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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