that information. I'm sure, from the IRS's standpoint, it's probably being reported somewhere, but it's the people that aren't businesses that are ... They're businesses. They're just not operating as a business-

Blake Oliver: Set up that way.

David Leary: Set up that way, yeah. That's what probably drove a lot of this.

[00:55:42] Ekos gets a $21 million Series B injection

Blake Oliver: Well, I think we're almost out of time. Anything else before we go, David?

David Leary: Ekos Software- Ekos is brewery software for craft brewers. They took a $21 million Series-B raise.

Blake Oliver: How much?

David Leary: $21 million.

Blake Oliver: Okay. Good chunk.

David Leary: Ekos is growing pretty good. They serve 2,000 small businesses on six continents now. It’s a niche app. They only serve brewers, and distilleries, but now, they're gonna use this money to kind of get in the whole end-to-end part of the craft supply chain. It used to be just software to like brew your beer, and now, they’re expanding out in the financial parts of this on both sides. That syncs in with QuickBooks, and Xero, etc. It just shows there's a lot of a lot of money in the niches, as well.

Blake Oliver: Riches in the niches.

David Leary: And that's it.

Blake Oliver: David, if our listeners want to get in touch with you online, where should they go?

David Leary: They should just text me ... I'm on all the socials, just @DavidLeary, and if you're on LinkedIn, just say, “I'm not a bot.” Helps me figure those out.

Blake Oliver: I'm @BlakeTOliver on social media; email me: blake@blakeoliver.com. Let me know your thoughts on any of the stories that we’ve discussed, and if you're feeling particularly adventurous, send me a voice memo. We'll play it on the air ... And subscribe to Earmark CPE! Go to earmarkcpe.com; put in your email address to get on my newsletter, and you can download the app on the App Store. Just make sure that you search for Earmark, not Aramark-

David Leary: And get your credit!

Blake Oliver: Yeah, and get your CPE credit for listening to this whole episode! You get specialized knowledge CPE credit. If it's not on the app when you listen to this episode, it will be shortly.

David Leary: Amazing!

Blake Oliver: That's it. Have a Merry Christmas, and I guess we'll talk before the new year, so I won't wish you a Happy New Year yet.

David Leary: Not yet.

Blake Oliver: All right, bye, David.

David Leary: Bye.

[00:57:37] Classifieds

David: Time for the classifieds.

[00:57:43] Oh My Fraud: A True Crime Podcast for Accountants

Blake: Hey, podcast listeners, it's Blake, and I wanted to let you know about a new show I'm working on with CPA/comedian, Greg Kyte, and blogger/former CPA, Caleb Newquist. It's called, Oh My Fraud, and it's a podcast all about financial crimes. That's right, a true crime podcast for accountants by accountants.

Caleb, and Greg are gonna come together every couple of weeks to unpack their favorite frauds, and explore the circumstances, psychology, and interpersonal dynamics involved. They also fully indulge in victim blaming the defrauded widows, orphans, infirm, and feebleminded because who can resist?

If you fancy yourself a trusted advisor or prefer your true crime with spreadsheets instead of corpses, listen to this show to learn what to watch out for, and to keep your clients, your firm, and even yourself safe. To subscribe, go to, ohmyfraud.com, or search "oh my fraud" on Apple Podcasts, Spotify, or wherever you get your podcasts.

[00:58:41] How to advertise in these classifieds

David: Want to get the word out about your newsletter, webinar, party, Facebook group, podcast, e-book, job posting, or that fancy Excel macro you just created? Why not let the listeners of The Cloud Accounting Podcast know by running a classified ad? Hit the show notes for the link to get more info.

Earn CPE Credits Listening To Podcasts
Broadcast by