Explore our business accounting, assurance, & advisory services in Burlington, Oakville & Hamilton.

Most businesses start as one single corporation. The business grows and becomes more complex. At this point, it may make sense to review your corporate structure to ensure you are maximizing your opportunities and reducing exposure. By having additional corporations, you can reduce your exposure to risk and also streamline the operations of your business.

There are three types of reports produced:

1. Notice To Reader – does not provide any level of assurance to the user of the statements
2. Review Engagement – provides a limited level of assurances to the user of the statements
3. Audit engagement – provides the highest level of assurance of the user of the statements

Usually, the use of assurance engagements are a result of bank financing requests, owners who may not be actively involved in the business or for businesses who might potentially be looking to be sold in the near future.

An Audit Engagement is the highest level of assurance of the user of the statements.

Corporate structures may change as business grows and industries and economy change.

A review of the business plan, your circumstances, the purpose of the company (eg. Holding Company for cash, investments, family trust) will help determine what the best corporate structures are for your situation and goals.

An analysis would need to be done to determine the relationship between net profits, profitability, and cashflow. An examination of how cash is used in the business can reveal how the cash flow cycle could be improved to benefit your company.

The ideal finance structure for your company will depend on the cash needs of the business.All businesses need to assess both their short and long-term cash requirements. Most businesses will need some type of short-term financing – such as a line of credit (LOC) – to be able to manage operating cash flow.

Longer term financing needs are usually based on capital expenditures which are typically financed by longer term debt to match the life span of the underlying asset (e.g. investment in equipment with a life span of 6 years would be financed with a longer-term bank loan that would match the timeline of the asset).

Budgeting is a part of a planning process that you undertake in advance of your next business year. It is where you plan for the results of the company’s activities for the next year. Budgeting is important because it provides a target for management to strive for in its operations.

Forecasting is performed at different times over the year to provide a best estimate to as to where the company results will end up at the end of the year. Forecasting has more relevance as the year progresses since this process can take into account changes in the business environment that management might not been able to identify at the beginning of the year (e.g. economic downturn or change in interest rates).

Working with a professional can help you interpret what the numbers mean and where they are going. This can be invaluable for the business owner to ensure they have a correct understanding to be able to assess their future strategies. In addition, the quarterly review provides a great opportunity to discuss upcoming plans and be able to get input from your professional advisor.

A CPA can provide input on your strategic plans regarding how they can affect profitability of the business and taxation. This information may change the strategic plan to better maximize profitability for the business.