Testimonials

Thomas Kralovic

"Williamson Accounting has been a solid partner in keeping us on track with our day to day operations as well as future business. Thanks to Michael and his team,their sound competent guidance on accounting matters has allowed us to focus on our business fully without  additional pressures of accounting matters." 

Thomas Kralovic, President, Spoon Media

 

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Williamson Accounting Inc. helping your small business to reduce taxes and simplify accounting in the Greater Toronto Area (GTA) and across Canada.

For a free initial conversation about your business, call (416) 444-8747 or Contact us.

Managing Debts and Your Bottom Line

j0423062Paying your company debts is just as important as collecting your own accounts receivable, and they need just as much management.

The good thing is, you actually have a surprising amount of control over how and when your company's debts are paid and that provides several advantages.

First, you want to adopt good internal controls for the payment of your bills, so you need to reconcile both:

Purchase orders with the invoices and statements your vendors send, and

Accounts payable
subsidiary ledgers with the general accounts payable ledger.


Once you have those controls working, here are a few ways to effectively manage your company's debts to maximize your cash flow:

• Keep as much interest-earning cash in the company bank accounts as long as possible -- but not too long. Consider using idle cash to pay down your lines of credit.
• Periodically provide your banker with updated cash-flow projections. An improved cash-flow picture might result in better terms on any open lines of credit. On the other hand, if the projection is less than robust, your banker might increase your line of credit with no bump in the interest rate, depending on the overall financial condition of your firm.
• Consider borrowing against the cash values of executive life insurance policies to reduce your net interest cost. Life insurance loan rates often are generally lower than bank rates.

And of course, use your suppliers to help finance purchases, as well as freeing up some operating capital, by taking advantage of favourable payment terms to temporarily free up cash.

The more business you give to suppliers, the better the payment terms you should obtain. The goal is to widen the spread between sales revenue and payments. allowing you to maximize the business's cash balances at very low cost. To that end:

• Use every possible discount,
• Stretch payments to their latest date, and
• Negotiate extended terms when possible and appropriate. 

Visit Us

We are located near Sheppard Ave. and the 401/ 404 Hwy corridor at 203- 211 Consumer Road 
Toronto, ON M2J 4G8
Tel: 416-444-8747
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Quotable

Abraham Lincoln

"Give me six hours to chop down a tree and I will spend the first four sharpening the axe."

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