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David Brown: It’s Time To Get Your Financials in Order

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Published

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With the end of the year looming, this is your
last chance to maximize or minimize earnings


This article originally appeared in the October 2015 edition of INSTORE.

business advice for jewelers from David Brown

The end of the year is fast approaching, meaning this is a good time to be thinking about your financial situation. Most businesses wait until the year-end has passed before getting their statements organized, but this can be too late to take advantage of some pre-year-end financial planning.

For any business owner looking to sell in the next three to five years, each year’s financial statements become increasingly important as any prospective buyer will be looking back at this information when it comes time to assess the business’s performance. That’s why now is the time to be thinking ahead and making sure your financial house is in order.

First, have a close look at your inventory. How much of it is now worthless? Should you be getting ruthless ahead of the year-end (and particularly the holiday season) with this product? Clearing it out can provide you with much needed cash to get you through the December lead-in period. What if this product has been around for years and survived every sale you’ve ever put it through? Then maybe it’s time to write it off. Talk to your financial adviser about what steps you can put in place now with the year-end coming up. What year-end expenses could you be claiming as a deduction? Bringing expenses forward into this financial year can help minimize your tax liability but again this depends on what your objective is. If you want to reduce your tax bill, then showing a lower profit is certainly an advantage. However, if you’re planning to sell your store, then you would want your profit to look as good as it can. Again, these objectives should be discussed with your financial adviser ahead of the end of the financial year to determine which strategy is right for you.

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“Have a close look at your inventory. Should you be getting ruthless ahead of the yearend?”


Are you looking at investing in any new plant or equipment? Once more, discuss this with your financial adviser. They can advise you as to the ideal timing to make the most from these larger expenses.

What about income? Getting some of your work in progress completed ahead of the financial year-end can boost your profits but is this what you need to be doing? There are advantages and disadvantages depending on your financial goals. Speeding sales through, or contacting customers to collect their repairs can be good for cash flow and help show improved earnings depending on how your financials are completed. However, it can lead to a higher reported profit and an increased expense with Uncle Sam. Is this what you need to be doing?

Again, now is the time to ask these questions of your CPA or financial adviser. A little bit of preparation can help make (or save) a lot of money later.


David Brown is president of the Edge Retail Academy. To learn how to complete a break-even analysis, contact [email protected] or (877) 569-8657.

 

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Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

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David Brown

David Brown: It’s Time To Get Your Financials in Order

mm

Published

on

With the end of the year looming, this is your
last chance to maximize or minimize earnings


This article originally appeared in the October 2015 edition of INSTORE.

business advice for jewelers from David Brown

The end of the year is fast approaching, meaning this is a good time to be thinking about your financial situation. Most businesses wait until the year-end has passed before getting their statements organized, but this can be too late to take advantage of some pre-year-end financial planning.

For any business owner looking to sell in the next three to five years, each year’s financial statements become increasingly important as any prospective buyer will be looking back at this information when it comes time to assess the business’s performance. That’s why now is the time to be thinking ahead and making sure your financial house is in order.

Advertisement

First, have a close look at your inventory. How much of it is now worthless? Should you be getting ruthless ahead of the year-end (and particularly the holiday season) with this product? Clearing it out can provide you with much needed cash to get you through the December lead-in period. What if this product has been around for years and survived every sale you’ve ever put it through? Then maybe it’s time to write it off. Talk to your financial adviser about what steps you can put in place now with the year-end coming up. What year-end expenses could you be claiming as a deduction? Bringing expenses forward into this financial year can help minimize your tax liability but again this depends on what your objective is. If you want to reduce your tax bill, then showing a lower profit is certainly an advantage. However, if you’re planning to sell your store, then you would want your profit to look as good as it can. Again, these objectives should be discussed with your financial adviser ahead of the end of the financial year to determine which strategy is right for you.


“Have a close look at your inventory. Should you be getting ruthless ahead of the yearend?”


Are you looking at investing in any new plant or equipment? Once more, discuss this with your financial adviser. They can advise you as to the ideal timing to make the most from these larger expenses.

What about income? Getting some of your work in progress completed ahead of the financial year-end can boost your profits but is this what you need to be doing? There are advantages and disadvantages depending on your financial goals. Speeding sales through, or contacting customers to collect their repairs can be good for cash flow and help show improved earnings depending on how your financials are completed. However, it can lead to a higher reported profit and an increased expense with Uncle Sam. Is this what you need to be doing?

Again, now is the time to ask these questions of your CPA or financial adviser. A little bit of preparation can help make (or save) a lot of money later.


David Brown is president of the Edge Retail Academy. To learn how to complete a break-even analysis, contact [email protected] or (877) 569-8657.

Advertisement

 

 

 

 

Continue Reading
Advertisement

SPONSORED VIDEO

Wilkerson Testimonials

Retirement Made Easy with Wilkerson

The store was a landmark in Topeka, Kansas, but after 80 years in business, it was time for Briman’s Leading Jewelers to close up shop. Third generation jeweler and owner Rob Briman says the decision wasn’t easy, but the sale that followed was — all thanks to Wilkerson. Briman had decided a year prior to the summer 2020 sale that he wanted to retire. With a pandemic in full force, he had plenty of questions and concerns. “We had no real way to know if we were going to be successful or have a failure on our hands,” says Briman. “We didn’t know what to expect.” But with Wilkerson in charge, the experience was “fantastic” and now there’s plenty of time for relaxing and enjoying a more secure retirement. “I would recommend Wilkerson to any retailer considering a going-out-of-business sale,” says Briman. “They’ll help you reach your financial goal. Our experience was a tremendous success.”

Promoted Headlines

Most Popular