Ernst & Young’s 10 resolutions for a happier new year
By CNW GroupNews
Jan. 7, 2009, Toronto – January presents an opportunity for
businesses to start fresh and reconsider key objectives and priorities. As companies
begin to plan for the upcoming year, Ernst & Young offers 10 resolutions
1. Cash is king,
manage it well. The most precious asset that businesses hold, cash must be
expertly managed. Cost optimization is important for all companies–healthy,
stressed or formally restructuring. Businesses need to ensure that, even if revenues
are dropping, they have sufficient cash to meet obligations when they arise.
2. Pay attention to
risk management – One of 2008's biggest lessons was that unidentified risk can
lead to catastrophic results. Leadership must refocus and redouble their efforts
to ensure that effective risk management is tied directly to business
3. Be mindful of
compensation. Compensation packages, especially around variable pay, should be
examined carefully as changes to pay programs affect numerous stakeholders in
the form of accounting, reported earnings, disclosure and tax implications.
4. Keep your eyes
peeled for M&A opportunities. Companies looking to expand through M&A
should stick to their core services and competencies and ensure they're making
smart purchases. This could also mean snapping up an underperforming competitor
as prices become more affordable.
5. Hold on to high
performers. Many companies are searching for quick ways to control and reduce
costs. While labour may seem like an obvious expense, retaining top talent
during this time can help companies stay afloat and reduce costs in the longer
6. Look beyond here
and now. With the baby boomers hitting retirement age, entrepreneurs will have
to turn to succession planning, which could offer opportunities for those
looking to expand their core businesses. It's important that, while navigating
current challenges, businesses don't forget about the future.
7. Make your
non-financial metrics count. The current state of the global economy has
naysayers arguing that economic reality will kill the budding green industry.
However, investing in sustainable and clean technology can create an important
competitive advantage in the form of cost reduction, efficiency improvements,
compliance with new regulations and the creation of new products and services.
Sometimes it pays to be green.
8. Get ready for
IFRS, it's coming. International Financial Reporting Standards (IFRS) are on
their way to Canada in 2011. In 2009, public companies are expected to provide
the Canadian Securities Administrators with a detailed implementation plan and
quantify the conversion's impact on their business, more precisely (CSA Staff Notice
9. Implement smart
tax strategies to save you money. Talk to your advisor and do it early.
Businesses can implement tax strategies to improve cash flow or minimize taxes.
10. See the lemonade, not the lemons. Use the heightened
scrutiny caused by the current financial and economic challenges to identify
ways to improve and grow your business. Remember: a climate of fear and risk aversion
creates real opportunities for investment and innovation if firms are able to
step back and see beyond the current turmoil.
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