About the episode
In episode of the Mom Owned and Operated podcast, Rita Suzanne and Sheila Watts discuss raising a family, running a business and remembering yourself.
Sheila Watts is a certified public accountant who helps business owners use the numbers to grow and scale their businesses. She knows the numbers tell a story and can be the key to increasing your bottom line.
Sheila works with small business owners and nonprofits to clear the confusion around the numbers so the best decisions can be made to increase profits. She believes that your financial information can be a powerful tool, making it easier to make better decisions to grow your business.
In addition to loving all things numbers and small business, Sheila is a wife and mom of two.
You can find Sheila on her website, on Instagram, on LinkedIn, and on Facebook.
Want to make your bookkeeping easier? Get the free guide.
Listen to more interviews by visiting momownedandoperated.com and apply to work with Rita at ritasuzanne.com/apply/
Listen to the episode
Sheila Watts, Rita Suzanne
Rita Suzanne 00:01
Welcome to the mom owned and operated Podcast, the podcast about moms and for moms, where we have candid conversations about running a business, raising a family, and remembering ourselves. I’m your host, Rita Suzanne, a single mom of four, digital strategist and provider of no nonsense business strategies and tactics. Hi, this is Rita Suzanne. And today I have my guest, she alo walks with me, she’ll I’m so excited to chat with you today and talk more about numbers. Please tell everyone more about you, your family and your business.
Sheila Watts 00:41
Sure. Thanks for having me. It’s great to be here. So I am Sheila Watts. I’m a certified public accountant. And I am a wife and mom of two young kids ages nine and three. And we live in Central Arkansas. And my business is an accounting firm, you know, just your typical accounting firm, I help small businesses and nonprofits with the numbers so that they can use those numbers to grow their businesses effectively and efficiently.
Rita Suzanne 01:08
Yeah, because I think that, like we were talking about before, a lot of small business owners, they don’t really want to look at the numbers, right? They just wanna right?
Sheila Watts 01:16
Avoid it. Yeah. Yeah. So can be something that people want to put on the back burner, because it can be a little intimidating. But it’s Yeah, promise, it’s not that bad.
Rita Suzanne 01:24
So what are the numbers that you would suggest that people focus on, especially when they’re first starting out? You know, it’s like, well, I don’t have a lot of income coming in. But what, you know, what are some things that maybe they should start looking at when they very first start?
Sheila Watts 01:40
Yeah, so I think when you first start out, the key is having a process of bookkeeping process in place, so that as your numbers grow, you have the ability to look at those numbers and see those things. I think looking at trends is really important, especially when you’re trying new things. Because when you’re a new business owner, especially, you know, you’re just making decisions, trying to figure out what works, what’s helping you grow your business, that type of thing. And so it’s important to keep an eye on you know, how much revenue you’re bringing in month to month, how much your expenses are every month, so that you can make sure that you are making good decisions to keep those revenue numbers going up. And then also, you’re not letting your expenses get out of control. So when you’re first getting started, I think really important, just looking at what’s happening as you move throughout the year, so that you can make sure that the decisions you are making are impacting your bottom line and the way that you want it you want them to
Rita Suzanne 02:35
Yeah, so why do you think that a lot of small business owners like kind of get nervous or really don’t want to look at the numbers at all, though, I
Sheila Watts 02:45
think it’s a couple of reasons. First and foremost, and I think this is a problem that we all struggle with is just having the time when you’re running a business, you are doing so many things, making so many decisions, just trying to hold your head above water and trying to do right by your clients or your customers. So the numbers can very easily get put on the backburner and you know, become one of those things that you just put off until later, which you will ultimately regret right. And then the other reason is that people are just intimidated, they don’t know where to start, they don’t know what they’re doing, which I think is typical, because most people have not gone, you know, gotten any type of education or, you know, schooling about the numbers and nobody teaches you how to run your business. Nobody teaches you in fact, most people don’t sign up running a business to do the books, right. That’s where someone like me comes in. So it can be very intimidating, because you do have a lot of resources, you know, QuickBooks and things of that nature, but they can still be very overwhelming to you know, someone who isn’t in that world. Yeah,
Rita Suzanne 03:47
I agree. Because so I have this folder that I keep all my receipts and write and write as bookkeeping needed. And then you know, so those are the ones that at the end of the month, I’ll add to I use fresh books. I know a lot of people use QuickBooks, but I find that sometimes with QuickBooks, there’s a little bit of a learning curve, because you have the credits and the debits and you know, and a lot of people don’t really understand how things work as much. So I think that’s why for a lot of people FreshBooks is easier because it’s just like expense income. But I know that the reports are not as expansive right. And so I think that, I guess it really just depends on if you have a bookkeeper, most of them do want you to use something like a QuickBooks.
Sheila Watts 04:39
Right? And I will say this that I think that the best thing to use is whatever works for you. If that’s a spreadsheet, then by all means use a spreadsheet. It’s not some in terms of what you’re using, it’s not going to make or break you what the best habit is, is what supports you in your business and what works for you. Have both price wise Functionality wise. And you can always outgrow those things and then move to the next level if you need to. You don’t have to right out of the gate start with, you know, the biggest software that there is. So yeah, I, again, I don’t want anyone to be intimidated. So if something like fresh books or a spreadsheet or QuickBooks is working for you, then by all means, whatever works, that’s what you need to use. Yeah,
Rita Suzanne 05:23
I love that. Because I know a lot of people who use wave because it’s free. And I haven’t I haven’t used it. I don’t know, I’ve, I’ve watched it. I’ve been thinking about transitioning over to QuickBooks for some time, just because there’s more reports and things in it. But because I’ve been using fresh books for eight years, I’ve right. It’s such a process. And I don’t want to like the migration is I don’t know, it’s just, it feels overwhelming to me. And so I haven’t really switched to anything else right now. But I love that because some people and the thing that I like about, you know, FreshBooks, and I’m sure that other software’s do this is like for those recurring expenses that I have in there, it’s, you know, automatically puts them in there for me, right, I don’t have to go in and add those, I just add the new ones that are, you know, more, I guess, random. Right, right stead. And so that makes it easier.
Sheila Watts 06:23
And I think that’s a perfect example of using what works for you, because a spreadsheet can work for you. And it can work for quite a long time if you needed to. But then you need to upgrade potentially, later on to something like fresh books, QuickBooks Xero, those types of things, because then you do get that more functionality. And then that saves you time, if you use that functionality to its, you know, its potential, then you’re not spending that extra time coding all of those recurring transactions, you’ve got it set up to where it’s doing it for you. And those are the things that you have to look at in terms of, you know, as you kind of move up the scale of what you need, what is the return on that? Is it safe to time? Is it saved money? Is it you know, those are the kinds of things that you’re looking at when you’re trying to pick out the system that works for you?
Rita Suzanne 07:06
And I like that there’s reports, right, like, the only report that I really look at, which is probably not, I don’t know, it’s the profit and loss. And so you tell me like what is what are the best reports to look at, you know, for like every month to see, you know, where you are in the profit and loss the one to look at.
Sheila Watts 07:26
So the profit loss is probably the one that I would go to first, because that is going to tell you exactly what’s happened during you know, that previous month, you have your total revenue, your total expenses, and then diving a little bit deeper into that, like I was saying before, it’s really important to not just look at a specific month or a specific period, like right now, if I looked at January through June, that’s really helpful. But one thing that’s really helpful and can be very impactful in the way that you make decisions is looking at what’s happening month by month, Spot the trends, see what products or services are, you know, increasing in sales or decreasing in sales. Look at you know how much you’re spending on apps or software, you know, those types of things to make sure that your costs aren’t getting out of hand, that you’re not over buying, you know, the next greatest app, even if you don’t actually need it, right, it’s really easy to do. Or you sign up for a subscription that you’re not using and you forgot about it. If I look at my numbers, I can see, oh, wait, I haven’t used that subscription in three months, it’s time to cancel those types of things are what you it’s really about looking at what the story is throughout the year. So looking at it side by side month by month comparison of your profit and loss can be something that’s really powerful to help you feel like you have a lot of clarity and control over what’s happening. A lot of times when I talk to business owners, they’re like, I know I’m making money, but I don’t know how much I’m making. I know I’m spent making spending money, but I don’t know where I’m spending it. And so when you look at your profit and loss and detail like that, you really start to be able to answer those questions for yourself and feel more comfortable and confident when you’re making decisions about what to do going forward.
Rita Suzanne 08:55
I love that because I do think that a lot of people get into those, oh, this is the next big thing I need to sign up for this in order to be successful or, you know, make make more money. What do you think is one of the biggest mistakes that people or small business owners are making when it comes to like actually doing their books?
Sheila Watts 09:19
I think one of the biggest mistakes that I see and I think that this is something that almost all business owners start with this mindset that the numbers are only for tax time that I really don’t need to worry about the numbers. You know, during the year, it’s all about compiling the information for tax time. Now, we all know that tax reporting is incredibly important. And it’s something that we all have to do you know whether you’re a business owner or not, it’s very important that you have accurate numbers to report to your tax preparer so that you know you don’t get in trouble with the IRS right. But if you only look at your numbers in terms of what you’re doing for taxes, you really are missing out because like I said before, it’s full of information for you that can help provide clear arity and confidence in what you’re doing with your business, you can grow your business based upon what you actually know is happening in your business, rather than flying blind. If you don’t know which service that you provide is your number one earner. Or if you don’t know how much it actually costs you to run your business, you really aren’t putting yourself in a position where something is going to come along and blindside you and you don’t know what to do. So that’s usually the number and it’s usually a mindset thing, right? It’s not about taxes, as much as it is about understanding what your business is doing and how it’s doing and how the decisions that you’re making are impacting your profit.
Rita Suzanne 10:37
Yeah. And so you, you say, at least at minimum, they should be looking at their numbers once a month. Right? Yeah.
Sheila Watts 10:44
So ideally, I like to my clients to see their numbers a month, every month, so that they can see those trends they can see. And the reason that that is so important is because if something is not right, if your sales are falling, or your expenses are creeping up, it’s hard to correct that if you’re six or seven months into the year, and then you realize it. But if you’re looking at something every month, you’ll catch those things a lot sooner. And the opposite is true, too. If something’s going really well, you don’t want to wait until October to say, Oh, this product is selling really well. I should have been pushing it even more to make more sales. So you really want to pay attention to that on a monthly basis is ideal, because then you can be making real time decisions that really have a huge impact on how your business grows, and how your profits grow.
Rita Suzanne 11:36
I think that something and you tell me if this is the case, I think that some business owners are reluctant to hire a CPA or somebody to do their books, because they’re embarrassed about the probably the way that they’re looking. And also maybe they’re you know, not, you know, maybe they you know, are presenting themselves as more accessible than they really are. Right? So like, what are your thoughts on that should you know somebody just weighed into I mean, I just feel like just basically talking to you, I feel like you would be, you would actually help somebody to get on track, even if they’re
Sheila Watts 12:17
right. So you see me smiling, because I mean, probably 85% of my conversations with people start with, I am so embarrassed about what my books look like. And I didn’t mean for it to get out of hand, or I have no idea what I’m doing. Please don’t judge me. And I always come from a place of non judgment, because I also know that there’s probably things that I do in my business that I should definitely be embarrassed about that I don’t know what I’m doing. Right. So I have to outsource. So yeah, a lot of the conversations that I have are, you know, very much come from a place of fear of judgment of what they’re doing and the mess that they feel like they’ve created. And I always start by saying everything is fixable, we can always get you back on track. And just recognizing that maybe you do have maybe you’re kind of out of your element, and that you need some help is is huge, in my opinion, I think just coming to the realization that this is not my wheelhouse, and I need to find somebody to help me is a big deal. And something to you know, sort of pat yourself on the back for because it’s hard to do, especially like you said, when you’re putting yourself out there, I’m a successful business owner. I’m a six figure business owner, but you don’t have your numbers in check. And I’m here to tell you that that happens. All too often. There are a lot of people that you know, I get to see the back end of their business. And and it’s sometimes it’s shocking, like how can you run a business not knowing your numbers and your numbers are a mess. But and I say that with no judgment, because it can happen to anybody. And a lot of times it’s just a result of a business growing so quickly. They’re doing all the right things. And it’s just impossible to do everything right. So then their numbers get pushed to the backburner. And so then, you know, they have a mess to clean up. And you’re right, that is something where I start with my clients, almost all of them come to me with some sort of situation and varying degrees of you know, a mess that needs to be cleaned up or, you know, getting processes in place like you were talking about having a folder for your receipts, you know, somebody may not know what to do with their receipts or have a process for that are, you know, have their business accounts separated from their personal accounts and things like that, that we you know, give some guidance in terms of getting things on track, so things feel like they run much smoother, and they’re actually able to feel like they have a grip on the numbers and they have a grip on their finances. So yeah, it’s definitely something I see a lot of, but I always tell people that I don’t want any shame related to that because it’s definitely something that can be fixed. And it’s not anything that’s a permanent problem in your business as long as you’re willing to fix it.
Rita Suzanne 14:49
Yeah, I think a lot of times people probably don’t hire someone to help with their their numbers. Are there any of that stuff because they don’t feel like they’re out? At that income level, right? Like, I’m not at that level, I can do this myself. And so what are your thoughts on that? Does it like, should they just start out with somebody like a bookkeeper? Like from the beginning? Or, you know, just I understand like, it’s based on the business. But, you know, when we’re talking about someone having massive growth, and it’s because they’re not prepared, and because they didn’t really start with that stuff from the beginning. Right,
Sheila Watts 15:28
right. Right. So I get that question. A lot of okay, what what income level do I need to start hiring a CPA or an accountant to help me with my books, and there isn’t a magic number I wish there was because it would make my job a lot easier to help people, right. But it’s not something that there’s a magic number that I can tell you, if you reach this number, then you need to call somebody, it really is a matter of what your time looks like, what what your goals are for your business. And then just what you feel like your your capabilities are personally, I’ve seen a lot of people run their business for the first five years doing their own books, and they’ve done a pretty good job of it. I’ve had people that come to me in month six, and say, I can’t do this help me, please. And it really is a matter of finding someone like me or another professional that can work with you, we all have a lot of different levels of service. I think a lot of people have this misconception that all accountants are going to be super expensive. And it’s only for the big guys. And you know, it’s just not a possibility for me and my tiny little business. And it is absolutely possible, it may just be an abbreviated service, it may be something that you know, you kind of just dip your toe in, and then you grow with me, I have a lot of clients that I grow with them in terms of what my services are to them. So it’s definitely something it’s a conversation worth having, having with someone like me, so that you can figure out what your options are. Never be afraid to reach out and see what the possibilities are. And if someone prices you and you know gives you a price and you’re not comfortable with it, then you shouldn’t go you know, you shouldn’t be doing that. I don’t want anybody to overextend themselves. But I will say that there is a lot of value in laying the foundation so that as you grow, things don’t get rocky, things don’t start falling apart, because you don’t have a good process in place. It’s always easier to put the processes and the foundation in place before you have massive growth.
Rita Suzanne 17:21
Yeah, and I say that about all things like processes are mind boggling, you know, are my thing. And I just love that, you know, when people I think that it helps you open up a lot of space when you have the systems and processes in place and alleviates a lot of the burnout that we feel right. And I
Sheila Watts 17:41
think a lot of people don’t consider their bookkeeping and their financial reporting process as a process. They just think it’s a thing that has to be checked off the list. But it’s just as important as your client onboarding process. It’s just as important as your you know, your lead generation process is just as important, because it’s going to help all of those other processes when you’re making decisions about what makes sense for your business.
Rita Suzanne 18:04
Yeah, I think that a lot of times people are super reactive when it comes to writing and their numbers and they just need to be more proactive. I just so happened to us to do Lee, you know, like accounts receivable and payable when I was younger in corporate. So I have that, you know, like little bit of understanding and foundational stuff in but I understand when people don’t have that it just makes things so much harder. What would you say like are your top tips to business owners other than, like, keep track of your numbers.
Sheila Watts 18:40
So some of the mistakes that I see that I think if I’ll start this by saying that I think that most business owners, especially when they’re starting out make one or more of these mistakes. So it’s really important that if you recognize them, you can keep from doing it, it will simplify your your business bookkeeping very easily if you don’t make these mistakes if you avoid them. So one thing that I always recommend is not mixing your personal business, your personal transactions with your business transactions, always keep those accounts separate. So checking accounts, credit cards, PayPal accounts, all of that kind of thing. You need to have a business account for each of those set up that you only use for your business transactions. You don’t want to be mixing, you know your software purchases for your business with your grocery, you know, grocery pickup and you know those things. You want to keep those things very separate so that you have a clearer look at what your numbers actually are. You don’t want to muddy the waters by mixing those. And another mistake that I see a lot of it a lot of is not staying on top of your numbers. So one thing that I always suggest people do especially if you’re DIY in your books, is to set a date on your calendar like the second Wednesday of every month block off a couple of hours where you sit down and do your your bookkeeping hold yourself account Also that so that you don’t end up six months behind and having to stress out and get caught up or you know, that type of thing. And then that allows you to stay on top of your numbers be able to look at your numbers on a regular basis. Getting behind can really put you in a situation where you just read the books. And if you do it every month, then you you don’t have that dread.
Rita Suzanne 20:20
Plus, you can look at the numbers. Right, right, exactly,
Sheila Watts 20:24
exactly. It sort of holds you accountable to make sure that you’re staying on top of things. The other thing is that, that we’ve already spoke about a little bit is only looking at the numbers at tax time and only looking at them from a lens of tax reporting, you really want to understand that your numbers really do give you a lot of insight as to how your business is doing and how your decisions month to month are impacting your business. So I always tell people don’t just think about taxes, you want to look at your numbers, as you know, the results of all of the decisions that you’re making every day. And then the last one is not using a professional. And I know we’ve touched on that a little bit. A professional will pay for itself very quickly. It’s a tax deductible expense, which is a great thing. It’s an added bonus. But using a professional is something that I always suggest if you can simply because it brings an expert into your business with an eagle eye that understands what’s happening, and especially if you get someone that’s familiar with your industry, a lot of times I find myself making suggestions to my clients based upon what I’m seeing my other clients do, you know, is there a way to reduce your shipping costs? Or is there a way to you know, those types of things, because I have the knowledge of looking at all of my clients, I can see where your process or your expenses or you know, some of those things can be improved upon, because I can see what my other clients are doing. And that’s a valuable resource. I think that people forget about you know, that that level of expertise that really can help you and not only do you get that, but you also get it off your plate. So then, instead of spending that two hours a month working on your bookkeeping, you get to go do something else, whether it’s, you know, something you want to do or make more money, or you know, that kind of thing. So
Rita Suzanne 22:14
I love that. So speaking of doing other things for yourself, one of the things I love to talk about is what you are doing for yourself, right, because we briefly talked about you being a mom, and that’s a full time job in itself, and then all the business stuff that you have going on, but what are you doing for you?
Sheila Watts 22:35
So I will say that this is an area that I need to get so much better at? And I think that’s probably an answer you hear a lot. Because I am terrible about this and for a couple of reasons. So I love what I do, I absolutely love what I do. So it’s really easy for me to get wrapped up in just work, work, work, work work. So it’s really hard for me sometimes to like take the time. And then I’ve also spent the last couple of years building this business. So I’ve sacrificed a lot of self time to make sure that I’m you know, doing the things that I need to do to continue that business. But I’m really excited because this summer, I’ve been very intentional in terms of trying to hire a team and expand my team so that I can start delegating some of those things that I’m very excited about this fall of having more time that I can, you know, give back to myself. And I’m a big, I’m an extreme introvert to the point, it’s probably kind of ridiculous. And I really like my alone time. I really like the the quiet time. And you know, when you have two young kids especially it’s summertime, like we were talking about earlier, you just don’t get a lot of that. So I’m looking forward to some quiet time.
Rita Suzanne 23:39
I feel you I’m probably one of those like extroverted introverts, right. So like, I am very good in social situations, and I love them. But then I need an entire day to write even just phone calls, like even phone calls a couple of them a couple of video chats a day, and I’m just like, I don’t want to do anything else, like nothing. So, you know, I’ve been I think that delegation is super important because we should really only be doing what we really love, you know what we’re really good at. And oftentimes, I think people think that they don’t have the budget for bringing on a team but as you know, like it actually opens up more even though it seems like hard at first, it opens up more and more time, more space more, you know, less stress.
Sheila Watts 24:38
It can be really scary because it’s you know, like I said, I really love what I do and so feeling like I’m handing that off to someone else can be really scary and a lot of work. But I know that in the long run, it’s gonna serve both me and my clients as well. So much better than I can you know, because I’m very limited in my time and energy. And like you said, you know, phone calls like I have gotten very Get strategic and how I schedule my phone calls, I only do them every other day, I’m not going to allow my calendar to be open five days a week, because that will just exhaust me, right. So I need that in between day to just kind of do my work and have my my time. So yeah, it’s definitely something that’s really scary to do. But I think it’s necessary as you grow, to make sure that you understand how you want to grow and and be very intentional with those decisions.
Rita Suzanne 25:24
Yeah, I think that, for me, especially having so many children and you know, then having to the needs, you know, attend to the needs, you know, that they need, by myself can be super draining along with my business. And so I do, I talk about isolating myself, like locking myself in my room, and you know, and just being alone for a few minutes, and it doesn’t, and when I would like probably more like an hour. But I need that. Right, right. I try to explain to them, it’s not you, it’s me, I, I need to be alone. And they’re like, Well, you’ve been working this whole time. I know tending to other people I need. Just just me, it’s not you. It’s me, you know. So I think that definitely taking some time for yourself is a super important thing. And it is a it’s a form of self care, and you know, something that we need to do, and some people will say things like, you know, I go to the, you know, go, I go get my nails done or get my hair done and stuff like that. And I think those are good as well. But I think it’s more important to attend to like your mental well being
Sheila Watts 26:35
right, right, exactly. Like if I can just sit down and make it through one episode of a television show. I want to watch without being interrupted sometimes that’s that’s enough for me, right?
Rita Suzanne 26:47
So tell us where we can find you online.
Sheila Watts 26:51
Sure. So I am on all of the you know, social media applications. I’m on Facebook, Instagram, LinkedIn, and Sheila watts, CPA, and then you can also find me at my website. It’s Sheila Watts cpa.com.
Rita Suzanne 27:04
Perfect. Well, thank you so much for joining us today.
Sheila Watts 27:07
Thank you for having me.
Rita Suzanne 27:08
It’s been such a pleasure. And there you have it. I want to encourage you to remember that being a mom who runs her own business is not easy. We all struggle, but just keep moving forward. And don’t forget to make time for yourself. As moms we are usually the first thing to go to the bottom of the list. If your business is overwhelming you and you need real solutions, not just some sugar coated suggestions apply to work with me at ritasuzanne.com/apply