Deloitte Canada sells off CAS practice, and other accounting news you may have missed
Welcome to my bimonthly news roundup at the intersection of accounting and technology. Subscribe here so you never miss an issue!
2021 marks the centenary of John Cromwell Jr. becoming the first Black CPA in America. But accounting and auditing firms still lack diversity, especially in leadership positions.
A change by QuickBooks is causing angst by taking away a perk that has saved accountants tens or even hundreds of dollars per invoice.
When you’re bored of complaining about missing out on $GME, move on to how you missed out on Bill.com. The accounts payable and receivable platform had a fantastic Q2 at the end of 2020, and saw its stock rise 23% in one day.
It’s been a rocky time for two out of the Big Four. Deloitte Canada sold some of its assets to Canadian rival MNP, and Ernst & Young angered employees by spending on a Super Bowl ad after layoffs.
No one knows when we’ll be back in the office for sure, but Labor Day is the hot bet. But remote work is sure to stay for many. Virtual whiteboards anyone?
For this and more of my top stories you may have missed, keep on reading. Also, thanks to my sponsor, Freshbooks, for making this newsletter possible! Check out their new accountant partner program to learn how you can work better together with clients.
📅 100 years since America’s first Black CPA was licensed, diversity in accounting still has a long way to go
February was Black History Month, which led to the typical spike in reports on diversity in accounting.
Going Concern published a piece about the experience of Black accountants in the early 20th century. It focused on John Cromwell Jr., the first Black person in America to be certified as a CPA in 1921, and Lester McKeever, who became chair of the Federal Reserve Bank of Chicago in 1997 after struggling to find a firm that would hire a Black accountant when he graduated in the ‘50s.
To celebrate Cromwell and all the Black accountants who followed in his footsteps, a group of accounting organizations, including the AICPA and the National Association of Black Accountants, launched a year-long campaign titled the 2021 Black CPA Centennial, featuring events and profiles of prominent Black accountants.
From past to present: Accounting Today published a survey looking at diversity in accounting and auditing. The short version is that women and people of Asian descent are well-represented at lower-level positions, but Black and Hispanic people are not. And when you zoom in to focus on leadership positions, the majority are still going to white men.
The survey also showed that across the three focus areas (which were race, gender, and LGBTQ+ identity), an average of 49% of respondents had left a job over “lack of equitable treatment,” and 40% had left due to “lack of inclusion.”
The bottom line: As in past years, the ideas about how to improve diversity in the partner ranks in accounting tend to focus on increasing mentorship programs. But who exactly is going to mentor staff when there are few people of the same race and/or gender in leadership to begin with?
Perhaps the time has come for more drastic action, even if that means setting targets specifying that X number of women and X people of color will be hired and promoted every year into various leadership roles.
This isn’t just about having a “diverse” company photo to display on your homepage. Having a diverse workforce is good for any business, including accounting. See, for example, recent report Audit Leadership Diversity and Audit Quality, which concluded that diverse auditing companies are more effective.
When everyone is from the same culture, innovating is a lot harder. The more people you have from different backgrounds, the more perspectives, ideas, and experiences you have to build from.
🎁 Intuit gifts accounting firms free QuickBooks Advanced — and takes away free ACH payments
QuickBooks giveth and QuickBooks taketh away. Let’s start with the good news: accounting firms will now get free access to QuickBooks Advanced, instead of lower-tier QuickBooks Online.
Moving on to the bad news. Accountants using QuickBooks Online have historically been able to give clients the option to pay them through ACH, with no fee. It usually took a little while, around five days, but once you’d factored in that time, it worked out to your advantage. But from March 10, there will be no more free ACH payments for accountants. Instead, every ACH payment will take just one day, and cost a 1% fee, up to $10 per transaction.
The bottom line: Why did Intuit kill free ACH? Perhaps they’re hoping to encourage QuickBooks users over to QuickBooks Cash, the nascent bank-within-QuickBooks that Intuit not-so-secretly wants everyone to start using. On QuickBooks Cash, instant deposits are still free.
However, Cloud Accounting podcast listener Todd Plager has a warning. If you convince your clients to switch to QuickBooks Cash, note that they still have to pay a merchant’s fee. And be diligent through that sign-up process. It will ask if you want to have all your QuickBooks payments go to QuickBooks Cash. If you tick ‘Yes,’ that decision is irreversible. Yes, Todd learned that the hard way so you don’t have to.
Speaking of clients and of playing the long game, this is a good opportunity to prove your worth. Be proactive and send out an email or text, letting them know that yes, QuickBooks Cash could be a great tool, but they should consult you before signing up.
👏 Xero added two new functions that will make your life easier
First, Xero has added the option to create company-wide chart of accounts (COA) templates in Xero HQ. This means that when you’re creating a new account, you won’t have to create a CSV file to populate it.
Second, after many years of begging from its users (including yours truly), Xero has finally added “check register” style reports that showing both sides of a transaction.
The bottom line: Using accounting software that almost does what you need it to is as frustrating as watching your favorite team make a big play, only to miss an easy scoring opportunity. Seeing Xero adding necessary, but previously missing features goes towards making up for that lingering frustration.
I’m not saying I’m personally responsible for the check register reports function. But it does seem like a chorus of U.S.-based accountants voicing our specific needs finally got through to the New Zealand-based company.
🕐 Rippling’s new time and attendance feature will help you track your employees to the second
Payroll, benefits, HR, and IT management platform Rippling has added a time and attendance feature. The tool tracks employees’ hours, allows supervisors to approve those hours, and syncs with payroll. It also schedules vacation days and company holidays, and you can set up rules to automate overtime procedures.
The bottom line: Rippling is making a name for its attention to detail when it comes to functionality, and this feature is another positive sign that the company is going for substance over (or at least as well as) style.
💸 Bill.com is making stacks
Bill.com stock went to the Moon in early February — but this wasn’t anything like $GME. The company had a great second fiscal quarter, exceeding its own expectations, and those put on fintech generally.
By the end of its fiscal Q2, which ended on December 31, 2020, Bill.com had more than 109,000 customers, a year-over-year growth of 27%. The company also reported that in Q2, its core revenue — based on subscription and transaction fees — had increased 59% compared to the previous year. Also in Q2, Bill.com processed $34.8 billion, up 40% from the previous year.
All of this puts them on track for profitability, and saw the company’s stock shoot up 23% on Friday, February 5 alone, after the earnings call on February 4.
The bottom line: It’s always nice to see an established fintech company soaring on the stock market (for a change.) Bill.com’s success was likely driven by the pandemic, when the thought of gathering in a poorly ventilated office to physically touch paper invoices from everyone in a company became a source of anxiety.
But that’s not to take away from the company’s delivery of these impressive results. It’s particularly interesting that as customers increased, revenue also increased disproportionately, suggesting that Bill.com is attracting larger companies that need a more robust approval process, and that its customers are relying on it more.
A MESSAGE FROM OUR SPONSOR
💁♀️ Set Your Clients Up for Success by introducing them to FreshBooks
Are your clients struggling with inputting their data, creating their invoices, collecting customer payments, or storing their back-up? They may not be using the right technology to effectively run their business. FreshBooks is an accounting platform, built for ease of use by business owners. Become a Partner and grow your firm with FreshBooks.Learn more
🤑 Don’t go to TikTok for financial advice
Things you can learn on TikTok: dance routines, baked feta pasta recipes, and laundry hacks. Things you shouldn’t learn from TikTok: financial advice.
As Vox reports, teenagers and young adults are offering financial ‘tips’ on the hugely popular app, in response to the question, ‘What’s a piece of information that feels illegal to know?’ Answers include setting up an S-corp to avoid paying 100% of your taxes, and creating a church to give yourself a “tax-free housing allowance.”
The bottom line: Possibly the reason some of these tips “feel illegal to know” is that they are illegal! Or at least ill-advised. Let’s hope it’s just a phase, and that most young people understand the parameters of TikTok knowledge well enough to realize they shouldn’t be getting financial advice from a platform most famous for videos of people lip syncing.
🍁 MNP bought 25 Deloitte Canada offices, and Deloitte wants you to know it’s totally fine
According to a press release, two of Canada’s Big Four accounting firms have come to an agreement that has one, Deloitte, selling a subset of its business to the other, MNP. The statement on Deloitte’s website says, “70 Deloitte partners and senior leaders, nearly 900 team members and close to 25 offices will join MNP.” For reference, MNP is a major Canadian-founded firm that will have 126 offices spread across the country thanks to this move.
The bottom line: It’s not quite a story of David versus Goliath: more like a slightly smaller Goliath versus a slightly larger Goliath. But that makes it even more interesting.
The press release somewhat plays down the eyebrow-raising significance of a global firm like Deloitte selling assets to big but still Canada-only firm MNP. But Deloitte is aware of how it looks. A “clarifying”/passive aggressive statement at the top of the press release on the Deloitte website noted: “The transaction with MNP is focused on smaller clients… We will continue our impressive growth in Canada…. we are not exiting any regions in Canada.”
One theory, posited by Cloud Accounting Podcast guest Rachel Fisch, is that at least some of the offices Deloitte is sending on their merry way were involved in the company’s attempts to build out cloud accounting capabilities. Deloitte took a shotgun approach to finding partners in the space, compared to MNP’s more methodical moves: looks like only one of these paid off.
🏈 Ernst & Young can’t afford raises but it can afford a Super Bowl commercial
Spare a thought for unsuspecting Ernst & Young employees who sat down to watch the Super Bowl believing they wouldn’t have to think about work until the following morning. (Especially if they’re Kansas City fans.)
Going Concern reported that on the Saturday morning before the Super Bowl, EY’s U.S. Chair Kelly Grier sent an email to employees excitedly breaking the news that the firm had paid for a Super Bowl ad.
Grier reportedly wrote that the Big Four firm had bought a 30-second ad for “a fraction of the normal cost.” It only aired in 10 cities that EY higher-ups deemed to have a high concentration of customers.
The bottom line: When you’re already known as one of the Big Four of anything, is brand recognition really a concern?
Given that a 30-second spot during the Super Bowl normally costs in the region of $5.5 million, even if E&Y paid “a fraction” of that, it’s still a lot of money. Especially — as Redditors pointed out — considering that in July 2020, the firm told a virtual all-hands meeting that it would not be handing out raises unrelated to promotions.
E&Y has also been plagued with reports and rumors of layoffs, or “performance-based separations,” as supervisors allegedly describe them. Apparently the commercial’s slogan — “Question everything” — doesn’t apply to employees wondering if their company is fumbling its priorities.
👩🏫 Zapier has made a list of the seven best online whiteboards
If the one thing you’ve really missed about physically going to the office is the majestic squeak of a marker pen scribbling across a whiteboard, Zapier has a list to help you remotely recreate the experience of a particularly productive brainstorming session.
Its list of the seven best online whiteboards for team collaboration in 2021 showcases options that meet a list of criteria, including being optimized for mobile use and having unlimited virtual boards, features that encourage group work, file attachment capabilities, and the option to share your board.
The bottom line: Personally, I miss the conspiratorial energy of meetings around a whiteboard: Learning about these remote options means potentially getting some of that back without even having to go to an office. But finding enough whiteboard nerds like me to fund seven companies selling this software might be a big ask, especially given that Google and Microsoft both have their own serviceable versions already.
🤷🏽♀️ Be honest: No one knows how much longer remote work will last
As far as anyone can tell (which admittedly isn’t that far), remote work is going to be the norm for many of us for at least another few months.
The Wall Street Journal interviewed leaders from multiple industries — including accounting — and found that many companies are predicting that they’ll be working remotely until at least late summer, maybe early fall. Labor Day (on Sept. 6) is the date many seem to have highlighted on their Outlook calendars. It’s far enough away to seem like a real possibility, not so far away it’s totally depressing, and there’s a chance kids might even be back at school by then.
Salesforce employees get to enjoy remote work for even longer — potentially forever. The company announced that even after the pandemic is over, employees will be able to choose between coming into the office every day or going by a hybrid model that combines remote and office work.
The bottom line: If 2020 taught us anything (other than the importance of the mute button), it’s that we cannot predict which way the pandemic will turn months in advance. In the meantime, as Journal of Accountancy points out, you may as well make sure your audio/visual setup and work-from-home policies are strong. You’ll be needing them.
Thanks for reading! Did you enjoy this news update? Get your own copy sent directly to your inbox every few weeks: Subscribe to my Newsletter.
For more accounting + technology news and resources, listen and subscribe to the Cloud Accounting Podcast, the #1 accounting and bookkeeping podcast in the world.
THANK YOU TO OUR SPONSOR
Work better together with FreshBooks