Financial Checklist for the Successful Professional

Posted on September 19, 2014 by djb | Posted in Professionals

There is often a challenge for the professional client that is consistent regardless of the particular industry in which you practice; the challenge of catering to the demanding schedule inherent in your field, and keeping up with the administrative and planning components that help keep you on solid financial ground. At DJB, we recognize this challenge and realize our professional clients are often overwhelmed by their own career demands. As such, part of our goal as your trusted advisor is to help overcome the challenges of keeping up on the “other” requirements that are outside the scope of your respective professional services. As a guide to help make this process easier, DJB has outlined a few key areas that the average professional client should consider annually, to help ensure you stay ahead of the game.

The Professional Checklist:

  1. Financial planning and management – as a professional, your annual income is often significant. Proper planning and management of your net wealth is key to ensuring your short term and long term financial success. Meet with your financial advisor frequently to ensure your needs and goals are addressed and properly managed.
  2. RRSP and TFSA contributions – Registered Retirement Savings Plan (RRSP) and Tax Free Savings Account (TFSA) are great tools to help professionals save effectively. Talk to your advisor to determine if these are a good fit for you. If so, consider monthly contributions to help manage cash flow more effectively.
  3. Tax planning – working with your tax advisor to ensure you are being remunerated in the most efficient manner is highly prudent. Regular discussion with your advisor will ensure the optimal strategy is created. Consideration to remuneration strategies involving salary, dividends and income splitting are common practices that can help save you tax dollars.
  4. Tax installments – the majority of professionals, either practicing as a sole proprietor, employee or through a professional corporation are subject to tax installments. Communicate with your tax advisor to know the details related to these installments and make notes in your calendar to ensure they are paid on time. Late or insufficient installments result in unnecessary interest costs.
  5. Record keeping – keeping your financial records in proper order will help ensure accurate amounts are reported on tax filings and will provide safeguards in case amounts are reviewed by the Canada Revenue Agency. Furthermore, proper records will help your advisors provide better advice in a timely manner. The importance of keeping records up to date, source documents properly filed, and information such as automobile logbooks current cannot be stressed enough.
  6. Insurance coverage – professionals in most fields carry a variety of insurance; professional liability, life, disability, critical illness, health, etc. At a minimum, this should be reviewed annually with your insurance advisor to ensure you are protected in case the unexpected occurs.
  7. Compliance with governing bodies – most professional groups require annual membership renewals, declarations of compliance, registrations, etc. Make sure you meet the annual administrative requirements of your particular governing body to ensure you remain a member in good standing.
  8. Final wills, powers of attorney and shareholder agreements – consider these documents annually. If circumstances have changed in your personal or professional life and updates are required to these documents, make sure they are made. Keeping these documents up to date and current will ensure your wishes and decisions are followed out as desired.

The above-noted items are not an all encompassing list. However, at a minimum, if these items are addressed annually a professional can sleep well, as you have given consideration to significant factors present in your career. As your trusted advisor, DJB can assist in making sure these items and others relevant in your career are addressed and properly managed.

Article written by: Ryan Bissonnette, CPA, CA

To read other articles or learn more about DJB’s Professionals Specialty Group.