May 19, 2020

How was Your First Quarter? Three Questions to Answer Now!

business tips
Doug and Polly White
money matters
Whitestone Partners Inc.
Bizclik Editor
6 min
How was Your First Quarter? Three Questions to Answer Now!

Written by Doug and Polly White

Wow! The first quarter of 2012 is over. It’s in the books. How did your company do? If your business is like ours, things have been moving so quickly that it can be hard to see the forest for the trees. This is a great time to step back, take a deep breath, and determine where you are going for the balance of the year. Enough time has elapsed for you to see some trends, but there is still enough of the year left to make meaningful changes that will impact your annual results. We suggest answering three questions:
1. How did your business do? Do you know how your business did in Q1? At this writing, we are just into April, so perhaps your books aren’t closed for the first quarter, but they should be closed by the 15th at the latest. In our experience, too many small businesses don’t close their books in a timely manner. That’s the rough equivalent of trying to call plays in a football game without knowing the score, the time left or the down and distance.
When you get your Q1 financials, will they have the information you need to know exactly where you stand? Some things you should see in your financial statements are:
·       Sales – Obviously, your P&L will contain revenue, but is it broken out in ways that are useful for management decision making in your business (e.g., by geography, by product line, by job, etc.)?
·       Gross Margin – The money you made after you pay the cost of delivering your products and/or services, but before you pay selling, general and administrative costs.
·       Product Line Profitability – If you sell products, you should know the profitability of each of your product lines.
·       Job Level Profitability – If you provide a service, you should know the profitability of each of your jobs.
·       Aged Accounts Receivable – You need to know if you are collecting the money that is owed to your business in a timely manner and if not, where to go to get it.
·       Inventory – Your balance sheet will list your inventory, but you need to know inventory relative to sales by product (a typical measure would be inventory turns or days of supply). Be careful of averages. Your inventory may look great on average, but if you are stocked out of your fastest moving items and have six years of supply of your slow movers, that’s not a good thing.
·       Cash Flow – A wise finance professor once told us, “You can’t buy beer with profit, you can only buy beer with cash.” Cash is king. Make sure that your profit becomes cash in the bank.
P&Ls are necessary, but they are not sufficient. Even in a smoothly running operation, financials are usually not available until several days after the month ends. That can be too late. Consider a business that ships product. If shipments start to go out late, that will eventually turn up in the P&L as reduced revenue. Unfortunately, by the time that happens, the damage is done, the customers are gone. What’s needed in this case is a weekly or even a daily report showing the number of late orders. This will allow the problem to be identified and fixed before damage is done. Does your business have all of the metrics that it needs for you to sleep worry free?
2. Did you achieve your goals? Yogi Berra said, “If you don’t know where you are going, you may wind up somewhere else.” Do you have a clear plan for where you want your business to go? If so, how did you do relative to your revenue goals, spending targets and profit plans. Too often, plans are made, but then they sit in a drawer, #NotHelpful! Get them out and see how your company is doing. If you don’t have goals, now is a great time to establish them.
Metrics without context are meaningless. If you are told that sales in the northeast region were $45,605 in the first quarter, is that a good thing or a bad thing? Without context you can’t possibly know. But, if we also told you that the revenue budget for the northeast in Q1 was $43,000, you would know that, from a revenue perspective, it was a good quarter. Goals provide necessary context for your metrics. Additional context can be provided by history and competitive comparisons.
3. What changes are you going to make? Insanity has been defined as doing the same thing and expecting different results. Don’t be insane! If you aren’t happy with your results from the first quarter, change what you are doing. Changes can be thought of in three categories:
·       Strategy – Many small business owners don’t think they need a strategy. That’s a highfalutin word for big companies. Fair enough, but there is one question that every business owner needs to be able to answer. “Why should a prospective customer buy our product or service rather than a competitor’s?” The next question to ask is whether there are enough prospective customers who value the thing that differentiates your offering to sustain your business. If not, what are you going to change? If so, what is your plan to reach this group of prospective customers?
·       People – Do your people clearly understand what you want them to do? Do they need additional training? Have all of the roadblocks to success been removed (e.g., do they have the tools they need to do their jobs well)? Are the proper incentives in place? If the answer to all of these questions is yes, but you are still not happy with the results, you may need to consider making a personnel change.
·       Processes – If your processes are broken, the best people in the world won’t be able to deliver the results you seek. Make sure that your processes are documented and implemented consistently across your company. When a problem does occur, make sure to ask what needs to be done to ensure it never happens again. This is the first step to ensure continuous improvement.
Hopefully, your 2012 is off to a fantastic start. If changes are needed, don’t procrastinate. There is still time to positively impact your year, but time is slipping away quickly.
About the Authors: Doug and Polly White are Principals at Whitestone Partners; a management-consulting firm that helps small businesses build the infrastructure they need to grow profitably. They are also coauthors of the groundbreaking new book, Let Go to GROW; Why Some Businesses Thrive and Others Fail to Reach Their Potential (Palari Publishing 2011). The book, which was named a Best Business Book of 2011 by the NFIB (National Federation of Independent Business) explains how entrepreneurs can avoid the most common pitfalls as their businesses grow and is available at

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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