The Accounting Podcast

Joe Woodard on pricing your monthly services; Firms with workflow problems do nothing to fix it; FTX is the latest Crypto Collapse; Xero: New CEO and half-year results and more!

Show Notes

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Show Notes

RSVP for the Cloud Accounting Podcast Party
DECEMBER 7TH
7 PM to 9 PM
Chandelier Lounge Cosmopolitan Hotel Las Vegas
https://cloudacctpod.link/party
 
1:55 – r/Accounting - Happy International Accounting Day
https://www.reddit.com/r/Accounting/comments/yrj5ev/happy_international_accounting_day/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
 
6:37 – FTX founder blames crypto meltdown on ‘poor labeling’ of bank accounts
https://www.telegraph.co.uk/business/2022/11/10/bitcoin-plunge-80pc-jp-morgan-warns-crypto-cascade/
 
18:00 – SURVEY: Workflow Is a Problem. So Why Aren't Firms Buying Solutions? - CPA Trendlines
https://cpatrendlines.com/2022/11/08/survey-workflow-is-a-problem-but-firms-arent-buying-solutions/
 
24:49 – Caleb L. Jenkins, EA, CQP on LinkedIn: TurboTax Live Business Full Service | TurboTax FS Business
https://www.linkedin.com/posts/calebjenkins1994_turbotax-live-business-full-service-turbotax-activity-6995591412155129857-HNhh?utm_source=share&utm_medium=member_ios
 
47:31 – Kanye’s Former Accountant Sues For $4.5M in Unpaid Fees
https://www.billboard.com/pro/kanyes-former-accountant-sues-unpaid-fees/
 
50:05 – Xero Shares Hit Lowest Level Since March 2020 After CEO Announces Retirement
http://www.wsj.com/articles/xero-shares-hit-lowest-level-since-march-2020-after-ceo-announces-retirement-151668040514



Connect with Joe Woodard

LinkedIn: https://www.linkedin.com/in/quickbooksadvisor/
Twitter: https://twitter.com/joewoodard
Website: http://woodard.com

Register for Scaling New Heights 2023: https://www.woodard.com/2023-scaling-new-heights


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Creators & Guests

Host
Blake Oliver
Founder and CEO of Earmark CPE
Host
David Leary
President and Founder, Sombrero Apps Company
Guest
Joe Woodard
As an author, consultant, business coach, and national speaker, Joe has trained over 125,000 accounting and business professionals in areas of practice development, changing technology trends, strategic consulting, and how to maximize the use of accounting software in their practices. Joe founded Woodard Events, LLC (aka Woodard®) a training and resource organization for accounting professions that provides education, community, and coaching offerings through onsite training events, virtual training events, and intensive, coach-led practice advancement courses. Joe is the host of one of the world's leading training conferences for accountants and bookkeepers called Scaling New Heights®. For every year since 2014, Joe has been recognized by Accounting Today as one of the Top 100 Influential People within the accounting profession. Joe regularly publishes articles for numerous news sources and media organizations that service the accounting profession, including The Woodard Report, the media arm of Woodard®. that reaches over 100,000 readers each year.

What is The Accounting Podcast?

The Accounting Podcast (formerly the Cloud Accounting Podcast) is the world's #1 accounting, bookkeeping, and tax podcast! Join us weekly for a roundup of accounting news, analysis, and interviews. Plus, earn free NASBA-approved CPE credits for listening with the Earmark app. Learn more at https://earmarkcpe.com.

Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

David Leary: [00:00:00] Regardless of what we technically call it. I think most of us can agree that all signs are pointing to an economy that is getting tighter, which means your small business clients will need your assistance in evaluating the spending of every dollar. How would you like to be the hero to your clients? By helping them to get free payroll until January 31st, 2023. Repeat free payroll until January 31st, 2023. Stay tuned to hear more from our sponsor OnPay later in the episode.

Joe Woodard: [00:00:31] You know why these things are are good. They're there. They're going to end up being a net positive disrupter. I'm not being non sympathetic. There are tax preparers out there that feel like this is a very big step in their backyard. And I get it. It's the way bookkeepers felt recently with a QuickBooks Live piece, but it's accelerating the path or the journey from where tax preparers and bookkeepers are to where they need to be.

David Leary: [00:01:00] Coming to you weekly from the OnPay Recording Studio, this is The Cloud Accounting Podcast.

Blake Oliver: [00:01:09] Hello and welcome to another episode of The Cloud Accounting Podcast. I am Blake Oliver.

David Leary: [00:01:16] And I'm David Leary. And Blake, we have another guest.

Blake Oliver: [00:01:20] Yes, Joe Woodard. Hello. Welcome.

Joe Woodard: [00:01:22] It's great to be here, guys.

Blake Oliver: [00:01:24] Great to have you.

David Leary: [00:01:26] I've tried to get Joe on the show now, I think three years in a row and it's never happened. We'll be at Scaling New Heights. We'll be doing live recordings, and Joe just gets too busy. And then our.

Joe Woodard: [00:01:35] Pandemic pandemics happened and we move.

David Leary: [00:01:37] Pandemics here. Yeah. And and then trying to book him is just hard in general for a different episode. So finally I was like, you know what? We're recording every Friday. We'll just give him the choice of every Friday and he'll have to come to one of them.

Joe Woodard: [00:01:51] And we found one. Is that great?

David Leary: [00:01:53] So one that fits well.

Blake Oliver: [00:01:55] Hey, guys, Happy International Accounting Day. International Accounting Day was November 10th. So yesterday, as we reported this. Yeah, on on that day, 526 years ago, Luca Pacioli published his critical work some day arithmetic, geometry, proportionate proportionality, which became the foundation for further advancement of accounting. It's amazing to think that our profession has been around now for over 500 years and and yet. As we were discussing last last week on the on the episode, the shortage of accountants and the lack of interest in accounting may be threatening the future of capitalism. And I can't believe it, but we actually saw this start to happen this week with the collapse of the crypto crypto exchange FCX. A company that was one week ago valued at something like $38 billion is wiped out, bankrupt and billions and billions and billions of dollars of customer funds are likely not ever going to be returned to anyone. It's kind of amazing that this is happening. David, were you following this?

David Leary: [00:03:08] I've tried to. I mean, explain. I think this is the problem I was saying about this this morning in the kitchen. I can't this doesn't pass the mom test. Like I can't explain to my mom what happened here.

Blake Oliver: [00:03:19] I don't I don't think most.

David Leary: [00:03:20] People, because of that is the reason it happened. If that makes any sense. Yeah, right.

Blake Oliver: [00:03:24] Yeah. I mean, I'm not sure if most people can explain what happened. I was actually Googling yesterday, trying to prepare for this to sort of do that. Right, David? Explain what happened. Like summarize what happened for our accountants and bookkeepers who are listening and there's not a lot of information out there because FTC's a crypto exchange that was offshore in the Bahamas somewhere does not get audited. It has no financial statements that it issues. It is not audited by any firm in the world as far as we can tell. And what happened, apparently, as far as I can tell, is that this exchange now, a crypto exchange is is like a bank, Right? In a lot of ways. And so they take custody of your funds. You deposit funds with them, and you're supposed to be able to invest it. Sort of think of it like a brokerage account. Right. And in the US, a brokerage, you know, has to be audited and maintain custody of client money. Right. They can't just, you know, do whatever they want with it. But CFTC's isn't subject to those regulations. And so what they were doing apparently is loaning customer funds to a related entity called Alameda Research, which was then investing that in very speculative crypto investments, which included something like they were doing what's called yield farming, which is investing in these new cryptocurrencies that offer a yield very speculative stuff, very dangerous, very risky. And something like half of the customer funds were being loaned out to this related entity. And so when there was a run on the bank, when people started to worry that FTX wasn't going to be liquid any longer, there was a run on the bank and they had to freeze again.

David Leary: [00:05:11] Which now the fourth or fifth. One of these companies has vowed to do this, right? Yeah. Yeah. Yeah. 10% return becomes absolutely nothing really quick.

Blake Oliver: [00:05:20] I just can't believe that people are investing in these exchanges. They're not audited. They have no financial statements like that. We're just trusting that this is being done properly and.

David Leary: [00:05:30] This is hardly businesses like this founder. I don't know if you saw some of this. Apparently he has a cabal. He runs. You know, they all live in the Bahamas, him and ten or 12 of the other 15 of the other employees all lived there together. They've all exchanged girlfriends. Like the whole thing is just a dominantly there's no due diligence. People are just buying this. So it's touch on blind faith and it goes back to Blake. Let's you know, this is the week. It's the one year anniversary of the big Matt Damon commercial.

Blake Oliver: [00:06:00] Oh, at the Super Bowl commercial where he.

David Leary: [00:06:01] Said encouraged to buy.

Blake Oliver: [00:06:02] Crypto for the brave. Right.

David Leary: [00:06:04] And you went off on that commercial in February of last year. I went back and listened to some of that episode. You kind of went off about on that commercial. And at that point crypto already fell 30% and two weeks before that we had our episode, It was titled Crypto is a Scam, and we had listeners calling us and telling us how ignorant we were and that we didn't do enough research. But obviously people are not doing research or investing in this because these are not this guy was had a $16 Billion net worth.

Blake Oliver: [00:06:34] I know well, but on paper, right on.

David Leary: [00:06:36] Paper.

Blake Oliver: [00:06:37] Apparently FTC's only ever raised only $2 billion. So they somehow got to, you know, the $38 Billion valuation on paper. They were trying to raise money. I don't want to go into super detail on this because you got a lot else to talk about. But there's one thing that relates to accounting that I want to bring up, which is this headline on The Telegraph. Ftc's founder blames crypto meltdown on, quote, poor labeling unquote of bank accounts. So Mr. Bankman-fried, who Sam Bankman-fried is the founder of FTC's, who is, you know, the darling of the crypto world until just a few days ago. He posted a Twitter thread on Thursday and he apologized repeatedly to FTC's users while blaming the exchange's woes on his own misreading of its management accounts. Here's the quote A poor internal labeling of bank related accounts meant that I was substantially off on my sense of users margin, unquote. I effed up. I should have done better. So think about this. He's blaming I mean, I don't know if we can take him at his word. Right. But he's blaming that he's looking at his books and he had not properly labeled, which accounts were user funds, depositor funds and his funds. I mean, that's just that's bad bookkeeping, right? That's blaming it on bookkeeping. And I'm wondering, like, does he even have an accountant? Were there any accountants working at FTC's, like, at all period? You know, Joe, do you invest in crypto?

Joe Woodard: [00:08:04] I know invest wouldn't be the word. So I've got a couple of comments here. One, I'd like to know what the average size of an account holder was or is and any any active cryptocurrency, because I suspect a lot of people are like me. They see a new one hit. I'll go through 100 bucks at it just so that in my Coinbase I could use 100 bucks as a baseline if it's up or down. Right? And also look at the graphs and stuff. But I play and if 100,000 people play with 100 bucks, right, an hour or a million people play with 100 bucks and start adding up. So how much of that is actually going on and what are the, let's say, actual customer risk, customer impact of something like this happening? So that's number one. Number two, none of this is going to be manageable. I don't think it's a scam, but I also think it's not viable is the way I would phrase it. Maybe you guys were being hyperbolic with the word scam, but it's not viable because it's not anchored in any kind of a tangible standard. You know, we used to have a gold standard in the United States now are now we know full well from the last year that our dollar is directly related to our economy. At least it's anchored in something and these things are anchored in nothing. They're anchored in in and public.

David Leary: [00:09:22] Worst of all, they're on each other.

Joe Woodard: [00:09:23] Right? Right.

David Leary: [00:09:24] Yes, exactly. You're on each other. It's like, oh, ours is anchored on this other fictitious coin. Yeah. And is on this other fictitious coin.

Joe Woodard: [00:09:31] And nothing's anchored in actual, tangible reality. But now to get to your to, to, to your actual question, which since I've waxed eloquent here, I've forgotten what it was like setting up your next quiz, your actual question. I'll answer it.

Blake Oliver: [00:09:44] I just want to know if you invest in cryptocurrency And you did answer.

Joe Woodard: [00:09:47] Yeah, I do. But but invest is a is is a very loose word. I think a lot of people are like me. They're dabbling in it.

Blake Oliver: [00:09:53] Yeah, Well, so you brought up a good point, which is that, you know, these cryptocurrencies are often, you know, they're not rooted in anything. Right? There's, there's, there are, there are different types of cryptocurrencies and we've got bitcoin, we've got tether, we've got usdc, we've got well, an FTX had its own cryptocurrency that issued and this is what set the whole thing off is that the exchange FDX issued its own cryptocurrency, which, you know, was like IOUs essentially, right? And it was discovered or leaked that the related entity, Alameda, which is also owned by the founder of. Held enormous amounts of crypto. And so that is what set off the bank run because people realize, oh, if FTX collapses, if the currency collapses, the crypto collapses, then Alameda is insolvent and then very likely the exchange is going to be insolvent. That's what set off the run. And this is the problem with unregulated exchanges like this.

Joe Woodard: [00:10:53] Is lack of regulation is part of the problem. But if you want to create an anchor port, that's legitimate because that one was all paper thin. But where I think the future of crypto is going to go is anchored in major corporations. If if if you're talking about a microsoft cryptocurrency or an Apple cryptocurrency, then they're anchored in in the success and in the stability of those corporations. But don't we just call that stock, right? But if we treat this as an extension of the stock model, not stock, but something that operates similarly in its valuation to stock, but in a much more fluid way that doesn't require brokerages, doesn't require trading, that still, as we all know, impacted by the schedule D So it fits, then I think what we're going to end up with is sort of the Volkswagen of stock, the people's stock and its cryptocurrency anchor based in one or more corporations, a single or corporate portfolio, which would be like a fund, right? I think it's going to morph in that direction.

David Leary: [00:12:01] As an ownership model.

Joe Woodard: [00:12:03] No, that that's that's back to stock as an anchor point. So that the Microsoft is stabilizing the currency just the same way that the economy of the United States stabilizes ours, but at a much greater scale.

David Leary: [00:12:17] So it's like my I have my Starbucks card or my my Starbucks app and I juice it up. It's just no different than when I juiced up my cash app. With some bitcoin I use.

Joe Woodard: [00:12:29] Even the corporate virtual risk.

David Leary: [00:12:31] I virtual Starbucks dollars, but they're somewhat backed because of the value of Starbucks itself. They actually produce.

Joe Woodard: [00:12:37] With one big difference.

David Leary: [00:12:38] They don't.

Joe Woodard: [00:12:38] Appreciate as Starbucks grows or expands or, you know, so so this would actually increase or decrease in value as a currency would. But yes, a good comparison. You're actually saying I'm transferring us dollars to to to Starbucks dollars with the difference that this would be a little bit more fluid. Yeah. And it would be open to be used as any cryptocurrency. I could use it at places other than Starbucks. So it's a good comparison, but much more versatile. Now, I could also be wrong, but this is just my big theory, right? And I think it's a further stepping stone. Big, big, big idea here. The Ridley Scott idea that corporations, not nation states, are the governing forces of the future, so that now I'm a citizen of Apple, I'm a citizen of Microsoft because now it has its own currency, it has its own economy, it has its own technology, which is of course, the anchor point of all things in the future, since we're going to live in the metaverse and and now in the metaverse is going to be the big catalyst to making this happen 102 hundred years from now is I will live in Microsoft land and I will visit the real world.

Blake Oliver: [00:13:49] Oh, God, what a depressing thought.

Joe Woodard: [00:13:52] Why does it sound better to live in Google Land?

Blake Oliver: [00:13:55] I mean, both of those are depressing thoughts.

Joe Woodard: [00:13:59] Yes, it can be very depressing. Yes.

Blake Oliver: [00:14:01] Yeah. Well, but, you know, Joe, like this whole metaverse thing is just so ridiculous. Like, I think Facebook has made just a fatal error here because until the technology improves to the point where we don't get motion sickness and we have legs in the metaverse and people actually want to wear these headsets, you can.

Joe Woodard: [00:14:19] See the peripherals.

Blake Oliver: [00:14:20] Yeah, yeah, yeah. I mean, it's just it's it's the motion sickness to me is like the biggest problem if you actually try to put on a headset and use it, you know, I get motion sickness, right.

Joe Woodard: [00:14:29] I read an article that, that almost half of our armed forces using it get motion sickness. And these are the sort of the people that have the toughest you know, they've already been vetted for handling, you know, volatile environments and yet they can't manage it. So it's it's it's a real big problem. Screen resolution and peripheral vision are the two drivers of that as because your mind's trying to adjust the pixelation to to the real world and it can't do so. So that is solvable. But I agree until it becomes globally usable without making people sick, it's we're a long way away from the worlds that I just described. Right. If they happen at all, they're happening in hundreds of years from now, what I just described. So I don't want to make people think that, you know, that I'm thinking this is the next decade horizon. But I agree Facebook is has bit too much of the apple too fast. I've got a mantra. And I've actually unfortunately lived this by experience that if you're one step ahead, you're a leader, two steps ahead, you're a visionary, three steps ahead, you're a martyr. And they may just be a martyr on this one.

David Leary: [00:15:38] Well, I think it's just I don't dwell on Facebook too much, but the All in podcast guys were talking a little bit about how the amount of money in revenue that Facebook is spending on the metaverse is that you think about major things in human history, right? Or technology things. It's way more as a percentage of time and effort that went to the Apollo missions. It's more than Apple invested to get the iPhone out the door. You're right. They're making a 200 year bet. But the way they're burning the money to do it, they're not going to be around in 20 years. They might not be around in five years. If they keep up at the pace they're spend.

Joe Woodard: [00:16:12] Clarify something, because I just read a great book on the metaverse and I'll get to you guys a link for your listeners. But the horizon on the trillion dollar economics, most economists and most futurist think is in the outside 30 years. Some are saying as close as 15 or 20. It's just the Ridley Scott esque world that I was describing where corporations run the world. If that ever happens, that's 200 and hundred years from now. So I don't know that they're that far ahead of the market. But what I can tell you is for the I agree with you, David, in principle, the amount of money they're spending for what could be a 30 year horizon is not survivable. And it's ambitious if it's a ten year horizon. Yeah.

David Leary: [00:16:57] This episode of The Cloud Accounting Podcast is sponsored by FreshBooks. I was on the FreshBooks website this week and saw this blog post. Five FreshBooks Features Accountants Love. So I figured let's share it with The Cloud Accounting Podcast audience. So without further ado, number one in-app estimates and proposals. With deep customization, you can create bespoke proposals for clients and even capture their e-signatures. Number two Pre-populated chart of accounts help you cut down on your setup times, and it helps clients feel confident when classifying their expenses. Three App Integrations Square Dropbox, HubSpot G, Suite, Gusto and Zoom time tracking allows your clients to take charge of their own time tracking payroll and make invoicing a breeze. Check out links you can require and collect payments up front to eliminate the need to chase clients that owe you money. If you want to learn about the benefits of working better together with FreshBooks, head over to Cloudaccountingpodcast.com Promo FreshBooks. That is Cloudaccountingpodcast.com Promo for Free HBO. Case.

Blake Oliver: [00:18:00] Well, so, you know, Joe, I got to be honest, when I hear people talk about the metaverse in accounting, you know, I just think this is this is absurd because there's so there's so much more that we haven't done yet. And to talk about the metaverse is to go way into the future beyond where we are. Here's an example. Cpa Trendlines did a survey asking about workflow solutions. What workflow solutions are you using in your firm? And some of these some of these answers are kind of crazy among all firms. Like a third do not use any workflow tool and are not considering one. And then 16% don't use one, but are considering one. And if you add those together, that's basically half of firms do not have a software tool for managing workflow. And what I mean by workflow is tasks, projects, tax returns.

Joe Woodard: [00:18:55] Basically their livelihood. Yeah, yeah, yeah.

David Leary: [00:18:58] So they probably have it on Excel though. I imagine they have a spreadsheet setup and they have different tabs for each client. I imagine they're tracking it some way. This, you know, it's, it's not.

Joe Woodard: [00:19:08] Fair. I imagine that they are not. I imagine that all of that process lives in the brains of the people doing the work, and it's all done in with extreme amounts of of variables, person to person. So there's no consistent brand offering by the firm at all. High errors and omissions. Human resource turnover costs are through the roof, even practice threatening. Yes, David, I think I think some of this percentage has it on Google. I didn't mean to dismiss what you were saying. They have it on Google sheets or they have it on Excel. But, but unfortunately, what I've seen as I as I've coached, it's even worse. Thousands of these firms and trained thousands of them. They they truly have nothing except what might live on the desk of one person versus another person versus another person. And it's all over the map. If it's not just written out on a piece of paper or just in their brain, it's it's bad out there.

Blake Oliver: [00:20:03] So let's look at what people are using. So the half of firms that are using solutions, it goes Practice C projects, which is Thomson Reuters then docket workflow. Oh, and I should say that the Thomson Reuters one is 9% and then we've got docket workflow at like 6% x cm workflow at closer to five, 5% said unsure. I mean, how could you be unsure what your workflow solution is? 4% office tools 4% Other CCH access work stream 3% custom that's 3%. I'm guessing that's going to be a lot of bigger firms. Or maybe that's the spreadsheets, David, that you're talking about.

Joe Woodard: [00:20:44] I need to note to that as easier to access workflow. I don't know of a CCH access Workstream that may be a typo, but those two are now the same as that. Awesome. So that is.

David Leary: [00:20:56] Why that's why you get this unsure. People like I don't know what we use. We have one. Yeah.

Joe Woodard: [00:20:59] Which by the way is nothing. That's another no answer. Right.

Blake Oliver: [00:21:02] Go file room firm flow. That's Thomson Reuters. Never heard of that. That's 2%.

Joe Woodard: [00:21:07] In. That's not a workflow. So I don't even know what they mean by that.

Blake Oliver: [00:21:10] Oh yeah. Somebody about 1% are on SharePoint. If we round jetpack workflow is about 1% on VEO, another Thomson Reuters project 1% Arrow, 1% AI Channel. Never heard of that. That's like half a percent. But none of the other apps like Carbon is at the bottom with zero like percent. None of the like none of these apps that we hear about in the cloud accounting world are anywhere in this survey other than jetpack really an arrow. And it makes me wonder like.

Joe Woodard: [00:21:41] Where's Canopy, for example?

Blake Oliver: [00:21:43] Right, right. Know canopy like no client hub, no.

David Leary: [00:21:48] Ceo like this, a whole stack of them.

Blake Oliver: [00:21:50] Yeah. So it's like, is this is this an indication of the CPA Trendlines audience, you know, or is this, is this just that? It's still very, very new and people are not using practice management.

Joe Woodard: [00:22:02] Obviously, any audience is going to create a skew in the demographic. But what I can tell you is it my experience, this is right on target now, maybe not in one app versus another, but this is right on target under adoption, disparate adoption, adoption of wrong technologies, trying to to repurpose things that shouldn't be just as workflow. I see that all over the place. It's bad.

David Leary: [00:22:26] So what do you think, Jojo? Just rough estimates in your audience. So obviously you kind of have an audience of it's really not CPA firms per se, but it's it's a lot of accounts and bookkeepers.

Joe Woodard: [00:22:35] There were 20%.

David Leary: [00:22:36] Cpa, but they're very they're forward thinking a little bit. I think there are early adopters per se. The fact that they go to your conference just shows their interest in growing their firm, etc.. What was your guess through your audience, those kind of numbers?

Joe Woodard: [00:22:48] Yeah, we've actually pulled our audience on this and unfortunately they're quick adopters of technology, but they are slow adopters of workflow. So this is systemic. Ins into the bookkeepers. And there are a couple of reasons why a much larger percentage of bookkeepers or sole practitioners than CPA firms are. So not that you don't have sole practitioner CPA firms, but a much larger percentage of bookkeepers. It's close to 70% of professional bookkeepers are sole prop or have only contractors supporting them or outsourced workers. So they feel less pressure to standardize because of the fact that they have it all in their brain. And we saw we coached them past that. You need to be scalable even if you don't plan to scale and you want to have something somebody go by one day and we have all these arguments, but it's a much harder value prop to to sell. The other reason is because they struggle with the same capacity problems to to lead and develop their firms that CPA firms do and multi practitioner firms do. So which is really at the heart of this whole thing. If you ask any any accountant, do you need standardization, standardization of process? Do you want it democratize throughout your practice? Do you want it to be constantly perfected and do you want to to capitalize the knowledge of what's in the brains of your people into true intellectual properties? That scale? Of course, they're going to say yes. But then if you ask them, do you have the capacity to or the resources to build that or when will you. They can't answer that question.

Blake Oliver: [00:24:32] David, I'm going to let you decide where to go from here. I've got a story. I got it. I got more I could talk about. I could talk about TurboTax live or TurboTax live. Full service business. That's the big.

Joe Woodard: [00:24:42] Story. Thanks. So it's a great topic. I just saw a press release today about the the Connect Experts platform so we can talk about all that.

Blake Oliver: [00:24:49] Okay. So, Caleb Jenkins, thank you to Caleb Jenkins for making me aware of this earlier this week that TurboTax Live is now doing business returns and the pricing was briefly available earlier this week. It is now gone. If you go to this TurboTax live business website, it just says get 50% off in early access to a dedicated business tax expert. Previously, it said $1,599 with a 50% discount if paid by December. Something in the pricing was kind of moving around throughout the week, but it has now gone. And so we talked about this was coming right, David, on a previous episode.

David Leary: [00:25:30] Thinking we went through that huge slide deck. Yeah, the Investor Day slide deck. And I think in that time it was about a $750 price point. So which would be the 5099 divided by two something around that area.

Blake Oliver: [00:25:40] And so like this is it's really happening. Turbotax live. So you sign up for the TurboTax software and you can chat with an enrolled agent or a CPA inside of the software. You can provide them all your docs and it is full service. They will actually fill out the forms for you and then go over with it. You go over it with you and then file the return and sign it. This is out. It's happening this year. And the response on tax Twitter was interesting to watch because I guess there's a lot of people and Joe, I really want to get your take on this. There's a lot of practitioners out there charging less than 1500 dollars for a tax return or even less than the 50% off the 700 or $800.

Joe Woodard: [00:26:26] That's great.

Blake Oliver: [00:26:26] Yeah, for a business return. So, you know, what's your take on this? How how I mean, it was one thing when we had TurboTax for 1040s because most practitioners are many practitioners I talked to are saying, you know, I don't really want to do 1040s anymore. I just do them for the business owners when I do the business return. Like I'm not really interested in that type of work. But now this is coming after the bread and butter of the accountant community.

Joe Woodard: [00:26:49] Well, but not, not by design. So I want to make sure I'm clear and this is my interpretation. I've not talked with any executives at Intuit about this, so I can just read tea leaves and not have to worry about speaking out of school. That's the good news. My interpretation of this is they this is a battle with H&R BLOCK. This is not a battle with the hang a shingle tax preparer. So now in the battle between into it and H&R BLOCK and all of the shells that are hitting the ground from this battle, is there collateral damage that could impact the rank and file tax preparer? Yes, of course. I mean, that same thing could be said of QuickBooks Live. Quickbooks Live was not designed to compete against the bookkeeper. It was designed to compete against bench belay finance pals KPMG Spark, as it's called the UK or our finance plus as it's called in Canada. It was designed to compete against those. That's the war. And now H&R BLOCK is doing bookkeeping. I think Intuit knew that, right, the positioning to that. So but as the gods of Olympus are throwing lightning bolts at each other, the mortals are impacted, Right? That's the way I look at it. But it's an important distinction. A lot of people are out on social media saying that Intuit wants to put professionals out of business. They don't. They have a competitive landscape and they're fighting their competitive landscape. Again, the gods are throwing lightning bolts now.

Blake Oliver: [00:28:19] Well, let me stop you there.

Joe Woodard: [00:28:20] What is their response? I mean, they still have to think about the small firms out there and there is a response for that.

Blake Oliver: [00:28:27] How does this not compete with it?

Joe Woodard: [00:28:30] Didn't say it didn't compete. I'm saying it's not engineered to put them out of business.

Blake Oliver: [00:28:34] But it might. It could.

Joe Woodard: [00:28:37] Right. So so here's here's Intuit strategy now and we can debate the merits of the strategy. But their strategy is while I am fighting with H&R BLOCK in bench building finance pals and all these other folks in the bookkeeping space, I want to take care of accountants by providing resources to for them to embrace advisory. So Intuit has simultaneously launched a tax advisory initiative coupled with a program, a solution that works with Intuit Pro Connect, so that they're there. Users of Intuit professional software can offer something that they're not offering Through this. They're doing the same thing in the bookkeeping realm. You know, they're leaning very heavily into anything that's advisory related and business coaching related so that the pro advisors can elevate beyond what QuickBooks Alive offers. So I'm telling you what their response is. I'm not debating its merits one way or the other. I'm just throwing it on the table for you guys to tell me what you think.

David Leary: [00:29:42] I think the good news here is I'm on the TurboTax website and I can't find this ad in the TurboTax website. It's actually you can tell they're becoming an accounting firm because their menu is so deep of all the different things they offer, you know, like these accounting firm websites that are just very generic and they just have these menus of with 30 items in it, 40 items. I can't find the TurboTax live business returns anywhere, a link to it on the bottom of their website or on the website itself. So that should be some comfort, right? Well, people are going to find this if they hear about it.

Blake Oliver: [00:30:12] That's because this is the first year. I mean, my guess is they don't want to overload it. They're going to they're going to try it out this year, see how it goes and then grow it.

Joe Woodard: [00:30:20] And also Intuit tends to stick that image, which I believe also tends to place things out there as as pricing tests and market viability test and then withdraw them. And they're very experiential. I don't think we're we're not seeing a change of direction by the launch pullback. We're seeing experiments launched, measured and pulled. Now the next experiment will come.

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Blake Oliver: [00:32:07] Well, so what we're going to do is David, I've already said we're going to do this, so I hope you are in agreement. I tweeted this out. We are going to take one of our entities. We've got three entities now and we are going to run one of them through TurboTax, live full service business and report back to everyone on our experience. Is it accurate? Is it convenient? Is it easier, David, than your experience working with a cloud firm? Because two.

David Leary: [00:32:34] Different cloud firms.

Blake Oliver: [00:32:35] Two different cloud firms, we're going to compare. So we'll we'll report back to you all, hopefully in January and let you know how it goes.

David Leary: [00:32:43] Yeah, I'll try it. I'll try to do with mine the better reps because it's a little bit the simplest one now at this point. And we'll we'll see what happens. I mean, the premise I've always said is. Me typing these things into other tools like text caddy and whatever other tools I need to upload or type things into. It's just easier to type it into TurboTax. And so, Blake, we've talked about this before, right? It's actually more work to work with a firm than it is to do things yourself.

Blake Oliver: [00:33:11] Well, you end up having to do the same amount of work to type it because you're typing into their tax organizer, online test organizer that you would have typed into a TurboTax. And then I'm.

David Leary: [00:33:21] Doing more because the other stuff's already in TurboTax. It just sucks it Exactly.

Blake Oliver: [00:33:25] Well, in that software is generally better than Yes. Yes. You know, it's better than.

David Leary: [00:33:28] I have 15 years of data in that other software, either.

Blake Oliver: [00:33:30] Or or there's the half of firms that don't use any sort of workflow management software. So you're just literally manually giving them all the information. There's no system for organizing it.

Joe Woodard: [00:33:40] You know why these things are are good. They're there. They're going to end up being a net positive disruptor. I'm not being non sympathetic. There are tax preparers out there that feel like this is a very big step in their backyard. And I get it. It's the way bookkeepers felt recently with a QuickBooks Live piece, but it's accelerating the path. Or the journey from where tax preparers and bookkeepers are to where they need to be. Because we're going to discover very quickly where the limits of this are. We've discovered that with QuickBooks Live QuickBooks Live will not service you if you have inventory. They won't service you if you're of a certain size. There are limits to the kind of clients the QuickBooks Live will take, and you're seeing ProAdvisor start to gravitate into those safe harbors. But those safe harbors also elevate the ProAdvisor into larger businesses with more complex operations than they had before, right? Turbotax. This is important for your audience to hear because a lot of them provide client accounting services. Quickbooks Live will not do cash flow projections, spend management, budget creation and curation collections and bad debt expense mitigation, financial measurements that create actionable management advice. And everything I just mentioned isn't rocket science. A lot of it bookkeepers already know how to do so. Now what's going to happen with tax is tax preparers are going to figure out exactly where the limits are here. I called my tax preparer yesterday without an appointment, got him on the phone within 30 seconds to ask him a question about my health insurance plans. I'm launching for my company when I'm when I'm an escort corp and I own more than 2%. It was a complex question for me. I didn't know how to map it. He answered it in under 15 minutes. And am I going to get that here? I can't imagine that I would hear I'm going to get a transaction transacted on my behalf called a tax return. So it all comes down to do you have the right kind of client where this is not a threat for you?

David Leary: [00:35:53] In the other point of view, I think I have on it right, is you have all your if all these firms are being coached like fire your fire, your clients for your clients, you just want a and be clients so you can offer that type of service. You got. Joe Right. So if that's the case, where are the C and D people? Millions of millions of businesses go to get services going to. Somebody's going to have to come in and fill that gap.

Blake Oliver: [00:36:14] They're going to go to TurboTax Live is what they're going to end up going.

David Leary: [00:36:17] Really, You're going to have to go somewhere because because that fits their budget and their demands. Right. Or their associations.

Blake Oliver: [00:36:21] I feel that that the advice to fire your C and D clients might not be the best advice. And the reason is, I think that the reason that those are C and D clients is not necessarily because of the client, it's because of the way the firm operates. Probably. Right. So a client might have relatively low fees, but that generally means they're going to be simpler. And if they're not, that means you've mispriced. So that's your fault. If they are not getting you the documents that you need on time and they're difficult to work with, that's often because of you, the firm, like put yourself in their shoes. Make it easy for them to get you the documents. Don't rely on them to be proactive. You know, it's.

Joe Woodard: [00:37:02] All firms have an upgrade funnel that's defined, right? And your D.N.C. Clients are perfectly fine to keep around as long as they're understood to be in an upgrade funnel. And as long as you're working the funnel to make sure you're moving a transaction into a relationship. Right?

Blake Oliver: [00:37:19] Yep. Yep. Well, and the thing is, it's very possible to build a really profitable and successful transactional based accounting or bookkeeping practice or tax practice. And the move to advisory is basically it's a way to avoid having to build the systems and processes that allow you to deliver a really good customer experience in a transactional business. At scale.

Joe Woodard: [00:37:41] At scale.

Blake Oliver: [00:37:41] Right. Most accounting practices, most bookkeeping practices are not built with good processes in place. It's all reliant like we saw.

Joe Woodard: [00:37:49] That in the workflow conversation.

Blake Oliver: [00:37:50] Half of firms know workflow. It's all in your head. And if it's all in your head, you can't serve those lower tiered clients effectively and that's why you have to get rid of them. But if you could do it like the way into it's doing what they're building is a whole workflow software that's going to allow them to offer the software and the service together at a really good price that's going to deliver insane margins for them.

Joe Woodard: [00:38:13] It's the blink. This is what I would argue, because I agree with everything you're saying. Yeah, and I would have agreed with it without any caveats or notes 15, 20 years ago. But the problem is not can or even, you know, theoretically should an accounting firm offer that at scale, of course, that would have been good business building. But now the competitive landscape technologically as well as through scaled organizations, is so threatening that unfortunately that whole market is going to be serviced in a very different way. Already is being serviced in a very different way. So in terms of the model, yes. But then the question would be, can I ever achieve the degrees of scale that H&R BLOCK and into it can achieve? And if the answer is no, then I am a general store with a Walmart next door, I will die. I don't care how good I run my store, how well I run my store.

Blake Oliver: [00:39:13] Well, there is a way to do it in sort of a boutique way. So I spoke with a listener of our show for my earmark podcast the other week, and he has 85 clients that pay him a starting price of $200 a month for bookkeeping, which is very I think a lot of listeners would say, Wow, I don't know how he does that. That seems low. The way he does it is it's 85. Keller Williams, real estate agents, all exactly the same client. And that's the kind of business that most firms would turn down. But he's managed to make very profitable and into a good business because he's the only one who does it. He markets exclusively to them. It's a niche. It's a niche and it's a niche. It competes with QuickBooks Live because they're not going to be able to handle all the unique aspects of being a real estate agent. And the the the documents you get.

Joe Woodard: [00:40:02] So niche is an insulator. Absolutely right.

Blake Oliver: [00:40:05] So I think it's possible, and that's the kind of firm I would build. Honestly, if I were building a new firm from scratch, I would build one where I'm at that, you know, $500 a month average type of revenue per client. Maybe it's a mix of bookkeeping and tax, not a lot of advisory. I wouldn't build a firm that's based on advisory because with the talent shortage, it's so hard to find people who can deliver it. So I don't want to deliver it right. I'm not going to.

Joe Woodard: [00:40:32] Need an in-between for you, though. Yeah, sure. There's an in-between. Okay. Because I agree with you. You can't scale what I would call business coaching because I want to make sure advisory is such a loaded word. You can't scale business coaching because it's a very specialized set of skills and a smaller, approachable market. You can scale recordkeeping, but you have to scale it in, like you said, a boutique way and it's still a red ocean. You still have to navigate around the sharks and and you're still at risk of disruption. But in the middle sits what we have phrased bookkeeping plus. And it gets me back to that list that I was talking about, budget curation, G&A review, spin policies, bad debt expense mitigation, and some light cash flow projections. These are things we've shown with this not theoretical. We have hundreds of bookkeepers who've now gone through these one day courses in each of these disciplines and started offering these not as advisory. I'm using air quotes for those watching the video, but as bookkeeping plus. And what we found is they can transfer that knowledge to the professionals in their firm and scale it. And what we've also found is as soon as you add even a single one of those disciplines to a client of any size at all, say 2 million or above in sales, then you cross 1000 month mark in in bookkeeping work and we shoot for a median in this model of 2500 a month. That's where we to be.

Blake Oliver: [00:42:09] Yeah, that was my sweet spot for the plus this type services. Right. But so what would you include in plus bookkeeping and management.

Joe Woodard: [00:42:17] Which is a big category. That's your budget. It's been policies spend cards for preemptive enforcement, G&A analysis. All right. So a budget curation. So the budget is a living, breathing thing that includes an element of forecasting and truing up every month. That spin management's a big one. You can break it apart into several different pieces or throw it together as a single thing, bad debt, expense mitigation. And you can do predictive analytics on any QBO or 0ar ledger by attaching a product called Tally Street. So that makes you look really smart and you can you can curate that, you can increase, you can decrease the length of the returns and you can create immediate cash flow bubbles. Those always feel good and you can reduce bad debt expense and then cash flow projections and I would say very high level financial measurements that don't scare people who aren't CFO types using products like REACH that have really easy to digest dashboards and maybe surface once a month or twice a month, four or five things, The business owner should look at just it and maybe monitor about ten things on their behalf. Now you do that and do it with real time accounting information at some level, at least cash or AP. And you're going to be offering what almost every other bookkeeper can't offer at scale. And more importantly, to channel my Ron Baker, you're going to be increasing their wealth, giving you the ability to share in that generation of wealth. That's true value pricing.

David Leary: [00:43:59] This episode of the Cloud Accounting Podcast is sponsored by Alicia Blake, and I talk a lot in the show about client experience. A great client experience may be the biggest impact on a firm success. Did you know that Lucio is so focused on improving the client experience that they have even gone as far as trademarking and I quote client experience 2.0 licious all in one client experience starts with your own firm's experience by allowing your team to do more together, having everything in one place, like secure messaging, client facing task file exchange and storage, electronic signatures, client invoicing and client emails. When you improve your team's experience, your client experience will follow. With Lucio, clients can use the app on their phone to easily e sign anything, scan and send you documents from anywhere. Send messages and best of all, pay you if you want to save 40% of your time by having everything in one place and start delivering a client experience. 2.0. Head over to Cloudaccountingpodcast.com Promo slash Lucio That is Cloudaccountingpodcast.com Promo Ford Slash Life's CIO. So just to remind, because I think we do need to move on and talk with the Zero news and some other stuff that happened this week. I want to be sure I heard you correctly. You're coaching for people. You're your members to get their firm to where you're charging clients $1,000 to 20 $500 a month.

Joe Woodard: [00:45:24] Thousand dollars is the concrete floor as the target?

David Leary: [00:45:27] Yes. See, this is why QuickBooks Live none of these are competition then? Exactly. If you're if you are, you're basically slamming. If you price your services like that, you are slamming the door in the face of somebody who's going to become a QuickBooks Live customer or TurboTax live customer. So I don't know where the argument is here because really, you're saying I don't want those steps.

Joe Woodard: [00:45:48] Exactly.

David Leary: [00:45:48] Right. My clients. Because, I mean, like, I'm not paying that much with my entities to an accounting firm for bookkeeping. Those are high prices.

Blake Oliver: [00:45:56] I wish we wouldn't use the letter ranking of these clients. I think it's insulting to them, Right. If we if we want to focus on client experience and being good advisors to our clients, it's can you imagine if we were if they heard us talking and they heard us calling them C and D and F clients how they would feel. Yeah, you know, they're not C, D and F clients. They're clients with specific needs.

Joe Woodard: [00:46:14] Everybody. Everybody has a journey to protect Blake. I agree. Yeah, but I'm not the protector of everybody's journey.

Blake Oliver: [00:46:21] At the same time, there's only so many of these $2,500 a month engagements out there.

Joe Woodard: [00:46:26] You don't need a.

Blake Oliver: [00:46:27] Lot of them. You don't. But I don't know. It's just I think that I feel like with a lot of firms, it's sort of like the shiny object syndrome where you've got this base of clients that you could just be serving better and you don't need to go out and find all these new advisory type of engagements. You could just do what you're doing better and make more money. Like most accounting firms are just very poorly managed. To be honest.

Joe Woodard: [00:46:55] You're not very they're not.

Blake Oliver: [00:46:56] Run like businesses, you know, they're run.

Joe Woodard: [00:46:57] Like you can increase margin by increasing efficiencies, but at some point your ability to decrease costs is not proportional to the ever declining price points being driven by, you know, scaled competitors. And you get yourself into a pricing vise, you still have to get out of that. Vise So, yeah.

Blake Oliver: [00:47:17] Well, having a having a methodology for, say, increasing prices would help most firms. Yes, it would have that. Yes, that is true. Right? They never increased the price on anyone. So they don't.

Joe Woodard: [00:47:27] Know that is true. Yes.

David Leary: [00:47:29] Hey, Steve had news.

Blake Oliver: [00:47:31] Can I do one more before we get into that, David, just because I have to get to this. So speaking of F clients, imagine if Kanye West was your client. Kanye's former accountant has sued him for $4.5 million in unpaid fees. And I just say yay, because he's no longer Kanye. He's just yay. Yes. So this is celebrity accountant. I didn't know we had celebrity accountants, but according to Billboard.com, Thomas St John is a celebrity accountant, and he filed a lawsuit in October that claims he was hired in May by Yeezy LLC to serve as his chief financial officer for an 18 month contract with a get this, $300,000 per month fee. So talk about advisory pricing on value, right? He says he demanded guarantees because of the risks of working with West and to assure that the star would not simply walk away, which of course is what he did. Exactly that At a June meeting at the pricey Malibu restaurant Nobu Ryokan, the accountant claims West became heated and aggressive and then abruptly terminated his new CFO. And so now, due to that contract, he is suing for $4.5 million. So, you know, maybe maybe you're right.

David Leary: [00:48:47] Joe should have build them up front fee subscription.

Joe Woodard: [00:48:51] Charging every month for that. Ach, buddy.

Blake Oliver: [00:48:53] Yeah, right. Get the get the money up front. All right, David, I'm going to let you take it.

David Leary: [00:48:59] Yeah. So Xero is in the news as well, so they announced their mid-year, what do they call this? They call them.

Blake Oliver: [00:49:06] Half.

David Leary: [00:49:07] Yearly return. They do.

Blake Oliver: [00:49:07] Half year.

David Leary: [00:49:08] Half year results. Yeah. Half year results. And as part of that we can get into the details a little bit on that. But as part of that they've announced that they have a new CEO.

Blake Oliver: [00:49:17] Yes, Steve Vamos is stepping down after what, five years?

David Leary: [00:49:21] Yeah. And the new person they've announced the appointment of I'm going to mess up the name Sukhwinder.

Blake Oliver: [00:49:27] You got.

David Leary: [00:49:28] It. Sing, Cassidy.

Blake Oliver: [00:49:29] I think you got it right. Yeah.

David Leary: [00:49:30] All right, good. And that would be news. Xero's new CEO as of February 1st, 2023. So she previously was the president of the Asia Pacific and Latin America at Google. She was the president at StubHub, founder of the board list, founder of Joyous. Join us. She was CEO there and and she was a co founder of Yodel. So she's been in this space directly. She's been in related businesses. Well and apparently that's.

Blake Oliver: [00:49:59] That's the thing is like co founder of yodel maybe she can finally solve xero's bank feed problem.

David Leary: [00:50:05] Fixed bank feeds.

Blake Oliver: [00:50:05] Yeah. Yeah. Of course, the stock price tanked on this news. I don't know if you saw that, but there was another story about how zero stock is at its lowest point. In a really long time. Yeah. Lowest level since March 2020, after they announced the retirement of Steve Vamos. But they had good results. David, did you say that You know what the numbers were?

David Leary: [00:50:31] Yeah. So I had the deck here. So it looks like the results were good.

Blake Oliver: [00:50:36] They had like 30% growth in revenue, right?

David Leary: [00:50:39] 30% growth subscribers is up to 3.5 million. They're still sitting on $1.1 billion in cash and they could do acquisitions, they can expand, etc.. But what I found interesting was that their investor deck remember how we were talking about Intuit, thinks that they have done nothing yet. They look at the TAM across the board. Right. And they're just they're a little sliver of third growth opportunities. And this also explains why it seems like Xero is doubling down in North America. So they have a slide at Slide 14 and their their deck that they released. So they talk about countries where they've already leveraged the cloud versus adopting the cloud. So leveraging the cloud is going to be their existing market. Australia and New Zealand. So the total TAM, they're saying there is 3.7 million and they're already over 2 million users in there. So, you know, it gets harder to grow every single time. But then they look, then they flip over. So the UK, North America and rest of the world is a total TAM, but North America is a total tam of 34.5 million and they only have 354,000 subscribers.

Blake Oliver: [00:51:43] Yeah, it's a huge opportunity, but they can't penetrate. They've completely failed to penetrate the US market to any meaningful degree in the last ten years. And I've watched.

David Leary: [00:51:52] Them do when they can chase though in a way, because the business size, they have to chase it, they have no choice.

Blake Oliver: [00:51:57] Yeah, well, but globally they've been doing great, right? So for all the growth that they've had has been globally, Right.

David Leary: [00:52:03] Uk Yeah. Rest of the world.

Blake Oliver: [00:52:05] Of the world, right. Yeah. But yeah, they have to, I don't know if they have to get the US market but I feel like that's the problem is they've actually been so successful globally because they don't really have meaningful competition globally.

David Leary: [00:52:17] That even they call what they call the rest of the world. The TAM for that is only 1.3 million.

Blake Oliver: [00:52:22] For the whole rest of the world.

David Leary: [00:52:24] Yeah, so UK is 5.5 million, US is 34.5 and the rest of the world, they're saying the TAM is only 1.3 million.

Blake Oliver: [00:52:31] Maybe they're mean, maybe they mean English speaking. But I feel like because I feel like if they just went like globally, there's got to be way more small businesses that they can go after. I mean. Right. It can't just be a million. Like, what about.

David Leary: [00:52:42] All of this, as you know, South Africa, Singapore, some of these other places, they're.

Joe Woodard: [00:52:47] In the localization cost to go outside of English speaking is is brutal. Right. So it took into it so long and they've only put their toe in the water. I think the only viable option for zero stay in English speaking countries. You know, I think the US is the only growth area for them. I think they've got to they've got to fight for this market again. They've stayed on the beachhead for the last few years, you know, kind of just hovering. They've got to go after it.

Blake Oliver: [00:53:17] Yeah. Well, how do you think, Joe, if you were if you were advising Xero, what would you tell them to do to make inroads against QuickBooks?

Joe Woodard: [00:53:23] Because it would tell them to focus on the fact that they don't have. I know we've already talked about how it's largely optics that you can stay out of their lane and things like this, but how they don't provide bookkeeping services, that's a that's an optics or PR vulnerability. They need to they need to exploit if they were if they were competing against into it, that's a political game. But it's when they should play. But but in the positive sense, they should focus on their entry level price points that the general ledger only. And then there's an incremental step in the full blown platform those the price point of QBO for multi portfolio companies is prohibitive. And this the reason most of them stay on desktop. And then the third thing I would say that they're already doing lean into product development on warehouse management. Their purchase of locate was brilliant. If they can execute correctly and go to market with that intellectual property in their product and create a true competitor to Cube, DX, Pro premier and enterprise for warehouse anybody distribution, anybody wholesale anybody e commerce, they're going to put a real dent in the market. They're still millions of cubed users. The reason they don't move is because they think they can't, and the reason they think they can't is because of inventory and job costing. For whatever reason, they're not embracing the add ons. If Xero will offer these features natively inside of its GL, they can disrupt.

Blake Oliver: [00:54:55] I hope they can do it. I'm a little I don't know. I'm hesitant to say that they will because they acquired Hub Dock, which is a totally natural thing to build inside a zero, the whole receipt document processing. And it's still separate from Xero, it's still not integrated.

Joe Woodard: [00:55:11] And they don't want to lose the QBO attaches and the cube. Yeah. So yeah, yeah. As soon as they move it in product fully in product C they lose all that. They could be attaches, I guess.

Blake Oliver: [00:55:21] Yeah.

Joe Woodard: [00:55:22] But. But with this one they decided to kill the, the, the actual engaged market. They gave Luke users a year to get off the platform and that was a hard cliff they did not extend that year expired exactly 31 days ago and now the only way you can get to the locate inventory goodness is going to be inside of zero. That's the way to do it, right if you're trying to disrupt.

Blake Oliver: [00:55:45] I feel like the other challenge they have is that like where QuickBooks has an advantage is you can sign up and you can start invoicing and getting paid very easily. It's all integrated with QuickBooks payments and, you know, like that's what a lot of people do, right? That's how a lot of people sign up. But with zero, yeah, you can sign up, you can send an invoice, but then to actually get paid, they've got to use an add on. You've got to sign up for another service. It's not all seamless. And I feel like that's where they need to focus just from a customer direct customer standpoint. But I totally agree with you, Joe, that that with the accountants, most accountants I talked to have no idea that these lower tiered GL offerings exist just for accountants. You know, the cash book accounts.

Joe Woodard: [00:56:24] They've under message that.

Blake Oliver: [00:56:25] Yeah the GL the ones where it's like just pure write up with no bank feeds for $3 a.

Joe Woodard: [00:56:29] Month, $3.

Blake Oliver: [00:56:30] A month. It's insane. You could you.

Joe Woodard: [00:56:32] Could all a disregarded holding company needs. Yeah but yeah.

Blake Oliver: [00:56:36] Yeah and you can and I know there are accountants who do this. Well, you know, they've got you know, I've got a client with ten subsidiaries I'm going to set them up with. I end up paying $30 a month with zero, whereas with QuickBooks, I'd have be paying, you know, $30 per entity or maybe $70 per entity. And people do.

Joe Woodard: [00:56:52] It depends on which version I need right on.

Blake Oliver: [00:56:54] So like that to me is focusing on the accounting and your.

Joe Woodard: [00:56:57] Listeners need to hear this. This is huge. Yeah. If the if the clients on QBO for their operating entities and you're thinking it's just too hard to move them over first know, of course it's not. But there are reporting aggregators that will grab both Xero and QBO data and put it to single dashboards. You don't have to have everything in a single GL for for the same client portfolio. You don't.

Blake Oliver: [00:57:17] Right?

David Leary: [00:57:18] Yeah, Yeah, that's a good suggestion because, you know, you see with family offices they have like the real business they might have to track in QuickBooks, but the rest of the family office stuff, these other oddball entities, it's the rental house, it's the airplane, it's the boat. You could run those on a three month project.

Joe Woodard: [00:57:32] And right now the accountants are holding on to cubed instances to manage those books. I tell you, that's how they're doing it. And it's for three bucks a month. Just get it to the cloud.

David Leary: [00:57:41] That's a good point.

Blake Oliver: [00:57:43] We got 5 minutes left. One more story, David, you got anything?

David Leary: [00:57:47] Well, I know last week we just mentioned that the IRS is not going to have a commissioner. Well, this morning they did nominate somebody and we don't even have to go into it too much because I'm working. We might try to get an interview with this person, The Cloud Accounting Podcast so we don't even have to talk about this person.

Blake Oliver: [00:58:01] It Is this Daniel Werfel?

David Leary: [00:58:03] Yes, not not Danny Whitfield, the former Florida State quarterback or Florida quarterback from the SEC. It's a different Danny Werfel.

Blake Oliver: [00:58:12] Okay. So he was a previous acting commissioner.

David Leary: [00:58:16] Acting commissioner, I think, under Obama for about eight months, if I remember correctly, reading the.

Blake Oliver: [00:58:21] Well, the story, hey, if you can get him on the show, I think we need to do that. And then we need to invite a bunch of tax preparers and just let them go at them with all their complaints about the IRS. We'll call it the gripe session episode. Right. I feel like the IRS doesn't hear from tax preparers directly enough, like they're getting this all second hand from associations. I when I talk to tax payers and I hear their stories, it's horrific how bad the service levels are at the IRS for preparers and the stuff that happens and just people hanging up on you if they don't know the answer and people lying to you and you know, the IRS needs to. I'm all about the customer, the focus on the customer. I feel like the apps that succeed focus on the customer, the firms that succeed, focus on the customer. And if the IRS wants to succeed, they need to focus on the customer. And one of their biggest customers is accountants.

David Leary: [00:59:15] Yeah. And then I guess the next thing is what's next for Joe? We're going to be at QuickBooks Connect. Joe, are you going to be at Connect.

Joe Woodard: [00:59:21] Will be at QuickBooks Connect. Yes. I in about six or seven members of my team.

David Leary: [00:59:25] Awesome. You'll have to come to the Cloud Accounting podcast party we're having.

Joe Woodard: [00:59:28] I would love to do that.

Blake Oliver: [00:59:30] I'd love to do that. When is that, David.

David Leary: [00:59:31] December 7th, 7:00 pm at the Chandelier Lounge inside the Cosmo Las Vegas Casino.

Blake Oliver: [00:59:39] So seven, seven December.

David Leary: [00:59:41] Seven, seven, seven.

Blake Oliver: [00:59:42] At 7 p.m..

David Leary: [00:59:43] And we'll have a link in the show notes here for by the time people who listen to this episode that should be ready to go, but then that ends conference season. So, Joe, you are your next June. You have your own conference.

Joe Woodard: [00:59:53] Yes. It'll be in St Louis this year and we are already have record numbers. We're 95% sold out on our show floor. And we are right now we are 70% as high on attendance as we were in June last year. So we are we're doing very well, especially in the current economic environment.

David Leary: [01:00:13] And last year you went platform agnostic a little bit, now used to be very heavy QuickBooks and heavy and. To it and now everybody is there but into it. Are you going to is there news here? Are you going to now have QuickBooks there and truly have all the players at one table?

Joe Woodard: [01:00:28] Intuit is always welcome and my invitation is constantly extended to them. They are welcome to join us at any time. Even if they join me after my show floor is full, I will carve out a space. I will find a way. So hear me into it. You're always welcome. But everybody else, with the exception everybody else is represented at this point, either through directly or through a reseller, except at this point. Freshbooks. They are still trying to decide what they want to do with the US market, how they want to engage. But if we can get them, we have every major player Zoho Accounting Suite Sage Xero through resellers, Acumatica Net Suite and Microsoft Business Central are all represented at the show.

David Leary: [01:01:11] That's great. It's a one stop shop that's I.

Joe Woodard: [01:01:13] Mean stop.

David Leary: [01:01:14] Shop. That's the great thing about conferences. You can hit a bunch of things at once. And so if you can get QuickBooks there, it really is convenient for everybody. It would be, yes.

Joe Woodard: [01:01:22] Now we we still a third of our training is still on the QuickBooks product. So QuickBooks is there in our breakouts, just not there with any corporate presence.

David Leary: [01:01:31] Got it. Anything else, Blake?

Blake Oliver: [01:01:34] That's it. If you want to get free CPE for listening to The Cloud Accounting Podcast, you can do that on the earmark app. Search for it on the App Store, on the Google Play Store. This episode will be up there the week after it releases. You can earn free CPE. I'm not kidding. And this is the time of year when everybody needs to get their CPE done. So catch up on your CPE using the earmark app, listening to Cloud Accounting podcast episodes, and many other accounting and tax podcasts and then don't let it snowball next year. Use the app every week, get a credit and you'll see that by November of next year, you've already got all the credits you needed. And no more worrying, no more stressing. So hope to see you.

David Leary: [01:02:23] Can get a team subscription. Yeah, you can buy it for your team. So Joe, you could buy this for all the members of your community. You could get a discounted subscription to earmark and gift that to everybody in your community who needs CPE or just for your firm. I think you still kind of have a firm, right, Joe Consulting firm. You're still.

Joe Woodard: [01:02:39] I have a consulting firm. I only employ one CPA right now, and that's Heather Satterlee.

David Leary: [01:02:44] Okay. Yeah.

Blake Oliver: [01:02:45] And Joe, thanks for joining us. Really appreciate having you on the show today. I hope to see you again real soon.

Joe Woodard: [01:02:51] Yep. Great to be here, as always.

David Leary: [01:02:53] Thanks, Joe. Bye. Time for the classifieds. Are you still paying 1% for ACH to receive money from your customers? If you collect, you can pay as little as $0.30 per transaction. You collect as two way sink to both zero and QuickBooks Online and gives you the features that the accounting systems lack, like installment plans, secure automatic payment, setup invitations, automatic receipts, and allows access to other credit card merchant providers beyond the ones that come with the accounting system, giving you more control over the service fees that you pay for more information in a 30 day free trial, go to you collect biz c a p that's you collect bizzy slash C app. Check out Hector Garcia's new app called Right Tool for QuickBooks Online. Instantly increase your productivity with keyboard shortcuts and more. It will save you seconds. The app is free at the moment in public beta. Check them out at right tool app. That is right. Tool app. R. I. G. H. Tt o. L dot app.

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David Leary: [01:05:18] 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 The Cloud Accounting Podcast know by running a classified ad if the show notes for the link to get more info?