Blake Oliver, Founder and CEO of Earmark, joins Hannah and Joey to discuss the disconnect between the traditions of the accounting industry and the next generation of accountants. The conversation covers the separation between monetary incentives and behavior change in the accounting profession, as well the need for accounting education to adapt to industry changes.
Intro (00:00:00) - Welcome to the Young CPA Success Show. If you're a young accounting professional, this podcast is your ultimate guide to navigating your early career. Join us as we share valuable insights, expert advice, and practical tips to help you kickstart your path to success and excel in the accounting industry. Let's embark on this exciting accounting journey together.
Hannah (00:00:23) - Hey, Joey, How's it going today?
Joey (00:00:25) - Hey, Hannah. I'm good. How are you?
Hannah (00:00:27) - I am well. I am so excited about today's episode of the Young CPA Success Show. We have Blake Oliver with this, who is the founder and CEO of Earmark. And that was a phenomenal conversation. I don't know. How did you feel about it?
Joey (00:00:44) - I thought that was, hey, you can tell that he's got his own podcast because he was like picking up things and doing the storytelling thing. Like, you can tell he's this is not his first rodeo on the podcast. Yeah, I really enjoyed a lot of the conversation about like some things that we learned about earlier in our career that would maybe change some things.
Joey (00:01:02) - And he's very much a visionary. You can tell that he spent a lot of time.
Hannah (00:01:06) - Absolutely.
Joey (00:01:07) - Kind of thinking about what's going on in the industry and maybe some of the challenges that, you know, if you're younger in your career and you're, you know, I'll steal from the story, but maybe you're stuck in an audit room and you're just auditing cash and you're like, Why am I doing this? And what's my future look like? And how do I get out of this mess? If that's you? This is the podcast for you because we cover that and he gives some really good tips and advice. What did you think?
Hannah (00:01:34) - I loved it. I love that he took an untraditional method to get to where he's at. I totally relate to that story and we hear more about it in the actual podcast too. So I love that piece of it and the advice that he's able to give us, having taken this non-traditional method to get to where he's at and just the insight that that's given him into this role in the future of what this role could be.
Hannah (00:01:57) - He is absolutely a thought leader in this industry. So it would absolutely behoove you to follow him on all his social media outlets as well as tuning in to this podcast. So I'm really excited for you all to hear more about it and and to dive into it.
Joey (00:02:16) - Enjoy the show. You're in Scottsdale. Did I hear that correctly?
Blake (00:02:21) - Yeah. Scottsdale, Arizona. It's raining today. Finally, it's going to say we are here.
Joey (00:02:26) - We're about eight hours east of you and we've got two tropical storms on either side of us. And none of the rain is making it here. So we're just like, this is insane.
Blake (00:02:37) - So I'm really looking forward to it. Cooling down. It's been the hottest summer on record here in Phoenix, so I love to hike. It's been tough for me, but I've been swimming a lot. So if you can get good alternative, cool down. Yeah, it's good. I'm I'm really it's interesting, actually. This ties into the discussion we're going to have about accounting and the talent pipeline and all that stuff. I think not enough accountants get physical activity. It's a problem, right? We don't have enough time in busy season. We neglect our physical and mental health. We don't spend enough time with our families.
Blake (00:03:14) - We don't spend enough time on our bodies. And ever since I started getting in shape later in life, I have been so much happier, so much more satisfied with my work. And I think actually that's like one of the arguments against busy season is like the physical toll it takes on your body. And I don't think we talk about that enough in the profession.
Hannah (00:03:34) - I notice such a difference in how I feel during a day, during the day, if I will intentionally take a break and go walk outside. I have a walking treadmill that I put under my desk for days when it's just like rainy or cold and can't get outside. But my mental just space is so much better. If I can literally step away, walk outside, especially working from home to like being able just that changes scenery, fresh air, vitamin D, all the things like world of difference. So I can certainly attest to to what you're saying.
Joey (00:04:02) - It's really funny you mentioned it because I've got two stories on this. The first one is, you know, when I think back to my first year in in tax season, I used to joke about this all the time.
Joey (00:04:16) - I was in Manhattan, Kansas. I was working in my college town, living with my college roommates, doing all that thing. But I was working busy seasons because I was doing the internship and those types of things. And that first kind of that first four months was when I learned that the local Pizza Hut in Manhattan, Kansas, did stuffed Crust Tuesdays on their buffet. And no joke, I didn't get the freshman 15, I didn't get the I didn't get the junior 20. I got the first tax season, 30 that was put on that first year because to your point, I wasn't exercising. I wasn't doing any of those types of things and. You're 100% correct that this is just kind of how it's going to how it's going to go. You know, if you're not investing in that and you don't have the time, it just snowballs and gets out of control.
Blake (00:05:03) - So let me run an idea by one of my crazy ideas. So. Overtime, paying staff for overtime. Some firms do it, some firms don't.
Blake (00:05:15) - Most accounting staff are exempt from overtime in a lot of states. Right. Because they're paid over a certain threshold. They're professionals, especially if you're a CPA, you can be exempt from overtime. And I have thought that one of the solutions to the talent pipeline problem is, you know, get more people into the profession is like start paying people for overtime. If the state societies and the CPA and Naspa all advocated and maybe even helped pass legislation to pay overtime like we would be more, I don't know, competitive as a profession. Now I know there's a lot of accounting firm owners out there, you know, who would say, Oh, no, that's going to increase my cost, right? Like would fight against that.
Hannah (00:05:58) - But but if they fight against it, though, could they not probably be more creative in finding solutions to where the overtime isn't necessary? Like wouldn't that promote that thought process?
Blake (00:06:08) - I mean, we encourage firms to treat their staff well, right? And some do. I would say it's probably 50/50.
Blake (00:06:15) - That 50% of firms that are taking care of their staff, looking out for their well-being. But then you got this other 50% that are giving the profession a bad name. Maybe even if it's less than 50%, it's those are the firms that are ruining people's experience and those are the people who go on Reddit and then write about this horrible experience they're having working for this partner that just abuses them. So if we don't do something about those partners and those firms, how do we repair the reputation of the profession? That's what I think. And like like what we're talking about goes to this, right? Just because you sit in front of a computer all day doesn't mean that the work you do shouldn't be limited. Right? People can only work so much in front of a computer before it starts to hurt their well-being physically, mentally. And so all these overtime protections that we've given to like factory workers and, you know, people who do physical labor like, I think that should apply to us to just because you work with your brain doesn't mean that it's not a muscle that you're using.
Blake (00:07:16) - So that's my crazy idea. Call me a socialist if you want. I'm not I don't think it's crazy.
Joey (00:07:23) - It's the fact that we even have to make that joke is is part of the the problem, right? Where you're starting to think about things and it's I think Hannah's point's great where it's like we've got, there can be a capitalistic based solution to this problem, which is if you're having to pay overtime, then now the business decision is where we've got to be more efficient with that so that we're able to create a better environment to foster that. And it's yes, you know, all about.
Blake (00:07:48) - Connecting the if you want to change people's behavior, you got to incentivize them with money. I think that's something we as accountants understand, right, that that like monetary incentives to work really well. So but we've totally disconnected that in our own profession. We're totally hypocritical when it comes to that. In many ways.
Joey (00:08:10) - So here's a question. I'm curious how far back we can go.
Joey (00:08:14) - One of the things that I always try to think about when I think about a current problem is like, how did we get here? Is that something that you spend any amount of time thinking about outside of this one issue? So if you could summarize for us, how did we get here?
Blake (00:08:28) - Well, I think it goes all the way back to accounting theory, which was developed 100 years ago. I don't know. Did you guys have to take like an accounting history class in school?
Joey (00:08:41) - I remember Luca Pacioli. That's a name that I remember. Yeah.
Hannah (00:08:45) - Math, but not accounting history. Isn't that funny?
Blake (00:08:49) - Like, so we have this wonderful profession, but we don't teach anybody about the history of it. And so just a few years ago, I was, you know, curious, maybe I had too much time on my hands or something. So I started like researching the history of accounting and just reading some books about it. There's a few. It's a few good ones.
Blake (00:09:08) - And I learned that, you know, modern accounting theory is only like 100 to 150 years old. And it was developed during the era of railroads because we had all these railroad barons in the United States, these corporations that spun up spending massive amounts of capital on railroads. And most of the money was coming from European investors. All the old money in Europe was pouring there, you know, family estates essentially into railroads and getting rich or not, because some of these enterprises were total frauds and there was no accounting standards there. There was even a standard concept of depreciation at the time. And so how can you measure the profitability of something like a railroad, which has these huge capital expenses without depreciation? And so it was these accountants from Scotland who were hired by these European investors to go audit railroad companies, and they invented a depreciation. They invented this whole balance sheet profit and loss thing that we take for granted today did not exist before then. And it was all designed to protect these investors so that they could understand what are these companies doing with our assets? You know, are they are they generating a profit? And, you know, that's like like Price Waterhouse.
Blake (00:10:32) - I think Waterhouse was like a Scottish accountant or something, one of them anyway, right. Like a lot of these firms that today exist, the Big Four were founded by Scottish chartered accountants in Scotland, just happened to be the first country in the world to have chartered accountants to have like this license. That's why they got the job. So what does this have to do with how we think as accountants? Well. Modern accounting theory is still basically the same as it was back then. We have this idea of capitalizing assets and we depreciate them, right? We it's all about adjusting the timing of revenue and expense. So that's different than cash flows essentially, right? We put stuff on the balance sheet to hold it there and then we take it off to put it on the PNL at the right time. That's about as simple as I can explain it. And it really hasn't changed in a hundred years since it was formalized after the Great Depression and we locked everything in with GAAP and with the SCC and with the Financial Accounting Standards Board and all that.
Blake (00:11:36) - It hasn't really changed, but our economy in the 70s went from being one that was primarily based on manufacturing to one that was based on intangible assets and services, and the accounting didn't change. So we have this strange situation where we have businesses where the entire value of the company is based on intangible assets, but accounting does not do a very good job of understanding intangible assets. So we have a situation where Netflix is reporting fantastic results and then they. Put out a release, a press release about how their subscriber count dropped. And it tanks their stock tanks, even though everything else is looking good on the financials. Right. They've got strong cash flows. They've got a good PNL, good balance sheet. What the investors care about is subscribers because it's a subscription business, but there's no standard GAAP metrics for subscription businesses. So we're living in a crazy era where, like the the accounting is supposed to be the language of business, but it hasn't adapted. It hasn't changed because we locked it all in with all this regulation.
Blake (00:12:45) - Almost 100 years ago, and it's gotten more complex, but it hasn't really gotten better at describing anything other than, you know, a manufacturing type of business or a railroad capital intensive, physical capital intensive businesses. And there's this whole era now of, you know, some I've seen stats that like 80, 90% of the market value of the Nasdaq is intangibles. And yet we still struggle to describe this with our accounting theory. So. I don't know if that answers your question, but I think that is a big blocker. It's a big reason that accountants don't understand subscription businesses that well, why we struggle to convert our firms to subscription business, why we still track time and we bill for time like we're, you know, like every employee in our firm is a piece of equipment making widgets. It's it's built into our mindset through the theory.
Joey (00:13:44) - It's interesting because I think there's there's so many things that I think about. And I just took some CPE classes last week, unfortunately not on earmark.
Joey (00:13:51) - I need to get that need to get that up and running for for myself because I do enjoy listening to podcasts and stuff like that on a go, you know, just going around town and stuff like that. But it was talking a lot about how one of the things that's going on right now is we're still trying to figure out how to handle blockchain and crypto and having to completely rewrite the rules for how do you even handle an investment in cryptocurrency that many companies, that's all they have, That's all they do. Yeah. And there's just no mechanism to do it on the balance sheet.
Blake (00:14:23) - And I think. We're getting ahead of ourselves too, because again, like our accounting theory. I mean, these are digital assets we're talking about, right? And if the accounting theory doesn't understand intangibles, which digital asset is an intangible, then, you know, how are we ever going to tackle blockchain and crypto? I think we need to go back to our roots and, like, we need to really do either of you, Hannah, Joey.
Blake (00:14:48) - Do either of you spend time on, like, SaaS metrics? You know, kak and LTV and all these like software company, kind of like metrics that they use to measure themselves. Because I did not. I spent a a couple of years in technology companies, and the thing that blew my mind was we never looked at the PNL. We never looked at the GAAP financial statements, even though we produced them. The only thing we ever looked at were these SaaS metrics, because that's what mattered to our business. And then there was this disconnect in my head. Because. The gap that I was taught in school was not relevant to this technology company. And most technology companies that are out there, they're not standardized like they've created this whole basically alternative framework of accounting and financial reporting that is not at all in GAAP and nobody learns it in school, in accounting.
Joey (00:15:43) - Well, that probably explains why for so many years you see these big unicorn tech companies and you look at it and like, how on earth is this company growing at this metric and getting this amount of outside equity that's at risk when they've never, ever, ever turned a profit? And the answer is other metrics.
Blake (00:16:21) - Yeah. So the answer is that traditional GAAP always shows subscription based businesses as either being extremely unprofitable or losing money if they're being run properly. Think about that. If you're running a subscription business the right way, it will not show a profit on a GAAP basis. And that's because GAAP says that sales and marketing expense is always a period expense. In a software or subscription business. Your sales and marketing expense is a customer acquisition expense. It's actually a capital investment. The way they think about it. So I'm acquiring subscribers, and subscribers are like an asset. They are an annuity, right? Because I can calculate how long I'm going to have them. So I can I know if they're going to stick with me for five, six, seven, eight, nine, ten years. I know what the value of that subscriber is based on all the metrics that I'm tracking, my churn rate, my average contract value. So I know that I can spend X dollars to acquire a customer and hit my targets.
Blake (00:17:05) - And I'm actually adding this asset on my. Balance sheet. Not my balance sheet, but my subscription based business balance sheet and GAAP says I have to expense that. So I look like I'm losing money even though I'm adding an asset because we are not allowed to capitalize our subscribers. Now, I'm not saying necessarily that we should be able to that that's exactly what should happen. But maybe if we at least reported those numbers, it would explain the loss that we're seeing on a GAAP basis. And this is why Amazon looked so bad for so many years. It was really adding prime subscribers. And that's what Jeff Bezos was all about. He knew that if he just added prime subscribers, his business would succeed. And on a GAAP basis, he looked like he was spending all the money they were making. And really he was, you know, building cash flows in the future. So to me, it's like that's a huge failing of generally accepted accounting principles and.
Hannah (00:18:04) - And think these are just a few examples in industries of where the where this applies but think that it is across the board.
Hannah (00:18:12) - I would say that there's a big, huge gap between what we are learning in our classrooms in college on the CPA exam versus what actual work experience looks like.
Blake (00:18:27) - 100% yeah, that's just.
Hannah (00:18:28) - That that gap that needs that. We need to find a bridge across of some kind in order to change the industry.
Blake (00:18:35) - It's gotten so big that I have people tell me that like almost nothing that they learned in school was useful to them on the job. I mean, yeah, you need to know your accounting one and two and maybe your intermediate and you need to know a little bit of cost accounting and, you know, but like. Most of what you learn in school is not relevant to what you do on the job. So I don't think it used to be that way. Right? So. Yeah. How do you get people to want to be accounting majors when that's the situation?
Joey (00:19:08) - You know, it's interesting.
Joey (00:19:09) - We we were talking in our pre-show meeting on Friday, and the question I asked Hannah was when was the last time that you did a, what's it called when you when you write down an impairment of goodwill? Like when was the last time you actually physically impaired goodwill Because we spent a month on that.
Hannah (00:19:23) - There was literally never.
Joey (00:19:26) - Never.
Blake (00:19:27) - Or we spent the thing that was so frustrating for me was we spent all this time on consolidations. It's like, unless you happen to be working in a multinational corporation that does a lot of consolidations, like it's just one of those things you're going to learn on the job to do it the right way. Like we learned it kind of in theory. I don't know. It just it never stuck for me. It seems like we have waste of time so much.
Hannah (00:19:49) - We have so much technology now, too, that helps us through so many things. I'm thinking one of my clients said I do have to do a consolidation because like the technology does it for me. Sure understand the general concept, know what to look for, eliminating entries and things of that nature. But the software is doing it for me.
Joey (00:20:06) - Mm hmm.
Joey (00:20:07) - We just change it around on how we code it so that it's automated and it's done. Yeah. Just fantastic.
Blake (00:20:12) - Yeah, You know, it's tough.
Blake (00:20:15) - It's tough like. The generation of professors? I don't know. I don't know about your professors, but mine were kind of on the older side. So it's like they they were working in like the 60s, the 70s, maybe the 80s. It's been a long time since they were in the workforce and things have changed a lot. And
Hannah (00:20:36) - That this morning there is a disconnect between people who are in the classrooms, even on the high school level. Yeah, I think it starts even at that place in terms of like the business and finance courses that kids are going through in high school. There's such a disconnect between the people who are in the classrooms versus what's actually going on in the industry, because maybe they haven't worked in the industry or they're maybe they're just by nature just not keeping up with what's going on either too. So the communication of how our industry is changed is not permeating through to the classroom in any capacity or if it is, it's in a small capacity.
Blake (00:21:11) - I think it's a problem with traditional education in general.
Blake (00:21:13) - I don't think it's limited to accounting. The world is changing so fast that by the time concepts get into the curriculum, which by the way, a curriculum takes years and years and years to change, if it ever does, by the time it gets in there, it's out of date. I mean, they still haven't added in like the technology classes that everybody's been asking for into the accounting curriculum. You know, how do you how do you actually use an ERP system or a QuickBooks or a GL? Like I was learning it on paper and I didn't get my CPA all that long ago because I'm a career changer. So I don't even know if I wonder actually if traditional college education will be what it is now in 10 or 20 years, if because of the shortage of workers, a lot of people will just start skipping college, go straight to professional certifications that they can earn without a college degree. It's a lot of time to invest in something that doesn't necessarily deliver a huge value add for you.
Blake (00:22:12) - I mean, compared to what you can learn. I mean, there's people going and getting Google career certificates and making six figures without a college degree. So I'm not saying like at the highest tiers, you know, the top tier schools that those won't still be full. But think about all these, you know. Schools where many students don't graduate. Where if they do, they don't really increase their earnings all that much like.
Joey (00:22:40) - Well. And the cost benefit of that is has been changed. I mean, it changed a lot for my generation. I graduated high school in 2006, so I've told people this before. When I was in high school, the question was not, are you going to college? It's where are you going to college? And then the unknown of that was how much you were going to spend on that degree. And it's you know, it was when you when you just run the numbers, you know, and this is coming from a bit of a tax background. My wife is also a tax accountant.
Joey (00:23:07) - I came from a tax background. And we've had this conversation after she got her CPA was she was like, I'm not going to use any of this. This, you know, becoming a tax accountant could 100% be a two year trade degree that you get from, you know, any level of college that you want to go to if you want to go to the community college route. Beautiful. That's a wonderful route for people. And it's she's like, we don't need I don't need CPAs to do this. I just need somebody who knows how the things flow. What sort of things to do has some good people skills to be able to ask these questions and can think I don't need them to know how to calculate, you know, the intangible life of of whatever or do this. I just need them to know how to do a tax return.
Blake (00:23:53) - Or take, you know, algebra two.
Joey (00:23:55) - Yeah.
Blake (00:23:56) - Or trigonometry or calculus or.
Joey (00:23:58) - Yeah.
Blake (00:23:59) - I mean there's, there's something to be said for, you know, a liberal arts education, like broad education.
Blake (00:24:05) - But I mean, there's a lot that we learn that isn't necessary for most people, I feel like. There was this mission. Decades ago to make sure that every American got a college education. That was the American dream, right? Everybody's going to go get a college education. But I don't think it makes sense. Not everyone needs one in Europe. They don't do that in Europe. They start tracking people in high school. You basically decide if you're going to be college path or you're going to go into like a trade or a profession and you don't have to go do all that extra education. You get what you need. And so maybe we're going to do something like that here in this country. The problem is there's still so many jobs where it's like bachelor's degree required. You know, it's like a gatekeeping mechanism. I mean, we do that for I mean, with the CPA exam, we go even farther. We say, oh, you got to have five years of education to sit for the CPA exam.
Blake (00:24:59) - I mean, let's just make it 20% harder for no reason, apparently.
Joey (00:25:05) - So there's a I'm sure you've met I'm sure you've met Jamie in our office before on on certain things. And Jamie and I'd love to have this conversation about like, what our hottest take is. And, and my hottest take is that the CPA is for a lot of jobs, the most overrated, you know, certification that you can have. I know sorry accountants everybody. Yeah, I can I can be reached, you know on the LinkedIn's but.
Hannah (00:25:30) - Coming for you Joey
Joey (00:25:31) - I know they're going to start coming for me. I needed to figure out who's whose email address in the office to send all the complaints to. Maybe we send them to Dave Hartley, send all your complaints to Dave Hartley. But it's it's one of those things like as we've started moving away from like if you're not going to do audit, if you're not going to do the type of work there, there's like three certifications that I can think of that more suit somebody to what we need in our job.
Joey (00:25:58) - And that don't require 150 hours.
Blake (00:26:01) - Yeah.
Joey (00:26:02) - To get that done.
Blake (00:26:03) - I think it's a real shame. What? I'm a CPA and I think it's a real shame what we have done with the CPA to make it so exclusionary. Adding the fifth year, um.
Joey (00:26:14) - Work requirements, you know, like a 2 to 3 years.
Blake (00:26:17) - Well, they reduce the work requirement. So that's like one year in most places. But most, most states, a lot of states still require that you do audit to get your CPA. I was lucky to be licensed in California where they got rid of that. So now you don't have to do audit to become a CPA. But yeah, it's it's so tied to audit and actually like the root problem in my opinion, of like the CPA pipeline issue is that two thirds of grads go into audit and then these audit firms burn them out and they quit the profession after 2 or 3 years and they don't go work at a regional firm or a small firm. They just quit entirely because they're like, I'm out.
Blake (00:26:49) - This accounting thing is not what I want to do with my life, you know? And so. It's it's we've got to, like, unlink the CPA from that in order to bring it into the future. And unfortunately, there's this like educational industrial complex that seems to exist with, you know, audit professors and, you know, big four partners who retire and then go teach and then tell their students, you know, you have to go big four in order to succeed all that stuff like but you don't have to. Accounting can be so great if you go to a small firm or a regional firm or you go directly to a corporation. There's so many opportunities and these students are not educated about it at all. They're just told, Here's the path you got to take. You know, it's get your fifth year go work for the big four, get your CPA work, work, work, work, work. And nobody wants to do that anymore. You know.
Joey (00:27:47) - So one thing I'm curious to get your thoughts on this, too.
Joey (00:27:50) - One thing that I've said is that most CPA firms are going to struggle with and it's it's going to start happening sooner rather than later. Again, painting with a super broad brush here, Gen Z in particular, is the most entrepreneurial generation of Americans that we've ever raised. And the reason for that is, you know, it used to be in order to start a business, to start a brand, to do something, you had to have capital, right? You had to have X amount of money saved up so you could buy a piece of equipment or something or whatever. But in the digital economy, all you need is this. Yep. And good luck finding someone you know in today's society who doesn't have one of those. And that's the thing I think most CPA firms are going to struggle with because the business model is based upon exactly what you said. It's we're going to get some associates, we're going to grind them. We're going to lose 80%. The 20% that rise are going to be your future managers and senior managers and partners and so on and so forth.
Joey (00:28:41) - And we're just okay with the churn. Yeah. And I think most CPA firms are really going to struggle finding in this next generation someone who's like, Well, why would I do that for you when I can just do that same level of, you know, work for myself and build my future that way.
Blake (00:29:00) - If I'm in a hustle, I might as well be building my own brand. Exactly. Building my own business.
Joey (00:29:03) - Exactly.
Blake (00:29:04) - Well, I think you're going to see more firms do employee stock ownership plans like BDO just did, which I mean, that could go sideways, but it could also be really successful because now you can say, come work for us. You're going to start earning equity on day one. That's pretty cool.
Joey (00:29:22) - Yeah.
Blake (00:29:23) - But they're also going to have to start treating their employees more like owners and less like, you know, just workers who are going to get worked.
Joey (00:29:30) - Yeah,
Blake (00:29:31) - if that's going to work, I think.
Joey (00:29:32) - Because this could be like, well, I'm an owner.
Joey (00:29:33) - And they're like, Yeah, but you're not that kind of owner. And then the question would be, okay, well then how do I become that kind of owner?
Blake (00:29:40) - Yeah, there's this division and this goes back to this old way of thinking in accounting firms. We have here's the partners, here's the staff, and there's this wall between them and you. You know, the people who think and make strategic decisions or partners and the people who work and execute those decisions are the workers. And that very much seems to me like an old mindset. A mindset from 1880 or 1910 and not from 2023. So. Gen Z wants to have input, right? They want to have an impact. They don't want to just work and be told what to do.
Hannah (00:30:21) - Yeah. Think they absolutely want to do work that's more meaningful for them and for their purpose and their goals and think that accounting can be that. I feel very fulfilled in my role, but absolutely did not think that what I'm doing today in my mid 30s was if you were telling me at 22 this is what I was going to be doing and what my accounting career was going to look like, I would have laughed at you.
Hannah (00:30:44) - And so I think there is this perception of what an accountant looks like, that we have to change the posture even of ourselves and how we talk to people about what we do. Kind of like what you said, Joey, going back to that conversation you were having with somebody of like, Oh, you want are you sure you want to go into accounting? Instead of saying instead of posing that as like, that's awesome. Like accounting is great. There's so many different things you can do with that and be really fulfilled in what you do in that next generation. It's just even more important to them than than prior generation for sure.
Blake (00:31:17) - Yeah. So what do you think? Hannah, What do you think the next generation accountant looks like?
Hannah (00:31:24) - Oh, gosh. I think the next generation accountant looks more like an advisor. I really think it's shifting more towards just having those soft skills, advising people, not just even on their taxes, just on financial decisions and posing more in that role. And because that leads itself because of automation and AI and the integration of technologies, we're going to have to be really strong in that way.
Hannah (00:31:52) - But I think that allows itself and opens the door for some really meaningful relationships to be developed with clients and feeling fulfilled and being able to help in a way that maybe as an accountant, it hasn't always been looked at that we could help in that way.
Blake (00:32:08) - Yeah, I agree. I think. If we can be in roles where we're helping people, that's satisfying and. If you're in that role where you're auditing a big multinational corporation, you're producing work papers that are going to be filed away that nobody's ever going to see again. Like that's it's hard to feel meaning in that work. Oh, you know, I'm supporting I'm defending the capital markets of, you know, the United States. Hard to feel that way, I think. But if we're working with small businesses, if we're meeting with people, I mean, that was my favorite thing about owning my own firm and being a freelancer before that was just having an impact on these small business owners, helping them out with something that was really stressful for them and making it easy.
Blake (00:32:54) - And the gratitude that I received after I did a good job. I love that feeling.
Hannah (00:33:01) - I really love educating my clients too, and just helping them, like seeing the light bulb go off. Like when we're talking through forecast or their KPIs or a financial statement, like just seeing that light bulb go off like that is also very fulfilling to me too. Is being able to like tell the story that the financials tell to somebody who's not in it, like we're in it and looking at it every single day. Like that piece is really, really fulfilling and I think it's going to become an even larger factor for this role as we go into the future.
Blake (00:33:33) - So, Joey, I think you mentioned you're in tax.
Joey (00:33:36) - So that's that's where my background is. So my background was very tax heavy is what my wife still does, but my parents both did. Yeah. Your point about the Big four and how hard you get pushed into that is it brought back a little bit of trauma from when I was in school and thankfully, like I had both my parents did the Big four game, so I knew kind of what that was going into it, but.
Joey (00:34:00) - You're right. Nobody was sitting there and saying, like, who's, you know, go find a good mid-level regional firm. It was, you know, go to the big four. And, you know, if you had the grades to do it, that's sort of where they just kind of pushed you. And man, it was.
Blake (00:34:16) - It's like for me.
Blake (00:34:17) - So so your parents were big for.
Joey (00:34:20) - But yeah, so yeah, both my parents were big for my wife is an accountant, My brother was an accountant before he left. My cousin's an accountant ish. He works for Deloitte on their consulting side. My grandfather was an accountant. Like, it's like we didn't know what else to do, which was a bit of a problem. Like, why couldn't we have been dentists? That would have been fun.
Blake (00:34:41) - Actually. They're not having the best time right now.
Joey (00:34:44) - No, they're not.
Blake (00:34:45) - There's a dentist in my neighborhood is complaining about how all of these private equity firms are buying up all the dental practices and making it hard for him to compete as an independent dentist.
Blake (00:34:55) - So they're having trouble, too, I guess. But I want to dig into that more. Joey, with you, like so you. You felt like pushed to go Big four. Did you do that or did you do regional? Like, what did you do after college?
Joey (00:35:08) - No, I got really fortunate. So I went to Kansas State University, shout out to the Wildcats. And we we now have a presence in the the Phoenix market, which I'm very excited for with Arizona State. But the you know so I had yeah go Sun Devils I had a wonderful relationship with two of my professors. One of its was like our introductory accountant guy is a wonderful man named Fred Smith. And another was our tax professor, a guy named Dan, Dan Fisher. And both of them were hugely influential in terms of helping me figure out where I wanted to go. And both of them had worked for the regional firm based out of Manhattan, a firm called Saint Gordon and Associates, which is, you know, I think we were like 50 or 60 people and had some satellite offices in different places.
Joey (00:35:57) - So that's where I got started. And it was one of those things exactly like you would imagine. It's hours and rate and, you know, kind of heavy tax work. But I got some really nice exposure to a lot of different things when other, you know, my friends were doing their internships and they just calculated D pad and it's like, that's all we did for an entire internship was do this one calculation 95 times for 95 different clients and you never see any other part of the product. They had never had any idea of whether that was a good outcome, a bad outcome. It just was.
Joey (00:36:35) - So I hated that.
Blake (00:38:36) - I just had to search Google for what is what is D pad.
Joey (00:36:40) - Oh yeah, yeah, yeah.
Joey (00:36:42) - And this is showing my age a little bit like domestic production. It's now defunct. It's gone. It was replaced as part of the.
Blake (00:36:49) - Production activities deduction. Amazing. Yeah. Yeah. See, that's not going to be very fulfilling is when you're just like.
Blake (00:36:54) - A cog in a machine of calculations, Right. What about you, Hannah?
Hannah (00:37:00) - Yeah, so I am. Buckle up. Because it took an adventure in terms of to get to where where I am. So I started out in freshman year of college. I knew I wanted to do accounting, did an internship with my family is Native Americans, did an internship with the CFO of our tribe during their annual audit and saw what audit looked like, and I was like, Absolutely not. Like, that is not what I want to do with my life. That is not what I signed up for. And so was like, maybe I want to do something different. Like I explored doing math, education or something of that nature, and so took a lot of math classes because I knew like that was a pretty good, pretty good at that. And then ended up meeting my husband. I got married before I even finished college and he is about seven years older than me, so he was a different part of his career.
Hannah (00:37:51) - We started our family before I finished college, but because of having the background that it did always worked in an accounting role, like settled up to a controller level, had my kids and then realize.
Blake (00:38:02) - Okay, so you didn't go public accounting, you were just.
Hannah (00:38:05) - No, doing an industry. Yeah, exactly. So I worked and I realized I was like, okay, this is pretty much all it's ever going to be if I don't finish my degree, get my license. But at that point in my career was like, I have really young kids and I can't do that. So I left the industry completely and became a licensed insurance agent. So did that for a few years, quickly rose to junior partner of our agency and took on the accounting budgeting forecasting role in our agency and was like, This is my passion. Like, I need to see this through. My kids are a little bit older now and I can do it. So actually completed my degree 3 or 4 years ago, did it as it was a program.
Blake (00:38:49) - Sorry, I have to stop you for a second, so you got to controller without a degree.
Hannah (00:38:54) - I did.
Blake (00:38:55) - Yeah. Yeah. Okay. Yeah, that's. That's impressive.
Hannah (00:38:59) - Yeah, I did it Work.
Hannah (00:39:02) - It did. It really did. Up to that point. And so I did a program for my degree where it was essentially like, work at your own pace. Like I completed 90 credit hours in three months because I could go and just like take it, take an exam. And I'd worked in the industry for so long I knew what I was doing. Like I just test it, I think needed. I had to study for like business law. Like that was the one that I really had to study for. But at that point I completed my degree and and dove back into the industry from that point. So mine is very untraditional in terms of how I've gotten here. And I'm actually studying for the CPA exam now still.
Hannah (00:39:40) - Yeah, I'm in the process. Yeah.
Blake (00:39:41) - I'm sure you'll do it. I mean, like, based on what you've just said, I don't doubt you in the slightest. That's awesome.
Hannah (00:39:48) - Yeah. Yeah. It's something that, like, I've always wanted to do. So, like, for. For myself, like, kind of speaking to what Joey says, I don't even feel at this point like it's something like I need to, like, be in the be fulfilled in my career at this point. But it's something that I've like wanted for me and want. To be able to say that I've done it. So yeah.
Blake (00:40:05) - For me, I'm a career changer, right? I got a bachelor's of music and then I realized that I didn't want to be a musician for a living.
Joey (00:40:13) - So tough. That's a tough life in its own.
Blake (00:40:15) - Yeah, well, you know, I was privileged. I grew up in a in a household where I didn't ever worry about money and I didn't understand it.
Blake (00:40:22) - And so then I got out into the real world and I'm, like, calculating my paycheck, working at Starbucks, playing gigs, weddings where I'd get paid like $100 to drive 50 miles. And I'm like, My bank account is going down every month. I don't I don't understand why doesn't this bohemian lifestyle work? And that's how I got into thinking about money and numbers for the first time in my life when I was like 22. And I got fascinated with it because I had to solve my own financial problems. And yeah, it led me to led me to a career in bookkeeping and then the CPA and all that. It's funny how sometimes, you know, you can get to CPA or being an accountant and it isn't that traditional pathway that everyone is told, and we tend to be the people who stick, right? Like we're not the ones quitting. We're the ones who came into it, you know, we like it.
Joey (00:41:18) - And there's some things to when I think about, you know, thinking back to 25 year old me getting started where I think there was there was a lot that.
Joey (00:41:28) - Maybe this is a this would be an interesting topic to to think about in terms of, you know, long term. Like what advice would you give to someone coming out of school today? You know, I think a lot about what Hannah was saying about the types of skills that you need. And it almost like accounting has like a it's like we have a marketing PR problem, right? Because every time someone you talk to someone about being an accountant, they're like, Oh, I hate math. I could never do an account. It's like, do you know how little math I do? I do like, no math. I have not done math in forever because I've got a calculator or a program or something that's going to do it for me. And I think there's so many there's so many kids out there who just don't realize, like there's what they think. And it reminds me of those memes that used to be on Facebook, right? Where it's like, here's what I, here's what my friends think.
Joey (00:42:15) - I do what my family think I do, but this is what I actually do. Yeah, right.
Blake (00:42:18) - Yeah.
Blake (00:42:19) - Totally misunderstood.
Joey (00:42:21) - Totally. Yeah.
Joey (00:42:22) - And I'm wondering, like, what sort of things we can do to to talk to people about this, because I think had I known 2 to 3 years into my career, like, what the next 10 to 15 years of my career could have looked like and that it didn't equal always just doing payroll entries or doing the type of stuff that you do as an entry level accountant. Yeah, that would have really changed my thought process about how I would have handled the first five years of my career because I kind of I did a little bit like Hannah. I kind of bounced around until I found something that really stuck. Yeah. Um, and the downside of that was I had to move a lot. I didn't get to put down roots, you know, I kind of my, my 20s were effectively a wasted decade. I didn't really start figuring stuff out until my 30th birthday, so.
Blake (00:43:09) - Here's the advice I would give somebody who's going to college or who's in college right now. It's that the advice you hear from your elders is often very out of date by the time it gets to you. So example in my own life was my parents grew up in the era of cheap college. And if you went and you got a college degree, it didn't matter what it was, what you majored in, you could get a good job. So that was their advice to me. It was like, Blake, you don't need to figure out what you want to do with your life. Just go major in whatever you want and you'll be fine. Because they were. They grew up in a time when, you know, they graduated from college in, you know, like the 70s. There are plenty of jobs for anyone with a college degree. And then they had the 80s and it was just like, you know, a great economic boom. So I went to college and I majored in music because I said, Oh, it doesn't matter what you major in.
Blake (00:44:06) - And then the Great Recession hit and then it very much did not matter what you majored in, because nobody wanted to hire a music major, even though I had a degree from a top university. So that advice was bad. It worked for their time, but not for our time. And so that's what you always got to think about is like what your professors are telling you or what your parents are telling you is not always. I think just because it was true once doesn't mean it's going to be true for you. And so. I think, based on what I see in the marketplace. With the changing nature of accounting and the needs of companies, that you're actually going to benefit more from just going to places where you can learn as much as possible, get a don't get that experience where you're just doing calculations, a single calculation for 90 different companies or all you're doing is auditing cash for two years. Like that's a waste of your time. What's more important is that you learn. So go to a firm where you can learn or go to a corporate job, where you're going to get a lot of experience and exposure to different areas like a boss that will move you around so you can learn different things.
Blake (00:45:14) - I think that's more important. Oh, and one where you can learn technology, where you're not going to be stuck in the same old tools because if you don't learn the tech, how can you go to a job where you are going to have to use new tech and you don't know it so.
Joey (00:45:31) - In fintech is going to solve a lot of.
Joey (00:45:36) - It would solve a lot of the frustrations from the early part of my career. Right. In terms of, you know, I saw I mean, up until three years ago, I was still manually calculating payroll for a company. Yeah. That refused to use a fintech solution for payroll.
Blake (00:45:51) - Yeah, that's amazing. Yeah, I couldn't I couldn't imagine doing things the old way. You know, when I started doing bookkeeping, I was keying transactions in. It was basically data entry. And I like doing it because it was like mindless. I could put on a music and I could just do it at night. And the whole thing changed over the in the course of just a few years, cloud based accounting tools, automating all that stuff.
Blake (00:46:14) - I built a business doing it, cut my time by 8,090%. And what's really exciting now is that all that benefit we saw in client accounting services and bookkeeping that, you know, Summit has built an entire firm on.
Joey (00:46:32) - It's the foundation of everything for us.
Blake (00:46:34) - All that automation that's all going to come for all the more traditional areas, tax and audit, because AI is going to do it. Because tax and audit, you can't automate that with rules. There's just too much complexity and too much judgment. But I can handle complexity and judgment. So I think you're going to see 8,090% reduction in hours on traditional audit and tax jobs. That's going to totally turn these firms upside down because they're billing for time. So they're going to have to change the business model just like I did, right? I couldn't build for time. Once I'd automated the bookkeeping work, I had to bill fixed fees. I had to do subscription pricing. All these audit and tax firms are going to have to do the same thing or they're going to automate themselves out of work or they're not going to be competitive anymore because they can't hire bodies to fill all these roles that you need to do it manually.
Blake (00:47:24) - So I'm bullish on like AI fixing a lot of the problems or at least being a catalyst to fix a lot of the problems we have in our profession. That's my hope.
Joey (00:47:36) - The other thing that's going to fix the profession, too, is we've got people like you who are thinking about it, I guess. I guess I'd include all three of us in here on this call trying to think the fact that.
Hannah (00:47:43) - We're having this conversation. Right?
Joey (00:47:45) - Yeah, right.
Blake (00:47:47) - And I love the fact that you're doing this show because I don't think there's enough content created by young accountants for young accountants, you know, And I just turned 40. I guess I still count as young because the average firm owner is 60 or older. I don't know. But I guess I'm middle aged now, technically, but. It's so much of the messaging in this profession has been top down and it's been from retired people who now run state societies and, you know, our professional leadership organizations. And it's like they're just totally out of touch with young people.
Blake (00:48:19) - And that's not an insult. That's just the nature of it. Like, how can you be in touch with people in their 20s when you're 60 plus? You can't really.
Joey (00:48:27) - I, I struggle with that at 36.
Blake (00:48:29) - Yeah.
Joey (00:48:29) - Feeling like I've lost touch with the 20 year olds.
Blake (00:48:32) - Well, I got an eight year old, so he helps me, at least with the lingo, you know, like.
Hannah (00:48:37) - I’m right there with you. I've got a 12 year old, a nine year old and an eight year old. And they help me. They keep me on on the up and up. I know.
Blake (00:48:44) - Bruh.
Blake (00:48:45) - Bruh, you're so suss.
Hannah (00:48:46) - Yeah, I've gone from mama to bruh. Yeah, bruh, bruh.
Blake (00:48:52) - It's people without children must think what the heck are they talking about right now? Like who? What is that? And my wife explained it to me. She's like, Blake, bruh, is just the new dude.
Hannah (00:49:03) - Absolutely.
Blake (00:49:04) - You said. We said dude.
Blake (00:49:05) - He says, bruh. I'm like, Dude is such a better word. And then realized I've gotten old because I'm now criticizing my son's, you know.
Hannah (00:49:14) - Its vernacular.
Blake (00:49:15) - I'm saying his vernacular. I'm saying that my vernacular is better than his vernacular. Uh oh.
Joey (00:49:21) - It comes for all of us, man. It comes for all of us at some point.
Blake (00:49:25) - But. You know. If he decides to become an accountant. I certainly hope that not just the lingo will change. You know that the pathways will change, right? We need multiple pathways. We can't just have one pathway. That's the problem. It's just there's one pathway and it's just not it's not a you know, it's got we need more competition, right? We need a market economy system of pathways.
Joey (00:49:51) - Well, and I think the other thing that needs to happen is I think the the folks who are doing the the work and those of us who are doing those things need to understand the value that we provide to the process, too.
Joey (00:50:00) - It's something I remind my clients all the time on the consulting piece, You know, when you're taking care of your employees, your employees are going to take care of you. Because let me tell you, the partners don't want to do all that work, guys. They do not want to do any of that work. They want to do other things. So understand your value and what you provide to this to this thing. And I mean, that's the thing that's always kind of blown my mind about accounting is like, how have we not figured out? And this will I'll probably get yelled at for this too, by a certain group of people. How have we not figured out how to have like an accounting union yet?
Blake (00:50:33) - Well, that's what isn't that what the associations are supposed to be? Your state society is advocating for you as an accountant, as a CPA, at least as a CPA, right.
Joey (00:50:44) - Are they advocating for me or are they advocating for the partners? Who are they advocating for?
Blake (00:50:48) - Well, I say follow the money.
Blake (00:50:51) - Who pays for all those dues? Usually it's the firm. And so that's who they advocate for. They advocate for the firm. But I think that they would be better served if they advocated not just for the firm, but also for the people working in those firms, because firms are just groups of people, right? Yeah. And yeah, that's actually what I would love to see associations do is advocate for the staff.
Joey (00:51:16) - Kind of be the you know, because we.
Blake (00:51:20) - This is another one of my crazy ideas. Let me let me get this let me get your take on this. Create a certification for firms for work life balance, for a positive workplace, healthy workplace. And you would measure things like how many hours of the staff working during busy season. Uh, you know, do they have flexibility? What's your parental leave situation? Do surveys, all that sort of thing? And if you pass with a certain score, you get a badge, you can put on your website and you can advertise that you are a.
Blake (00:51:57) - You know, a great place to work.
Joey (00:52:00) - Well, you can and you can start delving into some other things, too. You can look at things like psychological safety. You can look at things like initiatives, those types.
Joey (00:52:09) - And really have that independent, independently monitored. Yeah.
Blake (00:52:13) - The bullying, right. Like the surveys, there have been surveys of firms that find that, you know, I think like EY in Australia they have a huge problem with like bullying and people feeling like uncomfortable. Like it's, it's like more than 10% of people say in those firms that they have experienced like negative incidents like it's way too many way too many, you know, So yeah, we can do something about it but.
Hannah (00:52:37) - Don't think your ideas are so crazy. I think they're right on par for what we need to see in our industry.
Blake (00:52:45) - And you know what? It would be a revenue generator, too, because it's you know, you'd have to audit these these firms every so often to make sure they're living up to what they promised.
Blake (00:52:57) - So that could. Yeah, that could help. I don't know. I'm full of crazy ideas. That's the beauty of being a podcaster, is that I get to have the ideas. I don't have to execute them.
Joey (00:53:05) - You just get to you just get to think and then and then expound and then say, okay, well I have now we've done the millennial thing where we've raised awareness about the problem and now we can let someone else hop in and solve it for us.
Blake (00:53:17) - Well, hopefully getting the conversation going will will get things moving.
Joey (00:53:23) - Well, really quick before we wrap up, I wanted to talk a little bit with you about earmark and sort of what's going on, because I do think that's an important piece. Whenever I think about education, it's like this is it all comes down to flexibility and making sure kids are not just kids, but anybody in this in this profession is able to to do some stuff more on their schedules. So can you talk a little bit about your mark and what you're building and what you're trying to do over there?
Blake (00:53:45) - Absolutely.
Blake (00:53:46) - So earmark is a mobile app. You can get it on the app store, on the Google Play store. Just search earmark and you can get CPE for listening to podcasts like this one. And we're really proud to have Anders contributing content to earmark my own show. The accounting podcast is on there. You can earn CPE for listening every week, and the goal is just to make it super easy. You listen to a podcast, you take a quiz on the app and you get your certificate. It's all self study courses. In some states, you can do your entire CPE requirement on earmark, and it works for CPAs. CMAs enrolled agents can earn CE credits from the IRS for our tax courses. They allow you to get C for federal tax and ethics courses and even abroad, if you're a chartered accountant in the UK or in Australia or New Zealand, those licensing bodies typically accept Naspa credits, which is what we are licensed to provide. So yeah, it's just it's a problem that I had myself like, how do I get my credits? I don't want to go sit in seminars and I want to, you know, for eight hours a day to do this.
Blake (00:54:56) - I don't want to sit on webinars over and over and over again. So I thought, you know, this generation wants on demand, right? Let's make it on demand. So that's the idea. Earmark. Go get it on the app Store.
Hannah (00:55:08) - Awesome. You're clearly a wave maker and a problem solver and I love it. Thank you so much for coming on here and having this discussion with us. We always do like to wrap up our podcast with something just kind of totally, totally different, but we want to hear from you. What is the best piece of professional advice that you have ever received?
Blake (00:55:27) - It was from Bruce Phillips who bought my bookkeeping practice back in 2015. He's a partner at Appro. He said to me. The most important thing in life is relationships. Um, and I think he meant it in a business context that. Doesn't matter how good you are at your job. If you have the right relationships and you maintain those relationships, you will be successful. And it took me a long time to realize that.
Blake (00:56:00) - And I did not spend enough time early in my career developing relationships, you know, networking, all that stuff. Um, but once I sort of realized just how important it is, I started focusing on it and I view it as just I want to work with people who I'm friends with. And so I look for friends that I can work with in this profession and I figure out how I can do that. And if that's building relationships, right, if you do that, people want to work with their friends. They don't fire their friends.
Blake (00:56:32) - You know.
Blake (00:56:33) - Same thing with your clients, right? If you're friends with your clients, are they going to fire you when you make a mistake? Are they going to go, you know, find another provider who's cheaper a little bit, you know, bid you out every single time? No. And that's why the most successful partners have a lot of great relationships. So that's my advice. That's the best advice I've received anyway.
Hannah (00:56:55) - I love it.
Hannah (00:55:57) - Think that's so true? Think it applies, like you said, not just to professional relationships, but client relationships, personal relationships. I mean, that really goes in applies to a lot of different facets of life. Yeah. Yeah.
Joey (00:57:10) - Well, Blake, thank you so much for joining us. I think that's a we're almost to the top of the hour here, which I think we could have we could have kept going on this for a lot longer. So my my my hope here is that we can we can catch up again down the road year from now and start talking about all the things that are different from this conversation. Hopefully it starts getting better any time.
Blake (00:57:28) - Anytime Joey and Hannah, this has been a pleasure.
Joey (00:57:32) - Cool.
Joey (00:57:33) - Thank you so much.
Hannah (00:57:34) - Awesome. Thanks.
Outro (00:57:35) - If you're a young CPA looking to develop in their careers, we're always looking for great people. Visit our website for remote work opportunities with SummitVirtualCFO or find all our open positions at Anders CPAs and advisors.