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First piece of advice is make sure that you have and are in a very good relationship with a lot of your suppliers. What that can mean, is you have to remember that your suppliers are the ones that keep your business running. You have to know that if you don’t have them, you don’t necessarily have a business.
CFO services states that you definitely have to communicate with them that you potentially will not be able to pay all of the bill. However, make a very concerted, very honest and very energetic attempt at paying all of it all the time. If you do mention to them that you are only going to be able to pay X amount of dollars this month, but you’re going to be able to pay month next month. Make sure that you are correct and honest in that. You have to make every effort to keep them happy.
CFO services than says what you’re going to need to do is after you put as much money as you possibly can into all of the big payments, make sure you have completely paid off all of the smaller payments. Those smaller payments can definitely be a thorn your side, and can make things seem a lot worse and they potentially are. So make sure those hundred or 200 are payments are taking care of completely after every single month.
Often times what happens is there is an accrual for account fees. Those wage payables and the vacation or holiday payables and day off payables are definitely going to be able to be considered for accrual as well. It is not however recommended that putting them in accounts payable. The reason for that, is because they are simply an estimate, and not an exact bill. If you do not have an exact bill yet, you do not necessarily know how much money you may be able to have for it in order to potentially pay it off or not. You do not have the bill yet. You’re going to want to accrue them and make sure that you put them in a separate account.
As a matter fact all accounts should be in separate accounts so that you have a better understanding of where your money is going and who you’re going to be paying off. Make sure that the bills that you have outstanding are the ones that are going to go in a categorize in chronological order. The chronological order should start with bills that have not yet been in arrears.
Then what happens is it should be with the first zero 230 days past due. And then 30 to 60 days past due for another column, then 60 to 90 days past due for another column.
CFO services wants you to understand that often you’re going to have to think about how to accrue a lot of your bills and payments.
This is something that you’re going to be able to discuss with your charter professional accountant and they will be able to give you the best possible advice to be able to keep your business running and make sure that you have paid most of your bills.
As well, often times what happens is if you have a good relationship with your suppliers, they are going to be able to help you to have a payment plan so that you can pay them off not sooner but later.
What CFO services recommends, is that you pay very close attention very first of all to a lot of the bigger payments. Those the payments that are definitely going to supply you with your chance at profitability from within your business. It definitely needs to be taken into consideration that you put as much money towards the profitability of the bills that you are going to need.
As well, the fact that your then going to have to deal with a lot of the smaller bills. Those are usually pretty easy to deal with as they are often $50, hundred dollars, or $200. Make sure those are dealt with every single month so that it can’t be dealt with and can get interest and you’re going to be paying more on exactly what you don’t want to have. You don’t want to be paying for something where you don’t have any extra money.
You’re also going to need to understand the fact that you don’t put payroll or corporate tax in an AP aging summary. You should not see the Canada revenue agency or any sort of government payment or tax bill on specific GST. It’s only the payment there. They belong in their own separate accounts. You should definitely be having a corporate tax payable account as well.
Get to the point where you have to accrual for a lot of your accounting fees your wages payable and a lot of your other payable accounts as well. It is not necessarily recommended that you’re going to be putting them in accounts payable.
CFO services says the reason for that is because they are simply an estimate and not the exact amount that is owed to you or that you particularly owe. You’re going to not necessarily have that bill yet so you don’t have the exact amount. You’re going to want in that case to accrue them and put them in a separate account. The reason is because you are definitely obligated to pay them sooner than later, which is obviously the same with each and every single bill that you have. It is suggested having a separate accrual account as well. Keep in mind that your charter professional accountant will be able to organize all of these separate accounts for you.
