By Klayman & Company 28 Nov, 2016

Even though penny-pinching is harder to do today without any pennies, the concept remains valid and is especially applicable to the expenses incurred by small businesses. Here are a few ideas to improve the bottom line.


Employees require salaries and benefits as well as insurance, office space and equipment. Contracting out office tasks transfers these costs to a highly competitive third party and frees up your own premises for revenue-producing uses.

Negotiate with Suppliers

Contact your suppliers and see whether you can get a better deal. Far too often suppliers mechanically increase prices without recognizing the value of a long-term, reliable client. Why should rewards and discounts go to new clients while long-standing customers like yourself see costs go up? Call and make your pitch.

Use the Cloud

Using the Internet to send invoices and make and receive payments saves the cost of cheques, envelopes, letterhead and postage as well as the related labour. Further, cloud-based solutions for almost every manufacturing or accounting need are available for a reasonable “lease” rate. Such an approach reduces the cost of buying and installing software and assures you your cloud services will always have the latest updates.

Consider In-House Printers

Many businesses still need to print data to hard copy. Consider purchasing a laser or inkjet colour printer. Once templates for invoices, letterhead, or business cards have been installed, they can be printed as needed, thus eliminating large inventories of pre-printed forms. The templates can be adjusted for format changes or for staff and address changes.

Face-to-face meetings are not always necessary.

Meet with Telecommuting

For most business communication, a face-to-face meeting is not necessary. Virtual meetings will work if the number of participants is small, the meeting is kept short, and the agenda well planned. Establishing timelines, requesting daily updates and having access to work-in-process by the use of shared cloud facilities will ensure projects stay on time and on budget.


How often are the premises cleaned? Perhaps reducing the frequency of cleaning or having staff empty their own waste baskets at the end of the day are options that will reduce costs without impacting the tidiness of the office.

Go Paperless

Going paperless can be difficult for older employees used to paper trails. Paperless offices must establish a filing system suitable to everyone; this includes scanning every piece of paper that comes into the system and allocating it to the appropriate folder. Going paperless also means reviewing existing client files and purging data no longer required for taxation, legal or business purposes. This is the time to adopt standard records management practices for preserving, storing (onsite and offsite) and destroying documents. Scanning documents saves the cost of renting physical storage space, using employee time to file paper, and ultimately shredding and disposing of that paper.

Review the Cost of Your Premises

Signing a long-term lease may lock your business into a lease cost that will not be acceptable in the future. Look ahead and determine how your business will evolve over the next five years. If your strategic plan includes increasing or decreasing your space, consider signing shorter-term leases that allow an exit with, for example, three months’ notice.

If you own your building but no longer need all the space, consider subletting. You might also think of selling or leasing the entire property and moving to a smaller space. Such a move would provide proceeds from the sale of the building or lease income while reducing your own rental costs.

Think about Your Future

Taking an hour or so with your CPA to look at your current business model and associated costs will help you think about changes that will positively impact the bottom line and ensure that your business keeps on going.

By Klayman & Company 30 Sep, 2016

Businesses are already looking toward 2017 and considering what has to be done to keep profits growing. The Canadian economy is expected to grow at only 1.5% according to a prediction by the Conference Board of Canada, which claims that “…there are plenty of headwinds for Canada’s economic growth prospects:

·      Investment in the oil and gas sector is still falling.

·      Non-energy investment is lacklustre, so Canada may soon face lack of capacity in manufacturing.

·      Canadian consumer spending may not improve because incomes aren’t rising sufficiently.

·      Consumers are also stretched thin with debt.

·      Growth prospects for the global economy remain poor.

·      U.S. growth this year is also tepid.”

Preparing for 2017

In a slow-growth environment, the best way to maintain or improve the bottom line is to reduce expenses. Now is the time to look at year-to-date financial figures and establish budget goals for the next fiscal year.

Start with zero-based budgeting.

Consider the Following

Start with zero-based budgeting rather than simply adding a percentage to last year’s expensed figures. Every item of revenue and expense in the general ledger is reviewed and the revenue and expense items are justified with realistic assumptions.

1.     Consider the possibility of having employees work from their homes in order to:

  • reduce the cost of lease space
  • reduce travel allowances or reimbursement costs
  • reduce in-house cost for utilities, telephones, taxes, maintenance, and interest
2.     Review the communications system. Determine whether a separate facsimile line is necessary. Consider using an Internet system that connects to each employee’s smart phone rather than using the traditional land line.
3.     Consider whether the cloud would reduce computer, printing and communication costs and still enable employees to find data from one source.
4.     Purge old documents. Much data older than eight years can be shredded to free up space.
5.     Review the age and condition of your work vehicles. Should you buy a new vehicle or spend money on repairs and maintenance?
6.     Can some vehicles be sold to reduce the cost of insurance, licences, repairs, maintenance and fuel?
7.     Review the budget for snow removal and ground maintenance. Perhaps a flat rate per snow removal would be cheaper than a contract. Could ground maintenance be performed less frequently?
8.     Review electricity consumption. Can work schedules be altered to take advantage of lower, off-peak rates? Is it time to update the lighting systems, both in the warehouse and in the yard, to higher-efficiency lighting?
9.     Consider whether “just in time” delivery is a better way to manage inventory. Delivery “only as needed” reduces the amount of space devoted to storage and frees up working capital by cutting inventory costs.
10. Examine your lines of credit, credit cards, mortgages and loans. Perhaps interest costs can be reduced, advance payments made, and credit cards paid off with lines of credit at lower interest rates.
11. Determine whether it is necessary to maintain all full-time personnel. Could their jobs be done by part-time employees or contract workers?
12. Evaluate employees on performance and return on investment. Give raises simply based on productivity, quality of work, interaction with clients and staff. Have candid interviews with employees to obtain feedback on how they view their performance.
13. Ask all employees how they would improve their expertise to increase productivity or reduce costs.
14. Examine the time taken to collect receivables. If your company is not receiving payment within 30 to 45 days, perhaps it is time to implement a COD policy for late payers. If a large part of a delinquent client’s bill is, for example, machine parts, then perhaps you should have a deposit-for-parts policy in place. Otherwise, your business is acting as a bank for your clients but it is you who is paying your bank or supplier for overdraft or overdue accounts payable.
15. Examine credit card costs. If the cost of collecting credit card payments is excessive, consider switching to a debit card or e-transfer.
16. Going paperless can save funds. Establish a system of filing for incoming email; items received by surface mail should be scanned, filed, and then discarded. Use the Internet to transmit information related to invoices, payroll and payments. Consider e-transfers to clients rather than cheques.
17. Apply the 80/20 rule. Evaluate your customer base and determine the top 20% of your clients. Stratify the remaining 80% and determine which are the most aggravating to deal with. Stop dealing with them and concentrate on the best 20%. Work on improving your relationship with those in the remaining 80% who show promise.

Budget Like a Start-Up

Ensuring a solid continuous bottom line in times of economic uncertainty requires owner-managers to veer away from the traditional budget process. Management must look at all revenue opportunities and expenditures as if their business were still in the start-up phase and justify the figures for the following year on a line-by-line basis. This will give a better understanding of how to build opportunities and reduce costs.

By Klayman & Company 31 Mar, 2016

Canadian business owners do business all over the world. Most enjoy medical coverage from their respective province or territory and may carry additional travel and medical insurance when out of their province of residence.

Just as important as medical coverage, however, is the ability of emergency response teams or a foreign doctor, nurse or medical support worker to know immediately whether you have any special conditions that could determine how you need to be treated.

A MedicAlert bracelet or dog-tag lets first responders know that you have a specific medical condition or a specific allergy even if you are unconscious. (The bracelet/dog-tag can be easily identified by the symbol of a serpent-entwined rod known as the Staff of Asclepius, a Greek god associated with healing. ) The MedicAlert Foundation is a non-profit, charitable, and membership-based organization founded in 1956 in Turlock, California, by Dr. Marion Collins. The Foundation’s mission is to protect and save lives by serving as the global information link between members and emergency responders during medical emergencies and other times of need.

The Bracelet/Dog-Tag

Each MedicAlert bracelet/dog-tag provides first responders with information regarding allergies, implants such as artificial heart valves, medical treatments such as chemotherapy and treatment wishes.

Each bracelet/dog-tag contains the wearer’s unique ID number, medical condition and an emergency toll free number that connects to a live operator 24 hours a day seven days a week. As well, the organization provides a wallet card with emergency contacts and health information.

Worldwide Information Network

In the event of a medical emergency, medical practitioners or first responders can call the emergency number and speak to a live operator who can reference your health records that may include your medical condition, types of medications and dosage, as well as past surgical history. If the emergency requires transfer to a medical facility, MedicAlert will transmit the information to that facility so the information will be available when you arrive. In the event your travel takes you out of country, the MedicAlert Foundation is present in more than 50 countries and translation service is available in over 140 languages.

Low Cost

Firstly, let it be known that it is not possible to obtain a MedicAlert bracelet/dog-tag without becoming a member. Because the bracelet/dog-tag cannot carry all your medical information, you must become a member before the bracelet/dog-tag will be issued.

MedicAlert protection starts at $39.

According to their Canadian website, the cost of the MedicAlert ID starts at $39. (For the fashion conscious, MedicAlert provides a catalogue of specialty wear that resembles jewellery with prices topping out at around $2,700.) On top of the cost of the bracelet/dog-tag, a $24 fee is required to set up your medical profile and ensure the ID bracelet/dog-tag is properly engraved. The coverage after that is $5 per month with small discounts provided for prepayments of 24 or 36 months.

Other services provided by the MedicAlert membership include:

1.    online access to your medical information anywhere 24/7

2.    notification of family members or other named individuals in the event of a mishap

MedicAlert offers an optional service plan that enhances the basic plan with additional personal information that includes for example DNR orders, X-rays, MRIs, or CAT scans. These documents are available to a designated proxy or medical practitioner as needed.

If you are a frequent flyer, an entrepreneur who has previous medical history or have employees who could benefit from wearing a MedicAlert bracelet/dog-tag, perhaps now is a good time to investigate membership. Unfortunately, the cost of membership is not a tax-deductible medical expense and thus, if management determined that membership should be paid by the business, that cost would possibly be considered a taxable benefit.

MedicAlert Reduces Risks

The MedicAlert program is relatively inexpensive when one considers that information provided to first responders or medical practitioners provides knowledge crucial to your well being. That knowledge could reduce the risk of incorrect medical treatment as a result of a wrong diagnosis, may prevent unnecessary medical care, and ultimately just might save your life.

By Klayman & Company 16 Aug, 2017

Because lighting, heating and cooling represent 19%-25% of the cost of operating a commercial business, control of energy costs is essential to improving profit margins. A reduction of even 10% in these costs can produce a significant improvement. But, because Canada is located in a part of the world where temperatures can range from 40C below zero to 35C above, it is inevitably expensive to keep internal temperatures at levels needed to maintain comfortable working conditions through the changing seasons.

By Klayman & Company 16 Aug, 2017

Setting the price point for your product or service is not simply the process of determining the cost of production then adding a mark-up. It is more a matter of understanding the price the consumer will accept as the value of your product or service and keeping the costs of production to a level that will give you a profit at that price.

By Klayman & Company 16 Aug, 2017

The significant rise in the cost of equipment, vehicles, real estate, and inventory has prompted many businesses to increase business debt. Low interest rates, combined with the ability to obtain larger loans with extended payment terms, have allowed businesses to operate in a “business as usual” mode with less consideration for the actual cost of borrowing.

To give some idea of the effect of even low interest rates on an owner-managed business, the following key elements of most businesses have been put forward as an example of the effect of interest costs on a business. The effect of domestic borrowing has been added to show the full impact of current interest rates on the owner-manager. Since lending rates vary widely depending on a variety of factors such as risk, item to be funded and the term, and are usually negotiated, the interest rates used below have been chosen at random from Internet sources; calculations are approximate and for illustrative purposes only . All loans have been made effective June 1, 2017.

  • Commercial mortgage: $600,000 over 25 years at 3%
  • Two work vehicles: $120,000 financed over five years at 6%
  • Equipment loan: $200,000 financed over five years at 5%
  • Operating line of credit: $50,000 at 3% a year
  • Credit card debt: $10,000 at 15% a year on the outstanding balance

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