CFO Services | Getting A Financial Plan Created
Business owners need to understand how important a financial and tax plan is to the success of their business says CFO services. And in fact, if they do not have one. They may be putting their business at risk.
While half of all entrepreneurs fail in their business endeavour within five years. The second most common reason why people fail. Is because they ran out of money in their business.
And while running out of money in their business can have many different factors. If business owners pay less in taxes. Not only does that mean they will have to pay less money. Allowing them to keep more of their money in their business.
By having a great financial and tax plan created. Can help entrepreneurs know exactly what they need to do. In order to avoid running out of money in their business.
The first thing that they need to do, understands that no matter how big or small their business is. They can benefit from getting a financial and tax plan created. That is one assumption that CFO services says causes many entrepreneurs to hold back.
And that is not knowing that at financial and tax plan can help even when they are very small. According to most accountants, if an entrepreneur is bringing home fifty thousand dollars a year in gross revenue.
They can benefit from a financial and tax plan. However, it is not just that they can benefit from a tax plan. But by actually paying for a tax plan. Business owners can end up spending less money year after year.
By paying for a tax plan. Business owners can save more money per year than they would have spent on the tax plan in the first place.
However, CFO services says that business owners should look for an accountant that offer business, financial and tax plans as a part of their regular services.
The reason why, is because many business owners use expense as a reason why they do not get a financial plan made. And many accountants know how vital it is to the success of the business have a financial plan.
Therefore, they offer it free of charge as a regular part of their services. So that they can encourage all business owners to get one. And not let cost to be a barrier to the service that can help them succeed.
Business owners can find many accountants who offer this. And they typically will use a template. So that they can do the tax and financial planning efficiently. But also at an extremely high level.
This will also ensure that the accountant can quickly get through parts of the financial and tax plan that do not need a lot of thought. So that they can spend more time on parts of the tax plan that require more work than the other parts.
By understanding how important it is that business owners get a financial plan created says CFO services. Can empower them to find the right accountant to work with in their business.
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It is very important for entrepreneurs to understand how important a financial and tax plan is to the success of their business says CFO services. So that they can get these important documents to help them succeed.
And ideally, CFO services recommends finding an accountant who will do the financial and tax plans every single year. Because it is very important that an entrepreneur updates the information year-to-year.
Many business owners are led to believe that this is something that they only need to do once in their business. And then they will have an effective tax strategy for the rest of their business. But this is not true according to CFO services.
In fact, because the tax plan that is most beneficial to an entrepreneur is dependent on many different variables. As those variables are prone to change from year to year. Business owners need to get their financial and tax plans done over and over again.
For example, accountants must take the personal circumstances of the entrepreneur into consideration. Such as if they have any other streams of income. Such as from a family member or a spouse. Or from investments that they have.
It is also important to note if they have any debt, and how much that debt is. As well as how much their household bills are and if they have any dependents. By understanding this, the accountant knows how much money the entrepreneur needs to draw from their corporation every year.
If they create financial plan without knowing this information. The financial plan will not be based in reality. And may be very difficult for the entrepreneur to adhere to.
It is also very likely that their businesses circumstances are going to change year-to-year. Hopefully, because they are increasing their profit every single year. But they could have a dip in profit. Which will also require a different tax planning strategy to be created.
And finally, even the tax rules change every year. As every single accountant who has experience comes to understand. And if there is a government change. These tax rules likely will have also changed as well.
Therefore, it is extremely important for entrepreneurs to continue to update their tax plan on a yearly basis. Which is why finding an accountant that includes this in their regular services is so important.
The sooner an entrepreneur can create a financial and tax plan along with their accountant. The sooner they are going to be able to start saving significantly in taxes. Especially when they realize the tax rate in Alberta for personal taxes tops out at 48%. And yet the corporate rate is only 11%.
To cash in on that up to 37% lower taxes. Business owners need to strategize with their accountant in order to accomplish that goal. The sooner they can minimize taxes. The more money they are going to be able to keep in their business. And will be able to use that money to help themselves grow.