Volledige transcriptie van Cut Your Tech Stack 50%, Threat to CPA in Florida, IRS Cuts Recap

everybody's in the same trying to scale their firm. How do you stop answering client emails at 2 a.m.? It's those kind of problems people are solving. But what he does, which I think is super important, he gives out awards. So he has a gala and he gives out awards, and he awards people for hitting $100,000, $500,000, million dollars with their firm. And this goes back to my experience two years ago at NIO's conference when I was like, look how diverse it is, because there's no college degree or 150 hour rule. And the the diversity of the people winning these awards was amazing. And I just think it's super important that, you know, bookkeeping in the EY are the equalizer. Like a single mom can study hard for four months at a kitchen table and start a $200,000 a year business. And nobody, nobody, no organizations are in the way of that. And I think it's important to celebrate that as an industry. Blake Oliver: [00:06:28] I agree that's exciting. And that was our first earmark event where we offered live CPE, and we're very excited to be doing that in the future. For more events, if you are interested in offering live CPE for your event, but you've never done it before, we are looking to make that as easy and affordable as possible, so reach out to sales at earmarks and we will be happy to chat with you about it. I was at the Zero headquarters in Denver attending their AI roundtable. Figures such as Jason Stats and Chad Davis were there too. Really awesome to catch up with them. I can't talk about what happened at the event, because zero is a public company and is currently in a blackout period, so it will have to wait until next week. I also yesterday got to hike with our friend Giles Pearson. He was at the BDO Alliance conference in Las Vegas and took an extra day before he flew back to New Zealand to drive down to Sedona. And I drove up from Phoenix and I met him and we hiked around Cathedral Rock and Sedona. It was gorgeous. And Giles told me all about what was going on at the conference. And then I spotted an article in Accounting Today, a recap of it. I wish I could have been there because the executive Director of the BDO Alliance, Michael Horowitz, gave a keynote in which he compared the journey that accounting firms are going on today to hiking across the Grand Canyon, rim to rim, which is, as you know, that I did that last year for the first time. Blake Oliver: [00:08:07] And he said, some firms are going to make it. Some firms are not. And that's the hard part about the Grand Canyon when you hike across is getting down and across is one part. But then the hardest part is right at the end. And I agree that that's where we are at as a profession is the long climb up to the South Rim or the North Rim, I guess whichever way you go, um, some will be left behind, some will have to take a helicopter out. And he talked about the key challenges facing accounting firms, the investment that is needed to modernize firms in terms of staff and technology, the aging leadership, lack of succession planning, the rapidly changing and expanding client expectations on the profession, and of course, the entrance of private equity into the landscape, which is a big deal. And we've got more stories about that. A big roll up that happened, um, firms saying we're not going to take private equity. There's this big debate about what is happening with the profession and what is happening with the CPA license. Can you even use your CPA license? That's a big deal. So I thought that was really neat. Um, and I just want to highlight a few of the recommendations to cross that canyon from Michael Horowitz. He said, you got to invest in your people. You got to invest in technology, in your service offerings and in your relationships. David Leary: [00:09:34] So it's the same formula for the last 25 years. Basically, if you just run a business like that, you're probably going to be okay. Blake Oliver: [00:09:39] Well, yeah. So here's the problem though is that doesn't work. You can't just like when you say invest in people, what does that mean? Does that mean you throw more money at them? And when you say invest in technology, what does that mean? Does that mean you throw more money at it? Throwing money at a problem doesn't always solve it. And my view is that it's the underlying business model of traditional accounting firms that is the problem. And Mark Cosio was there and he said at the conference, quote, the partnership model isn't dying, it's dead. And we have to figure out different ways of doing business, unquote. Like, he really believes that it's over now. What replaces it is that private equity firms. I don't know if that is the solution. I don't know if that's going to solve the problems that accounting firms have, because a lot of these private equity firms are coming in and they're just continuing the business model. It's the the model of selling time and burning out your staff and getting them to work long hours, because that's what you're selling. That's the problem. And the shift that has to happen. The major shift is shifting from billable hours to outcome based pricing and incentives for your team. And that's what firms are really struggling with. And I don't see a lot of solutions for them to make that leap, at least that are being discussed and shared online if you're not at the event. David Leary: [00:11:07] And it seems like if P didn't want the existing business models, the money wouldn't be coming in as much because we all we could agree that accounting is going through this massive change right now with AI and things like that, and a new firm, what it is five years from now may look nothing like a firm now. Right. And P that's risky for P to buy a bunch of accounting firms and then not know what their business model will be five years from now. It's super risky. So they must really believe it's going to stay and they want it to stay the same. Or they wouldn't have bought all

these old legacy firms. Blake Oliver: [00:11:42] Or maybe because the timeline of private equity is often only 5 to 10 years, they are just hoping that the model continues for that long until they can sell. David Leary: [00:11:51] Get their little. Blake Oliver: [00:11:52] Another private equity, a bigger private equity company, get their return before the underlying issues become even bigger problems, which is staff turnover and not having a succession plan, and managers and directors leaving to do their own thing before they become partner. I just don't believe that many staff are interested in working for the same company for their entire career anymore, or maybe just a handful. People want to move around and do different things. So I am thinking about this. I'm trying to imagine what is the solution to this problem. Um, if our listeners have any thoughts, I want to hear them. Please put those in the comments and we'll take a look while we read our first sponsor message. So, David, let's thank all of our sponsors and then hear from our first sponsor. David Leary: [00:12:44] So all of our sponsors on today's episode we have Onpay relay, Reframe and Pay Hawk. So Onpay Forbes and CNBC rank Onpay number one for small business payroll. Onpay really knows how to get payroll done right for every client you serve. No matter how complex their software is, easy to use and backed by outstanding service levels, they handle new client onboarding for free and have experts on call to keep you and your clients on track. The system the system includes multi-state payroll, local tax filings, integrated HR tools, and more with no hidden fees. And when you join on Pace Partner program, you get a custom dashboard to easily manage all your clients in one place. Plus, you can gain exclusive perks like revenue sharing or discounts, free payroll for your firm, co-branding opportunities, premium swag, and more. Onpay helps you run your practice efficiently while providing exceptional payroll that your clients can count on. To learn more about using Onpay for your firm and clients, that may be farms, startups, restaurants, bars, doctors, nonprofits, gyms, franchises, or dentists. Head over to The Accounting Podcast. That is The Accounting Podcast. Thank you. Blake Oliver: [00:13:54] And thank you, Heather Smith, for joining us from Brisbane at 4 a.m.. Heather says, I expected you to have a Pope headline. We have an American pope that that was crazy news, uh, that I did not hear until late yesterday because I was out on a hike. Uh, I did not expect that. It's not Donald. David Leary: [00:14:16] Trump. I thought about trying to bring a headline like that because Warren Buffett stepped down, or he's going to step down, and he renamed the replacement. And I was trying to tie the two together. But I'm not that witty, and it was too early. I should use the I to tie the two stories together. Blake Oliver: [00:14:28] Heather asks, does the new Chicago born pope still have to pay US income tax? Noting US citizens living abroad have a global tax obligation. You have to pay tax on your worldwide income. That's a great question, Heather. Brian says, I don't think the Pope receives a salary, but if he if he does and any other income like from investments, it will still be taxable in the USA. David Leary: [00:14:53] Well, even if they provide him a place to live, even if it's not a salary, he has to claim that, right? Blake Oliver: [00:14:57] I think that's a fringe benefit. I don't know, actually, this could be an entire CPE episode is, uh, the taxability of, like, clergy benefits. And then. David Leary: [00:15:07] What? Blake Oliver: [00:15:08] What, is the pope going to get taxed? Does the Pope file a tax return? What name does the Pope put on their tax return? Is is he. You know what? He's Pope Leo the I forget the numbers at 14. Is that is that what goes on the tax return or is it his legal name here in the US? David Leary: [00:15:25] I you get to change your name, right? You become the Pope. And now you can say, I'd like a new name. And you could just. Exactly. Blake Oliver: [00:15:31] You get your Pope name. Yeah. So, um, I just love this. Having been raised Catholic. This is so funny. It's like the world is changing. I never like I remember when when I was in, I think I was in. Was I in high school when the last pope. Well, there were a bunch of bunch of popes since then, but like, I remember it like, everyone was like, there will never be an American pope. And now there is so incredible. Uh, Mordecai. Welcome, Mordecai says, watching from Florida. I see we make it to, uh, your notes. Or I guess you mean our like our show notes. Yes. We're going to talk about the threat to CPAs in Florida, or at least the threat to the Board of Accountancy, which may be dissolved if this legislation goes through. Welcome, Big Four transparency. Great to have you along with us. And Brian says, yes, let's do a Pope tax episode. All right. I'm going to I'm going to follow up with you, Brian. That would be amazing. Light Em up says he's a foreign head of state now. The king of Vatican City. I think he'd be exempt from US taxes now. Oh, thanks to sovereign immunity. Interesting point there. Perhaps a tax exemption is a nonprofit. That's what stoic bookkeeper says. And nightlight. Welcome. Welcome to the program nightlight. Good afternoon to you. It is still morning here okay. Let's talk about this Florida CPA threat since we just mentioned it going concern Adrian Gonzalez over going concern did a great summary of it. What is happening. There's a bill in Florida in the House. It passed the House that would eliminate all professional licensing boards and put their role under the Department of Business and Professional Regulation, also known as the DB. David Leary: [00:17:16] So if there was a board of real estate agents, a board of hairdressers, all that's going away in Florida or they want to. Blake Oliver: [00:17:22]

That's what would happen if this bill passes the Senate and gets through and is signed by the governor. Of course, the Florida Institute of CPAs has come out strongly against this. They've warned that it has the potential to have catastrophic consequences for the CPA profession. What what else would this thing do? Um, well, I did mention this, that it's all professional licensing boards, so not just the Board of accountancy. It's all professional licensing boards. That regulatory responsibility would move to DBR. So it's sort of similar to how there's a bill in Congress to eliminate the Public Company Accounting Oversight Board and move all its responsibility to the SEC, which has ultimate oversight, and so does the DBR. They've just, um, that their their regulatory oversight is delegated to these boards, the professional boards. Another interesting change is that it would eliminate continuing professional education requirements for all professions, including for CPAs, which is 80 hours biennially in Florida. The DBR would also be directed to study alternative pathways to licensure without requiring formal education. Now, what are the risks to this? Florida CPAs would lose mobility and reciprocity with every other state in the country, and that is the threat that leaders in the profession AICPA, Nasba and at the state societies. That's what they've been warning about for years. When this whole issue, about 150 hours versus 120 was opened up. Um, Florida does stuff like this every now and then though. David Leary: [00:19:06] So Florida was the first to do the 150, right? Blake Oliver: [00:19:10] Yeah, they. David Leary: [00:19:10] Were the first state. Yeah. Blake Oliver: [00:19:12] So, um, I guess the worst case outcome for this would be that loss of like mobility. And I've been thinking about this, right. The whole issue of mobility and the changes to like CPA licensure that are happening. And I honestly think that The threat to the profession in terms of the talent shortage and the lack of people wanting to become new CPAs in the past, which is now improving like that. That was the biggest threat. And so I accept the issue of mobility. If that is what we have to press, we have to pay to get more reasonable licensure. Then I say yes, because it is so easy now to just hire a CPA licensed in the state where you have a client. If firms really want to work across state lines, why not just hire somebody in that state who or who has that license and let them work remotely? So if you get over this whole return to office thing, the the need to like have everybody physically in a building, it's not as big a deal as you think. That was also one of the things that Giles brought up about the BDO conference, which is that all these firms are reinstituting three days in the office minimum, at least a lot of them. And there was like almost no pushback at the conference to any of that. So we have solutions. Remote work is a solution. And so I don't think it

would be so bad if mobility wasn't universal. It would actually be good for this individual CPAs licensed in smaller states, because then they would get more work because you wouldn't have these CPAs from large states coming in and doing audits for clients in your state. It would it would help protect the value of your license in a smaller state. David Leary: [00:20:59] Makes sense. Blake Oliver: [00:21:00] That's how I see it. So that's what's going on in Florida. Again, it's just legislation and process. We'll see what happens and we'll keep you updated. Now what else is going on in the profession when it comes to the changing business model. Private equity. Let's talk about that. There was a big roll up of smaller accounting firms Turns into what is now going to be a $170 million firm called Soarin. David, tell me. David Leary: [00:21:37] I think Lord of the rings, when I hear the name, that's what I was. What is Soarin? And apparently Soarin. Uh, it. The name Sornette combines the meaning of crash craftsmanship and unity. So there's a reason they chose that as the name. But this was a pretty big p slash merger roll up. Um, kind of. If you think about how the more of an alliance, to some extent in firm cooperation. Blake Oliver: [00:22:02] Well, now these firms are actually combining. David Leary: [00:22:04] They are combining. Yeah. So 13 regional accounting firms are going to United are a new national brand called Soarin, aiming to become one of the top 50 accounting firms in the country by revenue. I know you had a number. You said how big? Blake Oliver: [00:22:16] 85 partners. David Leary: [00:22:17] 85. Blake Oliver: [00:22:18] They will have over a thousand employees. When they're all combined. They will have 20 offices nationwide and 170 million in revenue. They are backed by private equity firm DFW Capital Partners, and they will operate in an alternative practice structure with Shawn CPAs PC offering a test services, and Soren Inc. offering business advisory and non attest services. And this is personal for us because one of the firms that is joining Soren is acuity, led by Kenji Kuramoto and Matthew May, who we have known for years. And I'm very happy for them and excited for them. They are. Two of the most forward thinking accounting firm owners that I know. And so if anyone's going to figure out how to make a private equity backed roll up work, it's these guys and make it work in a way that is good for the staff and not just the partners. David Leary: [00:23:14] And what's interesting about this is how you get 13 firms and all these different states all align. To make this happen all at once is one roll up and roll out. Blake Oliver: [00:23:23] Well, they were you know, how they got to know each other was through the BDO Alliance. A number of the firms, and I don't know if all of them were in it, but they got to know each other over many years. And so it made a lot of sense. So very excited for them. That is really neat.

I can't wait to talk to Kenji and Matthew about it. Hopefully do an interview with them about how it all went down. And I think that'll be useful to the leaders of firms who are interested in doing something similar. It is a long term strategy if you want. David Leary: [00:23:50] And I think that's that's the takeaway. I think Kenji and Matt hinted that this is not something that they've just been waiting till you're going to retire or just, oh, I got an offer. Let me go investigate it. They kind of had a plan in the march on how to move their firm forward in the future. That balanced out themselves, employees, etc.. And so it would be interesting to hear like the conscious decision really. That's what it is like consciously taking P years before you actually take it. It's probably the way to think about it. Blake Oliver: [00:24:16] I want to highlight a tweet regarding private equity from Mike Sylvester, CPA. He, uh, he tweeted at me and he said, if you work at a giant CPA firm owned at least partially by P and implementing AI and outsourcing jobs as fast as they possibly can. So the partners at the top make more and more money each year. I have a simple message for you get out. He says P will insist on making their money and the firm has zero loyalty to you. There are better firms you can work for, or you can start your own. So this goes to that idea. There are some private equity firms that are going to acquire accounting firms, and they're going to continue the business model, and they're just going to leverage tech and outsourcing to drive up profits at the expense of the staff. My hope is there will also be firms that figure out how to use AI and minimize the outsourcing, or at least do it intelligently in a way to make life better for the staff, reduce the hours they have to work while improving productivity and sharing that benefit with them. I want to hear stories about private equity firms that are doing it well. I hear a lot of stories about how it's well, I haven't heard a lot of stories at all about what it's like inside these firms. The only data point that I've seen is one that's not great, which is Big Four transparency in their surveys of real accountants working in these firms. The firms with the lowest satisfaction rates are the private equity owned ones. David Leary: [00:25:59] I think Big Four transparency had that too. They had. That's what I. Blake Oliver: [00:26:04] Yeah, that's what I was talking about. Big Four transparency. Did I say something else? David Leary: [00:26:08] I think you said going concern but I don't know. Blake Oliver: [00:26:09] Okay. David Leary: [00:26:10] I could have just heard wrong. The listeners will correct us. Yeah. Blake Oliver: [00:26:13] Um, going on with private equity, there was a story in accounting today about Bennett Thrasher rejecting private equity and championing independence there. A Atlanta based top 75 firm, they grew 11% last year, and they are saying they will remain fiercely independent and will not take private equity money. The CEO, Jeff Cole, believes that the firm's partner capital is sufficient for necessary investments, and they prioritize a people first culture, which they fear private equity would compromise, and they are now positioning themselves as not private equity. Cpa led and they emphasize client service. And they say that actually that marketing has helped. They have gained clients who left PE backed firms after experiencing substantial fee increases or service quality issues. So we're going to see a battle between the PE firms and the CPA firms. David Leary: [00:27:07] And going back to the tweet, he's saying that it's going to reread his tweet again. Blake Oliver: [00:27:12] Mike Sylvester's tweet. He said, um, if you work at a giant CPA firm owned at least partially by PE and implementing AI and outsourcing jobs as fast as they possibly can. So the partners at the top make more and more money each year. I have a simple message for you. Get out. David Leary: [00:27:26] Get out. So there's an article in the Wall Street Journal. Doctors are warning accountants about PE. So doctors have, for the last decade or so, since in the early 90s have been on this process of PE coming into ERS hospitals, buying up doctor practices. What does the doctor practice called? Doctor's office, I guess right. Blake Oliver: [00:27:46] Yeah I guess. David Leary: [00:27:47] Yeah. They're buying buying these up and family practice. And they argue that what happened is profits were always prioritized over professionalism. And it eroded health care standards at the that was given to actual clients. And that's the big warning doctors are putting out there for accountants right now. Blake Oliver: [00:28:05] Yeah that's the problem. When your when your number one metric is profit then you're going to incentivize some poor treatment of People. It feels like if you don't prioritize the people above the profit that will happen. And private equity, no matter what they say, they have an obligation to their investors to return a certain rate of return, right? To give them to to make profit like that is their priority. That's why they exist. David Leary: [00:28:40] So and that goes back to what I find. If we go back to the interview you did, we did with Mark last week. Was it last week's episode? Blake Oliver: [00:28:51] Um, I can't honestly, I can't. David Leary: [00:28:52] Remember maybe. Blake Oliver: [00:28:53] 1 or 2 weeks ago. David Leary: [00:28:54] And he really insisted how the firms are still run by CPAs. Blake Oliver: [00:28:58] Yes. David Leary: [00:28:59] But you look at this history of these, these doctors, it's very clear that eventually these hospitals and doctor's offices are not run by the doctors. Some were at tips. It doesn't mean just because today maybe more CPUs are CPAs are running things. It doesn't mean that's going to be true in the future. Blake Oliver: [00:29:13] Yeah. And we even

have a situation where there's like laws where doctors are not allowed to own hospitals anymore. So there's there's private equity is tempting, but it is a real threat to individual CPAs. And so I really hope that the leaders of the associations that claim to represent the interest of certified public accountants will do that and protect us from the same stuff that has happened in the medical profession and with dentists. It's the same thing with these dental office roll ups I've heard. So we need protection, right? And going back to Mark Kozol's comment that he made at the BDO Alliance, if the partner model is dead and dying, then who is the AICPA going to represent? They have traditionally represented the partners. Are they going to represent private equity? They're supposed to represent CPAs. So if the CPAs aren't running the show anymore, then it would be the mission of the AICPA to protect the CPAs who are working at these private equity owned firms. But that kind of puts the AICPA at odds with the owners of the firms, which they. David Leary: [00:30:39] Have money that's coming in. Who's paying the membership fees? Blake Oliver: [00:30:42] That's right. So, like, there needs to be this whole mindset shift at our state societies and in our national organizations that it's the individual CPAs that need to be represented. And that's also how you fix all the issues in the profession that are holding us back. The work life balance issues, the recruitment issues, the retention issues is you make the workplace a good place to work. David Leary: [00:31:05] And to tie this to the story with Florida. So your argument is the state societies and the national NAACP, they need to be protecting the individual CPAs. In the meantime, Florida's introducing legislation to not protect them. Well, it's actually a little scary. Well, the organization that could protect them might be eliminated. Blake Oliver: [00:31:24] Right. But you could also make the argument that the boards of accountancy have done a terrible job of protecting individual CPAs. And you can see that just with this use of the CPA designation. We have all these firms now, especially firms that are private equity and switching to alternative practice models, telling their CPAs you can't call yourself a CPA anymore. And why is that? It's because the boards of accountancy go after the firms for saying that they use they have CPAs or CPA firm when they have this alternative practice structure. And who does it hurt? It just hurts the individual CPAs at the end of the day because the owners say, well, we're just not going to call ourselves CPAs anymore. We don't need you. So in trying to protect the CPA, the boards of accountancy have actually Heard it by saying, you can't call yourself CPAs. It's like they they're just so backwards in their thinking when it comes to this. David Leary: [00:32:22] Yeah. So think about the, uh, the sovereign deal, right? Yeah. You have 13 firms. They're going to have the sovereign CPAs for a test services and Sovereign Inc for the business advisory, not a test. So I'm willing to bet anybody that's in Sovereign Inc is probably going to get told you can't put CPA on things, right. Because you're not the CPA firm. And let's just say of the 1000 employees they have, let's say it's 5050. Let's say all 1000 are CPAs. You're going to basically tell half half the CPAs at a company. They can't use that as it's. Blake Oliver: [00:32:50] Going to be more than that. It's going to be way more than that. And they'll probably even tell CPAs working in the attest firm that you can't do it, because it's just the safe thing to do. David Leary: [00:33:00] Even though the attest service is going to actually be called CPAs in the name of the business. But we don't want to. We want to create the impression that there might be a CPA working. Blake Oliver: [00:33:08] Or they might be working across state lines, serving a client in a state where they don't have mobility or whatever. And so just to be safe, we're just going to take that off of their email signature and tell them not to use it on LinkedIn. And I saw that again. Uh, another case of this on Reddit. A CPA posted on Reddit. I was asked to remove CPA from my email. We got a firm wide email stating that we need to remove any professional credentials from our email signature. Effective immediately. So why is this? Clients can't know we are CPAs and this stimulated huge discussion. This is four days ago from Pretty Recover 1841. And the first comment is is your firm owned by P. And the poster says yes. And then reveals that it's Cherry Baker. So Cherry Baker is telling the CPAs at their firm not to use CPA in their email signature. David Leary: [00:33:59] So where does this stop? I mean, obviously you go into professionals offices and they have their college degree or their you go to a doctor's office, they have their board of Examination passing or you go to a lawyer. They put up their bar exam certificate. Do you get a certificate when you finally become a CPA? Blake Oliver: [00:34:15] Yeah, I have I have it hanging on my wall. David Leary: [00:34:18] So are they going to have to pull that off their wall as well? Because what if a client comes in the office like like where does this stop? It's really crazy. Blake Oliver: [00:34:26] Yeah, I don't think it does. And that's why it's almost too late. This has been going on for, like 20 years and they haven't done anything about it. And now private equity is taking over and private equity is just making the call. Well, look, we'll make more money doing accounting services without calling ourselves CPAs. And we'll only call ourselves CPAs when we have to. And we'll only have a CPA firm when we absolutely have to, which is for this little segment called audit. David Leary: [00:34:54] And we don't even want we don't even actually don't even want to own. Blake Oliver: [00:34:57] No, they want it because that's how you

get the rest of the work. David Leary: [00:35:00] Okay. Blake Oliver: [00:35:01] Right. So but but you just need to be doing the audits so that you can refer the Are the clients to tax two consulting. You can get the information from the audit that you then use to cross-sell other services. So they want that, but they don't want any of the hassle that comes with it. So they've developed all these clever workarounds to not actually be a CPA firm most of the time, just that tiny percent of the time when they need to, which arguably is bad for CPAs to be marginalized in this way. Like all the work that CPAs have done over the years to grow into outside of assurance and audit and to expand, what we do is now being bought and taken away from us, and we're being stuck back in that box of audit and assurance. So this is, uh, this is exactly the opposite of what, like Barry Melanson was saying, we need to do all those years, move away from audit or move beyond it to do more. Well, that's not how it's working out. So let's talk about a positive story, which is that I think the 150 hour rule change, the the alternative is working because interest in accounting is rising among students. The center for Audit Quality surveyed over 3000 high school and college students and found a positive trend. Hispanic students showed the most significant increase. Familiarity with accounting rose from 37% to 50% over three years, and total interest increased from 29% to 37%. Asian and Pacific Islander students demonstrated strong growth as well. And yeah, overall familiarity increased in all groups. But compensation concerns remain a significant hurdle. Starting salaries are viewed as less competitive. No surprise there. And 31% of black students strongly agree they can earn higher starting salaries in other fields. Compensation concerns are least pronounced among white students 22%. I find that I find that interesting. Like why don't they care about them? I don't get it. Um, let's see more positive news from that survey. Students also showed increased positive views of work life balance. So we're making progress. But there's still a long way to go. David Leary: [00:37:35] And I think we started last week in Australia. They discovered that accounting is now getting more of a stable career. And I think we even talked about this. If the economy gets a little bit rocky, that had helped people come back to accounting again and the economy is questionable right now, that could make sense why people would come back. But that only. Blake Oliver: [00:37:53] That only happens. David, if um, if like other segments are hurt as well. But the economy, the job market is really tight, so that doesn't work. But go ahead. David Leary: [00:38:07] Yeah. You need to do our second ads. Let me jump in and do that if you'd bring it up. Relay. Between Blake and myself we now have three, four, five, six, maybe business entities, 20 or so checking accounts, dozens and dozens of virtual cards.

And it would be impossible to manage all of this if we weren't using relay as our small business bank. Relay is truly a part of the tech stack we use to run our business businesses. Relay allows Blake and I to each have our own logins. We can grant access to our team and even our accountant without sharing passwords or two factor authentication codes. Relay allows us to grow and scale our banking needs without ever going to a physical branch. I recently added an account to receive inbound merchant services with just a few clicks, and had to create a payroll checking account. Again, a few clicks and I instantly have access to my ACH info to give to my payroll provider. With relays virtual cards, we can issue debit cards to our team around the world for business needed, business needed. Business expenses. I can instantly spin up a new visa debit card and set both daily and monthly spending limits. And when a team member doesn't need to use their card anymore, I just freeze it until they need to use it again. Relay also has automation features to sweep money automatically from one account to another based on dates, amounts or target balances, or even percentages. For example, your inbound payments could be split daily to your payroll sales, tax payable, operating and savings account based on your predefined rules. To learn more about using relay for your firm and clients, head to The Accounting Podcast. That's The Accounting Podcast. Thank you. Relay. Blake Oliver: [00:39:37] Thank you. Relay. And now more good news. David Leary: [00:39:41] You said you had more good news because I might have some bad news, but I'll let you do the. Blake Oliver: [00:39:45] Can we talk about tax and the IRS? And this may or may not be good news, depending on how you see it. Let's talk about where the IRS is with their workforce reduction because the numbers have come down a bit. Remember when Doge first went into the IRS. They were saying something like 40% reduction. We're going to cut the staff that much. And that seemed like a lot. Well, where are they? It's 11%. So 11,400 employees, at least that many have left the IRS workforce since January. That is an 11% reduction. And where what departments were impacted the most? David Leary: [00:40:24] When you say left, these are the ones that took the voluntary. Blake Oliver: [00:40:28] They took the buyouts. David Leary: [00:40:29] The buyouts. Blake Oliver: [00:40:30] I don't know. I don't know the breakdown of voluntary versus involuntary, but I'm pretty sure these were voluntary because that's what we've been hearing about. The probationary employees. There were 7000 of them. They didn't. That's right. They got termination notices. But then that's all in flux because of the different court cases. So we don't know about that so far. What's going on? Um, so what is the impact by department? Um, tax exempt and government entities lost 31% of their staff, large business and international. They lost a quarter. Small business self-employed lost a little less 23% across all divisions. We had a 31% reduction in revenue agents. Good news is that in information and technology, information technology and taxpayer services, there was a five and 4% reduction respectively. So the reductions have been in revenue agents, audit staff and. David Leary: [00:41:27] Less in customer focused customer service front end. Blake Oliver: [00:41:31] Which is why we didn't see a total disaster at the IRS this season, most likely. So that is the impact so far of Doge on the IRS. What else has happened? We talked about these commissioners, the revolving door. David Leary: [00:41:49] On the fifth. Blake Oliver: [00:41:50] Now, Commissioner, Commissioner. David Leary: [00:41:51] Yeah. Blake Oliver: [00:41:52] Um, Michael Faulkender is the current acting commissioner. There's a lot of IRS employees who have accepted buyouts, so they haven't, I guess, formally been let go or laid off because they're getting paid until a few months from now. Um, 30,000 of them have accepted buyouts or been laid off. So I guess, you know, the numbers that I reported earlier are those that have actually left, but there will be more leaving. So it seems like we probably will get to that 20% number, which I believe was the reduced target that Doge announced. Or maybe it wasn't Doge, maybe it was the Treasury. I can't remember at this point. Direct file was halted. And what else is going on? I guess that's the real big impact so far. 11% reduction. Other news, the Treasury Department will stop issuing paper checks for all federal disbursements and will no longer accept paper checks as payment, effective September 30th, 2025. That's not. David Leary: [00:42:57] So now we have a date for that because they said they were going to do that. But now there's definitely a deadline. Blake Oliver: [00:43:01] So warning unless this gets extended, you're not going to be able to make a payment to the IRS or for your taxes after September 30th, 2025. This includes all government transactions, including tax refunds, benefit payments, vendor payments and intra governmental payments. And this, in my opinion, is a great move because the government spent over 657 million last year on physical infrastructure and technology for digitizing paper records and paper checks have a many, many, many, many, many times greater chance of being subject to fraud versus electronic payments. I think it's I want to say it's like 16 times more. David Leary: [00:43:44] And that's both directions, right? If I'm making a tax payment, can't do it by check anymore. And if I'm getting a refund check that has to be direct deposit okay. Blake Oliver: [00:43:54] So fewer audits of high net worth individuals and large businesses. Guess good news if that's you. More news at the IRS. The IRS and Ice, the Immigration and Customs Enforcement have reached an agreement to share immigrants tax information. Ice can now submit names and addresses of

undocumented individuals to the IRS for cross verification against tax records. The acting Ice director, Todd Lyons, said this is going to be strictly for major criminal cases, but many immigrants and advocates are skeptical about this limited scope. And as we've talked about on the show before, there is a risk that now that immigrants know that this data sharing is happening, maybe they will decide if they are illegal and they've been paying taxes not to do it. David Leary: [00:44:48] And it's interesting they talk about for major criminal investigations, I imagine before if there was a major criminal investigation, there was a path to go through a judge to get something released and get access to those records. So I don't know if now that it's just carte blanche, jump right in and get what you need out of it. I don't know if it's always going to be used for major criminal investigations. Blake Oliver: [00:45:10] I'm always skeptical of when a. I'm always skeptical when the government says, give us access to this information, we'll only use it for a specific purpose like that. That generally doesn't happen like it gets abused or used beyond the original scope. And we saw that with like all that spying legislation after like nine over 11 where the government was like spying on U.S. citizens. David Leary: [00:45:34] Um, Snowden, that's the whole Snowden thing. Blake Oliver: [00:45:37] Yes, exactly. David Leary: [00:45:38] Yeah. Blake Oliver: [00:45:39] You expose that or whistle blew on that or whatever. Um, there's a bill to regulate tax preparers, which they can't do. They haven't been able to do since 2000. And when was that? 2013. So a federal court ruling invalidated the IRS Registered Tax Return Preparer Program, and the IRS has not had one since then. Similar legislation has been introduced over the years. This is the latest. What would this bill do? It would give the IRS explicit authority to regulate tax preparation services and establish minimum standards for accuracy and fairness in tax preparation. It directs the IRS to create an automated formula to identify taxpayers at risk of economic hardship, authorizes the IRS to establish minimum competency standards for tax preparers, and allows the IRS to revoke identification numbers from sanctioned preparers, which is kind of crazy to think that they can't do that now. And it would also recommend tax software changes, including mandatory security controls and regular updates. I'm curious what our tax pro audience thinks about that. Seems to me that it might be good to have some sort of minimum standard for because. People who prepare taxes in the US. David Leary: [00:46:55] There's becoming an enrolled agent. That's some that that's a set of requirements you have to pass with the IRS. Right. Yeah. Blake Oliver: [00:47:02] That's that's yeah, that's a credential you get. But you have to take an exam. You have to do. David Leary: [00:47:07] The background. Blake Oliver: [00:47:07] Check. David Leary: [00:47:08] Don't they have like another one that's just for like some seasonal. It's not being like you're you're like a registered prepared list, some sort of list. And there's like some testing to get to that. Right. So really what they're trying to take care of all the other people that are just preparing taxes and don't have either those credentials. I imagine that's correct. Blake Oliver: [00:47:27] It's because you don't have to. Anyone can prepare taxes. All right. More tax news. The number of Americans or percentage of Americans who say their taxes are fair has reached a near record low. According to a recent Gallup poll. Less than half only 46% of Americans believe their federal income taxes are fair. 50% now view their taxes as unfair, and 59% of Americans feel their federal tax burden is too high, while 38% think it's about right. David Leary: [00:48:09] So that number there could be related to why Trump is, you know, Trump has this populist view, right? He doesn't want to, um, tax tips. And he's really trying to offer working class people relief. Other taxes. Sure. And so considering people think they're they're already taxed too much, this could be some of the reasons why, I don't know if you saw Trump is now pro tax increase for the wealthy. Blake Oliver: [00:48:34] Well sort of. David Leary: [00:48:36] You know it's hard it's hard to this week. Blake Oliver: [00:48:38] Anyways today he said he'd be okay. That that's his word okay with Republican lawmakers raising taxes on wealthy Americans. But then he also said that this could be politically problematic for the Republican Party, which seems to me, yes, could certainly be, given that no new taxes. Keeping taxes low has always been, or for a long time has been a pillar of the Republican Party. So it's kind of mind blowing to me that he is, I guess. How do we characterize this reluctantly supportive of this effort? But I think it was his idea to begin with. That's the funny part about it. So what would actually happen? David Leary: [00:49:21] Stereotype. Where? Oh, he like Trump's just in office for his rich crony friends because they want to establish a new tax rate of 39.6% for individuals earning 2.5 million or more or couples earning 5 million or more. And they think that this new millionaire's tax bracket could generate $67.3 billion over a decade. Right. That's assuming the IRS can go enforce and audit and collect, but that's a whole different. We can make the tax rate 100%, and if we don't have anybody to go get the money, it doesn't really matter. Blake Oliver: [00:49:50] Yeah. It's also assuming that the people who have to pay this higher tax rate don't decide to move to a place that has a lower tax rate. And that's the problem with trying to tax the rich too much, is that they have the means to set up entity structures to avoid this tax and relocate to avoid this tax. So it's like it's like a game of whack a mole, right, with moles who have, you

know, yachts and private planes and multiple houses. Like trying to trying to tax them is really challenging. And you might end up just like hurting the economy more if they go somewhere else. Now, it's not like a huge increase or anything. But, you know, I want to point out I'm not like defending the rich and saying that they shouldn't pay their fair share of taxes or anything like that. But let's let's just examine what is the tax rate of the super Rich Tax Foundation did a good analysis of this. And effective tax rates on the super rich can exceed 60%. And I just have a philosophical problem with that. I don't think anybody should have to pay more than half their income in tax. I even think that's a lot. Like just think about it. Half the money you make goes to the government. I just can't reconcile that in my head. No matter how much money you make. And the reason it's so high is because, you know, it's not just the federal tax rate that you got to pay. So it's currently it's 37%. It's the top federal tax rate. This would take it to like close to 40. There's also state and local taxes. Blake Oliver: [00:51:32] You add that to the federal rate. And then now the combined rate is 46% for the rich. Then you add in the foreign taxes that they got to pay because they have foreign assets and holdings, and now it goes to 50% or more. And if you are super rich, it goes up to like 60% when you add everything all together. So, you know, I just don't think that like raising taxes even further is the solution. And I'm kind of shocked that the Republicans are thinking about this. And I really do think that, like, politically, it's a terrible idea, especially when you've got all those Americans saying their tax rates are unfair. I mean, I don't know, I guess I don't get it. So before we move on to tech, David, let's talk about this. This is a good transition point. Frank wrote on CPA trendlines a really insightful piece, and the title is Shorter Turnaround Equals Happier Tax Clients. The argument is that decreasing turnaround time is the most cost effective way to improve client satisfaction. There are four ways to do it. To improve client satisfaction, you can lower prices. You can provide more value, you can increase quality, or you can provide better service, or you can do all of them right. But think about this providing better service is the faster turnaround time, right? Generally, that's what clients tend to complain about a lot is it's like it's slow. My CPA is slow. So the first three he says cost money, right. Lowering prices costs you money. Providing more value is going to cost you money in terms of hiring people, increasing quality is going to generally cost you money because. David Leary: [00:53:18] You're going to go slower, maybe to have quality. Blake Oliver: [00:53:20] But providing better service does not have to cost a lot of money these days. So I think this is a good transition into tech news, app news, because a lot of what's going

on in tech could help with reducing turnaround time and when you apply technology in your firm. If you think about it from that perspective, you're going to win. What's the other perspective? The other way to think about it is what a lot of accountants do, which is we look at how long it takes to do a particular task, and then we say, let's apply tech to reduce that time to do that task. That is looking at it from your point of view, from the point of view of the firm. But the client doesn't care about how long it takes you to do something when they're not in the office with you. David Leary: [00:54:10] Yeah, that's solving for your internal team and not solving for the customer. Blake Oliver: [00:54:14] Right. And so, yeah, you might reduce the time it takes to do a task, but does reducing the time it takes to do a task actually make you more money? Not necessarily because you'd have to go get more clients and more clients takes more time. Even if the tasks you are doing take less time. David Leary: [00:54:34] Because and usually there's flawed logic on that too. Like, I want to reduce the time it takes my team to do stuff. I'll make the customer do more work, which is really the worst possible scenario, because the customer is just going to get frustrated because that's going to take more time ultimately. Blake Oliver: [00:54:48] Right. So when you are implementing tech in your firm, think about it from this perspective, from the client's point of view. Put yourself in the shoes of the client. What would make them happier? Generally in most firms, especially if what you do is a lot of tax, it's getting their tax return turned around to them in two weeks or less. That would be a great client experience and keeping them updated about it along the way. So with that said, let's read an ad. And then actually, David, do you have a do you have to stop? Are you can we keep going or are you. David Leary: [00:55:21] No I'm good. I have to I can go a little bit. I have a garage door repair man coming, you know. Okay. Got it. Blake Oliver: [00:55:27] So let me let me read this one. This is a thank you to reframe for sponsoring this episode. Are you an accountant? Feeling threatened by I overseas accounting, overseas outsourcing and tech companies muscling into your territory. Here's a sobering truth the narrative that AI and automation can replace. What you do is gaining momentum, making clients question your value. But what if accounting could be seen as the most creative and innovative field in a post AI world? Introducing Reframe 2025, the transformational conference themed pricing with confidence, created by industry leader and CPA Hector Garcia, Reframe teaches accounting professionals to think beyond spreadsheets and reposition themselves as irreplaceable and deep thinking human advisors. This isn't your typical accounting conference. You'll learn a new approach to confidence based pricing strategies inspired by best selling authors like Ron Baker and Blair Ends. Master client conversations that command premium fees and join a supportive community of forward thinking professionals who refuse to be replaced by algorithms. Reframe is an annual event, but it is also a permanent movement to make accounting the most human of all professions. Get your ticket before 2025 25 sells out. Head over to The Accounting Podcast. Promo a25. That's The Accounting Podcast forward slash. 2025. David, let's talk about apps. What is hot in the world of accounting technology? David Leary: [00:56:54] So I think the hottest right now is the amount of money that seems to be going into practice management. So there's a couple of things I think last week, maybe two a week and a half ago. Canopy got a $70 million series C. And so canopy if people aren't aware of canopy is a practice management app. I think we've done an earmark expo with them. They have about 4000 accounting firms already on their product. And this is a this 70 million is on top of less than a year ago they raised 35 million. They want to use these new funds to boost their AI capabilities and automate all the tedious tasks that accounting firms have. And what's happening is they're doing this. They're adding more features to their product. Not just AI. And if you look at what's happening with the other practice management news, A, when they bought a tax product called A, when it was called taxa AI taxa, now they're going to rebrand it as a win tax. And this is going to roll into their platform. So a win now has their own payments to do your invoicing, digital payments, reconciliation and win practice for your time tracking, billing and reporting. David Leary: [00:58:02] It would experience which is your client portal E-signatures secure document. Now they're going to have a win tax, which is their AI tax driven tax prep collaboration tool. So this is now you're getting a suite of apps into one product right. And so you're seeing that again. So the same. So you have that. You're seeing it with canopy rolling up a suite of apps into one practice management tool. Everyone's doing it. And now as of yesterday or the day before, Thoma Bravo has invested $100 million into hub sync to fuel accounting technology growth. Now. Hub sync is another similar practice management product to you. Your time, your billing, your workflows all in one product. So you're seeing major money going into practice management for accounting firms where and it's in its multifunctional apps that do lots of different things. It's not just, oh, I just want to manage the workflow or just do the client engagement letters. You're getting the full suite right in these. Blake Oliver: [00:58:56] It's not just what we think of as traditional practice management software, which is time and billing. That's the old school practice management software. This stuff is very much client experience focused. The portal, the e-signatures, the engagement letters, way beyond just tracking my

time and billing my client. So I do think that practice management is having its moment. And that was the argument of Seth Feinberg on CPA trendlines. He points out these Massive fund raise rounds that we just saw. And he points out that like there's 37 different solutions currently available in practice management. It has just exploded over the last few years. So many different possibilities. Why is that? Well, there's clearly a huge need for this in the profession. Um, we're going to see when they all shake out who's left. And I really do think that if your firm does not embrace some sort of tech for this client experience, you're going to be left behind. Like this is the number one place to invest. If you are a firm that you know needs to invest in tech. That also brings us to the headline of this episode Cut Your Tech Stack 50%. Um, firms are frustrated with too many apps. And so we're seeing a consolidation of functionality now across not just practice management, but also in the the apps that we use for accounting and for accounts payable and for payroll. So David, we have zero and bill forming an alliance. What is going on with that. David Leary: [01:00:48] So zero is going to add Bill.com. And I can't ever not say Bill.com I'm going to say it until I die. It's always going to come out that way. Blake Oliver: [01:00:54] It's just it's just Bill but. David Leary: [01:00:56] No, it's just Bill. But if I just say Bill, I could be talking about something else, right. So they're going to add Bill.com for the in the US for embedded bill pay. So this would be similar how Bill Bill.com or bill used to power the bill pay inside of QuickBooks at one time. Now they're going to power bill pay inside of zero. Which is great because zero never had any ability to do that because you didn't really need to in Australia. Apparently the six banks in Australia have a bill payment system all set up to pay bills are really automated ways, so Xero never really had to build this, but the needs been here in the US. So you're going to be able to bulk bill payment, do bulk bill payments. You're going to be able to track payment workflows, the payment tracking without logging into bank accounts. You're going to be able to authorize controls. So you have that that authorize that better cash flow. Which makes sense because it may not be a zero user, but I always thought zero puts a bill in. Then you have to approve the bill. Then you can pay the bill like there's a second. There's already a natural right bill. There's a bill approval. But now there'll be in theory will be a payment approval as well. And then automatic reconciliation and reduced manual errors. So that's a that's launched in 2025. So it's it's probably going to go out as we speak. It's going to be on any zero users in the US that have early growing or established plans. Apparently that's their gold silver bronze type of their plans. Um, and that's going to allow payments to 7.1 million vendors and automatic reconciliation. So, so that's a embedded like With two apps in one, right? Because you don't want to have two separate apps, you're getting it all embedded. So Melio is now going to embed payments for AR and AP right inside of gusto. So you have a payroll app. Gusto. Blake Oliver: [01:02:37] So it's inside gusto. You're going to be able to use Melio to pay bills and invoice. David Leary: [01:02:43] It's embedded. So it'll it'll look and taste like gusto, but it'll be melio that's in there. Blake Oliver: [01:02:48] So that is huge because gusto has historically been payroll HR benefits. They started with payroll, they expanded into HR and benefits. And now they are going to be an accounts payable and accounts receivable platform as well. That is why. David Leary: [01:03:04] I understand it. But yeah I, I think. Uh, this goes back years ago QuickBooks used to have built in payroll. And Doug Sleeter convinced me that's a bad idea because you want your payroll separate from your GL and your accounting system, because a lot of payroll data tends to be more sensitive, So now if gusto adds in AR and AP. Now I have to invite other employees that don't need to be touching payroll or know anything about payroll. Now in gusto to do AR work and AP work. I just don't think it's a good idea. I don't understand the logic behind it. Not once have I used onpay and be like God, it'd be convenient if I could cut an invoice right now while I'm paying my employees. I just I don't understand the jump here. Blake Oliver: [01:03:47] Oh, I get it. And I think it's brilliant if they can execute it properly. So your concern about permissions and access to data totally legit. But you can deal with that. You can give people access to the payroll side of the app and not give them access to the payables side or the receivables side if you set it up right. So that's just to me, that's just a design issue and a security issue. I love the idea of payroll and payments being combined, because if you step back and think about it for a second, what is payroll? It's just paying one subset of your people in your organization. David Leary: [01:04:25] To some extent. A lot of payments that are go out to either to bill or products or to subcontractors. So I see that right. Blake Oliver: [01:04:32] And and. David Leary: [01:04:33] Gusto payroll subcontractors. Blake Oliver: [01:04:35] Gusto expanded to contractor payments already. So you can already pay your contractors and you know, in one place along with your employees. So why not be able to make an ACH payment to anyone for anything via your payroll system? It already handles the payments. It's just a bunch of taxes are withheld and there's a lot of reporting around payroll, but in the end it's just an ACH to a person. So I love this idea because I think it's also a great, great move for them, because payroll is one of the first things that a business will set up before anything else. So if you get them on and you

get them using payroll and payments on your app, that's very sticky. I'm not going to switch away from my payroll system if I've got all my payables as well. David Leary: [01:05:24] And then what's next? Expense cards? Like why not? Next I would say employees need expense cards. And then it's like, all right, well, you already do payroll and expenses. Why not just be a GL? Like, is that the march we're seeing here with this like this gusto. Want to be a GL secretively. Blake Oliver: [01:05:43] You always love to bring that up like a conspiracy theory. You know. David Leary: [01:05:47] Like conspiracy. Blake Oliver: [01:05:48] You think that everybody's going to become a QuickBooks competitor. David Leary: [01:05:51] Everybody wants to be QuickBooks. That's what I'm saying. Blake Oliver: [01:05:53] Look, making a payment is very different than like recording double entry accounting and reporting. And that's what always gets people tripped up is yeah, you can build a A GL. But then to create the user experience around it and all the reporting, it's that meets everyone's needs. Like that's what holds them back. And that's why it's a bad idea. But just to make payments, you know. David Leary: [01:06:13] What would you from an if you had to estimate how many people are using a payroll product like a Augusta or an AMP or ADP and don't have a GL. Blake Oliver: [01:06:24] Yeah. David Leary: [01:06:25] Because the GL, what percentage would you say? What's the percent of all gusto users don't have GL? Is it 90%? Like what would you say? Um. Blake Oliver: [01:06:34] Well, I don't know. I mean, at least at first they don't. You know, maybe I would love to know that. That would be an interesting stat. I wonder if they know that. Um. David Leary: [01:06:45] Because if you if you already have GL, you already got your invoicing in your accounts payable and there's plugins. We just talked about how Bill is going to be inside of zero. I just feel like this is like like headline. It's headline grabbing. It's it gets us to talk about it on the podcast. It's a press release. It probably looks good on a PowerPoint slide in some VP managers thing. It's going to look good in a board meeting, but I'm not necessarily sure it's going to result in massive usage. Or does it even make sense? Blake Oliver: [01:07:13] It's going to depend on how it's implemented, how it's built. Hk geek says in the chat. It's all going to depend on how it works together and how connected the service will be. When Qbo used Emilio for AP, it was rotten because most clients didn't know it was Emilio on the back end. Is that your experience, David? When they did the Qbo thing, you were working there? David Leary: [01:07:35] I mean, I was working there at the time, and so you have me on the website. I would call it Purple Emilio. And then when it was in QuickBooks, it was just green, but it was the same product. Yeah, it was just a green, Emilio. Blake Oliver: [01:07:44] And the issue

was when there were payment issues, Qbo support would push everyone to Emilio. David Leary: [01:07:49] And that was the biggest issue is, is the customers don't know where to go when you have deals like this. Like who? Like we can even talk about the zero billing. If something goes wrong, who do you contact? You contact zero. Do you contact Bill? Are you going to contact gusto? Are you going to contact Emilio? You have to. You have to make sure the whole service, it's software as a service, right? Blake Oliver: [01:08:08] It's how you implement it. Light em up. Says I don't need my payroll software to be my, ah, AP software. I'd prefer an app that can do its job. Well, what I what I need is an app that can wrap all my different customer portals into one. Okay, so I have an idea for how to solve this, and this is what I've told zero. Every time anyone will listen to me is I said, when you log into zero, it's like a widget based dashboard, right? Bank accounts are a box. There's a box for every bank account. There's a box for the different reports. What if you gave third party apps the ability to add a tile or a widget on that dashboard? David Leary: [01:08:46] We had discussions like this when I was at Intuit in 2010, 2011, 2012, like, why is this not exist, right? I don't know. Blake Oliver: [01:08:52] Because then you get the benefit of everything. You'd have one place to go and you could have like a Non-pay widget for your payroll. You could have a bill widget for your bill pay or or, you know, whatever you want. You could have that there. If it's if it's in the Xero Marketplace, allow them to add a widget. Like the same way that apps in the App Store can now add widgets on your iPhone home screen. Like really be an app store. David Leary: [01:09:20] And that model. Yeah. For whatever reason, the QuickBooks Xero model, it's very like open a new browser tab. That's where the app is. But if you think about we've been to Sage Intacct and NetSuite, the apps tend to be built into the UI of NetSuite, right? It's actually in the UI. It doesn't. I think you can still use the app separately, but it tends to be built in. And yeah, and this goes back to what you're talking about, like having less apps and having it all built together. I can agree with it. Makes sense. It's just I'm like, light them up. Why is my payroll and AP in one app I don't know. Blake Oliver: [01:09:51] Well then see then we wouldn't need that because then each app could do just what it's good at, but it would all be in the GL to organize it. I don't know why somebody hasn't figured that out. Um, that that's my wish. David, I know we have more to talk about with app news, so we will have to kick off with that next week. You have to go. I have to get to a lunch. Thank you everyone who has tuned in. We love streaming with you every week. If you haven't caught us on YouTube and you're listening on the podcast feed, go to YouTube, search for The Accounting Podcast and hit subscribe and that notification button. You will get notified when we go live and you can join us as we stream. Don't forget, you can earn free Continuing professional education credit for listening to our episodes. Go to earmarks, create your free account, and earn one free CPE per week. David Leary: [01:10:46] And then I don't know if this is like a good way to close or not, but there was a KPMG or PwC just laid off 2% of their staff. And there's all these conversations on Twitter. There's some rumors that maybe it's because of AI, maybe it's because of not. But there's a lot of bad takes on AI on Twitter right now that Twitter, that 20% of all accounting workforces are going to be cut because of AI. I think like jump into these conversations and let us know what you think, because I think it's way overstated the amount of impact AI is going to do 20% of. And I put this 20% of crappy tweets from accountants haven't even been limited by AI yet. Like like they're still manually writing these tweets, right? So I can't can I do all the other work? Blake Oliver: [01:11:29] Can I leave you with one data point? So when the electronic spreadsheet was invented or popularized with Excel in 1983, I believe it took 13 years for bookkeeping jobs to go down 20% 13 years. So that initial wave takes a while. It's very slow, but then it builds because bookkeeping jobs are now half what they used to be. So I believe that ultimately there will be a reduction of about 50% of accounting jobs that we do today, but it's going to take decades. And so if you're listening to this show, you are going to adapt. And maybe you're one of those people who gets the new job that gets created. Financial analysts, they doubled tripled over the same time period because of what you could do with Excel. Now, you didn't have to crunch those numbers manually. So that's that's my positive take on that. So I think that was a great way to end. David. David Leary: [01:12:26] It's funny, the first job that's been eliminated by I believe it or not is prompt engineer. Have you have you seen that. Blake Oliver: [01:12:33] Well, that's because that's how I make. David Leary: [01:12:34] A year and a half ago prop engineer was the hottest job. Yeah. And now, because the new AI models are so powerful, you don't need a prompt engineer anymore. Blake Oliver: [01:12:41] Oh, I disagree, I think you still need somebody, but, I mean, the way it is is now the prompt engineer uses the AI to design the prompts. It's there's still a human. David Leary: [01:12:48] In the AI does deep thinking. You can you can actually be less precise in your prompt in the AI can handle it. Now it's funny that that that's what actually replaced the AI. Blake Oliver: [01:12:57] Okay, I have to stop. I got to go or I'll be late. David Leary: [01:12:59] David. Bye, everybody. Blake Oliver: [01:13:00] Bye. David Leary: [01:13:01] See my garage door fixed? Blake Oliver: [01:13:02] You're the best.