Why Tax Owing is your greatest KPI

I was just handed the largest corporate tax bill of my career and I could not be happier about it.

What my company owes in taxes is its greatest KPI. The number tells me that my business was profitable. Simply put, I made more money than I spent. I used my assets efficiently and my expense management was in check. I also paid myself an above market-based wage, took a dividend and best of all, I have the moola in the bank to pay the tax owing.

Believe me, I didn’t always feel this way around tax time. There were plenty of years in my family business when I did not owe taxes because – well, my business spent more money than it made. It wasn’t profitable. I had bought into the notion that profit was an afterthought, an event. I believed that “spending” my way out of paying taxes was a solid strategy.

In the years when I did have to pay into taxes, I didn’t have the cash on hand. The money earmarked for paying taxes had disappeared into the operations of the business. Seeing the number on the GL meant little as I promised myself month-after-month that I would “pay it back”. I never could. I was caught in the survival trap.

Since I have been running Profit First in my business, I have a system that determines prices based on profitability, pays me a consistent wage, keeps expenses on par with growth and gives me calmness at tax time instead of being a nervous wreck!

So, this year I am celebrating the month of April not only because it is my birth month but because I get to pay a poop-ton of taxes at the end of it. I am grateful that my business helped guide others to prosperity while being prosperous itself. I am thankful to being able to give back to my country and to others in need through paying my fair share of taxes. Business can be a force for good and make money at the same time, even during a pandemic.

If you are ready to find your financial why, if you are done with not paying yourself, or if tax season caught you off guard again this year join myself and other like minded entrepreneurs that are ready to make their businesses work for them instead of the other way around. Doors open for Profit in Practice April 20.