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Growth and Integration: Benefits of Nearshoring in Mexico

Published by Summit Marketing Team on Apr 15, 2024 11:03:58 AM


The Modern CPA Success Show: Episode 117

Adam and Tom welcome Martin Moll, President of Cadencia, to discuss the concept of nearshoring in Mexico for accounting firms. They explore Martin's transition from law to accounting and his experiences with establishing nearshore operations in Guadalajara, Mexico—highlighting the city's educated workforce and cultural fit. The episode covers the advantages of nearshoring vs. offshoring, such as reduced language barriers, better technology integration, and alignment of time zones.



Intro (00:00:00) - Welcome to the Modern CPA Success Show, the podcast dedicated to helping accounting firms stay ahead of the curve. Our mission is to provide you with the latest and greatest insights on cutting edge tools, innovative marketing strategies, Virtual CFO Services, and alternative billing methods. Join us as we change the way people think about accounting.

Tom (00:00:22) - All right, welcome to this episode of the modern CPA Success Show. I'm Tom Walton, I work with Summit virtual CFO BI Anders. I'm joined by my usual co-host, Adam Hale. Adam helps run our organization. Adam. Welcome. 

Adam (00:00:34) - Hey, Tom. Glad to be here. 

Tom (00:00:36) - Yeah. And we talk an awful lot about kind of new things and accounting. And that's what we're talking about today. Maybe not as new, but for some people, not doing it yet, we'll talk some about nearshore. Martin Moll is our guest. Martin is president of Cadenza. And Martin, to introduce yourself, can you tell us a little bit about your career story and kind of what led you toward cadence? 

Martin (00:00:54) - Yeah. Well, thanks, great to be here. And I am sort of an accidental accountant my whole career. I'm actually not a CPA. I'm a lawyer by background, but got into CPA, the CPA worldwide. When I was an intern in law school. I was an intern for Deloitte and Touche. And but for some reason, well, there's a lot of reasons. And you guys understand that I fell in love with our industry. I really gained a lot of respect for the accounting world and how it works. And even though I practiced law for a little bit, my heart always lied with CPA firms. So, I started with the big firms and then went with a regional firm, that was now called Aldrich and eventually became the CEO and managing partner. and Aldrich and I both were wired to try to do things a little bit differently. And that includes, at the time, a fairly I mean, we're talking now 15 years ago, Aldrich had had an office in India, that grew to about 80 people and still has 80 people.

Martin (00:01:58) - So I learned both, the what is awesome about our industry and also what is so fundamentally challenging about our industry. And that's kind of how.

Tom (00:02:12) - Okay. Interesting. 

Adam (00:02:13) - Yeah. And so, Martin, you and I, we met in Toronto a couple years ago with, one of your partners from breakaway there, and Jody was there, I remember, and we had a good time and. Yeah, you definitely. I don't get accounting CPA vibes from you at all. So, that that's true and it is pretty cool that you were able to kind of rise to managing partner of a firm, you know, with that, with that background. So that that says a lot for sure. And then I think it was it was, probably about a year later. So, I saw that you had a post and we have been doing offshoring for quite some time. So with, you know, different values of success, like sometimes it works out well, sometimes it doesn't you know, just a lot of learning lumps there and different providers as well.

Adam (00:02:59) - And then whenever I and it's always kind of struck us because our clientele near shoring has become a very big thing for them, especially in like Central America, South America, you hear a lot in Colombia, for example, you know, on the tech side. And so, I was always like, why can't we do near shoring on our side? And then no kidding, like probably a week later your LinkedIn popped up and you're like, hey Kodansha, blah blah, blah. And I was like, I told Jody, I was like, this is what I was talking about. And so I reached out. I just wanted to learn a little bit more about it. And it was everything that I, you know, that that were kind of thinking of, you know, the cultural differences being, you know, the cultural piece being a little bit more aligned, being on, you know, and obviously the time zones are a huge thing. but what made you pick like, because the whole teams in Guadalajara.

Adam (00:03:50) - So what kind of made you think about that location and all that stuff, considering your background was more on, you know, working with teams in India?

Martin (00:03:58) - So great question. And yes, we were finding the same thing. We're seeing more nearshore. And we're on the West Coast and you know, it you see a lot in Central America, a lot in South America. And you know, now, of course, it's completely changed. But we looked once we realized we wanted to go nearshore, really, for all the reasons you mentioned, Adam. Time zone for one, cultural assimilation. just a direct flight, right? I mean, there's, we homed in on Mexico, and honestly, I wanted to go to the Baja, and because I and but we did a lot of due diligence and looked around and we chose Guadalajara because. And it's for those of you who don't know Mexico and honestly, I didn't, before that.

Martin (00:04:44) - Guadalajara is in central Mexico. It is north of Mexico City. So, you're kind of in the central part of Mexico. You have Monterrey, then Guadalajara, then Mexico City, and chose Guadalajara because it's highly educated. So, there are there were seven major universities. There were three, four privates and three, three publics. And so, there's a big pool of talented individuals working there. We also chose it because it's not a what I would say a dollar sized economy. So, people don't go to Guadalajara and go do jet skiing or parasailing or things like that, get, you know, the thing about Cancun or the Baja is you'll have PhDs who can make more money renting a fishing excursion than they can in their chosen profession. Right. But you don't have that. So, it's kind of a working town. And then also it's safe, I mean, you know, and we can if we want, we can dive in a little bit what safe means. Butit's a cosmopolitan city. I have no problem.

Martin (00:05:43) - In fact, I've been there with my wife, I've been there with my son, and I've been there with my daughter on separate trips. So, for all those reasons and all those reasons have borne out, and it's just been it's been a real joy.

Adam (00:05:54) - I can tell you've assimilated. You're rolling. Your R's really good. Like, I know I tried that for years, and I just end up sounding like a fool. So, congratulations for that. Let's see. What was that? I'm just kidding. That one I know. so that one I'm good on. Um. But. Yeah. No, that's I mean, I think that, and then, you know, the other thing is too, is, like, any kind of offshoring for us has always been, you know, some of the challenges have been the language barrier. So cost aside, you know, the language barrier and really understanding, you know, what we're trying to get across because, you know, just common things like I don't want to say like Walmart, but, you know, just general expenses that most people would say, hey, I know this is the general category, because, again, they're doing a lot of repetitive tasks like most accounting firms do anyway.

Adam (00:06:47) - And it's just those common things over and over that they just, you know, it was like you take for granted whenever you're communicating with an offshore team. And it seems like that gets shortened up a little bit whenever you're whenever you're dealing with somebody a little bit more nearshore on some of those things.

Martin (00:07:02) - And it's funny that you I use you said Walmart. I use Home Depot as an example. So, of if someone sees Home Depot on, you know, on a, on a GR or on a, you know, an expense run, they know what Home Depot is. that and yeah, the, the young professionals that we hire, I don't know if we've hired anyone who hasn't been to the US. It's funny and you guys can probably guess where they've been. They've all been to Disneyland. They've all been to one, and a lot of them have been to Dallas to see football, because Dallas is such an easy hub from Guadalajara. So, it just, it does make it easier to assimilate into a firm.

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Adam (00:08:24) - Some of some of the things that kind of attract us to and I know you addressed this pretty early on. So, just full disclosure, we have one team member currently looking to get a few more. We did not take your advice, which I, which we should have, and we should have hired in groups of, like, at least 3 or 4 people in order for them to kind of have their own kind of communal experience working with, with our team.

Adam (00:08:49) - So just by happenstance, we only ended up hiring one person, but again, looking to hire others. But one thing that I think you called out right away in terms of some of the differences that I think is interesting, is that, you know, in India, whenever we go over there, we're like, hey, we want somebody that knows QBO Build.com, you know, so we start naming off this tech stack, because they've, at least been westernized from a tool perspective. There's a lot of people over in India that, at least on the surface, say they have experience with that or they've had some exposure. But then whenever we go nearshore, like specifically in Mexico, you know, what we found is, like, there's not really a whole lot of exposure to things like QuickBooks and build.com and those kinds of things. So, I mean, I can share our experience, but kind of what do you tell people whenever, you know, because that gives people a little bit of pause at first.

Adam (00:09:46) - Like, wait a minute. They're not used to doing QBO everyday or build.com.

Martin (00:09:50) - Yes. Absolutely. And that was honestly probably one of the bigger surprises to us. And that I'm going to make a big broad generalization that is pretty accurate. Mexico is still a mainframe economy. So, they're very adept at computer systems, but it's much more, you know, F3 sort of things and not cloud based. So, and I know that our friends, you know, at QBO and or, you know, forensic into it and friends at zero or are trying to create, you know, trying to enter into that marketplace. But, it's still primarily, predominantly mainframe. So yes, they, they haven't been exposed to there's not a pool of talent that I can go because there aren't 20 credentials in Guadalajara, and we're not competing for each other. So, what I'll tell people is. Yes. So yep, that's I can't give you someone who's got three year's experience. The good news is if I once I find someone and you take the time to train them, they're not going to get poached, right? Because now I say that.

Martin (00:10:51) - And of course 20 firms are going to come to Guadalajara next week.

Adam (00:10:54) - Right.

Martin (00:10:55) - We're pretty unique in the accounting space. And having this sort of nurture opportunity. So, what I'll what I'll share is, is it's really what we can provide are highly, highly motivated, very well-educated, ambitious young professionals. And I strike the word young professionals, who are ready to roll up their sleeves and work and train. And then we do. And the cool thing is, and I learned this in India, the, you know, so we're up to we can get a little bit more into the business if you want, but we're up to about 40 staff assigned to maybe 7 or 8 firms, including Anderson. Very much. And, the bigger that community grows, the more. And we've got people now who are have been doing, you know, have been working in assigned to clients for three years. They have their own ecosystem. So, before they even reach out to a client and saying, hey, I can't figure out how to get this thing to work in gusto or, and build comm.

Martin (00:11:51) - They'll reach out to the community of other bookkeepers, other cars people, other financial analysts and say what, what? And then like, oh yeah, yeah, I struggled with that. And here's the solution. So that's the we kind of we like to provide the best of both worlds. So, we want, we want like including your person. We want them to ride for the brand. Right? We want them to be showing up wearing your company t-shirt, like I know that you're bringing your person to and we, you know, to your annual meeting retreat. Retreat. Right. We want them to show up wearing your t shirt, your hat. We want them to know you know who the local sports team is. We have a lot of clients who will have them show up on their Monday morning huddles. We have clients who have signed their team members to, you know, the Culture committee or the Values Committee so that they really are integrated to the firm.

Martin (00:12:37) - And at the same time, we're providing our own community in Mexico that they. You know, can bond with and learn from and grow together. So, you kind of get the you kind of get the to me it's A2X power and that you're getting the power of your own firm, plus the power of the group that we have in Mexico. And as long as I have really amazing clients, as long as Kodansha does so our, our firms, we only want we only want great firms, right? We want firms who, like Andrews, who treat their people with dignity, who aren't just looking for a warm body, who have core values, who want to train and develop. So as long as I've got that stateside, I'm going to do the same thing in Mexico. And it's just kind of a multiplier effect. That's a really long-winded answer to a short question.

Tom (00:13:25) - I love I love the community that you built. When you talk to prospects or think of prospects, what are you leading with from hey, if you look at your whole practice, here are the kind of things that we think are the best ones for you to consider having a nearshore team do versus what you might say.

Tom (00:13:39) - Keep these things inside your firm. 

Martin (00:13:42) - Love that question. I really say anything that you can do remotely. So, if you've got someone in Des Moines doing something, you can have someone in Guadalajara doing the same thing. And we really stress, yes, it is a lower cost option. not as low cost as India, but it is a lower, you know, the cost of living is lower in Guadalajara. And certainly, we loved that. But, I really stress an hour in Mexico should be worth an hour in Des Moines now at night might not be worth the same as your office, your staff who are local because firms are still learning to deal with remote. Although summit of course that was that. You know you already did that. So, we have no we talked really a lot with our team in Mexico. There should be no our discount, right. It should be. So, we really lead with that, that good people are good people. And there's a I talk a lot about there's a study and I was just it's funny, I was just talking to my business partner Kristin about this.

Martin (00:14:36) - There's a study that talks about. Engaged employees, inspired employees and employees who are just phoning it in, and engaged employees are worth 2.5 employees who are just phoning it in, in other words. So, one engage, one inspired employee who loves what they're doing can produce this the same as more than two just average employees. So, my challenge to the team in Mexico is you better be inspired, right? You know, it's like I want I want our clients to say the cost is almost irrelevant because I'm getting I'm getting, you know, these are super employees.

Adam (00:15:14) - That's a yeah. I mean, that's an interesting concept too, because, yeah, whenever were looking at it, you know, I would say that on average, most of the team members in India run about, you know, of the, the baseline accountant salary. They run about a third. And then in cadence, it's roughly rough. You know, it's about half. But there's also that attrition of, you know, the hour that you were talking about.

Adam (00:15:39) - And so we've tried to calculate that in the past, you know, especially working with so many team members from India to try to kind of figure that out. And it usually ends up being about double what their base cost is. Whenever we look at really their, I don't want to say realization, but whenever we look at like their effectiveness on an engagement, it's usually, you know, it goes from being, you know, 20% to, you know, or it goes from being a third to about two thirds pretty quick because, you know, just because some of the inefficiencies that are in there. But I think the other difference is, is that and again, this might not be a flair, statement for the firms in India because I know they have some higher level people and we have some really good team members from India that do a tremendous job. But the way we've always kind of looked at offshoring was like, there's this there's this chunk of work that really nobody wants to do on the team, right? It's recurring.

Tom (00:16:37) - It's repetitive in nature. Anything that's repetitive, you know, give it to them. Eventually we're going to automate it. It's going to it's going to go away. Like, why build out this team? Why build out this resource? Let's force ourselves into some processes and give it to them. I think what I, what was pretty unique right out of the gate and talking with you is it's like, no, you're hiring an accountant, you know, New Mexico or Mexico. It doesn't really matter. Like this person wants to elevate within your firm. And so, you know, the time that you vest with them isn't necessarily just like training them on the task to just do that over and over for the next 2 or 3 years. But you're training them just like you would. You're on, you know, your onshore team, and they can kind of progress and move up within the organization. That perspective was just kind of, I think, unique and different for us. On how we approach that work.

Martin (00:17:28) - Thank you for that tagline. I'm going to steal that from you, Adam. New Mexico or Mexico, it doesn't matter. That's much better than Des Moines. So. I don't know why I didn't think about that and then, yeah, I'm really glad that you captured that. You captured it. Well, I couldn't have said it better. And that's exactly what our model was. It's different, in that these really are careers and now that we are, you know, this post-Covid society where people are learning to deal with remote, why not take advantage of this? And we do so to that end, and I think, you know, this, Adam, and you're going to your team will meet him in a couple of weeks. But we one of our, one of our first hires was an employee experience professional. And he's actually a professor of accounting in one of the Jesuit universities, a university called Tiso in Guadalajara. So he, along with being a full adjunct accounting professor, he's full time with cadence and he spends time with them with our team on a daily basis talking about, you know, career development growth, asking, you know, because I know it's an overused word, but just critical thinking is just a rare commodity in our industry as technology, as has made things easier and easier, it's harder to get staff people to think critically.

Martin (00:18:49) - And so that's my goal on behalf of Andrew's is to get is to well, because it's hard for you to train. Those are the things that you really need to have. Boots on the ground, right? Is so hey, Seuss on a weekly basis is leading skills training, critical thinking training, along with, you know, how to get Qvo certified and serial certified. So that's the it is. Yeah, it's we're not. in fact, I just had a request from someone who's a buddy of mine saying, look, I've got I've got three months' worth of sales tax data that just needs to be input. You know, is this something that cadenza can do? And I'm like, I don't have anyone, you know, that's not, that's not what our model was.

Adam (00:19:31) - Right. I mean, they can do that function as part of a broader function like any other team member would be. But yeah. And I think that approach is, like I said for us, was a little bit different in that, you know, I would say that our experience working with our team member was at first the team's like, oh, wait a minute.

Adam (00:19:49) - She doesn't have the technical training on the software. And so, they're like, oh, there's a little bit of this like learning curve. And we got to go really slow. But our experience from a cultural perspective, working with teams in India is they're very quick to say, yep. Got it. Yep and they don't really have it you know. And so you kind of like build this process and you're just showing them how to do this one thing. And it's not that. They can't think critically. I'm not saying that. I'm just saying like by design of how we're interacting with them and how we're like, kind of told to interact with them and the tasks that we're giving them, we're not really tasking them with that kind of behavior to begin with. and then what we found is like, you know, working with our cadenza person is that critical thinking piece. And like you said, she's very well-educated, smart person. She's able to like then, you know, cut that learning curve down eventually.

Tom (00:20:45) - You know what I mean? Like, it goes exponentially back up. So the time we invested initially is like really paying more dividends rather than, you know, what we've experienced. And again, that's you know, that's not that's not a slide on the India team. It's just the way we approach in the way we've kind of as a profession been trained to approach offshore work. which is kind of unique I guess.

Martin (00:21:08) - But yeah, I, you put it well. Yes. And, yeah. I'm not sensing any slight on India and we still believe in it and we think it's, you know, it, it's just it's a. It's just another alternative for firms out there who are desperately looking for alternatives.

Tom (00:21:31) - Yeah. And how would you answer? I think a lot of our listeners are from smaller firms. So say it's a 10 to 15 person firm and they've not done any kind of outsourcing offshoring at all. Almost all of them are having challenges finding people though.

Tom (00:21:45) - That's a, you know, the war on talent. It's really difficult finding people as people approach you. What would you usually tell them from a, well, here's here's what I can offer. And I'm thinking also of Adam saying we didn't completely list your guidance of having more than one person. But if I'm saying, okay, I want to grow by maybe 2 or 3 people but can't find them. What would you say here, here's here's how you should think through doing that where you people.

Martin (00:22:08) - Yeah. So, we try we want to be I'm going to I'm going to say a SaaS play. Right. So, we want to we want to not only provide. The staff people, but we want to provide the consulting as a, you know, not for charge, but to the best practices. Right? So that happens in a couple of ways. One is here's this community of amazing firms. And we do have, and you guys know some of these firms, they're you know, they're part of this kind of universe that we all travel.

Martin (00:22:37) - And we do have some firms that have, you know, 4 or 5 people and they've they have just hired a one person in, in Guadalajara. so we start with, here's this amazing universe of clients because of other firms. The thing this goes back to my, you know, when I first shared about how I fell in love with the accounting industry, one of the things that really struck me way back then, when I first started in a public accounting and hasn't changed, is how accountants really support each other. I think that's unique in our industry. I don't see I as a lawyer, I don't see law firms doing the same thing. Right. And so, you know, and like, like, you know, if a firm owner ends up with, you know, and Adam's aware of this when, if a firm owner ends up with a, with an illness and realizes that, that, you know, he can't he can't work in the firm the same way the account committee just gathers around and says, okay, we're going to help you out.

Martin (00:23:30) - And this person happens to have a team member in Guadalajara. so accountants by nature do that. So here's a community of firms who have already done this and they're willing to help you. That's number one. Number two is we're going to be there every step of the way and help you understand. Yep. They don't understand, Kubo. Let's get them certified. They don't understand. And, and then the other thing is just it's it's it's worth it's worth taking the, the step. And so we just we, we work with them, ideally if they can. And we make this as easy as possible, get on a plane and come to Guadalajara and meet your team, hired them, spend a week or two, the investment, the ROI I've seen on that and firms that do that is huge because you establish that bond. in fact, we're going, when we have our first of baby, someone who, had a baby while she was a staff person at Kodansha.

Martin (00:24:25) - We're going to go to the christening in a small town outside of Guadalajara. We're going to come early and go to the christening. So you get to know your team that way, right? You might meet their parents. You might meet their spouse. and then it really feels like it just happens to be someone that's down the hall so that we, and we encourage that along all along the way. And then we check in with the firm on a regular basis. Okay. How can we help? You know, Jesus will be like, okay. Do you, you know, is there an area that they need work on? Should we strengthen skills, you know, and just really support it? so because what what's interesting kind of go more globally for these smaller firms. The reason I think it's an imperative is if you look at the top third of the US economy, roughly 27% of their workforce. Is offshore. Right. So, whether that's Hewlett-Packard or Disney or Walmart, you know, that's the kind of numbers we're talking about.

Martin (00:25:25) - If you go below that it's like 3%. So it's interesting to these small firms is why aren't you taking advantage of this same cost benefit as your bigger competitors are? And you know, like Deloitte was, is very, very open. And, you know, they have 80,000 people in India and they plan to double that within five years. That's not a they're open with that. Right. And so for these smaller firms who are thinking, well, you know, it's not for me, it's just for the big guys, well, why would why should they have a 20% cost differential in you not.

Adam (00:25:57) - Right? Well, and like you said, it's not even just cost. I mean, these days, it's just, you know, everybody is aware of the numbers. Just the fight for talent and the mass exodus that we're seeing not only in retirement and then the inflows decreasing. I mean, that's always a hot topic. And then we, frankly, have had people that are just like, nope, going to a different industry in general, you know, especially during Covid.

Adam (00:26:20) - So, there's definitely and our clients need us more than ever because we've been positioning ourselves more as like advisors and outsource. You know, they can't hire their own internal people. So, we have this demand coming on one side and the shortage of team members on the other. So, we do need to figure something out. what are your thoughts on I mean, obviously if we're talking about this person, you know, kind of graduating through the ranks of a, of a firm like, what's your thoughts on making that team member client facing and at what point do you, you know, do you kind of do those kind of things.

Martin (00:26:56) - So we have a number of clients who do have client facing who are calling, you know, with PBC requests, who you know and will facilitate getting a Google number so that it doesn't show up as an international call. It's really firm by firm, but we encourage it because, again, think about our own journey.

Martin (00:27:14) - as professionals, once you got in front of a client, your world kind of changed, right. And I was always as a managing partner, I was always pushing to, to have that experience sooner than later. So. So, really, it's I would say I would treat it, you know, back to your phrase, Adam. I would treat it no different in Mexico as New Mexico and my personal biases sooner than later, because that's how they really that's when it's not just a bunch of numbers. It's actually, you know, Johnson Plumbing Supply. And I talked to old Man Johnson, and he's really worried about his tax bill and that that kind of connection. and, and the sort of professionals that were hiring old Man Johnson is more than happy to talk to Sergio or to Claudia. and it just, you know, because they're they have great communication skills and they're empathetic. And so, we and you'll I notice when I go into our clients websites, a lot of them, you know, if the if the client has a staff listed, they'll list their Mexico team just right there, right there with the whole team.

Adam (00:28:18) - Yeah, sure. We're pretty transparent that way. I mean, like you said, the team retreat, the, you know, the website, those kinds of things. It's just for us, you know, not saying, like at the accounting level, they don't have a whole lot of interaction. But to your point, it's like once they graduate into definitely like senior accountant role, they need to be able to get in front of the client and have those conversations. So, I know, like in terms of English, you know, what kind of things do you do there to ensure that, you know, the team is very fluent in English and, and those kinds of things?

Martin (00:28:52) - Yeah. Quick question. So we our we have an English speaking office. Right. So, they all speak English during the work hours. Now, you know, if they want to talk about Chivas which is the local football team, they're going to they're going to speak in Spanish, and I don't blame them.

Martin (00:29:08) - And we, have we'll do we brought in English. Coaches, you know that that work on. And it's interesting because it's honestly more now I'm learning, you know, because, you know, we talked about Spanish. You know, I'm trying to speak Spanish and the, the whole putting the, the, you know, it's flipped. So, I so understand more what I think of as oh it's bad English. No, it's just good Spanish. So I've had a little bit more sympathy for them, but we, um we it really hasn't been a challenge. It's actually not difficult to find fluent English speakers, and communicators and so it's now we do have some firms who have already said, okay, well I you know, as they once they get that to your point, Adam, the you know they hire someone and they, you know, and after a couple of years now they're client facing and they're managing a team.

Martin (00:30:05) - They may hire a bookkeeper in Guadalajara who doesn't speak English and, you know, works directly for that person, because that's one of the joys is, you know, as you know, doesn't matter whether that's Mexico or India or wherever. Once your team gets established, then they start doing their own training and hiring, and then that's when it really cooking with gas. Yeah.

Tom (00:30:27) - Yeah. Martin. When things don't go well. So when, when things fall off, there is what I assume there's some really common things where you're going back and saying, well, I can predict it's going to be maybe these couple things if you're saying it didn't go well, is that true? Yes.

Martin (00:30:40) - Yes. number one, and I would say this has nothing to do with Mexico. It's just using an offshore and nearshore team. Um. Accepting the fact that the same is that if your person. It's this funny thing. If your person offshore makes a mistake, you're like, oh, see, I told you it wasn't going to work.

Martin (00:30:58) - If the person down the hall makes a mistake, you're like, okay, let me. So having the same understanding that it is a learning curve. I mean, like Adam said, that the reason people are dropping out of accounting is it's a hard industry. It that that those first five years where you have to learn the software and the law and the accounting and the client service and there's, there's there's a lot all at once. And then, you know, then it becomes easier. So, expecting and understanding that that gap, is going to happen. And then the other one is, is um. You know, the not bringing your team member in to to me, in my humble opinion, into the whole client context. Again, going back to Johnson Plumbing Supply. You know, if you just say, hey, look, here's a bunch of bank recs and you know it, I don't think you get as good a work product out of them as if you say, let me tell you about this client.

Martin (00:31:50) - Let me tell you about their struggles. Let me tell you why they're such a mess. Because Johnson has never seen a computer in his life. So he's going to give you the, you know, proverbial shoebox. So, you know, just that. And then, honestly, let's face it, there we have had we've had mismatches in terms of hiring. that that just is part of human capital as opposed to software.

Tom (00:32:15) - Yeah. But part of the hiring you, would you encourage people to interview the person they're going to work with? Right. You're not just getting placed a person. You're trying to do that up front.

Martin (00:32:25) - We want again, we want you to feel like you're hiring someone. You know, just down the down the hall. So yeah, they we screen. Were really rigorous. it's interesting. You can be more rigorous in Mexico. so, you know, we'll actually, we'll actually go to the houses of the people who were hiring and just, you know, just make sure that they've got a, you know, if they're going to work remotely, that they've got a secure place to work from.

Martin (00:32:52) - They're not, you know, in a dining room with a bunch of cousins running around. so we're we're able to do all of that. So by the time you meet with the client, they've been vetted. We've done all the background checks so you can feel comfortable. You're just really looking for a fit.

Adam (00:33:06) - Yeah. Talk to us a little bit about security, because I know, you know, that was obviously a concern for ours initially, you know, we have our whole security team. We have our stateside team locked down pretty good. So, how do you address the concerns around security, whether they're working in the office or remotely at home?

Martin (00:33:26) - So we look at it. We look at it like no different than than a state side firm. We look at it in two buckets. One is just security, meaning, you know, background checks, you know, quality of this, you know, so that's on reference checks on, you know, again we're we're hiring all college graduates.

Martin (00:33:42) - So we're you know, we're able to check, you know, all of that. So that's just a character issue. And then we have a 24/7 security consultant who's a former Hewlett-Packard executive and has a team. So we're able to do the same. We can wipe a computer at a moment's notice. and then we do the training as far as that's, you know, so that's the, the pure the technical piece. And then the third one is just, training about don't pick up, you know, and put a flash drive into your, into your hard drive and, you know, don't write your password on your laptop and things like that. And so it really what we say is once we do that hand-off from, from our person to your firm, we know that we know that everything's secure. Then it's up to you guys.

Adam (00:34:26) - Right? So as far as like monitoring their laptop, making sure they're using our controls like we're heavy LastPass users, we try to lock everything down from that perspective.

Adam (00:34:35) - So, yeah, just kind of doing that stuff. What about, as it relates to some of that stuff? I know that in the past where we've had some issues, it's like, you know, the team feels comfortable with everything related to like doing the bank racks and doing all those other kinds of things, as long as they're not in an account where they can move money, you know? So like as long as they're not doing money movement and those kind of things. And also, me times people are a little bit more sensitive around payroll and I guess payroll because it has, you know, people's Social Security numbers and it has those kind of things. How what are your thoughts around, you know, the concerns about that? Do you say, yeah, maybe stay away from that stuff or stay away from it for a while or no, you know, it's no different than stateside.

Martin (00:35:24) - Honestly, I would say it's a personal decision. I think that's part of why I recommend coming to Mexico and meeting with your team.

Martin (00:35:32) - Right. Because then it's not just a body on a computer. Well, it's like, of course I'm, you know, this is Julia, and, you know, I met her husband I met her dad. and so, for instance, you know, and you, Adam, you might have worked with her, you know, my personal assistant, Sally, who's based in Guadalajara. She has everything. She's got my social. She's got my credit card. I have heard. Do some light bill pay for me. so. But that's a character, you know, I trust her as a person, and then I trust her. But I think every client's a little bit different. And I think sometimes, you know, those same clients wouldn't trust the person that they hire in, you know, in Des Moines to do that. So it's a kind of an individualistic decision.

Adam (00:36:18) - Yeah. Yeah. Is it now is there anything and I should probably know this because I know I had to kind of get this out.

Tom (00:36:23) - But I mean is there anything. So for instance we carry insurance that if anybody fortunately this has never happened like takes money from one of our clients, we have like a insurance piece. Is that on us or is there something else on your back end that you have to carry to support the contractor? How does that work?

Martin (00:36:42) - We carry we carry cyber, which is I think the bigger risk. And then we do carry for, you know, whatever that is dishonest acts. We don't carry professional liability. and that's intentional because we don't, we're not doing the work itself. We're not warranting the work. Right. So that that one, you know, makes sense.

Adam (00:37:03) - Yeah.

Adam (00:37:05) - No, I think that's, uh I mean, again, those are sometimes those are the concerns. And then what about in terms of best practices, just, in terms of onboarding, because what we've always been told is like it makes sense to have a liaison on, on one side and a liaison on the other in order to make sure that that things are, you know, cohesive and going well.

Adam (00:37:25) - So how do you guys address that?

Martin (00:37:28) - So we, have a kind of a guide for clients. And here's, here's the things that you should do. but the. The best thing right is, is to have that liaison have that person that is kind of their buddy. and then to work as hard as you can to integrate them into your firm. Right? If they feel like they're there. I'll just use the phrase again, if they're writing for the brand, you know, it's like, and once in a while when I'm in, in Mexico and I'm just wandering down the hall, I'll just say, well, you know, tell me about tell me about Anders core values, right. You know, it's like, you know, and it's kind of fun a lot. You'll be in fact, you might ask your team member if she if she, you know, if that's part of your onboarding. I would hope that she does because I, we really want her to feel like she's part of your firm.

Martin (00:38:19) - and that's where you're going. That goes back to this, the value of an inspired employee. Because then she's not just putting numbers in a form. She's actually working for the greater good of where Andres wants to go. And I know that Andres has big ambitions. And so, you know, we want her to feel that way.

Tom (00:38:34) - Yeah. To me, that's probably the biggest difference I'm hearing from other offshoring kind of things is the idea that it's really just an extension of your team, and you could look at it as another remote team member that people would have, and that really makes a lot of sense. this has been fantastic. so, Martin, if people are saying, okay, I'd like to take that first step, what would you suggest people do to get in touch with cadenza and a little bit about what that process would look like if they wanted to engage you.

Martin (00:39:00) - You said you said it. Well, just reach out to us and, we've got we've got a process that, that, you know, we have some frequently asked questions and of kind of a video that explains what we're up to.

Martin (00:39:14) - And then really the best thing to do is, is meet a few of the, you know, meet our it's one thing to talk to me, but, you know, like like you said, Adam, I'm, I'm the executive. Right? It's like it's like, talk to Sophia, talk to Jesus, talk to, Gina, our recruiter. And once you meet the team and you're like, it's pretty easy for them to say, oh, I want I want someone like that. And it's like, well, that's. Yeah, exactly. Those are the sort of people that we're hiring.

Tom (00:39:39) - Yeah. That makes an awful lot of sense for that. Well, I hope that people will. Adam, any final thoughts before we let Martin go? And.

Adam (00:39:46) - Yeah, I mean, just overall, I mean, obviously the world's getting a lot smaller and there is a competition for talent. So, I think that near shoring is I mean, it's been here for a while.

Tom (00:39:56) - I think it's going to get bigger. And you know Martin, we appreciate, you know, people like you kind of helping to lead the charge and create a place where we can, you know, tap into some some folks in Mexico.

Martin (00:40:08) - Awesome. Well, you guys know or Adam, you know, I love this industry. And this really is a you know, this is mission driven for me. because I believe in these small accounting firms, so I have no idea what's going on outside. I hope that's not too loud.

Adam (00:40:23) - We got somebody to edit that out. Don't worry about it.

Tom (00:40:26) - Martin, thank you very much. This has really been valuable. All right, all right.

Martin (00:40:30) - My pleasure. Yeah. Take care.

Outro (00:40:32) - Enjoy this podcast. Visit our website summitCPA.net to get more tips and strategy for achieving modern CPA firm success. We are here to be a resource in this ever-changing industry.

Unlocking Growth and Integration: Benefits of Nearshoring in Mexico with Martin Moll

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