Play a Game with Money

Do you regularly track your money coming in? Do you track it daily? What patterns do you see? Perhaps those patterns gave you the impression that Money is a bit elusive.

Well, if you are the least bit competitive, you could play a game with Money. Here are some games or challenges you can play using the Daily Money Tracking tool.

Game #1 – See how many non-zero money days you can have in a month…challenge yourself to have more positive money days than zero days.

Game #2 – Create a challenge for bringing in a minimum dollar amount for a number of days (ex: $1500 or more coming in at least 1 day a week).

Game #3 – Challenge yourself to beat your highest positive money day from the previous month.

Game #4 – Challenge yourself to hit your bold money goal for the month BEFORE the end of the month (ex: if you bold money goal is $10,000 for the month, set a target of hitting that goal by the 21st).

One of my clients went from completely ignoring her money to using the Daily Money Tracking tool as a game board to see how much more money she could receive each month. With a Maverick Money Archetype, she openly admits to now playing the game to win and is having fun with it!

Choose your challenge, then brainstorm all the ways that could happen. Think outside the box, and outside of your current situation. Then, once you’ve decided on a strategy, start taking consistent action – each day/each week. Be sure to track your activities and results daily so you can see what’s working and what needs adjusting.

 

[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/12/IMG_0012-resize-square.jpg[/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money Mindfulness Coach. Her mission is to eliminate the stress and anxiety you experience around money and taxes, by empowering you with the know-how and mindsets to improve your business success and financial wellness, so you can have more harmony, joy and abundance in your life.[/author_info] [/author]

Charge What You’re Worth

Why is it that women especially have a difficult time appreciating and owning the value they bring to the table – both in business and in the workplace?  A lot of it has to do with how society has taught us…we’re making progress, but we still have a long way to go.

And I’m happy to provide workshops and training programs that help women entrepreneurs stand in the truth of their value and charge what they’re worth.  Here’s how you can empower yourself and stand in the power of what you’re worth:

  1. Identify and understand the results your clients get as a result of your work.
  2. Know what your time is worth to you.
  3. Gain clarity on what sets you apart from the rest – what makes you unique.
  4. Shift your mindsets and adopt an empowering pricing paradigm.
  5. Stop charging for your time…instead, charge for the value you deliver.
  6. People NEED you, and you playing small (discounting your value) is a huge disservice to them.
  7. PRACTICE stating your fees and unique value until it becomes as easy as saying “pass the salt”.

 

“Doubts and fears are normal, but they don’t define our value” (Casey Brown)
Here’s a great Ted Talk on defining and communicating what you’re worth.

 

[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money Mindfulness Coach. Her mission is to eliminate stress and anxiety people experience around money and taxes, by empowering them with the tools, knowledge, strategies and mindsets that will put them in the driver’s seat of their business success and financial wellness, so they can have more harmony, joy and abundance in their life.[/author_info] [/author]

Take Nothing for Granted

Last weekend I was visiting with my family in Quebec on the family farm.  As is tradition, we always have dessert after supper, and my son had asked for ice cream.  When he went to get it out of the freezer, it was a soupy separated mess…the very large, very old (over 50 years old) chest freezer, had finally died at some point that day.  Now normally, this wouldn’t be a big deal since my parents have 2 other somewhat large (but old) chest freezers and 3 fridges each with their own freezer compartments, and they would find room in those for the soon to be spoiled food.  But harvest season just ended, and the freezers were quite full.   It was interesting to watch as a number of family members scrambled to make room in other freezers, even next door in my brother’s freezer, and I started to think about how we just take it for granted that equipment is going to keep working (even when it’s old).

It was the same when my furnace died last winter.  Even though it was 25 years old (well past the lifespan of a furnace these days), and needed repair, I took it for granted that I’d get at least one more winter out of it.  Not so – I was forced to deal with the expense of a new furnace a year earlier than I had planned.  And my dishwasher that died this summer – 15 years old – I hadn’t planned for that, and we’ve resorted to doing dishes by hand.

We do it with our cars, our phones, our 

computers, and even our bodies.  We take it for granted that things are just going to keep working…we never think that something is going to give out, even when it’s old, and therefore don’t think about or plan for repairing or replacing it.  And when that time comes, we typically experience great stress over the hassle and cost of repairs/replacement.  One solution is to build a capital replacement reserve in your cash flow plans.

Larger businesses have policies, systems, and processes to track their capital equipment, its expected life, replacement costs and annual operating costs.  They also build up reserve funds (capital replacement funds) so that when something breaks or dies, they are prepared – they have a process and the funds to deal with those “unexpected” break-downs.  And they have similar processes for when key employees “break-down”, by ensuring that at least one other staff member is properly trained to do the job and can step in if and when needed, at least in the short term.

So what are you taking for granted in your home or business?  And what policies, systems, and processes (including financial) can you put in place to give you peace of mind and to deal with “break-downs” with greater ease and grace when they happen?

If you need assistance with your cash flow plans, send me an email…let’s see how I can help 🙂


[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money Mindfulness Coach. Her mission is to eliminate the stress and anxiety you experience around money and taxes, by empowering you with the know-how and mindsets to improve your business success and financial wellness, so you can have more harmony, joy and abundance in your life.[/author_info] [/author]

 

Are You Playing Small?

Over the last 6 months or so, I’ve heard a lot of women (and some men) in my circle lacking confidence in their fees and the value they give to their clients. This results in “chasing” revenues and profits (or chasing revenues for little to no profits), attracting clients who may not value or respect your time or gifts and likely leading to stress/burnout or giving up on your dreams. You may take what you offer for granted because it comes so easy to you (and therefore you don’t think you should charge much for it).

I find that most of these women (and men) have these things in common:
– they are most often light/energy workers, holistic practitioners, and creatives.
– they have a deep desire to be of service and help others improve their well-being (be it financial, spiritual, physical or emotional).
– they have been judged in the past for shining they’re light, being told they’re “too much” and should tone it down.
– they want people to like them (and therefore “conform” to what other people like/expect).
– they fear that if they raise their prices, people will judge them as greedy or that people won’t be able to afford them and they’ll lose clients or won’t get new clients (and therefore they won’t be able to be of service).
– they have their own insecurities and limiting beliefs about money.
– they think, “who am I to be so bold?”

If you’re one of these people (and you’re not alone, I am one too!), I have this to share with you from Marianne Williamson: (paraphrasing) Your playing small does not serve the world…who are you not to shine, be brilliant, talented, gorgeous, fabulous?

So how DO YOU shine, be brilliant, raise your prices and stand confidently in your fees and the value you provide to others? I’ve created a system for standing in the truth of your value and getting paid what you’re worth (with ease and grace), and would love to share it with you at my workshop on Nov 1st –Confidently Charge What You’re Worth (and Increase Profits) workshop. Time to stop playing small and SHINE!

Register online before Oct 15 and save $73 (my birth year :)).
http://54.82.103.175/event/charge-what-youre-worth-workshop/

Money is Evil?

What stories were you told about money when you were growing up?  What stories about money do you tell yourself and your kids now?

Go ahead, list them…I’ve heard (and told) so many:

  • Money doesn’t grow on trees.
  • Money is evil (or the root of all evil).
  • Rich people are snobs, bitches, a-holes…they don’t care about anyone but themselves.
  • Money is hard to come by…you have to work hard for money.
  • If you don’t work hard, you don’t deserve money.
  • There’s not enough money…you can’t afford to ________.
  • Rich people are spoiled.
  • So and so was born with a silver spoon in his mouth.
  • People with money are crooks/crooked – they never made an honest day’s wage.
  • You’re not smart enough to make a lot of money.
  • You can’t take it with you, so you might as well spend it and enjoy life now.
  • You have no idea where the money goes – it just seems to disappear.
  • Money is elusive…just when you’re starting to build some savings, something happens (illness, car repairs, home repairs, etc.) to drain your bank accounts.
  • You’ll never get out of debt.
  • You’ll never have enough money to do the things you want to.

(And so on)

Do you cringe or stress every time you look at a bill or your bank accounts, and start complaining about said bill or bank account?

Now, if you were Money, and I kept telling all these stories about you, would you ever want to hang out with me or help me?  Likely not.

Here’s the thing – The energy you put out there is the energy you get back.  So if you’re always complaining about Money, how hard it is to get money, how bad it is, well, guess what – you’re not making a good invitation for Money to come and stay with you.

Start paying attention to the energy and words you put around money.  Go ahead, write down all your money stories (how you feel about it, what you think about it).  Acknowledge how you’ve been treating money.  Then apologize, and start showing it some love instead…start inviting it into your reality and show it some appreciation.  Here are some things you COULD do instead of complaining about Money:

  • Be grateful for every dollar coming in AND going out (yes, be grateful for your bills too, and what they represent).
  • Dream about Money and all the positive ways it can contribute to you.
  • Imagine what Money looks like, feels like, and how it feels to have Money.
  • Start asking questions about how you can have more money, or how you can do xxx with more money.

 

The truth is, Money makes life easier, allowing you to do more and experience more of what brings you and your family joy.  Just think – the more money you have, them more good you can do in this world.

I invite you to shift your money stories – from contracting and negative to expansive and empowering.  What would your life BE like with Money as your partner?

Visit www.visionspire.ca/events for upcoming workshops and programs that will transform your money stories and help you create a healthy relationship with Money and finance.

 

What is Financial Wellness?

It’s no secret that money is the #1 factor causing stress – affecting our mental and physical wellness. It’s also no secret that it takes awareness, know-how and empowering money mindsets, along with INSPIRED action to create the stressless financial reality that you desire.

Financial wellness (and “freedom”) is a mental, emotional, and educational process that provides for an intricate balance of the mental, spiritual and physical aspects of money.  It involves having an understanding of your financial situation and taking care of it in such a way that you are prepared for financial changes…and knowing where your money comes from and where it is going.  One of the first questions I ask my clients is whether they track their money…most of them say no.  In fact less than 40% of North Americans have a good understanding of their finances, and even less (20%) actually have a plan for their financial future.  Without the awareness and planning for your desired financial reality, it’s easy to become controlled by circumstance, fall “victim” to the “poor economy”, to peer pressure, to rising consumer debt – a deterioration of financial wellness.

What does financial wellness (and “freedom”) look like to you? And what actions are you taking daily to adopt those empowering mindsets and take that INSPIRED action to have your financial freedom?

Feel free to leave comments below, or send me an email – would love to hear your views.

PS – If I could give you a simple solution that would promote and empower your financial well-being (in as quick as just a few minutes), would you say yes? Click [YES] to find out how.

[button link=”http://54.82.103.175/moneychallenge/” type=”big” color=”green”] YES! I want to empower my financial wellness![/button]

Getting Comfortable with Money

The more comfortable you get with Money, the more you empower yourself.

I hear many people say they don’t pay attention to their finances because it stresses them out (likely a huge factor behind today’s low financial literacy rates).  One of the reasons for this stress is that they don’t know what to look at or what to do.

Let me tell you a story to shift this perspective.

I have a client who, 9 months ago, had this same perception of money – it was stressful.  She never looked at her numbers, and as long as her debit card worked, she felt everything was ok.  Her husband took care of all the finances (and the stress of dealing with it).  He balanced her books for her and took care of their personal money matters for which she had no awareness or interest.

Then she heard me speak about having a relationship with Money (instead of treating it like just a thing, or a “necessary evil”), which completely shifted her perception and way of being with Money.  She started paying attention to it, understanding it, and looking for ways to bring more money in.

This client recently told me that she now looks at her numbers daily, has gone to her bank about reducing fees and asking about investments (something she had zero knowledge of 9 months ago), and is becoming her own money “guru”.

This new “relationship” with money has empowered her beyond her imagination (and beyond her husband’s imagination) – giving her more confidence in her business and in her relationships, and resulting in greater ease for her business and her family.

Money is the #1 factor causing stress in North America, but it doesn’t have to be.  When you shift your perceptions, and pay attention to your finances, ask questions and learn more about them, you WILL become empowered to take INSPIRED action to build your net worth.

What actions will you take today to empower yourself with money and finance?

 

[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer brings 20 years of professional accounting and tax knowledge to her more recent accreditation as a Certified Money, Marketing & Soul Coach. Through her money mindset and profitability workshops, group training programs, guest speaking and 1-1 coaching, she helps heart centered business owners transform their relationship with money & finance (reducing their money stress), so they can do more of what they love with greater ease and joy. If you would like to be more empowered to create the business (and life) you imagine, with Money as your PARTNER, Linda can help. Contact her for a no-obligation 30 minute complimentary Clarity Call to learn what your next steps should be. [/author_info] [/author]

[button link=”https://visionspire.gettimely.com/book?product=643447%3ASV” type=”big” color=”teal”] LET’S CHAT![/button]

Know Your Numbers

In my 20 year career as a professional accountant and now business coach, I have worked and talked with hundreds of entrepreneurs.  I’ve seen many grow their business exponentially, and I’ve seen some fail.  Many entrepreneurs have told me they’re struggling to make ends meet.  When I ask them if they know how much money they’ve made and spent in the last 6 months, or if they have a plan, almost all of them say no…they don’t track their numbers (many handing over all their receipts for the year to their accountant at tax time), or if they do have their bookkeeping done, they don’t look at the numbers.  Many tell me that they don’t look at their numbers because they don’t know anything about finance, dealing with finance/money stresses them out, and/or they don’t have time.  This certainly backs up the statistic that over 85% of business failures can be attributed to a lack of financial planning and organization.

If you want to have financial wellness and abundance, one of the essential keys is to know your numbers and what to do with them so you can take the appropriate action in line with your business (and life) objectives.

If you don’t track and review your numbers, how would you know how you’re doing?  How would you know if the products you’re trying to sell are making you money?  How would you know if your marketing and sales efforts are paying off in profitable returns?

What numbers could you be tracking?  Literally, hundreds.  But here are some key financial numbers that every business owner should know and understand:

  • Cash in, cash out, net cash flow – What do you bring in, spend, and how much is left each month?
  • Collection rates – How long does it take you to get paid? Do you have policies and processes in place to ensure you’re getting paid on time (or faster)?  Statistics show that any money owed to you that is more than 90 days old likely won’t be collected.
  • Cash burn rate – How fast do you burn through your cash on hand? Typically, you want this to be 3 to 6 months.  It’s a fast track to failure if you don’t have cash to meet your next payroll.
  • Revenues – Are your sales increasing? Decreasing? Are you hitting your targets?
  • Product and Client profitability – How much money is each of your products/services and clients making you…you want to focus on the profitable ones, and let go of the ones that don’t make you money.
  • Gross margin and profit margin – Compare your margins to plan and industry averages – how are you doing? Do you know how much sales you have to make for every dollar you spend in order to have the profits you’d like to have?
  • Capital spending and Return on Assets (ROA) – What are you investing in your business (and do you have a plan for this)? Are the assets you’re buying making you money?
  • Cost of client acquisition – What is it costing you to bring on a new client [=total marketing costs/# new clients]?
  • Return on investment (ROI) – Are your investments making you money, and how much? You can look at this not only from actual investments in stocks/funds/etc., but from every expense line and every effort you make. For example, you may want to know the ROI on your investment in your learning, investment in marketing and advertising efforts, or investment in people.

Whether your focus is on marketing, sales, productivity or profits, you need to track the appropriate numbers and review them on a regular basis to make sure you’re on track with your plans.  By looking at your numbers, and understanding their story, you can then identify the money/productivity leaks and opportunities on which you can take action to grow your business and your profits.

Every person has the opportunity to have financial wellness and abundance.  The difference between the 30% of the population who thrives financially, and the 30% of the population that struggles to survive, is that those who thrive have a plan, track and review their numbers, and take inspired action to grow their net worth.

Your numbers tell a story.  They tell you where you’re making money, where you’re losing money, and whether your efforts are paying off.  Do you know what story your numbers are telling you?

If you would like to empower your financial wellness and abundance, and get to know you numbers better, I can help.  Drop me a line and let’s talk.

[button link=”http://54.82.103.175/contact” type=”big” color=”purple” newwindow=”yes”] LET’S TALK![/button]

[author] [author_image timthumb=’on’][/author_image] [author_info]Linda Spencer, CPA, CA Certified Money, Marketing & Soul Coach [/author_info] [/author]

road over water

8 Things You Need to Know as CFO of Your Small Business

Let’s face it, as a small business owner, you wear many hats – one being that of Chief Financial Officer (CFO).  And as the CFO of your business, you are focused on strategy, planning and operating your business in a way that optimizes your profits and cash flow, and ultimately your financial value.  As CEO (Chief Executive/Operating Officer), you have the big picture vision, the dream.  But as CFO, you are the gate-keeper, the one that ensures the investment in the big picture vision is sound.

This is why I am sharing with you 8 key things that top CFO’s are concerned with to help you make better business decisions and avoid the top small business money mistakes.

  1. Revenue / Sales

The key to any business success is SALES!  No sales, no cash, no business.  So as CFO, you need to understand your sales numbers, as well as your products and target customers, so that you can recommend and take courses of action to ensure that you are going to hit/exceed your sales targets…things like return on marketing, cost of client acquisition and retention, pricing strategies and policies.  The key here is knowing your market and having a good sales and marketing system, as well as having good customer service…after all, it’s easier to get repeat business and referrals than it is new business from strangers.

  1. Vision for the Future

So many entrepreneurs operate by the seat of their pants, looking at short term gains with no real vision for the future.  While this might work in the short run, it is not a sustainable model for the long term.  The cornerstone of what I coach my clients is always to start with the end in mind, and have that end in mind when making your business decisions.  This includes having a written business plan (operational, financial and marketing/sales)…it doesn’t have to be elaborate (unless it’s required by investors/lenders), but it does need to be written down somewhere, vetted and shared with your team, and re-visited regularly.

  1. Talent Acquisition and Management

At one conference I attended, the common message I heard from all the women entrepreneurs who shared their success stories is that the key to their success was building good relationships and having a good team.  This is consistent with my research and with what big business CFO’s have shared with me personally.  You need to have the right people doing the right things with the right tools…and you need to have a system for evaluating their performance, rewarding them and retaining them.  You want a team that will challenge your ideas and strategies, to ensure that you are making the best choices for your business and your clients (and you’ll want to encourage them to do so).

  1. Risk Management

Risk management has been one of my main focus areas for over 10 years.  It is an area that is top of mind for big business CFO’s, but it is one of the most neglected areas in small and micro business.  Yet, risk is an area that can sink a small business in a heartbeat if not managed properly.  Do you know what your risks are?  They could be legal, operational, reputational, financial and credit, compliance, technology, privacy, economic or market risk.  What if something went wrong in providing a service to your client and they sued you?  What if you made a big order with a supplier and they didn’t deliver?  What if an employee was committing fraud?  Or someone was stealing your intellectual property? Or if you didn’t pay your taxes? Or if your technology failed, or someone hacked in and stole your data?  Some effective ways to manage these risks include first identifying your risks, then ensuring you have adequate and appropriate insurance, legal contracts, effective policies and procedures, and internal controls.  How does your business measure up to its risks?

  1. Governance

Along with risk management, comes governance.  Corporate governance is the system by which companies are directed and controlled. It provides the structure through which businesses set and pursue their objectives, while reflecting the context of the social, regulatory and market environments they play in.  For many small business owners, corporate governance and reporting is an afterthought…the reason being may be that many small business are not held accountable by any particular governing body, so governance and reporting takes a back seat to everything else in the business.  Why does this matter?  For one, good corporate governance strengthens a company’s reputation and risk management practices.

Not having good governance structure and practices could lead to things such as the following practices that could cause harm to others and ultimately cripple a business:

  • taking risks which have serious consequences, neglect of duty of care
  • dishonesty, withholding information, distortion of facts
  • misleading communications or advertising
  • avoiding blame or penalty or payment of compensation for wrong-doing
  • secrecy and lack of transparency and resistance to reasonable investigation
  • harming the environment or planet, people or animals
  • unnecessary waste or consumption
  • invasion of privacy or anything causing privacy to be compromised
  • conflict of interest, betrayal of trust or breaking confidentiality

As CFO of your business, the gate-keeper, you need to ensure you have good governance and reporting practices to reduce your risks.

  1. Operating Productivity

Often, cost control is a function of operational productivity.  This includes measuring how well you, your team and your assets are working for you.  What is your return on time and investments? You can look at revenues and costs as a function of time, or people (by function of sales, marketing, operations, technology, admin), or assets (particularly if you’re a capital intensive business).

  1. Profits and Cash Flow

No entrepreneur gets into business with a view of incurring losses…and it sucks when that happens.  Profits are often the driving force for creating financial value and obtaining financing.  But it’s not just revenue minus expenses…you have to also take into account depreciation and other costs indirect costs that you might not be thinking of on a regular basis, such as interest, taxes, and what you pay yourself (and YES – you should be paying yourself, just as you would for any other employee).

Even more important than profits, I think, is cash flow…you need to know what cash is coming in (receivables and collections) and going out (payables, payroll and taxes), and when, so that you can manage it effectively and ensure that you are still paying yourself, your employees  AND all the other bills.  That’s why it’s important to track, reconcile your accounts and review your cash flow at least on a monthly basis (or weekly is better) so you can make quick decisions to bring in more cash, especially if you’re facing a shortfall.  Doing so can also help identify problem areas in your business that need further investigation.

  1. Tax Planning and Optimization

As a small business owner, you have options as to how you structure your business, and what makes the most sense for you from a tax perspective…you don’t want to be paying too much tax, but also need to ensure you’re not under-reporting your income or over-deducting expenses.  Unexpected tax audit adjustments can be costly, and come with significant interest and penalties.  I’ve seen businesses go out of business because of unforeseen tax assessments.  This not only goes for income taxes, but for sales taxes and payroll taxes as well.

________________

How do you track and report all this?  Where do you start?  Start by working with your professional advisors… Ask your accountant questions so they can help you understand what your numbers are telling you.  Hire a business consultant – they’re trained to see and understand the big picture, analyze the situation and identify areas for improvement, as well as the solutions to implement for greater success.  If your concern is sales, hire a sales consultant or coach. Talk to your lawyer about hedging your legal risks, and to your business insurance agent to ensure you’re adequately covered.

Still not sure?  Send me an email…I’d be happy to discuss your situation to see how I can help directly or refer you to someone in my vast network of business experts (accountants, lawyers, marketing strategists, sales coaches, social media experts, web and graphic designers, content writers, technology solutions, insurance specialists, financial analysts and advisors, HR specialists, recruiters, and more!).  And check out upcoming workshops and programs than may assist you www.visionspire.ca/events

Contact Linda@visionspire.ca .

 

[author] [author_image timthumb=’on’][/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money, Marketing & Soul business coach. Her mission is to eliminate stress and anxiety around money and taxes, by empowering heart-centered small business owners with the tools, knowledge, strategies and mindsets to put them in the driver seat of their financial success and wellness.[/author_info] [/author]

12 Ways to Optimize Your Cash Flows and Taxes Before the Year is Through

Most entrepreneurs aren’t thinking about their 2016 taxes this month, but they should be…there are some things you need to do before December 31 to take advantage of certain deductions and tax credits for your 2016 tax return.  And, it’s also a good time to have a boost in your cash flows.  Here are 12 tips:

Increase Your Cash Flows

  1. Want a boost in your cash flows this last month of the year?Look at where you are leaving money on the table – it could be outstanding receivables, over-delivering on your services, not following up on leads (how awesome would it be to book another client or two just before Christmas?!).
  • While you’re at it, why not review your payment policies…maybe a change is required such that you’re getting paid in advance or at the very least on the day of service (that way you don’t have to worry about chasing those receivables after the fact).
  • Now is also a good time to review your pricing strategies to make sure your charging for value.  Now would be a good time to notify your clients of price increases that will take effect in January.

 

2.  Consider accelerating purchases for your business.

As a business owner, you probably have a good idea of the things you need for your business.  If you want to get the deduction from your income this year, purchase items you need in your business on credit in December and pay for them in January when your credit card is due.  This way you’ll get the tax deduction this year but defer the cash outlay until next year.

  1. Pre-sell packages/services/goods to be delivered in the new year.

‘Tis the season for giving, so why not offer an incentive for people to pre-order goods and services and pay for them now, that they’ll receive in the new year.  Examples could be taking custom orders for your goods for future delivery, offering gift certificates for clients to give to their loved ones that they can use in the new year, offer savings/bonuses to pre-sell a program/course/workshop that will take place in the new year.

4.  If you haven’t already done so, now is a good time to look at your 2017 plan.  When you have clarity in where you’re going, and align your actions to achieve that, you’re telling the Universe that you’re open and ready to receive.  That receiving may even happen sooner than you think.  Going back to my previous point – when you have clarity of your 2017 goals/targets/plan, you can decide which offers to promote and pre-sell now.

When you’re planning for the new year, plan with the end in mind and ask these key strategy questions:

    • What is your overall vision, purpose and goal?
    • Where will you play (play where your target clients are)?  How will you become more visible and build your audience?
    • How will you hit/exceed your targets?  What will  you offer, at what price? How/when will you get paid? What are you marketing/sales strategies? How will you know you’re on track?  What are your back up plans?
    • What capabilities/resources need to be in place to support that?
    • What management systems need to be adopted and implement to support that?

 

Optimize your 2016 taxes

So now you’ve injected some extra cash into your bank before year-end, the year would not be complete without thinking about how to optimize your taxes.  Here are some tax-saving tips that you’d need to consider doing before year-end.

  1.  Maximize your CCA (tax depreciation) claims.

Purchase business equipment before year-end to accelerate the capital cost allowance (CCA) deduction by one year.  For most equipment purchases, you get 1/2 the CCA deduction in the year of purchase.  So if you purchase in Dec 2016, you get 1/2 the year’s CCA in 2016, then a full year’s worth in 2017.  If you wait until early 2017 to make the purchase, you only get 1/2 the year’s CCA in 2017, even though you’ve been using it for almost a full year.   Again, buy them on credit and pay later, allowing your to get the deduction in 2016, but defer the cash outlay to 2017.

2.  Keep cash in the family and reduce your taxes.

Pay a reasonable salary to your kids/partner for actual work they do for you (this is a form of acceptable income splitting).  You get the deduction, and the income should be picked up in their income tax return for the year, presumably at a lower tax rate than yours.  But, also beware of additional tax compliance and amounts you have to remit (such as CPP contributions and completing T4’s).

3.  Maximize your car expenses.

If you use your car for business, and you know you’re car is in need of service and repairs (perhaps new winter tires?), make those necessary car repairs before year-end to get the deduction in your 2016 income (in proportion to your business use of your car).  While you’re at it, update your mileage log to track all your business km’s.

4.  Maximize the Canada Education Savings Grant (CESG) for the year by making your RESP contributions prior to December 31.

If you have kids under the age of 18, the Canadian government give you a grant on the RESP contributions made for your kids’ post-secondary education.  The grant is 20% of the RESP contributions, to a maximum of $500 on $2500 of contributions made in the calendar year.  Now is the time to top up your RESP contributions to take advantage of the maximum available CESG for the year.  There are additional grants available for low income families and kids with disabilities.

5.  Maximize your RRSP contributions.

Assuming no carry-over room or pension adjustments, you can contribute 18% of your earned income for the previous year to your RRSP in 2016 (to a maximum of $25,370 for 2016 contributions).  Many people wait to top up their RRSP contributions until February.  However, there are a few instances where it would make more sense to do so before the end of the year.

    • If you’re nearing retirement, and make spousal RRSP contributions, consider that if you wait until Jan/Feb 2017 to make those contribution, your spouse will not be eligible to withdraw them until 2020.  Making the contribution in 2016 accelerates the eligible spousal withdrawal to 2019.
    • As a tax free savings vehicle, if you’re 18 or older, you can make after-tax contributions to a Tax Free Savings Account (TFSA).  The maximum contribution for 2016 is $5500 (like RRSP’s, the unused contribution room gets carried forward and available to you in future years).  If you’re planning to make a withdrawal from your TFSA, do it now instead of waiting until January – that way your withdrawal is added back to your contribution limit for 2017 (otherwise you have to wait until 2018 to be eligible to add it back into your TFSA).

6.  Maximize your medical tax credits.

Medical and dental expenses incurred in the year can only be claim if paid in 12 month period (claim period) that ends on or before December 31.  So, you’ll want to pay those outstanding medical expenses/prescription refills/dental bills before year-end to maximize your claim for 2016.

7.  Optimize your charitable donations tax credits.

Total charitable donations in excess of $200 made in the year can give a higher tax credit (approximately 40% in Ontario) than your marginal income tax rate, giving  you a net benefit on your tax return.  But, the donations have to be made in on or before December 31 in order to be claimed on your 2016 tax return. So if you’re planning on giving, December is a great month to give.

8.  If you have unregistered investments which are giving you taxable gains in the year, consider selling stocks with accrued losses to offset realized gains for the year to reduce your taxable income.  Also, consider paying investment related expenses before year-end in order to get the deduction for this year against your investment income.

 

So there you have it – 12 ways to increase your cash flow and optimize your taxes for 2016.  Of course, these are general statements – each person’s situation is different and must be considered carefully before making decisions that will affect your taxes and cash flow, taking in to account the specifics of your situation.  I would suggest you speak to your accountant/tax advisor/investment advisor to be sure you’re making the best choices for your unique situation.  I’m happy to assist as well – contact me and request your complimentary clarity session to see how I may help.

[button link=”http://54.82.103.175/contact/” type=”big” color=”green”] Request Your Complimentary Clarity Session[/button]