FREQUENTLY ASKED QUESTIONS

4-A conducts regular presentations on these topics. Please contact us if you’re interested.

Why is Financial Reporting Important?


  • Analyzing on a monthly or quarterly basis (NOT ANNUALLY)
  • Understanding the current financial position not just historically
  • Collection of accounts receivable and Cash flow
  • Knowing your margins and clients
  • Banking covenants and reporting requirements
  • BUDGETING and PROFITABILTY





INCORPORATION

What are the Options to Ensure I have Enough Cash Flow for my Business?


  • Consider Alternatives to having shareholders paying the bills
  • Use leverage to grow (LOC, leasing and term loans)
  • Look at options such as finance/lease vs. renting/purchasing with cash
  • Assess ratios related to: A/R turnover, Inventory turnover, Non utilized capital assets




Is it all about INCREASING Sales to grow my Business?


It’s not always about increasing sales to ensure financial growth. Other things to consider are:

  • Reducing the cost of sales to increase margins
  • Reducing wastage (increase billable/recoverable time)
  • Being efficient and watching margins and focusing on areas such as Gross profit / Net Profit / EBITDA




What about Banks? How can they help my Business Grow?


Banks are your friend. They can help your business by providing operating capital through:

  • Lines of Credit – 75% of A/R <90 days plus current inventory
  • Term loans – existing assets that are not financed




What About Tax Planning?


  • Tax planning is critical for ensuring your business is compliant with the government yet provides a possible tax savings to maximize benefits for the company (i.e. holding cash in company).
  • Another area that we can assist you with is planning for your retirement by the proper corporate structure.





FINANCIAL GROWTH

Why do I need Corporate Bookkeeping?


As a separate entity your Corporation will need the following:

  • Monthly bank account reconciliations
  • Monthly credit card account reconciliations
  • A record of Personal expenses vs. Corporate expenses




How do I keep Track of my Books?


As a business owner you have a variety of ways to track your books. You can choose to do it yourself or hire a professional Bookkeeper. This depends on your time and your budget. It is highly recommended that you enlist the services of a professional bookkeeper however if you choose to do it on your own we recommend using recognized software programs to help you such as:

  • Simply Accounting
  • Quickbooks
  • Excel Spreadsheet Synoptic




What Items Need to be Recorded or Monitored?


  • Accounts Receivables (remember to Invoice regularly)
  • Record Expenses
  • Accounts Payable (Note: Capital Assets are not a direct expense when purchased)
  • Monitor cash flow and profitability monthly and by project
  • Always be ready to make the hard decisions on customers/product lines.




What do I need for Year-end Preparation?


  • Provide what the accountant needs to reduce time and billing
  • Demonstration of year-end binder





CORPORATE BOOKKEEPING

What type of corporate structure do you have?


  • Operating Company
  • Holding / Investment Company
  • Family Trusts




Why a Holding / Investment Company is appropriate?


  • Tax free dividends from Opt. CO to invest
  • Reduced liability risk on company equity
  • Set-up for a retirement plan




Why and When to create a Family Trust?


  • Split income with family members.
  • Allocation of income to children under 18 (in compliance of rules)
  • Allocation of Capital Gains Exemption




When is succession planning important?


  • Transition to children
  • Sale of the Business
  • Significant Growth
  • The main word is PLANNING – no right answer, you just need to plan





TAX PLANNING & SUCCESSION PLANNING

Why is Financial Reporting Important?


  • Analyzing on a monthly or quarterly basis (NOT ANNUALLY)
  • Understanding the current financial position not just historically
  • Collection of accounts receivable and Cash flow
  • Knowing your margins and clients
  • Banking covenants and reporting requirements
  • BUDGETING and PROFITABILTY





FINANCIAL MONITORING & REPORTING

What are the Options to Ensure I have Enough Cash Flow for my Business?


  • Consider Alternatives to having shareholders paying the bills
  • Use leverage to grow (LOC, leasing and term loans)
  • Look at options such as finance/lease vs. renting/purchasing with cash
  • Assess ratios related to: A/R turnover, Inventory turnover, Non utilized capital assets




Is it all about INCREASING Sales to grow my Business?


It’s not always about increasing sales to ensure financial growth. Other things to consider are:

  • Reducing the cost of sales to increase margins
  • Reducing wastage (increase billable/recoverable time)
  • Being efficient and watching margins and focusing on areas such as Gross profit / Net Profit / EBITDA




What about Banks? How can they help my Business Grow?


Banks are your friend. They can help your business by providing operating capital through:

  • Lines of Credit – 75% of A/R <90 days plus current inventory
  • Term loans – existing assets that are not financed




What About Tax Planning?


  • Tax planning is critical for ensuring your business is compliant with the government yet provides a possible tax savings to maximize benefits for the company (i.e. holding cash in company).
  • Another area that we can assist you with is planning for your retirement by the proper corporate structure.





PERSONAL TAXES