The Short-Term Focus This Year and Next Tax Savings Accounting Issues Sarah Loewen Neufeld, C.G.A. Manager, Assurance Services January 26, 2009

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

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Who is on your team?


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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


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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


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CA, CGA or CMA?


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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?


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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


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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!


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Do you

have a plan?


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When to plan

What to plan


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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


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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.?


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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


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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


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The next step of growth

• Working capital issues

• Expiring tax losses – different than accounting losses

• Tax free income

• Amalgamation


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Succession/sale of business

• What would you like to do?

• Is there family involved?

• Could take years or just weeks


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Where is your cash coming from?

• Are you financing?

• You want a comfortable retirement

• What are your sources for cash?


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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


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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?


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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?


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Take Control –

You are the CEO

so act like one!


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• Do you understand how your business is performing?

• Leakage

• The what if’s

• Are you actively participating?


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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


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Suck it up Princess

• The day to day stuff

• Must have good books

• Avoid audits

• Decrease accounting fees

• Better planning information for you


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Networking

• Chamber of Commerce

• Networking groups/women’s groups

• Farmer’s do this best!

• Get that outside view looking in


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Networking

• Are you the exception?

• New ideas for competing

• Other ideas, better ideas

• Fresh perspective


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Free advice

• Talk to suppliers/mentors/competitors

• Utilize trade shows, industry meetings

• Make time for coffee!

• Education and professional development


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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

Documents

The Short-Term Focus This Year and Next Tax Savings Accounting Issues Sarah Loewen Neufeld, C.G.A. Manager, Assurance Services January 26, 2009