CFO Services | Why Get A Financial Plan Created
It is extremely important for business owners to get a financial plan done according to CFO services. Because this will ensure that they are paying the minimal amount of taxes.
One of the most important reasons why entrepreneurs go into business for themselves in the first place. Is to be able to save money and accumulate wealth. And they do this by implementing an effective tax strategy.
In fact, the corporate tax rate is at 11%. And the highest personal tax rate in Alberta is currently 48%. Which is why many entrepreneurs go into business for themselves.
However, if business owners are not going to an accountant in order to get this financial plan and tax plan done. They will end up spending far more in taxes than it would have cost them to get a financial and tax plan done in the first place.
Some business owners tend to think that they have to grow to a certain size. In order to benefit from CFO services doing their financial and business planning. They think they need to make a quarter of a million or a million dollars per year. In order to make the cost of the financial planning worthwhile.
However this is not true at all. Business owners only need to be making fifty thousand dollars per year in order to make it cost effective. This means extremely small businesses and even solo print nor can benefit from tax planning.
In fact, businesses that are making over fifty thousand dollars in a single year. Are ending up paying far more in taxes. Then they would by paying CFO services to do their financial plan and tax plans on their behalf.
By understanding this. Business owners can shop around for the right accountant for them. One that will not only do a business plan. But one where the business plan will include a financial and tax plan within it. The reason why, is because these plans are vital to the success of the business. Through paying less taxes.
But also, the best accountant will not charge additionally for these plans. Because of how important they are to the business.
If entrepreneurs are using an accountant that will do their year end finances. But does not do the financial or tax plan. Are setting the business owner up for failure. Because how can the accountant expect a business owner to remain in business. Without implementing an effective tax strategy.
Owning a business is just like owning an airplane. Because in theory, a plane will help a person get places. But if they do not know how to fly the plane. It is likely going to end up in an unmitigated disaster.
In the very same way, by owning a business. Business owners can save taxes. But they need to know what they should do in order to save taxes. Because owning it alone does not mean that it is going to give them what they need.
Business owners should find an accountant who will help them get a financial and tax plan. So that they can save the money they need in their business.
How Can You Learn About The CFO Services?
It is very important for business owners to have financial plans as well as tax plans according to CFO services. The reason why, is because those financial and tax plans will be what helps an entrepreneur avoid paying too much money in taxes.
In fact, the reason why entrepreneurs go into business for themselves. Is so that they can minimize the amount of taxes that they have to pay.
29% of all entrepreneurs that fail say that running out of money is the reason why their business was not successful. And when half of all small businesses in Canada and up failing. That is a lot of business owners who are running out of money in their business.
If they were able to implement an effective tax strategy. They would be able to pay less in taxes. And use that money that they save towards running their business.
Some business owners may not have gotten a financial or tax plan done. Simply because they did not know if they could afford to get one done. Or, they did not want to pay extra because they were trying to save money.
Or, what is worse is if entrepreneurs think that they have a tax strategy. But they actually do not, and are continuing to take their accountants advice. Despite the fact that no tax planning was done.
The best way for an entrepreneur to be able to tell if they have a tax strategy or not. Is if they are getting 100% salary, or 100% dividends as a means of getting paid.
This typically is an indication that not enough thought has gone into their tax planning process. In fact, the best tax strategy usually includes a combination of salary and dividends.
But what that combination is says CFO services. Will depend on the personal circumstances of the entrepreneur and their business. And is best determined by their own accountant.
Another way for business owner to understand if their accountant has done some tax planning. Is if they discussed their personal life with their accountant at all. And while this might seem silly to some business owners.
It is very important for an accountant to know the entrepreneurs personal circumstances. Such as how many dependents they have, if they have any other income such as from a spouse or investments.
How much that they have. And how much they are paying per month in bills including mortgage and car payments for example.
These are all very important for CFO services to know ahead of time. So that their financial and tax plans can reflect an entrepreneurs reality. So that it would be most likely to end up helping an entrepreneur. Rather than a strategy that is designed around an entrepreneur bringing money in from elsewhere.
Therefore, business owners should not settle on any accountant. They should shop around for one that not only will provide the financial and tax plans. But will provide the financial and tax plans at no additional charge. Because ultimately, that is what is going to help an entrepreneur succeed in business.