TIME TO SORT OUT THE SHOE-BOX

By Frances McGuckin

The astute business owners will not wait until April to organize their accounting and books for the dreaded tax time. Paperwork and accounting are generally disliked by most people, yet to succeed, keeping control of the financial reins is as important as marketing and generating sales.

There are a few good reasons for being organized and monitoring your business regularly as opposed to throwing everything in a box in the dying throes of tax time. Firstly, you may have gone bankrupt without realizing it when the situation could have been turned around.

Secondly, your accountant will probably hate you and charge double rates. Thirdly, a business that operates out of the proverbial shoe box means there is no proper management, business planning or financial planning. These businesses rarely grow or succeed over time. Last but not least, you will have a better indication of your personal tax liability rather than be shocked in April at the amount owing.

So why should you monitor your business regularly and keep your financial house organized? We are living in a competitive and downsized economy which is radically changing by the month. Only the financially fittest will survive. Technology is changing the way we do business, and you have to constantly monitor the effects that factors such as e-commerce are having on your business.

By monitoring a business regularly, changing profit structures can be pinpointed and the problems analyzed and resolved before it gets out of hand. If a business is making too much money, there is time before tax returns are filed to review how to reduce taxable income and plan ahead for personal savings and retirement. It's too late to do this in April.

Some business experience unpredicted growth, suddenly finding themselves growing too quickly without the ability to inject more capital to grow the business successfully. All businesses should develop a business plan, work to it, and revise it regularly as circumstances change. A business may be pouring marketing dollars into media which are not working for them. Seasonal trends can be monitored, inventory lines reviewed, and financial figures prepared to determine whether current economic situations are affecting the business either negatively or positively.

Don't be a shoe-box stuffer and operate in the dark. The financial health of your business dictates the financial future of your family, so even if you don't do it for yourself-do it for them.