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From Random Acts of Advisory to Strategic CFO Services

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“The darkest times for an industry are the times in which an accountant is most valuable.”

Chris Macksey, CEO of Prix Fixe Accounting, learned this firsthand during the COVID-19 pandemic. While restaurants nationwide struggled to survive, his specialized firm actually grew—not despite the crisis, but because of it. Restaurant owners desperately needed help navigating Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL) applications, and industry-specific relief programs that their generalist accountants couldn’t handle.

In this live recording of the Earmark Podcast from Boston’s Advisory Amplified tour, host Blake Oliver explores how accounting firms can evolve beyond traditional services to become true strategic partners. Joined by Chris and James Erving, Head of Sales, Americas at Fathom, the conversation shows that delivering valuable advisory work doesn’t require advanced certifications or complex methodologies. It just takes a willingness to form opinions and use modern tools to turn financial data into business guidance.

What Advisory Really Means (And Why Accountants Struggle With It)

The accounting profession can’t even agree on what advisory means. James cuts through the confusion with a simple definition: “Being involved in the decision-making process rather than just the delivery of information.”

Chris takes it further. At Prix Fixe Accounting, he treats advisory as completely separate from Client Accounting Services (CAS), even assigning different team members to each. “It’s any of the work that you can’t scope really very easily,” he explains. Unlike predictable bookkeeping tasks, advisory demands flexibility and judgment.

The real challenge is having an opinion. “I have run into so many accountants who just won’t have an opinion about anything other than the accuracy of the financial statements,” Blake says bluntly.

Chris shows what having an opinion looks like in practice. When a restaurant’s food costs creep up from 23% to 28%, he doesn’t just report the variance. He digs deeper. “Is it that something’s changed in the kitchen, or is it just inflation that’s causing that number to gradually rise over time?” That shift from reporting what happened to explaining why it happened (and what might happen next) is where advisory begins.

But not every client needs this level of service, and knowing when to offer it makes all the difference.

Finding the Right Clients for Advisory Services

James identifies three clear signals that a business needs advisory support. First, rapid growth that outpaces the owner’s ability to manage finances. Second, reaching a size where DIY financial management becomes overwhelming but hiring a full-time CFO doesn’t make sense. Third, major events like acquisitions or exit planning.

This targeted approach beats what James calls “random acts of advisory”—the unpaid, unstructured advice many firms already provide without recognizing its value. By identifying specific triggers, firms can systematically deliver advisory services rather than hoping opportunities appear.

The conversation also reveals an important distinction between types of forecasting. James explains that small businesses often need short-term cash flow forecasts to predict cash positions in the next week or two. Larger or more stable businesses benefit from FP&A-style planning with three-to-12-month horizons and scenario modeling.

Understanding which clients need which services allows firms to focus their efforts where they’ll have the most impact, and where clients see enough value to pay premium fees.

Why Industry Specialization Accelerates Advisory Success

Chris’s restaurant-only focus demonstrates the power of specialization. His firm doesn’t just understand debits and credits; they understand why champagne and caviar became popular during the pandemic, how street construction affects revenue, and when consumers will pay for fine dining versus seeking value menus.

“Right now, consumers really feel a lot of pain in the pocketbook,” Chris explains. “The auto loan default rate is up. Credit card balances among consumers are at their highest levels. Consumer confidence is down.” This economic insight shapes his current advice: forget the $175 prix fixe menu and focus on feeding a family of four for under $75.

The specialization advantage goes beyond knowledge. Chris spent over a decade as a chef before becoming an accountant. “It’s a little bit of a cult industry,” he says of restaurants. “If you’re in, you’re in. If you’re out, you’re out.” This insider status builds trust that no amount of technical expertise could match.

His firm even mandates their approach. “The tech stack is set. There really aren’t any options. And there’s only one price point, it’s prix fixe. And you’re just going to have to enjoy the ride.”

This confidence comes from aggregated data across similar businesses. When restaurants see sales drop 20%, Chris can show clients it’s an industry-wide trend, not a personal failure. “When you can actually see that data and validate it for yourself, you know that no, it’s not you. It’s just the economy.”

The depth of specialization creates value generalist firms can’t match, but you don’t need a decade of industry experience to start delivering meaningful advisory services.

Making Advisory Practical: Tools, Metrics, and First Steps

“Once they actually do it for the first time, they realize, oh, I’m just looking at the last three years. I’m kind of rolling it forward, making an educated guess on what it’s going to be. And that’s really all it is.”

Chris uses this approach to explain forecasting for his team. Rather than treating it as an advanced skill only partners can handle, he involves staff accountants in creating annual budgets. They examine historical data, consider market conditions, gather client insights, like upcoming construction that might impact foot traffic, then make informed projections.

The key is matching the service to the business reality. Chris doesn’t do detailed cash flow forecasts for restaurants because “they have such tight cash flow that you’re off 5% and your cash flow projection’s shot.” Instead, he focuses on annual budgets with monthly check-ins.

Visual presentation transforms complex data into insights clients can actually use. “Our client base is largely visual people, and the financial literacy is usually pretty low,” Chris notes. He spent over a decade cooking before seeing a P&L statement, so he understands the challenge. Charts showing 12-month trends for metrics like food costs communicate far better than spreadsheets full of numbers.

Non-financial metrics add crucial context. For lodging clients, Chris tracks occupancy rates, average daily rates, and rooms sold. These are “numbers that you will not see surfaced in QuickBooks.” When revenue changes, these metrics reveal whether it’s a pricing issue or a volume problem.

James emphasizes the importance of using proper tools. “You don’t have to build an entire Excel model customized to a client to get started.” Modern platforms like Fathom automate much of the work, creating professional forecasts and visual dashboards without custom spreadsheets for each client.

For firms ready to begin, Chris and James offer practical advice. Start with forecasting, since it’s a natural extension of work you already do. Pick one or two industries where you have multiple clients and build expertise gradually. Ask more questions about your clients’ businesses. And remember, clients don’t expect you to know everything. They value accountants willing to connect financial data to business decisions.

Your Path from Compliance to Advisory

The shift from traditional accounting to advisory starts with three elements: forming opinions based on financial data, developing knowledge of specific industries or situations, and using modern tools to make forecasting efficient rather than overwhelming.

Chris’s experience during the pandemic proves the value of this transformation. While generalist firms struggled to help clients navigate crisis programs, his specialized knowledge made Prix Fixe Accounting indispensable.

The firms making this transition today position themselves for a future where their value only increases. Economic uncertainty creates more need for strategic guidance. Industry disruption demands advisors who understand both the numbers and their context. Business owners facing unprecedented challenges need professionals willing to venture beyond historical facts into forward-looking advice.

Listen to the full episode to hear additional insights on pricing advisory services, overcoming staff resistance, and managing the cultural shift within your firm. Chris and James’s conversation offers a practical roadmap for any firm ready to move beyond “random acts of advisory” to systematic, profitable guidance that transforms both your practice and your clients’ businesses.

Saying No Is the Ultimate Power Move for Women in Accounting

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Years ago, Nancy McClelland sent a text to Questian Telka that would eventually birth the She Counts podcast. “What if our default wasn’t saying yes?” she asked. As two self-proclaimed yes-aholics who regularly got themselves “into a lot of trouble with how much we say yes,” Nancy wondered what life would look like if they flipped the script entirely, making “no” their default and forcing themselves to justify every yes.

That text conversation planted a seed that grew into episode 14 of She Counts, where Nancy and Questian sat down with Brandy Jordan, a self-proclaimed “Jane of all trades” who’s made a name for herself as Catalyst at Woodard and Concept Alchemist at High Rock Accounting. Brandy knows something about saying no that most of us desperately need to learn.

When “New Scenery With the Same Inbox” Becomes Your Vacation

“For years, vacations were just new scenery with the same inbox for me,” Brandy admits during the conversation. She’d work through every trip, checking emails poolside, taking calls from the beach. No one demanded she stay online. It was her own inner superhero insisting she needed to be available.

The kicker? She was coaching other professionals about boundaries while burning her own to the ground. “The irony was painful,” she says.

Sound familiar? If you’re nodding along, you’re in good company. Nancy hasn’t taken a vacation without her laptop since before the pandemic. Questian can’t remember the last time she took a full weekend off. When she recently took her kids to the pool on a rare day off, she remembers thinking, “Wow, this is a nice feeling. Like I’m not actually working.”

This is the reality for women in accounting, where the pressure to prove your worth through constant availability feels like oxygen: invisible but essential for survival. As Brandy explains from years of coaching high performers, “These are bright, capable people driving themselves into the ground because saying no felt like career limiting or a personal flaw.”

Your Yes Reflex Is Actually Killing Your Career

Here’s the brutal honesty Brandy drops early in the conversation: “Every time you say yes, you’re saying no to something else whether you mean to or not.”

For women in accounting, the pressure runs deeper than just workplace expectations. The industry rewards responsiveness and that service-oriented mindset. It sounds great until you realize you’ve become the default note-taker in every meeting, the organizer of office birthday cards, and the coordinator of team events, all while maintaining your full workload.

“These smaller yeses create patterns of taking on all the extra things that need to be done,” Questian observes. Meanwhile, colleagues who don’t say yes to all the extra stuff actually get their work done while you’re in what Brandy calls “that constant state of feeling like you have to catch up.”

Nancy confesses she literally remembers the last time she felt caught up: 19 years ago, sitting on her front porch at age 34, choosing between the beach and yoga. “I’ve spent the past 19 years trying to get back to that moment.”

Part of the problem is what behavioral economists call the planning fallacy. As Brandy explains, we tend to underestimate how long tasks actually take, even when experience proves us wrong repeatedly. Questian nails it: “I recognize that it takes me about twice as long as I think something’s going to take me, but I still don’t want to acknowledge it.”

We’re not just miscalculating time; we’re completely ignoring mental bandwidth. Some tasks drain us more than others, yet we schedule them back-to-back as if our brains are machines. As a result, we keep telling ourselves we’ll figure it out or catch up next week. But as Nancy points out, being an adult has become “saying I’ll catch up next week, every week for the rest of your life.”

The Revolutionary Difference Between Saying No and Starting With No

“Starting with no is not about being negative or difficult,” Brandy clarifies. “It is about installing a new operating system for your decisions.”

Drawing from Daniel Kahneman’s book, Thinking Fast and Slow, Brandy explains how our reflexive yes belongs to System 1, the quick, emotional, people-pleasing response. Starting with no forces System 2 thinking, where you actually ask whether you can afford the cognitive load, the hours, and the context switching this demands.

Think about budgeting money, Brandy suggests. “If you constantly spend first and figure it out later, you always feel behind and stretched. But if you start each month at zero and consciously decide exactly how to allocate your funds, you’re going to feel empowered and in control.”

The same applies to your time and energy. But you need concrete criteria. Brandy’s approach is to write out five personal values that align with everything you do. Then identify your top three or four career goals. Every request gets filtered through the question, “Can I do this without compromising my other priorities?”

“I’m writing that down,” Nancy said. It’s the question that changes everything because suddenly you’re not asking “Can I squeeze this in?” but “What am I willing to sacrifice?”

How to Actually Say No (Without Feeling Like a Jerk)

“Don’t start saying no to the biggest thing that comes your way,” Brandy advises. “Start small because you have to get comfortable with saying no.”

Her practical framework:

  • Use clear yet empathetic language: “Thank you for considering me, but I cannot take this on right now”
  • Offer alternatives when possible, such as suggesting a colleague who might benefit or be better aligned
  • Give yourself time by saying, “Let me review my workload and get back to you tomorrow”

That pause is crucial. “It gives you space to thoughtfully assess the request without the stress of an immediate reaction,” Brandy explains. “Your fear will diminish because now you’ve thought it through logically.”

Questian admits the pause is her biggest challenge. She recalls immediately wanting to volunteer for a speaking opportunity, even reaching out to Nancy when a colleague declined it. Nancy’s response? “No, I’m going to protect you from yourself here.”

The shift changes how you think about no entirely. “Stop thinking that saying no is inherently selfish or inflexible,” Brandy insists. “By thoughtfully evaluating your commitments, you respect your own capacity and your team’s capacity and ability to rely on you fully when you do commit.”

The Day Brandy Told Herself No

The hardest no Brandy ever said wasn’t to a boss or client; it was to herself. After years of preaching boundaries while working through every vacation, she finally drew the line. The laptop stayed home. Not in the hotel room, not in the bag. “I knew if it was in my bag, I wouldn’t leave it be.”

Notifications went off and she warned her team, “I will be unreachable. Carry on. Don’t break anything.”

The hardest part was silencing that voice insisting something might implode. “It never does,” Brandy reflects. “There’s nothing life-threatening in our line of work that would need anything right away.”

The payoff was immediate: real rest, a fresh perspective, and the end of that hypocritical guilt. Now everyone at work knows, when Brandy’s on vacation, she’s unreachable. Period.

Nancy’s taking her first laptop-free vacation since pre-pandemic after hearing this. She’s even built in buffer days before and after. Her new philosophy? “If this all burns down while I’m gone, then that wasn’t the business I wanted to be running anyway.”

Why Your Team Secretly Wants You to Say No

“Modeling is essential,” Brandy emphasizes. When leaders protect their bandwidth, they demonstrate that focus is a competitive advantage, that thoughtful prioritization—not endless accommodation—delivers excellence.

Nancy discovered this when she vulnerably told her executive assistant, “I need you to help me. I’m not good at this.” She even offered a raise if her assistant could help her survive through July. “That took a lot of vulnerability and it was a little embarrassing,” Nancy admits. “But they’ve really been stepping up for me.”

Something magical happens when you actually disconnect. “It’s amazing what they can figure out when you’re not around,” Brandy observes. Those urgent emails? Already solved. Your team becomes highly self-sufficient when given the space.

The transformation extends beyond individual teams. As Questian discovered, “When I take a vacation and really put everything away, I am so much more efficient. My efficiency level increases substantially.”

Brandy puts it bluntly: “Self-abandonment is unsustainable leadership.”

Your Challenge: One No, Two Weeks

The path forward isn’t complex, but it requires courage. As Brandy says, you need to practice because “anything new is work” at first, but it becomes a habit when you consistently ask, “Does this align with what I want to do?”

Nancy and Questian are committing to trying this approach. Will you? Choose one request in the next two weeks and apply Brandy’s framework. Pause. Evaluate against your priorities. Ask, “Can I do this without compromising my other commitments?”

If the answer is no, practice saying, “Thank you for considering me, but I cannot take this on right now.”

Then head to the She Counts LinkedIn page and share your experience. Because you’re not alone in this struggle, and you shouldn’t have to figure it out by yourself.

As poet Nayyirah Waheed writes, “I don’t say yes because I’m strong. I say no because I am.”

The accounting profession needs leaders who model sustainable excellence, not martyrdom. That transformation starts with two letters: N-O.

Ready to dive deeper? Listen to the full episode above where Nancy, Questian, and Brandy explore every nuance of moving from exhausted accommodation to strategic leadership.

Your QuickBooks Is Smarter Than You Think (And Getting Smarter Every Day)

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When you can upload a photo of a bank statement and watch QuickBooks turn it into perfectly categorized transactions, you know something big is happening in the accounting world. The tedious work that once took hours is disappearing, replaced by something far more valuable: actual business insights.

In episode 114 of The Unofficial QuickBooks Accountants Podcast, titled “Those Sneaky AI Agents,” hosts Alicia Katz Pollock and Dan DeLong explore the seven AI agents that Intuit built into QuickBooks Online. After testing these tools extensively, they conclude it’s “90% AI and 10% marketing,” a ratio that should interest any accounting professional wondering if these changes matter.

The Seven AI Agents

Intuit rolled out seven different AI agents across QuickBooks: accounting, payments, customer, finance, project management, analytics, and payroll. As Alicia explains, “All of this is not even version 1.0. It’s kind of version 0.5 at this point.” Some features are in beta, others depend on which QuickBooks version you use, and a few you might not see unless you’re using specific features like projects or payroll.

But these agents are turning QuickBooks from a recording system into something that actually helps you make decisions. “What they’re trying to do,” Alicia notes, “is take the data, make it actionable, and give us insight into what’s happening in the business so we can actually take action on it.”

The Accounting Agent: Your New Data Entry Partner

The accounting agent has completely redesigned how bank feeds work. While teaching a three-hour class on the new features, Alicia made a surprising discovery. “All the things I was taking out were all of the gotchas and the troubleshooting.” Problems that plagued users for years, like dealing with duplicate transfer rules, simply don’t exist anymore.

The new banking interface features inline editable fields, meaning you can categorize transactions without constantly clicking into detailed views. Yes, it looks more cluttered at first, especially on smaller monitors. But there’s a fix: hit Control+Period (or Command+Period on Mac) to activate Zen mode, which folds away the sidebar and gives you full screen for your banking work.

The AI now explains why it’s suggesting certain categorizations. As Alicia describes it, “This is why you are off base, or oh, this is why that actually makes sense.” The downside is you have to retrain the AI from scratch. The good news is it learns fast—usually after seeing each transaction type once for monthly items, or three times for quarterly ones.

The Game-Changing PDF Upload

Here’s where things get really interesting. If your bank doesn’t connect to QuickBooks, you no longer need to wrestle with CSV files. Just drag in a PDF, JPEG, or PNG of your statement—even a photo from your phone works. The AI scrapes the document and creates a functioning bank feed with all the categorization benefits of a direct connection.

There are limits. Statements with both checking and savings accounts on the same page won’t work (though you could split them with a PDF editor). Complex statements get sent to human reviewers who typically respond within two hours, and they use your statement to improve the system for everyone.

Collaboration Without Meetings

The new collaboration feature adds a speech bubble icon to each transaction. Click it to ask questions, request documentation, or explain unusual expenses, all without scheduling a meeting. One of Alicia’s clients who previously met monthly with her bookkeeper immediately saw the value. “She is really excited to not necessarily have to meet in real time.”

The “Ready to Post” feature finds the sweet spot between automation and control. Instead of auto-adding transactions, it identifies high-confidence categorizations and presents them in a bubble at the top of your feed. As Alicia explains, “These are the transactions that we are pretty darn sure we got right.” Review them all and accept them with just two clicks.

Smarter Reconciliation and Problem Detection

The new reconciliation screen looks complex at first, but it’s actually brilliant. Upload your bank statement, and QuickBooks shows you exactly where problems hide. Not just “you’re off by $150,” but whether the difference is in deposits or payments.

Each transaction now has two rows: one showing what the statement says, another showing what QuickBooks says. Colored badges instantly communicate status. Green means matched. Blue means it’s in QuickBooks but not on your statement. Orange flags special situations like voided transactions.

The anomaly detection feature takes this further. Blue sparkles appear on reports when something breaks from normal patterns. Alicia describes her old process: “I’ve always had to run a P&L by month and physically scan all of the numbers and then drill in to go see, well, why is this one higher than usual?” Now the AI simply tells her: “You have this extra transaction for five times as much as usual.”

The Payments and Customer Agents: Growing Your Business

The payments agent analyzes your invoice history to surface potential issues. When Alicia’s system revealed “84% of your invoices last year were paid late, or not at all,” it immediately suggested adding a 2% late fee and provided the setup right there.

For each customer, it tracks payment patterns individually. Do they always pay three days late? Twenty days late? This insight helps you make smart decisions about payment terms and follow-up strategies.

The Customer Hub (currently in beta) adds full CRM capabilities to QuickBooks. It can scan your Gmail or Outlook for business conversations and turn them into leads. Track prospects through your pipeline from inquiry to close. But the real magic happens after the sale.

The system can send automatic feedback surveys after invoice payment. Happy customers (4-5 stars) get asked when they want to work together again and if they know anyone who needs similar services. These responses appear as work requests and warm referrals in your Customer Hub. As Alicia emphasizes: “That’s new business. That is money in your pocket.”

Evolution, Not Replacement

These AI agents aren’t replacing accountants; they’re freeing us from tedious work to focus on what matters. As Dan notes about modern business, “If you’re waiting for a quarterly report to be done three months ago to make a decision these days, that’s just not fast enough.”

The key is Dan’s “trust but verify” approach. The AI excels at pattern recognition but needs human judgment for context. When his payments agent incorrectly suggested late fees for on-time payments, human insight caught what the AI missed.

Alicia’s advice? Start clicking those blue sparkles. Give feedback with the thumbs up and thumbs down buttons. Don’t just dismiss features because they’re in your way; actually evaluate if they’re helpful. As she puts it, “Thumbs down is ‘No, this thing is not accurate and it’s not helpful,’ not ‘I don’t want to look at it right now.'”

Ready to see these “sneaky AI agents” in action? Listen to the full episode where Alicia and Dan demonstrate each feature, share implementation strategies, and explain exactly which upgrades might be worth it for your practice. The future of accounting is here, right in your QuickBooks account.

Alicia Katz Pollock’s Royalwise OWLS (On-Demand Web-based Learning Solutions) is the industry’s premier portal for top-notch QuickBooks Online training with CPE for accounting firms, bookkeepers, and small business owners. Visit Royalwise OWLS, where learning QBO is a HOOT!

Deloitte’s $440,000 AI Fabrication Scandal Exposes the Accounting Profession’s Deepest Fears

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A startup founder discovered $2.1 million in embezzlement by his co-founder in just 18 minutes using Claude AI. The company’s internal auditors, external auditors, and even the CFO had completely missed it. Meanwhile, Deloitte was forced to refund the Australian government hundreds of thousands of dollars after delivering a report filled with AI-generated fabrications.

In this episode of The Accounting Podcast, hosts Blake Oliver and David Leary dig into these stories. They explore how AI is both exposing massive frauds and creating embarrassing failures, examine the chaos from the government shutdown, and question whether traditional accounting services still matter when 86% of major companies use broken charts that nobody even notices.

When AI Catches What Humans Miss (And Creates What Shouldn’t Exist)

The accounting profession is experiencing an AI identity crisis. On one hand, artificial intelligence can spot complex fraud that teams of professionals completely miss. On the other hand, professionals are using it to generate work that looks legitimate but is actually riddled with fabrications.

Let’s start with Deloitte’s spectacular failure. The Big Four firm charged the Australian government $440,000 AUD (about $290,000 USD) for a 237-page report on welfare compliance systems. The problem? It contained over 20 AI-generated errors, including completely made-up quotes from federal court judgments and references to non-existent academic papers.

Chris Rudge, a Sydney University researcher, spotted the errors immediately. One fabrication attributed a non-existent book to constitutional law professor Lisa Burton Crawford on a topic completely outside her field. “I instantaneously knew it was either hallucinated by AI or the world’s best kept secret because I’d never heard of the book, and it sounded preposterous,” Rudge said.

Even after getting caught, Deloitte insisted its findings and recommendations were still valid. This prompted Australian Labor Senator Deborah O’Neill to observe that Deloitte has “a human intelligence problem.”

But here’s where it gets interesting. While Deloitte was using AI to create fake references, a startup founder used it to uncover real fraud. He exported his company’s QuickBooks data into Claude AI and asked one simple question: “What’s wrong with this picture?”

In just 18 minutes, the AI found what everyone else had missed: 17 fake companies routing $2.1 million to his co-founder’s personal accounts through shell companies. The AI spotted patterns humans overlooked, including fake vendors paid on 23-day cycles while real vendors were paid on 28-day cycles, and payment amounts that followed Fibonacci sequences, which humans subconsciously create when making up numbers.

The founder has since turned this into a business, selling AI-powered fraud detection prompts for $10,000 each to 47 clients. He’s probably making more money from his fraud-detection business than from his original startup.

As Leary points out, this creates both an opportunity and a threat for accounting firms. “The real risk of AI taking accounting jobs isn’t that AI will take the job away. Clients are just going to say, ‘I can do that myself. I don’t need to pay somebody $400,000 to do a half-assed ChatGPT thing.’”

Government Shutdown: When Critical Systems Break Down

The conversation then turned to the government shutdown’s impact on air travel and tax services. The situation has become genuinely dangerous, with cascading failures that reveal how fragile our systems really are.

Air traffic controller-related delays jumped from a typical 5% to 53% as workers called in sick rather than work without pay. Oliver experienced this firsthand when his flight was delayed for hours with no official explanation, though flight attendants privately blamed air traffic control shortages.

The scariest incident happened at Burbank Airport in Los Angeles, where the tower went completely unmanned. “When that happens, there is a backup procedure, which is that the pilots have to do their own air traffic control,” Oliver explains. “They get on a shared frequency and have to communicate with each other. There’s no intermediary. So that not only slows things down. It also creates risk. There’s a huge risk of these planes crashing into each other because they miscommunicate.”

The economic impact is staggering. The US Travel Association estimates $1 billion in weekly losses to the travel economy. Over 750,000 federal workers have been furloughed, while more than a million work without pay. For TSA screeners earning an average of $51,000, the situation is untenable. “If they don’t get paid, they are not paying their bills,” Oliver notes. “They’re going to go drive for Uber to pay the bills.”

The IRS shutdown creates serious problems for accountants. Nearly half of IRS staff have been furloughed. While electronic returns continue processing and automated refunds still flow, human support has collapsed. Phone support is essentially gone, paper returns sit unprocessed, and audits have stopped. Yet interest and penalties continue to accrue, and all deadlines remain in effect.

Adding to the chaos, Trump fired over 4,100 federal workers instead of furloughing them. The Treasury alone lost 1,446 employees, including about 1,300 IRS workers. “It’s the first time in modern history that mass firings have happened during a funding lapse,” Oliver observes.

The administration also created a new “CEO of the IRS” position to bypass Senate confirmation, appointing Frank Bisignano, former CEO of Fiserv, who still owns about $300 million in company stock. This creates obvious conflicts of interest, especially since Fiserv is involved in launching digital stablecoin initiatives. “This is why you have to have hearings. You can’t just appoint somebody to a position,” Leary emphasizes.

When Independence Becomes a Joke

Next, Oliver and Leary discussed how financial entanglements are destroying audit independence while regulators focus on trivial violations.

Take BDO’s current crisis as an example. The firm took a $1.3 billion loan at approximately 9% interest from Apollo Global Management to finance its employee stock ownership plan. The debt forced the company to lay off employees, freeze travel, and conduct emergency cost reviews across all divisions.

But while BDO was giving First Brands a clean audit opinion, Apollo was actively shorting the company. First Brands collapsed months after BDO’s clean audit. “If I’m BDO and I audit a company that is being shorted by a company I took a $1 billion loan from, where’s the independence?” Leary asks. “What is the fraud triangle? Opportunity, rationalization, and financial pressure. All the parts of the fraud triangle are here.”

Meanwhile, EY is celebrating a “dramatic audit quality turnaround,” with its deficiency rate dropping from 46% in 2022 to below 10% in 2025. They achieved this miracle by firing 132 public company audit clients. In other words, the problematic audits didn’t disappear. They just moved to Deloitte and KPMG. “Have we actually achieved anything here? Or have we just shifted the bad audits somewhere else?” Oliver wonders.

The hosts also discussed a new scheme where crypto promoters target CPA firm clients. The Truevestment Bitcoin Legacy Fund wants CPAs to help raise $150 million from their clients, which institutional investors will then match before merging into a Nasdaq entity—essentially a SPAC wrapped in Bitcoin speculation.

The marketing compares buying Bitcoin today to “buying the Dow at 900.” But as Leary points out, when the Dow was at 900 in the mid-1960s, it consisted of companies like AT&T and General Electric—”companies that made things” and created real value, not speculation.

Why Nobody Cares About Financial Reports Anymore

Perhaps the most damning revelation from the podcast’s recent news roundup is that 86% of major companies are using broken charts in their financial reports. A CPA Journal study found bar charts with misleading axes, pie slices that don’t match percentages, and deliberate distortions to exaggerate performance. Of 1,584 charts reviewed, 12% had fatal flaws that completely misrepresented the data.

“The fact that so many of them have errors and nobody’s pointing them out indicates to me that nobody’s reading them,” Oliver observes. Indeed, 10-K filings get downloaded an average of just a few dozen times.

The hosts even shared a bizarre example where social media bots criticizing Cracker Barrel’s new logo caused the stock price to tank. According to Wall Street Journal data, 44.5% of posts about the logo change were from bots. “Maybe nobody cares about your charts because nobody even cares about the financial statements,” Leary suggests.

What This Means for Your Firm

The key insight from Hector Garcia stuck with David: “AI is never going to do perfect accounting, but it’s going to do it good enough.” For most clients, “good enough” financials that they can generate themselves might be perfectly adequate.

Accounting professionals can embrace AI for meaningful fraud detection and insights, or watch clients realize they can generate “good enough” work themselves. As this episode of The Accounting Podcast makes clear, the traditional value proposition of professional accounting services is crumbling. The firms that survive will be those that identify and deliver human value that transcends what AI can do: strategic insight, ethical judgment, and genuine expertise that no algorithm can replicate.

Listen to this episode to understand not just the challenges facing accounting, but what you need to do differently starting today.

The IRS Can Hit Your Clients With Criminal Charges for Bad Bookkeeping (And Most Tax Pros Don’t Know It)

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If you’ve ever received a shoebox full of receipts from a client or struggled with QuickBooks files where half the expenses are labeled “miscellaneous,” you know the frustration. But according to Jeremy Wells, EA, CPA, in this episode of Tax in Action, poor recordkeeping isn’t just a workflow problem. It’s a legal violation that could cost your clients thousands in penalties.

Most tax professionals treat recordkeeping like a suggestion. But it’s actually a federal requirement with serious consequences, including a 20% penalty on underpaid taxes and even potential criminal charges. Understanding these requirements can transform your practice and create new revenue opportunities.

Your clients are breaking the law (and they don’t know it)

Wells starts with a section of the tax code that most practitioners overlook. IRC Section 6001 doesn’t suggest or recommend. It requires taxpayers to “keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time provide.”

The Treasury regulations spell it out even more clearly. Taxpayers must keep “permanent books of account or records, including inventories, as are sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown by such person in any return.”

“The way I read this,” Wells explains, “you as a taxpayer, in order to file a tax return, need to have permanent books and records you can rely on in order to justify and substantiate any amount of gross income, deductions, credits, or anything else that you’re putting into that return.”

Here’s what catches many people off guard: tax returns themselves don’t prove anything. In Wienke v. Commissioner (T.C. Memo 2020-143), the Tax Court established that returns are “merely statements of claims and are not considered evidence of the claims themselves.” The real evidence must come from the taxpayer’s books and records. So when your client thinks their signed tax return proves their income to a lender, they’re wrong. Without proper records backing it up, that return is just a piece of paper with numbers on it.

The penalties for inadequate recordkeeping can devastate a small business. Section 6662 imposes a 20% accuracy-related penalty on any underpayment due to negligence, which specifically includes “any failure by the taxpayer to keep adequate books and records, or to substantiate items properly.” That’s 20% on top of the taxes owed, plus interest.

But it gets worse. Section 7203 makes willful failure to keep records a criminal offense. The penalties are up to $25,000 for individuals or $100,000 for corporations, plus up to a year in prison. While Wells notes that your typical shoebox client probably won’t face jail time, the existence of criminal penalties shows how seriously the IRS takes recordkeeping requirements.

The three warning signs every practitioner must recognize

These requirements create ethical obligations for practitioners too. Circular 230, Section 10.34(d) allows you to rely on client information, but requires “reasonable inquiries if the information as furnished appears to be incorrect, inconsistent with an important fact or another factual assumption, or incomplete.”

Wells calls these the “three I’s” that should trigger immediate concern. He shares a common example: “When I ask them what their business mileage is, they’ll just tell me a flat number that has three or four zeros at the end of it. As soon as I see that information, I already know, just in my gut looking at that information, whether it appears to be incorrect, inconsistent, or incomplete.”

When you spot these red flags, you can’t just ignore them. Wells describes the uncomfortable conversation that follows when he asks for a mileage log. “Nine times out of ten, they’re going to tell me they didn’t actually keep up with one.” At that point, you face a tough choice. Do you push harder for documentation, accept questionable information, or potentially end the client relationship?

“It might be a tough decision to stop working with a taxpayer because they want to claim a certain amount of miles,” Wells acknowledges. But when clients repeatedly ignore recordkeeping requirements despite annual reminders, “at that point, we might have to reconsider the relationship.”

How good records flip the script on IRS audits

While penalties provide the stick, there’s also a powerful carrot for maintaining proper records. Wells reveals how good recordkeeping can completely change the dynamics of an IRS dispute.

Normally, the IRS holds all the cards. The Supreme Court established in Welch v. Helvering (1933) that “the commissioner’s determinations have a presumption of correctness while the taxpayer bears the burden of proving the IRS position wrong.” Wells calls this “a tough hill to climb, especially for a taxpayer that has not kept good books and records.”

But IRC Section 7491 flips this burden. When taxpayers introduce credible evidence, comply with substantiation requirements, and maintain proper records, the burden shifts to the IRS to prove the taxpayer wrong.

“If a taxpayer shows up to an examination or an audit with good books and records,” Wells explains, “then the auditor knows that under Section 7491, now it’s on the IRS to prove the taxpayer is wrong.”

This creates “a more positive settlement climate,” according to a 2003 Tax Notes article Wells cites. Auditors become more willing to negotiate reasonable settlements rather than risk losing in court. He notes that even when a taxpayer takes a “technically incorrect position,” having good records to explain their reasoning can lead to much better outcomes.

Why the Cohan Rule won’t save your clients

Many practitioners rely on the Cohan Rule as a safety net, but Wells warns it’s been dangerously misunderstood. This 1930 court decision allows taxpayers to deduct “a reasonable estimate of the amount of a verifiable trade or business expense if the exact figure is unavailable.”

“I’ve heard, between bad tax advice on social media and some practitioners who haven’t really read the court case,” Wells says, people claiming “if the client doesn’t know how much, we’ll just fill in a number and appeal to the Cohan rule.” But that’s not how it works.

Courts take a harsh view of taxpayers trying to use Cohan without basis. In Barrios v. Commissioner (2023), the court stated it “bears heavily against the taxpayer who failed to more precisely substantiate the expense.” Translation: courts will slash your estimates, sometimes to zero.

Wells cites Williams v. US (1957), where the court refused to “guess” at expenses, calling relief without evidence “unguided largesse.” The message is clear: you need some reasonable basis for any estimate, not just a number that feels right.

Making matters worse, Section 274 completely blocks the Cohan Rule for certain expenses:

  • Travel
  • Entertainment
  • Business gifts
  • Listed property (especially vehicles)

For these categories, taxpayers must keep contemporaneous logs showing time, place, amount, and business purpose. Wells emphasizes how strict this is: “There have been tax court and federal court cases where the mileage log was simply thrown out and no deductions were allowed because the taxpayer attempted to recreate that log after the fact.”

Turn recordkeeping problems into profitable services

Instead of fighting poor recordkeeping every tax season, Wells outlines specific services that transform this challenge into recurring revenue.

His foundation is a “bookkeeping review service.” You’re not doing actual bookkeeping. Instead, you review the client’s records quarterly and flag issues. “We’re probably not going to look through a lot of five, ten, twenty dollar office expenses,” Wells explains. “But we might look through some expenses that are four or five, six figures.”

During these reviews, you might spot expenses that should be capitalized instead of deducted, deposits miscategorized as revenue when they’re actually loans, or aging receivables signaling cash flow problems. The key is efficiency. “They don’t take nearly as much time as actual bookkeeping does,” Wells points out.

He also strongly advocates for direct communication with clients’ bookkeepers, eliminating the game of telephone that wastes everyone’s time. Set up quarterly check-ins to discuss categorization questions, journal entries, and ownership changes before they become tax-time emergencies.

“This should not be free,” Wells stresses. “This should not be just included. You should not just start doing this out of the goodness of your heart.” Whether bundled into tax prep fees or structured as a monthly subscription, these services must generate revenue.

Some practitioners take this even further with preferred partner networks. Wells knows firm owners who refuse to prepare returns unless the books come from their vetted bookkeepers. While it sounds extreme, the benefits are clear. “They’re never going to have to worry about whether a deposit was really revenue or contribution of equity or new line of credit, because they trust the bookkeeper to have taken care of that already.”

For maximum scalability, Wells suggests creating educational resources. Use screen recording tools to solve common problems once, then share those videos with multiple clients. “Each time a client asks you a question, you know others have that same question,” he notes. This transforms repetitive education from a time drain into a reusable asset.

Listen to transform your practice

Recordkeeping isn’t optional; it’s legally required, with penalties ranging from 20% of underpaid taxes to potential criminal charges. But understanding this framework doesn’t just protect you and your clients from disasters. It opens doors to shift audit dynamics in your favor, negotiate better settlements, and create profitable advisory services.

Will you keep wrestling with shoeboxes every tax season, hoping estimates will pass muster? Or build systematic solutions that generate recurring revenue while protecting everyone involved?

Listen to the full episode to learn exactly how to implement these strategies in your practice. Because when you understand the legal framework—the requirements, the penalties, and most importantly, the opportunities—you stop just surviving busy season and start building a practice that thrives year-round.