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Financial Statements: Not Just for the Canada Revenue Agency
With the start of the New Year, regardless of your
financial position, you are a busy person. You are dealing with
customers and suppliers whose business philosophies range from
desperately clinging onto market share to those who see opportunity
in the current economy.
If your outlook is that of the former, you're in for a rough period.
A solely defensive attitude without any plans for moving forward
can only lead to an eventual decline. I hope the following may
change your perspective.
For those who do not believe that this is the end of the economic
world, I bring you good news. Timidly led, poorly structured competitors
will fall by the wayside, and if prepared, you will be the one
to pick up the slack in the market.
Whatever your industry, or opportunity, one thing is constant:
you will need cash to finance your increased capacity. The bank
and your suppliers are the quickest ways to acquire funds without
starting new relationships that that will take a great deal of
time to cultivate. In order for any supplier to allow you extra
credit or extended terms, or a bank granting loans, they will
want credible financial statements. The 10-month-old statements
that were compiled by your public accountant that conform to income
reporting standards of the Canada Revenue Agency will simply not
do. Creditors want to know that you have an intimate knowledge
of cash flows surging through your business.
If you are a BusinessVision user, a module called F9
may be an inexpensive Excel-based tool that you may wish to use
in providing financial reporting that is meaningful from the bank's
perspective (Sage PFW and Epicor users would use FRx).
With a professional presentation and drill-down capabilities,
F9 gives you the ability to provide lenders with the information
that they require to monitor and measure your progress on an annual,
quarterly or monthly basis. Products like F9 and FRx provide you
with ratios and metrics for an online, real-time environment.
Lenders appreciate that they are dealing with data and financial
position facts that are days old rather than months old.
Remember that nothing motivates the closing of a deal faster than
someone ready to write a cheque and commit themselves financially.
If you acquire credit by using financial tools properly, you will
be ready with financial that will enable your enterprise to grow.
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Irwin Pinsky, B.Comm., CGA
Irwin Pinsky is the manager of our small business division and focuses
on our BusinessVision practice. Irwin's experience includes that
of a public practitioner focused on emerging companies, as well
as financial controllership.
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