Date: August 2, 2019
Attendee and Guest: Kelly Coughlin, CEO, EveryDay CPA – KC Truby, Founder/Chief Executive, TALK Accounting
Good morning business owners, it is early a.m. on a Saturday and I know most of you are up and at them, ready to carpe diem. That is seize the day, if you don’t remember your Latin. This is Kelly Coughlin, CEO of EveryDay CPA. One of our tagline themes at EveryDay CPA is “We help business owners use debits and credits as weapons of mass competition.” Frankly, I really want to say as weapons of mass destruction of their competition but the politically correct police discourage me from saying anything that relates to violence. Even though we use Sun Tzu, a brilliant 5th century B.C. military strategist as the foundation of our business strategy, they are apparently okay with that but not weapons of mass destruction.
Regardless, today I am going to interview KC Truby, founder, and chief executive of Talk Accounting, TALK Accounting. KC and his team have created a new accounting program that connects with QuickBooks, but the transactions, the journal entries, the debits and credits of mass competition, destruction, are entered into your QuickBooks, not by some part-time bookkeeper that comes in twice per month, rather, by you the business owner, in the field, on the job. In a sense, it’s just like Uber disintermediated the taxi business through their technology that connected a buyer and a seller directly, without the need for a dispatcher. KC’s team has disintermediated the need for a bookkeeper to input many debits and credits of mass destruction. To be clear, I am going to rephrase that. KC’s team has disintermediated the need for a bookkeeper to input many debits and credits but, to be clear, it doesn’t completely eliminate the need for an accountant or a bookkeeper, rather, it frankly makes better and more efficient use of their time, and from my perspective, it makes it a more interesting job.
With that, I’ll introduce KC Truby at TALK Accounting. KC, how are you today?
KC: Kelly Coughlin, I am doing fine. I am excited to be here. It’s summertime out here in Arizona so we are a little toasty today, but let’s tell some people about mass destruction of the competition or about mass prosperity by using debits and credits as weapons. I love that sentence, that was fascinating,
Kelly: Great. Well, before we get into your background, KC; I have a couple of questions for you on that. Tell me, what was the need that you saw in the market place and how are you fulfilling that need with your TALK Accounting solution?
KC: So, I owned a little training company out here, and I am talking to one of my new college graduate kids, a little whiz kid that was sitting in there and was helping me do some programming, my wife walked in with the American Express bill, 12 pages long. She starts going through line by line, what was this for, what was this for? And we have been through this little song and dance off and on for 40 years and so I just started making stuff up because I couldn’t remember what I spent money on three months ago. She walks out after a few minutes and my employee sitting there looking at me, says, “Did you just lie to your wife?” [Laughs] I just made all that up. And I said, you know what’s really funny, she knew I was lying the whole time. And the whole premise, the whole idea was there that we can’t remember what we did, but it’s a constant problem not to record the business intent at the moment of a transaction. And this young gentleman said, “You know that artificial intelligence, voice recognition, I’ll bet you if you just talk to your phone, this could be wiped out. And you wouldn’t even have to have that little song and dance with your wife every month.” So, it was that moment of going to that uncomfortable what was this for, why did you do that, for the 12th time this year, for the 40th year in a row, that we finally decided, you know, we should do something about this and solve it for everybody.
Kelly: Interesting. You know I was educated by the Jesuits and your statement about lying, one of these philosophers said, “If a tree falls in the woods, does it makes a sound?” And if nobody is there to hear it, it doesn’t make a sound. So, I wonder, similarly, if you are lying to somebody and they know you are lying, is it lie anymore?
KC: It could be a conspiracy.
Kelly: Alright, well, that sounds kind of interesting. So, KC, I know we have talked a little bit about this being a great solution for businesses that are mobile, that spend a lot of time in vehicles or on job sites. I’m thinking truckers, contractors, trades. Why is it, is that a fair assessment that’s a good solution for those kinds of businesses and why is that?
KC: Well, the biggest problem is that the realtor, the Uber driver, the trucker, the salesmen on the road, the one person gig economy, employee, self-employed has is that they are always moving, and they don’t record the business in transactions, they all think, well, I’ll get to this later’ well, I’ll save that receipt; I’ll get the work finished when I have time. And that never happens. And as an accountant, you are well aware of what happens when we don’t have good records and how susceptible we are to what’s called the correspondence audit where we get a letter from the internal revenue and they want us to justify, not only with receipts, proof of transactions but business intent for why we went to the hotel in Dubuque, Iowa, last August or why we took somebody to lunch at Applebee’s. And we can’t do that because we lost the receipt and because we didn’t take the time to write things down, and now the internal revenue service is going to disallow that expense. And the average correspondence audit, which about 4% of the people are getting hit with right now, every year, the average owner is coming in with $3000 and $5,000 and $7,000 tax bills because we didn’t record the business intent at the moment of the event and that’s what TALK does. It gives you a simple process to get the business intent, get the receipt and get it into a cash basis profit and loss statement right now that can import to QuickBooks if you are using QuickBooks or other software.
Kelly: Okay, so let’s just go through the process. Let’s take a trucker, picture a trucker, he gets in his truck at 6:00 a.m., his tank is empty and he hasn’t eaten breakfast yet. How does he use TALK Accounting?
KC: And so at the beginning of the week, his income, let’s say he is a lease driver, his income came in and it was directly deposited to his TALK Accounting MasterCard – we call it TALK Commercial MasterCard, and that card now holds his weekly income from last week’s mileage. So he got paid so much per mile and he got a wire transfer like he does every Friday. Okay, so now I get up in the morning and I fire up the truck, in which, you know, I was a truck driver in my early 20s so this scenario was a valuable experience. So, he fires up the truck and he is going to go into the pilot and get some ham and eggs. Now, when he comes out or when the bill comes the waiter is going to bring the check and normally he is just going to pay this check and then stick the receipt in his pocket. Now, what’s going to happen is, he is going to use his TALK MasterCard and as soon as he pays the bill his phone is going to light up. And it’s going to just say, ping! And the trucker will look at this phone and the phone is going to deliver a message. It will say, Jack, you are at the pilot truck stop, in Topeka, Kansas. You just spent $11.47, what was that all about? And all the trucker has to do is touch the screen, the recording starts and he will say, I am buying breakfast on my way to Denver with a hot load, and that’s it. Now I have enough information about that transaction and then my artificial intelligence can code it along with capturing the transaction data because we just use the TALK MasterCard. And that gives me a qualified transaction right into a cash flow spreadsheet that’s part of the online banking. And if I am a larger company I can have that imported into QuickBooks. But a lot of people, like truck drivers, don’t even need QuickBooks, if they are recording, temporaneously, the business intent of when they spend money.
Kelly: So where does that spreadsheet go then if they don’t use QuickBooks? Where does it go?
KC: Interestingly enough, the spreadsheet is actually their online banking, and we all know what online banking looks like because we click and log on probably once or twice a day to find out if we can write another check. So we are looking at it all day long, but now, instead of just having the total amount of money you have in a list of your checks, expenses that you have put money out on, you are also going to see revenue coming in on your online banking and you are going to see all of your expenses coded to the particular category. So, if I bought a tarp because I have got wood on the back and I can see it’s going to rain up front, 30 miles from here, if we are in a rainstorm, I have got to tarp-this load. Now I have got a categorized expense for the $300 I paid for the tarp. And if I am buying fuel it is categorized, if it is food it’s categorized. And all those things are treated differently at tax time anyway. So this is going to be a big help to my accountant, my tax preparer, because everything is in this spreadsheet which is my online banking. And it can be exported directly to excel so that it will go right into QuickBooks or right into tax software. And can you imagine the amount of money and time that’s going to save that trucker to get that tax return done?
Kelly: Yeah, so at EveryDay CPA, we work with a lot of truckers at tax time and tax resolution issues because they do have a tendency to kind of get into some problems because they are always on the road. So you are saying that we wouldn’t have to have QuickBooks set up, that the transaction expense categories, that those categories get set up at the online bank, or does it? Do they accept any categories at that point, at the online bank?
KC: Well, the online bank will accept any categories because we are actually an accounting firm that created this software and then we help other accounting firms deliver it to their clients and so it’s modifiable. So, if you are not using one of our standard 12 categories for a trucker then you can go in and change it.
Kelly: Alright, so we have truckers that listen to this podcast and they say, hey, that sounds cool. They contact us at EveryDay CPA and we set up the account with you, they have got to sign some things, I’m sure, because we are dealing with banking, but it’s pretty straightforward, correct?
KC: It’s pretty straightforward, and we actually have the staff to walk the trucker right through it, on your behalf so that we are going to show them how the deposits are made into their TALK Commercial MasterCard. We will show them how to expense money and talk to the phone. We will show them how to take a picture of the receipt that the waiter has handed to you so that we are lock and loaded so that two years from now or two years from now we get one of those correspondence audits we are not going to be up all night worrying about it. We are not going to be in tax resolution because we have lock and loaded evidence of exactly why we spent money in Topeka, Kansas.
Kelly: Alright. And you gave us special pricing at EveryDay CPA so I want to thank you for that, and all our truckers and others, not just truckers, can take advantage of that. So, thank you for that KC, I appreciate that.
KC: We are excited to work with you, Mr. Coughlin.
Kelly: Great. So I have one other question for you KC, let’s say you have got a trucker, he is in his hotel room and he needs to pay some other bills that have accumulated while he has been on the road, can he do that on the fly from his hotel room?
KC: Well, the TALK Commercial MasterCard is a business checking account. It’s not your personal account. So we get out of that co-mingling that you have been warned about that before mister trucker. And if you are in your hotel and you have got to make a lease payment on your truck, you can either have that set up, so automatically drafts off the card. You can actually issue a check from your laptop or phone to make the lease payment at your convenience. And the same thing will hold true when you need to send money home at the end of the week for the rent and the diapers. So at the end of the week, with the leftover money, it can easily be sent to your home checking account so that the personal bills can be paid. It will operate exactly as if we were a checking camp but we’ll do everything from your phone so that you don’t have to worry about losing a checkbook or keeping the reconciliation of the account balance because you will see your account balance in real-time, right on your mobile phone, all the time, as well as all of your transactions.
Kelly: Well, this just seems like ideal for truckers, maybe Uber drivers, right? But certainly truckers. And these guys are always on the road.
KC: For the truck driver, the gas the delivery driver, the Uber person, we are always running around with a glove box full of receipts and as you well know, the average taxpayer pays several thousand dollars a year in excess income tax because they can’t remember where and when they spent money. That problem totally goes away because we are capturing the transaction at the exact moment it happens and shoving it to your phone and asking you to simply answer one question by talking out loud the business intent. And if you don’t tell us the business intent at that moment, I am going to come back in five minutes and ask you again. I’m going to be back at 5:00 p.m. and ask you again, and I am going to become your mother talking about vegetables. I’m going t become a nag until you tell me why you spent $18 at the pilot truck stop,
Kelly: Right, and if they have cash transactions, what should they do about cash transactions?
KC: Now, we are going to strongly recommend that they s do not have cash transactions, but they can use this to record the transaction in cash and then it will be up to the accountant to reconcile at the end of the year for the tax return because we won’t be able to code the cash transaction.
Kelly: What about a debit card withdrawal, cash withdrawal, can they put any category to that?
KC: They can do the debit card cash withdrawal. As soon as they take $200 out of the ATM they are going to get a message on their phone, hey, what was that $200 for?
KC: And you will be expected to talk to the phone and explain why you took $200 out and how we are going to code it back at the office so that at the end of the year you are not looking at 10 or 20 or 50 or 500 ATM withdrawals and trying to figure out what the Lord am I going to do with all of these.
Kelly: See, I think that that pays for that because that’s always a nightmare.
KC: Kelly, a lot of these ATM withdrawals are business-related expenses but you are forced, when you are doing the return, to categorize them as owner drawer income because you don’t have any contemporaneous notes about what the money was intended for.
Kelly: Well, I know, I mean, like, I go to New York three or four times a year and I always take out cash for taxis and, you know, you are constantly having to keep track of these taxi receipts but what I would rather do is just take $200 out, taxis, transportation, ground transportation. So those are good things. Well, I congratulate you KC on what you have designed and built here. If we have got a trucker or a contractor that wants to get going on it, I know you have got a select few of key and critical accountants, like EveryDay CPA, that’s set up to do this, what’s the best way for people to get going with you if they want to use TALK Accounting?
KC: The very first thing they should do is simply call your office and say we would like to know a little bit more about this. Then you can send them to a short description video, on the internet of course, at talkaccounting.com, but we would like you to send them to that sight with your link. I’ll send them a link, and then when they tell us that we would like to try this, at that point, our at-home gig economy bookkeepers actually assist that trucker on your behalf, to get that card set up, open the bank account with Sunrise Bank in Minneapolis, to train the trucker on exactly how to use this so that their tax return bills go down, their bookkeeping costs goes down and they know exactly where they are, financially, all the time. We don’t just give them stuff and turn them loose we have a bookkeeper who will walk them through, for the first two months, hand by hand by hand to make sure that this is operational.
Kelly: That sounds terrific. KC, tell me a little bit about yourself. Give us your background.
KC: Hey, you know I started accounting in 1969 when I was 16 years old, and so I know a little bit about this. I have not been a very good accountant, mostly I am a pretty good salesman and a pretty good software engineer so I have tended to float around the accounting industry writing software programs and developing other companies but I have been an entrepreneur, a small business owner for 51 years, since I was 16 years old. And this is something we have worked on in the last four years, here in Tousan with a group of young programmers out of the U of A, and they were specialist in artificial intelligence and voice recognition, to create a methodology to easily convert my spoken voice into a coded accounting transaction, solving so many problems. And so after all those years of experience, in owning one business to another and solving accounting and tax problems for clients, we finally have been able to come up with a simple way, using that smartphone to get rid of that wallet full of receipts.
Kelly: Great. Well, KC, thanks for your time and I look forward to working with you with some truckers and contractors and anybody else that’s on the road that needs help classifying their expenses and minimizing the risk of an unfavorable IRS audit. So thanks a lot for your time.
KC: Thank you.