There is a famous quote that says – a non financial person when a transaction happens they only recognise one entry. As an accountant that works with various small to medium businesses i tend to agree. Doing so with no judgement of course 😉
Though the most recognised entry is that of an Income, it is also not useful to ignore the expenses we incur during our operations. Because such has an effect on our businesses – positive or negative.
Being equally in control of our expenses helps us to not burn the business funds due to unexpected expenses that could have been managed or avoided. Track your expenses and review them as often as possible. It is advisable that it is done on a monthly basis to avoid being exposed to a loss or shrinkage only at the financial year end of the business. It might be too late to rectify.
In as much as you may rely on your bookkeeper or accountant please make it to a point that you receive frequent communication from them. Their job is to assist you with providing clarity via the numbers that will communicate clearly the position and the performance of your business.
Learn and be able to read at least the 2 parts of the Financial statements. The Income Statement and the Balance Sheet. It is extremely important that you are able to analyse them as they carry valuable business information. Whether your business is a promising success, stagnant or non-profitable.
Do not overlook the business deductions in your business. Though they have a limit as regulated by the receiver of revenue it is also important that you note them as they play a huge role in reducing your tax liability. Deductions such as: Gifts to clients, Software, Insurance premiums, Training and Development, bad debt written off, etc. All these are required one way or the other for scaling our businesses thus it will be dangerous not to recognise them in our recordings.
The blog is compiled by an accountant who runs a fast growing accounting firm. She would like to also remind the readers or business owners that though accountants are not magicians that can grow your business overnight, if you have a look at the information they put together – it might be helpful for you in running a successful business!
Happy trading 🤍
Compiled by Ms. Dikeledi Seoloane on behalf of the accounting firm – Matsobanemetja Business Consulting (Pty) Ltd
Dikeledi is a registered business accountant and qualified tax practitioner.
http://www.matsobanemetja.co.za
Matsobanemetja Business Consulting Pty Ltd 