Accounting Firms Merge, Strengthen

Tulsa accounting firms Emmons, Hartog & Swarthout PC and Kallenberger & Associates are merging effective Nov. 1 in a move to open growth opportunities.
Hartog, Kallenberger & Swarthout will open in the expanded and remodeled offices of Emmons, Hartog & Swarthout, 1560 E. 21st St., Suite 300, with a combined staff of 17, including eight CPAs and nine professionals. The firm will occupy the entire top floor with 7,300 SF.
Managing partners Paul Kallenberger, Paul Hartog and Lee Swarthout said the primary goals of the merger are to enhance the firm’s ability to attract quality personnel, expand capabilities to enhance client service and allow the firm to handle additional growth.
“We have offsetting strengths and offsetting weaknesses, but the real thing that drew us together is hoping to have the ability to attract that next employee who is at least the same quality that we have now,” Swarthout said.
CPA firms, faced with increasingly complex accounting needs, are finding mergers an efficient solution to give firms the capacity to continue to attract top talent and serve clients.
“We have talked for about a year now, and we have had a lot of interaction, and I am very comfortable with these gentlemen,” said Kallenberger, whose firm was founded in 1969. “We are of the same mind, want to provide the best service we can and really help our clients out. With additional staff here it will be much more likely we can do that.”
Kallenberger said the merger brings the firm to a “critical mass” that opens many opportunities.
“We have done a good job in the past, but you can only do so much,” he said. “When you get to be a firm of 15 or more people, it means so much more for your clients and to your employees — additional education, marketing possibilities, etc., that you didn’t have before. We are at 17, and we are not going to stop there. We are generating a real momentum now.”
Hartog said that, in spite of the economy, the firm has been growing.
“We feel like we can do a lot more with a bigger organization,” he said. “Our limitation has been, not that we couldn’t get business, but that we didn’t have enough of the quality people that we need to service the clients. We have a lot of experience, the three of us, but we need to have others coming up that can do some of the work. We really feel like we have three people that can work together very effectively and make the thing grow.”
With a combined annual billing of about $2 million, the merged firm’s specialties now include construction, manufacturing, nonprofits, employee benefit plans, oil & gas operations, retail and real estate operations.
Kallenberger’s firm, which will move from its office at 4606 S. Garnett Road, Suite 402, brings an emphasis on the construction and manufacturing industries.
“That’s about 70 percent of our client base, and we have developed a very good niche there,” he said. “Construction has been an excellent industry for us and encompasses all financial aspects: audits, reviews, compilations, consulting services as well as full tax services.”
Hartog and Swarthout together have more than 60 years of public accounting and business consulting experience. With backgrounds from national and local accounting firms, they merged in 1995, offering a full range of accounting, tax and consulting services.
“Our core clientele is in the oil and gas industry, employee benefit plans, medical services providers, nonprofit organization, retail and wholesale and a lot of contract compliance audits for one of the major rental companies,” Swarthout said.
The merger goal of attracting more quality talent has already been successful, the partners said.
“Since announcing this, we have been able to attract three high-quality CPAs to the firm,” Swarthout said. “One of the things that attracted them to our company was because we were going to merge. They could see that we are a firm that is not happy with the status quo, that we want to grow and be able to offer services to a wider range of clients.”
New personnel include:
Linda Orr, staff accountant with 20 years of commercial construction accounting experience and CPA license to be completed in November. She is an associate member of the Oklahoma Society of CPAs and its Tulsa chapter.
Blake J. Bergman, CPA, audit senior, with bachelor’s degrees in business administration and accounting from the University of Oklahoma and a master’s in accounting and financial analysis from Northeastern State University. He has been a staff II auditor with Ernst & Young LLP and is a member of OSCPA.
Neville C. Bedwell, CPA, tax senior with 10 years of accounting and tax experience. He has a bachelor’s in accounting from Langston University.
The partners see the merger improving the firm’s efforts to serve new clients.
“I think the way this will evolve is it will strengthen the niches we are in,” Swarthout said. “It’s going to enable us to get better, more exposure and to talk to people who make the decisions in those companies, and, hopefully, they will make a decision to use us.”
Kallenberger said there are opportunities in the construction business that the merger and added staff will open.
“We have been engaged in construction work in Tulsa for 30 years, and there numerous potential clients we haven’t approached yet,” he said.
The merger will also open opportunities for the staff to concentrate on specialties.
“It will allow our people to specialize in part of a practice, like the auditing or accounting practice, the tax practice, the consulting practice, general business service practice. It’s a good thing for us in all respects,” Swarthout said. “It’s not the same industry that it was even five years ago. It is almost impossible to be a general practitioner and provide everything from one person. You can’t do that anymore.”

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