<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=187647285171376&amp;ev=PageView&amp;noscript=1" alt="facebook pixel">
Call us: (866) 497-9761 or Learn More

Finding Joy in Accounting: Outsourcing, Taxes, & Franchising

Published by Summit Marketing Team on May 5, 2023 6:00:00 AM

The Modern CPA Success Show: Episode 88


As the Co-founder of Cadencia, Owner of Sherwood Tax and Accounting, and Founder of Breakaway Bookkeeping and Advising, Kristen Keats is on a mission to bring joy to the accounting industry. From nearshore outsourcing to taxes and franchising, Kristen talks with Tom and Jody about how her businesses are helping spread joy throughout the industry.





[00:00:18] Jamie: Hello everybody. Welcome to today's show. Fortunately we didn't record our pre-show because we were talking about some fun things that Jodi and our guests did in Vegas, but hopefully, we probably won't get to that when we're actually recording here, but it was a lot of fun. 

[00:00:30] Kristen: Thank you. Thank you for having me. So yeah, my name's Kristen. I am a CPA. I have been doing the CPA thing for over 20 years. I kind of stopped counting after 20, so I don't know if it matters after that point anyway.

[00:00:43] Mainly in tax. I got into cloud accounting and bookkeeping about 10 years ago when that came on the scene. My passion and my mission is to bring joy to accounting, and so that's what I'm trying to do with each of the companies that we founded. 

[00:00:59] Jody: So, so you got two companies; how does that work? How, how can you be a master at two companies?

[00:01:05] Kristen: That's a great question. It turns out you can't; it turns out that you need help to run more than one company. I'll kind of give a timeline real quick. So I founded Breakaway Bookkeeping and Advising in the fall of 2019.

[00:01:21] That was right about the time I met you, Jody. Breakaway was like rainbows and unicorns. Everything was awesome, and it still is for the most part. And then about a year later, the opportunity came up to purchase Sherwood Taxes. Because I am a tax person and my mission is to bring joy to accounting, that’s definitely an area that needs joy.

[00:01:38] We added that to the portfolio of companies. And then about six months after that, we founded Cadencia, which is an accounting staffing company based in Guadalajara, Mexico. And so yeah, I was kind of just trying to wear all the hats for a while. and then about a year ago we said, nope, that's not gonna work.

[00:01:58] So me and my two partners, Martin Mall is one of my partners. My other partner is Shay, who also happens to be my cousin. We divided and conquered. So Shay kind of took the reins of Breakaway and has been CEO of Breakaway since about February of last year. Martin is CEO of Cadencia and then I'm currently CEO of Sure with Tax, even though they kind of all flow up to the investment company.

[00:02:21] Jody: So do you guys all own all part owners of all three of 'em then, but you guys each have your own separate role? Everyone has their separate role, so how's that working? So you've got a three head monster it sounds like. 

[00:02:32] Kristen: Although they obviously each take different focus, I like to think of 'em at all as serving that same goal. Because if you think about like, we're serving our clients with Breakaway really does that CFO controller advisory practice. I mean, kinda like your firm, Jody, right? That's their high level in the day-to-day with the clients.

[00:02:55] Yep. In my ideal world, Sherwood Tax kind of plugs in. On a quarterly basis with our clients and then we're doing the tax compliance and really advisory around really tax specific things. Mm-hmm. . And then we've got cia, which is supporting both of these companies by providing in this very, in this world where we're having the hardest time finding accounting professionals.

[00:03:13] We found an avenue outta Guadalajara to train and, and provide accounting staff for all the companies and other firms as we..

[00:03:21] Jamie: Sounds like a discovery there. So I'm kind of curious about how you guys got down that path.

[00:03:25] Kristen: Yeah, so Martin and I had,Martin longer than myself, had worked with teams in India previously.

[00:03:33] So at the firm where he was the CEO and I worked at, there was a brief moment in time where we worked together. We had basically a company in India where they worked with that. I had never worked with an offshore team before, but coming from a smaller firm and then getting exposed to that as a resource, that was like, blew my mind, you know, because it was, staffing was already an issue, you know, four or five years ago we were already having that problem.

[00:03:56] And so I was like, oh my gosh, here's these trained professionals that are [00:04:00] ready to go. You know, that they're just waiting and they're hungry for the work, and so, Throwing everything I could over there and I'm like, this was just such a game changer for me. And so when we, we knew that when we started Breakaway as our own company, we knew that that was gonna be such a huge part of the model, because what we wanted to do was we wanted to give individual accountants or people that wanted to go out and start their own companies, those same resources that are available to these bigger firms and. Working with an offshore team can be really scary and daunting if you've never done it before. You know, to kind of go into that world of not knowing anything, and we right about that same time we got connected with an accountant here in Oregon, but he's from Mexico.

[00:04:38] He had a team in Mexico and we're like, wow. Another problem is solved because it's really tough with India. The time difference is really, really tough and if you wanna travel to go see them, it's a huge commitment to go travel. It's expensive. Mexico's easy for us, you know, it's like four hours to get down there.

[00:04:56] The culture and the language, we've got good English speakers there, so it just made it so much easier. So we started exploring that option. Right around 2020. And then we kind of were able to get it going within a year. And so yeah, started it in 2021, mainly to help us out internally. And then we ended up growing it to be available to other accounting firms too. 

[00:05:18] Jody: So do you use 'em for both your tax practice and your CFO practice advisory practice? How does that  work?

[00:05:25] Kristen: Yeah, so for the tax practice, I've got four dedicated staff that support me here for Breakaway. So the way Breakaway is set up is that each of our advisors is really running their own practice and Breakaway is just providing the management and support services behind it.

[00:05:43] So what we've done is offer it out as a service to the Breakaway advisors. Kind of the same as any other client. So with them it's a little different. For the Breakaway advisors that are utilizing Cadencia people, most of them just have one helper at this point in time. They haven't really built teams cuz their practices aren't big enough to support that.

[00:06:00] So it's a little bit of a different model, but it works that there's kind of  one when you bring onstaff, you hire 'em just like you would a US employee. Where you have a dedicated person.

[00:06:11] Jody: Basically each advisor within Breakaway Advisors has a dedicated team member.

[00:06:17] Is there a liaison between the two or are they completely dedicated, one for one relationship?

[00:06:24] Kristen: Yep. I mean, we do have a person at Cadencia who's awesome. He actually used to be on my team, but we kind of switched roles because we found that we needed someone there to be kind of a liaison from time to time.

[00:06:39] Especially with some of the firms have bigger teams, and they don't always have the time to, let's say if there's a performance issue or something like, it's good to have just someone who does speak native Spanish speaker to native Spanish speaker to really kind of figure out if there's problems or issues going on. So that's why we have Raul in that role there. 

[00:06:57] Jody: Especially one in Mexico, which is really cool, being in our hemisphere.

[00:07:03] Kristen: Yes. Thank you. I think it's cool too. I do have some best practices that I share with the clients. And mainly it's about getting things because we've learned a lot too in dealing not only with, with me as a client, but also other accounting firm clients, and we can't overemphasize the importance of internal processes and having those really firmly in place because, and this is probably the same with any remote team and you guys have remote teams, so you understand that's probably the biggest hurdle. And so really thinking about how you work and getting your processes down. I say the more you can just treat them like you would any other member of the team, the more successful you're going to be.

[00:07:49] I'm literally on Zoom with my team every single day with everybody. I mean, whether they're US or Mexico, we have a team meeting every day and talking about who's doing what. Just our little tactical 20 minute meeting every day. And so I think the more that you can do it, you just can't think of them like, oh, we're just sending work to Mexico, or that's the Mexico team. As much as you can integrate 'em into your actual team, it'll be the more successful. 

[00:08:15] Jody: Oh, I a hundred percent agree with that. I think that's probably the biggest key to success that you do it that way, and it's kind of neat being in a remote team like we are. It's fairly easy to do that, especially if they're in the same time zone, cuz then they can just hop on and they can be treated no differently.

[00:08:31] You know, overseas, it gets a little tougher because there's only a small window of opportunity there and when you can have the whole day available, I think that makes a big difference. 

[00:09:20] So Cadencia will go through and do the initial vetting. And so the client will put in what they call a work order. They'll put in what their request is for and what their credentials are that they are looking for. And of course like the more specific they can be, the better off.

[00:09:35] Cadencia will then go and present like two to three candidates, depending on who they can find. So almost like a recruiter, just going and finding those. And so again, I don't know that there's any big difference between interviewing one of those candidates, and just someone that you would be interviewing really for, you know, the culture of your own firm.

[00:09:56] So if you have things specific to your own culture and things that you would wanna make sure that they are on board with that.

[00:10:04] Jody: Can Cadencia come here to work?

[00:10:10] Kristen: So especially with the initial team members, like we've got fluent English speakers. They come from the best universities in Mexico. A lot of 'em have traveled to Europe. Like these are pretty affluent families that can afford to send their kids to these universities. At least now, I'm starting to get to that point, where I can then elevate those folks that I hired two years ago and then maybe hire non-English speakers or ones that aren't as strong in their English. So about six months ago, I brought in a gal, Ellie, she still speaks like she was sold to me as like, no, she's a non-English speaker, but it's much better than my Spanish, I'll put it that way.

[00:10:50] Okay. And so, but she reports to Claudia, who, Claudia is a little more fluent, a little more confident. And so Claudia can be her boss. So that's like my goal is to really have a dialed in team. The more people I can have on that team, the better. And then if they can get me a quality work product and then ideally, my US-based people are the ones interfacing with the clients and all the technical and compliance work is being done by the Cadencia team.

[00:11:15] Jody: Do any of your clients speak directly with the Cadencia team at all or not? 

[00:11:19] Kristen: Yes, they do, because, honestly, if they wait for me to ask the client questions and everything has to funnel through me, it will never get done.

[00:11:30] And so that's why I put the team on our website. I introduce them. When I do Zoom calls with the clients, I have the team attend. That's the other great thing about being in the same time zone; they can be on the Zoom calls with me, even if they don't ever speak or say anything, they can listen and learn.

[00:11:44] They can take notes for me. And then the client has a face. And so it's not just like this person with a different sounding last name. You know, they're, they see their faces and they know them as humans.

[00:11:57] Jody: So they're team members. Can they grow within your organization similar to the rest of your team?

[00:12:03] I mean, do they get promotions like the rest of your team? How incorporated do you have them with a team? 

[00:12:11] Kristen: Very much. When I'm interviewing them, I tell them that the sky's the limit. And so like, I would love it if all of them had the ability to even get to be a client service manager.

[00:12:25] You know, like if they get to that level and then they've been with us long enough, there's no reason why they couldn't just go to the same levels, you know, that, that anyone in the US could get to. So, that's my dream. My dream is that the higher they go, the better. And the more I can build a team underneath and even all the way up to an owner.

Here's the interesting thing about Mexico also is that a lot of them have US visas, some of them even have US citizenship or dual citizenship. So we've had to address the question, which never came up in India, what if I moved to the US?

[00:13:02] Can I still work for Cadencia? We didn't think that far in, but I kind of came through a thing of like, well, if you have been with me at least five years, and if you're someone who would be a client service manager, then why wouldn't I hire you in the US? Like again, we're having such a hard time finding these qualified people.

[00:13:18] You probably at that point wouldn't be a Cadencia employee, because that doesn't make sense anymore. But if you're living in the US, then I could just hire you outside of that. These are the problems I would love to be a part of, if we have super qualified people who are moving up. But yes, to answer your question, yes, they're on the same promotion schedule. In fact Elizabeth who's been, she was the first employee hired at Cadencia that's still with me, she was hired as an admin person. Turns out, she had a finance degree. So I had her start running payrolls and doing kind of bookkeeping.

[00:13:47] Now she's a tax preparer, so she's just been, she's been moving up the ranks. 

[00:13:51] Jody: You mentioned tax preparer. Any issues with that at all? I mean, they're pretty fluent with the US tax code?

[00:13:57] Kristen: okay. See, this is good because you guys can learn from all of my mistakes. So my mistake was, if I had to start over again, at least train everybody. So they're very good in bookkeeping. Teach them to know QuickBooks, like even just QuickBooks is a different system than they're used to. Then, I would have them move to business taxes. I made the mistake of having them go to individual taxes. I wouldn't do that again. I would wait a couple of years, once they kind of got used to how things go because they don't have an individual income tax in Mexico. They're like, why does it matter if you're married? Like the questions that they ask me, they're like, I don't understand. Why does it matter if you're married? I'm like, you know what? I actually don't know.

[00:14:40] Jody: Definitely not do the individuals right away business kind of form movement into business tax returns, and then they can kind of teach them how it relates then back to the individual. That makes a ton of sense. So, mostly you would, you would bring them in for the CFO side, the accounting side, the finance, versus bringing them in for taxes at least right away based on the individuals that you've got on your team.

[00:15:08] Kristen: Yeah. If a year ago I could go back, I would've had them learn business tax returns first before individuals. They're gonna have a basic understanding of accounting. So if you can lay some groundwork with them about, what does an s corporation mean? What is partnership taxation? So that's what we're doing now to prep them for businesses.

[00:15:30] Jody: Cost wise, how much do they cost compared to like the US folks? Are they fairly similar in costs? Is there gonna be a big difference there? How does that typically work? 

[00:15:42] Kristen: There's a big difference. There's a pretty big difference in the cost, which is nice. I'm not gonna lie; that's definitely nice. But I'm at the point where, even if it wasn't such a big cost differential, which is probably half the cost of a US-based person at the same level, it's just the availability. They have their own corporate trauma, but it's different from our accounting corporate trauma that probably you and I have, like baggage from burnout and public accounting things. 

They have a different level of abuse and working for Mexican companies. There's corporate trauma everywhere you go. Mm-hmm, but it's not scaring them away from accounting, like what's happening in the US.

[00:16:31] And so I know there's all kinds of podcasts about what's happening there with kind of the pipeline problem for accounting, but they  don't seem to have a pipeline problem, so that's good. No pipeline problem at all.

[00:16:39] Jody: So, how would someone get a hold of somebody if they wanted to consider using this  model?

[00:16:46] I mean, Would they contact you directly or how, how does that work? 

[00:16:51] Kristen: They can, but I probably would just end up forwarding it to my partner, Martin. . And so, and they, we have a website,  Cadencia, it's  Cadencia.io is the website instead .com. It's Cadencia.io and you can submit a form there if you wanna learn more about  Cadencia, and then we can get an appointment.

[00:17:07] It's probably either with Martin or we, now we have a salesperson named Justin, so probably one of the two of them you can meet with, answer all your questions and then say, okay, this is the type of person that I'm looking for. And then we'd go start the search. 

[00:17:27] Jody: Didn't wanna spend the extra money for the .com? 

[00:17:30] Kristen: Well, okay, so I “io” an Italian means joy. So we kind of liked that. It was on purpose, Jody. 

[00:17:40] Jody: That was a great, that was on purpose for me cause I didn't wanna spend the money.

[00:17:46] Jamie: That is a perfect lead. I'm really curious. I love this  Cadencia. I love learning all about it, but I've been dying to know how to bring joy to accounting. Cause I've been doing it for 20 years and I love my job. A lot of times the part of my job I love is the non-accounting stuff, so tell me about how to bring joy to it?

[00:18:03] Kristen: That tagline came up almost as a joke because I said there are things about it that are fun. But I feel like there were so many things that took away the fun. When we founded Breakaway, we asked ourselves ‘what can we take away from people so that all that's left is the joy?’ The joy is interacting with your clients and really feeling like you're making a difference.

[00:18:26] The spirit of collaboration and teamwork with your clients, so I wanted to bring joy on both sides. I want it to be joyful for accountants, but also for the clients. Accounting for the clients, a lot of times, is pretty terrible. They probably dread those calls with us.

[00:18:42] So, how can we make it more positive for both sides of it? And so we tried to just solve for all the things. So for example, hourly billing. I felt like it was something that sucked the joy out of a relationship with an accountant. If you feel like you can't pick up the phone when you have a question, then that's gonna detract from the relationship.

[00:18:59] So that's just an example. But anything we're just trying to solve for pain points, friction points with our clients and how can we take those away? Your mission should be bigger than you can do in your lifetime.

[00:19:14] It's day by day , but it is a North Star, and we talk about it, and we never lose sight of it. Any decision that we make or any of the things that we're doing, we ask, ‘is this gonna further the joy? Is this going to help us to bring joy?’ 

[00:19:30] Jody: And what about Breakaway? It’s not a traditional accounting firm. It breaks the model, pun intended there. It's not what everybody's thinking, so explain what Breakaway is for everyone.

[00:19:48] Kristen: Breakaway is technically a franchise. We were trying to figure out how we could structure this thing so it did what it wanted. So the purpose of Breakaway was to be able to provide a foundation so that someone who wanted to start their own practice could do that without kind of getting bogged down in what you get into when you have your own firm, such as building a website and coming up with your engagement letters and getting your insurance and doing the billing and collection for your clients, like all these kind of things.

[00:20:18] We were trying to solve for that and staffing was a part of it, too. So we always knew that we would try to solve for as much as those pain points so that the advisors could just go out and serve their clients. It ended up taking the form of a franchise. And I won't bore you guys with the legal details, but that's just how it ended up.

[00:20:33] Because we didn't want people to be employees because we really wanted them to have their own practice and have that kind of ownership and have control over their own destiny. 

[00:20:43] Jamie: Prior to coming to Summit, I was thinking about starting my own thing and didn't really know where to start.

[00:20:52] You know, I was like, okay, I have some ideas. I have a business plan. I know what I want to do,  all that stuff that you're talking about was probably what prevented me from doing it. If someone reached out to you, what kind of questions did they ask and where would they start?

[00:21:03] Kristen: So it's funny because you said you had a business plan. One of the things that we require is for them to have a business plan because we want people to be successful. We found that,we first get people that kind of were doing this on a whim and then, it didn't really get any traction and so we wanted to make sure that they had a plan to be successful in doing it.

[00:21:24] So, yeah. Once someone says, yeah, this sounds good, that I want to come on board, then we have them sign the agreement. We get them set up with an email. We, they come in our Slack channel. We get, we have a whole library of training resources if they need that and have access to it. All of the clients are signed up through our, we use Ignition.

[00:21:42] So it all goes through our ignition account. We collect on that. So yeah. And then we have, we, it's one of our pillars and breakaway is community. . So we're very much about like the hive and the community and building that. So we have what we call cohorts. So they have similar to, so when I was in public accounting, [00:22:00] I was at Arthur Anderson.

[00:22:01] We had like a start group. Yep. I'm sorry. Arthur firms had this too. Yeah. And you got really bonded with that start group of people. And we found that we wanted to create that in breakaway too. So that's what we call 'em cohorts. And they all start together. They're in Zoom meetings once a week. So there's this whole onboarding process.

[00:22:14] So they kind of get to know like what best practices, things that other folks have learned to help them get. and then they can move into different cohorts depending on kind of their specialization or kind of what groups they want to be a 

[00:22:25] Jody: part of. So, so you're not rely on, so I have to ask, right? Yeah, cuz I mean, like with, with a CPA, firm owner, if you're, if you're small, you got these tax questions, you don't understand how, what the answer to, or you've got this issue now, now you've got other people that you can kind of bounce questions off of without having to worry about them taking your clients or anything like that.

[00:22:42] Is it. Is that what I'm hearing? 

[00:22:44] Kristen: Absolutely. Like that's one of our other taglines is work for yourself, not by yourself. Because that's the hard thing about working for yourself. It's like, yeah, who are you gonna ask? Yeah, you can get on, you know, some. Facebook forum or something like that, but you're not really sure.

[00:22:59] And so yeah, we've got this really robust Slack channel and that's what, what Martin and I call the breakaway magic is when we see stuff that like we have nothing to do with and we just see the whole community helping each other and they're having social events now and they're doing things and we're like, that's the coolest thing ever that we just like started this like kind of launchpad and then it just kind of keeps going.

[00:23:18] Mm-hmm. by itself. . So how many 

[00:23:19] Jamie: team members are in are in that area, and then how many like new people join a year or new entities are joined each. 

[00:23:26] Kristen: So we've got, I think we've got about 25 breakaway advisors now, maybe 27, something like that. And we've been getting more and more traction. So I think this, the latest cohort that we have is like four mm-hmm.

[00:23:39] and we say we can do up to like four cohorts per year. So kind of just depending on timing. Mm-hmm. , like I said, we like to have 'em start together so that they have a group together. Mm-hmm. . So yeah, it's been, it's been doing pretty well. So that's been in three years 

[00:23:50] Jody: that we've grown. So. So would a cohort be just an individual or would it be like an individual.

[00:23:55] Three or four employees underneath 

[00:23:56] Kristen: them. It could be, they could [00:24:00] have employees. So we've got a gal. Usually when they start out with us, we find that we're not really getting advisors who already have a book that are joining us. It's really people who are just starting out on their own. Okay. But we've got a gal who, she's been with us I think two years, and I think she's got like eight people or something working for her now.

[00:24:17] So she's just grown it to that point. That's probably our biggest team. Mm-hmm. that's on. And then we have a couple more that maybe just have like one or two employees, or they just have a ncia person that helps them out on the bookkeeping side, and then they're just doing their own like CFO thing with their clients.

[00:24:31] Jamie: Yeah. I, I, I love the model and I think it's, it's, it's genius like you said, having the cohorts, people working together. I think there's a genius. Don't say genius . Sorry. It's brilliant. , Jonie, Jonie, Jonie reserves the word genius for himself and no one else be careful that, thank you. 

[00:24:46] Kristen: I always forget his ego can't, his ego can't 

[00:24:48] Jamie: tolerate up two geniuses on one podcast.

[00:24:50] So that's, that's, that's the rule. That's why they have me hosted, so they wanna make sure we keep it with one. So but no, I think it's brilliant. I think it's a really cool model. I think a lot of people listening to this like, oh, this is actually a lot easier than I thought. Cause the first step is what I think a lot of people are afraid of taking.

[00:25:05] Mm-hmm. . So I, I, I think it's a really smart way to do it, 

[00:25:08] Kristen: especially, well, Jamie, you know, there's probably room in the next cohort for, 

[00:25:10] Jody: hey,

[00:25:17] Jamie: Once Jody gets sick of me, hold off. That's where I'll go. 

[00:25:20] Kristen: There's always breakaway anymore. 

[00:25:22] Jody: Is he still on line?

[00:25:27] Jamie: All right, so I'm gonna, I'm gonna change topics here a little bit just because this is something fun we did in one we was recent podcast. Then I think I'm gonna keep this going and we, we promised early on that there was some Vegas talks. So I'm gonna, I'm gonna ask each of you, what is your. Vegas game and and, and what you, what, what how much you've won in one night.

[00:25:43] The most you've won in one night. So I'll start with you, Jody, cause I know it's gonna be a big number, so. Oh, 

[00:25:47] Jody: geez. Yeah. Thanks for putting me on the spot. My favorite Vegas game by far is blackjack. Love to play it. , you usually start with $500 and play. Do I lose type of a thing or, or see how much I can, I can win.

[00:25:57] Most of everyone in one night on [00:26:00] $500 was $35,000. Yeah, I got really lucky in a casino in New Orleans. Had a great time. We were there for about five hours and yeah, just kind of build it up, build it up, build it up, and ended up winning a significant amount of money. So that was, it was a lot of fun.

[00:26:14] The, the fun part about it was afterwards, what to do with it. Cause it was all. They gave me cash in New Orleans. I was like, what? What am I gonna do with this stuff now? So I'm putting in my pockets. I got 35 grand in my pockets as I'm going back to my hotel room at five in the morning. Cuz we started at midnight and my partner Adam and I did.

[00:26:30] And that was the fun part. And then when you get to the, get to the hotel, you're putting it in the, in the safe. And then, then I've gotta fly to another conference I'm speaking at. And so it's in the, it's tucked in all my shoes and my luggage and walking through the airports. Wasn't sure. And then of course, then I flew back.

[00:26:45] So I had like three conferences back to back to back. I had 30 grand, 35 grand in my, in my suitcase of luggages the entire. . So that was, that was fun. So, and I, we will report, and it's still sitting in. Am I safe at home? So I have not spent it . 

[00:27:00] Jamie: It's like you've see in the movies, like in where they're flying across the, the country with money taped to em after coming home from Vegas.

[00:27:07] definitely seen that before. And I, I can, I can attest. I first time I went to Vegas with Jodi I was, my wife and I beforehand were talking about much money to bring, like, how much cash should I bring? And she's like, I think two hundred's enough. And I'm like, no, 300, like, we're going. Forth on it. And then I walk up to a table with Jody and he lays down like a thousand and gets a thousand dollars in chips and like, oh, I'm outta my league

[00:27:27] I'm sitting here thinking we're gonna be doing like dollar tables, nickel tables, and he's like laying a thousand dollars down within the first two minutes of game. I don't think they have dollar tables. 

[00:27:34] Jody: No. There's naming. Sorry to break this to you. 

[00:27:38] Jamie: I know I am. I'm small time, so, all right. Kristen, your turn.

[00:27:41] What's, what's your game? 

[00:27:43] Kristen: Wow. My game is also blackjack. I love it. I, unlike Jodi, I have, I have zero expectation of winning when I go. And I'm probably, I'm more along your lines, Jamie. I bring like 300 I think was the what I brought on the last trip. And if I can either break even or even if I can, I don't mind if I come home with [00:28:00] zero.

[00:28:00] As long as I get to play for a while, like that's my thing cuz I just see it as like a fun cocktail. People come and go from all over the country and I get to talk to 'em and it's usually I look for a table. Jodi and I talked about this, like I don't just sit down at any table. I will study. I want a good mojo.

[00:28:14] Yep. I want a fun. Mm-hmm. happy, positive. If people are too serious, I'm, I'm out of there. We gotta laugh. We gotta have a good time. It's gotta be a fun part. 

[00:28:22] Jamie: You have a good dealer that'll occasionally be like, No, you don't 

[00:28:24] Jody: want to hit that . 

[00:28:25] Kristen: Yeah, yeah. Like one that'll like interact with us. Yeah, absolutely.

[00:28:30] And, and sadly I think like on the strip it's getting like less that it's got, it's gotten too serious on the strip. Mm-hmm. , last time I was there I went with Mike Loland and we went downtown and so that was a little more fun cuz yeah, it's less money. People are a little less stressed out. About, about gambling.

[00:28:44] Like it's supposed to be fun, right? It's called a game. Like we're supposed to be having fun here. Probably the most I've ever won I think was about 4,000. Nice. This was a long time ago. Yeah. I got really lucky. But it's funny how the always the, the stories are you are up all night when you win that.

[00:29:00] Cuz once you start winning, like you're not gonna go in. And that's the only way you can end up winning that much money. So, yeah. I just remember, and my trick, the dealers don't like it when you do this, but I, every time I got like 100 bucks, I just put it in my pocket. I get a black chip and just put it away.

[00:29:14] They don't like it cuz they wanna know. Yeah. They wanna know how much you got. Much too bad. They don't, they, they don't control me. So yeah, that was, that was pretty fun. But yeah, I don't know what, I was not. It's taping money to my body 

[00:29:24] Jody: on the, on the, on the plane . Oh, 

[00:29:27] Kristen: it's not, yeah. I don't know what happened to it.

[00:29:30] That was a while ago. My, my parents, 

[00:29:32] Jamie: I don't have fun. We played a lot of cards at my house growing up, but the thing my parents always said is like, , they would cut your hand off if you did that in Vegas. Like if I ever was like playing Parker with them or something like that and like, you know, tried to grab a card back or do something, they're like, oh, you cut, you get your hand cut off in Vegas.

[00:29:45] And the first time I went to Vegas, like I was scared to death. I'm like, , I'm gonna lose, I'm gonna lose how many fingers in this, in this game? You know, there's certain like tape table rules I'm not supposed to do. So like, yeah, the take in the black chip put it in my pocket. I would, I wouldn't dare, cause I'd lose, I'd be worried about a finger

[00:29:59] Jody: So, I [00:30:00] mean, kinda sounds like bringing it back to the accounting side, I mean, it sounds like you, you, when, when you sat down at a table, I mean, you're looking for the fun, you know, you're looking for the the, the excitement type of thing. How does that relate to, to running a CPA firm? ? 

[00:30:14] Kristen: That's a good question.

[00:30:15] I mean, I think to, well, to be any small business owner, you have to be comfortable with risk. And so I think that, Accounting firms. I think it's a really interesting time because you can't just look at how the business has always been run and expect to run it that way anymore. Cuz I think first the model doesn't work anymore.

[00:30:35] Cuz it used to be back in olden days, you could pay you people a third of what the fee was. A third goes to the house and a third goes over it. That ratio doesn't work anymore. Mm-hmm. because people are just demanding higher salaries. Mm-hmm. . And so even, even these kind of like basic business metrics are, are out the window.

[00:30:51] So yeah, you have to, you just have to get more comfortable with risk than, I think as accountants, a lot of times we're comfortable with or like what we're used to. So yeah. Jodi, I think you said to me one time, like, you, you could tell like I was a risk taker because we did play blackjack together, like that first time that we met and you're like, I can tell you're more risk taker than a typical accountant.

[00:31:11] Mm-hmm. . So, but I think all of us are gonna have to get there. We just have to get comfortable with uncertainty. I, I think so 

[00:31:17] Jody: too. I think risk is a huge part about it. Right. Just from the way that you even bill a client. My gosh. I mean, we've built clients forever, and I, and I say we, I mean the industry itself has built clients forever on an hourly rate, right?

[00:31:28] Just billing clients, an hourly rate, sending an invoice out marking the invoice up to whatever, sending it out, and then hoping the client pays, hope the client's happy with it, hope the client, you know, pays timely. And if not, then we then we're constantly changing. We're chasing that money that. You know, when we, when we started, we, when we started, we did the same thing for the first couple years.

[00:31:47] I was like, no, screw this. We're not doing this anymore. You know, let, let's figure out how we can do this so that we get our money up front. And that's when we went to the subscription based billing, you know, and, and we started collecting money. From day one, you know, first was monthly [00:32:00] and then it was, then it was on a a weekly basis until where all of our clients that come on board now pay, pay us on a weekly basis.

[00:32:06] And that's just kind of the expectation. You know, e even with our tax return, standalone clients, and I'm talking, those are more of our CFO type clients. And even our tax return clients, we're only seeing them once a year, which we have a very small amount of that, you know, they, we, we offer 'em a discount in November to.

[00:32:21] They're fee up upfront. And cuz we don't want to chase that money. And, and it was kind of funny because the first time we did it, I was like, oh, there's no one's gonna pay this upfront. Why would they do that? They're gonna pay it two months in. and it's like we found that just about half our clients paid it that way.

[00:32:34] They, they loved the idea of getting a discount. They loved the idea of knowing what their fee was going to be so they knew what the tax rate was gonna cost. It wasn't gonna change miraculously, or that this giant bill, you know, on top of the, their giant tax bill, you know, that wasn't gonna happen. And, and it was just simply just taking that little risk, which to me, it wasn't a risk.

[00:32:51] We're just sending out a notice. Hey, would you like to pay early? And here's how you pay it and here's how you ach the. And, and, and bam, you know, they did it. And, and, and you know, Kristen, kind of tell me your experience. I think you did something very similar this year. 

[00:33:04] Kristen: Yes, I did. Well, I took, I took your advice on that piece.

[00:33:07] So I, so I had already kind of started down the path of, yeah, everybody's gonna be on subscription. I'm not just doing this once a year tax work. And so that was my pitch that I sent out to the client. In like around the end of October saying, Hey, if you only talk to us once a year, like this might not be the model for you, but if you wanna engage with us throughout the year, have us available for your questions.

[00:33:28] Yes, we're gonna be able to do that. And yes, your fee is going up. So I kind of like put everybody on notice about that. And we started building out these proposals just kind of based on what we knew about the clients. Mm-hmm. . But per your advice, I did offer them that discount and a lot of clients did take advantage of it, so we just did like a 10% discount if you prepaid the whole fee.

[00:33:46] And, and I kind of tongue in cheese said, oh, you can deduct it this year if you pay it this year. And they're like, oh yeah. So they were like, I, so they ended up doing, and some of 'em were even like, Kristen, are you gonna send me that invoice now so I can go ahead and pay [00:34:00] attention? I'm like, okay. So yeah, that was a very good piece of advice.

[00:34:03] So we got, we've got a good like cash reserve, which usually at this time you do not have good cash reserves. And of course, like Erz wanting their tax prep fee or their software fee right now, all these software fees come due right now. So it's a really nice way to, well, that's why 

[00:34:16] Jody: we did it, right? I mean, we did it for that reason too.

[00:34:18] We, we, we did it because November and December were our worst. And we had to figure out how, how do we get money in these worst months because we got all these big bills coming due. And that was exactly the reason why we did it. You know, Hey, let's offer a discount, see if they'll pay early. And it's like, well, that was easy,

[00:34:33] Now, now what else can we do? Can we convert 'em into a monthly account? You know? And, and it was kind of funny because, you know what, we just signed up a client. Now you're gonna probably laugh with this one. We signed up with a client for a CFO that starts in January and he's like, you know what, can I pay that onboarding fee now so that I can get a big discount now?

[00:34:51] Absolutely. So he sent us a huge check for the onboarding fee. And we don't even start till January one, you know, this is on our traditional CFO practice, you know, and, and it was just simply by just a asking the question or kind of giving that opportunity for a client to, to do something, you know, taking the risk like you, you had mentioned there.

[00:35:07] The, the other thing I was talking, I was thinking about is when you mentioned being at that table, taking the risk, but you always looked for the crowd. That was fun. You know, and, and again, that's that joy you're talking about. We start with humor. Humor's a big part of what we. You know, we start with jokes when we talk about, you know, when we're talking about you know, to start off all of our meetings, we do fun facts.

[00:35:25] We do, we have a lot of fun with our team and I think that translates over to clients. Do you see the same thing, you know, with your team and your clients and how all that kind of. You know, treat your people well. They treat your clients well. Profits is automatically come because of it. Is that, is that your, your similar philosophy 

[00:35:40] Kristen: any day now?

[00:35:41] Yeah. any day now the profits are coming, but Yeah. And in fact like it's, but I, I'm kind of joking, but like, also I've had a, I bought an existing firm, so we've had to do a lot of like, turnaround and like my way that I run the firm is so different than how the prior owner. . So, yeah, that, I mean that's, I'm [00:36:00] like, you, Jodi, like that's the way I try to connect with people.

[00:36:02] Like I just try to get, get a joke and crack a smile and stuff. And so yeah, we that's how we are internally with our team. Like we're a pretty tight-knit team. Especially cuz we do talk every day and so we, we try to build fun in there whenever we can. And yes, with the hope that hey, we're never gonna take each other.

[00:36:18] or ourselves. So seriously, you know, we're now, I don't want people to get stressed out if they have to deal with a client, you know, because that's the other thing too, like, I want clients that are gonna be cool. Mm-hmm. , I want clients who are gonna to roll with it. And so that's, that's really my say.

[00:36:31] You're right. It's kind of the same thing as a blackjack table, right? Like if I'm meeting a new client and they can't like crack a smile at my stupid jokes that I'm doing, like, I dunno if this is gonna work. You don't laugh at my jokes. I dunno.

[00:36:45] Jody: this 

[00:36:45] Jamie: podcast. Definitely come full circle and I, I think we're, we're right at the edge of time here, so as we normally like to end, I'd love for both of you to kind of give final thoughts. And again, I'm definitely learning a lot from the two of you, you two of you talking. But I kinda want to give some final thoughts to our listeners.

[00:36:58] So we'll start with you, Jody. Final thoughts? 

[00:37:00] Jody: Well, first, it doesn't surprise me that you're learning a lot from when I'm talking

[00:37:06] No, I'm just joking. So I think the big thing is, is. You know, u utilizing an offshore team, I think is, is really great. Utilizing a nearshore team I think is even better. And I think, you know, and, and our biggest thing is that, you know, we want to be, we want our team to connect with each other. We want our team to our team to feel like our offshore, our, our, our nearshore team are all the same team.

[00:37:25] It's not like we're center. It's not, we have a software or bot. In a different country doing the work. We want to be actual people people that can grow within our firm and so forth. And I like the idea that the folk, the fact that they're in Mexico, you know, Mexico's right across the border, they can come to our team retreats.

[00:37:40] Not, not a big deal, it's just, you know, they just get, you know, on a plane and hop over, you know, type of thing. And that's the that's the, a big thing or big bonus I think that you've got with. With Kinesia that you know, maybe other offshore companies do not have. So, you know, kudos on that. The other thing is, you know, the way that you've, you started your, your your, your other practice with, you know, just [00:38:00] giving entrepreneurs the opportunity to figure out how to be and run their c CPA practice, you know, giving them the guidelines, instructions and how to do everything.

[00:38:08] I thought, I think that that's some genius and that's super, super cool. So you got two kudos from me. The second, the third one is just, you know, you just need to learn how to play blackjack a little bit better. That's the, that would be the third one there. . Outside of that, okay, 

[00:38:20] Kristen: we're doing all, we'll plan the next, we'll plan the next Vegas trip.

[00:38:23] There you go. 

[00:38:24] Jody: Let me know. Luck for 

[00:38:25] Jamie: you, . All right, Kristen. Final thoughts from you. . 

[00:38:29] Kristen: So final thoughts for me. Thank you, Jodi. That means the world to me. I respect you so much. So it means the world to me to have you have those compliments come from you. And so, yes, if anything, like one of our, our kind of core principles is breakaway, is ease.

[00:38:42] And so if anything I want people to take away is that like, Hey, you know, don't let this stuff scare you because there's people like me that want to help people. We want to make it easy. I wanna. Better for our profession in general. And so if I can do that through these different, you know, avenues that we've got, either helping with staffing through ncia or helping someone start their own practice through breakaway, you know, that's my, that's my mission that, that I'm trying to get to in this life.

[00:39:08] So thank you for giving me a voice around that. Oh, for 

[00:39:10] Jamie: sure. Awesome, awesome. Well, yeah, great job. This is the, this is a fun show and I definitely appreciate you joining us and maybe we'll bring you on again in a couple months once we once you learn some more things. 

Finding Joy in Accounting: Nearshore Outsourcing, Taxes, & Franchising


Share this podcast episode on Twitter:

The Modern CPA Success Show for Accountants 🎙️ by @SummitCPAGroup:

Episode 88 - Finding Joy in Accounting: Nearshore Outsourcing, Taxes, & Franchising 👉



Want to listen to more Summit CPA podcasts?

Leave a comment