We met Helena Swyter from SweeterCPA through a mutual business connection after attending a networking event. Most small business owners are too busy to handle  taxes, bookkeeping, and anything else having to do with the IRS. Often they start out doing the work themselves, but soon find themselves overwhelmed and finally hire a bookkeeper and an accountant to make sure things are tracked and filed properly and on time.

We were impressed by Helena’s own journey with entrepreneurship and wanted to dive into some of the common issues she sees with small business owners.

Tell us about how you got your CPA business started?

After completing my Master’s degree in Taxation and completing the CPA exams, I initially followed a fairly typical career path for an Accountant – I went to work for a huge accounting firm and starting climbing the corporate ladder. A turning point came in 2012 when I attended a conference for bloggers – I’d had a small, personal blog so I was attending this conference without a thought towards my life as an accountant. There I discovered the need for tax, accounting, and bookkeeping guidance among creative professionals. I found this experience of helping people figure out the ‘nuts and bolts’ of starting a business deeply rewarding, and decided on the plane ride home that I would show the same courage as them and started SweeterCPA to help people establish and strengthen their businesses.

You’ve worked a lot with small business owners. What are the three biggest mistakes you see small business owners make and what could they have done to avoid them?

Most of the mistakes I see small business owners make are caused by a rush to get the business up and running, causing some of the financial organization details get pushed to the side. Unfortunately, these initial mistakes can cause big headaches later on, so getting ahead of them before your accountant (or, worse, the IRS) asks for financial data is always a good idea. The first mistake is not keeping the business and personal finances separate from the beginning. A lot of people will use their personal bank account to pay for business expenses, especially when they’re just getting started. As the business grows, this habit becomes harder to break, and reviewing bank statements to untangle the business and personal expenses takes up more of their time. Most banks and credit unions are happy to help you set up a separate business account.

The second mistake is waiting until tax time to handle bookkeeping. Staying on top of tracking income and expenses isn’t just helpful for filing taxes, but is also useful for making sure you’re spending time and money wisely. The online bookkeeping options currently available, like Quickbooks Online, can automate a lot of the process, and if the idea of doing the rest of the work that wasn’t automated is unappealing, finding a trusted bookkeeper will pay off the first time you need to provide a profit and loss statement to your accountant.

Along those lines, the last problem I see is people not having a clear understanding of their tax liabilities. Businesses that sell items may be required to collect sales tax, businesses with employees need to be aware of payroll tax liabilities, and every entrepreneur should be aware of how their business will impact their personal income tax situation. Quarterly estimated taxes and self-employment tax both tend to be an unpleasant surprise for people who weren’t prepared! A quick call with an accountant early on can help make sure you understand what to expect.

How often should small business owners be working with their accountant and what should they expect from their accountant?

Most people only think of their accountants when it’s time to file their annual taxes, but small business owners should be checking in with their accountant more frequently. I typically advise my clients to get in touch with me at least every three months. Businesses running payroll or paying monthly sales tax should be interacting with an accountant even more frequently. At these check-ins, I can answer any questions they have, advise on quarterly estimated taxes, and help explain how changes in their life such as moving, getting married, having children, etc. will impact their tax situation.

In terms of expectations, you want to be able to view your accountant as a trusted adviser, who works with you to help your business meet the business’s tax obligations. After an initial meeting, you should ask yourself if you feel comfortable talking with them about financial details, and whether you have confidence that they are able to serve your company in the ways that you need. Your expectations around the frequency and method of contact (emails, phone calls, in-person meetings) should be discussed during an initial consultation with an accountant so everyone is on the same page, and you should feel that they understand both your industry and your business-specific needs.

As a small business owner yourself, what are some of the biggest challenges you had getting your business started and how did you overcome them?

One of the hardest things to do as I was getting started was balancing my excitement to get the business started and profitable with the need to handle the more mundane details of getting a small business off the ground. Researching and selecting a legal entity type (LLC vs. S-Corp), getting an EIN, creating a business bank account, and a number of other accounting-specific requirements were just a few of the minor challenges that led me to postpone accepting clients. Of course, not everyone’s business is quite as dependent on this kind of obsession with organization, but making sure that there was a strong foundation for growth and that all the
paperwork was filed and accepted gave me some peace of mind a few weeks later when SweeterCPA starting to take off.

What’s your favorite accounting software for small business owners?

I always tell my clients that the best bookkeeping software is one that they will actually use. If one of my clients is most comfortable keeping track of everything in an Excel document, and can provide all the information I need at tax time, I’m not going to force them to change. However, I will tell them that the web-based bookkeeping solutions have really come a long way over the past couple years in terms of automation and user experience. My favorite is QuickBooks Online – their ProAdvisor Program helps keep accountants up-to-date whenever the software changes, and knowing that I have to stay up-to-date to maintain that certification helps reassure my clients that I know what I’m doing.

Helena Swyter of SweeterCPA can be reached through her website.