18/02/2022
Are your Business & Tax affairs in Order?
If you haven't learn anything through this Covid-19 pandemic, I don't know what to tell you 🤷♀️
What I have come to realise with many 1st time & even existing SME's, is that many are clueless when it comes to Accounting/Tax Fees (ITR12/14, Annual Financial Statements, etc) and even more fail to keep proper Transaction Records. So when you mention the Fees for the services they require they almost fall on their backs.
Guys please I always advice my clients, If you are a DIY person (doing bookkeeping, Tax Returns/submissions yourself), you still gone need an accountant to do your Annual Financial Statements which are the most expensive, so my advice is Hire a professional and pay a retainer Fee monthly, So when your Financial year end comes you won't have to pay lumpsums of +-R5500 for example, but because you payed the professional +-R450 for example every month you are stress free and your Affairs are in Order.
Another very big concern is Poor Management especially Money management, statistics show that +-5 out of 7 businesses fail within their 1st year (https://businesstech.co.za/news/business/487503/south-africa-has-one-of-the-highest-business-failure-rates-in-the-world-analysts/) and beside the other challenges businesses face is maintaining balance in all their affairs(personal & business ventures).
Example 1: Poor Money Management
Business (Income) TurnOver = R50 000 p.m,
Business running expenses = R20 000 p.m,( Salaries, Material, Petrol etc.)
Personal Expenses = R 30 000 p.m (Rent, car payments, family responsibility, loans, clothing/furniture accounts, entertainment etc.)
The problem with the Above example:
No Vision (Just getting by)
No Investments
Example 2: Proper Money Management
Business (Income) TurnOver = R50 000
Running Expenses = R20 000 p.m
Owner Salary = R19 000
Investments = R 3 000
Business Emergency Funds = R 5 000
Other = R 3 000
If your business is approximately 6years old and you implemented Example 2 for the past 5years(when Covid-19 hit):
Investments =R3000*12=R36000*5= R180000(Excl. Interest)
Bussiness fund = R5000*12=R60000*5=R300 000(Excl. Interest)
You would've been fine for atleast 12months
An accountant can assist you with a budget forecast.
Please guys be wise now:
*Have a Plan and
*Maintain your affairs as best possible
If this Post helped you, we'd like to hear from you and how it helped you
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