The Future Is Now with Blake Oliver
Blake Oliver joins Randy Crabtree on Episode 72 of The Unique CPA. The founder of Earmark CPE, Blake pieced together the seemingly disparate ideas of podcasts—a world to which he contributes via co-hosting the Cloud Accounting podcast—and CPE, utilizing his skills in web design, tech, and business building to bring free CPE to accountants nationwide. Plus, The Unique CPA has joined the Earmark family! So now you too can earn CPE by listening!
Today, our guest is Blake Oliver. Honestly, if you listen to podcasts at all—I assume you do, because you you’re listening to The Unique CPA—I probably do not need to introduce Blake to you. But for the fun of it, I’ll do a little introduction here: Blake is co-host of the Cloud Accounting Podcast which I’ve seen is probably the most listened to, or most popular, accounting podcast out there. On that, they give a weekly news update for accountants, bookkeepers, and others interested in the industry. Blake has been named by CPA Practice Advisor on their “40 Under 40” list, he was recently named on their 20 Most Influential list, he’s been on Accounting Today‘s top 100 most influential list—so you can see, he’s done some stuff in this industry. In addition to all that—and something that I’m gonna want to expand on today—he recently started a company, Earmark, which is turning podcasts into CPE presentations. And he’ll correct me if I got that wrong—the wrong terminology—but we’re hoping, and we should by the time you hear this, hopefully have The Unique CPA on there and you’ll be able to get CPE for this. Enough of that—Blake, welcome to The Unique CPA.
Hey, Randy—thanks so much for having me. It’s fun to be a guest on a show. I now host two of my own, so…
Oh, you have two? Besides the Cloud Accounting, what else?
So Cloud Accounting Podcast, which we’ve been doing for a few years now. And then also the Earmark Accounting Podcast, which is our captive portal for creating any content that I want to create.
Okay, so on Earmark, you’re doing stuff in addition to—I’m assuming the Cloud Accounting Podcast is on Earmark, correct?
And then you have your own.
Yeah, that’s whatever I want to create. That’s me going off as a solo artist, for that one.
Wow. You’re leaving the team behind, and you’re just going solo occasionally, and then go back to the team, huh?
I’m gonna do both at the same time. We’ll see how long I can do it. But you know, thank you so much for the intro. It’s been fun being a podcaster. I wasn’t the first person to create a podcast in the accounting space. There’s guys on From the Trenches in Australia. David Boyer has been doing this for a long time. There’s other shows that have been around—Jason Blumer has been doing The Thrivecast for like ten years—before anyone even knew a podcasts were, he was doing one.
So we’ve been doing ours for like, I don’t know, four years. And I just got this idea. Last year— actually, it was a couple years ago, I had some listeners start saying, “Hey, I love learning. By listening to accounting podcasts and your podcast. Specifically, I learned more than anything I learned in my CPE courses that I have to take for my CPA. Can I get CPE for this?” And they were saying it sort of half jokingly. That percolated in my mind. I thought about it, I thought about it, and finally I said, “I’m going to do this.” And so I hired a developer, I started building an app last year, and we just released it in January of 2022. Now, you can download the Earmark CPE App, and you can listen to my podcast, and get free continuing education credit for it. And you can also listen to a lot of other ones. And I’m really excited for this show, Unique CPA, to be on Earmark hopefully soon!
Soon! It’s up to me to fill out the paperwork to get things going. So that’s the goal, at the earliest today. I tried to push that off on our marketing team, and they pushed it back to me. So I guess it’s all up to me right now. So we will get that going.
But I’m excited about it, because honestly, for two years, I’ve been thinking, “Why are we not giving CPE? How can we give CPE?” And that’s as far as I went with it. So it was awesome to see you went that next step and not just we should but let’s do it. And that just, I think is great. So because I had the same questions.
There’s a good reason that a lot of people haven’t done it yet. It’s because it’s kind of hard to figure out how. I had to go read all of NASBA’s—the National Association of State Board of Accountancy’s—standards, which is like, you know, dozens and dozens of pages, and then figure out which study method. Because there’s different kinds—there’s the live webinars, the in-person, there’s the self study, which we could use, ‘cause we use self-study. And then I had to figure out, “How do I build an app that automates this?” Because if we’re going to create a platform for podcasts, people put out content a lot. We put out content weekly, most shows are biweekly or monthly. So we can’t be, like, manually doing all this.
So we figured out a way to automate the issuance of the CPE. The user just verifies that they have listened to the episode, and then takes the quiz questions—and there’s five quiz questions, multiple choice, per hour of CPE. And you email yourself this certificate. So it’s kind of a self-service app—that’s the idea.
Yeah, I was actually recently on a podcast, where the guy asked me to do a webinar for him, and I did it. And they were self-service from that standpoint, with the getting out. Now I’ve done CPA academies, and then you fill out the paperwork, and that certificate gets sent to you, but this was a little bit different, and it was pretty interesting how efficient that was, so you must be doing similar.
Well, you know, I’m an accountant. I’m a CPA, so I know how busy everyone is. And the last thing you want to do is spend 30 minutes trying to get your CPE for a course you took. So we make it five minutes or less. I’ve already got some CPAs who have gone and gotten 20 hours of continuing education on the app already in like one month. So it’s gonna save people a lot of time, and I hope actually incentivize people to do CPE the right way. We are all doing it the wrong way. We are all waiting—most of us, I mean, maybe some of you listeners are responsible adults—but most of us have too much going on. And we wait until the month before our license renewal, and then we have to do 20, 40 hours, all at once, and it’s a nightmare, and you don’t learn anything. So the idea is with this app in your pocket, on your phone, you just do an hour a week, and then you are ready—you’re done. Right? So we’re going to try to get everything you need: audit, tax, ethics, all the fun stuff too, we’ll get that in the app, and yeah, you could do all of your CPE in the app.
Now the challenge is, -ome states require you to do in-person still, believe it or not. Like it’s crazy to me that they require it like it’s better somehow. I’m sorry, but it’s not better. It’s often worse.
I mean, how many times have you gone to a live course and you see people on their computers, typing in emails while the speaker is presenting? They’re not listening. They’re just there to check the box. So yeah, I want to make actually CPE useful and educational again.
That’s great. So you won’t believe how excited I got when Terrell Turner posted this on LinkedIn that he had this ability for his podcast—and he has a great podcast, I’ve been on with him, And he does a great job online—I saw it was, he turned it into CPE. I thought, “How did he do this?” And then I traced it to Earmark, I traced it to you I reached out to you like within minutes of seeing he did that, and now I’ve slowed the process down because I haven’t filled out the paperwork yet! But when I saw that, I got so excited. So again, I really want to thank you for doing that. And I really think it’ll change CPE in general. And like you said, I’ve been guilty of the last month, getting the 120 hours in, we have a three year renewal where I am, so 120 hours in, and this will help me with that for sure.
For me, it’s just so selfish because I love going out and hiking. I live in Arizona. I live in Scottsdale near the McDowell mountains. So we have the largest urban park in the country, right outside my door. And I go out and I hike in those hills, those mountains, and I listen to podcasts. So I get all my CPE this way.
Yep, that’s great. And I’ve actually been doing what you just said—for the last month, my wife and I have been on the road and we’ve gotten a lot of hiking and we were in Arizona for two weeks, been in California for two weeks now, and hitting a bunch of different spots for hiking. So that’s my new way to get CPE as well.
Alright, let’s back up. Because we went to we went to the last thing I was planning on touch on—which doesn’t matter because I love when these go not the way I’m thinking—but I want to get a little background on you because you’re very intriguing. Just you, I mean Earmark and everything else, but you personally graduated from Northwestern University with a degree in cello.
Yes. String performance. Cello, violin, yes.
And so how did you go from this prestigious degree at a prestigious university to becoming one of us lowly CPAs?
Well, it turns out that a prestigious degree from Northwestern isn’t worth very much if you major in music. Well, the truth is, it was fantastic, actually, and I learned so much. I tell people that I learned from studying music—I didn’t necessarily learn anything practical in terms of my profession now, right? But I learned grit. And it’s just like playing a sport, right? When you play a sport—Division I level of college—you learn skills that make you a successful leader and manager the rest of your life. And so to me, I learned similar things. And I wouldn’t trade it for the world.
The way I got into accounting is I moved to LA, and the financial crisis was in slow-mo mode at that point, so it was like, happening, as I moved there. And I was going to start freelancing and working in the industry and stuff like that. It just cratered the budgets. So if you know anything about film accounting and production, the music is the last thing that gets done in a picture. So when there’s a financial crisis and all the budgets get cut 20% or more, what gets cut? First, it’s the thing at the end—the music. That’s when the money dries out. So everyone started using synthesizers—this is when, you know, computer music, right music made on computers without live musicians was starting to actually really not just become a sort of 80s kind of retro thing, but actually sound so good that you can’t tell the difference. Now, most people don’t realize that most music on like reality TV, there’s not real musicians. It’s all just somebody in a synthesizer
Really? I did not know that.
Yeah. My brother in law does it. He makes that kind of music.
So he put you out of business! Your brother in law is the reason you’re a CPA?
Well, except for the problem for him now is he lives in LA, but now everyone in the world can make music for TV, so it’s totally demolished him too.
Automation comes from all of us.
So there wasn’t a lot of music, there wasn’t going to be this career as a professional cellist playing the instrument because computers had already automated me. So I said, “Well, I just wanna do this for fun. What can I do to make a living?” I started tutoring SAT, because I was always good at that. And then I was working at a tutoring company, and the bookkeeper quit in the middle of our busy season. And I talked my way into his job, because it was a good job—it was stable, more stable than the tutoring stuff—and I was like, “I can figure out how to cut checks in QuickBooks.” That’s what he looked like he was doing. So that’s how I got into QuickBooks, got into being a pro advisor, decided, “Hey, I can make way more money, helping people with QuickBooks than I can with anything else, you know, playing weddings. Now that’s not very much fun.”
So yeah, that was how I got into accounting. I eventually became a CPA. Along the way, I started my own cloud bookkeeping company. There’s a lot of them now. You may have heard of ScaleFactor, and Pilot, and Bench—
And all these VC funded startups. I had one, we just never got VC funded. Because after like three years of doing it, I realized something that the VCs haven’t, which is that these are not good businesses, for that kind of growth.
Yeah, I was never gonna go out and raise money on a lie.
I’d be happy to talk to you about that. But I think, you know, ScaleFactor went down—they crashed and burned because they were lying to their VCs.
And a lot of these companies are really just, they’re just accounting firms dressed up to look like tech companies and look like SAS businesses, software companies, and they’re not. And their margins suck. And eventually people will figure it out.
Well I think you need to expand on this. You can’t just throw this out here and not go further. So—give me a little more.
Oh, well, sorry, I sort of took a detour there. We’ll come back.
So, so yeah, so I founded that company was called Cloudsourced Accounting. And so I sold that to a CPA firm that is now part of Aprio.
Aprio is a top 50 firm, so Aprio Cloud, part of that was mine. So by the transitive property of accounting for mergers, I can say I’m an ex-partner at Aprio.
I’m very familiar with Aprio. I consider Richard Kopelman, the managing partner there, a good friend. And I had heard about this, I just didn’t know you were part of that whole transition when they—Aprio Cloud became its thing.
So Bruce Phillips is the CPA who bought my firm, his firm HPC became Aprio Cloud. That was after I left. And so, Richard Kopelman, I don’t know if you know this story, but they’ve been expanding a lot.
And there’s still some states where Aprio is not an appropriate name. Do you know this story?
Yes, but I don’t think he wants this out in the public!
It’s too late. I’m telling. So Richard Kopelman, in order to register, I think in North Carolina, as a CPA firm, he had to change his name to include the name “Aprio” in it, because they still have a law that you have to have your name in the name of the firm. So he changed his middle name, legally, to Aprio.
Richard Aprio Kopelman.
Yep, I heard about this right when it happened.
I think it’s brilliant. And I think it shows just how far behind the times a lot of these state boards are. It’s insane that you have to do that.
Alright, Richard, if we don’t cut that out? It wasn’t me that brothers up. It was Blake, just remember that.
It was me. Sorry, Richard. Apologies.
Richard’s been on the podcast before.
It’s too good not to share that story.
It is a great story, and every time I hear it, I just start cracking up. I mean, it’s just so strange.
So all right. So go on with your Cloudsourced Accounting took over and then are we to the “people are lying” part yet?
Uh, so I left Aprio—or I left Cloudsourced Accounting, and I went to work for Armanino in LA as a manager in their CAS practice. And then about a year into that, a tech company called Flowcast recruited me to be a product marketer. And you know, I like to talk—I think it’s pretty obvious to anyone listening, I enjoy hearing the sound of my own voice. And so product marketing is a really interesting job where you can be a CPA, and you can get paid to do webinars and create CPE content. So I’ve spent the last four years creating CPE content for software companies that are trying to talk to accountants. And one way that you do that is by giving them CPE.
I really enjoyed that, but I felt it was kind of limiting, because here I am, and I can only talk about the topics that are relevant to their apps, I can only—I have to be kind of salesy. I don’t like being salesy. Part of the reason my CPE was good and people liked it is because I tried not to be salesy and actually educational. But ultimately to actually do it and make it the best, you just can’t be captive. And so I left on my own, and now I’m creating CPE, and also helping other people create CPE. So you create amazing content, every time you release an episode. People should get CPE for that.
Yeah, I agree completely!
So that’s how I got to where I am.
Alright, awesome. It’s quite a story. So do we want to skip the the other parts of…?
Yeah, I should just touch on that. Because it is unfair to like hint at that and not talk about it.
More people should know about this. So ScaleFactor was one of these, you know, software assisted bookkeeping companies that claim to be using machine learning and artificial intelligence to automate the work of accounting.
And in reality, nobody has figured out how to do that yet. Maybe some small aspects, such as the coding of transactions, but we’re not talking about replacing bookkeepers or accountants yet.
So all of these companies, they have a bunch of software, but they also have an army of people that they’re hiring. And they’re accounting firms. That’s what they do—they provide a service using people, leveraging people.
Well, ScaleFactor, according to my sources, was hiding the cost of their labor in operating expenses and not up in COGS.
So they were trying to look more automated than they were.
Right. Because if the only thing in your COGS is your software, then you’re gonna have great margins, just like a software company, right? That’s the difference in valuation between a software company and a service business. A software company can have 80, 90% margins—gross margins. A service business is lucky if it has, you know, 50% gross margins, but it’s often much less than that, right?
So that is what determines your valuation. And I think a lot of these companies, as with many other apps that are developed like Uber, for instance, right? The valuation of Uber is predicated on them eventually developing self-driving technology to eliminate the drivers because their biggest cost is the drivers.
Right. Yeah. Makes sense.
So that’s where we’re at with that, you know, and, of course, anyone who’s done our job, I think, understands there’s a whole lot more complexity to accounting and bookkeeping services, than just coding transactions. The hubris of software people in the SAS world is they think, they look at accounting, and they come into it from their own perspective of, “Oh, I founded a company. I’m a software guy. And now I have to hire some accountants. What are they doing for me? Oh, this looks so easy. I could automate this. I’m going to start my next company, and I’m going to automate all this stuff.”
What they fail to realize is that the relationship side of the business is something you can’t automate, right? And that’s where they fail.
Now, I’m not saying somebody won’t do it. But so far, nobody has done it. And I come to this from the perspective of somebody who was thinking about it—like I was actually out there, I was gonna go out and raise money, I had these grand plans to be like that. And then I realized it just doesn’t work.
So as a CPA, I have an ethical obligation not to ******** my investors.
Uh oh! We just got an R rating on the podcast. How do they rate podcasts?
Are we gonna have to make this explicit? You can delete this. I’ll send you my—
No no, that’s completely fine. So a couple of key points: First time hubris has ever been used on the podcast. So congratulations on that word. And—hold on, I gotta get my train of thought. Where was I going with this? You’re just getting me flustered, here. We’re going everywhere.
I apologize. You know, at a certain point, I realized, it’s just important to like, when we’re talking, we’re doing these things like, have fun and be honest. You know, there’s so much content out there, where it’s like, super produced, and people are just putting on their suits, and they’re looking fancy, and they’re not actually saying anything.
And I’m sick at this point in my career of just not saying anything that matters.
And let’s say something that matters, and it’s okay if we forget what we’re going to say. That’s actually my favorite thing to do to people. Sometimes I’ll just be on a show, I’ll be hosting an episode, and I’ll be like, I have no idea what we should talk about next.
Yeah. Oh, I do that all the time. Yeah. And I am there right now because I’m trying to figure out which direction we’re going next.
Well, yeah, and I haven’t been very helpful. I apologize.
No! I’m having a great time! So we have two goals on the show.
One, we have fun. I’ve laughed a lot so far. So we’re having fun. Two, we educate. And I think we’ve done that as well. So we’re hitting both ends. That’s all we need.
We talked about gross profit, right? Like, that makes this an accounting CPE course.
That’s right. Gross profit, and we talk client accounting services, and so…
So maybe that’s the next topic we should hit on.
Yeah, that’s what I was thinking after talking about the, you know, the Cloudsourced Accounting, and talking about the need for individuals still—it’s not all automated, and we still need the people behind the scenes. It’s maybe a lot more tech enabled, but it’s not tech only. So if somebody is looking to use this technology, maybe this is what they want for their CAS or CAAS, whatever we want to call it, or I don’t know if those are two different things. But any advice out there for them?
Well, first of all, I really believe that CAS, or outsourced bookkeeping, or outsourced accounting, or what we call all this advisory stuff we’re talking about, is the future of our profession. And in many ways, it’s not actually the future of it—it’s the past of it. It’s what accounting used to be.
Before we all became auditors and tax people, what did accountants do? They did accounting.
And so we stopped doing that for a long time, because it was really hard to do that as a public accountant in a way that was efficient, because we couldn’t be at their office all the time, and everything had to be done there. But now with technology, we can fill this role again. And so we can really add value, especially to small businesses that desperately, desperately need accountants—and not just some random person off the street who they hire to do this stuff for them. So we can do it higher quality, we can protect them against fraud. Like, I believe this is a very fun—it’s a very empowering—it’s a fulfilling career for an accountant.
And so I’m telling everyone I can talk to, like, young students, “Do not go work for the Big Four in tax or audit. Yeah, that may have been your path, the only path you could have taken at one point, but now you can go work for a smaller firm or regional firm. You can do CAS, you can advise small businesses, you can make a big difference to them.”
And so it’s growing. It’s it’s over 10% of firm revenues across the board are now CAS—outsourced accounting—and CAS stands for “client accounting services.” The AICPA and CPA.com, have decided to confuse the situation by calling it Client “Advisory” Services, which it is not always. Sometimes it is.
Right. Or I’ve heard Client Accounting and Advisory Services as well.
Oh yeah, even better, two A’s in there.
Yeah, we can be CAS ******* there. Sorry, you’ll have to bleep me again. But, you know, whatever you call it, it’s just accounting, you know? And I think we should just call it accounting. “I’m doing accounting for my clients.” And it’s great. It’s the future and technology is what made it possible. And that’s why I do this whole cloud accounting thing. Cloud meaning, we took everything to the cloud from desktop, and now we can do it on the cloud.
Yeah, virtual company. employees work remotely. This is all revolutionary to some people, because that just happened in the pandemic, but a lot of us we’ve been doing it for 20 years. So yeah, it’s the place to be.
Yep. And you know, I’m sure you know, Josh Lance. So Josh, I’ve had on the show, too. And I know Josh, he’s a Chicago guy as well. And so yeah, he’s had the virtual practice now for, I don’t know, ten plus years,or whatever. And so they’re virtual, they’re on the cloud, they’re, you know, no office.
These firms are growing twenty to seventy or eighty percent annually.
Crazy growth rates. All the growth is happening with these firms, because nobody wants to go work for a traditional firm anymore. Why would you want to go work in a cubicle when you can work at home, and you can have flexible hours?
That’s what people want. And in the great resignation, the talent crunch, this is all just accelerating. All this stuff that has happened for ten years is now really taking over, like very fast. It’s really cool to see it happen, because I’ve been preaching this for years and years, and I feel like nobody was listening. But now people are listening.
Oh, no, I agree completely. And I think it’s great. I mean, we’ve always, since we started Tri-Merit, we’ve always been, you know, I guess, say, a remote workforce. We had a small office, but not many people there. We have, you know, 45, 50 people now, they’re all around the country. You know, we have an office in the Chicago suburbs. But if there’s two people there on one day, I’m surprised at this point.
And honestly, cloud based, although we don’t have to have all the technology that CPA firms do, or all this new—we don’t need the tax program and the accounting program and all the other programs that they need to communicate together. And so, but it’s pretty cool to see and I think it’s going to be big for the companies that have that flexibility, like you said, work when you want, get your job done, you know, and do it whenever you want. If it’s two in the morning, do it at two in the morning. Those firms are just going to take over because you know, nobody wants to be micromanaged.
And you have to figure out how to do it if you want to stay competitive because the next thing that people are doing, here’s what’s next: Firms like Josh’s are figuring out how to do outsourcing, but in a much better way than has been done in the past. Because once you set up your team to work whenever they want, wherever they want, you can get people all over the world.
And this takes a huge mindset shift, because no longer are you managing people in a nine to five, where you’re peering over their shoulder to see what they’re working on. You have to very effectively do this in a remote project management platform. If you set it up right, you can do it, and you can rest assured knowing the work is getting done. And you can hire a team in Guadalajara, Mexico, like one firm that I’m talking to, or you can hire a team in the Philippines, like a lot of people are doing.
They are, yep.
And these are people that are not just processing transactions, they’re actually doing the service, and then you have folks here in the US who provide the client interaction. And that team together is both affordable and effective, and will kick ass against any traditional firm.
Nope. I’ve got to keep you on my advisory board, because I need to know what I’m missing and to make sure that we stay competitive and stay on top of everything.
So one other question, because I thought about this while you were talking, and maybe it’s not time to segue, but do you have an opinion on, or maybe we should talk about this, because this is an interesting area for me, you know. Private equity investments that are coming into the big public accounting firms now—I mean, this is happening. I’ve actually wrote an article on it recently which I’m thinking is going to be published soon. But, you know, I think you mentioned it earlier—well, you didn’t mention this part—but what I think they’re doing a lot of that they’re saying, the money’s gonna go into technology and this and that, and help them be more competitive, but then you lose the people factor. And I think that’s where firms can outpace that or at least stay ahead of the curve, as the smaller firms that don’t get private equity investment, are really the firms that are gonna give that personal touch. I don’t know if you have an opinion or in general.
So I think the private equity discussion is related to the partnership discussion. I—maybe you can convince me otherwise—I haven’t actually debated it a lot with people, but I have recently come to the conclusion that the partnership model is done. It’s not a good model of governing a fast-changing business, and we are in a fast-paced environment. Partnerships are by nature conservative, and they are difficult to change. And that’s what’s held back most firms, is you have some partners that are five years away from retirement—a huge chunk of them all the time—like, I don’t want to change anything. That’s going to disrupt my plan.
Yeah, you’re right.
And partnerships also rely on employment for life, which is a concept that I cannot even believe still exists. You know, my grandfather had a job for life after World War II when he came back, and he got a job at an insurance company, and he worked there for twenty or thirty years after that, right? That doesn’t happen anymore. I mean, not frequently. I change jobs every two years, you know?
You take that long?!
That used to be a liability. But now it’s an asset, because people know, I can come in, and I can act like a consultant and make a bunch of changes and fix things up and do things, and then I’m like, “I’m bored, I’m off to the next thing.” And that’s how you stay competitive, right, is you need to be agile. And partnerships, you know, they resist change, just by nature of the way that the power of voting is distributed, they resist change.
And so what we’re seeing is the corporate model taking over. The fastest growing firms I know don’t have a partnership model, they have a corporate model. And when you roll into one of those firms—let’s say you have a small firm of your own, that’s like three to five people or something less than ten—you get a buyout, and you become an employee. And if you’re at a certain point in your career, that’s actually really worth it. Because now you don’t have to stress about the equity, you get a good salary, and let’s just face it, when you’re an equity partner in an accounting firm, you don’t really own anything, you just have some sort of, like, deferred compensation plan when you retire. It’s not that you can cash out at any time, right?
No, no. Right, exactly.
It’s just like a pension.
And that’s what they said in some of this investment stuff recently is that, you know, the partners there are really getting bought out today by the private equity.
And they’re for the most part becoming employees. They’re going to have some ownership and the other stuff, but they’re just getting, let’s get rid of that partnership—it’s almost like that, let’s get rid of this partnership structure. Give me my money today, I may be working for twenty more years. And I know I’m not going to get the, you know, this thing at the end like I was going to—although they promise that the private equity will then, and I don’t know how this works, it’s gonna churn two or three more times in their career, and I don’t know what the end game is there. I have no idea how that works. But they’re already doing that, I guess, by private equity, is getting rid of that structure.
Yeah, a lot of like, the partner retirement plans, are just unfunded liabilities, and you’re gonna see a lot of these things become upside down, because you don’t have enough young CPAs entering to become partners. So then the liability grows and grows and there’s not enough new partners to fund it. You got to cash it out now. I think we’ll actually see some firms go under that don’t get the cash. They will fail, and they’ll have to like, renege on their payouts, and those retiring partners are gonna be screwed, right? Although you know there’s, the bigger the firm, the less likely you are to live very long after you retire because of the stress of the job.
You know, there’s a terrible stat about like, big four partners, that like, they retire at mandatory retirement, then they live like three years and they’re gone.
Like, that’s just so messed up, but it’s effective. Maybe those, maybe the Big Four will keep going as a result of that.
But what I’m trying to say is that partnerships aren’t—like being a partner in an accounting firm, people are starting to realize it’s not such a great thing. And it’s really just a high paying job. So if you’re just gonna have a high paying job, why wouldn’t you just have a job, right? Instead of being tied to this thing for the rest of your life?
And having to deal with partners and screaming at each other in boardrooms and all the horrible stuff that goes on in a partnership a lot of the time, with people that you are like, you’re more tied to your partners than you already your spouse. So that’s what I think is changing is we’re going to see corporate models develop and predominate. And people will have equity in the form of stock options, which is much more ideal than in the form of a partnership.
And I’ve seen, I’ve talked to quite a few firms, you know, in the last few years that are getting rid of the deferred comp overall anyways, it’s just, you know, coming in your get your salary and your salary’s your salary. Now, I think I think they still have “Okay, well, you know, you brought in this equity and you get this equity out,” but it’s not a deferred comp or anything. So at least they’re getting there some way, a little bit.
The other thing that I’m passionate about, from a fairness standpoint, from a diversity standpoint, is this idea that, like, why do we have this separation between partners and staff?
If you think about it, it’s actually an artificial barrier that we create right? Above this line, you have a voice, and below this line, you work. And that’s like the old factory model of production: management, workers. We are in a knowledge economy now. Your young people want input, they want to help determine the direction of this company, they want to just do what you tell them. And the partnership model, that’s what that is. So, there’s some firms that I talked to—I haven’t talked to a lot that have done it, but there’s many that are looking into it—as figuring out how do we give equity, stock options, profit, share whatever to our staff, and get rid of this dividing line. And I like that a lot as a, you know, I mean, I’m one of those people who, like I went into Armanino, and I just couldn’t keep my mouth shut. You know, like, I exited myself from that firm, because after a year of complaining, nothing was happening, and I’m like, “Until I’m a director or a partner, I’m not gonna be able to affect change, because I don’t really have a voice. I can give advice, but I can’t do anything.” And I just wasn’t willing to put up with that, you know, I’m—that’s just my personality,
Well, I got that same personality.
So those people tend to go off and start their own firms.
That’s the kind of, those kind of people, do that. But you know, we need to retain them in the profession, like a lot of them leave the profession.
I just had this revelation recently, like, everyone’s wondering, in leadership, in this profession, like “Why can’t we attract new CPAs, young CPAs into our profession? It must be that we aren’t focusing on technology, right?” No. It has nothing to do with that. The hours are long, the pay is bad, and you don’t have any control over your life. Right. And you’re you don’t feel like you have purpose.
Yep. Nope. I agree.
It’s very simple.
I agree. I agree completely. So I don’t know if you’re familiar with John Garrett. And I don’t know what you think…?
Yeah, he’s great. I love John Garrett, “What’s your ‘And’?”
Yeah, yeah. So John, and I just recorded a show last week. Second time he’s been on, and I really live by—even before I met him, but after meeting him—by what he says is that, you know, you are not your title at the office←you are, you’re a hiker, you know, that’s what you are. That’s your passion. You are this. And I completely agree. And I don’t think enough firms concentrate on that. So I’m really want to make sure his message gets out more, and I’m hoping that the more firms will start to do what he says as well.
if you think about it, the fact that his show even has to exist, is a signal that there’s something wrong with our profession, where people do not feel like they can be themselves at work.
I mean, you want people to feel happy. You want people to stay at your firm. Let them be themselves.
I agree completely. Alright, one last thing on the on this topic. And then we probably should wrap up.
But I’m having so much fun, though!
Well, we don’t have to wrap up. We can keep going.
But we have meetings to get to. We have Zoom.
We do have Zooms. I was just gonna look at my calendar to see if I have a Zoom. That when you were talking about this whole new model, potentially, you know, as corporate or whatever. I actually had drinks with a CPA out here in California last week, whose firm is an ESOP and I never even heard of that before, an accounting firm being an ESOP. And so everybody that comes in as an employee is an owner at some level.
I love it.
I wonder if that’s something because, “Now I have a voice, I have some ownership. I know I’m a smaller voice, maybe the directors or the executive committee or whatever, but I do have input now.”
You have some voice, right? That’s all people—people want to be heard. They want to be heard. They want to know that they make a difference. And yeah, I think that is just brilliant. And maybe another way to say what I’m trying to say is, it’s not that the partnership model is broken, it’s just that everybody needs to be a partner. We all need to be partners.
Mmm hmm. And if everybody’s voice is heard, we’re all gonna be better off. So yeah, you know, doesn’t mean you’re gonna implement everything everybody says, but boy, at least feeling like you’re being heard, and knowing that some of you[r ideas] are going to be used, I think is huge. And that’s—we try to do that.
But imagine, and this is the reason this is hard for managing partners and for executive committees in firms is like, imagine if your staff, the 90% of the people that make up the other 90% of the people that make up your firm, your thousand person firm, there’s 900 people there that have no vote. Imagine if you gave them a vote, what would happen in your firm?
You’d probably be much better off!
You would be better off, but it’d be scary, because a lot of stuff would change. Right? A lot of stuff would change.
Yep. And that’s why I had a hard time ever working for anybody because I felt that I wasn’t making those decisions. A funny thing, because you mentioned, after, so I was managing partner of a firm in the Chicago suburbs. And you know, 16 years ago, merged in with another firm, and then kind of took some time off and then decided, “Hey, I’m gonna try to work for somebody.” Then this firm, they were doing R&D tax credits, and I lasted well, after a month, I’m like, “Okay, they’re not listening to me. I have some really good ideas, I think we can really help this business,” and nobody was listening. I’m like, “Okay, I’m leaving to start my own. Sorry.”
So hopefully, this becomes a middle ground where we have these midsize firms where you don’t have to go and start your own small one, because that’s painful.
It is. It is.
It’s hard. Not everybody can do it. Yeah. I want a middle ground.
All right. Well, you know, we can go for probably five more hours. I think we’ll skip that today.
But we’ll do it again. We’ll do another episode. And yeah, I’m happy to come back anytime. I love this. And I hope your listeners, you know, don’t mind my pontificating. But, you know, I’ve been keeping my mouth shut for a long time, because I’ve either been inside of firms, or I’ve been inside of software companies that depended on the establishment, and so I couldn’t say everything I wanted to say. And now I’m on my own again, and I have a platform and I can say the truth, you know, at least what I think is the truth. And I’m curious—if you’re listening right now, and you have thoughts about this, I’m on Twitter, I am an open door person for everyone. Blake@Earmarkcpe.com is my email. I’m @BlakeTOliver on Twitter. At me.
All right, that’s great, because I was just gonna ask people to get a hold of you, because hopefully you get good responses to what we have out here today.
Sometimes I get some like, you know, 85-year-old partners dismissing me, but they don’t really know how to use Twitter, right. So I’m kind of safe here. They don’t know what a podcast is, you know.
Right. So you’re saying that’s not my demographic?
85 year olds. All right. So this is one I keep. I told John this last week while we were recording, for some reason after I had him on the show the first time, I stopped asking people what their passion was outside of work because I felt I was stealing his thing, but I was doing it for a year and a half before I even met him. So yeah, we’re gonna finish with this. And I know you mentioned one thing already that you enjoy—hiking—but what are your outside of work passions?
So right now it is going swimming with my son. He’s seven years old. He’s a really good swimmer. And we go every day we can on the weekend for like, two hours, and I get my exercise. We live in Arizona. So it’s like, you gotta if you live in Arizona, you have to swim. It’s the perfect sport.
It is, although there’s no water, but you have to make your own.
We make our own. And we’re working on—the governor. Governor Ducey, just proposed a billion dollar project—actually, I hope this happens because it’s so brilliant to build a desalinization plant in like Mexico, and pipe the water up to us.
If we can do that, we will be able to live here forever. But that’s the problem. It’s the water from the Grand Canyon, or you know, the water from the Hoover Dam running out.
So all right. Well, Blake, I really appreciate this. And honestly, I’m going to reach out to you. We’re going to do this again. I’m going to be on Earmark—hopefully this episode is one of the first we have on Earmark. So I appreciate you doing that. And anything else before we wrap up.
Hey, it’s been a pleasure. This is a lot of fun. I’m happy to come back anytime.
You got it.
About the Guest
Blake Oliver, CPA, is an accountant, entrepreneur, and podcaster who specializes in technology. He is one of Accounting Today’s Top 100 Most Influential People and has been named a 40 Under 40 in the accounting profession by CPA Practice Advisor. Blake is the creator of Earmark CPE, an app that offers NASBA-approved CPE for listening to your favorite accounting and tax podcasts. He also co-hosts the Cloud Accounting Podcast, a Top 50 Business News show on the Apple charts and the most popular podcast for accountants and bookkeepers in the world.
Blake lives in Scottsdale, Arizona, where he likes to hike in the winter and swim in the summer.
Meet the Host
Randy Crabtree, CPA
Randy Crabtree, co-founder and partner of Tri-Merit Specialty Tax Professionals, is a widely followed author, lecturer and podcast host for the accounting profession.
Since 2019, he has hosted the bi-weekly “The Unique CPA,” podcast, which ranks among the world’s 5% most popular programs (Source: Listen Score). You can find articles from Randy in Accounting Today’s Voices column, the AICPA Tax Adviser (Tax-saving opportunities for the housing and construction industries) and he is a regular presenter at conferences and virtual training events hosted by CPAmerica, Prime Global, Leading Edge Alliance (LEA), Allinial Global and several state CPA societies. Crabtree also provides continuing professional education to top 100 CPA firms across the country.
Schaumberg, Illinois-based Tri-Merit is a niche professional services firm that specializes in helping CPAs and their clients benefit from R&D tax credits, cost segregation, the energy efficient commercial buildings deduction (179D), the energy efficient home credit (45L) and the employee retention credit (ERC).
Prior to joining Tri-Merit, Crabtree was managing partner of a CPA firm in the greater Chicago area. He has more than 30 years of public accounting and tax consulting experience in a wide variety of industries, and has worked closely with top executives to help them optimize their tax planning strategies.