Like many of us, June marks the halfway point of your company’s 2015 financial period.  This is the most opportune time to evaluate how you are tracking to your financial targets and assess where you will end up on December 31st.  The ‘Mid-Year Review’ sounds daunting to most business owners, but it is an integral part of having success each year.   We encourage our clients to take this proactive approach to their finances to bring visibility to any concerns, address it, and plan for the remainder of the year.

Questions you should ask yourself:
–          Is my business set-up appropriate?
–          Do I have the right Tax Planning in place?
–          What will my Cashflow and Tax position be at year-end?
–          Am I in Tax Compliance with CRA?

Business Setup Review
Reviewing how your business is structured, periodically, ensures that any changes that occurred from when you started your venture are reflective of what your current state is.  You will need to assess the level of risk and liability suitable in determining how your legal entity is registered (Sole Proprietor, Partnership or Corporation).  Canada Revenue Agency (CRA) allows a Small Business Deduction applicable to the first $500,000 of taxable income to incorporated entities.  This can lead to a significant tax savings for businesses that have not incorporated, and you should understand if your company is in a position to benefit.  For those that are already incorporated, have you determined the most beneficial treatment for your compensation (Salary versus Dividend)?

Tax Planning Review
After December 31st is normally when most business owner start their tax filing process.  From a Tax Planning perspective, this is being reactive with very little opportunities existing in reducing taxes.  Tax Planning is a proactive approach that occurs well in advance of the end of the year.  Take advantage of tax strategies to minimize your 2015 tax liability.  By utilizing the next 6 months wisely, this window of opportunity can be the difference between meeting your financial targets and exceeding your planned success.  Speak with a qualified professional to determine the options available, as there are various strategies depending on each financial situation.

Forecasting
If you had the ability to have a glimpse 6 months into the future, would you make alternate business decisions?  Forecasting out your year-end Cashflow and Tax Liability can provide you with insight into your business to plan for capital purchases.  Your Mid-Year Review provides a chance to review your current results, and apply knowledge about your business that you did not have at your last Year-End Review.  This newfound wisdom gives you the ability to forecast and mitigate unfavorable surprises.  A forecast will also provide guidance on current spending, and assist in developing guard rails.

Tax Compliance

It starts with good record keeping and organization.  Year after year, business owners that are not diligent in this, find themselves in a scramble.  Filing receipts and invoices in an orderly fashion can actually save you in accounting fees, as well as, give you visibility into where your money is going and coming from.  Take the time now to bucket your business expenses in the tax filing categories and calculate your allowable portion in accordance with CRA [Statement of Business Activities].  This not only gets you income tax-ready, but GST/HST filing-ready too.

Final Thoughts…
The benefits of performing this thorough exercise are tremendous.  Not only will you be able to identify your weaknesses, you now give yourself an opportunity to rectify any deficiencies.  You are also able to leverage any strengths and finish the year strong.  At the very least, having a Mid-Year review for your business reduces the year-end stress.

Like many of us, company finances are looked through the rear-view mirror.  Those that are successful view the entire windshield, which is proactive and forward-looking.  We strongly recommend that you review your finances strategically, or you can engage Tangible Accounting to provide you with objectivity.  At Tangible, we assist in seizing this window of opportunity to review your financial outlook in a holistic manner and make the necessary changes to your game plan, and improve your bottom line.

Tangible Accounting Mid-Year Review Offers:
–          Financial Statements Review with Year End Forecast
–          Risk Mitigation Plan and Consultation
–          Tax-Readiness Assessment
–          Business Analysis
–          *NEW CLIENT SPECIAL* Fees are credited to your 2015 Corporate/Business Tax Return

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