‘I used the lockdown to pursue the business rescue licence and that opportunity was brought by SAIBA.’
Matome Modika has established a thriving accounting practice in Tzaneen, along with a college specialising in business studies, which is not surprising for a man who believes in continuous career development.
CIARAN RYAN: Today’s podcast is sponsored by Draftworx, which provides automated drafting and working paper financial software to more than 8000 accounting and auditing firms and corporations. CFO Talks is a brand of the South African Institute of Business Accountants. It’s my great pleasure today to welcome Matome Modika, who is a certified financial officer, that’s the CFO (SA) designation with the South African Institute of Business Accountants. He also has a junior business rescue licence from SAIBA. He has an MBA from the Management College of Southern Africa in Polokwane. He’s also busy with a Master of Commerce degree. On top of all of that he is a master tax practitioner with the South African Institute of Tax Professionals. Since 2009 he has run an accounting practice called CSL Accountants in Tzaneen, and for those outside of South Africa that’s in the north of the country in Limpopo province, where he services a growing portfolio of businesses in that area. The practice specialises in tax and advisory. Matome is a firm believer in continuous career development and we’re going to find out about that in a minute, and that explains his decision to pursue no less than two master’s degrees. Welcome to CFO Talks, Matome, you’re obviously speaking to us from Tzaneen, right?
MATOME MODIKA: Yes.
CIARAN RYAN: Here we are in the middle of winter and we’re also in the middle of a lockdown. Just before we came on air, you were telling me that you were using this extra time that you’ve suddenly found yourself with, for some studies and that explains why you were able to accomplish so many degrees and licences, is that correct?
MATOME MODIKA: That’s correct and thank you for granting me this opportunity. I am currently working from home, and I am in Tzaneen, where my offices are based. As you rightfully said, I am a firm believer of continuous career development. I used the lockdown to pursue the business rescue licence and that opportunity was brought by SAIBA. I was able to see to it that within the period that was allocated to us, I was able to achieve that while we are still in lockdown. The decision to continue studying my Master of Commerce also came in because of the lockdown period that we were in.
CIARAN RYAN: I’m keen to hear why you decided to pursue the CFO (SA) designation with SAIBA. Now that, of course, is the top designation that there is in SAIBA. What motivated you to do that?
MATOME MODIKA: It was mainly due to the desire to become part of the international community, which is the International Association of Financial Executives Institutes. This was after I had travelled to Matera in Italy in October 2019 to attend the CFO World Congress, and the presentation by most speakers constantly reminded us of the need for more finance executives in the corporate world. Based on the presentations, I was eager to pursue designation and I was encouraged to initiate same upon my return to South Africa, in order to start working my way up into the corporate world.
CIARAN RYAN: Tell us about your practice in Tzaneen, how long has it been going, what kinds of clients do you service up there and how are business conditions generally in the area, has it been impacted badly by the lockdown?
MATOME MODIKA: CSL Accountants was established in 2009, the primary focus upon establishment was financial advisory and taxation services to small businesses. Currently we are experienced to offer small to medium enterprise services, anticipating an opportunity to engage with government institutions, such as municipalities and government departments. Since establishing CSL Accountants, we’ve carried out VAT recovery projects for Maruleng Municipality in the government space, and we are working hard to be of service to other municipalities within the district, as well as other districts in the Limpopo province. The bulk of our clients are engineering firms, construction firms, and many other small enterprises one could mention. The business is generally well in the area, as we continue to receive requests for engagements from private companies in and around the Tzaneen. What is exciting is the fact that not only are we focused in Tzaneen as the accounting profession has evolved so much, inquiries from companies based outside Limpopo, mainly in Mpumalanga, Gauteng and the Northern Cape are received and we manage to assist these clients due to the improved technology and modern ways of interacting with clients.
‘I believe that word of mouth goes a very long way.’
CIARAN RYAN: So these clients who are reaching out to you from Gauteng and Northern Cape and other places, how are they finding out about you? How do they come to you in Tzaneen?
MATOME MODIKA: Look, you service the one client today, you give them the best that you can and I believe that word of mouth goes a very long way. Sometimes we receive calls from people who we’ve serviced before, advising us that they are going to refer people, do we give them permission to give those people our contact numbers, and then yes, we welcome that with both hands.
CIARAN RYAN: You’ve mentioned already that you’re interacting remotely with a lot of your clients through Zoom and so on. Has the lockdown changed the way that you’re having to deal with your clients? Is it not sometimes a bit difficult when you need to be face-to-face with the client that you are having to do it by phone or by Zoom when you should be in the office?
MATOME MODIKA: Most definitely the lockdown has changed the way we deal with clients. However, the services that we render to our clients are now in demand more than ever before, they still require us to assist in finding the cash flow and you’ve got stakeholders in the process that want to analyse the performance of these businesses in their respective industries and in this case, you can only give them financial statements in order for them to do analysis of the performance of this business. Although this may sound like traditional accounting, it remains relevant to corporate governance as [unclear] the subject of corporate governance has grown in importance over the years, especially due to the increasing corporate scandals that resulted in some corporate traders. It, therefore, remains that corporate governance is not only important to large corporations, but so small and medium enterprises as well. As you know, SMEs in South Africa have been noted by various academics as not paying enough attention to issues of corporate governance. This is mainly because they are more interested in profits and in so doing, not watching how they are impacting their stakeholders, poor corporate governance practices are manifesting in the form of failure to have a board of directors, having no board committees, having a poorly composed board but not disclosing financial statements, window dressing, financial data, to solicit funding among other malpractices. This has partly negatively affected their chances of getting funding due to the bad image that some of them are portraying in the eyes of the potential investors and financial institutions. It is for these reasons that we encourage them through leadership to practice good corporate governance.
CIARAN RYAN: Okay, you have one master’s degree, you’re busy with a second one, tell us why you decided to pursue these degrees, was there some sort of gap in your accounting knowledge or your business knowledge that you felt you would fill with a master’s degree or two master’s degrees?
MATOME MODIKA: In your opening statement you rightfully indicated that I am a firm believer of continuous career development, and I felt that education is very key to that. I aspire to become a chartered accountant one day and due to family background, I’ve only managed to study up to a BCom accounting level with the help of my parents. I did not see that, as the dream shattered due to financial constraints. Hence, the reason to have continued my studies on a part-time basis with Management College of Southern Africa. The master of business administration degree has given me a comprehensive and advanced theoretical knowledge and applied skills in the key areas of business and management. I then wanted to lend theoretical training specialising in the field of commerce and accounting with the ultimate goal of attaining the CA designation in future. To answer that question precisely, the two degrees are different in that your MBA is more focused on the practical aspect of business management, whereas the MCom is focused on the theoretical training, specialising in the field of commerce and accounting. Given this difference, I came to a conclusion that these two will be very helpful in future, should I decide to take the path of the CA designation.
CIARAN RYAN: What drew you to accounting in the first place? Did you have an aptitude or a love of numbers or was it something else?
MATOME MODIKA: It’s a very interesting question. When I first thought of accounting, I was in grade eight, unfortunately we didn’t have the luxury of career guidance in public schools, but I had to follow the stream that was considered difficult by many of our peers. During the learning process, we then learnt that as accountants we are expected to deal with finance matter of an organisation and develop strategies around finances. That revitalised the passion for accounting and motivated me to work hard to become an accountant one day. Like any other student, I did not want to struggle with employment upon completion of my studies and I had to look at scarce skills in different sectors in the corporate world in order to come to a meaningful decision. Luckily, our accounting teacher, who encouraged us to work hard, as we’d made good career choices in following accounting, never fell short of encouraging words for us to one day become finance personnel in different organisations. So I would say it was mainly following what many considered a very difficult stream.
‘Since my admission as a business accountant in practice, I have never looked back.’
CIARAN RYAN: Tell us a bit more about your career journey, did you grow up in Tzaneen? Is that where you went to school and how did you come to be where you are now?
MATOME MODIKA: I grew up in the dusty streets of Mohlaba Cross village in Tzaneen and I attended high school in [unclear] township, a high school that I am today, exceptionally proud of. The school played a huge role in shaping me to what I am today. Then I went to the University of Limpopo and I concluded my BCom accounting degree. After my studies, I volunteered to assist a local high school with accounting lessons, where I was responsible for grades ten to 12 students, as the school had no accounting teacher. Within a period of six months, I was recruited by FNB to serve them as an express teller, until Standard Bank offered me an opportunity to become a relationship manager. I had to manage a portfolio of about 1,180 accounts for small businesses. After five years of experience with Standard Bank, I was then employed by GNC Consulting Engineers as a financial manager, I am grateful for that opportunity today because it opened doors for me to request recognition from SAIBA as a business accountant. Since my admission as a business accountant in practice, I have never looked back. I then obtained the general tax practitioner designation from the South African Institute of Tax Professionals, which was later upgraded to the master tax practitioner. I established CSL Accountants in 2009, which operated successfully to date resulting in the establishment of the CSL Learning Institute and this is a college that specialises in business studies. After all, I wanted more than a VAP (SA) designation, hence, the reason to have pursued the CFO designation immediately after completing my MBA with the Management College of Southern Africa. At the start of the global pandemic an opportunity arose for a business rescue license through SAIBA, and I grabbed it with two hands, without hesitation, and that makes up the modern CFO that I am. However, I feel that I still have more skills to learn in order to be of assistance to the corporate world. Hence, the reason I continue to invest in career development.
CIARAN RYAN: Can you give us your idea of the skills required of the modern CFO and I’m thinking that specifically you’ve done these master’s degrees, where the emphasis is more on general business disciplines, for example, team leadership, communication and that kind of thing. What is your experience and what is it that your clients are demanding from you as a CFO?
MATOME MODIKA: Our clients are demanding so much, and I think most of them still believe that as a CFO, you need to make use of the older ways where CFOs were perceived, like CFOs in the olden days were perceived to be keepers of the books and records of the companies, doing financial reporting and statutory compliance, most of them still perceive us as that. I will then quote from the Forbes survey that suggested that almost one in three CEOs worry that their CFOs are not prepared for the challenges ahead. Years ago, the role of CFO was fairly straightforward and it’s mainly the three that I have mentioned here. But the modern CFO skills goes beyond being a typical accountant, perceived as placing excessive emphasis on controlling expenditure and budgets in that it involves leadership, which mainly deals with people management, dealing with the operation of financials side of the business, controlling of finances and development of various financial strategies, identifying problems and offering solutions is part of the vital ingredients to a CFO’s success. That is mainly what we are trying to convert the olden ways of doing things as CFOs into the businesses today. As they say, forewarned is forearmed.
CIARAN RYAN: I guess this whole Covid thing has changed the nature of the job that accountants are providing, they really are becoming advisors to their clients. Right now, we’re in the middle of a pretty severe lockdown, lots of restaurants are closed down, lots of businesses in the hospitality business are closed down, and they don’t know how they are going to survive this month or next month. These are very challenging times and they do look to their accountants to help guide them, not so?
MATOME MODIKA: That’s very correct and we see that quite a lot. With many of them hearing about this Temporary Employee Relief Scheme funds, they come to us and they want us to assist, only to find that previously they had not registered their employees with the Department of Labour, which makes it difficult, and most of them were previously advised about running payroll and making sure that they are registered employers before we even got into the global pandemic. As a result of them not taking that advice, some of them are not able to get the benefit.
CIARAN RYAN: Let’s talk about you a little bit, what do you do in your downtime? Are you a family, man? When you’re not in the office, what are you doing for fun?
MATOME MODIKA: I’m a very reserved person with various interests. I can mention a whole lot but a few things I like to do is spending time with family, I like to travel, experience new things but the lockdown has since changed the way things are done, with the restrictions worldwide resulting in different ways of doing things now. But to get my hands and brains off work, I watch sports like soccer and I do a lot of hiking in mountains, it’s part and parcel of experiencing nature and simultaneously keeping fit. So by the time I get back to work, I have lots of energy to push work and motivate others in my role.
CIARAN RYAN: Yes, where you are in Tzaneen there are some beautiful hiking trails for just the kind of activity that you’ve been talking about, so you’re a bit spoilt in that area.
MATOME MODIKA: Of course, yes [laughing].
CIARAN RYAN: And your family, do you have a wife and children?
MATOME MODIKA: Yes, I have got a wife and my son is 16 years old.
CIARAN RYAN: Is your son coming into matric and what career does he want to pursue?
MATOME MODIKA: I must say, that seeing his father as an accountant, I think he wants to follow the accountancy route.
CIARAN RYAN: Good for him.
MATOME MODIKA: Some people say that maybe I channeled him to go there. But I see him struggling a bit with accounting in the school where he is at Stanford Lake College here in Tzaneen, it’s a very good private school. He’s up and coming, we try to give him as much support as we can.
CIARAN RYAN: And helping him through his homework.
MATOME MODIKA: Of course, yes, but mothers are always hands-on with the homework while we are busy with work.
CIARAN RYAN: This is a little bit off the subject but the general business conditions in Tzaneen, how are they? Just describe for people outside of South Africa, the economy there. There’s a lot of farming, citrus farming and that kind of thing but you also mentioned a lot of your clients are engineering businesses. Maybe just give us a sense of the kind of businesses that there are.
MATOME MODIKA: We have different types of businesses and as you rightfully said, there is a lot of farming taking place in Tzaneen. There are white farmers, let me put it like that, but unfortunately most of the people who we see are your black customers who are mostly involved with construction, consulting and land transport, just to mention a few. It’s mostly black clients who we see but that’s not to say that there is not room for one to be able to engage with farming businesses or something of that nature.
CIARAN RYAN: And the general economy in that area, is it depressed or is it surviving okay?
MATOME MODIKA: It is surviving okay.
‘The difference with the rich is that they invest first before they spend.’
CIARAN RYAN: Final question. Are there any books that you would recommend? This is the obligatory question we ask everybody on CFO Talks. What books are you reading that really inspired you?
MATOME MODIKA: Rich Dad Poor Dad by Robert Kiyosaki. I have just started reading this book, but I have seen a few quotations by Robert Kiyosaki, and my favourite one that I use to motivate both my clients and others I interact with is, it is not about how much money you make, it’s about how much money you keep. Sometimes I read this quotation together with Jim Rohn’s quote, which is the rich invest their money and spend what is left, while the poor spend their money and invest what is left. The difference with the rich is that they invest first before they spend, while the poor spend and then they invest what is left. I agree 100% that it’s very key how much money you keep, as opposed to how much money you spend. I’ve also read Long Walk to Freedom by Nelson Mandela and A Promised Land by Barack Obama, both books taught me so much about perseverance and these two icons have endured so much in pain and rejection, but their perseverance carried them through. Like the good book says, perseverance is the mother of success.
CIARAN RYAN: Absolutely, Robert Kiyosaki’s books, I don’t know how many millions he’s sold, but I think the way that he broke down what is an assets and what is a liability, even for accountants I think he really nailed it and simplified it in a way. I think anybody can read that and say, ah, I get it. You have that aha moment.
MATOME MODIKA: It’s an amazing book, yes.
CIARAN RYAN: Matome, thank you so much for coming on, we’re going to leave it at that. It’s always interesting to see what the accounting community is doing. There you are in Tzaneen with a thriving practice, it sounds as though your practice is doing great, even though Covid has struck and you’re managing to keep your clients happy and on the go, and you’re doing it through remote means and expanding. I think what I also get from our talk is the extent to which accountants are the lubricant for the economy, they are so important and I’m sure your clients count on you so desperately at times, it’s like their success is your success. I think it’s an amazing accomplishment that you’ve pulled off.
MATOME MODIKA: Yes, it’s just like that and as I’ve indicated and I’ve told some of our associates in the accounting industry, it’s not all doom with this lockdown. These clients need us as much as we need them and together we are able to survive these difficult times.
CIARAN RYAN: Let’s stay in touch, I’m just very keen to hear what happens in the course of the rest of this year. It’s a very strange year, very strange times and it’ll be great to catch up with you a little bit later.
MATOME MODIKA: Thank you so much for having me, Ciaran, and I hope to stay in touch in future.
CIARAN RYAN: Thanks. That was Matome Modika talking to us from Tzaneen.