In today's episode, Jamie Nau, our host and Director of Accounting, sits down with Jody Grunden, Partner at Anders CPAs + Advisors, and Blake Oliver the Founder & CEO of Earmark CPE. Blake Oliver specializes in accounting technology and was recognized twice by CPA Practice Advisor's “40 Under 40” list and Accounting Today’s “Top 100 Most Influential People” list. He will talk about what Earmark CPE is, who it's for, and what they envision the future of CPE to be.
"I think CPE is also one of those things that's kind of stagnated in our profession. Going to webinars, going to in-person seminars... it's just old-fashioned, it's inconvenient. People do things on their phones now. So why can't we learn on our phones on demand, wherever we are, whenever we want." - Blake Oliver
The finer details of this episode :
Episode resources
Jamie: Hello everybody. Welcome to today's podcast. Very excited for today's show. Cause we're gonna talk about everyone’s favorite topic, the CPA license, as well as the upcoming CPE that everybody has to get every year. So, I’m very excited for this show. I’m joined once again by Jodi Grunden, and our guest today is Blake Oliver.
He knows all things, CPA and CPE. So he's gonna take us down this topic. Before we go down that road, Blake, I wanna get a little bit of your background. So if you wanna start there, welcome to the show.
Blake: Yeah. Thanks for having me, Jamie. Thank you, Jody. So I am Blake Oliver. I am a CPA. I got my start though as a non-traditional accountant. I was a musician freelancing in Los Angeles. I majored in music performance in college. I went to Northwestern for cello performance and I thought I was gonna be a musician. I graduated into the financial crisis.
Basically, I got my diploma and then everything went to shit. So, I don't know if you know a bit about how accounting for film and TV works, but my dream was to go to LA and get into recording music in studios.
Well, the budgeting for film works such that the music is the last thing in the budget, the last thing down the line. And so it's the first thing to get cut when budgets get cut because you've already spent all the money up to that point. So if you, if you run out, that's where you go cheap.
And so unfortunately all of the recording gigs and stuff that I was hoping to break into, which is already difficult, kind of died out for 10 years, perhaps. Maybe not that long, but I realized I didn't wanna stick around to wait. So I got into bookkeeping.
Jamie: So, they would tell you that you have five minutes for a song? Basically that’s how everything will be done? Like you have five minutes to write a song for the show? [00:02:00]
Blake: So that's my buddy. That's my brother-in-law Zach, who's a composer. I was playing on the recording sessions. So they hired the musicians to come in and play and record the soundtrack.
So I got into bookkeeping as a way to make a little money. Cause I've always been good with tech and I sort of fell into it. As a non-traditional candidate, I kind of had a different perspective on CPA accounting.
I started a firm called Cloud Source Accounting in 2010; we were all online, all virtual, all remote. We only got leads from our website. This was a new thing back then. And, for me, I didn't know what I was doing. I didn't know there was a different way to do this. It just took off. Right?
There's a lot of demand for that as we can all see right now. So I built that business for about five years, sold that to HPC, which is now APRI cloud. So by the transitive law of accounting for mergers, I'm a former partner at APRI. I don't like to say that. You know, but yeah, so that's kind of it.
I left public accounting. I guess after I sold my firm, I went to Armino, which is the largest California-based CPA firm to be a manager there. I thought I'm gonna learn how to do this thing for real. And I discovered, no slight to Armino, but I discovered that most CPA firms don't know anything more than me about how to run a cast practice or how to run an outsource accounting practice.
And after about eight months, I got frustrated with the pace of change, especially with the centralized technology up in San Ramon. I couldn't get anything done my own way. I couldn't innovate inside of a traditional model. And so I got recruited to go into accounting technology to be a product market to create CPE programs for accountants.
So I worked at Flow Cast and then at Giraffe. For the last four or five years, I've been in tech. And I just set out on my own to do my own thing, which is a CPE company. Great to be with you. It's been kind of a wild ride over the last 10 years or so. I mean, I'm not kidding 10 years ago. [00:04:00]
What is it? It's well, 2022. So a little more than 10 years ago, I was working as a barista at Starbucks and in that time since then, I've built and sold a business and I've started a new one, and I've worked at technology companies. I've worked at CPA firms. I got my CPA. It's kind of amazing what you can do in this country if you just are willing to work hard.
Jody: Oh, for sure. That's, that's beyond cool. A music major.
Blake: Geez. Yeah. So don't ask me to get my cello out. I haven't practiced in a while, but that's a bit about me.
Jody: So, kind of the pros and cons. You started your own business and well, first of all, you couldn't find anything in your passion, which was music.
And so from passion to going on the other side of your brain to the accounting world, that had been a huge jump all by itself. Just thinking through that would have to be ginormous. And then going from that and growing it and doing something no one's done at that time, to be honest with you, you and I were probably the only two firms out there doing what we were doing which is kind of cool.
And then you got out of that, a few years later, sold that, which is fricking awesome, and decided you wanted to basically go into the big firm thing, and that didn't work out for you and you figured that right away. And then you kind of jumped right back into technology and now you're to the point where you're running your own business again.
So you go from a business to being an employee to running a business. Why did you go back from the employee? Why did you know what was the big jump there? You know, I'm an owner, I'm an owner again.
Blake: I'm a terrible employee. I'm just gonna say that. I think I'd be a good employee if I could work at a place that gave me a lot of authority, right?
Yeah. You know, I need my own P and L, so I could be an employee, but I need to be an owner of a segment or something like that. I tend to get the autonomy with the big firm with Armino; my frustration there was centralization of it. I had to put every request through them when Microsoft teams came out. [00:06:00]
Remember that there was a banner. And it took me eight months to get them to turn it on. You know, like I, geez, go through an approval process. This is not uncommon. I know no slight to them. That's just the way things run at a lot of big firms. They didn't care about me as a manager.
Right. I had no authority. That's why I think that's actually one of the reasons why it's really tough to innovate inside of CPA firms, because it's so top down, right? Getting the staff and the managers to actually do something different–if you are an innovative person inside a firm, you fight against the entrenched way of doing things.
And eventually you get fed up, and you leave like I did. I left for a lot more money, too. That's the other thing, too. How do you compete? We could get into the whole CPA profession and all that stuff, but when you can't innovate inside of traditional models and the pay isn't as good as what you can get in technology and do another stuff, it’s not a surprise to me that we have a retention issue in accounting, and that we're losing talent every day.
So, I know every firm's not like that. You know, Jody and Jamie, your firm is super innovative and stuff, but it's a small piece of this big profession.
Jody: Oh, for sure. For sure.
Jamie: Yeah. Jody and I both worked in those environments where any idea was not going anywhere; any idea you had was put it in the box, and we'll visit it in five years.
Jody: We've all been, and by the way, I'll give you a gift for the idea.
Blake: I distinctly remember like a month after I came in, I was sitting with the whole outsource accounting team at headquarters, and I was showing off this new chat app. [00:08:00]
It was called. I forget what it's called. It was acquired by like Citrix years later, but it was this team kind of chat thing before even Microsoft teams existed that would allow us to collaborate on documents like an internal Wiki. I presented it, and I was so excited.
This is gonna change how we do CAS. This is gonna change how we do accounting … crickets. After I presented … crickets … total silence; no one had any interest in changing how they were doing.
Jody: Even when we went remote, I mean, we pride ourselves on having such a forward-thinking team.
When we decided to go remote back in 2013, fully remote, it was like an anarchy. I thought I was the devil. I mean, everybody looked at me like, what are you thinking? You know, there's no possible way we could do that. And it's like, “people we're doing it for our clients. Why can't we do it for ourselves?”
And it's like, nah, it just won't work. Why not? You know, it was like everything in the world was throwing at me. Finally, when you kick everybody out and you force them to work from home because I had to remodel the building. Kicking him out and forcing them to come back, forcing them to figure it out for six weeks.
After six weeks, it was like, oh, this is kind of cool. I do like this, and fast forward to the pandemic, the same thing happened to a lot of folks out there. Before we were talking about different things, even the smallest, I say small change. That's not really a small change, I guess, going remote.
But, that change alone was so big; there's no way that our firm could do that. We're too big, you know, we're too small. We, you know, whatever, you know, you hear all the reasons for it. And now, after the pandemic, it's like people are coming up to us and saying, how do you guys do it? We need to figure this out. We need to do this. Right?
You know, that sort of thing. And so yeah, that change is just unreal. People, accountants especially, they're the worst. And as an accountant, we're the worst, I guess, with change because we just don't like it. And it's gotta be perfect. You know, that sort of thing in reality, life's not perfect.
Blake: I mean, in our defense, we're a conservative profession by nature, right? It's in our accounting standards that we should be biased toward being conservative in what we do. So, I get that, but at the same time, there's just insane opportunity out there if you're willing to take a tiny little. [00:10:00]
You can change your firm and do incredible things, and double your profits and not be miserable during the busy season. Maybe that's something we should question; do we need all this work compression? I mean, I know that's been the way we've done it for decades, but that's not the way it always was; we didn't have a busy season, a hundred years.
Jody: I can't imagine that at all. What's your thought on that one? On busy season compression.
Jamie: It's funny, a lot of people think it's just tax, so people think it's tax and due to the tax deadlines, but I worked in audit and audit was the same way.
You know, you had to get all the audits released within 90 days. And of course those timelines changed as well, but you had to get all the audit opinions released. And so, yeah, I had my busy season and it was just part of the culture almost, right? Like, you walked into a CPA firm and people said, okay, we know, we know that January to March, I mean, January to April are gonna be hell for you guys and just live with it. Right?
And then your summer is going to be nice. And then, you know, the first part of the year is gonna be a little more interesting; it was part of the culture, and it was part of what everybody expected.
So, I think to come to a place like Summit where we've found a way to not have to do that, and again, that's really made all the difference, I think the biggest thing is, and this is what I credit to Jody and Adam for, is not being afraid to make mistakes, right?
I know how many mistakes we've made along the way with every change we've made. And it's like, you know, a lot of people see it. Okay. If we do that, this could run us out of business. And it's like, well, no, you can change course if it's gonna be that type of mistake pretty quickly. And so, I think that's the biggest thing when it comes to embracing changes, not being afraid to make mistakes. And I think that's really where it comes from.
Blake: It might cost you some of your profits. You gotta be willing to take that risk. Right?
Jody: Believe me. Yeah, of course. Yeah, it definitely did for sure. You know, and that was just like getting rid of the billable hour. We track time to make sure everybody has job profitability and that sort of thing is in line that we need when we need to increase prices and that sort of thing, but we never bill by the hour. It's amazing how that's changed a lot of the things that we do because we don't have a ton of admin. [00:12:00]
A lot of firms have an admin for every 10 people, roughly, because they're basically tracking, and getting the whip out and all that kind of good stuff. And, since 2004, we've been doing it completely subscription based; we've just zap their bank account every Monday for the exact same dollar amount.
We've got it built into our process that we're gonna win the majority of our clients on profitability and our profit margins around 72, 73% for a client, which is awesome. And we know that some clients are gonna be 40% and some clients are gonna be 90%; we're not gonna win on every one of them.
And for an accounting firm, it is tough to take because they wanna win on every one of them. That 40% just drives them up the wall. It's like, how can you … what do you do in that 40%?
Well, you work with them, you transit it closer to 70%. Or you adjust your pricing model going forward so that doesn't happen again.
That type of thing is a discussion all by itself. But what we found is, it's not needed. Right. On the billable-hour thing, I can talk about that forever.
People really don't bill by the hour anyways, right? There are accounting firms out there who say ‘we bill by the hour.’
It's like, yeah. Well, what if the amount that you're billing by the hour isn't equal to last year? What do you do? It's like, well then, we write it up and we mark it up 5%. okay. Well, that's not bill by the hour.
Blake: I actually experienced this inside of a big firm. The problem with the billable hour is discouraging innovation, and I will talk ad nauseum about this. We don't have to make the whole episode about it, but I'll just say for our listeners that the big problem I ran into was exactly what you were talking about, Jody, where we were trying to measure profitability on every job every month. [00:14:00]
So I was really restricted in how much time I could dedicate to particular clients and the staff; if they became more efficient, they lost hours. I actually had somebody tell me, I don't wanna do it this way. I like the way I'm doing it. You're gonna cut my hours.
And, and that's the problem that you experience. And I experienced firsthand when I started my business. I was a bookkeeper doing data entry. I figured out how to automate 80% of my job. I was billing hourly previously. If I kept billing hourly, I would now be billing 20% of what I've been billing before.
Does that make sense? No. Fix the fees. And then I get to enjoy the fruit of my labor in terms of the profits. If you are thinking about your pricing in terms of how many hours it takes, you're gonna lose money when you become more efficient.
You're not gonna have that flow to the bottom line. And it permeates the entire culture of the firm where people like doing it; the reason they wanna keep doing things the way they're doing them is because they've figured out how to fill up their timesheet. So there's no reason if that's how you incentivize people to become more efficient, because all it means is that you're gonna give them more work to do. You're gonna give them more clients.
Jamie: Yeah, I think tto Jody's point that 40%-profit client with a lot of companies, that'd be their best client. Right? Because they're making a ton of money on it because they're being super inefficient. They're billing a lot. And that's their favorite client.
For us, that's our least favorite client. We're digging into that client. We're trying to figure out how to make it better. We're trying to build new efficiencies, and, along the way, we're gonna build some efficiencies that we can use on our other clients that are gonna get that 72%-client up to 76%, up to 77%. So it's really like we're solving the problem by going to that fixed billing because we're not looking at those clients as our favorite, right?
Our favorite client is not the one we're charging 400 hours a week to. Those are our clients we had to get away from; we have to fix this or they're not gonna work for us anymore.
Blake: The traditional model is all about keeping everybody super busy because it's all about utilization and realization and hitting that 80, 90% threshold. [00:16:00]
Well, I don't know what it really is, but let's say that's what your target is–to hit those billable hours. So everyone's too busy to innovate. There's no time to actually try new things because we all know anyone who's tried new technology knows that the first month you do it, you lose right.
You do not win the first month or even second month or third month. It's only after you’ve ironed out all the kinks in the process that you start to see real efficiency gains,and that's punishing to you if you're under a time-based model. It's you, people have to eat the hours. I had to do that.
I was trying to innovate, and I was eating hours because I was putting in new systems and the staff didn't want to participate in that. So people were like, we're just going back to the busy-season thing. We're all just too busy. We're all focusing on revenue and not on profit margin; it's killing us.
I think actually the cause of the great resignation in accounting is that the business model itself is failing to deliver good jobs–good, quality jobs. What student these days looking at social media is going to wanna go into a traditional accounting job when they see ‘I'm billable for 55. I've gotta work as much as 65 or more.’
And, oh, they're all remote now. So there's not even like the team camaraderie and culture that you used to get inside the firm. I'm just gonna be sitting at home, working crazy hours for what? Right? What greater good am I doing in the world?
Ticking and tying or auditing cash or whatever it is, we've just stopped being competitive. Accounting used to be a great job but not anymore. The world has changed, and there's many, many other alternatives. And so, when I hear CPA and state society leaders talk about how we need to go out to the schools and we need to recruit more people into our CPA pipeline and get more people to take the exam, I think that's solving the problem the wrong way. [00:18:00]
We've got a bucket full of water. There's a big hole at the bottom of it. All these people are leaving our profession and here our leaders are talking about filling the bucket up with more water. Let's plug the hole, right? The hole is really obvious. It's too many hours and not enough meaningful work.
Jamie: No, sleeping at the office just isn't cool anymore. That's the thing; it used to be a badge of honor. Like, hey, we are doing a restatement right now. And I worked 97 hours this week, and I slept at the office Wednesday night because we had to get through these financials. It's just not a badge of honor, which again, that's definitely not a bad thing.
Blake: Well, it was great. It was great when you were getting paid a lot of money to work those hours, like I'm happy to get paid a lot of money to work a lot of hours. Right? And most people are, but now you get paid $55,000 a year coming outta school to work 55 hours a week. Yeah, no, that's tough.
The big firms are like, we can't recruit people. I wonder why. We're accountants. Maybe we should look at the numbers, right?
Jody: The way I look at it, most firms, either tax or audit driven, that's their main focus, and really consulting is, in my belief, is where people nowadays want to be.
They wanna be consulting, helping business owners out and that sort of thing. And so if there's a way that they can make that shift, you know where consulting used to get the leftovers for the most part, you talk to any CA program and they're like, yeah, we're like the redheaded stepchild back here; you know, that type of thing.
What they need to do is re-refocus, reposition that to where tax and audit become the small part and that cast program or that consulting program becomes the larger part. And I think by doing that, you're going to get more and more people in the profession wanting to be in the profession.
Because now, they know they're actually making change. There's some autonomy. They're not just simply behind a desk crunching numbers. Nobody wants to do that anymore. They want to be client facing, working with clients, helping them out and that sort of thing. I think that's the big shift, you know, for those bigger firms, they've gotta make that shift. [00:20:00]
Otherwise they're gonna be the dinosaurs out there. These smaller firms will grow, and they'll grow fast, and they'll grow with their clients. If they don't make that shift, it's a tough mindset shift though, right?
Blake: Like what tax and audit partner is gonna want to become subservient to the bookkeeping department.
Right. Which was always my problem. We were the bookkeeping department and some of the partners still referred to us that way, even though we rebranded ourselves. And I think that they did that because it was a power thing. It was a way of diminishing our contribution because they saw us as a threat. And, honestly, it is a threat; it's a threat to the traditional career path.
It's a threat to everything that we've been over the last, I don't know, 50, 60, 70 years; honestly, tax isn't that important anymore. And there's not a lot of opportunity in. Audit fees haven't increased; they've decreased. If you count for inflation, they've actually shrunk.
Why is that? That's part of the reason also why we can't pay auditors more, right? Audit fees haven't increased. And my feeling is that it's because we, as a profession, have failed miserably to deliver value in audit. And this is a failure of our entire leadership, the regulators, the accounting leadership to modernize accounting standards to actually reflect the economy that we're in.
And I'm happy to explain this further. I say this as somebody who went into tech because tech is, I think, the part of the economy that is least served by accounting. The way we do accounting, And, Jody, maybe you can tell me this because I'm an outsider, I'm a newbie relatively, has accounting meaningfully changed in a hundred? The way that we do accounting GAAP. [00:22:00]
Jody: No, no, no. Hasn't until the GAAP hasn't definitely hasn't changed the way we do things. I think, really, the only thing that's changed is just the service type, like the CFO, the consulting.
That sort of thing really never existed when I was back in public accounting, 20 years ago. I mean, that wasn't even a thought. If you went out and played basketball with a bunch of people on the audit team, you got written up because you’re getting too … I don’t know what the term was.
Jamie: Was it independence?
Jody: It’s like, I’m playing basketball with them, and throwing up in a garbage can. That's not independent. I don't know what you're talking about, you know? And, you can't joke with them, that sort of thing. It was silly.
I got written up at one of the bigger firms for joking around with clients. Wow. The client didn't turn me in. One of the partners saw me do it and they're like, can't be that way in front of the clients, you know? And they wrote me up. It was like, that's amazing.
Blake: I would've been ejected so quickly from that firm, Jody.
Jody: Oh, it wasn't even six months later, I was gone.
Jamie: Well, that's what I always talk about for new people–younger people, too. I remember my first audit, I was talking to an AP clerk, and she'd been doing this job for 20 years, and I was fresh outta college.
I didn't really know what I was doing and I'm asking her questions. I could physically see her hand shaking because she was so nervous. And I was like, okay, I'm not gonna do this for very long. I don't wanna make people feel like that. You know?
And I always had that in the back of my mind. So, to Jody's point, I always tried to be friendly and nice and be there to be like a partner with them.
And of course that doesn't always look kindly upon in the audit world. It's like, yeah, it lasted 10 years. But the whole time I was there, I always thought about that first person I ever audited and how she was shaking. And she knew this job a thousand times better than I did. I was asking questions on a piece of paper and writing down what she answered.
That’s all I was doing, and they were making her so nervous and I'm like, oh, I just don't wanna do this. [00:24:00]
Blake:. That's amazing. So, I forgot where we were going with this. It was, oh, the audit. I think there is a reason audit fees have stagnated, and it's because accounting standards haven't changed in a hundred years.
Let's look at the history of accounting. I actually wish the history of accounting was a class that was required to get the CPA. it would be so illuminated for people, as opposed to some class that doesn't make any difference.
Jody: Yeah.
Blake: Our modern accounting standards, and modern in air quotes, what we've developed during the gilded age to account for the industrial expansion in our country, railroads for example, and these are capital heavy, capital intensive, massive corporations. And so all of our accounting standards really focused when it comes to accruals and deferrals on physical inventory and capital investments–tangible assets.
We're really good as a profession doing that, putting that stuff on the balance sheet, having all sorts of rules so that we can properly match income and expense. That was the big accomplishment of accounting back in the 1800s, figuring out how to do that. And then, of course, we formalized it all with the SEC, and all the regulation right after the great depression, but things haven't changed since then.
And in that time, we have gone from an economy that is like 90% tangible assets to one that is 90% intangible assets, 90. Oh, true. True. 90% of the S and P 500 market value is in intangible assets. And what do I mean by that? I mean like Facebook, for example, which has really no tangible assets of its own, unless you count its own infrastructure that it probably has. But most SAS companies, most technology companies these days, they don't own anything.
Uber doesn't own cars. And so when you look at the accounting for these companies, they're building intangible assets with a subscription-based business, but the customer list, the subscribers, are not on the balance sheet anywhere. [00:26:00]
We've screwed up as accountants because now with those kinds of companies, income and expenses don't match anymore because all of my sales and marketing expenses to acquire customers is expensed.
I'm generating all these intangible assets, but it's all going onto expense. Investors were really kinda screwed by accounting and missed a lot of the opportunity over the last decades, because all these companies looked super unprofitable; do you remember when everyone was making fun of Amazon for not making money, but all the people who really knew what was going on knew that they were gonna make a lot of money on a GAAP basis eventually.
Which, now they do, but when they were in startup mode, GAAP showed them as doing horribly. So, to me, that’s a failure of accounting standards to modernize. Now, I don't have all the answers. I'm not saying we should necessarily put all of our customer lists on the balance sheet or whatever, but I think we could do a better job with disclosures and have standardized sets of disclosures for technology companies and intangible assets that would allow investors to get useful information.
But right now, you know, GAAP is useless. Almost completely useless for valuing companies that are built on intangible assets. And when 90% of market value of the S and P 500 is intangibles, it's no surprise to me that the value of audits has plummeted because what we are auditing isn't useful and the customer is the investor.
We have completely, as a profession, lost touch with who our customer is when it comes to GAAP. It's the investors; it's not our client; it's the investors. Sometimes those are the same people, but they're not often. Right? So, the output, the deliverable, we're giving them is not helping to manage the business.
It's not helping to tell investors whether or not to invest. So they're going to other places for information. That's why data analytics is so sexy now, because I can tell a lot more about a tech company based on all their non-financial than I can about their financials. [00:28:00]
Yep. And so you wanna talk about CPA irrelevance? I think we're already there. Baruch Lev did a study. I think he's at NYU or he's a professor that Ron Baker likes to cite his studies a lot. He's very critical of GAAP. And he did a study that found that investors only use financial statements like 4 to 6% of the time. 4 to 6% of investor decisions are based on financial statements. That seems nuts to me; kind of crazy. Right?
Jody: I believe that a hundred percent.
Jamie: How much are they spending on those audits for 4 to 6% of the end product users?
Blake: So, to me, my theory is, the reason audit fees have stagnated is because the value has stagnated and has not grown in audits.
If we wanna actually make more money from the compliance stuff, from the audit stuff, we have to figure out how do we make GAAP more useful? The financial statement's more useful because then when we audit them, the audit means something. And also like the way we do audits is just garbage.
Like yes or no, it's pass/fail. Why is it pass/fail? Why do we have a pass/fail system? And I think it's because we are lazy. Or perhaps we're not wanting to assume risk.
Jamie: It goes back to what we talked about in the beginning.
I think you're still talking about the same people that don't want to change. And so you're talking about a big population of people that don't want to change. And you're talking about something they've been doing for hundreds of years in the audit standard.
So why are those gonna change when you're talking to not just one company of people that don't want to change, but a whole population of people that don't want to change.
And so I think that's where it goes back to, not laziness or anything like that, I think it is really just their fear of change.
Blake: Yeah. And that's the way I think of it. I think an audit opinion is a pass/fail opinion on a set of financial statements that are relatively meaningless. Here we are talking all about this ESG stuff, which is great. I think it's important that we deliver, you know, climate-change type of information to investors if they want it, but that still doesn't fix the problem that the underlying financial statements really aren't that useful. [00:30:00]
I would love to see … Why don't we have audits and why don’t auditors find fraud? As an investor, I'm kind of flabbergasted that detecting fraud is not part of audit. I mean, what else are we there for?
Jody: Oh, so I agree.
Blake: It can be materially correct, but maybe this whole thing's a fraud. I don't know. It could be that's what I'm saying as an audit partner, I'm just relying on what they provided. Okay. Okay. That's really helpful.
Jody: How are you battling with Earmark now that you're the CPE for accountants? How is that going with this? Is it kind of contradictory to what we're talking about?
Blake: I like to point out problems, which is why I'm a bad employee, because if we were in a management meeting, Jody, I'd be telling you all this stuff about your firm or whatever. [00:32:00]
Earmark CPE is my new company where we provide CPE on your mobile app for listening to podcasts, like this one. That came out of the idea of, I think CPE is also one of those things that's kind of stagnated in our profession–going to webinars, going to-in person seminars.
It's old fashioned, it's inconvenient. People do things on their phones now. So why can't we learn on our phones on demand wherever we are, whenever?
And so that's what Earmark is. It's a way to earn CPE. And also, I think in my small way to help contribute to changing the profession by bringing new voices to the profession.
I'm not the only one who sees this. I'm not the only one who's saying these things. They've been excluded from the dialogue, from the conversation because the big societies and the AICPA are really rooted in the big firms. And the big firms are not interested in change, and it's not because they're bad people; it's because the business model itself is not adaptable.
Right? Even the partners at big firms are prisoners of the model. And this was amazing to me when I discovered this; everyone thinks becoming a partner is the holy grail, but it's not. You're really just a highly compensated employee. And your equity is all locked up in that partnership until you retire.
So you're stuck. I don't know why anyone would buy into a traditional firm anymore. Do you really want a job for life? Do some people want that? Partnerships can be worse than marriages. You can't get out of them.
Right? It's basically the same thing. But you can get divorced. It's hard to get out of a partnership, a business partnership like that. It's my way of trying to help move our profession forward and offer a different point of view. And, I'm very passionate about accounting. I don't know if you can tell, but I love it.
I'm so glad that I found accounting and got outta music because I find actually that what we do is super creative. Jody, like you said, it has the potential to make a big difference in small businesses. [00:34:00]
Now that we can work remotely, we can be advisors. We can be consultants. We can really, really help them.
If we could just change how we think and think about accounting as serving the business, helping give information to the key stakeholders, as opposed to just this “check the box” compliance activity that has to happen. Until we do, our services are gonna have a low value because it's not how many hours we put into it that determines the value.
It's what the deliverable is to the end user and what they get out of it. So that's why all the innovative accounting firms are switching to offering forecasting and budgeting and forward-looking financial statements. They're bringing in non-financial information to create business models and forecasts; that stuff's actually really interesting and useful.
It's exciting. You can charge good money for it. You can build a firm where you have a hundred clients instead of a thousand clients, and everyone knows that's a better experience, which is awesome. You don't have a busy season anymore because now, instead of all of your revenue being tax returns, 90% of your revenue is monthly ongoing bookkeeping, accounting advisory, and then maybe 10% of it is their tax return. Or 20. it's flipped to the way it used to be.
Jody: Those people aren't working a bazillion hours from January through May. We had one person on our team do that this year, and it wasn't a badge of honor. It was like, Hey, you gotta cut it out. You can't do that. It was the opposite.
Blake: There are always those people, right? The rock stars, and they respond to the incentives, and it's great. If somebody wants to do that, if they are happy with that, that's great. But most people, most millennials, I'm a millennial, I'm 38. Mm-hmm wait a minute. No, I'm 39. [00:36:00]
I'm getting to the point where I'm losing track. But my 40th is coming up, so I'm on the edge. I'm at the beginning of it. But like, you know, we got Facebook when I was in college, so that's kind of like a dividing line of people who had social media and people who didn't.
The economy has changed so much from the boomers to the millennials and the Gen Zers that like our entire outlook on life has changed. Right? Housing is incredibly expensive. So for a lot of people, the American dream of the house in the suburbs and the two-car garage, the family, it's gone. They aren't even trying; you can't afford it. But, yeah, people don't wanna work the long hours, right?
I have a lifestyle now. I moved from LA to Scottsdale, Arizona, still not a super cheap place, but half the price of where I was. It's all relative. Right? So my wife and I, we both work. We can afford a home on one salary, which means we have incredible freedom and flexibility.
If my wife doesn't like her job, if it goes sour, she can quit. Go get a new one. Same for me. I can start a business. We have freedom. In LA, we had to both work just to pay the mortgage, and we don't have to take jobs where we have to work a lot of hours. So we are super involved in our son's life. [00:38:00]
I go pick him up from school every day. I'm the guy who does the homework with him. I walk to school, I pick him up, we hang out, we have dinner together. Why would I trade that? Why would anyone trade for a job where I missed dinner with my family and maybe I don't even see them for like three months a year.
And I think this is really, really hard for partners and traditional firms to comprehend because they have given all that up. They have sacrificed all that and they expect everyone else to do the same. The new generation is saying, sorry, bud. I'm just not that excited by the thought of having a family that I don't know.
And then getting divorced three times. Being Mr. Partner and being basically a miserable human being, it's not healthy. It's not good, right? Live to live. Don't live to work.
Jody: Oh, for sure. For sure. And that's, that's how we did. That's how we pretty much developed our company. I was a hockey coach.
I didn't wanna work a bazillion hours during the busy season. I couldn't because I was coaching. And so I had to figure something out. I had to figure out how we can do this so that it wasn't such a big burden on everyone because I surely wasn't gonna take time off if everyone else is working a ton of hours. That wasn't gonna happen.
And you know, everything kind of revolved around the family; how do we make it so that people stay well instead of maybe giving them big raises. You take them on a small trip. Jamie and I went to Scottsdale; that's something cool that most firms wouldn't even think about doing. They'd kind of cringe at the idea, taking a person and their spouse to a really cool retreat, you know, that type of thing.
But just as a ‘thank you, you did a great job, I appreciate it.’ That type of effort, those types of things, I think really go the longest. You know, amongst everyone, you know, the team retreats that we have are kind of the similar type of thing they're, they're designed for mostly just so people get a chance to hang out with each other, you know, that's the, and we spend a lot of money doing that, you know, cuz we're completely remote, you know? [00:40:00]
So you've got to, you know, especially with money nowadays, like you said, they want to hang out with people. They want to have fun. They want to enjoy things. And with the autonomy; they want all that kind of stuff and what we provide here at Summit is a remote environment where you get all that stuff, too.
I think that's the proud part about owning the company–developing a company that people really enjoy coming to work and you really kind of get fulfillment from it. Yeah.
Blake: They’re getting meaning from it.
Jody: When they do leave, they're leaving for a job that's 20, $30,000 more. And we high five to 'em, you know, congratulations and good luck with your next profession; there's nothing wrong with that, I guess is what I'm saying. And that's a cool thing. We can develop people, making them marketable, helping them build their resume, and eventually when they move on; they're very high in demand.
Jamie: That's awesome. Which is pretty cool. And like you said earlier, everybody loves that rock star who wants to come in and work 60 hours a week and does a great job and loves it. But you can't build a firm on that anymore. I truly believe that. I think you can have one or two of those in your firm, and you'll be lucky if they last a year or two because eventually they're gonna burn themselves out.
I'd rather have a person that's working 45 hours a week and occasionally has that 30 hour week, coaches, and does all that stuff that lasts with us for a long time, because that's a lot more valuable for us. So with that said, we are right up on time here. So I wanna give you, you guys kind of a final thought.
This was a great conversation. We didn't talk a ton about CPE, but I know we talked a little bit about the podcast transition there, but final thoughts? We covered a lot in this show. So, Blake, I'll start with you.
Blake: Sure. Well, if our listeners want to learn how to get CPE for listening to podcasts like this one, go to Earmark CPE.
Download the app for Apple or Android devices, you can sign up for free. It's completely free. The CPE is free. I know it sounds crazy, right. We’re going to have a premium membership at some point, but we will always have a free tier. So you'll always be able to go and get CPE for listening to podcasts, so please join us. [00:42:00]
You're gonna hear some amazing voices, voices that you probably have not heard before. If you liked anything of what I'm saying, I think you'll like what you hear. It's really innovative and you don't have to just listen to me. It's not just me; people get tired of listening to me.
It's all about other voices. Are we getting this show on Earmark? Is that the plan?
Jamie: Yeah, for sure. Jody, your final thoughts here.
Jody: I've known Blake for a long time. I didn't realize his prior thing before Giraffe, but we met on the forecasting side; we were looking for different tools and benefits, and then to follow him outside of that and now to be joining him on this new platform is really super cool.
Cuz the platform's innovative, which is kind of neat; everybody listens to the podcast, right? I mean I do. Jamie does, you know, everybody listens to the podcast. And probably not everybody, but I'd say most everybody, so it's kind of nice that I can earn some CPE doing that and learn some stuff.
It makes it a lot nicer what you're doing, Blake; it is pretty cool. I can't wait to see what it looks like when it becomes the Facebook of CPE
Blake: Well, we're gonna try to. I think it could be big. That's my hope. I don't wanna have another job if I can avoid it.
Jamie: I don't blame you. It's a great idea. I love it. I really think it's an innovative and smart idea, and I'm excited to be on there as well as enjoy the CPE. Every year when December comes, I'm like, oh crap.
I have to take a bunch of classes now because I didn't get enough.
The ones where I have to take tests and it's like, I can't even understand half the words in the test because it's stuff I'm not even doing. I'm just doing it to get credit. I'd rather actually get CPE for stuff I enjoy doing.
And to Jody's point, I've been listening to podcasts, accounting-based podcasts, for over 10 years now. [00:44:00]
Blake: Well, my hope is that you'll pick up the app every week and do an hour and then by the end of the year you're done. You've already done it. That makes sense to me.
Yeah. So, we're looking for tax content. We are looking for the really technical stuff that people would love to hear from you and from your listeners, like what is the stuff that's really in demand? I know it's not just like the practice management stuff, but we also want everything, right?
Ethics, tax, accounting, audit, we're working with some audit, cool audit for tech companies and trying to get their content on there. I think that's actually a huge opportunity for audit. I mean, even if we don't make the accounting standards change, everyone still has to get done.
So improving efficiency there with tech, there’s so much opportunity for companies that are looking to potentially be on the podcast.
Jody: How can someone reach out to you and how would they get a hold of you?
Blake: Blake Blake earmark cpe.com to shoot me an email. Let me know if you want to host a show, it's free.
Do you wanna put up content? It's free. We just wanna create the world's Database of accounting knowledge that everyone can draw from.
Jody: Yeah.
Jamie: Sounds great. Great. Awesome. Well, definitely appreciate you coming on the show. This is an awesome conversation. I'll probably even listen to this one for some free CPE.
Blake: Yeah. I wonder if we can get the instructor credit for this. I gotta figure that out.
Jody: I’d give him one. I thought I'm giving me one. That's not fair.
Blake: I'll have to figure it out. Thank you. Thank you, Jamie. Thank you Jody.
Jamie: Thank you. Thanks a lot. Appreciate it.
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