YouTube transcript
Video ID: AXnliZAiezc
Language: en
Captions: auto-generated

[0:00] She would track her time in this secret
[0:02] spreadsheet and if she started to go
[0:05] over on a client, she would move numbers
[0:07] from one to another. All your data is
[0:09] meaningless. You can't make decisions
[0:11] based on this data. And that's what
[0:13] we're doing as a profession. We
[0:15] shouldn't be so misaligned with honesty,
[0:19] which is insane. Right. Right. That's an
[0:22] ethical foundational principle of our
[0:24] profession is integrity, honesty, and we
[0:29] have built a system that teaches people
[0:32] to be dishonest. People choose webinars
[0:35] that to attend based on their schedule,
[0:37] not what they need to learn. So, here
[0:39] you are sitting in this webinar that's
[0:40] for a topic that's completely irrelevant
[0:42] to your career. That's not learning.
[0:44] companies play games like they're buying
[0:47] they're buying each other's revenue from
[0:49] each other in reciprocal transactions,
[0:51] right? And then if they can justify a
[0:53] purpose for it, they can recognize it as
[0:55] topline revenue and increase their
[0:57] earnings. Hi everyone, I'm Devin Kums,
[0:59] your host. I'm a CPA MBA who's helped
[1:01] negotiate multi-billion dollar deals as
[1:04] a financial adviser at top companies
[1:05] like Google and Deote. Today I'm super
[1:08] excited to introduce my friend Blake who
[1:10] is the founder of Earark and also the
[1:12] host of the number one accounting
[1:14] podcast in the world. We cover a lot of
[1:16] really interesting topics from his
[1:18] journey from music into accounting and
[1:21] then going into a traditional accounting
[1:23] firm into something really
[1:25] non-traditional like starting his own
[1:26] business and starting a podcast, making
[1:29] a successful podcast. and then some
[1:31] really interesting technical areas that
[1:33] are wrong with the accounting profession
[1:35] and some ways that we can think about it
[1:37] including the value of truth and
[1:39] integrity to the profession. So I think
[1:41] it's going to be a really interesting
[1:42] episode to watch it even if you're not
[1:44] an accountant but if you are an
[1:45] accountant you'll get something special
[1:46] out of this one. So please watch, please
[1:48] subscribe. Really excited for it and
[1:50] let's dive straight into
[1:52] it. Mike for so much for coming on the
[1:55] show. I really appreciate it and I think
[1:57] everyone's going to be really curious.
[1:58] How does an accountant and a CPA come
[2:01] from a public accounting background to
[2:03] starting a podcast and starting their
[2:05] own CPE company and going into
[2:07] marketing? Like what's that all about?
[2:09] Deon, great to talk with you. It's been
[2:11] a journey. Um, how did it come to be?
[2:14] Well, so I started the accounting
[2:16] podcast about seven years ago now, and
[2:20] we're now the number one podcast for
[2:22] accountants in the world by downloads.
[2:25] uh it's
[2:26] indisputable.
[2:27] And I guess that came out of uh when I
[2:31] left public accounting, I I I had some
[2:33] time on my hands. I was working at a big
[2:35] firm in West LA. I was commuting on the
[2:39] 405 every day and I was sitting in a
[2:41] cubicle. Well, actually, I had my own
[2:43] office as a manager, but I was in the
[2:46] glass box. I had a view of the view of
[2:49] the beach, Santa Monica Beach, but I
[2:50] never went there. And every day I would
[2:52] see the traffic building up on Santa
[2:54] Monica Boulevard. Uh and then I knew I
[2:57] was going to have to sit in that for an
[2:58] hour. So, you know, being in public
[3:01] accounting, right, it's very busy. I was
[3:04] uh I had a lot of free time on my hands
[3:05] when I left. And I went to work for a
[3:07] tech company. And sort of in between is
[3:09] when I started that podcast. And
[3:12] uh it w it started small. We had like a
[3:15] hundred listeners for a year or two and
[3:17] it's just grown. It's exploded. and uh
[3:19] we started putting social videos out
[3:22] there on Tik Tok and Instagram and now
[3:23] we're getting millions of views uh on
[3:25] our on our clips. Was that your ambition
[3:27] when you when you started? Did you
[3:28] expect it to get that big or was it more
[3:30] like, hey, I'm going to try this out as
[3:31] a hobby or what was what was in your
[3:33] head when you started that? Uh no, it
[3:36] was just a hobby. You know, podcasting
[3:39] was still relatively niche and it was
[3:42] called we didn't even call it the
[3:43] accounting podcast. It was called the
[3:45] cloud accounting podcast. It was super
[3:47] niche and the focus was on technology
[3:50] and how accountants are using it in
[3:52] small practices. So, zoom in from
[3:56] accounting to small accounting practices
[3:58] and then zoom in on the ones that are
[3:59] doing client accounting services and
[4:03] that's what we were talking about. So,
[4:04] it was really small audience, the kind
[4:06] of audience that you go to a conference
[4:08] and there's maybe like a few hundred
[4:10] people, maybe a few thousand people at
[4:11] like a QuickBooks conference. That was
[4:13] the audience. Um, and I I started that
[4:16] with my co-host, David Liry, who worked
[4:17] at into it for 20 over 20 years, and I
[4:21] came from the public accounting side.
[4:23] Uh, I said I was, you know, I was at a
[4:25] large accounting firm. Before that, I
[4:27] had my own small cloud-based practice.
[4:30] So, we were one of the first zero
[4:32] partners in the US. I was the second
[4:34] bookkeeper to get certified on Zero on
[4:36] the West Coast. And, uh, and that just
[4:39] like skyrocketed my business. They sent
[4:41] us tons of leads. We had, you know,
[4:43] hundreds of clients within five years.
[4:45] And we were doing it all on subscription
[4:47] basis. So, small business would pay us a
[4:50] few hundred bucks, maybe a few thousand
[4:51] bucks to do their books. We did the
[4:53] bookkeeping, the payroll, the bill pay.
[4:55] That was our bread and butter. Uh, and I
[4:58] was very fortunate where a CPA firm
[5:00] wanted to acquire our team, our
[5:04] processes. And so, I was able to sell
[5:05] that after like five years. So sold so
[5:08] had that firm, sold it, went to work for
[5:11] a large firm and then uh burned out
[5:14] there after like a year because I
[5:15] realized I would never get anything done
[5:17] and that's when I went into tech. So I
[5:18] don't know if that answers your
[5:19] question, but that's kind of the short.
[5:21] Oh yeah. Well, that's a and that's a
[5:22] very unusual journey, right? And I know
[5:24] Zero for people who don't know is kind
[5:26] of like the competitor at least the way
[5:27] you can correct me if I'm wrong was like
[5:28] the competitor to QuickBooks. I remember
[5:30] them reaching out for partners actually
[5:32] around the same time and I I used to
[5:33] drive the 405 also. I used to be in LA,
[5:35] so funny. We have a lot of overlap
[5:36] there. And I Yeah, that'll just driving
[5:38] the 405 is a full-time job, you know.
[5:40] That's a second time. Oh, man. And did
[5:42] you get to drive it when there were
[5:43] those fires on both sides? Like I drove
[5:45] to work one day and the the the hills
[5:48] were on fire. This was before the latest
[5:50] ones. Um it's kind of a precursor to
[5:53] that. Yeah, I know. I Yeah, that was
[5:54] almost like 10 year like seven or 10
[5:56] years ago. I remember I remember that my
[5:58] wife worked at UCLA and we worked over
[6:00] on like Sherman Oaks. We lived in
[6:02] Sherman Oaks and my wife worked at UCLA
[6:03] and my clients were in Santa Monica and
[6:05] just that 405 grind and I remember the
[6:07] fire and just being stuck on the freeway
[6:09] with fire on both sides, you know.
[6:13] My first apartment in LA was Sherman
[6:14] Oaks. Oh, crazy. We lived in the same
[6:16] neighborhood. Where where at? Benefit
[6:18] Street. Okay. Benefit Street. We near
[6:20] Crave Cafe. Oh, man. I was a regular at
[6:22] Crave. I actually even worked at the
[6:24] spot. If you knew the spot over in Cino
[6:26] as a place I worked, one of the first
[6:27] jobs. So, yeah. No way. Yeah. Small
[6:29] world. I I I would go to Crave like
[6:32] every day and and work there with my
[6:34] laptop. We probably saw each other.
[6:35] Yeah. Yeah. I'm sure we passed
[6:37] Crosspath. It's It's insane because I
[6:39] was there a lot of the time pretty late
[6:41] just working on my laptop. It was a
[6:42] great place. Um but so how did what B
[6:46] It's It's interesting because you
[6:48] obviously have this huge capacity for
[6:49] work, it seems like. I mean, you picked
[6:51] up the zero, you started a podcast, but
[6:54] why did public accounting burn you out?
[6:56] What was what was so draining about it?
[6:59] And and I guess because you obviously
[7:02] like accounting, right? And so it's and
[7:04] Yeah, I love it. So I'm kind of curious
[7:06] from your perspective. Yeah. So I backed
[7:09] into the traditional accounting career
[7:11] path, right? So I started I was a music
[7:13] major in college. I graduated with a
[7:15] degree in cello performance in 2007. And
[7:19] we all know, all the millennials
[7:21] remember what happened in 2007 is the
[7:23] world collapsed in a in a recession. And
[7:26] so uh I couldn't really find work. I was
[7:28] gigging in LA and the first thing that
[7:31] gets cut when there is a financial
[7:33] crisis in the film industry is the music
[7:36] because that's the thing that comes last
[7:37] in the production process. So it was
[7:40] around the same time that composers were
[7:42] starting to use technology
[7:45] to replace musicians. Yep. Synthesizers
[7:48] were becoming really good. There were
[7:49] all these sound libraries coming out
[7:50] that could uh replicate the sound of
[7:52] string instruments. Logitech all that
[7:54] all that stuff. Yep. Yeah. the Berlin
[7:57] Philarmonic recorded a sound library and
[7:59] so you could just buy that for like 300
[8:01] bucks or something and you could play it
[8:03] on your keyboard and most people if it's
[8:06] underscore if it's the music under the
[8:07] dialogue most people cannot tell. So all
[8:10] of the work not for the A-listers but
[8:13] the work for the upandcomers the newbies
[8:14] like me was just gone. So it's funny uh
[8:18] we talk about automation and accounting
[8:19] and how it's going to destroy jobs and
[8:21] all that stuff and I say well hey I have
[8:23] an experience in this. I've I've have
[8:25] I've my my first career got automated in
[8:27] many ways. So I decided that there
[8:30] wasn't enough work where I wanted to
[8:31] stick around and try to make it into the
[8:33] A-list movies cuz there were only like I
[8:36] don't know maybe a couple dozen chists
[8:37] in the in the whole city that worked
[8:40] regularly. Yeah. Um so I picked up
[8:42] bookkeeping like I I got a job as a
[8:45] bookkeeper. Uh I was good with numbers,
[8:48] right? Musicians are good with numbers,
[8:49] accountants are good with numbers and I
[8:52] love technology. I was always into sound
[8:53] recording in college. And so when I got
[8:57] into QuickBooks, I realized, wow, this
[8:59] is fun. Like, and I had an opportunity
[9:02] to optimize some ways that the business
[9:05] I was working in was doing accounting.
[9:07] And that got me hooked. So, that's how I
[9:10] ended up starting my practice was I was
[9:12] a QuickBooks Pro Adviser and gradually
[9:15] grew a bookkeeping practice and then
[9:17] connected with Zero when they were new.
[9:19] And that was a big opportunity.
[9:22] Um,
[9:24] so when I sold that firm, I
[9:27] thought, I need to go learn how it's
[9:29] really done because I didn't I didn't
[9:32] know. I was just making it up as I went.
[9:35] So, I went to work for a big accounting
[9:36] firm as a manager in their client
[9:39] accounting services practice, in their
[9:41] outsourced accounting practice. And
[9:44] basically within the first, honestly, at
[9:47] the employee orientation is when I
[9:48] subconsciously knew I wasn't going to
[9:50] last. But it took about six months for
[9:52] me to consciously realize that. Um, and
[9:55] then I I very I I probably would have
[9:58] stuck it out longer, but I got recruited
[10:00] by a tech company in LA called Flowcast
[10:02] to go be their first uh product
[10:04] marketer. So I was the CPA on the
[10:06] marketing team doing webinars. Oh, how
[10:09] did you like that? That's such a that's
[10:10] such a pivot, right? I mean, you're kind
[10:12] of just jumping from music to
[10:13] bookkeeping to the public accounting and
[10:16] now you're in marketing, right? Did
[10:18] Well, you think about it, right? like I
[10:20] I trained to be on stage to perform as a
[10:23] musician for 10 years from when I was 10
[10:26] and I started playing the cello up until
[10:28] 20some and it was more than that. And
[10:33] so for me to do a webinar was actually
[10:36] pretty easy because hey you've got all
[10:39] your speaker notes right there. You've
[10:40] got a presentation prepared. You know
[10:42] when you play a cello concerto you can't
[10:45] bring sheet music with you. You got to
[10:46] memorize for a recital. You got to
[10:48] memorize like an hour of music. An hour
[10:50] and a half of music. So, I uh I had a
[10:55] really fun time learning how to do that.
[10:56] I didn't even know what a product
[10:57] marketer was when I joined that company.
[10:59] They taught me. Oh, wow. And it sounds
[11:01] like it sounds like you loved it. It
[11:02] sounds like it was right up your alley.
[11:03] Oh, yeah. It's fun. I mean, we they had
[11:06] a big email list, you know, uh like a
[11:09] 100,000 accountants. And so, they would
[11:12] advertise a webinar and I would get to
[11:14] create all the content. It's
[11:16] educational, right? And I would teach
[11:17] accountants about tech and they would
[11:20] bring thousands of people to these
[11:21] events. So, I really enjoyed it. I loved
[11:25] That's when I realized I love teaching,
[11:28] educating. Um, and so that's what that's
[11:31] what I'm want to do, you know, for the
[11:33] rest of my career is is help teach
[11:37] CPAs, Cas, EAS, accountants, bookkeepers
[11:41] how they can use technology to make
[11:45] their lives better. Accounting doesn't
[11:47] have to suck. It's actually really
[11:50] amazing. I came into it as a musician
[11:52] because I was poor and I was working too
[11:54] much. And accounting gave me money and
[11:57] flexibility and I could work as much as
[11:59] I wanted and have a great lifestyle. So
[12:01] when I went into a big firm and I saw
[12:04] people that were so unhappy and
[12:06] overworked and underpaid, I thought this
[12:08] is so messed up. It does not have to be
[12:10] this way. So it's so it's it's so crazy.
[12:13] I think you're the only person I've ever
[12:15] met in accounting that has such a like
[12:17] so much overlap with my own life because
[12:19] I had a recording studio when I was 18.
[12:21] Similar around 2007. and I lost it
[12:24] during the recession. I fell into
[12:25] accounting because I like the numbers
[12:27] and I like the tech. And then I'm always
[12:30] shocked by when I go to certain
[12:32] companies. I I always find that people
[12:34] accountants don't like doing the
[12:35] training. They don't like they don't
[12:36] like being in front of people. But
[12:38] that's where I thrive. I do like
[12:39] thousand person plus trainings at Google
[12:41] um all of the time for executives and
[12:43] it's it's so much easier than live
[12:45] performances for two hours to your
[12:46] point. It's so much less stressful. U
[12:48] but then to your wait I got to ask you
[12:51] though. So I because I see the guitar.
[12:52] Is that a guitar behind you or is that a
[12:53] bass? I can't tell. Yep. Guitar. Nice.
[12:56] What kind of guitar is that? That's an
[12:57] ovation. It's a There's a whole story
[12:58] behind that because um when I was
[13:00] homeless, I actually had a pawn one of
[13:02] my favorite guitars like 15 years ago
[13:05] after I lost the studio and then my wife
[13:07] bought me a replica of it like three
[13:09] years ago kind of commen uh to
[13:12] commenserate like, hey, you know, you
[13:14] you can still enjoy your life and get
[13:15] back into music. I'm not nearly as good
[13:17] as I used to be, but I still like to
[13:18] play. So yeah, I definitely can't play
[13:20] as fast uh as I used to. Yeah. But you
[13:23] know, the nice thing about the cello is
[13:24] that people just want to hear you play
[13:25] like
[13:27] beautifully lyrically, so you can get
[13:29] away with not with with losing the the
[13:31] speed. Well, that that's why you have
[13:32] the acoustic, not the electric, you
[13:33] know, like just a few chords and like a
[13:35] few notable songs and people are having
[13:37] a good time. But if you have your
[13:38] electric, people want you to start
[13:39] ripping and
[13:41] Yeah. I don't mean to derail this this
[13:43] podcast, but I I just got to ask like
[13:45] what uh what kind of music did you do in
[13:47] your recording studio? Oh, I did a a
[13:49] variety of like I did a acoustic I liked
[13:52] like a lot of acoustic rock and then um
[13:55] and then like kind of folky stuff, but
[13:57] then I liked a lot of like heavy stuff
[13:58] like punk rock rock itself like overall
[14:01] rock genre, hard rock. I still have some
[14:03] albums I'll share with you some of them
[14:04] if you're ever interested. It'd be um it
[14:06] was a lot of fun. I mean, you don't meet
[14:08] a lot of there there are a good number
[14:10] of musicians in accounting, but you
[14:12] know, there's it's a it's a small group.
[14:14] So, yeah, I've met a few, too. I know I
[14:16] know a guy I could introduce you who
[14:17] actually helped film the uh was in the
[14:19] studios filming the Lord of the Rings
[14:21] soundtrack. So, that guy is really So, I
[14:23] met there's a few of us. There's a few
[14:24] of us and he's really cool. He works at
[14:26] Google. Yeah, he works at Google with
[14:27] me. And so, that's amazing. Yeah. Yeah.
[14:29] Really cool. But I I I think it's really
[14:31] interesting to your point that like I I
[14:34] found centering all around that when
[14:35] you're like teaching and you like
[14:37] numbers. Accounting can be really really
[14:39] fun and you can really do it in
[14:40] interesting ways and help solve unique
[14:42] business problems, but you got to kind
[14:44] of break out of that mold of the general
[14:47] public accounting of like let's just
[14:48] grind 60 hours, let's grind 100 hours
[14:50] and find maximum ways to build. And so
[14:53] how did you kind of break that mold and
[14:55] now it seems like your main focus is
[14:57] earmark. Is that correct? and what
[14:58] what's that like what's that looking
[15:00] like in this new stage for you?
[15:03] Well, I'll start with that first
[15:04] question because I think that's really
[15:04] important. Um, and it's something that I
[15:07] learned as a musician when I went to
[15:09] Northwestern University as a chist.
[15:12] Actually, I I went there as a like a
[15:14] general studies student and I played the
[15:16] cello and I was very serious about it in
[15:18] high school. I was like the principal of
[15:19] my youth orchestra. I was um and then I
[15:23] was in the San Francisco youth symphony.
[15:25] Um, I I lived in Sacramento, so I would
[15:27] drive every weekend to go to San
[15:28] Francisco, and we got to play in Davies
[15:30] Hall. Our conductor of the youth
[15:31] orchestra was the assistant conductor of
[15:33] the San Francisco Symphony. It was like
[15:34] being in a like a a professional
[15:37] orchestra. It was that good. It drew
[15:39] from all over the Bay Area.
[15:41] Um, and I was definitely not principal
[15:43] at that in that orchestra. I was like
[15:45] barely got in. And so, uh, you went to
[15:47] Northwestern. I wasn't sure what I
[15:49] wanted to do. And I got um I went to
[15:53] like a master class for the cello studio
[15:56] and I just saw how incredible these
[15:58] chists were and I said I don't want to
[16:01] do anything else. I just want to learn
[16:02] how to play like
[16:04] that. And so I asked if I could get
[16:07] lessons. Hans the cello teacher Hans
[16:09] Jensen he blew me off. He didn't want to
[16:12] teach me like and at the now now now I
[16:14] realize how ridiculous it was that me
[16:15] just like a student who didn't even
[16:16] audition for the music school wanted to
[16:18] get lessons from this legendary
[16:20] professor and uh so he he said go take
[16:24] lessons with this guy over here you know
[16:26] one of the uh other professors you know
[16:28] adjunct and uh audition for me when we
[16:31] do auditions for next year and so I did
[16:34] that and I auditioned for him and I
[16:36] don't think I would have gotten in like
[16:38] normal through the normal process but I
[16:39] was already there and I think he just
[16:41] like intrigued. Here's this kid who like
[16:44] thinks he can do this. So, I was the
[16:45] worst chist when I joined that studio.
[16:48] Wow. Um out of like 20 chist, right? Or
[16:51] something like that. And
[16:54] uh the thing that he taught me that is
[16:58] like the most valuable thing anyone has
[16:59] ever taught me in my whole life
[17:03] is
[17:05] it's how to focus and how to
[17:08] work. How to
[17:10] practice and this works for work too but
[17:13] how to focus and practice in a focused
[17:16] way. how to practice in a focused way
[17:18] where you are not sitting in that
[17:20] practice room for 12 hours a day and
[17:23] where you can become a world-class
[17:25] musician in 4 to 6
[17:29] hours and cuz when I started there like
[17:33] I thought all right I want to catch up I
[17:36] got to catch up to these other freshman
[17:37] chess I'm a sophomore like I'm way
[17:40] behind I'm like years behind I'm just
[17:42] going to go into this practice room and
[17:43] grind just be in there all day long and
[17:46] I did that to start and I was not making
[17:48] any progress. I was not getting better.
[17:49] I was just hurting myself. I was
[17:51] physically hurting myself. Yeah. You'll
[17:52] really get injured playing that long.
[17:53] Yeah. It's Yeah. Very physically
[17:55] demanding. And and what he taught me is
[17:58] that like it it's really about how you
[18:00] practice, not about how much you
[18:02] practice. Now, the best musicians will
[18:04] still once they get good at practicing
[18:06] practice a lot, as much as they can. So,
[18:08] this is tricky, right? It doesn't It
[18:11] looks like they're just grinding away,
[18:12] but they're not, right? So he taught me
[18:13] how to practice and
[18:16] um basically the takeaway from that is
[18:19] that it's it's it's like in accounting
[18:21] we're doing it all wrong. We're focusing
[18:23] on billing as many hours as possible but
[18:25] we would do so much more we would
[18:28] accomplish so much more and create so
[18:29] much more value if we focused on on how
[18:34] we are working the work that we are
[18:35] doing not the hours that we are putting
[18:38] in. I
[18:40] can especially with automation and AI
[18:42] now I can produce 10 times as much as
[18:45] any other accountant and I can do it in
[18:48] less time. So we we've got it all wrong
[18:52] in the profession. We have to move away
[18:54] from this inputs hours mentality. Um and
[18:59] career success should not be defined by
[19:02] how many hours you sit at your desk
[19:03] every day. If we do that, we are going
[19:06] to destroy the profession because that's
[19:07] what's been happening for the past, you
[19:10] know, hundred years. You know, I I got
[19:13] to jump in there because I was actually
[19:15] thinking about this in the shower this
[19:16] morning, which is funny enough. And I I
[19:18] didn't plan it. I wasn't looking at your
[19:19] stuff and thinking of it, but it drives
[19:21] me crazy that I've known so many firms.
[19:24] I've worked with tons I've worked with
[19:26] Deote, a bunch of smaller firms
[19:27] throughout my career and you'll have
[19:29] teams of 20 people going out to do an
[19:31] IPO or implementation and everyone knows
[19:34] the clients know you know that everyone
[19:36] on the team is booking 60 hours a week
[19:38] in order to launch the implementation.
[19:40] Everyone knows though there's only one
[19:42] person or two people on that team that
[19:44] are actually doing a bulk of the work.
[19:47] They're doing like prao distribution 90%
[19:48] of the work. You could cut most of that
[19:50] team but it's all optics. It's all like
[19:52] this is how much it costs to get it done
[19:54] and we know the project's going to cost
[19:55] a couple of million so let's staff it to
[19:57] cost a couple of million and then you
[19:59] have a bunch of people just sitting
[20:00] there who don't like their lives or are
[20:02] glued to their desks and they're not
[20:04] learning anything and they're not adding
[20:05] any value and it it blows my mind. It
[20:07] doesn't make sense from an investing
[20:08] standpoint. It doesn't make sense from a
[20:09] career standpoint. I just don't it's
[20:11] it's madness but we keep doing it. We
[20:13] like I don't I was really don't know how
[20:15] we get out of that unless there's more
[20:16] education around like two two people
[20:18] into businesses, right? So yeah, I think
[20:22] the issue has
[20:23] been that it's profitable. It works. It
[20:27] may not be optimal, but it makes a lot
[20:30] of money for the partners. And the
[20:32] partners grew up in that system. So they
[20:34] don't know any better. They don't know
[20:36] another way to do it. And they're in
[20:38] many ways prisoners of the system too
[20:40] because the firm is designed to
[20:42] incentivize and reward this kind of
[20:43] overwork. It's the metrics are all
[20:46] wrong. And that's what frustrated me
[20:48] about public accounting and why I
[20:50] couldn't handle it for more than six
[20:52] months or so is
[20:54] that everything was designed to
[20:57] incentivize me to get more clients.
[21:00] Topline revenue. It was billable hours.
[21:04] It was not profit. Believe it or not,
[21:07] we're accountants. You would think that
[21:09] would be the most important number is
[21:10] your profit. But we didn't calculate
[21:12] that. We didn't know what that was. We
[21:15] had like realization but that was kind
[21:17] of a fake metric because everybody would
[21:20] fudge their numbers in order to hit
[21:22] it. Can I tell you a story please public
[21:25] accounting about? Yeah. Yeah, please.
[21:26] Please. So, one of the most talented
[21:29] staff accountants that I worked with, a
[21:30] senior staff accountant who was in a
[21:32] different office from me. We were
[21:34] working on a project together. I was
[21:36] working on the tech side. She was
[21:37] working on the accounting side. And we
[21:39] got to know each other and she revealed
[21:42] something to me. very revealing uh which
[21:46] was her secret time sheet. And I found
[21:49] out that actually many people kept
[21:51] these. So this was a spreadsheet where
[21:53] she had all of her clients listed and
[21:56] she had the budget, the hours budget for
[22:00] each client that she had either inferred
[22:02] from the billings or had been explicitly
[22:06] told. And then she would track her time
[22:09] in this secret spreadsheet. And if she
[22:12] started to go over on a client, she
[22:14] would move numbers from one to
[22:16] another. So when this happens, right,
[22:20] when you incentivize people to always
[22:22] hit their target, they will figure out
[22:24] how to hit their target if that's how
[22:26] you're going to bonus them and promote
[22:28] them. And so I realized all these
[22:30] numbers that we were tracking when it
[22:31] came to actual hours versus budgeted
[22:33] hours were false. They were all based on
[22:36] a lie because if a enough people in the
[22:39] organization fudge the numbers which you
[22:42] know when you design a system like that
[22:44] I would expect probably more than half
[22:46] to be doing that maybe 80% uh there
[22:49] would be a few dieards but they won't
[22:50] last long right because they don't they
[22:52] want to be honest they leave they don't
[22:54] do well they don't get promoted that
[22:56] sort of thing when you have a system
[22:57] like that that incentivizes people to
[22:59] lie or to fudge it or to you know they
[23:02] don't think of it that way necessarily
[23:06] uh then all your data is meaningless.
[23:08] You can't make decisions based on this
[23:10] data. And that's what we're doing as a
[23:12] profession. Um you go to a conference
[23:14] and you ask accountants, have any of you
[23:16] ever fudged a number on your time sheet?
[23:17] Have you ever put a number that was not
[23:20] the actual hours build on your time
[23:22] sheet? Every hand goes up.
[23:26] That happens all the time. So, you know,
[23:28] it's it's sort of like I mean it is
[23:31] madness. Yeah. We're all lying, right?
[23:34] And we all know that lying like is the
[23:36] complete opposite of ethics, right? We
[23:38] should be aiming for the truth. But then
[23:40] to your point, it's so fascinating. I I
[23:42] when I try to get new clients now when
[23:44] I'm working on on the side and I'm like
[23:46] I am intentionally saying you should pay
[23:49] me a retainer and tell me the work you
[23:51] want me to do or a fixed fee and I'll be
[23:54] available for you to finish that work.
[23:56] That's going to work out best for
[23:57] everybody. Don't give me hours. don't
[23:59] get because then you're going to
[24:00] incentivize me to show up to a bunch of
[24:02] meetings
[24:03] that I'm gonna just listen to and have
[24:06] like I'm I don't need to be a part of
[24:07] all that, right? You're not
[24:08] incentivizing the actual output. So, it
[24:10] just it drives me crazy. You're 100%
[24:11] correct. And oh my god, that was the
[24:14] worst, too. That was the best way to get
[24:15] hours. If you needed to pad your time
[24:17] sheet, join every meeting. And it's so
[24:21] easy because you can just go back to
[24:22] your calendar and you can fill in the
[24:23] time sheet from that. Yeah. Yeah. Yeah.
[24:25] Exactly. We would have these meetings
[24:26] with like 12 people on them. And I'm
[24:29] thinking, how much is this costing the
[24:31] company, right? And it goes further
[24:33] because then all those accountants then
[24:34] go into take those habits into tech like
[24:38] me at Google. I can't tell you how often
[24:41] it is that you have these people who
[24:43] just set up a bunch of meetings for
[24:44] optics and be like, look how look how
[24:45] busy my calendar is. I have 30 hours of
[24:47] meetings a week and I have to do my
[24:49] regular job. It's like you should be
[24:50] rewarded on that. You should be rewarded
[24:51] on how few meetings you are and are able
[24:53] to do your job. Right. So tries to be
[24:55] but I know we're going on a tangent
[24:56] here. Productivity. Yeah. No, no. I mean
[24:58] this is really important because you're
[24:59] what you're saying is true is that we
[25:02] bring young accountants into public
[25:04] accounting students they graduate they
[25:06] go into public accounting it's like
[25:07] twothirds go into audit something like
[25:11] that right the other third go into tax
[25:13] very few go anywhere else after school
[25:15] they go into public accounting and we
[25:17] train them we condition them to think
[25:20] this is normal and this is the way they
[25:21] should be working and you do that for a
[25:23] few years and you create a cult-like
[25:26] behavior you create an ingrained
[25:27] behavior that is really really hard to
[25:29] shake and so that's why even in industry
[25:31] where billable hours are irrelevant you
[25:34] still have people who think that way and
[25:36] it really holds back accounting and
[25:38] finance teams. Yeah. Yeah. And it I
[25:39] catch myself even telling teammates
[25:42] like, "Well, I'll when I educated
[25:43] teammates around my career," I'm like,
[25:44] "Well, my personal view is that we
[25:47] shouldn't be doing this and this this,
[25:48] but for you to succeed in this job, you
[25:51] need to not agree with my personal view
[25:53] and you probably need to show up to
[25:54] meetings and do this optics and build
[25:55] these hours cuz that's how you're going
[25:57] to be incentivized here." And that
[25:58] doesn't feel great. We shouldn't be so
[26:01] misaligned with honesty, which is
[26:04] insane, right? Yeah. Right. That's an
[26:06] ethical foundational principle of our
[26:09] profession is integrity, honesty, and we
[26:14] have built a system that teaches people
[26:17] to be dishonest.
[26:19] Yeah, it's it's completely insane. And I
[26:21] think I'm glad we're at least talking
[26:22] about it. I'm glad I wasn't I was having
[26:24] these thoughts in the shower. I'm like,
[26:25] how would I ever change this? And it's
[26:26] so funny that we're talking about it
[26:28] now. Um, I think the only way you can
[26:30] change it is through education and
[26:32] talking about it, which is what I like I
[26:34] would love for you to talk more about
[26:35] how you started earmark and I a little
[26:37] background on myself is I teach at
[26:39] community college. I teach at Aloney
[26:41] College because I've always thought like
[26:42] that's the next generation. We need to
[26:44] get ahead of them and accounting got
[26:46] helped me get out of homelessness. It's
[26:47] such a great profession, but there's so
[26:49] many ugly parts of it. How can we make
[26:50] it better? You go by teaching the next
[26:52] generation. And then I started building
[26:53] out this podcast to find
[26:55] more more professionals who are aligning
[26:58] their ambition with actual values and
[27:00] character. And so like you making you're
[27:03] doing something similar with earmark
[27:04] which is really cool and you've done it
[27:05] for the next last couple years. So I'd
[27:07] love to learn more.
[27:09] Yeah. Well, the practical way it started
[27:12] was we started getting more and more
[27:14] listeners to the podcast. And after like
[27:16] four years, I started getting people
[27:18] CPAs coming up to me at conferences
[27:20] saying, "Hey Blake, I learned so much
[27:22] from your show. I ought to get CPE for
[27:24] it." And it was like a joke and but then
[27:28] it people kept telling that joke. It's
[27:30] like a dad joke, right? And I
[27:31] appreciated it. And I thought, wait a
[27:33] minute, there's something to this. What
[27:35] if how could we do this? Could we offer
[27:37] continuing professional education for
[27:39] accountants for listening to this show?
[27:41] And CPAs have to earn 40 hours a year.
[27:44] It's a lot. It's a week of your working
[27:47] life every year. And the way they do it
[27:51] currently is pretty awful if you ask me.
[27:55] It's go to in-person seminars and sit
[27:57] there in a conference room for a whole
[27:59] day, multiple days. Some people do it
[28:01] all in like one week. I'm like, how do
[28:03] you cram all the learning you need to do
[28:05] into one week every year? like I could
[28:06] not do that. I have ADHD. Traditional
[28:08] education does not work for me. So, uh
[28:11] that was not an option when I got my
[28:12] CPA. And the other option is like
[28:14] webinars which is slightly better. But
[28:16] what happens is that people choose
[28:18] webinars that to attend based on their
[28:20] schedule, not what they need to learn.
[28:22] So here you are sitting in this webinar
[28:24] that's for a topic that's completely
[28:25] irrelevant to your
[28:27] career. That's not learning. Yeah,
[28:29] you're checking the box for compliance,
[28:31] but are you really improving your
[28:33] professional
[28:34] competency? Probably not. So, that was
[28:38] the idea with earmark. And so, I hired a
[28:41] guy on Upwork and I started building out
[28:44] the designs for it. And then he
[28:46] convinced me to let him code the first
[28:48] version of the app. And after like eight
[28:50] months, we released it and it lets you
[28:54] earn CPE for listening to a podcast. So,
[28:56] you can listen to an episode of the
[28:58] accounting podcast. You can listen to an
[29:00] episode of my earmark podcast. We've got
[29:03] Oh my fraud. We've got tax bites. We've
[29:05] got federal tax updates. We've got
[29:07] Jackie Meyer show, which I can't
[29:08] remember the title of right now. I mean,
[29:10] we got like dozens and dozens of shows
[29:12] now. Hopefully soon. Your show. Yeah, I
[29:15] would love to be on it. Yep. Right.
[29:18] Right. And and so, uh, it it lets you
[29:22] earn the CP on demand. Like you can
[29:24] listen to the episode, you can stop,
[29:25] start it whenever you want. When you're
[29:27] done, you take a quick quiz and you get
[29:29] your CPE. And it sounds simple, but like
[29:33] figuring out how to do that under the
[29:35] rules for CPA, that's so hard was well,
[29:38] it was kind of a fun challenge, right?
[29:39] It was like a CPA type challenge where I
[29:40] had to read the 66 page standards issued
[29:44] by the National Association of State
[29:46] Boards of Accountancy. It's clear as
[29:47] mud. Clear as mud, right?
[29:51] And I didn't have AI at the time to help
[29:53] me uh help help me figure this out. So
[29:55] then I I read them all. I wrote down
[29:57] like what are the what's the minimum
[29:59] that we need to do to satisfy the on
[30:01] demand requirement and can we do this
[30:02] with audio and yes the answer is yes. So
[30:04] then we built the app to satisfy those
[30:06] requirements and handle the compliance.
[30:08] Uh and it works. So that was the genesis
[30:13] you know that's why we started earmark.
[30:16] It's been going now for like three
[30:17] years. We've
[30:20] issued 120,000 maybe 130,000 CPE credits
[30:24] at this point. We've got, you know, tens
[30:27] of thousands of users on the app and the
[30:30] goal is just to help every accountant
[30:32] with a CPE requirement learn about it
[30:35] and give it to them as an option.
[30:38] And for me, going back to this
[30:42] discussion about talking about this
[30:43] stuff, the problems in the profession,
[30:45] right? That's what I do a lot on my show
[30:47] is I expose the issues in the
[30:50] profession. Um, we talk about the
[30:53] challenges, we talk about what needs to
[30:55] be done to improve it, the culture, the
[30:57] work life balance, the hours, the pay.
[31:00] This is stuff that you would never hear
[31:03] about or rarely hear about in a state
[31:06] society meeting or at an AICPA meeting
[31:11] because those societies like they they
[31:15] just they don't talk about that kind of
[31:17] stuff. And so a lot of people though are
[31:20] concerned about it. And and the the
[31:24] feedback has been incredible. There are
[31:26] so many accountants who felt like they
[31:28] were thinking the same way, but all the
[31:30] messaging has been top down for all
[31:32] these years. And why is that? Well, I
[31:37] think the simple answer is that the CPA
[31:40] dues are often not paid by the
[31:43] individual CPAs. They're paid by the
[31:45] firms. And the large firms are very,
[31:48] very large. The big four, for instance,
[31:51] pay for their AICPA dues for all the
[31:55] CPAs who work for them. That's what
[31:58] hundreds of thousands of CPAs. Yeah.
[32:01] Could be. Yeah. Tens of thousands at
[32:02] least, right? I mean, like what? So,
[32:05] Deote is like 140 I don't remember what
[32:08] it is, but it's like it's a lot of
[32:10] people. Yeah. So, there's a lot of CPAs
[32:11] working there, right? And so, you know,
[32:14] they pay the money to like organizations
[32:16] like the AICPA.
[32:19] And what is an
[32:21] AICPA president going to do? Who are
[32:24] they going to listen to? Follow the
[32:25] money. Yep. So, the the firms which have
[32:29] this messed up culture and, you know,
[32:32] structure that creates overwork and
[32:34] underpaid, you know, situations for
[32:36] accountants, right? They're the ones
[32:38] basically who have the voice in these
[32:39] organizations. And so that's why these
[32:41] organizations don't talk about this
[32:42] stuff. Um, but guess what? Thanks to
[32:46] social media and thanks to podcasting
[32:48] and uh alternative media, we can get the
[32:52] word out. We can start discussions about
[32:54] this stuff. And that's what most
[32:56] accountants care about, right? Because
[32:58] most accountants are not firm owners and
[33:00] most accountants are not controllers and
[33:03] CFOs. They're the staff who are doing
[33:06] the work. They're on the front lines.
[33:07] they're the ones suffering. And if we
[33:10] want to make this profession better, we
[33:12] need to be talking about this stuff
[33:13] because we need to figure out how to
[33:14] make the profession a better place to
[33:16] work. And so that's my mission is
[33:19] by by making earmark available, we can
[33:23] get that word out. And it's not just me
[33:25] anymore, right? It's it's so many other
[33:27] podcast hosts and uh creating awesome
[33:30] content. And there's technical on on
[33:32] there, too, right? and we're creating
[33:33] all sorts of new kind of like technical
[33:35] content that's more relevant for
[33:36] accountants. So, you know, driving
[33:39] accounting standards forward, that's
[33:41] another thing that I'm really passionate
[33:42] about. That's a wonky thing. I think
[33:44] that accounting standards like GAP is
[33:46] completely outdated and it needs to be
[33:48] rewritten and you're not going to hear
[33:50] anyone at the top talking about that,
[33:53] you know. Yeah. And I I would love to
[33:54] talk I I have many many opinions on
[33:57] that. I think what and I'm looking
[33:59] forward to contributing technically to
[34:00] some of it like with my expertise from
[34:02] doing Revreck at Google and other
[34:03] companies. I'm so excited. Yeah, I'm
[34:05] really pumped to do it. But to your
[34:06] point, I think what I'm hearing from it
[34:09] is like you're actually coming in and
[34:10] speaking the truth like and that's
[34:12] something I've always liked about
[34:13] accounting is I think that's the goal is
[34:15] that like finance can like someone used
[34:18] to say it to me, one of the first CPAs I
[34:20] worked with who uh I I won't wasn't the
[34:23] most competent person I ever worked with
[34:24] but he was a nice guy. He um he said the
[34:26] reason he became a CPA is because he
[34:28] wanted no one to BS the numbers to him.
[34:30] Like and that's kind of the goal is like
[34:32] anyone can fudge the numbers. Anyone in
[34:34] finance if you've worked in any business
[34:36] you can make any forecast show anything
[34:38] you want by playing with the
[34:39] assumptions. And the goal of accounting
[34:41] is well let's try to ground it in
[34:43] consistency and accuracy and con like
[34:45] make sure we can compare the information
[34:47] and get the truth behind it. And it's so
[34:50] interesting like truth is so
[34:51] fundamental. It's a science. It's meant
[34:53] to be a science. There's supposed to be
[34:54] a truth behind it for us to have bridged
[34:56] into this falseness and these lies and
[34:59] like interpretations of GAP that are
[35:01] inconsistent and the SEC is not keeping
[35:03] up and the fazb is not keeping up and
[35:05] it's great like what you're doing with
[35:07] earmark needs to be done for the
[35:09] profession to keep its integrity. You
[35:10] need you need clear honest communication
[35:13] for us to have like to have that. It
[35:16] reminds me of a professor who he said
[35:18] the reason he likes accounting is
[35:20] because reputation was so important and
[35:23] it's like you have a blank piece of
[35:24] paper and like if you're a CPA it's
[35:28] completely clean and as soon as you do
[35:30] something wrong in public you crumple it
[35:32] up and no matter how much you flatten it
[35:33] it's still going to it's going to be
[35:35] show the marks. But it's so many people
[35:37] are crumpling the profession publicly
[35:39] and and everyone knows it. Like everyone
[35:42] it's no one's surprised, but we're all
[35:44] pretending like it isn't happening,
[35:46] right? Yeah. It's this elephant in the
[35:48] room that nobody wants to acknowledge at
[35:51] the top in the official leadership
[35:52] positions because it's uncomfortable,
[35:54] right? And it it's a threat to to to the
[35:57] system.
[35:59] Um, and the regulators are totally like
[36:03] oblivious to what's going on in my
[36:05] opinion, just based on what they've
[36:08] done.
[36:09] Um, accounting is the science of
[36:12] business. That's what it should be in my
[36:14] opinion. Right. And so, you're right.
[36:17] We've we've gotten away from that. It's
[36:20] it's all loose. It's all estimates. It's
[36:22] all gray areas. It's like let's let's
[36:24] make it look good. Um, and that that's
[36:28] not our true value to the economy,
[36:31] right? The the reason people trust CPAs
[36:33] is because they believe that we serve
[36:35] the public. We have an obligation to the
[36:37] public, not just the companies that we
[36:38] work for. So, if we want to really serve
[36:42] the public, we need to solve the
[36:45] accounting talent pipeline. We need to
[36:47] get more CPAs out there to help small
[36:50] businesses and medium businesses that
[36:51] can't afford to hire a CPA right now.
[36:54] So, we need more CPAs. There aren't
[36:56] enough of us to do the work. That's a
[36:59] problem. Are about to retire, right?
[37:01] Like, we're going to lose a ton. Yeah,
[37:03] we're losing so many. PE firms are going
[37:05] to go wreck and buy them all and remove
[37:07] the licenses from them. So, that's a
[37:08] whole Oh, that's a that's a fun that's a
[37:10] fun topic for, you know, like the whole
[37:12] PE thing could be good, could be bad.
[37:15] Um, you know, it's it's
[37:19] Sorry to cut you off. Sorry. Go ahead.
[37:21] No, no, it's fine. I just I lost my
[37:23] train of thought. There's so much to
[37:24] talk about when it comes to that, you
[37:26] know, like um I would actually love I
[37:29] don't know where you want to go with
[37:29] this, but I I love to talk about the
[37:32] problems of GAP and accounting standards
[37:34] with uh people who actually understand
[37:37] it even better than I do, which I'm sure
[37:38] you do, uh given your, you know, role at
[37:42] in Google Cloud and all that. Um but
[37:45] like, you know, when I when I look at
[37:46] this just as an outsider who never had
[37:48] to do any like real gap financials, I
[37:49] was always working with small businesses
[37:51] that that didn't have to do that level.
[37:53] Um, it just seems to me like it actually
[37:56] relates to this whole tariffs
[37:57] conversation that we're having right now
[37:59] where the focus of accounting standards
[38:03] and tariffs is on tangible
[38:06] assets. But since the 70s, our economy
[38:10] has inverted from tangible to intangible
[38:13] assets. as you are well aware at Google
[38:16] cloud which is all about data intangible
[38:19] assets there's nothing physical
[38:21] at Google and yet it's one of the most
[38:24] valuable companies in the world right
[38:26] it's all information economy is what
[38:28] people call it right so like we have a
[38:31] president who's he and his advisers seem
[38:34] to be living in this world of the 60s50s
[38:37] and60s where the American economy was 80
[38:41] 90% driven by tangible assets by
[38:43] manufacturing by making things, right?
[38:45] And
[38:46] um and but in the 70s, starting in the
[38:50] 70s and accelerating in the 80s and 90s,
[38:52] the that inverted where now the the
[38:56] crazy stat is this that 90% of the S&P
[38:59] 500 market value is driven by intangible
[39:02] assets. Oh wow. I didn't know that stat.
[39:05] I would believe I believe it though. I
[39:06] believe it. Yeah. And it used to be just
[39:09] 50 years ago, it used to be the other
[39:10] way. Well, okay. Um, oh, here's an
[39:13] interesting thing. Can I jump off that
[39:14] point real quick? Yeah, go for it. So,
[39:16] what's so fascinating is then you go
[39:18] into the revenue because a lot of the
[39:20] value of S&P 500 is driven off earnings
[39:22] quality, right? And like earnings and
[39:23] the valuation is based off of earnings
[39:25] or forward earnings and all those
[39:28] intangible all those earnings are based
[39:30] off topline revenue and all that's based
[39:32] off of ASC 606, you know, the revenue
[39:34] recognition standard. And what you find
[39:36] is a lot of these large
[39:38] companies play games like they're buying
[39:41] they're buying each other's revenue from
[39:43] each other in reciprocal transactions,
[39:45] right? And then if they can justify a
[39:47] purpose for it, they can recognize it as
[39:49] topline revenue and and increase their
[39:51] earnings. So like let's say Salesforce
[39:53] wants to buy uh sell its software to uh
[39:57] uh QuickBooks or into it or what whoever
[40:00] owns them. Mhm. if they can say like,
[40:02] "Oh yeah, there's a justified reason
[40:04] they're buying it." And then and by a
[40:06] reciprocal purchase of a QuickBooks
[40:08] product, they both could take the
[40:09] topline revenue on it. And there's some
[40:11] like contra revenue guidance around it
[40:12] of like, well, you have to make a
[40:14] business justification. It has to be at
[40:15] fair market value. There's a ton of
[40:17] judgment around it. And most people
[40:18] don't even know that guidance or are not
[40:20] going to be sophisticated, especially
[40:22] the auditors around it. And so then my
[40:24] question instantly like how much of that
[40:27] intangible revenue or like that what's
[40:30] you're basing your data off of is
[40:32] actually even real like is that or is it
[40:33] just inflated competitive per
[40:36] competitive reciprocal purchases? Yeah.
[40:39] Because if we if you if you are let's
[40:42] say you're Salesforce and I'm into it
[40:44] and we want to both inflate our numbers.
[40:46] We want to both have more revenue. We
[40:48] could just like buy unnecessary seats or
[40:52] licenses or we could overpay each other.
[40:57] Yeah. Right. Yeah. Exactly. And then in
[40:59] theory, who's going to challenge the
[41:00] price? Yeah. Exactly. If you have to
[41:02] have some really good auditors who are
[41:03] really technical to get into that
[41:05] detail, but it's because of the
[41:07] materiality of these companies too, it's
[41:09] really easy to inflate 10 million, 20
[41:11] million, 30 million, $40 million here
[41:13] and there to and and just keep nickel
[41:15] and dimming that from each other. and
[41:17] you don't use them like if you under dig
[41:19] it. How are you going to audit the seat
[41:20] usage by an internal your internal
[41:22] company like how many people are
[41:23] actually using that software? No, no
[41:25] 22-year-old auditor at Deote is going to
[41:27] be doing that. Yeah, there's no way,
[41:28] right? That's the problem. That's the
[41:30] problem with the audit model, right? You
[41:32] got these like totally inexperienced
[41:35] recent grads who have never worked in
[41:36] industry before
[41:38] auditing like really experienced people
[41:41] who know how to manipulate the system if
[41:43] they want to. Yeah. So, it's uh Yeah,
[41:46] you're right. It's total. That's f I did
[41:48] not know that that was possible. Yeah,
[41:50] that is I wonder how much revenue is
[41:53] inflated that way. Yeah, I would be
[41:55] confident a lot. The guidance is
[41:58] explicit against it. Like, oh yeah,
[41:59] you're supposed to gross it. You're
[42:00] supposed to net it down if you don't
[42:02] have fair market value or don't have a
[42:03] business use for it. It's like a payment
[42:05] to a customer. But it's just so hard for
[42:07] auditors to catch that and to justify it
[42:09] and so easy for someone to come on the
[42:12] other side and just you know how it is
[42:13] on the documentation side is to say yeah
[42:15] we got we we got fair market value it's
[42:17] at list price we bought it at or sold it
[42:19] at list price and or a reasonable
[42:21] discount and yeah this is they have
[42:23] 100,000 people in the organization so of
[42:25] course they're going to use it but no
[42:26] one's auditing that underlying usage
[42:27] right like the application of the
[42:30] principle
[42:31] isn't reflective of the intent of the
[42:33] principle which I think you were getting
[42:35] at to earlier of like the issues with
[42:37] the regulators catching up, right? And
[42:39] the intent with ASC 606 was to like
[42:43] prevent this manipulation from happening
[42:46] and so that you get hundreds and
[42:48] hundreds of pages of guidance and rules
[42:51] and regulations, but accountants are
[42:54] smart and they'll figure out how to get
[42:57] around it. So it just it just creates a
[43:00] huge compliance burden now for the
[43:02] businesses that don't have the resources
[43:04] to hire somebody who can be their you
[43:06] know ASC 606 expert or a whole team that
[43:09] can do it especially in the intangible
[43:11] space like you said which is probably
[43:13] 90% of you know US's like US's revenue
[43:17] or market cap but then there's only
[43:18] probably hundreds of true 606 experts in
[43:22] that space right which is insane. Yep.
[43:25] Yeah. So like my feeling on this is it's
[43:29] we need to go back to first principles
[43:32] when it comes to accounting. We we we
[43:36] have to focus on measuring and reporting
[43:40] metrics that are not easy to
[43:44] manipulate
[43:46] because you can't build a house on a
[43:48] foundation of sand. Yeah. Very true.
[43:51] Yep. We right we need a strong
[43:53] foundation and you know the all the
[43:56] movement actually in in GAP over the
[44:00] past few years has been toward more
[44:02] estimates and like you said the problem
[44:04] with estimates is that uh you know the
[44:07] auditors don't have the expertise to
[44:08] challenge them. Yeah. So like all this
[44:11] fair market value stuff that we're
[44:12] working on like it's hurting it's
[44:14] hitting earnings. It's like the one
[44:16] number that Wall Street really cares
[44:18] about that accountants create. Do you
[44:21] know this is the only EPS is the only
[44:23] ratio that's actually defined in GAP? We
[44:26] have all these ratios. Oh, that's so
[44:27] insane. I didn't I actually didn't know
[44:29] that. That's I learned something new
[44:30] today. That's insane. Yeah, EPS is the
[44:32] only one that's defined. Like, correct
[44:33] me if I'm wrong, but that's that's what
[44:35] that's what I Yeah. think and um and
[44:39] that number is so easy is is easy to
[44:42] manipulate, right?
[44:44] And
[44:46] it and it's because GAP is still based
[44:49] on like the the
[44:51] manufacturing logistics
[44:53] uh industries that it started in. Right.
[44:55] Yeah. gap was defined starting in the
[45:00] 1880s 90s in the guilded age when
[45:04] European investors started pouring money
[45:07] into America and they sent over Scottish
[45:10] accountants to report on what was
[45:13] actually happening in those railroads
[45:16] and in those factories steel factories.
[45:17] So archaic. Yep. Yeah. And and so like
[45:20] that's why the focus of GAP is so much
[45:23] on cost. Cost accounting is the
[45:26] foundation of of GAP. And it's because
[45:29] at the time uh that was how you measured
[45:32] the success of a business. It was all
[45:35] about optimizing your manufacturing
[45:38] process to control costs. And so the
[45:42] like
[45:44] uh what do you call it? The like a
[45:46] margin per unit was a super important
[45:48] metric because you could look at two
[45:50] steel companies and you could see this
[45:52] company's steel costs less than this
[45:54] company's steel and they're able to sell
[45:55] it for a higher price and so you can see
[45:57] which business is
[45:59] better and that's why we focus so much
[46:01] on accumulating costs in in accounting.
[46:04] It's like all cost
[46:06] based, right? But but so that but then
[46:10] think about what happens when you switch
[46:11] to an intangible economy
[46:14] where you still have
[46:16] costs but there the value of what you
[46:20] create is not rooted in the
[46:22] cost. So like the value of like in
[46:26] manufacturing you can extrapolate the
[46:28] price from the cost. Yeah. Yeah. There's
[46:30] quality differences too, but really in
[46:32] the end quality kind of comes together
[46:36] like all the railroads. Yeah, you have
[46:37] to, you know, have they have to have a
[46:39] similar quality. So like basically you
[46:42] can you can compare this like so the the
[46:44] cost determines the price you can or the
[46:46] profit you can make. That's it. Cost
[46:48] determines profit. But in the intangible
[46:51] economy of like Google, the cost does
[46:55] not determine the profit. Yeah. Yeah.
[46:58] It's Yeah. And it's so fascinating. And
[46:59] then the underlying cost drivers, things
[47:01] like data centers or these long-term
[47:03] assets, they can change depreciation
[47:05] methods on like you see it very
[47:07] regularly. Oh, EPS is a little short.
[47:08] Just did it. Yeah. Yeah. Yeah. Exactly.
[47:10] So, oh, we're a little short on EPS this
[47:12] year. Let's extend the depreciation of
[47:14] our data centers like or or we're having
[47:16] a bad year. Let's go from uh seven to
[47:18] five years. Yeah. Yeah. Exactly. Yeah.
[47:21] Yeah. Yeah. Ex. It's absolutely crazy.
[47:23] But hey, I I want to I feel like we and
[47:25] I could talk probably for hours and I'm
[47:27] looking forward to being on your show
[47:28] and being supporting uh earmark, but I
[47:31] want to just hear like what's next on
[47:32] your docket for you. How can my
[47:34] listeners support you? How can I
[47:36] continue to support you? And I'm looking
[47:38] forward to continuing the conversation
[47:39] after two ways. One is listen to the
[47:42] accounting podcast. Find that in your
[47:44] podcast player. Go to accounting.show in
[47:47] your web browser. Subscribe wherever you
[47:49] listen to podcasts. We're also on
[47:50] YouTube now. We live stream on YouTube
[47:52] which has been really fun. Sounds blast.
[47:54] That sounds And we have built a actually
[47:56] a bigger audience on YouTube now for our
[47:58] podcast than on our podcast feed. Uh
[48:02] that's really cool because you can
[48:03] interact with us. You can comment as we
[48:04] talk about the latest stories. And I
[48:07] don't know if I mentioned what our show
[48:08] is about. It's a weekly news roundup for
[48:09] accountants. So whatever is in the news
[48:12] that is relevant to accounting and tax
[48:14] professionals, that's what we talk
[48:15] about. Awesome. So, the last few weeks
[48:17] it's been a lot of tariffs and Doge
[48:19] because Doge has been going into the IRS
[48:21] and doing some stuff, a lot of stuff.
[48:23] And the tariffs impact all of us uh in
[48:26] the economy, but especially accountants
[48:28] because, you know, we're working for
[48:30] these businesses that now have to deal
[48:31] with sudden cost increases. And so, I
[48:34] you know, we talk about that. We we're
[48:35] not afraid to get into political issues
[48:37] that relate to accounting. Um, in my
[48:39] opinion, we should be talking about that
[48:41] stuff
[48:42] because especially when it comes to tax.
[48:45] It politics and and accounting merge
[48:48] together in tax. Yeah. So, we we aren't
[48:51] afraid to do that. I know a lot of like
[48:53] CPU providers are afraid to talk
[48:54] politics because they don't want to piss
[48:56] people off. Uh, but you know, I think
[48:59] you can do it and you can do it in a
[49:00] rational way and we can approach it in a
[49:03] numbersbased way, right? Objective,
[49:06] scientific. Let's talk through the
[49:08] numbers. Yeah. And sometimes the numbers
[49:10] change my mind. And I I I don't I'm not
[49:13] a partisan person. Uh I, for instance, I
[49:17] I like what Doge is doing. I've been
[49:19] following that and I enjoy it. Um I
[49:22] think the tariffs are one of the worst
[49:24] ideas a president has ever had since
[49:27] McKinley did it,
[49:29] you know. So I can think both things.
[49:32] And what's great is that our audience
[49:34] appreciates that. Um and I get called I
[49:37] get called MAGA on LinkedIn and I get
[49:40] called liberal snowflake on Twitter. So
[49:43] I think I'm doing something right. That
[49:44] means you're doing something right. That
[49:45] means you're exercising your freedom of
[49:47] speech and searching for the truth,
[49:48] right? Because there's no there's no
[49:50] hard line. What else can we do? What
[49:52] everyone should subscribe to earmark,
[49:53] right? I'm going to I'll subscribe and
[49:55] I'll put some stuff on it. Like that's
[49:57] like definitely something to do, right?
[49:59] And here's the the best part. You don't
[50:01] even have to pay a dime to use it.
[50:03] That's part of our public service. You
[50:04] can go to earmark.app app. You can
[50:07] download the app from the the earmark
[50:08] app from the app store and you can earn
[50:12] one CPE for free per week. If you want
[50:16] to support us, it's just $150 a year to
[50:19] subscribe and that gets you unlimited
[50:21] CPE. It gets rid of the ads, some other
[50:23] perks, some more stuff we're going to
[50:24] build. Uh and and we've got, you know,
[50:28] thousands of subscribers now. It's
[50:29] amazing. So, it's making the work we do
[50:31] possible. Um,
[50:34] so that's that's really it. Get the
[50:36] earmark app and you know, also just like
[50:40] use your voice, speak
[50:42] out about how we can improve this
[50:45] profession. Um it it is really the
[50:48] individual voices of accountants that
[50:50] made this latest change happen with CPA
[50:51] lensure that's going around the states
[50:53] where we're getting rid of that 150 hour
[50:55] rule and bringing it down to four years
[50:58] which I believe is essential to
[51:00] attracting students who don't want to be
[51:01] in school forever. Yeah. Um definitely
[51:04] you know the value of traditional
[51:05] education has declined in relevance or
[51:08] in you know not not maybe uh in like
[51:12] total value but basically in relative
[51:13] value. Yeah definitely. Yeah. These
[51:15] days. So yeah, um that is how you can
[51:17] support me earmark app and listen to the
[51:20] accounting podcast. Well, I'll be doing
[51:22] that personally and then I'll also put
[51:23] the links below and I'm looking forward
[51:25] to working with you on getting webinars
[51:27] up and being on your show too. Blake,
[51:29] it's a pleasure. I really would if
[51:31] you're ever in the Bay Area, I'd love to
[51:32] take you out or when next time in LA
[51:33] area, I'll I'll give you a call, man.
[51:35] I've really enjoyed our conversation.
[51:37] That that would be awesome. Uh looking
[51:39] forward to it. Can't wait to have you on
[51:40] my show. Yeah, can't wait.