Tariffs & your business
As tax season begins to wind down and the new financial year is in full swing, it is usually the time to focus on KPIs and strategic decision-making to reach your long-term business goals. Unfortunately this year it is not business as usual. Instead of looking into the future with clear expectations and ambitions many businesses are facing overwhelming uncertainty. The United States is no longer the stable partner most Canadian businesses rely on and the tariff war between our two countries is hurting their books.
At Financly we hear your worries and we are here to help. Some of you are wondering if your business will be impacted by the tariffs. Others want to know what changes they can make to weather this storm. Thankfully your books can give you the data you need to make informed decisions.
Businesses Impacted by Tariffs
Not sure if your imports or exports are subject to tariffs? Use this handy Tariff Finder to check!
Tariffs are an extra tax added to goods imported from foreign countries, paid to the government who instituted the tariff. Trump’s tariffs on Canada are paid by the American people and businesses that import goods into the USA. So if your business exports to the USA, you could be impacted. Your competitiveness in American markets takes a hit as your products are more expensive to buy. This hurts the Canadian economy because it can discourage Americans from buying Canadian products and resources. The Canadian government has implemented counter tariffs as a result. Counter tariffs directly impact any Canadian company that imports any of the included goods from the USA.
What Changes Can I Make?
Ensure you have good margins on your products.
The prices of your products are more important than ever. It is essential that you know the true cost of your products so you can price them accordingly. Landed costs are particularly important during these uncertain times. The cost of your products is not just made up by the purchase price. The true cost includes many extra expenses that occur while the product travels from your supplier to your doorstep. This includes shipping, taxes, duties, insurance, handling fees, and now tariffs. You have to know your landed costs so you can make strategic pricing choices that assure your margins are high enough to make it through this tariff war.
Change Your Suppliers
Review your current suppliers. Note how many are in the USA and consider how tariffs will impact your landed costs. Try looking for Canadian or European options and switch suppliers wherever possible to mitigate tariffs all together.
Understand Your Numbers
Use the data that your books provide you to your advantage. Advice online can be varied and confusing, because each business will be impacted differently by tariffs. The issues an e-commerce drop shipping business will experience are not the same as those from manufacturing overseas or others with non-physical inventory. Opening up US warehouses to cut back on shipping costs for your cross border customers could work well for a large company but won’t for small businesses. Meeting with an accounting professional who knows your numbers and understands your unique business needs can give you lasting advice. At Financly, we understand your business setup intimately. Our accounting professionals can help you protect your margins and the profit of your business.
Our bookkeeping services will help you make the most informed decisions about how your business will handle tariffs—and any other unexpected impacts to your business! Reach out today to see how Financly can help you.