“Finance without strategy is just numbers, and strategy without finance is just dreaming.”
– E. Faber
A company’s financials provide owners with insight into the business activities and performance of the company. As a small business owner, the financials you maintain should go beyond the statements prepared by your accountant, to include detailed records on investments, real estate, liabilities and other assets that are material to the operations and success of your business.
Maintaining accurate corporate financials is also important should you ever entertain selling your business in the future, as it will help you establish maximum value.
RECORD TYPE: Financial Statements
Financial statements will generally include a Balance Sheet, Income Statement and Cash Flow Statement. A corporation must prepare financial statements annually when filing the company’s income tax return. Preparing financial statements more frequently throughout the year is recommended however, as it will provide better insight into the business operations.
Suggested Action: Upload a copy of your company’s current Financial Statements and update them whenever new ones are prepared.
RECORD TYPE: Investments
The investments you make as a business owner will be an important part of your financial planning if your retirement includes generating income from your corporation. How you manage your corporate investments will largely be dictated by your goals, attitudes, investment experience, risk tolerance and time horizon.
Suggested Action: Upload a copy of your Investment Statements once each year or whenever you make a material change to the investment allocation
RECORD TYPE: Real Estate
It is important to maintain copies of all corporate real estate transactions, especially for any money you may spend on renovations and upgrades, which can help reduce future capital gains tax.
Suggested Action: Upload a copy of all Real Estate documents including purchase agreements, mortgage documents, property tax assessments and receipts for major improvements.
RECORD TYPE: Liabilities
Many business owners are asked to provide personal guarantees for corporate debt, something that adds risk and should be avoided where possible. Taking charge of your corporate debt and making plans to reduce the cost of credit, will reduce your risk, and free up cash flow that can be used to achieve other business goals you may have.
Suggested Action: Upload copies of Account Statements for any operating lines of credits, loans, credit cards and other debt obligations your company may have.
RECORD TYPE: Other Assets
Other assets include any asset that is not accounted for elsewhere and can include shares in related businesses or money lent to shareholders, family and friends.
Suggested Action: Upload documentation for your other assets.
NEXT Steps
- Download Resources
Click the Resources link to download and print the various worksheets and templates applicable to your needs. Set aside some time over the next few days to complete each one. Remember to involve your partner/spouse should you have one. - Gather Documents
Complete each worksheet or template and gather other statements and documents for each type of Record to be uploaded to this Tile. - Upload Documents
Using a scanner or the Sidedrawer Mobile App, upload all statements and documents to the appropriate Record for secure storage and collaboration with your family and trusted advisors. - Add Collaborators
From the Sidedrawer home screen, click on the Collaborator icon to add someone you wish to give access to one or more of your Records. Enter their email, name and relationship to you, then select the Record and permissions to be granted.
Click here to print the Corporate Financials Document Checklist.