The Short-Term Focus This Year and Next Tax Savings Accounting Issues

Sarah Loewen Neufeld, C.G.A.

Manager, Assurance Services January 26, 2009

Who is on your team?

Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business mnp.ca

CA, CGA or CMA?

Advisors Chartered Accountants and Business 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?

Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business 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!

Advisors Chartered Accountants and Business mnp.ca

Do you have a plan?

Advisors Chartered Accountants and Business mnp.ca

When to plan What to plan Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business 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.?

Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business mnp.ca

The next step of growth • Working capital issues • Expiring tax losses – different than accounting losses • Tax free income • Amalgamation Advisors Chartered Accountants and Business mnp.ca

Succession/sale of business • What would you like to do?

• Is there family involved?

• Could take years or just weeks Advisors Chartered Accountants and Business mnp.ca

Where is your cash coming from?

• Are you financing?

• You want a comfortable retirement • What are your sources for cash?

Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business 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?

Advisors Chartered Accountants and Business 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?

Advisors Chartered Accountants and Business mnp.ca

Take Control – You are the CEO so act like one!

Advisors Chartered Accountants and Business mnp.ca

• Do you understand how your business is performing?

• Leakage • The what if’s • Are you actively participating?

Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business 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 Advisors Chartered Accountants and Business mnp.ca

Networking • Chamber of Commerce • Networking groups/women’s groups • Farmer’s do this best!

• Get that outside view looking in Advisors Chartered Accountants and Business mnp.ca

Networking • Are you the exception?

• New ideas for competing • Other ideas, better ideas • Fresh perspective Advisors Chartered Accountants and Business mnp.ca

Free advice • Talk to suppliers/mentors/competitors • Utilize trade shows, industry meetings • Make time for coffee!

• Education and professional development Advisors Chartered Accountants and Business mnp.ca

Summary • Who is on your team?

• Do you have a plan?

• How do you spend you day?

• You are the CEO – so act like it!

• Networking Advisors Chartered Accountants and Business mnp.ca