Another Top 100 firm takes PE investment; Tech accounting firm Osidon abruptly shuts down; Crypto investors aren’t filing tax returns; Intuit’s Mailchimp problem; and more!
David: What if, instead of sending your clients a report as a PDF from QuickBooks, you could invite them to a suite of interactive reports where they can drill down on any number, gain insights, and easily communicate with you about any report, account, total, or even an individual transaction? What if you could do this for free? Stay tuned to hear more from our sponsor, Digits, later in the episode.
Blake: And that is what I hate about big firms. And that is what I hate about corporate America. It's inhuman. It is dehumanizing. Nobody should work for a company like that. We- they should not exist. And I'm so glad that there is this talent shortage right now because it's forcing companies like that to reckon with what they've been doing; the way they've been treating people.
David Leary: Coming to you weekly from the OnPay recording studio, this is The Cloud Accounting Podcast.
Blake: Welcome to The Cloud Accounting Podcast. I'm Blake Oliver.
David: And I'm David Leary.
Blake: David, it is Sunday April 17th, day before the deadline.
David: And this is the fifth time I think I've rescheduled this episode with you.
Blake: Well, you're not in your normal recording studio in Tucson. Where are you?
David: No, I'm in a little hotel room. They call it a micro social hotel or where the hell this place is called.
Blake: Oh, like how small is it? I've been to some pretty small ones.
David: Okay. Well, considering I'm in Dallas, Texas, it's extremely small.
Blake: I thought everything was bigger in Texas.
David: But there's not even a headboard like on the bed. It's just up against the wall.
Blake: So, when I used to fly up to San Francisco once a month to go meet with my company, when I was working in tech, I stayed at these micro hotels. I forget actually what it was called, but it was like literally, just, you walk in, the entryway is the bathroom, and then that's actually the first-floor area. And then you would go up a little loft, and the loft would be the bed. And it was-
David: Oh, that's super teeny. Wow.
Blake: Yeah. Yeah. Yeah. And I actually- you know, if you're not claustrophobic, they're kind of fun. And they do have high ceilings because of that- at least this this type- but I'm a fan of the micro hotels. Like, I don't- if I can save money by staying there, then I do it.
David: Well, in general, I just need a bed and a shower, but occasionally, I need a desk. So, like today, I needed a desk, and they don't really have a desk or a chair. So, I had to- I took the luggage rack thing in, stacked it up on the bed. I set up a desk on that.
Blake: Ah. I've never done a capsule hotel. I really do want to try that at some point- go to Japan and do a capsule hotel.
David: I feel like my kids would be into that. Like, they each have their own little bed, little silo.
Blake: So, you're in Dallas. What are you doing in Dallas?
David: My daughter has a volleyball tournament. So, there's a- I think 1800 teams. It's over two weekends. It's in a- two weekends in Dallas, and one weekend in Austin. And we're only here for this age division here, but that's a lot of volleyball.
Blake: Wow, it is. How many- you’ve been to a lot of games?
David: They have like a hundred courts. It's crazy.
Blake: Wow. That’s great.
David: Yeah. And so then, they play a round of three, then next, they play around of three, then the you know, elimination bracket today. And so, yeah. So, I've rescheduled on you three times ‘cause I'm like, “Oh, they got games again.” And I'm actually missing a game right now because I was like, “I can't reschedule again,” but you know, that scheduling gets a little rough.
Blake: Well, just imagine if you were in tax, David, you wouldn't have been able to go.
David: Exactly. And so, I think, Blake, I want to say like, I'm thankful for you. I just want to like get that out there. And I'm thankful for like all of Tax Twitter, all the accountants. My accountant, he sent me an email Friday night at 1:00 AM to clarify a couple of things from my extension. Right?
Blake: Yeah, yeah. Yup.
David: You guys are just like- it’s amazing like how much work accountants and bookkeepers are having to do to meet deadlines. And then you've seen it on Tax Twitter, right? Everybody's kind of in that same boat. But you're almost done. You can get there.
Blake: Almost there.
David: Did you file your extensions? Are you on top of it?
Blake: Well, I am in a similar situation. I am communicating with my tax advisor over the weekend to get it filed. So, expect to do that any moment.
[00:04:19] Get free CPE for listening to this podcast at EarmarkCPE.com
Blake Oliver: Do you need CPE? Now, you can get free continuing professional education credit for listening to this show. Visit earmarkcpe.com to get started. Or search for Earmark CPE in the App store or Google Play. It's free to join, and free to earn CPE.
[00:04:41] Tips for energizing your staff for last minute returns
Blake: So, should we talk about a little bit of tax news or- I saw an article anyway related to tax season. This is from our friend of the show, Ed Mendlowitz. The headline is ‘Energizing Staff for Last-Minute Returns: Tips From Ed's Long Career in Public Accounting and Tax’.
David: Just tell me buy pizza for the staff is on his list.
Blake: Pizza is not, but ice cream is. So, if you're looking to mix up your food-based perks in your office, Ed suggests bringing in ice cream sundaes in the afternoon. “One time, we told the staff to have their spouses bring their young kids to the office. And we had a clown there for half an hour to entertain them.
Ed also liked to walk around the office with magic tricks for the staff, and some of the tricks would really stump them.” I guess Ed is into magic, which I also was into that. I had a phase that I went through where- I even performed a magic show for money, for like a kid's birthday party.
David: I think Brex at their booth, at all the conferences last year had a magician standing there.
Blake: They did. And it was pretty good, right?
Blake: “We had a masseuse come to the office in the afternoons, and each person got a 10 or 15-minute shoulder and upper back rub.” I like that one a lot. That's a great perk.
David: Did I say about that it forces you to stop what you're doing? ‘Cause if you get your ice cream, you could sit right back at your desk and keep working as you eat your ice cream, right?
Blake: That's true.
David: You truly take a 10-minute break if you get the little shoulder massage.
Blake: “We would send flowers or a plant to the spouses or partners of staff, and dolls or Teddy bears to their children.” That's good. Send it on their behalf, right?
David: Yeah. Sorry, you won’t be seeing your significant other or your parents for the next two weeks.
Blake: Yeah. Yeah. Give it up.
David: Hope that this Teddy bear will do.
Blake: A card- send them a cardboard cutout of their-
David: That's- oh, yeah.
Blake: -of their significant other. They also would give tax-free cash gifts on the evening of April 15th. So, like, as you go out the door on the evening of April 15th, here's a hundred-dollar bill. I think that's nice. Cash is great.
David: Yeah. That, and a bottle of whiskey or something too.
Blake: Yup. Yup. Closing the day after tax season ended. I don't understand that one exactly.
David: Oh, I think a lot of people just- yeah, you just shut your office for the next seven days or whatever. I think that some people do that.
Blake: Oh, for the next week. Yeah, that makes sense. That makes sense. Definitely, don't book client meetings for the week after, right?
David: Yeah. Or an offsite for your employees or, yeah.
David: You want- let everybody rest, for sure. I saw-
Blake: Here's a- before you go onto the next story, I just had to- this is a good one. “One time to have a little fun, I made believe the giant paper cutter that I used a lot cut my tie in half. The staff noticed after I yelled some inappropriate words about it. And some of the staff couldn't stop laughing for quite a while. What I did was pre-cut the tie, so it was a clean cut.
A month later, the staff presented me with that tie in a frame box, which hung in my office for years. It probably was a lot- it probably it was fun working for Ed, right, you know?
David: Well, the important thing is, is putting in effort, right? He's putting in effort. He's showing he-
Blake: He's trying.
David: He’s trying, exactly. And that's 99% of it, right? You should try.
Blake: Showing he cares.
David: I think I saw somebody on Twitter said they were rewarding themselves- that they said throughout the time of tax season where every time they type one piece of data entry into a field, they get to eat one M&M.
Blake: They get to eat one M&M? I like-
David: Yeah. So, you said this kind of motivation or energy, which I thought was kind of interesting.
Blake: That's kinda how I work, where I'll give myself a small task- maybe a 15-minute task- and I'll say, “At the end of this, if I get this done, if I work really efficiently, I can go like, get a coffee.”
[00:08:23] Firm goes under right at tax deadline
David: Well, I don't know if you saw this. There is one firm that didn't have to motivate their employees because apparently, the labor shortage caused them not to have any.
Blake: Oh yeah?
David: And they just pulled the plug last week, and sent clients a letter that just says, “Tough shit.”
Blake: I did hear about this because this was a listener tip that we got. Would you like to hear the email?
David: Do you want to do the email or do you want me to set the table of a year ago?
Blake: Yeah. Sorry, yes, I jumped the gun on that. So, we talked about this firm.
David: Yeah. So, last March, whenever it was- and I've tried to search our show notes and I couldn't find it, and maybe I'm not searching good enough, but I swear we talked about this. So, there's an accounting firm, Osidon, O-S-I-D-O-N. And they are out of South Africa. They expanded to the U.S. So, this article is March 1st, 2021. So, we're going back almost exactly 12 months ago, right?
David: Almost exactly a year. It's an accounting firm that was started in South Africa and basically, it was driven by the founders- it's Henny Ferreira and his wife, Melissa. They didn't like the support and service they had from their own accountants, so they started this firm.
Blake: Classic story we hear a lot when we get to tech people coming into accounting to start accounting firms.
David: Yes. And I don't know if they were tech or not. That, I'm not sure about. So, they launched a firm, and then it was doing okay. And then they opened up in Austin- their Austin U.S. headquarters- and they made that the headquarters of the whole entire company, right? And because this is still from the article last March, “Osidon uses the latest AI and cloud technologies to build the digital accountant.
Accounting functions are executed by an intelligent system while clients are assigned a human U.S.-based accountant to assist with other services such as consulting, advising, and continuous support.” So, again, it's like, “Hey, we got some people, we got some tech, and because of that, we're going to be like super-efficient,” right?
Blake: Yeah. The headline in the announcement- the original PR announcement back in 2021- is pretty ambitious. ‘World's first online digital accountant expands to USA’. Oh, wow, the first online digital accountant. Amazing.
David: Yeah. And so, they- and they said, “At its core, Osidon is a tech company using the latest technology to develop groundbreaking software systems. With automation, comes efficiency and affordability on a grand scale.” And I'm stressing these things from the press release because we'll get into what happened eight to 10 days ago.
Blake: They were featured in Entrepreneur: How Osidon has gone from startup to scale up in two years.
David: Well, those are just all paid PR articles. Like, you and I could get articles in those stupid magazines if we wanted to, Blake. Like, they're still paid. Like, it's not like it's real coverage of anything, but yeah, they got an endorsement here, where they said they were an official corporate partner of the Institute of Management Accountants.
Blake: They're also a Xero platinum partner. That's how- that's one of the ways that we know about them.
David: Yeah. And they’re- so, essentially, what happens, we got this listener tip. You want to jump into that?
[00:11:30] Listener email about Osidon
Blake: Yeah. So, this is an email we received transcribed to voice by AI.
Listener: Hey, Blake, listener of the podcast with you and David and a big fan as I listen to it every week. Wanted to send this to you as an anonymous listener to avoid issues with the clients taken on. Recently, I got a few leads stating that they have been let go from their previous accounting firm.
Turns out, Osidon just recently closed down, effectively immediately, with practically no notice to their clients. They say its due to the “labor shortage” but yet, in the same letter they sent to clients, state that they are giving zero refunds, and will not be meeting any of their “financial obligations”.
Both clients I’ve now taken on stated they have no idea whether even if their corporate extensions for their S-Corps were filed as they have not gotten any communication from them for some time, and now just got this letter last week. Without disclosing fees, it sounds like they banked on somewhat low monthly fees to probably gain a decent market share to later maybe get enough momentum to slowly raise the fees.
I thought it was odd, given they are a platinum-level firm with Xero, and I’ve seen their ads a number of times. And I recall they were on a few news articles once or twice. Not to mention, on LinkedIn, they have what looked like a decent size firm of 25+ employees. So, it’s not a very small firm either.
Whatever they case, maybe I feel like there’s more to this story, given the many avenues this firm could have gone to better take care of their clients and transition out of the business. Who knows what comes up later on as time progresses? I attached the letter the clients got and the very abrupt email as well they sent it via with the recipient email taken out.
Blake: Thank you to our anonymous listener for sending us this. And David, you have the letter from Osidon.
David: Yeah. So, I have the letter. I did share it on Twitter and we can talk about some of the comments that listeners put on Twitter. But so, their site, osidon.us is 100 percent down; completely pulled the plug on it. But I was able to use the way back machine Is it the Wayback Machine or Way Wayback Machine?
Blake: I don’t know, but-
David: It's from archive.org, right?
David: It's part of the Smithsonian, right? And I was able to get some screenshots of their website. So, they basically had, prices were starting at $265 per month. And a lot of it in their FAQs were talking about how you have a dedicated person, they’re always going to be there when you need an answer. D Don't worry, you can log into this portal and see where your status of things are.
But then obviously, it sounds like the clients weren't communicated with at all. So then, it's like, was there even a portal that didn't need to exist? These things, I don't know, but it's a full-blown-
[00:13:52] David reads Osidon letter
David: And I'll go over to the letter here and read their letter. Should I read the whole letter?
Blake: Yeah, why not?
David: All right. And then you’ll AI me to sound like a corporate legal person or something?
David: All right. So, this is a letter that was written. It says closure- and it has their letterhead; it has their logo. It says, “Closure of U.S. Operations. To whom it may concern. It is sad and very disappointing that I have to inform you that due to labor shortages in the USA, Osidon will close our USA operations with immediate effect. All services and staff will be terminated and operations seized,” which-
Blake: I think they meant ceased.
David: Ceased, right? And then people picked up on that word because that makes it seem like maybe something illegal happened, right? “The USA expansion was a massive success. We have built up a very healthy and fast-growing business in the USA. Due to the massive labor shortage in the USA, we have not been able to find or retain enough staff members to sustain our operations in the USA.
Salaries have been spiking to record highs and have become unsustainable to accommodate our business model. To close a healthy company due to staff shortages is very disappointing, but we will unfortunately, have no other choice. A detailed explanation of the impact of labor shortage can be found in the link below.” And they just linked to some article on the U.S. Chamber of Commerce.
“With the immediate cancellation of services and no further investments in our USA business, the company will no longer be able to meet any of its financial obligations, and will not be able to afford any refunds or compensation to any possible creditors. If you have any queries, you can send an email to firstname.lastname@example.org, and this email will remain active.
We’ll also ask you to respect the fact that none of our staff members in the USA represent Osidon anymore and they can no longer- employees of the company.
Blake: As they are no longer in place of the company.
David: Of the company. We wish you the best of luck on your business journey, going forward.” And it's signed by the seal.
Blake: And this was sent what, like, last week? The week before?
David: Yeah, this is like yeah, the eight days of tax season, basically.
Blake: And they're South African site is still active. So, this is a South African firm that expanded to the U.S. And they’re- I did the currency translation. They started about $200, U.S., a month.
David: Yeah. Or their old website, I found images, was 265 a month. And they do everything, in theory. Like, we're going to do your taxes, and your payroll- like, it's a full suite, right?
[00:16:17] Thank you to our sponsor, Scrutinize
David: This episode of The Cloud Accounting podcast is sponsored by Scrutinize. The month end close can be stressful, causing quality reviews to sometimes fall by the wayside. There just isn't enough time to manually review all the data. But what if you could audit client's books in seconds instead of hours? Scrutinize automates recurring financial reviews.
Scrutinize connects to your QuickBooks or Xero file, then quickly scrutinizes the data by searching for dozens of common issues, audits the user activity and analyzes transaction volumes. Whether fixing simple clerical errors, surfacing potential fraud, or uncovering deeper issues like process breakdown, staff training gaps, or other apps running amuck, Scrutinize helps your team drive the quality outcomes your clients depend on.
You can even use Scrutinize to help you scope and price new clients by analyzing the monthly transaction volume, and servicing areas of their books that will need attention. To request a demo and to start your 14-day free trial, head over to cloudaccountingpodcast.promo/scrutinize. That is cloudaccountingpodcast.promo/scrutinize.
Blake: So, what are people saying on Twitter about this? ‘Cause you posted this letter on Twitter.
David: Well, it's kind of like, I'm stepping back and thinking about this. At one level, every single firm we know has a labor shortage right now.
Blake: Yeah. Yeah. Well-
David: I don't know any firm that's like, “Oh, we have too much staff.” Nobody. So, every firm is suffering this, but you don't see other firms just telling their clients, “Tough shit. We're not doing your returns.” So, that's kind of one thing. And then the other thing is this game of, “Oh, tech's going to solve all these problems.” Like, in theory, if- the tech's going to get rid of the labor, right?
David: And I'm saying this in theory is like, this is their promise, right?
Blake: Right, right, right.
David: This is what they're banking on. And one of the responses- this is from Brett, @Brettereveryday on Twitter. So, he says, “So, the AI solves accounting scorecards reads, scale factor, big, red X, Osidon, big, red X.” And then, he's like, “Where does Botkeeper stand?” You know, owning up to AI at offshore labor and selling the firms instead of businesses.
So, there's- you know, people are starting to question this tech. And Allen Douglas, CPA, he's a tax accountant, @Taxcountant on Twitter. “Just an extension of what's been happening and will continue to happen in the industry. All that other customer experience, sales advisory, AI stuff is zero value if staff capacity isn't there to deliver timely, high-quality work, first and foremost.”
And people were, you know- this is funny though, too. Like somebody else is like, “Our prices were so low. We had huge growth, and our compensation was so low that we couldn't have any employees. I'm shocked this came to this.”
Blake: They probably signed up a ton of clients, and then when it came to actually deliver the work, they didn't have the people. This happened with- there was another firm that shut down.
David: Visor. Visor, remember?
Blake: Yeah. Visor did the same thing. Yeah.
David: And left people hanging. And it's a really a shame because, let's say they- fine, everybody's going to make mistakes, you have some issues with the business. But they could have partnered with other firms, right? Be like, “Hey we're going to hand you off to this- to whoever it might be.” And then they- but they really just sent this like ‘tough shit’ letter, which it just sucks if you would've got this.
And what if you got this letter or an email this weekend? You can't just go get a new accountant right now. Nobody's really kind of taking on extra clients right now. Like, what are you supposed to do? But yeah, this happened.
Blake: Well, yeah. So, you know, there's some clients for the taking, I guess. Although they're probably paying really low fees because that's the problem too, right? It's not like Osidon’s done us any favors. Although if it's 200 a month, see, that's actually- I wonder what's included in their package. Because if it's $200 a month, you know, you could do a tax return at the year-end for that, perhaps.
Blake: Depends on the kind of business.
[00:20:17] Trevor's email about Digits
Blake: But anyway, let's keep going. We got some more listener mail. Here's a message from another listener.
Trevor: Your recent podcast talking about Digits was hilarious/great. I have spent the last week plus wondering what Digits even is, and how they managed to raise all this money. Glad I am not going crazy!
Blake: Thank you Trevor for that. Now, some of our listeners also expressed their surprise that Digits is now a sponsor of The Cloud Accounting Podcast. And in case you're wondering, we are fairly open with our sponsorships. We don't say, “Oh, you can be a sponsor, and you can't.” You know, we're capitalists and we'll take money.
We're like an accounting firm, David. We will take any client that walks in the door. You know, every ad dollar is a good ad dollar. And so, yeah, we happily accepted Digits as a sponsor, which I'm kind of amazed that happened.
David: But we separate. So, what’s sponsorship for us? ‘Cause every day, somebody will email me, be like, “Yeah, we want to sponsor the podcast. We want you to talk about this, and we want you to put on our founder.” And we don't do any paid episodes.
David: So, the sponsorship’s like a silo over here, unrelated to the what we talk about on the show. And we've said bad things about QuickBooks, they've sponsored. We said bad things about Sage, they've sponsored. We said bad things about Xero, they sponsored. Like, that's just- like, it's- and to some extent, to be honest, even I can go back to like Botkeper, right? Botkeeper kind of got better because of it, right?
Blake: It's true. It's true, yeah.
David: It made it better for everybody. So, it's like, there's not like a change in tone, right? The show's not really- like, we've gone out of our way not to do paid sponsorships of content.
Blake: And you know, we could be making so much more money if we were just willing to do what our sponsors wanted, right? Just to say whatever anyone says. There's a lot of money out there, and there's a lot of people doing that.
David: Oh, we could do two episodes a week.
David: Yeah. We can make a lot of money just charging apps that want us to praise the podcast on what they say.
Blake: Promote their app, right? Although this is a little awkward because before they sponsored, I scheduled an interview with Wayne Chang- the founder of Digits- because I was so interested. And so, that was already on the books. Then they sponsored like the day before the interview. So, I thought it was actually somebody pranking us. So, I did the interview, and that's coming out. So, appearances-
David: That's the Earmark podcast?
Blake: Well, no, I think I'm going to put it out on this feed. So, there's going to be a short interview with Wayne Chang coming out.
David: Oh, like a bonus episode in a situation [CROSSTALK]?
Blake: A bonus episode interview, yes.
David: Do it on this episode.
Blake: Do on this one? At the- well, we’ll see. Maybe right after; it will be a bonus episode right after this one.
David: Yeah, it depends on what you get edited. Yeah, that makes sense.
Blake: But yeah, it wasn't paid for. It was already booked by their PR people. So, you know, I just want to be up front with everybody. That's what it is. And I think I asked- you know, I tried- I did my best to ask hard questions. And like you said, David- well, I think what we say sometimes can be perceived as bad by PR communications folks working at companies but what I would say to that is we are critical and we say what we think.
And that is in the end, more valuable to listeners into the community than repeating your talking points.
David: And we've heard directly from either VPs or founders of NetSuite, Intacct, Xero and QuickBooks. Yes, their PR people sometimes get upset on our coverage, but the leaders of those companies are like, “Keep doing it.’ I think kind of keeps us honest.” I think the- it’s that emperor's new clothes, right?
David: I think these leaders don't want to hear everybody echoing how great they are. And we're just-
Blake: The smart ones, yeah. So, that's that. We got one more listener voicemail. This is from Ray.
Rey: Hey, Blake and David. Wanted to respond to the recent messages about M-1 cash versus accrual tax and so on. It appears that the perspectives are just too narrow and limited. As every accounting major is well aware, there are three different lanes of accounting. U.S. GAAP, managerial accounting, tax accounting. Each is a valid system with its own rules and each has limitations, but each has opportunities to deliver lots of value.
Most business owners are focused on managerial accounting. Investors and lenders focus on GAAP, as do most industry benchmarks and metrics,, while the government focuses on tax. Alright, so our tax returns merely required annoyance of a “overhead expense with no intrinsic value,” absolutely not. Proper tax compliance affords opportunities for maximizing deductions adjustments and credits. Over once a lifetime taxes will most likely be the largest expense.
Think about it, add them up: income taxes, sales taxes, fuel tax, property tax, payroll tax, et cetera. Proper tax compliance and tax planning results in real and significant cash savings. Conversely, half-baked or sloppy tax work leaks money on the table, or worse, it can cost lots of money. So, go ahead, fill out the M-1 wrong.
If you get a notice from the IRS, you could have just given them the hook they need to audit the entire return. And most audits sent up with a big tax bill. And don't forget about the penalties and interests that they'll tack on and all. Yeah, don't forget about the professional fees to represent you in the audit as well.
So, even if you end up with a no-change letter, after the audits done, it'll still most likely cost you a few thousand bucks just to get there. So, avoid the notices, avoid the letters, avoid the intention, and do it right. If you're audited and have excellent records, the audit will go fast and easy. And the result should be no, or at most a minimal tax due.
So, this is a great service to the clients that will save the money in the long run, and enable them to not worry about this stuff, so that they can focus on the more important work of running and growing their business. At our firm, we overlay these three concepts: GAAP, managerial and tax into the chart of accounts that's customized for each client.
Then in Xero, we customize the balance sheet, the income statement, and other reports to meet the needs of the various consumers of the data. So, we're getting these reports from the same source of the truth, single source of the truth. We ensure that each transaction is recorded properly throughout the year.
We provide GAAP and managerial reports throughout the year, and then we coordinate and check the other non-income tax filing, sales and use payroll property, et cetera, to make sure it makes sense to the books. Then at the end of the year, we compile and file the income tax returns.
We then cycle back any tax planning opportunities or ideas into the operations throughout the year. To do this bookkeeping, accounting taxes and CAS, the right way is not easy, but when done right, it's a deep client relationship that goes on for many years and delivers lots of value. Thanks a lot to you guys in the show for helping in this effort.
Blake: And that was Ray Ariano, CPA. Thank you so much Ray. I love what he said there. And I love- if I could summarize the point, which is- well, there's sort of two points in there for me that really stick out. One is that the value in tax is in saving you money on the biggest expense throughout your whole life.
David: Yeah, and it's funny. Like, for as long as I've been in this space, I've never heard anybody frame it that way. That's what stuck out to me, this concept of like, taxes across the board for your entire life across, all the taxes you pay is your number one expense.
Blake: And notice how that has nothing to do- what he said has nothing to do with filling out a return or filing a return. It's all about maximizing your savings And that is where, from a marketing and sales standpoint, a lot of firms fail. They focus on the mechanics of what we're doing; they're selling a tax return but really, what you're selling, the thing that creates value for your customer is not the return.
It's not doing the return, it's this maximizing deductions adjustments and credits over a lifetime. And then the second part that I love is this idea that we're going to set up the books, so that everybody gets what they need from the books. Management gets what they need, tax gets what they need. It can be done, but unfortunately, most of the time, it isn't. You have one person over here doing the books, you have one person over here doing the tax, and they don't talk, except once a year.
And that interaction is often incredibly inefficient because the books aren't set up so that the tax preparer gets what they need. And they could be. And that’s why I think the single reason- the single biggest reason- why firms are getting into CAS and seeing huge benefits from doing client accounting services or just what I call accounting for clients’ bookkeeping is that you've got everything you need when it comes time to file the tax return.
At least from a numbers standpoint, from a trial balance standpoint, you have it. It's already done and you've broken the transactions down. You've set up your chart of accounts so that it can flow into the tax return. And this is also one of the things I like about Xero is that you can actually do cash and accrual books in the Xero at the same time.
So, if you want to use the accrual books for management purposes, you want to give a cash set of books to the tax team, you can do it and you don't have to have separate systems. This is the way it needs to be. And it's not complicated. It just means communication.
David: And so, you're selling the- you're not selling the science of the numbers behind the return, you're selling the feeling of, “Hey, over your life, we're going to save you 30 grand here, and over this- these moves we're going to make here are going to save you 60 grand over here.” And it's the feeling you're giving from that.
Blake: That takes a lot of effort to communicate that to a prospective client because you need to be able to prove it. So, having case studies of customers where you've- or clients, whatever you like to call them- that you've worked with for a decade and you can actually quantify and give examples of how your firm has helped them, and get a number if you can.
Like, try to find clients where over the lifetime of this client, we have saved them $100,000, $1 million, whatever it is. Because then, your fees will be a fraction of that, normally. But you'll also be able to raise your fees because you're putting your fee in the perspective of, “Here's how much we're saving you. And it's not just, we're doing a tax return for you.”
[00:31:30] Thank you to our sponsor, Digits
David: This episode of The Cloud Accounting Podcast is sponsored by Digits. Digits is building accounting tools so powerful that you'll think they're from the future. In collaboration with hundreds of firms, Digits has been thought through and built from the ground up. Their latest product, Digit Reports, can generate all your clients’ monthly reports all at the same time with just one click.
Digits reports aren't your typical boring, static PDF reports. They're beautiful, interactive, and alive with the latest data. Using Digits is easy. You just connect it to QuickBooks. About 24 hours later, all your data will be fully analyzed, then can begin generating reports, automatically create executive summaries, and start having those much-needed high-value advisory discussions with clients, either face-to-face or using the built-in chat features.
And in case Digit Reports isn't enough, Digits also offers Digit Search, which you can use to quickly find and navigate directly to transactions inside of QuickBooks Online. To learn more about Digits and sign up for free, head over to cloudaccountingpodcast.promo/digits. That is cloudaccountingpodcast.promo/digits.
Digits, finance from the future.
[00:32:40] David's experience at The Good Feet Store
David: So, I didn't know how to bring this to the show, but I think you may have opened a door for me. Because I think about like fees and price. So, I've been having some sciatic nerve problems, been going to physical therapy. And you know- and I bought some off-the-shelf shoe inserts from a-
Blake: What kind?
David: Dr. Scholl’s, right?
Blake: What kind- oh, shoes.
David: Shoe inserts, right? Or-
Blake: This is your- your feet are in pain?
David: Well, it's not my feet aren’t in pain, but I think my hips are misaligned. I'm like a mess, right? And so, long story short, last weekend, I was over- my son was getting his hair cut. A couple of stores down is the Good Feet Store. Do you know anything about this place?
Blake: I've heard of it. That's about it.
David: Okay. What do you think would be the experience if I go into that place?
Blake: What should it be? Well, a Good Feet Store.
David: Well, I mean, just what's your guess based on its outside reputation?
Blake: I don't know. You go in, somebody greets you with a smile and asks you what you're in for. And then they do some sort of measurement of your feet, and they fit you with custom insoles for your shoes.
David: Yes. Custom- you assume it's custom insoles. Like, you think it's that. So, I go there and it feels like a doctor's office. So, there's this tight, technical expertise feeling they put out, right? There's models of the foot, and the tendons, and muscles, and all that kind of junk, right? They got doctors playing on TV screens, and testimonials from customers.
And basically, you- by the time I realized what it was, it was almost too late, right? This guy- they're just salespeople. They're not doctors. They didn't touch my foot. You’d think they would touch my foot. I stood on some scammy ink blot, like a thumbprint of my foot- some ink. And they literally get off-the-shelf inserts from the back room.
So, you're getting off-the-shelf insets, but your impression is they’re custom. Now, here's the- this is what's been driving me crazy. The accountants and they get so upset, “Ah, QuickBooks raised the price $10, and like, we can deal with it.” Off-the-shelf inserts. So, I think like Dr. Scholl’s or Walgreens for like 20 bucks, right? You can get decent inserts, maybe from like the- a running shop, 60 bucks, you know? 50 bucks for some decent inserts, right?
Arch supports, blah, blah, blah. How much do you think it costs to get their kit? So, it's basically four. It’s a set of four- it's a set of three inserts. There's like a trainer, a daily one, and then kind of one for slippers or dress shoes or whatever. How much, Blake, do you think this costs?
Blake: And you're saying like a regular off-the-shelf would be what, 50 bucks?
Blake: 60? They're marking it up hundreds of dollars?
Blake: Oh my God. The Good Feet Store. Wow.
David: But they don't let you leave. Like, they'll sell you something. So, I wound up buying- I paid $150 for their ‘not-as-good’ one, right?
David: And so, I- but I still probably- I paid $150 for a $60 insert though, so they still got me, right? But I had to go through the whole experience ‘cause by the time I realized that it was just- they are a perfect sales operation. It's about that. You only answer yes, right?
David: Then they tell you what you're going to feel. And I was thinking about this for firms, I'm like, obviously, there's tons of margin, right? But how do you get that feeling and tiptoe people into the water? Is it just one app? Is it just like, “Hey, I'm going to put your employees on this time sheet app,” then you [INAUDIBLE], “Hey, how was your life? Is it easier this week?”
Right? It’s kind of that, that you don't try to sell them a huge package all at once. It's like this chip away, chip away, chip away, chip away. Now, the other thing I think that helps them, I think they’re a big Medicare scam.
Blake: Oh. So, people get reimbursed for this.
David: They get reimbursed. And also, the other advantage they have- but I think this is true for accounts and bookkeepers, right, people are- you're coming to them when you're desperate.
David: You’re not walking in that store unless you're having feet pain or back pain.
Blake: Yeah. You're barely walking in that store.
David: You're barely walking in that store. So, but it's- I just thought it was just, if accountants should actually just go and experience it- I know you’re trying- it's just a sales job, but just think it's- there's an experience happening there. And it's like, right there with ShamWow and knife sales guys. Like, they’re really good, but they've got it down to a science.
And I'm not saying that you should make your firm be scammy like this, but it just shows like, how the experience is letting them charge people $1,700 for $60 inserts.
Blake: Right. A good sales and marketing operation can increase the value of something that otherwise, off the shelf, would be a fraction of the price. Yes. Amazing.
[00:37:29] Private equity in public accounting
Blake: Hey, well, we've talked in the past- changing subjects here- we've talked in the past about private equity in public accounting. EisnerAmper took on a big private equity investment last year, split off the CPA firm. The PE firm is deeply invested now in consulting in a non-CPA consulting tax firm. Well, another one of the top firms in the country- a top 25 firm- called Citrin Cooperman disclosed that New Mountain Capital has acquired a majority interest in them.
So, this isn't EisnerAmper with a minority interest, which well, they didn't disclose it, but I assume it's a minority interest. This is a majority interest in Citrin Cooperman, and they're going to do the same thing. They've- are splitting off the attest practice into its own firm, and the non-attest side will be an LLC. So, this isn't two out of a hundred.
Oh, and we've got- Your Part-Time Controller is also a non-CPA firm in the top 100. So, that 3% right there that I'm aware of.
David: And is 1-800-ACCOUNTANT kind of the same as well?
Blake: Yeah. As a non-CPA-
David: Non-CPA firm.
Blake: -firm providing accounting. Yeah. Yeah. So, there's another one.
[00:38:52] NFT of Jack Dorsey's first tweet
Blake: I've got blockchain news, David. Crypto news. I'm a crypto skeptic, and here's some fuel for that fire. This was in The Guardian: Man Who Paid 2.9 million for NFT of Jack Dorsey's First Tweet Set to Lose Almost 2.9 million. Crypto entrepreneur. Sina Estavi made headlines in March, 2021, when he paid 2.9 million for an NFT of Twitter boss, Jack Dorsey's first tweet.
But his efforts to resell it have run aground with a top bid of just $6,800 as of Thursday.
Blake: He put the NFT up on a exchange to try and sell it- an NFT marketplace called OpenSea- last week. He was trying to sell it. He tried to ask a minimum of 48 million for it, and then that was removed after the first offers were in the low hundreds of dollars.
David: He should, you know, pay a commission to the Good Feet Store people to sell it for them. They’d probably move it.
Blake: So, this is amazing because I think it shows that the valuations of NFTs, which are from very few extremely wealthy people who are speculating, are not to be taken at face value. If one person is willing to pay $2.9 million for an NFT of a tweet, that doesn't mean that everybody is willing to pay price. And you got to find another buyer to really establish a value for these things.
And so far, most NFTs have just been rich people selling them to each other, So, unless there's a broader market that develops, it's all imaginary money, right? It's imaginary value, and people, I believe, who are in the space who are wealthy or trying to make money off of it are deliberately- this is my theory- selling these NFTs back and forth to try to create the market.
David: Yeah. There's a market term for that, I heard, on Planet Money Podcast. And like, I'm not- it's not coming to me what that it's a- it's a win manipulate markets, but I'm not-
Blake: Yeah. That's been around for a long time, right?
David: Yeah, yeah.
Blake: You agree with somebody else, “We're going to buy and sell each other's stock.” This was something that people did during the gilded age, right? To pump up prices.
David: Or people just buy and sell the same stock to create volume-
David: -to get other people interested, yeah, yeah, yeah.
Blake: Yeah. Yeah. And there's ways in regulated markets that we can stop that. And it's illegal. But in unregulated markets, it's possible to do it, right? So, there you go.
[00:41:22] Google pushing automation
David: So, an article I saw that- it's from Wall Street Journal, it's the Google Head of Finance, “Anything that can be automated, we strive to automate,” right? And I've always known that Google in general,tThey've always had that mindset- automate everything now. Obviously, this is rolling down into their finance department, their CFO.
So, it doesn't really say she's the CFO, Kristin Reinke, Head of Finance at Google. So, I'm assuming she's a CFO, but maybe they don't have that as the real complete title. And it's a Q&A style article, like, about digitization, essentially.
The two big takeaways or three takeaways I have in here, one was- and this is something I think firms could do for when they hire in the departments, right? She said they have a finance academy where they offer SQL training for those who want it. “We try to give our talent all the tools that they need so they can focus on what the business needs.
We're giving them access to business intelligence and machine learning tools so that they're not spending time on things that can be automated.” So, they’re- instead of like, telling your employees, “Be more efficient, don’t do this,” like, they kind of have an academy they're training their employees, right?
David: It'd be like having a Zapier class for your, you know, your team or something, right? So, I thought that was kind of an interesting takeaway. The other one was just, I just thought it was very entertaining and funny here that I can’t believe they ask this. Is your finance team using Excel or a similar tool? Now if this is the CFO at Google, what do you think the answer to that question, no matter what, has to be, publicly?
Blake: So, she's a VP, Head of Global Finance, and yeah, that's an idiotic question that we wouldn't ask.
David: ‘Cause her answer is “We use Google sheets,” right? Our finance team loves spreadsheets, right?
Blake: Actually, I wonder if they like, secretly, are using like Excel but they have to say Google Sheets.
David: That would be my guess, but regardless, like, she has to say Google Sheets.
Blake: Yeah. The funny thing is now, you can open Excel files in Google Sheets, right? They did that a few years ago, so now, you can- it doesn't matter, right?
David: And then the Wall Street Journal reporter actually asked a great question. How many people work in your financial organization? And she replies, “We do not disclose the size of our teams within Google.” So, what this tells me, she doesn't have as much automation as she thinks she has.
Because if she did, if she had a staff, a finance team that was like much smarter than companies the size of Google, she'd be bragging about it. So, the reporter just let her off the hook on that one. But I thought that was interesting.
Blake: Yeah. It's always funny. Like, especially in technology companies, like when you actually experience what it's like to work with the finance department. Even in our space, right? Like, you get paper checks and you’re just like, “Oh.”
Oh, we’ve got paper- like, I don't wanna throw people with sponsors under the bus, but some of the biggest cloud accounting companies send paper checks when they sponsor, let's just say that.
Blake: Yeah. I had a- there was a funny situation where because we use Earth Class Mail for our mailing address. I had to switch it because of this. So, a check went to Earth Class Mail, and then I had to- I actually printed out the check image that they scanned for me, and then I used my phone to take a picture of the check to deposit it.
Which you can apparently get away with, because you know, nobody's- I don't know if anybody's actually like, checking those check images at the bank. Probably just an exception reporting kind of thing.
[00:44:36] Thank you to our sponsor, Synder
David Leary: This episode of The Cloud Accounting Podcast is sponsored by Synder. With direct connections to Amazon, Shopify, eBay, Stripe, Square, and 20 of the most popular online and e-commerce platforms, Synder automatically categorizes and accurately posts transactions into the accounting system, allowing you to easily prepare your client's data and organize their consolidated P&L, regardless of the number of platforms they may be selling on.
Synder allows you to use the general ledger of your choice, QuickBooks, Xero, or even Synder’s own GL, which is designed specifically for e-commerce businesses, and contains everything you need out of the box to make tax season a breeze. Synder can sync all the necessary details like inventory items, tax, shipping, discounts, classes, and locations, even correctly handles the processor fees.
With tools like a duplicate detector and rollback functions, you can rest assured your clients’ books will never get messed up because you can undo and restore any synced data with literally one click. If you need support from cinder, they offer free help using your favorite means of communication, be it chat, email, or phone.
To try out Synder for free, head over to cloudaccountingpodcast.promo/synder. That is cloudaccountingpodcast.promo/synder.
[00:45:46] Only 3% of crypto holders had paid their taxes by the end of March
Blake: So, going back to cryptocurrency, here's a story in Accounting Today. This was as of April 6th, when this report published: just 3% of U.S. cryptocurrency investors had filed their taxes by the end of March. By comparison, Americans overall, have filed about 40% of individual returns expected this tax season.
So, at the end of March, overall Americans, 40% had filed their individual returns, but just 3% of U.S. cryptocurrency investors had filed the taxes. So, maybe that's an opportunity. That was from a report by CoinTracker. I think if you're going to go after anybody who didn't do their taxes as a firm, do some marketing after tax season, it's probably the crypto people.
And they probably haven't done it for years. A lot of them have no idea that they have to report this kind of stuff.
David: Oh, but have you been following Tax Twitter?
Blake: No. Well, I mean I do, but-
David: Oh, they want [INAUDIBLE] over crypto people.
Blake: Oh yeah?
David: Like, the crypto people are arguing what they should and should not do. They're arguing that there’s no gain on the crypto. Like, I don't think anybody wants crypto people as clients.
[00:46:57] The SEC is creating rules to help protect crypto users from hacks
Blake: The SEC is proposing new crypto rules for exchanges to protect users from hacks. Basically, the SEC said- this kind of surprised me. I didn't realize this was the case, that they weren't doing this. The SEC said that an exchanger company holding cryptographic key information for a user- meaning they have your key, and they are the custodian of your key- they should account for those crypto assets as a liability at fair value of the crypto assets on their balance sheet, and warn investors of the risks of safeguarding those assets.
So, I guess exchanges have been not doing this. So, they've been holding funds for their customers, And when the exchange has the key, that means they're the custodian of those funds, right? They could actually- they could move the money. They haven't been putting that on their balance sheet, like a bank would have to do, right?
Like when you put money in the bank, that goes on the bank's balance sheet. But crypto exchanges haven't even been doing this basic thing. And of course, it will increase their liabilities and their assets you know, significantly. I mean, if they have- if they've been keeping all that off balance sheet.
[00:48:07] Marvel superhero still bitter about being fired from accounting job
Blake: And then this one's just for fun. We've talked about Simu Liu, the Marvel superhero who starred in Shang-Chi and The Legend of The Five Rings or is it 10 Rings?
David: Oh yeah. I noticed he was bouncing around on the socials this week.
Blake: Well, there’s a story in Huffington Post- or is it just as it's called now, HuffPost- Marvel star Simu Liu thanks accounting firm for laying him off 10 years ago.
David: Yeah, I think he either tweeted or Instagram posted, but a decade later, he still like hated his job in accounting.
Blake: So, Simu Liu, if you didn't know, he used to work at Deloitte, Canada. He got a job there I think after he got his MBA, and he worked there and got fired; he got laid off. And the way he- I think he's still bitter about the way he got let off- laid off. Let me read this for you.
“10 years ago, to this day, I was led into my managing partner's office at Deloitte and told that they were terminating my employment, effective immediately. A lady from HR and a security guard escorted me back onto the floor in front of the entire open-concept office. It was so quiet you could hear a pin drop. Nobody moved, offered a whisper of encouragement, or even looked in my direction.
I fought back tears of humiliation, grabbed my things, and never looked back.” And it goes on. The best part is he also calls out by name the partner who fired him. Anyway, you know how many people have seen this? I don't know how many have seen it, but it was liked by 431,000 people. And he tags Deloitte in the post, so.
David: It’s been floating around everywhere. And that's like, it doesn't help, right? If you want to try to get younger people involved in accounting, when a Marvel superhero is out there saying, “Thank God I'm not an accountant. Thank God I got fired,” it doesn't help the recruiting here.
Blake: Can I read the rest of this?
Blake: 10 years ago, I thought my life was over. I had wasted countless time and money that my family had invested in me, years of schooling, gifted programs, trying to live up to my parents' expectations. It all came crashing down in an instant. Every April 12th, I get really funny and introspective, but this is the 10-year marker, which means I'm really in my feels.
I know some of you have read Gladwell, and man, was his prediction on point. 10 years or 10,000 hours, my goodness what an incredible journey it's been. I spent four of those years running around like a headless chicken, trying to figure out how to break into the industry, struggling with credit card debt and taking any job I could.
Another three years were spent trying to break into Hollywood, sinking my precious life savings into something many would call a pipe dream. It's really only been these past three years anything I've done has begun to bear fruit. I know luck has played a substantial role in my successes, but I'm sure if I hadn't been cast in two life-changing roles, I'd still find purpose and meaning in the pursuit of success on my own terms- not my parents' definition, mine.
I don't know who needs to hear this right now, but no amount of money is worth compromising your vision for yourself. The pursuit of a dream, your dream, against all odds is what life is all about. Happy April 12th, Instagram. To Paul Gibbon and the offices of Deloitte, Toronto, sincerely, honestly, thank you. You did for me what I never had the courage to do myself.
You destroyed a life that I was building for someone else, so that I could finally begin to build a life for me.
David: It just shows like how deep this is rooted in him. Because he doesn't need to make a post like this. He’s a big multi-millionaire movie star. But the fact that this still weighs on him, kind of is a testament of like, this is what our industry's offering people? That's kind of crazy.
Blake: Yeah, but they humiliated him.
Blake: Can you imagine working your whole life to get to the Big Four, you got the job, you don't see it coming, they lay you off and they walk you out in front of everyone you know? And you don't have friends outside of work, right? So, that's really- those are all your friends too. And you're gone- it's over. It's like they killed you professionally.
And that is what I hate about big firms. And that is what I hate about corporate America. It's inhuman. It is dehumanizing. And any company like that, nobody should work for a company like that. We- they should not exist. And I'm so glad that there is this talent shortage right now because it's forcing companies like that to reckon with what they've been doing. The way they've been treating people. And I know I said we’d get to the app news, but there's one more story that's related to this.
[00:52:46] Brandon Hall's tweet response to EY
Blake: On Going Concern, a tweet from Brandon Hall made Going Concern. Brandon Hall is known as the real estate CPA, has a very fast-growing successful firm, cloud accounting firm. He posted a response to a tweet by Ernst & Young. EY posted on April 12th, “How can you turn resignation into retention? X next to pay perks and promotions, check mark next to empathetic leadership.
An EY study of greater than 1000 U.S. workers found a direct correlation between retention and workplace empathy,” and then a link to the story. So, EY is saying, like, “No, it's not pay perks and promotions, it's empathetic leadership,” which is hilarious, right? Because I think anybody would tell you that like, the empathetic leadership you get at the Big Four is bullshit, right?
Like, they don't give a shit about you. They don't care about you. They just care about your numbers, right? That's what the business model has created, is this monster of a public accounting firm. Anyway. Brandon said, “RIP to the EY social team. If you're looking to work for a firm that pays well, offers perks, promotes people and has empathetic leadership, slide into my DMs.” And the best part of all of this is that EY then had to respond.
They said, “Hi, Brandon. Thanks for calling this out. The aim of the post was to demonstrate the importance of empathetic leadership. It is now clear to us that the post didn't achieve that, so we have deleted it into reviewing our social media messaging for this research. Looking after our people in every way is and always will be our top priority.”
David: They get a little taste of Cluetrain Manifesto. That's what that was.
Blake: So, this is the power of social media and a talent shortage. I hope- I don't know if the Big Four can be saved, or if they just have to get torn down, but like, you know, this is going to change things. This is starting to change things. The fact that they responded is incredible.
Blake: They took down the post, you know?
David: They didn't ever respond anytime I tagged them in our episode releases ever, so who knows? Maybe one day they- maybe they will now, and they’ll start reaching out to us.
Blake: Maybe one day.
David: Should we jump into app news?
Blake: Oh, and by the way, I should say subscribe to my Earmark Podcast, Earmark Accounting Podcast because Brandon Hall, I interviewed him last month, and that episode is going to come out soon. So, you get to learn about his approach to running a modern firm. I think he's in his early thirties, has built a successful growing firm. They had like 40, 50 people.
David: Yeah, I don't think he's working this weekend, actually.
Blake: Yeah. No. Yeah. So, like, you want to know how it's done, subscribe to the Earmark Accounting Podcast, listen to that interview. I thought it was fascinating. Okay, app news? We got time for- we're already like-
David: Yeah. we should jump into app news now. Let’s knock it out.
[00:55:41] Intuit gives 10% raise to all Mailchimp employees
Blake: All right. What really quick do we have? What's the best?
David: So, some companies are trying to make it better for their employees. So, there was a leaked memo or leaked email- Intuit has given most of the MailChimp employees a 10% raise, but morale still remains low because people are quitting and employees feel belittled. So, just to rewind-
Blake: Where was this reported?
David: This was Insider.
Blake: Insight Business- okay, Insider.
David: And so, they essentially- if you kind of rewind and like put yourself in the shoes of a MailChimp employee. MailChimp employees never got any ownership of the company MailChimp.
Blake: No equity.
David: Their founders always sold them on the idea, “We will never sell this company.” They used to give them a big, old cash bonuses, but the owners owned everything. Then these owners sell MailChimp to Intuit for $12 billion. Each founder- there's two founders of MailChimp- basically, both pocketed 4 million each, 5 million. I'm sorry, 4 billion each, right? Maybe 5 billion each.
David: And so, employees have just been like really turned off to this whole idea. And then obviously, you know, the culture is probably a little bit different, right? MailChimp culture, it's just different. And now, you're starting to get people leaving and they're getting high turnover since the sale of- to Intuit.
People that have been there four or five years at MailChimp, executives, leading engineers, they're starting to leave. And so, Intuit just gave a flat-out off-cycle raise to all 1,300 employees the 10% raise this month.
Blake: Yeah, but that's not going to fix the bigger problem, which is that the MailChimp culture was quirky different. That's why they could get away with not offering equity. You have to offer some- people something else if you don't give them equity. But now that they've been sold to Intuit, which Intuit’s a wonderful company that makes amazing products, but also, it's a big, corporate entity. It's going to feel very different. And the cultures aren't going to align, right?
David: And the- you know, getting Intuit stock is great, but it's a long-term great, right? And if you're used to having like quick cash coming in, you're not going to get that from Intuit stock-
David: -in your stock purchase plan. If anything, you got to at least wait every quarter or every six months to exercise that. So, there's that, but in general, this article also has some of the other quotes. So, Moshi Levin- oh, I'm sorry, Moshi Lettvin, L-E-T-T-V-I-N, a principal engineer who had been at MailChimp for four years, and as he was leaving December, after what he described as a comically bad acquisition- this looks like his tweet. “Basically, every staff engineer I can think of has left, but one who said he can't risk it because of a family situation.”
Blake: Well, and in this job market, if you're an engineer, if you're a software engineer and you're like a tax manager, you can get any job you want, anywhere.
David: Yeah. And apparently, they did an all-hands where obviously, Chris did an all-hands with the MailChip employees. And then they- after that meeting, a week after they announced they were going to do this 10% salary bump for them because if not, they would've probably put it on their normal Intuit schedule, which would have been in August that the cycle Intuit uses and-
Blake: This is just so stupid. I'm sorry, I just got a rant on this.
Blake: Because the founders made so much money, like $4 billion. It's more than any reasonable person can ever spend. And all they had to do to keep these employees happy was to give them a small piece of the action on the steel.
David: And I'm surprised Intuit didn't make that a requirement as part of the acquisition.
David: Intuit could have twisted arms on that to make it-
Blake: Just give them all $1 million each. How much would that cost?
David: And you still have $4 billion each in your pocket. Yeah, I know.
David: It’s just insane. And then actually, it's Intuit's fault. Intuit should have twisted their arm and said, “No, you gotta- I know your employees don't have ownership, but you need to cut them checks when we write you a check or we're not going to do the deal.” Intuit should have twisted their arm more on this.
Blake: Expensify did this right. When they went public, they gave additional options to everyone at the company. So, even the people who hadn't been there for a while are now incentivized to stay for five years. And they gave them a big chunk. So, it's like, “As long as you stay here, and you hit our goals- and we hit our goals as a public company, you're going to be millionaires.”
Blake: And that's what you got to do.
David: Obviously, I was in Intuit a very long time, and my wife was in the HR benefits-type insurance space. Like, benefits in Intuit are like some of the best you get in the world. It's amazing amazing, but you have to put yourself in the shoes of those MailChimp employees. They're just like, “We were lied to by our founders, and the founders got billions of dollars and we got nothing.”
David: And it's not saying that Intuit's not nothing, it's just, that's what they're comparing it to. And Intuit has a problem now. Intuit has a problem on their hands because of this.
[01:00:30] Wrap up and where to reach us
Blake: Well, David, there's more that we could talk about. As always, I've got 20 more stories in my queue, but that's all our time for this week, and I think they can wait. So, in the meantime, if our listeners want to comment on any of these stories, send me a voicemail, send me an email, Blake@BlakeOliver.com. We love hearing from our listeners.
We love your voicemails. We listen to all of them, and I don't think we've ever not played one on the air. So, you have a very good shot at being famous on The Cloud Accounting Podcast.
David: Famous. Or shut down your firm.
David: Shut down your firm, short notice, you’ll get on the podcast.
Blake: You'll get on it. Send a letter. David, where can people reach you online?
David: I’m on all the socials, just @DavidLeary.
Blake: I am @BlakeTOliver. David, I hope the rest of the tournament goes well. Good luck to your daughter and her team.
David: Yeah, I just saw- I got a text they won. So, they're playing right now again- a second game. So, hopefully, I can get over there before it's over. So, I'm going to do-
Blake: All right.
David: a quick one-mile walk and hopefully, get there.
Blake: Oh, wait, you can’t run. You got the sciatic thing.
David: But I got the inserts though.
Blake: You got the inserts, so use those inserts. All right, David. Talk to you later.
David: All right. Bye.
Blake Oliver: Wow! What a great episode! And wouldn't it be great if you could earn CPE credit for that? Now you can! Visit earmarkcpe.com to sign up for free, and earn free CPE credit for listening to this show. That's earmarkcpe.com.
David: Time for the classifieds.
[01:02:02] Future Firm
David: If you're looking to quickly grow a scalable, systematic, seven-figure accounting firm without having to work 50 plus hours per week, check out Ryan Lazanis’ online coaching membership, Future Firm Accelerate, designed around Ryan's experience taking his cloud firm from scratch to sale so that you don't have to reinvent the wheel.
You'll get online learning and topics that help you automate and systemize all aspects of your firm. You'll get coaching when you need help with implementation, and you'll also join a collaborative community of hundreds of other forward-thinking firm owners. For more details, head over to www.futurefirmaccelerate.com.
[01:02:39] Get W9
David: Tired of clients not remembering to get W-9s? getW9 automates and streamlines the collection and storage of W-9s. getW9 has a QBO integration, and they have a partner program that pays 25% commissions. getW9 plans start at only $19 a year. Visit getW9.tax today to get started. That is getw9.tax.
David: Are you still using emails to exchange sensitive files with your clients? Maybe you're using that old, complicated client portal that's painful to work with. Stop suffering and start using Firmsta. Firmsta is an innovative and secure client portal designed to help your accounting firm work more efficiently with your clients.
With Firmsta’s intuitive interface, you will quickly add your clients, easily create folders, and securely share files in no time. Firmsta also allows you to add your staff members so that you can access all your client's information and collaborate effectively. Start your free 60-day trial now at firmsta.com.
You'll love it, or it's free. That's firmsta.com.
[01:03:44] 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 going to 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.
[01:04:43] 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.
Blake: Here's a message from another listener. Did that sound really weird to you, David?
David: It’s horrible.
David: Like, is it inside edition? Like, when is this?
Blake: Let's try this again.
David: Is somebody threatening to murder us? Like, what is that? Why is it doing it?
Blake: I don't know. This is a weird Zencaster thing. I'm just going to read it.
David: You’re going to have to leave this in the outtake though, at the end. It’s pretty funny.