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Office of the CFOPresented by: Brett Redd, CPA
Save Time and Money
KNOWNYOU
<My Heading>
Office of the CFO
Confidence
Profit
Cash flow
Compliance
Confidence
FIELD
Bankers
Merchant providers
Investors
Regulators
Profits
What is the VERY most important driver of profitability in direct sales?
Profitable Sales
0% 5% 10% 15% 20% 25% 30% 35% 40%
PROFITS
GEN & ADMIN
SELLING
PRODUCT
Dialing It In
0% 5% 10% 15% 20% 25% 30% 35%
PROFITS
GEN & ADMIN
SELLING
PRODUCT
Leading Indicators
Sales revenue
New consultants/reps
Number of parties/size
Activity percentages
Profits vs. Cash Flow
Revenue 350,000 375,000 400,000 Product costs (80,000) (275,000) (29,500) Commissions (118,700) (122,500) (131,200) General & Admin (112,000) (116,250) (120,000) Net Income 39,300 (138,750) 119,300 Net Margin 11% -37% 30%
Cash Flow Killers
Inventory
Merchant reserves
Overhead
Growth
Must forecast both profitability and cash
Compliance
Multi-state sales tax
Foreign income tax
Gross receipts tax / use tax
1099 and payroll taxes
Merchant covenants
Bank covenants
Business licensing
Sales Tax Mayhem
8,000+ taxing jurisdictions
Nexus and direct selling
Reseller permits
Trust funds of the state
Remember – it is a pass through
Sales Tax Set Up
1) Research – product, price, customer type
2) Rates
3) Set up software
4) Register
5) Collect and remit