In this video, we explore how to use Voyant’s new optional model to seamlessly incorporate business ownership into your clients’ financial plans. Whether your client owns an LLC, C-Corp, S-Corp, Sole Proprietorship, or LLP, this feature allows you to reflect the cash flow realities of their business with clarity and precision. You’ll learn how to: Model inflows such as salaries and dividends, Account for business-related outflows, Simulate the future sale of the business as part of a long-term strategy. This enhanced modeling capability adds depth to your planning conversations and helps demonstrate the tangible value of your advice to business-owner clients.
Transcript – Cash Flow Modeling for Business Owners (US)
Today, we’re going to walk through the basics of incorporating a business into a client’s financial plan. We’ll use a simple example couple, Lily and Curtis Edwards, and I’ll guide you step-by-step through creating a company, adding assets and income that the business owns, modeling dividends, selling the business, and handling the cash flow results in the client’s personal plan.
Let’s get started. Lily has a business, so we’ll begin by creating that company in the software. From the home screen, click the plus button in the bottom right corner and navigate to the company tile. If you don’t see the company tile in your version of Voyant, contact us at support@planwithvoyant.com, and we can turn that on for you at no additional cost.
I’ll select “Company” and enter Lily’s business details. Lily’s company is an LLC structured as a partnership, with 50% ownership for Lily and 50% for a partner outside of this plan. Once saved, the company section appears on the dashboard. Here, you can open the company at any time to make changes.
Under Savings and Investments, you’ll notice a default account has been created for the company—this is the cash account for the business. All money coming into or going out of the business flows through here.
We’ll start by adding revenue. Click the plus button, select Income, and choose Other Income. Now that the company exists in the plan, it can own items. Set the company as the owner of this income and name it “ABC Company Revenue.” You can enter a gross or net amount—just adjust the tax status accordingly. I’ll enter a net amount and set it to non-taxable. For timing, this income will end at Lily’s retirement, so I’ll select her retirement event as the end event.
Switching to the company’s cash flow chart, we can see the revenue starting this year, growing annually, and ending at retirement. In Year View, you can also see revenue in cash flow and investments, showing money contributing to the company.
Next, let’s add a property owned by the business. From the plus button, select Property. Change the asset type to Business and set the company as the owner. Enter the name, market value, and purchase value. Business properties can have linked debts, expenses, and incomes—these will be correctly debited or credited to the company’s cash flow. After saving, we can view the asset chart with details turned on to see both liquid and illiquid asset values. Year View will show property value, debts, and equity over time.
A company can also own insurance. For example, we’ll add a policy on Lily owned by the company. Name the policy, select “Personal” as the type, set the insured to Lily, and the owner to the company. Enter the lump-sum benefit of $1.5 million, a $2,000 annual premium, and set the company as the beneficiary. In Year View, you’ll see the company listed as the owner of the policy.
Now we’ll model dividend payments to Lily from the company. From the plus button, select Company, then Company Distribution. Name it “Dividend Distribution,” choose ABC Company as the source, and set $200,000 annually. Because Lily owns 50% of the company, she’ll receive half of this amount. Timing will start now and end at Lily’s retirement. Viewing Lily’s personal cash flow, you’ll see dividends flowing in and growing each year until the year before retirement.
Next, we’ll model the sale of the business. Open the company and add an ownership transfer. There are several options here—gifting to family, to a trust, or to someone outside the plan, either all at once or over multiple years. We’ll choose “Sell” to a person outside the plan, spread over five years, starting at retirement. In Lily’s cash flow, you’ll see inflows from the sale beginning at retirement. In Year View, those liquidation inflows appear over five years and then end. In the company's view, Lily’s ownership percentage decreases each year until it reaches zero in year five.
By default, sale proceeds go into Lily’s cash account, which has a 1.5% growth rate. If you want them in another account, such as a joint investment account, open Lily’s cash sweep options and redirect the funds. This way, the proceeds can grow at a higher rate.
Finally, let’s look at reporting. Currently, the main report available for businesses is the Asset Details report. You can configure this to include a specific company, such as ABC Company, and run it just for that business. More company-specific reports are planned for the future.
I hope this has been helpful. If you have questions, reach out to support@planwithvoyant.com. You can also click your client’s name in the top right corner to request support, send a message, or share client access. We’re happy to set up a one-to-one session to walk through a specific client case.