15-Year-Old Passes CPA Exam & NY Requires Independent Audits of AI Hiring Processes

As a small business owner, I've had my share of accounting, tax, bank feed, and app issues. Some kids say I'm a mess, kind of like some of your clients, but as a reflect in the last three years of my business, the one app that I've had not any problems with is on pay. It's been said it and forget it payroll. Stay tuned to hear more from our sponsor on pay later in the episode. So easy prediction for the next few years. We're going to see more and more partnerships turn into corporations just because it's easier. And when you actually look at the conversation structure for partners in a lot of ways, they're already like employees. And there's this supposed equity, but that only gets paid out to you when you retire as this deferred conversation. Just get rid of it, right? That makes sense to get rid of it and just pay people out what they earn. Stay tuned to you weekly from the on pay recording studio. Hello and welcome to the cloud accounting podcast. I'm Blake Oliver. The former accounting podcast, now the accounting podcast. No, I did it again. It's going to take practice. All right. Welcome to the accounting podcast. I'm Blake Oliver. And I'm David Leary. Happy Fourth of July. Yeah. Happy Fourth of July. I think we saw each other in St. Louis, it's going new heights. Holiday week has been crazy trying to schedule to get this episode recorded. But we finally are back at our houses, not remote anymore. And yeah, I went to LA. It was hot in LA. And then I went to Disneyland. And it was actually not too hot at Disneyland. Took my eight year old. My wife and I went and we had a blast. We're practically Disney adults now. I think we've been three times in 18 months. We're definitely part of that pandemic revenge spending group. But you're not going just you and your wife. You're taking your kid. So yeah, we're taking, yeah, I mean, we have, we have an excuse to be there. Although you don't need that anymore, like you can just go. You can be an adult and be into Disney. And like the world is a wonderful place now. It was great though, like the lines were really short. I think everybody went on Fourth of July. And they have all the technology now at Disneyland, where you know, use an app to book your place in line. And so a lot of people do that. So now you don't have to wait in line anymore. You just go and spend money in the park. You know, you go shop, you go eat. So even though the park was super busy, the lines were not very long. And yeah, we did everything we wanted to do. And now you're back in 150,000 degree. Yes. Now we're back in reality in Phoenix. It's a hundred and I mean, it's like there was an article in New York Times about how like we might beat the 18 day streak, I think, is the record for days over 110 degrees. So we're aiming to beat that in the next few weeks. So I'm inside and I have nothing to do, but record podcast episodes. So I'm eager to talk about all the news with you, David. And so I did my traveling myself. I went up doing a destination wedding at an all inclusive place. And it reminds me of what you talked about, like, bundling, you don't really know what you're paying for stuff. It's all bundled up on one price at the end. Oh yeah, last time it's our last episode. We talked about the benefits of bundling. It's really hard to fairly, like, did I get my value or not? Do I want to spend this? Or could I just eat the buffet for free? It plays a lot of price games in your brain, but eventually through these travels, I went up in Chicago, daughter played in the National volleyball championships. I was there for Fourth of July. And this time of the year is beautiful in Chicago. Oh yeah, it's great. That's the reason I went to college in Chicago is because I visited in the late summer. And I was like, even like, looking at, I was like, maybe next year I just go there for a whole month and we can never be in B when it's super hot in Arizona. We just go down Chicago in the summer, but I did remember what you said about winters there. And maybe it's not a good idea. Yeah, don't spend it all year there if you can avoid it. And the one thing in Chicago that I noticed they were doing that is kind of a holdover from COVID. And then maybe you can do this with your own clients possibly, but they auto opt you into an extra service fee. So this is not a tip. It's just 3% extra they stick on your bill. Is this every restaurant? Not every restaurant, but a lot. And what's the, what do they call this charge? Every restaurant explains it slightly differently, but they frame it as a way to pay for insurance for their employees. Now you could ask to have it removed so you could auto opt in charge. And I was like, well, what did you do that with clients? They're just like, hey, we're gonna charge you this extra fee every month. And so you ask us not to charge you. We had one of those, we called it our technology fee. And it wasn't my firm, it was at the big firm that I worked at. And we just added a surcharge to every bill. And if a client complained about it, then the partners would generally remove it. So I think this is not, I don't know if it's common practice, but it definitely happens. Did you ask to get your charge removed, David? No, because every time I, even though it's on the menu, they disclose it before you order your food, but then by the time you eat and you get your check, you forget it. And then, but that time it's too late. Well, the big news I saw over the fourth of July weekend was that a 15 year old in Mississippi has passed the CPA exam. Jimmy Chilamegris, a 15 year old from Mississippi, has become the youngest person to pass the Certified Public Accountant exam. He graduated from high school at age 12 and obtained a bachelor's degree at 14 and then completed the exam in just six months. He plans to specialize in tax law and hopes to use his accounting skills to help people with their financial problems. He studied about five hours a day and advises others to continue living their lives while preparing for exams. Wow, 15. Yeah, and he knows he wants to be a tax attorney already. And I guess he, I think I saw that he passed the bar as well, like something, I mean, he's gonna, he's going to, oh, he passed, sorry, he didn't pass the bar. He crushed the law school admission test and he's going to attend law school at Loyola University in New Orleans this fall. So he's gonna go back to school. He's not gonna go work for the big four because I was thinking about this. This could be the window to expose because there's a lot of child labor laws for 15-year-olds. Uh-huh. And like if he went to work from the big firms, they won't be able to work him 80 hours a week and this could be a, this could be the exposure that people need to see about the working conditions of big firms but he's not gonna take a job. Don't feel too bad if you're listening and you feel like you're not a high achiever because he did have to retake one section. He had to take financial accounting and reporting twice after coming up two points shy of passing with a 73. Oh, well, there, I've got that on him but pretty impressive, yeah, the youngest ever. He got an article in Journal of Accountancy. So, I mean, it makes less impressive about Chadate GPT passing it now. 15-year-olds can pass it. Well, what else, what else is new? What else? S-M-A-I news? Yeah, we gotta talk AIB actually. I just remembered we got some listener mail. We got an email and a voicemail. So, perfect, let's get to that. Let's, let me read this email first. This came from Jennifer. Aloha, I believe I heard that you are using TurboTax Live's new service for S-Corp tax preparation and you are going to be sharing your feedback about your experience with all your listeners. I was super excited to hear about this and would be extremely interested to find out what the client experience would be like for that service. Can you confirm if anyone at TurboTax or Intuit is aware that you are doing this? Because if they are aware, then I'm sure Intuit will give you the white glove service and this will be a very biased and unauthentic test which really can't be used as an expectation of how someone else's experience would be with the same product. And honestly, since it was announced on the air that you're doing this to your very large audience, I would have to assume it's extremely unlikely that the staff at Intuit are unaware that this is going on. In the worst case scenario, even if you do get the white glove treatment, we can just view the results of this test as the best case scenario and then maybe others can call in and share what the non-white glove treatment was really like and how it differed from your experience. Looking forward to the results, Mahalo, Jennifer Drought of Aloha Accounting and Tax. PS, you guys are the absolute best. The content of your podcast is extremely relevant, valuable and always interesting. As the solo owner of a very small firm, I'm so grateful for this content. Thanks for listening. Thank you, Jennifer. Would you say that we got what the glove service? I don't think we did. And video. That video is still forthcoming. I don't think that are prepared new who we were. So thank you, Jennifer, for stroking our egos there with the large audience, but I don't think our audience is large enough where the random tax repair that we were assigned into it, TurboTax, knows who we are. And my guess, and this is this like great leadership, poor leadership. Like there could be possibly a leader in it maybe no we did this. And a good leader at a company or a firm would step back and just see how it plays out. So they have an honest view of their own company versus the white glove thing. So I suspect yes, somebody in into it probably knew we did this. As far as we can tell there was no interference or contact or anything like that. So stay tuned. We still have not released the video. We're putting the final finishing touches on it. And I hope to have it for you very shortly. We will let you know on the podcast when it is available. And I guess like what would be the best way for people to get notified when that happens? Join our email list. Join the email list, follow us on all the socials. Follow us on social media. Go smash that subscribe button. That's what all the kids say these days. Smash that subscribe button on the YouTube. And in the video go out on YouTube and you can actually see the windows in the screens. But we also probably just take the audio and just shoved into the podcast feed as well. So that's what we'll do. So just stay tuned to this podcast and you will get to hear what our experience was. All right, now we have a voicemail from McKenzie Patel who we got to meet at Bitwaves Enterprise Digital Assets Summit in Austin. I think it was in Austin, right? She had the best presentation. I remember all the presentations. It was great. So here's McKenzie. Hi, Flightkin David. It's McKenzie Patel, founder of Hashracist. We briefly met at the e-bass FitWave conference back in Austin in April. And I think I told you I'm a YouTube fan of the accounting podcast or marketing general. And so I wanted to share some of the highlights with our learn so far. So first off, all your conversations about GPP and helping to use an accounting artist of fascinating, I'm a big fan of AI. I've actually been using this tool called Prophexity to help a lot with accounting questions in my practice. I especially love your ethos to have GPPT with that up to fail the CPA exam because, well, of course it was. There's no way GPPT wouldn't pass the CPA exam if it could pass all of these other tests. And for someone who's grown up with Digital Technology all of my life, I'm so excited for GPPT to automate most of my works that can focus on the highest level of accounting, like overall strategy for my clients. And really just being their financial counselor and partner. And so second off, I didn't even know that there was a college shortage in accounting. The first time I heard about this, I was honestly so shocked. I graduated from the University of Florida in 2020. And US is a massive feeder school for the big four, especially for the Tampa, Miami, and Atlanta offices. And so there was Chick-fil-A catered almost every day to the accounting building. And all of my friends had job offers by their junior year, basically all of them. But now is that I've learned about the talent shortage. This, I guess you could call it a courtship, but makes complete sense. Now, I think only one of my friends from UF is still at the big four. I'm with three years, and we graduate then. So this upper out system, and if three burnout is quite real, which is why I chose to skip the big four experience altogether. And so again, I'm going to talk about the talent shortage a lot, but I read something the other day that I want to share with you. So I just finished reading this book called Managing the Professional Service firm by David Meister. And it was published in 1993, so it was 30 years ago. This book is all about how to run and manage a professional firm, like an accounting, or legal, or architecture firm. And some parts of it are pretty old school, like the billable hour model. And thanks to you guys, I know all about value pricing and subscription model pricing now. But there was one particular part I was honestly flabbergasted about. So chapter 18, it's entitled Surviving the People Crisis. And David Meister explicitly talks about the impending talent shortage, and he called us out 30 years ago. Now, for starters, his reason was purely demographic. So one of the quotes is, in every developed economy, the percent of the population in the 25 to 34 age group has started to decline from its 1985 peak. It will continue to fall over the next 20 years. And the US is groupled to climb from 23% to 17% of the total population in the next 15 years. In the 70s and 80s, there was an abundance of young workers because it was a baby boomer generation, right? More women were also working. So the worker's supply was cheap. So then I asked TPPT about the same demographic in 2021. And it says, as of 2021, 14.2% of the US population was between the ages of the 25 and 34. So I have to draw so about 8% of young educated workers that all these big firms are relying on. The book didn't get into burnout, overwork, will pay, et cetera. On contrary to the supply of workers, or since the seven supply workers was short and it was the completed salary for all these new workers, it was clearly not happening, right? So my friend who started working in the big forum, I think his friend's salary was 62. K here was one of my other friends who was a software engineer and big tech earned a hundred in turn came as a starting salary, so quite the difference. And so the book goes on to say, quote, the real impact of the people crisis, they'll be felt and absorbing the high cost, that will result from competition for educated young workers and continue to make the professional firm career path attractive. In an environment when mid-level employees will receive numerous head-hunter calls. So it seems the billing pattern means the same for new friends with the wages have not been insured and increased to match this short-needs supply of workers. I can definitely see how his day is coming to the big forwards able to hire mostly my entire math class, particularly my family and three happy hours, which I think are less expensive than a hundred can take per year for new hire. But finally, Diven may start with some strategies to combat his people short as. And the principle was to hire a pair of professionals which he defined as people who did not have traditional qualifications. It can be hired at the lesser cost than the traditional group. So the kind of predicting the outsourced or offshore labor or international revisioning still a U.S. labor force, maybe without a fee fee or a master's degree. When reality, it was taken outside the U.S. And they also mentioned a related solution to hire non-traditional candidates. And so the officers, these people don't really want careers. They're fine with working at the same job. I really just not having the same pressures as trying to advance an upper-up system. So for example, hiring people in their, let's say, 40 or 50s who are working for their, are looking for their second career or a mom's wrenching over force. Again, I think both viable strategies. And instead of going work to get more technologies, the author meant in getting a computer to do the processing, which is kind of funny considering the whole cloud accounting ran us on in the past 10 years. But of course, obviously tied back to AI and the potential it has for a county. So again, thank you so much for all the work you both do for the accounting podcast. It was so great meeting you both in person. And it's been eliminating and truly the best way to keep up to date on what's going on in the accounting profession. I really think the talk trash should be a requirement for any accountant out there. So all right, thanks again so much. Have a great day. Wow. That was a great Christmas meal. Thank you so much, Mackenzie, for all that info and for listening and for the kind words we really appreciate it. It's funny that the talent crisis has been the slow moving disaster for years and years and years. And maybe that's why nobody has figured out what to do about it or done anything like really meaningful because it's just been very slow. But yeah, I mean, the baby boom population issue is just one part of this. And that should be the only part of this we should have to deal with. That's what precipitated all of this. It's fewer young people have more options. There's fewer workers and there's plenty of jobs and so they can take their pick. And they're not gonna pick the ones that make them work long hours for low pay. It's really simple. Not how much chickfully you get. No matter how much chickfully you get or how much you talk up how great the profession is people are very simple. They don't want to work 60 or 70 hours or 80 hours and they want to make good money. And they can do that. If they were correctly, everyone in our Mac program went to work for Big Four and one still does. Well, and that's the way those firms work, right? Most people spend two or three years there and then are out. The problem with that is we need to count and not just at Big Four firms. Like they may be having their needs met because people are willing to go there and work a few years for a low salary because they're getting that resume experience. They're getting that very valuable bid for experience on their resume. But what about all these smaller firms that there's nobody left for them? Or what about all of these cities and corporations, the smaller businesses, the main street businesses that don't have enough accountants? Well, I think a big issue, right? It's fine if people want to go to the Big Four and get some experience and then they stay as accountants and work in other parts of the accounting industry. But I think the problem is the experience is so poor that they just bail from accounting entirely. And that's what the evidence shows is that we have a retention issue when it comes to the big firms. They're churning and burning people and those people are leaving entirely. Yeah, because they don't want to work the long hours anymore. Nobody wants to work long hours. Why, why should they if they don't have to? Just because you did it doesn't mean that other people are gonna do it. You did it because you had to. I mean, I'm not talking about you, David. I'm talking about the... I don't know how you do it. Yes, yes, yes, you being... We, we are the, it's because I'm older. So you're like, I'm like, oh, David, you'd be a stereotypical white male senior partner at a firm if I was in account. There you go. Well, speaking about change in our profession, there's a big change coming to one of the largest accounting firms in the United States. BDOUSA is shifting from a partnership to a corporation. I spotted this in CPA practice advisor and I guess it ties into your Chicago trip because they are based in Chicago, David. So Chicago based accounting from BDOUSA LLP will change its name to BDOUSAPA on July 1st. I guess it already did. As it transitions from a partnership structure to a professional services corporation based in Delaware, this move will provide advantages such as lower corporate tax rates, simplified tax filing for partners. So basically all the partners are now gonna be employees of the corporation and they'll get a W2. And they've said that they have no plans to pursue a private equity deal. So it doesn't have anything to do with that, at least on the face of it. There's six largest accounting firm in the US by revenue with 2.49 billion in revenue for the 12-month period ending April 30th, 2022. So easy prediction for the next few years. We're gonna see more and more partnerships turn into corporations just because it's easier. And when you actually look at the conversation structure for partners in a lot of ways, they're already like employees. And there's this supposed equity, but that only gets paid out to you when you retire as this deferred conversation. Just get rid of it, right? That makes sense to get rid of it and just pay people out what they earn. And the other advantage of this, and maybe BDOUSA doesn't understand this or who knows where this is in their plans, but once they turn into corporations, they now can offer ownership to lower-level employees that are not partners now. I mean, theoretically, they could, yeah, they could shut up to you, right? They could offer options. And that'll be the next thing that happens, right? Is to retain managers, we're gonna start giving them stock, and then maybe even the staff will start earning it, which is great because it's sort of tearing down this barrier, this wall that's always been between partners and then everybody else, right? Partners have equity, everybody else does not. And I think we're gonna have to start offering equity to more and more people if we wanna keep them. Just like tech companies do. This episode of the Cloud Accounting Podcast is sponsored by OnPay. OnPay is built for accountants. I'm a 30 plus years of payroll experience. They can be the payroll partner you can always rely on. They offer a dashboard to manage all your clients in one place, and when I say manage, I probably should say balance that fine line between control and delegation. OnPay lets you keep 100% control. You can delegate payroll to someone at your firm or hand off payroll duties to your client. But no matter who runs payroll, OnPay always takes care of all tax payments and filings, even local filings. And with integrations with QuickBooks Online, Zero and QuickBooks Desktop, you can use OnPay across your entire client base regardless of the accounting GL they're using. OnPay's partner program offers free payroll for your firm, discounts or a rev share, and a dedicated support team of in-house payroll experts will do all the heavy lifting. From setting up your dashboard to adding your clients and their employees, they'll even enter any prior wages to make it easy to switch. If you're looking for a great product with great support to match, check out OnPay. To learn more about switching your clients to the award-winning OnPay payroll in HR, head over to cloud accounting podcast.promo slash onPay. That is cloud accounting podcast.promo-forward slash O-N-P-A-Y. OnPay, switch to better payroll. And I don't know if you saw it, if you wanna stay on the big four with EY, so they've officially announced, I think it's really, really official now that they've called off a project Everest. You know, they were going to separate the two? Yeah, it was official. I think it's officially off. There was even an internal note that was seen by the BBC. We acknowledge the challenges with separating some of our clients from the start. BBC, we acknowledge the challenges with separating some of our businesses that have the deepest technical expertise in a way that gives both organizations the capabilities they need to compete in the market effectively. So they kinda couldn't figure out how to do it. Yeah, I didn't yet. I got more EY news. Apparently, despite Project Everest failing, they are the number one audit firm in terms of public company clients. EY audited the most public companies registered with the Securies and Exchange Commission between March 2022 and May 2023, according to an analysis by audit analytics. It's pretty high, 14.4% of all SEC registered public companies. And they gained 25 new clients over the past year. The big four, of course, EY is one. Dominated the market, share of large accelerated filers, auditing 88% of this market. Deloitte is the top audit firm of both accelerated filers and non-accelerated filers. So, depending on how you decide who's the biggest or got the most, it's either the delayed or EY. I don't have anything else in the big four. Or even top 10 per se. Well, stay tuned for our next episode featuring our guest, Meryl Johnson, of bean ninjas, because she's in Australia. And we're going to talk to her about what she thinks about the PWC scandal in Australia. So, I will save all of the latest news on that for next episode. For next week, next episode. So, we move on to tech news. Yeah, or AI. We can jump into AI. So, this is an article that was in computer world on June 26th. Microsoft's co-pilot. So, that's going to be, I think it's called M365 now. I think it's what it's called. It's not Office 365. It's Microsoft 365. And you get a giant suite of 10,000 things. All for Microsoft, which is good, because that's what firms have. So, the M365 co-pilot system consists of three elements. Microsoft 365 apps, such as Word, Excel, and Teams, Microsoft Graph, which includes your files, your documents, your data crust, all your Microsoft 365 environments. So, think about folders on your network, folders on your hard drive. There's going to have some sort of co-pilot navigating between all those documents. And then, they're open AI models, which will be the user-prompti. They're through open AI's Chatchee BT, Chappee BT4, Dolly, Codex, Codex, and Embeddings. So, they're all, these models are going to take place on the Microsoft Azure Cloud. So, there's kind of three co-pilot waves or products that are coming out. Right now, it's available in an Early Access Trial. So, Chevron, Good Year, and General Motors are all testing the new AI assistant in Office 365 right now. So, they're already testing it. And they ran an apply. Sorry, I don't mean to interrupt, but I saw that it's available now as in the, if you've got the developer build, like the beta, basically, versus Windows. Yeah, now you can start using Windows co-pilot. So, like, you could do it right now if you sign up for that. It's not a risky build of Windows, but yeah. I saw the reviews, though, and the reviews are like underwhelming. People are saying, comparing it to some of these assistants, like Clippy, where it actually can't do that much yet. So... They said it's like Clippy? Oh, man. I hope it's not... I hope it's not another Clippy. That would be so disappointing. And they said, ahead of its full launch, they will roll it out in small things. So, you'll see some of it in one note and one drive and SharePoint. Viva, I don't even know what Viva is. VIVA. That's like their HR tool. But I don't think some of those videos and some of the features we think it's gonna have could still be way off. Yeah. So, right now, you can use it. And it's basically, it gives you access to some Windows features, like the ability to change some settings, but not all. Here's a quote from PC World. Windows co-pilot has been programmed to cut through all the clutter and menus and to do what it tells you to do. So far, unfortunately, we've got a lot of options, which includes switching to lighter dark mode, taking a screenshot, and little else. Frazing occasionally matters too, just as some chatbots can be fooled into following an action, or questioned by refrazing it, co-pilot refused to switch to light mode once when I phrased it poorly, though it then learned and didn't repeat the mistake. Advanced users probably won't see much value from this as they can either navigate quickly to whatever sub menu they need, or though this is extraordinary. Windows has always lacked a robust help function, and this is an opportunity to help users do what they want to do full stop. So maybe this is the promise of Clippy finally realized. I think, you know, AI could be used like for copy paste. Like think about these repeated actions you do all the time. Like it should just, Windows should start guessing when you highlight something that you probably want to copy it, right? You know, you could just have like QuickBooks or zero open in a tab in Microsoft Edge and you could chat with Windows co-pilot and tell it to do things, right? And it could recognize the interface and understand what to do. It'll be like having a RPA tool. That's the real promise of it. It could actually layer on top of all these websites where we do stuff. And so you could basically tell it to run a macro. You could describe a macro and have a- Chris, say create an invoice with this stuff or just create the invoice who open up for it. Yeah, it does all the clicks. It does all the keyboard input, right? That's exciting. But we're not there yet. No. And to it released a press release. And I'm going to really just say press release because it basically says nothing. But here's the headline. It says, and to it supercharges and to it jenoes with open-airs large language models and so it sounds like we talked about how we didn't have a couple of past couple of episodes how into it and their jenoes what they're building, how many AI patents they have and all that. They're opening this up to open AI and chat GPT. Like, is it a plug-in? Are they going to? Is that going to appear on an Intuit site to interact with financial style data? None of that's very clear. That's about all. A press release to announce we're working on it. Hey, at least, at least Microsoft released something. Good for them. Speaking of companies that have announced that they are working on things, Thompson Reuters says it is adding AI to its tax software. According to a story in accounting today, Thompson Reuters plans to invest 100 million per year in artificial intelligence starting next year with a focus on integrating the technology into its tax research and tax preparation systems. The company has already made significant investments in AI. They acquired an AI legal assistant startup called CaseText for 650 million. They're going to use AI to create more efficient workflows, provide faster and trusted answers, blah, blah, blah. This episode of the Cloud Accounting Podcast is sponsored by Relay. Relay in myself, we now have 3, 4, or maybe 5 business entities, 20 or so checking accounts, and dozens and dozens of virtual cards. It would be impossible to manage all of this we weren't using Relay's or small business bank. Relay is truly a part of the tech stack we use to run our 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 baking needs without ever going into 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, just a few clicks, and I instantly had access to my ACAship vote to give to my payroll provider. With Relay's virtual cards, we can issue debit cards to our team around the world for 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 their card, I can freeze it until they need to use it again. To learn more about using Relay in your firm and to learn more about Relay in your firm, visit our website at www.relay.com or visit our website at www.relay.com or visit our website at www.relay.com or visit our website at www.relay.com or visit our website at www.relay.com or visit our website at www.relay.com We're going to see a lot of companies just make AI acquisitions because it's a as a hiring technique. I think I saw a ramp, you know, the credit card, charge, business expense app. I think they acquired a AI startup as well. I think we're going to see a lot of that happening. I think we're going to see a lot of that happening. But speaking of AI that's actually been released, did you see that Avalera launched a sales tax calculator plug-in for Czech GPT? Yes, and I played around with it. Oh, you did? Yeah. Well, you can ask it to calculate the sales tax for a particular transaction and it'll ask you for the address and it'll give you the right. So their plug-in is doing a math or just giving you the rate based on the Nexus. I think it can do the math and I don't remember exactly what I did because I did it like a week or two ago. But yeah, I mean, basically it's like talking to somebody who knows the sales tax rates. Now would you try? If you're an end user that has chat GPT and you do this plug-in is a special plug is a special instance of chat GPT that you only ask sales tax stuff too or does it just supplement your whole chat GPT experience? No, no, so the way it works is yeah, I would say it's the second. It's the latter. So you log into chat GPT and you install the plug-in from the store and then it enables the chatbot to have access to Avalera's database so it can go query for you and then you can have a conversation with it. So maybe that's how the intuitive stuff might be where if companies with some proprietary knowledge could open up their data to chat GPT, it really makes chat GPT that that's more useful. So this is a great example of expanding chat GPT's database to current information through Avalera. And the same thing could be done for a tax research. Somebody could create a plug-in that gives you access to the current internal revenue code and then chat GPT could use that to go do research for you. The era of massive hallucination and out-of-date information will come to an end once the database is current. And these plug-ins are being utilized. So if you're a big firm and you're a senior partner with some special expertise and some tax thing, you're super-specialized and I don't know. I'm just making something up because I don't know. This is why I'm a podcaster. So in terms of a term that the technology and resources could capture your knowledge. Maybe you have an Word Dox who knows? You just have a lot of this knowledge. You could put that in as a plug-in and other people in the firm could install your plug-in in theory instead asking you questions directly could use this to pick your brain for a minute. Yeah. Yeah. Yes, you can't right now, it's trained on old data, but you're going to be able to very soon it. We're all going to be using it every day. I'm convinced, I'm already using it every day for non-accounting and tax stuff. It's just a matter of time until it gets the information in there to do that too. We're all going to be using it. Checking fast, I used it on an airplane flight. What did you use it for? So with earmark, we have a back end that's not very useful for getting data out of, and it gave me the results in a format called JSON. And I wanted to put it into Excel. And Microsoft has like an importer, and I didn't have patients to go through the wizards and fix the fields and get to import correctly. And I was like, you know what? I bet ChatGPT can do this. So I opened up ChatGPT, and I said, take this JSON, I just pasted it in and make it a CSV file. And then that didn't work because we have episode titles with commas in the name, so that I said, do it again with pipes, you give it to me, it brought it into Excel like nothing. Do it again with what? Pipes, you know, the little vertical pipes as the door, in between the fields instead of commas, imported right into Excel like nothing. And so that's where this gets really powerful because what used to take lots of clicks, and this sounds dumb, but it used to take learning, and I have to learn how to do this, and it got me to the same ends, right? I got what I wanted out of it, which was this data over here into Excel on the table the way I need it, right? Well, continuing on with AI, you mentioned that a lot of these AI acquisitions are aquahires. Google lost an exec to Gusto. Gusto hired the former global head of data science and analytics at Google, Jeremy Welland, and made him the company's new head of data. Wow. Yeah, so big win for Gusto, I know that they are, they're likely looking to go public soon, so they're building the team up to get that, you know, big company expertise. And they're starting to build a bigger data play beyond just running payroll, right? They bought a payroll calculations company now to where they could start offering services like Avalera does for sales tax, but for payroll, right? And so they're, they're just not a payroll company anymore, payroll app if you want to think about it that way. I got more AI news. Tax file has released an AI tax prep bot. It's a generative AI tax prep bot that will streamline the tax filing process. It uses artificial intelligence to automate various tax related tasks, making it easier for users to file their taxes accurately and efficiently. What else does it do? So the main thing that it seems to do that is exciting is it will look at the last year's returns and then figure out what to ask for this year, which is what we've talked about as a major use case, David, creating the tax ordinance request, yeah, the creating the tax organizer, the checklist. And so the way it does that is it does OCR, you know, converts all that text into tokens and then runs them through the model to figure out what do we need this year based on last year's return. And it will create a tailored checklist of clarifying questions and required documents. At the same time, the model can also monitor chat communications between the client and professional, identifying key information, addressing queries and highlighting any potential areas of concern that require human attention. That's according to a story in accounting today. So I don't know. It's exciting to read that. I wonder how it works in real life if any of our listeners have used tax files, AI, tax, botter of access to it. I would love to hear what you think about it. Well, it also feels like it's out of season right now too. Right? Are you in that communication phase with a lot of your clients right now? Which is good, because then people will tip to in the water but it'll be next busy season. There's gonna be a lot of apps doing this. Yeah, next May when we record this podcast, there's gonna be crazy stories we're gonna have about the way people use different parts of AI to prepare taxes. There's also a new AI law in New York. We're starting to see some of these reactionary, what's the word, reactions to AI. So in New York, well, let's just step back for a second. I think a lot of companies are using some sort of automated processing for parsing through resumes, for job applications. And they've actually been doing this for a long time, not just with AI, just with automation, right? If somebody doesn't have the right experience when they submit an application, automatically reject them. Nobody ever sees the application. And these are incredibly valuable tools because you might get 500 applications for a job and there's no way that you as a business owner or a firm owner are gonna be able to like sort through that, right? So you have the tool that you're using, we doubt 90% of them, so you only look at 50. Well, a lot of these tools are now adding on AI, which makes it even more sophisticated. And in New York, there's a law now. It's called the automated employment decision tool law that requires employers to inform candidates if they are using AI in the hiring process. And they have to undergo annual independent audits to ensure their systems are not biased. Because that's one of the complaints about AI is that it copies the biases that we have. You're training it on? Yes. Because it's trained on data sets that are human generated and humans may be biased. Violations can result in the fines of up to $1,500. Proponents see it as a positive step towards regulating AI and addressing discrimination. But public interest groups, civil rights advocates believe the law is under inclusive and may not cover all uses of automated systems and hiring and the effectiveness of independent auditing is also questioned. I found the independent auditing part really interesting here. Like the fact that businesses are gonna have to be audited for their hiring practices. Like how is that gonna work? Is that an opportunity for accounting firms to do these audits? If you're in New York, I would be looking into this because it could be a gold mine. All these businesses are gonna have to get audited who's gonna do those audits. The mandated audits will have to evaluate whether the output of an AI system is biased against a group of people using a metric called an impact ratio that determines whether the text selection rate varies across different groups. The audits won't have to seek to ascertain how an algorithm makes a decision. And the law skirts around the explainability challenges of complex forms of machine learning like deep learning. So like, this is an opportunity for the AI CPA, actually. So just like there's the SOC two compliance. Yeah, like create some standard for AI ethics, I don't know. And they could have a little badge, they could sell. A lot of firms get to jump into this business model now. Yeah, this seems like a perfect opportunity to create more work when we don't have bodies to do it. There's a trade group called BSA, which includes Adobe, Microsoft, IBM. They are criticizing the law, arguing that the third party audits are not feasible. Here's a quote from the executive director of stop, Albert Foxconn. There's a lot of questions about what type of access an auditor would get to a company's information and how much they would really be able to interrogate about the way it operates. It would be like if we had financial auditors, but we didn't have generally accepted accounting principles, let alone a tax code and auditing rules. So we've got this new law that requires independent audits of AI hiring practices. But no guidelines. No guidelines. AI can create those guidelines. And they can use AI to perform the audits, like take care of it. Have the AI do the audits. This episode of the accounting podcast is sponsored by Ford Lee. Are you tired of waiting for client payments to clear and being stuck with slow ACH transfers? Fustrated with paying high fees for credit cards? Stop being stuck with slow payments and say hello to the future of real-time payments with Ford Lee. America's first instant business payment solution. Before Lee, accounts in the USA can receive small business payments instantly in their bank accounts and manage cash flow and simplify accounting with automatic reconciliation. Best of all, Ford Lee allows you to receive faster payments 24, 7, 365. With competitive processing fees, generous partner rewards and no commitment required, Ford Lee empowers you to build a modern practice with happier clients. If you're ready to liberate clients in yourself from the expensive credit card fees, the limitations of bank hours, holidays, weekends, and are ready to embrace the future of real-time payments with Ford Lee, hit over to cloud accounting podcast out promo slash Ford Lee. That is cloud accounting podcast out promo of Ford slash F-O-R-W-A-R-D-L-I. That's, yeah. I've some app news you want to jump into some of that. I thought it was interesting. Let's go. So one is high level, and it's interesting because we removed the word cloud from the name of our podcast. And I remember the early days of cloud. One of the fears people had was like, oh, then the IRS can just connect to the server and see whatever they want, right? And there was this logical or ill-logical fear of that happening. Well, maybe those people weren't so tinfoil-habit after these two stories I saw come out this week. So one of them was Kraken, K-R-A-K-E-N, which is one of the cryptocurrency exchanges. Oh, Kraken, Kraken, sorry. There's no C-K, it's pronunciation, but the way it's spelled. It's like K-A-K-E-N. Like the mythical monster. The Kraken monster. The sea monster. So cryptocurrency exchange Kraken, Kraken, Kraken. Kraken, Kraken. Was ordered by a judge to provide a wide swath of information about its users to the IRS for the agency's investigation of an unreported tax liability. Now, I wasn't going to bring this to the show, just that story. But there's another story that has occurred. Now this is in Canada, but Shopify vows to fight a C-R-A. That's the revenue agency, the IRS of Canada, requests a handover record for more than 121,000 Canadian businesses. I heard about that story. So the IRS of Canada, the C-R-A, wants Shopify to give them data. Do we know what data they want? No, it's not very, they want six years of back channel records for leading Shopify stores. Wow. And the founder, Shopify CEO, Tobias Lutki, he's going to fight this. He thinks it's overreach, but this is going back 15 years ago when people clouded for sort of coming. And now these fears are happening. Right. Give me 100,000 records, boom. The fear is, if you have your data, your accounting of finance data in the cloud, that the government can come and ask for it, demand it from the service providers. So go get it. Just keep getting it, right? Go get it. If you want 100,000 QuickBooks desktop files, you've got to like, there's some work on your end to go do that. But now they can just get swaths of records like this and just pile them all in. Yeah, I don't know. I guess they could always have done that with desktop files, right? They could, you know, demand your QuickBooks desktop file if they had the authority to do that. 100,000 separate times in a row, they'd have to do that. Right. Oh, as opposed to just making a demand from, yeah. Yeah, that's true. That's true. So it's kind of that. That's an interesting thing that's kind of happened bubble up. And then what's another interesting thing that I saw? Do you remember Rackbook we've talked about them before? They're like movie, movie production payroll? Yeah, specifically for film and TV production companies. Yeah, so now they're moving out into expense tracking and tracking receipts and purchase orders on movie sets as well. So they're turning into a full-blown accounting system slowly, but surely. Obviously they would never do the revenue side probably. Yeah, but all the expenses that are happening in a movie, they're tracking that. And then here's another one I thought you would find interesting. There's an app that was, I never really saw it get traction here in the States, but I guess in the UK and maybe down under, it was an app called Timworks. Have you ever heard of this? Timworks, no. So from the best I could tell, it's like a chat app. So if I'm using zero and dexed and auto entry and I need to clarify some conversations about a transaction, it's like a chat program for you and your clients. Well, they completely shut down. And the reason they shut down is no matter what they could do despite their best efforts, they could never really get clients to use this tool. So that's the big trick with all of this stuff. You roll out things for your client and they just don't use it. They don't use it. That's a big problem with portals. It's always been the problem. Half will use it, half won't. And if half don't, did you really get a lot of benefit out of it? So then we think like, oh, the onboarding portal, right? Your tax organizer, in fact, becomes in chat GPT, are people just not going to want to interact with that either? Like, is it just, are people fundamentally just lazy? Yes, people are fundamentally lazy. We need to recognize that. And you've got to meet them where they are. But also, as a firm, you've got to have limits. And so if you're going to use a tool like that, you need to say to every client, you must use this tool to communicate with us. And you're not allowed to use any other means to communicate with us. So whatever you choose has to be full featured enough to work for that. That's why I always say that anyone who makes a client portal needs to figure out how to integrate email. Because ultimately, you're going to have situations where somebody has to email you something. And then it goes outside of the tool if the tool doesn't have email integration. Now, when we did our TurboTax live, did we have to use email? Or was everything through the tool? We couldn't use email. We had to use it through their tool. I guess that was a, I guess I'm wrong. That was an example. But they had to call you, right? They called yourself directly. Right, and I couldn't call them. But the only way I could communicate, the only way we could communicate with our taxpayer was through their chat-based tool portal. So if you force the clients to do that, it works. We had no other option, no other way to do it. So maybe in the answer is we need to be tough as firm owners. I've thought about that before. Intuit a lot of these events. Sometimes we'll have a special area for pro advisors. And it's like a journey or a special room. And one of them, the one year, the theme was like, getting your firm fit and all these things. And I was like, one of the things should be like a punching value, just help people just get tough with clients. Just being a little tougher with these types of things. Because you're right, it's very hard to dictate anything down to your client. Well, the hard part, too, is like changing behavior. If you've had a client for years that has always emailed you or always texted you, getting them to use some other tool is like very difficult. And we don't want to, I've been there. I've tried. It's really hard to change client behavior. And hardly anybody ever gets to start from scratch. And that's always the challenge is converting everybody, getting them over to a new system, getting them to not use the old one. Especially when you're like, oh, but this is different than the tool I put you on two months ago or two years ago. Oh, yeah, if you've been switching them off. It's better this time. Yeah, exactly. Well, that's why the email integration helps. Because then the clients who are communicating with you that way that are used to it, they just keep doing it. And then you can get newer clients on, say, a chat tool. But you got it all in one place. That's my philosophy is, you can't abandon the old in favor of the new. You got to have a transition, a way to migrate people over. Yeah, it's just only new clients use this tool. Well, David, I think that's all the time we got this week. Where can people find you if they want to follow you online? I'm on all the socials just at David Leary. And I'm even on threads now. Me too. I don't really want to be though. I don't see the point. I feel like it's just a Twitter clone. I just get my name locked in. Yeah, I did it because they made it easy. That was what was smart, actually, is they just said, port your Instagram profile over to threads. And there it is. But now it's another app. And I had to turn off all the notifications. Because I got a zillion notifications every time somebody followed me. And yeah, I, unless Twitter crashes and burns, I don't see threads changing things. They should have just built it into Instagram. I would have, I would use it if it was in the Instagram app. I just don't want another app. Nobody wants another app. It's another, it's another inbox. Yeah. Which just goes back to another chat tool. Like, you want to put your clients on some other chat tool? If too many, everybody's too many. I am at Blake T. Oliver on all the socials, including for the time being threads. Follow us on YouTube. We are the accounting podcast on YouTube. And like us and subscribe there, you'll get notified when we go live. And it's always fun to have you join us live. We are not live for this episode. But we are almost always live for the other ones. And we'll see you around here. And our new handles. So we're not the cloud accounting pod anymore. We're just. A C C T pod. A C C T pod. That's us. So our David, see you next week. All right. Bye. Time for the class of fads. We don't like uncategorized transactions, but we do like cats. And we love uncat. 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