professional business advisory services

The Benefits of Professional Business Advisory Services

Running a small business in Canada can be both rewarding and challenging. With the ever-evolving economic landscape, changing regulations, and the need to stay competitive, small business owners are constantly faced with decisions that can impact their growth and success. This is where business advisory services can add real value, offering invaluable support that goes far beyond traditional accounting.

Business advisory services are designed to provide small business owners with expert guidance on a variety of strategic and operational issues. Whether it’s navigating financial challenges, improving operational efficiency, or planning for future growth, these services can help businesses thrive in today’s competitive environment. For those looking to make informed decisions that propel their business forward, understanding the value of professional business advisory services is essential.

1. Types of Advisory Services

Business advisory services encompass a broad range of offerings, each tailored to address specific needs within a business. Understanding the different types of advisory services available can help small business owners determine which areas of their operations can benefit the most from expert guidance.

Financial Advisory Services

One of the core offerings in business advisory is financial advisory services. This includes everything from financial planning and analysis to cash flow management and budgeting. For small business owners, having a clear picture of their financial health is crucial. Financial advisors can provide insights into cost-saving opportunities, financial risks, and investment strategies that align with the business’s goals.

Strategic Planning and Growth Advisory

Strategic planning is another critical area where business advisory services can make a significant impact. This involves setting long-term goals, identifying opportunities for business growth, and developing a roadmap to achieve those objectives. Growth advisory services often include market analysis, competitive benchmarking, and strategic partnerships, all aimed at positioning the business for sustainable growth.

For small businesses, which may not have the internal resources to focus on long-term planning, strategic advisors can offer the expertise needed to create a viable growth plan. Whether it’s expanding into new markets, launching new products, or scaling operations, strategic planning services help businesses navigate these complex processes with confidence.

Operational Efficiency and Process Improvement

Operational advisory services focus on improving the day-to-day operations of a business. This can include streamlining processes, optimizing supply chains, and enhancing overall productivity. Small businesses often operate with limited resources, so maximizing efficiency is key to maintaining profitability. Advisors in this area work closely with business owners to identify bottlenecks, implement best practices, and leverage technology to improve operations.

Risk Management and Compliance

Risk management is an essential aspect of any business, especially for small businesses that may be more vulnerable to market fluctuations, regulatory changes, and unforeseen challenges. Business advisory services in this domain help businesses identify potential risks, develop mitigation strategies, and ensure compliance with local and federal regulations.

Advisors can provide guidance on everything from cybersecurity threats to legal compliance, helping small businesses protect their assets and avoid costly penalties. In an era where data breaches and regulatory scrutiny are on the rise, having a robust risk management plan is not just advisable—it’s essential.

Succession Planning and Exit Strategy

For business owners looking towards retirement or considering a sale, succession planning and exit strategy advisory services are invaluable. These services help owners transition out of their business smoothly, ensuring that their legacy is preserved and that the business continues to thrive under new leadership. Advisors assist with everything from valuation and negotiation to finding suitable buyers or successors.

Succession planning is not just about the eventual exit; it’s about preparing the business for long-term success, even in the absence of its founder. Advisors work with business owners to create a plan that minimizes disruption and maximizes value, ensuring that the business remains strong for years to come.

2. Benefits for Small Businesses

Investing in professional business advisory services can yield significant benefits for small businesses. Here are some of the key advantages that small business owners can expect when they engage with expert advisors.

Informed Decision-Making

One of the most significant benefits of business advisory services is the ability to make informed decisions based on expert insights and data-driven analysis.

Small business owners often wear many hats, and it’s easy to become overwhelmed by the sheer volume of decisions that need to be made. Advisors provide a fresh perspective, offering strategic advice that is grounded in experience and tailored to the specific needs of the business.

Whether it’s a decision about entering a new market, hiring additional staff, or investing in new technology, having an advisor by your side ensures that you’re making choices that are aligned with your business’s long-term goals. This not only reduces the risk of costly mistakes but also increases the likelihood of success.

Enhanced Business Growth

Business growth doesn’t happen by accident—it requires careful planning and execution. A trusted advisor can be instrumental in helping small businesses identify growth opportunities and develop strategies to capitalize on them. From market expansion to product diversification, advisors work with business owners to create a growth plan that is both realistic and ambitious.

For Canadian small businesses, growth can mean different things: expanding locally, entering international markets, or even increasing market share in a niche industry. Whatever the goal, business advisors provide the tools and expertise needed to achieve it.

Increased Operational Efficiency

Efficiency is the lifeblood of any successful business, and this is especially true for small businesses with limited resources. Operational advisory services help businesses streamline their processes, reduce waste, and improve productivity. By identifying inefficiencies and implementing best practices, advisors can help small businesses do more with less.

This not only boosts profitability but also frees up time and resources that can be reinvested into other areas of the business. For example, automating routine tasks or optimizing supply chains can result in significant cost savings and allow business owners to focus on strategic initiatives rather than getting bogged down in day-to-day operations.

Better Risk Management

Small businesses are often more vulnerable to risks than larger enterprises, making effective risk management a critical component of success. Business advisory services provide small business owners with the tools and strategies needed to identify, assess, and mitigate risks before they become major issues.

From financial risks to compliance challenges, advisors help businesses navigate the complex landscape of potential threats. This proactive approach not only protects the business’s assets but also provides peace of mind, knowing that potential risks are being managed effectively.

Long-Term Sustainability

For small businesses, longevity is often the ultimate goal. Business advisory services contribute to long-term sustainability by helping businesses build a strong foundation that can withstand economic fluctuations and changing market conditions. This includes everything from financial planning and cash flow management to strategic growth and succession planning.

By working with advisors, small business owners can ensure that their business is not only successful today but will continue to thrive in the future. This focus on sustainability is particularly important in the Canadian market, where economic conditions can vary widely depending on the industry and region.

Competitive Advantage

In a competitive market, standing out from the crowd is crucial. Business advisory services can provide small businesses with a competitive advantage by offering insights into industry trends, consumer behavior, and emerging opportunities. Advisors help businesses stay ahead of the curve, ensuring that they are not just reacting to changes in the market, but proactively positioning themselves for success.

Whether it’s adopting new technologies, entering a new market, or simply improving customer service, the guidance provided by business advisors can make all the difference in maintaining a competitive edge.

Get The Advisory Support You Need

For small business owners in Canada, the benefits of professional business advisory services are clear. From informed decision-making and enhanced business growth to increased operational efficiency and better risk management, these services offer invaluable support that can help businesses thrive in a competitive marketplace.

Whether you’re looking to expand your business, improve your operations, or simply make more informed decisions, business advisory services offer the support and guidance needed to achieve your objectives. For small business owners in Canada, the right advisory services can be the difference between merely surviving and truly thriving.

Ready to take your business to the next level but not sure where to start? Book a consultation with Avisar today and let our experienced advisors help you build a clear path to growth, efficiency, and long-term success.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

keeping accurate financial records of a business

The Importance of Keeping Accurate Financial Records for Small Business

For small businesses, the management of financial records is a cornerstone of sound business practice. Accurate financial records are pivotal for tracking growth, planning, and ensuring compliance with Canadian tax laws. In this post, we’ll shed light on why meticulous financial record-keeping is essential for small business owners across Canada.

The Role of Accurate Financial Records of a Business Operations

Vital for Strategic Planning and Management

Financial records provide a clear snapshot of your business’s financial health and trajectory. They include various documents such as bank statements, invoices, payroll records, and more. These records are crucial for making informed decisions, from daily operations to long-term strategic planning. For instance, understanding cash flow patterns can help you anticipate financial needs and avoid potential shortfalls.

Ensuring Compliance and Ease of Reporting

For businesses in Canada, maintaining accurate financial records is not optional but a regulatory mandate. These records are necessary for accurate tax filings and audits.

The Canada Revenue Agency (CRA) requires businesses to keep records that support the amounts declared in tax returns for at least six years. Accurate financial records streamline the process of financial reporting and ensure compliance with minimal discrepancies, which can protect your business from fines and penalties.

The Importance of Financial Statements in Decision Making

Insights into Business Health

Financial statements are derived from well-maintained, accurate financial records and are indispensable for reviewing the financial status of a business. They help in understanding assets, liabilities, and equity, which are crucial for assessing the company’s financial stability. Regular financial statement reviews can signal the health of a business, showing whether it’s thriving, stable, or in need of intervention.

Basis for Financial Transparency and Investor Confidence

Accurate financial statements are also critical for maintaining transparency with stakeholders, including investors, creditors, and banks. They form the basis of trust and reliability between the business and its partners, potentially aiding in securing investments or loans.

The Consequences of Poor Financial Record-Keeping

Impact on Business Growth and Funding Opportunities

Inaccurate or poorly maintained financial records can severely hinder your business’s ability to grow. It complicates the process of financial analysis and planning, leading to poor management decisions. Additionally, it can impede your ability to receive funding. Banks and financial institutions heavily rely on sound financial records to assess creditworthiness.

Legal Repercussions and Financial Liability

Failure to maintain accurate financial records can lead to serious legal consequences, including penalties and audits by the CRA. Such situations can not only be financially damaging but also tarnish a business’s reputation, potentially leading to long-term harm.

How Long Do You Have to Keep Financial Records for Your Business in Canada?

The question of “how long do I need to keep financial records for my business” is a common one amongst Canadian entrepreneurs. The good news is, the CRA provides clear guidelines on record retention. Here’s a breakdown:

  • Six Years: Generally, most financial records, including sales invoices, receipts, cancelled cheques, bank statements, and general ledger entries, must be kept for a minimum of six years from the end of the fiscal year to which they relate. This applies to both businesses and self-employed individuals.

  • Seven Years: If your business claims capital cost allowance (CCA) on assets, you’ll need to keep all related records for a minimum of seven years after the year you disposed of the asset.

  • Ten Years: For certain records like payroll information, including T4 slips, Records of Employment (ROE), and remittance slips, the retention period is extended to ten years from the end of the year to which they relate.


It’s important to note that these are the minimum retention periods mandated by the CRA. You may choose to keep your records for a longer period for your own reference or future business needs.

Best Practices for Managing Financial Records

Regular Updates and Reviews

To keep financial records accurate and comprehensive, it is crucial to update them regularly and conduct periodic reviews. This practice helps in identifying and correcting errors promptly and ensures that the business has reliable data for making financial decisions.

Don’t let bookkeeping tasks pile up. Develop a consistent routine and dedicate time to record your transactions regularly. This prevents a backlog from accumulating and simplifies the recordkeeping process.

Leveraging Technology

Utilizing accounting software can enhance the accuracy of financial records. These tools help in automating entries, reducing human error, and providing backups for data security.

Invest in a user-friendly accounting software program that automates many bookkeeping tasks, such as recording transactions, generating reports, and managing invoices. Popular options include QuickBooks Online, Xero, and FreshBooks.

Professional accountants like Avisar can aid in selecting the right software tailored to the specific needs of your business.

Why Small Business Accountants are Indispensable

Expertise in Tailored Accounting Solutions

Small business accountants specialize in addressing the unique needs of small enterprises. They are not only adept at organizing financial records but also provide strategic insights that align with your business goals. Avisar Chartered Professional Accountants, for example, offers services that go beyond traditional accounting, including tailored advisory services that help businesses maximize their financial potential.

Streamlining Financial Processes

Professional accountants help streamline accounting processes, ensuring that financial records are timely, accurate, and compliant with Canadian laws. This can include the implementation of efficient bookkeeping systems, payroll management, and ensuring that all transactions are documented and accessible for audits and strategic reviews.

Conclusion: Your Financial Records are Your Business’s Future

The meticulous management of financial records is imperative for any small business. Accurate financial documentation supports strategic planning, compliance, and financial transparency—all crucial elements for business success.

Avisar Chartered Professional Accountants understands the complexities involved in financial management for small businesses and offers expertise that goes beyond the numbers to foster growth and stability.

For small business owners, investing in sound financial record-keeping, with the support of specialized accountants like Avisar, isn’t just a regulatory necessity—it’s a strategic asset.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.

Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

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cash flow management is critical for your business

Cash Flow Management: Mastering the Lifeline of Your Business

In a world where nearly 82% of businesses falter due to poor cash flow management, understanding this vital aspect is not just important—it’s your lifeline. Mastering cash flow management can mean the difference between thriving and merely surviving.

Imagine navigating a ship through unpredictable seas. Without a clear understanding of your position and the elements at play, the journey becomes perilous. Similarly, without a firm grasp on cash flow, your business may struggle to reach its destination: success.

Understanding Cash Flow: The Bedrock of Business Health

At its core, cash flow represents the movement of money in and out of your business. It’s a real-time snapshot of your financial health, showing how well you’re managing your resources. Understanding cash flow goes beyond merely observing the numbers; it involves deciphering what those numbers say about your operational efficiency, your ability to meet obligations, and your potential for growth.

Cash inflow is the lifeblood of your business, pumped in through sales, accounts receivable collections, and any other sources of income. Conversely, cash outflow is the expenditure tide, flowing out for expenses such as rent, payroll, inventory purchases, and other operational costs. The equilibrium between these two streams dictates the financial health and stability of your business.

Profit vs. Cash Flow: A Critical Distinction

A common misconception among business owners is equating profitability with healthy cash flow. A business can be profitable on paper yet struggle with cash flow.

Profit, or net income, is a measure of what remains after all expenses are subtracted from revenue over a certain period. Cash flow, on the other hand, is about the actual amount of money available at any given time. For instance, sales made on credit contribute to profit but not to immediate cash flow, highlighting the potential for discrepancies between the two.

The Significance of Cash Flow Statements

Understanding cash flow necessitates familiarity with cash flow statements, a financial document that breaks down the cash generated and used by a business over a period. This statement is divided into three main parts:

  • Operating activities (day-to-day business operations)
  • Investing activities (purchases and sales of long-term assets)
  • Financing activities (loans, dividends, and equity)

A well-maintained cash flow statement not only offers a snapshot of the business’s liquidity but also provides insights into its operational efficiency, investment strategies, and financial health.

In essence, mastering cash flow management empowers you to make informed decisions, anticipate future financial needs, and navigate the challenges of business operations with confidence. It enables you to ensure your business remains solvent and can sustain growth over the long term.

The Impact of Poor Cash Flow Management

Neglecting cash flow management can have dire consequences. A study by U.S. Bank found that 82% of business failures are due to poor cash management. Without a vigilant eye, you might not see trouble brewing until it’s too late. Inadequate cash flow management can lead to:

  • Inability to meet financial obligations on time
  • Compromised business relationships and creditworthiness
  • Hindered growth due to lack of funds for reinvestment
  • Increased stress and potential for business failure

Measuring and Analyzing Cash Flow

To steer your business towards success, you must first learn to measure and analyze your cash flow accurately. This involves:

  • Understanding cash flow statements: Learn to read and interpret cash flow statements, which detail the cash generated and used during a specific period.
  • Identifying cash flow trends: Look for patterns in your cash flow over time. Are there seasonal fluctuations? Are certain products or services more profitable?
  • Benchmarking against industry standards: Knowing where you stand in comparison to industry averages can provide valuable insights and highlight areas for improvement.

Tips for Improving Cash Flow Management

Improving cash flow management is a multifaceted approach that involves both strategic planning and practical actions:

  • Invoice promptly and follow up: Delayed invoicing leads to delayed payments. Develop a system for timely invoicing and follow-up on overdue accounts.
  • Optimize inventory: Excess inventory ties up cash. Use inventory management tools to maintain an optimal inventory level, reducing waste and freeing up cash.
  • Negotiate better payment terms: Work with suppliers to negotiate payment terms that align with your cash flow cycle, possibly extending payment periods.
  • Leverage technology: Implement accounting and cash flow management software to automate and streamline processes, providing real-time insights into your financial status.
  • Manage expenses: Regularly review and categorize expenses. Identify areas where costs can be reduced without impacting quality or productivity.

Implementing a Cash Flow Management System

A structured cash flow management system is crucial for maintaining control over your financials. This involves:

  • Regular cash flow forecasting: Anticipate future cash flow with forecasting based on historical data, current trends, and expected changes in the market.
  • Setting cash reserves: Establish a safety net of cash reserves to buffer against unforeseen challenges.
  • Creating actionable policies: Develop clear policies for payment terms, credit control, and expense approval to ensure consistency and discipline in cash flow management.

Advanced Cash Flow Management Strategies

For businesses looking to take their cash flow management to the next level, consider these advanced strategies:

  • Dynamic discounting: Offer early payment discounts to customers for quicker cash turnaround.
  • Supply chain financing: Utilize third-party financing to pay suppliers early at a discount, improving supply chain efficiency and maintaining cash flow.
  • Cash flow analysis tools: Invest in advanced analytics tools to gain deeper insights into cash flow patterns, enabling more informed decision-making.
  • Leverage Financing Options Wisely: Consider lines of credit, invoice factoring, or other financing solutions to manage short-term cash flow needs without compromising long-term financial health.

Conclusion

By understanding and effectively managing your cash flow, you’re not just surviving; you’re thriving, ready to seize opportunities and navigate challenges with confidence.

Remember, effective cash flow management is an ongoing process. It requires vigilance, adaptability, and strategic foresight. By implementing the tips and strategies discussed in this post, you can ensure your business not only survives but thrives in the competitive marketplace.

Book a free consultation to learn more about how to use solid cash flow management to run your business.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

small business employee benefits

Small Business Employee Benefits: What You Should Offer

Small business employee benefits can be a great equalizer when competing for talent against larger companies. The big guys have more resources to offer top talent, and small and medium-sized businesses can’t always compete with the salaries offered by larger firms. A more innovative way to approach hiring as a small business is with the help of employee benefits.

A great employee benefits plan helps small businesses attract more talent and reduce employee turnover. However, there are always tax implications to keep in mind. If you are thinking about offering benefits to your employees for the first time or want to change or increase your current benefits package, then this article is for you.

The Landscape of Employee Benefits in Canada

Canadian employee benefits are usually considered standard for all full-time employees. However, each province has different regulations for employee benefits and probationary periods. Some of the more common benefits offered by small businesses in Canada include:

  • Paid time off
  • Flexible working hours
  • Personal leave
  • Medical leave
  • Family violence leave
  • Critical illness and compassionate care leave
  • Extended maternity and paternity leave
  • Holiday pay
  • Health insurance
  • Healthcare spending accounts (HSAs)
  • RRSP contribution matching

Picking the right benefits to attract talent to your company depends on the demographic you want to hire. For example, younger recruits might be more attracted to flexible hours and personal leave benefits. At the same time, older applicants might be more interested in RRSP contribution matching and compassionate care leave.

Key Small Business Employee Benefits and Their Tax Implications

While you can offer your employees a wide range of potential benefits, there are a few that can make a big difference in your recruitment and retention strategy. These are some of the most common benefits, along with their tax implications for business owners.

Health and Dental Insurance

Offering health insurance plans or dental insurance coverage can benefit small businesses. It signals to prospective employees that you care about their well-being and can help keep them healthier, leading to fewer sick days.

For business owners, there are additional benefits to offering health and dental insurance. There is deductibility for the employee and non-taxable benefits for the employer. This helps employers and employees get more out of health and dental insurance coverage.

Retirement Savings Plans (Group RRSPs)

Another benefit small or medium-sized business owners can offer employees is a Registered Retirement Savings Plan, or RRSP, matching program. This type of employer-sponsored retirement plan uses matching contributions from employers and employees with the plan option.

The tax implications from retirement plans and RRSPs involve deductions and deferrals. Typically, the amount of money that the employer contributes is tax-deductible. The employees who contribute can also enjoy tax deferrals until they withdraw the money from the retirement savings account.

Stock Option Plans

Depending on your company structure, stock options are another type of employee benefit that can make you stand out among your competitors. This type of benefit allows you to offer stock options to employees as a benefit, usually after a certain number of years worked for the company. 

This kind of benefit gives employees an ownership stake in the company and a vested interest in its success.

This type of benefit also allows the employee and employer to defer tax implications until later. That can help save money in years when taxes are high. The value of shares is also included in taxes for the employees, so deferring the taxation on stock options can help add more value to the benefit.

Professional Development and Education

Another valuable benefit you can offer to employees is professional development and education courses and training. By helping employees gain more knowledge and learn valuable and applicable skills, you can make a job more appealing and more beneficial to their future careers.

Many professional development and education programs are tax-free or are tax-deductible for the business. So not only are you helping your workforce learn more and grow more robust, but you can also avoid taxes or deduct the expense from your yearly tax report.

Special Considerations for Small Businesses

Small businesses operate differently from large corporations, so there are some special considerations to consider as you work on your employee benefits plan.

Tax Credits and Incentives

There are some specific Canadian tax credits available for small businesses offering certain benefits, including:

  • Apprenticeship job creation tax credit (AJCTC)
  • Film and television tax credits in Ontario
  • R&D tax credit
  • Union dues tax credits in Québec

Navigating the Complexity

Trying to figure out the best types of benefits to offer your employees and track the tax implications of those benefits is challenging. Navigating the complexity on your own can be overwhelming, especially for new small businesses that haven’t offered benefits before. In these cases, it’s best to consult with a professional accountant or tax advisor to remain compliant and maximize your tax advantages.

The Impact on Employee Retention and Recruitment

The benefits you offer can be a game-changer for small businesses in the competitive job market. Small companies like Willful have maintained their competitive edge and thrived during the pandemic thanks to their benefits packages. With only 15 employees, Willful attracted top talent with benefits like medical and dental insurance, stock options, education budgets, summer hours, and a vacation fund. 

By offering benefits that your competition hasn’t even considered, you can attract the best potential recruits to come to your business, no matter what size company you have. Benefits can help level the field for your hiring and employee retention strategies.

Conclusion

Benefits can offer important tax implications and better recruitment practices for small businesses. The benefits you offer and the depth of your coverage can help you attract top talent, keep your current workforce happy, and give you a break during tax season. Reviewing your current benefits strategy and seeking expert advice from tax professionals can help you get the most out of your plans. If you need help with your benefits planning, book a free consultation to discuss your benefits plan with certified professionals.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

financial literacy

Unlocking Business Success: The Power of Financial Literacy for Entrepreneurs

As entrepreneurs and small business owners, you wear many hats, from marketing mavens to product developers. It’s impossible to be an expert in every aspect of your business. Still, there is one area that will pay huge dividends on the investment of time you make: financial literacy.

Financial literacy isn’t just about crunching numbers. It’s about understanding those numbers well enough to steer your business in the right direction. And in the unpredictable world of business, that understanding is priceless.

In this post, we’ll delve into the importance of financial literacy for small business owners, highlighting how mastering the basics can lead to smarter, more informed business decisions. So, whether you’re a seasoned business owner or just starting out, let’s embark on this financial journey together.

The Direct Impact of Financial Literacy on Business Success

Financial literacy is more than just a buzzword; it’s a foundational skill that can make or break a small business. Let’s dive into how understanding the financial ropes directly influences your business’s success.

Improved Cash Flow Management

Cash is the lifeblood of any business. A U.S. Bank study found that a whopping 82% of small businesses fail due to poor cash flow management1. By understanding the nuances of your cash inflow (sales, investments) and outflow (expenses, purchases), you can predict potential shortfalls and take proactive measures. It’s not just about making money; it’s about ensuring that money is available when you need it.

Informed Decision Making

Have you ever been of two minds about investing in new equipment or hiring more staff?

Financial literacy equips you with the tools to make these decisions confidently. By understanding your financial statements, you can gauge the health of your business, assess profitability, and determine the feasibility of big-ticket expenses. It’s like having a financial compass guiding you toward decisions that align with your business goals.

Risk Management

Every business faces financial risks like fluctuating market conditions or unexpected expenses. Being financially literate equips you to identify those risks early on.

For instance, if you’re aware of market trends, you might foresee a potential dip in sales and adjust your spending accordingly. Or, by regularly reviewing your financial statements, you might spot irregularities that could indicate fraud. Financial literacy acts as your business’s early warning system, helping you navigate potential pitfalls.

The Indirect Benefits of Financial Literacy

While the direct impacts of financial literacy, like cash flow management and risk assessment, are often in the spotlight, the indirect benefits can be just as transformative for small business owners. Let’s delve into these often-overlooked advantages.

Enhanced Confidence in Decision Making

When you understand your finances, you’re not just making decisions; you’re making informed decisions. Imagine being at a crossroads, unsure of which path to take. Financial literacy is like having a map, giving you the confidence to choose the right direction.

Better Relationships with Financial Institutions

Banks and creditors love working with informed clients. When you demonstrate a clear understanding of your financial position, it not only makes their job easier but also builds trust. This can lead to better loan terms, faster approvals, and even potential partnerships. Think of it this way: would you rather lend money to someone who knows exactly how they’ll pay you back or someone who’s just hoping for the best?

Long-term Business Sustainability

Financial literacy isn’t just about the here and now; it’s about the future. By understanding financial trends and the broader economic landscape, you can make strategic plans for growth and expansion. It’s like planting seeds today for a harvest tomorrow. Businesses prioritizing financial education tend to have a more sustainable growth trajectory, ensuring they’re not just a flash in the pan but a lasting presence in the market.

How to Improve Your Financial Literacy

Improving your financial know-how is more accessible than you might think. Here are some ways to chart your course to become more financially savvy.

Educational Resources

The digital age has blessed us with many resources at our fingertips. From online courses on platforms like Coursera and Udemy to insightful books like “Financial Intelligence for Entrepreneurs” by Karen Berman and Joe Knight, there’s no shortage of material to dive into.

Hiring a Professional

Sometimes, the best way to learn is from someone who’s been there and done that. Consider hiring an accountant or financial advisor, even just for a few consultation sessions. They can provide personalized insights, answer specific questions, and guide you through the intricacies of your business’s finances.

Plus, having an expert on speed dial can be a game-changer during those “I’m not sure what to do” moments.

Continuous Learning

The financial landscape is constantly evolving. Regulations change, new tools emerge, and market dynamics shift. Dedicate some time each month to stay updated. Subscribe to financial news outlets, join business forums, or attend workshops. By committing to continuous learning, you ensure that your financial knowledge doesn’t just grow but stays relevant.

In essence, improving financial literacy is a journey, not a destination. Whether you’re diving into online courses, seeking expert advice, or simply staying updated, every step you take strengthens your business’s foundation.

If you focus on developing and maintaining your financial literacy, the positive impact on your business will be profound.

If you’d like to have a conversation to help you get started, book a free consultation. We’d be happy to offer some advice.

mastering financial forecasting

Mastering Financial Forecasting: 3 Things You Need to Know

Financial forecasting is a vital skill that many small business owners overlook, especially when first starting a business. Impacting sales projections, planning for expenses, and cash flow, this skill makes it easier for you to see how your business will do not only today, but tomorrow, next week, and next month. Financial forecasts make it possible for you to determine whether you’ll have sufficient funding to keep your business operating in the future, or if additional funding may be needed.

Mastering Financial Forecasting: Predicting and Planning for Small Business Success

The Importance of Financial Forecasting in Strategic Planning

A financial forecast will project sales, expenses, and cash flow into the future of your business, allowing you to determine areas where financing may be required to prevent your business from shutting down or suffering other financial difficulties. But beyond seeing into the short-term future, financial forecasting also plays other roles in your business, specifically in your strategic planning process.

Having a strategic plan for your business gives your budget some place intentional to put every dollar and gives you strong direction on which way to go as you face a range of issues in your company. Though you’ll still want to have a buffer set aside for unexpected emergencies, having a strategic plan that includes expected growth, capital equipment replacement, annual expenses, and similar revenue and expenses in place makes it easier to make decisions that are in line with your overall strategic plan.

Think of it this way: if a business didn’t plan for capital equipment replacement or for a slow season, the business might be caught without enough funding to successfully complete the financial cycle. With a plan in place, the owner, management, and leadership of the business can make decisions that are in line with the plan, preventing wasted time, money, effort, and materials.

How to Create Financial Forecasting Models and Projections

Though expenses, revenue, and cash flow all look at different aspects of your business’s overall health, all three follow the same basic rules when undertaking your financial forecasting. The biggest difference is which factors you’ll be considering.

  1. Define your financial forecasting purpose. What do you want to learn? Are you estimating sales or determining if your budget will work? These purposes will help you decide which measurements to use in the process.

  2. Pull your past financial data and statements. The past got you to where you are today and will help you determine where you’ll go in the future. You’ll want to know about revenue, liabilities, equity, expenses, losses, investments, income, per-share earnings, and fixed costs.
  3. Choose a timeframe. How long do you want to go into the future? For a business that has a regular income, you can create financial forecasting based on a few weeks’ data, but for irregular or seasonal income, go for several years. Most companies use a single fiscal year. If you’re doing long-term planning, pull long-term data and trends.
  4. Decide what financial forecasting method to use. Quantitative forecasting uses existing historical data for identifying trends and patterns but may not take into account industry changes. For those changes, a qualitative forecasting method that includes expert opinions and sentiment about the business and industry is more accurate.
  5. Document the process and review calculations. Much like weather forecasts, financial forecasting isn’t 100% accurate and will change more the further you get from the point of analysis. Document your process for future use and revision and check its accuracy after strong internal or external changes. Automation can make this process easier.
  6. Analyze the data. By regularly checking the data created regularly in your business against your forecast, you can determine how accurate your financial forecasting will be. You can also determine when your goals and plans should be accordingly adjusted.

  7. Repeat. Based on your timeframe in #3, repeat your financial forecasting on a regular basis to ensure that you’re still on top of the figures and in control of your spending and income.


By understanding how these documents are created, you’ll have a much better idea of how to leverage them to your company’s advantage in the future, including when you’re preparing an annual budget, finding problem areas, setting intelligent business goals, attracting investors, and reducing your risk. You’ll also be able to undertake innovative discussions about your company’s financial health with financial institutions, creditors, and other organizations you work with.

Why You Should Regularly Review and Adjust Financial Forecasting

However, it’s not enough to simply finish these financial forecasting models. You’ll also want to take time on a regular basis to review and adjust as needed to optimize your results. As an example, if you have higher or lower sales or expenses than was forecast, you have the option of slowing down the progress of your strategic plan or speeding it up. The strategic plan will still come into play, but it will have its timeline adjusted when financial forecasting is reviewed and adjusted.

Though financial forecasting can seem like a very complex process, it’s actually fairly straightforward once you understand the basic processes that are involved. Why not take a little time when things are quiet and work one out using the steps above? Once you’ve figured out how to accomplish this task, your business will be in much better hands and will be facing a much stronger future.

Would you like a free review of your financial statements? You can book one here.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

Federal Budget 2023: Previously Announced Measures

Budget 2023 confirms the government’s intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release.

  • Legislative proposals released on November 3, 2022 with respect to Excessive Interest and Financing Expenses Limitations and Reporting Rules for Digital Platform Operators.
  • Tax measures announced in the Fall Economic Statement on November 3, 2022, for which legislative proposals have not yet been released, including: automatic advance for the Canada workers benefit; investment tax credit for clean technologies; and extension of the residential property flipping rule to assignment sales.
  • Legislative proposals released on August 9, 2022, including with respect to the following measures:
  • borrowing by defined benefit pension plans;
  • reporting requirements for Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs);
  • fixing contribution errors in defined contribution pension plans;
  • the investment tax credit for Carbon Capture, Utilization and Storage;
  • hedging and short selling by Canadian financial institutions;
  • substantive Canadian-controlled private corporations;
  • mandatory disclosure rules;
  • the electronic filing and certification of tax and information returns;
  • Canadian forces members and veterans amounts;
  • other technical amendments to the Income Tax Act and Income Tax Regulations proposed in the August 9th release; and
  • remaining legislative and regulatory proposals relating to the Goods and Services Tax/Harmonized Sales Tax, excise levies and other taxes and charges announced in the August 9th release.
  • Legislative proposals released on April 29, 2022 with respect to hybrid mismatch arrangements.
  • Legislative proposals released on February 4, 2022 with respect to the Goods and Services Tax/Harmonized Sales Tax treatment of cryptoasset mining.
  • Legislative proposals tabled in a Notice of Ways and Means Motion on December 14, 2021 to introduce the Digital Services Tax Act.
  • The transfer pricing consultation announced in Budget 2021.
  • The income tax measure announced on December 20, 2019 to extend the maturation period of amateur athletes trusts maturing in 2019 by one year, from eight years to nine years.
  • Measures confirmed in Budget 2016 relating to the Goods and Services Tax/Harmonized Sales Tax joint venture election.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.

non-profit board

Non-profit boards take work to make themselves successful

This post comes from our guest expert Larry Nelson, founder of Nelson/Kraft and Associates, an executive search firm that works with non-profit organizations.  He has conducted many board governance workshops and has served as a valued advisor to boards and CEOs.

A non-profit organization is only as strong as its board.  And great boards need to be carefully constructed to succeed. In this post we explore four areas of focus critical to board success.

Defining the Non-Profit Board Structure and Purpose

It is essential to determine in advance what the board’s role will be: Is it advisory, operational, or policy-focused?  It is also important to decide how often the board will need to meet to achieve its mandate, and those meetings should be scheduled two years in advance.

Careful selection of board members is a science.  Select members based on their competencies and experience.  Key competencies include commitment, communication, conflict resolution, initiative, objectivity, practical judgment, accountability, open-mindedness, integrity, self-awareness, transparency and empathy.

Non-profit Board membership also needs to reflect a wide range of expertise.  Most non-profits can benefit significantly from members with strong backgrounds in finance, law, governance, business/non-profit leadership, fundraising, marketing, sociology, public relations, theology and human resources.  That mix will vary, depending on the nature of the non-profit.

A board manual should include role descriptions for the board members, the chair, the vice-chair, the secretary and the CEO.  Clearly indicate the distinction between roles.  Remember, the chair manages the board and the CEO manages the staff.  Both work for the board.

The board manual also serves as both the framework for decision-making as well as firm organizational policies.  This way, you will have documented expectations of board members, how the board will operate, what is expected of staff and how staff will interact with the board.

Set term lengths for board members and pay careful attention to gaps in areas of expertise that may be lacking on the board.  Have an effective board recruitment procedure in place.  And prepare a formal orientation program for new board members so that they can become active participants from their first day on the board. 

Build in annual board retreats.  These allow board members to get to know each other socially and to provide designated time to do some critical big-picture thinking.  

What Makes A Great Board Meeting?

Have you ever left a board meeting with the feeling that it was a complete waste of your time, needed to be better planned, wasn’t well chaired and did not move the organization forward?  Great board meetings do not happen by accident.

Here are some key factors that make for a great meeting:

The meeting started and finished on time.

The board information package was issued and read by all before the meeting.  It also included:

  • Staff accountability reports and information on the key issues to be considered,
  • An agenda that was well planned with an indication of the time that should be spent on each issue
  •  and key benchmark indicators quickly informed the board of the organization’s achievements.

The board used a consent agenda at the start of the meeting to save valuable board time.  (Consent agendas allow routine, recurring agenda items to be approved without discussion or individual motion, such as approval of agenda, minutes and staff reports.)

Staff reports indicated that risk areas were being monitored and under control, sound stewardship principles were being practiced, and the staff was highly motivated.

The meeting focused on the future, ensuring the organization achieved its goals and not micromanaging the past.

The chair led well, establishing good time management and soliciting the input of every director.

The venue was comfortable, and there was a rest break every 90 minutes.

The board acted as a team because the members had a high level of trust.

The meeting ended with an evaluation of the session:

  • Did the members do their job?
  • Did the organization move forward as a result of the meeting?
  • How could we make the next meeting better?

Members left the meeting knowing that their time had been valued and respected by the organization and that each one, acting as part of the board team, made a difference.

Everyone left feeling confident that the CEO had given a complete account of their stewardship.  The organization showed that it was avoiding what it must not do and focusing on what it should do.

The secretary circulated the minutes within a reasonable period after the meeting, which included clearly indicated action items to be completed at specified dates in the future.

How To Build An Effective CEO-Board Chair Relationship

It all begins with mutual respect.  There must be clear role descriptions for the chair and the CEO and written mandates for each board committee.

The board chair’s position is the second most significant in the organization after the CEO.  There needs to be ongoing mentoring/training of the next chair.

The chair should be the CEO’s number one encourager.  There should be an understanding that they will never embarrass or surprise one another in a board meeting.

The chair should act as a valuable sounding board to the CEO, providing regular feedback, counsel and advice.  The chair should also clearly communicate to the CEO what the board needs to know.

The board chair and CEO should take time to get to know each other, both professionally and socially, to build trust.

The chair should realize that the board’s number one objective is to make the CEO successful.  If the CEO isn’t successful, the board can’t be successful.

Consider a Birkman assessment for both the CEO and chair.  This handy reference tool helps them understand how each one is wired, how each makes decisions, and what level of encouragement and feedback each other needs.

This CEO/chair partnership is further enhanced by having them meet in person or by phone before upcoming board meetings to prepare the agenda together.  The chair should ask the CEO what you need from the next board meeting.  What are the take aways that you must have?  Put these early on the agenda.

Importance of a Board Member Orientation Process

Helping new board members get up to speed quickly is a gift to everyone,  both fellow board members, CEO and staff. Here is a checklist for helpful information to provide the new board member before they attend their first board meeting (download a PDF version):

____ Articles of incorporation and letters of patent

____ Bylaws

____ Board policies

____ Monitoring or assessment reports on the organization’s performance from the

         past year

____ Employment contract  and role description for the CEO

____ Biographical notes for each board member

____ Board minutes from the past year

____ Budget for this fiscal year and financial statements for the past fiscal year

____ Summary of current board  governance issues

____ Summary of the current topics, problems, trends and opportunities

____ Schedule of board meetings for the next two years and attendance expectations

____ Conflict of interest policy and policy on confidentiality

____ Policy on reimbursement of board expenses

____ Duties and responsibilities of board members under law.

Download a PDF of the checklist

NFPO Board Checklist
How to recruit board members for a non-profit

How to Recruit Board Members for a Non-Profit

The board of a non-profit organization plays a huge role in its success. Perhaps the most important responsibilities of board members are determining the organization’s mission and purpose and selecting the organization’s Executive Director. These are significant tasks, but their responsibilities do not end there. Board members must also:

  • Ensure effective organization planning.
  • Ensure adequate resources and manage those resources effectively.
  • Determine, monitor, and strengthen the organization’s programs and services.
  • Enhance the organization’s public standing.
  • Ensure legal and ethical integrity and maintain accountability.
  • Recruit and orient new board members, and assess board performance.

Unfortunately, finding the right board members for non-profits isn’t easy. This is especially true if a board is looking for members with specialized skills. However, it’s not impossible to find great board members if one looks in the right places. 

Determine How Many Board Members are Needed for the Non-Profit

How many board members does a non-profit need to have? Experts say that having seven to fifteen board members is ideal; however, a small non-profit may not need this many members while a large organization may need more than fifteen to operate effectively. Existing board members should consider future goals and programs, the current board’s strengths and weaknesses, and other factors to determine how many new board members should be recruited. 

Obtain Recommendations from Existing Board Members

Existing board members can be a great source of referrals for new board members. They have worked with current employees and volunteers, know the non-profit’s needs and are passionate about helping a non-profit reach its goals. Naturally, suggestions for potential new board members will still need to be vetted to ensure they are the right fit for the board; even so, asking current board members for suggestions can jumpstart the process of finding new board members. 

Consider Volunteers, Employees, Donors, and Others Connected to the Organization

There are several advantages of choosing new non-profit board members from a pool of current volunteers and donors. Those who have been involved in a non-profit for some time will be familiar with the organization’s methods and goals. They will likely adjust to their new role with ease, and they’ll know at least some of the people they will be working with. Current members/donors are also familiar with the organization’s culture and way of operating, which makes the transition process smooth and problem-free. Furthermore, current organization members and/or donors have likely been vetted, making them “safe” picks. 

On the other hand, there are good reasons to consider those who aren’t currently involved in the organization. New people can bring in new ideas and ways of doing things that can revitalize the organization and enable it to reach its goals faster and more effectively than would have otherwise been possible. If the current non-profit isn’t diverse enough, bringing in diverse board members can strengthen the board by providing well-rounded leadership.

Use Social Media to Identify Potential Board Members

Reaching out to unknown individuals via social media can be a scary process. However, it may be the best course of action for several reasons. If a board cannot find a member with the specialized skills it needs from within the organization, then reaching out to potential new members is the only option. If the organization is moving in a new direction, then it may need to bring in new people to help the non-profit reach its long-term goals. 

LinkedIn can be a great source of information about potential board members, as users can search the platform for individuals with particular qualifications and skills. Furthermore, the platform can be used to connect with potential board members and get to know them before offering them a position on the board. Even if the individual in question isn’t able to fill the role, he or she may be able to refer the current board to potential candidates with a similar skill set. 

Knowing how to recruit board members for a non-profit organization is important. Sometimes a non-profit needs to add new members to a board in order to take on new projects; in other instances, current board members need to step down and be replaced. As the need for one or more new board members can arise at any time, keeping a list of potential members updated and handy will enable the current board to select new members with relative ease, bring the new members onboard without undue delay, and create a seamless transition process that will empower the non-profit to reach its goals.

Disclaimer: Avisar Chartered Professional Accountant’s blog deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein. Although every reasonable effort has been made to ensure the accuracy of the information contained in this post, no individual or organization involved in either the preparation or distribution of this post accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.