But that’s not all...there is so much more.
Here is the 12-Point Financial Management Checklist that business owners should include in order to make informed decisions, mitigate risks, and drive their businesses towards long-term success:
- Forecasting and Cash Flow Management: Creating a comprehensive budget that outlines income, expenses, and projected cash flows is essential. Maintaining a healthy cash flow is critical for any business. Be sure to monitor your cash flow to ensure there’s enough liquidity to meet operations and manage unexpected expenses.
- Understand The Key Financial Reports: Be able to analyze your income statement, balance sheet, and cash flow statement to understand the business's financial health and identify areas for growth as well as improvement.
- Pricing Strategies: Setting the right prices for products or services is vital to generate profits and sustain the business. Make sure to consider production costs, competition, and customer preferences while determining prices.
- Capital Management: Deciding on the appropriate mix of debt and equity financing is crucial. Too much debt can strain the business with interest payments, while too much equity dilutes ownership.
- Cost Control: Keeping a close eye on expenses is essential for profitability. Continue to identify cost-saving opportunities and optimize operational efficiencies without compromising the quality of products or services.
- Investment Decisions: Evaluating potential investments or expansion opportunities requires careful analysis. Be sure to consider the potential return on investment (ROI) and associated risks before making any significant financial commitments.
- Financial Risk Management: Identifying and managing financial risks is vital to protect the business from adverse events. This includes risks related to currency fluctuations, interest rates, market volatility, and credit.
- Tax Planning: Retain a tax professional to help you be aware of tax regulations and your activities to optimize tax liabilities legally. Proper tax planning can save significant money and prevent potential legal issues.
- Financial Reporting and Compliance: Ensuring accurate and timely financial reporting is essential for decision-making and compliance with legal requirements. If you are unable to hire a CFO currently, outsource one on a part-time contractual basis.
- Financing Options: You don’t always have to use your own money! Understand various financing options, such as loans, lines of credit, venture capital, and angel investors, for raising capital when needed.
- Exit Strategies: At the end of the stretch, you should plan for potential exit strategies, such as selling the business, going public, or handing it over to successors. Being prepared for an exit allows for a smooth transition and maximizes the value of the business.
- Triple Bottom Line: Be a conscious entrepreneur and business owner by avoiding predatory capitalism. Consider the Triple Bottom Line, where you focus not only on profit, but also people and the planet!
Why Accounting and Tax Planning is Important for Business Owners
As a business owner, it’s hard for you to be an expert in all matters - Finance, Human Resources, Marketing, Accounting, Sales, Shipping, Procurement – and that’s why you hire the best talent to staff those roles. But many of those disparate functions have one thing in common: They have some form of accounting and tax element to them.
Business accounting and taxes can sometimes be a barrier to growth and profitability of your business. However, if planned correctly, the tax codes offer a number of valid opportunities that business owners can leverage to their advantage. Without savvy accounting, you could literally be losing thousands of dollars a year in unclaimed rebates, benefits, charge-backs and deductions,
Whether it’s Income Tax, Employment Taxes, Estimated Taxes, Self-Employment Tax, Excise Tax, Provincial Sales Taxes or Goods and Services Taxes – the legislative environment for each of them is too complex for any single individual to master and navigate. So, when it comes to assessing and planning your business taxes, you need an experienced team of Tax Planning professionals to guide you.
We will connect you to Accounting and Tax Planning specialists to provide invaluable advice and services to a range of business entities, including Sole Proprietorships, Partnerships, Limited Liability Companies (LLPs), Business Corporations/Incorporated Companies, Co-operative structures and Not-for-profit entities.