News Update with Marie Phillips, CPA and Jennie Taber, CPA at the Accounting & Finance Show LA

Los Angeles CPAs Marie and Jennie join the podcast at the #AccountingShowLA to discuss the iNSYNQ QuickBooks hosting ransomware attack, how Trump’s tax law threatened TurboTax’s profits (and how Intuit fought back), the sad statistic that only 60% of accounting firms use remote access tools, why the 4-day workweek could be the next big thing, and the problem(s) with timesheets

This episode was recorded live at the Accounting & Finance Show LA at the Los Angeles Convention Center on July 24, 2019.

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Transcript

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

David Leary: I'm David Leary.

Marie Phillips: I'm Marie Phillips.

Jenny Taber: I'm Jenny Taber.

Blake Oliver: Thank you so much for joining us here at the Accounting and Finance Show in Los Angeles.

Jenny Taber: Yay! 

Blake Oliver: The L.A. Convention Center.

David Leary: Yes, that's what that background noise is. We're here on the floor.

Blake Oliver: This conference is competing with the citizenship thing that they do here with like 20,000 people. I was walking into the convention [00:00:30] center, and I'm like, "Wow, there's so many people coming to the Accounting Show!" Then they all go the other way to the citizenship ceremony.

Marie Phillips: The big ceremony, yep.

David Leary: We should take our portable rig, and go over there, and ask everybody, as an additional question-

Blake Oliver: What is advisory? 

David Leary: Define advisory! You knew where I was going with this. You exactly knew where I was going with it.

Marie Phillips: What do you want to do as a job when you're an American?

Jenny Taber: Do you want to be an accountant? Here are the ways you can do it.

Blake Oliver: That's right. Shall we just jump into the news here?

David Leary: We did get a review.

Blake Oliver: Okay. 

David Leary: Do you want me to read that review?

Blake Oliver: Yeah, let's hear it.

David Leary: Okay, this review is another five-star [00:01:00] review. Thank you. "Required listening. If you're an accountant, bookkeeper or basically anyone who works in the accounting industry, you should be listening to the Cloud Accounting podcast. Blake and David curate the latest industry news in an engaging and efficient matter that will absolutely keep you in the know within your profession." This is from marriage Kenji Kuramoto, who actually we interviewed a few episodes back.

Blake Oliver: Yeah. Thanks a lot, Kenji! 

David Leary: Yeah, he wrote a review. He must've listened to his own episode and got excited and wrote us a five-star review. So, we did get a review this week.

Blake Oliver: That's fantastic. What [00:01:30] should we start with this week, David? What's top of mind for you?

David Leary: I caught up, on the airplane flight, a little bit. iNSYNQ had their outage, so that was- 

Blake Oliver: Oh, yes, iNSYNQ- 

David Leary: going on for a while. 

Jenny Taber: This is not the band.

David Leary: Not the band. 

Jenny Taber: Yeah. 

Blake Oliver: Well, we're not actually sure how you pronounce it. It's spelled I-N-

David Leary: S-Y-N-Q. 

Blake Oliver: Okay. It could be iNSYNQ. 

Jenny Taber: Sounds right. 

Blake Oliver: If so, I'll see if I can splice any of that into the background of this episode.

Marie Phillips: Doesn't [00:02:00] sound like they're "iNSYNQ" with what they need to be doing. [Sting] 

Blake Oliver: Oh ... 

Jenny Taber: Boo! 

Blake Oliver: I'll definitely a sound effect for that. We can talk about that. There's also TurboTax Intuit. Free File is back in the news that doesn't seem stand. ProPublica is still on the march about that. I think, Jenny, you've got something about the four-day workweek-

Jenny Taber: Four-day workweek.

Blake Oliver: And Marie-

Marie Phillips: With some exciting survey about who works remotely and who doesn't.

Blake Oliver: Okay. All right. Well, why don't we [00:02:30] get started? What we wanna do first? How about iNSYNQ? What happened with them?

David Leary: Let's do that. You always know we've crossed a new line when Krebs on Security is covering the accounting industry-

Blake Oliver: Right, yeah.

David Leary: -because there'd be no reason for them to cover us, unless there's a security problem. So, iNSYNQ went down. They got hit by the same ransomware attack that hit CCH [cross talk] 

Blake Oliver: Yeah, similar type of thing. 

David Leary: You talked about it. You did the research a couple weeks back. It's called ...

Blake Oliver: I don't know. There's different names for these viruses, but they get in ... There's [00:03:00] two different kinds. One is ransomware, where it locks up your computer, and encrypts it, and demands payment in Bitcoin in order to unlock it. Then there's just like generic malware, which gets in there and tries steal people's information. Which, of course, accounting software is a great target for that, right? This was a ransomware attack, specifically.

David Leary: This was a ransomware attack. They pulled everything down, but they just didn't pull down the servers that people didn't [00:03:30] have access to. They wound up shutting down, apparently, their Twitter account, because they were getting angry tweets at them, and they didn't wanna have to deal with it. It's the exact opposite of the example we talked about last week, when the IRS- not IRS, the Australian-

Blake Oliver: Tax Office.

David Leary: -Office. Their website had a problem. They had an outage, and they were very proactive on Twitter, communicating to everybody. It's the exact opposite thing that happened here. And it goes, I think ... CCH had- they didn't communicate properly when they had an outage.

Blake Oliver: Right, yeah,  yeah. 

Jenny Taber: That [00:04:00] really affected us in a bad way-

Blake Oliver: Oh, yeah ... 

Jenny Taber: -it was down for ... I'm in tax, now, so it was down for a good three days.

David Leary: The CCH outage.

Jenny Taber: Yes, the CCH outage. There was very little communication about that. We had no idea when it was coming back. When you're in the middle of it, it's the panic-inducing, because you have no idea ... 

Blake Oliver: You had some deadlines coming up, too.

Jenny Taber: It was right before the May 15th deadline.

Blake Oliver: Right. How were you getting appraised of ... How did you know when it was gonna come online? Or, you were just waiting?

Jenny Taber: Googling; googling [00:04:30] for info?

Blake Oliver: That's crazy to me!

Jenny Taber: On Accounting Today.

Blake Oliver: Because you're at Armanino.

Jenny Taber: Yeah.

Blake Oliver: That's a largest California-based firm, right? 

Jenny Taber: Yep. 

Blake Oliver: Full disclosure: I used to work there with you, Jenny.

Jenny Taber: Yes.

Blake Oliver: To me, that's iNSYNQ that CCH wouldn't have some person calling every hour to update you. I don't know ... 

Jenny Taber: There was something that happened this week, where there was an update over the weekend. So, yesterday, when we got into work, the update wasn't installing [00:05:00] properly, and it was happening- apparently, not just us- 

Marie Phillips: Yeah, our firm, as well- 

Jenny Taber: -it was nationwide. 

Marie Phillips: -was down for like two to three days. 

Blake Oliver: Oh, no! Wow ... I didn't even hear about that. 

Marie Phillips: Over the weekend, and then early this week.

Jenny Taber: Yeah. Eventually, we got the updates, but I was like, "I can't get into my tax app!"

Blake Oliver: Yeah. That's very frustrating.

Jenny Taber: Yeah. 

David Leary: This went down on last Tuesday, on the 16th. They notified everybody on the 19th. Then, even as of this morning-

Blake Oliver: You're talking about the iNSYNQ attack.

David Leary: The iNSYNQ attack, yep. 

Blake Oliver: Right.

David Leary: Even [00:05:30] as of this morning - Oh, I lost the tweet - people were not able to get in. 

Marie Phillips: QuickBooks, right? Because it's the QuickBooks Online provider-

David Leary: -and QuickBooks Online-hosted, or QuickBooks, sorry. 

Marie Phillips: -yeah, that's who they are, right? 

David Leary: QuickBooks Desktop-hosted. 

Blake Oliver: This, to me, is so crazy that, in 10 years, the conversation has shifted from is QuickBooks Online or is online- is cloud accounting secure? To now, we're questioning the security of desktop, because these hosted solutions aren't secure. Why is that? Why [00:06:00] are the hosted solutions ...? Why can't they ...? 

David Leary: I don't know what the why is. I just think if you have a firm, and you ... The whole point of using these hosted solutions is to outsource your IT department, because supposedly ... You can go to iNSYNQ's blog posts, you can go to iNSYNQ's website: "24/7 security experts monitoring everything." You're paying a premium to outsource this to machines that are getting hacked. What's the point? You might as well just go true SaaS, true cloud. 

Blake Oliver: Well, I think the problem, too, [00:06:30] is that if you are using a hosted solution, your users ... The users on the platform are at the biggest risk. Even if the hosting platform, itself, is secure, I might go and install something that's malware. Then, to get really secure, you have to lock down all the apps, but then that defeats the purpose of the hosting, which is to have all this flexibility. 

Marie Phillips: Yeah, we did have a few threats and issues at the firm I'm with now. What we ended up doing is hiring an [00:07:00] audit company that only audits for your IT security levels that came in, gave us a list of recommendations, and now it takes seven log-ins to go into somewhere you actually need to use. If you're on an airplane, or internationally, if you're outside the US and don't have service, you cannot work, because you can't get into your computer.

Blake Oliver: That happened at my wife's company, too. She is not allowed, anymore- if she travels abroad, she can't work.

Marie Phillips: Yeah. They also removed access to a lot [00:07:30] of email-related ... You can't go on to Gmail to check your emails, because that's, I think, a big threat - will a user end up downloading an attachment on a personal email? There are ways, but you gotta find the right mix?

David Leary: I still just don't understand how these jump from one machine, to the next machine, to the next machine. Is that just a fundamental flaw of the hosting companies?

Blake Oliver: I'm no expert, but I [00:08:00] think they're utilizing the same server for multiple firms, or multiple files, because it wouldn't make sense to have one computer dedicated to just one.

David Leary: Yeah. It's not one physical machine, but-

Blake Oliver: Right. 

David Leary: I used to work with a lot of VMware back in my QA days. You'd power it off. It would just be like opening a Microsoft Word file, typing in it, closing it, opening up another Microsoft Word file, and you wouldn't expect the stuff you do on this Microsoft Word file to magically get into the other Microsoft Word file. 

Blake Oliver: Right, right.

David Leary: That's kind of what's happening with these [cross talk] 

Blake Oliver: Yeah, there's some- it's like [00:08:30] something about there's not enough of a wall between these-

David Leary: PC to PC. I suspect this is happening, because they know once they get into one, now they're into 400-500, who knows how many? Because these companies aren't gonna disclose it ... It's not like the, what was it, Florida, right? That county in Florida paid the ransom, two weeks ago, or so- 

Blake Oliver: Right. Yeah, there's a city in Florida ... There's a bunch of cities that have been hacked by ransomware recently- 

David Leary: Now, I'm wondering if any of these companies are starting to pay the ransom.

Blake Oliver: Yeah, who knows? [00:09:00]

David Leary: That's a question for the iNSYNQ president.

Blake Oliver: Yes. Oh, yeah, and what's his name from iNSYNQ - not Justin Timberlake, right? - Elliot Luchansky ... I saw that he was online tweeting about this. He has offered to come on the show and talk- 

Marie Phillips: Oh, then you can ask the question.

Blake Oliver: Yeah. We'll ask him about this. We'll say, "Hey, what happened? How are you gonna stop this in the future?" His Twitter [00:09:30] profile says "Leader, entrepreneur, investor. CEO & Board member of Cloud X - a holding co. of cloud-based solutions for SMBs, including @insynq." He owns the company that owns iNSYNQ, it sounds like.

David Leary: I'm sure we'll still be talking about this story next week, because, like you said, there's tweets and people are calling out their support; that their support is not giving out honest answers still. 

Blake Oliver: What was next? Free File, right? We were gonna talk about that. Should we jump into Free File, or ...? 

David Leary: Is Free File your beat? You wanna jump on that? 

Blake Oliver: All right. TurboTax is back in the news, for [00:10:00] our listeners who may not have been following the story. ProPublica has been investigating Intuit for supposedly making it very, very difficult for tax filers to find the free version of TurboTax, the version that TurboTax committed to create for the IRS in partnership with them as like a deal for the IRS not making its own tax-filing software, which tax agencies do all over the world, [00:10:30] except for here in this country, for some reason. Intuit had this deal and apparently was hiding and making it very difficult for people to find the truly free version of their product. They even had different names. There was Free Edition- 

David Leary: TurboTax Free Edition and TurboTax Free File. 

Blake Oliver: There was Freedom Edition and Free File ... It's so difficult. I don't even know the difference of the names. They had names that were almost the same. Basically what happened is there's another ProPublica follow-up story saying that when the Trump [00:11:00] tax cuts came into effect, that reduced the number of people that were going to be filing itemized deductions and all these special forms, because it raised ... Jenny, you're a tax person, right? It raised the ...? 

Jenny Taber: Yeah. It raised the standard deduction up to ... God, if I get this wrong, it's gonna be embarrassing-

David Leary: It's not a test. 

Jenny Taber: -like $12,000- 

Blake Oliver: Something. 

Jenny Taber: -something. Basically, it took away the exemptions, but [00:11:30] it's less likely that you'll itemize, because you'll reach that threshold of the standard deduction.

Blake Oliver: That's why that was actually a threat to TurboTax, because it meant fewer people are filing complicated tax returns.

David Leary: That's what the ProPublica calls out. They won't buy the TurboTax Deluxe, because you don't need all that extra stuff.

Blake Oliver: What Intuit did is they apparently took a bunch of forms that used to be in the free edition and made them part of the paid edition, so that people would have to pay more, or [00:12:00] that people would continue to have to pay.

Jenny Taber: Or is it one of those things where you have to pay up front, and then, you get refunded for it, or something like that? Can you say, "Hey, I qualify as a free filer. Please refund me?"

Blake Oliver: People have been trying to call TurboTax to get refunds, who would've otherwise qualified for Free File - true free filing - but were steered into the paid product. At first, Intuit was giving those refunds, but then they [00:12:30] realized that it would be a lot of refunds, so now they're not doing that.

David Leary: It looks like ProPublica has another recorded phone call, as well. You'll have to maybe stitch that audio into the podcast. 

Blake Oliver: Yeah, that's it. Some of these phone calls are really interesting with this - the strategies that TurboTax is using to avoid giving refunds to people. These are people that made ... Here's an example of someone who made just over $12,000 as a graduate teaching assistant and had student loans. She began filling in her details on TurboTax. [00:13:00] Then, in order to get the actual tax break for the student loans, she had to upgrade to TurboTax Deluxe to claim it. Even though she only had $12,000 of income-

Jenny Taber: She was probably only getting a refund, because if she was getting paid by W-2, it was getting withheld.

Blake Oliver: Yeah, I don't know-

Jenny Taber: If she was 1099, maybe she had to pay something, if she didn't pay estimated, but- 

Blake Oliver: The ironic thing is that it cost her more to upgrade and file than the tax deduction was worth-

Marie Phillips: That's so crazy. 

Blake Oliver: That's always the worst, right? The thing I hate the [00:13:30] most about doing my taxes is when I go to all the trouble of itemizing everything, and it takes me hours and hours, and then it tells me, "Oh, you're better off just taking the standard deduction ..." 

Jenny Taber: Yeah, yeah. Nothing. You get nothing. 

David Leary: But I still do it, just in case.

Blake Oliver: Just in case, right? But that was frustrating. Well, let's talk about how many firms are using remote-access technology, right, Marie?

Marie Phillips: Yeah, it's really interesting, I would think, especially based on the people we're surrounded with- that everybody is in the cloud. Everyone is using remote access. Reading this survey that was published [00:14:00] by CPA Trendlines, only 60 percent of firms employ remote-access tools. What that means is 40 percent of firms do not remote-access into their computer, do not work in the cloud, do not work on online software. They have to drive to work to go to their computer station to use a program installed in their computer, only, to do any work, whether it's tax, audit, accounting. Yeah, it just blew my mind.

Blake Oliver: I wish our listeners could see our brains all exploding right now, right? [00:14:30]

Jenny Taber: Actually, before I got into public accounting, that's how it worked, when I was in private industry.

Marie Phillips: Oh, yeah.

Jenny Taber: I had everything on my office computer.

Blake Oliver: So would you remote into it, if you were at home?

Jenny Taber: Never. 

Blake Oliver: No? 

Marie Phillips: Yeah, that's true, actually. When I used to work for Forever 21, we did everything in Excel, and the only accounting software they had was Lawson. A $3.5 billion company running all of their work onto software that were desktop.

Blake Oliver: Wow. 

Marie Phillips: Yeah. Now, we do everything in the cloud, 100 percent. We [00:15:00] have two softwares that our firm cannot move into cloud, which is tracking time and tracking expenses. Everything else is pretty much in the cloud, and our servers are still ... We still need to VPN, which for the listeners, that means I just need to download a program that allows me to access my computer remotely from home.

Blake Oliver: That's what this survey is talking about, right? 

Marie Phillips: Yeah, that's what they're talking- which is the most basic- that first step from being able to work remotely. 

David Leary: If you were 100-percent cloud, truly using cloud SaaS apps, if you took that survey, you'd say, "I don't do remote [00:15:30] access anymore." 

Marie Phillips: That's true. 

David Leary: That number could be dubious. It might not be ... 60 percent might be acceptable.

Blake Oliver: I really doubt that the other 40 percent are saying, "I use all cloud, 100-percent cloud, and I never need to remote ..." 

David Leary: Yeah, because, at best, that number's 10 percent - at best-

Blake Oliver: At best [cross talk] 

Marie Phillips: At best. 100 percent? 

Blake Oliver: The people who are all 100-percent cloud? C'mon, let's be honest. Even the most cloud firms, like Marie, you guys are-

Marie Phillips: We're definitely leveraging cloud, but we're not 100-percent [00:16:00] cloud-based.

Blake Oliver: Right.

Marie Phillips: There is not one business day where I can be fully in the cloud, because I will need to log in to access client files, and that's a remote log-in, for which I need my phone and I need to be, you know, within the U.S., et cetera. It's kinda silly. There are still a few ways where we can improve on our processes.

Blake Oliver: This might be a good point to stop and do the Jeopardy thing, where we meet our contestants. So maybe, Marie ... You mentioned your firm. Would [00:16:30] you mind telling us a little bit about yourself, and your firm, and what you do there?

Marie Phillips: Absolutely. I work for Gursey | Schneider. I started working there over six years ago and about four years ago, started the accounting practice. It was just me with three tax partners. They kinda looked at me, and were like, "Okay, what do you do?" I said, "Well, I just do accounting." They said, "Okay, go ahead, build the practice from scratch." Now we're five. We started with online QuickBooks ... Well, Desktop, at the time, and then [00:17:00] online. What we do is CFO outsourcing cloud accounting, which means bookkeeping in the cloud, but we leverage technology to avoid data entry, and a lot of consulting work.

Blake Oliver: Five years ago, it was all tax and audit?

Marie Phillips: Five years ago, it was all audit.

Blake Oliver: All audit.

Marie Phillips: Yes. 

Blake Oliver: Wow, a full, totally, 100-percent audit firm. I don't-

Marie Phillips: Oh, no, my career- 

Blake Oliver: Your career. 

Marie Phillips: The firm actually is 60-percent litigation. If you wanna get a divorce, and you need a litigator to come investigate [00:17:30] how much you or your spouse spent on which credit card, that's what we're excellent at.

Blake Oliver: Oh, so do you get to do those forensic engagements, where you ...? No? 

Marie Phillips: No. I worked on one, and I have to bless the people who work in that department, because you have to have amazing human skills to deal with customers at the hardest- in the hardest phase of their life. Yes, a big chunk of our office works in litigation, but then we have a small business [00:18:00] management department that's more full-on, like buy houses, handles purchases and sales of assets like A to Z for a customer, including accounting. We have a large tax department, and also, within the department, we have accounting, and tax, and audit.

Blake Oliver: You mentioned you're fully on cloud, except for two applications.

Marie Phillips: Only my team. Five of us are fully in the cloud, except the application that allows time entry and expense [00:18:30] tracking. Then we have to access all client files on a T drive, like a server. The other departments are not all in the cloud, but they're moving towards more and more cloud-based accounting, including CCH. I think that has been such a difficult transition, because the amount of downtime they've had to experience - including during tax season last year - has been painful. I think everybody's trying to do their best and get to a place where it's smooth, but it takes time. 

Jenny Taber: It's also been complicated by [00:19:00] the fact that the software had to change drastically, because of the Tax Cut and JOBS Act. We ended up extending a greater percentage, I think, than ... I don't wanna say every year before, but it's a lot more extensions. We have a nice fall busy season ahead of us [cross talk] Yeah, it's starting. We're already in it.

Marie Phillips: Yeah. It's like a no-downtime year.

Jenny Taber: It's fine.

Blake Oliver: Jenny, let's [00:19:30] talk about the four-day workweek, and then we'll talk about your background.

Jenny Taber: On USA Today, there was an article, "A Four-Day Workweek. Is This the Next Big Thing?" There was a study that ... They interviewed a CEO of a Seattle-based design and marketing firm and noticed that the workweek- as the work week slogged on, her employees' energy and productivity wilted.

Blake Oliver: That sounds familiar.

Jenny Taber: Yeah, I had [00:20:00] similar experiences, where I have all my energy at the beginning of the week, on Monday and Tuesday, and by Friday, I just wanna go home. If I get all my work done, I can do that, but, you know, that's just how I work personally. I feel very- that that the four-day workweek could be a big thing, if firms or companies allow their employees to work to [00:20:30] their strengths and work to their best ... How they work most productively, which could be slamming 10 hours a day into a four-day workweek. Because I ended up working more than 40 hours a week, usually, but just- 

Blake Oliver: If you compress it, yeah. 

Jenny Taber: -front-ending it in the first half of the week.

Blake Oliver: Yeah, that's one of the options that the article highlights is people working 10-hour days, four days, Monday through Thursday, and being [00:21:00] more productive, or getting the same amount done, right?

Jenny Taber: I think you get that kind of senioritis, or at least I did, on a Friday. You think, "Oh, it's a Friday, I can relax." Some Fridays are not like that, but, if it can be, wouldn't that be nice?

David Leary: It would be, but the promising part of this, to me, is if everybody just works Monday through Thursday, I always love, on a Friday afternoon, email stops, all the inbound stops, and you get more work done in four hours on a Friday afternoon than you do the rest of the week. If nobody's working on Friday, that's like a solid eight [00:21:30] hours of uninterrupted free work, which would be super-productive for everybody.

Blake Oliver: That's true.

David Leary: Everybody should just pretend they work a four-day [cross talk] and just really sneak in that fifth- 

Jenny Taber: I remember, I always got put in a bad mood if someone gave me new work on a Friday afternoon. I was just like-

Blake Oliver: Yeah, that's the worst. 

Jenny Taber: I gave 'em a dirty look, like, "Please don't ..." 

Blake Oliver: That's why, if you're a good manager, you gotta schedule that email to go out Monday morning, instead of Friday at 4:00, if you really want it to get done.

Jenny Taber: Right, because then I'd be stressed all weekend, thinking, "Oh my God, what have I [00:22:00] gotten myself into?" 

Marie Phillips: It is really interesting. We actually love doing that at the firm, too, because it's our way to actually retain the more senior managers that may not be looking forward to becoming partner. The ones that want to grow more into a director track, we have started to offer that. You come in Mondays at 11:00 a.m., and then you take off Friday.

Blake Oliver: That's nice.

Marie Phillips: That way, we can make sure that you can still grow with the firm, but you're obtaining that work/life balance, or whatever it is. If you wanna just work from home half the time, the [00:22:30] owners are really- the partners are really flexible.

David Leary: Does this impact us, with that whole ... People are obsessed, still, with that billable hour-

Jenny Taber: Yes. -this mind

David Leary: -this mindset of, "Hey, we're gonna shift to a four-day workweek." That's 10 more hours of a week we could still try to bill for ... Will they just pretend ... Everybody'll shift. They'll get their ... We'll just recreate, working 10-hour days, instead of eight-hour days, and everybody'll work on that fifth day for 10 hours.

Jenny Taber: Point is, if you're burnt out by a certain time, you're not gonna be productive. There's [00:23:00] no point in trying to shove more work into a tired person, I guess.

David Leary: But you bill for it the same.

Jenny Taber: Yeah.

David Leary: The clients don't know.

Blake Oliver: Let's give some context to this. I love this story, Jenny, because of some of the stats in here. First of all, how many organizations are actually offering four-day workweeks? It's still pretty small, but it's growing; its 15 percent, which is more than I thought. That's a lot. That's up from 13 percent in 2017. Here's the great part. Here [00:23:30] we are talking about four days versus five days, versus 40 hours versus 32 hours. Research shows that employees only do about four hours of actual work during the day.

Marie Phillips: I wonder if that's true, at a CPA firm, where they track your rates, and then their ... We get an email once a month, with like, "Here's everybody's stats, their productivity, and all of it, based on their PTO, no PTO ..." There is a pressure, I think, we have during the summer [00:24:00] months, May through about August, on the tax side. They do a little, like, "Oh, whoever gets the most hours, or if you get over 120 hours that you billed this month, you get a gift card." I think they still push that a lot to make sure that doesn't happen, but it sounds right.

Blake Oliver: I suspect that, at a lot of firms, the people who are billing lots of hours are just gaming the system.

Jenny Taber: Yes.

Marie Phillips: Right.

Blake Oliver: Nobody wants to admit it. I can't be the only one who had a really hard time actually keeping track of the work I [00:24:30] was doing, because I'm going back and forth between 20 different clients that I'm managing. I'm not tracking every email I'm sending. That's insane. I would just, at the end of the day, kinda look at what I had done, and just apportion the eight hours into the buckets that I felt were most appropriate. If I had a particularly difficult client and I had enough budget, I would just say I worked four hours on that, right? Jenny, you [cross talk] 

Jenny Taber: I put four hours of energy into this client. 

Blake Oliver: Exactly, right? Because it's not how much you're actually working, it's-

David Leary: All of you are CPAs; all three of you, right?

Marie Phillips: Yes. [00:25:00]

Blake Oliver: Yeah. 

David Leary: It's almost like is this an ethical thing? When push comes up, at the end of the day, you being the CPA are like ... Yeah, you're just winging the time and writing down some billable time ... 

Marie Phillips: I don't think it's fair, sometimes, to ... I try, as much as possible, if it's a quick call or something, I always tell a client, "Just call me," because it'll be cheaper to call me, and I fix it now than if you wait until year-end, and it takes eight hours. I won't bill for that call, but later on, if I end up doing ... We bill by 15-minute increments, so, if I end of doing 50 or 55 minutes on a [00:25:30] client, of course, I'm gonna round it up, if we've been on the phone four times that month, but I'm not gonna go and bill a 0.25 [cross talk] hour for a call. 

Jenny Taber: I always like to look for efficiencies. I don't like to waste time. I feel the billable hour is not really an hour that's all billable.

Blake Oliver: Yeah. 

Jenny Taber: But mine is. I think mine is [cross talk] 

David Leary: -breaking news.

Jenny Taber: I feel like my [00:26:00] work ... If that's an hour, that's a true hour.

Blake Oliver: Yeah.

Jenny Taber: So, maybe that'll count for an hour and a little change? I don't know, but like ... 

Blake Oliver: That's the hard part is I would work some hours where I'm working on a client, and I'm like, "Wow, I really didn't accomplish much at all."

Jenny Taber: Yeah.

Blake Oliver: Mostly because I was spending the time learning something, so I felt guilty. Am I supposed to bill for that? Well, the firm would say yes, but I couldn't do it.

Marie Phillips: Yeah. 

Blake Oliver: Then I would spend another ... I would do something for a client that was amazing. Maybe it only took [00:26:30] me 15 minutes, but it was clearly something that would have taken another person at the firm two hours, right? Then I'm like, "Well, what am I supposed to do?"

Jenny Taber: Yeah. Well, not only do you- are most invoices built on the billable hour and how you charge your clients based on inputs, which is stupid, but in order to get evaluated as an employee, they look at your billable hours, your chargeable hours. I'm [00:27:00] frustrated because I feel like my value isn't related to that at all. It's your relationship with the client. It's are you getting all your work done? Is anybody waiting on you or complaining about you? Do you have the reputation of being lazy or ...?

Marie Phillips: Do you train others, which is not billable [cross talk] a lotta the time. Are you adding value? 

Jenny Taber: -lots of other factors that come in. So, sometimes it can be frustrating to be valued on something that- on how much time you spend [00:27:30] on something, which if you spend less time on doing the same work, you should be valued more.

Marie Phillips: Yeah. 

Blake Oliver: Right! Exactly! 

David Leary: It eliminates all the motivation to be efficient or to get better.

Jenny Taber: Right. 

Blake Oliver: Jenny, you've heard my story. I have two stories from my time at our firm- at the firm together. One involved a senior accountant, who ... We got along really well. We kinda had the same 'let's get things done' attitude. Screw this administrative crap. She showed me her secret timesheet. She [00:28:00] had a secret timesheet and her official timesheet. Her secret timesheet was how much work she actually did. Then she had a budget of hours that she knew she was allowed to bill to these clients, based on the budget that had been established. She would just make sure, every week, that she was billing up to that budget amount, because her budgeted hours filled the week ... 

Marie Phillips: But you kinda lose the purpose of understanding better your profitability on clients, or which clients are you ... Sometimes, [00:28:30] I don't ... I know there's certain clients, where it's so tight, and I'm just not gonna bill for that. I'm just gonna eat it and not get paid for it, because I'm just like, "You know what? I know it's gonna be a write-off, and that's gonna take me an extra 30 minutes at the end of the month, to do all my write-offs, so I may as well just not ..." But then, you lose that sense of is it a D client, and you need to let them go? 

Blake Oliver: I know. Well, what I hate the most is that it just penalizes taking risks and trying new things, because most of the time, when you try new technology, you're [00:29:00] gonna waste time at the beginning. There's no incentive at a big firm or at any firm, where they're primarily measuring you based on your hours to do any of that stuff, because all it does is reduce your hours and make you less efficient in the short-

David Leary: Yeah, because as soon as you figure out how to take an hour- something that took you an hour, and now you know how to do it in six minutes ...

Jenny Taber: Right. 

David Leary: Now, that six-minute thing gets across to every client, firm just lost hundreds of [cross talk]

Blake Oliver: You lost revenue ... You actually lose revenue- 

Jenny Taber: Actually, when I budget numbers for how much time I'm supposed to spend on a return, I take that as a challenge. I [00:29:30] say this is budgeted for six hours? I accept your challenge. I will do it in three.

Marie Phillips: It's tough the following year, when something [cross talk] why is it more expensive? 

Jenny Taber: The assign it to somebody else, and they're like, "Well, Jenny did it in three?" 

Blake Oliver: Yeah. Actually, everybody who follows in your footsteps, Jenny, probably hates what you've done. 

Jenny Taber: Yes. That's my goal to make everyone hate me. 

David Leary: Speaking of billable time, I wanna make sure I heard you correctly, Marie. You said that you [00:30:00] still have to do some desktop billing software you have to sign into?

Marie Phillips: Yes, we do. It's called Aderant. The tough part is because the firm is mainly a litigation firm with a tax department that is growing, I think with time, they may be at the same level, but up until now, this is a heavily customized software that needs to be set up a certain way [cross talk] for litigation- 

David Leary: So, it's a legal practice management software. 

Marie Phillips: Yes, it really looks like that. They actually have been going to- IT has [00:30:30] been going to conferences, and the administration team, to see can we replace that? But it would be a half-a-million-dollar investment; not just in terms of software, but training and the costs associated with it. In my opinion, like, yeah, let's do it! At least give me this software. I can use it for my team, so we're not constantly ... It's been painful, because if you turn in your timesheet late, you can get penalized-.

Blake Oliver: Like financially penalized? 

Marie Phillips: Financially penalized.

Blake Oliver: Oh, no!

Jenny Taber: Oooh ... 

Marie Phillips: You have 260 [00:31:00] employees in the firm, so you have one HR person that's chasing 260 timesheets at the end of every month. Eventually, they had to implement a penalty, but it really affects morale on the team. I had one employee get dinged $300 because he missed a 0.25 entry, so it's kinda like-

Blake Oliver: Yeah, that's hard. 

Marie Phillips: -you see the pain it creates in your team. I was in France to visit family a few years ago, and kinda the same thing, freaking out. I can't remote log [00:31:30] in to that software from France, because of the internet speed. You had to remote into your computer, and then from the computer into the software. It just couldn't hold that. I had to have my team, at the time, my staff, find a way to get access to my own timesheets, so she can do my timesheet for me-

Jenny Taber: Oh! 

Blake Oliver: You're literally calling in your timesheet there. 

Marie Phillips: Yeah, it was just brutal. They are trying to implement, in the cloud, where you can have an access online, but it's still clunky. I tried this week, and it [00:32:00] wasn't working.

Blake Oliver: So, Jenny, you and I used to work together at Armanino, on the same team, in outsourced accounting. Now you're in tax. Why don't you tell our listeners a little bit about what you do and your background at Armanino? 

Jenny Taber: I'm Jane Taber. I work for Armanino, and I'm a tax senior. I actually came in as a senior, having been promoted from OFA, which is the Outsourced Finance & Accounting department at Armanino. That was my background. I had done accounting in private industry before - monthly [00:32:30] financials, monthly close, reconciling bank accounts - everything to keep the company going. I said, "I'm going for my CPA ..." I'm in a public accounting firm. I've never done tax. It's a challenge. I wanna make a move. Seems like a great place. They have an internal mobility program there, which is official now. It wasn't official at the time that I transferred but ended up transferring to tax. [00:33:00] It's very interesting. It's a totally different part of my brain now.

Blake Oliver: How is it different than what we were doing at outsourced accounting?

Jenny Taber: Well, outsourced accounting, it was kind of busy all the time, in terms of schedule. Tax is more seasonal. It gets really, really busy and intense twice a year, and then ... What I did this summer is I went on vacation for the first time.

Blake Oliver: Right, which is hard to do in accounting.

Jenny Taber: Yeah, because [00:33:30] it's-

Blake Oliver: In outsourced accounting. 

Jenny Taber: -if you're not doing monthly close, which is the first end of the month, you have constant, constant work, like payroll; different deadlines that are happening all the time. Having someone else help you do your work, like with the timesheets, is a challenge. But in tax, there are dead zones, and there are very intense busy zones. That's [00:34:00] a main difference, in terms of the work-

Blake Oliver: But you like the challenge. You like having all that work [cross talk]

Jenny Taber: -there's always something new, and I enjoy puzzles, and figuring out puzzles, and figuring out details, and things like that. So far, it's really fun. It works.

Blake Oliver: Well, I think that's all the time we've got today. David, where can people follow you online? Get in touch with you? 

David Leary: I'm @David Leary on Twitter. That's probably the easiest.

Blake Oliver: Yeah, and [00:34:30] how about you, Marie? Where should people connect with you online?

Marie Phillips: I'm on LinkedIn - Marie F. Phillips. You can also find me on Twitter or any of the social media platforms.

Blake Oliver: Cool. How about you, Jenny?

Jenny Taber: Jenny Taber, CPA on LinkedIn. I am not on Twitter, so don't try to look for me there. If someone is there, that's not me.

David Leary: Let's get you signed up now.

Jenny Taber: Yeah.

Blake Oliver: All right. Thanks so much for joining us today. It was great to see you both in person and hope to see you again soon.

Marie Phillips: Thank you for having us. [00:35:00]

Jenny Taber: Thanks, Blake and David. 

David Leary: Bye, everybody. 

Marie Phillips: Bye. 

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