Charles interviews Taxbot cofounder Jake Randall and uncovers how most accountants are leaving a lot of revenue on the table.
See how the Taxbot app helps small business owners and contract workers take better care of their business finances in as little as 12 minutes a month.
Taxbot makes tracking business expenses and mileage easy and fast and beats having your clients show up with a grocery bag of receipts.
Click the link below to learn more about Taxbot and Jake Randall.
Podcast Transcript
Charles Kirkland:
Hey, this is Charles. I am super excited today to have our guest on the show. He is the founder of Taxbot.com
Like basically just imagine you’re a small business owner and you really don’t want to go to jail. You really have no desire. Yeah, I’ll sit in front of an IRS agent and try to explain why your giant grocery bag of like gas receipts are completely, you know, in order and the whole nine yards. So with that, Taxbot is created to save you time, it’s created to save you money. And on that, Jake, how’s it going?
Jake Randall:
Hey Great, thanks for having us on Charles, it’s great to be here.
Charles:
Dude, I’m excited. So first of all, tell us about Taxbot; what is it and why do I need it?
Jake Randall:
Yeah, so we, we look at helping the small business, self-employed person. It’s really an underserved market. So our core product is the Taxbot app and it’s a software application, goes on your phone, that helps you track all of your tax-deductible expenses and actually do it in a way that would pass an IRS audit. Because you know, everybody in the service or technology world knows, that QuickBooks, you know, or any other service or technology software is not what’s gonna hold up in an audit.
That’s what does your financials, that tells you, that’s a scorecard.
And we, kind of, focus on the document aggregation, uh, and, and the proof elements that you need to stay out of trouble with the IRS. And so, you know, automatic, uh, matching of receipts to bank transactions, we automatically track business mileage in, in your vehicle so that you have all of your mileage logs buttoned up.
Charles:
Cause as we know, that’s a huge audited category when you’re self-employed.
And so we just kinda tried to automate as much of that process as we can because we know: one – business owners are busy and they don’t want to do it, and uh, two – they need to be doing it and their accountant wants them to do it.
And sometimes that just has turned into a situation where, you know, the accountant just kind of deals with the fact that their accountant, that their clients are not fully prepared because it’s kind of like herding cats to try to get them to do the right thing.
Yeah. How about this? I mean, back when I was selling we take a receipt, we write a date on it, we’d write some mileage. You’re telling me that, you actually, Taxbot has a GPS and literally it could like spit out a detailed map of every route I took today.
Jake Randall:
So, let’s say, Charles, you and I are going to meet up for lunch to talk about doing this podcast. So, you jump in the car, you start driving.
If you’re like me, you’re not thinking about tracking your mileage. You’re thinking about, oh, what’s this meeting going to be like or what, what do we need to talk about? So, your mind’s not on tracking your mileage, so you’re getting in your car, you start driving and the phone, you know can sense when you’re moving and it starts tracking the trip for you. So, you don’t have to remember to do anything. It gets tracked.
And then later, when you come back and look at your app, you’ll see that trip, you’ll see a whole map of the trip. You’ll actually see, like, the tracing of the route that you took. You’ll see the beginning and then the address.
If we had had that event on our calendar, it would actually fill in the details and show you that this was the trip for that calendar event. Uh, the same that we went to a lunch to talk about the podcast and it just lines everything up really nice. And all you have to do is kind of approve the work that we’ve done.
So you just swipe it right, if it’s business, and if it was a personal trip, you just swipe it left and you’ve got everything you need in your mileage log. If there’s something missing, like some details that it needs to be IRS compliant, it will prompt you. Just say it really quickly, like you know, who was that, who was at this meeting?
And we’ll ask you those types of questions, on the mileage side. It does, similar thing for uh, expenses, you know, with, with the app.
Let’s say we’re at that lunch, I snap a picture of the receipt, of the bill that comes, well Taxbot will read the text on that receipt, send it up to the cloud and then tomorrow when that expense hits your bank account, when it clears at the bank, it’s going to match the two up and kind of use data from both of them to kind of fill in gaps and try to fill in, you know, all the details about who you met with, what you talked about. Uh, if it can find those, you know, and just match it all up. So then again, it’s done automatically for you. All you had to do was snap a picture of the receipt and then come back and see if we did it right.
Charles: I am, I am hyper impressed because I had been that dude with a brown paper bag with enough receipts in there.
Charles:
I’m thinking, if these things get wet or, you know, spontaneously combust, I’m going to really have a hard time explaining a whole lot of math. So this is very, very impressive. Now, I’ve got a question. How exactly did you come up with, I mean, was this a case of, okay, now you know, like I have got the IRS breathing down my neck.
Jake Randall:
Thankfully it wasn’t that the IRS was after me. Um, but I actually met my partners in another venture and one of the things that we were doing is we were writing a marketing campaign around why somebody would want to start a business for themselves and the tax advantages that, kind of went along with being in business for yourself.
And so that’s where I met my partners. One of them, Sandy Botkin, you know, he’s an author and speaker on tax strategies.
And I was, kind of, oblivious to all of this, but I sat down in that marketing or that meeting and listened to him talk and tell me about all these tax strategies that I, that I had never heard of, that my accountant had never told me about.
And I realized that people were just absolutely missing the boat. Some of them were literally just not doing anything really except for, you know, throwing up a prayer and handing off their books to their accountant saying, save me as much money as you can. And I’ve just realized that there was a huge opportunity there to help people.
So, it actually started as an education company where we went out and we found groups of small, self-employed, uh, individuals and we taught them the things that I had learned, the strategies, that you need to be proactive and all the things you can do, writing off, you know, healthcare expenses.
If you have an HRA or uh, you know, why rich people buy their vehicles and trucks and SUVs at the end of the year and all these things that nobody really knows, uh, in the small business world, but seems old hat to accountants. But there’s just kind of this, this gap.
So that’s where we started and eventually, we found out that we were telling people, you know, Oh, you can write off all your meals, but you need to keep track of X, Y, and Z and you can write off your, your car, but you need keep track of X, Y, and Z. And we didn’t have a tool for them to do the tracking, even though we were telling them that the IRS really wants good documentation. So that was kind of the impetus for let’s start a software company. And that’s kinda how we got going.
Charles:
That’s impressive.
And I think you’ve nailed it because like you said, most like, QuickBooks’ design is kind of semi-organized stuff to hand off to somebody else. And while I like QuickBooks, it doesn’t give me the documentation. And more importantly, QuickBooks doesn’t necessarily say, Hey Charles, you could’ve saved like an ever-loving boatload of money if you had done X, Y, and Z. Doesn’t tell you that.
It’s just like, give me: Hey, uh, you made money or lost money, have a good day. So this is very, very impressive. Now I’m going to hit you with the next question. This is going to be kind of, I know it’s going to be difficult. Why did you do an app? I mean, let’s face it. I mean, it’s an app. I mean, tell me about why you picked an app over anything else.
Jake Randall:
And you know, don’t get me wrong, I think Quickbooks is an amazing piece of software, we, you know, we use QuickBooks to manage our business, but for most self-employed people, especially the small guy, it’s too complicated.
Like, there’s too many moving buttons and pieces, you know, you got to learn to do lots of stuff. And most small business owners are not accountants. They don’t have an service or technology degree to know how to run that. It’s pretty easy if you’re an accountant, but if you’re not, you can kind of get lost in there. So we said – it’s got to be something easy. And luckily I had two business partners that were uh, much older.
One of my partners had just turned 85 and we said it’s gotta be easy enough for him to use it. And that’s kind of the, was our standard for building the app. And, you know, you have it there with you all the time. Um, mileage is, is obviously we can tap into the GPS on your phone when we needed to track your trips.
And then with the camera, you could snap pictures of receipts because you mentioned something earlier, Charles, about your brown paper bag of receipts. Uh, it seems like the further or the older I get, the worst the receipts are that we get from vendors.
The quality just goes, is going down. You know, you get one of those receipts and you actually gonna leave it in your car on that thermal paper and it’s gone in, you know, an hour. And so we wanted to be able to capture that documentation as soon as possible and that just kind of led us to the phone.
Charles:
It makes perfect, perfect sense. So I’m super impressed with that. So simple and easy, I can put it on my iPhone or my android. Um, it’s going to basically keep track of the car I drove, it’s going to keep track of the miles, it’s going to go to my calendar, pull data from that, sync it up, take my receipts and say, it’s a rock solid path to keep you being audited or if you are audited it’s just a rock-solid path to say this came from this event, I’m good.
And that’s a big deal. That’s it. That’s an extremely big deal.
What is the biggest challenge you face every day in growing your business and how do you overcome?
Jake Randall:
So it’s really interesting. I mean, we know the taxes are an entrepreneur’s biggest expense in their life, right? Combined taxes; they just spend more on that than they spend on their food, shelter and their clothing.
And their transportation combined.
But it’s something that people just don’t want to think about, right? It’s like the old axiom of death and taxes and nobody wants to talk about it and you can’t avoid it.
And, and so we found that a lot of small business owners don’t want to think about taxes until it’s too late. So they want to think about it only, uh, as it’s approaching the April 15th deadline. But if you don’t think about taxes or you don’t plan and do anything, um, before December 31st, that’s when the game clock hits zero, pretty much.
And after that, there’s not a lot you can do for your business taxes. And most business owners don’t really think about it until the game’s already over; they’re trying to win the game that’s already ended.
And, so, trying to get people to shift their mindset a little bit and start to think of taxes as a legitimate year-round strategy to keep more money in their pocket, has been a challenge.
But what we’ve done to, kind of, then overcome that, as we spend a lot of time actually educating people, not necessarily on compliance, but we lead with, uh, you know, things like, uh, did you accidentally donate an extra $10,000 to the IRS last year, check out this article and, or come to this Webinar and learn why 93% of small business owners overpay their taxes every year.
And so we get them on kind of the, the understanding that, wow, maybe I could have missed out on something, sort of that a buyer’s, or not buyer’s remorse but regret. And then we’d kind of lead them into, well, you know, in order to get all this stuff you have to be keeping track of your expenses in the way the IRS requires. Um, and then, and then we try to connect them up with, um, you know, the right accountant at the end of the day to help, sort of, facilitate that.
Right?
If you’ve got two people working on a project, if you’ve got the accountant that’s reaching out, the right accountant, that is reaching out and say, Hey, let’s talk in the offseason or year-round and you’ve got the client that understands that they need to talk year-round with the accountant. Then you kind of has a little bit of synergy and some accountability that can really drive some significant change for the entrepreneur.
Yeah, that’s exciting to hear because, I mean, literally we’re saying that we have a tool which is what this 24/7 is, it can now document and process this whole thing.
We can clean that desk, plug that in for, I’m gonna just say audit proofing data area of the business.
We now have an educational aspect of it where we’re educating the small business owner, not all necessarily how to use the app, cause the app is fairly simple to use, it does a lot of complex things, but it’s simple to use and we’re educating them on, the small business owner, on how to basically get better with taxes, how to save more on taxes and how to utilize the same strategy that I would just say, you know, the wealthiest of the wealthiest 1% would be using to minimize their taxes, but in such a way that is completely legal and compliant with no issues.
Charles:
That’s exciting, that’s an exciting proposition there.
Jake Randall:
Yeah, it really is.
I mean, that’s one of my favorite things is when you, when somebody finally gets that, when somebody finally understands that as an entrepreneur, that they can do a lot more for themselves tax-wise and saving money on their taxes than they have realized in the past, and you will, you see that light bulb go on and then you can easily show them where they can save money and any accountant can do this.
We kind of did this, just kind of fun little thing where we brought seven strangers into our office. We had them bring their tax returns into our office and we kind of, we still need it all and everything, but we had the clock running and we sat them down and looked at their tax return.
And then in less than 10 minutes for each one of those seven strangers, we found $10,000 of things they could have done last year had they known about them. Uh, and so we could have saved them $10,000 on their taxes if they had a little bit of knowledge and been proactive on a few things and that’s not really hard, looking at it from an accountant’s perspective, but when you, from the entrepreneur side of the table, that is mind-blowing.
Right? And it was, it wasn’t that the accountant missed anything. It was that the client didn’t have enough foresight to do something. So I think there’s a real disconnect in America with entrepreneurs understanding how to leverage their tax professional.
And I think the tax professional in many cases, not all cases, um, doesn’t feel comfortable reaching out to the entrepreneur during the offseason and saying, hey, I’d like to bill you for some of my consulting time.
You know, and sell them on that. And I think, but if you can line those two up, I think that you’d create a real synergy where entrepreneur’s light bulb is just going to go off and that, that’s what’s really exciting when you see that, for me.
Charles:
Oh, I totally agree. It’s one of those things where pro athletes are built in the offseason about what they do to prepare for the on the season. Same thing for small business entrepreneurs. It’s the thing they could do.
And I will tell you when you said 10,000, I’m thinking, Oh, you know, it’s like, would you, what could you do with an extra $10,000 – a lot of stuff in these days. And when you see people who are missing that and they could have been potentially missing, you know, that they could’ve missed that for four-five years in a row or longer.
Charles:
That’s a lot of wealth that they, they’re giving away. And I don’t think, I think most entrepreneurs don’t realize the tax code is created as such a way that they give you the ability to build wealth if you know how to use it correctly.
And I think most people just as you said, they don’t know how to, and this is the off-season thing they need to be going with. I truly agree with you. Most CPAs, most accountants need to be more proactive in their client’s business. That’s a huge opportunity. So we’re going to play a lightning round here. What is the last book you read?
Jake Randall:
The last book I read was, well, I’ve got three that I haven’t finished yet, but the one that I’m reading right now that I am almost finished with, that I’m really, uh, picking up on is called “Overdeliver”.
Um, by Brian Kurtz. And it’s, uh, it’s just about really making sure that you overdeliver on your, your promises and there’s a lot of, it’s a marketing book, but you know, the thing that really just stuck out to me is really understanding your client and really taking, um, the things you know and understanding about their problems and really trying to deliver better service than they were expecting.
The exponential growth that can happen and, you know, the client satisfaction is obviously going to be through the roof. So, I’m really enjoying that book right now.
Charles:
That’s an exciting book, it’s actually on my list. But tell me about the other three that aren’t done because I want to know what you’re reading. That sounds really, really good.
Jake Randall:
Okay. So, um, I’m a sucker for marketing books. I just liked the way the, the people think about that.
I’ve got another one that I’m rereading. Um, it’s a book called “Breakthrough Advertising”. It’s really, it’s kind of the deep, deep read, um, by Eugene Schwartz, about just understanding, you know, customer mentality. And then, uh, the other one I’m reading is actually a fantasy novel because I find if I have a little bit of fantasy in my life that I’m a little bit more creative. So I’m reading one called “The Swarm” and, uh, kind of my guilty pleasure.
Charles Kirkland:
”Breakthrough Advertising” and it’s an amazing book. It is certainly not bedtime reading cause it is deep thinking, but it’s an amazing book. So thank you for being on the podcast.
Where can we learn more about Taxbot and how do we learn more about Jake?
Jake Randall:
Yeah, so Taxbot, uh, you can check out at https://Taxbot.com/ that’s pretty straight forward and we are, that’s probably the best place to go and sign up for our newsletter or something. Get on the list. Um, and we can share a ton of cool stuff with you guys.
