The Young CPA Success Show: Episode 41

Tom and Jesse from FinOptimal return to the show to discuss the Bench shutdown with Hannah and Joey. Along the way they discuss the rise of AI in the industry, changes to the 150 CPE credit rule, memes, and how CPAs can better convey what they do to clients. The conversation underscores the importance of adaptability, effective communication, and maintaining professional standards amidst technological changes, using Bench’s experience as a cautionary tale for the profession.

Speaker 1 00:00:00 Welcome to the young CPA Success Show. If you’re a young accounting professional, this podcast is your ultimate guide to navigating your early career. Join us as we share valuable insights, expert advice, and practical tips to help you kickstart your path to success and excel in the accounting industry. Let’s embark on this exciting accounting journey together.

Joey 00:00:22 So I think there’s I mean, there’s a lot of stuff that’s gone on since we’ve we’ve last talked. And I think the the thing that I think about with, with phenomenal the most is, is what you guys are doing and trying to like, you know, lean into the artificial intelligence space, kind of lean into some of the automations and stuff. Like that’s very that’s been in your bag already. Yeah. And what I’ve always appreciated about your approach is that you are you’re very like pragmatic about like what is real about it. Like you, you like you’re not going to be hyperbolic about what the future is going to look like. You’re feeling pretty comfortable and like what you provide and how you think about things.

Joey 00:01:01 So let’s maybe we should start with the big elephant in the room, which is like when bench went down at the end of last year, I had a lot of talks, thoughts about it. I was like, I see what they’re doing. It reminded me a lot of like scale factor, if you remember that from like the the early like 2020, 2021. I tried so hard to work there in like 2017 and they just did not want to hire me. And then they went. Then they went under and I was like, okay, I don’t feel as bad about not getting that job, but like, bench felt a little bit like that where it’s like you’ve had this sass play to it, but really your sass was just outsourcing and it didn’t work from a business perspective. So like, how have you guys how did you how did you view that? How did you think about it and how are you responding?

Hannah 00:01:46 Hang on. On one back up. Let’s make an assumption that our audience and one of the guys might not know the full story of bench.

Hannah 00:01:55 So let’s do like a Cliff notes version of rewind and give me a synopsis of what has happened. Catch! Catch us up. Like I know. Hi, Joey.

Joey 00:02:11 Joey.

Tom 00:02:11 Your hat. I mean, who knows it best?

Joey 00:02:15 It might not be me.

Jesse 00:02:16 I’ll take a I’ll take a gander. I’ll take a gander. I’ll tell the story. And then I get to have the first commentary. Sure, sure.

Tom 00:02:24 There you go.

Jesse 00:02:25 So. So we’re going to talk about bench scale factors much closer physically to me. That was an Austin I think. yeah. But less recent, bench was a company that raised a lot of VC capital. I don’t know how much VC capital is redundant. They raised a lot of VC and their strategy. This is me telling me telling what I think their strategy was. I don’t really I obviously wasn’t in the boardroom, wasn’t in management there, but I think they really aimed for, the low end of the market in terms of willingness to pay and also the needs of the clients.

Jesse 00:03:10 They’re looking for people who don’t need much and don’t want to pay much. And I’m sure that that’s not a tiny segment. I’m sure that they thought through the, the, you know, the pros and cons of that approach. And, you know, I think a lot of people who are talking about I bring that up because a lot of people talking about their demise are very vocal about the quote unquote, race to the bottom. You know, they were charging 300 bucks a month, and that wasn’t the lowest price point. I remember early on when I looked at it, when you were you wanted to get a quote. They had a slider. It was kind of based on the the larger of monthly income or monthly expenses, but it topped out very, very low. Right. Fin optimal. You know, very quickly we were we were charging You know, I don’t. Early contracts. Very few were less than $1,000 a month. And, you know, this is way below that. And so, you know, they got and they got customers presumably that were willing to pay in that range.

Jesse 00:04:12 And they said, we do. We don’t do a cruel accounting. We do cash accounting, which basically means we’re going to categorize. So I think they had a they had a long run. It was maybe ten years that they were in business 10 or 15 years. And then suddenly about two months ago, they announced that they were shutting down abruptly. And then the next day they announced that they were not shutting down. They were being sold to, I think it was an HR services company.

Tom 00:04:40 employer.com

Jesse 00:04:42 What was.

Tom 00:04:42 It? I think employer.com. They’re like.

Jesse 00:04:45 employer.com.

Tom 00:04:45 Serial or business. I was going.

Jesse 00:04:47 To say PEOPLE.com. So I’m glad you so and then you know so people still call it a spectacular demise because presumably almost all of the equity was wiped out. It was not a successful play for the VC community and any other investors. and, you know, for all practical purposes, bench is no more. It’s a part of another company. So, you know, people did talk about the race to the bottom.

Jesse 00:05:16 I do I don’t really think personally I don’t think it’s a compelling argument that well they went after the low paying customers and you know, that’s why they failed. I think people who are only willing to pay 300 now, maybe it’s closer to 4 or 500 a month. They are not going to pay $1000 or $2000. So it’s not like that. That’s not like you people who are saying it’s the race to the bottom, I won’t do it. You’re never getting those customers. And bench did get those customers. We could argue why they failed. Maybe it was about financing. The hurdle rate is simply to like you have VC in your cap table, you have to grow at a certain rate and you make decisions. You know that’s you make decisions that are consistent with a higher risk play. And maybe you can’t make 300. You can’t make money at $300 at those levels, right, given lots of other things. So I am not a race to the bottom proponent. The thing that I think about the most is why they chose to build their own general ledger.

Jesse 00:06:18 You talked about the SAS play. It is a non-trivial enterprise to build a general ledger. You’re competing with, you know, an 800 lbs gorilla that at least when bench started, this has changed. Now you know you’re paying 100 bucks a month for QuickBooks. But at the time when QuickBooks online was still trying to become dominant, you could get QuickBooks for 15. It was.

Joey 00:06:39 Like ten bucks a.

Jesse 00:06:40 Month.

Joey 00:06:40 It was so cheap when you started.

Jesse 00:06:42 So yeah. And so it was just not, in my opinion, a good play to try to build. And there was also zero. So it’s not that their GL wasn’t good. They’re not the only company that built their own GL. And I’ve posted about this and somebody commented and said we built our own GL. It’s great. Yeah great. Build your own GL. But like your venture capital is very expensive. If you’re using it to develop a general ledger, you are not using it to develop processes and other technology to make your team more efficient.

Jesse 00:07:14 Unless you think the general ledger is doing that better than QuickBooks, right? I’d love to build a better general ledger than QuickBooks, but I don’t think the the venture capital is going to pay off that quickly for it. You got to build something that is added value to the general ledger and then prove yourself. And then maybe you can go back and build a general ledger on top of it. So that is sort of, to me, a decision inconsistent with making the most of that capital and maybe some kind of indicator as to where things went wrong.

Tom 00:07:45 Wow, what a concise answer.

Jesse 00:07:49 Well, I had to tell you.

Joey 00:07:51 There’s a lot we can.

Jesse 00:07:52 I was afraid you guys would bring it back to baseball. I really wanted to yank it off the bench.

Tom 00:08:00 So when Alex.

Jesse 00:08:01 Rodriguez.

Joey 00:08:01 Signed that last night.

Tom 00:08:04 I mean, the thing calling it a sass is interesting. It’s like it’s really a service that you have to use our platform, right? The. I think the everyone just felt like they could just go and windmill dunk on them though.

Tom 00:08:20 Keep it in sports references all over Lincoln. Yeah. Like everyone was just celebrating their demise. And I do get it because I think it’s frustrating as a business owner, when you’re providing a service that is worth thousands of dollars a month, to have people constantly come to you and say, well, I could get it from them for 300, so why would I work with you? And then you go as business owner. How could they possibly provide it at 300? And then it goes, well, it turns out they can’t. And that’s why they’re going out of business. So you kind of everybody wants to take that victory lap, which I think is natural. But it’s also like they did try to do something much greater, like at scale than what a lot of other accounting firms are trying to do. So you have to give them respect for that. I don’t necessarily agree with calling a service a SaaS when it’s literally just a service. I think a lot of people do that. You know, what is AI you know, people say, what did they say always India or whatever.

Tom 00:09:15 Like it’s just offshoring disguised as I, I think there’s a lot of people doing that. I think that’s like highly unethical. Honestly. I think it erodes trust in the accounting community on new tech. Like when when people hear that there’s this thing and then they find out, no, it’s actually not software. It’s just people overseas doing it that’s not good for any of us. It’s really not good for any of us.

Jesse 00:09:37 I don’t remember that being part of the bench story. That was something that came out that they were alleging to be automating, something that was actually.

Tom 00:09:45 I think I think that there I mean, I didn’t I don’t keep track of benches marketing that often. I think towards the end they were talking about how they’re using automation. I could be wrong there. I know who they pointed to originally and said before they got acquired, they said, hey, we’re done, but like you should go work with this other solution instead. Oh yeah, that was like an AI platform. And I think those are coming from a dime a dozen.

Tom 00:10:10 We can get to that eventually because I think that’s interesting. But like what I also found interesting to the bench reaction was everybody on LinkedIn just repeats the same thing in an echo chamber all the time, like the same five principles. And like I think they are good ideas, right? Like niche down. Get rid of your low paying clients. Focus on your high paying clients. Try to replicate your best clients like stats. Does that Jason starts talking about all the time. It’s great advice. The same people though who parrot what he says. The second bench went out of business. Were groveling on LinkedIn like, I’ll take any bench client you want. And it’s like, how can you out of one side, say they’re race to the bottom for $300 and then turn around and go? But now I want those $300 clients. Right. So the whole reaction was and that windstorm was was very, very strange. Like the reaction just felt gross to me.

Jesse 00:11:02 I would be interested in seeing the Tam.

Jesse 00:11:04 Sorry, I don’t get another turn. I know, but no, no.

Joey 00:11:07 Take the turn.

Jesse 00:11:08 Like because. Because I have to correct what I said before. It’s not that every one of their clients was only willing to pay that price. Some of our early clients were former bench clients. Some people who, if they like to Tom’s point, if they don’t understand the difference between $300 and $1000, they’d say, why would I pay 300? Why would I pay 1000 when I can get it for 300? And some of those people, once they realize the service difference, not having a cruel accounting, for example, they say, oh, you know what, I am willing to pay a thousand, but there’s still plenty of people not willing to pay a thousand. And I don’t know how many that is. It’s probably a sizable number, but the economics are probably not.

Tom 00:11:49 Well, the idea of standardizing the like, everybody has to be on RTL and we control the tech is an interesting move because when you think about like a productized accounting firm, like standardized technology is critical.

Tom 00:12:02 So like it’s an it’s one way to think about doing it. It’s obviously Jesse, not how we think about doing that. Right. but it’s an interesting play. Again, they tried something different and it didn’t work out after ten years, but it definitely worked out for some of those ten years. I’m sure some of the initial founders made money, a lot of money off of it. So you win some, you lose some.

Joey 00:12:27 Well, I think there’s there’s a couple of things that and I’m glad you said something. Both of you said something that I really wanted to touch on here. I think a little bit back to this is a Twitter, a Twitter conversation I had with, I call him Boomer. Mike on Twitter is Mike Sylvester. He’s a CPA, does a lot of stuff, post a lot of weird polls that are always kind of funny to see just a slice of Americana on his polls, on his Twitter timeline. But we were having a conversation about marketing that we’re seeing, like as the NFL playoffs are ramping up and on the Super Bowl about like, oh, you know, fire your CPA.

Joey 00:13:01 We’re into it. And it’s like there was a lot of backlash to that. And I my response to him was like, well, CPAs, we’ve kind of done this to ourselves in a way, because to Jesse’s point, we haven’t really done a great job as an industry of like really explaining the spheres of how things work and the levels of pyramids in terms of like, yeah, you do want to pay me a thousand bucks a month because here’s all this extra value that’s going to be provided to you. We’ve never really done a good job as an industry of explaining that sometimes that transactional level of accounting that some people call low level accounting. That in people’s minds means low value accounting is actually kind of the most important part of anything that we do, and we’re as guilty of it as anybody. And that’s why I was I was laughing to when people were dunking on bench because I was like, this is not this is not good. No. For the industry as a whole, if this is happening.

Tom 00:14:00 There’s a branding, there’s a branding issue. I’ve talked about this so many times, like, okay, like you go to the dentist, there’s the dental hygienist and the dentist. Do you know what each one of them does, right? Right. What’s a bookkeeper? What’s a controller? What’s a CFO? There’s there’s 78 different cast abbreviations. We’re confusing everybody for no reason. And you’ve got bookkeepers who provide legitimate advisory services, but they just for some reason, feel inadequate or don’t want to talk about it in a different way or they feel insecure. It’s actually saying they’re an advisor when they are. And then you’ve got advisors who literally are like the worst bookkeepers I’ve ever seen in my life. And there’s just it’s a branding nightmare, and I don’t I don’t know, I might have been on this last episode where I said, somebody needs to come out and just say, like, here are the words we’re using. Everybody get on board. It can’t be me.

Hannah 00:14:54 I think it was. Why can’t.

Joey 00:14:55 Why can’t it be.

Hannah 00:14:56 You? I agree.

Tom 00:14:57 Nobody. Yeah, because I don’t say anything serious. Ever. So, like, no one’s going to believe me.

Jesse 00:15:04 This is the.

Tom 00:15:04 Most serious I’ve been in, like, weeks.

Joey 00:15:06 Jesse’s rolling his eyes in the background. I mean, it’s so different.

Jesse 00:15:09 Every every industry is so different. You know, I think about somebody running a restaurant, even a nice restaurant, you know, like an expensive restaurant. And you know, where you’re paying, where they’re they’re taking in, you know, 20, $30,000 a night. Right? that’s a cash business. You know, your bookkeeping needs are pretty simple. And a controller. The job of a controller, bookkeeper, CFO in that business. That that restaurant has probably has willingness to pay if they needed it. But, you know, it’s okay, fine ingredients and things of that nature. All right. Maybe we could get a better handle on our Cogs, but still, they kind of buy it pretty close to when they sell it.

Jesse 00:15:55 So. And I don’t know I don’t know how well you could standardize it. A consumer packaged goods company, right. The burdens of inventory and Cogs accounting are so monstrous that, you know, controller doesn’t really get it because it ignores the strategic director of finance, doesn’t really get it because it ignores the the tactical that is so critical for working with the warehouse. Right. But then if you go over to a SaaS company and it’s all about RR and revenue recognition, that’s a whole separate set of products and processes and people, you know, I don’t know. I don’t know how well we could standardize it. All right, fine. Let’s standardize it by industry and then job name. You know, maybe then we can get something standard and company size. How many warehouses do you have? If you have enough warehouses, you’ve got to have a person devoted to doing inventory and Cogs accounting. Just do you have to true.

Joey 00:16:47 Up like intercompany balances? If so, you’re going to need a higher level operator, then great.

Joey 00:16:53 You’re going to get expense allocation.

Jesse 00:16:56 Yes.

Tom 00:16:57 Joey, I think you’re right though. This is it’s an accounting community problem. And that’s why I am glad that there are so many people. Like I did say earlier, everybody parrots the same talking points in the situation of bench. It was in my, in my opinion, hypocritical the reaction. But like outside of that, I do think it’s generally really good for the profession that there are so many communities and people like encouraging each other to charge more, because when we get away from this race to the bottom idea, right, the more people who feel empowered to charge $1,000 a month. Then the the market that buys from us is going to be conditioned to to pay that much money and we’ll all make more money. But when you’ve got people out there that are still just being Walmart, right, it’s like, well, how are we going to compete with Walmart? Right?

Joey 00:17:49 Yeah.

Hannah 00:17:50 Well like always have people out there like that. Like I think to some degree I think they’ll always be a bit like a bench of some kind, somebody who thinks they can scale that to some degree.

Hannah 00:18:00 But I don’t think that negates the fact that we’ve got to reimagine our value proposition just in our roles, in our industry, how we communicate that, how we talk about ourselves, even like in what we do. I think that that also gets a bad rap. And like, I can tell somebody like I’m an accountant and what somebody else can defines as an accountant what they think of like, my mom’s going to think of it different than, you know, somebody else that I just randomly meet. And I say that on my account, it, you know, so like, I think that there does need to be Just general change in that way. I don’t know that I necessarily have like an answer for how we how we go about doing that. But there’s there definitely I think there’s there’s a route starting point even beyond just us in the industry as well. Like we’ve got to do some education, for folks beyond it.

Joey 00:18:49 I mean, I think we just like, yeah, we’ve got to hold ourselves to like a, a higher standard.

Joey 00:18:54 Like I think about I was just doing some consulting for someone the other day where we were talking about legal documents that they need. So it’s like, you know, if you’re a business and you pay, you’re going to pay a lawyer $5,000 for a buy sell agreement that you’re going to stick in a drawer and you’re never going to look at for maybe even the entire existence of your company. If it’s not relevant. Right. You’ve got to have it, but you’re never going to look at it. And nobody ever questions the the lawyers hourly rate. But then we’ll sit there and we’ll argue with each other about whether we should be charging 80 bucks an hour or 100 bucks an hour for bookkeeping. And it’s like we’re our own worst enemies when it comes to that. And it’s like we haven’t solved the problem of explaining to business owners, like, you’re going to you’re going to pay for this document that you’re never going to use. You’re going to use this stuff every day. You’re going to be in your QuickBooks file every day, and you don’t want to pay for that.

Joey 00:19:50 Like, what are we doing?

Hannah 00:19:52 Make it make sense.

Tom 00:19:53 Yeah, I don’t think I think I think though, there there is an onus on the accountant to, to demonstrate their value in a way that makes sense. And I think that, you know, when I first joined for optimal, we would talk about the way that we do things in a way that made sense to us, and it didn’t make sense to the people we were trying to sell it to. And until we totally reframed how we talk about our software and services. Then it clicked. Then people started going, I get what this website’s about? I get what you guys are doing now. I’m ready to buy it. And I think, like, there needs to be more sales and marketing training to accountants, right? So they can explain how to talk, like they need to know how to talk about what value they’re providing. Because I’ve worked with marketing agencies that are trying to help find optimal grow, and it always takes weeks for them to even wrap their head around what are we doing? Like they think about it as taxes and my bank account.

Tom 00:20:59 Right. And it takes weeks of meetings to be like, no, okay, there’s more than that. Right? And these are people that I’m paying to understand what I’m doing, flip that. We need people to pay me and understand what we’re doing.

Jesse 00:21:11 So it’s rather striking.

Hannah 00:21:14 What.

Jesse 00:21:15 When you pay them to understand you, it still takes weeks like they’re getting.

Tom 00:21:19 That’s what I’m saying. And we’re trying to get people to pay us for stuff they don’t understand.

Hannah 00:21:23 Yeah, yeah.

Tom 00:21:24 So it’s just a it’s a marketing thing. But yeah, I don’t know. We could get rid of the Walmart.

Jesse 00:21:31 You’re selling a complicated thing for typically a lot of money. You know, services charging thousands of dollars a month are facing you know, buying decision. That’s usually not instantaneous. Sometimes it is. How do you get how do you position it. How do you you know I know how piece of marketing. You know, how Tom knows how you hire a marketing firm that you then pay money to understand it?

Tom 00:21:56 No, you just memes.

Tom 00:21:58 We all we so many memes until they understand it. That’s the memes are good universal language. Yeah, we just have a poor account.

Hannah 00:22:06 An account has some good ones out there, right?

Tom 00:22:09 But those are tailored to like accountants. Like we all like commiserate and laugh together. We need more memes to explain to business owners why they need an accountant.

Jesse 00:22:18 Targeting the customer. Yeah.

Tom 00:22:20 The accounting meme verse. That’s cool.

Jesse 00:22:22 That’s a good.

Hannah 00:22:23 Yeah, you should start.

Joey 00:22:24 I would say you on that.

Hannah 00:22:25 You want to get famous? There you go. Oh, you.

Tom 00:22:27 Thought you said you looked at my Twitter and my LinkedIn. It’s 98% memes. It’s just all I mean, I think.

Joey 00:22:34 If I think if you look at my teams here, it’s 95% gifts. And it’s the same like Kansas State gif of Willie the Wildcat pointing at you saying, what’s up?

Tom 00:22:43 GIFs and memes? Yes. And memes.

Hannah 00:22:45 Yes.

Tom 00:22:46 But for real though, like if you actually think about that though, like gifs and memes are just a it’s a very simple and casual way to communicate an idea, right? Like I always say this to our team, right? Like I think in today’s day and age corporate jargon, it’s people are tired of it.

Tom 00:23:05 And just communicating like humans is the best way to interact with one another. Like, and if we can just talk about the way that like what accounting is like, you would explain it to your friend at a bar or a party. I think we have a better chance of getting business owners to go, oh, that makes sense. That’s not what I thought it was. I’ll give you money for that. Right. So I would just challenge everyone to to speak more human about accounting. And then I think people will get it.

Joey 00:23:31 We talk about that all the time. And like the funny joke in in our company is like, Joey uses a lot of sports references and I’m like, that is 100% fair. I’ve tried to expand the movies. I’ll throw a Taylor Swift in there, but like, yep, I’ll, I’ll give a good, you know, sports reference. But the reason I do that is because to your point, I’m trying to explain something that inherently makes sense to me, to someone that it doesn’t make sense to.

Joey 00:23:57 And I’ve got to bridge that gap. So if I can sit there and say, you doing this is like Leon Lett fumbling the ball at the two yard line, oh, okay. And you remember.

Jesse 00:24:06 I talked so long because I knew it was going to come back to this guys.

Hannah 00:24:09 Yeah. Always does. I’m in the.

Joey 00:24:12 Does. But it’s like with you.

Tom 00:24:14 Joey I’m with you, brother.

Hannah 00:24:16 Keep going. Yeah. It’s like.

Joey 00:24:18 If I can get you to understand that at a different level. Now you. Now we’re speaking the same language 100%.

Hannah 00:24:26 I just had this epiphany. So I think that you could also tie this into, especially if you’re trying to target sports lovers as your target people that you want to work with. Like obviously, there you go. There’s the memes, there’s the genre of memes and gifts that you’re going to put out there about how you describe yourself and your services. You’re trying to talk to, a millennial mom who’s a swiftie. Mine are going to look a little bit different than yours, Joey.

Hannah 00:24:52 Mine aren’t going to be, sports references. So.

Hannah 00:24:57 But that would.

Hannah 00:24:57 Work. Get to know.

Hannah 00:24:58 Like at the end of.

Tom 00:24:59 The day, people buy from people, right? And like, if you’re a solopreneur or starting a small firm, you’re not going to get 100,000 clients. How many do you really need? 50. Right. There’s not 50 small business owners out there that wouldn’t see a Taylor Swift meme and go, I mean, actually look at this person, right? Maybe I have something in common with them, right? It’s like niching down in a different way. It’s like finding a niche that’s having a personality trait that’s in common with a buyer, rather than just throwing jargon at them.

Jesse 00:25:31 Right. And a picture is worth a thousand words.

Tom 00:25:35 Are you coming back to my my idea of the I picture behind the thing? Do you want to invest in that, Jesse?

Hannah 00:25:42 I remember that.

Jesse 00:25:43 Well, like I you know.

Hannah 00:25:46 I do.

Jesse 00:25:46 Think. Yeah, I don’t know.

Jesse 00:25:49 We talked about the need to educate how you do that with some level. I think you also need an accompanying meme education campaign. what does that mean, meme? What does that meme mean? You know, like, sometimes I need a minute to figure that out, but, you know, I’m with you guys that we need a better way to communicate what the value prop is to the right audience. Lots of different ones. Sports ones, music ones, you know, art ones, I don’t know.

Tom 00:26:20 Parent.

Hannah 00:26:21 Yeah.

Jesse 00:26:22 Parent ones. Yeah.

Hannah 00:26:23 Yeah.

Tom 00:26:25 Memes is a service. Hit me up.

Jesse 00:26:27 Memes is a service.

Hannah 00:26:28 There’s there’s a guy on there.

Joey 00:26:30 Who, like. His name is Bailey Karlin. He lives in. He was with Barstool for a while. He’s done something now, but, yeah, he teaches a class at a university that literally is just. He calls it memes 101, and he teaches college. Kids like how to communicate through memes. It’s it’s kind of neat.

Tom 00:26:46 It’s becoming much, much, much more popular.

Hannah 00:26:49 Yeah.

Joey 00:26:50 Well, because we all make assertions about who we are, right? Like, we do that all the time. Like looking at your background here, like, I don’t know if you like, actually play the guitar or if you just like, like the vibes that it’s giving off. But you’re you’re like you’re making an assertion about who you are and what you care about by this. Hannah, with the picture of her kids behind her, over her left shoulder. Me with my golf, right. All those different things. We all make those assertions all the time. So why? Why should we just expand that? Like why shouldn’t we expand that to everything we do?

Hannah 00:27:23 Well, I thought what was behind you, Joey, was abstract art for a long time.

Hannah 00:27:28 Yeah. Me too.

Joey 00:27:29 Yeah, definitely. Definitely golf courses.

Tom 00:27:32 Now that makes sense. But I am with you, Hannah. I was, like, looking, and I was like, where’s the golf picture? That little one behind, like, it looks like.

Hannah 00:27:39 But y’all are just.

Hannah 00:27:40 Gonna nod through it. Y’all weren’t gonna say anything. You’re like, yeah, wait. The golf?

Hannah 00:27:44 No, I mean, it looks it looks great. I am glad you said something.

Jesse 00:27:47 Because I too was like, are they pictures of golf clubs or.

Hannah 00:27:52 Yeah.

Joey 00:27:54 Yeah, totally.

Hannah 00:27:56 Well, you said that though about the names 101 in school. It kind of makes me think that, like, I feel like how we market ourselves in our profession should be a part of the curriculum of what we go through in school. Like it really should be a part of, of how what we walk away from our colleges with armed with. As we go into this profession. Honestly.

Joey 00:28:20 You know, it’s it’s funny you mention that because I wanted to I wanted to segue to this, too. So this is a natural segue. Like, I remember when I first got out of school. The thing that industry was saying we needed, like the question was always like, hey, it’s great that, you know, this really complicated, like, gap leasing thing that you need to know.

Joey 00:28:39 I don’t remember what it was at the time. I didn’t really pay attention. I studied for the exam and passed it and I was done. But like, everyone was like, what I really need to do to be taught in college as an accountant was how to use Excel. And now I think the new version of that is, is what I really need you to be able to do as an accountant is have some communication skills, because advisory is becoming and has been and will become more important for accounts in the future. So setting the table. One of the things that we have seen in the industry in the last couple of months that started to kick in, and Blake Oliver has some content on this. Lots of folks are talking about it. States are starting to push back on, like the 150 hour rule for the CPA. And I’m like, is that really going to start solving our problem, or is that just a red herring that like, makes us feel really good but isn’t going to solve the problem.

Joey 00:29:26 And my my concern is that it’s going to lead to less qualified individuals coming out. And we wouldn’t have solved the underlying issues that were making that 150 so prohibitive.

Tom 00:29:39 Yeah, I’ve I’ve, I’ve got Jesse. You go first on this one because I think my take on is probably specific to me.

Jesse 00:29:48 you know, I personally I’m trying to remember if I had the 150 hour rule when I became a CPA roughly around 2010. I, you know, I don’t remember I remember having to take some extra classes, you know, to, to pick up enough accounting classes to, to take the test. But, I personally don’t think it’s going to have major sway over whether people decide to go, I don’t know.

Joey 00:30:13 I just that’s my opinion.

Tom 00:30:15 I don’t I don’t think that the number of hours, first of all, calling an hours is ridiculous because every time I laugh and I’m like, why is it called hours? Like credits or whatever? It’s ridiculous. Stupid.

Hannah 00:30:25 Yeah.

Tom 00:30:26 It’s I the way that I got my CPA was a joke.

Tom 00:30:31 I got my bachelors and I had extra credits from high school, and I took like two online classes to hit the accounting specific requirement. It was just me paying extra money like I filled the 150 with, like, gym. It makes no sense. Make the test harder. If we’re like, I don’t care if there is any our requirement. Like why do we really like why? I don’t.

Hannah 00:30:53 Remember the test being.

Jesse 00:30:54 Easy. By the way. I was gonna say.

Hannah 00:30:56 Early in the process, I will fight you if you make it. I want to make it harder, like.

Hannah 00:31:01 I don’t I don’t.

Tom 00:31:02 Want it, all right? I don’t want to make it harder. I’m just saying. Okay. Thanks. Ours doesn’t make sense. The out who? Who cares about hours, right? The test should be modified, I think because I’m a CPA and I don’t know how to do a statement of cash flows or read it because I just like got lucky and it wasn’t on. I sat down, I was like governmental accounting or statement of cash flows.

Tom 00:31:25 At the time, governmental happened to be popular on the test. And with two days that they said, I’m going to study this instead. And I guessed it, and I never looked at it again for the rest of my life. Like, it’s a it’s a it’s stupid. The whole thing makes no sense. I’m a CPA, I’m terrible at accounting. I passed a test. It should be more practical. Number of working hours under a CPA should be much more valuable. Like. And the test? It should be more simulations I think. Less multiple choice, more simulations. Put things on about problem solving and communication and make the test indicative of what we want people to be. Who cares about ours? My God, like I.

Jesse 00:32:06 Think I’m with you, Tom, I don’t care.

Hannah 00:32:09 I don’t care. Yeah. I think like an.

Joey 00:32:10 Apprenticeship is just as valuable is like, you know, we see that in other things where it’s like other, you know, things like electricians and stuff where they’re like, yeah, we need you to pass this test.

Joey 00:32:19 This is good. But what we really need is for you to, like, have a little bit, you know, like driving, right? If you have kids that are driving when they do the driving test, they got the homie and the right with the wheel to make sure you don’t like drive off the off the side of a cliff. That’s kind of important for learning how to do some.

Hannah 00:32:34 Skills, if we’re going to.

Hannah 00:32:35 Call it. Correct me if.

Jesse 00:32:36 I’m wrong 150 hours, which basically means you have to do.

Hannah 00:32:40 You.

Jesse 00:32:41 Have to do graduate school, right?

Joey 00:32:43 Because I didn’t have a.

Hannah 00:32:45 Bunch of history hours. Unless you.

Hannah 00:32:46 Change your degree a couple of times.

Hannah 00:32:49 And then you just.

Tom 00:32:50 Have to fit a random 30 hours of accounting hours. So then you’re like, well, I take this random, I just need to get a C and A like the fact that it can be rigged. As someone who completely rigged his way to a CPA, it’s broken. I set, I study, I graduated with honors in accounting.

Tom 00:33:07 And when I sat down for FA, I googled his revenue with debit or credit. Okay. Being good at taking tests should not let you get certified. I’m not.

Hannah 00:33:15 Even kidding.

Jesse 00:33:16 When you applied for this job.

Tom 00:33:18 I graduated with honors from Binghamton, which is like a it’s an accounting firm for big for. Yes. And I googled is revenue a debit or credit? Like I’m not even kidding. Like I was just good at taking tests like that. That shouldn’t get me three letters. When there are people out there that are way better at accounting than I am, right? So make it more practical. Otherwise it’s just broken.

Joey 00:33:41 Well, and I think that the other challenge too is I think, you know, and this was I might be paraphrasing, but like I haven’t listened to his entire podcast, but I know that was something he’s talked about, which is like start removing some of these barriers. And I’m like, yeah, I, I agree with with that.

Hannah 00:33:54 But that’s like one of.

Joey 00:33:56 Yeah like Oliver. Yeah. And he.

Hannah 00:33:58 Tried to be did.

Tom 00:33:59 He try to be the head of Naspa or something.

Hannah 00:34:01 I think he applied.

Hannah 00:34:02 Yeah. He should have been on LinkedIn.

Tom 00:34:05 He should do that. Whoever.

Hannah 00:34:07 Like, he’s got the most common sense approach.

Joey 00:34:09 To all of this, from any of the influencers that I’ve heard, the things that.

Tom 00:34:13 I’ve heard the two. Sorry. Go ahead.

Hannah 00:34:16 No.

Joey 00:34:16 The thing that scares me though is like we’ll use that as like, oh we’ve, we’ve reduced some of the barriers to entry here. Like this is going to solve the pipeline problem, but we won’t have solved like any of the 15 other things that are causing the pipeline problem. Like, you know, I still think wages are still way too low for starting stuff. There’s less opportunities for people to like, move up quickly or, you know, do the other types of things like, you know, again, whether it’s 150 hours or not, if you’ve got a smart person that you, you know, 15 years ago would have become an accountant, but now they realize, oh, I’m just going to go do some sort of software engineering or some somewhere else because, you know, worst case scenario, I’ve got a 30 year career.

Joey 00:34:59 In this best case scenario, I pop out at a, you know, startup And just, you know, have an equity exit and make lifetime money by the time I’m 30. Like, there’s nothing in accounting that’s going to compete with that for those those good analytical brains that we need to do this job. That’s my big fear.

Tom 00:35:19 It’s. Yeah. Yeah. It goes back to it. Like the hours should like all those things that you talk about. Are you want something to be able to stumble into accounting, find that they love it. Work under someone who is a good accountant and say I’m going to pass these tests. That should be the path to being a CPA. You shouldn’t have to pause at 27 years old and say, I had a general business degree. I kind of got this accounting job. Now I’m in it, but do I really want to pay $25,000 for credits to get certified? Like, my friends have gone through that and I’m like, that’s awful, and you’re better at accounting than me.

Tom 00:35:55 I just picked it earlier. That’s not that’s not how we remove the hours entirely. Zero hours.

Joey 00:36:03 That is that is a scorcher.

Hannah 00:36:05 I’m the Ron.

Tom 00:36:05 Paul of accounting now. But no taxes, no rules.

Speaker 7 00:36:11 I mean, I hate is.

Jesse 00:36:12 This might be a little controversial, but, you know, if the if the concern is we’re not getting enough accountants, let’s fix it by lowering the hours requirement. You know, I hate to broach the topic because I don’t remember hearing it on the list, but I do think I is probably going to change things a little bit in terms of what the accountants are doing and what they’re needed for, and that’s another element here. But not to open a can of worms.

Hannah 00:36:38 Well, I heard probably on TikTok, somebody say that I will not take our jobs, but someone who knows how to use I will take our jobs. And I was like, oh, that was good. Like, that is really, I think the best way that I’ve heard that put that was Tom.

Jesse 00:36:55 Tom.

Joey 00:36:56 Tom puts that on LinkedIn.

Hannah 00:36:57 Yeah, yeah. I did make a post today.

Tom 00:37:00 About how 85% of our jobs are going to get taken by AI. But spoiler alert it is not a serious post. but no, you’re 100% right, Hannah. I think no matter what, whoever stays on the cutting edge of what’s new is going to be okay. Like, I think that’s something that Jesse I talked about recently on one of our podcasts. It’s like to be a top 1% accounting firm or top accountant is just you have to just try stuff. Everybody else is too afraid to try, or there’s 14 levels of red tape and I don’t know, I have to get this $20 ChatGPT Pro subscription signed off by my team. Like if you have that much red tape and that much hesitancy to try new stuff, you’re going to get left behind. But people who are just willing to try stuff and play around with it and tinker, they’re going to be fine no matter what. Even if you’re not using AI in your day to day life, if you’re just keeping up with, oh, I can see what it can do.

Tom 00:37:58 And I recognize where the limitations are, and my mental math is just not worth investing a ton of my time right now. But it’s evolving at such a rapid pace that, hey, I’m just going to like, keep an eye on it, right? Watch it on the stove. And when it’s boiling, I’m going to be the first one to grab it. You’re going to be fine.

Joey 00:38:16 Well, there’s going to be some canary in the coal mine, whether it’s stats or somebody else who’s going to figure out, like what the tool is. And like, once they’ve blessed it, that’s when I’m going to become an adopter. So like, maybe not the first adopter, but like, yeah, 2 or 3. That’s where I want to be 100%.

Tom 00:38:33 You just follow stats Chad Davis and you’re good. They’ll they’ll tell you what’s good.

Hannah 00:38:38 Yeah.

Hannah 00:38:41 Well, I have an opportunity for all of you, like, want to get in on a tool because we have an initiative here that we’re looking for a solution to automate our closed workbook like process from start to finish.

Hannah 00:38:54 Like so we have closed workbook reconciles every every account on a balance sheet. And what I found as being a part of this beta test is that it doesn’t exist right now. Like there, I don’t think there’s a product right now that does it. Like the way that we like fully want it done. So I’m just saying there might there’s an opportunity there for you guys.

Hannah 00:39:14 Yeah. I mean I mean I don’t.

Jesse 00:39:15 Know if you’re going to find one product that reconciles every balance sheet account, but if you’re looking for one that reconciles accrued expenses, deferred revenue, prepaid expenses and unbilled revenue, I do happen to know of a solution. What solution are you trying? You’re saying that doesn’t exist, you’re trying to standardize and you’re not, and you haven’t found a product that does all of them.

Hannah 00:39:34 Right? Yeah, yeah.

Hannah 00:39:35 But I mean.

Tom 00:39:36 But like we have and I’m not going to say I was, I was going to not name drop you named.

Hannah 00:39:42 Okay I’m gonna not I will I’ll wait.

Hannah 00:39:44 I was gonna name I missed it.

Jesse 00:39:46 What did.

Hannah 00:39:46 She drop.

Tom 00:39:47 I’m not going to name drop our customers. No Hannah. Glad you named. We can Bleep it. We can bleep it.

Hannah 00:39:51 Okay I’ll wait till we’re done recording I’ll tell you later. Yeah. There you go.

Tom 00:39:57 I’ve had zero bleeps on this podcast, which is really good for me, by the way, so I just want to take credit the.

Jesse 00:40:01 Competitors or our.

Hannah 00:40:02 Customers.

Tom 00:40:03 Jesse, we’re talking two different things at the same time. I was going to say what vendors they were looking at, and I was going to say what some of our customers have done.

Hannah 00:40:12 So like, yeah.

Tom 00:40:13 I don’t want to turn this into a product pitch, but like a career, obviously. What does what Jesse talked about but like Booker is a Google sheet that syncs to QuickBooks. So like these are legitimate firms that are using our books for hundreds of clients have set it up where a query does all the accruals, automatically reconciles with the report.

Tom 00:40:31 Jesse alluded to everything else that spreadsheet based is in Booker, which is a Google sheet syncing to QuickBooks, and then you pull the balance sheet with Wrangler or other app into the same workbook, and you can just use formulas to basically keep things in check and just literally write formulas.

Jesse 00:40:48 You should now mention that we’re about to release a report that if you have activity that’s not booked by that in the balance sheet, we specifically call that out for you?

Tom 00:40:55 Well, not for Booker and Wrangler, but sure.

Jesse 00:40:58 Well for. Yeah, right. For we’re talking about balance sheet reconciliation.

Tom 00:41:03 Yeah I know I’m talking about if you’re using Booker to book entries for PNL and balance sheet, you’re also pulling those same things. Right. And we can do it. We basically already have it.

Jesse 00:41:12 So we have you covered. Yeah. There’s a product.

Hannah 00:41:14 You guys product okay.

Hannah 00:41:16 That I’m legitimately I’m going to connect y’all with our director of it to make sure.

Hannah 00:41:22 They know.

Hannah 00:41:23 He literally talks to you all about it because I’m telling you like it’s been a challenge to to find something like I think we’ve found like and we’ve talked to some people who are like doing pieces of what we’re trying to do.

Hannah 00:41:34 So like we’re trying to do like the whole shebang. And really it’s like we have it’s pretty manual now in terms of our clothes, our book we require for all of our clients, but we’re trying to remove the manual piece, obviously lean in to the AI and how it can really help our folks.

Jesse 00:41:52 Interesting.

Hannah 00:41:52 Didn’t mean for that to go down a hole product like.

Hannah 00:41:55 No, no, it’s fine, but.

Tom 00:41:57 We could talk about that in others. I don’t think anyone wants to hear me, like walk through processes with you on the call, but we can definitely do it with your IT person because I’m curious, like what all the steps are involved in. I’m sure there’s ways to do it.

Joey 00:42:09 And that’s what I like about, you know, not to, you know, inflate geology goes too much. But what I like about what fit optimal provides and why I think not only are you guys cool dudes, but like the way you think about the world is really interesting. Again, I think if you’d had told me ten years ago that QuickBooks online would be able to create its own iOS system, like with different things plugged in and kind of be the centerpiece of it, I would have laughed you out of the building because that product was garbage in 2017.

Joey 00:42:40 But like, you can stack so many different things on or around Cubo right now that like if you’re like, if someone told me, well, I’ll just get sage 300 to do all my stuff, I’m like, why? Why would you do that? Just do QuickBooks online. And you can stack various different things to fit in there. So like I really think the way y’all are thinking about that and providing those tools is super helpful. And if CFOs and bookkeepers and accountants and people who are using these things understand that you don’t have to have one software that does it all, you can literally sit there and say, I can get the best in show for bill pay. I can get the best in show for credit cards. I can get the best in show for payroll, I can get the best in show for automation, and just pick and choose these little bits of your tech stack and smash them all together through QuickBooks online.

Hannah 00:43:29 Like I know you.

Jesse 00:43:31 Log Enthusiast two.

Joey 00:43:32 What’s that?

Jesse 00:43:33 Are you a dog enthusiast too?

Joey 00:43:35 Oddly enough, we have cats.

Jesse 00:43:38 Oh, okay, because I thought Best in Show was specifically for like, dog shows.

Joey 00:43:44 Well, I did, I did love what was that movie? That was with.

Tom 00:43:47 Great point. Let me ruin it by talking about dogs.

Hannah 00:43:52 I. Had you ever heard that he hit.

Tom 00:43:55 Such an eloquent pitch of why.

Hannah 00:43:58 It really was how he fit on.

Tom 00:43:59 The ecosystem. It was like the perfect phenomenon. Hey, Joey.

Hannah 00:44:03 Do you like the distributed.

Jesse 00:44:04 Distributed ERP? We call that distributed ERP.

Hannah 00:44:07 Yeah, Joey Gbo.

Hannah 00:44:08 Was thinking of sponsoring this podcast, but now nevermind.

Hannah 00:44:14 Now we’re gonna get the.

Joey 00:44:14 Westminster Kennel Club dog show that.

Hannah 00:44:17 It competes.

Joey 00:44:17 With. Like.

Hannah 00:44:18 Doesn’t it compete.

Joey 00:44:19 With like, the Masters or something like that? Like it’s always on when it’s like some other massive sports event? Yeah, something like that.

Tom 00:44:26 Joey that’s the.

Hannah 00:44:27 That.

Tom 00:44:28 Concept though is is really unique. And you know, I think that’s what makes Kubo great. And what I’ve found just like interacting with, you know, hundreds and hundreds of firms over the last two years, now that we are selling them, our software is the firms that have an accountant in the tech advisor tech ops role move faster and are so much better just because it’s like, no, like there’s there’s no language barrier.

Tom 00:44:56 The person knows they’ve closed books. The person that is running your tech should have closed books previously. Obviously not a requirement, but it’s better to have someone than to have no one. But to have someone who has closed books puts you so far ahead. So far ahead. Yeah.

Joey 00:45:18 That’s what separates our our director of it. He’s he was a CFO before he kind of ran into that role. So he’s thinking about it from that perspective all the time.

Tom 00:45:27 Exactly, exactly.

Joey 00:45:29 Well, I know we’re getting towards the end of the end of the show here. Is there anything you mentioned that you guys have a new product that you’re kind of rolling out? always want to make sure we get a chance to talk about the cool things you guys are doing, because I really do think you’re you’re more on the leading edge of automation you have been for your entire careers from that perspective. What are you working on? What are your timelines? How do people get in touch with you? how do they follow your other? Not another, not another, another, not another podcast about accounting?

Tom 00:46:01 I mean, since we last spoke, we have three apps that are publicly available right now.

Tom 00:46:05 And like, you know, we wrestle with this all the time because we’ve got other apps that are unreleased. But where we’re really trying to focus right now is helping people who are using these apps and people who aren’t to get value out of them today. Right. We think with a truer prepaid deferred revenue, fixed assets, payroll accruals, Booker, every other journal entry, and Wrangler a reporting app, you can really continuously close your clients books. And while we do have unreleased apps like a payroll booking app that can book payroll a little bit more elegantly than Booker can, you can still do it. Sure, you can still do it with Booker, Right. So like where we’re focusing at least for the first few months or quarters of 2025 is just like, how do we get more people ramped up on these things because we the moment, once that moment happens, it’s like, okay, converted. Like that person is now an evangelist and they’ll go show everybody how cool this stuff is. So just honestly reinvesting in what we’ve put out there, like Jessie was alluding to earlier in a crew report that’ll auto reconcile Qvo and accrual.

Tom 00:47:15 Where right, right now you run a report from a carrier and you look at Qvo to tie it out. But what if it was just automatically reconciled all the time? Right. So how can we just double and triple down and just keep digging that moat? because we have other products that we will release. But for now, like why not make the ones that we have that people love the best version that they can be? Yeah. And I have to basically just fight Jesse every day to not release new apps. He’s like, but we can just.

Hannah 00:47:46 Release this.

Tom 00:47:47 One. And I’m like, no.

Hannah 00:47:49 No.

Jesse 00:47:49 I really do. The product ization efforts very important, as is customer support and being responsible to feature requests and the products we already have out there give us plenty of work to do right now. So yeah.

Tom 00:48:00 But it’s funny because accountants are so skeptical and they’re such rational decision makers that, like, we have so many people now that are like, yeah, we heard about you a year ago, but like, you’re still around.

Tom 00:48:12 So now will actually because because they’re so used to tech just like coming and going and coming and going. So I mean every day there’s a new app born from an incubator that’s going to automate your books. And then five days later they pivot to, I don’t even know what selling watches or something like. They just like are accounting. Stuart I’m just going to go change my mind entirely. So I get it. People are kind of tired of apps coming and going, but now that they know we’re here to stay, I feel like way more firms are like, all right, let’s do this thing.

Joey 00:48:40 Well, I think that’s what separates y’all is you all are actively using. You’re not just developing your own products, you’re actively using them in your practice, which I think is a huge like a that’s a that’s a massive like, you know, again, analogy time. If I’m going to a restaurant and the chef doesn’t eat his own food, I’m a little nervous, right? But if I see a fat chef back there, I’m like, oh man, this is going to be a great, great meal, right? Not not to compare you to a fat chef, but we.

Hannah 00:49:10 Are the fattest.

Tom 00:49:11 We are the fattest chefs in the world.

Jesse 00:49:14 Guys, I apologize. I do have a hard stop. It’s really nice to to see you again. Joanna. Thank you so much for having us back. and, we’d love to talk some more soon.

Joey 00:49:26 Thanks, Jesse. Appreciate you.

Speaker 1 00:49:27 If you’re a young CPA looking to develop in their careers, we’re always looking for great people. Visit our website for remote work opportunities with Anders Virtual CFO.