Year End Tax Saving Tips

If you are like most other people, you don’t start thinking about saving money on your taxes until you sit down sometime in April of the following year to comply with the CRA regulation of filing your personal income taxes by the last day of the month. As you learn each year, you should have sat down with or without your advisor towards the end of the tax year – November/December and looked for tax saving opportunities. Here are a few items to consider:-

  1. Tax loss selling – If you have large capital gains for the year perhaps you should consider to finally dumping those ‘dogs’ and apply the capital losses.
  2. Charitable donations – Making a donation before December 31 of this year will help reduce current taxes.
  3. Employer bonus – Deferrring is always a good choice, so if you are entitled to a bonus in 2012 take the money after January 1, 2013. This is the simple answer, but your tax rate in each year may tell a different story. Looking at the issue now could lead to saving money!
  4. RRSP conversion –  If you are turning 71 in 2012 make sure to make your contribution before December 31 – don’t wait until late February 2013. The deduction will not be allowed!
  5. Fees – Pay all deductable fees – tuition, mamagement, safe deposit box, accounting, childcare, etc. before the end of the year.

Remember each taxpayer is different and the above tips and comments are but a short ‘idea’ reminder. Should you need more information please post your question or give me a call. Next week – 5 more tax saving tips that will look good on your bank account.

Key Performance Indicators — How to Measure True Business Success

If a business is to attain true and lasting success, it can’t rely on old news.

Counting on financial statements—snapshots of a business weeks to months old—to direct the future profitability of a business can lead instead to failure. To make the right decisions, a businessperson needs to know what is happening right now.

The get that information, a system must be put in place to measure all areas of business performance. The goal is to improve the quality and timeliness of the information available to decision-makers. After all, what can be measured can be managed.

A businessperson will quickly discover that it is the current non-financial numbers that are absolutely critical to the profitability of the business. By having relevant information more readily available, and the ability to identify trends more quickly, a businessperson will have the tools to manage the business more profitably.

It is vital to the success of a business that “Key Performance Indicators” (KPIs), discussed in detail a little further on, be monitored in a consistent and timely manner. This will yield instant feedback about all areas of the business’s performance so that adjustments to strategy can be made without potentially costly delays.

In the world of small business, owners and managers tend to spend the majority of their time working “in” their businesses rather than “on” their businesses. They become so focused on financial statement measurement that they miss seeing the big picture. Most wait until the end of the month or quarter—or even of the year—to see the outcome and assess how the business has fared. As a consequence, they are forced to make critical business decisions on a limited amount of already outdated financial data. Such delay may cripple their decision-making.

The concept and benefits of measuring activities are not hard to grasp: More information about the business—quicker! However, being able to identify the activities critical to the business’s goals does take some work. To simplify the process, the decision-maker should start by dividing the business into four key activity centers: Sales/Marketing, Management, Operations and Finance.

Under these four headings, KPIs are then defined and measured in order to provide better information for making critical business decisions in a timely manner. Some examples of KPIs are the following:


  • Conversion ratios
  • Average transaction value
  • Frequency of customer contact
  • Number of customer complaints


  • Absenteeism
  • Productivity
  • Total staffing
  • Sales per administration staff member


  • Returns and rework
  • Labour productivity
  • Downtime
  • Make-up pay / Overtime pay


  • Accounts receivable days
  • Operation cash flow
  • Inventory turns
  • Dead inventory

There are literally hundreds of potential KPIs to be measured in every business—each with the potential to yield timely information vital to decisions that optimize profitability.

Businesses that adopt this process should commit to it for a minimum of one year. Experience has shown it takes at least that long for a consistent and disciplined application of this approach to reliably identify trends and achieve long-lasting results.

With these feedback mechanisms in place, decision-makers will know what is currently going on without having to be intimately involved in every detail of the operation. Together, they function like the dashboard in a car, which relieves the driver of having to lift the hood every few minutes to check if the engine is performing properly. Decision-makers are then able to work “on” the business rather than simply “in” it, since they will possess the information needed to make timely course corrections as they navigate their businesses toward true and lasting success.

A few opening thoughts…

Have you heard the one about the guy who decided to become an accountant?
He realized he didn’t have the charisma to become an undertaker.

There are a lot of jokes told about accountants. It’s not considered to be a particularly glamorous occupation. But there are very few jobs in which one can have as great and positive an effect on the practical realities of people’s lives.

So, all joking aside, as long as we consider people and the quality of their lives to be important, accounting must be considered important—and worthy of the conscientiousness and diligence demonstrated by every worthy accountant.

This is the first in what I intend will be a weekly effort to simplify tax preparation/accounting and bookkeeping for what I hope will prove to be my loyal readers. I will write posts containing hints on how to make your life less complicated when it comes to the necessary tasks of keeping records and meeting the Canada Revenue Agency’s demands for various filings (monthly, quarterly or yearly).

The range of topics will be as numberless as the pages in the tax code, and I will always be happy to do my best to answer your questions. So please don’t be shy about emailing us or posting comments and questions in this blog. We promise that we will answer every query and publish every blog comment of broad interest.

So tune in next week for my post on “Key Performance Indicators”—or How to Measure True Business Success.