A new Small business client came to us for Accounting and Income tax Help. They were a local Edmonton Renovation Company. We were very happy to sit down and work with them to grow their business and increase their profit.
The complaint they brought to us, was that the previous Accounting firm did not educate them, and did not encourage the adoption of technology to grow their business.
To start with we demonstrated we are a virtual firm. We utilize digital and cloud systems to efficiently work with our clients.
With that adoption of Software, and the use of the smartphone as well as an Ipad to conduct business. The Smartphone replaced many tasks that were taking up valuable time and helped to keep their files more organized.
Steps in the Success Journey
A change in business value and personal income does also incorporate savings on personal income tax. These are the steps we took to help this business refine their process so they could save and make more profits. Each business is unique so these steps may change depending on the goal and business structure.
Profit Chart.
Year end of March 31 2020
Prior Acct Firm Analysis360 Analysis360 Analysis360
Description |
2 Year Prior |
Last year |
Current Year |
Next Year |
Gross sale |
525,000.0 |
600,000.00 |
675,000.00 |
750,000.00 |
Operating Expense |
300,000.00 |
310,000.00 |
355,000.00 |
385,000.00 |
Direct Labour |
200,000.00 |
150,000.00 |
100,000.00 |
125,000.00 |
Total Expense |
500,000.00 |
460,000.00 |
455,000.00 |
510,000.00 |
Gross Profit |
25,000.00 |
140,000.00 |
220,000.00 |
240,000.00 |
Corp Tax (@ 12 % |
3,000.00 |
16,800.00 |
26,400.00 |
28,800.00 |
Net Income After Tax |
22,000.00 |
123,200.00 |
193,600.00 |
211,200.00 |
Less Dividends |
20,000.00 |
83 200.00 |
100,000.00 |
0.00 |
Net R/E after Dividends |
2,000.00 |
42,000.00 |
135,600.00 |
211,200.00 |
Non Taxable Insurance Proceeds (claimed On CI) |
0.00 |
0.00 |
500,000.00 |
0.00 |
Adj R/E |
2,000.00 |
42,000.00 |
635,600.00 |
846,800.00 |
Accounts Past due |
295,000.00 |
10 000.00 |
25,000.00 |
20,000.00 |
Bank Balance |
10,000.00 |
295,000.00 |
695,000.00 |
810,000.00 |
Other Assets- Auto - Rental Property |
10,000.00 |
10,000.00 |
100,000.00 |
100,000.00 |
Personal tax Personal Net Income |
35,000.00 All Salary 55,000.00 |
19,020.00 Mix Sal& Div 85,000.00 |
11,000.00 Dividend only 125,000.00 |
0.00 All income from Loans On Insurance Plan 200,000.00 |
Client Goal: | Year 1: | Year 4: |
Client wanted to PAY Zero Personal Income tax. | 0 personal tax | |
Increase Bank balance | $10,000.00 | $810,000.00 |
Collect on Bad Debts AR | $295,000.00 | $20,000.00 |
Wanted to have a New Company truck | 0 | $100,000.00 |
Wanted an increase in Profit after tax | $22,000.00 | $211,000.00 |
Wanted to increase sales | $525,000.00 | $750,000.00 |
Of course, transformation and improvement in Cash, bank, sales, required collaboration with the Accountants, Training the small business owner, Adoption of Technology and following Tax planning, financial planning, and utilizing targeted business services from Analysis360°.
We have only expressed the growth in the actual numbers without reflecting the various % increases and ratio improvements. Small business owners often are more interested in the basic business indicators of Growth, Gross sales, profit after tax, and disposable income.
Personal income could be an issue, if you could not live on a net income of 200,000.00 then that might mean further work on personal goals, personal budgeting and financial planning.
Peace of Mind for this client could be measured this way.
We appreciate the trust this client gave us to let us come in and work together to help them reach their goals!
If you would like support in reaching your goals, book a FREE Consultation here.
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