Entrust Accounting & Advisory Services
Management Accounting involves identifying, measuring, interpreting, and communicating of financial and non-financial information to management for the purpose of making prudent business decisions.
Management Accounting focuses on two areas:
Analyzing and reporting on operation business metrics, variance analysis, rates of return, and business ratio analysis which is used to assist stakeholders internal to the company in making well-informed business decisions, and
Forward-thinking planning exercises such as budgeting, make-or-buy decisions, cash flow forecasting to name a few.
According to an Innovation Science and Economic Development Canada report (Key Small Business Statistics Nov 2019), a business's survival rate in Canada during the next year is 95.4%. Pandemics will drop that survival rate substantially. The survivability rate of a business lasting five years is 64.9%, and drops down to 43.7% after ten years and 31.3% after fifteen years. This is not very good news if you expect to use your business to help fund your retirement
According to a BDC article “9 common mistakes to avoid when starting a new business”, the top 3 mistakes were 1) Neglecting to make a business plan, 2) Inadequate financial preparation and resources, and 3) Failing to monitor progress and adjust.
Entrust Accounting & Advisory Services, Business Planning offers to guide business owners and operators through a process that confirms the overall goals of the company, which validates market trends, assesses current results, and creates a measurable plan that provides a roadmap to success.
Cash is the lifeblood of a company. If not managed properly, there will come a time when there will be insufficient funds to meet an obligation as it comes due. Business owners often ask, “If I’m making money, then why do I have problems paying bills?”
Proper budgeting involves planning for revenues, expenses, working capital, investing, and financing the business. A misconception about budgets is that they are restrictive in nature, and once they are set, they cannot change. Implemented properly, budgets can increase freedom by allowing business owners to understand where and why changes occurred thereby allowing them to make better business decisions should the need arise.
Budgets serve to help owners: focus on what is important, identifies areas where over or under spending is occurring, provides a plan to increase earnings, identifies opportunities for improvements, and helps improve business owners' sleep habits.
Entrust Accounting & Advisory Services, Budgeting Service offers to guide business owners and operators through a process that develops a:
1) detailed sales budget,
2) cost of sales budget,
3) expense and profit budget,
4) inventory and supplies budget (if required),
5) business assets acquisition/disposal budget, and
6) financing and debt servicing budget.
The deliverables will be a detailed forward-looking 12-month budgeted income statement, balance sheet, and statement of cash flows.
BUSINESS PLANNING & BUDGETING
BUSINESS PERFORMANCE ANALYSIS
“What gets measured, gets done” is a statement often attributed to management guru Peter Drucker, and the effect of that is “if you can’t measure it, you can’t manage it”. To measure something, you need to understand what is being measured. In short, if you want to control something, you need to understand it. Measures for measurement's sake is meaningless and wasteful.
Performance analysis studies the company’s overall results and compares its efficiency and effectiveness to achieve those results. The analysis always starts with the company's financial results and available budgets and plans. Company direction, functional processes, and individual contributions are then examined to determine whether the objectives, goals, and measures are in place to organizational goals and objectives.
Beyond accounting and tax preparation services, Entrust Accounting and Advisory Services offer years of executive experience in manufacturing & operations, engineering, marketing, and sales. These groups are measured on more than just a budget; key success factors in key result areas drive business growth and Entrust Accounting and Advisory Services is well-positioned to facilitate the business improvements that matter most to your business.
STRATEGY MAPPING & BALANCED SCORECARD
Do you ever wonder why ‘things’ are not getting done? Have you wondered why employees do not seem to get the sense of priority and urgency that you do? Most likely the problem is not what your business needs to accomplish, it is the communication and monitoring of how the business is getting things done at the level of urgency you require.
Strategy Maps and Balanced Scorecards are the foundation of a business owner's ability to translate vision into reality. Strategy Maps define what needs to get done and answers “if I better prepare my staff, then my staff know more about the product and markets. Increased product and market knowledge will help acquire more customers, which in turn improves financial results”. Balance Scorecard puts measurements to ‘preparing staff’, ‘measuring product and market knowledge’, ‘customer acquisition’, and ‘financial results’.
Strategy Maps are a visual representation that links the various ‘initiatives’ that a company must accomplish. It communicates how training employees improve productivity that enhances customer acquisition resulting in improved financial performance. These initiatives are defined under the perspectives of financial, customer, internal (processes and projects), and learning and growth.
Balanced Scorecards (BSC) bring life to the Strategy Map by linking ‘leading’ and ‘lagging’ measurements to the Strategy Map ‘initiatives’. Utilizing a variety of metrics, the BSC is used to provide feedback regarding the progress the company is making towards achieving its objectives.
Measures of quality and on-time-delivery can provide early indicators of how well objectives will be met, if at all. Issuing purchase orders for supplies and raw materials too late could impact a company’s ability to deliver manufactured product to customers thereby missing sales and profit expectations
Have you ever been turned down for a business loan and not know why? How often have you been surprised at the end of the year when after talking with your accountant that financial results were well below expectations? This is the equivalent of a financial heart attack; it hit you out of nowhere, and you did not even suspect it.
Financial wellness is the state a business achieves when it can pay all its obligations when they come due, have enough resources to survive most business shocks, and are generating enough funds that allow your bank account balance to grow predictably and reliably.
Doctors use measures such as blood pressure, temperature, weight changes, physical checks, complete blood count test (CBC) results, urine tests, and if required, many more to establish health trends for an individual. Changes in results could be early indications of problems to come. Too much LDL cholesterol in your blood, coupled with increased blood pressure could be symptomatic of heart issues later.
Entrust Accounting and Advisory Services perform a complete diagnostic review of your past financial performance and conduct a comprehensive list of financial and operational ratio analysis. Doing so allows us to detect trends that could be indicating, cash flow leakages, decreasing productivity, declining working capital, declining quality, weakening sales results, increasing debt servicing, and more. Sometimes, just like your health, paying extra attention to a few company areas can yield lasting positive outcomes.