Build A Focused Firm with Hector Garcia, CPA

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Blake: [00:00:01] We're going live. One. Hello, everyone, and welcome to build a focus firm with Hector Garcia. I am Blake Oliver, your moderator for today's episode. This is the third installment in an eight part series all about how to build an accounting or bookkeeping firm that gives you joy by focusing on what matters. We go live on YouTube each Friday through the rest of the year at 11:30 a.m. Pacific 2:38 p.m. Eastern. If you're on our email list for this series, you'll get an email with the link to each live stream. If you aren't on that email list, go to the sign up page. I am putting that in the chat in our live stream right now and you can find that in the show notes if you're listening to the podcast version of this episode. Thank you to our sponsor Avella for their financial support to make this series possible. Avalanche's Award winning tax automation solutions help accounting practitioners of all sizes from sole proprietors to top 100 firms. Avila simplifies sales tax compliance with real time rates, automated returns, filing registrations, tax research and automated tax solutions for specialized tax areas. They live and breathe tax so you don't have to. Learn more at Avaliacao Accountants. Thanks everyone who has joined us as we record live.

Blake: [00:01:22] Please feel free to chat with us. You'll need to subscribe to the earmarked channel to do that. Let us know your thoughts. Let us know your questions. We want to hear from you. Now let's talk about CPE continuing professional education credits. You can earn one CPE credit for joining us today. This is a live stream. It's not a webinar, so it works a bit differently. You're going to get an email next week with a link to the course on the earmarked CPE app. Sign up for the app, click the link to the course, and you're going to be able to take a quick five question quiz. To get your CPE certificate, you have to be signed up for the email list to get that link, so please do click that link in the chat or in the show notes to sign up. Or you can just download the earmark app on the Apple App Store or the Google Play Store, and you will be able to see that course when it goes live. With that out of the way, let's get to our topic today, [00:02:12] technology. Today, we're going to learn how to leverage cloud systems to manage work and free up time. Hector, [00:02:19] how are you doing this Friday?

Hector: [00:02:22] Very good, Blake. Very, very excited about episode three on technology. So as Blake mentioned, we have an eight part series. We are currently dealing with part three all about technology. We're going to spend an hour talking about technology. Blake and I were in the prep of this episode. We were like, It's an hour enough. You know, how much can we talk about technology? Well, you know, Blake pretty much has a a weekly podcast to talk about technology for our industry. [00:02:50] So what I try to do is give you a summary of sort of everything you need to know in order to start creating a roadmap around planning technology for your firm. So let's jump right through it. We're going to do three parts. [00:03:05] We're going to do hardware and platforms. So they're going to be sort of the first third of the episode that I'm going to talk about, [00:03:11] accounting software and ERP systems or ERP systems, [00:03:16] you can say, and or because sometimes accounting software is our ERP is or or becoming ERP is or, or people confuse them as ERP. So, well, we'll separate the difference between definition wise accounting software and ERP and some of the apps that connect. And then the third lesson is technology and people, because sometimes if we forget that technology is for people, people are not for that technology, and we lose sight that all these technology planning could break the strategic intent of our people planning.

Hector: [00:03:49] Okay. So we're going to sort of we're going to end it with that third lesson. And of course, we'll have Q&A at the end or even throughout the the the life session. You know, once you listen to this in the recording, you will you'll have the benefit of whoever attend the life and ask questions. So anybody ask questions, Blake will be monitoring that and I'll be answering that stuff live. [00:04:14] So let's go to part one hardware and platforms. [00:04:18] So there are essentially two subsections to hardware and platforms. [00:04:24] So the first section we're going to talk about essentially a local server, which is a traditional way that firms housed information central to the firm. [00:04:35] They want to talk about [00:04:36] hosted solution, which is a local server but under somebody else's control, [00:04:42] and then a [00:04:42] web based platform, which is what you don't need hardware, and you're sort of working from somebody, somebody else's hardware, that's all serving it in your browser. [00:04:53] So we'll we'll talk about those three and what role they have. Sometimes you can use all three, sometimes one of the three, we'll get there. And the second subsection to hardware and platforms is [00:05:04] workstation and peripheral. [00:05:06] So I'm going to quickly do a couple of blurbs around what you got to be thinking about beyond servers, you know, scanners, printers, that sort of thing. So we'll discuss that briefly. Okay. So let's talk about local server server versus hosted solution versus a web based application.

Hector: [00:05:23] So to start defining these, so our [00:05:26] local server is when you have a physical computer that's owned and controlled by the firm, it's typically within a premise. [00:05:35] Now there's situations where you own the server and you're leasing space in a in a server room somewhere else that is secure and you're using the bandwidth, but you still control it. That's not that common. It used to be called [00:05:51] co-location, [00:05:52] but that has been replaced by by virtual computing, virtual computing, cloud platforms and that sort of thing, which we'll talk about. But the local server is still very much a thing used in firms. I have a local server myself that I control and I use and I explain the decisions I make that I made around using the server and not. And [00:06:17] this local server could be hosting data or it could be hosting applications or it could be hosting both. [00:06:23] So we'll get into that. Next option is a [00:06:26] hosted solution. [00:06:27] This is basically a local server that's local to someone else, and they're leasing you access to those resources. Sometimes it could be a physical computer that they're leasing access to you for a flat fee of sorts. Sometimes it's fully managed, sometimes it's self managed. We'll get there too. But typically this is a monthly fee per user where you basically get access to both applications and data. And we'll give you some examples of that as well. And [00:07:00] the last one that's really not relevant to servers, but it's essentially what's replacing the essence of having to need a server. [00:07:09]

Hector: [00:07:09] It's a web based platform and we're talking about apps, talking about platforms. And by that I mean it really is it's an application, but it's it's a it's a platform because it is there for you to sort of make it your own. And sometimes we refer to these as third party apps, but a platform is a little bit different than an app. So for the purposes of this. Episode when we talk [00:07:36] about app is typically an extension or an addition to a platform, [00:07:41] and then we talk about platform. It's sort of the main thing where all the data, the source of truth is being stored. So we'll dig into that deeper because it's important for you to know those definitions. So when you're shopping around for solutions, you can ask, Hey, this is a hosted solution, it's a local server is it's desktop software, it is a platform. So these are important concepts to know when you're out there procuring or comparing different solutions. Okay, so let's dive deeper into local server. [00:08:13] Local servers can either be a file server. This is typically a central place just with data or files OC all the actual applications run in the workstations. [00:08:27] So one of the typical things I see is you have a tax practice that has a multi user tax software. The tax software is installed in every one of the tax preparers computer, but the tax database, the actual clients tax database and maybe all the W-2s, all the attached documents, work papers, all the stuff that you get from your client, it's in a central location.

Hector: [00:08:53] That way any of the preparers can pick it up and can look at it without having to go physically into the original computer used to prepare it. And and in some cases, especially if it's a local server, you control what user has access to which folders or which clients or which data sets that sort of thing. Now, one of the most common things that are used, probably even more common than the file server is the application server. [00:09:23] So an application server is used to run the actual applications on the servers and the desktops themselves. They're workstations where people working, they're just seen as terminals and in this multi user environment. [00:09:40] If you have a desktop based application. So if you have a tax software that's desktop based ultra tax, whatever it is, that's not on a web browser, you typically don't want to install tax software in every single workstation, especially with a multi user environment, because you could have one user on one version and one user that update it to the latest version. And you can create conflicts. When user opens the same file, the user B tries to open. [00:10:12] So one way to avoid that is to have all your applications in a server. [00:10:18]

Hector: [00:10:18] This could be a local or this could be hosted by the way, but we're talking about it in the context of local. So when the workstations, whether they're physically on premise or remote, they actually log in to the server with something called terminal services or remote desktop and they run the the apps in the server and all of the computing power, it's in the server. [00:10:43] What's really nice about this is if you need to update the software, you update it once, once and everybody that logs in, it's on the latest version. So that's the major difference between just a file server and an application server. [00:10:57] Okay, So let's talk about some pros and cons. So [00:11:06] pros on local servers is [00:11:08] you [00:11:08] have total control, faster routine service issues. [00:11:12] So you have to restart the server or download a Windows update. That stuff is pretty easy to do, but if you have it tough because you know most accountants are not I.T. people, so that's a pro if you have IT stuff, right? So the larger the firm, the more likely that they can manage internal local servers. You [00:11:32] can do most of the work even when the Internet is down. [00:11:35] This is a huge plus for firms that have had experiences where April 13th Internet goes down and it's complete chaos. So at least if you're within the local area network, if you're in the office per se, even in today's remote work environment, some people still go to an office.

Hector: [00:11:52] So if you go to an office and there's a local server there, you could probably continue to work. And so that's a huge plus too. You [00:11:59] can also add new apps and experiment with ease. [00:12:02] And I'm going to experiment lightly because usually you don't want to experiment with a server that used to run your entire business, but it happens where you know, there's an opportunity to add some sort of cloud based app to a desktop based application to speed up some sort of process. Right? You know, like, let's say that you're I'm going to pick an ultra tax, ultra tax desktop, the base tax software. Let's say that there was an app that talked ultra tax and allowed customers to log in to some magic portal, post a W-2 and the stuff comes straight into the desktop software and adds the W-2 and updates the tax return. So think of any desktop platform that you have where there's an opportunity to add a cloud based app. And if you're hosting this, you have to go through all these control processes, control measures for the hosting company, even allow a new app into the world, right? Because these are shared resources and typically a virus or some problem with one of the computers can bring down a whole cluster of users. So if you want to add apps, expand with apps, experiment with apps, your own local server, it's it's better.

Hector: [00:13:19] [00:13:19]Some of the cons is well there's a bigger upfront investment servers typically are going to be 5 to 10000 at the very minimum for them to be decent servers for a 5 to 10 person firm at the minimum. [00:13:34] So it's a higher upfront investment and there's [00:13:37] bigger it costs overhead. [00:13:39] So you either need a full time i.t person or sort of a highly paid contract i.t person that could jump on your server somehow, remotely or physically and work on it. When something needs to be done. It does get [00:13:53] more complex for setting up remote access. [00:13:56] So when you have your own server in your premise that you own and control and you want people from the outside to come in, you have to open security wise, you have to open ports for people to come in from the outside. So obviously this [00:14:11] creates higher risk of vulnerability. [00:14:14] And for the most part, there's very [00:14:18] low flexibility for upgrading and downgrading. [00:14:21] So if you have own server and you have to upgrade it, you're going to have to go buy a hard drive, get it shipped, open the server, shut down the server, install the hard drive, that sort of thing. Whereas with hosting solutions, it's much different that they usually have these multimillion dollar server systems and they literally just give you a 1/10 of 1% of of the power. And then if you say, you know what, I want 2/10 of 1% of the power of that multi million dollar system, usually within a click and a minute of internal reboot, you're up and running with double the capacity.

Hector: [00:14:56] So those are the things you really want to think about pros and cons on local server and typically there's [00:15:03] less redundancy. [00:15:03] So if you have your own local server and it goes down, you need to have a second local server for it to sort of kick in when the first one goes down or you need that server to be sort of much bigger capacity for it to also have a redundant hard drive, a redundant operating system, a redundant mechanism all within the same physical hardware. And if you get a power surge or whatever and the and the power supply of that one computer that had redundancy quote unquote built in, it's not really redundant because the whole machine is down. Okay. So yeah, so [00:15:40] redundancy is a big issue. Even if you have backups, you know, you still got to get the server backup and download the backup to be back up and running operationally so that, [00:15:50] you know, we dealt with local servers for a very long time. I had a local server for 13 years for my tax application. I'm an I.T. person myself. I come from. Background. So I built my own server. I maintained it. So I'm a different monster per say compared to other accountants.

Hector: [00:16:08] But on April 10th, both my hard drives, my regular one and my backup rate got fried somehow and I was down and I had a backup, but I had to call my my IT guy, even though I think I have I.T. guys are much smarter than me. And I said, Dude, I got to get up and running. I do have a backup. What can I do? He's like, [00:16:33] I'm going to spool up a server for you. Within 2 hours, I had a virtual server I hosted solution fully managed, and then I just had to give him access to my backup solution. He went there, he downloaded all the files. We [00:16:46] did have to install my tax software and my QuickBooks and all that stuff in the server to be up and running, and that took maybe another three or 4 hours to download. So yeah, it took a whole day, but at least I was up and running two days before deadline. But like, you know, it's funny we say it anecdotally, you know that, you know what, if this happens on April 13th and it literally happened to me, so I made the decision partly because I was cheap. I wanted to spend I spent three grand on my server four years ago. I spent another $2,000 halfway through to put my memory additional hard drives, and it lasted me a good 13 years. The same server, by the way. It's pretty amazing how good that server was.

Blake: [00:17:29] Yeah, 13 years is a really long time for a tech.

Hector: [00:17:34] That's amazing. My thing, I was so mad. He's like, Dude, should I be mad You pulled off something no one can pull off at the same server. Granted, you know, we had more memory, we had more hard drive controllers, we had more hard drives, a bigger power supply. I mean, all these things happen to the process. But I didn't spend more than five grand in hardware over the last 14 years on it and maybe or 13 years. And maybe I pay my guy 2 to 3 grand over the years to maintain it. So it helped that I was an IT person and I did most of the routine stuff, but never again. [00:18:07] I'm going to have a sort of non redundant. I had a backup but I didn't have redundancy. [00:18:13] And these two things are very, very different. [00:18:16] Redundancy, not the same thing as backup. Backup is great. Redundancy is obviously much better, especially for those situations. [00:18:24] So I host the solution. So this is what I evolved to typically [00:18:29] hosted, [00:18:29] will run both applications and file server because hosting implies that is controlled by a third party that is not on premises. Hosted is almost always within the context of a remote desktop terminal services or a VPN. So because you're never going to be locally connected to a hosted solution, in some cases with a VPN, which is a more expensive solution, more bandwidth requiring solution, you can have a hosted server that opens a VPN so the users feel that they're in a local environment and the difference between a hosted solution and a VPN and sometimes VPN is a sort of subsection. I mean sub part of the host solution is with a hosted solution, your remote it into the server and there's your computer window and there's also the remote desktop window.

Hector: [00:19:26] And just like dealing with the interface of remembering that some of the files are in your computer and not in the server and you have to actually transfer it to the server. So there's not that much interaction between your your files and the server files with a VPN is different. A well put together VPN will have you connect to a hosted server, which is a centralized app and centralized centralized apps and centralized documents. But it will feel like you're working locally and you're interacting more with your computer and your files. So those two are kind of important distinctions to make on the pros for hosting. As I mentioned, it is a [00:20:04] lower IT upfront cost. [00:20:06] And I think for the most part, it's monthly. Monthly hosting the actual monthly hosting cost. Annual lives are typically lower than a full time staff. I mean, I would say otherwise it would not be a value proposition. Host solutions typically have high security, high security, high redundancy and automated backups. That's very sort of basic with a hosted solution. And as I mentioned earlier, downgrades and upgrades are flexible. [00:20:40] Some of the cons is you can't access it if the internet goes down. It's [00:20:44] a big no no for some people, [00:20:46] low flexibility when it comes to adding apps. [00:20:49] Like I said, experimenting with new apps or doing special updates, it takes them longer to get to you or to do an update that requires every single customer to be rebooted per se, and [00:21:01] you don't control anything. So you're at 100% at the mercy of the service provider. [00:21:07]

Blake: [00:21:10] Do you have a sense as to what the breakdown is of firms these days? How many are using a local server, how many you're using hosted?

Hector: [00:21:22] Yeah, I don't I don't have a census, but I can tell you just from sheer obligation, from the from the firms that hire me to the training. And what I observed is almost always [00:21:33] when their tax solution is that's the base, they have a local server. [00:21:39] It's it is so common. Almost always when they do non collaborative, non collaborative QuickBooks desktop write ups, not cloud, it means that one user checks out the app. I mean, one user checks out the desktop database works on it finishes and they're done. So there's no multi-user, there's no client collaboration that almost always leads to a local server. I've seen some instances where the opposite is true, where the actual tax software company offers the hosting solution. So accountants feel that they're getting a single provider, although it almost never is right where they have one provider for hosting and one provider actually sells them to StubHub. So that is a situation I see more collaboration with QuickBooks Desktop where maybe the host, the client file and they give remote users access. You can have more than one person working on QuickBooks or maybe the client collaborating on QuickBooks desktop as well. The same thing with like a sage 50 sage 100. Another type of desktop solution. Obviously with QuickBooks Online and Xero, this is all moot. Okay, got it. So that's what I know for the most part. But I do see most old school firms with a local server and with the trusty IT person to maintain it. Okay, so I'm going to mention some way if you want to start Googling some of these things and learning more about them.

Hector: [00:23:10] So the host solutions, I'm going to really break them into two categories. [00:23:16] There's self-managed and there's full managed and there's stuff in between. So self manage means that you know how to manage servers. You just don't want to deal with the hardware. [00:23:27] So you have an IT staff, you're an I.T person. The three biggest in the game are no surprise. Microsoft, [00:23:35] Microsoft Azure, Amazon Web Services and Google Cloud. All three of these providers are best in class three biggest companies in the world. You [00:23:47] log in into their website, you sign up if you know what you're doing, you can spool up a server within I don't want say minutes, but definitely under the hour. You can have a server up and running and the server could be Linux, it could be Windows Server. So it's very, very flexible how how the servers gets pulled. But you can't you really need to know what you're doing. You've got to have an IT staff, but see hardware required other than your workstation that you're using to set this whole thing up. Now the opposite of self-managed platforms would be [00:24:23] managed service providers. So typically with managed service providers you are outsourcing the entire I.T function to a third party to a company and it requires no i.t staff and no no hardware. So you're basically trusting them with your i.t infrastructure and there's a gazillion companies and they're typically very small. [00:24:46] There isn't like a big name like Microsoft U.S. so I'm not going to mention a particular one just because if you, if you Google MSSP or managed service provider and you go to like top ten, top 20 for small business for midmarket, ten different websites will give you ten different listings.

Hector: [00:25:03] So these are typically much smaller regional type companies that offer this. [00:25:09] Now for industry, specifically, let's talk about our industry for accounting, some MSPs. [00:25:17] Productize their services and they call themselves a hosting service provider and they usually add the word for QuickBooks for tax software, A, B and C for Sage. Right? So they so they are their MSPs that focus on one major application of that industry. So in the QuickBooks desktop world, the biggest player is right networks that actually have a contract with Intuit and QuickBooks users, they can purchase QuickBooks Enterprise and hosting at the same time. They pay a single provider, they pay into it. So it feels like Intuit is providing cloud based desktop software, but it's really two providers. It's Intuit selling them the desktop software and right networks supporting the hosted solution. So that's why they're biggest some of the competitors, the right networks or or independent from Intuit, MSPs that are industry based or application based are go to my ERP suites net with twosies, so net summit hosting and ACE Cloud hosting. So these are the five biggest players, especially when you say QuickBooks hosting services or something like that. We're talking about within the context of QuickBooks desktop, some of these hosts, Sage 50 and Sage 100 as well. [00:26:41] Now let's move on to web based platforms. [00:26:44] In this category that we're discussing. So with waste platforms, there's a whole slew of them.

Hector: [00:26:51] And what I'll do is I'll just go straight into the examples instead of defining them. So I'm in a group, all the examples, and these are all the apps that are ever encountered with or ever played with or used or, or, or, or been exposed to in my entire career. And there's more to. But I'm going to tell you sort of the biggest ones, the ones that matter. So I'm going to break them down into different subcategories. So [00:27:17] productivity and collaboration platforms [00:27:20] will be one subcategory. [00:27:21] Information management [00:27:23] will be another subcategory. [00:27:25] File management [00:27:26] would be the third subcategory. [00:27:29] Internal communications management [00:27:30] will be the fourth subcategory. [00:27:33] External communication management would [00:27:36] be the Fifth Subcategory project and task management. Some people call this practice management and we'll save Practice Management Episode eight of the podcast mini series because we're going to go through the entire first seven of like, how do you run your business before we talk about, okay, now that we know how we want to run our business, how do we pick the one practice management solution that can cater to our entire strategic intent? But I will talk about some of the common practice management apps here in the project task management category. And then last one is accounting or platform ERP, which is the one that we're going to discuss a sort of the third segment of this of this episode and the add ons to those accounting or platform ERPs. So before we jump in, Blake, I think you want to do the mid role so we can think of a lot for the podcast.

Blake: [00:28:35] Exactly. Thank you so much to Avalere for their financial support that makes this series possible. [00:28:41] Cavalera came to me and came to Hector and said, Hey, we want to help accountants be more effective, run better practices, be happier. Please use your judgment. Make a series that you think will help. And they gave us total freedom to do that. So [00:28:58] thank you so much. That's the result of of that. So here's a message from Cavalera. Please do check them out. [00:29:05] Did you know that 52% of accounting practitioners from small to large still rely on spreadsheets and manual processes for sales tax compliance? It's time to stop and focus on automation. [00:29:17] The average for accountants suite empowers even the smallest practitioner to support clients tax compliance needs. All firms can benefit from our referral program. Simply refer clients to Avalere and let us assist on your behalf for practices that offer direct compliance services. Use Avalere for Accountants Award winning tools to help you start or grow a tax compliance or CAS service expressly designed for accounting service providers with multiple clients. Solutions include real time rates, automated returns, filing registrations, tax research and automated tax solutions for specialized tax areas. Partner with Avalere and grow your practice with efficient and accurate sales tax compliance while reducing risks for you and your clients. To learn more, contact Avalere at Accountants at Avaliacao or visit them at Avaliacao Legal Accountants. All right. Back to productivity and collaboration platforms.

Hector: [00:30:19] All right. So [00:30:20] the first subgroup of apps, [00:30:22] this is what people like to call [00:30:24] the tech stack, [00:30:25] right? So that's a buzzword in today's industry. What's your tech stack? So I will tell you, which was I used personally and but I want to break them down so you can also see the ones I've used before or tried or or know of their existence. So let's start with productivity and collaboration platforms. And I guarantee you every accounting firm is using one of these three no matter what. In some cases they're using all three, which makes things even more confusing or two out of the three. This is the one I recommend to marry one and one only and try to restrict users to not use at least two. This will make total sense. You're going to be like, Oh yeah, of course I use both. I use two of these. So the one of the biggest one that's, I would say biggest one of the modern world, let's call it that is [00:31:15] Google Workspace, formerly known as G Suite. This is the Gmail, the Google Doc, Google Sheets or Google Presentations meet or hangout. [00:31:25] And Google has like 50 or 40, 50 or 60 actually application sub applications in the work state workspace environment, including tons of them that are just testing and they might live for a year and die because Google's always experimenting. And Google workspace was Google's response to Microsoft Office. Right? And then the second one is [00:31:48] Office 365, which is Microsoft's response to a Google workspace. Right? [00:31:55] Because Microsoft for a very long time owned the productivity space, especially on PCs.

Hector: [00:32:01] Mac is a little bit fragmented, but on PCs with Excel Word, PowerPoint Outlook, OneNote and most recently especially Post-Pandemic Teams teams was sort of the replacement of Skype and sort of when Skype meets Zoom and Slack, right? So so Office 365 is the sometimes cloud version, sometimes desktop version, but definitely subscription version of the of a web based or web powered, let's call it that productivity tool. And for a long time there hasn't really been a contender and. The one that has really impressed us and many people in industry, Blake would probably agree, is out of nowhere this company goes Zoho Z, Ohio basically became an entire platform that it's as powerful as Google Workspace and Microsoft Office. Now I say as powerful because there are natively cloud based and the ability to expand, create more apps, integrate with each other, integrate with other apps is is incredible. And because pretty much they were born they were born as a Web based platform. So the scalability of Zoho, like how quickly Zoho can add new apps, sometimes it's it's true envy for Google and Microsoft. Well, these are the three biggest productivity collaboration platforms. The one tip I'll give you is. I use Excel sometimes I use Google sheets. Sometimes I'm even a culprit of using both. And I have my own reasons. But almost always when I go back and try to find what I was working on, there's an extra one minute delay in my head where I'm trying to remember if I did it in Google or if I did it in Microsoft, did I save it into my SharePoint, into my OneDrive, or is it locally in my computer? And that just creates sort of a lot of waste.

Hector: [00:34:09] [00:34:09]So if you were using a single platform, typically there's a single place for you to go search it. So yes, I get it. Google Sheets and Microsoft Excel, they're not comparable power wise, but you know, maybe you build an Excel and then upload it to Google Drive so you have a single place where it is. But I can tell you from personal experience that has caused issues for me. I see some firms that use Gmail, but they manage their Gmail in Outlook, which is pretty much insane. But they but they do that, you know, so like stick to one, right? So either use outlook or use Gmail, but like using both, it's like you're mixing in to too big of a monster of sort of two monster monsters with really long tentacles. And it's just to to open for confusion. [00:35:01] So this Google versus Microsoft debate is probably going be the debate of the ages, or at least for the next ten years, just like QuickBooks Desktop versus QuickBooks Online or desktop application versus any cloud based application like Xero FreshBooks or QBO has been the debate of the last ten years. I think the next ten years pretty much the cloud based accounting has won that debate. Now it's okay, do we go, you know, Gmail or Zoho or do we stay with Microsoft? So that's another important thing that's going to come in the pipe.

Blake: [00:35:34] [00:35:34]And I feel like a lot of times this debate between Google and Microsoft falls also along Mac and PC lines, because if you have a PC and you're running Windows, the Microsoft Suite makes a lot of sense. But if you have a mac. I guess it's different now. Microsoft has all the stuff and bells and whistles like Excel for Mac actually is usable now to some people might argue with that, but it's pretty good. And you've [00:36:01] got all the online stuff too, so you can do either on Mac, but for a long time you couldn't really. And if you want a mac, you kind of had to do Google.

Hector: [00:36:09] You know, interesting observation from my experience. And you had you ask the question earlier about, you know, do I have a census on who's using local versus hosting? And if you were to ask me the same thing, do I have a census on who's using Mac versus PC and Google versus Microsoft? [00:36:25] One thing I found is Mac users, because they are so used to not getting the full feature set of Microsoft apps on Mac, they were more likely to jump straight into a cloud based solution like like Google, even if quote unquote g sheet g sheets or Google sheets is much weaker than Excel because they're like, well, you know what? Except for Mac is much weaker than Excel for PC anyway, so I might as well go straight to cloud. [00:36:55] So I found that accounting firms that have a lot of Mac users are more likely to go to cloud, even though Mac and PC had nothing to do with cloud or not cloud. [00:37:06] But I find Mac users are more likely to go cloud. [00:37:10] Also because Mac users were early adopters of iPhone and early adopters, iPhone are statistically more likely to do things on the cloud anyway. So that could be sort of a leading indicator of that as well. So the next subcategory here is [00:37:26] information management, [00:37:27] so I'm going to go through them. Our table is kind of the hottest thing on [00:37:31] simplified no code database management. [00:37:35] Okay, So you can, if you were always interested on learning about databases and everything about databases was intimidating for you, for you. Table is your gateway drug into databases. Super easy to do? I never know. Databases. I use air table myself. I love it. I think Blake user table as well.

Blake: [00:37:57] Yeah. We use it for ad sales for The Cloud Accounting Podcast and we have all these automations with forms where people can order in a page on a website and it kicks off all of these tasks and it's all custom built by my co-host, David Leary.

Hector: [00:38:15] Right? So instead of having just a bunch of spreadsheets with a bunch of data, which is how most accounting firms sort of do their quasi databases is their table, it's one place where it feels like a bunch of it could feel like a bunch of spreadsheets with a bunch of data, but it can be organized and cross-reference through all your databases. And then Mondaq.com, I would say, is the closest.

Blake: [00:38:38] The automations that you build between the databases. That's where it's really a really powerful.

Hector: [00:38:43] Sort of the thinking of the data or referencing the data, because you don't always have to sync the data between databases you just reference. You're like, okay, by the way, if if this customer has this status on this database, then, you know, on this other database, you change this tag or change the status or whatever Monday is, I would say is the closest contender to our table. The difference between Monday and our table and in its core, they're not very different because when you customize Monday, you can make it look like a table. And when you customize a table, you can make it look like Monday. It's just that Monday, [00:39:21] it's more of an interface driven app. It's customizing the user experience on clicking, dragging and moving where every table is more focused on the data itself. [00:39:32] So Monday took a visual approach, a table took a data approach. They're both cloud based, they're both databases. [00:39:41] They can both be customized to have different views, but every table is much more of a database, and Monday is much more of the front end per se. [00:39:49] Monday is a great front end table is a better back end. You could call it like that, but you'll be. Don't be surprised if every table starts looking more like Monday up front with better front end and Monday feeling more like a database over time. Those two are probably the hottest thing in the industry. We use Monday dot com in our practice for a four hour cleanup projects. [00:40:14] There's Microsoft SQL, which is the most traditional one. Most I.T. People will go straight to Microsoft SQL, especially if you have your own server. So people with their own local servers are very likely to use Microsoft SQL. [00:40:26] Then there's a notion I don't use notion, but everybody talks about notion is the hottest thing out there. Blake Maybe you have some, some say about notion.

Blake: [00:40:35] I love notion as a wiki. It's kind of weak as a database, but it's, it's really started as a, as a wiki. So think of [00:40:43] it like a bunch of Google Docs or a bunch of word documents that are all tied together in a website view. You can create an internal website. Maybe it's like a SharePoint, but it actually works really well and you can make pages public too. So it's a really nice way to put up pages on the internet that you want to share with people without having to go and put it on to a website. You can basically make your own website in notion as well. [00:41:07]

Hector: [00:41:07] Now can we, can we define Wiki for people that don't automatically understand wiki, you know, like knowledge, like a knowledge internal knowledge base, not as a management system.

Blake: [00:41:17] Yeah. Like a frequently asked questions for your firm or a process documentation place. So I put in for instance, we produce podcast episodes and all of my knowledge of, of the best practices for how we do it and what settings we use. They go into a notion page, and then the editors can reference that it's like a training manual of sorts.

Hector: [00:41:40] Okay, so imagine a Wikipedia for your firm about how to do stuff inside your firm.

Blake: [00:41:46] Some people use it to track client information, even use it as a page for each client. And then, you know, some new piece of information comes in. Just drop it into notion.

Hector: [00:41:57] So it's like a quasi CRM as well.

Blake: [00:41:59] It could be, Yeah. It's very flexible.

Hector: [00:42:01] Yeah. What's happening now is all these app companies are starting to look the same. Like, like the next one in the list is click up, right click up started wiki.

Blake: [00:42:12] They added the whole document thing now, but they started as task management.

Hector: [00:42:15] Exactly. So clickable was hey, just add your task and you know, click it up. If it's ready, click it down. If it's priority, that's otherwise. It was a simple, you know, list your task and reorder them but click up. I think it's maybe like a seven year old app. This thing has become this humongous database notion air table Monday dot com notion start app. So like I'm impressed and how often click up shows up in the top ten productivity apps of all different sorts of angles are using myself by the way. But I remember watching my friend said David rave about click up when he first started just as a simple task management app.

Blake: [00:42:54] There's a few firms that use it as their exclusive practice management tool and it works for them.

Hector: [00:43:01] Yeah. There's a company called. Elation. Elation like, Do you have a better way to pronounce that one?

Blake: [00:43:09] I don't actually know. I've always said Atlassian, but I could Atlassian.

Hector: [00:43:13] So this company pretty much was created to acquire information management apps. So they've acquired JIRA, Confluence and Trello and I've never used Confluence or JIRA, but I've known Trello for a long time and Trello was a very popular sort of practice management app. So Ellison [00:43:31] could be the next company that creates a whole slew of practices, not specifically just for accountants, just just business management and database management. [00:43:40] So watch for those. Of course, [00:43:42] Salesforce started as a CRM and now Salesforce is pretty much everything. Salesforce is a full blown ERP. [00:43:50] Like I saw I went to a bank a couple of days ago and they added the way they created my account is with Salesforce. You know, like, you know, I had nothing to do with CRM, you know, it's like backend account management for a bank. So like Salesforce has become everything, everything. And Salesforce is now so far away from small business that they don't even have something that a small business would even fathom to pay. But interestingly enough, when I go do consulting with a small business client, they say, Hey, we're thinking about adding CRM, we're looking at Salesforce. And I have to say bad news. You know, Salesforce is like an SAP. It's like it's this whole monster of application and it will cost you a lot to do and one that has lost traction. But it was one of the big ones sort of I would say this notion before notion was a thing. It's Basecamp, so also very famous. Okay, let's move on to subsection three of apps [00:44:47] file management. So I think the number one cloud based file management has [00:44:53] inadvertently become Google Drive. Even though Dropbox is kind of a close contender, it will be between those two. [00:45:03] Google Drive is free for most people, and obviously that has driven the amount of users. Google Drive is very convenient for Gmail users, so that has driven a lot of users. Google Drive is the fundamental database of your Google sheets, your Google Docs, your Google slides. So it's become the default document management app. [00:45:29]

Blake: [00:45:29] Yeah. So for me, [00:45:31] when Google Drive added the file stream app to Mac, I'm on Mac. I think they have it for PC as well. But when they added this file stream option, that's when it became a Dropbox killer, a box killer, because it allows you to use Google Drive like a network drive. [00:45:48]

Hector: [00:45:48] It it feels like a local folder in your computer, right?

Blake: [00:45:52] So I can have a computer with only 500 gigabytes of storage and I've got all of my cloud files. On a network drive that operates like it's on a server in my.

Hector: [00:46:04] Like, like a file server, right? Like a like a VPN file server type of stuff. Hey, local. It all comes full circle.

Blake: [00:46:11] [00:46:11]And Google has so much storage capacity as a business that they make it essentially free. So I can have as many files as I want if I'm on a Google Apps subscription and they don't charge me extra, which is kind of insane, it's that that makes it a good deal. [00:46:27]

Hector: [00:46:28] [00:46:28]One thing I find Google Drive to not be a good fit for is for. Client collaboration because like, like adding clients to a Google Drive folder and they have to have a Gmail account. [00:46:41] It's just really confusing. The Web platform of Google Drive is not friendly for clients to upload the W-2s. [00:46:49] I find Dropbox is a little bit easier than that, even though it's technically not a good solution either. But the reason why Dropbox is potentially a good solution is because people already know how to use Dropbox. [00:47:00] So you had the benefit of people already knowing how to use it to be able to navigate through it. But for for client collaboration, neither one of these are good if your clients are not techie.

Blake: [00:47:11] [00:47:11]What would be amazing with Google Drive is if they had a a way to set up a portal for your firm where you could just direct people to a page on your website and they upload files and it goes into like an inbox in Google Drive. Maybe that exists, but I haven't been able to easily create that. Yeah, [00:47:29] that would be awesome.

Hector: [00:47:31] You're right. Maybe that's the next thing with air travel and automation. You know, could we get their table to to be the database that calls the Google Drive files that have a front end for customers to log in? I mean. The. [00:47:50] It needs to be secure. Bottom line, it needs to be secure. And when you deliver the file, you have to have the ability to one password protect to easily organize folders or customers know what is their data, your data. And you also have to make it easy for the customers to share the third party users. [00:48:09] So if you said you put a tax return on a Dropbox or in a Google drive, it could be a whole I mean, it could be a whole surprise as to what they do to end up sharing that file and inadvertently open up access to all the other sorts of files that they don't want give access to other users. So you've got to be very careful with those two for client data. So we mentioned bulk stock come if you're a microsoft user, OneDrive is [00:48:37] basically a Dropbox or Google Drive for Microsoft application for Microsoft application driven files, [00:48:45] word Excel, but you can put anything in a OneDrive at this point and sync dot com. I've never used it, but that's come up a lot in my searches and kind of the old school one in our profession is smart Vault Smart was the first app to really productize file management and and client portals They're still there they're still kicking it but I feel this Marvel has kind of been out innovated by some of the other solutions, but a lot of accounting firms still use them.

Hector: [00:49:19] Okay, let's talk about [00:49:20] apps for internal communication management. It should be no surprise to you that the number one is Zoom. [00:49:27] Zoom has gone from a I don't know about the profitability and the stock price, but [00:49:33] strategically speaking, zoom in terms of adaptation has been one of the most powerful new apps of the past decade I've ever seen. I mean, the level adaptation and the what was most impressive about Zoom, which is a testament of how good the company is, is how the pandemic happened. And Zoom did not glitch. [00:49:55] I mean, yes, some minor cases, but I continue to do webinars and meetings with Zoom with all of a sudden 100 times the volume of usage and somehow Zoom was able to handle it. Now, I would not be surprised if Zoom use was, you know, for backbone IT computing. And like I said, they said, hey, pandemics here, the capacity to make it 100 times more capable. And somehow Amazon had the capacity and said, yep, we're good to go. So Zoom has been just very impressive. And what I like about Zoom too, I'm not trying to endorse it, although Zoom, if you want to endorse the podcast or welcome, you do that. [00:50:36] But what about Zoom is they added telephony, which really simplified my office communications. So I have I pay one fee per user that has my Zoom communications and my IP phone. So [00:50:50] there's one.

Blake: [00:50:51] That's a big selling point. Yeah.

Hector: [00:50:53] Yeah. And what's really cool, if somebody calls me to my zoom phone, it literally rings on my physical Internet phone here and also rings in my computer. If my zoom app is turned on and it rings on my phone. So they really simplify and I could pick it up from anywhere. And I can and I can initiate a phone call from my physical phone to another employee and then transfer it to a Zoom meeting from the phone. Yeah, it's it's really impressive. It's really impressive. Really impressive. What I wish Zoom had was a Slack type of thing. So unfortunately, I'm using both swimming slack and and I feel that these two things are redundant and I wish Zoom had a Slack type of component.

Blake: [00:51:40] So it's a huge missed opportunity because they do have chat. I don't a lot of people don't realize that the Zoom app has a way to chat with other Zoom users, but they never really focused on it.

Hector: [00:51:51] And so it's a really basic chat. It's like. Q You know, it's like, it's like it's almost like first generation chat, you know, where Slack is like 100 generation.

Blake: [00:52:01] You know, chat doesn't have to be super fancy. If they just built something like Google Chat where you can have persistent chat rooms and you can have threads, it's not it's not that complicated. What most people need.

Hector: [00:52:12] Like what, where, [00:52:14] where Slack really stands out is you can have specialized rooms, right? So it's not just chatting between people is to have a topic of conversation and a history that's isolated from a different topic of conversation. And that's where Slack. [00:52:28]

Blake: [00:52:28] Really, and that's what Zoom needs to add. And then it would be great because clients are already using Zoom. Almost everybody has used Zoom now, right? So what if you could just like chat securely with clients via the zoom on their phone? It would solve so many communication issues.

Hector: [00:52:43] That's true. What I think accountants will fear is by giving somebody. The power, assume they're going to request a meeting every single time and it'll be a little more intrusive. Yeah, so but may not be a bad thing. Then we have Google Meet or Google Hangouts, which surprisingly, [00:53:01] I mean, it's people use it by default because they use Google Workspace, but it doesn't seem to be very popular. But it's all built in. [00:53:10] It's all free, you know, like you can do. You can do free. Google Hangouts for a lot longer than you can with free Zoom. Then there's [00:53:19] Microsoft Teams, [00:53:20] which I don't want to talk about Microsoft, but my experience with Microsoft teams, especially during my kids school, virtual school, it was just so negative. And and I think that Microsoft teams not nailing the experience on the school made all the parents cringe about teams. And that's why I would never consider teams versus Zoom. However, fun fact Microsoft teams is more of a zoom plus slack. But like our our office still chooses to have zoom and slack, although we wish it was one. Microsoft teams is kind of both. So that's the interesting piece where where I want it. But I have such a weird feeling towards Microsoft teams that I don't use it too much. And RingCentral, [00:54:11] which I believe uses Zoom architecture. But but they've done a really good job. Ringcentral did the combining of telephony of e fax and Zoom meetings into a single package, and that's why they rose up, you know, versus Zoom. [00:54:28] But they still use the same Zoom platform. It's interesting. And click up again, not surprising. Like I said, click up now [00:54:36] added, you know, video calls and internal communication. [00:54:39]

Hector: [00:54:39] So click up has become this humongous app that does everything. And I got to check it out myself. I haven't seen it in like seven years, but it's pretty impressive. But you know, what clique up has moved up in the ranks and has become pretty much an all business platform. Okay, let's shift over to [00:54:55] external communication management. [00:54:57] So [00:54:58] Pipedrive CRM is [00:54:59] a is a serum that we use in our firm because it's really I mean, we used about seven different ones. We use Insightly, we use method, we use Zoho CRM. And I think at some point, like maybe seven years ago, I use HubSpot mostly for social media management and it became a CRM solution afterwards. But [00:55:22] at the end of the day, the issue that I have with CRMs is if the users don't like, if your employees, your team doesn't go in there and feed it information, it's useless. And if there's any consternation, if anything feels. Clunky or like it feels like double data entry. Your employees are not going to use it fully. [00:55:45] And we found Pipedrive to be super easy to type into. So like, I'm always going to be buying into the CRM app because they're all crm's are all the same, but the one that makes it easier to load data in there. So that's why we chose Pipedrive. I'm not going to endorse it over Zoho. Crm is wonderful. Method is amazing. If you want to integrate with QuickBooks. I mean, I'm sure that there's a good CRM that integrates with Xero. I don't know that word Lake if you know one. Feel free to mention it.

Blake: [00:56:17] Yeah, there's quite a few. I mean, I. I don't know if I had one off the top of my head. My favorite right now is I think it's on your list is active campaign.

Hector: [00:56:25] That's active campaign, which is similar to MailChimp. It's more like email marketing.

Blake: [00:56:31] Yeah. And it's more for I don't know if I would actually recommend it for an accounting firm because it's more about automation. And so they get a lot of ecommerce companies, software companies using it.

Hector: [00:56:39] But how to make communications.

Blake: [00:56:41] Yeah, but [00:56:41] if you had a very automated firm and you wanted to like automate most of your client onboarding and you want to automate most of the signup process, you could do that with like something like Active campaign. [00:56:52]

Hector: [00:56:53] Does it integrate with edit table, by the way?

Blake: [00:56:55] I hope it does because we're going to try and do that.

Hector: [00:56:58] We're trying. Yeah. So I use so I use MailChimp and not because I'm a QuickBooks person, but I use MailChimp. Before Intuit acquired MailChimp, you know, I was delivering CPA certificates through my webinar series six years ago via MailChimp. So so I use MailChimp [00:57:19] for just mass emailing people and I have a big database of people that want to know about my trainings and my webinars. [00:57:27] So that's how I keep people informed. With MailChimp, I'm also using MailChimp to inform. I developed a new app called Right Tool and I'm having people sign up to the MailChimp list so they can be informed when there's a new update. So every time there's a new update, I automatically automatically email them all the new things that have added to the app. And then when a new person logs in, I mean signs up to the mailing list, it automatically sends an email on instructions on how to install it and download it. So MailChimp has also worked for certain levels of automation for me, and money that come is used as a CRM as well. So it is part of the category. So CRM, of course [00:58:12] Salesforce, CRM, HubSpot CRM, which was social media management, and now it's both social media and CRM. So if your company is very much social media driven, I think you would like HubSpot quite a bit. [00:58:26] There's also a click up, click, click up also creeping into CRM Keep. It's another big one and active campaign. Blake which which you mentioned you're using.

Blake: [00:58:39] [00:58:39]And I love HubSpot and one of their big selling points is their CRM is free. I think it's still free and that's a hook to get you into their marketing automation software so you can sign up for HubSpot CRM for free and use it like, that's pretty great. [00:58:53]

Hector: [00:58:53] See, I didn't know that. Okay, so I'm going to specifically talk about project management that's mostly used in the accounting industry. There's money.com, which is not one of the biggest ones. By the way. I would argue that carbon is bigger than money to come, but that's the one we use. So I mentioned it. I mentioned it first. And by the way, I love money to come and I hate it. So I love I love it because we got it to work. I hate it because it took me two years to get it to work. So and that's the problem with apps that were not designed for your industry. So you've got to keep tweaking and adapting to make it match your industry. Some models have come. It's [00:59:33] a generic. Database CRM app that you have to continue to mold to make it work for you. [00:59:40] But after two years, we're happy with it. There's text on which we're also using a love tax item. We use [00:59:47] that only for the tax workflow. I hate the fact that in my firm we have a bookkeeping workflow and a tax workflow into different places, but the requirements of a tax workflow are very different than a cash accounting bookkeeping workflow. There's a lot of signing of documents on the tax side. [01:00:06]

Hector: [01:00:06] There's a lot of KBA, like know your customer type of stuff where people have to, you know, verify who they are. Identity identification. So I found taxes to be sort of the best of both worlds on that. There's also a client hub, [01:00:23] client hub. [01:00:24] It's a fairly new one into the market, but they've been [01:00:28] very supportive of the accounting industry. And this was designed, I believe, by a QuickBooks ProAdvisor. So like they're thinking of a QuickBooks accountant in mind. [01:00:39] So that's why that's why Client Hub is so popular. There's also a [01:00:45] keeper, which I would say is probably the best direct competitor to Client Hub. They're also tackling, for the most part, the QuickBooks consultant, QuickBooks Bookkeeping Market. But they recently added Xero into keeper support. [01:01:00] So Keepers Good task management app that syncs with QuickBooks and Xero, which is interesting. Then there's Carbon, which I think it was [01:01:07] founded by a bunch of Xero people, Xero people. So Karbon started mostly to try to serve the Xero community. But I would argue that the majority of of users of Karbonn are QuickBooks users. [01:01:20] Now Kava has an interesting sort of in-box three management approach to tax management. So Karbonn is probably the most the one that has the most personality out of all of them.

Hector: [01:01:31] The rest of them all sort of feel very similar. There's also ignition, which is the most unique of all of them, because Ignatian is not a task manager or a project manager initiated or [01:01:44] at least started as solely an engagement management. [01:01:48] So like all the things that happen to get the customer in, to get paid to sign the contract, I don't know if deals with workflow after the fact, it's probably going to be too strong in that. But that's what makes ignition or used to be called practice ignition ignition most unique. And then there's [01:02:07] Trello [01:02:07] we mentioned earlier and one that I've seen a lot of bookkeepers use is [01:02:11] financial sense. [01:02:12] It seems to be very popular and [01:02:15] Smartsheet at the beginning got some traction because it felt like a spreadsheet. But I almost feel that Smartsheet us has become much more abstract over time. [01:02:25] And there's also Asana. Asana has been a very popular one and not surprise click up shows up again on the task management. I promise you click up is not sponsoring this podcast. It's just I don't know what they've done. It's like they're trying to do everything.

Blake: [01:02:40] Now, but they should, so.

Hector: [01:02:43] Okay, So that was. Yeah, you're right. So we are going to talk about the third subsegment here or actually we're going to finish the [01:02:54] hardware and platforms [01:02:55] here by talking about sort of like peripherals. So. I'll just make it really quick. Okay. Number one, [01:03:03] if you're an accounting firm, you need to have a workstation for two or three years. [01:03:07] The cost of upgrading a workstation and dealing with the downtime and getting it people and waiting for the new memory or the new hard drive typically supersedes just buying a new laptop, a new desktop. So like make it as part of the cost of doing business to change your workstations every two or three years. Two And this is one thing that grinds my gears when I go to an accounting firm specifically and I see a user on a single monitor, it makes me want to just flip because why would you miss the opportunity to pretty much double the viewing space that that person has increasing productivity by 20 or 30% because you want to save? $200. So like to me, [01:03:56] every user she had the benefit of two monitors. If [01:04:00] the user doesn't know how to use the monitors or can't really make it productive for them, then I get it. But for the most part, every user, almost every user can draw value from that.

Hector: [01:04:12] I recommend at least 24 or 27 inch and do high contrast, because if people are watching a screen all day long and you want them to very easily increase and decrease, that contrast depends on how tired the eyes are. So you don't want to get it. You don't want to go cheap on the monitor for sure. Plus, monitor staring at a monitor all day gives employees headaches. Headaches are never productive, right? So monitors are something you want to invest in. Document scanning. [01:04:42] I see so many firms go cheap on document scanners and they want their employees to be productive. [01:04:49] But they sit there staring at the scanner, run through 100 pages of the client gave you for 5 minutes, you know, because it didn't spend an extra 200 bucks or 300 bucks on a faster scanner if you're scanning documents because your customers are not giving you digital documents, then don't go cheap. One thing that drives me crazy is when I see an employee staring at a scanner, it's just, you know, not not a best use of productivity. And for printers, I have a printers, but laser. I just go with laser. Forget about ink. Ink is like so 1980s. Just go with laser. Even if it's more expensive, it's faster.

Hector: [01:05:30] It's just better. Bottom line. Okay, let's move on to accounting platforms and [01:05:35] ecosystems. [01:05:37] So the most common one, the [01:05:39] biggest one is QuickBooks Online. [01:05:41] I don't want to call QuickBooks Online an ERP. I know Intuit wants me to color in ERP. I just can't. I can't It's not it's not an ERP. I'm a reasons why and I'll say a little bit. Next one is QuickBooks Desktop, which is also not an ERP. But if I had to call one thing in ERP, I think desktop is much more of an ERP from a features perspective, from a connectivity and an ecosystem perspective, QuickBooks Online behaves more like an ERP. So in the near future, if one of these two that's online will become an ERP, it will be online, Then we have Xero. Again, I wouldn't call zero and ERP either. It's an accounting platform with an ecosystem, Zoho Books and FreshBooks and FreshBooks is, you know, still not a full accounting software. It's it's getting there and they're doing a good job at that. [01:06:39] Let's talk about mid-market. [01:06:40] So mid-market, it's going to be typically an ERP. [01:06:44] And the reason why, in my opinion, what makes an ERP, an ERP and not an ERP is how robust the user permission structure is. How robust the custom reporting platform is and how customizable the experience for the user and the different departments and the sub users within the departments can be. [01:07:10]

Hector: [01:07:10] Which QuickBooks Online and Xero and Desktop. Several books and FreshBooks are one size fits all. They're not customizable for the particular industry. So the players on the ERP world and mid-market are [01:07:21] Net Suite, Microsoft Dynamics, Sage Intacct, Ooredoo and SAP Business one. Some of the pros of QuickBooks desktop is it's been 30 plus years in the market has a lo loyal old school followership still has about a million users. Best bang for the buck feature buy feature wise versus other ERP solutions. Is great for inventory, job costing and reports at a relatively low cost. The biggest con with QuickBooks desktop is risk of obsolescence [01:07:58] like QuickBooks. Desktop users never know or always fear that the rug is going to be pulled under them and QuickBooks desktop will be phased out. Unfortunately, that's the reality we live in. [01:08:11] Support is dwindling. [01:08:12] You know what's funny? 5 to 7 years ago, I used to get clients that say, Hey, I want to work with you because my my accountant doesn't support QuickBooks Online. Now. Now it's the opposite. Now people are saying, Hey, I want to work with you because my accountant is not supporting QuickBooks desktop. That's that's fascinating.

Blake: [01:08:33] It has flipped in ten years. It's gone from 20%, 80% to 80%, 20%. That's incredible.

Hector: [01:08:41] It's fascinating. That stuff has a clunky multiuser experience. I still go to offices where they have QuickBooks desktop and I'm sitting in front of the bookkeeper and I have to do something that requires a single user mode. I laugh at this. He goes, Hector, She goes, Hector, cover your ears. And they start yelling, Hey, guys, I'm going in multi-user mode and get on a quick boat. I mean, I'm going in single user mode. Get out of QuickBooks or you see them press through all the extensions on the phone and go, Bob, get out of QuickBooks. I'm going to go in single user mode. Robert It's insanity. It's insanity, but it's comedic for the most part. So the multi-user experience in QuickBooks desktop is just it's horrible, it's horrible, and it's not so great with large databases. And by the way, I'm a lover and a supporter of QuickBooks desktop. You know that, you know, people that follow me, they know that. But the online experience on Xero and QBO for Multi-User, it's night and day, especially on the multi-user side, and it's very slow to do updates and new features because you have to download the updates, install them, restart the computer with QBO or Xero, they add a new feature done. It's there. Quickbooks Online Pros is [01:10:01] ten plus years in the market as a mature industry has a lower a loyal followership, especially for people just getting into the profession. The younger accountants over 5 million users, extremely easy to use. I would say probably it's biggest pro at the same time is it's gone. [01:10:19]

Hector: [01:10:19] It's so easy to use that people have a false sense of security and they screw things up and QBO so much more often than any other software I have seen in my life, which gives accountants and bookkeepers tons of job security. But it just adds to the frustration that it's maybe too easy to use. It's [01:10:39] easy for accountant user collaboration, easy for multi user collaboration. [01:10:45] As I mentioned, [01:10:46] tons of learning materials and third parties supporting, creating content, videos, articles, answers. Facebook groups is a relatively fast pace of new features for updated, although [01:10:59] I'll be the first one to say not fast enough for me, but relatively compared to all the other accounting solutions. Qbo can update pretty quickly and and deliver updates pretty quickly. Very low cost of entry, I would say. One of the few apps that you can say today, I want to go to the cloud and you can literally start typing stuff on a browser to up and running within 30 minutes. I don't know how if Xero works like this, but QBO very much feels that that is very, very, very easy to get started. And the largest ecosystem of integrating apps. No surprise they are 5 million users. Every app developer wants to connect to it. Okay, so it's just logic. Cons [01:11:45] still far behind than its predecessor. [01:11:47] Desktop and feature set. [01:11:49] Too many changes too fast leads to broken features. And [01:11:52] this is not not just QBO.

Hector: [01:11:54] I think Xero has been a culprit of this too. And FreshBooks now is the trying to update. When you do too many updates too fast, something can be broken or broken and that drives accountants bonkers. Like accounting needs to work. It can't, you know. Hey, sorry, it kind of works because we're trying something new that doesn't fly with accountants. Higher monthly fees are the competitor. I would say that feature the feature QBO is going to have [01:12:21] highest monthly fees [01:12:23] like Xero has a $10 or close to $10 per company file entry point for like a write up type of client. Qbo doesn't have this. So I think that's probably one of the biggest cons in my opinion, because they have the largest market share. Quickbooks Online is getting way too comfortable with a poor position and they have a target in their on their back. [01:12:49] If QBO doesn't quickly address all the little issues that it has, you know, I think there's many companies out there looking to take after their position [01:12:59] on Xero saw books and FreshBooks and sort of combining them because you take several books here and FreshBooks and there's still not a 10th of the market share of, of QuickBooks as a whole. But [01:13:11] they're the biggest alternatives to QuickBooks Online. [01:13:14] Some of the cons and all include QuickBooks Online and this is that. These are ecosystems and they're not ERPs and [01:13:23] they're all one size fits all. And this works great if you're targeting accountants, but [01:13:28] when you're targeting small businesses, if you're not trying to cater to construction, medical or manufacturing, then the app itself falls short and then [01:13:40] you need a third party app. [01:13:41]

Hector: [01:13:41] And a third party app doesn't have seamless integration. To it, then most small business owners get frustrated that they have to learn two systems. And as a friend, Doc says, [01:13:58] customers want one throat to choke. They don't want one app to blame the other app, and vice versa. [01:14:05] Okay. And one of the things that's cool about these QBO zero and FreshBooks is that integration is a no code approach. Like I've integrated tons of apps and never written one line of code. If you're working with ERP systems, there's going to be a lot of lines of code. So there's not that much no code approach integrating NetSuite with application and that sort of thing, although they're they're getting better. They're getting better. [01:14:35] Some of the sort of issues with midmarket ERP applications such [01:14:42] as NetSuite dynamics intact, although SAP is implementing [01:14:48] the implementing cost and software cost averages to at least 100 grand in the first two years of implementation, and I would say 99% of people implement any of these things will not tell you until a year or two that they feel confident that the implementation is complete or close to complete. So one of the problems I've seen with people that generally outgrow QuickBooks and they go to a net suite intact, whatever is that they spend a whole year with parallel systems because they don't trust the new system yet. [01:15:26]

Hector: [01:15:26] So they're forced to have two systems so they can at least comply with tax authorities or whatever, while they're still trying to figure out how to get the new system in place. [01:15:36] Some of the virtues of ERP is, I think I mentioned this earlier, robust access and multi user platforms, high flexibility and customized ability to adapt software to specific workflows and not vice versa. [01:15:51] When we talk about tech and people, that's an important piece. [01:15:55] The APIs tend to be more robust, but they really are not to much in no code approach, [01:16:02] and [01:16:03] ERPs have better reporting platforms. [01:16:06] However, getting your custom report is normally a mission. You've got to go to three different consultants until you figure out the one that can build the report for you. So it has more capability of better reporting, but not the end user. So [01:16:26] let's talk about some of the tech stock recommendations for your firm. [01:16:29] So [01:16:30] for engagement management, for onboarding management, I think ignition is the only one worth mentioning [01:16:36] for practice management or task management. Client Hub Taxonomy Keeper or Carbon QBO or QuickBooks Online Accountant has a very, very light but free task manager. But it's mostly useless for larger firms [01:16:53] for only CRM. I think like Zoho, Pipedrive and Monday. [01:16:57] And I didn't know how spot was free so I would add venture at HubSpot to that. Thank you Blake for the tip CRM with quick QuickBooks integration. Only one in the market would be Method CRM, HubSpot.

Hector: [01:17:12] I mean, as I mentioned earlier, [01:17:14] CRM plus social media, HubSpot Reporting tools for client advisory. I would recommend Swift as why EFT Rich reporting. Fathom HQ and Helm Cashflow. For multi company consolidations. I would recommend currency. For [01:17:35] digital banking. And this is, I would say. Digital banking is hard to define per se, but I would say [01:17:44] non brick and mortar, non brick and mortar style banking. [01:17:49] I think there's a lot of options out there. I would say this is the hardest thing in the fintech world, which is, you know, a company that wants to be a bank or become a bank or spooling banks overnight. But I think Blake and I, as users of really financial would probably agree they're probably best in class, mostly because the people that built really financial came from the QuickBooks zero world. So like understand what we as small business accountants deal with and [01:18:22] I think the biggest threat to relay or the biggest competitor would be QuickBooks Checking which is a built in banking inside QuickBooks, [01:18:29] just given the sheer number of users. [01:18:31] Webinar and meeting platform, I think Zoom [01:18:34] Zoom, you know, is the one that takes the cake [01:18:37] for bank statement conversion. [01:18:39] If you have a PDF bank statement for a bank account that was closed and you want to convert it into a file that QuickBooks can read or zero for that matter money from. I understand that for Xero is really important that when you can't connect the bank that you at least upload a CSV of that bank so you can reconcile.

Hector: [01:18:58] So money is a great app for converting PDF statements to a readable format for QuickBooks or Xero [01:19:04] for payroll management. I like ADP, Gusto, QuickBooks Payroll and on pay. [01:19:09] There's things about each for those that I absolutely hate, but I will stay with that. There are some things about each of those that are absolutely like, and it's going to be more of a personal preference because payroll is a very touchy thing [01:19:23] for contractor management. Quickbooks payroll is [01:19:26] actually pretty good, and [01:19:28] Tax1099 is a great product for creating 1099 [01:19:32] for a QuickBooks desktop hosting right networks [01:19:35] for HR management. I really like rippling do a good job, just works. Incentive fits [01:19:42] are probably the two biggest contenders, but we like rippling a lot [01:19:47] for sales tax management. [01:19:48] It's no surprise Best in class is available [01:19:53] for QBO navigation has announcement and I slid this one in right tool for creating step by step tutorials scribe how [01:20:03] it's amazing scribe how check it out is mind blowing [01:20:07] for creating video capture tutorials or quick video that you want to send to your customers. Loom [01:20:15] is awesome [01:20:16] for podcasts or conversation. Recording Zoom is more than enough. [01:20:21] I mean, I would say nine out of ten podcasters use Zoom. Once you sort of kick it up a notch, then you use [01:20:27] Riverside or FM, [01:20:28] which is what accounting podcasts you assistant Blake uses for this podcast. Do you have something to say?

Blake: [01:20:35] It's what we're using right now.

Hector: [01:20:36] Yeah. Yeah. And is there anything on transcription that would you recommend? Because I don't do a lot of transcription for conversations or podcasts?

Blake: [01:20:45] [01:20:45]D Script is the editing software that we use that transcribes the audio and the video [01:20:50] recommend that.

Hector: [01:20:51] Is that similar to other, similar to other.

Blake: [01:20:54] Similar to it. But, but this enables you to do the editing. What if you just want [01:20:58] pure transcription? I also like what's the name Sonics? I that was founded by the former president of Xero, Jamie Sutherland, [01:21:11] who wow the first head of Xero in the US. Yeah.

Hector: [01:21:14] Wow, that's interesting. So I always like when one of us it's building other applications because they'll think of us first, you know, when when building solutions now a fairly new one into our world for [01:21:29] tax software integration, [01:21:30] because tax software hasn't really been integrated much in the past couple of years. 34 is really, really interesting. If you do taxes and [01:21:41] for inputting data into QBO or or QuickBooks Online [01:21:45] or desktop sites and of transaction Pro and for importing into Xero, you actually don't need a third party app because the one thing that Xero did better than QBO from the get go is to build in importing tools for almost every one of their transactions. And I would say, and I've always been a critic for Intuit for allowing a third party market for importing data into your accounting system, which should be fundamental. Would you agree with that, Blake?

Blake: [01:22:15] Yes, unfortunately, it's just not enough of the time. You know, it's old thinking, you know, we got to get the data. But no, that's not how you grow as a software company these days.

Hector: [01:22:26] Right? Can't get good data [01:22:28] for time tracking harvest QB time and clock chart. [01:22:31] Really popular [01:22:34] to add on inventory to QuickBooks Online. Fishbowl Online [01:22:38] and so's inventory are the biggest ones to add on inventory management to zero. I like locate inventory which was acquired by zero. Of course, everything I like gets acquired by the opposite company of the system that I use. I love Hub Dock got acquired by Xero. I love Locate Inventory, got acquired by Xero. I locked out of entry, got acquired by buy by Sage. Meanwhile, Intuit acquires things that are not so useful to me. Mailchimp would be the exception. Mailchimp is a wonderful, wonderful app. I would I would endorse MailChimp because I used it even before Intuit. So another [01:23:15] one that's great for adding inventory to Xero is Dear inventory, [01:23:20] one that can do both [01:23:23] Xero and QBO for Construction Management is Knowify great [01:23:27] app, probably best in class for commercial, for commercial construction companies, [01:23:34] for builders, for home builders, multiple homebuilders. I like Builder Trend [01:23:40] and that connects to Xero and QuickBooks Online. One really simple field service management app that talks to Zero and QBO is jobber. And I don't for multistate or e commerce sales tax calculations. I have Laura for AP management. I like Miller and Bill.com. And is there another AP management that you like?

Blake: [01:24:07] Like you said, M.I.A. You said Bill.com. Yeah. You know, I've been using Ys WIC for international payments.

Hector: [01:24:17] And I believe Veeam is also in that international payments market. Yeah, I don't use either one of them, but worth worth mentioning [01:24:25] for reimbursable or expense management. Expensify [01:24:28] or literally, I don't know where David. I mean, Didi was nothing four years ago and Expensify was everything just like Tally was everything. Like eight years ago. And that was nothing. And expensify it's everything. So like, Divvy came out of nowhere to be a really good contender to Expensify. Okay, so last segment, let's wrap it up. We went way longer than the our we were projecting, but I think Blake and I before the podcast, we were like, how can we do this? And in one hour it's not easy.

Blake: [01:25:01] Yeah, and this is the benefit of it not being a webinar is we can go over and people can still get their CPE in the app next week. Exactly.

Hector: [01:25:10] Yeah, exactly. And to be honest with you, one of the most pleasant things in the world is to hang out with Blake and chat about Tuck shop about the things that matter to us.

Blake: [01:25:22] Hey, Hector, in the time we have left, do you think we could answer a question?

Hector: [01:25:27] Yes, of course.

Blake: [01:25:28] Keith asked in regards to workstations slash computers. What minimum speed and ram would you recommend?

Hector: [01:25:35] So, you know, we're not in a podcast. They're talking about megabytes and gigabytes. But I would tell you, any computer, you go to BestBuy or Amazon that costs you a laptop, for example, because you $600 or more, that's going to be sufficient for for a workstation type of application. Now, on the server itself, that's where you have to be on 32 gigabytes, 64 gigabytes, You have to have a lot of RAM to have a multi user environment, especially when you run applications. But Keith, for the most part, if you are on the last two generations of Intel processors on somewhere in the middle, like an I5 or above, if you're somewhere in eight gigabytes of RAM or above, if you have at least a solid state hard drive with 250 gigabytes or above all those things work the same, or most of the resources and computing power is happening at a server level anyway. One thing I'll tell you, if you're going to buy a mac, [01:26:36] do buy the latest processor M2 or the latest M1, because Mac has transformed the way they build their computers and they're getting away from Intel. [01:26:49] So like, don't buy the old Macs that have Intel. Like, I wouldn't I would not put a dollar in the old technology. Definitely go with the M1 or M2 processors with a mac. And nowadays the computers don't come low, Ram. I mean, they come with sufficient ram anyway.

Hector: [01:27:09] So our our friend Ron Baker has something that he says a lot. And the older I get, the larger my frame gets, the more observant I get about this life and business, the more the bakery isms become true to me. And [01:27:27] one of the bakery items that Ron Baker says is You can be efficient with things, but you must be effective with people. And I think that when we go on a rampage of technology, of upgrading, of finding the next shiny object that's going to, quote, solve the problem, we forget that the apps and the technology is there for the people, not the other way. And one of the errors I think that we make is. Because technology is supposed to serve people. And we forget that sometimes because we're chasing after a new app or a new piece of hardware that we end up getting the new app or the new hardware that doesn't mold to us and we end up having to mold our people, our process, even bend our logic, like how we approach business to adapt to that technology. And if you find yourself twisting and turning to many of your processes and your ideas and your values to cater to the limitations of the technology, that's when the technology is no longer serving you. [01:28:40] So these are the questions you want to ask yourself or whoever is selling you that technology or what you're testing it and demoing it, you know, are you getting the answers you want? First question is, is the technology itself making the experience for the worker pleasant or unpleasant? Like I have an employee that if I give them another QuickBooks desktop file to work with, I think he'll quit.

Hector: [01:29:11] Yeah, he's done, you know, So like, yes, I know we still have some QuickBooks desktop clients, but it's no longer a pleasant experience for him where I have another employee where she told me it happens to be my wife, by the way. She told me, If you change our company file to QBO or I'm like my firm, my one of my friends, multiple firms, one of my friends is a great person. If you change that one, then I quit to QBO. So. So it could be either way. I mean, like sometimes it's a very subjective, but is the experience pleasant? And yes, we can retrain employees. That's true. We should not be at the mercy of a personal preference. But are the developers making it pleasant for the user? What about the customer experience? Because sometimes we collaborate with the customers. So the one reason I like taxed them so much on the tax management side is that the portal is super easy to use and the mobile app is super friendly. So my customers can log in to the mobile app and see the tax return.

Hector: [01:30:17] And not a lot of not a lot of companies pull that off. Well. Next one is is a technology mobile friendly right a lot of people are are mobile first. Next question to ask is [01:30:30] does the tech company provide good onboarding for your firm or your clients? [01:30:35] You know, the secret sauce of tsheets before they were acquired by Intuit is how much effort they put to make sure that the customer went from free trial to functional with eight of a person really quickly. And not a lot of software companies are investing into that or they get so big that can no longer afford to have a capable person doing that onboarding. So as an accountant, especially even though I'm only 42, I'm already an old school accountant in mind because even though I've only been practicing for 14 years, it feels like 57 years of practice because the level of intensity of the last 15 years of technology and my involvement with it, I'm only going to work with a software company that makes it easy for my customer to use that app and collaborate with me. Otherwise I'm probably going to ignore it altogether. Next question to ask is [01:31:30] Is your tech company support available your critical busy periods? [01:31:35] So like my tax software that I was using a couple of years ago. Had a 35 minute wait when I had a problem with something with tax software in April.

Hector: [01:31:46] And then when I told them, Hey, dude, I can't wait 35 minutes to get your support on this, you know what they said? They said it's B.S. [01:31:55] You don't understand the role of an app that prepares tax returns for accountants if you're not able to serve them during our busy season. I get it ends up being busy for you, too. [01:32:08] But you have to have that infrastructure set up. [01:32:13] Is there a direct contact or an account manager assigned to you so you can address non sales issues? [01:32:20] I hate when software companies, they say, Oh, we have a rep assigned to you, but all the rep can do is tell me more services. What's the point? I want the rep to solve the problems to escalate technical support issues. Next question is [01:32:36] does a tech company have a revenue sharing or affiliate program? [01:32:39] Sometimes we want to partner with them and deliver the solution to our clients and maybe we want to work for free, quote unquote, helping our clients implement it because we get paid on the back end. So we take away the consternation where the client has to pay us consulting work to make the app work because we're getting paid on the back from the app company. [01:33:02] Does the tech company have a clear pricing structure? [01:33:05] I hate when there's no pricing on their pages where it says do a free child will call you.

Hector: [01:33:10] And we talk about pricing. I hate that. It's just it just makes me cringe. You know, as a as a as a buyer of technology. The other one that's interesting to ask is [01:33:22] who pays for this tech? Is that you or your client? [01:33:25] Is there a different price if you pay for it versus your client? [01:33:31] Does a tech company have a good track record [01:33:34] like you don't want a brand new tech company that looks really shiny, but then two years from now, they go under. All your data, all your database, all your reports, whatever are gone. So that would be catastrophic. [01:33:47] Does the tech company have a big list of power users that you can contact or hire for advisory work? [01:33:55] Look, you're going to implement a new Tech Monday hub Doc, I mean, HubSpot, whatever. If there's a person you trust that's good at it, spend the money and get that person to give you the information that the tech company will never give you. They're going to give you the inside scoop, the gotchas, the Hey, make sure you do this before you move forward. So at the end of the content now, [01:34:19] I'm going to give you a couple of first steps so you can build a focused firm around this concept of technology. [01:34:25] First up, I would say is [01:34:27] list ten apps that you're currently using in your business, the most or [01:34:33] the most common apps that you're using.

Hector: [01:34:37] [01:34:37]Second step find redundancy. [01:34:40] Is there an opportunity to at least give it a one? And really what I want is for you to be logging in to one less place to do something. So dig deep into each of the apps. You know, like let's say you're using click up and click does everything you know, Then you can start getting rid of some other apps, right? Maybe you pay a little more to the app that does everything like the Microsoft teams or the click ups or or the Mondays or the air tables and start taking over a lot of things. You know, can you start getting rid of some apps? Because ten years ago it was hot to get apps. Now I would say it's hard to get rid of apps. And as I'm getting older and my voice is starting to give up on me, I realized that even though I have a lot to say and I love talking, what I need to do is I need to get rid of words. I also need to figure out how to say more with less, which on this episode was not applied by the way. And last one is, [01:35:38] if you have a horizontal or vertical niche, create a spreadsheet with the top five apps for that niche. Spend the time comparing feature by feature call [01:35:50] experts, call up companies, collaborate, and eventually make that chart available to your prospects or customers.

Hector: [01:35:58] That way, you're giving them value up front because when customers are shopping around for. Property management app, construction management app, nonprofit management, app inventory, whatever. The bullet points in the website of the app maker that says it does this, it does that, that typically more BS than anything else. So like if you vet the app and you literally compare what quote invoicing means across five apps, then you give the customer insight that's invaluable and as unique and, and, and, and position yourself as an expert in a particular industry. This is a huge credibility builder. Huge. And the last one is [01:36:44] next time. It's time to purchase a big piece of software or big piece of hardware, look into the possibility of avoiding big one time purchases and look for affordable productize web platforms, subscriptions of zero barrier of entry. That is also very easy to get out of if you don't like it [01:37:06] because big upfront costs basically overcommit you to a technology and because you have this sunk cost that you can't shake off, then you end up overusing it for longer than you were supposed to and you don't pay fast enough. So that's the benefit. And I hate paying monthly fees, but the benefit is with these subscriptions you can hop in and help out with ease. So those would be my next steps for you to build a focused firm around technology.

Blake: [01:37:37] Hector. Thanks so much for this huge dive into all the tech. I feel like somebody who is just starting their practice has so much to know now. So we'll leave it there for this episode of the focus firm session for next week is going to be on sales process and onboarding. You'll learn to create a disciplined, consistent process to win and onboard customers. If you'd like to join us live for that. Be sure to subscribe to the YouTube channel. Go to YouTube and search for earmark CPE. You'll get notified and do join our email list. The link is in the show notes Hector. And to our live listeners, thank you so much. I'll see you here next week.