inventory Archives - Canadian Small Business Women

Sep 18 2017

ANXIETY IN NUMBERS

Many entrepreneurs don’t take the time to understand their numbers, in fact, most ignore them altogether!! They rely on their bank balance to tell them if they’re doing well or not and just get the bookkeeping done for the sake of taxes. That may work for you, but how are you going to make informed decisions if you live in obliviousness of your numbers? They tell you the story of how your business is doing and can give you great insights into what’s working, and most importantly, what’s not!

Here are some of the top Key Performance Indicators (KPI’s) you should monitor for your business.

Advertising as a Return on Investment (ROI)

We know advertising is necessary for business growth, brand development and awareness, and most importantly sales. But not all advertising channels work the same. In the beginning you may advertising anywhere that will have showcase you, but the key is to track which of these channels actually brings you clients. Try using a different promo code in each channel so that you can track which is working and get rid of the ones that aren’t.

Inventory turnover

If you have a product based company where you buy the inventory upfront to try and resell it, then this KPI is vital for you. Inventory turnover is the number of times inventory is sold over a time period, which can be monthly, quarterly or annually. This will help you track what inventory is moving and what takes longer to sell. Accordingly you can adjust your buying choices and often your marketing choices too.

Accounts Receivable turnover

This one is really important if you have repeat customers. These days many businesses operate on a “pay before you receive” model wherein the customer is paying for the product or service before it is delivered. However, many businesses still have the more traditional model of providing a service and then invoicing for the work completed, thus resulting in a period of time where you are waiting for a customer to pay. By keeping track of AR turnover you can identify whether your companies policy for credit is working as intended or whether you wish to continue to do services for clients who are perpetually late. A good accounting system will also allow you to review an AR aging to see which customer is always past due.

Gross Margin

Again if you are in an inventory based business, you need to be aware of two factors: first you need to factor in the cost of inventory into all your sales and second you need to make sure you have enough of a markup to not only cover your inventory cost but your operating cost. Doing a gross margin analysis combined with a break even analysis will help you figure out if your pricing structure is working for you or not.

Budget to actual

You’d be surprised how many entrepreneurs don’t have a budget, or if they do, they don’t compare their budget to actual numbers. A budget is not set in stone, of course, but knowing how your actual sales/expenses compared to what you were forecasting can tell you a lot about your business initiatives.

Of course the key to doing any of the above is timely and accurate bookkeeping and financial reporting!

“Behind Every Great Business is a Great Accountant”

For more information on how to keep your business tax efficient, or to get a consultation on whether you are making all the right tax choices for your business, contact Dharna CPA. www.dharnacpa.ca. Info@dharnacpa.ca

Aug 26 2015

Best Practice record keeping

What documents and information should a business provide to its accountant in order to file its business taxes, specifically payroll, HST and income tax?

If you do your bookkeeping yourself, provide a softcopy of your records (eg., Quickbooks or Simply Accounting file)
A copy of all your Bank statements for the year. Note: if you do your own bookkeeping, then ensure you provide a copy of your year-end bank reconciliation
A copy of all your business credit card statements for the year. Note: if you do your own bookkeeping, then ensure you provide a copy of your year-end credit card statement bank reconciliation
Cancelled cheques, cheque stubs and bank deposit book for the year
Copies of all invoices issued
List of Accounts Receivables
List of Bad debts
List of year-end inventory (including the cost)
Invoices for capital assets purchased during the year (eg computers, furniture etc)
Details of assets disposed of during the year (even if you got no money when the asset was disposed of)
Copies of all expense receipts
List of Accounts Payable
Details of all bank loans
List of all payroll payments during the year showing gross amount, withholdings and net amount paid. You should also indicate how paid (cheque, cash or direct deposit)
Your accountant should have access to your CRA account data , so it will n ot be necessary to provide CRA correspondence, unless it is of a non-routine nature, and one which your accountant would not have access to
Mileage log detailing business kilometers driven
Record of any expenses you paid for the business (out of your personal funds)

Tips on recordkeeping

It is very important to have a record keeping system in place from the first day of business operations. It is best practice to consult with your accountant on what records to maintain. The accountant should have readily available, a checklist of record required. This makes the first year of filing much easier, and you are less likely to make mistakes which have to be fixed in later years due to lack of knowledge
After your tax filing deadline, consider filing your income and expense receipts in “tax” folders, as opposed to putting them in categories. If you are audited, then all the data used in the tax return is in one place. You simply pick up the folder, and hand it to the auditor. You can use tabs to separate the docs in the categories on the tax return
Manual record keeping – this can be as simple as an accordion folder where you drop all invoices, expenses, bank statements and other required documents, in the separate sections. Then give this folder to the accountant to summarise and use to prepare taxes.
To reduce accounting bill, you can summarize the receipts for your accountant. This is most applicable to a Sole Proprietor, where the basis of the tax return is your income and expenses, as a full financial statement is not required. However, for a corporation, expense summarization doesn’t help too much, as the basis of your corporate tax return is your Bank statement.
Electronic recordkeeping is strongly suggested for a corporation. Simply because of the details required to be reported, as well, CRA requires a full financial statement – Income Statement and Balance Sheet (which is not required for Sole Proprietors)
Stay on top of your recordkeeping

Green Meikle & Smith Chartered Professional Accountants

Authorized to practice public accounting by the Chartered Professional Accountants of Ontario

1020 Matheson Blvd. E. Unit 10

Mississauga, ON L4W 4J9

905-919-3543 Ext 101

647-338-5306 (cell)

greenmeiklesmith.com

Mar 26 2014

Is time to step up and go pro!

Have you recently had an idea for a great new project, or possibly recently launched one? Maybe you’ve already set up a business, but sometimes find yourself not stepping up and making the commitment you need to get the results you want.

I see this so many times with people. I get into a conversation with someone who passionately wants to build and grow their business. They are blessed with amazing gifts that they one day hope to cultivate further, and become more successful; however they do not take ownership of their gifts. They stay stagnant and remain stuck or dabbling in it and not fully committing to it, and sometimes treating their business like a hobby.

The key to unlocking your potential and building the business you crave is to stop being an amateur and going pro. This is something I’ve learnt from Marie Forleo and Steven Pressfield, who are strong advocates of the need to stop living our lives as amateurs.

I recently read that “in every moment of your life, you’re either operating like an amateur or a professional. An amateur does things half-assed, is late for meetings, doesn’t give 100% of themselves and let’s their negative attitude and self-limiting beliefs {i.e.: “I can’t do it. It’s too hard. I don’t have the money”, etc.} run the show. In contrast, a professional gets up every morning, practices extreme self-care, is on time, doesn’t let their mind-chatter run the show and is in it, to win it.” How honest and direct is that?!

If you do not have the level of success you want in your business, it’s time to take inventory and see in what ways you’ve been operating like an amateur. Where have you not stepped up and committed to growing your business? If you want more clients, but don’t make offers and network with potential clients. Or, you have an idea of great new product that can help grow your sales, but find yourself constantly procrastinating and never getting started. How many times have you stopped and quit at the first sign of opposition, or complained, gotten frustrated and angry because things are not working out as you’ve plan and you’ve yet to reach your ideal goal?

Going pro means being fully committed and not just being interested in achieving your goals. When you are just interested you do what is convenient versus being committed which means doing whatever it take. When you are committed, you will not make any excuses. You focus on how you can and will.

This is not an easy task, but it starts with making a firm decision and going after your goals, regardless of the inner critic voicing its concerns. You keep going and working towards your dreams. It also means doing the things you don’t feel like doing, and facing possible rejection and criticism.

Think about how the greatest athletes practice their craft. Yes, they have a passion that fuels them, but they’re also disciplined and committed to being the best they could be. This is something each and every one of us is able to do in our own lives and in our business. This will lead us to the desired results we all crave. But it starts with a decision to stop being an amateur and going pro.

So I ask you, in what ways are you ready to turn it up and go pro? Let me know in the comments below.

Uchechi Ezurike-Bosse is a Business & Lifestyle Strategist, Speaker and Writer, but most importantly, a proud Mother and Wife. Uchechi is Co-Founder of Elite Wellness Services Inc. (www.elitewellness.ca) and Founder of My Empowered Living (www.myempoweredliving.com) a website aimed at helping women change negative and disempowering mindset and live their passion! Whether it’s starting and building their dream business, or helping them create a lifestyle they crave, Uchechi is the modern woman’s secret to success! Visit Uchechi at www.myempoweredliving.com to get your FREE copy of 5 Simple Steps to Create a Life you’re Crazy About! A 15-page workbook!

Jan 15 2014

Time To Take Inventory

When we think of inventory, we often think of a storage room or warehouse full of merchandise to be sold. The inventory I want talk about today is our personal inventory. It’s January – the time for New Year’s resolutions, revised business plans and targets, and a fresh start!

I did an exercise with the youth at the shelter I volunteer at and wanted to share it with you:

Make a list of your habits.
Divide them into two categories, those that serve you (aka good habits) and those that hinder your progress (aka bad habits).

It’s helpful to look at this exercise from a personal and business standpoint. Often the two overlap for entrepreneurs anyway! This exercise should be done as part of your “what’s working/what isn’t” review that should be a part of your 2013 recap. Whether it’s spending too much time on Facebook or not enough time getting leads and referrals, we have to be honest with ourselves about the things we’re doing (or not doing) that are hindering our progress.

We all know that habits are hard to break, but when those habits are hindering your personal and professional/business growth, it’s time to take notice and take action! It’s said that it takes 21 days to develop a new habit. That’s it. 21 days of consistent effort will get you closer to opening up the channels that contain all the good stuff that’s going to help you be a better entrepreneur, mate, friend or parent. There are going to be challenges. Don’t beat yourself up if you fall back into old habits. Acknowledge the slip up and why it happened and move on.

The habits we want to release took time to become a part of our daily routine. It’s going to take time and commitment to let them go and develop new ones that will help you to take your life to the next level. Try not to overwhelm yourself. When we’re making the list of our habits, it can be easy to get carried away focusing on all of our negative habits. We’re not going to change all of them at once. Focus on one or two that you feel are manageable and work your way up to the bigger ones. Remember that small successes will build momentum.

If you need help, ask for it. An accountability partner is a great help when you’re working on making changes in your life. Surround yourself with positive people. We all have changes we want to make; we might as well support one another to ensure that we all achieve success!

Sandra Dawes is a certified life coach specializing in helping women who feel unfulfilled with their 9-5 follow their dreams and pursue their passions. She holds an Honours BA, an MBA as well as a certificate in Dispute Resolution.She has completed her first book,Embrace Your Destiny: 12 Steps to Living the Life You Deserve!

Connect:
www.embraceyourdestiny.ca
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www.facebook.com/embraceyourdestinythebook
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