Daughter Knows Best

From the Nov. 2009 Issue

New technologies continue to shape professional accounting practices in ways
that would have been impossible to comprehend or might even have seemed insane
only a few decades ago. Take the accounting firm of James J. Matousek, CPA Ltd.
(www.matousekconsulting.com)
in the Chicago suburb of Mt. Prospect, Illinois.

While the practice may seem traditional at first glance, offering business
consulting, tax compliance, payroll and other services, its similarity to most
other firms ends there. Run by the father-daughter CPA team of Jim Matousek
and Jody Padar, the practice has applied modern mobile and remote work technologies
in unique ways that allow each of the principles to work from where they choose.
For Jody, this means sharing office space and resources with another accounting
practice, while father Jim uses an office a few blocks away.

While many professionals have worked from home offices for years and have
recently started taking increasing advantage of mobile work technologies, Jody
and her father have built a firm based on these capabilities, enabling each
to office remotely, but using mostly web-based professional programs that allow
them to perform client engagements, share data as needed and collaborate in
other ways, whether in the office, at a client’s location or while spending
time at the family’s vacation home in Door County, Wisconsin.

Of course, all of this was impossible when James started his consulting practice
in 1969, before his daughter (who is also one of this year’s 40
Under 40 Honorees – www.CPATechAdvisor.com/40under40/2009ebook)
was even born. He began working in the corporate taxation division for Midas
International. As with many corporate tax professionals, he also offered tax
compliance services on nights and weekends during tax season, slowly growing
the client base he served through his business and tax consultancy.

While he had considered striking out on his own a few years later, the arrival
of a newborn daughter made the security of corporate employment much more desirable,
so Jim continued his evening and weekend seasonal practice while staying at
Midas for 35 years. He eventually reached the level of director of taxation,
before retiring in 2001.

For daughter Jody, growing up in a house that doubled as a workplace after
school and on the weekends was essentially a long-term internship. With clients
calling or visiting the house during the tax season, she naturally eased into
a support role, providing assistance to her dad and learning the profession
from the ground up. Instead of heading to the beach or the mountains for spring
break, Jody navigated mountains of 1040s, supporting schedules and worksheets
for her father’s engagements.

It seems quite natural then, that when Jody attended Saint Mary’s College
in Notre Dame, Indiana, she majored in accounting as an undergraduate and then
earned a Master’s of Science in Taxation from Northern Illinois University.
She entered the professional field working first for PricewaterhouseCoopers
in its tax technology group and then joined Sam Zell’s Equity Group Investments,
which controls a multi-billion dollar mix of private and public, domestic and
foreign businesses.

Jody soon discovered, however, that she didn’t really like working at
a Big 4 firm or on the corporate side, so she tried joining mid-sized Chicago-area
practices. After the birth of her own children and returning to practice part-time,
she found it difficult to regain the professional respect she believed her expertise
deserved, so in 2006 she came up with a plan. Her father had retired from Midas
but was contracting with a New York firm and still providing tax services from
his home office in Chicago, so the two teamed up to form a more balanced practice
that leveraged the corporate tax expertise they both had, plus her business
consulting skills and technological savvy.

The firm has enjoyed rapid growth since, growing a large consulting base and
focusing on educating clients instead of simply fixing their mistakes through
write-up and reconciliation services. They use a value-based pricing method
that contracts clients at a monthly rate for work over the year, which provides
a steadier workflow and revenue stream.

“We found a market that CPAs in the Chicago area were missing,”
said Jody. “Clients pay for service, not just the end result. Even though
they want to do things as cheaply as possible, if you provide quality service
and personal attention to their business, they will pay a premium for it.

“I don’t want to do bookkeeping, and clients don’t really
want to pay me to do that kind of manual labor. It’s more valuable to
them if I spend that time teaching them how to do things right.” Acting
as more of a virtual CFO than a bookkeeper also benefits clients by allowing
them to call in as they need to, while helping to make their data more reliable
at the end of the year for taxation and business planning purposes.

In addition to using laptops for mobility and multi-screen monitors while
in the office, Jody has implemented professional accounting, practice management
and tax compliance systems that are all hosted via an ASP provider. This lets
her and her father access information from wherever they may be, while also
letting her mom Peaches assist with administrative tasks from home. It also
allows contractors the firm uses for other services to work from their preferred
locations. One even continued to manage payroll processing for clients while
she was vacationing abroad.

Part of her teaching-based philosophy for client service is also aided by
remote desktop and collaboration tools, such as client portals and GoToMeeting,
which lets her assist clients in a way that allows them to watch what she’s
doing and learn how to do it themselves. Through Jody’s effective use
of technology, Matousek Consulting earned a score of 299 on The CPA Technology
Advisor’s Productivity Survey (www.CPATechAdvisor.com/productivity), a
free workflow and technology assessment tool for tax and accounting practices.
Scores on the survey range from -400 to +600.

While Jody admits that she is “ultimately a tax person” and that
teaching her clients proper bookkeeping practices makes her job easier at the
end of the year, it also helps with her other client work and is a reason that
the consulting side of the firm accounts for about half of the revenue.

Through her close relationships, clients have come to think of Jody as a part
of their work families, relying on her for many more aspects of running their
businesses, from im-proving operations and budgeting, to financial coaching
and even an occasional HR-related process such as helping to interview a prospective
bookkeeper or office manager. She also recently helped a client overcome cashflow
concerns by taking advantage of an online “eBay-like” website for
selling receivables. Called the Receivables Exchange (www.receivablesxchange.com),
the system costs about the same as accepting credit cards, but allows the business
to receive their receivables in a day or two, instead of waiting up to 90. Short-term
receivables selling has become an attractive alternative to many small businesses
who’ve found it increasingly difficult to get lines of credit in the current
economy, while the process itself remains transparent to their customers.

While her father plans to extract himself from the day-to-day operations of
the practice and focus more on enjoying retirement with his wife and his grandchildren,
Jody finds that one of the most challenging aspects of running the firm is in
delegating client services that she has built relationships around.

“The business has grown beyond my dad’s wildest dreams,”
says Jody. “He thought it would be a simple tax practice, but it’s
grown so much that we now use contractors and are considering hiring in-firm
staff. It’s hard to let go, but I know that I either have to learn how
to let others manage some of the work or else find a way to replicate myself.”

And as far as her father using the words retirement or exit planning …
well, the proud daughter also knows that taxation is in his blood. “He’s
still an expert in the field and continues to write white papers and figure
out new strategies on tax laws. So as much as he says he will be gone in three
years, I know he’ll still be available and eager to lend his experience.”