HomeMy WebLinkAboutThe Citizen, 1998-01-14, Page 11ARE YOU LOOKING FORWARD TO RETIREMENT?
FIVE RRSP GROWTH STRATEGIES
1. Borrow to make up catch-up contributions. If you have not been making
maximum RRSP contributions, you probably have thousands of dollars in
unused room. If you can afford the monthly payments, consider borrowing a
lump sum to make a big dent In your RRSP carry-forward.
2. Use windfalls such as bonuses, raises, Inheritances, etc. to top up
your RRSP.
3. If you get a "retiring allowance", make the most of It. If you leave your Job,
part or all of your severance payment may qualify as a retiring allowance-
even If you're not retiring. That amount can then be put Into your RRSP
without affecting your normal contribution limit.
4. Maintain a separate fund from RRSP investments for emergency expenses.
RRSPs are meant to be used for long-term retirement saving.
Associated
Financial
Planners
limiled
5. Start a spousal plan. Usually the
higher-income partner makes the
spousal contribution in order to shift
future Income to the spouse with the
lower tax bracket.
Helen M. He herington
Financial Planning Consultant 887-9964 or 1-800-869-8922
Are you eligible for
government grants and loans?
Answer these questions to find out.
• Are you launching a new business or
do you have a good idea for a new
business?
• Are you currently on employment
insurance?
• Are you planning on expanding your
existing business?
• Do you have a sound business plan,
or can you prepare one?
If you answered "Yes" to any one
of these questions, you are a candidate
for the grants and loans the federal
and provincial governments provide
to small business.
Why give money to new ventures
and small businesses? Simply put; it
pays off. Small businesses are
recognized as major contributors to
the economy. They employ people and
pay taxes. Even if you receive a grant,
which means you don't need to pay hack
Small Business
SECRETS
anything, the government sees its
reward over time. (And if you have
any qualms, remember this: it's your
tax money.)
Small business people are using
these funds to open their doors, market
their businesses, purchase equipment
and hire employees. Sometimes, all it
takes is a simple application and brief
proposal.
If you'd like tips and advice on
getting government funding to launch
or build your small business, call the
Small Business Consumer Centre, an
independent research organization, at
I -800-667- 1493, extension 406. NC
ANNOUNCEMENT
I am pleased to announce the
opening of my accounting practice
in Seaforth. I will be continuing to
provide the accounting services
formerly provided by Deloitte &
Touche. I have 9 years of previous
public accounting experience, 2 of
those years managing the Seaforth
office of Deloitte & Touche. The
current staff of Mary Anne McNichol and Cathy
Melady will continue to work with myself at the same
location on Main Street. We will be providing the same
accounting and tax services as in the past. We look
forward to serving your needs and will continue to
provide the services you require to achieve your goals.
Please feel free to call me anytime or drop in at the
office to see me. Telephone: (519) 527-1331
Fax: (519) 527-0338
Brian E. Wightman 64 Main Street
P.O. Box 1180
Certified General Accountant Seaforth, Ontario
NOK IWO
Brian Wightman
THE CITIZEN, WEDNESDAY, JANUARY 14, 1998. PAGE 11.
II 'As irtess
Outsourcing a consideration for new millennium
The recent recession dramatically
reshaped the operations of most
Canadian businesses, both big and
small. Downsizing, right-sizing and
restructuring created a leaner,
meaner and often overburdened
workforce.
As a result, many businesses
simply can no longer do all the
things they need to do. But
neglecting essential functions is
like neglecting your health — sooner
or later you will hurt.
One increasingly popular
solution, says Joe Broughton, CA,
is "outsourcing" — or contracting
with outside suppliers for the
specific skills and services your
company does not have.
For example, if you're running a
transport company, you might
contract out for trucks and drivers,
explains Pat Lafferty, CA. A
grocery store might outsource its
distribution function. Print media
might outsource sales.
Governments can outsource a
whole range of service delivery
activities that are not crucial to
public policy roles.
Other types of services currently
being outsourced, adds Broughton,
include data 'processing,
accounting, collecting accounts
receivable, staff training, payroll
processing, finding financing,
reviewing product quality, market
surveys, efficiency studies,
printing, graphics, property and
facility management, cleaning and
janitorial services, public relations
and advertising — in short, any area
where your company is short on
skills and time or may not need
full-time resources.
According to Lafferty, the types
of services that best lend
themselves to outsourcing are
"generic and routine; well defined,
with a clear beginning and end;
easily measurable to ensure you are
getting an acceptable level of
service; provided by established
suppliers; and offered in a
competitive environment so that
you have some bargaining power."
More elaborate outsourcing
services in areas such as research,
professional and information
services need more sophisticated
agreements and performance
reporting.
Outsourcing is not a good idea,
advises Broughton, "when it is
important to control and maintain
process flexibility to attain the
desired results and where an
activity is central to what you do."
This might include receiving and
shipping, control of operations,
marketing and product
development.
For example, "While you might
contract out the sales function in
some small markets, you should
not do it in a new market critical to
your organization's future."
Moreover, warns Lafferty, "If
you use outsourcing in its fullest
sense, handing over management to
an outsider, you risk losing control
Allocation key
Continued from page 10
allocation is a strategy that requires
discipline and focus to stay on
track. It may be tempting from time
to time to make some ad hoc
investment decisions given changes
in the market environment but the
key to asset allocation is a long-
term outlook tailored to one's own
investment needs, expectations and
objectives.
over a key element of your
business. Risk sharing is not easy
to manage."
When used properly, outsourcing
can really help pump up your
company's productivity. The
biggest benefit, of course, is saving
money.
Although it varies according to
industry and the type of function
outsourced, you can expect to save
at least 10 per cent — and often
considerably more — over what you
would have to pay to have it done
in-house.
Just before John was ready to
make an employment offer to what
he believed was the perfect
saleswoman for his small printing
company, she asked him what kind
of employee benefits he offered in
addition to the salary commission
arrangement he had proposed.
"None," he said. "This is a tiny
company and I can't afford to waste
any money on frills."
She turned down the job.
In today's fiercely competitive
economy, employers better be
prepared to offer more than a basic
salary package, advises Rick
Kraiewski, CA. "Offering a
comprehensive employee benefits
plan can make your workplace
more attractive to prospective
employees, giving you the edge
that allows you to choose the best
applicants." As well, he says, you
can use benefits to encourage long-
term employment.
"Moreover, if you don't offer
basic benefits, you may well lose
your best people to someone who
does," he adds.
Many employers have found that
the cost of whatever benefits they
offer is soon outweighed by a more
highly motivated and productive
workforce. Various studies have
also shown that such programs
often create healthier employees
and reduced absenteeism.
According to Neil Dixon, CA,
non-salary employee benefits can
include any or all of the following:
• Reimbursement of medical,
dental, drug and prescription
eyeglass expenses.
• Short and long-term disability
benefits.
• Life insurance.
• Allowances for travel, meals and
entertainment.
• Use of company cars.
In addition, say both CAs:
— it frees you up to concentrate
on your core business activities.
— you pay for resources and
services only for the period they are
required.
— the suppliers have the most
current knowledge of their service
areas.
— service can usually be adjusted
quickly according to changing
needs.
If you think that outsourcing
some of your operations may be a
• Club memberships.
• Free housing or a living
allowance.
• Group RRSPs, sometimes with
matching donations from the
employer.
• Flexible work hours.
• Education and training.
• Social events such as golf days,
company picnics, parties, and
lunches.
• Discounts on company products
and services.
"You have to look at each
situation to see what benefits make
the most sense," suggests
Krajewski. "A benefit that might
motivate your sales force, such as a
company car or meal and travel
allowances, won't be suitable for
your security person. That
employee might be more interested
in training to upgrade his or her job
prospects or in subsidies for
transportation work."
It is impossible to estimate the
cost of such a plan because it
depends on the business, the types
of employees and how much
money can be sprung loose for this
purpose. But giving employees a
plan that will show they're
employer had heart needn't cost the
earth, says Dixon. "Many of these
benefits involve little or no cash
outlay, such as holding periodic
social events, setting up and
administering a group RRSP,
letting them buy products at a
discount or giving them flexible
work hours."
Krajewski warns, though, that the
decision to implement such a plan
should not be made lightly. Once
put in place, the employer can't
renege on it. "If you do, you're
bound to hurt employee morale."
From The Institute of Chartered
Accountants of Ontario.
good strategy for your business,
talk to your CA first. He or she can
help you evaluate which activities
can be contracted out and which
ones had better remain under your
own control. Moreoever, many CA
firms now offer a variety of
outsourcing services and those that
don't will certainly know who to
call.
From The Institute of Chartered
Accountants of Ontario.
Benefits aid competitiveness
JACQUIE COWING
ACCOUNTING SERVICE
Computerized Accounting
& Income Tax Preparation
Monthly Bookkeeping Tailored
To "YOUR" Needs
• Reconciliations • Personal, Farm
• Government Business & Corporate
Remittances • Electronic
• Payroll Tax Filing
All services available on site
or at our office
RR 2 Bluevale
(519) 887-9248