the short-term focus this year and next tax savings accounting issues sarah loewen neufeld, c.g.a....
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The Short-Term FocusThis Year and Next
Tax Savings Accounting Issues
Sarah Loewen Neufeld, C.G.A.Manager, Assurance Services
January 26, 2009
Chartered Accountants and Business Advisors
mnp.ca
Banker is your friend
Loan covenants are there for your protection
There may be room to negotiate
Relationships may be worth more than saving a % or 2
Chartered Accountants and Business Advisors
mnp.ca
Accountants are not just bean counters
• Get the “real” thing
• Must have many years of education after their bachelor’s degree as well as years of practical experience
• Must have liability insurance
• Professional development
• Specialists are used when needed
Chartered Accountants and Business Advisors
mnp.ca
How to use your Accountant
• Do your own bookkeeping
• Look at the big picture
• Advice on the short-term and long-term
• Do you know what else your accountant can do for you?
Chartered Accountants and Business Advisors
mnp.ca
Bookkeepers – Your front-line person and commonly taken for granted
• Don’t waste your money on your accountant for this work
• Going rate is $40+/hour in Steinbach, $60-80/hour in Winnipeg
• What do they do?• Your accountant cannot do your
bookkeeping and your financial statements
Chartered Accountants and Business Advisors
mnp.ca
You are not married to these people!
Shop around until you find one that meshes with you
Most professionals are priced the same
Find the best ones and never let go!
Chartered Accountants and Business Advisors
mnp.ca
1 year – What can be trimmed to improve on expenses?
• Is your gross margin decreasing?• Is that new product costing or
contributing?• Analysis your accountant can help you
with• Cash flow• Purchase capital assets
Chartered Accountants and Business Advisors
mnp.ca
5 year – What kind of growth can be sustained?
• Can you get the right employees
• Physical space
• Where/how do you want to grow?
• Where do you see the market going?
• Are you doing business in the U.S.?
Chartered Accountants and Business Advisors
mnp.ca
10 year – much like 5 year with succession issues and cash flow security
• If you’ve made it this far …
• Where are the profits going?
• Tax planning issues both corporate and personal
Chartered Accountants and Business Advisors
mnp.ca
How is the corporation set up?
• Are you saleable?
• Do you need re-organization to sell/shut down?
• Get advice before you set the wheels in motion
• See a professional
• Major bucks at stake here
Chartered Accountants and Business Advisors
mnp.ca
The next step of growth
• Working capital issues
• Expiring tax losses – different than accounting losses
• Tax free income
• Amalgamation
Chartered Accountants and Business Advisors
mnp.ca
Succession/sale of business
• What would you like to do?
• Is there family involved?
• Could take years or just weeks
Chartered Accountants and Business Advisors
mnp.ca
Where is your cash coming from?
• Are you financing?
• You want a comfortable retirement
• What are your sources for cash?
Chartered Accountants and Business Advisors
mnp.ca
Other issues
• What are your assets and liabilities really worth?
• Time value of money
• Sell the assets or shares
• $750,000 CGE vs. capital dividends
• Preferred shares in a freeze
Chartered Accountants and Business Advisors
mnp.ca
How do your spend you day?
• Cost/benefit analysis to be done
• What is your time worth?
• Do you delegate?
• Can your really be good at everything?
• Do you have time to plan for the future?
Chartered Accountants and Business Advisors
mnp.ca
Pay what the person is worth• Not what you would like to pay them• The right person will earn back the extra
pay and more• Hire an outside contractor or hire a staff
person• Be educated re: human resources• What is the market bearing?• Are you being interviewed?
Chartered Accountants and Business Advisors
mnp.ca
• Do you understand how your business is performing?
• Leakage
• The what if’s
• Are you actively participating?
Chartered Accountants and Business Advisors
mnp.ca
Small issues that add up• Missing deductions and opportunities• Do you need to pay EI or Workers’
Compensation?• When to incorporate?• Trusts?• Educate yourself• Have an annual meeting
Chartered Accountants and Business Advisors
mnp.ca
Suck it up Princess
• The day to day stuff
• Must have good books
• Avoid audits
• Decrease accounting fees
• Better planning information for you
Chartered Accountants and Business Advisors
mnp.ca
Networking
• Chamber of Commerce
• Networking groups/women’s groups
• Farmer’s do this best!
• Get that outside view looking in
Chartered Accountants and Business Advisors
mnp.ca
Networking
• Are you the exception?
• New ideas for competing
• Other ideas, better ideas
• Fresh perspective
Chartered Accountants and Business Advisors
mnp.ca
Free advice
• Talk to suppliers/mentors/competitors
• Utilize trade shows, industry meetings
• Make time for coffee!
• Education and professional development