Federal Budget 2018 Summary
Make Your Charitable Giving Count
by Stephanie Kormos, CPA, CA, Partner
“You log you learn”: a phrase I have often heard while listening to fitness coach James Smith talk about health and exercise. Smith’s commentary isn’t suited for everyone but he does have some great points about how managing your caloric intake has a significant impact on your physical performance and overall health. As you log your calories, he says, you learn what your body need to perform at its best.
As I log my coffee habits, I learn to make better decisions. For example, I am often just as satisfied by an americano as I am with a latte. A latte has almost as many calories as a light lunch whereas an americano has very few calories. Tracking my daily caloric intake allowed me to see how much of an impact my choice of coffee had. Drinking that much coffee is probably still not the best decision for my health (I’m not perfect) but I now know better when I can afford to have a latte and when I shouldn’t.
Tracking your transactions on a regular basis will help you understand what your business needs to succeed. If you are not tracking your spending, budgeting, and financial projections, your business will not run at its optimal performance.
Knowing how much cash you should have coming in, and when and how much cash is going out can help you prepare for the unknown. If you are not managing your financing on capital expenditures you may find yourself in a cash crunch when trying to satisfy your day-to-day liabilities. This can increase your stress, but worse, may result in great opportunities lost because you a) don’t have the financing in place; b) aren’t organized enough to respond quickly; or c) simply don’t have the information to know if you can take on risk.
“You log you learn”. Start by tracking your daily cash inflows and outflows on a regular basis. Set a budget to see if what you expected to happen actually happened. If you don’t know how much to budget, your accountant can help you. If you are planning on making a large capital purchase, plan what you will need for cashflow and determine if your current cashflow and authorized financing is sufficient or if you will need approval from your lender. The sooner you start talking to your lender about upcoming cash flow needs the more likely you will be able to have things in place by the time you go to make your purchase. Timely tracking of the information makes it more useful for current and future activities. It is very hard to make decisions using data that is a year and half old. Keep it up-to-date and look at it regularly.
By logging your transactions on a regular basis you are better able to identify what works and what doesn’t. Logging and tracking information will not magically result in you making perfect decisions. But it will help you to make more informed decisions that will help your business perform at its best.